Contact theSOPAbout theSOPSupport theSOPWritersEditorsManaging Editors
theSOP logo
Published:July 29th, 2009 09:35 EST
UNDP CIDP and Development Foreign Investment and Small Business in Crimea

UNDP CIDP and Development Foreign Investment and Small Business in Crimea

By Elmaz Muzhdabaeva

UNDP CIDP presented the results of the research entitled `Small business: economic chance of Crimea?` In his speech, the reporter stated positive tendencies of the small business development on the peninsula, but also pointed out the difficulty to estimate the actual state of affairs, as a large part of the Crimean economy remains in the shadow. 


«Official statistics reveal that 9,6% of the total amount of products, works and services sold in Crimea in 2007 were produced by small enterprises, while in 2002 this indicator reached 14,8%. However, it seems impossible to make an accurate assessment of the real social and economical role of the small business. Experts estimate that, for instance, in February 2009 over 45% of the Crimean enterprises` economic activity has been left out of the official data », stressed UNDP.


To improve the economic situation in the Crimea and to attract foreign investments, it is necessary: 


-to modernize tax legislation, currency and customs- tariff policy;

-to reform the system of bookkeeping calculation; to improve banking system;

-to accept the packet of investment bills;

-to create the transparency of the Ukrainian enterprise-monopolists and to protect the rights of minor investors.


One of the major factors, which arise on the path of foreign investments into Ukraine, according to the western analysts, is economical instability. Not less the West is perturbed by the level of bureaucracy and corruption in the Ukrainian power structures. The extremely sensitive zone of problems for the Crimea is the personnel shortage.  


It is not uncommon that promising personnel`s try to leave the Crimea and move to the center of the country or even beyond its borders, naturally assuming that it is much easier to find interesting high-paid job, to build the career. It sometimes occurs so that after having gotten a great education in the capital, young personnel realize, that to return back home -  is the hopeless way. 


Foreign investors make conclusions about the investment attractiveness of the region on the basis of summary coefficient on a number of the key indices, among which: the presence of place for the  enterprise; the cost of the earth (buildings for the enterprise); the presence and the cost of raw materials;  competitors situation; the cost of work force; cost and the quality of transport and communication line structure; the factors, connected with the local special features and the quality of life, probable lingual complexities; proximity to the markets.   


What it is necessary to attract the investor into the Crimea?  Firstly: Clear determination of investment niches in the region economy.  Secondly: Detailed preparation of investment areas. Elimination of all juridical obstacles, or the demonstration of the precise way of the optimization of the juridical relations


Elmaz Muzhdabaeva, an independent journalist