The Prime Minister (PM) reported, "The total amount of foreign direct investment received by Ukraine over the last seven years was only USD$3.9 billion, or approximately USD$79 per capita. This level was the second lowest amount in any of the fifteen former Soviet Union Republics except for Belarus."

"This extremely low level of foreign direct investment is not acceptable to the new government and will never move Ukraine onto the world economic stage as a strong, private market economy," the new government leader explained.

Prime Minister Kinakh told the large crowd of key government and business leaders attending the Foreign Investment Forum that Ukraine must immediately unite its efforts and move forward to implement a whole range of new government policies. New legislation and regulations, which will liberalize and deregulate business activities, provide a stable and predictable legal environment, enhance governance, and reform public administration. All the various branches of governmental power in Ukraine must unite in supporting this important effort.

"Ukraine must also move to remove international capital and foreign trade restrictions, facilitate the financing of business by the domestic and international financial sector, eliminate corruption, and implement effective business promotion programs," the Prime Minister said in his speech.

"We should stop referring to a reported 'unique Ukrainian situation' when developing investment policies. The methods used effectively to attract foreign direct investment in the other transition economies will also work in Ukraine.

Ukraine is not an economic anomaly," the new governmental leader emphasized. This announcement was a welcome change to policy statements by some previous government leaders which indicated the standard procedures of international business and finance should not be adopted in Ukraine At the Investment Forum Prime Minister Kinakh announced an immediate eight part plan of action to accelerate investment activity in Ukraine. The plan of action will revolve around the recommendations of the International Private Capital Task Force (IPCTF). The Prime Minister's plan is a call to:
1. Finalize a detailed action plan to accelerate investment activity in Ukraine using the IPCTF study as the base of the plan;
2. work in cooperation with the President to obtain Presidential decree's for the specific parts of the plan that can be implemented by Decree;
3. submit legislative proposals to the Verkhovna Rada of Ukraine for actions requiring legislative approval;
4. promote the benefits of the investment action plan with the people of Ukraine and with the international community;
5. gain approval by the President, Cabinet of Ministers and the Rada for the plan;
6. monitor and measure the results of the changes in government policies and the effect on the flow of private investment funds using the benchmark analysis found in the IPCTF study;
7. hold regular forums with key organizations about the major issues and the effectiveness of program implementation; and
8. use the strategy to directly improve the economic and social development of Ukraine.

The Prime Minister emphasized that working to improve the economic development of Ukraine is the highest priority for his new administration. His office has already begun to "Develop and implement the specific measures and steps aimed at significantly improving the investment climate in Ukraine," according to the PM.

Those in attendance at the Investment Forum welcomed the remarks by the new Prime Minister and were impressed by his commitment to change. Everyone indicated they will be watching and waiting to see what specific actions are taken by the new government in the next few months prompted by the fact government implementation of major economic reform measures has been difficult and slow in the past.

Following the Prime Minister's remarks, a representative of the private business sector, Michael Bleyzer, President of SigmaBleyzer, an American-Ukrainian Investment Banking Group, spoke on the topic, "Attracting Private Capital to Ukraine Through Good Governance."

Mr. Bleyzer, also a leader of the IPCTF steering committee, outlined the recommendations of the IPCTF study and emphasized that the IPCTF framework provides a comprehensive tool for building consensus, developing an action plan and implementing the government policy changes needed in a transition economy like Ukraine.

"Economic growth is the key to creating jobs, increasing incomes, solving social problems, and fighting poverty," stated the President of SigmaBleyzer. "The IPCTF Action Plan, if implemented by the government of Ukraine, will provide the basis for Ukraine to successfully complete its transition to a market economy and democracy."

On behalf of International investment community Bleyzer issued "A Call For Action," to the government of Ukraine and challenged government leaders to find the "POLITICAL WILL" to enact the Prime Minister's Action Plan. "You are a new government, you have a new mandate, a new opportunity." "CAN YOU DO IT?" Bleyzer said in closing his presentation.

The U.S. Ambassador to Ukraine, Carlos Pascual, spoke about the "Rule of Law." The Ambassador said, 'The rule of law is fundamental to all economic activity in all economies around the world. Without it, chaos reigns and economic development is not possible. For Ukraine this means completing work now on the basic legal framework, including the Law on Judiciary, the Civil Code, the Criminal Code, Tax Code, and other basic codexes."

Ambassador Pascual said that experience has shown," Investors need clarity and simplicity. When completing each of the needed laws, the challenge for the Rada will be to keep them simple and clear. No hidden surprises; no special favors. When a law is well written, everyone--business people, police, the courts--can agree on exactly what is meant."

"Ukraine must also have an independent judiciary," the Ambassador stated. "Passing a sound law on an Independent Judiciary that will build confidence in the impartiality of Ukraine's legal system is fundamental to advancing the rule of law in Ukraine. Everyone must be treated equally---foreign and domestic, high officials and rural farmers. Preferential treatment for any party undermines the rule of law"

The Minister of Agrarian Policy, Ivan Kyrylenko, told the Forum the main thrusts of government policy reforms in the agriculture sector should be the following: (1) provision for further development of private land ownership; (2) development of a land market; (3) development of mortgage financing using land as collateral; (4) land survey's, land use and conservation policies; and (5) the improvement of the legal base on land regulation.

The agriculture and food sector should be a major economic engine for Ukraine, but has been operating far below it's capacity. The sector has been severely crippled by an entire system of extremely poor government laws and regulations that have not allowed a strong, private, market driven food system to develop in Ukraine.

The UKRAINE FOREIGN INVESTMENT FORUM will be held Monday, June 18, 2001, in the Palace of Arts "Ukrainian House," 5th Floor, from 9:00 a.m. to 18:00 p.m.

The Ukraine Foreign Investment Forum will take place within the framework of the Fifth Plenary Meeting of the Foreign Investment Advisory Council (FIAC) of the President of Ukraine, which will be held in Kyiv, Ukraine on Tuesday, June 19, 2001. The Investment Forum and the FIAC meeting will be major events for the new government and are expected to attract considerable attention in Ukraine and in the West.

The theme for the Investment Forum will be "The Perspectives of Increase of Foreign Investment in Ukraine." The Presidium of the Forum will be Pavlo Gaidutskiy, Deputy Head of the Administration of the President of Ukraine, and Michael Bleyzer, Chairman of SigmaBleyzer (USA).

The recently completed study by the International Private Capital Task Force (IPCTF) entitled "Accelerating the Flow of International Private Capital to Ukraine" stated, "Given low levels of domestic savings, the only way for Ukraine to continue to grow on a sustainable basis is to accelerate the inflows of international private equity capital to the country. Without these international private capital inflows, Ukraine will not succeed over the long term." The IPCTF study shows Ukraine is only receiving a small fraction of the potential flow of International private capital.

The major topics to be presented and discussed at the Ukraine Foreign Investment Forum will center around the specific actions the newly appointed Government of Ukraine will take now to implement the improvements in nine key government policy areas outlined in the IPCTF report, which had the strongest impact on foreign direct investment flows to successful transition economies. The implementation of the IPCTF framework and its recommended Action Plan for Ukraine will be the principal focus of the Forum.

Prime Minister Anatoliy Kinakh will give the keynote address speaking on the topic, "The Implementation of Reforms and the Strategy of Economic Growth and the Expansion of Opportunities for Foreign Investment in the Ukrainian Economy." Michael Bleyzer, Chairman of SigmaBleyzer, will follow the Prime Minister speaking about, "The Main Factors Influencing the Attraction of Private Equity Capital to Ukraine." The Deputy Chairman of the Verkhovna Rada, Stepan Havrysh, will address the Forum on the topic, "The Creation of a Stable and Predictable Legal Environment in Ukraine."

Additional speakers at the Ukraine Foreign Investment Forum will include Volodymyr Stelmakh, Chairman of the National Bank of Ukraine; Mykola Azarov, Head of the State Tax Administration; Olexander Bondar, Chairman of the State Property Fund; Olexander Bazarov, Chairman, Credit Suisse First Boston Ukraine Bank; Olexandra Kuzhel, Chair of the State Committee for Regulatory Reform and Entrepreneurship; Andrew Taylor, Managing Partner, Ernest & Young Ukraine; Vasyl Rohovyi, Minister of Economy; Oleh Dubyna, First Vice Prime Minister; Ivan Kyrylenko; Minister of Agriculture; Carlos Pascual, United States Ambassador to Ukraine; Patrick Bracken, Head of Cargill Ukraine; Yevhen Marchuk; Secretary of the National Security and Defense Council; and Olexander Lebedev, Chairman of the National Reserve Bank, Russia.

Attendees at the Ukraine Foreign Investment Forum will include members of President Kuchma's Foreign Investment Advisory Council (FIAC), members of the IPCTF steering committee, representatives of international businesses who are investing in Ukraine, international banks, ambassadors of foreign countries, the international financial institutions, and other invited guests.