FDI article about Ukraine


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FDI article about Ukraine

  1. 1. reGiONs eUrOPe PrOFile: YUlia tYmOShenkO Calmamid thechaos The PasT few years haVe beeN TurbuleNT eVeN by ukraiNe’s sTaNDarDs, buT Prime miNisTer yulia TymOsheNkO iNsisTs The siTuaTiON will seTTle afTer NexT year’s PresiDeNTial eleCTiONs, wriTes Courtney Fingar F CUrriCUlUm Vitae rom the outside looking in, it is difficult ahead of her keynote address. She is a contro- to see how exactly Ukraine works as an versial yet charismatic figure with a compli- yulia TymOsheNkO entity, or how it stays together. It is a frac- cated biography, from oligarch and so-called 2007 tious, bipolar country, all but pulled in half by ‘gas princess’ who made a fortune in the Ukraine tensions both internal and external. So, how energy industry, to antagonist in the Orange Prime minister to go about pursuing a co-ordinated, cohesive Revolution that followed questionable presi- 1999-2001 investment promotion strategy and national economic development plan? dential elections in November 2004 and brought her erstwhile ally Viktor Yushchenko Ukraine Vice-premier minister That question was a hot one at the Lviv to power (whom she will challenge in presi- International Economic Forum, which was dential elections in January 2010). 1998 held in early October. InvestUkraine, the Speaking to fDi (in Ukrainian) on the side- Ukraine Parliament Deputy of parliament national centre for investment promotion, is lines of the forum, she is every bit the parti- working to resolve the question, and its new san, pinning the blame on political opponents 1998 director, Olena Hantsyak-Kaskiv, was on hand, and positioning her bloc as the solution to the Strategic Committee on taking lots of notes throughout discussions instability, although, it must be said, with no Budgeting of the Ukraine and eager to glean best practices from the small amount of charm. Parliament Chairwoman international participants. “Indeed, right now there is a political crisis The most interesting domestic participant, in Ukraine that has been caused by two factors. however, was the one who is a central player in First of all, it’s an absolutely unprofessional the divisive, tumultuous politics of the coun- constitutional reform conducted during the try but also perhaps the only one with the star last presidential elections with all its conse- wattage to raise (if not improve, which is a quences right now; and, secondly, [we are fac- matter of opinion) its profile internationally. ing] the next presidential elections which always, in any democratic society, mean com- Charismatic figurehead petition and today complicate relations Appearing at the final session of the event, between all presidential candidates,” she says. prime minister Yulia Tymoshenko draws a “However, I do hope that by the middle of standing-room-only crowd – a diminutive, doll- next February the rivalry will be over, and like figure who sits demurely with ankles then the Ukrainian parliament, and all pol- crossed wearing a white lace dress and famous itical forces, will be ready for a new con- blonde braid wrapped around the top of her stitutional reform that would clean this intol- head, while introductory remarks are made erable chaos.” Opportunities remain Chaos, certainly, is not a state that investors enjoy – economic, political or otherwise. Yet the prime minister would urge investors not to bide their time while she works the political angle and while the economy seeks a way back immense possibilities from the brink. lie in the energy “I believe that even today neither the politi- sector, where Ukraine cal situation nor the current crisis should pre- vent investors from bringing investments into lags behind in an Ukraine, as right now there are most suitable efficient power- opportunities for that,” she says. Foremost among these opportunities, from consUming of both the prime minister’s perspective, include the indUstrial and energy sector – an area she knows intimately and a hot-button issue if ever there was one, hoUsehold sectors. given the geopolitical complexities surround- we need investors ing European energy dependency on Russia, and Russia’s willingness to make full political use of this upper hand. “Ukraine indeed offers great opportuni- 36 October/November 2009
  2. 2. reGiONs eUrOPe ties; particularly, immense possibilities lie in the energy sector, where Ukraine lags behind in an efficient power-consuming of both industrial and household sectors. That’s why Ukraine needs investors particularly in this sector,” she says. The prime minister devoted a decent chunk of her speech at the forum to promot- ing renewable energy initiatives. “Today we have everything in place for Ukraine to join the common efforts for using alternative sources of energy,” she said. tax benefits on renewable energy From January 1, 2010, new legislation will come into force under which companies involved in using alternative regenerative sources of energy will be exempt from paying taxes for 10 years. It is a significant change. “Currently in the whole spreadsheet of the Ukrainian energy consumption, it’s only 0.83% that is generated from using alternative energy sources. At the same time in [devel- oped] countries, where they are much more involved in this matter, a share of energy com- ing from those sources is up to 15% and in cer- tain cases even to 25%,” she says. “We have to remember that Ukraine has simply unlimited resources that can be used as regenerative alternative sources of energy. That’s why I would like us to work more on this problem... This is the exciting and new prospects for the potential investors into our economy.” Days after the Lviv event, she told local media that Ukraine will cut purchases of Russian gas next year, following a statement by Gazprom CEO Alexei Miller that the com- pany will not reduce the volumes of gas sup- plied to Ukraine in 2010. Energy sector importance aside, Ukraine is still largely an agricultural country. It offers “the highest-quality soils”, which have not been fully exploited for agribusiness. “That is why it is necessary for the future investors to come here and assess the current situation to decide what investments are needed and how they would work in the most efficient way,” Ms Tymoshenko comments to fDi before mak- ing her way through the crush of people all shouting for her attention. “They have to come here to work as this sector offers great oppor- tunities and markets for the produce, as well clockwise from top: Ukraine prime minister yulia tymoshenko; president viktor yushchenko; as fantastic export potential.” ■ gazprom, the russian oil company which Ukraine has been at odds with October/November 2009 37