Foreign investors would like to see the newly elected President of Ukraine demonstrate effective anticorruption efforts, appoint credible reformers to key positions, and separate politics and business interests by reducing the influence of oligarchs.
These are the findings of a new survey of strategic and portfolio investors which was jointly conducted by the European Business Association (EBA), Dragon Capital, and Center for Economic Strategy (CES) in April 2019.
At the same time, a shift in Ukraine’s geopolitical direction away from the West, steps to undermine the existing anticorruption framework, and attempts to infringe on the central bank’s independence during the new President’s first 3-6 months in office would have the most negative impact on investment and business decisions.
An overwhelming majority of the surveyed investors, or 88%, are interested in investing in Ukraine, but most of them, or 68% of total respondents, prefer to wait until after the parliamentary elections and formation of a new government.
Widespread corruption and low trust in judiciary remained the biggest obstacles to investment in Ukrainian assets for the fourth consecutive year. Market monopolies and state capture by oligarchs add to the negative perception of Ukraine’s investment attractiveness. “Unstable financial system and currency”, previously among the top-3 hurdles, sank to sixth place. The military conflict with Russia remains a significant obstacle, as well as “oppressive law enforcement agencies”, which rose from seventh to fifth place.
The survey was conducted by the European Business Association (EBA) and investment bank Dragon Capital with analytical support from Centre for Economic Strategy between April 15-19, 2019. A total of 75 respondents, including portfolio and direct investors and those already invested or planning to invest in Ukraine, participated in the online survey. The survey was conducted in the form of an online interview with the help of Info Sapiens.