Ukraine has ranked 134th in the world in terms of economic freedom, according to a report by the Heritage Foundation, an American conservative think tank, published on March 27.
That is a marked improvement from years past, but the country still lags far behinds its neighbors.
Ukraine moved up 13 positions in the Index of Economic Freedom, but still ranked 45th out of 45 European countries. Ukraine also has an overall score that is well below the regional and world averages.
In the ranking, a lower score on a scale of 1 to 100 denotes less economic freedom. Ukraine earned a score of 54.9, putting it in 134th place out of 186 countries and making it a “mostly unfree” economy. It is immediately followed by Pakistan, Afghanistan and Niger in the rating.
According to the index, Ukraine is also an outlier in its immediate neighborhood. Poland ranks 46th, Russia places 94th, Belarus takes 88th and Moldova scores 87th.
Among positive changes, the report highlights a constitutional amendment that lifted lawmakers’ immunity from prosecution and Ukraine’s current proposal to implement land reform, which would increase annual GDP by about 1.5%, according to the World Bank.
Among 12 economic freedoms covered by the index, Ukraine’s economy showed the poorest results in investment and financial freedom. However, it improved its fiscal health and trade freedom.
According to the Heritage Foundation, the Ukrainian economy has weak rule of law indicators because of corruption and bribes in the judiciary.
“Corruption remains a serious problem, and there is little political will to fight it despite strong pressure from civil society,” the report states.
Among the factors that harm Ukraine’s economic freedom, the think tank’s experts identified the outdated labor code, excessive bureaucracy that deters private investments, nonperforming loans and underdeveloped capital markets.
According to the report, Ukraine’s economy has improved from the “repressed” category in 2018, when the index placed the country’s “oligarch-dominated economy” 150th out of 180.
The Index of Economic Freedom was first published in 1995. It describes an economically free society as one where individuals are free to work, produce, consume and invest in any way they please. It says that these freedoms are associated with healthier, cleaner, richer and more democratic societies.
According to the 2020 index, Singapore, Hong Kong, New Zealand, Australia and Switzerland enjoy the highest economic freedom rankings, while Eritrea, Cuba, Venezuela and North Korea are the most suppressed.
