Inward FDI in Ukraine and its Policy Context, 2012

Type Working Paper - Ukraine and its Policy Context
Title Inward FDI in Ukraine and its Policy Context, 2012
Author(s)
Publication (Day/Month/Year) 2012
URL http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2196375
Abstract
In 2010 and 2011, Ukraine experienced a revival of inward foreign direct investment (IFDI) flows compared to 2009, when flows had plunged to less than half of their 2008 level. At US$ 7.2 billion, IFDI flows to Ukraine in 2011 were well above their level of US$ 4.8 billion in 2009, although still considerably below their peak of US$ 10.9 billion in 2008. The increase in 2010-2011 was brought about partly by the rather difficult economic situation, which led many domestic and foreign investors to sell their businesses to willing buyers. Improved performance of the Ukrainian economy in 2010, rising prices of raw materials and food and regulatory changes, especially in the banking industry, were factors that attracted increased IFDI flows. However, Ukraine has failed to improve the investment framework and to accelerate economic reforms adequately. The country continues to suffer from a high level of corruption and the absence of effective guarantees protecting foreign investors. Among other key factors hindering FDI in the country are its rather controversial relations with Russia and the delay in concluding an association agreement with the European Union (EU).

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