Despite unprecedented challenges amidst the full-scale military invasion of Ukraine, it remains the steadfast defender of its territory and important contributor to the global economy as one of the major suppliers of essential food products. Obviously, for Ukraine as an eyeopener, there is an immense potential for further development of trade, bolstering industry, and rebuilding of infrastructure.
The aggressor’s attacks caused direct damage to buildings and infrastructure in Ukraine, amounting to a balance cost of USD 135 billion. The recovery and reconstruction are estimated to cost up to USD 411 billion. In 2023, 80% of reconstruction projects in Ukraine were implemented thanks to financial resources provided by international financial organizations and governments of partner countries. Among the largest institutional investors in Ukraine are the World Bank, the European Investment Bank, the European Bank for Reconstruction and Development, the IMF, USAID, IFIs, and the IFC. Local and foreign entrepreneurs have also participated in the reconstruction process, particularly for rebuilding their business facilities.
The Ukrainian government seeks new pathways for reconfiguring investment service infrastructure, incentives, and targets to continue attracting local and foreign capital to the country’s economic recovery. The updated investment targets have formed new top sectors that are vital for the country and Ukrainians and are expected to shape the future structure of the economy: defense industry, agriculture and food production, energy generation, industrial manufacturing, and the IT industry. The development of these sectors is currently based on three approaches: rebuilding ruined facilities and infrastructure, upgrading existing and economically effective capacities, and building advanced and sophisticated production and generation units.
Despite the challenges and difficulties brought by Russia’s war, the Government of Ukraine is working to upgrade and create conditions for the effective attraction of domestic and foreign investments due to Ukraine’s unique location, connectivity, and competitive manpower. The Law of Ukraine “On State Support of Investment Projects with Significant Investments in Ukraine” was launched last year to motivate the attraction of strategic investors to Ukraine’s economy through state support for large investment projects.
Other instruments are also largely used in Ukraine to diversify encouragement for investments: the Production Sharing Agreement (exploration and production of minerals in a certain subsoil area) and the Public-Private Partnership (additional investments into the public sector of the Ukrainian economy). The Law of Ukraine “On Industrial Parks” and the supportive legislation provide a variety of tools for developing industrial parks in Ukraine. State incentives target managing companies, companies-initiators, and/or participants of industrial parks from the moment of inclusion in the register of industrial parks. The economic activities supported within an industrial park cover fields such as the processing industry, recycling of industrial and/or household waste (except for waste disposal), R&D, and activities in the IT&TC sector. To date, almost 70 industrial parks are in the register.
The most valuable step undertaken by the government during the last two years is the digitalization of investment service infrastructure in Ukraine, including creating a database covering thousands of projects that are or will be implemented simultaneously at different stages throughout the country. Potential investors can use a unique electronic platform, Advantage Ukraine (https://advantageukraine.com/), which hosts more than 500 investment projects and opportunities in 10 sectors of the economy.
The state restoration ecosystem, DREAM, was created as a single window for all recovery and modernization projects initiated by Ukrainian communities. The platform ensures their transparent and efficient implementation at the national, regional, and local levels. DREAM (Digital Restoration Ecosystem for Accountable Management) collects, organizes, and publishes open data across all stages of reconstruction projects in real-time, implementing the highest standards of transparency and accountability. Everyone, everywhere, can monitor the effectiveness and efficiency of projects, using these insights to mitigate risks, conduct accurate reporting, and improve overall project performance (dream.gov.ua). The DREAM ecosystem is still “under construction” and will be fully represented at the forthcoming Ukraine Recovery Conference-2024 (URC2024) in Berlin this June.
The URC2024 is a continuation of the annual series of high-level political events dedicated to the swift recovery and long-term reconstruction of Ukraine since the beginning of the aggression against Ukraine. It is also the first URC hosted in an EU member state and comes at a critical time for Ukraine. The forum will bring together leaders from governments, international organizations, businesses, and civil society. The key goal of the URC2024 is to mobilize international support for the recovery, reconstruction, reform, and modernization of Ukraine. This includes providing emergency assistance for immediate needs, implementing short-term recovery projects, and creating attractive conditions for businesses to unlock private sector investments in Ukraine (https://www.urc-international.com/). Current and potential investors from Singapore are also invited to join the event.
Investment activities in Ukraine involve not only inflows from overseas but also reinvesting. Thousands of manufacturing facilities continued their operations despite the missile attacks; some were relocated to the Central or Western territories of Ukraine. A significant part of Singaporean investors did not leave Ukraine and continued their investment activities: Food Empire (instant drinks in Cherkasy region), Wilmar International (oilseeds processing and TM Chumak food production in Odesa and Kherson regions), Olam International (agricultural products in Kyiv region), and Flextronics (electronic industry in Zakarpattia region).
Ukraine has presented to the world a powerful and comprehensive plan for the recovery of the country. The implementation of this strategy, developed for ten years, has gained favorable assessments and support from international partners. It is time to shift to a higher gear in investment relations with Ukraine. We will be happy to assist businesses in paving the way for new partnerships and opening up new opportunities in Ukraine.
Kateryna ZELENKO
Ambassador Extraordinary and Plenipotentiary of Ukraine
to the Republic of Singapore
