Page 15 - UKRRptJul19

Business," and highlighted the need to introduce a land market for farmland as well as improve the investment climate.
The new president has started to issue his policy agenda that is also part of the campaign for his party Servant of the People (SOTP) that is competing in the general election slated for July 21.
Overall the agenda is a continuation of the liberal reforms that are being coordinated with the International Monetary Fund (IMF) and Ukraine’s other International Financial Institution (IFI) partners.
Amongst the new initiatives, Zelenskiy called for Ukraine to enter the top 10 countries in the World Bank’s Doing Business ranking within 3-4 years. But more radically he has returned to the theme of land privatisation that was delayed by the Poroshenko regime as too hot a political potato to tackle before the presidential elections just past.
Zelenskiy called for the elimination of restrictions on the sale of farmland, which can currently only be leased.
In addition Zelenskiy listed other reforms he intends to tackle including: privatizing the state’s non-core assets, introducing tax amnesty, fighting corruption – especially in the courts – protecting competition, limiting monopolies, creating a special service to exclusively oversee business and financial affairs, and boost natural gas production.
The over reaching theme is to “form a positive image of Ukraine to the extent that a waiting line of investors would stay here,” Zelenskiy said.
Despite the strong western political support for Ukraine in the face of Russian aggression and the new liberal mind set that has not translated into investment, which remains minimal and Russia continues to be the largest investor into the country.
The stock of foreign direct investment (FDI) in Ukraine declined by 0.2% quarter-on-quarter in January-March to $41.5bn, the nation's state statistics service Ukrstat reported on May 30.
It was weighed down by contracting loans of direct investors, which declined by $131mn. At the same time, net capital inflow of $91mn partially compensated these losses.
FDI inflows were highest from Russia ($138mn) and Cyprus ($106mn, a proxy for both Russian and Ukrainian oligarchs) in the first quarter. Concorde Capital is predicting a total fo $2.4bn net FDI by the year end, but even that sum is small in proportion to domestic investment.
Among other topics, Zelenskiy said that he reached preliminary agreement with top businessmen (Rinat Akhmetov, Victor Pinchuk and Ihor Kolomoisky) to invest in social and infrastructure projects to rebuild the Donbas region affected by the war with Russia, estimating the needed costs at UAH300bn.
The prior day, Zelenskiy announced plans to organize an investment forum to rebuild Donbas in September. Zelenskiy also reached an agreement with Akhmetov that the “Rotterdam Plus” approach in calculating the electricity prices of thermal power plants will be cancelled.
15 UKRAINE Country Report July 2019 www.intellinews.com