After a number of downgrades in some credit and other rankings, Ukraine has finally received some good news as World Bank said on Oct. 29 that the nation made some progress in easing the regulatory environment.
Ukraine
jumped 28 positions, ranking 112th place among nations, in the 2014 Ease of Doing Business
Report. Most of the fixes came in the area of receiving construction
permits, as well as in registering business and registration of
property.
“I
the past year Ukraine has implemented more regulatory reforms,
tracked by doing business report, than any other country in the
world, I think it’s a very important achievement,” Qimiao
Fan, World Bank director for Ukraine, Belarus and Moldova
said in Kyiv on Oct.29.
“That is the good news, but unfortunately that’s also the end of
the good news.”
Ukraine has
remained in the bottom half of the ranking of 189 economies, lagging
behind its neighboring countries of Europe and Central Asia region.
The average score in the region is 71.
Moreover, the
broader picture of Ukraine’s investment climate remains grim, as
it remains one of the most corrupt nations, ranking 144th among 176
countries, according to the 2012 Transparency International index. It
also fell back 11 positions in the global competitiveness index,
released in September by the World Economic Forum, affiliated with
the World Bank.
World Bank’s
Fan said companies operating in Ukraine still face high costs of
electricity (Ukraine ranks 172 in this area), poor conditions for
protecting investors (128), a large number of taxes (164), high costs
of trading across borders (128) and difficulties in resolving
insolvency (162). He said Ukraine should tackle those issues next.
Moreover,
other elements of business environment, which are not measured by
Doing Business, remain a deterrent for business activity.
“Businesses,
particularly middle-sized companies continue to suffer from
macroeconomic instability, large number of permits, frequent
inspections, non-transparent application of the law, corruption
inconsistency of political regime and insecure property rights. These
challenges must be addressed for further improvement of business
environment in the country,” Fan said.
Leonid
Kozachenko, head of entrepreneur’s council at the Cabinet of
ministers of Ukraine, also said that a lot still needs to be done to
cut the huge number of inspections Ukrainian businesses are facing,
citing the case of Nibulon, Ukraine’s biggest grain trader. In 2012
alone the company had 762 inspections, being checked about four
times on any given working day.
Meanwhile,
authorities say they’re working on improvements in business
climate. There are three laws on protection of investor rights
pending in parliament, two of those have passed the first reading,
according to Oleksandr Danyliuk, head of coordinating center on
implementing economic reforms
He hopes it
will improve Ukraine’s performance in the Doing Business ranking
further.
World Bank’s
Fan says that signing the Association Agreement in November might
help improve the legal framework.
“Ukraine’s
very significant improvement in this year’s business ranking shows
that a lot can actually be achieved in a short period,” Fan said.
“It’s my
belief that Ukraine should build on the excellent momentum created by
the significant improvement in 2014 doing business ranking, seize the
opportunity of possible signing the Association Agreement and Deep
and Comprehensive Free Trade Agreement with EU, accelerate reforms
and make Ukraine a better place for business.”
Kyiv
Post staff writer Anastasia Forina can be reached at
[email protected]
