COMMENTS

Does it make any difference for the economy of Ukraine who, domestic or the foreign investors, dictates the rules of the game on our market?

Ihor DOBRUTSKY, president, Roksolana Company, Kyiv :

“It would be better, of course, for the country as a whole if the domestic investor sets the pace: this means that the economy is strong and the country has money. Conversely, if a foreign investor calls the tune, this testifies the inability of domestic investors to revive the economy. In my opinion, the best option would be a balance between domestic and foreign investments and healthy competition between them. Today’s market has been divided selectively: for example, high tech and telecommunications are taken over by foreign investors, while the production of household items and foodstuffs by domestic investors. The Ukrainian investor is still weak, being able to afford only small investments. But, on the other hand, a large foreign investor will want to come to Ukraine only when he feels there are normal conditions here for the domestic investor. For everybody wants stability above all. It is time to drop the demagogy and say firmly that passing a package of economic laws is now a top priority. As soon as stability sets in and enterprises start working, we will immediately see Western investors; these things are interconnected.”

Volodymyr CHERNIAK, manager, Scandia Company :

“Today the Ukrainian market is dominated by Russian Companies, which have had a good investment ground prepared for them. Suffice it to analyze the latest investments made in Ukraine to come to this conclusion. As to Western investors, we can only expect them to come if they are going to bring over their proven technologies, no longer of use in the West. It is simpler to deal with Ukrainian investors. They need no help; all they need is the opportunity to work normally. What investors also need is stability: they have to know what will happen a few days later. For investment is a serious process: a sizable investment requires detailed calculation of everything at least five years in advance. It does make a difference for the economy of Ukraine, which investors dictate the rules of the game. While the foreign investor will, naturally, carry away most of the money he has earned, the domestic one will stay behind here.”

Volodymyr ZABOLOTNY, vice president, International Center for Privatization, Investments, and Management:

“With the question asked this way, it makes no difference who dictates the rules of the game because any diktat is undesirable. Neither the domestic nor foreign investor should dictate their conditions. As soon as somebody begins to dictate his conditions, everybody, including the dictator (Daewoo being a glaring example) will lose out. In a situation with equal rules for all, the one who works more effectively will win.

“On the other hand, Ukraine needs direct foreign investment, and we are interested in having as much as possible. Thus, when the rules of the game are the same for everybody, we must ensure a favorable investment climate, but there should be no privileges at the stage of investment project implementation.

“Today’s investment situation can be called amorphous: neither the foreign nor the domestic investor have the edge. However, with due account of the political aspect, domestic capital does have the upper hand owing to its interests it lobbies. This applies in particular to capital inflow restrictions. This is especially evident when large facilities, very important for Ukraine, are being privatized. It is here that serious foreign firms do not come: this means there is resistance inside the country. On the other hand, this is not investment but the aspiration own certain groups to own something without investing anything.”

Oleksandr KOKOSHYN, financial manager, Markom Joint Venture:

“Investment is the lifeblood of the economy. Ukraine cannot do without it at present. With the number of domestic and foreign investors being equal, the state should give preference to the one it derives more profit from. However, it is today’s reality that foreign investors play the leading role. To perform successfully, an investor should be firmly protected by law, while his right to dictate his conditions exactly consists in preventing the rules of the game from being changed.”