Investor moods in the second half of 2016

Transcription

1 EBA INVESTMENT ATTRACTIVENESS INDEX Investor moods in the second half of 2016

2 What do you think about the investment climate IC in Ukraine How would you estimate the IC for your company now if compared to the previous months 5 KEY QUESTIONS What are your expectations regarding the IC in the upcoming months Will it be profitable for new foreign investors to invest in Ukraine in the upcoming months What are your expectations in terms of the conditions for doing business in your main sector within the upcoming months 89 CEOs of the leading Ukraine s businesses EBA members

3 points on a grade scale + H points if compared to 2,57 points in the 2 half of 2015 Careful recovery and adaptation moods prevail but Index remains in the negative area

4 INDEX DYNAMICS Index in Ukraine is measured since 2008 and Index has never reached the positive zone. The highest Index rate ever was witnessed late early 2011: 3,4 respectively and 3,39 points

5 positive value neutral negative value

6 businesses are not satisfied with the current investment climate were not satisfied in H No crucial steps. Only hints for improvements. A lot of trust has been lost, because the old intransparent and corrupt system has not changed

7 % respondents think the investment climate is favourable Positive: Macroeconomic indicators improvment ( inflation, GDP, FX market stability etc) Slighly visible anti coruption fighting and positive dynamic in terms of foreign investment. Banking sector clean up engaged by NBU.

8 some positive changes in the eyes of business

9 respondents mentioned financial stabilization and regulation

10 no tangible positive changes saw no positive movements in the first half of the year For us a President in the US being elected who is pro business Anything that is good for US business is good for us We are not crawling but we are not galloping yet towards good investment climate We can not say that nothing is being done What we can see is a slop for corruption in regulatory framework It is not the reforms imitation game ny more There are now more sophisticted ways to leave the situation unchanged

11 NEGATIVE CHANGES AS SEEN BY BUSINESS % no success in corruption fight slow reforms pace reformers are leaving Negative: Complaints about corruption are higher than in H (+5%). No movement on judicial/police/prosecutor reform, slow progress on decentralization, slow progress on e-declarations. Lack of will to fight corruption. Vested interests in the government. Privatization failure. Law enforcement, SFS and courts remain corrupt.

12 I N V E S T M E N T C L I M A T E : H V S H nothing has changed IC has slightly improved slightly declined % notably declined Positive: Banks started to offer instruments for hedging against exchange rate risks Negative: No timely VAT refund. Consumer market has become more price-conscious

13 of CEOs think business climate will improve during next months think Ukraine will be profitable for new investors in 42% think that Ukraine will not be profitable for new investors next 6 months

14 S T R A T E G I C I S S U E S F O R I N V E S T O R S no progress in corruption fight no signs of court VAT refund became better reform land reform current customs rules simplified situation is critical unfavourable better currency regulation do not see signs of financial stability do not see simplification of customs rules no progress in VAT refund

15 MOST SIGNIFICANT ACHIEVEMENTS & WEAK POINTS OF THE CABINET OF MINISTERS OF UKRAINE based on respondents' open comments no achievements yet macroeconomic stability reforms imitation majority of ministers appointed to serve vested interests are not competent to introduce structural reforms unable to fight corruption slow reforms pace

16 WHAT SHOULD BE DONE? actively tax reform reform of change of simplify processes fight corruption law enforcement and court government leaders new point and procedures for doing business and decrease pressure 25% 23% 15% 14% Just really implement all declared reforms! Complete relaunch of law enforcement, SFS and courts with new independent staff and market level compensation. President and the PM have to ensure authorities stick to their IMF commitments in order to qualify for EFF tranche every quarter. Loosen up the currency control regulations. Make it easier to pay for services/products abroad. Lift the limitation of the foreign currency on the accounts.

17 WHAT INFLUENCES UKRAINE'S INVESMENT ATTRACTIVENESS MOST? Corruption Lack of consistency and speed of reforms Law enforcement Lack of political will vested interests in the Government Lack of trust to the Government Degraded and corrupt judicial system War on the East based on respondents' open comments / by priority

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