eba investment attractiveness index 1 st half of 2016

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Joy Arlene McDonald
6 years ago
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1 eba investment attractiveness index 1 st half of 2016

2 [ ] What do you think about the investment climate (IC) in Ukraine? [ ] How would you estimate the IC for your company now if compared to the previous 6 months? [ ] What are your expectations regarding the IC in the upcoming 6 months? [ ] Will it be profitable for new foreign investors to invest in Ukraine in the upcoming 6 months? [ ] What are your expectations in terms of the conditions for doing business in your main sector within the upcoming 6 months? 92 CEOs of the leading Ukraine s businesses- members of the EBA May 2016

4 investment attractiveness index POSITIVE 5 4 NEUTRAL VALUE 3 3,25 3,28 3,2 3,08 2,64 2,56 2,57 2,22 3,4 3,39 2,56 2,19 2,18 2,19 2,14 2,12 2,12 2,17 2,39 2,72 2,74 2,65 2,5 2,51 2,66 2,56 2,57 2,88 2 1,81 NEGATIVE 1 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II ІІІ IV 1st half

5 [ eba investment index ] 1 st half 2016 [ 11% think the climate is favorable] The most progressive members of the Government left. Continuous slow speed of reform and accusations in corruption at all levels.

6 [ positive changes] 1 st half 2016 None Currency Stability New Government I am happy that the prices for natural gas have been unified as this was a massive source of corruption. I'm happy that a new government has finally been formed though I don't know how long it will last. Some minor efforts to attract investors appeared in Ivano-Frankivsk and Lviv regions. Nothing worth attention at the Central/Kyiv level.

7 [ eba investment index ] 1 st half 2016 [ Negative changes as seen by business ]

8 [ eba investment index ] top negative changes No changes Lack of progress on reforms Corruption

9 investment climate [current] 61% rather unfavourable 17% extremely unfavourable neutral 11% 3% 8% 11% of CEOs said the investment climate in Ukraine is favorable. Resignation of Minister Aivaras Abromavicius shocked the self confidence of Ukrainian politicians and led to a reset of power. This, alongside Leszek Balcerowcz accepting the role of 'chief PR face for reform should increase expectations of positive changes for both internal and external stakeholders.

10 [ eba investment index dynamics ] last 6 months Most negative changes happened in 2014: production of fake products, increased illegal imports, foreign currency payment restrictions.

11 investment climate [last 6 months] people say: 50% does not change Nothing noticeable - remained the same. 15% slightly declined 9% notably declined 22% a bit improved

12 next 6 months

13 investment climate [next 6 months] In-depth financial monitoring check-ups improve business transparency. New govt. formed, but still too early to assess their effectiveness and 'will' to drive reforms.

14 investment climate [new entrants] 30% say Ukraine will be slightly or very unprofitable for newcomers

investment climate [progress] CEOs do not see court system

any signs of financial market stabilisation see no land reform

progress with VAT refunds saw simplification in customs rules

15 investment climate [progress] CEOs do not see court system reform and are not satisfied with corruption fight do not see any signs of financial market stabilisation see no land reform do not see any simplification of customs rules do not see any progress with VAT refunds saw simplification in customs rules think trade became more simple and easy see progress with VAT refunds

16 bonus question: investment climate [bonus]

17 investment climate [which steps do you expect from the newly appointed team of the Cabinet? ]

18 investment climate [will they manage to implement reforms?] (Probably) no There are hopes Hard to say Hopes are still there. The Cabinet is not revolutionary, hopefully it will evolve towards reforms and maintain the direction toward a liberal, democratic, pro- European open economy. I think we will have the same problems due to the fact we have the same people there.

19 investment climate [what should be done] 1) Limitation on dividends for foreign investors should be canceled. 2) FX/devaluation of local currency has to be at reasonably low level, inflation controlled and reduced. 3) Reforms of Procurator and judiciary has to be carried out. 4) Customs have to be reformed and be under strict monitoring to significantly reduce corruption. Authorize dividends payments - no investor will come to a country where he is not sure to be able to transfer back the benefits from his investments

20 investment climate [what should be done] fighting against corruption court & prosecutor reform currency regulation banking reform tax reform faster reforms reduce bureaucracy

21 please contact the EBA Communications team for more information

Oleg Ustenko, Julia Segura, Valentyn Povroznyuk Edilberto L. Segura

Oleg Ustenko, Julia Segura, Valentyn Povroznyuk Edilberto L. Segura 217 Executive Summary The ceasefire in Eastern Ukraine -- a base condition of the Minsk-2 Agreement -- continues to be violated by the Russian-backed separatists. Rebels continue to fire against Ukrainian