Ukraine

Chris T.Reuter
Piotr Bartenbach
Kateryna Vakhula
Magorzata Zubiel
Bartomiej Staszczyk
International Management, Mirosaw Jarosiski, Ph.D

Table of content
1.
2.
3.
4.
5.
6.
7.

Geographical location and conditions

Country history with its latest developments
Political and legal system
Living conditions (income and wealth)
Education
Investment climate
Tips for an investor

Geographical location
and conditions 1/3
Ukraine is located in the
center of Eastern Europe.
Country bordering the
Black and Azov sees.
Only 5% of the territory
are mountains, while 95% plain.
The coastline of the Black
see is more than 1500 km.
The climate is temperatecontinental on the whole
territory of the country
except Crimea. There the
climate is subtropical.

Geographical location
and conditions 2/3
The territory of Ukraine from
East to West is 1316 km and 893
km from North to South.
Square of the country is 603700
km.
It is 5,7% of the territory of the
whole Europe and 0,44 of the
territory of the whole world.
Ukraine is the biggest country in
Europe that is wholly located in
its territory.
Countries-neighbours: Russia,
Bialorus, Poland, Slovakia,
Moldova, Hungary and Romania.

Geographical location
and conditions 3/3
The average temperature in winter is
-12, while in summer it is +23.
Depending on the part of the country it
could be -27 in winter and +37 in
summer.
Relative humidity is 65%-80%.
The of the black earth of the whole
world is located on the territory of
Ukraine.
Ukraine is one of the leading countries in
the world according to mineral
resources.

Living conditions
Development of GDP per Capita in US $
4500
4000
3500
3000
2500
2000
1500
1000
500
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Living conditions
Income Development from 2000 2012 (selected years) in mln. UAH
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
2000

2005

2008

2009

2010

2011

2012

Living condititions
Structure of population income in 2012

Profits and mixed income; 15%

Social aid and other current transferts received; 37%
Wages; 42%

Income from ownership (received); 5%

Living conditions
Distribution of Income by Quintile
2010

35.74

22.41

17.79 14.13 9.93

2008

37.08

22.46

17.49 13.61 9.36

2005

37.43

22.61

17.49 13.45 9.02

2002

37.43

22.58

17.54 13.52 8.93

0%

20%

40%

60%

80%

100%

Income share held by

lowest 20%
Income share held by
second 20%
Income share held by
third 20%
Income share held by
fourth 20%
Income share held by
highest 20%

Living conditions
Poverty headcount ratio (% of population)
60
50
40
30
20
10
0
2002 2003 2004 2005 2006 2007 2008 2009 2010

Less than 5$ /day

Less than 2,5 $/day

Living conditions
Average monthly nominal wage in $
400

365

350

318

300

270

250

218

230

2008

2009

200
150

97

100
50
0

25
2000

2005

2010

2011

2012

Living conditions
Availability of selected durable goods in
households in 2012
Type of good
Colour TV sets
Computer
Mobile phones
CD players

Average per
100 household (pcs)
115
33
187
7

Cars

22

Motorbikes, bicycles
and scooters

49

Living conditions
Internet users per 100 inhabitants
2005: 3,8
2010: 23,3
2011: 30,6

Country History

Divided between a variety of powers

Independent in 1991
Orange Revolution
Nowadays

Attiutude towards
other countries
Ukraine = not multi-ethnic and multicultural nation
Rise from 2000, detailed studies in 2008
Most vunerable groups:
Roma
Crimean tatars
Muslims
Migrants, refugees and asylum seekers

National heroes
Bohdan Khmelnytsky (1597-1657)
Hetman of the Zaporozhian Host of the
Crown of the Kingdom of Poland in the
PolishLithuanian Commonwealth (now part
of Ukraine)
led an uprising against the Commonwealth
and its magnates (16481654)

Threat of terrorist
attack
2012 Dnipropetrovsk explosions
29 people injured

2006 Kharkiv supermarket bombings

14 people injured

Political and legal system

Semi-presidential republic in 1991

Parlimentary system in 2004

President
Term length: 5 years, renewable once
Nations representative, Commander-in-Chief of
the Ukrainian Army, Head of National Security and
Defense Council

Viktor Yanukovych (2010)

Party of Regions

Prime Minister
Term length: 5 years or less
Head of government, President of Cabinet of
Ministers of Ukraine

Mykola Azarov (2010)

Party of Regions

Parliment
Parliment = Verkhovna Rada
Sole body of legislative power
Composed of 450 deputies

Parliment - division
Government (254)
1. Party of Regions (210)
2. Communist Party of Ukraine (32)
3. Non-affiliated (12)
Opposition Parties (190)
4. All Ukrainian Union "Fatherland" (99)
5. Ukrainian Democratic Alliance for Reform (42)
6. All-Ukrainian Union "Svoboda" (37)

2
1

3
4
5
6

Legal system
Constitutional
Court

Inteprents Constitution of Ukraine

Validates laws against Constitution

Courts of General
Jurisdiction

Supreme Court
Highest Specialized Courts
Cassation Court
Appellate Court
Local Courts

Constitutional
Court

Proposes judges for appointment or dismisal

Controls for formation of corps of judges
Examines cases involving unjust judging

Corruption level
144 place out of 176 countries
investigated
In other studies in top 3

Contraband
Ukraine annually loses 1 billion EUR due to
falling into the Ukrainian market of
counterfeit and contraband products
Head of the State Inspectorate for Consumer Protection Serhiy Orekhov, 2013

Membership in national
treaties & programmes
North Atlantic Cooperation Council.
Partnership for Peace (NATO program)
Organization for Security and Cooperation in Europe

Education
11 years of schooling are mandatory, schooling
begins at the age of 6, unless your birthday is on or
after September 1 or on February 29
Schools receive 50% of their funding from the city
budget and 50% from the national Government
budget
The Ukrainian educational system is organized into
five levels: preschool, primary, secondary, higher
and postgraduate education

Education
Grade

Age

6/7

7/8

8/9

9/10

10/11

11/12

12/13

13/14

14/15

10
11

15/16
16/17

School level

Accreditation

primary

I level

secondary, base

II level

secondary, complete

III level

Ukraine produces the fourth largest

number of academic graduates
inEurope (2012)

Education
About 70% of adult Ukrainians have a secondary or higher
education. The number of people with higher education has
grown by 34.9% in the last 12 years
The official language of Ukraine is Ukrainian, an East Slavic
language which is the native language of 65% of Ukraine's
population. Russian is the native language of 33% of
Ukraine's population and the rest (2%) are native speakers
of other languages
Ethnologue lists 40 minority languages and dialects; nearly all
are native to the former Soviet Union

Languages of Ukraine

Source:http://en.wikipedia.org/wiki/File:RussianUseEn.PNG

Investment climate
Ukraines investment climate has been
historically marked by ever-changing
business environment and great
variance between official statistics and
actual conditions.
1. Social attitude towards foreign investors
2. Corruption
3. Government incentives
4. Government restrictions
5. FDI level

Social attitude towards

foreign investors
Social attitude towards foreign investors is in
general positive.
Ukrainians mostly acknowledge actual benefits of
having foreign investors in their country.
They are however a little afraid of having their
lands and major national assets bought out by
foreigners. The same as we were when foreign
investors started massively investing in Poland
after joing EU.

Corruption:

Corruption Perception Index

Source: Transparency International transparency.org

Government
Incentives
Tax exemptions:
Sector specific incentives:
Target sectors:

Source: FDI Atlas -

Government
Restrictions
Non-discrimination of foreign investment
and general provisions on foreign
investment protection- legal framework
provides for national treatment for firms
establishment.
Transsectoral and sectorial restrictions on
foreign investment which qualify for the list of
exceptions to national treatment and measures
reported for transparency in the meaning of the
OECD Declaration on International Investment
and Multinational
Source: OECD Investment
Policy Reviews: Ukraine Enterprises.
2011

Government restrictions:
FDI regulatory restrictivness index, 2012

In Billions USD

Foreign Direct
Investments (2000-2012)
12
11
10
9
8
7
6
5
4
3
2
1
0

Source: World Bank - http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD/countries

Ukraine
Ukraine
Poland

Investment climate:
Summary
Ukraine performs rather poorly in attracting
foreign investment, drawing just over $7 billion in
FDI on average annually from 2007 to 2012.
Government official uses lot of malpractices and
are corrupted
Due to poor property right protections, selective
law enforcement and a weak judicial system,
Ukraine is not considered as a very attractive
country to invest in.

Tips for an investor 1/10

Ukrainians love presents!
Bring something from Your country and
You will definitely receive something
from Ukrainian people not only for You,
but for Your family as well (Ukrainian
sweets, red caviar, souvenirs)!

Tips for an investor 2/10

Be sincere!
Tell Your business partners about Your
family and children during the lunch,
about Your plans for holidays and
anything else that is not related to
business!

Tips for an investor 3/10

Do not be afraid if You will be invited
to dinner after negotiations! Feel free
to eat and drink alcohol during the
dinner.

Tips for an investor 4/10

Try to speak Ukrainian!
Ukrainians love if You say Hi and
Bye or Thank You in their
language.

Tips for an investor 5/10

Be ready to walk and eat a lot!
Ukrainians will make You a tour around
the city as soon as You come and will
feed You a lot=)

Tips for an investor 6/10

If You have a meeting, it is better to
call Your partner and confirm it an
hour before the arranged time or the
day before the meeting.

Tips for an investor 7/10

Do not be late! If you are late to the
meeting even for 5-10 min, always call
your business partner!

Tips for an investor 8/10

Make jokes=)
It helps to create a warm and trusted
atmosphere between you and your
partner.

Tips for an investor 9/10

Ask Ukrainian partner to make a photo
together!
He/she will definitely like that idea=)

Tips for an investor 10/10

Dress code!
If you meet for the first time, wear a
suit with tie or skirt suit and heels (if
you are a women).

Bibliography
1. . . (2010) i , .
2. . . (2012) , .
3. Ukraine's education system should be funded at 10% of GDP, says Lytvyn, Interfax-Ukraine (November 23,
2009)
4. Education Ministry: Some 44 percent of children unable to attend kindergarten, Kyiv Post (August 11, 2010)
5. State Statistic Services of Ukraine , Ukraine in figures Statistical Publication, Kiew 2013.
6. http://data.un.org/CountryProfile.aspx?crName=UKRAINE [accessed last 13/12/2013]
7. http://unstats.un.org/unsd/snaama/resQuery.asp [accessed last 13/12/2013]
8. http://povertydata.worldbank.org/poverty/country/UKR [accessed last 13/12/2013]
9. http://www.bbc.co.uk/news/world-europe-18010123 [accessed last 8/01/2014]
10. http://www.coe.int/t/dghl/monitoring/ecri/countryby11.country/ukraine/ukraine_cbc_EN.asp [accessed
last 8/01/2014]
11. http://globaledge.msu.edu/countries/ukraine/government [accessed last 8/01/2014]
12. http://www.transparency.org/cpi2012/results/ [accessed last 8/01/2014]
13. . (2002) . ,
.
14. . (2006) , .
15. Hofstede, G, 1984, Culture's Consequences: International Differences in Work-Related Values, Sage.
16. Knapp, K., and Knapp-Potthoff, A., 1990, Interkulturelle Kommunikation, Zeitschrift fr
Fremdsprachenforschung, pp. 62-93.