By Olzhas Auyezov
KIEV, March 10 (Reuters) – Ukraine’s government has fallen short of
promises to clamp down on corruption, a survey of foreign and local
investors showed, undermining efforts to return the former Soviet
republic’s economy to pre-crisis levels.
The survey published on Thursday by the European Business
Association, a lobby group, found its members were less pessimistic
about the investment climate in Ukraine.
“We are glad that the government has not lost the will to continue
reforms,” Tomas Fiala, EBA President and managing director of Dragon
Capital brokerage, told reporters.
“(But)… there have been no improvements and there even may have
been some deterioration in the areas of corruption and the ability to
defend one’s rights in courts.”
Ukraine struck a $15 billion deal with the International Monetary
Fund last July, pledging to cut its budget deficit by raising energy
prices for households, overhauling the pension system and implementing
other painful reforms.
According to EBA data, 79 percent of those surveyed now saw the
dynamics of fighting corruption in Ukraine as “rather unfavourable” or
“definitely unfavourable”. Eighty-four percent had the same views
regarding to judicial reforms.
A recent U.S. State Department report, meanwhile, cited businesses
saying customs officials routinely seek bribes to expedite the clearance
of goods, and the European Union said last month it had suspended some
financial aid on transparency and accountability grounds.
Net foreign direct investment in Ukraine grew 5.6 percent last year
to $4.7 billion after dropping by more than 20 percent a year in 2008
and 2009.
Andrey Bespyatov, head of research at Dragon Capital, saw net FDI at
$5.5 billion this year.” If there are real reforms and the issues raised
by the investment community are addressed I think this figure has good
upside potential,” he said.
Ukraine’s economy, dominated by steel exports, grew 4.2 percent in
2010 after shrinking by almost 15 percent in 2009. The government
expects growth of 4.5 percent this year.
Ukraine ranked 134th among the 178 countries covered by Transparency
International’s Corruption Perception Index last year, putting it on a
par with Nigeria and Zimbabwe.
(Writing by Olzhas Auyezov; Editing by John Stonestreet)
