10 steps to find investors – experience of Trostyanets mayor
Trostyanets mayor Yuriy Bova spoke on how he managed to attract more than USD 200 million of investments over 8 years.
“Investments around the world are attracted according to one scheme. First and foremost, we should understand that Ukraine must compete with Poland, Czech Republic, Slovakia and other European countries, therefore each hromada needs to create conditions no worse than those in other countries.” This is how Trostyanets mayor Yuriy Bova began his speech at the 2nd All-Ukrainian Forum of Amalgamated Hromadas. Then he proposed a clear algorithm to attract investments:
1. Each hromada has to develop a spatial planning scheme of its own territory. Clearly defined land plots intended for investment objects, should appear on the general plans of settlements. In this case, it should be clear, what investor is required for a particular site;
2. Each hromada must determine what investment direction it is interested in, as for example, not every hromada needs a chemical plant. What is needed then? Probably, tourism or recreation development, etc.;
3. All communication lines are to be provided to the designated areas. Investor will not wait until you build the road and supply the site with water and sewage system. He will go where all this already exists. The funds for the development of engineering and transport infrastructure, provided to you by the investor, must be used first of all to set up infrastructure he requires;
4. Investors should be given maximum benefits: those from rent payment, from the tax on the development of engineering and transport infrastructure, etc. The amount of all investor’s payments to hromada budget should be reduced to a minimum level;
5. Local authorities should be 100% open. Council sessions have to be broadcast on the Internet, budget should be available on the official hromada website, with preferably an English version. After all, investors, especially foreign ones, draw information about hromada mainly from open sources. Do not hesitate to include investor’s representatives in your executive committees – let them see how the local government works. At least, investor should receive such an offer;
6. Hromada should promptly issue all necessary certificates. For example, one hromada issues urban planning conditions and limitations per month, and the other one – per day. Which hromada will be chosen by the investor in your opinion?
7. There should be no social burden on the investor. He does not have to build and maintain dormitories, summer camps or cinemas;
8. Open investor service offices in your hromadas. A representative of your hromada who speaks the investor’s native language must accompany him everywhere and be in constant contact with him;
9. It is necessary to constantly communicate with the investor, though not in the office of the local government head, but at investor’s enterprise, at his site. Therefore, a bridge between hromada and investor should be built so that he realises that hromada is interested in his investments;
10. Do not be afraid to plan industrial parks on your territory. Serbia, a small country with seven million inhabitants, which at the turn of the century (as a result of the war) appeared at the level of 1945, was able to recover due to the creation of the parks attracting foreign investments. In 2010, the government of Serbia adopted an economic development plan envisaging a fourfold increase in export potential. The country was open to foreign investment as much as possible, providing investors with significant tax benefits and establishing industrial parks in almost every community. Now Serbia has about 200 such parks. They produce goods for EUR 2,6 billion per year, and these goods (in the amount of USD 2,1 billion) are mostly exported. Almost every year Serbia attracts USD 200 million of foreign investments.
According to Yuriy Bova, by applying of this algorithm, Trostyanets has attracted over USD 200 million of foreign investments in various fields during the last eight years. Consequently, several new plants with a whole residential cluster around were built in the town.
“In 2005, when I came to work as a mayor, Trostyanets’ budget was only UAH 3 million,” said Mr Bova. “Now, after amalgamation on 29 October, we will have at least UAH 100 million of our personal revenues. And investors made a considerable contribution to it all, creating thousands of jobs in our town.
Громади:Тростянецька територіальна громада
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