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The Ukraine ranks 43^rd in the world in terms of size (603,700 km²) 25^th in terms of population (46.4 m) and the border is 6,500 km long. According to the latest UN estimates, Ukraine’s population is declining due to low birth rates and emigration. Ukraine has in total six large urban centers, five of which boast more than a million inhabitants. Population density is highest in industrialized regions in the east of the country, particularly in the Donbass area. Kyiv is by far the biggest urban centre, with over 2.7 m residents.

In the Ukraine the key sectors are agriculture and forestry, mining, light and heavy industry as well as the services sector. Most important export markets are Russia, Turkey, Italy, Germany and Poland, whereas the main import partners are Russia, Germany, Turkmenistan, China and Poland.

The Ukraine primarily exports raw materials, steel products, chemical products, machines and foodstuffs, but imports mainly fuel, machines, chemicals and foodstuffs.

The most noticeable positive development in 2006-07 was a substantial boost in foreign investment flows. Even taking into account the fact that more than 50% of FDI in the last two years was generated by one-off purchases of Ukraine’s giant steel-mill Kryvoryzhstal by Mittal Group and leading local bank Aval by Raiffeisen International (in the biggest private M&A deal Ukraine has ever seen), the country is now clearly on the map of many foreign investors. They are queuing up to buy banking and insurance institutions, real estate, food-processing, metallurgy, mining, telecoms and tourism assets. The genie in the bottle, foreign investors say, is about to be released. Besides Raiffeisen International, a number of Austrian insurance companies and European production companies with regional headquarters in Vienna have entered the Ukrainian market recently. Germany and Austria have been among the top-10 biggest sources of FDI for the past 15 years.

Currently the effects of the world financial crisis are being felt strongly in the Ukraine: investors and private individuals are withdrawing deposits from Ukrainian banks. Companies have problems with liquidity; the financing of investments has become more difficult. The availability of consumer credit (e.g. cars, property) is very limited. The building and construction industry is also affected by increasing credit restrictions.

Nevertheless the economic outlook for the Ukraine for 2009 is overall positive. The investment potential of the Ukraine is distinguished by very well trained skilled workers, proximity to the European Union and good infrastructure. The income levels are also favorable for investors.

On the 16th May 2008 the Ukraine became the 152nd member of the WTO, which can only benefit the country’s economy, as WTO entry is a good prerequisite for a free trade agreement with the EU.

Good chances exist for foreign companies in particular: facilitation of investment and exports, competitive advantage for foreign brand products etc. Certainly, a long transition period has to be taken into account.

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