On 31 October 2011 Ukraine launched its global media campaign aimed at improving the country’s investment image and attracting direct foreign investment. The road-show is at the core of the campaign, which is a presentation on the Ukraine’s investment potential and top five national projects in the 16 largest financial centres of the world. A delegation for the State Agency for Investment and National Projects of Ukraine will visit financial hot-spots in the US, Europe, Asia and the Middle East.
Why should investors be interested in Ukraine?
Today, potential investors are unfortunately more aware of Ukraine’s problems than its market benefits. The primary objective of our media campaign is to rectify these views and inform the global public and business community of the most essential messages.
With the highest rate of GDP growth in Europe, Ukraine is a transition market economy state with significant investment potential. Ukraine’s key advantages are: a favorable geopolitical position with access to the three strategic regional markets of the EU, Russia and Asia; good connection with the Middle East region via sea routes and the fact that four of the 10 European transportation routes pass through its territory.
Ukraine has a highly skilled and educated labour force, is the fourth most educated population in the world and fifth for its number of certified IT specialists. Accordingly, the labour market is much cheaper than in EU countries.
Ukraine also has great agricultural potential, with 56 per cent of its territory suitable for agricultural use, in addition to possessing one third of the world’s black soils.
Ukraine is a dynamically evolving consumer market. The state has revealed a series of legislative initiatives to attract investors and assist them in this market: the new tax system provides investors with an opportunity to submit an electronic application for VAT refund; the requirements for the minimum capitalisation of enterprises have been mitigated; there is a mechanism of automatic compensation for exporters, and certain industries such as shipbuilding, aircraft construction, hotels and alternative energy receive a 10-year tax holiday.
A new law on industrial parks in Ukraine is based on the successful experiences of their construction in Eastern Europe. Prepared by leading international experts via Project LINK (USA), the law has already been implemented in some regions of the country.
What role does the State Agency play in the investment market of Ukraine?
The State Agency for Investment and National Projects of Ukraine is the central executive body involved in implementing state policies – as defined by the country’s President – in the investment arena and managing national strategic projects to help develop the basic branches of Ukraine’s economy. Primarily responsible for investment reform in Ukraine, the agency’s key principles are: project management, personal responsibility, prioritising investment funds over budget, along with partnership and cooperation with the world’s leading companies. Investment reform will include a radical improvement of the investment climate and the formation of investment proposals meeting international standards.
When implementing national projects, the state budget will not be used, thus providing plenty of potential for international investors. The national projects aim to address certain social issues or radical economic renovation of particular regions, and often involve the creation of a new industry in Ukraine. The state will also prepare the national projects start-ups, providing funding for research, removing regulatory obstacles and, in specific cases, issuing a state guarantee.
The State Agency also works hard to improve and promote Ukraine’s image abroad. Aside from the road-show, we set up the annual International Investment Forum with state leaders, heads of government and global companies all participating. Traditionally, this event is held in June, yet this year, the initiative will start with an International Investment Conference on 9 December in Kiev. Forum topics relate to specific issues that are a priority for both Ukraine and the European states, as well as for countries in which Ukraine has a significant competitive advantage or influences regional processes.
Moreover, the interactive investment web portal Іnvestukraine.com will be launched in the coming weeks, offering new services to ease difficulties investors might face. For example, the ‘One Stop Shop’ is an interactive roadmap, of sorts, for the investor. ‘Project Marketplace’ is a system that contains investment projects. Its operation will be prepared and carried out at the highest professional level, and in close cooperation with the world’s leading consulting firms. We plan to turn this portal into the number one web resource on Ukraine in the world by mid-2014.
What motivated you to choose this list of projects for the Road-show? What are their advantages?
All the projects presented on the road-show were determined by the President of Ukraine. Each project is a high priority for Ukraine and of great potential interest to investors.
For example, ‘LNG-Terminal’ envisages the construction of the re-gasification terminal for liquefied natural gas on Ukraine’s Black Sea coast, which could produce up to 10 billion cubic metres of gas each year. The project will allow Ukraine independence in the energy sphere and to diversify energy supply sources. In line with the global trend toward liquefied gas use (it’s cheaper than piped natural gas), the project has important implications for Ukraine’s energy strategy.
‘Energy of Nature’ seeks alternative sources of energy for Ukraine. The project envisages the construction of wind farms and solar power plants with the capacity to generate approximately 2000 MW, as well as plants for alternative solid fuel production and the installation and exploitation of small hydropower plants. These measures will improve Ukraine’s green credentials.
‘Clean City’ plans for the construction of a modern waste recycling and disposal complex. Waste recycling can potentially be turned into a profitable business, due to sales of recycled items, such as scrap metal, glass, compost and the reduction in raw material usage.
‘Open World’ looks to establish a national information 4G net. Such technology would allow electronic passportisation and voting, a land register system, electronic tax management, road traffic coordination and an emergency services rescue system. The project would provide 1.5 million pupils with netbooks, Ukrainian educational software products and internet access. The project will significantly improve the general competitiveness of Ukrainian society and shall reveal Ukraine as an outpost for global innovation.
‘Olympic Hope – 2022’ plans to construct the sport and tourist infrastructure for the Winter Olympic Games 2022. The project provides infrastructure development in accordance with the International Olympic Committee requirements and its implementation will increase the number of tourists and accelerate regional development.
Why did you choose the road-show as the best means to present Ukraine?
As only one of a number of elements of Ukraine’s global media-campaign, the road-show provides a unique opportunity to present Ukraine’s investment potential in the 16 biggest financial centres of the world, and to substantially improve the country’s investment image. We hope that the results of the road-shows will provide Ukraine with an image of the developed financial, political and business-centre of Eastern Europe.
Over two months, the road-show will present the top five national projects listed above. Attended by representatives of the business elite, famous politicians and public figures of the country, the event will present information on Ukraine’s investment climate, investment legislation, the main functions of the State Agency and how the agency can assist foreign investors.
The road-show will also provide important opportunities to sign contracts and agreements on specific investment and national projects, considerably accelerating the process of attracting foreign investment. Various booklets and brochures will be handed to road-show participants and the road-show will advertise by print and broadcast along the way.
Will this campaign address Ukraine’s negative image abroad as a country burdened with bureaucracy and corruption?
As I have mentioned before, the world community is not aware of Ukraine’s positive economic attributes. The world’s media often publishes information on Ukrainian problems, and rarely on our key investment benefits. This has been caused by the absence of a nation branding strategy. Ukraine’s global media campaign is extremely important in creating a single approach to promote Ukraine’s image abroad.
The implementation of our national projects, the launch of the web portal investukraine.com and the image campaign will significantly improve Ukraine’s investment rating for 2013.
The above mentioned measures are also important to achieve a high level of interaction with investors, a high-quality representation of our country in the international market and our vital goal of increasing the volume of investments to US$ 72 billion.