Photo by Viktor Talashuk on Unsplash

The ‘Make in UA’ investment forum had several prominent speakers. Among them was Ukrainian Prime Minister Denys Shmyhal, who said that the Ukrainian government is working on several approaches to better the investment climate.

The Second Annual UkraineInvest Forum was held earlier today with prominent speakers attending such as the Ukrainian Prime Minister Denys Shmyhal. The event focussed on the potential in the manufacturing sector in Ukraine and highlighted reform work.

Shmyhal said that Ukraine has passed several reforms in the recent year such as the quality implementation law, the investment nanny, and the government’s privatization of several state companies which he said would also increase next year. 

“We have already received two investment projects (under the investment nanny project) and we have 27 registered requests for other projects,” said Shmyhal, “And I think that the process will go on. We expect to see the number of investments grow.”

He added that the government will work on several reforms next year and that the focus will be on creating several industrial parks and making it easier to get access to finance. 

“Industrial parks with economic incentives… can be the starting point for economic development. Next year, we will talk more about privatization… and I expect a boom in privatization next year,” said Shmyhal, “We are also working on the digitalization of the country. Ukraine is a leader in this and the government continues to transform and shift to digital communication with business and civil society, to make the relationship between the government and the businesses corruption-free, transparent, and comfortable.”

Feedback is important

Among other things, Shmyhal said that Ukraine will continue to push for more integration with the EU such as implementing the Open Skies Agreement and working for free-roaming. In addition, he said that Ukraine will focus on modernizing its customs services which include modernizing crossing points to minimize the transportation time.

“We have an ambitious goal of increasing GDP two-fold by 2030,” said Shmyhal, who added that it is important to have a direct dialogue between the government and businesses. 

Halyna Yanchenko is a Member of the Parliament of Ukraine and Head of the Temporary Special Commission of the Verkhovna Rada on Protection of Investors’ Rights. She also pointed out that dialog is important to improve the investment climate. 

“We can say that all branches of the government are now cooperating,” said Yanchenko before talking about the many reforms Ukraine has approved, “All of this is done to make it more comfortable to work in Ukraine and it is a political message that the Ukrainian government is committed to cooperating and that the Ukrainian government welcomes foreign and domestic investors.”

“But all these initiatives mentioned by the Prime Minister and me will not work on a large scale without the trust from the private sector. It highlights the importance of formal and informal communication. That we receive feedback from the private sector,” she said. 

Davyd Arakhamia, who is also a member of the Servant of the People political party, acknowledged that Ukraine still has several problems. 

“Companies often hire a legal company before making an investment to simplify everything,” said Arakhamia, adding that Ukraine has to prevent investors from halting investments due to problems with too little state support and too many regulations. “It is our task to solve this.”

Oleh Nemchinov, who is the Minister of the Cabinet of Ministers of Ukraine, agreed. 

“We are a challenged country but a country that wants to develop. Step by step, we are moving towards reaching the 2030 targets,” he said.

A new program was presented

UkraineInvest is the government’s investment promotion office and they used the event to present the program ‘Make in UA’ with the focus on what can be done to improve the manufacturing sector in Ukraine. In two videos, Ukraineinvest highlighted that Ukraine has done several improvements over the last several years such as the landreform.

Sergiy Tsivkach is the Executive Director at UkraineInvest. He told the participants that it is important for Ukraine to increase manufacturing to create more jobs and innovation. He also said that manufacturing this year stood for 11.7 percent of the Ukrainian GDP, which is the highest in three years but that this number is expected to grow. 

“We had our first formal request today (under the new program) and one more is on its way. The first project is always the hardest but after that, the number of projects will increase,” said Tsivkach, who pointed out that Ukraine expects that the foreign direct investments from countries such as the Scandinavian ones will see four times increase over the next few years. 

Sergiy Tsivkach, Executive Director of UkraineInvest. Photo: Stefan Weichert

The Ukrainian government has previously passed a decentralization reform. It makes the Ukrainian regions much more dependent on tax revenues from local companies. The law was passed to give the regions larger incentives to improve the business environment. Ivan Lukeria, who is the Deputy Minister for Communities and Territories Development of Ukraine, said that the reform is very important. 

“Each region now has their own strategic plan for how to compete with other regions,” he said, “… To create comfortable living conditions in communities, which also includes attracting investors (with better schools and infrastructure).”

“The industrial parks are also a possibility for each investor with a much lower threshold to bring in local capital. It is a plot of land with all the necessary infrastructure and reduces costs for private investors. For the next year, the state budget provides for building infrastructure parks… Our plan is to support our investors.”

Jason Pellmar is the Regional Manager in Ukraine, Belarus, and Moldova at International Finance Corporation, IFC. He said that industrial parks are very important. 

“It is good to hear this talk about industrial parks. It makes a lot of sense. But let me add that it should be Eco-industrial parks. Because it is also about aligning with the EU green deal,” said Pellmar, who mentioned that the EU green deal is an opportunity for Ukraine to come on board if it acts now. If not, Ukraine might be left out of key markets, he added.