The European Business Association in Ukraine (www.eba.com.ua/en/) has published the results of its fifth annual investment attractiveness survey. The survey gauges the investment attractiveness of Ukraine as felt by the foreign businesses operating in the country.
According to the survey, 48 % of foreign investors felt Ukraine became less attractive for investment during the past year. 42 % saw the investment climate as unchanged and only 9 % saw improvements. The lack of trust in the judiciary was the main obstacle for investment for the first time, no doubt due to the controversial decision of the country´s constitutional court to cancel the requirement of government officials to file e-declaration of their assets. The decision is seen as being in open conflict with Ukraine´s recent campaign of anti-corruption reforms. Corruption of government officials, previously the number one obstacle for investment, fell to second place this year.
The following obstacles to investment according to the survey included market monopolization and power seizure by oligarchs, and the cumbersome and frequently changing legislation. Debt default and a shift away from democratic values were also seen as looming threats.
In the first half of 2020, foreign investment flows have fallen by almost 50 % globally compared to 2019 obviously largely due to the Covid-19 crisis. The eventual total fall in 2020 is estimated to be no less than 30 % according to the OECD.
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