#Official Commentary of Marina Zheynova on attractiveness of Ukrainian market for foreign investors
Another foreign company, namely, the German company Henkell & Sohnlein Sektkellereien KG may leave the Ukrainian market. It would seem that the Ukrainian authorities have to do everything possible to avoid capital flight and keep investors, but no. In practice, opposite happens.
Apparently, as is usually the case in Ukraine, the sustainable development strategy of “Ukraine-2020” approved by the decree of Petro Poroshenko will remain on paper. It is significant that one of the paragraphs reads: “Net receipts of foreign direct investment up to 2020 should amount to more than $ 40 billion.”
Someone may say that now in Ukraine the situation is good for attracting foreign capital. The capitalization of Ukrainian companies hits the bottom, because a far-sighted investor will not miss the opportunity to purchase some assets for next to nothing. But foreign investors, by contrast, are fleeing the country.
In my opinion, one of the reasons for the inability of foreign companies to survive in Ukraine is impossibility to compete with those who set the rules of the game. Because a significant portion of investments in the economy of Ukraine in the past two years of funding – it is money of Ukrainian oligarchs. But they enter either through offshore or through the company with the western residence permits, but that hardly changes the case.
The point is that if we change signboard, the owners remain the same, as well as tasks, such as tax avoidance in order to minimize the taxable profits and, naturally, in the absence of political stability, concealment of the real owners’ ‘factories, newspapers and steamships’.
But real foreign investors are leaving Ukraine, commenting on their decision like, “due to the unfavorable economic situation.”
Authorities, of course, attribute lack of foreign investment to the war, but investors themselves say it is not a major factor. Investors are interested in risk factors for capital protection. But how to protect capital while the total corruption of the authorities?
I note that in the world ranking of corruption perceptions Ukraine ranked 130 out of 168 positions, being close to Iran, Cameroon, Nepal, Nicaragua and Paraguay.
It is clear that there are classical parameters that deter investors, such as corruption, the lack of transparent and clear for the western investor system of obtaining documentation, presence of a large number of permits, taxation…
But there is also a simple reluctance of Ukrainian oligarchs to intromit foreign investors to industrial enterprises and resources, because oligarchs themselves still are ‘not full’.
In principle, foreign investors don’t really strive to make even at some point the best deals. I think they, in contrast to the ‘patriots’ are not encouraging fence lustration, riots in stores, banks and gas stations, public prosecutor’s chaos and the ‘independent’ judiciary. As they say, money likes silence…
Marina Zheynova, the DPR People’s Council Deputy