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Ukrainian government promotes investment
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21 June 2010
The newly elected Ukrainian authorities
have announced their intention of
attracting investment into the country.
To encourage investors they plan to
make the economy more transparent
and competitive. The President’s new
administration has promised that there
will be a change in attitudes toward the
sale of state companies.
Such sales will be necessary to achieve the Ukrainian
authority’s economic forecasts for the year ahead. In
particular, the forecast for GDP growth is put at 3.7%, the
consumer price index at 112.2%, producer price index
116% based upon an average annual calculation. Real
wages are predicted to grow by 5% and the minimum level
is set to increase by 23%. The government believes that
unemployment will fall by 8%. This positive view extends
to trade where the forecast is that the volume of exports
will grow by 15.3%.
Unlike the previous administration, Ukraine’s new
President Viktor Yanukovych and his Prime Minister
Nikolay Azarov, have been able to demonstrate a
coordinated approach to the economy. “On the second
day of the inauguration, the President of Ukraine issued
three edicts, two of which concerned the creation of the
committee for economic reform and fighting corruption,”
said the Deputy Chief of Staff Administration of the
President of Ukraine Andrii Goncharuk. Yanukovych also
stated his ambitious intention that during the forthcoming
ten-year period Ukraine plans to join to the 20 most
developed countries in the world.
By the end of this year it is forecast that the government
will adopt a new Internal Revenue Code where the valueadded
tax and corporate income tax will be lowered. Also
the Ukrainian Authority promises to reduce the number
of regulations with which companies must comply. “There
are 86 inspecting organisations. We’ve got a whole army
of unnecessary people (intervening) for both the state
and business. We plan to cut their numbers by more than
half,” said the Deputy Prime Minister of Ukraine Serhiy
Tigipko.
The government promises to change the country’s
approach to privatisation of state enterprises, making
this process more transparent and understandable for
investors. Among the state companies which may be
added to the list of those to be privatised are energy
generating and energy distribution companies, and the
Ukrainian Telecommunication Company. There are also
plans to revitalise the agriculture sector through private
investment. Among other sectors that may be included
in the privatisation plans are machine-building plants,
such as the Lugansk diesel locomotive plant. “I want to
accentuate the point that such serious objectives need a
suitable framework,” explained Tigipko.
Source: Aleksandra Nekrashuk,
Ukraine Business Insight
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