Regional Economic Development – Key Instrument to Attract Foreign Capital
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Economic Development – Key Instrument to A?ract Foreign
Capital
Dmytro Krepak Kiev, Oct. 2014
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Ukraine vs. Poland: Key Indicators (2013)
Poland Ukraine
Area (km2) 312 685 603 550
PopulaSon (mil. people) 38.3 44.2
Literacy 99.5% 99.7%
Unemployment 10.3% 8%
GDP at PPP (bln. USD) 814 337
GDP Growth 1.3% 0.4%
GDP per person (USD) 21 100 7 400
Budget deficit (% of GDP) 0% -‐5.2%
Export/Import bln USD 202.3/207.4 71.1 / 87.2
Foreign Direct Investment (bln USD) 248.2 61.5
% of populaSon below the poverty line 10% 24%
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State of Polish Economy in 1989
1. 640% inflaSon rate
2. Budget deficit of 7.2% of GDP
3. 400% difference between “official” and black market currency exchange rate.
4. NaSonal Bank’s foreign currency reserves = 2.5 bln. USD
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Polish “Shock” and “Therapy”: Full Recovery in 4 Years
1. StabilizaSon 2. LiberalizaSon 3. PrivaSzaSon and Restructuring
1990 1991 1992 1993 1994
InflaSon (%) 585 70 43 35 32
GDP growth (%) -‐12 -‐7 2.6 3.8 6.0
Unemployment (%) 6 12 14 16 16
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Economic Development is the Key Element of Growing Jobs and FX flow to Ukraine
Foreign Direct Investment
Growth of taxable income
1. Business Climate 2. Quality Labor 3. Infrastructure 4. Quality of Life
$$$ to improve…
New Jobs
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Key Elements of ProacSve Economic Development
1. Strategy
2. ProacSve Business Development -‐ Site SelecSon ConsulSng
3. MarkeSng and AdverSsing
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Strategy: What do Companies Look for? What is our CompeSSve Advantage to A?ract them?
1. Reduce costs
2. Enter new markets
3. Gain access to new technologies and know-‐how
§ Affordable skilled labor § Low unionizaSon § Literacy and college educaSon § PopulaSon size, age, income § Unemployment § Business climate, incenSves for
investors § TransportaSon infrastructure § Availability of industrial sites § Research faciliSes and
insStuSons § Availability of high tech clusters § High quality of life
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ProacSve Business Development/ Site SelecSon ConsulSng
1. Complex product, difficult market
2. Who makes locaSon decisions?
3. Sales management
4. Deal closure – face-‐to-‐face contact is criScal
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Role of Banks in Economic Development: Example of North Carolina, USA
Key Stakeholders Driving Economic Development 1. State-‐private Economic Development Partnerships (Research Triangle
Partnership, Charlo?e Regional Partnership)
2. Electric and Gas USliSes (Duke Energy, Piedmont Natural Gas)
3. NC Department of Commerce
4. Academic InsStuSons
5. State Leadership: Governor, Mayors, Senator, Congressmen
6. Top Banks: Banks of America, Wachovia
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