The work of the first “Office for protection of investors and entrepreneurs in Kyiv region”, Oleksandr Pokryshka develops the idea for Fashion of Diplomacy being the head of office for protection of investors in Kyiv region, the advisor of the Head of Kyiv Region State Administration, the Manager of ICCC Ukraine regional office in Kyiv region and Kyiv city, the Deputy Director “Business association of exporters and importers UKRAINE–CHINA”.
How, above all, Kyiv region can attract foreign investors? Actually you often hear about its agrarian potential…
– Kyiv region is in the first place, the capital area in the center of Ukraine having a priori certain advantages for investors, because the region has the most developed transport infrastructure in country: 3 international transport corridors and railways with 5 main directions stretching throughout the territory. The biggest international airport of Ukraine “Boryspil” and largest logistic centers are located in the region. The city Kyiv is within the territorial region. It’s the capital of Ukraine and megapolis, important political, business, industrial, scientific, technical, transport and cultural center of the country related to the region by strong entrepreneurial and social connections. There is also enough qualified labor force in contrast to other regions of Ukraine having scarce professional staff. In addition, there are numerous high quality “brownfields”. Their exploitation speeds up the implementation of investment projects dramatically.
Kyiv region set up a pilot project at the initiative of governor Oleksandr Tereshchuk and Ukrainian national committee of the international Chamber of Commerce (ICC Ukraine). It’s the first in Ukraine “Office for protection of investors and entrepreneurs in Kyiv region” functioning as an effective instrument for regional business and protector of legal rights.
Of course, it tends to be the competitive benefits of our region with respect to other regions of Ukraine but, actually, each region of our country is unique and has a number of its strong sides needed to be employed efficiently.
As for the agrarian potential, it’s undoubtedly an additional benefit, but a focus shouldn’t be placed on it today! We need to discard an idea of raw material supplier for Europe and world. It’s rather shameful for Ukraine and in particular Kyiv region to play in this field. All the eff orts should be focused on the establishment of enterprises with deep processing producing high added value goods. It should be a national trend but not only a strategy of Kyiv region.
What branches of Ukrainian national economy primarily need foreign investments?
– it’s not a very reasonable statement… If we speak about direct foreign investments, any investor is predominantly a pragmatist here who contributes money not to the field that requires investment in our country but in the most lucrative sphere under the lowest risks and placement of funds in the shortest terms. Now you see a goal for the country that is to create favorable conditions for attracting investment in the very branches of strategic importance and significant for the country in this particular period of development.
It’s undoubtedly, the most perspective investment branches in Ukraine today are the ones targeted at import substitution or totally export-oriented subject to a closed loop production cycle using local raw materials. It’s the market segment that embodies all the preconditions for rapid growth.
Talks about the creation of favorable investment climate have been in place since the first years of independent Ukraine, but attractiveness of this climate still requires improvement. Do you stick to this point of view?
– I absolutely agree! Unfortunately, dealing with the issues of attracting investments on the local level for almost 10 years, I have to point out, that Ukraine has no a unified legislative policy in regard to preferences for foreign investors! I was asked only one simple question when having some presentations of our regions investment potential abroad in front of the biggest and most powerful investors of Asia and Europe: Why do we have to put money exactly in Ukraine and what benefits the country provides for foreign investors?” I have nothing to answer, except that an investor can be exempted from import duty bringing equipment for industrial needs as the contribution in share capital of foreign investment enterprise. But believe my experience, even this really efficient measure is extremely difficult to implement….
Taking all the risks into consideration foreign investors face in Ukraine generally, we have negative consequences nowadays. The transition from poor dynamics of direct foreign investments in the Ukrainian economy to the recession…
What do we need to do in order to improve the investment climate not only in Kyiv region but throughout the country?
– Attracting direct foreign investments in the Ukrainian economy must be a strategic goal for the central and local authorities! We need to turn from declaration to real actions! From my perspective, it’s the only chance for our country to recover from a long-lasting crisis, because internal resources and financial injections of international donors are likely to be scarce.
It’ll be enough to adopt a preferences policy for foreign investors and establish a special body engaged exclusively in the promotion of investment opportunities and investment friendly projects of the country. It should be a group of professional negotiators and speakers who will encourage Ukrainian promo-campaigns worldwide. We’re definitely not the country with a lot of investors to contribute money to. That’s why we should advertise ourselves, provide potential investors with information persuading them in our uniqueness and favorable investment conditions. If an investor doesn’t come to us, we should approach him! And there is nothing shameful in this step, because the globalized world has a real competitive confrontation for financial resources and investments. Unfortunately, we lose this fight. This philosophy the People’s Republic of China applied. The result of such policy we observe nowadays. It’s the second biggest economy of the world!
It’s also necessary to establish a special guidance group for investment projects, because now a foreign investor is alone with all the challenges and obstacles that emerge in the process of project implementation in regions. As a matter of fact, there are a lot of them! That’s why today local authority itself doesn’t possess real mechanisms of support for investors except talks only. There should be an aide who literally takes an investor’s hand and guides him to the successful project launch. I always say: “Travel to any remote country, where you even don’t know a language not mentioning peculiarities of local legislation. Try to have a plant built there!“ And we are eager, in our turn, to see a rich investor from a faraway country who builds a modern enterprise for US, contributes to the budget, broadens job opportunities for US and even puts up a school for US. And we’ll just declare him support as representatives of local authority. It doesn’t work like that!
What pattern of foreign investment protection is the most reasonable for Ukrainian realities?
– There is no a common pattern of foreign investment protection. To put it mildly, It’s no secret that there are a lot of problems concerning this field in Ukraine. But a judicial branch and law enforcement system give rise to unfavorable criticism by foreign investors. They can’t protect their legal rights for today. That’s why central authority should work hard to improve a current state of things.
How a larger inflow of investments can make a better life for an ordinary Ukrainian citizen? What will people feel in their everyday life?
– Answering to this question, I don’t feel like saying any trivial stuff, but the most important item is related to confidence in the future and improvement of economic situation! It’s two basic notions all of us need today – Ukrainians!
Because investments represent new job opportunities, filling local and national budgets, construction of new infrastructure and social guarantees. It’s the very instrument providing a progressive movement to the prosperous future of our country.
That’s why we need to fight for every investor! Possibly creating hothouse conditions on the initial stage to attract him to our country!
We also shouldn’t forget about investors and support them by all means, especially the ones who have already “entered”, remained standing and keep on working in these intricate economic conditions of modern Ukraine! Let us pay tribute to them!