Ukraine Competitiveness Report 2009

Friday, July 10, 2009

UKRAINE COMPETITIVENESS REPORT 2009

Ukraineranked 72nd out of 134 countries in Global Competitiveness Index Rankings
World Economic Forum (WEF) and Foundation for Effective Governance (FEG) Study

Foundation for Effective Governance (FEG), Kyiv, Ukraine, Thursday, July 9, 2009

KYIV, Ukraine – Ukraine is ranked 72nd out of 134 countries in the Global Competitiveness Index Rankings, stated Nataliya Izosimova, Managing Director of the Foundation for Effective Governance (FEG), at the presentation of the final 2009 Ukraine Competitiveness Report. The report was prepared within the framework of a partnership project between FEG and the World Economic Forum (WEF).
“Compared to last year’s report, Ukraine demonstrated little progress, having moved from 73rd to 72nd position. It should be noted though that the number of ranked countries has grown from 131 to 134 this year,” Izosimova stated.
The report found that Ukraine is between developing countries Morocco and the Philippines in The Global Competitiveness Index, having outperformed many countries in Africa and Latin America. Meanwhile, it is notably behind EU-15 (old EU members) and is ranked 4th among the CIS countries, behind Russia, Kazakhstan and Azerbaijan.

WEAK IN INSTITUTIONAL ENVIRONMENT, MARKET EFFICIENCY

According to the report, Ukraine is weak in institutional environment (115th place), infrastructure (79th place), macroeconomic stability (91st place) and goods market efficiency (103rd place).

At the same time, Ukraine is in line with the EU-15 in terms of tertiary enrollment, outstrips the EU-12 (new EU members) in market size (31st place) and has become the leader among the CIS countries in availability of new technologies over the last year.
For the second year in a row, FEG in tandem with the WEF has been analyzing Ukraine’s competitiveness both on national and regional levels.
“In 2009, we enlarged the number of studied regions from 12 to 15, including the city of Kiev. The regions are compared to one another and to other countries. Such analysis gives an in-depth understanding of problems each region should address to improve its competitiveness. It also may be a roadmap to develop state policy in the regions,” Izosimova stated.
The analysis showed Kiev is the most competitive region among those studied. Ranking 63rd among 149 economies (134 countries and 15 Ukrainian regions), the city is behind Croatia and Hungary but outstrips Turkey and Brazil.

In the regional rankings the city is followed by Zaporozhye, Odessa, Dnepropetrovsk, Sumy, Donetsk and Lvov Oblasts. Poltava Oblast is in the middle of the rankings. Khmelnitskiy, Cherkassy, Vinnitsa, Kherson, Zhitomir Oblasts, Zakarpatye and Crimea showed low level of competitiveness.
“We see that industrialized regions in the south and east of Ukraine take the lead, while agricultural regions lag much behind in the Ukraine Competitiveness Report. So, a need arises to develop an effective state economic agenda that would encourage economic development and improve competitiveness in underdeveloped regions,” Izosimova stated.
FEG has carried out the project assessing Ukraine’s competitiveness on the national and regional levels in partnership with World Economic Forum according to its methodology, which underlies the annual ranking of WEF’s The Global Competitiveness Report.
According to Thierry Geiger, an economist of WEF’s Global Competitiveness Network, the methodology is based on assessment of a country’s growth potential in the mid and long term, with due account for current level of development.
“To identify the level of competitiveness of an economy, we study and analyze a set of factors that define its productivity. We take the information we need from public statistical data and polls of representatives of large businesses in a particular country. For example, we polled 116 top managers of large Ukrainian businesses in 2008,” he explained.
Geiger also noted that the important thing about such research based on the WEF methodology is that it creates a platform for dialogue between the government, business and civil society, and as a result, encourages introduction of reforms to boost productivity and improve living standards.

FOR THE UKRAINE COMPETITIVENESS REPORTS GO TO THESE LINKS
For more detailed information on the Foundation’s comprehensive Ukraine’s competitiveness research as well as the final Ukraine Competitiveness Report, for 2009 and 2008 please, visit http://www.feg.org.ua/en/cms/projects/studying_Ukraine_competitiveness or for 2009 go to: http://www.feg.org.ua/docs/Final_Eng_2009.pdf.

About The Foundation for Effective Governance: The Foundation for Effective Governance (FEG), an independent public policy institution, was formed in 2007 by Ukrainian businessman Rinat Akhmetov. FEG’s main objective is to encourage the development of long-term national economic programs for Ukraine, through the formulation of practical policy solutions to the political, economic and social challenges facing the country.

The basic principles governing FEG’s activities are independence, a focus on economic development, openness, and a practice-oriented approach. FEG’s International Advisory Board includes former Prime Minister of Canada Kim Campbell, Chair; former U.S. Sen. Lincoln Chafee; and Gyorgy Suranyi, former president of the National Bank of Hungary. More information is available at www.feg.org.ua/en.
About World Economic Forum: The World Economic Forum is an independent international organization committed to improving the state of the world. It has been publishing its annual global competitiveness Report since 1979. Now it covers 134 developed and underdeveloped economies.

The Report is used by governments, scholars and business leaders to have a better understanding of strengths and weaknesses of economies and identify necessary economic reforms and measures. WEF holds its annual forums in Davos, Switzerland. WEF has been analyzing Ukraine’s competitiveness since 1997.

LINKS: http://www.feg.org.ua/en/cms/projects/studying_Ukraine_competitiveness or http://www.feg.org.ua/docs/Final_Eng_2009.pdf.

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