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Modern economic POTENTIAL OF UKRAINE |
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Investment portrait of Volyn regionRegulatory environmentActivity of the regional state administration on encouragement of investments
InfrastructureRoad transport The total length of general-use roads is equal to 6,311.8 km (3.4% of Ukraine’s total motor road length). Out of this, roads of state-importance extend for 650.7 km and local roads – 5,666.1 km. 5,678.8 km of roads have hard pavement, which is equal to 90% of the total length (the average figure for Ukraine is 97%). The density of general-use roads in the region is equal to 31.3 km per 100 sq. km. The region’s main highways of international and state importance are Kiev-Lutsk-Brest, Brest-Lutsk-Dubny-Ternopol-Chernovtsy, Kovel-Lutsk-Lvov, Kovel-Zhovkva, Rivne-Lutsk-Ustilug, and Korosten-Sarny-Kovel-Warsaw. The Kiev-Lutsk-Brest highway is of paramount importance for the region, because it connects the region with the central, southern, and eastern regions of Ukraine and the Republic of Belarus. The second most important highway is Kovel-Lutsk-Lvov, which connects the region with the western and south-western regions of Ukraine. Highways Kovel-Helm-Warsaw and Vladimir-Volynskiy-Ustilug-Hrubieszow-Zamosc connect the region with the Republic of Poland and European countries. Volyn region’s network of routes includes almost 700 municipal, suburban, and intercity routes within the region, on which 1,400 buses perform 9 thousand trips daily. 106.7 mn passengers were transported for a long distance of 1,242.3 mn passenger-kilometers in 2004. The number of transported passengers doubled in comparison with figures reported in 2003. In 2004, the region's transport companies moved 1,201.7 ths. tons of cargo, which was 3.4% more than the region did in 2003. Cargo traffic reached 277.5 mn ton-kilometers, 34.7% growth in comparison with the figure in 2003. Such commodities as construction materials, industrial raw materials, grains, sugar beets, and potatoes dominated the region’s automotive cargo transportation. Railways and rail transport The total engineered railway length in Volyn region is 615 km and its density is 3.1 km per 100 sq. km. The region’s present-day railway network has an important transit capacity, let alone external and domestic transport and economic connections. The region’s transit status and the role of the city of Kovel as a leading railway junction in Western Polesye were key factors in the formation of the railway network and organization of Volyn’s economy. The region’s railway network is based on 6 main lines, which spread out radially from Kovel. The railway Kovel-Zdolbunov-Kiev (100 km of which is located within the region and accounts for 16% of its total length) is of high importance for the region, because it provides access to central, southern, and eastern regions of Ukraine, Russia, Moldova, and Transcaucasian countries. Being a part of the rail line Kiev-Warsaw, the latitude main line Kovel-Sarny-Kiev provides the region’s access to the northern and eastern Ukrainian regions, Russia, and Belarus. The railway Kovel-Jagodin-Helm provides transit export and import transportations. It is of international importance and connects the region with Poland and other West European countries. The Kovel-Brest main line (56 km within the region’s territory) provides service to the region’s northern districts connecting it with Belarus, the Baltic States, and West-European countries. The railway Kovel-Vladimir-Volynskiy-Lvov provides the region with access to Zakarpatye and Central-Eastern Asia. It transports coal and various agricultural and industrial goods. The wide-track rail line Vladimir-Volynskiy-Ustilug-Hrubieszow-Katowice, which was built in the 1970s, has provided the region with a second way to access Poland. It is of international importance providing key transit export and import cargo transportations (coke, coal, iron ore, and metals). Railway transport accounts for over a half of the total commodity turnover and around 2/5 of the general-use cargo traffic. Transit transportations account for 2/3 of the total cargo traffic. Communication The region has 45 telephone numbers per each 100 households (this figure is equal to 68 for urban areas and 21 for rural areas). Construction of optical fiber communication line Lutsk–Kovel–the state border has been completed with service branches to the towns of Kiverets, Kovel, Ljuboml, Rozhyshche, and Shatsk. In order to expand the possibilities for putting into service digital automated telephone exchanges, the city of Lutsk has constructed a long-distance backup-transit telephone exchange with the up-to-date digital telephone equipment. The postal service is a responsibility of Volyn Department of the Ukrainian State Enterprise of Postal Service “Ukrposhta”. Consumers are rendered 216 types of postal services, including 36 new services. The company is constantly implementing up-to-date technologies. The region has a branch network for water and gas supplies. Almost all of the region’s inhabited areas are provided with electric power. Electric power supply The region’s fuel and energy complex consists of mining enterprises specializing in mining and processing solid mineral fuel (coal and peat) and natural gas and enterprises responsible for supply and distribution of natural gas and electric power. Apart from that, the enterprises of the State Forestry Association “Volynles” and inter-sectoral forestry enterprises of the agroindustrial complex generate a significant portion of firewood. The specific feature of the region’s fuel and energy complex is its high dependence on external supplies of energy resources such as natural gas and electric power. Open JSC Volynoblenergo is responsible for the supply and distribution of electric power to the region’s consumers. Gas supply The region’s own resources are capable of covering only 12% of its total needs. Since operations started at the Lokachi gas field, gas production reached 10% of its production resources (2.5 bn cu. meters). Since March 2003, the region launched operation of Lokachi gas field within a full technological cycle. Natural gas production totaled 88 mn cu. meters in 2004. The total length of gas distribution pipelines in the region is 3,643 km. Solid fuel production There are 4 operational coal mines in the region that extract over 400 ths. tons of coal every year. In 2004, mine No.5 “Novovolynskaya” put a new line into operation. In 2004, Volyn mines extracted 471 ths. tons of coal, which was 85.6% of the planned quantity. The prospective development program of the coal industry to the year 2010 foresees putting the first line of mine No.10 “Novovolynskaya” into operation in 2007. By 2012, mine No.10 “Novovolynskaya” is expected to have reached the engineered capacity of 900 ths. tons of coal per year. The regional development program of the region’s peat industry for the period up to 2010, which is titled “Volyn's Peat”, suggests that the region’s annual peat production should reach 100 ths. tons per year. In order to expand existing peat-extraction capacities, two new raw material bases with a total engineered capacity of 115 ths. tons are currently being surveyed. Non-traditional and renewable energy sources Volyn region has a substantial potential for non-traditional and renewable energy sources, the economic basis of which now equals to 602.8 ths. tons of conditional fuel. The main problem connected with its implementation is a lack of an efficient mechanism of encouragement to employ energy-saving technologies, implement innovation projects and attract investment funds in the sphere of non-traditional energy sources. Among various renewable energy sources, the region now uses only waste from wood-cutting areas and woodworking at a rate of 5% of the economically-expedient potential. It is suggested to expand usage of this energy resource at the expense of plant biomass (firewood and waste from wood-cutting areas and woodworking, replacement of light oil products with alcohol and petrol mixtures), liquefied gas and wind power engineering, which will generate 19-25% of the region’s total energy needs. The use of biomass is considered as the most promising direction, which is capable of replacing 422 ths. tons of conditional fuel with biogas, which is almost equal to the minimal natural gas consumption from all of the region’s consumers. One of the most important tasks is to form public opinion in such a way that it should be clear to everyone that a transition to alternative energy sources is the only way to avoid an energy and ecological disaster. The development rate of non-traditional power engineering in the 20th century indicate that it can compete with such traditional energy sources as oil, gas, coal, and nuclear energy. The search for and implementation of the required technological solutions will result in the creation of a science-intensive competitive product. This problem is now being tackled by scientists at the Lutsk State Technical University. It is possible to expect that the region will have several different biogas-generating research facilities by 2010. Demographic state of the labor marketPopulation The region’s population is 1.0448 mn (as of 1 January 2005). This number includes 551.7 ths. women (or 52.8% of the total population) and 493.1 ths. men (47.2%). The over 60-year-old population consists of 197.9 ths. people (18.9% of all population). There are 219.2 ths. people younger than 16 (21.0%). School-aged youth between 16 and 25 account for 171.1 ths. people. The natural population rise is negative at 2,203 people. A recalculation of this indicator per 1,000 inhabitants yields the figure of -2.3 people. Education There are 15 higher educational institutions, 23 professional and technical schools, and 822 secondary and high schools in the region. Volyn region has 5 specialized sectoral designing, construction and scientific and methodological institutes, 4 branches of sectoral designing and research institutes, 4 sectoral construction organizations, and the regional scientific and production center for ecological and aerospace monitoring “Polesye”. In addition, the region’s agroindustrial complex includes the Polesskiy branch of Soil Science and Agricultural Chemistry Institute, 2 scientific and production associations “Travy” (Herbs) and “Elita”, the scientific and production center for meat cattle-breeding selection “Zorya”, and a planning and surveying agricultural chemicalization station. The region’s scientific institutions employ 753 scientists and technicians, including 40 doctors of science and 205 candidates of science. Most scientists (468) are employed in the technical sphere and agriculture (245). Companies with foreign investmentsExamples of successful investment projects with the participation of foreign capital investments, which are of a high importance for the region’s economic development, are provided by such joint-stock companies as Lutsk Bearing Plant and Lutskplastmass. Many joint ventures are also operating efficiently in the region. Some of them are:
The region is presently carrying out a number of projects with the participation of foreign investors, in particular:
Region’s specific featuresNatural environment Volyn region is located in the north-west of Ukraine. It borders the Republic of Belarus in the north, Ljubljana Province of the Polish Republic in the west, Rivne region of Ukraine in the east, and Lvov region of Ukraine in the south. The region occupies the western part of the East European plain and is within Ukraine’s natural and geographic zones of marshy woodlands and the forest-steppe. The territory of Volyn region is home to a part of the main European watershed dividing the Black Sea and the Baltic Sea basins. The mineral and raw materials base is represented by such minerals as coal (74 mn tons), natural gas (7,615 mn tons), phosphorites (7.31 mn tons), copper (28 mn tons), construction stone (18 mn tons), construction chalk (27.3 mn tons), sapropel (70 mn tons), helium (15.6 mn tons), and others. Apart from that, the region contains such widespread minerals as peat, raw materials for bricks and tiles, construction sand, glass sand, and concrete raw materials (loam and marl). The region has a sufficient quantity of minerals to secure balanced development of the economy and satisfy the region’s needs for minerals. The region’s ground is formed by peat-and-podzol, peat, and peat-and-swampy soils. The northern part contains black earth and the southern part contains dark-gray soils. The natural fertility of most of the soils is low; they have an acid reaction and need to be limed. Vegetation is rich and varied in Volyn region. A third of the total area is covered by picturesque fir and mixed woods. Meadows occupy a large area. The region has peat bogs and typical marsh vegetation. There are significant reserves of rare plants and herbs in the region. A number of enterprises are engaged in large-scale storing of herbs, mushrooms, forest berries, etc. In terms of natural and geographic divisions, Volyn region is subdivided into 10 landscape districts. Foreign economic and investment cooperationVolyn region is situated in the north-western part of Ukraine and borders the Polish Republic (border length – 190 km) and the Republic of Belarus (border length – 205 km). The direct border with the European Union facilitates active development of business relations with foreign countries. Economic cooperation with CIS countries is the most active (62% of the foreign trade turnover). The region’s main business partner is the Russian Federation with a bilateral commodity turnover of USD 253.9 mn in the first half of 2005, which was 6.6% higher than the previous year’s figure. Economic transactions with EU member states resulted in a commodity turnover of USD 132.8 mn or 28% of Volyn region’s total foreign trade turnover. It must be pointed out that the region’s trade turnover with Greece, Italy, Lithuania, and Poland have added more than two-thirds and those with Sweden and Belgium have doubled. Local business entities’ activities were aimed at strengthening their economic positions on the markets of Asian and African countries last year. They accounted for 8% in the region’s total foreign trade turnover. Commodity turnover with countries on the American continent was USD 1.5 mn, which is equal to only 0.3% of the region’s total foreign trade turnover. Investment cooperation is an important direction in economic relations. During 1993-2005, Volyn’s economy was a recipient of an amount exceeding USD 114 mn in foreign capital investments. The region accumulated substantial experience of working with foreign investors, various foreign funds and international technical assistance programs. However, taking into account the region’s investment capacity, the cooperation potential is still far from being used to its full extent. Priority directions in the sphere of attracting foreign investments are as follows:
Its status as one of the European Union’s neighbors provides Volyn region with new opportunities to expand cooperation in many branches of the economy. Volyn will become increasingly attractive for potential investors, taking into account its main advantages, some of which are as follows:
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