Ukraine ahead of Puerto Rico-Russia – Japan. Talking about the new Doing Business rating

Украина обогнала Пуэрто-Рико, Россия - Японию. О чем говорит новый рейтинг Doing Business

The world Bank has published an annual rating of investment attractiveness of countries Doing Business in which Ukraine has climbed 7 points in comparison with last year’s rating. She took took the 64th place among 190 countries.

The rating is not the first head of the New Zealand. Further, the top five are Singapore, Hong Kong, Denmark, South Korea. From post-Soviet countries, the best rated Georgia – it occupies seventh place. Russia is located on 28th place, 49 Belarus, Moldova 48.

The last place in the ranking – 190-e – is Somalia.

Ukraine annually reports “Peremoga” with a rating (he grew up and Poroshenko), but as you can see, on the ease of doing business lagging behind still, not only from Belarus, but even more so from Russia.

By certain domestic traditions, these countries are considered “Soviet” the dominance of the bureaucracy. However, the Doing Business rating, which is quite popular among Ukrainian reformers, shows a different picture: in fact Ukraine for years can’t even catch up with Moldova. Not to mention Kazakhstan, who did the 25th place.

That pushed Ukraine to the top

The business environment in which the calculated ease of Doing Business index consists of 10 indicators:

registration of business,obtaining construction permits,connecting to electricity,registering property,getting credit,protecting investors,paying taxes,trading across borders,enforcing contracts,resolving insolvency.

Украина обогнала Пуэрто-Рико, Россия - Японию. О чем говорит новый рейтинг Doing Business

According to the world Bank, this year Ukraine improved its performance by 6 of the 10 indicators that are considered by world Bank teams in the rankings.

The Cabinet has listed, for some items grew by Ukraine and by what means.

The biggest progress – 27 points up and showed under the component “Protection of minority shareholders.” In the message, the government says that this happened thanks to the opening of the ultimate beneficiaries.

Plus 10 points our country has received over the component “Getting a building permit” by eliminating the requirements to hire an independent designer and engineer of technical supervision system of online notifications and reduce the cost of building permits within Kiev.

Also increased the rating on other components. “Connection” has grown from streamlining the technical conditions and the implementation of a geographic information system. Also improved the reliability of electricity supply due to a compensation mechanism off.

Growth evaluation component “international trade” has contributed to the simplification of requirements for certification of individual industrial goods.

“Registration of property” have risen due to increasing transparency of land administration and simplification of property registration.

Based on the criterion of “Access to credit” increased due to the fact that improved access to credit information through the creation of a new National registry of credits in the National Bank of Ukraine.

Earlier, Vladimir Zelensky set the goal for 3-4 years to get into the top ten rankings. But even if Ukraine will add 15 positions per year, this will not happen – until it goes too far

The rating of Russia and Belarus

Russia has improved its position in the ranking and ranked 28th against the 31st in last year’s ranking. That is included in the TOP 30 countries.

The drafters of the rating note that over the past year, Russia has undertaken reforms, which resulted in the improved position by two indicators — on access to the grid (12 to 7) and obtaining a building permit (from 48 th to 26-th place).

Note that in April 2019, Russian President Vladimir Putin instructed to ensure Russia in 20th place by 2024. That is about the time, as Zelensky plans to go in the TOP 10.

And, although this is more realistic than in Kiev, plans, get it from Russia – is unclear. Earlier Putin has published the decree in which has demanded to enter into the twenty more than last year. But it did not.

As for Belarus, it took 49th place, considerably having decreased in the rating. Last year it was a whopping 12 places higher. In the structure of the rating of Belarus slipped in terms of: “Registration of enterprises” (with 5 spaces 30), “Obtaining construction permits” (48 versus 46 last year), “Getting credit” (104-e a place from 85), “Protecting investors” (79 vs 51), “enforcing contracts” (up from 29 seats in the 40), “Resolving insolvency” (74-th place after ‘ 72).

The country has risen only in terms of “Registering property”, taking 14th place against the 29th position last year, and added one paragraph (24 vs 25) on the item “international trade”. While in most of Belarus said that the country is stable just in other States the figures are growing faster.

Doing Business = rich country?

This rating captures the presence or absence of bureaucratic impediments to doing business. Only.

While entrepreneurs in a much greater extent affected by other factors: solvency of the population, developed communications and infrastructure (good roads, for example) and the availability of cheap loans.

It is these three factors – the basic for business development, and if available, the other issues in any case is solved.

Lending in Ukraine is practically not working, and effective demand after the crisis of 2014-2015 is low. Roads also have questions. That is, to do business in our country is objectively hard, even if bureaucrats will not do.

That is why the place in the Doing Business ranking says little about how the country is economically advanced.

For example, China is in the ranking below Russia – 31 (and below RF there Italy). However, Chinese companies and startups, the whole world knows. And of course you can’t compare the Chinese economy with the Georgian, which occupies 7-th place in Doing Business. But in fact is one of the poorest countries of the former USSR.

As well as the proximity of Russia with Japan and Austria in the rating of the world Bank suggests that the standard of living in Russia is comparable with these countries.

That is an attempt of the Ukrainian authorities to put this rating as the evidence of the serious progress of the country – a little reflects a business situation really.

Real change can be seen if Ukraine will catch up to start at least Georgia in the rankings in terms of GDP per capita, which is published by the same world Bank.

It is 9200 dollars per person in 2018. While Georgia – 11400, Armenia – 10300, Belarus – 20 000, Russia – 27 000 dollars.

However, this ranking power for some reason prefer not to remember.

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