Ukraine’s government has failed to carry out economic reforms meant to improve its business climate and boost much needed foreign investment, the World Bank’s recent Doing Business report shows.
According to fresh rankings released on Oct. 20 on the ease of doing business in 183 countries, Ukraine placed 152 — between Liberia and Bolivia. This comes despite continuous promises of change by President Viktor Yanukovych. Ukraine’s rating deteriorated from last year’s report, which ranked Ukraine at 149.
According to World Bank research, Ukraine slid in these categories: registering property, getting credit and protecting investors. In addition, the ability of business to freely trade across borders deteriorated, a reference to the nation’s cumbersome and non-transparent customs procedures.
The new report also shows that nothing has changed in Ukraine’s tax system, which is still among the most difficult in the world. Only the tax systems of Republic of Congo and Venezuela were ranked worse, while the number of payments that Ukrainian businesses have to make annually to comply, which is 135, was found the world’s highest.
The only improvements that the World Bank researchers found in Ukraine over the last year were in the areas of starting a business, resolving insolvency and dealing with construction permits. The latter, however, can hardly be considered an achievement. When it comes to the ease of getting an approval for construction, Ukraine is still among the worst countries in the world. According to the report, getting a building permit only gets tougher than here in India, Albania and Eritrea.
This rating comes as a blow to Yanukovych’s record.
“The main reforms in Ukraine took place in the second half of 2010. I am sure this will move Ukraine up in the list next year,” deputy head of presidential administration Iryna Akimova and Yanukovych’s top adviser on economic policy predicted in February. “Our task is to enter the top 100 in the next few years.”
Neither she nor Vitaliy Lukianenko, prime minister’s Mykola Azarov spokesperson, were prepared to comment on the results of the latest World Bank report.
According to Andrey Bespyatov, head of research at Dragon Capital, a Kyiv-based investment bank, the deterioration corresponds to other surveys – such as the Investment Attractiveness Index quarterly published by the European Business Association.
“There are serious doubts as to the rule of law and objectivity of Ukraine’s judiciary,” Bespyatov said. “There is a saying about a fly in the ointment, but Ukraine’s problems are far bigger than that.”
Kyiv Post staff writer Vlad Lavrov can be reached at [email protected]
