INVESTMENTS IN UKRAINE: FAVORABLE, BUT TOO TOO RISK
Investors are withdrawing assets from Ukraine, because over the past two years it has become difficult and dangerous for them to work here. Even such a dedicated partner to Ukraine as the EBRD can reduce the amount of investment. The Ukrainian government calls the creation of a favorable investment climate one of the priorities of its activities. In particular, the Cabinet of Ministers regularly reports on the simplification of bureaucratic procedures for business. However, innovation does not make Ukraine more attractive to investors, criticized by experts interviewed by DW. “Over the last two years the investment climate in the country has deteriorated significantly. First of all, this is due to the deterioration of capital protection. In matters of protecting investors’ property, Ukraine also slipped far back, ”said Sergei Desyak, president of the Association of Private Investors of Ukraine, in an interview with DW.
According to him, now the mood of investors is very skeptical about further work in Ukraine. “They are set up, if you leave money in the country, it is conditionally“ quiet ”, and if you implement something, it is only abroad,” Desyak notes the trend. He notes that now mainly investors, both Ukrainian and foreign, are trying to withdraw their assets from Ukraine as soon as possible and increasingly see EU countries as a new home base for their capital. “Investors agree that the level of business profitability in the EU may be five times lower, but investment protection is,” said the president of the Association of Private Investors. According to Sergey Desyanka, investors are most afraid now in Ukraine of raider attacks on their business and “manual” administration in all spheres of life.
Lending is questionable
Uncertainty in the future and raiding creates an ineffective judicial system. On this, speaking in Kiev with journalists on Tuesday, February 5, pointed out the President of the EBRD Summa Chakrabarti. According to him, investors are increasingly complaining about the deterioration of the investment climate in Ukraine through the actions of the tax and customs services, and also complain about the lack of reforms. “This is especially true for Ukrainian companies that have fewer protection tools, because, as foreign companies, they cannot ask for help from the embassies of their countries,” adds Andre Kuusvek, director of the EBRD in Ukraine.
The EBRD notes that the deterioration of the business climate may lead to a significant reduction in lending. The amount of Chakrabarti noted that last year the volume of loans from the EBRD to the Ukrainian economy reached $ 1.2 billion and the bank hopes to repeat these figures in 2013, but: “The volume of our investments depends on the business climate,” said Chakrabarti. EBRD executives fear that the current investment climate may change the bank’s plans if their potential clients cannot continue their operations in Ukraine.
Protection of the right to business without corruption
A separate item in the EBRD highlights corruption, which does not allow investors to conduct business in Ukraine in a civilized manner. “Corruption must be fought at all levels. Not only do you need to create laws, but you also need to implement them so that everyone has equal conditions, ”Chakrabarti is sure. Namely, in order to protect business from corruption, the ЄBR proposed Ukraine to create an ombudsman institution for corruption and state bodies. A member of the Ukrainian anti-corruption coalition of civil society institutions, Yulia Griega, is sure that if the Ukrainian government introduces the office of ombudsman for corruption, this structure will not be effective. “Such an ombudsman will not be a big threat to Ukrainian corrupt officials,” Grieg is convinced. After all, corruption in Ukraine begins with the highest echelons of power, a social activist notes.