Международная студенческая научно-практическая конференция «Инновационное развитие государства: проблемы и перспективы глазам молодых ученых». Том 1

Borovska K.S., Rieznik M.A., Pikiner V.V.

Oles Honchar Dnipropetrovsk National University, Ukraine


Creating favorable investment climate is a matter of strategic importance for Ukraine, because it is the investment climate that determines the dynamics of socio-economic development of the state and the pace of modernization of the national economy to a large extend. Ukraine considers direct foreign investment as a means to provide the necessary amount of financial resources to implement major investment projects, as well as a means to compensate the lack of domestic resources to cover necessary expenses and, thereby, accelerate the transformation of the economy. Attracting direct foreign investment in Ukraine allows businesses to improve on technical and technological levels and requires them to apply new and innovative methods of work and production management, which helps to increase productivity and stimulate innovation. In addition, cooperation with foreign companies makes it possible for Ukrainian producers to have new markets for their products outside the customs territory of Ukraine. Currently, stimulating domestic market and creating favorable investment climate will allow Ukraine to be prepared for a possible second wave of financial crisis and ensure a stable economic growth.

Taking into account the state's economic capacity and limited domestic investment opportunities throughout the period of economic transformation, the Ukrainian government is trying to create favorable framework conditions for investment. Thus, the transition to the investment management based on market relations has been realized. The multi-sectoral system of capital construction is being developed. The Ministry of Construction was abolished. The construction companies were divided into smaller units and privatized. Macroeconomic policy has an emphasis on creating the prerequisites for investment growth such as the decline of the inflation rate, ensuring optimal interest on deposits and investments, lower interest rates on loans, debt reduction and the growth of consumer demand. Despite all these achievements, however, the level of mobilization of investment resources in the production and their efficient use is quite low in Ukraine now. Unattractiveness of the investment market is the main reason for the scarcity of domestic and foreign investment in Ukraine.

Currently, the state of innovation development of Ukraine is characterized by:

- the lack of financial resources;

- the drop in solvent demand for scientific and technical products;

- the deterioration of the quality characteristics of scientific personnel and material and technical resources for research;

- the imperfections in the development and implementation of state programs.

The analysis of main reasons for the negative investment climate in Ukraine showed that many potential investors are interested in the developing market of Ukraine, in its generous resources, skilled labor, at the same time they don’t rush to take the plunge, however. Potential investors are cautious as they are aware of the influence of the following factors:

- the negative international image of Ukraine;

- its dynamic law;

- the excessive regulation of investment activities;

- the insolvency of a large number of Ukrainian enterprises, the low level of responsibility for keeping the contract terms;

- the virtual absence of the system of making and substantiating business proposals, business plans, investment programs which is identical to the one of Western countries, their inconsistency with generally accepted international standards, both in form and content;

- the high level of corruption in bodies of power, including decision makers in the sphere of foreign investment and those involved in their implementation;

- the high level of tax burden for small and medium-scale businesses;

- the high debt load;

- the private financial market;

- the low level of protection of investors and owners, etc.

All these factors create unfavorable environment for business and investment.

In order to eliminate the negative influence of these factors on the investment attractiveness of Ukraine the government has to implement some measures aimed at:

- improvement of the regulatory and legal framework to attract long-term foreign investment;

- simplification of the registration process for foreign investments;

- improvement of information support of foreign investors about potential investment opportunities;

- channeling public investment resources to the certain priority areas of the economy only;

- reducing the level of taxation for enterprises with foreign investment when a certain volume of investment is exceeded;

- stimulating the development of the stock market, credit, investment funds and other financial institutions, which should ensure the corporate (general) financing of investment projects by domestic and foreign investors;

- arranging the list of measures to strengthen the responsibility of representatives of executive and local bodies for corruption and other discriminatory practices used with investors;

- introducing the practice of concluding transparent agreements between investors and authorities on mutual obligations in the sphere of competitive business behavior and competitive business policy of the state in certain medium-and long-term markets;

- formation of favorable investment image through organizing and participating in international exhibitions, fairs, investment projects, publications in international printed matters;

- preparing an action plan to ensure a favorable investment climate within the proclaimed priorities of socio-economic development, attracting a large number of experts, scientists, public authorities and representatives of business to its development and discussion;

- development of regional plans to improve the investment attractiveness of regions, taking into account the peculiarities of their current ratings of investment attractiveness, provision of state monitoring of their implementation as a criterion for success of the activities of local administrations;

- development of mechanisms for providing public services to improve the qualification and certification of specialists in the field of investment.

In our opinion, these activities will improve the investment climate in Ukraine.

Thus, for the country to keep pace with the global economy, not to face the lack of interconnection and interdependence of the components of the state economic policy (innovation, budget, etc.), the need for new priorities in economic, industrial, scientific and technical policy should be supported at the expense of investment. Investments are the basis for the development of enterprises, individual industries and the economy as a whole. It is no use hoping for a sustainable development of domestic production, scientific and social progress and the proper place of our country in the world economy without a reliable investment basis. Therefore, it can be concluded that in the market conditions the economy can not grow without adequate investment. Consequently, investment is an important condition for the economic development of any country.


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