Dragon Capital held its 15th Annual Ukraine Investor Conference on Feb. 12-13 in Kyiv.
The event drew about 400 foreign investors and local guests, with foreign institutions whose representatives attended boasting over $3 trillion under management, invited speakers and media representatives. This was matched by a high-profile speaker faculty, which included the president and prime minister of Ukraine, the National Bank governor, senior Cabinet officials, and many others. The size of the audience, one of the largest in the history of our events, demonstrated investors’ keen interest in Ukraine’s double elections this year, presidential in March and parliamentary in October. Politics was, therefore, a major focus of the conference.
Below please find our summary of the keynote speech by President Petro Poroshenko:
- Ukraine has made huge progress since my participation in the Dragon conference five years ago. The worst is now over, the economy has grown for 12 quarters, with 2018 expansion at an est. 3.4%, a seven-year high; inflation has been reduced to the single digits; the banking system is stable, the hryvnia is strengthening, and NBU reserves are now higher than before the Russian aggression. There is confidence in the future, and improvement in the investment environment is inevitable.
- Ukraine aspires to apply for EU accession in 2023, and further integration with the EU will only support the investment climate. The recent constitutional changes on EU and NATO membership will become law in the coming days. Ukraine has already benefited greatly from the association and free trade agreement with the EU, with exports to the EU increasing to 43% of total exports and Russia’s share shrinking to 8%. Exports to the EU surged by 55% over the past three years, to a record level in 2018. But Russia maintains economic pressure and remains a major threat, attempting to thwart Ukraine’s move westward, including by interfering into this year’s elections. Aside from Russia, Ukraine’s other enemy is poverty. Poverty feeds populism, which is a major threat in this year’s elections, as previous failed experiments with controlling prices of food staples and fuel taught their initiators nothing. It is critical that investments continue to flow in to create new productive jobs.
- Focus on further progress in the Doing Business rankings. Ukraine is currently 71st but several pieces of legislation will ensure further improvement in 2019.
- Ukraine will successfully overcome current election turbulence, and the next administration will stay on the path of reforms and European integration.
- Following the elections, parliament will return to the bill on capital exit tax, which should be viewed as a key source of new domestic investment. Other legislative priorities are the creation of the land market and establishment of the Financial Investigation Service to end law enforcement pressure on business once and for all.