Should we worry about Ukraine's positions in the world rankings

Stephan Mergenthaler, associate director for Strategic Foresight with the World Economic Forum:

Indices are an excellent starting point for political discussions about strategies and priorities of economic development. In this sense, indices are an excellent tool to motivate decision-makers to improve the economic performance.  This is like winning a marathon, whose participants must be persuaded to run disregarding of pain. An effective dialog between the players – the government, the private sector and the society – is the key. The second important point: indices never show the absolute truth – they should be considered in the proper context. The final rating has little meaning by itself, but it points to the factors which have influenced the result. Blind comparison is useless, but one should look for the reasons behind the numbers.
A position in rankings is neither goal nor business strategy. Of course, every country should work for its higher score in Doing Business, but to prioritize it over the country’s complex development strategy is a mistake. A company trying to improve its working processes at the expense of its clients will not be successful. Similarly a country should never forget its general business idea. That is why the World Economic Forum sees ratings only as a place to start.

Igor Burakovsky, Director, Institute for Economic Research and Policy Consulting:

We deal with an entire complex of ratings, consisting of 15-20 indices and more. The introduction of new indices is connected, firstly, to the expansion of our capabilities to calculate and measure and, secondly, to the growing complexity of social processes. The society becomes less concerned with jobs as a tool to survive but as an instrument to ensure proper life standards. I think that our obsession of international indices is a myth that has never worked for Ukrainian economy. In Ukraine, we can often observe childish fascination with different indices. I don’t understand the state policy revolving around an idea of driving the country up the rating charts. This is silly.  I believe that our first task is to adopt fair and equitable laws. We should make the change, and the indices will later show us if this change was for the good.

Lee Saw Hoon, Productivity Corp Senior Director of Global Competitiveness, Malaysia:

Three years ago when Malaysia chose to pursue a new economic model aimed at higher profitability of our economy, we treated the indices very seriously and vouched to get to the top by developing our country’s global competitiveness. The essence of Malaysia’s new economic model is to improve the quality of life for all of our citizens. Malaysia is a much diversified country with three major ethnical groups, living in their own enclaves. We have realized that without unity, we will never have political stability; consequently, there will be little value in our competitiveness. Unity also means a narrower gap between the rich and the poor, so that all of our people feel involvement and motivation. Of course, we spoke much about indices. The office of our Prime Minister has the Performance Management and Delivery Unit (PEMANDU), whose task is to ensure Malaysia’s higher competitiveness. All government departments have several KPI units, which measure and assess their performance, including in relation to international ratings. We produce an annual report showing the key indicators of effectiveness of every department. Our goal is not a top position in a particular ranking, although we are determined to keep Malaysia in Top-10 or at least Top-20. Of course, not all of our achievements are successful. Some of the departments are very skeptical about ratings. That is why we often invite experts from World Bank or other global institutions for a dialogue. For us, competitiveness is a race without a final. The moment we slow down, we lag behind. This is a continuous competition, improvement, and collaboration.

Sergey Budkin, Managing Partner at FinPoint Investment Advisors:

Of course, ratings are useful, primarily for the government and the experts. Indices play a less important role for business and have even less meaning for local consumers. We can picture a country as an ocean and businessmen as fish. Ratings are temperature, mass, saltiness, etc. If fish is uncomfortable in the water, it knows this itself, and no analysis results will persuade it of the opposite. Indices are indeed important for foreign consumers, i.e. corporations contemplating doing business or investing in Ukraine. Moreover, one never knows what kind of information will impact the decision; sometimes, this decision is made after half an hour of turning over a magazine on the plane. The traveler notices that the country has made a jump in the ratings and stores this information in the back of his mind. In six months or a year, this exact information may influence an important decision he makes.

Vitaliy Leibin, Editor-in-chief, Russian Reporter:

Indices are our bread, especially if they are fun. We do not only consume, but produce them. Doing Business is one of the world’s best rankings. We like it and we work with it a lot. For example, “Starting a Business” is a key parameter for many businessmen in Russia, but one grasps its meaning only after comparing what one sees on paper and in the real life. We should certainly try to move up the ratings, but we should not forget that there are always tight spots which can only reveal themselves if one deals with the situation hands-on.

Ukraine’s position and close neighbors in leading global rankings:
Networked Readiness Index: 73 (Trinidad and Tobago/ Thailand)
Global Competitiveness Index: 49 (Columbia/Hungary)
Travel and Tourism Competitiveness Index: 76 (Macedonia/ Albania)
Enabling Trade Index: 81 (Gambia/ Malawi)
Ease of Doing Business Index: 137 (Lesotho/Philippines)
Index of Economic Freedom: 163 (Solomon Islands/Uzbekistan)

Date: 10.07.2013
Author: Yaroslav Kobzar
Source: Forbes