Investors Shun High Tech Projects in Kyiv

Trade and public catering account for nearly half of all foreign capital investment in Kyiv. Meanwhile, advanced technology projects attract almost no investment, Interfax-Ukraine quotes Mykhailo Pozhyvanov, deputy chairman of the Kyiv City Administration and chief of the Department for Foreign Economic Relations and Investment, as saying. According to him, in the first half of 2003 foreign investment in Kyiv came to $103.8 million, up 46.8% from the same period of last year. “Despite all the efforts by the mayor’s office, the lion’s share of foreign capital is invested in the trade and public catering sphere accounting for 47.3% of all foreign investment, with the financial, credit, and insurance sphere attracting 17.4% of foreign investment,” said Mr. Pozhyvanov, adding, “The overwhelming majority of foreign companies choose small-scale projects in sectors that make possible fast capital turnover. Thus, they only increase the competition among local investors, while large-scale projects remain unclaimed by either local or foreign investors.” Mr. Pozhyvanov states that in the first half of 2003 per capita investment in Kyiv came to $750, which is five to ten times higher than average per capita investment figures in the rest of Ukraine. However, investment activity in Kyiv “looks modest” compared to that in our neighboring states, which, according to Mr. Pozhyvanov, is due to a number of problems that hinder the development of projects. To illustrate, the city programs approved in 1997 and 2001 do not clearly set any priorities for attracting foreign investment.