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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Question of <I>The Day</I>

What Legal Business Generates The Biggest Profits in Ukraine?
8 February, 2005 - 00:00

Andriy BLYZNIUK, director of the National Association for the Development of Trade and Services:

“The most profitable sector is retail trade, regardless of the goods being sold. And because of the recent political events, it has become even more attractive to investors, and therefore more profitable.

“As a business for private individuals, I can single out operations connected to real estate rentals. The better the condition and location of the apartment, the more profits it will generate. It is especially profitable to rent apartments on a daily or even hourly basis, although there are problems connected with this.”

Tetiana BARYSHPIL, deputy chair of the board, European Insurance Alliance:

“Taking into account all the required outlays, the classic insurance business cannot be called exceptionally profitable. It is much more profitable to deal in petrol, oil, or natural gas. However, given the unsaturated market and countless vacant niches, the insurance market may become one of Ukraine’s most profitable sectors in the long term.

“However, small and medium businesses have virtually no possibility to afford insurance services, since these businesses are strapped for cash. Most of the funds are at the disposal of large companies or joint ventures.”

Serhiy LIEKAR, deputy chairman of the State Tax Administration:

“It’s difficult to single out any specific sector that would be developing much faster than others. Positive changes and rising profit trends are discernible in all spheres of Ukraine’s industry. Everything depends on the size of investments and the investor’s willingness to risk his money for the duration of the payback period. Of course, the more money that is invested in a business, the larger the profits. Therefore, our most profitable sectors are metal, chemical, and oil industries, and the energy business.”

Yury AVKSENTYEV, chairman of the State Committee for Regulatory Policy and Entrepreneurship:

“In my view, the largest profits are generated by businesses that deal with intellectual property and brands.”

Oleksiy KOSTUSIEV, chairman of the Antimonopoly Committee:

“Ukraine is facing a paradoxical situation: profits from the production of certain kinds of simple products, such as coke, petroleum products, and metals, are almost four times higher than those in technological sectors, such as machine building and the food industry, even though there are several times more enterprises in the latter sectors. This is evidence of certain disproportions in the economy. Another aspect is that monopolists are abusing their dominant position in the market, and cartel participants periodically garner super profits. This is illegal business, and we are focusing our efforts on such violations.”

Oleksandr OLIYNYK, expert with the Reforms Institute:

“Considering that roughly half of our economy is in the shadow sector, and companies working in the open are not in the habit of publicizing information about their performance, no one can say for certain how profitable Ukrainian business really is. All calculations are based only on forecasts and hypotheses. Therefore, in my view, one of the most profitable sectors in Ukraine is residential construction. The mushrooming of new buildings in the capital is indirect proof of this.”

Interviewed by Natalia HUZENKO, The Day