In 2019, the most ambitious reforms should be carried out in the investment business of Ukraine. What would authorities do? Outline the basic principles of the Cabinet of Ministers' economic policy to implement the new investment strategy and restrictions, which the state has no right to overstep. Set government spending limit at 30% of GDP, prohibit an increase in the total number of licenses, as well as the creation of new regulatory authorities. And most importantly - to prohibit any restrictions imposed on the movement of capital.
In order to attract long-term money to the economy of Ukraine, it is necessary, of course, to create a favorable investment climate so that the conditions for business are better than in other countries. The list of such conditions is big, I will mention only a few - these are the legal security of the investment business and the absence of legal restrictions for it, low taxes and high profitability, the availability of skilled labor and so on. Moreover, now our weakened state hears "promises" from all sides, which few years ago hardly anyone would have seriously said. At the same time, of course, none of them will be actively implemented.
After all, everything is already clear: the backwardness of our economy from the countries of the European Union is simply colossal, and from such a start, repeating even the Polish breakthrough is beyond any fantastic calculations. And yet, what at this time Ukraine can offer investors who are known to love either big risks at low costs - cheap labor with high risks, or reliable institutions - developed market players along with expensive labor? There is also a set of solutions, but their implementation requires time and political will. And the situation in the Ukrainian economy is extraordinary.
Yes, the Cabinet of Ministers has resources, but the crisis is getting worse: industrial production is declining, the number of labor migrants is growing, real incomes of the population are declining, and so on. To get out of this direst situation, we need professionals in all economy spheres who need to create favorable conditions for effective work. And in order to make the hryvnia an investment currency, as well as to restore confidence in local banks and financial-industrial groups, one should show their ability and readiness to work in a civilized manner, first of all, according to standard market rules and competitive conditions.
It is time, finally, to honestly admit - we have been thoroughly driven into the economic crisis, we have already gotten involved, but there are still no development institutions. In particular, the Cabinet of Ministers did not create the Ukrainian Development Corporation. And, according to the National Bank for January-September of 2018, the net inflow of foreign direct investment amounted to only $ 1.5 billion, of which 28% are transactions of debt transfer to the authorized capital, and for real and sustainable growth Ukrainian economy, we need annually at least $ 10 billion. Moreover, in recent years, the state budget has been squeezed, capital investments are not growing. True, personal consumption grew slightly (but it mainly grew at the expense of rent).
In a word, budget funds are not invested in the real sector of the economy, as well as the long money of the actually killed Ukrainian stock market and the domestic market of joint investment. Yes, and foreign markets sources of investment in the economy of Ukraine are disappearing. But the worst thing here is that the policy of the government and the NBU does not solve, but, on the contrary, aggravates a huge problem when the hryvnia is not an investment currency. In my opinion, ministers and legislators sincerely believe that investments can only be made in US dollars and euros.
Therefore, for the fifth year in a row, the deputies, with the tacit consent of the Cabinet of Ministers, categorically refuse to adopt the draft law "On capital markets" in the Verkhovna Rada. Because of this it is impossible to create an International Investment HUB in Kyiv. But our colleagues from Kazakhstan have already created the Astana International Financial Center (AIFC) with a universal exchange. And now, firstly, according to their comprehensive privatization plan, by the end of 2018, three state-owned enterprises should be listed on the AIFC for IPO / SPO. Secondly, on November 5, 2018, Kazakhstan placed Eurobonds at a coupon rate of 2.37% in the amount of EUR 525 million maturing in 2028. And our Ministry of Finance, as is well known, placed similar 10-year Eurobonds for $ 1.25 billion at a coupon rate of 9.75% per annum! Feel the difference. And these loans we will certainly give back.
That is why we need a new investment strategy. This is the way to implement a comprehensive program for the development of investment and innovation activities, approved by the Resolution of the Cabinet of Ministers, as well as effective processes of state participation in the establishment and development of mechanisms for mobilizing investment capital to Ukraine. After its implementation the improvement of the banking and non-banking systems, capital market and risk hedging business will be subordinated to the needs of ensuring economic growth and innovative development. It is assumed that the main tasks of the future International Investment HUB in Kyiv will be:
- financing of economic development projects in the industrial and agrarian sectors of the Ukrainian economy;
- attraction of medium and long-term investments by enterprises;
- ensuring the mobilization of foreign capital;
- attraction of long investment funds in the organized stock market and the joint investment market;
- the creation of the International Investment and Exchange Center in Ukraine, as well as the Ukrainian Development Corporation.
In turn, the Cabinet of Ministers of Ukraine should ensure the modernization of the national economic system and direct it to meet the needs of economic development:
- to create a civilized legal environment for the work of foreign and domestic investors;
- to stimulate the activity of all participants in the investment process;
- to ensure the creation of a specialized infrastructure and the introduction of special financial instruments for investing innovative economic development;
- organizationally support the formation of "growth points" (national and regional development projects).
If we manage to do all this, we will lead in a number of recognized international ratings regarding ease of doing business, anti-corruption, attractiveness for investments, speed and depth of economic transformations, improvement of the business climate, quality of law reforms, depth of economic liberalization. If not - we will see the economical collapse.
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