5.12 Conclusions

The study of tobacco investments in Ukraine reveals that these investments serve the interests of the investors much more than the interests of the country:

- Cigarette production did not increase substantially and some tobacco factories were closed or are going to be closed;
- Tobacco companies change equipment in their Western factories and sell old equipment at a high price to Ukraine;
- Tobacco cultivation continues to decline and contributes only 3% of raw tobacco for production, while the tobacco industry prefers to import tobacco from other countries, including developed ones;
- Tobacco companies prefer to use high tar tobacco from abroad;
- The amount of taxes paid depends more upon tax rates than upon the production of cigarettes.

One can see that the economies of developed countries have seen much more profit from tobacco investments in Ukraine than the Ukrainian economy. In fact, tobacco investments in Ukraine are the investments made by Ukrainian smokers into the economy of developed countries.