MINISTRY OF EDUCATION AND SCIENCE OF UKRAINE

ODESSA NATIONAL ECONOMIC UNIVERSITY

Department of General Economic Theory

and economic policy

ESSAY
on the topic:
"INVESTMENTS IN TRANSITIVE ECONOMICS OF UKRAINE"

Done it
student of group 015, 1st year
Alina Serhiivna Burlak

Supervisor
Doctor of Economics, Associate Professor of the Department of Economic
Sciences,
Rosetska Yu.B.

Odesa – 2023
Investment in Ukraine's transitional economy is a topic that attracts the attention of
many investors, researchers and economists who are interested in the economic
development of the country.
Ukraine is going through a period of changes and reforms in its economy after the
revolution in 2014 and the conflict in the east of the country. As part of the
transition to a market economy and integration into the world community, Ukraine
is taking a number of measures to improve the investment climate, strengthen the
legal framework, attract foreign investors, reduce bureaucracy, etc.
One of the key areas of investment in the transitional economy of Ukraine is to
support small and medium-sized businesses, which are considered the engine of
economic growth. Investors can invest in the creation of new enterprises, the
expansion of the business of existing companies, as well as in the development of
economic sectors such as IT, agriculture, logistics and others.
In addition, Ukraine has great potential for investment in the energy sector,
especially in the field of renewable energy. Ukraine is one of the leaders in Europe
in terms of biomass utilization and hydropower opportunities.
Another important factor for investing in Ukraine is its geographical location and
potential for the transit of goods between Europe and Asia. Ukraine is located at
the intersection of many transport corridors, which makes it attractive for investors
interested in logistics and transportation of goods.
Despite all the problems and challenges faced by Ukraine in the transition to a
market economy, the country has great potential for investment and development.
Moreover, many experts believe that investing in the transitional economy of
Ukraine can bring high returns and success for investors who are willing to take
risks and invest in the long term.
However, before investing in Ukraine, it is necessary to take into account some
risks. Some of these include political instability, economic hardship, corruption,
inefficient government and judiciary, and the need to execute business plans in an
environment of unpredictable legislation.
In order to mitigate risk, many investors use a strategy to diversify their
investments and work with local partners who have a deeper understanding of the
local economy and business culture.
In summary, investing in Ukraine's transitional economy can be profitable and
promising for investors who are willing to take on the risks and challenges in a
volatile economic and political environment. However, before investing in
Ukraine, it is necessary to conduct a thorough market research and assess potential
risks.
In addition, there are several specific areas that may be of interest to investors, and
in which Ukraine has some advantages.
Industry. Ukraine has a developed industry that can be attractive to investors.
Metallurgy, engineering, energy and chemical industries can be singled out among
the promising industries.
Agro-industrial complex. Ukraine is a major producer of grain, butter, sugar, milk
and meat. Accordingly, agriculture and processing of agricultural products can be
promising areas for investors.
Information Technology. Ukraine has qualified IT specialists and relatively low
software development costs. Therefore, many Western companies open their
development centers in Ukraine.
Tourism. Ukraine has a rich history, culture and natural attractions that can attract
tourists from all over the world.
Infrastructure. Ukraine needs investments in the development of its infrastructure,
including roads, bridges, airports, railways, etc. This may be a promising direction
for investors who are ready to invest in long-term projects.
Despite some risks and challenges, investing in Ukraine's transitional economy can
be very promising and rewarding for investors who are willing to take on the risks
and challenges. A key success is a thorough market research and understanding of
potential risks and opportunities.
In addition, it is worth mentioning some specific activities and initiatives that
Ukraine can take to attract investment.
One such example is the creation of a special economic zone (SEZ). In 2020, the
Przemysl SEZ was created, which is located in the west of Ukraine and provides
tax incentives and other benefits for investors. This could be a good opportunity
for investors who are interested in investing in Ukraine.
It is also worth mentioning the national project "Velyka budivnitsvo" (Great
Construction), which includes infrastructure projects in various areas such as
roads, bridges, airports, railways, etc. It may be attractive for investment investors
who are interested in investing in long-term infrastructure projects.
In addition, Ukraine is working to improve the investment climate in the country.
For example, the Agency for Investment Promotion and Export Development
(Ukrinvest) was created to facilitate the investment process and increase the
attractiveness of Ukraine for foreign investors. The government of Ukraine is also
working to improve the business climate, reduce corruption and improve the legal
system.
In general, Ukraine is of interest to investors in various industries, and there are
several activities and initiatives that can help attract investment to the country.
However, before investing in Ukraine, it is necessary to conduct a thorough market
research and evaluate the potential risks and benefits.
Another interesting initiative is the launch of a digital state in Ukraine. This means
the transition from paper-based processes to electronic ones, as well as the
introduction of new technologies in the civil service. This can attract investors to
the IT sector and other related industries.
In addition, Ukraine has significant natural resources such as land, forests, water
resources, minerals, etc. This may be attractive for investors who are interested in
investing in agriculture, sawmills, woodworking enterprises, metallurgical plants,
etc.
It is also worth noting that Ukraine is the largest producer and exporter of
sunflower oil in the world, and is also one of the three largest exporters of grain
crops. This may provide opportunities for investors interested in the agricultural
sector.
In addition, Ukraine has great potential for tourism development due to its rich
culture, history and natural attractions. Investments in tourism development can be
a good chance for investors.
Finally, Ukraine is a member of the World Trade Organization (WTO) and has the
freedom to trade with the European Union, the United States, China, and others.
This can provide advantages for investors who are interested in international trade.
In general, Ukraine has a lot of potential for economic development and
investment attraction. However, as in any other country, investors should conduct
thorough market research and assess the potential risks and benefits before making
an investment decision. There are certain risks in Ukraine, such as political
instability, corruption, tax problems, etc. However, the government of Ukraine is
actively working to eliminate these problems and create conditions for a more
attractive investment environment.
For example, laws have been passed that provide investors with tax incentives and
subsidies, as well as simplify procedures for obtaining building permits and other
documents. In addition, infrastructure is actively developing in Ukraine, which can
increase the attractiveness of the country for investors.
It is also worth noting that Ukraine has a cheap labor force, which may be
attractive to investors who are interested in the production of goods. In addition,
Ukraine has qualified specialists in such sectors as IT, science and technology,
which may be of interest to investors interested in developing new technologies
and products.
Finally, it is worth noting that Ukraine has a strategic position that allows it to
serve as a bridge between Eastern and Western Europe. This may be of interest to
investors who are interested in international trade and logistics.
In general, Ukraine has a lot of potential to attract investment and develop its
economy. However, in order to realize this potential, it is necessary to continue to
work on addressing the problems associated with corruption, taxation and other
aspects of the investment environment.