Ukraine: Eastern Europe

1
Ukraine Eastern Europes Greatest Market

• Brussels, 27 June, 2007

2
Ukraine introduction

• The second largest country in Europe
• Strategic position at the crossroads between
  Europe and Asia
• The largest Eastern European consumer market with
  47 million people
• 69 of the territory of Ukraine is adapted for
  the agricultural use
• Rich in natural resources (coal, iron ore, gas,
  stone, salt etc.)
• 32 active airports, flights to 45 countries
• 20 seaports and 10 river ports
• 4 out of 10 European transport corridors run
  through Ukraine

• Industry/GDP 27
• Agriculture/GDP 10
• Investment/GDP 19
• Exports to Russia 18, EU 29
• Imports from Russia 40, EU 32
• (data from Dec 2006, source Institute for
  Economic Research and Policy Consulting)

3
Ukraine Investment advantages

• Rapid Growth Rate
• 7 in 2006 6,5 forecasted for 2007
• potential for high investment returns
• Sizable Domestic Market
• rapid growth in purchasing power and consumer
  spending
• Retail trade turnover has increased by 20 over
  the past five years
• Real income accounting for price factors has
  increased by 24 for 2006
• Strategic market access
• geographical location and bilateral/multilateral
  agreements make Ukraine an ideal manufacturing
  base for Middle East and Russian markets
• soon open access for the Ukrainian-based exports
  to the 150 members of WTO
• Low Labor Costs and Highly Qualified Human
  Capital
• one of the lowest salary levels in CEE for hard
  working and loyal labor force - less than 70 USD
  (in agriculture), 150-160 USD (in construction)
  and 170 USD (in transport)
• In 2005, Ukraine was ranked 5th in number of
  certified IT specialist by Brainbench
• Rich in Resources
• 6th in the world production capacities of metal
  and mining
• 40 of the global production of manganese ore is
  located in Ukraine
• 1/3 of the worlds black soil is found in
  Ukraine

4
Ukraine FDI dynamics

• Cumulative FDI inflows in USD billion, as of Jan
  2007

FDI distributed by the main sectors of Ukrainian
economy, as of Jan 2007

Source Ministry of Economy, Ukraine
5
Alternative and renewable energy a promising
sector for investment

• The sector includes alternative (rape,
  biodiesel) and
• renewable
  (wind, sun, water) sources of energy
• - Sector capacity 100 mln tons of the
  conditional fuel
• Biomass potential 22 mln tons
• Territory 42 mln hectares of arable land for
  rape production
• Hydropower potential of the Transcarpathian
  region 2-3 GWt
• Investments needed for sector in 2003-2010
  2,57 bln.
• Special Governmental support program exists
• Law on bio-fuel development adopted in June
  2007
• Kyoto Protocol 150 mln tons of pollutants
  saved annually
• Competitive advantages
• - availability of land
• - low-cost labor

6
Information Technology a promising sector for
investment

• Total market size - about 2,2 billion
• Growth rate in 2006 28
• in comparison 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 2005 in terms of the number
  of certified IT specialists by Brainbench

7
Other sectors with investment potential

• Logistics
• Construction
• Financial Services
• Social Investments
• Agriculture

8
Ukraine Theres never been a better time than
now
Elena PanovaPublic-Private Partnership Officer Ihor Nikolaiko Director
UNDP Ukraine1 Klovsky Uzviz Str., KyivTel 380 44 253 9363Fax [phone]elena.panova_at_undp.org InvestUkraine 28 Druzhby Narodiv Blvd., Kyiv Tel [phone] Fax [phone] inikolaiko_at_investukraine.org