How tourism has changed in the Odesa region in recent years and where are the unique but little-known places for tourists, how to attract a large number of investors to our region, for what purpose the Agency for the Regional Development of the Odesa Region was created - all this was told by the director in an exclusive interview with "ElitExpert" Department of Investment and Foreign Economic Activity, International Cooperation and Tourism of the Odesa Regional State Administration Roman Hrygoryshyn.
— As is known, you come from Ivano-Frankivsk region. How did you end up in Odessa and do you now consider yourself an Odessan?
— My parents and I often went on vacation to Odessa when I was a schoolboy. That's why he fell in love with this city even as a child. He seemed mentally close to me. I dreamed of living here, dreamed of living by the sea, dreamed of studying here. But it turned out that I entered to study in Kyiv. But even studying in the capital, he still often came to Odessa. I was drawn here. My future wife is also from the Ivano-Frankivsk region, but studied in Odessa. This is where we started meeting. The first investment project that I accompanied was also in Odessa. Therefore, all roads led me to this city. Yes, I live here and I like it very much, the mentality of Odessans is very close to me, but I do not consider myself a fifth-generation Odessan. But my son is definitely from Odessa!
— The department headed by you supervises several different topics at once - economy, investments, tourism and international cooperation. Let's start with the last one. Which countries are the main trading partners of our region? What do we buy from them, and what do we sell?
— If we operate in numbers, then today our strategic market for the sale of goods from regional producers is the EU market. The total market share of the EU countries in the total volume of exports of goods of the Odesa region during the last five years is more than 25%. These are mainly the Netherlands, Bulgaria, Poland, Spain, Italy, Belgium, France, Romania, Germany, Hungary. No less important for us are Turkey - about 10% in the total export structure of the region, Egypt - 6,5%, China - 7%, Bangladesh - 3,1%, India - 4,5%.
We export grains: corn, wheat, rice, barley, soybeans, millet; sunflower oil and animal fats; as well as cable products; juices, jams, nectars; radiators for central heating; honey and bee products; home shoes made of textile materials; plastic products for food packaging; electric household water heaters, etc. In total, in 2020, regional enterprises sold goods to partners from 172 countries.
In terms of imports, the largest supplies are: from China – more than 25%, Turkey – 13,4%, USA – 10%, Indonesia – 4,8%, Germany – 4,5%. We buy from them: wind power plant components; solar panels; ceramic tiles for the floor and walls; cargo and passenger cars, bicycles, motorcycles, tractors; fresh vegetables and fruits (grapefruits, lemons, oranges, etc.); ferrous metal products; children's toys; electrical household goods; firearms, hunting rifles.
By the way, our region traditionally occupies a leading position in the volume of export of services - 2nd place among the regions of Ukraine. The largest volumes come from maritime transport services, business services, and services related to travel and telecommunications. Among the partner countries, services were mostly exported to Switzerland, Germany, Cyprus, and Turkey.
The structure of import of services is practically the same as that of export: about 80% are transport services and about 13% are business services. In 2020, the largest volume of services was imported from China, Cyprus, Spain and Bulgaria.
— It is known that after the annexation of Crimea, the domestic tourist flow was redistributed and a large number of Ukrainians, who previously annually vacationed in Crimea, now go to Odessa. What does this give the economy of the region?
— The annexation of Crimea really provoked an increase in the flow of tourists to the Odesa region. There are both negative and positive trends here. Of course, today the economy of the city and the region receives a crazy influx of resources - and this is a plus. Every holidaymaker spends money in our hotels, on the beaches, in entertainment centers and restaurants, and uses transport. The negative is the lack of quality service. What do we do for a tourist so that he returns to us again? Especially a foreign tourist. We must work not only to improve the service, but also to provide comfortable conditions of cooperation to world tour operators and world chain hotels so that they come to Odessa. This will be an indicator that we are becoming a real resort city of international importance.
Legalization of the gambling business is also very important for the external flow of tourists. So far, only one hotel has received permission on the territory of Odessa, and one more is in the process. It is not a poor tourist who comes to be entertained by such a view. Accordingly, a day of living in the city is much more expensive than staying a budget tourist, especially from the internal flow. If he spends an average of $50-100 a day, then a rich tourist will spend $1000. But first of all, you need to work on the service.
Today, there is no universal formula that allows you to get absolutely accurate data on the number of tourists. Statistics are based on information received from the state border service, owners of hotels, hostels, mini-hotels in the region and transport companies.
And yet, the figures for the number of tourists in the Odesa region over the past four years are: 5,7 million in 2017, 6,2 in 2018, 6,3 in 2019, and 4 million tourists in 2020.
The last figure is smaller, since last year the tourism industry was one of the first to suffer losses from the outbreak of the new coronavirus in the world. Of course, it was a difficult time and the decrease in foreign tourists was felt, but the closed borders to some countries became an impetus for the development of domestic tourism in the region. The desire to travel remained unchanged. We saw just such an example in the summer of 2020, when against the background of the global quarantine, Ukrainians traveled around their country much more than before. Many traveled within their region or nearby regions. Of course, the demand for "own" sea, which Odessa region can boast of, has grown.
This year, the situation has improved significantly, but I cannot give exact figures for the number of tourists yet.
— For people who are only planning vacations in our region, name the TOP-5 cool, but little-known tourist locations in the Odessa region - not including Odessa.
— I would pay attention to green tourism and here it is worth looking towards the village of Mayaki. There are many interesting locations, a nature reserve, pelicans, river channels, and there is already infrastructure. There you truly feel oneness with nature. Also, we have an undeveloped part of the coast - beyond Sergeevka and beyond. Many interesting virgin beaches. Other spits are Budakskaya, also near Sergeevka, and a long spit-overflow, which stretched from Lebedevka to the southwest for tens of kilometers to the mouth of the Danube. There you can see dolphins swimming to the very shore of the sea. There are also many interesting locations in the north of the region, for example, in Savrany. This is a better winter vacation, where you can visit the Residence of St. Nicholas. And Berezovka is a ski resort. There are also thermal springs there, and they are also on the Tylygulsky estuary. But here it is already a question of investments, because these places still need to be put in order.
— Another aspect of your activity is the Agency for Regional Development of the Odesa Region, where you are the head of the Supervisory Board. The agency was created only six months ago and is a non-governmental organization. For what purpose was it created and does it not duplicate the functions of the department you head?
— No, they are absolutely not duplicated. The main goal of the Agency in the name is regional development. The question is that agencies in our country legally appeared in the law on regional policy back in 2016. At that time, almost all regions (except ours) created this institution, but not all of them had a "beautiful" history, and in fact, no region has an ideal history. There are a number of reasons for this. The main one is the lack of a business model. The agency should not exist for public money and eat our taxes. It should be a completely self-supporting instrument. And here it is very important to build a concept thanks to which the Agency can make money.
When our team arrived, we started looking for an external tool that would help build a competent investment policy. We definitely understood that the Department of Investments of Odesa Oblast will definitely not be a regional investment nanny. Because officials work here - they can do anything, except commercial concierge service. Then we needed an external instrument, and that was precisely the Agency for Regional Development.
I think that now they will pay attention to us in the Ministry of Regions, and the President's Office has already been elected. This is indeed a possible scenario for saving the Agency as an institution. We are now in the process of a pilot project, we will soon present it, we will show the first intermediate results, and what is important is that we are not spending state money on this.
After the presentation of the project to the first persons of the state, further decisions will be made. If this model is taken as a concept, Odessa will become the first region to build an economically successful Agency. But there is still a question of cooperation with communities. Why, for example, did Izmail succeed? Because Izmail is steadily investing in the development of the city. Most territorial communities believe that if there is a budget, it must be spent in full. And in a good way, part of this budget can be invested, invested in your development. Conditionally, 10 thousand hryvnias invested in the Agency per month, in the grant dimension, can give 100 thousand dollars in six months. Of course, everything depends on the quality of the Agency and the information provided by territorial communities.
= You mentioned the launch of a pilot investment project. Is it about "ProUkraine", which you recently presented?
- Yes. The project of the new format of the investment policy ProUkraine is being implemented in the territory of the Odesa region with the support and assistance of the Office of the President of Ukraine. Its main tasks are the formation of a real investment product in the conditions of the existing legislation and investment climate, as well as the creation of a high-quality concierge service.
We focus on small investments that do not fall under the Law "On State Support of Investment Projects with Significant Investments in Ukraine" (for projects with a financing volume of more than 20 million euros). We will help small and large villages of the Odesa region, or rather, each united community, to create its own investment product that can give impetus to the further development of their territory. Here one of the main mechanisms of work is exactly what ARR (Regional Development Agency) does.
By concierge service. In short, we suggest that the investor conclude a contract with the APR in order to secure an investment manager for him, who will communicate with any authorities in the interests of the client. The solution of all questions, tasks and problems remains solely the responsibility of the Agency.
By product. We have practically completed the passporting of the united communities, where the main resource points of the territory are collected. Now we are working on creating an investment map with flagship projects for each community in the region together with HYS Enterprise. As a result, we will receive 91 investment proposals. Their formation will be helped by 10 consulting companies that APP attracts for cooperation (so far I can name SigmaBleyzer, ARBC, InVenture). Thus, investment products will fully comply with international standards, as well as have a real economic benefit. Before entering the market with specific investment proposals, we plan to make a catalog together with one of the "Big Four" companies (Deloitte Touche Tohmatsu, PricewaterhouseCoopers (PwC), Ernst & Young, KPMG).
— There are similar investment attraction agencies both in the region and in the city. Their stated goals are clear, but concrete results are of interest: how many large investments did you manage to attract to the Odesa region?
— There is an Odesa 5T Office in the city, and an Agency has just been created in the region. We have projects under discussion, in manual mode, so to speak. Now, for example, we are conducting negotiations on the construction of an oncology center with investments of more than 100 million euros, and the construction of a bitumen plant with investments of about 10 million euros is also being discussed. But at the moment, all the tools and work mechanisms are clearly not fixed. Since the opening of the Agency, we will constantly inform about new projects and contracts signed with potential investors.
— Earlier you voiced information about the creation of the Investment Council. Share the details.
— The Investment Council acts as a consultative and coordinating body, thanks to which the regional and city authorities receive feedback from top representatives of local business regarding the region's investment policy. During general meetings, businessmen give their recommendations and visions for solving certain issues. This is a kind of opportunity to build a direct dialogue and not wage behind-the-scenes wars. Invest Sovet will also coordinate the concierge service (for APP) to help establish an ideal model of working with investors. Also, Odessa businessmen can provide not only organizational, but also financial assistance to projects that are discussed at the Council.
— And in conclusion — Gosstat recently published information that investments in the country's economy have decreased. Including, the Odesa region lost 10% compared to last year. Have we stopped being attractive in the eyes of foreigners, or is the cause in the coronavirus pandemic?
— If you analyze the situation more deeply, then the reduction of foreign investments in Ukraine in general can be traced back to 2007. After 2014-2015, the situation worsened for obvious reasons. And to be objective, we have a really weak and underdeveloped domestic market, a low level of legal protection of investments.
A major component of the inflow of direct investments into the country is reinvestment in the capital of enterprises with foreign investments already operating in Ukraine. Due to last year's crisis, the losses of these companies increased. Consequently, the inflow of foreign capital to Ukraine also decreased.
The second reason is the coronavirus pandemic. Economic activity has stopped all over the world. And this period should be viewed as a time of opportunity, during which we can and should do our homework. Now the economy has shrunk, but after the opening of the world, there will be a big recovery again. And you need to be ready for this time: have your products and offers. And, perhaps, this is our success story, namely the Odessa region.
