German-Polish workshop on competitiveness

From now on Ukraine will have better chances of attracting direct foreign investments. At least, representation of the Ukrainian government and the European Union are convinced in this. Kyiv recently hosted the official launch of the EU Twinning project “Enhancing performance of InvestUkraine: Ukrainian Center for Foreign Investment Promotion in line with best European practices.”

Germans and Poles will help us in mastering European practices: the project will be launched by the German Federal Ministry of Economics and Technology and the Polish Information and Foreign Investment Agency.

According to the authors of the project, there will be a lot of work. Despite Ukraine’s pre-crisis economic achievements, the overall increase in direct foreign investments remains insignificant comparing to the other countries of the region. The main hardships of the process, according to Europeans, include the imperfection of Ukraine’s legislation, the complicated enterprise registration procedure, the absence of an adequate infrastructure and knowledge, experience and skills for efficient attraction of direct foreign investments.

The Ukrainian Center for Foreign Investment Promotion (the non-profit organization InvestUkraine, which was founded by the Ukrainian government in August 2005 to offer free-of-charge help to potential and current foreign investors in running their businesses in Ukraine) was expecting this moment from The Day of its foundation, admitted Olena Hantsiak-Kaskiv, acting director of the Center, at the project launch. She said, “We want to work better. This does not mean we cannot work well. We are open for learning to work even better. According to the leading European practices…Our team has a feeling, that Twinning is not just a tool. Twinning essentially dictates a certain philosophy, which is necessary for Ukraine and very relevant right now. It offers ways to collaborate: in the project we have an opportunity to learn from certain partners, who are willing to share their experience with us and to make sure that we master everything correctly.”

Ulrike Hauer, Counselor and Head of the Trade & Economic Section of the EU Delegation to Ukraine, spoke at the project launch and expressed an expectation that the project would help Ukraine. “Ukraine needs it, because your country’s competitiveness in the sphere of direct foreign investments’ attraction is lower than we even expected. Unfortunately, Ukraine suffered a lot from the economic crisis. And it aggravated its investment climate even more, even though there are also enough reasons for this inside the country – first of all, insufficient reforms,” she said.

According to Hauer, starting from 2008, when Ukraine joined the WTO, the country faced a necessity to withstand great competition with other countries. It cannot compete very successfully as yet. So, the Ukrainian government’s priority should be increasing the country’s economic competitiveness, said Hauer. She added that foreign investors could play a very positive role in this process: “Foreign investments give a possibility to increase the number of jobs; they bring new technological standards to the country and give an opportunity to the local companies to enter international markets,” stated Hauer, “But on the other hand, investors need a more predictable, uncorrupted, and transparent business climate. In Ukraine these aspects are not in order, unfortunately… But it does not mean that Ukraine does not have a potential. It is immense. There is a large domestic market, favorable geographical position, educated and qualified labor resources, and so on.”

Hauer believes that Ukraine needs to look different in the sphere of foreign investment attraction. “So, we will solve all the assosiated issues through the project. I hope that we will manage to improve the investment climate of Ukraine,” she added. The project is designed to take nearly two years — it will last until October 2011.

BY THE WAY

The Ukrainian Center for Foreign Investment Promotion is fortunate to have partners that will share the investment experience. For example, Poland recently won the sixth position at 2010 AT Kearney Foreign Direct Investment Confidence Index rating among the 25 most attractive countries of the world in terms of investments. According to the report from the international consulting company AT Kearney, Poland went up by a record 16 positions in the rating – from the 22nd position, which it took in the last presented research in 2007, reports UNIAN. China maintained the lead; the USA won the second position by forcing India out to the third position. Brazil advanced by two positions to the fourth place, while Germany rose from the 10th to the fifth position. Ukraine did not make it to the list. Among the neighbors that did is Russia, which went down from the 9th to the 18th position, and Romania, which took the 16th position (earlier it did not belong to the top 25).