Ukraine’s President Volodymyr Zelensky released a video flaunting the merits of Ukraine to foreign investors on Twitter on Aug. 24.
Zelensky’s one-minute promotion video in English with Ukrainian subtitles depicts the country as a land of opportunity in tourism, information technology and agriculture, calling it “the next big thing.”
“The whole world can prosper with Ukraine, now,” he said.
Zelensky’s promotion video comes amid a weak performance by the country in attracting foreign direct investment. For years, foreign investors have been saying that Ukraine’s non-independent judicial system as well as rampant corruption are the main reasons why they are not willing to invest.
The recent resignation of Ukraine’s former central bank governor Yakiv Smolii did not help as it further deterred investors from putting their money in Ukraine due to their questioning of the body’s independence.
In addition to Ukraine’s weak rule of law, the coronavirus pandemic has also been a negative shock on the country’s economy. Ukraine’s government forecasts that the country’s gross domestic product will shrink by about 5% in 2020. The pandemic also influenced foreign investments, projected to decline by about 38% in emerging countries, according to the United Nations Conference on Trade And Development’s World Investment Report 2020.
IT and agriculture
Attracting foreign direct investment has long been one of Ukraine’s top goals — and its biggest challenges.
Foreign investment stood at over $3 billion in 2019, an increase of 30% compared to 2018, according to the UNCTAD report. Yet the report adds that a “sizeable share of FDI, estimated at about one-third of the value in 2019, was reported to be roundtripping of Ukrainian capital through offshore centres.”
In his video, Zelensky called Ukraine “the world’s new tech hub” due to the country’s low 5% tax on information technology.
Ukraine’s tech talents are widely recognized: European and U.S. investors continue to invest their money into Ukrainian startups, while global information technology behemoths like Google and Viber opened up their research and development centers here.
IT brings Ukraine $5 billion in exports annually, thus securing 3.5% of gross domestic product of the country. Meanwhile, the Ukrainian industry continues to grow.
Agriculture is also a major asset of Ukraine, according to Zelensky. Ukraine has some of the world’s richest soil, and, according to Zelensky, “it can feed the world.”
Calling Ukraine “Europe’s breadbasket,” he praised the land reform voted by the Verkhovna Rada on March 31, easing an almost two-decade ban on the sale of agricultural land.
However, the law will only come into effect on July 1, 2021, and it will benefit only Ukrainian citizens and companies. Foreign companies will not be able to purchase land without an all-Ukrainian referendum allowing it, which might deter foreign investment in the sector despite Zelensky’s efforts to promote it.
