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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Site  MarkeSng:  Ukraine  

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Site  MarkeSng:  Ukraine  

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Site  MarkeSng:  Ukraine  

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Site  MarkeSng:  USA  

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Site  MarkeSng:  China,  Taicang,    “a  modest-­‐sized  city  in  Jiangsu  Province”  

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Site  MarkeSng:  Poland,  Nickel  Technology    Park,  Poznan              

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Site  MarkeSng:  Russia,  Rostov  Region,    Close  to  Ukrainian  Border  

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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