Matiyeshyn on Europe, through a Ukrainian eye

In conditions of growth of economic risks for the world and Ukraine, the question of attraction of investments acquires a special topicality.

World media and international organizations publicly point to challenges and risks linked with investment possibilities of Ukraine in 2012. For example, according to 2011 Forbes rating Ukraine has ended up 105-th among 134 countries, going down by 7 positions in comparison with 2010. This is according to such basic criteria as property rights, innovations, taxes, development of technologies, level of corruption, bureaucracy and protection of investors.

At the same time, according to the “Doing Business-2012” rating, prepared by the World bank and International Finance Corporation, in 2011 Ukraine has fallen from 149 to 152 position out of 183 countries. At the end of 2011 the level of Ukraine’s attractiveness for foreign investors has fallen to a record-breaking low level – even in the crisis year of 2009 this indicator was higher. Pressure from the Ukrainian authorities, corruption, a new Tax Code and non-transparency of legislation are among the main reasons of this downfall. This is a reaction of the world business commonwealth to actions of the Ukrainian authorities concerning the maintenance of an investment climate in the state.

An indicative fact is that Cyprus continues to remain the greatest investor of Ukraine. The Ukrainian authorities obstinately continue to refrain from including Cyprus into the list of offshores through which the capital escapes Ukraine. Only according to official figures of the State Statistics Committee, in 2010 Ukrainian companies invested into Cyprus a sum of 6,5 billion dollars. Simultaneously, in 2010 Cyprian companies invested 9,5 billion dollars into the Ukrainian economy, which made up 22 % out of a total amount of direct foreign investments into Ukraine this year.

These and other figures show that even a big Ukrainian business doesn’t trust its government.

Ukraine became the last European country, in which the elite prefers to launder the capital rather than to form its own successful state.

It doesn’t understand all the hopelessness of this path. At the same time, this adds optimism to people — this won’t last long.

Social responsibility of the big business before its own state, especially in times of the present crisis, is now topical in the West. Maybe, it’s time for the biggest Ukrainian businessmen to follow the example of big American and French businessmen (W.Buffett, B.Gates, 16 top-managers and billionaires of France and others) who are voluntary ready to pay higher taxes to their states during crisis? Or we still should expect the time when the Ukrainian people will be compelled to take back a part of Ukrainian funds from the offshores and other “islands” by means of a protest for the maintenance of their own survival? This will lead to the hunt for the capitals.

Many questions remain open. Hence, Ukrainian investors still have possibilities left to change the situation for the better. I am sure that following the example of the Ukrainian business, foreign investors will also increase the level of financial confidence in the Ukrainian state.

This will be a game where all parties win. Or there will come the wind of change.

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