Modern economic POTENTIAL OF UKRAINE

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Investment Portrait of Zakarpatye region

Zakarpatye is a picturesque corner of Ukraine with a special geographical location in the context of state geopolitics.

Zakarpatye region is the only Ukrainian region bordering on four foreign states: Poland to the north-west (the border stretches for 33.4 km), Slovakia to the west (98.5 km), Hungary to the south-west (130 km), and Romania to the east (205.4 km). Also it borders on two Ukrainian oblasts (Lvov and Ivano-Frankovsk regions to the north-east and south-east).

Taking into consideration its geographical specifics, Zakarpatye region has been a convenient connecting route between the states of Northern, Southern, Eastern, and Western Europe, Hungary, Poland, Romania, and Slovakia for a long time.

The region is relatively small in area and population compared to other regions. Its area is 12.8 ths. sq. km and the population amounts to 1.28 mn people.

Zakarpatye region is divided into 18 administrative territorial units, including 5 regional administrative centers (Uzhgorod, Mukachevo, Khust, Beregovo, and Chop), and 13 districts.

The climate in the region is mild, moderately continental.

The Carpathian Mountains occupy approximately 80% of the region territory, and the Pritisnyanskaya Lowland makes up the rest of it. The highest mountain in Ukraine, Goverla (2,061 m above the level of the sea) is situated in the territory of the region.

At present Zakarpatye region is considered one of the most environmentally safe regions in the country. The unique natural ecosystem of the Carpathian biosphere natural reserve is among the most valuable ecosystems on Earth and is included into the international network of UNESCO biosphere refuges.

Zakarpatye region is an active member of the Carpathian Euroregion, the interregional union of the boundary region of Ukraine, Poland, Slovakia, Hungary, and Romania.

The history of Zakarpatye region has a number of unique characteristics that influenced the economic, political, and ethnic development of the territory.

The territory of the region, over the whole studied period of its existence, has been a component of 22 different state structures. The most important historical record was left by the Great Moravian state, Kievan Rus, the Hungarian kingdom, Transylvanian principality, Austria and Hungary, Czechoslovakia, the Hungarian crown, Soviet Union, and independent Ukraine.

Zakarpatye region unites an important geographical crossroads of both borders and the close connection between the inhabitants of neighboring border regions of foreign states. This ethnic variety is unique in Ukraine and the whole Europe. In spite of national, cultural, and religious differences, the population of Zakarpatye region has found common grounds over the centuries. As a result the following nationalities reside here: Ukrainians, Rusins (78.4%), Hungarians (12.5%), Russians (4.0%), Romanians (2.4%), Gipsy (1.0%), Slovaks (0.6%), Germans (0.3%), Jews (0.2%), and in all, representatives of more than 80 nationalities altogether.

Investment Zakarpatye region

It is necessary to pay attention to the unique opportunities of Zakarpatye region investment activities while analyzing the economic portrait of the region.

There is no other area in Ukraine bordering simultaneously on four states, including present and future members of the European Union (Poland, Slovakia, Hungary, and Romania), as well as two regions of Ukraine (Lvov and Ivano-Frankovsk regions). Also, the transportation infrastructure and significant experience in international cooperation found among its people should not be forgotten.

Zakarpatye region already possesses specific experience regarding foreign investments. It is mostly explained by a rise in investment activities after the adoption of two Laws of Ukraine “On a special regime of investment activities in Zakarpatye region ” and “On special economic zone Zakarpatye”. These laws, along with other general legislative acts, have created a favorable environment for foreign capital inflows.

These laws were written in response to the necessity to support and encourage economic development in the depressed and subsidized territory of Zakarpatye region.

Through the marketing functions in these two laws, Zakarpatye became a zone of interest for such famous transnational companies as Volkswagen, Skoda, Audi, Ikea, Fisher, Philips, Hewlett Packard, Flextronix, TDK, Leoni, Delphi, Yazaki, Le-Go, Henkel, Groklin, etc., which have now implemented their own investment projects in the region.

Natural resources

Forests, which occupy more than half of the region’s territory, are its core.

The mineral and raw stock basis of the region is represented by 150 deposits of more than 30 kinds of natural resources, including unique in Ukraine deposits of polymetals, alunites, zeolites, liparites, etc. The Solotvinskoye deposit of rock salt is sufficient in the region among occurrences on non-metallic mineral resources. Unique in Ukraine deposits of zeolites are extremely promising.

Zakarpatye’s germanium, used as semiconductor in modern radio electronics, instrument making, space technologies, and other industries is highly estimated on the world market. The oblast has broad possibilities in the development of porcelain and chinaware using kaolin as a raw stock. Zakarpatye’s kaolin is unique by its whiteness and has no competitors in Ukraine. This material resembles the raw stock of China in its chemical composition. The region is extremely rich in raw stock for the construction industry. There are 13 revealed deposits of carbonaceous raw stock in the region (limestone, dolomite, and marble). It is used as facing material, decorative chips, limestone powder, and Portland stone.

Industrial mining for gold was started in 1999. The designed output of the deposit is roughly 480 ths. tons of ore. The operational life of the mine is more than 15 years. As the ore is rich in silver as well, length of the mine operations could be prolonged.

Resort potential

The region has extensive natural, recreational, and resort potential. More than 700 water sources were revealed and researched in 67 fields of mineral and thermal waters of about 30 types. The region’s waters are equal to famous waters in the Caucasus, the Czech Republic, and France in their chemical composition. Their curative attributes were mentioned in archives of the middle XV century.

Nowadays there are 20 deposits of sub-thermal waters (with the temperature 20-35oC), thermal (with the temperature 35-42 oC), and highly thermal (with the temperature more than 42 oC) waters.

Zakarpatye region is extremely promising from the point of view of tourist and recreational potential development.

Picturesque low-hill landscapes and relief are favorable for winter sports and rest. Unique deposits of carbonated and hydrocarbonated, sodium, and sulphide waters create real possibilities for the industrialization of recreation and tourism. The season for the most favorable conditions for rest of aged people (temperature at 15-20oC) lasts in Zakarpatye region the longest in Western Ukraine (4 months, and even up to 6 months). The Carpathian Biosphere Reserve created in 1993 has become a center of scientific research in the area of mountain ecosystems. It draws both local and foreign scientists.

Transportation

The functioning of international transportation corridors on the territory of the region has a special importance for the creation of a favorable investment climate. International transportation Corridor No.5 (Cretan) connecting Lisbon, Trieste, Ljubljana, Budapest, Kiev, and Volgograd crosses the region. It connects Western European and Eastern European highways, railroads, and river national networks with the purpose of securing transit freight carriages along the Europe-Asia direction.

A number of state and commercial companies conduct the transportation, forwarding, and servicing of transit and international freight carriages in the region. The largest of them are OJSC Zakarpatinterport in railway transportation and CJSC Avtoport-Chop among road transportation companies, and through a network of international road carriages service (SMAP) and the offices of the automobile service of the state company Ukrinteravtoservice. International Uzhgorod Airport is a 4G class airport accepting An-24, An-26, An-32, Yak-40, Il-18, An-12, and helicopters. Airport through traffic capacity comprises 1,500 people per day. There are regular flights to Kiev, Donetsk, Kharkov, Dnepropetrovsk, Vinnitsa, Rivne, Budapest, and Moscow. It is possible to dispatch and receive freights through the airport of Mukachevo with the take-off runway of 2,500x40 m. It is suitable for the landing of Il-62, Il-76, Tu-124, Tu-154, Tu-204, An-124, and Boeing-737-400 planes.

More than 1,700 km of mainlines transport energy carriers and raw stock resources cross the territory of the region. Gas from the united gas transportation of Ukraine is exported to European Union states and Romania through four trunks. Oil from the Russian Federation is carried out to Slovakia, Hungary, and the Czech Republic through two branches of the Druzhba pipeline. Refined petrochemicals are exported to Hungary from oil refineries of Russia and Belarus through the Samara-West pipeline. Ethylene produced by the Oriana chemical concern in Ivano-Frankovsk region is transported to Hungary through the Kalush-Tisavarosh pipeline.

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