“Lack of confidence in the judiciary” was considered the main obstacle to foreign investment for the first time in five years.
About 48% of foreign investors believe that Ukraine has become less attractive to invest, 42% consider the investment climate largely unchanged, and only 9% see an improvement.
According to Dragon Capital, this is evidenced by the results of the fifth annual foreign investor survey, conducted by the European Business Association, Dragon Capital and the Center for Economic Strategy in late October 2020.
“For the first time in five years, a survey of distrust in the judiciary topped the barrier against foreign investment. Rampant corruption, the leader of previous years, ranked second. These two barriers are the most important for both strategic investors and financiers,” the report said.
The monopoly of markets and the oligarchy’s takeover of power is the third obstacle, although strategic investors also face significant hurdles due to cumbersome and unstable legislation.
Government borrowing defaults are called the biggest threat to the investment climate. The second and third positions came as a result of moving away from democratic values and changing the geopolitical course.
Strategic investors also see a threat in excessively flexible fiscal and monetary policies, which poses risks to macroeconomic stability. Portfolio investors consider the inability to reach an agreement with the International Monetary Fund as the greatest threat after default.
Dragon Capital
Dragon Capital Investment Company (CEO – businessman Thomas Fiala) was founded in 2000 in Kiev and specializes in investment banking, brokerage services and real estate management. In 2007-2017, the minority stake in Dragon Capital was owned by one of the largest banks in the world, Goldman Sachs. Dragon Capital is under the management of about 30 commercial properties with a total area of more than 680 thousand square meters. M, which makes the company one of the largest players in the real estate market in Ukraine.
EBA
The European Business Association is a non-profit international business organization in Ukraine, founded in 1999. It unites more than 900 European, Ukrainian and global companies.
ITS S.
The Center for Economic Strategies is a non-governmental research center on economic policy, established in May 2015. The mission of the CIS is to support reforms in Ukraine in order to achieve sustainable economic growth. The Center conducts independent analysis of key aspects of public policy, as well as works to strengthen public support for reforms.
Ukraine and foreign investment
On June 26, 2020, the National Bank of Ukraine improved the foreign direct investment account. According to international standards
From now on, the balance of payments takes into account the reinvested income of the enterprises, that is, the income of the foreign direct investors includes not only dividends, but also their share of retained earnings for the project. These changes are in line with International Monetary Fund statistics standards and practice in most countries.
And because of the Coronavirus, the volume of foreign direct investment in the world decreased in the first half of 2020 by 49% compared to the same period in 2019