James Brooke, UBN

 

🔵 Net foreign direct investment in Ukraine was the worst in 20 years, Lenna Koszarny Founding Partner and CEO of Horizon Capital, said Friday at a discussion of the draft National Economic Strategy 2030. Looking at negative flows for first nine months, she said: “We hope that net FDI will go to zero.” To get Ukraine on a growth track, she said the government’s goal should be: judicial reform, capital market reforms and investment reforms.

🔵 Industrial production dropped last year by 5% yoy, reports the State Statistics Service. Manufacturing was down 7%. Other big drops were: coal mining down 13%; and electricity generation down 6.6%. On the upside, steel was up 6.5% and cement was up 7%. In 2019, industrial production was down 1.8%, cancelling out a 1.1% growth in 2018.

Several years ago (perhaps many) I felt that FDI and Industrial Production were key indicators of Ukraine’s economic health.  Industrial Production (coal mining ??) not so much anymore.  FDI … that’s another story.  With EU at -7% 1H20, Ukraine’s optics don’t seem horrible.  However with the complete lack of any investment, there is not much to take to cause negative investment.  FDI, for the past 5 years, can’t get much worse.  Let’s get to the point – any FDI, of even the smallest amounts (couple billion?) would make a huge difference and would be a strong catalyst for economic growth & development.