Shifts of FDI – a lesson for Ukraine?

factory-722863 960 720The role of foreign direct investment, or FDI, as an accelerator of economic growth of the receiving, i.e. the host, country is difficult to dispute (although, as there are always exceptions to every rule). These benefits include the increase in the level of investment, higher wages, transfer of technology, transfer of know-how, etc. Therefore, it is in the best interest of a country to attract such investments. This is especially true for developing economies. One of the reasons is because it is much more efficient to buy or receive new technologies than to develop them on your own.


In order to attract FDI, the economy has to first satisfy several conditions. These conditions depend on the reason for an investor to be interested in the host economy. Generally, in the literature on FDI, there are four main reasons: searching for new markets, searching for resources, searching for strategic assets and searching for efficiency. The last one involves such aspects as low-cost labour.

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For Russia, the war has never ended

2015 Moscow Victory Day Parade - 01Every year on May 9th, nostalgic people from the post-Soviet republics can feel like Soviet citizens again. The slogans and posters from the Second World War inspire them just like “make America great again” has inspired Donald Trump’s voters.


In 2014 rhetoric from the Second World War was successfully used to portray the Ukrainian-Russian conflict. Ukrainian soldiers who were trying to defend their own bases in Crimea were called “fascists”. Today, Donbas separatists associate themselves with the Red Army soldiers who were fighting against Nazi Germany. During the so called Immortal Regiment March in Donetsk, people were carrying portraits of killed separatists as well as the portraits of real participants of the Second World War. This concept is a powerful message, it helps to gather Russian people around the state and its “strong leader”, and even go to war against “fascist regimes” in neighbouring countries. The Second World War’s history can be a good example for the construction of a new reality. Facts as well as borders become flexible in times of hybrid war in the Intermarium region.

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Intermarium vs the Three Seas Initiative

3Cs 2The Intermarium strategy was developed in Poland as a political doctrine at the turn of the 20th century. It was an attempt to answer the general question on how to rebuild a sovereign Polish state and how to secure its future. The concept was innovative even if the purpose was not. The Poles alone, and Poland as a sole actor, wouldn’t be able to achieve such a goal. Poland’s enemies, especially Russia, were considered the main obstacle to independence and excessively powerful. The authors of the Intermarium strategy, Józef Piłsudski and his closest associates of the Polish Socialist Party, discovered the potential of nationalistic aspirations of other nations living within the Russian state. The idea was simple: to initiate a national revolt in a suitable moment and split Russia along national divisions. In such a way both major Polish goals would be fulfilled: independence and a secure future. Russia, if pushed from Europe and stripped of its conquest, would be annihilated as an empire and no longer pose a threat to the newly established states.

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Intermarium – A view from Germany

MerkelThe concept of Intermarium was developed and promoted by former Polish President Józef Piłsudski between the First and Second World Wars. The main reason behind it was to keep out Russian imperialism through the co-operation of several Central and Eastern European states and was also important in opposing German influence. In contemporary times, several Eastern European politicians have been bringing up the idea of an Intermarium anew. What does this mean for Germany? Would it bring more security for Ukraine or other countries in the so-called “grey zone” between Europe and Russia?

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Relations between Visegrad and the UK in a post-Brexit Europe

brexit textIn the wake of the Brexit vote, Hungarian Prime Minister Viktor Orbán called for a reconfiguration of EU governance that prioritises the role of member states over institutions, arguing that democracy can “only be reinforced through the member states”. Orbán’s appeal comes at a time when eastern and central European states are testing their capacity to play a more decisive role in Europe through a number of new and reinvigorated alliances such as the Three Seas Initiative, based on the concept of Intermarium, and the Visegrad Group (V4) that brings together the Czech Republic, Hungary, Poland and Slovakia in an effort to maximise their influence within the EU and the wider region by adopting joint positions on key policy issues.

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