Gov't agrees credit for Ukraine projects, but many want more
The government expects to agree on the credit line, which has been in the works for the past few years, at the Polish-Ukrainian Economic Summit in Rzeszow, to be attended by the presidents of both countries. The credit line will be targeted at investments in Ukranian agri-trading, food processing and metals industries.
But some Polish companies, think the government's credit offer is too small. "This is a ridiculously low amount," said Jan Krysiuk, economic director at pharmaceuticals concern Polfa Kutno. "If we, a relatively small company, last year sold $1.5 million worth of products, then what's ECU 20 million for the entire market?"
Zdzislaw Halaczkiewicz, investment director at agri-trader Agros Holding, said that the credit amount would only be sufficient for a few months. Longer term, Polish companies would need greater funding.
And even the Ukranian government, which ultimately will benefit from any Polish investment, admitted the amount may at first look like just a drop in the bucket.
"Bonaparte said something like that, 'Let's go into the fight, then we'll see,' " said Jurij Pulkalski, deputy director of the trade mission at the Ukrainian Embassy in Warsaw. "So, we'll see."
But Pulkalski wasn't about to look a gift horse in the mouth, noting Ukraine was happy that after two years of discussions the credit is materializing. "By acting together we could demonstrate to all of Europe, not only the Central or East part, our normal, economic relationship," he said.
Within the last few years, Ukraine has become Poland's second largest trading partner in Eastern Europe, second only to Russia. Total trade between Poland and Ukraine reached $1.6 billion in 1997, a 16% increase from 1996. Polish exports to Ukraine grew even more, by 23%, and gave Poland a trade surplus with its neighbor of $1.2 billion.
Polish exports consist mainly of chemical products (22% of total exports), food products (19.4%) and minerals (15.9%). More than 400 Polish companies have already invested $40 million in Ukraine.
Polish executives said, however, Ukraine's impoverished fiscal condition limits trade and investment. "That's a real obstacle for many investments," said Stanislaw Lipinski, deputy director of the trade center at holding company Universal.
Polfa Kutno's Krysiuk added that in some ways a barter agreement would be better than credit. Still, Polfa is hoping to increase exports there by 40% annually.
While increased trade is welcome, Pulkalski said Ukraine is now awaiting capital investment into production. And many Polish investors are already considering this option. "The country, with almost 60 million people, offers great potential," Lipinski said. "Additionally, it's our closest neighbor."
Polfa is also currently working on an investment into a production facility, but Krysiuk would not reveal details.
But some Polish companies, think the government's credit offer is too small. "This is a ridiculously low amount," said Jan Krysiuk, economic director at pharmaceuticals concern Polfa Kutno. "If we, a relatively small company, last year sold $1.5 million worth of products, then what's ECU 20 million for the entire market?"
Zdzislaw Halaczkiewicz, investment director at agri-trader Agros Holding, said that the credit amount would only be sufficient for a few months. Longer term, Polish companies would need greater funding.
And even the Ukranian government, which ultimately will benefit from any Polish investment, admitted the amount may at first look like just a drop in the bucket.
"Bonaparte said something like that, 'Let's go into the fight, then we'll see,' " said Jurij Pulkalski, deputy director of the trade mission at the Ukrainian Embassy in Warsaw. "So, we'll see."
But Pulkalski wasn't about to look a gift horse in the mouth, noting Ukraine was happy that after two years of discussions the credit is materializing. "By acting together we could demonstrate to all of Europe, not only the Central or East part, our normal, economic relationship," he said.
Within the last few years, Ukraine has become Poland's second largest trading partner in Eastern Europe, second only to Russia. Total trade between Poland and Ukraine reached $1.6 billion in 1997, a 16% increase from 1996. Polish exports to Ukraine grew even more, by 23%, and gave Poland a trade surplus with its neighbor of $1.2 billion.
Polish exports consist mainly of chemical products (22% of total exports), food products (19.4%) and minerals (15.9%). More than 400 Polish companies have already invested $40 million in Ukraine.
Polish executives said, however, Ukraine's impoverished fiscal condition limits trade and investment. "That's a real obstacle for many investments," said Stanislaw Lipinski, deputy director of the trade center at holding company Universal.
Polfa Kutno's Krysiuk added that in some ways a barter agreement would be better than credit. Still, Polfa is hoping to increase exports there by 40% annually.
While increased trade is welcome, Pulkalski said Ukraine is now awaiting capital investment into production. And many Polish investors are already considering this option. "The country, with almost 60 million people, offers great potential," Lipinski said. "Additionally, it's our closest neighbor."
Polfa is also currently working on an investment into a production facility, but Krysiuk would not reveal details.
