Ukrainian President Volodymyr Zelensky and BlackRock CEO Larry Fink revealed that the asset management company will coordinate investments to rebuild the embattled nation.
Zelensky and Fink met virtually on Wednesday to discuss the initiative, agreeing to focus on coordinating the “efforts of all potential investors and participants in the reconstruction” and channeling “investment into the most relevant and impactful sectors of the Ukrainian economy,” according to a readout published by the office of Zelensky, which also revealed that executives from BlackRock are slated to visit Ukraine some time in the new year.
An earlier press release from Zelensky’s office described aid from BlackRock as “pro bono.” Analysts at the firm will “include advice on the structure, investment process, governance and use of proceeds for a fund” while creating “opportunity for both public and private investors to participate in reconstructing and rejuvenating the market economy in Ukraine by delivering fair and just returns to investors.”
BlackRock Financial Markets Advisory and the Ukrainian Ministry of Economy signed a memorandum of understanding last month outlining the arrangements.
“We’ve shown that we know how to win on the battlefield. Another important task for us is to achieve victories in the economy as well, and to be an attractive country for investors,” Zelensky said earlier this year. “The investment attractiveness of our country is of particular importance. It’s important to me that a structure like this be successful for all parties involved. We are capable, and we want to restore a normal investment climate.”
Although the extent of damage to the labor force, infrastructure, and natural resources of Ukraine as a result of the invasion has not been officially measured, an estimate from the World Bank forecasted that the Ukrainian economy would contract more than 45% this year, while the Russian economy is slated to shrink more than 11%.
“The magnitude of the humanitarian crisis unleashed by the war is staggering. The Russian invasion is delivering a massive blow to Ukraine’s economy and it has inflicted enormous damage to infrastructure,” World Bank Vice President for Europe and Central Asia Anna Bjerde remarked in a statement. “Ukraine needs massive financial support immediately as it struggles to keep its economy going and the government running to support Ukrainian citizens who are suffering and coping with an extreme situation.”
Zelensky, who was named Time Magazine’s Person of the Year and recently delivered a joint address before the United States Congress, rose to international prominence in February. He has been revered among Western lawmakers and celebrities as he leads the war-torn nation, which many officials originally predicted would succumb to its neighbor within weeks.
BlackRock, which manages more than $8 trillion in assets, has meanwhile gained notoriety in the United States amid the company’s support of the environmental, social, and governance movement, also known as ESG. State officials and other market actors have pulled investments from the company as critics of the movement say the philosophy pushes social and political causes in a manner that exposes investors to unnecessary risk. BlackRock has implemented “voting action on climate issues” against dozens of portfolio companies, according to a stewardship report published two years ago.