You're reading: Ukraine’s joining to Customs Union not to bring jump in investment, says EBA president

Ukraine's joining to the Customs Union will not bring the long-term positive effects and a jump in investment, apart from the temporary fall in the price of gas – for no more than three years, according to President of the European Business Association (EBA) and Dragon Capital CEO Tomas Fiala has said.

“The joining to the Customs Union will not give the positive effect, compared to the joining to the Free Trade Zone (FTZ). The EU has a larger market – eight times larger. We see the very positive example of Central European countries, which are growing quicker than Russia with its large raw material resource,” Fiala said.

He noted that in Poland, Hungary, the Czech Republic and Slovakia wages are higher, doing business conditions are better, investment usually arrive with know-how, and this is not acquisitions of old assets.

“The strengthening of their national currencies to the dollar thanks to the fact that the investment started arriving in 1990s, the large fall in the deficit of the current account, and many countries have the surplus… As they were open to investments, investments arrived and started producing products for the local market and exports. The effect from joining the FTZ is not only the access to the largest market in the world, but also it will arouse a large splash of investment,” Fiala said.

“Many people are trying to frighten that there is nothing to do for Ukraine on the European market, as its products are not competitive, although again, the positive experience of Central European countries attests to the contrary,” he added.

“The same situation was in Poland and the Czech Republic after 1990, when 90% of foreign trade was oriented to Eastern Europe. Today, 80-90% of trade is oriented to the EU countries. This happened very quickly thanks to investment, modernization and integration,” Fiala said.