No Rush to Invest in Ukraine’s Space Industry
Last week Kyiv saw the close of the international exhibition called Space Technologies Serving Society, which ably presented achievements in the development and production of space-related items and civil- use articles manufactured with space technologies. Over our ten years of independence, enterprises of this sector have contributed to launching about fifty carrier rockets which put into orbit more than eighty satellites.
While fulfilling the presidential decree of February 6, 2001 On Measures to Apply Space Technologies in Developing Innovations in the State Economy, the sector encountered the problem of improving investment attractiveness and creating conditions for to attract investors. As was noted at a workshop on the attraction of investments in the nation’s space industry, this can be done via international space projects, such as Sea Launch, Dnipro, Cyclone-4, as well as projects to produce civilian purpose items. It is important that, according to Oleksandr Serdiuk, chief of the international cooperation department of Ukraine’s Space Agency, the law grants our enterprises major privileges which do not exist in any other branch of the economy. In particular, space-related entities are exempt from the land tax and import duty on the goods to be used for the production of space equipment up to January 1, 2009. Also exempt from taxation are the sales of space systems, space carrier rockets, and space devices manufactured by space-related entities. Some projects do not even need considerable investments. In the opinion of Volodymyr Solovei, marketing manager of the Ukrainian-Russian Kosmotras Company, it takes $7 million for the Dnipro space system to put into orbit small 500-kg communication satellites (a very promising niche on the satellite market).
It looks like everything is fine in our space industry. But why then is the foreign investor not coming? Unfortunately, this question was never discussed at the workshop. Eduard Kuznetsov, deputy director general of the National Space Agency, noting that investments in the space industry over the past few years can by no means be considered satisfactory “because these are meager funds,” raised a host of complaints about investors: they mostly try to invest in secondary, not priority, fields and, in general, they are reluctant to make contributions to high-tech production, which makes everybody a loser. “We are surprised that investors take too much time, even years, to solve some problems, which has a negative effect on the performance of enterprises. Unfortunately, investors do not work the way we would like them to, so one must take a critical view of not only our activity but also that of investors,” Mr. Kuznetsov says. However, investors are indifferent to this kind of criticism. All they need from us is a favorable economic environment, which might mean not only preferences.
