Ukraine currently finds itself in a pivotal position as it continues to experience historic transformation since undergoing its Revolution of Dignity in 2014.
Over the last four years the country has faced compelling challenges as it fought a war on its eastern border with Russia, achieved macro-economic stability, overhauled archaic systems left over from the soviet era, and preserved social cohesion to build consensus around the need for deeper structural reforms.
Against this background, the Ukrainian government a year ago launched ‘UkraineInvest’ – its investment promotion office, with a mandate to facilitate the attraction of investment into Ukraine. Our strategy began with catering to established investors already in the country, as we knew that to attract new investors we had to first assist existing investors to resolve their current issues with state authorities.
Positive results would encourage them to consider further investment thereby expanding the network of success stories that could be showcased to potential new investors.
Circumstances proved us right. While challenges remain, by working in tandem with the Business Ombudsman Council and the Government Commissioner on Investments, and with the support of the Prime Minister, we successfully collaborated with many existing investors in 2017 to unlock over $700 million of new investment.
We also realized that UkraineInvest’s message – that global supply chains can benefit from the innovation and opportunities offered by Ukraine’s “brains and grains” – resonated positively with investors.
In fact many investors remain amazed by the meteoric rise of Ukraine’s IT sector, which in only five years, has exploded from a fringe economic activity to the country’s third largest export.
The on-going dynamic development of Innovation Technology is fundamental to Ukraine’s future and has been at the core of UkraineInvest’s “4+1 sector strategy” of focusing on the key drivers of the country’s economy: Agribusiness; Energy (especially renewables); Manufacturing; and Infrastructure.
Of course, the big future opportunity is Ukraine’s integration into the European supply chain and the high value-added innovation-driven investments necessary to power the growth that Ukraine needs to forge a modern 21st century economy.
UkraineInvest sees the future and is currently guiding some 20 global brands into the market, representing an investment value of over $4 billion.
In all of this UkraineInvest enjoys the unequivocal support of the Ukrainian government which continues to tackle corruption issues by institutional means. Most importantly, in 2017 the government passed four of five key structural reforms mandated by the IMF designed to transform the country in the areas of healthcare, pensions, education, and privatization of state owned enterprises. These efforts, in turn, underpinned the success of the government’s Eurobond issue in the fall of 2017 – a key market indicator of trust in the government’s investor-friendly reforms. This was further echoed in a survey undertaken by the Institutional Investor in the second half of 2017, which rated Ukraine #1 on a list of EMEA countries for potential investment. In similar fashion, Ukraine improved its position in the World Bank’s Ease of Doing Business in 2018 to #76, a rise of 61 points over the last 5 years.
We know that things will not get any easier in the immediate future. Ukraine however remains a challenging, yet rewarding environment for business and that is precisely what makes it Europe’s last big truly emerging market – the region’s final great investment opportunity.