August 26, 2016
IIP, International Investment Partners, Sergey Nosenko

Sergii Nosenko: foreign investors generally disappointed with the policy of the Ukrainian authorities

The expectations of deregulation and market reforms that would lead to investment boom in Ukraine did not materialize. A senior managing Director of international investment company International Investment Partners (IIP) Sergii Nosenko expressed such an opinion in interview to the edition InternetUA.

InternetUA asked for comments from market participants on possible routes of investment processes in the IT industry development, the major barriers deterring potential investors, and learned which technological segments will continue to be the most attractive?

“We can say that foreign investors in general are disappointed with the policy of the Ukrainian government in the investment process. The expectations of deregulation and market reforms that would lead to investment boom did not materialize. It was a way to compensate losses of Ukraine from the war, however, the opportunity is lost, now the country is moving from an economic crisis into a political one. But the political crisis can lead to regime change. All major investors know that,” said Sergii Nosenko.

According to him, major international investment companies expect big privatization, which could create a trend of transferring state property into private hands – that is, if we are talking about investment in traditional industries. If we are talking about the innovation economy, the interest of American companies, in particular the IIP, is now focused on it startups and agricultural business.

Answering the question about which kind of projects from the IT industry are most popular among investors, Mr. Nosenko drew attention to the quality of the preparation of such projects.

“In order to convince investors in the seriousness the developer must be ready to fund  approximately 20-30% of the invest project by himself” — he said.

Commenting on the importance of political factors in the rating of investment attractiveness of the project, Sergey Nosenko said: ІТ projects are good for their mobility. The owners of factories are forced to negotiate with any authorities. In IT all is easier, and the government should be interested in the fact that these well-paid employees were working in Ukraine. Investment company, unfortunately, has a poor understanding of regional specifics of Ukraine, but it does not mean that the country is unpromising. Investors always take into account political factors, monitor the progress and results of the elections. Of course, the factor of Donbass negatively affects the investment climate of the neighboring regions, in particular, Kharkiv, projects that require major capital investment.”

Sergii Nosenko believes that the main risk of Ukraine – political instability and perfect unpredictability, plus the high level of corruption of officials.

“Everything will depend on the events in the country. The closer the Ukrainian economy will be to the indicators of openness and transparency – the more there will be foreign businesses. The most important factor is the adequacy of the national Bank management, with which there are big problems, which is manifested not only in the “bank falling” and the exchange rate (which attracts the attention of all citizens), but primarily in the regulation of financial markets (with what, in particular, investors are facing). Overall, the global risk can only be war and the actions of the government, and all other factors are secondary.

IT markets show stable growth, and I think this trend will continue,” — said Sergii Nosenko.

Source: investment in IT: what are international players interested in