Ukrainians do not like arranging definite meeting times. Michailo Vyshyvaniuk, head of the Ivano-Frankivsk Regional Administration, is no exception. Like many Ukrainians, he is a product of contrasting and sometimes conflicting influences.

“Come on Friday or Saturday. If I’m here, I’m here; if I’m not, I’m not,” says the bear-like man affectionately known as Michailo Vasylovych [Michailo, son of Vasyl] in the corridors of the 1970s-style regional government headquarters.

Cultural identity

First of the influences that shape the regional boss of this picturesque, tradition-led region is a strong attachment to folk culture, together with the fatalistic attitude – of man making plans but God fulfilling them – that is central to Ukrainian life. His regional marketing brochures show woodcarvings, painted Easter eggs and the distinctive embroidered towels made by the Hutsul people of the Carpathian mountains.

Second, there is the cult of personality. The larger than life bureaucrat with three assistants, holding court behind padded doors in a palatial office with a clean desk, at first appears to be a hangover from Soviet times. Mr Vyshyvaniuk’s management style means he has a vociferous, table-thumping view on every big strategy issue. But the details are somewhat sketchy and are left to his associates. The strength of his influence is such that even in the neighbouring oblasts [regions] of Lviv and Ternopil, people are well aware of his name and reputation.

Third, and most relevant for foreign partners, he has embraced the importance of market reforms and is seeking expertise beyond Ukraine’s borders.

A stroll around his city shows the old and new rubbing shoulders. It may not have the striking panorama over the River Dnipro of the capital Kiev or the Renaissance courtyards of nearby Lviv. But it does have a sense of sophistication and entrepreneurship, which has attracted Western businessmen such as UK travel agent Bob Sopel, who has located his fashion boutique, Manchester, in the pedestrianised centre.

Annexed by the Soviets only after World War II, the region has been quicker than others with a more engrained central planning ethos to adapt to the new environment.

Although parts of the oblast were closed to outsiders due to military sensitivities, the region was never as repressed as some other areas of Ukraine. “Market economics have always been with us in this region, and the Soviet days did not really last very long,” says Mr Vyshyvaniuk, surveying the couples walking arm in arm along the tree-lined boulevard of Hrushevskoho Street from his window.

Market mode

“Market ideas were left in people’s consciousness and communism did not totally poison the psychology of ownership. It was the stories of their fathers and grandfathers that saved them,” he says. “We can show an example to other regions of our country, particularly in the east,” he believes, in terms of both national pride and economic leadership.

“Our oblast is definitely one of the key regions that took an active part in the struggle for independence. But the communists painted a picture of our region, that we are all fanatical nationalists. I would rather say that we are a centre of national consciousness. The two terms have very different meanings.”

National consciousness in the region is so strong that just an hour’s drive away from the city, the Hutsuls of villages such as Yaremche and Tatariv will tell you stories of how partisan groups holed up in the mountains continued to resist Soviet occupation well into the 1960s.

Walking in this unspoilt terrain, close to Yaremche, it is easy to see how the still dense hillside pine forests, populated by wolves and bears, could hide whole armies.

Mr Vyshyvaniuk has no doubt that these picturesque landscapes will be his region’s greatest attraction. “I am already convinced that the Carpathians will be the new Austria or Switzerland of Europe,” he says, before outlining ambitious plans for a railway to link Yaremche directly with Kiev, a new airport for Dolyna and a helipad for Kolomiya, together with investment in green tourism. The Chornohora mountain range, the highest in Ukraine, follows the edge of the Carpathian National Nature Park, which falls within his remit.

Seeking partners

Mr Vyshyvaniuk frequently crosses the border to Romania and Slovakia to seek out business partners and investors for the region. “Ukraine is looking for partners to help in its economic rebirth,” he says. “Not just in the west, but in the east, north and south.”

This is a reference to the United Economic Space treaty ratified by the Russian and Ukrainian parliaments to set up a rival bloc to the EU. The EU has so far given Ukraine’s reforms a less than lukewarm endorsement. The new bloc is also expected to include Belarus and Kazakhstan.

“Unarguably, the creation of a single economic market means free movement of goods and trade. This is extremely important for us. We want to become members of the World Trade Organization,” says Mr Vyshyvaniuk. “The problem is that, today, how quickly can this happen? Ukraine is open to foreign goods but their markets are closed to our goods. I will give you a barrel of goats’ cheese tomorrow, and you try to sell it in Europe and you will see the problem.

EU promises

“Europe told us to give up our nuclear weapons and promised us money in return. We gave them our weapons but received no money. They told us to shut Chernobyl. We did this and are building other, safer reactors, without help from Europe. We hear only promises about the future, but we need to eat today.”

He says Leonid Kuchma, the president of Ukraine, has laid down a course for Ukraine to enter Europe. But he does not discuss Mr Kuchma’s own problems on the international stage. Europe is linking accession plans for Ukraine with the need for a full investigation into the murder of journalist Georgy Gongadze, whose headless body was found in remote woods 100 miles from Kiev nearly four years ago.

Although Mr Vyshyvaniuk has a photograph of Mr Kuchma on his desk, and the two men speak regularly about taxation and business issues, his political inspiration seems to come more from Leonid Kravchuk, Mr Kuchma’s predecessor.

“As Kravchuk said, we are not moving straight to democracy, but evolving from dictatorship to democracy,” says Mr Vyshyvaniuk. “This is not an easy path to tread and for most of the people in our state, this means psychological evolution rather than a revolutionary process. For this, you need time.”

The autumn presidential election will pitch prime minister Victor Yanukovich, a follower of Mr Kuchma and an advocate of closer co-operation with Russia, against Viktor Yushchenko, who promises to focus on increased integration with the EU and Nato, if elected.

These diametrically opposed political and economic views have no effect on inward investment, according to Mr Vyshyvaniuk. “Foreign investors are not interested in the results of the election, just economic results,” he says. Yet it is no irony that the biggest foreign investment in his region to date, a €250m stake in an oil refinery in the village of Broshniv, has come from Russian oil company Lukoil. This dwarfs the €78m total invested by other countries, including Canada, Germany and Poland, also predominantly in extraction of natural resources.

Tax system

Mr Vyshyvaniuk denies that a punitive tax system discriminates against foreign investors. “Find me a system where somebody actually likes paying taxes. Our problem is not with the system but people’s attitude to the system,” he says, smirking at the straight-laced approach of the Kiev-based special commission on taxation.

“According to the commission, it is the first holy duty of a citizen of Ukraine to pay taxes. But they need to work with the people in the regions and convince them of their responsibilities. For instance, how can a loss-making private restaurant or shop exist from year to year, without posting a single hryvnia [unit of Ukrainian currency] in profits? We have 117 businesses like this in our region, which are not honestly paying their taxes. This is the real work that the commission must do.”

"We can show an example to other regions of our country"