Business survey confirms capital's No, 1 ranking
Kyiv continues to be by far the country’s most attractive location for foreign investors, accounting for well over a third of foreign direct investments in 2001, a recent survey reveals.
The Institute of Reforms, a Kyiv‑based think tank, every year compiles investment ratings for Ukraine’s regions based on their economic and financial development, the number of new businesses opening and employment rates.
For the fourth successive year Kyiv city topped the rating for investment attractiveness with a score more than twice that of the second‑ranked region – Dnipropetrovsk oblast.
This result was clearly reflected in the amount of foreign direct investment received. The capital last year attracted $233.6 million – or 39.9 percent of total national FDI. Second‑ranked Dnipropetrovsk Oblast drew $139.3 million, or some 23.8 percent.
For the first time since the rating was launched in 1997, Kharkiv Oblast took third place, receiving $47.4 million. Donetsk Oblast was pushed down into fourth place, with $28 million.
Odessa and Zaporizhya oblasts were rated fifth and sixth, attracting $36.1 million and $19.6 million respectively.
As well as absolute figures, the project also ranked regions by the rate of growth of investment in 2001. The leaders in this category were Ivano‑Frankivsk and Kirovohrad oblasts, while Kyiv and Donetsk ranked 21 and 24.
The institute states that total FDI into Ukraine since independence totaled $4.53 billion as of March 1, 2002, or $93 per capita. It estimates that only about a third of foreign direct investment into Ukraine is officially registered.
The report said the country that has invested most into Ukraine’s economy is the United States, which accounts for 16.8 percent of total investments, followed by Cyprus with 10.7 percent, Great Britain with 9.4 percent, the Netherlands with 8.5 percent, Russia with 7 percent and the Virgin Islands with 6.1 percent.
Markiyan Datsyshchyn, the project leader, noted that the first quarter of 2002 saw the first decline in total investment from Cyprus, which fell by $4.56 million. He said the peak of investment by Cyprus‑registered companies into Ukraine came in 2000, when they invested $146 million. According to the institute, this implies that much of the Ukrainian capital previously held in offshore accounts has made its way back into the country.
Viktor Pynzenyk, a Rada deputy who heads the Institute of Reforms, said that many foreign businesses who want to invest in Ukraine are deterred by negative views of the country’s investment climate and the absence of clear legislation. He added that investors from Russia and Cyprus are more knowledgable about how to successfully invest into Ukraine.
The project also revealed that Kyivans enjoy the highest average salaries in the country. Last year, the average monthly salary in the capital was Hr 557, or around $100, compared with the national average of Hr 340.
The research was carried out with financial support from the Democracy Fund of the U.S. Embassy.
