Question of <I>The Day</I>
Recent analysis of the investment influx into Ukraine suggests that last year nonresidents channeled into this country’s economy about $813.7 million, an increase of 2.7% from 2000. As of January 1, 2002, foreign direct investment in Ukraine totaled $4,406,200,000, with a $531.2 million increment in 2001, down 10.4% from 2000. According to Ukraine’s Ministry for the Economy and Integration with Europe, investment came from 113 countries, with Russia ranking among the top five investors. According to official estimates, Russia holds a 6.7% share ($295.1 million) of total investment in Ukraine.
Anatoly HALCHYNSKY, NBU Board Chairman:
Ukraine is interested in Russian investment no less than in that of other countries. Analysts forecast an increase in the Russian investment influx into the Ukrainian economy next year. Some went so far as to say that its share in total investment will amount to 70%. I believe this to be an overstatement. On the other hand, the Russian capital flow into Ukraine is quite substantial. What worries me most is the fact that investment comes to Ukraine not always directly from Russia, as offshore schemes often come into play. Secondly, we are more interested in high-tech, especially in the manufacturing sector, and this is where Russian capital loses out to Western investment. Thus we should view the increase in the influx of Russian capital with caution. And, most importantly, it should come to Ukraine with no political conditions attached. This way political pressure from Russia can be avoided. Since politicization of the investment market is not making this process any healthier. As for the prevalence of Russian capital, we must remember that we cannot compete with them in many sectors. Moreover, the degree of capital concentration in Russia is much higher than in our country. To quote President Kuchma, we must take care of our nation’s capital, strengthen it, and make it more competitive. This also applies to tenders involving Russian capital.
Volodymyr HAVRYLOV, Director General of the Rosagroprom Financial Industrial Group [Russian agro-industrial group]:
To say that Ukrainian capital is either winning or losing would be too categorical. In some respects Russian capital cannot compete with that of Ukraine. Russians tend to be wary about investing in Ukraine, because much still remains unclear, so they calculate the risks. People working on this market know full well what mechanisms exist here. They know where to enter and when to leave and what they will get in return. In this respect, if they do not turn a profit, they will at least keep what they invested. To Russian entrepreneurs this is not all that clear. Both Russia and Ukraine need reciprocity. We can compete in some spheres, but we should not forget that a competitor is a potential partner. Why don’t we agree on prices, schemes, and mechanisms? Need some help? At your disposal. Short of money? Feel free to ask, although there is enough money in Ukraine. We need a dialog as a basis of cooperation in business.
Volodymyr MAKIYENKO , Head of the Razom (together) Russo-Ukrainian Economic Center:
There is much less Ukrainian capital, and that is why it can’t compete. Today Ukraine simply does not have such resources for doing business. Russia is reportedly five years here. And this is only natural. First, even in Soviet times Moscow had lured all of the best brains. Incidentally, many Russian businessmen are Ukrainians. Second, you should make allowances for the difference in the resource basis. For one thing, Russia had significantly more capital to start from. However, today no one is banning Ukrainian businesses from investing in Russia. In Moscow there are organizations ready to assist Ukrainians who want to do business. There are programs to support businesses with analytical information or provide counseling on investment security. As for the current trade and economic relations between Russia and Ukraine, little has been accomplished beyond declarations. It is already to get down to concrete projects.
