6 reasons to invest in Ukraine during the war
I was on my way to London for a conference «Invest in Ukraine» and understood — the debate will not be the easy one. The event was held by the Ukrainian A7 GROUP to convince the Foggy Albion businessmen to include the Ukraine in the list of countries that can and should be invested. Bloody war, Russia drew us in, brought the country to pause. What will happen tomorrow in Ukraine? Not knowing the answer for this question, investors are cautious and do not rush to bring multi-million dollar projects to the country.
However, from the conventional wisdom that money likes silence, there are exceptions. For example, the Israeli economy, fighting with the Arab countries since the inception of the state in 1948, is growing by leaps and bounds. The country has taken a niche of development and export of modern technology, which allowed it to take the leading position in terms of GDP and to become the first on the size of venture capital investment per capita. Also investments are growing in South Korea, despite the ongoing confrontation with North Korea. Will Ukraine be able to repeat the success of these countries?
London debate was toned by Sevki Acuner, Head of EBRD mission in Ukraine. European Bank for Reconstruction and Development is the largest investor in the Ukrainian economy – it annually brings in the country of about 1 billion euros. Military operations in the east have not changed EBRD plans – till the end of 2014 the bank plans to invest in Ukraine 1 billion euros, which is a good signal for other investors. «Investors have shown great interest in our conference, which means that they are interested to develop their projects in Ukraine now», — said Maria Barabash, managing partner of A7 CAPITAL, which held the conference «Invest in Ukraine».
«Obozrevatel» talked with current and potential investors attending the conference «Invest in Ukraine» and highlighted 6 benefits, the businessmen, who dared to invest in Ukraine during a military confrontation with Russia, will receive.
- Less competition. It’s simple. Not everyone will bring himself to such leap in a dark, but at prompt response to the changing environment and with a touch of fortune such high-risk investment can pay off in spades.
«Dared fall short of, so they will get more. When all is well, there is lot of smart people, like you, and you get a zero margin. Zero risk — zero profit «- brings the advantages of investments during conflict under deliberation Valery Kutsyy, CEO of «Miratech» Company, providing IT outsourcing services.
Now it is the best time to invest in Ukraine, because there are few investors, thus, the opportunity to get high profits is very high.
- You can earn more money. The second advantage results directly from the first one: there are less people to build a business, thus, the one, who took a risk, takes all. Or nothing. It depends on fortune. Although the loss of the business — not uncommon in peacetime as well.
Now it is the best time to invest in Ukraine, because there are few investors, thus, the opportunity to get high profits is very high. The risk is greater than under other conditions, but the game may well be worth the cost, «- says Iryna Tymczyszyn, founding director of the Ukrainian-British club, engaged in business relations between the two countries.
IT-company «Miratech», due to the annexation of the Crimea and the conflict in the east, has lost its clients in these regions, among which there were the top banks and telecoms, but in the whole country the company’s revenues are growing, even in conditions of war-conflict.
«Turnovers are growing, the number of vacancies is growing, including even for Ukrainian customers, not to mention the foreign ones. Everything is fine. Our competitors are also disposed relatively optimistic. Of course, there were added more complexities, appeared lot of risks and additional barriers, but the flywheel is swung and customers are coming, «- says Valery Kutsyy.
- High public demand forces the Government to reform the economy.
Hope for the new Ukrainian government was heard in all the speeches at the conference in London. Foreign business waits edgily from the president and government reforms that will improve the investment-climate in the country.
«The trust appeared in the country, and this is perhaps the most important change that has occurred,» — says Andre Kuusvek, who headed the EBRD in Ukraine for about 5 years.
He is revoiced by Katre Saard, Founding Partner of «Alpcot Capital Management» Company, which since 2009 invests in the agricultural sector and the oil and gas sector of Ukraine. Even during the war with Russia they are not going to leave the Ukrainian market, but still hope for a speedy resolution of the conflict.
«We are optimistic about the long term prospects, but for now everything depends on the conflict with Russia. In addition, there are problems in the financial system, but we see the desire of international institutions to provide assistance to Ukraine. Therefore, I am optimistic and I think that the new government is oriented on the right things and far-reaching reforms, «- business woman shares her inside optimism.
Private investors who want to come in Ukraine, even at the level of start-ups, will be particularly valuable.
- Authorities are ready to assist investors.
When there are few investors and the state is in need of money, the authorities will be more than willing to compromise in order to attract investors.
«Private investors who want to come in Ukraine, even at the level of start-ups, will be particularly valuable» — suggests Iryna Tymczyszyn.
Just a few days ago, she brought to Ukraine the investor, interested in our country. He studies the structure of the market and assesses the possible return on investment.
Irina believes: the country now will try in every way to encourage and assist the investors at any level, and it is necessary to take advantage of it.
- Develop new spheres to get the profit.
Military operations change the priority of the business, which brings big profits. Director of the Ukrainian-British club Iryna Tymczyszyn gives an example: «Investors who have come to Ukraine in recent years, despite all the difficulties, are satisfied, because they see the potential. During last few months, when there were military operations, their business has improved. They ride the crest. For example, those, working in the energy sector, understand: if the mines have exploded and there is no coal, then you need to find coal, for example, in Africa and sell it to Ukraine. Its price will be high. But that’s the whole trick; this is an investment that brings in money».
Running into billions government order for military equipment supply, announced by the President Petro Poroshenko, can revive Ukrainian economy as well. And the Ukrainian Embassy in London even insists on the need to develop something like the Marshall Plan for Ukraine.
«After the military conflict was often experienced economic surge. Therefore, we are interested in economic aid over the sample of the Marshall Plan for Ukraine, which will be effective for the Ukrainian economy and profitable for investors», — said at the conference «Invest in Ukraine» Charge d’Affairs of Ukraine in the United Kingdom Andrew Kuzmenko.
- Relatively low wages and a great motivation of Ukrainian workers.
«For the good specialists the investor is willing to pay the ultimate price, but the highest price will still be lower than, for example, in England. And it is at this very many outsourcing companies very serious benefit «, — says Iryna Tymczyszyn.
«You’re the one of the few, so you’re dealing with people more motivated,» — adds Valery Kutsyy of «Miratech».
In conditions of armed conflict Ukrainians, who have not specifically laid claim to the European level of salaries, have become more compliant. They are willing to work more and better for less money. And everything saved for the investor transforms into another line of income.
There are enough both benefits and risks of investing in the country in time of war, but nothing ventured – nothing gained.
Yuliya Lavrisyuk, Editor-in-chief, Obozrevatel.com