Ukraine placed 127th out of 180 countries in the world ranking of the Index of Economic Freedom in 2020, the Heritage Foundation reports.
In comparison to the previous year, Ukraine’s score increased by 1.3 points. But the country still ranked last among 45 countries in Europe. Its overall score is below the world average.
The Index of Economic Freedom is published annually by the Heritage Foundation, a conservative U.S. think tank.
The index is measured based on 12 factors grouped into four categories: rule of law, government size, regulatory efficiency and open markets.
Each factor is graded on a 0 to 100 scale, with 0 being the worst. A country’s overall score is the average of the sum of all factors.
The country scored 56.2 in 2020, which was classified as “mostly unfree.” Ukraine is behind Djibouti and Mauritania in economic freedom, according to the Heritage Foundation.
Ukraine’s immediate neighbors performed better. Belarus has an index of 61.0, Poland’s is 69.7, and Russia’s is 61.5.
Ukraine needs to increase its attractiveness to investors with expanded anti-corruption reforms, the report says.
“Ukrainian law addresses property rights, but enforcement by corrupt courts is unreliable,” the Foundation wrote. “(Also) the enforcement of contracts is time-consuming and costly.”
Additionally, the ongoing conflict with Russia, which invaded eastern Ukraine in 2014 and annexed Crimea, has a negative effect on international investment flows and trade.
On the positive side, the report lists the simplification of construction permits in Ukraine, as well as an improvement in energy supply and investments in the workforce.
The economic freedom index has been published annually since 1995. According to the Heritage Foundation, most humans lack economic freedom and opportunity, which the think tank describes as “the fundamental right of every human to control his or her own labor and property”.
The countries with the highest scores are Singapore, New Zealand and Australia. In the last place are North Korea, Venezuela and Cuba.
