4 April, 2013
NEWSRELEASE
Steps in place
Confidence of investors in the 1st quarter of 2013
The EBA’s Ukrainian Investment Attractiveness Index for the first quarter of 2013 remained unchanged in comparison with the same measurement at the end of last year - 2.12 points out of a possible five. 85% of respondents think that no changes for the better have occurred, and this is the biggest indicator of the absence of positive changes in the history of the index which dates back to 2008.
Results of the Investment Attractiveness Index
The third quarter of 2008 – first quarter of 2013
Investment Attractiveness Index
Methodology: Investment Attractiveness Index is calculated using:
-Investment climate in Ukraine (1.7 points)
-Dynamics of the investment climate: last 3 months (2.1 points)
-Expected dynamics of the investment climate: the next 3 months (2.3 points)
-Utility for new entrants to invest in Ukraine: last 3 months (2.2 points)
-Investment climate in the key sector: the next 3 months (2.5 points)
If we compare the results of 4 components from the 4th quarter of 2012 with the current metrics, we see that there is absolutely no difference, which indicates an absence of significant changes in investor confidence.
When asked what changes the business community perceived, respondents answered as follows - 85% think that there have been practically no positive changes in the first quarter of year 2013 - the biggest indicator of the absence of positive change for the entire history of the index.
Experts believe positive shifts occured regarding income tax reductions in some sectors, primarily in the IT sector and the energy sector, as well as a small shift toward European integration and improving relations with the IMF.
Among the other positive changes are some legislative changes, which are considered to be related to problems of the judicial branch of government, the stability of the hryvna, changes in the licensing of pharmaceutical products, moratorium on land sales, cheaper credit, the new property registration procedure.
Like in previous periods, businesspeople point out the pressure that is related to the political situation - corruption, inability to get a fair hearing in court, the redistribution of business in favour of the political elite. Positive innovations have taken place in 2012 but international businesspeople are increasingly talking about the inability to work honestly in Ukraine.
Tomas Fiala, EBA President, Chief Executive Officer, Dragon Capital:
“Our Index has been flat at a low level already for the 6th quarter. Without a new IMF program and completing tasks necessary for the signing of the AA with the EU it will stay low in 2Q as well, unfortunately.”
Negative Changes in Investment Climate during the last 3 months
Anna Derevyanko, Executive Director of the European Business Association:
«It’s not a surprise that the index of investment attractiveness of Ukraine remained at the same low level. It’s a pity, but the systematic problems of Ukraine do not disappear but continue to influence investors’ confidence directly and indirectly. Reduced purchasing power, limited access to credit, and lack of equal conditions for doing business together with bureaucratic and administrative pressure on business and an unfair judicial system – all these factors reduce the attractiveness of Ukraine for investors. A certain number of respondents, although small, even think that these conditions are incompatible with the process of doing business in our country.
But at the same time, we understand that a miracle can’t happen in just a short period of time, and we appreciate the authorities’ efforts, directed to overcome the underlying problems and drawbacks of the Ukrainian investment climate. Currently, the main priorities are to eliminate the shadow economy, minimize fiscal pressures and to boost customs and tax reforms».
For additional comments please contact Yulia Gotsyk, EBA Communications Team Leader, by telephone:
+38 (044) 496-06-01, mobile +380 50692 9002 or by e-mail:
INFORMATION:
The Investment Attractiveness Index of Ukraine: Theevaluation of the Investment Attractiveness Index of Ukraine is conducted by the European Business Association with the support of the research company InMind. The index is based on regular monitoring of the investment climate of Ukraine by the first persons of the EBA member-companies.
European Business Association (EBA) - the premier organisation for foreign business in Ukraine - brings together 965 European, Ukrainian and international companies. The EBA was established in 1999 as a forum for discussion and resolution of problems facing the private sector in Ukraine. This initiative of business people was supported by the European Commission. Being a non-profit Association of legal entities, the EBA sees its core mission as representing the interests of European and domestic investors in Ukraine, and improving the investment climate has been the EBA’s major concern since the moment it was founded.Please visit our web-site for additional information .
Details on
InMind, - full-research agency, a representative of the international network Factum Group in Ukraine.InMind provides a full range of services in marketing research and consulting: quantitative and qualitative market research, consumer product, and innovative analysis and research audit. InMind specialists have over 18 years experience in the Ukrainian market research.