Agriculture and finance have found themselves pushed towards the heart of the war that began a year ago when Russia invaded Ukraine.
Seizure and destruction of agricultural land and assets has emerged as one of Russia’s battlefield objectives. The specter of a global food crisis sparked by the war’s impact on grain and fertilizer trade has framed a broader conflict that is also being fought through sanctions, seizure of financial assets, and sharp shifts in energy policy.
Despite the still-uncertain outlook on the ground, early steps are already being taken to launch a reconstruction of Ukraine’s economy that could bring important changes for global ag investors and help define the conflict’s next stages.
JPMorgan global head of alternatives Anton Pil, who met with Ukrainian President Volodymyr Zelenskyy in Kyiv in February, told Agri Investor agriculture joins energy and technology as key sectors of a reconstruction effort the bank has agreed to advise.
“The Marshall Plan took five years to get started. I think we would all hope that when the conflict reaches a resolution that we can help re-build Ukraine much, much faster,” Pil told Agri Investor.
“To do that quickly, you can’t just wait for the end of the conflict we are all hoping for – you can, but then you are going to have to wait years after that. We’d like to see if there is any way to help them accelerate that on behalf of the Ukrainian economy, and help the Ukrainian government think through different ways they can set up their economy for a post-war renaissance that we think they deserve and will probably get.”
Ukraine and JPMorgan’s partnership was sealed by a memorandum of understanding signed during the visit. One of the bank’s ideas for the country reportedly includes a vehicle seeded with as much as $30 billion in private capital dedicated to rebuilding infrastructure destroyed during the conflict. In early February, the US Agency for International Development announced a transfer of $135 million to the Western NIS Enterprise fund to help support re-development in Moldova and Ukraine as part of its response to Russia’s invasion.
Pil said partnerships between public and private capital will play an important role in meeting the challenge of rebuilding Ukraine quickly. Meetings with Ukrainian officials, he added, indicated they are very willing and able to make changes necessary to receive private capital in the formats most Western investors are accustomed to.
“I am hoping that we can lay the foundation of the economic standards within the Ukrainian legal system, et cetera, and increase its transparency to the point where it’s just another institutional, investible market like anywhere else,” he said.
“That’s the desire of Ukraine as well; they have to become an attractive place for capital. They don’t want to be a place where it takes five years to figure out how to invest. They are going to need that capital much quicker. Frankly, as the largest bank in the world, I think it’s incumbent upon us to help them best position themselves for the changes that are required to speed up that process so that it doesn’t take five years.”
A potential renaissance in Ukraine’s ag sector animated many investment strategies and conference discussions years before the country’s coveted black soils became a battleground. It is important to remember the thorny issues that had long stalled development of an investible land market in Ukraine were only solved under emergency conditions imposed by covid-19. Any effort to rebuild Ukraine as quickly as Pil suggests will face intense scrutiny from multiple sides.
Investors will have to gauge for themselves the degree to which assistance from JPMorgan and other financial heavyweights can help speed an arduous reform process that can only resume in earnest after the bullets stop flying.
Agri Investor will publish the full interview with Anton Pil next week where he discusses the bank’s ambitious timberland plans and the acquisition of Campbell Global.