UKRAINE:

LARGEST MARKET IN EASTERN EUROPE

COUNTRY PROFILE… DID YOU KNOW?

Population 46,2 million of which 68% - urban population

Territory 603,7 thousand sq.km = the largest in Europe

GDP per capita – EUR 2,400 (as of 1H2008)

the geographical center of Europe is situated in Ukraine

#1 granite reserve in the world with the 45% of the world reserve

6th in the world in production capacity of metals and mining

56% of land is arable and 1/3 of the world’s “black soil” is found here

And still….

28% of population living under the nationally-defined poverty line

Unemployment: 3% (end of 2008); 9% (forecasted in 2009)

Average life expectancy 65Y male, 76Y female

FOREIGN DIRECT INVESTMENT IN UKRAINE(by sectors, by years, by source countries as of July, 2008)

WHY INVEST IN UKRAINE?

Strategic market access at the crossroads of East-West and North-South trade routes + WTO accession

Sizable domestic market (46 mln consumers – the largest market in EE)

Low labour costs and highly qualified human capital

Rich in natural resources

PRIORITY SECTORS FOR INVESTMENTS

SECTOR: Alternative Energy

Biomass and wind are primary renewable sources of energy

Sector capacity (annual fuel demand): 110-140 mln tons of the “conditional fuel” (currently 42%)

Biomass potential: 22 mln tons

Territory: 42 mln hectares of arable land for rape production

Investments needed for sector in 2003-2010: $ 2,57 bln.

Special Governmental support program exists (Law on bio-fuel development adopted in June 2007)

COMPETITIVE ADVANTAGES:

availability of land

low-cost labor

SECTOR: ICT / High Tech

Total market size - about $ 2,2 billion

Growth rate in 2006 - 28% (Russia – 18%, Poland – 15%, Kazakhstan – 33%)

4,000 companies and appx. 47,000 workers involved

Competitive advantages include:

Qualified and relatively low cost skilled labor

Highly-ranked technical schools

Medium-high innovation level: Technological Activity Index – 0.600 (ranked 39 among 117 countries)

Ukraine rated 5th in terms of the number of certified IT specialists by Brainbench

SECTOR: Agriculture and Food-Processing

Total market size - about $1 billion

Annual growth rate of 20%

COMPETITIVE ADVANTAGES:

More arable land than France and Germany combined

Excellent soils in large fields and very large farms available

Good profits in simple arable cropping at low rents

good geographic position for large export markets: Russia, Kazahstan, and EU member states

skilled and inexpensive laborINVESTMENT OPPORTUNITIES:

Processing of fruits and vegetables

Drying and freezing of fruits and vegetables

SECTOR: Infrastructure and Logistics Development

Investment in infrastructure

Roads, hotels, airports, bridges etc.

Logistics development incentives:

4 out of 10 European transport corridors run through Ukrainian territory

Great amount of construction material deposits in Ukraine

EUR 20 billion are allocated by the EC and EIB for net Trans-European transport corridor development

Greater openness of Ukrainian economy as a result of WTO accession

Growth of retail trade in Ukraine

SECTOR: Tourism

Potential recreational territories -

12,8% of the country's area

Unique health-improving resources: more than 500 mineral water and clay deposits and 47% of beaches situated along the sea shore territory of the Black Sea and Azov Sea

Diversity of landscape: sea, mountains, steppe…

Ecotourism, cultural and historical tourism, village tourism, gastronomic tourism are niche opportunities!!!

USEFUL LINKS

Ukrainian Center for Foreign Investment Promotion:

http://www.investukraine.org/

Doing Business in Ukraine (Government Portal)

http://kmu.gov.ua/control/en/publish/category?cat_id=929504

Investment Proposals of Ukrainian Companies (Ukrainian Chamber of Commerce and Industry)

http://www.ucci.org.ua/dnload/invest.pdf

Doing Business in Ukraine (PWC, 2007):

http://www.pwc.com/Extweb/pwcpublications.nsf/docid/975CF16F2D406D9180257045004291BA

THANK YOU!

Yuliya Shcherbinina

Public-Private Partnership Officer

United Nations in Ukraine1 Klovsky Uzviz, Kyiv, 01021Tel: +380 44 253 9363Fax: +380 44 253 2607yuliya.shcherbinina@un.org.ua