Analysis of the investment attractiveness of Ukraine

Размещено на http://www.allbest.ru/

National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute”

ANALYSIS OF THE INVESTMENT ATTRACTIVENESS OF UKRAINE

Demishev Ivan Postgraduate Student,

Voitko Serhii Doctor of Economic Sciences, Professor

Annotation

investment attractiveness economic war

The article is devoted to the issues of investment attractiveness of Ukraine in the context of economic recovery after the Russian-Ukrainian war. The main objective of the article is to assess the current state of investment attractiveness of the national economy and to identify priority areas for its improvement. The use of innovative research methods in assessing the investment attractiveness of the national economy is a fundamental element for building an up-to-date model for its improvement. As a result, an increase in foreign direct investment flows into the country's priority sectors will allow the national economy to recover on the principle of "build-back better", which is in line with Ukraine's short-term priorities. The innovative component of these investments, in turn, will make a great contribution to the long-term economic development of the country even after the return of the pre-war level of the economy, creating additional jobs and promoting high-tech exports The main issues of the methodology for analyzing the investment attractiveness of the country are revealed. The indicators for assessing investment attractiveness using the indices of rating agencies are detailed.

Keywords: investment, investment attractiveness, investment potential, economy, economic recovery.

Анотація

АНАЛІЗ ІНВЕСТИЦІЙНОЇ ПРИВАБЛИВОСТІ УКРАЇНИ

Демішев Іван, Войтко Сергій Національний технічний університет України "Київський політехнічний інститут імені Ігоря Сікорського"

Стаття присвячена питанням інвестиційної привабливості України в умовах відновлення економіки після російсько-української війни. Основною метою статті є оцінка сучасного стану інвестиційної привабливості національної економіки та визначення пріоритетних напрямів її покращення. Використання інноваційних методів дослідження в оцінці інвестиційної привабливості національної економіки є фундаментальним елементом для побудови сучасної моделі її покращення. Як наслідок, збільшення потоків прямих іноземних інвестицій у пріоритетні галузі країни дозволить відновити національну економіку за принципом "build-back better", що відповідає короткостроковим пріоритетам України. Інноваційна складова цих інвестицій, у свою чергу, зробить великий внесок у довгостроковий економічний розвиток країни навіть після повернення довоєнного рівня економіки, створюючи додаткові робочі місця та сприяючи високотехнологічному експорту. Розкрито основні питання методології аналізу інвестиційної привабливості країни. Деталізовано показники оцінки інвестиційної привабливості з використанням індексів рейтингових агентств. У статті запропоновано рішення щодо підвищення інвестиційної привабливості ключових секторів економіки України в умовах післявоєнного відродження після російсько-українського конфлікту, що узгоджується з цілями економічного зростання. Для вирішення поставлених у статті завдань використано низку методів дослідження, зокрема діалектичний та абстрактно-логічний підходи, методи узагальнення та систематизації для вивчення концепції інвестиційної привабливості, а також методи групування, порівняння та математичної статистики для аналізу інвестиційної привабливості України. На основі отриманих результатів можна зробити висновок про потенційні можливості країни у залученні інвестицій для забезпечення сталого економічного зростання. Наприкінці, зазначимо, що постійний моніторинг та аналіз інвестиційної привабливості країни є важливою умовою для успішного розвитку національної економіки в умовах глобальних викликів.

Ключові слова: інвестиції, інвестиційна привабливість, інвестиційний потенціал, економіка, економічне відновлення.

Problem statement

In today's environment of intensified international economic relations, investment attractiveness is a crucial factor in the progress of a country's economic development. Attracting investment contributes to the accelerated modernization of key sectors of the economy and the creation of new jobs. The issue of studying investment attractiveness becomes especially important in the context of a shortage of public funds in Ukraine during the recovery of the country's economy after our victory. During this period, a significant number of enterprises located throughout the country lost their production capacity due to disruptions in supply chains, and enterprises located in the war zones lost significant assets.

The state support program is unable to fully compensate for these losses due to the evergrowing volume of the latter. The decline in corporate profits is leading to an aggravation of the economic situation in the country as a whole. Attracting additional investment resources can help restore the country's economic environment and ensure further development [1, p. 84].

The war has a significant negative impact on investment flows to Ukraine in general. Corruption, lack of trust in the judiciary, unpredictable exchange rates, and an unstable economic and political situation are causing a decline in investment flows. Despite this, Ukraine has a number of economic sectors with potential for investors. First and foremost, it is the agricultural sector, as well as the production of agricultural machinery, alternative energy and information technology.

Despite the fact that foreign investment in Ukraine has declined, there are still prospects for its development. In order to boost foreign investment, in addition to ending the war in Ukraine, it is necessary to create a favorable business environment for investors, simplify the procedures for registering and doing business, and abolish outdated regulations.

Analysis of the latest research and publications

The essence of investment attractiveness in economic science has been studied by such scholars as P. Drucker, J. Keynes, F. Kene, M. Porter, R. Rogers, A. Smith, P. Samuelson, K. Freeman, J. Schumpeter, and others. Theoretical approaches and methodological developments of investment attractiveness assessment are disclosed in the scientific works of Ukrainian scientists, in particular: I. Blank, Vinnichenko, A. Voynarenko, A. Gaidutskyi, O. Galchynskyi, O. Gudzynskyi, M. Demyanenko, V. Ivanyshyn, M. Kisil, O. Kozak, M. Koretskyi, S. Kravchenko, G. Mostovyi, O. Nepochatenko, O. Savchenko, O. Oliynyk, O. Prokopenko, O. Skydan, etc.

Identification of previously unresolved parts of the overall problem

The largest war in the twenty-first century has caused significant losses to Ukraine's economy, and its recovery is a newly emerging research topic. Analyzing Ukraine's investment attractiveness before the war makes it possible to identify the traditional problems that need to be solved when attracting investment to rebuild an innovation-oriented economy. In addition, Ukraine's prospects for joining the European community of developed countries require that the country meet the Copenhagen criteria, which can be partially achieved through a high level of investment attractiveness of the national economy. The problem of studying the level of investment attractiveness of the state's economy is revealed in the scientific works of both foreign and domestic scholars, but needs to be further developed.

The purpose of the article is to identify and substantiate the ways to improve the investment attractiveness of Ukraine.

Summary of the main research material

The investment environment can be studied at the macro and micro levels. At the same time, the macroeconomic environment is formed by variable factors that stimulate or discourage investmentin the national economy. These factors include: economic, political, environmental, and socio-cultural. Macroand micro-level factors also have a significant impact on the investment behavior of investors [2, p. 39].

In the studies of scholars from different countries, most components of investment attractiveness or competitiveness of countries are traditional (economic, socio-cultural, political, technological, innovative, natural, image) and are used in different configurations. Determining a universal list of indicators of a country's attractiveness is a difficult task. It becomes even more difficult because the same factors may be more or less important for different investors in terms of specific economic activities.

The specification of methodological approaches to assessing the level of investment attractiveness of the national economy through the prism of rating assessments of various agencies becomes a prerequisite for the formation of modern methods of regulating this process and is a fundamental element of the model of successful attraction of investment capital. The investment attractiveness of the State can be assessed using the system of indicators of various international rating agencies, namely:

- Ease of Doing Business Index;

- Global Competitiveness Index;

- EBA Investment Attractiveness Index.

The Doing Business Index is compiled by the World Bank. It assesses the level of business regulation and the ease of doing business in various countries around the world. The index takes into account such aspects as company registration procedures, obtaining construction permits, obtaining loans, investor protection, taxation, and others. The Global Competitiveness Index is a ranking compiled by the World Economic Forum (WEF). It measures the competitiveness of countries in terms of their economic, technological and institutional capabilities. The index takes into account various factors such as infrastructure, education, innovation, market conditions, macroeconomic stability, and others. The EBA (European Business Association) Investment Attractiveness Index is an assessment tool used to determine the attractiveness of countries for investors. This index assesses key aspects such as political stability, economic development, business climate, corruption and other factors that may affect investment decisions.

Let's analyze the dynamics of these indexes in Table 1.

As of the current year, Ukraine has seen a decline in investment attractiveness due to large-scale war in the country. Thus, the level of investment attractiveness of the Ukrainian economy in the second half of 2022 is 2.48 points, which corresponds to the value of this economic indicator during the COVID-19 pandemic. According to the European Business Association, military operations on the territory of the state are the first among the possible factors that could negatively affect the level of investment attractiveness of the state. The second place is occupied by military attacks on the country's energy system, which significantly complicate and sometimes make it impossible to do business, and the third is corruption at various levels.

However, in addition to the negative factors, there are several positive developments towards a high level of investment attractiveness of the Ukrainian economy during active hostilities. For example, according to a survey of EBA member companies, such a factor may be the granting of Ukraine the status of a candidate for accession to the European Union and high investor expectations for in-depth reforms against the background of the terms of international financial assistance agreements with Ukraine, such as the IMF EFF.

In the current context of globalization and internationalization of countries, regions, and economic systems, international investment cooperation is of particular importance, allowing enterprises to attract new production and management technologies, produce innovative competitive products, and expand export opportunities for national goods and services. Improving investment attractiveness, increasing the volume of investment capital, diversifying investment sources and related risks, as well as providing resources and innovation for the development of certain economic sectors will contribute to the growth of high value-added production. Thus, the positive dynamics of attracting investment capital is an incentive for the growth of incomes of the state's population, which reproduces investment flows.

The experience of developed countries shows that active participation in international capital flows strengthens the economic stability of recipient countries and contributes to higher rates of development. In this regard, in the global aspect of the investment process, the movement of foreign direct investment is of the greatest interest [6, p. 133].

Table 1

Ratings of investment attractiveness of the Ukrainian economy