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Southern investment climate: worth investing

10/ 10/ 2017
  Investments are able to speak. What are they talking about in Ukraine? First of all, the crisis has passed. According to the expert estimates of the first persons of the EA member-companies, the investment attractiveness index of Ukraine reached 3.15 points - that is, it came out of the negative plane. Among other territories of the south of Ukraine is a rather interesting place for doing business. It occupies 18.8% of Ukraines area, which is home to 14.4% of the total population of the state. Even after the annexation of the Crimea, Odesa, Mykolayiv and Kherson regions remain an outpost of the country on the Black Sea. Being at the crossroads of important transport routes, the regions have a strategically advantageous geographical location, which is especially important for the development of trade and economic cooperation with the countries of Europe, Asia and Africa. In particular, the river route along the Danube is the shortest access to the Black Sea from Germany, Austria, Slovakia, Hungary. The Dniester connects the region with Moldova, and the Black Sea - via the Bosporus with the Mediterranean Sea. Accordingly, the main branch of the regions economy is transport. Also, trade, real estate transactions and business services, as well as processing industry, the main branches of which are food and chemical, are also developed. In spite of a number of positive hard and soft investment factors, the weaknesses of the Southern region and Ukraine, in general, the lack of development of the transport complex in the coastal region is in the first place. And also imperfect legal regulation concerning basic branches of the marine complex, decline of the fish industry, insufficient realization of the prospects of the recreational and tourist complex and unfavorable customs and tariff policy. The latter entails a loss in the competition to attract international freight traffic. Development of transport and logistics potential of coastal areas should include changes in several directions. Namely, the reconstruction and development of the port infrastructure, a special legal regime for the operation of ports and port areas, a special tariff policy for logistics chains, the development of logistics centers in port areas. Tourism is another promising area of ​​development. If the city of Odessa annually receives a sufficiently large number of tourists each year, other areas of the region do not yet use their tourist potential, despite the wide opportunities for tourism development. Rebuilding the appropriate infrastructure, restoring the recreational complex, informing tourists widely, developing new tourist routes - all this can bring the south of Ukraine to one level with world-famous resorts. Promising re-industrialization and modernization of production capacities creates additional niches for the development of industrial potential of the region: Shipbuilding becomes possible as a result of the interweaving of a number of factors. First, the emergence of a military threat from the sea necessitates the development of a naval navy. Secondly, the prospective development of the maritime industry raises the need for the restoration of fishing and transport navy fleets. Thirdly, the formation of production-transport hubs and the development of agro-industrial complex and recreational infrastructure requires the production of ships of the river-sea class. And also bulk carriers and passenger ships, possibly at the facilities in the city of Nikolaev. Mechanical engineering. The need for the restoration of heavy military equipment, as well as the development of the field of agribusiness and seaports, offers prospects for the development of enterprises included in the structure of Ukroboronprom. And also for the localization of manning and repair of various machines for agroindustrial complexes. In addition, the development of port and logistics infrastructure will open up opportunities for the production of various machines used in the processing of goods at the production facilities of Mykolaiv, Odesa, Kherson and Mariupol. Development of agroindustrial complex opens up possibilities for localization of production of equipment for crop and livestock production, packing materials for finished products. Production facilities can be located in Nikolaev, Kherson, Odessa regions. Transport, recreation, production and agro-infrastructure create conditions for the development of the sphere of building materials. Production facilities can be located in the Mykolaiv, Odesa regions, where this sphere has already been developed. Recreational complex requires solutions for the development of local power plants on alternative fuels. Thus creating a market for the production of electrical equipment. It is possible to set up production in Mykolayiv and Kherson. Considering the high place of the region in the rating of investment attractiveness, it may also be expedient to intensify efforts to attract investors to the regions economy as a whole, and not only to particular industries. Marketing measures can be combined with measures to intensify cross-border cooperation and measures to improve the culture of service entrepreneurs. Strengthening the protection of property rights through operational responses in cases of doubtful transfer of property rights will help investors to remain and feel more confident and have been interested in investing long funds in the region. Finally, it should be noted that money is a tool for creating the necessary. They must work and have a return. And the hryvnia - to be counted. If capital is invested on such a principle, the volume of investments is equal, that each hryvnia invested today will increase GDP and employment of the region tomorrow. And the greater the volume of investment, the more hope that life will be better and easier tomorrow. Source: Novoe Vremia

Investments are able to speak. What are they talking about in Ukraine? First of all, the crisis has passed.

According to the expert estimates of the first persons of the EA member-companies, the investment attractiveness index of Ukraine reached 3.15 points – that is, it came out of the negative plane.

Among other territories of the south of Ukraine is a rather interesting place for doing business. It occupies 18.8% of Ukraine’s area, which is home to 14.4% of the total population of the state. Even after the annexation of the Crimea, Odesa, Mykolayiv and Kherson regions remain an outpost of the country on the Black Sea.

Being at the crossroads of important transport routes, the regions have a strategically advantageous geographical location, which is especially important for the development of trade and economic cooperation with the countries of Europe, Asia and Africa. In particular, the river route along the Danube is the shortest access to the Black Sea from Germany, Austria, Slovakia, Hungary. The Dniester connects the region with Moldova, and the Black Sea – via the Bosporus with the Mediterranean Sea.

Accordingly, the main branch of the region’s economy is transport. Also, trade, real estate transactions and business services, as well as processing industry, the main branches of which are food and chemical, are also developed.

In spite of a number of positive hard and soft investment factors, the weaknesses of the Southern region and Ukraine, in general, the lack of development of the transport complex in the coastal region is in the first place. And also imperfect legal regulation concerning basic branches of the marine complex, decline of the fish industry, insufficient realization of the prospects of the recreational and tourist complex and unfavorable customs and tariff policy. The latter entails a loss in the competition to attract international freight traffic.

Development of transport and logistics potential of coastal areas should include changes in several directions. Namely, the reconstruction and development of the port infrastructure, a special legal regime for the operation of ports and port areas, a special tariff policy for logistics chains, the development of logistics centers in port areas.

Tourism is another promising area of ​​development. If the city of Odessa annually receives a sufficiently large number of tourists each year, other areas of the region do not yet use their tourist potential, despite the wide opportunities for tourism development. Rebuilding the appropriate infrastructure, restoring the recreational complex, informing tourists widely, developing new tourist routes – all this can bring the south of Ukraine to one level with world-famous resorts.

Promising re-industrialization and modernization of production capacities creates additional niches for the development of industrial potential of the region:

  • Shipbuilding becomes possible as a result of the interweaving of a number of factors. First, the emergence of a military threat from the sea necessitates the development of a naval navy. Secondly, the prospective development of the maritime industry raises the need for the restoration of fishing and transport navy fleets. Thirdly, the formation of production-transport hubs and the development of agro-industrial complex and recreational infrastructure requires the production of ships of the river-sea class. And also bulk carriers and passenger ships, possibly at the facilities in the city of Nikolaev.
  • Mechanical engineering. The need for the restoration of heavy military equipment, as well as the development of the field of agribusiness and seaports, offers prospects for the development of enterprises included in the structure of Ukroboronprom. And also for the localization of manning and repair of various machines for agroindustrial complexes. In addition, the development of port and logistics infrastructure will open up opportunities for the production of various machines used in the processing of goods at the production facilities of Mykolaiv, Odesa, Kherson and Mariupol.
  • Development of agroindustrial complex opens up possibilities for localization of production of equipment for crop and livestock production, packing materials for finished products. Production facilities can be located in Nikolaev, Kherson, Odessa regions.
  • Transport, recreation, production and agro-infrastructure create conditions for the development of the sphere of building materials. Production facilities can be located in the Mykolaiv, Odesa regions, where this sphere has already been developed.
  • Recreational complex requires solutions for the development of local power plants on alternative fuels. Thus creating a market for the production of electrical equipment. It is possible to set up production in Mykolayiv and Kherson.

Considering the high place of the region in the rating of investment attractiveness, it may also be expedient to intensify efforts to attract investors to the region’s economy as a whole, and not only to particular industries. Marketing measures can be combined with measures to intensify cross-border cooperation and measures to improve the culture of service entrepreneurs.

Strengthening the protection of property rights through operational responses in cases of doubtful transfer of property rights will help investors to remain and feel more confident and have been interested in investing “long” funds in the region.

Finally, it should be noted that money is a tool for creating the necessary. They must work and have a return. And the hryvnia – to be counted. If capital is invested on such a principle, the volume of investments is equal, that each hryvnia invested today will increase GDP and employment of the region tomorrow. And the greater the volume of investment, the more hope that life will be better and easier tomorrow.

Source: Novoe Vremia

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