Ukraine is open for business

When I started the 120-month series about how Bayer can contribute to advancing the UN Sustainable Development Goals by 2030, despite ongoing conflicts in parts of the world, I did not imagine Goal 16 (Peace, Justice and Strong Institutions) would ever feature so prominently. But more than a year into Russian’s invasion of their neighboring country Ukraine, I have to: Ukraine’s recovery is not only vital for its own future or a peaceful Europe – it is a prerequisite for global food security. Bayer continues to believe and invest in Ukraine with a focus on the two sectors most critical to rebuilding a better future: agriculture and health.

Every so often, life hands you one of those moments that is so intense, you remember them forever. In April this year, I experienced one of these as I was travelling to Kyiv as part of a business delegation led by German Economics Minister Robert Habeck.

Images do not fully capture the reality of a war zone. The sights and sounds of a normal European city in the springtime were all present in Kyiv: commuters grumbling about the traffic, people dressing up for an evening out and spilling loudly out onto the streets from buzzing cafes and bars. But, jarringly, especially as a result of the increased drone attacks in recent weeks, they are juxtaposed with the sights and sounds of war: the shells of bombed-out buildings, the air raid sirens going off on smartphones, the queue snaking round the block for free loaves of “victory”-branded bread handed out by church volunteers. When I walked past the pictures of the people who have been killed in this war, I couldn’t stop looking at the birth dates as many of the victims were the same age as my children.

I was in the fortunate position of being able to choose to leave the war-torn country and return to safety, with every turn of the train’s wheels taking me closer to my family. Many Ukrainians have had no choice but to take the same journey with the opposite goal in mind, with almost a third of the population forced to leave their homes and families, seeking refuge either abroad or elsewhere within the country. But those who remained are defiant; those who fled, hopeful of returning.

Everyone I spoke to was determined not just to rebuild the homes and cities they have lost, but to rebuild Ukraine’s industries and institutions in a way that will create a more prosperous and fair society.

Ukraine already stated this aim almost a year ago in its national recovery plan, which frames the rebuilding efforts as an opportunity to “leap-frog economic growth and quality of living” and to become a “magnet for international investment”.

In this month’s article I want to explore how to support Ukraine in moving from surviving to thriving. Because doing this will need more than the ingenuity of Ukrainians and a global humanitarian effort — it will need  investment on a massive scale (most recently estimated at US$411 billion).

Governments as well as multinational companies have a strategic interest in supporting Ukraine so it can get back on its feet and flourish as fast as possible.

Not only is it vital that governments, businesses and individuals contribute to President Zelensky’s United24 fundraising platform, but it also means companies must carefully consider their own business case in the country and where they are best placed to help create the jobs and infrastructure Ukraine will need to fulfil its vision for the future.

Doing this is a requirement for the world, because Ukraine’s position as breadbasket for much of the planet has been significantly undermined by Russia’s unprovoked attack.

Prior to the invasion, many countries in the Global South were highly dependent on food exports from Ukraine’s fertile lands:

it has historically been a critical producer and exporter of foods including grains and sunflower oil. Although the Black Sea Grain deal brokered by the United Nations and Türkiye has allowed for at least some exports at scale, the war has crushed Ukraine’s ability to feed the world: looking at wheat, for instance, it is projected that production this year could be just half the 2021 levels, and 38% below the 5-year-average. It remains Putin’s strategic goal to wage war on the food system, to create his version of Stalin’s Holodomor – but this time the crisis will play out on a global level, as it will hit hardest those who can least afford it. Ukrainian wheat previously comprised more than half of the World Food Programme’s wheat supplies, for instance, making the country a vital source of nutrition to hundreds of millions of people in developing and often politically unstable countries. And the WFP is prey to multiple jeopardies: many of the globe’s richest countries are simply not delivering the resources they should be. The world’s second-largest economy, China, scrapes in as just the twenty-second largest contributor to the WFP, having provided less than US$12 million – yes, million – of the total US$14 billion the body received in 2022.  

The war also had a catastrophic effect on some of the raw materials of Ukraine’s agriculture: equipment, machinery, and, perhaps most significantly, supplies of fertilizer. The latter is due to the conflict curtailing exports from Russia (a major producers of ammonia, phosphate and potash), and because spiraling fuel costs caused production in Europe to drop by a staggering 70%. Here, Europe has also turned to Africa to fill the gap, but this strategy risks exacerbating the poverty gap and bringing simmering tensions to a head, as the continent is of course also struggling with shortages. It certainly does not make sense for developed countries to deprive Africa of fertilizers and, subsequently, increase aid budgets to compensate for the ensuing weaker harvest on the continent.

All this serves to highlight the fundamental and inextricable connection between food stability, poverty and conflict.

Put bluntly, if Ukraine cannot produce and trade food at pre-invasion levels, we face a heightened risk to global food security, creating a vicious circle: as long as there are people with empty stomachs, humanity cannot live in peace.

And of course it is a risk that is exacerbated by climate change; alongside concerns over the conflict, farmers in Ukraine (and, indeed, in many countries across the world) are worried by the increased temperatures and reduced rainfall they have experienced over the last few years.

That’s why at Bayer, we intend to be a key corporate actor supporting Ukraine, given our unique expertise in agriculture and health – industries that are vital for the country’s recovery, and with their focus on nourishing and healing, embody the absolute antithesis of war.

Restoring Ukraine’s agricultural sector and healthcare system is vital to rebuilding its economy and supporting the wellbeing of its population.

And at Bayer we hope to lead by example when it comes to investing in Ukraine to achieve these goals. Here’s what we have done so far, and what we think needs doing next.  

Our contribution to supporting Ukraine and maintaining global food security

We began by aiding our employees and their families leave danger zones in the early days of the Russian invasion. We then helped address Ukraine’s needs in the immediate aftermath, by creating a disaster relief fund, donating seeds and healthcare products, and financing equipment like ambulances and a mine clearance machine (which has recently started its vital work on fields in northern Ukraine). We have also supported our employees financially and through other benefits. Thanks to the 170 Bayer colleagues who chose to remain on site in our Ukrainian seed plant, we are also continuing to supply farmers with corn seeds, thus helping them to keep the planting and harvesting cycle on track. Moreover, the seeds produced also supported Central- and Western European farmers in the 2023 planting season as the ongoing drought depressed local seed production.

Another area where Bayer has leverage is helping patients suffering from chronic diseases like cardiovascular and cancer. They are particularly vulnerable to the consequences of Russia’s war: Russia’s attacks have damaged over 1,000 healthcare facilities in the country so far, and while Ukraine has made restoring these facilities a priority, the impact on cancer and other chronic disease patients has nevertheless been devastating. Many patients in need can no longer access the lifesaving care they need – because treatments are no longer available, because resources are allocated elsewhere, or because facilities no longer function. To support the most vulnerable, we have helped finance the reconstruction of the Chernihiv Medical Center of Modern Oncology, which had been heavily damaged by Russian artillery shelling, and we are donating oncology therapeutics and a vital drug for the treatment of cardiovascular diseases to patients in Ukraine.

We are now shifting to future-focused commitments. Following my visit in April, Bayer announced its investment of an additional 60 million Euros in our seed production site in Pochuiky, Ukraine, adding to the 200 million Euros already spent on the facility prior to the full-scale Russian invasion in 2022. The site will play a significant role in supporting Ukraine and the EU demand for high quality seeds to support countries dependent upon their food production. Pochuiky will become the largest corn seed plant in the country, with substantially increased production capacities, carbon-neural energy production, and state-of-the-art agricultural and storage facilities. We believe it is our duty to continue to believe and invest in Ukraine; the following points are what we see as priorities in the years to come.

Restoring arable land

There are multiple success factors in ensuring Ukraine can once again become a secure and prolific food producer, one of which is restoring the millions of acres of former agricultural land that have been ravaged by toxic pollution from munitions and fuel, and made all but inaccessible by deadly mining. Ukrainian farmers are displaying extraordinary resourcefulness and willingness to diversify, but there is only so far innovative techniques can help them when a quarter of the country’s available agricultural land has been degraded, and 26% of the country’s total land mass is covered in mines and other unexploded weapons. Demining will require vast amounts of resources and could take decades – which is why it is crucial that the work starts now. We have already supported in the provision of demining equipment and intend to contribute further to the work that is vital to Ukraine’s economic and environmental recovery, and to food security across the planet.

Supporting Ukraine’s accession and integration into the EU

Ukraine needs a clear signal from Brussels. Joining the EU would benefit Ukraine economically, of course (it would integrate markets, facilitate long-term investment – including from Bayer – and open up access to funding for infrastructure and agriculture, for instance). But it goes even deeper than that: politically, being anchored in the EU would secure the country’s status as a sovereign Central European nation. And Ukraine’s accession would not just benefit Ukraine: it would re-energize the European project and help the rest of Europe to re-focus on its founding ideals and its future potential. Bayer intends to support Ukraine with this accession project to the best of its powers.

At the same time, the ongoing controversy of Ukrainian exports into Central European neighboring countries is foreshadowing how difficult the integration will be once the negotiators start to focus on the details. Getting to this point requires further reform efforts on Ukraine’s part if it is to continue successfully with its bid for EU membership. As the European Council acknowledged in February this year, Ukraine has already made “considerable efforts”, but there is still a long and arduous way to go: it is crucial, for instance, that Ukraine further strengthens state institutions and the rule of law.

Promoting international partnerships with foreign states and entities

Over the last year, Ukraine has been the recipient of vocal and enthusiastic support from public figures and institutions in Europe and beyond. It is vital that this translates into material support, rather than loud lip-service and empty gestures. I very much hope that public and private stakeholders will therefore participate actively and generously in initiatives like the Ukraine Recovery Conference, which takes place in June and focuses on mobilizing and reducing the risk of investments in Ukraine. I look forward to representing Bayer at the conference – to discuss Bayer’s strategy and investments in Ukraine now and going forward, and to learn from our partners. With its resilience and spirit, Ukraine has shown us it is a country to believe in, and I hope to see many other companies in London who believe in Ukraine as much as we do.

No (wo)man is an island

In the 17th century, the poet and clergyman John Donne wrote that “No man is an island entire of itself; every man is a piece of the continent, a part of the main.” He meant that individuals and, by extension, states, cannot exist within a vacuum, even if they seek to impose one. Donne was ahead of his time in his systems thinking; we know now that individuals and states are delicately positioned, utterly interdependent elements within a complex web – meaning that a traumatic event will ultimately impact the whole system.

War is the ultimate traumatic event. Like any other war, therefore, the ramifications of Russia’s invasion of Ukraine extend far beyond its borders, and it has undermined more than progress towards just, peaceful and inclusive societies – the sixteenth Sustainable Development Goal. Russia’s war in Ukraine has undermined global food security, impeded and distracted from international efforts to solve the global climate crisis, and displaced and impoverished millions of people. It threatens, in other words, to undermine the world’s progress towards achieving any of the Sustainable Development Goals, not just SDG16 – progress that is vital to humanity and to our planet.

So while rebuilding Ukraine is everything to its own people, it is also crucial for people across the world.

People and businesses across the world, therefore, need to get behind, and put money behind, the reconstruction efforts.

In Ukraine, hope springs against the miseries of war – something I found humbling and deeply inspiring. We owe it to our bombarded yet unbowed friends in Ukraine to help nurture and yield fruit from this hope.