Jun 08, 2012

Crimean Tatars: EU Funding Programme For Investment

The head of the EU delegation to Ukraine launched a support programme for Crimea, aiming at improving the region of Sevastopol by supporting tourism, infrastructure and foreign direct investment. 

Below is an article published by The Parliament:

The EU has launched a €12m support programme in Crimea, it has emerged.

It was launched by the EU's ambassador in Ukraine, José Manuel Pinto Teixeira with 11 EU member state ambassadors and diplomats.

Speaking in Sevastopol, Teixeira, who is head of the EU delegation to Ukraine, said, "The programme is a new boost to supporting the social and economic development of Crimea with a specific focus on tourism, infrastructure and the promotion of foreign direct investment (FDI)."

The EU-funded project foresees setting up a Sevastopol investment promotion agency, to identify at least six "investment success stories" to help the city build an image as an attractive place for doing business.

The objective is to generate new opportunities for economic development, and this has the full support of EU diplomats.

The EU budget for the promotion of investment in Sevastopol is spread over two years, with the primary aim of attracting FDI to the former Soviet Black Sea naval base.

One reason why EU funds are needed for the city is the poor record of the Sevastopol city state administration (SCSA) in attracting investment.

Last year, Sevastopol took 27th place out of 27 regions of the Ukraine, with a meagre €349 FDI per capita invested - 250 per cent below the average in Ukraine.

Speaking at the launch, the governor of Sevastopol Vladimir Yatsuba said, "This new funding from the EU will give us a strong impetus.

"And I give my promise to foreign investors that we shall give them full support to acquire land for development projects in Sevastopol with the minimum of red tape."

But Yatsuba faces two problems in his ambition to raise Sevastopol up the rankings of cities that offer business a favourable climate to do business.

The first is the global economic situation, which is making business cautious in evaluating opportunities in emerging markets.

The second and more sinister hurdle is what one Ukraine expert described as the "embarrassing loose cannon" in his own administration - deputy governor Volodymyr Arabadzhy, who openly contradicts Yatsuba on his internet portal.

Arabadzhy has been responsible for economic development in the city for many years and some say that he is only trying to protect his own record with such comments.

But his remarks still command weight with the investment community and could be seen as damaging for the city's image.