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( Foreign Direct ) Investment ( Regional ) Competitiveness. Dusan Kulka, FDI Advisor Regional competitiveness Forum, November, 2006. FDI in CEE Region. (Overall) investment attractiveness is heavily influenced by national legislation & government performance.
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(Foreign Direct) Investment (Regional)Competitiveness Dusan Kulka, FDI Advisor RegionalcompetitivenessForum,November,2006
FDI in CEE Region • (Overall) investment attractiveness is heavily influenced by national legislation & government performance. • First significant investment activity has been / is mostly related to privatization of state owned enterprises. • Followed by “spontaneous” (mostly resource and market seeking) investments investigating emerging markets’ potentials / conditions. • If balance 1,2 and 3 provides satisfying feedback, first larger greenfield investments start searching for convenient location in the region / specific country. • Manufacturersseekingefficiency represent vast majority of those FDI.
Basic info Source: The Vienna Institute for International Economic Studies; www.wiiw.ac.at
Export per capita in 2004 $65.771.534.270 Total exports $32.672.195.000 Total exports Source: UNCTAD data; BermanGroup analysis; www.bermangroup.cz
Share of export as % of GDP Source: UNCTAD data; BermanGroup analysis; www.bermangroup.cz
Once FDI feel happy More than 600 investment projects successfully implemented • 45% of employees in industry • 55% of industrial production • 65% of industrial exports
Ukraine & FDI • High potential versus poor performance • First big efficiency-seeking investments plus growing annual inflow of FDI Still serious obstacles: • Problematic business climate / poor image: unstable environment, red tape, … • Low understanding of FDI business practice • Very limited number of market-ready investment opportunities • Lack of professional assistance to investors
Annual sales per employee Share of exports BAS Ukraine 2005 UAH 117.121 44% 25% UAH 57.057 Average Average FDI FDI
Average monthly salary Investments per employee and new jobs BAS Ukraine 2005 UAH 105.087 UAH 871 UAH 789 UAH 39.510 16% 12.7% Average FDI FDI Average
Network of large cities • Skilled and inexpensive labor • Growing domestic consumption / markets • Improving export performance • Positive development in light industry and machinery • Increasing interest of investors – productivity gains • Slow but continual improvement of country’s business environment • WTO accession expected Ласкаво просимо