Modern economic POTENTIAL OF UKRAINE

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The investment portrait of Sumy region

Regulatory environment

Investment attracting activities of the regional state administration

Today, the enterprises and organizations of the region are entertaining 170 investment proposals, the realization of which would require the attraction of about USD 2.3 bn.

According to the tasks of the 2005 action plan, active work on information about the investment potential of region was conducted:

• a set of investment questionnaires for Ukrainian trade-economic missions abroad was developed;
• a CD sent to investment funds, which detail investment activity in Ukraine;
• proposals concerning investment possibilities of region are sent to Russian investment companies, funds, banks.

The region constantly is host to various business delegations who want to learn more about the economic potential of the region and conduct negotiations with the leaders of enterprises and with entrepreneurs.

Collaboration with regions in the Russian Federation is actively developed and there is an active exchange of information. Work on creating a Euro region borders on Sumy and Kursk regions is proceeding.

In the city of Sumy the International investment forum “Investments. Partnership. Development" was conducted on September 15th-16th. More than 60 foreign companies took part in it, among them representatives of well-known investment funds and companies: “Western NIS Enterprise Fund,” “Business Award,” “Foyil Securities,” "Bi.Ci. Toms," the leaders of foreign states trade missions.

As a result of the work conducted, since the beginning of 2005, the volume of direct foreign investments grew up by USD 24.5 mn, 4.3 times more than last-year’s index.

The general volume of direct foreign investment into Sumy region, as of July 1, 2005, was USD 163.6 mn, or USD 132 per one regional habitant. According to these indexes the region occupies the 12th position among the regions of Ukraine.

Direct foreign investments came from 25 countries and were invested in 119 enterprises of region. The largest volumes came from the following countries: Liechtenstein – USD 35.2 mn (21.5%); Switzerland – USD 34.8 mn (21.2%); the USA - USD 27.3 mn (16.7 %); Cyprus – USD 25.7 mn (15.7 %); British Virgin Islands – USD 24.6 mn (15.0%); United Kingdom – USD 6.1 mn (3.8 %); Poland – USD 3.7 mn (2.3 %); and Russian Federation – USD 2.9 mn (1.87 %).

It should be noted that this group of countries has the status of constant investors. Each of the foreign investors fund a priority area in the region with capital investments: Switzerland and Liechtenstein sent their investments into the machine building, United States of America - into the food industry, United Kingdom, the British Virgin islands - into the wholesale and etc.

The most attractive industries for the foreign investors is still machine building – 66.6% of total volume of investments, food industry and processing of agricultural product – 17.1%, operations with the real estate, hiring out and services to the legal entities – 4.7 %, wholesale and retail trade – 4.0%, production and distribution of electric power, gas and water – 3.9%, and production of coke, products of petroleum processing – 1.3 %.

Among cities and areas of region, the leading place, according to the volumes of investments, is constantly Sumy. Its enterprises received investments of USD 28.2 mn (78.4% of the general volume in region), into the Trostyanets area – USD 25.5 mn (15.6 %) Shostka – USD 3.8 mn (2.3%), and Akhtyrka district – USD 2.1 mn (1.3%), Akhtyrka town – USD 1.5 mn (0.9%). Into the other cities and areas foreign investments were less than 1% in volume.

The priority investment directions:

• growing and deep processing of flax and hemp;
• growing and processing of oily rape on bio-fuel;
• creation of machine-technological stations of various profiles for maintenance of agricultural enterprises in the areas of region;
• renewal and development of stock-raising region: milk cattle-breeding, pig breeding, poultry farming and sheep breeding;
• reconstruction of Sumy airport;
• building of a factory for processing hard domestic wastes;
• building of a factory for producing cartridges.

Infrastructure

Transport communications

The region has a developed transport system. It is crossed by the intergovernmental motorway Kiev - Moscow. The major railway routes are Kiev - Moscow, Kiev - Kharkov, Dnepropetrovsk - Saint Petersburg. The large railway stations are Konotop, Vorozhba, and Smorodino. The operating length of railway track is 920 km, and highways about 7,300 km.

The territory of Sumy region is crossed by the main gas pipelines: Urengoy - Pomary - Uzhgorod, Yelets - Kursk - Sumy - Dikanka, Kursk - Sumy - Kiev, Sumy - Konotop, Belsk - Sumy, Kiev - Bryansk and by oil pipelines: main Michurinsk – Kremenchug and of republican meaning - Little Pavlovka - Akhtyrka.

Labor market demographic condition

The region includes 15 towns (out of them 7 are of regional submission: Sumy, Konotop, Shostka, Akhtyrka, Glukhov, Romny, Lebedin), 20 urban villages and 1,500 rural settlements. Greater part of population - 65.5 % - lives in towns, and part of town habitants constantly increases. Sumy is a multinational region. Here, in consent and neighborliness, live the representatives of more than 50 nationalities. The greatest in quantity are Ukrainians (88.8 %) and Russians (9.4 %). The percentage of men in the total population is 45.6 %, women – 54.4 %.

Constant population of the region as of January 1, 2005