On 5 July 2013 the Foundation for Effective Governance will present its new analytical product: a collected edition titled Ukraine in the world: an overview of international indices. It will include such world recognized indices as WEF’s Global Competitiveness Index, IMD World Competitiveness Ranking (Switzerland), the Ease of Doing Business Index created by the World Bank and the Index of Economic Freedom created by the Heritage Foundation and the Wall Street Journal. In addition it will cover three specialized indices of the World Economic Forum and a new research study of Boston Consulting Group.
The collected edition is designed to increase the public awareness of the calculation methodology for the most important indices and expand the possibilities for their practical application.
“Over recent years we have seen an increased level of interest in different international indices and rankings in Ukraine. However, if the users knew how to read and interpret them and how to apply the results then these indices and rankings could become efficient tools in the process of decision making and implementation of strategic decisions. Our collected edition helps to solve these tasks as it presents a number of well-known indices, briefly describes the calculation methodology and outlines the most remarkable results for Ukraine. While working on the materials we consulted international experts and organizations, which compile indices,” stated Senior Project Manager of the Foundation for Effective Governance Ihor Goncharenko.
There are lots of different indices, composite and special, regular and one-time, which assess different aspects of activity of countries, regions and cities. Most indices are public and their results are publicly available, which allows us to use them to make management decisions including at the government level.
Over recent year Ukraine’s position in different international indices has proven highly controversial: in some cases it lost positions and in some it managed to climb up the ranking. A clue to this inconsistency may lie in interpretation of the index results as each of them has own calculation methodology and a set of estimated parameters. Only good understanding of the index methodology and its right interpretation will help to see the real picture and identify the areas for possible application of results. Wrong interpretation of the index results leads to inaccurate assessments and wrong decisions, which may be “too costly”.
“In today’s world, evidence-based policy making is becoming the norm. In this context, composite indicators are becoming an essential tool of the toolkit of decision makers and governments around the world. Benchmarking, the science behind composite indicators, has many benefits, including that of stimulating multi-stakeholder dialogue, creating a sense of urgency, identifying good practices, improving statistical standards, and monitoring progress. In addition, composite indicators represent a compelling way of raising awareness of a larger public as rankings naturally appeal to human beings,” believes Thierry Geiger, an economist of the World Economic Forum.
“Ukraine has a number of competitive advantages in each of the index presented in the collected edition. Improvement of Ukraine’s position in international ranking will depend on Ukraine’s ability to quickly and efficiently solve the problems and use the existing strengths. However, climbing up in the rankings should not be the goal in itself but rather serve as the indicator of progress on the way to economic growth and the well-being of the nation,” believes the Director of the Foundation for Effective Governance Natalia Izosimova.
Over the last two years (2011-2012) Ukraine has improved its position in the WEF’s Global Competitiveness Index, climbing 16 places to 73rd place out of 144 countries. In fact Ukraine has almost reached the pre-crisis level (72nd in 2008).
In addition to an improvement of its position in the WEF’s Global Competitiveness Index Ukraine has made a breakthrough in the World Bank’s Ease of Doing Business Index: it moved up 15 places among 185 countries; the new position represents the biggest move upwards over the last 6 years.
At the same time in the IMD World Competitiveness Ranking compiled by the IMD World Competitiveness Center (Lausanne, Switzerland), which covers 59 countries, Ukraine has been among the bottom three countries for four years in a row but for 2013 when it moved up to 49th place.
Ukraine regularly gets low scores in the Index of Economic Freedom compiled by the Heritage Foundation and the Wall Street Journal since 1995. Over the last 6 years the country has lost 28 positions, down to 161st place out of 177 countries.