Businessman Igor Nikonov knows the secret of the Ukrainian economic miracle

Ukrainian entrepreneurship is looking for a way to get the country out of the crisis. They recognize the need of common efforts of the authorities, entrepreneurs, activists and ordinary citizens. Now Ukraine resembles a clean sheet of paper where you can draw anything you like.

For more than three years, all spheres in Ukraine – political, economic and social – have been in crisis. Shift of power, conflict in the East, annexation of the part of Ukraine’s territory, national currency devaluation – each of these factors has exerted downward pressure on the nation’s fate. One might jump to the conclusion that the country is doomed, has no future and soon those who intend to leave Ukraine for good would be queuing at airports and train stations in search of a better life. Indeed, some Ukrainians have gone to Europe or Russia for seasonal labour. But the overwhelming majority remained to work and revive the state.

One of them is the Ukrainian businessman Igor Nikonov. He owns and manages the construction business, K.A.N. Development, which executed a number of large projects of residential and office real estate, mostly in the capital. Igor is not only depressed about the situation in Ukraine and, moreover, is not going to leave the country – on the contrary, he is sure that today the country is more attractive to foreign investors than ever before.

‘Despite the international auditors’ forecasts giving their assessment of the investment climate for well-established patterns, the profitability of business in Ukraine can reach 30-40%. Today, I call Ukraine Klondike on the eve of the discovery, as it is on the verge of significant reforms. The one who understands the lay of the land and takes the right steps now, will then scoop a large profit. I have experienced several crises in Ukraine and studied this market in great detail, so I can say for sure that it has the high potential in all spheres of the economy’ Igor Nikonov says.

The businessman has the reason for optimism. After all, it has become much easier to start a business in Ukraine: the number of permits and certificates has decreased, red tape is gradually coming to naught. The country needs foreign investors, it is waiting for them, and this is noticeable.

The country has a quite optimistic outlook. In the near future, the adoption of a law on industrial parks is being prepared, under which free economic zones will be created in Ukraine. Also the measures aimed at simplifying business operations in the country include the tax preferences for manufactures and preferential terms for clearing equipment. All this will be a kick start for the processing industry development. And an additional incentive for domestic production will be the taxation of primary commodity exports, which is planned to be legalized in the near future.

Why industrial parks? Igor Nikonov is convinced that due to such free economic zones it is possible to overcome the economic crisis. As an example, the businessman points to the successful experience of the United States, Great Britain, Germany, China and Turkey.

‘So Ukraine can set up a lot of production – both to meet the needs of the domestic market, and for export. In my opinion, the conditions for the development of industry in Ukraine are no worse than in China: this is due to the wealth of natural resources and favourable location, especially regarding the European and Middle Eastern markets – in terms of transport, infrastructure and logistics,’ Nikonov observes, and as an additional benefit, he refers to the fact that Ukrainian workers and specialists are rather qualified.

A lot of people are sceptical in Ukraine: while there is fighting going on in the East, there can be no economic successes. However, Igor Nikonov has his own point of view on that. In his opinion, the war has stimulated an additional incentive for serious achievements in the field of economy. And now it is necessary to hurl all effort into increasing the share of own production.

‘We have a huge domestic market, and the volumes of imports are amazing. At the same time, 70% of our raw materials are exported. We need to actively take up the processing of raw materials and, as far as possible, to phase-out imports on the domestic market,’ Nikonov confidently says.

The advantage of Ukraine is that there are a lot of unfilled niches that can be used for modern high-tech production. In order to achieve this, it is necessary to support the middle class and small business, at the state level as well. They are they are the backbone of Ukraine’s economy.

It is also necessary to use 100% of our own natural advantages: the availability of massive raw materials reserves, both agricultural and mineral resources. Besides, Ukraine is very lucky with its location: the country is directly at the intersection of trade routes between East and West. It would be a real crime not to take advantage of such a clear benefit.

The Ukrainian land is a major opportunity, which is still difficult to estimate. Now in Ukraine there is a moratorium on the sale of agricultural land, and a hectare of land is worth $500. At the same time in neighbouring Poland, this figure is $10,000 a hectare. We can calculate that the land bank in Ukraine is 41 million hectares and the price of this land is $410 billion at market price. This is a wide field for opportunities and investments.

Nevertheless, high level of corruption, as well as interpenetration of power and business, remain the main obstacles to economic achievements and crisis recovery. According to Igor Nikonov, business and politics should be divided, otherwise they will interfere with other.

‘I believe that entrepreneurship have no business being in politics: everyone should do what he has a knack for. If a politician owns some business – he is destroyed by the media, which follow his every step. And if you are engaged in politics, you have no time for business,’ the businessman sums up.

Igor Nikonov is convinced: taking an active position, pushing the authorities to legislative changes, minding their own business, Ukrainian entrepreneurs will sooner or later put the situation in the country into motion. And then the boom of domestic production will start, and foreign investments will flow to Ukraine. If these conditions are observed in a state with such a huge potential, it will be quite easy to make an industrial breakthrough.

The author: Margareta STROOT

Margareta Stroot, a multi-talented individual, calls Brussels her home. With a unique blend of careers, she balances her time as a part-time journalist and a part-time real estate agent. Margareta's deep-rooted knowledge of the city of Brussels, where she resides, has proven invaluable in both of her roles. Her journalism captures the essence of the city, while her real estate expertise helps others find their perfect homes in the vibrant Belgian capital.

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