News Analysis: Ukraine continues efforts to woo overseas investment
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E-mail Xinhua, July 19, 2013
Faced with a continued decline in economic activity, widening budget deficit and lack of fresh funding from global lenders, Ukraine is keen to share its upside potential with foreign investors to attract international capital injections, analysts say.
Ukrainian First Deputy Prime Minister Sergey Arbuzov said on Wednesday that the government will try to create a better investment environment for foreign businesses.
"Each investor must consider the Ukrainian authorities not as a risk factor, but as a strategic partner," Arbuzov said at the government meeting.
With an aim of becoming a hotspot for entrepreneurs in East Europe, Kiev hopes to triple overseas investment to 17 billion U.S. dollars this year on the back of an improvement in investment climate.
Data from international ranking agencies suggests that Ukraine' s investment climate appears to be improving on many counts.
The European Business Association (EBA) said that Investment Attractiveness Index of Ukraine has shown slight improvement in the recent 12 months. The index increased 0.2 points to 2.16 point (with a maximum of 5 point) in the second quarter this year.
In 2012, Ukraine climbed from the 152nd to the 137th place in a World Bank business ranking, due to positive changes in terms of business start-up, property registration and tax reduction.
Following its rise in the ease of doing business report, Kiev is pushing with an ambitious plan to move from the current position to 100th place by 2015.
To achieve this goal, the Ukrainian government has pledged to step up efforts to protect overseas investors.
Arbuzov said that in the near future the government will create special mechanisms to protect investors' rights and combat illegal mergers and takeovers in the private sector.
The state also will initiate a dialogue with businessmen on ways to further encourage fair competition in the Ukrainian market, Arbuzov said.
He emphasized that the government was committed to stimulating local production in various sectors, in particular energy.
Although the investment volume has risen steadily over the past few years and reached 6.1 billion dollars in 2012, Ukraine still has a great investment potential to tap, experts say.
The East European country with a population of around 46 million offers huge domestic sales market, well-educated and relatively low-paid workforce and a favorable geographical location.
The agricultural wealth of Ukraine which is for decades regarded as the source for its economic self reliance is not well- developed now. Analysts say the country's farming may be even more lucrative with using fertilizers, well-equipped machinery and the latest technologies.
Energy development is another promising sector of the Ukrainian economy. The International Energy Agency estimates the post-Soviet country's unconventional gas reserves at around 5 trillion cubic meters.
The Ukrainian legislation is quite supportive to implementation of energy projects, as Kiev is seeking to ease its dependence on costly Russian gas supplies.
Experts also list pharmaceutical industry, machine-building and IT-technology sector among spheres that require investment, and can bring substantial dividends to businessmen.
"The need for Ukraine today is to ensure stable economic growth. Now, investors do not expect Ukraine's economic miracle, as they did before 2008, but if the growth rate accelerates, more investors will return to Ukraine," Pavel Illyashenko, the managing director at the Kiev-based "Kimto" think tank told Xinhua. Endi
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