Ukraine has a lot to offer the international business investor-diverse manufacturing base; large deposits of natural resources; extensive and extremely fertile farmland; developed transportation network including excellent port facilities; unique location in the center of Europe and a large consumer market.

At the same time, the most valuable asset of Ukraine is its highly educated and skilled work force. The rate of literacy of 52 million people Ukrainian population is greater than 98%, which is one of the highest levels in the world. After Russia, the Ukrainian Republic was far and away the most important component of the former Soviet Union, producing more than three times the output of the next-ranking republic.

After Ukraine gained its independence in 1991, the Ukrainian government liberalized most prices and erected a legal framework for privatization process. The economy's restructuring was significantly accelerated in 1994 when Mr. Leonid Kuchma was elected as the President of Ukraine. An anti-crisis package of reforms introduced by the Ukrainian Government and supported by an IMF Structural Transformation Facility allowed the country to curb monthly consumer price inflation down to around 4 to 5%. At the same time, the exchange rate of internally convertible Ukrainian currency remained essentially stable to the major world currencies for more than a year. The budget deficit came down from 8.6% of GDP in 1994 to 4.1% in 1995 on a cash basis and is expected to be reduced further. All these factors allowed Ukraine to carry out the comprehensive currency reform, which included introduction of a new currency unit, the hryvnya, in September 1996.

A great attention is paid to the privatization process. Currently the private sector accounts for approximately 50% of GDP. Ukraine is an outward-looking country, and the Government of Ukraine is very keen to attract foreign investment which should become the lifeblood for the development of this emerging market. In particular, the new Law of Ukraine on the Regime of Foreign Investment was introduced in April of 1996. The law stipulates full protection of foreign investment. It guarantees that a foreign capital may not be nationalized under any conditions. It also guarantees foreign investors with the right to remit without impediment their revenues and to receive reimbursement of losses (including lost profits and moral damage) caused by the improper action or inaction of state bodies. In the event Ukrainian foreign legislation changes the guarantees specified in the Law such guarantees shall remain valid for a period of 10 years from the date that the legislation is modified.

The adoption of the Constitution of Ukraine on 28 June 1996 is deemed to be the final step in the process of establishing basic legal framework. According to the evaluations of western experts, the new Constitution belongs to the most democratic ones in the world. It guarantees all the major rights and freedoms including the right to keep land as a private property. In order to encourage investment and facilitate investing process, the Government of Ukraine has established the Agency for Reconstruction and Development.

The economy of modern Ukraine is formed by both agriculture and industry, which are based largely on the country's natural resources.

Natural resources

According to the experts, Ukraine contains approximately 5% of the world's total mineral resources. Ukraine has deposits of more than 80 types of minerals. The Donetsk Basin contains huge reserves of high-quality coal and the nearby iron-ore deposits of Kryvy Rih are equally rich. Other Ukraine's mineral resources include manganese, mercury, titanium, chromium, nickel, bauxite, uranium, phosphate, sulfur and peat. Development of the above-mentioned mineral resources under concession agreements along with transportation and refining of oil and gas are among the most promising areas for foreign investments.

Industry

Industry contributes more than 40% of GDP and accounts for more than one-fourth of total employment. Ukraine is a major center for heavy machinery and industrial equipment production, machine tools, large electrical transformers, ships, locomotives, rail cars, passenger and cargo aircraft, agricultural machinery as well as textiles. It also has a well-developed chemical industry that produces various plastics, tires and fertilizers. The Ukrainian aerospace and defense industry, which includes more than 500 military enterprises and research institutes, is known for its state-of-the-art technology and production of reliable equipment.

Agriculture

Agriculture accounts for about 25% of Ukraine's total GDP and the same percentage of total employment. Mainly due to extremely fertile soil, Ukraine is a major producer and exporter of a wide variety of agricultural products, including sugar, sunflower oil, flax, different crops and dairy products. This sector offers diverse opportunities for foreign investments, especially in the field of food processing and storage.

Due to its enormous industrial and agricultural potential, recent reforms that have provided political and fiscal stability, highly educated population and unique location, Ukraine has become a place of great opportunity for foreign investors.

For more information, contact the Trade and Economic Mission of Ukraine in the United States.

Mr. Igor G. Gayduchok, Head of Mission
Trade and Economic Mission of Ukraine in the United States (Main Office)
Embassy of Ukraine
3350 M Street, N.W.
Washington, DC 2007
Phone 202-337-0293
Fax 202-342-3874
E-mail yebur@aol.com

Trade and Economic Mission of Ukraine in the United States (New York District)
Mr. Eugene A. Andrianov, Deputy Head of Mission
Consulate General of Ukraine
240 East 49th Street
New York, NY 10017
Phone 212-371-5690, ext. 105
Fax 212-371-5547
E-mail andriano@tiac.net

Trade and Economic Mission of Ukraine in the United States (Chicago District)
Mr. Olexandr V. Artamonov, Expert
Consulate General of Ukraine
10 East Huron Street
Chicago, IL 60611
Phone 312-642-4388
Fax 312-642-4385
E-mail victork@mw.idsonline.com

A Los Angeles office will be open soon.