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Ukraine has largest outflow of foreign investment in 20 years

Author : 112.ua News Agency

Source : 112 Ukraine

At the end of almost every trip overseas, Office of the President publishes press releases, which every now and then talk about investments. They say that during meetings with representatives of the authorities of a particular state, investment cooperation was discussed: its activation, deepening, etc. The formulations are very different, but the essence is the same - it seems that Ukraine is about to be covered by an avalanche of investments
10:32, 14 April 2021

Volodymyr Zelensky Facebook

At the beginning of last year, President Volodymyr Zelensky, speaking at the World Economic Forum in Davos, said that Ukraine should become an investment leader in Eastern and Central Europe. A month later, at the Ukrainian-Turkish business forum in Kyiv, the head of state urged not to waste time and invest in Ukraine, since, in his opinion, all the prerequisites for this have been created in the country.

Not only during public speeches, but also during Zelensky's overseas trips, the Ukrainian delegation now and then communicates with representatives of other states on the topic of investment cooperation. We remind how it looks in practice and what it turns into as a result.

Canada. July 2019

Expectation. During a three-day visit, Zelensky met in Toronto with Chrystia Freeland, then foreign minister, Deputy Managing Director of the International Monetary Fund (IMF) David Lipton, and Prime Minister Justin Trudeau.

It was with him that the Ukrainian leader discussed the issue of strengthening trade, economic and investment cooperation between the countries.

"... We would like to strengthen it (cooperation, - ed.). Therefore, our countries will work to expand the bilateral Free Trade Agreement in the sphere of services and investments," Zelensky said during a joint briefing with Trudeau on July 2.

Reality. So far, this issue is at the "agreed to negotiate" level. It was discussed by Ukrainian Prime Minister Denys Shmygal and Deputy Prime Minister and Finance Minister of Canada Chrystia Freeland in a telephone conversation that took place almost a year after Zelensky's visit to Toronto.

Earlier this year, Shmygal and Freeland spoke on the phone again. The Canadian politician noted the interest in expanding the Free Trade Agreement between the countries and declared her readiness to work in this direction.

Shmyhal replied that Ukraine is completing the formation of its delegation for the relevant negotiations. It was supposed to be headed by the Minister of Economic Development, Trade and Agriculture Igor Petrashko. We could not find more details about the work of the delegation.

Poland. September 2019

Expectation. Zelensky in Poland urged business representatives and Ukrainian students to invest in Ukraine, promising to create all conditions to protect their investments.

"I am personally ready to protect all investments ... We have already prepared more than 70 bills. We are talking about reforming the law enforcement and judicial systems. There are a lot of bills to improve the investment climate and for business," the president reassured.

Zelensky made a similar appeal to business in October 2020, when his Polish colleague Andrzej Duda was in Ukraine on a working visit.

“Today, you can open your own business in less than half an hour, without leaving your gadget, from your computer. - ed.) ", said the Ukrainian leader.

Reality. The law on "investment nannies" was passed in full last December, and Zelensky signed it in February. Therefore, it is too early to draw conclusions about the effectiveness of the document.

What factor will contribute to the development of Polish investments in the Ukrainian economy, said on the eve the State Secretary of the Office of the President of Poland Krzysztof Szczerski.

"We are very interested in the process of de-oligarchization of Ukraine since it opens up the Ukrainian market," Szczerski said on March 29 after a meeting of the Advisory Committee of the Presidents of Ukraine and Poland via videoconference.

So far, statistics indicate the growing interest of Ukrainian businessmen in the Polish market. According to Rzeczpospolita, despite the pandemic, more and more Ukrainians are opening their own businesses in Poland. Over the past year, the number of Ukrainian citizens doing business in the neighboring country has grown by more than one fifth - to 9.5 thousand.

The publication notes that the pandemic, on the contrary, revealed a new trend in labor immigration from Ukraine. So, last year it was joined by the owners of bankrupt small and medium-sized companies who are actively looking for work in Poland, and over time, when they learn the language and adapt, they open their own business there.

Japan. October 2019

Expectation. During this visit, the Ukrainian leader and First Lady Elena Zelenska took part in the enthronement of Emperor Naruhito.

Zelensky discussed attracting investment to Ukraine at meetings with the leadership of the country's parliament, as well as the chairman and members of the Japan-Ukraine parliamentary friendship association.

Reality. At the end of last month, negotiations were to begin between Ukraine and Japan to update the 1986 Double Taxation Convention.

As an analyst at Mitsui & Co. Global Strategic Studies Institute Daisuke Kitade said, Japanese companies in Ukraine must pay more taxes than companies in other countries.

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"Since Japanese companies have suffered from this outdated Convention, I hope for an early completion of negotiations and updating the Convention," Ukrinform quotes Daisuke Kitade.

The settlement of this issue may have a beneficial effect on the arrival of Japanese investments in Ukraine, analysts say.

Oman. January 2020

Expectation. Perhaps the most scandalous foreign trip of the Ukrainian leader - the Ukrainians learned about it from the media.

When the President's Office had to react to the relevant news, they said that Zelensky went to Oman with his family at his own expense and plans to discuss there "trade and economic cooperation between the two countries, strengthening diplomatic relations and attracting investment to Ukraine."

The topic of investment really came up. Thus, at a meeting with the executive president of the State General Reserve Fund, Abdulsalam al-Murshidi, Zelensky said that Ukraine "offers significant investment opportunities."

Reality. Following the meeting, the President's Office said that the Omani side "expressed interest in enhancing cooperation in the investment field," and also accepted Zelensky's invitation to visit Ukraine to get acquainted with promising projects and areas of cooperation.

So far, the visits of the delegation from Oman to Kyiv have not been reported.

UAE. February 2021

Expectation. Zelensky visited the United Arab Emirates with his wife on February 14-15.

During a meeting with Sultan Ahmed bin Sulayem, Chief Executive Officer of one of the largest port operators in the world - DP World group of companies, the President called for increased investment in Ukrainian ports.

Reality. Back in February 2020, DP World operator acquired a controlling stake in the Ukrainian container terminal TIS, based in the Yuzhny port of the Odesa region. The expansion of investment is still unknown.

As reported in the Office of the President, during a two-day trip to the UAE, the Ukrainian delegation signed a number of documents totaling $ 3 billion or more.

Qatar. April 2021

Expectation. Zelensky's trip to Qatar ended with the signing of 13 interstate documents and two commercial contracts, which, according to the President's Office, will attract "billions of dollars in investments" into the Ukrainian economy.

In addition, based on Zelensky's words, Qataris are interested in investing in the hotel infrastructure of Kyiv, Kherson region and Odesa. In a conversation between the President and the Emir of Qatar, Tamim bin Hamad Al Thani, they talked about attracting investments in the development of infrastructure facilities, in particular, in the construction of roads and bridges in Ukraine.

Reality. Since the trip is completely "fresh", it will be possible to judge its effectiveness over time.

Outflow instead of inflow

Despite the authorities' efforts to turn the country into an investment Mecca for Eastern and Central Europe, the opposite trend was observed last year - foreign investors were actively withdrawing their funds from Ukraine.

According to Vasyl Gorbal, a member of the Council of the National Bank of Ukraine, the net outflow of foreign direct investment (FDI) in 2020 amounted to $ 868 million. This is the largest annual outflow of FDI over the past 20 years.

Oleg Ustenko, adviser to the President of Ukraine on economic issues, noted in March this year that 2020 was difficult in terms of attracting investment, but it is expected that this year the Ukrainian economy could receive about $ 3 billion in FDI.

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