In Ukraine, non-transparent capital flows are twice as large as transparent ones.

Thursday, December 7, 2023
In Ukraine, non-transparent capital flows are twice as large as transparent ones.

According to the Center for Economic Strategy, the share of domestic private constructive capital in Ukraine is about 22%, while corrosive capital is about 46%.

Corrosive capital represents opaque capital flows without a market orientation, which can be used to apply political pressure in order to influence the economic and social spheres. Almost half of all corrosive capital flows through the businesses of oligarchs. The rest stems from companies with opaque capital origins, and violate competition rules, or are  designed to avoid paying taxes. Corrosive capital dominates the industrial sectors of the economy.

Conversely, constructive capital originates from a business that is effectively managed and serves transparent, market-oriented, and legitimate purposes. Such capital is widespread in areas where oligarchic influence is small, namely IT, retail, etc.

Other capital includes state and communal property (20%) and constructive foreign capital (12%).

According to experts, the expansion of constructive capital to other economic sectors will create prerequisites for faster economic growth, achieved through the establishment of uniform rules for all market participants and large-scale deregulation.

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