Ukraine in the rankings mirror

Within two years (2011-2012), Ukraine has improved its result in the World Economic Forum’s Global Competitiveness Index by 16 points, moving up to the 73rd position among 144 states. According to the experts, during the same period, the country made a breakthrough in the World Bank’s Ease of Doing Business Index, having moved 15 slots upwards. At the same time, the World Competitiveness Yearbook published by the Institute for Management Development (Switzerland), Ukraine has steadily been mentioned as one of three worst performers, and only the last report showed that it moved from the 59th position to the 49th. No better are Ukraine’s results in the Index of Economic Freedom. Over the last six years, Ukraine has lost 28 positions in the ranking of 177 countries and, with the worst result in Europe, moved to position 161. What can one make out of these obvious contradictions?

Late last week the Foundation for Effective Governance presented its new analytical digest: Ukraine in the world: review of international indices”. Its authors highlight that most indices are public, which makes it an attractive tool for analysis and executive decision-making, including at a state level.

At the same time, FEG’s Director Natalya Izosimova told The Day that one should not give too much credit to indices as far as the Ukrainian government’s decisions are concerned. “All indices are information tools. Strictly speaking, they make no direct conclusions nor give recommendations. However, based on the compiled data resulting in certain rankings, the governments may take targeted decisions about prioritizing one sector of the country’s life over another. Our goal is not to prompt the government; indices will do this on their own. How to build up advantages and eliminate restraining factors is the question for state decision-makers in different countries”, said Ms. Izosimova. She summed up: “The professional government studies and analyzes these indices and makes certain conclusions based on the gained data. Our goal is not to tip off the government, but to show the public how to read and use these rankings properly, and how to use this data for making grounded decisions”.

Igor Burakovsky, Director of the Institute for Economic Research and Policy Consulting, also spoke of the changes. In his opinion, the society has become less concerned with jobs as a tool to survive but as an instrument to ensure proper life standards. The expert also made his evaluation of the global indices: the first group measures default risks of the emitter and makes basis for certain decision-making; the second group evaluates specific sectors of different economies and pinpoints to their quality; and the third group has social or public importance. At the same time, Mr. Burakovsky showed doubt that the competitiveness of Ukraine’s regions can be properly evaluated; this approach is more suitable for subjects of federations rather than relatively unified countries as Ukraine. As to indices of corruption or economic freedoms, they have more influence over the civil society, although the governments’ behaviors are also affected. According to the expert, “the civil society sees these indices as a signal for reforms, and the government – as an irritator.”

Bogdan Gavrilishin, Ukrainian economist and public figure of worldwide renown, made an unexpected and unconventional comment about global indices and rankings: “I am more concerned with the quality of life than with competitiveness indices. There is no connection between competitiveness and the quality of life. Indices do not study the gap between the rich and the poor in the USA, and this is the global leader in competitiveness rankings. 

Date: 09.07.2013
Author: Vitaly Knyazhansky
Source: Day # 117