The time to buy for maximum profit isn't when everybody else is buying, but when most are fearful. To follow the simple logic of buying low and selling high. However, many people shy away from following this rule, hedging their actions until the moment is past and they miss the real bargains.

With the new year and general elections almost out of the way, now could be the time to consider Ukraine. The country has had a tough time over the past couple of years, with sky high interest rates having shaken out most indebted individuals and companies. The term "lean and mean" could certainly be applied to those left standing in Ukraine; a solid foundation for future bounce back as the overhang of personal debt is now way less than typical in Western countries.

But to better assess Ukraine for investment, we need to dig a bit into the statistics.

How's the Ukrainian economy doing?

There are plenty of negative media comment on Ukraine's economic situation, but is there an underlying positive that could be a buy signal to investors? Let's look closer at the key indicators.

A headline negative has been Ukraine's hefty external debt. About US$ 37 bn of public debt is due for repayment this year and finding the money is going to be a problem. Whilst this a sizeable sum, total external debt is "only" US$69 bn, which is about 21% % of GDP (total value of country's production).

Compare this to the UK's massive US$9 trillion external debt, which constitutes a dizzy 365% of GDP! Even spendaholic America has debt far less than this at 90% of GDP.

In a worst case scenario, it's quite likely Russia would use some of their cash mountain to bale out their trading partner and ethnic brothers, Ukraine. As Abu Dhabi did for their neighbours, Dubai, recently. Not sure who will stand up for UK if it defaults...

On public spending: Electioneering politicians couldn't bite the bullet last year and slash spending. Whilst countries like the UK and USA may get away with this buying of votes for a while, not so Ukraine. The International Monetary Fund (IMF) stopped disbursement from a US$16.5 bn standby loan arranged in November 2008.

However, public spending is not as chronic as in a number of other European countries, the deficit projected at between 5.5% and 6.8% (according to different sources) of GDP for 2010.

Strong export growth

Ukraine has, in our view, a trump card: strong export potential, based on steel, chemicals and, increasingly, agriculture.

Until last year's slump, exports in Ukraine were growing very strongly. Between 2004-07, annual increase was a huge 24.6%, rising to 35% in 2008. After a bad knock in 2009, exports this year are estimated to rise by 4.5%, whilst imports by only 1.6%.

The country's big earner, over the longer term is likely to be its agricultural exports. It has by far the largest area of fertile arable land in Europe, the potential of which is only now being realised. It might be described as the "Argentina of the North".

With world population shooting up, food exports, particularly grain, are going to be highly profitable. Investors are waking up to this trend and investment options such as http://www.uaproperty.com/index.php?-M=page:Farmland-Investment are now available.

Investment continues

Ukraine is a country with low production costs and abundant raw materials. It's position just on the border of the high cost EU is very favourable for attracting investment. This is clearly being recognised by foreign investors as shown by the nearly US$11 bn attracted in 2009.

FDI (Foreign Direct Investment) has been affected by the severe economic downturn, but not as quickly as might be expected . In fact, in 2008 saw an increase of 25.3% above that for 2007. This is a continuation of a trend that really got going in 2004. However, and inevitably, some decline is evident in 2009, with estimates of US$ 5 to 6 bn.

Investment flowed from a wide variety of countries, with Germany well in front for the EU. However, much of the cash comes from Cyprus, a likely conduit for funds from the Russian Federation.

Country Forecast Overview (3 Year)

Source: Country Forecast Ukraine May 2009 (Economist)

In summary

The worst is most likely past for the Ukrainian economy. Recovery from recession will be slow in the first half of this year, but likely accelerate towards the end of the year and into 2011.

The new government may or may not be as ineffective as the last, but with most politicians in the country having strong links to business, it is almost certain that no seriously anti enterprise legislation will be passed.

Given time, the fundamentals of the country's investment appeal will reassert themselves. Low cost non EU production base. Huge agricultural potential. And close ties with a rich neighbour, Russia.

Investment targets should be: upmarket coastal and ski apartments, at discounted price. (there is foreclosed ski apartment availability at www.eaglevalley.info). Farmland. And commercial property at distressed price.