Ukraine's government members summed up the state's efforts in improving Ukraine's business climate in a meeting with members of American Chamber of Commerce and European Business Association on June 25.
Prime Minister Arseniy Yatsenyuk, Finance Minister Natalie Jaresko and Economy Minister Aivaras Abromavicius talked of the recent and upcoming reforms in financial and business fields, advocating Ukraine’s increasing investment attractiveness.
“You, the actual investors, are the best advocates of Ukraine and the best advertising for the potential foreign investors,” Yatsenyuk said during the meeting.
The invited participants commended the meeting but pointed out worrisome issues that still remain.
“There is a dialogue. It is constant, high-level and ongoing,” Andy Hunder, president of ACC, said following the meeting.
At the same time, he said that the two main concerns for foreign businesses remain standing. One of them, the slow pace of reforms, looks like it can be amended since the current government, according to Hunder, is the most competent there ever was.
But the second issue, the fight with corruption, wasn’t addressed at the meeting at all, and it remains the problem that worries businesses the most.
The military conflict in eastern territories and the financial crisis have plunged foreign investments in Ukraine by 21 percent since early 2014. The direct foreign investment was $41 billion in April, a fall-back to the amount of 2010.
To bring back the investors, Ukraine has to ensure financial stabilization. That, according to Yatsenyuk, will be reached by restructuring the external debt, the challenge that Finance Minister Jaresko is working on now.
Ukraine’s external state and private debt is $125.9 billion as of first quarter of 2015, which is 110 percent of the country’s gross domestic product. The interest payments on it take up five percent of Ukraine’s GDP, according to Yatsenyuk, which Ukraine can no longer afford.
Ukraine’s four-year and $17.5 billion deal with International Monetary Fund will stabilize the country’s finances and ensure the currency rates don’t jump like they did in February, repelling the businesses that deal with imports, according to Jaresko. The first tranche from the IMF doubled Ukraine’s reserves, she said at the meeting on June 25, helping to avoid bankruptcy.
Apart from the financial stabilization, the government aims to attract investors by publishing the Strategy of Development of Ukraine in early July. Such a document, according to Economy Minister Abromavicius, will ensure that the government and parliament share a common view of the future and the needed reforms. Today, he said, some initiatives of the lawmakers prove a lack of the common understanding.
Next, the government plans to open the trade missions in all of the Ukraine’s major trading partners – beginning with U.S. and China – by the end of 2015.
At the same time, Abromavicius reported to the businesses represented at the meeting that the ministry works to decrease the regulatory pressure on business.
He said that his staff allocated 201 procedures that were “painful” for businesses, and needed to be canceled, and have already removed 84 of them.
Another problem to be soon removed is the Anti-Monopoly Committee, that President Petro Poroshenko recently claimed to be “monopolized by monopolists.”
“We were often criticized for the way it works,” the minister said.
In response to criticism, by the end of 2015 the committee will be redesigned to fit the standards of Ukraine’s foreign partners.
