Problems in creating a favorable investment climate in Ukraine - Курсовая работа

Great value foreign investor pays on the specific country agreement on promotion and mutual protection of investments and how the country fulfills its contractual obligations. The most important thing - the presence of legal stability. Investor should clearly know the rules of the game and be sure that they will be kept unchanged. To sum up the above said, we can conclude that the state investment policy must constantly respond to the economic state of the environment, continuously adapting to the changes not only in the country but also around the world. Particular attention should be given to the stability, predictability and transparency of the economy. 1.2 Factors that forming investment climate Creating a favorable investment climate depends on several factors. The legal environment is one of the most important factors in forming favorable investment climate. The experience of many countries shows that the balanced budget, modern technology and strong NBU not enough to guarantee normal investment activity. There should also be effective courts; contracts with legal force; fair laws; protection of property rights; predictable rules and procedures. Countries where legality is not the basis of life are remaining as countries with great potential and nothing more. The development of law is also the key to a successful fight against corruption. Businessmen in all countries have problems with taxes, customs procedures and other requirements. But the attractive investment climate offers entrepreneurs certain rights and guarantees. In this area, clarity is the key word. Each country creates its own legal system, and they are quite complex. But the lawyer should explain investor about risks, in simple examples, that he will meet. In other case, it will mean a lawyer mistake or a mistake or imperfection of laws that are poorly formulated because of political compromises or lack of time. Availability of these features are very important for investors: [16] Ø civil, contract and corporate law (corporate law in Ukraine is especially imperfect); Ø ownership of land and property, because no one wants to invest if the law can be repealed; Ø reliable system of land registration; Ø the right to use land as collateral for a loan that gives the bank or lender; Ø guarantees in case of insolvency of the debtor. However, foreign investors identify existing barriers to investment in the Ukrainian economy, which form the unfavorable investment climate: unstable and excessive government regulation, strict legal system, corruption, high tax burden, problems in establishing clear property rights, low income, lack of physical infrastructure etc. Creating a climate conducive to business development, strengthening rule of law, increase transparency - a key factors to give more economic opportunities for Ukrainians. Our state should also work on other key tasks. Another very important factor in creating a favorable investment climate is the financial stability of the country. This factor increases the urgency of reform, so Ukraine should make the order in its economy, lower interest rates to attract much-needed investment. Interest in Ukraine from US and other foreign investors - is essential, and the reasons for this are clear: Ø Ukraine is a market of more than fifty million consumers; Ø Ukraine occupies a strategic position in Europe, so products can be easily delivered to Central Europe and so on; Ø Ukraine has the most fertile agricultural land in the world and is rich in other natural resources; Ø Ukraine has a well-educated and skilled workforce (this fact comes from statistic about number of Ukrainian citizens moved to another states and received good workplaces (especially in IT sphere)). But despite all this the actual foreign investment in Ukraine is low. Ukrainian economy has significant resource potential. Especially I wanna mention land, forest and water resources; rich mineral resources, soils. More than 60% of agricultural lands are represented by black-earth of very good quality. In most regions in Ukraine there are sufficient quantity of precipitation, favorable temperature, solar energy - these facts allow to carry out business activity with minimal costs in different economical spheres. Besides that, human resources is one of the key competitive advantages of economy of Ukraine. Our country has one of the most favorable density indicators, comparing to other countries (for January 1, 2013 population density was 75.5 people per 1km2) [10].