1. UKRAINE: LARGEST MARKET IN EASTERN EUROPE

2. COUNTRY PROFILE… DID YOU KNOW?  Population 46,2 million of which 68% - urban population  Territory 603,7 thousand sq.km = the largest in Europe  GDP per capita – EUR 2,400 (as of 1H2008)  the geographical center of Europe is situated in Ukraine  #1 granite reserve in the world with the 45% of the world reserve  6 th in the world in production capacity of metals and mining  56% of land is arable and 1/3 of the world’s “black soil” is found here And still….  28% of population living under the nationally-defined poverty line  Unemployment: 3% (end of 2008); 9% (forecasted in 2009)  Average life expectancy 65Y male, 76Y female

3. FOREIGN DIRECT INVESTMENT IN UKRAINE (by sectors, by years, by source countries as of July, 2008)

4. WHY INVEST IN UKRAINE?  Strategic market access at the crossroads of East-West and North-South trade routes + WTO accession  Sizable domestic market (46 mln consumers – the largest market in EE)  Low labour costs and highly qualified human capital  Rich in natural resources

5. PRIORITY SECTORS FOR INVESTMENTS

6. SECTOR: Alternative Energy  Biomass and wind are primary renewable sources of energy  Sector capacity (annual fuel demand): 110-140 mln tons of the “conditional fuel” (currently 42%)  Biomass potential: 22 mln tons  Territory: 42 mln hectares of arable land for rape production  Investments needed for sector in 2003-2010: $ 2,57 bln.  Special Governmental support program exists (Law on bio-fuel development adopted in June 2007) COMPETITIVE ADVANTAGES:  availability of land  low-cost labor

7. SECTOR: ICT / High Tech  Total market size - about $ 2,2 billion  Growth rate in 2006 - 28% (Russia – 18%, Poland – 15%, Kazakhstan – 33%)  4,000 companies and appx. 47,000 workers involved  Competitive advantages include:  Qualified and relatively low cost skilled labor  Highly-ranked technical schools  Medium-high innovation level: Technological Activity Index – 0.600 (ranked 39 among 117 countries)  Ukraine rated 5th in terms of the number of certified IT specialists by Brainbench

8. SECTOR: Agriculture and Food-Processing  Total market size - about $1 billion  Annual growth rate of 20% COMPETITIVE ADVANTAGES:  More arable land than France and Germany combined  Excellent soils in large fields and very large farms available  Good profits in simple arable cropping at low rents  good geographic position for large export markets: Russia, Kazahstan, and EU member states  skilled and inexpensive labor INVESTMENT OPPORTUNITIES:  Processing of fruits and vegetables  Drying and freezing of fruits and vegetables

9. SECTOR: Infrastructure and Logistics Development Investment in infrastructure  Roads, hotels, airports, bridges etc. Logistics development incentives:  4 out of 10 European transport corridors run through Ukrainian territory  Great amount of construction material deposits in Ukraine  EUR 20 billion are allocated by the EC and EIB for net Trans-European transport corridor development  Greater openness of Ukrainian economy as a result of WTO accession  Growth of retail trade in Ukraine

10. SECTOR: Tourism  Potential recreational territories - 12,8% of the country's area  Unique health-improving resources: more than 500 mineral water and clay deposits and 47% of beaches situated along the sea shore territory of the Black Sea and Azov Sea  Diversity of landscape: sea, mountains, steppe…  Ecotourism, cultural and historical tourism, village tourism, gastronomic tourism are niche opportunities!!!

11. USEFUL LINKS Ukrainian Center for Foreign Investment Promotion:  http://www.investukraine.org/ Doing Business in Ukraine (Government Portal)  http://kmu.gov.ua/control/en/publish/category?cat_id=929504 Investment Proposals of Ukrainian Companies (Ukrainian Chamber of Commerce and Industry)  http://www.ucci.org.ua/dnload/invest.pdf Doing Business in Ukraine (PWC, 2007):  http://www.pwc.com/Extweb/pwcpublications.nsf/docid/975CF16F2D406 D9180257045004291BA

12. THANK YOU! Yuliya Shcherbinina Public-Private Partnership Officer United Nations in Ukraine 1 Klovsky Uzviz, Kyiv, 01021 Tel: +380 44 253 9363 Fax: +380 44 253 2607 yuliya.shcherbinina@un.org.ua