High investment attractiveness
IBI-Rating confirms the investor friendly climate in Odessa city having assigned invA+ (“high investment attractiveness”).
The rating of Odesa city can be explained by the role of the city as an economic centre in the south region of Ukraine. Natural resources and their potential for development of the city, good geographical location and favourable climate conditions create competitive advantages and additional possibilities for investors. The city, the same as Ukraine, in general, has a thoughtful ecological legislation with minimum restrictions. Ecological challenges affect, to a certain extent, the development of some businesses and living conditions, if being toughened, they can have an impact on strategic development plans.
Consolidation of branches of local authorities, increased development of transportation engineering, despite essential wearing off, help sustain economic highlights, which can be further improved and spur, in its turn, the growth of various sectors of economy. The political instability has a certain impact on the development of the city, and can lead to a change in local authorities after the elections for the Mayor. However, the city has additional advantages in the financial market due to more intense development of financial structures and moderate debt load on the local budget as compared to other cities of Ukraine. Along with this, the local authority budget is not sufficient enough to earmark some funds for large-scale investment projects, due to the specificity of its role. The local authority has neither essential mechanisms that can make it possible to give preferences to investors, nor strategy for building relations between the authority and investors.
There are healthcare centres, education and culture institutions, as well as historic and cultural properties constituting historic or cultural heritage with some of them having not only national but also international importance.
The following factors can have a positive impact on investment attractiveness: improvement of the legislative framework, accomplishment of the core development projects, and increase in income, stabilization and step-by-step ecological improvement, infrastructure streamlining. The following factors can negatively affect the investment attractiveness: investors’ complaints about action of the local authorities, worsening of efficiency of enterprises and reduction in a scope of investments, worsening of environmental conditions, continuing deterioration of the infrastructure.
This case study is based on the information and documents provided by the Odessa local authorities, including analysis of social and economic development indicators, treasury annual reports for 2010-2013 and the first half of 2014, municipal budget data, project information, other necessary internal information, the open source information that the rating agency believes to be reliable.