Ukraine's Investment Attractiveness Index freezes in H2 2016- EBA
Ukraine’s Investment Attractiveness Index in H2 2016 totaled 2.85 points compared to 2.88 points in H1 2016 and 2.57 points in H2 2015, according to a study of the European Business Association (EBA) conducted on the basis of a poll of top managers of companies in November and December 2016.
"Confidence of business has not changed a lot – neither to positive nor to negative zones. The index is still lower than neutral zone – 3.0. The reform pace could have been quicker," EBA Executive Director Anna Derevyanko said at a press conference in Kyiv on Thursday.
She said that corruption, juridical power and slow removal of red tape remain the key problems.
According to the study, 67% of businesses are not satisfied with the current investment climate in Ukraine, while in H1 2016 they were 78%. Only 9% of respondents believe that the investment climate is favorable. Complaints about corruption grew by 5 percentage points in six months.
Some 46% respondents mentioned the absence of changes in the investment climate in H2 2016 compared to H1 2016, while 14% saw slight changes, 12% - the climate slightly worsened and 9% said that it notably worsened.
"No changes in the judicial and law enforcement reforms are seen, as well as slow steps towards decentralization and e-declaration. There is a lack of political will to overcome corruption. Personal interests of officials prevail. We see failure in privatization. Court, tax and law enforcement agencies remain corrupted," the EBA said in the study.
Some 29.2% of respondents said that stabilization of the financial sector and regulation are among positive changes.
Some 34.9% of top managers said that the business climate would improve in the next six months, while 42% of respondents said that Ukraine would not be attractive for new investors in 2017.
The businesses said that among top priority steps to change the situation is active fight against corruption (25%), tax, judicial and law enforcement reform (23%), relaxation of doing business and weakening of pressure on business (14%). Some 15% respondents added a new step - the change of the country's leaders.
A total of 89 CEOs of companies that are members of the EBA were polled.