Ukraine falls 11 places in global competitiveness rating
Ukraine is in 84th place in the World Economic Forum’s Global Competitiveness Report 2013-2014 between Tunisia and Uruguay. The drop in its position is seen in most areas identified, but most of all with respect to macroeconomic stability. The report warns that in the absence of reforms the situation will get even worse.
Ukraine’s highest rating was back in 2008 – 72nd place. It fell in 2009-2010, but then rose by 7 places in 2011 then by 9 in 2012.
Ukraine enjoys a strategic geopolitical location between the European Union and Eurasia. Its wealth lies in natural resources, an educated labour force and significant agricultural and industrial potential.
However, after 20 years of independence, Ukraine’s national income remains below its 1989 level. The gross domestic product (GDP) per capita is lower than that of its neighbours, whose economies developed more dynamically in the last 20 years; Ukraine also suffered severely in the recent economic crisis. In 2009, GDP shrank by 14.5%, resulting in one of the biggest contractions globally. In 2011, Ukraine’s trade deficit doubled to US$ 6.7 billion, as the world’s 10th largest steel producer saw global demand weaken for its key exports of metals and machinery.
Recently, the country experienced an impasse in implementing structural reforms, resulting in setbacks to both its democratic transformation and a decline in appeal to foreign investment. Ukraine needs to further reform its public governance and judicial systems, rebuild trust between the government and civil society, modernize its economy and infrastructure, and create favourable conditions for the development of business. Further, it needs to transform its social protection, healthcare and education systems.