Trade Compliance

GHY discusses changes to international trade regulations and explores cutting-edge compliance strategies.

Ikea’s “Symbolic” Ukrainian Experience

Posted April 01, 2014

Despite trying to crack the Ukrainian market for over decade, the world’s largest home-furnishings retailer still doesn’t have a presence in the country. The reason: “because Ikea’s system didn’t have any money for bribes,” according to Lennart Dahlgren, the retired Ikea executive who spearheaded the company’s entry into Russia.

A thorough article in Bloomberg News examines the decades lost to corruption and bribery in Ukraine – described by one expert as “a mess beyond description” and “one of the worst-managed countries in modern history.”

Reporter Agnes Lovasz explores a number of the reasons Ukraine is currently one of the poorest of the former Warsaw Pact nations. Not least among them is the widespread plundering of state coffers over the years by many officials and their family members. For example, prior to being deposed, former president Viktor Yanukovych and his allies are said to have moved $70 billion into offshore accounts, a staggering amount equal to about 40 percent of GDP.

Petro Poroshenko (aka the “Chocolate King”), a popular business tycoon campaigning to be the next president, has called Ikea’s experience a “symbol” of what’s wrong with the country.