The main message of Ukrainian delegation for American business lied in the promise to improve the working conditions of foreign investors.
Showed the progress
President of АСС in Ukraine, Andrey Gunder sees the main goal of the visit of Ukrainian residents to the business forum in showing their progress to American investors and sharing planes for future. Furthermore there were investors which were ready to invest billions of dollars.
According to the Ministry of Economic Development of Ukraine, a range of investment companies is ready to exceed the amount of funding for Ukrainian projects.
In the words of one of the members of Ukrainian delegation, during the closed-door negotiations, were mentioned different companies of energetic, IT, agro, pharmaceutical and aero- spheres. Among them were: Cargill, Rozetka, Amazon.
It became known that a share in the biggest Ukrainian internet-shop Rozetka.ua was bought by Horizon Capital investment Fund. Apart from that, American companies invest $1 bln in agricultural equipment purchasing for Ukraine, which improve the quality of yield.
American company TrailStone, which invests in oil and gas extraction, is going to start offering the services of sale and purchase of gas on Ukrainian market. NJSC Naftogaz Ukraina and American Frontera Resources Corporation signed the memorandum of cooperation in oil and gas extraction investment in Ukraine.
Fears of investor
A lot of observers confirm that theoretically it is possible to interest investor in investing in Ukraine, but in reality it is not that simple.
Alexander Paskhaver, the counsellor of the President of Ukraine, understands that current government is confronted by the similar questions about unfavorable investment environment, as the previous one.
After negotiating with lots of American investors, Ukrainian delegation arrived at the conclusion that it is hard to attract new businessmen, which don`t have experience of investing in Ukraine, and it would be much easier to convince those, who have already worked with Ukrainian market.
If present investors, who work in Ukraine, will share their negative experience with others, it would be impossible for us to attract new investors.
Foreign investor still isn`t sure, if he can preserve or dispute the rights on property in Ukraine. They are also still dissatisfied with law-enforcement agencies` activity, high level of corruption and bureaucracy and holes in labor and tax legislations.
American investors, who already work in Ukraine, also have problems with fiscal policy.
Consequently, during the forum the president of State Fiscal Service of Ukraine promised to get rid of tax holes. It would be good indeed, if conscientious taxpayers stop drugging the burden of those, who don`t pay taxes.
Recently appointed business-ombudsman Algirdas Shemeta confirms, that only for the first month of his being on the post he received more than hundred complaints from Ukrainian companies, and in most cases they concerned the State Fiscal Service of Ukraine.
Tymofey Mylovanov believes that investors need real proofs from Arseniy Yatsenuk about fight against corruption, and not some interviews in mass media.
Privatization or sale?
Potential investors are interested in IT sphere of Ukraine and also energetics, namely reactors, fuel and infrastructure development. Ukrainian agrarian sector is also attractive for investors.
According to the observer, if foreign investors start working in industries, which are attractive for them, then sooner their interests will spread on other spheres of Ukrainian economy.
Prime Minister Arseniy Yatenyuk accentuated on attraction of American investors to the process of privatization of Ukrainian governmental enterprises. Participation of American investors in privatization of Ukrcentrenergo and Odesskiy priportovuy zavod was discussed on the forum.
Counsellor of Minister of Economic Affairs Adomas Audickas believes that for successful performing of privatization, Ukraine should make this process clear and thorough, as it was in the case of Kryvorozhstal and tender on 3G connection.
Some investors are scared that current privatization in fact can overgrow into the Christmas sale or traditional for Ukraine assets split-up.
It is worth noticing that while American investors are being attracted to invest in Ukrainian assets, enterprises are being driven to unprofitability condition, for local players to buy them at less cost.
In fact not a single enterprise is ready for privatization. And on those units, which can be sold, are the subject to split-up, and their property is being underpriced before the sell.
For the foreign investor low price can also be profitable, but it is disadvantageous for government, which has problems with budget fullness.
Adomas Audickas in response to complaints towards the Cabinet of Ministers about delayed privatization of governmental enterprises is also asking the question: and when it is going to be the right time? He thinks, that at the moment, nobody can say when it is going to be a good time for privatization.
