Ukraine up 4 places in world bank rankings, but government still disappoints business community
Ukraine has risen four places in the World Banks Doing Business rankings, and now stands at 83rd out of 189 countries, according to the banks latest business survey, which was released late on Oct. 27.
But compared with its former Soviet neighbors, Ukraines performance is still less than impressive: the Baltic states rank between 16 and 22; Georgia remains at 24; Kazakhstan jumped 12 places to 41; was Belarus down one place to 44, while Russia has gone up three spots, to 51.
The only former Soviet countries that rank below Ukraine are Uzbekistan and Tajikistan – widely viewed as two of the most repressive countries in the world.
At the Orchestrators of Change conference on Oct. 29, Kyivs business community expressed their disappointment that the government has not done more to meet the criteria, while also trying to remain positive.
“Just four positions, my friends, doesnt mean anything,” Oleg Utsenko, the executive director of the Bleyzer Foundation, told conference-goers.
Speaking about world investment trends, Utsenko told the room packed with businessmen that right now Ukraine needs to appear as attractive as possible: “Investor attitudes have changed. Theyre scared… This means less money for developing markets. Less investment and bigger demand means there is more competition to attract investors.”
Ukraine saw its best improvements in the “Starting a Business” category, where it rose 40 places. According to the World Bank, this was achieved by “reducing the time required for VAT registration and by eliminating business registration fees.” But other areas have seen almost no improvement.
“Ukraine has gone up in the rankings for opening a business. But you understand that this is just the first stage,” Rufat Alimardanov, the regional head of the IFC in Ukraine and Belarus, said at the conference on Oct. 29.
However, Alimardanov remains optimistic that Ukraine can improve a lot over the next two years, and said that this might not be as difficult as it seems at first glance.
For instance, the “Getting Credit” category does not assess how easy it easy for someone to get credit in Ukraine - rather its about the procedure in place to do so. After all, as Alimardanov noted, “no one is really getting credit in Ukraine at the moment.”
Or to take another example: It takes businesses in Kyiv an average of 263 days to get hooked up to the electricity supply from the time of submission of their the application. This is compared to 77.7 in OECD high income countries, or an average of 118.5 in other European and central Asian countries.
The dire need for improvements in the energy sector was noted by Prime Minister Arseniy Yatsenyuk at the same cabinet meeting. He placed the blame for Ukraine being “pulled down” in the rankings entirely on the National Commission on Energy Regulation and Utilities and the Ministry of Energy and the Coal Industry for failing to de-monopolise the energy sector.
The results are well below the 25 place climb predicted in March 2015 by Ukraines minister of economic development and trade, Aivaras Abromavicius. But instead of back tracking, Abromavicius told a cabinet meeting on Oct. 28 that in two years time Ukraine would be in the top 50.
Andrey Bespyatov of Kyiv-based investment bank Dragon Capital said such a goal was realistic
“Given that Ukraine placed 150 or so just five years ago, it is quiet achievable, but it all depends on the criteria and whether the government approves new legislation,” Bespyatov said.