PUBLIC RADIO
Kyiv, Ukraine
10 December 2002

Over the past ten years foreigners have invested in Ukraine the same amount of money they have pumped into Poland's economy in the first eight months of 2002. The low level of foreign investment in Ukraine was addressed by experts at the Monday conference in the Verkhovna Rada.

Not only is the level of investment too low, its distribution in Ukraine is stunningly unequal, with a resident of Kyiv getting $625 in foreign investment and a resident of Chernivtsi or Khmelnytsky oblasts a mere $14. Although Ukraine's economy has received the total of $680 mn in investment in the nine months, many investors have withdrawn their money from the country over the same period. Says deputy director of the Institute of Reforms Markiyan Datsyshyn, "As the level of repatriation of investment has increased, there has not been any serious growth of investment".

To attract foreign investment, experts believe, steady economic growth, market infrastructure, and human resources are needed, with only the latter factor sitting well with foreign investors. Says expert of the Sigma Blazer investment fund Viktor Ekker, "What is the situation in Ukraine today? Not very encouraging. Free economic zones have failed to come up to the expectations, the stock market is almost at the freezing point, the state's investment ratings are low, and there has been no real headway in the privatization of state-owned strategic enterprises".

Representatives of the state tried to provide positive arguments, with Volodymyr Kovalenko of the Economy Ministry saying, "We have approved a program to enhance Ukraine's investment profile, and many of the program's concepts have found their way into the draft 2003 budget".

Still, foreigners continue to invest primarily in Ukraine's food industry and trade, with a mere 8% of investment going in machine building and 4% in the chemical industry.