Why large investment is bypassing Ukraine

 

This year was a turning point for the world. According to the UN investment in the world by the end of the year will increase by 5% to nearly $1.8 trillion

It is against the background of falling investment in the past year by 2% to $1.74 trillion due to the weak global economic growth and a high degree of political risk for multinational companies.

However, global growth in investment did not affect Ukraine. We have this year is expected to decline in investment compared to last year.

If you compare the share of investment in GDP, now it amounts to about 15%. If you compare, for example, including more or less calm preformation at times, it was the numbers in the range of 18-20%.

According to Gleb Vyshlinsky, Executive Director of the Center for economic strategy, ten years ago, when Ukraine and the whole region was on the rise, these figures reached 25% of GDP.

In 2005, after the first Maidan, the volume of foreign investments in Ukraine increased by 4.5 times. In 2008, it even reached $10 billion By 2013 the volume of investments fell to $4.1 billion.

The signing of the Association agreement with the EU gave hope that investments will start to grow again, but they fell ten times. This year the amount of investments in Ukraine will reach the level of 2013.

Igor Mazepa, the head of Concorde Capital investment company, said that the business had very high expectations that something changed in our country. But it turned out that it is not.

“Not so is from the standpoint of regulation, is not so from the point of view of the investment climate, in General, not changed the political culture there was no change in the business culture,” says Mazepa.

Some even very detailed look to the Ukraine, but still they are not ready to invest because there are still many obstacles for them. The key: high level of corruption and weak judicial system. “Because there is no security. Because a bribe can solve the issue”, – says Elena Belan, chief economist at investment company Dragon Capital. And business sees it and understands.

Not to say that the government did not try to do anything to change the situation with investments in a better way. For example, recently the Verkhovna Rada adopted the law forbidding in the country of the so-called mask show, that is military actions against the business.

But apparently that’s not enough.

Why Ukraine has attracted so little investment and what you need in order to change the situation, see in the continuation of the theme in an interview with Borys Lozhkyn, investor, Secretary of the National investment Council.

In addition, a special report of the Perche Spalte see about when in Ukraine to recover the loans for business.

Completes the release of the review of economic events for the week from blogger and business journalist Denis Bezlyudko.

 

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