Changes

Ukraine encourages foreign trade and investment. The foreign investment law allows Westerners to purchase businesses and property, to repatriate revenue and profits, and to receive compensation in the event that property were to be nationalized by a future government. However, complex laws and regulations, poor corporate governance, weak enforcement of contract law by courts and particularly corruption have discouraged broad foreign direct investment in Ukraine. While there is a functioning stock market, the lack of protection for minority shareholder rights severely restricts portfolio investment activities. Total foreign direct investment in Ukraine was approximately $21.2 billion as of January 1, 2007. At $447 per capita, this was one of the lowest figures in the region.  

Ukraine encourages foreign trade and investment. The foreign investment law allows Westerners to purchase businesses and property, to repatriate revenue and profits, and to receive compensation in the event that property were to be nationalized by a future government. However, complex laws and regulations, poor corporate governance, weak enforcement of contract law by courts and particularly corruption have discouraged broad foreign direct investment in Ukraine. While there is a functioning stock market, the lack of protection for minority shareholder rights severely restricts portfolio investment activities. Total foreign direct investment in Ukraine was approximately $21.2 billion as of January 1, 2007. At $447 per capita, this was one of the lowest figures in the region.  

While countries of the former Soviet Union remain important trading partners, especially Russia and Turkmenistan for energy imports, Ukraine's trade is becoming more diversified. Europe is now the destination of over one third of Ukraine's exports, while around one quarter of Ukraine's exports go to Russia and the CIS. Exports of machinery and machine tools are on the rise relative to steel, which constitutes over 30% of exports. Ukraine imports over 80% of its oil and 73% of its natural gas. Russia ranks as Ukraine's principal supplier of oil and Russian firms now own and/or operate the majority of Ukraine's refining capacity. Natural gas imports come from Russia and Turkmenistan, which deliver the gas through a pipeline system owned and controlled by Gazprom, Russia's state-owned gas monopoly. In 2005 and 2006, Ukraine switched from barter to cash payments for gas imports. Ukraine controls the gas pipelines on its territory that are also used to transit Russian gas to Western Europe. The complex relationship between supplier, transporter, and consumer has led to some tensions, including Russia's decision to cut off gas supplies for three days in January 2006.  

While countries of the former Soviet Union remain important trading partners, especially Russia and Turkmenistan for energy imports, Ukraine's trade is becoming more diversified. Europe is now the destination of over one third of Ukraine's exports, while around one quarter of Ukraine's exports go to Russia and the CIS. Exports of machinery and machine tools are on the rise relative to steel, which constitutes over 30% of exports. Ukraine imports over 80% of its oil and 73% of its natural gas. Russia ranks as Ukraine's principal supplier of oil and Russian firms now own and/or operate the majority of Ukraine's refining capacity. Natural gas imports come from Russia and Turkmenistan, which deliver the gas through a pipeline system owned and controlled by [[Gazprom]], Russia's state-owned gas monopoly. In 2005 and 2006, Ukraine switched from barter to cash payments for gas imports. Ukraine controls the gas pipelines on its territory that are also used to transit Russian gas to Western Europe. The complex relationship between supplier, transporter, and consumer has led to some tensions, including Russia's decision to cut off gas supplies for three days in January 2006.  

The Government of Ukraine's 12-month $605 million precautionary standby agreement with the International Monetary Fund (IMF) expired in March 2005, and Ukraine currently does not receive IMF financing. In Article IV Consultations, the IMF recommends fiscal discipline and structural reforms, particularly of Ukraine's pension system. In July 2005, the World Bank approved a $250 million Development Policy Loan (formerly a Programmatic Adjustment Loan) to support reforms to improve the investment climate, public administration and financial management, and social inclusion. European Bank for Reconstruction and Development (EBRD) project outlays more than doubled in 2005 to 530 million Euros, bringing its portfolio to 2.2 billion Euros.

The Government of Ukraine's 12-month $605 million precautionary standby agreement with the International Monetary Fund (IMF) expired in March 2005, and Ukraine currently does not receive IMF financing. In Article IV Consultations, the IMF recommends fiscal discipline and structural reforms, particularly of Ukraine's pension system. In July 2005, the World Bank approved a $250 million Development Policy Loan (formerly a Programmatic Adjustment Loan) to support reforms to improve the investment climate, public administration and financial management, and social inclusion. European Bank for Reconstruction and Development (EBRD) project outlays more than doubled in 2005 to 530 million Euros, bringing its portfolio to 2.2 billion Euros.