Despite the government’s talk of Ukraine joining the European community, its business practices remain closer to sub-Saharan Africa.
The World Bank and International Finance Corporation announced the latest results of their annual poll, Doing Business in 2009 and Ukraine ranked a solid 145 out of 181 countries.
This puts Ukraine slightly above Surinam, Sudan and Burkina Faso and just behind Ian, Surinam and Cape Verde. Unsurprisingly, very rich countries such as Singapore, New Zealand and the United States top the list. While very poor countries, Guinea-Bissau, Central African Republic and the Democratic Republic of Congo are at the bottom, clearly showing the connection between government regulations and poverty.
Ukraine’s failure is even more striking is comparison to some other former Soviet states. Azerbaijan was noted as the biggest reformer last year, jumping 64 places to No. 33. Kyrgyzstan jumped 30 places to 68 and Belarus vaulted 30 places to 85. Georgia, in striking contrast, ranks 15th overall, an example of major reform after a non-violent revolution removed a corrupt political elite.
In looking in detail at the list there are two specific areas where Ukraine stands out. In “dealing with construction permits,” Ukraine ranks 179th out of 181. Kyiv is no longer the only European capital without a 5-star hotel, but the difficulty and massive corruption that hampers every construction project is well-known and documented. The end result is the lack of commercial office space and sky-high prices for apartments. (As well as a lot of wealthy bureaucrats.)
Or as the report states aptly, if dryly: “The cost and time for dealing with construction permits increased. All new construction projects are now subject to an infrastructure tax. And an administrative backlog has added 42 days to the time.”
Finally, in paying taxes, Ukraine ranks 180th, just missing the worst spot in the world.
Of course, for anyone who has tried to business in Ukraine, this report is old news.
