Competitiveness Ukraine Eng Report 2011

Ukrainian National Competitiveness
Report 2011
Towards Sustained Growth and Prosperity
Ukrainian National Competitiveness Report 2011

is published by the Foundation for Effective Governance
with support of the World Economic Forum.
The Foundation for Effective Governance

Copyright 2011
by the Foundation for Effective Governance
Layout and design: Print House Kolo.

Published by the Foundation for Effective Governance
Authors:
Timur Boyko
Anna Chukhay
Ildar Gazizullin
Igor Goncharenko
Vitaliy Kovalenko
All rights reserved. No part of this publication may be

reproduced, stored in a retrieval system, or transmitted,
in any form or by any means, electronic, mechanical,
photocopying, or otherwise without the prior permission of
the Foundation for Effective Governance.
Contents
Opening Remarks
Overview
Chapter 1 Assessing Competitiveness of
Countries and Regions: The Global
Competitiveness Index
Annex A Structure and Calculation of the Global
Competitiveness Index
Annex B Ukrainian National Competitiveness
Index 2011 data
Chapter 2 The Most Problematic Factors for
Doing Business in Ukraines Regions in 2011
Chapter 3 Ukraines higher education system:
quantity does not always lead to quality
Chapter 4 The current state of transportation
infrastructure impedes economic growth
Chapter 5 Assessing the Competitiveness of
Ukraines Regions in 2011
Ukraines Regions Competitiveness Profiles
Opening remarks
Opening Remarks
NATALYA IZOSIMOVA
Director of the Foundation for Effective Governance
This year, the foundation releases its fourth edition

of Ukrainian National Competitiveness Report. In
2008, in partnership with the World Economic Forum,
we conducted our first study of the competitiveness of
Ukraines regions, covering 12 of the countrys 27 oblasts
and special-status cities. We have annually increased the
number of regions covered in our report, so that this year
I am pleased to announce that, for the first time, all 27
have been included.
As before, the report contains a competitiveness
index of Ukraines regions, which is calculated using the
methodology of the Global Competitive Index (GCI), an
international rating of more than one hundred countries.
However, this year, we have made improvements to the
index, adding analyses of two rating categories: Ukraines
infrastructure and education system. Additionally, the
emphasis is now on comparisons between the ratings of
Ukrainian regions rather than with other countries.
The success of Ukraine in the international arena
is a direct result of the productivity of the countrys
regions. At the same time, the problems of any particular
region, even one with a small population or that doesnt
make a significant contribution to national GDP, affect
the entire country. An unbuilt tunnel in a region with an
international border is a liability for the whole nations
foreign trade; while a corrupt education system in the
countrys leading universities amounts to a poor quality
labor force for all of Ukraine.
By analyzing the low scores of individual oblasts, we
can indentify the reasons behind them, and thus apply
modern methods of correcting the situation in the oblast
as well as the entire country. On the other hand, the
high scores of certain Ukrainian regions can serve as an
example for other regions, and the basis for an exchange
of practical experience in the forging of national policy.
Macroeconomic stability has become a priority

in the agendas of most countries, and Ukraine is no
exception. However, it is our opinion that the country
cannot occupy itself with putting out fires as they flare
up even big fires like the world economic crisis. Instead,
it has to lay the foundations for future prosperity. As
our experience with the municipal government of Kyiv
has shown, development cannot move forward without
a strategic plan. The Strategy to develop Kyiv City by
2025 project, which the foundation helped work out,
became a continuation of successful projects for the
development of long-term regional strategies for Lviv,
as well as Donetsk and Dnipropetrovsk oblasts. Thus,
in this years report, we have more carefully examined
those components of competitiveness on which depends
the productivity of the country in the midterm: higher
education and infrastructure.
In conclusion, I would like to say that the task of
the foundation in compiling this report on Ukraines
regions competitiveness was to create a unique and
objective tool for decision makers at all levels whether
they be business people, potential investors, or local and
national government officials. Each year, we try to make
this tool easier to understand and use. One of this years
innovations is the launching of a web site with interactive
capabilities that allow users to familiarize themselves
with precisely those parts of the report that are of interest
to them.
I sincerely hope that our efforts will facilitate an
increase in the number of people who can make use of the
results of this study, provoke higher quality discussion of
the competitiveness of Ukraine and its individual regions,
as well as stimulate the introduction of economic reforms
and long-term programs of regional development.
Overview
Overview
This year, the Ukrainian National Competitiveness
Report consists of five sections. The first chapter presents
the methodology of the World Economic Forum, which
was used in the Report to assess the competitiveness of
Ukrainian regions. Appendices A and B provide a detailed description of the Index as well as the statistical
data and questions addressed to company executives,
which were used to create the index.
The second chapter provides the results of the Executive Opinion Survey on the main problems of doing
business in Ukraine, broken down by industry and region.
The third and fourth chapters provide an analysis
Figure 1
of the impact of Ukraines transportation infrastructure

and higher education system on the countrys competitiveness.
The fifth chapter of the report provides the main
results of a study on the competitiveness of Ukraines regions. The section analyzes the competitive strengths and
weaknesses of the regions in general, as well as similarities
and differences in the individual assessments. The second
part provides a short description of each of Ukraines 27
regions, including their strengths and weaknesses.
Finally, the report provides the regions competitiveness profiles, including the ranking and the data values
used to calculate the index.
Ukrainian National Competitiveness Index 2011

Kyiv
Dnipropetrovsk
Kharkiv
Kyiv Oblast
Donetsk
Zaporizhzhya
Sevastopol
Odesa
Poltava
Lviv
Mykolayiv
Ukraine (Regions average)
Volyn
Luhansk
Vinnytsya
Sumy
Cherkasy
Rivne
Zakarpattya
Ivano-Frankivsk
Khmelnytsky
Chernivtsi
AR Crimea
Zhytomyr
Ternopil
Chernihiv
Kirovohrad
Kherson
4,26
4,10
4,05
4,04
4,03
3,98
3,96
3,95
3,94
3,88
3,87
3,87
3,87
3,87
3,86
3,84
3,81
3,81
3,80
3,78
3,77
3,77
3,77
3,76
3,74
3,68
3,68
3,58
3,20
3,40
3,60
3,80
4,00
4,20
4,40
Competitiveness Ranking
Assessing Competitiveness
of Countries and Regions: The
Global Competitiveness Index
MARGARETA DRZENIEK HANOUZ AND THIERRY GEIGER
World Economic Forum
This chapter sets out the basic principles of the Global Competitiveness Index, a benchmarking tool used by
the World Economic Forum to assess the competitiveness of nations.1 The same tool is used in this report to
picture competitiveness of Ukraine and its regions.
This report offers businesses and policymakers the
instrument to assess relative strengths and weaknesses of
a national economy comparing to other countries. The
results may also help to identify the best practices in certain spheres.
One of the main advantages of the methodology
used in the report is that it is partially based on business
perceptions and therefore informs the government and
the public about the view of the CEOs who stimulate economic growth by their investment decisions.
1.1
The 12 pillars of competitiveness
Continuous progress in theoretical and empirical economic research inevitably makes the methodology used by the World Economic Forum to assess
national competitiveness to evolve over time. The latest step in this evolution is the Global Competitiveness
Index (GCI), which was first introduced in 2004 and
which has been developed in cooperation with Professor
Xavier Sala-i-Martin of Columbia University. Since then,
the GCI has become the World Economic Forums main
tool for assessing competitiveness.
The GCI is designed to evaluate the potential of
countries to grow over the medium to longer term, taking into account present level of development, based on
the understanding that competitiveness is the set of institutions, policies and factors that determine the level of
productivity of a country.
The GCI sums up the latest thinking on competitiveness and captures the complexity of the economic
growth process by taking into account a weighted average of many different components, each of which reflects
one aspect of the complex reality of competitiveness. The
components are grouped into 12 different categories,
called the twelve pillars of competitiveness and described
below.2 The detailed structure of the GCI is presented in
Annex A of this chapter.
1st pillar: Institutions
Institutions shape the framework within which individuals, firms and governments interact to generate
income and wealth in the economy, and therefore have a
strong bearing on competitiveness and growth. The quality of the institutional environment plays a central role
in the ways in which societies distribute the benefits and
bear the costs of development strategies and policies. It
also has an impact on investment decisions and on the
organization of production.
2nd pillar: Infrastructure
High-quality infrastructure is critical to ensuring
the efficient functioning of the economy. It is also an
important factor determining the location of economic
1
This chapter is based on Sala-i-Martin et al. (2009) and Browne, C., Geiger, T. (2009). For more information on the topic please
refer to these sources.
For a more detailed description of each pillar and expanded references, see Sala-i-Martin et al. (2009)
Chapter 1. Assessing Competitiveness of Countries and Regions:

The Global Competitiveness Index
CHAPTER 1
11

12
activity and the kinds of activities or sectors that can

develop in an economy. Well-developed transport infrastructure reduces the effect of distance between regions,
thereby truly integrating the domestic market and connecting it to other markets. It also facilitates the movement of workers around the country to the most suitable
jobs. Economies also depend on electricity supplies that
are free of interruptions and shortages to ensure that
businesses and factories can work unimpeded, while a reliable and extensive telecommunications network allows
for a rapid and free flow of information.
3rd pillar: Macroeconomic environment
Although macroeconomic environment alone cannot increase the productivity of a nation, macroeconomic disarray seriously harms the economy. Firms cannot
make informed decisions in the absence of price stability,
the financial sector cannot function if the government
runs huge deficits, and the public sector cannot provide
services efficiently if it has to make large interest payments on its past debts.
4th pillar: Health and primary education
A healthy and educated workforce is vital to a countrys competitiveness and productivity. Poor health produces significant costs for business, as sick workers are
often absent or less productive. Investment in the provision of health services is therefore critical for clear economic, as well as moral, considerations. As basic skills are
vital to the productivity of each individual worker, this
pillar also takes into account the quantity and the quality
of basic education.
5th pillar: Higher education and training
Good quality higher education and training is crucial for economies that want to move up the value chain
beyond simple production processes and products. To
capture this concept, this pillar measures secondary and
tertiary enrollment rates as well as the quality of education. The extent of staff training and the availability of
vocational training is also taken into consideration, as it
ensures a constant upgrading of workers skills to meet
the changing needs of the production system.
6th pillar: Goods market efficiency
Efficient goods markets allow countries to produce
the right mix of products and services given supply and
demand conditions, and ensure that these goods can be
most effectively traded. Healthy market competition,
both domestic and foreign, is important in driving market efficiency and thus business productivity. Such competition ensures that the most efficient firms are those
that survive. The pillar also looks at demand conditions
that force companies to be more innovative and more
customer-oriented, thereby fostering healthy competition.
7th pillar: Labor market efficiency
The efficiency and flexibility of the labor market are
critical for ensuring that workers are allocated, or easily
re-allocated, to their most efficient use in the economy
and provided with incentives to give their best effort in
their jobs. Labor market flexibility also implies that busi-
nesses can adjust wages independently to a large extent

and than their relationships with employees are smooth.
Efficiency of labor markets calls for meritocracy in the
workplace and the ability to retain talent in the country.
8th pillar: Financial market sophistication
An efficient financial sector allocates the resources
saved by a nations citizens, or those invested from abroad,
to its most productive uses. It channels resources to the
entrepreneurial or investment projects with the highest expected rates of return, rather than to the politically
connected, based on a thorough assessment of risks. A
well-functioning financial market also makes different
products and services available to businesses and entrepreneurs according to their financing needs, from such
sources as loans, security exchanges, or venture capital.
9th pillar: Technological readiness
This pillar measures the readiness of an economy
to adopt and use but not necessarily to develop new
technologies to enhance the productivity of its industries.
In todays interconnected world, the ability to adopt and
use new technologies has become an important competitive advantage of firms. Information and communication
technologies (ICT) have consequently evolved into the
general purpose technology of our time, given the critical spillovers to the other economic sectors and their role
as efficient infrastructure for commercial transactions.
10th pillar: Market size
The size of the market affects productivity because
large markets allow firms to exploit economies of scale.
Traditionally, the markets available to firms have been
constrained by a nations borders. In the era of globalization, international markets have become a substitute for
domestic markets, especially for small countries. This is
why both domestic and foreign markets are taken into
account when constructing the tenth pillar of economic
competitiveness, market size. By including both domestic
and foreign markets in the measure of market size, this
pillar also avoids discriminating against geographic areas
such as the European Union that are broken into many
countries, but have one common market.
11th pillar: Business sophistication
Business sophistication concerns the quality of a
countrys overall business networks, as well as the sophistication of the operations and strategies of individual firms.
This is conducive to higher efficiency in the production of
goods and services, leading to increased productivity and
enhancing a nations competitiveness. When companies
and suppliers are interconnected in geographically proximate groups (clusters), efficiency is heightened, leading to
greater opportunities for innovation and to reduced barriers to entry for new firms. Individual firms operations
and strategies branding, marketing, the presence of a
value chain, and the production of unique and sophisticated products all lead to sophisticated and modern
business processes, as they spill over to other companies.
12th pillar: Innovation
The last pillar of competitiveness is technological innovation. In the long run, efficiency gains can be achieved
The interrelation of the 12 pillars

Although the 12 pillars of competitiveness are discussed separately, this should not obscure the fact that
they are interdependent: they are related to each other
and also tend to reinforce each other. For example, businesses will not innovate at a large scale (12th pillar) if
institutions (1st pillar) that protect intellectual property
rights are not in place or if the labor force is poorly educated and trained (5th pillar). Although the actual construction of the Index will involve the aggregation of the
twelve pillars into a single index, measures are reported
for each pillar separately, thereby offering an analysis of
the competitive strengths and weaknesses of countries.
By highlighting and prioritizing areas for improvement
and strengths to build upon, this analysis provides a basis
for policy formulation.
1.2 Competitiveness and the stages of

economic development
It is clear that different pillars are of different importance to different countries. Cameroon is likely to focus on other issues to improve its competitiveness than
France. This is because Cameroon and France are in different stages of development: as countries move along
the development path, wages tend to increase, and in
order to sustain this higher income, labor productivity
must improve.
Table 1.1
According to the GCI, in the first stage, the economy is factor-driven and countries compete based on their
factor endowments, primarily unskilled labor and natural resources. Maintaining competitiveness at this stage
of development hinges primarily on well-functioning
public and private institutions (1st pillar), well-developed infrastructure (2nd pillar), a stable macroeconomic
framework (3rd pillar), and a healthy and literate workforce (4th pillar).
As wages rise with advancing development, countries move into the efficiency-driven stage of development, when they must begin to develop more efficient
production processes and increase product quality. At
this point, competitiveness is increasingly driven by
higher education and training (5th pillar), efficient goods
markets (6th pillar), well-functioning labor markets (7th
pillar), sophisticated financial markets (8th pillar), a large
domestic or foreign market (10th pillar), and the ability
to harness the benefits of existing technologies (9th pillar).
Finally, as countries move into the innovation-driven stage, they are able to sustain higher wages and the associated standard of living only if their businesses are able
to compete with new and unique products. At this stage,
companies must compete through innovation (12th pillar), producing new and different goods using the most
sophisticated production processes (11th pillar).
The concept of stages of development is integrated
into the GCI by attributing higher relative weights to
those pillars that are relatively more relevant for a country given its particular stage of development. That is,
although all twelve pillars matter to a certain extent for
all countries, the importance of each one depends on a
countrys particular stage of development. To take this
into account, the pillars are organized into three sub-indexes, each critical to a particular stage of development,
as shown in Figure 1.1. Countries are allocated to stages
of development based on the level of GDP and the share
of minerals exports3. The precise thresholds are shown in
Table 1.2.
Countries falling in between two of the three stages
are considered to be in transition. For these countries,
the weights change smoothly as a country develops, reflecting the smooth transition from one stage of development to another.
Subindex weights and income threshholds for stages of development

Stage 1:
Factor-driven
Transition
from stage 1
to stage 2
Stage 1:
Efficiency-driven
Transition
from stage 2
to stage 3
Stage 1:
Innovation-driven
<2 000
2 000-2 999
3 000-8 999
9 000-17 000
>17 000
Weights for basic requirements subindex, %
60
40-60
40
20-40
20
Weights for efficiency enhancers subindex, %
35
35-50
50
50
50
5-10
10
10-30
30
GDP per capita (USD) thresholds*
Weights for innovation and sophistication factors subindex, %
* For economies with a high dependency on mineral resources, GDP per capital is not the sole criterion for the determination of the stage of development. See text for details.
Countries are allocated to stages of development based on two criteria. The first criterion is the level of GDP per capita at market
exchange rates. This widely available measure is used as a proxy for wages, as internationally comparable data for the latter are
not available for all countries covered. The precise thresholds are shown in Table 1.1. A second criterion measures the extent to
which countries are factor driven. We proxy this by the share of exports of primary goods in total exports (goods and services)
and assume that countries that export more than 70 percent of primary products (proxied by minerals) are primarily factor
driven. See Sala-i-Martin et al (2009).

and standards of living expanded only through technological innovation. Innovation is particularly important
for more advanced economies. These tend to operate at
the technology frontier, so that the possibilities of integrating and adapting exogenous technologies, as captured in the ninth pillar of technological readiness, are
limited. Firms in these countries must design and develop cutting-edge products and processes to maintain
a competitive edge. This requires an environment that is
conducive to innovative activity, supported by both the
public and the private sectors. In particular, this entails
sufficient investment in research and development, especially by the business sector; high-quality scientific
research institutions; collaboration in research between
universities and industry; and the protection of intellectual property.
13

1.3 The Global Competitiveness Index

Data
Out of the 119 indicators composing the index,
about one third are hard data, i.e. statistical data typically
collected from international organizations. The remaining indicators are obtained from the Executive Opinion
Survey (the Survey) based on the methodology of the
World Economic Forum in all countries covered by the
Report.
The aim of the Survey is to capture the qualitative
dimension of specific aspects of competitiveness and to
provide comparable data on issues for which hard data
indicators do not exist. Business leaders are asked to assess specific aspects of the business environment in the
country in which they operate. To conduct the Survey in
each country, the Forum relies on a network of 150 Partner Institutes. Typically, the Partner Institutes are recognized economics departments of national universities, independent research institutes, or business organizations.
In Ukraine, the Centre for Social and Economic Research
Ukraine (CASE) is the Forums Partner Institute.4
1.4 Conclusions
14
This chapter has presented the Global Competitiveness Index which serves as the main vehicle for assessing
competitiveness of Ukraines regiona in this Report. The
GCI captures what government and business leaders have
known for a long time. Competitiveness is a complex
phenomenon and the overall level of competitiveness of
a nation can be improved only through a wide array of
reforms in different areas. The GCI also highlights the
fact that the priorities are different for different countries,
depending on their level of development.

The GCI is constructed by combining hard data with
perception data gathered through the Executive Opinion Survey. As a result, the relative scores of the various
subcategories of the GCI provide useful information as
to what the priorities for reform should be, both from the
cold reality of the hard data and from the point of view
of the business community that is currently operating in
the country.
The GCI is an instrument that can be used to identify the competitive strengths of a country as well as the
barriers to its economic progress. It can also be used to
establish comparisons with neighboring countries and
the relative position in the overall rankings that a particular country holds. In this context, the particular strength
of the World Economic Forums competitiveness work is
that it provides a platform for dialogue among government, business, and civil society that can serve as a catalyst for productivity-raising reforms, with the aim of improving living standards.
References
1. Browne, C. and T. Geiger. 2009. The Executive Opinion Survey: Capturing the Views of the Business
Community. The Global Competitiveness Report
2009-2010. World Economic Forum. 49-57.
2. Sala-i-Martin, X., J. Blanke, M. Drzeniek Hanouz, T.
Geiger, and I. Mia. 2009. The Global Competitiveness Index 20092010: Contributing to Long-Term
Prosperity amid the Global Economic Crisis. The
Global Competitiveness Report 2009-2010. World
Economic Forum. 347.
For more detailed information about the survey process and the treatment of survey data, please refer to Browne, C. Geiger, T.
(2009).
Countries/economies at each stage of development
Stage 1:
Factor-driven
(37 economies)
Transition from
stage 1 to stage 2
(24 economies)
Stage 2:
Efficiency-driven
(28 economies)
Transition from
stage 2 to stage 3
(18 economies)
Stage 3:
Innovation-driven
(35 economies)
Bangladesh
Algeria
Albania
Argentina
Australia
Benin
Angola
Belize
Barbados
Austria
Bolivia
Armenia
Bosnia and Herzogovina
Brasil
Bahrain
Burkina Faso
Azerbaijan
Bulgaria
Chile
Belgium
Burundi
Botswana
Cape Verde
Croatia
Canada
Cambodia
Brunei Darussalam
China
Estonia
Cyprus
Cameroon
Egypt
Colombia
Hungary
Czech Republic
Chad
Georgia
Costa Rica
Latvia
Denmark
Cote dIvoire
Guatemala
Dominican Republic
Lebanon
Finland
Ethiopia
Guyana
Ecuador
Lithuania
France
Cambodia, The
Ghana
Honduras
El Salvador
Mexico
Germany
Iran, Islamic Rep.
Indonesia
Oman
Greece
Haiti
Jamaica
Jordan
Poland
Hong Kong SAR
India
Kazakhstan
Macedonia, FYR
Russian Federation
Iceland
Kenya
Kuwait
Malaysia
Slovak Republic
Ireland
Kyrgyz Republic
Mongolia
Mauritius
Trinidad and Tobago
Israel
Lesotho
Paraguay
Montenegro
Turkey
Italy
Madagascar
Philippines
Morocco
Uruguay
Japan
Malawi
Qatar
Namibia
Korea, Rep.
Mali
Saudi Arabia
Panama
Luxemburg
Mauritania
Sri Lanka
Peru
Malta
Moldova
Syria
Romania
Netherlands
Mozambique
Ukraine
Serbia
New Zealand
Nepal
Venezuela
South Africa
Norway
Nicaragua
Suriname
Portugal
Nigeria
Swaziland
Puerto Rico
Pakistan
Thailand
Singapore
Rwanda
Tunisia
Slovenia
Senegal
Spain
Tajikistan
Sweden
Tanzania
Switzerland
Timor-Leste
Taiwan, China
Uganda
United Arab Emirates
Vietnam
United Kingdom
Yemen
United States
Zambia
Zimbabwe

Table 1.2
15

16
Appendix : Calculation and structure of Global Competitiveness Index in 2011

This appendix provides details on the structure
and calculation procedure of the Global Competitiveness Index (GCI). The structure and calculation procedure of the Ukraines regions Competitiveness Index is
the same.
The numbering of the variables matches the numbering of the Data Tables of the World Economic Forums Global Competitiveness Report 20112012. The
number preceding the period indicates the pillar to
which the variable belongs (e.g. variable 1.01 belongs
to the 1st pillar, variable 12.04 belongs to the 12th pillar). Published numbers are rounded to the nearest integer, but when calculating the GCI accurate data are
used.
The calculation of the GCI is based on successive
aggregation of scores from the indicator level (the most
disaggregated level) up the overall GCI score. Unless
otherwise specified, an arithmetic mean is used to aggregate individual variables within a same category at
all level of aggregation. a
For aggregation of the variables a percentage indicated next to each category is used. It is a weight of
a category within the parent group of indicators. For
example, a 9th pillar score a country is 17 percent of
the efficiency enhancers subindex score regardless of
its stage of development. Similarly, the transport infrastructure score accounts for 50 percent of a infrastructure pillar score.
In contrast to lower aggregation levels, shares of
each of the three sub-indices (the basic requirements,
efficiency enhancers and innovation and sophistication
factors) are not constant. They depend on the stage of
development of a country, as noted in the first chapter. b
For example, Ukraine is between the first and second stages of development, and the weight the basic
requirements subindex in the overall GCI index for the
country is 40 percent, while for Norways (a country at
the third stage of development) GCI it is only 20.
Variables that are not derived from the Executive
Opinion Survey (Survey) are identified by an asterisk
(*). For technical notes and data sources please refer
to the Appendix B. To make the aggregation possible,
these variables are transformed into a 1-to-7 scale in
order to align them with the Survey results. We apply
a transformation method that preserves the order of,
and the relative distance between, country scores.c Indicators marked with a superscript means that we
assign a half-weight to each instance. To avoid double
counting, they are assigned to half their weight in each
case. d
Weight (%)
within immediate
parent category
BASIC REQUIREMENTS
1st pillar: Institutions..................................................25%
A. Public institutions..........................................................................75%
Property rights...................................................................................20%
1.01 Property rights
1.02 Intellectual property protection* 1/2
Ethics and corruption........................................................................20%
1.03 Diversion of public funds
1.04 Public trust of politicians
1.05 Irregular payments and bribes
Undue influence.................................................................................20%
1.06 Judicial independence
1.07 Favoritism in decisions of government officials
Government inefficiency....................................................................20%
1.08 Wastefulness of government spending
1.09 Burden of government regulation
1.10 Efficiency of legal framework in settling disputes
1.11 Efficiency of legal framework in challenging regulations
1.12 Transparency of government policymaking
Security.............................................................................................20%
1.13 Business costs of terrorism
1.14 Business costs of crime and violence
1.15 Organized crime
1.16 Reliability of police services
B. Private institutions........................................................................25%
Corporate ethics................................................................................50%
1.17 Ethical behavior of firms
Accountability....................................................................................50%
1.18 Strength of auditing and reporting standards
1.19 Efficacy of corporate boards
1.20 Protection of minority shareholders interests
1.21 Strength of investor protection*
2nd pillar: Infrastructure..............................................25%

A. Transport infrastructure................................................................50%
2.01 Quality of overall infrastructure
2.02 Quality of roads
2.03 Quality of railroad infrastructure
2.04 Quality of port infrastructure
2.05 Quality of air transport infrastructure
2.06 Available seat kilometers*
B. Energy and telephony infrastructure................................................50%
2.07 Quality of electricity supply
2.08 Fixed telephone lines* 1/2
2.09 Mobile telephone subscriptions* 1/2
3rd pillar: Macroeconomic environment.....................25%

3.01
3.02
3.03
3.04
3.05
3.06
Government budget balance *

National savings rate*
Inflation* e
Interest rate spread*
Government debt*
Country credit rating*
4th pillar: Health and primary education....................25%

A. Health............................................................................................50%
4.01 Business impact of malaria f
4.02 Malaria incidence* f
4.03 Business impact of tuberculosis f
4.04 Tuberculosis incidence* f
4.05 Business impact of HIV/AIDS f
4.06 HIV prevalence* f
4.07 Infant mortality*
4.08 Life expectancy*
B. Primary education..........................................................................50%
4.09 Quality of primary education
4.10 Primary education enrollment rate*
EFFICIENCY ENHANCERS
5th pillar: Higher education and training..............................17%
A. Quantity of education......................................................................33%
5.01 Secondary education enrollment rate*
5.02 Tertiary education enrollment rate*
B. Quality of education......................................................................33%
5.03 Quality of the educational system
5.04 Quality of math and science education
5.05 Quality of management schools
5.06 Internet access in schools
C. On-the-job training........................................................................33%
5.07 Local availability of specialized research and training
services
5.08 Extent of staff training
6th pillar: Goods market efficiency..........................................17%

A. Competition...................................................................................67%
Domestic competition.......................................................................75%
6.01 Intensity of local competition
6.02 Extent of market dominance
6.03 Effectiveness of anti-monopoly policy
6.04 Extent and effect of taxation 1/2
6.05 Total tax rate*
6.06 Number of procedures required to start a business* h
6.07 Time required to start a business* h
6.08 Agricultural policy costs
External competition........................................................................25%g
6.09 Prevalence of trade barriers
6.10 Trade tariffs*
6.11 Prevalence of foreign ownership
6.12 Business impact of rules on FDI
6.13 Burden of customs procedures
6.14 Imports as a percentage of GDP* i
B. Quality of demand conditions.......................................................33%
6.15 Degree of customer orientation
6.16 Buyer sophistication
10th pillar: Market size...................................................................17%

A. Domestic market size...................................................................75%
10.01 Domestic market size index* i
B. Foreign market size......................................................................25%
10.02 Foreign market size index* k
INNOVATION AND SOPHISTICATION FACTORS

11th pillar: Business sophistication...........................50%
11.01 Local supplier quantity
11.02 Local supplier quality
11.03 State of cluster development
11.04 Nature of competitive advantage
11.05 Value chain breadth
11.06 Control of international distribution
11.07 Production process sophistication
11.08 Extent of marketing
11.09 Willingness to delegate authority
7.07 Reliance on professional management 1/2
12th pillar: Innovation................................................50%

12.01 Capacity for innovation
12.02 Quality of scientific research institutions
12.03 Company spending on R&D
12.04 University-industry collaboration in R&D
12.05 Government procurement of advanced technology
products
12.06 Availability of scientists and engineers
12.07 Utility patents*
1.02 Intellectual property protection* 1/2
References
. For each category i that consist from K indicators:
7th pillar: Labor market efficiency...........................................17%

A. Flexibility.......................................................................................50%
7.01 Cooperation in labor-employer relations
7.02 Flexibility of wage determination
7.03 Rigidity of employment*
7.04 Hiring and firing practices
7.05 Redundancy costs*
6.04 Extent and effect of taxation 1/2
B. Efficient use of talent....................................................................50%
7.06 Pay and productivity
7.07 Reliance on professional management 1/2
7.08 Brain drain
7.09 Female participation in labor force*
8th pillar: Financial market development............................17%

A. Efficiency......................................................................................50%
8.01 Availability of financial services
8.02 Affordability of financial services
8.03 Financing through local equity market
8.04 Ease of access to loans
8.05 Venture capital availability
B. Trustworthiness and confidence....................................................50%
8.06 Soundness of banks
8.07 Regulation of securities exchanges
8.08 Legal rights index*
9th pillar: Technological readiness.........................................17%

A. Technological adoption.................................................................50%
9.01 Availability of latest technologies
9.02 Firm-level technology absorption
9.03 FDI and technology transfer
B. ICT use.........................................................................................50%
9.04 Internet users*
9.05 Broadband Internet subscriptions*
9.06 Internet bandwidth*
2.08 Fixed telephone lines* 1/2
2.09 Mobile telephone subscriptions* 1/2
b. As described in the chapter, the weights are the

following:
Stage of development
Stage 1:
Factor-driven
Transition
Stage 1:
from stage 1 Efficiency-driven
to stage 2
Transition
Stage 1:
from stage 2 Innovation-driven
to stage 3
GDP per capita (USD) thresholds*

<2000
2 000-2 999
3 000-8 999
9 000-17 000
>17 000
Weights for basic requirements subindex

60
40-60
40
20-40
20
Weights for efficiency enhancers subindex

35
35-50
50
50
50
Weights for innovation and sophistication factors subindex

5
10
5-10
10-30
30
* For economies with a high dependency on mineral resources, GDP per capita is not
the sole criterion for the determination of the stage of development. See text for details.
Note: There is inverse dependence between GDP per capita and weight in the range of
subindex weights. For example, for a country with GDP per capita of USD 2999 the weight used
for subindex Basic Requirements is 40%.
Ukraine is between the 1st and the 2nd stages of development.
. The standard formula for converting hard data

is the following:
6
(country score - sample minimum)

(sample maximum - sample minimum)
+1
The sample minimum and sample maximum

are, respectively, the lowest and highest country scores
in the sample of countries covered by the GCI. In some
instances, adjustments were made to account for extreme outliers. For those hard data variables for which
a higher value indicates a worse outcome (eg, disease
incidence, government debt), we rely on a normalization formula that, in addition to converting the series
to a 1-to-7 scale, reverses it, so that 1 and 7 still cor-
17

18
responds to the worst and best possible outcomes, respectively:

6
(country score - sample minimum)

(sample maximum - sample minimum)
+7
d. For those groups of variables that contain one

or several half weight variables, country scores for
those groups are computed as follows:
1
(sum of scores on full weight variables) + (sum of scores on half weight variables)
2
1
(count of full weight variables)
(count of full weight variables)
+
2
. In order to capture the idea that both high inflation and deflation are detrimental, inflation enters
the model in a U-shaped manner as follows: for values of inflation between 0.5 and 2.9 percent, a country
receives the highest possible score of 7. Outside this
range, scores decrease linearly as they move away from
these values.
f. The impact of malaria, tuberculosis, and HIV/
AIDS on competitiveness depends not only on their respective incidence rates, but also on how costly they are
for business. Therefore, in order to estimate the impact
of each of the three diseases, we combine its incidence
rate with the Survey question on its perceived cost to
businesses. To combine these data we first take the ratio
of each countrys disease incidence rate relative to the
highest incidence rate in the whole sample. The inverse
of this ratio is then multiplied by each countrys score
on the related Survey question. This product is then
normalized to a 1-to-7 scale. Note that countries with
zero reported incidence receive a 7, regardless their
scores on the related Survey question.
g. The Competition sub-pillar is the weighted
average of two components: Domestic competition
and Foreign competition. In both components, the
included variables provide an indication of the extent
to which competition is distorted. The relative importance of these distortions depends on the relative size
of domestic versus foreign markets. This interaction
between the domestic market and the foreign market
is captured by the way we determine the weights of the
two components. Domestic competition is the sum of
consumption (C), investment (I), government spending (G), and exports (X), while foreign competition
is equal to imports (M). Thus we assign a weight of
(C+I+G+X)/(C+I+G+X+M) to Domestic competition and a weight of M/(C+I+G+X+M) to Foreign
competition. For Ukraine, the calculation yields a
weight of 0.75 for the Domestic competition component and of 0.25 for the Foreign competition component.
h. Variables 6.06 and 6.07 combine to form a
single variable.
i. The values of this variable are normalized.
j. The size of the domestic market is constructed
by taking the natural log of the sum of the gross domestic product valued at PPP, plus the total value (PPP
estimates) of imports of goods and services, minus the
total value (PPP estimates) of exports of goods and
services. Data are then normalized on a 1-to-7 scale.
PPP estimates of imports and exports are obtained by
taking the product of exports as a percentage of GDP
and GDP valued at PPP.
k. The size of the foreign market is estimated as
the natural log of the total value (PPP estimates) of
exports of goods and services, normalized on a 1-to-7
scale. PPP estimates of exports are obtained by taking the product of exports as a percentage of GDP and
GDP valued at PPP.
Property rights
Property rights, including over financial assets (1 = are poorly defined
and not protected by law, 7 = are clearly defined and well protected by
law)
Efficiency of legal framework in challenging regulations

How efficient is the legal framework in your region for private
businesses in challenging the legality of government actions and/or
regulations? (1 = Extremely inefficient, 7 = Highly efficient)
Source: Foundation for Effective Governance, Executive Opinion

Survey, 2011

Survey, 2011
Intellectual property protection

Intellectual property protection in your region (1 = is weak and not
enforced; 7 = is strong and enforced)
Transparency of government policymaking

Survey, 2011
Diversion of public funds
In your region diversion of public funds to companies, individuals, or
groups due to corruption (1 = is common, 7 = never occurs)
Survey, 2011
Public trust of politicians
Public trust in the financial honesty of politicians is (1 = very low,
7 = very high)
Survey, 2011
Irregular payments and bribes
In your region, how common is it for firms to make undocumented
extra payments or bribes connected with the following
a. Import and export permits?
b. Public utilities (e.g., telephone or electricity)?
c. Tax payments?
d. Awarding of public contracts and licenses?
e. Obtaining favorable judicial decisions?
(1 - common, 7 - never occurs)
Survey, 2011
Judicial independence
Is the judiciary in your region independent from political influences
of members of government, citizens, or firms? (1 = no heavily
influenced, 7 = yes entirely independent)
Are firms in your region usually informed clearly by the government

on changes in policies and regulations affecting your industry?
(1 = never informed; 7 = always informed)
Survey, 2011
Business costs of terrorism
The threat of terrorism in your region (1 = imposes significant costs
on business, 7 = does not impose significant costs on business)
Survey, 2011
Business costs of crime and violence
The incidence of common crime and violence (e.g., street muggings,
firms being looted) (1 = imposes significant costs on businesses,
7 = does not impose significant costs on businesses)
Survey, 2011
Organized crime
Organized crime, such as mafia-oriented racketeering, extortion in
your region (1 = imposes significant costs on businesses, 7 = does not
impose significant costs on businesses)
Survey, 2011
Reliability of police services
Police services (1 = cannot be relied upon to protect businesses from
criminals, 7 = can be relied upon to protect businesses from criminals)
Survey, 2011

Survey, 2011
Ethical behavior of firms

The corporate ethics (ethical behavior in interactions with public
officials, politicians, and other enterprises) of firms in your region are
(1 = among the worlds worst, 7 = among the best in the world)
Favoritism in decisions of government officials

When deciding upon policies and contracts, government officials
(1 = usually favor well-connected firms and individuals, 7 = are
neutral)

Survey, 2011

Survey, 2011
Wastefulness of government spending
Public spending in your region (1 = is wasteful, 7 = provides necessary
goods and services not provided by the market)
Survey, 2011
Burden of government regulation
Complying with administrative requirements (permits, regulations,
reporting) issued by the government in your region is (1 =
burdensome, 7 = not burdensome)
Survey, 2011
Efficiency of legal framework in settling disputes
How efficient is the legal framework in your region for private
businesses in settling disputes? (1 = Extremely inefficient, 7 = Highly
efficient)
Survey, 2011

Annex B: Ukrainian National Competitiveness Index 2011 data
Efficacy of corporate boards

Corporate governance by investors and boards of directors in your
region is characterized by (1 = management has little accountability,
7 = investors and boards exert strong supervision of management
decisions)
Survey, 2011
Protection of minority shareholders interests
Interests of minority shareholders in your region are (1 = not protected
by law and seldom recognized by majority shareholders, 7 = protected
by law and actively enforced)
Survey, 2011
Strength of investor protection*
Strength of investor protection, 010 (best), 2010
Source: The World Bank, Doing Business 2010
Quality of overall infrastructure
General infrastructure (transport, telephony and energy) in your
region is (1 = underdeveloped, 7 = as extensive and efficient as the
19

worlds best)
Survey, 2011
Quality of roads
Roads in your region are (1 = underdeveloped, 7 = extensive and
efficient by international standards)
Survey, 2011
Quality of railroad infrastructure
Railroads in your region are (1 = underdeveloped, 7 = as extensive and
efficient as the worlds best)
Survey, 2011
Quality of port infrastructure
Port facilities and inland waterways in your region are (1 =
underdeveloped, 7 = as developed as the worlds best) | * For landlocked
regions, this measures the ease of access to port facilities and inland
waterways.
Survey, 2011
Quality of air transport infrastructure
Passenger air transport in your region is (1 = infrequent, limited, and
inefficient, 7 = as frequent, extensive, and efficient as the worlds best)
Survey, 2011
20
Available seat kilometers*

Air transport passenger turnover in a region per week, million seat
kilometers
Source: State Statistics Committee of Ukraine
Quality of electricity supply
The quality of electricity supply in your region (lack of interruptions
and lack of voltage fluctuations) is (1 = worse than in most other
countries, 7 = meets the highest standards in the world)
Survey, 2011
Business impact of malaria

How serious do you consider the future impact of malaria on your
company in the next 5 years? (1 = extremely serious, 7 = not a problem)
Survey, 2011
Malaria cases*
Number of malaria cases per 100,000 population, 2010
Business impact of tuberculosis
How serious do you consider the future impact of tuberculosis on
your company in the next 5 years? (1 = extremely serious, 7 = not a
problem)
Survey, 2011
Tuberculosis incidence*
Number of tuberculosis cases per 100,000 population, 2010
Source: Ministry of healthcare of Ukraine
Business impact of HIV/AIDS
How serious do you consider the future impact of HIV/AIDS on
your company in the next 5 years? (1 = extremely serious, 7 = not a
problem)
Survey, 2011
HIV prevalence*
HIV prevalence as a percentage of adults aged 15-49 years, 2010
Source: Ukrainian AIDS prevention and control center
Infant mortality*
Infant (children aged 012 months) mortality per 1,000 live births,
2010
Life expectancy*
Life expectancy at birth (years), 2010
Fixed telephone lines*

Main telephone lines per 100 population, 2010
Quality of primary education

Primary schools in your region are (1 = of poor quality, 7 = among the
best in the world)
Source: National Commission for Communications Regulation of

Ukraine

Survey, 2011
Government budget balance*

Central government gross surplus/deficit as a percentage of GDP, 2010
Primary education enrollment*

Net primary education enrollment rate, 2010
Source: National Bank of Ukraine
Gross national savings*

National savings rate as a percentage of GDP, 2010
Secondary education enrollment*

Gross secondary education enrollment rate, 2010
Inflation*
Annual percent change in consumer price index, 2010
Tertiary education enrollment, gross %*

Gross tertiary education enrollment rate (18-23), 2010
Source: State Statistics Committee of Ukraine, Caclulation: Foundation

for Effective Governance
Interest rate spread*

Average interest rate spread (difference between typical lending and
deposit rates), 2010
Source: National Bank of Ukraine, Calculation: Foundation for
Effective Governance
General government debt*
Government gross debt as a percentage of GDP, 2010
Quality of the educational system

The educational system in your region (1 = does not meet the needs of
a competitive economy, 7 = meets the needs of a competitive economy)
Survey, 2011
Quality of math and science education
Math and science education in your regions schools (1 = lag far behind
most other countries, 7 = are among the best in the world)
Survey, 2011

Survey, 2011
Internet access in schools
Internet access in schools is (1 = very limited, 7 = extensivemost
children have frequent access)
Survey, 2011
Availability of research and training services
In your region specialized research and training services are (1 = not
available, 7 = available from world-class local institutions)
Survey, 2011
Extent of staff training
The general approach of companies in your region to human resources
is (1 = to invest little in training and employee development, 7 = to
invest heavily to attract, train, and retain employees)
Survey, 2011
Prevalence of trade barriers

In your region, tariff and non-tariff barriers significantly reduce the
ability of imported goods to compete in the domestic market (1 =
strongly agree, 7 = strongly disagree)
Survey, 2011
Trade-weighted tariff rate*
Average import tariff, 2010
Source: International Trade Centre
Prevalence of foreign ownership
Foreign ownership of companies in your region is (1 = rare and
limited, 7 = prevalent and encouraged)
Survey, 2011
Business impact of rules on FDI
In your region, rules governing foreign direct investment (1 =
discourage foreign direct investment, 7 = encourage foreign direct
investment)
Survey, 2011
Intensity of local competition

Competition in the local market is (1 = limited in most industries, 7 =
intense in most industries)
Burden of customs procedures

Customs procedures (formalities regulating the entry and exit of
merchandise) in your region are (1 = extremely slow and cumbersome,
7 = rapid and efficient)

Survey, 2011

Survey, 2011
Extent of market dominance

Corporate activity in your region is (1 = dominated by a few business
groups, 7 = spread among many firms)
Degree of customer orientation

Customer orientation: Firms in your region (1 = generally treat their
customers badly, 7 = are highly responsive to customers and customer
retention) | 2008-09

Survey, 2011
Effectiveness of anti-monopoly policy
Anti-monopoly policy in your region is (1 = lax and not effective at
promoting competition, 7 = effective and promotes competition)
Survey, 2011
Extent and effect of taxation
The level of taxes in your region (1 = significantly limits the incentives
to work or invest, 7 = has little impact on the incentives to work or
invest)
Survey, 2011
Total tax rate*
This variable is a combination of profit tax (% of profits), labor tax and
contribution (% of profits), and other taxes (% of profits), 2010

Survey, 2011
Buyer sophistication
Buyers in your region make purchasing decisions (1 = based solely on
the lowest price, 7 = based on a sophisticated analysis of performance
attributes)
Survey, 2011
Cooperation in labor-employer relations
Labor-employer relations in your region are (1 = generally
confrontational, 7 = generally cooperative)
Survey, 2011
Flexibility of wage determination

In your region, wages are (1 = set by a centralized bargaining process,
7 = up to each individual company)
No. procedures to start a business*

Number of procedures required to start a business, 2010

Survey, 2011
Rigidity of employment index *

Rigidity of Employment Index on a 0100 (worst) scale
No. days to start a business*

Number of days required to start a business, 2010
Agricultural policy costs
Agricultural policy in your region (1 = is excessively burdensome for
the economy, 7 = balances the interests of taxpayers, consumers, and
producers)
Survey, 2011

Hiring and firing practices
The hiring and firing of workers is (1 = impeded by regulations,
7 = flexibly determined by employers)
Survey, 2011
Redundancy costs, weeks of salary*
Firing costs (in weeks of wages), 2010

Quality of management schools

Management or business schools in your region are (1 = limited or of
poor quality, 7 = among the best in the world)
21

Pay and productivity

In your region, pay is (1 = not related to worker productivity,
7 = strongly related to worker productivity)
Survey, 2011
Reliance on professional management
Senior management positions in your region are (1 = usually held
by relatives or friends without regard to merit, 7 = mostly held by
professional managers chosen based for their superior qualification)
Survey, 2011
Strength of legal rights index on a 010 (best) scale

Availability of latest technologies

In your region, the latest technologies are (1 = not widely available or
used, 7 = widely available and used)
Survey, 2011
Firm-level technology absorption
Companies in your region are (1 = not able to absorb new technology,
7 = aggressive in absorbing new technology)
Brain drain
Your regions talented people (1 = normally leave to pursue
opportunities in other countries, 7 = almost always remain in the
region)

Survey, 2011

Survey, 2011
FDI and technology transfer

Foreign direct investment in your region (1 = brings little new
technology, 7 = is an important source of new technology)
Women in labor force*

Female participation in the labor force as a percentage of male
participation, 2010

Survey, 2011
Mobile telephone subscriptions*
Mobile telephone subscribers per 100 population
Availability of financial services

The level of sophistication of financial markets in your region is
(1 = poor by international standards, 7 = excellent by international
standards)
Survey, 2011
22
Source: National Commission for Communications Regulation of

Ukraine
Internet users*
Internet users per 100 population, 2010
Source: Gemius/GFK-Ukraine
Affordability of financial services

Does the financial sector in your region provide a wide variety
of financial products and services to businesses? (1 = Not at all,
7 = Provides a wide variety)
Broadband Internet subscriptions*

Broadband internet subscribers per 100 population, 2010

Survey, 2011
Internet bandwidth*
Internet bandwidth, kb/s/capita, 2010
Financing through local equity market

Raising money by issuing shares on the stock market in your region is
(1 = impossible, 7 = very easy)
Survey, 2011
Ease of access to loans
How easy is it to obtain a bank loan in your region with only a good
business plan and no collateral? (1 = impossible, 7 = very easy)
Survey, 2011
Venture capital availability
In your region, how easy is it for entrepreneurs with innovative but
risky projects to find venture capital? (1 = impossible, 7 = very easy)
Source: IKS-consulting
Source: International Telecommunications Unit

Domestic market size index*
Sum of gross domestic product plus value of imports of goods and
services, minus value of exports of goods and services, normalized on
a 17 (best) scale
Source: Calculations: Foundation for Effective governance.
See Annex
Foreign market size index*
Value of exports of goods and services, normalized on a 17 (best)
scale
Source: Calculations: Foundation for Effective governance.
See Annex

Survey, 2011
Local supplier quantity

Local suppliers in your region are (1 = largely nonexistent, 7 =
numerous and include the most important materials, components,
equipment, and services)
Soundness of banks
Banks in your region are (1 = insolvent and may require a government
bailout, 7 = generally healthy with sound balance sheets)

Survey, 2011

Survey, 2011
Regulation of securities exchanges
Regulation of securities exchanges in your region is (1 = not
transparent, ineffective and subject to undue influence from industry
and government, 7 = transparent, effective and independent of undue
influence from industry and government)
Survey, 2011
Legal rights index*
Local supplier quality

The quality of local suppliers in your region is (1 = very poor, 7 = very
good)
Survey, 2011
State of cluster development
In your regions economy, well-developed and deep clusters are
(1 = rare or absent, 7 = widespread in many fields)
Survey, 2011
Capacity for innovation

In your region, companies obtain technology (1 = exclusively from
licensing or imitating foreign companies, 7 = by conducting formal
research and pioneering their own new products and processes)

Survey, 2011

Survey, 2011
Value chain breadth

Exporting companies in your region are (1 = primarily involved
in individual steps of the value chain, e.g., resource extraction or
production, 7 = present across the entire value chain, e.g., do not only
produce but also perform product design, marketing sales, logistics
and after-sales services)
Quality of scientific research institutions

Scientific research institutions in your region (e.g., university
laboratories, government laboratories) are (1 = nonexistent, 7 = the
best in their fields internationally)

Survey, 2011
Control of international distribution
International distribution and marketing from your region (1 = take
place through foreign companies, 7 = are owned and controlled by
local companies)
Survey, 2011
Production process sophistication
In your region, production processes use (1 = labor-intensive methods
or previous generations of process technology, 7 = the worlds best and
most efficient process technology)
Survey, 2011
Extent of marketing
In your region, the extent of marketing is (1 = limited and primitive,
7 = extensive and employs the worlds most sophisticated tools and
techniques)
Survey, 2011
Willingness to delegate authority
In your company, willingness to delegate authority to subordinates
is (1 = low top management controls all important decisions, 7 =
highauthority is mostly delegated to business unit heads and other
lower-level managers)
Survey, 2011

Survey, 2011
Company spending on R&D
Companies in your region (1 = do not spend money on research and
development, 7 = spend heavily on research and development relative
to international peers)
Survey, 2011
University-industry collaboration in R&D
In the area of R&D, collaboration between the business community
and local universities is (1 = minimal or nonexistent, 7 = intensive and
ongoing)

Control of international distribution

Competitiveness of your regions companies in international markets
is primarily due to (1 = low-cost or local natural resources, 7 = unique
products and processes)

Survey, 2011
Govt procurement of advanced tech products
In your region, government procurement decisions result in
technological innovation (1 = strongly disagree, 7 = strongly agree)
Survey, 2011
Availability of scientists and engineers
Scientists and engineers in your region are (1 = nonexistent or rare,
7 = widely available)
Survey, 2011
Utility patents granted*
Number of utility patents (i.e., patents for invention) granted by USA
patent authority, per million population, 2010
Source: USPTO, State Statistics Committee of Ukraine. Calculations:
Foundation for Effective Governance
23
The most problematic factors for

doing business in Ukraines
regions in 2011
1
2
Corruption and policy instability are among the top

three problems faced by businesses in Ukraine,1 according to company executives polled from a wide variety of
sectors across Ukraine (see Figure 2.1).2 However, whereas last year the problem of policy instability topped the
list, in 2011 it has moved down two positions to 3rd place.
Ukraines new Tax Code, which came into force on 1
January 2011, and the high level of uncertainty surrounding its application, are likely to be two reasons why tax
policy is now perceived as the number one problem of
doing business in Ukraine. Business continues to respond
negatively to any sudden changes in state policy and the
high risk that such changes create.
Its not surprising that inflation and foreign currency
regulation, which were seen as pressing problems immediately following the 2008 economic crisis, have in 2011
been put on the back burner. However, considering the
high level of macroeconomic instability currently being
experienced by Ukraine, its likely that these two indicators will again move to the forefront of concerns about
doing business in the country.
Compared to last year, the number of respondents
who indicated corruption as a problem of doing business
in Ukraine increased by half. At the same time, foreign
currency regulations, inflation, access to financing and
the unpredictability of local and national government
policy are mentioned less frequently by business executives as problems.
This year, 95% of company executives working in
different regions of Ukraine have noted frustration with
the same problems. This was not the case last year.
However, opinions are divided as to the biggest problem of doing business in Ukraine. Thus, tax policy ranks
1st in 13 out of 27 Ukrainian regions, as well as in Ukraine
in general. Remarkably, taxation is the biggest concern
for business executives in both the east (Dnipropetrovsk,
Zaporizhzhya and Luhansk oblasts) and the west (Zakarpattya, Ivano-Frankivsk and Rivne oblasts).
The second biggest problem for Ukrainian business
as a whole is corruption, which becomes problem number
one in the countrys south (the Autonomous Republic of
Crimea, Kherson and Odesa oblasts) as well as in the cities of Kyiv and Sevastopol.
Policy instability was perceived as the main problem
in only three Ukrainian regions, but it nevertheless remains firmly embedded in the number three spot for the
country in general.
In addition to the above top three problems,
Ukraines tax rates also figured prominently in responses
by businessmen in some regions. Although this problem
was noted in only 7.1% of responses in the country as a
whole, it appeared more frequently in regions where tax
policy in general is seen as the biggest problem.
A sector analysis of the Executive Opinion Survey
shows that different industries and regions agree in their
perceptions about the top three problems of doing business in Ukraine (Figure 2.2). However, investment and
insurance companies as well as the hospitality and restaurant industry are more concerned by tax regulations. This
problem is less pressing for the food processing industry,
Here we are talking about average scores across the regions of Ukraine.
Executive opinion survey was conducted in the beginning of 2011.
Chapter 2. The Most Problematic Factors for Doing Business in Ukraines Regions in 2011
CHAPTER 2
25
Figure 2.1
three additional questions in its poll of company executives: the difficulty of receiving licenses and permits,
working with regional customs, and access to land plots.
As a result, one in four executives mentioned the permit
system as an impediment for doing business, while one in
five noted Ukraines customs policy as a problem.
Most Problematic Factors for doing business - 2011 vs 2010
Tax regulations
16%
Corruption
15%
14%
10%
Policy instability
12%
Tax rates
7%
Inflation
7%
Inefficient government bureaucracy
6%
Local and national government instability
6%
Access to financing
6%
Permit and licensing system for doing business
5%
Inadequately educated workforce
4%
Regional customs policy
3%
Inadequate supply of infrastructure
3%
Crime and theft
2%
Poor public health

Access to land plots
2%
1%
2%
Restrictive labour regulations
2%
Poor work ethic in the national labour force
1%
Foreign currency regulations
1%
17%
8%
10%
5%
10%
9%
3%
3%
2%
2011
2%
2010
1%
4%
0%
5%
10%
15%
20%
Source: Foundation for Effective Governance, Executive Opinion Survey 2011
Electricity, water
and gas supply
Extractive industry
Hotels and restaurants
Manufacturing
Other services
Wholesale and retail trade
Transport and
communications
Banking
Investment banking
Insurance
Tax regulations
Corruption
Policy instability
Tax rates
Inflation
Access to financing
Crime and theft
Poor public health
Accessto land plots
Construction
Most problematic factors for business by industry, share of respondents who picked a factor as a problematic, 2011
Agriculture
Figure 2.2
Ukraine
Chapter 2. The Most Problematic Factors for Doing Business in Ukraines Regions in 2011
26
the energy sector or utilities. At the same time, the banking sector, construction business, and transportation and
communications are more worried about corruption. The
agriculture sector perceives policy instability as its priority problem.
This year, the Foundation, in partnership with the
American Chamber of Commerce in Ukraine, included
61
57
46
33
32
29
29
24
24
22
17
16
11
10
10
10
8
5
53
50
53
35
28
22
31
18
29
26
10
21
15
10
14
16
8
3
65
66
48
29
36
22
30
28
28
18
4
11
10
9
3
11
6
3
57
54
37
36
28
27
33
30
30
21
3
18
13
13
15
5
5
6
66
55
37
22
30
39
24
32
20
18
10
13
9
4
9
22
13
4
72
56
33
39
50
39
33
22
11
11
17
22
17
22
11
17
6
0
61
56
45
32
32
29
29
24
23
29
26
16
9
10
10
8
7
6
62
57
48
34
34
27
30
28
22
20
11
17
14
13
10
10
9
3
62
58
49
33
39
32
29
24
20
18
20
11
12
13
9
9
7
6
61
62
48
33
24
31
29
21
27
17
17
18
11
9
10
8
10
5
64
72
49
43
29
37
22
21
24
15
19
24
11
9
12
8
9
5
80
80
40
10
30
50
20
40
30
10
30
10
10
0
10
10
10
30
73
61
51
35
24
33
25
29
12
24
24
24
8
12
10
8
10
8
Ukraines higher education

system: quantity does not
always lead to quality
World Economic Forum Global Competitiveness Report 2011.
According to the Executive Opinion Survey, the

education system of Ukraine does not contribute to the
growth of regional competitiveness, despite the relatively high scores it receives for individual indicators in the
index. The scores for the indicators secondary education
enrollment rate and tertiary education enrollment rate
place the country among the top 20 in the WEF Global Competitiveness Index (Table 3.1). It is ranked 8th
among 142 countries included in the report according
to number of students at higher educational institutions
(79.4%).1 However, Ukraines overall score under the
Higher education and training pillar puts the country
in the lower global ranking of 51st place. The reason for
this low ranking is Ukraines poor Quality of education
and On-the-job training. Every year, these two sub-pillars contribute to a lower overall education score for the
country. Just four years ago, Ukraine was ranked 55th
on its Quality of education and 83rd on its On-the-job
training. This year, it ranks 72nd and 103rd respectively.
Despite its low ranking, the score of the Quality of higher education in Ukraine has been growing over the last
three years, which means that Ukraine is lagging behind
other countries in the rate of its educational improvement rather than in absolute terms.
Ukraines poor performance in the Higher education and training pillar leads to a weakening of its overall
competitiveness rating. This pillar is included under the
sub-index of Efficiency Enhancers, which are paramount
in calculating the scores of countries at the second stage
of development (under WEF methodology) which
means they will be very important for Ukraine in the
near future. The importance of Efficiency Enhancers is
demonstrated by the high correlation between its Index
value and the welfare of the region evaluated in terms
of Gross Regional Product (Figure 3.1). It will be very
difficult for Ukraine to improve its competitiveness and
welfare without improving its education system, particularly Quality of education and On-the-job training.
Today, the most problematic factors of Ukraines
education system are the following:
The quality of education does not meet the current
expectations of employers. There is a gap between the
skills of Ukrainian graduates and the needs of Ukrainian
employers. According to Executive Opinion Survey 2011
(hereinafter referred to as the Survey), one in five employers considers poorly qualified employees a problem
for their business; six percent of executives believes it is
the biggest problem. In terms of sectors, food processing and agriculture suffer the most difficulties as a result of poorly qualified employees. In these sectors, 29%
of (food processing) and 26% of (agriculture) business
executives noted that poorly qualified employees hinder the operation of their business. The mining industry faces the same problem: nine percent of employers
note poorly qualified workers as their biggest problem.
Considering that over 30% of Ukraines working-age
population is employed in one of the above three sectors,
qualification criteria is surely an important issue for the
overall economy.
In addition, each year Ukrainian business has become less and less satisfied with the qualifications of the
Chapter 3. Ukraines higher education system: quantity does not always lead to quality
CHAPTER 3
27
28
Table 3.1
Results for Ukraine in the higher education and training pillar and its components
Indicator
A. Quantity of education
B. Quality of the education
C. On-the-job training
2011
(out of 142)
Rank
Score
51
4.58
14
6.23
72
3.97
103
3.54
2010
(out of 139)
Rank
Score
46
4.61
13
6.23
67
3.95
97
3.65
2009
(out of 133)
Rank
Score
46
4.38
16
5.59
61
3.92
89
3.64
2008
(out of 134)
Rank
Score
43
4.46
21
5.58
55
4.09
83
3.70
Source: World Economic Forum Global Competitiveness Reports 2008 - 2011
available workforce. For example, last year, the poor

quality of the countrys workforce ranked 13th in a list of
the biggest hindrances to doing business in Ukraine. In
2011, it ranks 10th out of 18.
The number of higher education graduates does not
meet the needs of the economy. This has led to a shortage
of certain types of graduates and a high number of overqualified people at certain skills levels. On the one hand,
employers experience difficulties in finding employees
with the required skills; and on the other hand, university graduates cannot find jobs. The Ukraine Labor Demand Study, produced by the World Bank, demonstrates
this mismatch of skills in the Ukrainian labor market.2 A
shortage of skilled blue-collar workers and an oversupply
of white-collar workers were recorded in 2009. The study
also demonstrates a lack of skilled employees in the public sector and many unfilled vacancies as a result.
The skills mismatch in the labor market can be
partially explained by a decline in Ukraines vocational
education. Thus, the share of students seeking vocational
qualifications3 from among the total number of Ukrainian students has dropped from 62% in 1990-1991 to 27%
in 2010-2011 (Figure 3.1).
Some professions in Ukraine are ageing, primarily
Figure 3.1
in the public sector. These are low-paid professions as

a result of a non-competitive labor market. The ageing
phenomenon is also observed in jobs with fairly specific
working conditions and qualifications. As a result, young
specialists are reluctant to work in these fields. Many experts note that this will eventually lead to a significant
shortage of such specialists, and thus to higher headhunting and recruitment costs.
The system of education does not develop skills important for competitiveness. The quality of management
training, which is a key element in any modern companys performance, is very low in Ukraine. The country
does not train Western-style executives who can successfully handle all the challenges of a market economy. Most
surveyed company executives noted that Ukrainian business schools do not meet international standards. They
score 2.97 out of a possible seven points, with the international average being 4.18 points.
In terms of quality of math and science education, the key indicator for measuring the development
of logical thinking and critical analysis, Ukraine lags far
behind most developed countries. The average regional
score is 4.21 points on a scale of one to seven. Ukraine
thus exceeds the global average by 0.27 points, but places
Higher education and training pillar and Gross Regional Product per capita of Ukraine's regions
6
Higher education
and training pillar score, 2011
Correlation coefficient = 0,76
Kyiv
5
Kharkiv
Dnipropetrovsk
Chernivtsi
4
Kherson
GRP per capita 2009, USD

3
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
Source: State Statistics Service of Ukraine, calculations of the Foundation for Effective Governance
2
3
Ukraine labor demand study, 2009, World Bank, Washington, DC.

Students from vocational schools and higher education institutions of levels of accreditation 1 and 2.
8 000
9 000
Figure 3.2
reaucratic procedure. Even private higher education institutions are to some extent vulnerable to this problem.
Ukraines centralized system of education and its quantitative rather than qualitative approach to assessment of
education institutions means a poor educational infrastructure, low quality equipment, an obsolete curriculum and little practical application of education.
The skills mismatch in the labor market can be partially explained by poor planning in vocational and higher
education. The current planning in Ukraine focuses on
maximizing the number of students and retaining teaching staff to ensure maximum funding. As a result, the
system produces graduates with skills and knowledge
that are not in demand and quite often do not meet the
real needs of the economy.
Ukraine has poor quality control for its education system. The Ministry of Education, universities and schools
are assessed using quantity rather than quality indicators.
Educational institutions obtain funds based on the number of students that they enroll rather than on the quality of knowledge and skills that they provide. There are
no incentives for educational institutions to improve the
quality of education. Internationally recognized external
monitoring does not exist. Ukraine has never participated in international monitoring initiatives such as PISA6,
PIRLS7 or IAEP8, and just once took part in TIMSS in
2007. No Ukrainian university is included in popular international ratings of universities. Only in 2011 were two
Ukrainian universities Kyiv Polytechnic Institute and
Donetsk National University - entered among QS World
University Rankings top-700 universities.
The problems associated with high demand for
quality personnel also contribute to a labor market imbalance. A shortage of employees with certain skills can
be explained by low salaries. Education is an investment
Number of students in education institutions of Ukraine, per 10 000 of population
800
Higher education institutions
of I-II levels of accreditation
700
Higher education institutions

of III-IV levels of accreditation
600
Vocational schools
500
470
497
511
512
400
170
488
465
285
180
300
200
146
120
107
108
100
95
87
77
79
100
127
108
107
106
102
98
96
92
95
1990/91
1995/96
2000/01
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
Source: State Statistics Service of Ukraine

4
The main performance indicators of higher education institutions of Ukraine as of beginning 2010-2011, State Statistics Service
of Ukraine.
OECD, Public Spending on Education (2010), Eurostat Education Database (http://epp.eurostat.ec.europa.eu/portal/page/portal/education/data/database).
70th in the global list of 142 countries - at the level of

Benin, Zimbabwe and Kenya. This point is underlined
in the Trends in International Mathematics and Science
Study 2007 (TIMSS), where Ukrainian school childrens
educational achievements in these areas fall below average. Ukrainian fourth- and eighth- grade school children
scored 469 (26th out of 36) and 462 (25th out of 45)
points, respectively, with the average international score
being 500 points. The mathematics and science knowledge of Ukrainian school children are far below most EU
and CIS countries participating in the survey, and lower than the levels of Singapore, China and Hong Kong.
School children from Georgia, Romania, Turkey and a
number of Asian and African countries scored lower
than their Ukrainian peers.
The reasons for the above problems in the area of
higher education and training are the following:
Funds allocated for educational purposes are inefficiently used. In recent years, Ukraines national and local
budgets have allocated about 7% of GDP4, which is quite
a large amount, to education. OECD countries spend
an average of 4.6% of GDP on education, EU-27 countries 5.07%, and the EU-15 4.97%.5 At the same time,
most budget funds allocated to education in Ukraine are
spent on paying salaries and utility bills (according to
some estimates, the share of these expenses exceeds 70%
of budget outlays). Investment in improvement of educational facilities and equipment, as well as innovation,
comes last on Ukraines to-do list.
Lack of financial and academic autonomy for Ukrainian educational institutions. The system of education in
Ukraine is centralized. In order to change curriculum,
approve expenses, make serious changes or introduce
something new, one has to obtain the consent of the
Education Ministry and go through a complicated bu-
29
Education in Ukrainian regions:

employers opinion
Quality and quantity indicators of Higher education and training are different across the regions of
Ukraine (Figure 3.3). Quantity indicators, which include
secondary education enrollment rate and tertiary education enrollment rate, are quite high in all the regions of
the country. The cities of Kyiv and Sevastopol as well as
Kyiv Oblast lead the country in secondary education enrollment rate (100%). Donetsk Oblast has the lowest secondary education enrollment rate - 88.5%. The scores of
regions in tertiary education enrollment rate vary widely.
Kyiv city and Kharkiv Oblast demonstrate the best performance (100%), while Zakarpattya (29.06%) and Kyiv
Oblast (35.06%) have the worst. The wide disparity is the
result of the uneven distribution of universities across
the country.
The quality of education in the regions received
a worse evaluation. The regions average score is 3.87,
versus a global average of 4.01. Out of all the indicators
under the quality of education sub-pillar the quality of
management schools turned out to be the lowest (2.97).
The regions score for quality of business schools varies widely. Dnipropetrovsk Oblast received the highest
score (3.60), and Chernihiv Oblast the lowest (2.44).
The indicators for quality of the education system, quality of math and science education and internet access in
schools received a more positive evaluation. Business
executives evaluated the quality of the education system
in Ukraines regions at 3.92 on average. Sevastopol and
30
Figure 3.3
Higher education and training pillar and its components, 2011

Higher education an training pillar
Quantity of education
Quality of education
On-the-job training
Source: alculations of the Foundation for Effective Governance

6
7
8
9
10
PISA The Programme for International Student Assessment.

PIRLS Progress in International Reading Literacy Study.
IAEP The Internal Auditing Education Partnership.
Average regions score of the labor market flexibility 5.02, and 4.51 the nations average.
The worlds average score of access to the services is 4.1.
Kherson
Zakarpattya
Chernihiv
AR Crimea
Vinnytsya
Chernivtsi
Khmelnytsky
Mykolayiv
Ivano-Frankivsk
Kyiv Oblast
Zaporizhzhya
Volyn
Ukraine
Cherkasy
Rivne
Donetsk
Ternopil
Sumy
Poltava
Lviv
Dnipropetrovsk
Odessa
Zhitomyr
Sevastopol
Kyiv
Kharkiv
1
Luhansk
in the future, and as a rule students choose to enter a

profession that will pay good money. In June 2011, the
average monthly salaries in Ukraines healthcare and education sectors were UAH 1,862 and UAH 2,502 respectively, against an average national salary of UAH 2,708.
For comparison, the machine building and equipment
manufacturing sector pays UAH 2,605, while the average
salary in Ukraines electronics and optical devices sector
is UAH 2,340.
Employers also bear some of the blame for the
countrys poorly qualified workforce. It turns out that
most companies do not invest in the training and retaining
of their staff. The nations average score for extent of staff
training is very low 3.15 points, against the international average of 3.96 points. On the one hand, Ukraines
flexible regulation of its labor market9 does not impose
any obligations on employers to train their staff. On the
other hand, employers do not take it upon themselves to
invest in personnel, who are not regarded as a strategic
resource or a competitive edge. Also, planning is often
short-term, partly because of the high risks of operating
a business in the country.
This low score could be explained by relatively low
local availability of specialized research and training services. On average, business executives in the regions gave
only 4.48 points (out of a possible seven points) to access
to such services, which earned Ukraine a global ranking
of 60th place.10
Inadequately educated workforce as a problem for doing business in Ukraines regions, 2011
40
% of respondents that picked inadequately
educated labor force as a problematic factor
30
20
10
Kyiv
Ivano-Frankivsk
Volyn
Mykolayiv
Rivne
Khmelnytsky
Dnipropetrovsk
Sumy
Zaporizhzhya
Ternopil
Kyiv Oblast
Kirovohrad
Lviv
Sevastopol
Kharkiv
Zakarpattia
Ukraine average
Odesa
Cherkasy
Vinnitsya
Chernihiv
Kherson
Poltava
AR Crimea
Luhansk
Donetsk
Zhytomyr
Chernivtsi

Scale: 1 The system of education does not ensure economic competitiveness
7 The system of education contributes to the improvement of economic competitiveness to the highest extent
Chernivtsi Oblast show the best performance (4.27 for

both regions), while Kherson Oblast has the worst score
(3.08). Company executives believe that Sevastopol has
the best quality of math and science education (4.69) and
that the Autonomous Republic of Crimea has the worst
(3.56). The internet access in schools indicator across the
regions is relatively high (4.37) and exceeds the global
average of 4.16.
Out of all the scores under the Higher education
and training pillar, the average score of the On-the-job
training sub-pillar in Ukraine is the lowest (3.81) falling
below the global average by 0.22 points. According to the
Executive Opinion Survey, the On-the-job training is the
best in Donetsk Oblast (4.18) and Sevastopol (4.13), but
the worst in Chernihiv Oblast (3.49). Such a low evaluation is first of all the result of a low score for the indicator extent of staff training (3.15 compared to the global
average of 3.96). Odesa Oblast is the worst performer in
this indicator (2.74) and Volyn Oblast is the best (3.53).
According to the Executive Opinion Survey, employers in different regions of the country face different
problems as a result of poorly qualified workers (see Figure 4). Business executives from Zhytomyr, Chernivtsi,
Donetsk and Luhansk oblasts experience the most dissatisfaction. The sectors suffering from a poorly qualified
workforce in these oblasts are the same as for Ukraine
in general: the food processing and agriculture sector.
In Zhytomyr Oblast, business executives working in
the food processing industry and in other business services experience the most dissatisfaction: 56% of company executives (in food processing) and 50% (in other
business services) believe that an inadequately educated
workforce is the biggest problem for doing business. In
Chernivtsi Oblast, this problem mostly worries company
executives in the agriculture, food processing and public utility (gas, electricity and water) sectors. In Donetsk
Oblast, its the training of public utility employees that
causes the most worry.

On the other hand, in Kyiv, Ivano-Frankivsk and
Volyn oblasts, most companies are satisfied with the level
of education of their workforce. If taken by sector, investment companies and hotel and restaurant businesses
experience the least problems related to the education of
their staff. Only 10% (of investment company) and 11%
of (hotel and restaurant) business executives indicated
that they face problems as the result of a poorly qualified
workforce. As mentioned earlier, food processing companies (29%) and agricultural enterprises (26%) experience the biggest problems in this regard.
Competitive education is the major

contributor to the countrys
competitiveness
This assessment of Ukraines education system
demonstrates that the country has so far maintained a
satisfactory standing in the global ranking of the pillar
of Higher education and training. The analysis of trends
in this pillar, however, shows that the countrys performance is declining as the result of its low quality of
education and poor on-the-job training. As competitive
education directly and indirectly contributes significantly to the countrys overall competitiveness, making it a
priority in state and regional policies is justified.
An analysis of Ukraines regions demonstrates high
quantity indicators of education in all regions. Quality
indicators are low across the country, but differ significantly by region.
The removal of wide disparities in regional performance and the rollout of effective reform of the higher
education and training system in Ukraine can have significant potential to increase the countrys Global Competitiveness Ranking.
Figure 3.4
31
The current state of

transportation infrastructure
impedes economic growth
Overview
Poor quality is a common problem seen in every
component of Ukraines transportation infrastructure.
The situation is aggravated by insufficient interaction between the various sectors of the transport industry, low
investment, an outdated regulatory system and wear and
tear on ageing fixed assets.
With this combination of problems, todays transport infrastructure cannot support sustainable economic
development and ensure the global competitiveness of
the country.
At the same time, infrastructure is a key competitiveness advantage of Ukraines regions, according to
one-third of respondents in the Executive Opinion Survey, which was held in early 2011 to prepare the Ukraine
Competitiveness Report. The percentage of executives
(including those from key economic sectors) who noted
inadequate supply of infrastructure as one of the biggest
problems of doing business in Ukraine was noticeably
smaller (Figure 4.1).
Infrastructure requires careful attention considering its importance as a competitive advantage and the
numerous unresolved problems noted in this sector. The
competitiveness study shows that transportation is the
weakest element of Ukraines infrastructure system, and
this chapter is dedicated to this particular sector.
The special role of infrastructure in the Ukrainian
economy comes from its extremely transport-intensive
nature. For example, in the last decade, Ukraine had to,
on average, move six kilometer/tons of freight to earn
one dollar of GDP. In the EU (EU 25), this figure was 0.3
kilometer/tons, or twenty times less [1, 2]. In Ukraine,
this ratio is the result of the dependence of the economy
on the production of low value-added commodities such
as metals, ores and grain. In addition, transportation and
communications account for 13% of the nations GDP.
The financial crisis of late 2008 early 2009 led to
a significant downturn in economic activity. As a result,
Ukraines existing infrastructure appeared to be sufficient
to meet the needs of the economy. This is confirmed by a
much smaller number of executives, especially from industries that were most affected by the downturn, who
were not particularly critical of infrastructure as a problem for doing business (Figure 4.1).
The crisis restrained demand for transportation services, which even led to a slight year-on-year improvement in the number of points earned by Ukraine for its
quality of infrastructure (Table 4.1). Yet this improvement cannot be considered sustainable, as the assessment
of roads is still low and there is no improvement in the
score for port infrastructure.
The economy and thus the transport sector started
recovering in early 2010. Growth rates for conveyance of
passenger and freight by all modes of transportation varied between 11% and 14%, exceeding even GDP growth
rates. The gradual revival of the global economy continues to encourage both the recovery of the Ukrainian
economy and additional demand for transit. As a result,
demand on the national transport infrastructure is growing.
Chapter 4. The current state of transportation infrastructure impedes economic growth
CHAPTER 4
33

34
Figure 4.1
Infrastructure: a competitive advantage and the most problematic factor for doing business
Transport, Communications
Trade
Construction
Agriculture
Manufacturing
Extractive industry
Hotels and restaurants
Electricity, gas, water supply
0
10
20
Competitive advantage
30
40
50
Most problematic factor
Wear and tear on ageing fixed assets, aggravated by

underinvestment, causes even greater gaps between infrastructure supply and demand. Nearly 70% worn out,
transport infrastructure is in desperate need of investment. This is substantiated by the Surveys findings: 27%
of transport and communications executives mentioned
access to financing as one of the gravest hindrances to
doing business.
But so far, the sector has not received adequate
investment. In 2009, investment in the fixed capital of
Ukrainian transportation (except pipeline transport)
and transport infrastructure totaled only UAH 14.2bn
(USD1.8bn), or 1.55% of GDP.1 Moreover, because of the
economic crisis, investment into the sector has dropped,
as demonstrated by a downward trend in new fixed asset start-ups, which has returned to the level of the mid2000s (Figure 4.2).
Private investors could change the situation for better, but in the transport sector there are numerous investment barriers, primarily regulatory ones. This fact is
substantiated by changes in FDI in the transport sector:
2008 saw FDI outflow of USD 20 m, while 2009 enjoyed
aggregate investment inflow of only USD 43 m.
Big investors in Ukraines transport system are inTable 4.1
ternational financial institutions, first and foremost the

EBRD, because of Ukraines important role as a transit
link in the EUs transportation strategy. This being the
case, heavy investment is made into the development of
a limited number of transit road segments. This process
is, however, accompanied by an increase in the countrys
foreign debt.2
The government has maintained a leading role in
stimulating investment in the countrys transport infrastructure, but it has failed to set priorities among the
various elements of the transport system. Investment in
the top-priority areas would lessen the load on Ukraines
transport system in general. The existing infrastructure
is clearly in need of deep modernization, but there is still
no agreement as to who will provide funding for such an
upgrade and how.
In general, inefficient regulation and the absence of
effective regulators in Ukraines transport industry suppresses development of the sector, which is reflected in
the quality of transport services. In the Survey, 48% of
transport and communications executives named irregular government policy, while 31% noted inefficient government bureaucracy, as the biggest hindrances to doing
business.
Infrastructure pillar and its components for Ukraine

2011
(out of 142)
Indicator
2010
(out of 139)
2009
(out of 133)
2008
(out of 134)
Rank
Score
Rank
Score
Rank
Score
Rank
Score
71
3.9
68
3.8
78
3.4
79
3.1
Quality of overall infrastructure
71
4.2
70
4.1
79
3.5
86
3.1
Quality of roads
138
2.1
136
2.0
125
2.2
120
2.2
27
4.4
25
4.4
30
4.1
30
4.0
Quality of port infrastructure
96
3.7
94
3.6
80
3.7
87
3.5
Quality of air transport infrastructure
101
3.9
110
3.6
101
3.6
105
3.6
Sources: World Economic Forum Global Competitiveness Reports 2008 2011

1
Russia has a similar ratio, while Central Europe enjoys greater share (up to 2%) and developed countries invest twice as much
(7). In addition, the investments have greater dispersion among regions, from $2 to $166 per capita (Chernivtsi and Odesa
Oblasts, respectively), and investment absorption is often inefficient, with one-third of total investments being channeled into
repair rather than upgrade.
During 1998-2008 EBRD invested a total of $965m (52% into railroads and 39% into motor roads) in Ukraines transport infrastructure. Unlike new EU member countries, for Ukraine this money is special-purpose loans, not the financial aid. As a result,
Ukravtodor, the National Motor Road Agency of Ukraine, says it needs more than UAH 7bn (over $870m) in debt servicing to
meet its obligations under the loan agreements.
Introduction of new fixed assets in transport industry, USD bn

3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: Transport and communications of Ukraine, State Statistics Service, 2010
Sharp increase in the number of cars lays

open poor quality of roads
The poor quality of Ukrainian roads came into focus during the dramatic increase in the number of motor vehicles in the country in the early 2000s. Today, less
than 2% of Ukraines road network can be considered
high quality and modern, while more than 50% fails to
meet even basic criteria. Poor quality of roads leads to
huge losses - about 3% of GDP annually, making the sector particularly needy of heavy investment.
Ukraine steadily receives one of the worlds lowest
scores for quality of roads in the Global Competitiveness
Index. Although assessments of the countrys quality of
roads by business leaders in certain regions is sometimes
not bad, the quantitative and qualitative indicators of the
countrys overall road network are extremely low by European standards.
Road quality: four groups of regions
By and large, all regions can be divided into four
groups, based on their scores for quality of roads. With
Kyiv Oblast on top and Kharkiv and Poltava oblasts at the
bottom of the first group (see Table 4.3), the best-performing regions have a combination of high road network density and a comparatively low level of disrepair. They show
a relatively high density of category-one roads (i.e., at least
four traffic lanes) and often reasonably good indicators for
supportive infrastructure (e.g., density of gas stations). At
the same time, this group enjoys a high intensity of passenger and freight traffic.
The second group includes four regions to the west of
Ukraines capital with higher-than-average scores. They
have moderate road network density, insufficient supportive infrastructure and below average intensity of passenger
and freight traffic. Basically, these are domestic transit regions. The next group consists of a few industrial regions
in the countrys east and south, which are characterized by
somewhat low road network density and at times a high
3
level of disrepair. But this group is also characterized by

construction of new roads.
The final group, of the worst performers, includes agricultural regions a few western oblasts and several central ones. Most of these have a low density of first-category
roads, below average supportive infrastructure and often
low freight traffic. These regions are outsiders in terms of
the number of cars per capita, while almost all oblasts in
the first and third groups are leaders in this indicator.
The second half of the 2000s saw a sharp increase
in the number of automobiles in Ukraine. Over the
first decade of the millennium, the number of motor
vehicles grew by 22%, with the average annual growth
rate exceeding 140,000 automobiles, of which 90% were
passenger cars. The peak was in 2007 and 2008, which
saw an annual growth rate of 12%, or 900,000 cars. Car
ownership indicators in Ukraine, however, are still low in
comparison to other countries: three times lower than in
Poland and four times lower than in Spain - a big but not
the richest EU country.
In Ukraine, the pace of road development noticeably
lags behind growth in the number of automobiles. Unlike
developed EU countries, Ukraine cannot boast of high
road network density. For example, in France, a country
comparable to Ukraine in terms of area, road density is
5.9 times higher. At the same time, Ukraines technical
road standards do not meet EU quality standards. The
country has as little as 2,600 kilometers of category-one
roads, which feature a mandatory median strip and 2-4
traffic lanes going in each direction.3
Other roads (categories 2-5) are of very poor quality: only 40% have road markings, 40%-50% fail to meet
other basic criteria (a smooth, hard surface). Ukraines
roadside infrastructure requires particular development.
For example, the availability of gas stations across the regions is highly disproportionate (Table 4.3), and there has
been a reduction in the number of rest stops and service
stations over the past several years.
Ukraines poor quality of roads has been the cause of
Length of the first-category roads makes less than 1.6% of a total length of all-purpose hard road network (165,800 kilometers,
net of city streets under the jurisdiction of local governments). Only 280 kilometers are highways, which meet international
standards.
Figure 4.2
35

36
numerous car accidents. Current losses from traffic accidents are estimated at 1.5%-3.5% of GDP (estimates from
OECD International Transport Forum). Ukravtodor
puts annual losses from poor quality of roads at UAH
32bn (nearly 3% of GDP).
Estimates demonstrate that Ukraine has to repair
37,600 km and build 400 km of road every year to meet
modern standards [3]. But in the second half of the
2000s, Ukraine put into operation an average of four
times less roads than required by these estimates. The
country did upgrade its road network in 2010, opening to traffic about 1,000 kilometers of new and repaired
roads. More than half of the repair and upgrade effort
was part of EURO 2012 preparations, the reason for Kyiv,
Kharkiv, Donetsk and westward roads seeing a higher
concentration of improved segments. Ukraines roads are
still insufficiently involved in the transit of freight.
Thus, even individual improvements in road infrastructure still fail to keep pace with the countrys growing number of automobiles. The gap between supply and
demand, especially in terms of quality of roads, is the
biggest issue adversely affecting the competitiveness of
Ukraines transport infrastructure.
Quantity of railroads does not mean

quality
Ukraine can boast one of Europes longest rail networks. High rail traffic helps to lessen the load on other
modes of transport. Yet, the majority of Ukraines rail
network is worn out and outdated. Disproportionate
loads on particular routes hamper the development of
key directions. The sector can be modernized with the
creation of the proper conditions for raising private capital.
The quality of Ukraines railroad infrastructure received one of the highest scores in the Global Competitiveness index, putting the country in 27th place internationally. The Executive Opinion Survey found that in
certain regions local managers assessed quality of railroad infrastructure even higher - at the level of developed European countries and leading Southeast Asian
nations.
Quality of railroad infrastructure: three groups of regions
Ukrainian regions can be divided into three groups,
depending on their scores for quality of railroad infrastructure. The first group consists of regions with main rail
traffic flows. They scored high on quality of railroad infrastructure (more than 5 points) and feature high rail density, intensive passenger movement (but moderate freight
movement) and a high level of wear on assets (see Table
4.4). These regions include oblasts that contain cities with
at least a million inhabitants (except Odesa), that lie between principal transit hubs or contain main transit roads.
Also included in this group are Ukraines two special status
cities (Kyiv and Sevastopol)
The second group includes inland transit oblasts,
which received a high assessment for the quality of their
railroad infrastructure and moderate scores for rail density and passenger movements. They combined high speed
and heavy weight of trains with high wear and tear on the
5
BRIC Brazil, Russia, India, China
rail lines. This group includes regions between the countrys

capital and it western border, as well as two eastern oblasts
between the million-plus-population cites and Odesa
Oblast, whose ports offer onward transport services.
The remaining regions comprise the third group, having low rail density and, as a rule, little passenger traffic
flows.
The development of railroad infrastructure in main
industrial and border regions is important for long-distance rail traffic: in 2009 the average distance of moving
one ton of freight by rail exceeded
500 kilometers as compared to 46 kilometers by motor vehicle.
Ukraines rail network of 21,650 kilometers is one of
the biggest in Europe, after those of Russia, Germany and
France. In aggregate, 46% of Ukraines rail network is electrified, a figure that meets average European standards.
Ukraine ranks 4th among Eurasian nations in terms
of rail traffic volumes, yielding only to BRIC countrie5.
However, Ukraines rail quantity does not equate to rail
quality. The railroads have high freight traffic intensity
three to five times higher than in developed EU countries
but significantly lower traffic speed. The country uses
the same tracks for freight trains with an average speed of
39 km per hour as it does for high-speed passenger trains,
which are forced to move slower as a result.
Most Ukrainian railroads are outdated and nearing
their replacement date, two-thirds are single-track, and
only 60% of railroads have automatic regulation systems
and continuous welded tracks. The average railroad bed
is 67% worn out (in high-traffic regions - 74%). Other
related infrastructure is also worn out and outdated, including most stations, storage facilities and traffic control
systems. The average work life span of the fixed assets of
the national railway company Ukrzaliznytsya has been
89% expired for the past five years.
The poor quality of infrastructure of freight shippers (e.g. coal shippers) is of special concern. It leads to
increased car detention time and wear and tear. Regional
rail operators have hundreds of their cars damaged in
ports because of the use of clamshell cranes [4].
On the other hand, Ukraines bureaucratized rail
transport system leads shippers to create their own car
fleets. As of today, shippers own and operate 30,00040,000 freight cars versus the 130,000 cars of Ukrzaliznytsya [5].
The high concentration of freight shippers is another important issue. Ukraines main export goods and
the products necessary to manufacture those goods (coal,
coke, ores, metals, fertilizers, grain, etc.) account for twothirds of the countrys rail traffic. Such a concentration
creates a heavy burden on certain routes. In Ukraine, the
main sections of the railroad make up the countrys strategic railroad network, which accounts for 45% of the total length of the railroad but for 90% of all rail traffic [5].
Other sections are used less intensively.
On the positive side, a full 24% of Ukraines railroad
is used for freight traffic. In comparison, the EU (which
uses only 8% of its railways to transport freight) is concerned about the growing use of vehicular transportation (trucks account for 44% of freight traffic in the EU),
Poor port diversification leaves SMEs

overboard
Ukraine has a number of powerful sea ports. However, businesses in most regions cannot fully enjoy this
competitive advantage because of poor logistics and insufficient cooperation between different modes of transport. Small and medium-sized business loses because
of poor opportunities for container transport. Port infrastructure is little used for internal freight transport.
Development of an integrated multimodal logistics infrastructure could change the situation for better.
The scores for quality of port infrastructure in
Ukrainian regions differ significantly. The scores for
southern seaside regions are four times higher than
those of the western oblasts, corresponding to the values
of developed nations. The western regions are at the level
of the worst performers in the Global Competitiveness
Index. For the regions without access to sea, the Survey
assessed the port infrastructure through their access to
ports via other infrastructure. Thus, the extremely low
scores of those regions mean underdevelopment of the
entire transport infrastructure as an integrated and interrelated system.
The main problem is related to the concentration
of freight traffic. For the past several years, key export
goods accounted for at least two-thirds of sea shipments,
which is similar to the railroad freight traffic structure.
However, the share of container freight, which is often
sent by small and medium-sized businesses, is small, decreasing from 9% in the mid-2000s to 1.3% in 2009.
Among the reasons for limited container shipments
are relatively high costs and time intensiveness, which are
due to underdevelopment of the container infrastructure
in the sea port terminals and of the overall multimodal
infrastructure. Container freight traffic, even through
leading Ukrainian ports, is not focused on the largest
containerships of 500-1500 TEU (twenty - foot - equivalent units); although since 2007 the ports have been ac-
commodating 5000 TEU ships.

The capacity for development of deep-water ports
is determined by container traffic concentration. This is
particularly the case in Odesa Oblast, where ports account for almost all container shipments. Since containers are used mostly for imports, there was a big drop in
container traffic because of the global financial crisis from 1.25m TEU in 2008 to 0.52 m TEU in 2009, with
the maximum annual capacity of Ukrainian ports being
2m TEU. The dependence on imports causes a situation
whereby ships are often one-quarter loaded with empty
containers on their way back in the direction of the exporter [1].
The share of internal (cabotage) transport is extremely small: only 3-4% during the 2000s. Although
internal freight accounts for about two-thirds of total
freight in the river ports, this share is comparable with
sea ports in absolute terms.
To fully meet business needs, the port infrastructure should be more diversified. To this end, the country
needs to develop new deep-water ports, renew internal
routes and create multimodal logistics infrastructure.
Air transport as an example of monopoly

Fewer than 10 airports account for a large share of
Ukrainian air transport. In fact, the other air transport
infrastructure is stagnating and often does not meet international standards. Diversification and further development of the industry can be achieved by raising the
purchasing power of the population and introducing attractive incentives for investors.
The scores of leading regions for quality of air transport infrastructure are four times higher than those of the
outsiders, a dispersion easily explained by the structure of
the airports. Out of 36 airports certified by the State Aviation Administration, about 15 (of which fewer than 10
are national airports) provide regular flights. Only seven
leading airports account for almost all air traffic: 97% of
passenger flights (including all international flights) and
83% of freight movements (in 2010). One leading airport
(Boryspil) is responsible for two-thirds of passenger flow
and three-quarters of freight flow.
Non-compliance with international standards is a
big obstacle for air transport development. Most airports
in Ukraine do not conform to the rules of the International Civil Aviation Organization and the International Air
Transport Association. Airfields - the runway surfaces,
service vehicles and equipment are becoming worn out
and outdated. Extensive modernization has shown benefits in Boryspil (terminals F and D) and Kharkiv, where
mechanisms of public-private partnership were applied.
Reconstruction is in progress in Donetsk and Lviv, too.
However, the international hub project in Boryspil is far
from completion.
Inland traffic opportunities remain unexplored.
Sporadic cases of inland flights being renewed are the
exception. The problems in the industry are aggravated
by the fact that monopolistic trends appear at the level of
airports, airlines and their alliances.
so it is implementing rail development programs to reduce the transport asymmetry. Ukraine is attempting to
implement projects for combined trailer and container
services, which will lessen the load on its roads, but the
projects have encountered numerous regulatory barriers
so far.
The difference in rail-track widths between Ukraine
and Europe is also a pressing issue for westward freight
and passenger movements. Ukraine is making every effort to capitalize on its wider tracks, by extending them
deeper into Polish territory. Ukraine is also involved in
a project for construction of a wide track line to Vienna.
Conversely, the narrower European-type railroad network inside Ukraine is still not being used to full capacity.
In summary, Ukrainian railroads are well developed
in terms of quantity, but fail to provide the necessary
quality. Railroad modernization is being held back by a
lack of reforms aimed at creating a competitive rail market and setting up appropriate regulatory system.
37

38
Table 4.2
Transport and logistics infrastructure of Ukraine and its neighbors
Countries
Hungary
Global Competitiveness Index,

Infrastructure, 2011
Enabling Trade Index, Infrastructure, 2010
Logistics Performance Index, 2010
Rank
Score
Rank
Score
Rank
Score
46
4.52
41
4.14
52
2.99
Russia
48
4.52
48
4.00
94
2.61
The Slovak Republic
57
4.23
32
4.69
38
3.24
Poland
74
3.87
51
3.97
30
3.44
Romania
95
3.37
59
3.81
59
2.84
Moldova *
96
3.32
58
3.46
104
2.57
Belarus **
n/a
n/a
n/a
n/a
74
2.53
Ukraine
71
3.87
71
3.56
102
2.57
Sources: WEF Global Competitiveness Report 2011, WEF Global Enabling Trade Reports 2009-2010, World Bank Connecting to Compete the LPI and Its Indicators 2007 &
2010
Notes: *ETI for 2009;
**LPI for 2007; ETI among 125 countries, max score 7; LPI among 155 countries, max score 5.
Ukraine loses the competition for transit

Development of transit encourages the development of Ukraines infrastructure in general. A favorable
geographic location is not enough to compensate for
problems with internal infrastructure, especially problems with logistics, bottlenecks of routes and archaic
and non-transparent customs policy. So far, Ukraine has
been losing in the competition for transit routes.
In general, Ukraine has a strong transit potential.
Three out of ten Pan-European Transport Corridors,
major European automobile highways in latitudinal (40
and 50) and longitudinal direction (85, 95 and 105)
as well as six corridors of the Organization for Cooperation of Railways go through the country. The regions
featuring international transit routes have higher overall
scores for infrastructure.
However, transit capacities are held down by a range
of problems. Ukraine is behind its neighbors by quality
of overall infrastructure and transit infrastructure, in
particular. For example, Ukraine scores lower in the infrastructure pillar of the Global Competitiveness Index
than its neighbors (see Table 4.2). In the more focused
sub-index transport and communications infrastructure
of the Global Enabling Trade Index (also based on calculations of the World Economic Forum), Ukraine loses to
almost every neighbor in terms of infrastructure development. In the Logistics Performance Index (compiled
by the World Bank) Ukraine also has a rather low score,
taking 102nd place out of 155.
The excessive concentration of specific goods and
freight hubs hampers the development of transit services
in Ukraine and infrastructure in general. Expansion of
transit routes is limited by a range of bottlenecks, e.g.
congested internal routes (from Kharkiv and Donetsk
to Lviv and Odesa), railroad tunnels (Beskydsky in Zakarpattya) or capacity of railroad stations near ports in
Odesa, Yuzhny and Illichivsk.
Also, the focus on transit could simply lead to a limited use of infrastructure for the countrys own needs.
This is the case with some sea ports, where in 2009 the
transit volumes remained unchanged, yet the freight
movements on internal routes fully stopped.
Ukraine could take advantage of part of the transit

capacity quite quickly by addressing problems in customs, and border and logistics infrastructure. However,
a balanced development of transit capacities in the long
run will require more resources, a requirement typical for
the transport infrastructure sector in general.
Conclusions
An excessive concentration of supply and demand
for infrastructure resources, an uneven distribution of
internal and external routes, and slow investment activity
result in big gaps in the state of Ukraines transport infrastructure across the regions. As a result, multipliers at the
regional and industrial levels are inhibited.
The regulatory environment has many problems
as well. These relate, firstly, to sea port and railway laws,
investment, transit and customs issues. The reformed
transport regulatory system should comply with international requirements and standards.
The above problems hamper the development of
transport infrastructure, which, in turn, restrains the
economic development of the entire country. So, development of the transport infrastructure remains a priority on the agenda of economic reforms. After all, it is
the infrastructure that consolidates regions, businesses,
Ukrainians into one nation, and integrates the Ukrainian
economy into a global marketplace.
Ratio of length of all-purpose hard roads to

number of gas stations
score
km per 1,000 sq km
km per
1 gas station
3.29
275
47
1.6
25
Kyiv Oblast
4.29
295
55
4.8
22
Sevastopol
4.11
391
27
2.8
Donetsk
4.01
303
42
3.1
13
Kyiv
3.89
n/a
n/a
n/a
n/a
Vinnytsya
3.75
338
34
1.1
35
AR Crimea
3.71
245
20
0.5
18
Kharkiv
3.58
298
35
1.9
23
Poltava
3.58
308
64
1.2
34
Zhytomyr
3.54
278
30
2.8
46
Zakarpattya
3.47
261
51
0.6
15
Volyn
3.42
285
49
0.8
37
Rivne
3.32
252
45
2.2
35
Zaporizhzhya
3.29
251
72
0.5
24
Odesa
3.26
242
26
2.4
22
Sumy
3.23
282
51
0.1
48
Luhansk
3.18
217
49
1.3
23
Cherkasy
3.15
283
39
1.9
28
Dnipropetrovsk
3.10
287
44
3.0
23
Kherson
3.10
175
39
0.8
23
Chernivtsi
3.00
354
55
0.6
25
Khmelnytsky
2.97
346
51
0.6
37
Chernihiv
2.93
226
74
1.8
54
Lviv
2.84
376
42
0.6
23
Ivano-Frankivsk
2.69
300
46
0.8
24
Mykolayiv
2.67
195
51
1.6
24
Ternopil
2.52
361
74
0.4
32
Kirovohrad
2.38
252
47
0.6
31
Own calculations, including data of the State Statistics Service and the Ministry of Infrastructure (for 2009, unless stated otherwise).
References:
1. World Bank. Ukraine: Trade and Transit Facilitation
Study, 2010
2. European Environment Agency Report No 3/2006
3. Realizing the Potential of Ukraines Transport Infrastructure in Post-Crisis Economic Development
Strategy, .: NISD, 2011.
4. Cargoes aplenty yet no cars. Magistral, No 11 (2011).

5. Transport Policy of Ukraine and its Alignment with
European Union Standards, .: UNDP Blue Ribbon
Analytical and Advisory Centre, 2010.
6. Petrenko, Ye. Rail Transit in Ukraine: Current State
and Challenges, No 1 (2010).
7. International Transport Forum. Trends in Transport
Infrastructure Investment 1995-2009, 2011.
Share of first-category roads in the entire

network of all-purpose hard roads
Ukraine (27 regions)
Average all-purpose road wear over 5 years

(2006-2010)
Regions
Density of all-purpose hard roads
Motor road infrastructure by region
Quality of roads
Table 4.3
39
Railroad infrastructure by region
Density of railroads
Passenger traffic
Freight traffic
Average rail wear over

5 years (2006-2010)

40
Table 4.4
score
km per 1,000 sq km
bn pass km
bn ton km
Ukraine (27 regions)
4.92
36
48.3
196.2
67
Kharkiv
5.54
48
6.4
18.3
74
Regions
Poltava
5.44
30
6.4
18.3
74
Dnipropetrovsk
5.33
48
9.4
41.1
61
Zakarpattya
5.31
47
5.3
15.6
58
Kyiv
5.30
n/a
16.3
37.8
72
Donetsk
5.28
60
3.7
32.1
71
Lviv
5.20
59
5.3
15.6
58
Sumy
5.17
31
11.4
28.1
73
Sevastopol
5.07
n/a
9.4
41.1
61
Rivne
5.00
29
10.8
26.7
65
Zaporizhzhya
4.98
36
9.4
41.1
61
Odesa
4.92
32
7.2
51.3
68
Luhansk
4.92
41
3.7
32.1
71
Zhytomyr
4.91
34
16.3
37.8
72
Khmelnytsky
4.83
36
16.3
37.8
72
Ternopil
4.82
41
5.3
15.6
58
Kyiv Oblast
4.81
26
16.3
37.8
72
Cherkasy
4.79
28
7.2
51.3
68
Vinnytsya
4.75
41
11.8
44.6
70
AR Crimea
4.71
23
9.4
41.1
61
Ivano-Frankivsk
4.68
36
5.3
15.6
58
Kirovohrad
4.65
36
7.2
51.3
68
Mykolayiv
4.59
29
7.2
51.3
68
Kherson
4.59
16
8.3
46.2
64
Volyn
4.56
30
5.3
15.6
58
Chernihiv
4.44
27
16.3
37.8
72
Chernivtsi
4.26
51
5.3
15.6
58
Own calculations, including data of the State Statistics Service and the Ministry of Infrastructure (for 2009, unless stated otherwise).
Assessing the Competitiveness

of Ukraines Regions in 2011
Introduction
In 2011, the Foundation for Effective Governance,
in partnership with the World Economic Forum, conducted a competitiveness study of all Ukrainian regions:
24 oblasts, the Autonomous Republic of Crimea and two
cities - Kyiv and Sevastopol. The results of the study have
made it possible to produce a comprehensive analysis of
the weaknesses and strengths of each region, as well as
their overall impact on Ukraines position in a Global
Competitiveness Ranking. Due to improvements in the
sample for the Executive Opinion Survey its possible to
highlight specific features of the regions competitiveness
by sector.
In 2011, the competitiveness index of Ukrainian
regions was calculated on the basis of statistical data for
2009-2010, while the Executive Opinion Survey took
place from autumn 2010 to spring 2011. Thus, the assessment of the economic situation made by business executives, as well as the statistical data, refer to the period of
Ukraines economic recovery following the 2008 global
financial crisis up to recent macroeconomic events such
as deterioration of the credit crisis in the euro zone and a
potential US default.
Chapter 5. Assessing the Competitiveness of Ukraines Regions in 2011
CHAPTER 5
Competitiveness assessment results

This year, the top five regions in the competitiveness
index are Kyiv City, Dnipropetrovsk, Kharkiv, Kyiv and
Donetsk oblasts. It was somewhat surprising to see Kyiv
Oblast among the leaders. However, it appears that the
competitive advantage of being near Kyiv City outweigh
the oblasts other disadvantages. The areas with the lowest scores include Zhytomyr, Ternopil, Chernihiv, Kirovohrad and Kherson oblasts. Thus, the makeup of leaders
and outsiders has not changed.
This year, there are seven new regions included in
the GC1: mostly oblasts with small economies, and Sevastopol City. Their aggregate share in the countrys economy was about 10% in 2009. Most of these new regions are
low-ranking in the index with two exceptions. The City of
Sevastopol and Kyiv Oblast are among the top 10 regions
mostly due to high scores in the basic requirements subindex.
Kyiv and Sevastopol, the only two Ukrainian cities
with a special regional status, took 1st and 7th positions
in the rating, which reflects the concentration of business
activity in Ukraines cities-millionaires2. Due to their high
levels of financial and human resources, large cities and
regions have more capacity to fulfill their competitive advantages. Thus, the top five regions of Ukraine include
the countrys four most densely populated areas.
However, economic growth via development of several megacities is not the only option. Additionally, growing a big city too fast can slow down the development
of peripheral areas and lead to wider regional disparities.
The development of regional clusters is no less efficient a
tool to foster economic growth. Many Ukrainian regions
vary in their economic structure, and have the potential
1
2
Chernihiv, Kirovohrad, Kyiv, Mykolayiv, and Ternopil Oblasts and Sevastopol City.
Ukrainian millionaire cities: Kyiv, Kharkiv, Dnipropetrovsk, Odesa and Donetsk. In the Global Ranking 2011 city-states Singapore and Hong Kong also hold the leading positions: 2nd and 11th accordingly.
41
Assessment methodology
This year, the Foundation has continued perfecting
the GCI methodology used to calculate regional compar-
Kherson
Kirovohrad
Chernihiv
Ternopil
Zhytomyr
AR Crimea
Chernivtsi
Khmelnytsky
Ivano-Frankivsk
Zakarpattya
Rivne
Cherkasy
Sumy
Vinnytsya
Luhansk
Volyn
Mykolayiv
Lviv
Poltava
Odesa
Sevastopol
Zaporizhzhya
Donetsk
Kharkiv
Kyiv Oblast
Subindex ranks of Ukrainian National Competitiveness Ranking 2011

Dnipropetrovsk
Figure 5.1
Kyiv

42
tive than that of national ones3. In other words, the level

of corruption and government inefficiency at the regional
level does not seem so high to business executives. However, a still relatively low score for the quality of institutions (since 1998 when Ukraine entered the GCI for the
first time) contributes significantly to a poor rating of the
regions and Ukraine as a whole. Thus, it will be very difficult for Ukraine and its regions to develop and improve
competitiveness without solving the problems in the
basic requirements sub-index group: Institutions, Infrastructure, Health and primary education, and Macroeconomic environment.
Regional disparity between the best and the worst
performers is very wide (see Figure 2.3). Thus, the final
scores for Kyiv City and Kherson Oblast are as disparate
as the global rankings of Iran (ranked 62nd) and Malawi
(ranked 117th). The largest disparity among the regions
is observed under the technological readiness, market
size and infrastructure pillars. A wide gap between the
regions contributes to slow improvement in competitiveness as the group of rank outsiders creates a bottleneck
for development of the entire country (see chapter about
infrastructure). The smallest disparity is under the goods
market efficiency and health and primary education pillars.
to exploit economies of scale; thus, they can develop several competitive clusters at the same time.
The results of the study demonstrate that the main
competitive advantages of Ukrainian regions are quality Healthcare and primary education, Higher education and training, and Labor market efficiency. Despite
positive assessments given by company executives, final
scores were high primarily a result of good statistics, for
example on educational enrollment rates (see chapter
about higher education). At the same time, business executives marked a number of elements that present serious impediments for development, for example the high
level of brain drain, which was specified by respondents
in many regions.
The results for the market size, innovation and technological readiness pillars are the lowest. The low score
for market size can be explained by the particular way
the size of regional markets was calculated, while the innovation pillar is not of great importance for Ukraine at
this stage of its development (see Chapter 1). However,
the low technological readiness indicator is a critical factor contributing to poor regional competitiveness. The
survey results also demonstrate a lack of FDI, which
could be used as a means of technology transfer. Official statistics additionally show a relatively low degree
of telecommunication technology absorption (although
adequate statistical data on high-speed Internet in the
oblasts is not available).
Interestingly, the evaluation of regional public and
private institutions by company executives is less nega-
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
27
Ukrainian National Competitiveness Ranking 2011

Basic requirements
Efficiency enhancers
Innovation and sophistication factors
21
22
23
24
25
26
27
Due to the peculiarities of the methodology for regional competitiveness evaluation the scores on a number of pillars for Ukraine
and 27 regions do not match (on average).
Statistical data
Regional instead of national data (as was the case
before) have been used to calculate a number of indicators. For example, tertiary education enrollment rate was
calculated for each region based on data from the State
Statistics Service of Ukraine. In addition, for the first
time, we took into account macroeconomic environment and market size factors despite some artificial divisions between Ukrainian regions in this regard (see The
Ukraine Competitiveness Report 2008-2009).
Executive Opinion Survey

This year, the sample has been expanded and improved. The sample size for each region was determined
based on the regions share in national GDP. Thus, the
overall number of respondents in each region (27 regions
in total) varies from 70 to 120 people (see Table 2.1.).
Last year, the number of respondents participating in the
survey in each region was about 50 people. In addition,
Figure 5.2
Scores range: the best and the worst results in Ukrainian National and Global Competitiveness Indices in 2011
Regions average
Worst region
Best region
Best country
Worst country
Global Competitiveness Index
2.9
2.4
6.1
4.0
3.2
1.6
2.6
2.9
2.9
2.2
8th pillar: Financial market development

4.2
3.4
5.8
6.3
6.9
3.6
2.4
1.7
0
6.0
4.2
1.1
4.9
4.1
2.2 2.6
5.6
4.0
3.5
6.1
5.0
4.1
6.8
6.0
5.6
1.9
6.7
4.3
3.7
2.9
6.7
4.9
3.3
5.7
4.3
3.6
2.5
3.4
4.2
3.3
5.9
5.8
7
to ensure better assessment of the regional situation, the

questions for company executives included the wording
in your region instead of in your country.
The pool of respondents was developed on the basis
of data from the State Statistics Committee. For example,
the pool for a large company survey was based on the list
of companies generating the highest income and a random sample of companies where the number of employees exceeds 250.
The main method of information collection was a
telephone interview with company executives in Ukraine.
The number of interviews carried out from November
2010 to April 2011 totaled 2,132: 1,962 interviews with
non-financial-sector companies and 170 with financialsector companies. In addition, there were 35 personal
interviews and 17 completed questionnaires, which comprised 2.4% of the total number of interviews held.
ison so as to take into consideration regional peculiarities in the best possible way. Despite the fact that there
were often minor differences or that they affected only a
few regions, it was important to take them into account.
The example of a region that developed under similar
conditions is more illustrative for local and central governments than examples of other countries or Ukraine as
a whole. The successes or failures of an individual region
could be less visible in the national ranking or be of no
relevance to the country. At the same time, the index is
still calculated using WEF methodology, which ensures
consistency when analyzing trends and allows us to compare the competitiveness of regions and countries.
The absolute value of the competitiveness index is
more important for the assessment of the situation in
the region than its corresponding ranking. The assessments of the regions coincide on a number of indicators
and factors, with the difference often being just one hundredth of a point. So, the exact position of the region in a
ranking if often no so important.
43
Twelve pillars of competitiveness results of Ukrainian regions in 2011

Kyiv
Dnipropetrovsk
Kharkiv
Kyiv Oblast
Donetsk
Zaporizhzhya
Sevastopol
Odesa
Poltava
Lviv
Mykolayiv
Volyn
Luhansk
Vinnytsya
Sumy
Cherkasy
Rivne
Zakarpattya
Ivano-Frankivsk
Khmelnytsky
Chernivtsi
AR Crimea
Zhytomyr
Ternopil
Chernihiv
Kirovohrad
Kherson

44
Table 5.1
Ukrainian National Competitiveness Index
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Basic requirements
27 15 25 9 11 19 17 26 6 24 18 1 21 5 8 12 7 4 20 3 2 22 13 10 14 16 23
1 6 4 9 5 8 2 3 10 15 11 23 12 14 13 17 22 19 20 25 16 7 24 27 21 26 18
3 2 6 1 15 4 24 20 22 8 7 18 12 10 17 13 11 9 16 26 25 5 21 23 19 14 27
7 19 11 3 24 12 1 5 16 6 27 10 17 14 22 18 15 2 13 8 4 20 21 9 25 26 23
Efficiency enhancers
1 6 2 17 12 4 3 5 8 7 19 15 14 22 9 13 11 26 18 21 20 23 16 10 24 27 25
10 2 15 4 12 7 9 14 8 13 6 5 16 3 24 18 11 1 20 19 17 26 21 23 25 22 27
2 3 18 11 15 16 24 25 9 22 20 14 19 5 12 6 1 21 7 10 4 26 13 23 8 17 27
8th pillar: Financial market development
17 3 8 9 2 6 5 24 4 12 15 1 16 19 10 20 18 25 14 13 7 26 21 11 23 22 27
1 3 6 2 5 10 7 4 11 9 8 12 16 13 17 15 24 18 19 23 21 22 14 20 25 27 26
1 2 4 6 3 9 26 5 10 7 12 21 8 13 15 14 22 16 17 19 27 11 18 25 20 24 23
Innovation and sophistication factors

12 1 6 15 2 3 4 19 8 20 11 10 5 7 9 21 16 23 24 18 25 14 17 22 26 13 27
10 3 1 13 2 8 4 21 7 16 5 12 11 9 6 19 17 22 14 20 24 25 18 15 27 23 26
Rank 22
The Autonomous Republic of Crimeas competitive advantages are

its Macroeconomic environment and Infrastructure.
Crimea lags behind other regions of Ukraine, however, in Innovation, Financial market development, Labor market efficiency, and
Goods market efficiency.
Corruption, tax policy and overall instability in local government

policy are the biggest obstacles to doing business in Crimea.
Crimea is Ukraines 8th most populous region but

ranks 11th in terms of its share of national GDP. Around
4.3% of Ukraines population resides in Crimea, which
accounts for 3% of the nations GDP. Per capita, Crimeas
GRP is 30% less than the national average (UAH 13,933
in 2009).
Crimea ranks 22nd in the Ukraines Regions Competitiveness Report 2011 index with a total score of 3.77,
which is 0.10 points less than the national average among
27 Ukrainian regions. Compared to last year, Crimea has
lost 0.29 points in its index score and 17 positions in its
index ranking. Eighty per cent of this drop in Crimeas
ranking is due to a switch to the use of regional statistical data in determining the size of internal and external
markets. The other 20% is explained by worse assessments made by the business community.
The Republic received the highest assessments for
indicators in the first sub-index: Basic Requirements
(11nd). For the two other sub-indexes - Efficiency Enhancers, and Innovation and Sophistication Factors
- Crimea received lower rankings (24th and 23rd, respectively). The Republic scored the highest in the pillars
Macroeconomic environment and Infrastructure, taking
5th and 7th positions, respectively. In the Goods market
efficiency, Labor market efficiency and Financial market
development pillars, Crimea took second-to-last place. It
Figure 5.4
ranked 25th for the Innovation pillar.

The Macroeconomic environment in Crimea was
ranked 5th in the index thanks to a relatively small difference (7.86%) between the interest rates on credit and
deposits. However, this performance corresponds to a
significantly lower global position (99th).
The region scored relatively high in Infrastructure,
with the highest points awarded for quality of air transport infrastructure (4th in the country), quality of port
infrastructure (5th) and quality of roads (6th). The Republic also has quite a high number of mobile telephone
subscriptions, with 125 subscribers per 100 people (6th
among all regions). On the other hand, quality of electricity supply and quality of railroad infrastructure in
Crimea rank much lower (21st and 20th, respectively).
All the above mentioned indicators have demonstrated a
year-on-year decrease.
Crimeas Goods market efficiency received a low
ranking (26th) because of a negative assessment of
Crimeas effectiveness of anti-monopoly policy (26th),
extent of market dominance (24th), prevalence of foreign
ownership (26th), degree of customer orientation (26th)
and agricultural policy costs (24th). At the same time,
business leaders in the Republic noted the relatively high
level of buyer sophistication (8th among 27 regions).
In terms of Labor market efficiency, Crimea also
takes the second-to-last position in the index. Almost
all indicators in this pillar have fallen from last year. In
2011, the weakest indicators include the ratio of women
in labor force (21st place - a fact that reflects the inefficient use of human capital) and reliance on professional
management (20th). Compared to last year, the ability of
the region to retain talent has significantly deteriorated
- with the resulting brain drain costing the region 1.06
points for this indicator and putting it in 18th place. Business leaders assessed the relationship between pay and
AR Crimeas performance by 12 pillars of competitiveness

Best performing region
AR Crimea
Ukraines regions average
7
4.3
3.8
4.5
4.3
4.0
3.6
4.9
4.0
4.3
4.1
6.0
5.7
4.2
3.4
5.0
4.1
4.0
3.5
4.9
4.6
4.1
3.6
4.2
2.7
3.6
1.9
3.7
3.2
4.2
3.8
2.6
3.3
AR Crimea
45

46
Figure 5.5
The most problematic factors for doing business in AR Crimea

Corruption
15
Tax regulations
Policy instability
14
15
16
13
12
Tax rates

Inflation


Access to financing


Crime and theft

Poor public health
7
6
7
7
5
6
6
4
3
4
6
3
2
2
2
1
1
AR Crimea
2
Ukraine Regions' Average
1
2
productivity, and also between hiring and firing practices

relatively high (8th and 12th, respectively).
Financial market development in Crimea is one of
the lowest among Ukrainian regions. The Republic is last
in the indicators of availability of financial services and
affordability of financial services. Local business leaders
gave low marks to financing through local equity market (26th) as well as to regulation of security exchanges
(26th). However, Crimeas soundness of banks was rated
relatively high (7th place).
The regions level of innovation received a poor assessment first and foremost because of the poor quality
of scientific research institutions (27th), and insufficient
company spending on R&D (23rd). The Republic was
also ranked low in the availability of scientists and engineers (22nd), university-industry collaboration in R&D
(21st), and intellectual property protection (21st). Relatively strong indicators in the Innovation pillar are government procurement of advanced technology products
(14th) and the utility patents (14th).
Cherkasy
Rank 16
Labor market efficiency and Institutions are the competitive advantage of Cherkasy Oblast.
The oblast lags behind other regions in Business sophistication, Financial market development and Innovation.
Tax policy, corruption and government policy instability are the most
problematic factors for doing business in the region.
Cherkasy Oblast takes 14th place in Ukraine by

population and 15th by share of Ukraines GDP. Overall, 2.81% of Ukraines population resides in the oblast,
which produces 2.05% of the national GDP. As calculated per capita, Cherkasy Oblasts GRP is 73% of Ukraines
average (UAH 14,393 in 2009).
The oblast ranks 16th in the Ukraines Regions
Competitiveness Report 2011. Its total score is 3.81,
which is 0.06 points less than the average for Ukraine
10
15
20
25
(3.87). Compared to last year, the region has lost 0.15

points in the index and seven positions in the competitiveness ranking. Its aggregate score has gone down because of a decline in the score for the regions strongest
sub-index, Efficiency Enhancers. The oblast took only
15th place among 27 regions in this sub-index and only
19th and 21st places in the first and third sub-indexes,
Basic Requirements and Innovation and Sophistication
Factors, respectively.
Cherkasy Oblast performs best in Labor market efficiency (6th among 27 regions). Institutions of the region have received relatively high scores (12th) as well.
The oblast loses out to others in Business sophistication
(21st), Financial market development (20th) and Innovations (19th).
The comparatively high 6th position of Cherkasy
Oblast in terms of Labor market efficiency is due to flexible hiring and firing practices (4th) and a high ratio of
female participation in the labor force (91% of mens
share, 7th place). In these two indicators the oblast is
competitive globally as well, with the above two scores
corresponding to 15th and 20th places in the WEF Global Competitiveness Index. In terms of pay and productivity, Cherkasy Oblast has taken a lower position among
Ukrainian regions (10th), yet this indicator still nets a
very high 5th place in the global ranking. Flexibility of
wage determination (18th) and cooperation in laboremployer relations (17th) further weaken the indicator.
In Institutions, the region takes a comparatively
good place, primarily because business managers have
highly evaluated the public trust of politicians (3rd) and
low business costs of crime and violence (3rd). They
have also noted a relatively low level of irregular payments and bribes (6th among 27 regions). On the other
hand, the oblast has heavy burden of government regulation (22nd), high wastefulness of government spending
(20th) and a low score in property rights (21st).
All indicators of Cherkasy Oblast in Business sophistication have received low scores, except for local
supplier quality. In particular, the oblast has limited lo-
Cherkasys performance by 12 pillars of competitiveness

Cherkasy
7
4.3
3.8
4.5
4.3
4.0
3.6
4.9
4.0
4.3
4.1
6.0
5.7
4.2
3.4
5.0
4.1
4.0
3.5
4.9
4.6
4.1
3.8
4.2
2.7
3.6
1.9
3.7
3.2
4.2
3.8
3.3
2.6
Figure 5.7
Figure 5.6
The most problematic factors for doing business in Cherkasy
47
Tax regulations
16
Corruption
15
Policy instability
Access to financing
11
16
15
12
9
6
Inflation
Tax rates




Poor public health
Crime and theft

7
6
7
6
5
6
4
3
4
5
2
3
3
1
2
1
2
Cherkasy
1
1
0
cal supplier quantity (21st) and business managers are

not willing to delegate authority (20th). The region has
also performed badly in nature of competitive advantage
(21st), which means that the competitive advantages of
the local economy depend on low cost of resources rather than on unique products and production processes.
Production process sophistication is quite low in the national (17th) and international ratings (112th). In its best
indicator - local supplier quality - the oblast takes 9th
place among 27 regions.
The regions Financial market development has received low scores because of low affordability of financial
services. Business executives have given poor marks to
financing through local equity market (24th) and sound-
10
15
20
25
ness of banks (24th) in the regional report. International

scores for these indicators are much worse, putting the
region in 124th and 123rd positions globally. However,
the executives noted the relative ease of access to loans
(4th) and availability of financial services (6th).
The regions poor results in Innovations are explained by low assessments of the availability of scientists
and engineers (25th), university-industry collaboration
in R&D (24th) and capacity for innovation (23rd). On
the other hand, a positive influence from government
procurement of advanced technology products (4th
among 27 regions) and high quality of scientific research
institutions (8th) is observed in the region.
Chernihiv
of Ukraines average.
Chernihiv Oblast ranks 25th in the national index,
coming in between Kirovohrad and Ternopil oblasts. Its
competitiveness index is 3.68 against a national average
of 3.87. The oblast has received relatively low scores in
all competitiveness components: Basic Requirements
(23rd), Efficiency Enhancers (25th) and Innovation and
Sophistication Factors (27th).
The region has received the most points for Labor
market efficiency (8th) and Institutions (14th). At the
same time, the oblast loses out to most regions in the
Innovation and Sophistication Factors sub-index (27th)
and in such pillars as Health and primary education
(25th), Goods market efficiency (25th) and Technologi-
Rank 25
For Institutions and Labor market efficiency, Chernihiv Oblast has

exceeded the Ukrainian average.
The oblast loses out to most regions in the Innovation and Sophistication Factors sub-index and pillars such as Health and primary
education, Goods market efficiency and Technological readiness.
Government policy instability, tax policy and corruption are the most
Chernihiv Oblast ranks 21st among 27 regions of

Ukraine by population (2.4%) and 19th by contribution to Ukraines GDP (1.6%). The Oblasts gross regional product per capita is UAH 13,121, which is 66%
Figure 5.8
Chernihivs performance by 12 pillars of competitiveness

Chernihiv
7
4.3
3.7
4.5
4.2
4.0
3.7
4.9
3.5
4.3
4.0
6.0
5.6
4.2
3.4
5.0
4.1
48
4.0
3.6
4.9
4.8
4.1
3.7
4.2
2.6
3.6
1.6
3.7
3.0
4.2
3.5
3.3
2.5
Figure 5.9
The most problematic factors for doing business in Chernihiv

Policy instability
15
Tax regulations
14
Corruption
14
12
16
15
Tax rates
10
Inflation
7
7
6
4
Access to financing
Poor public health
6
3
6
2
2
5
3
Crime and theft
2
2
Chernihiv

1
10
15
20
25
Figure 5.10
average in fixed telephone lines.

Chernihiv Oblast loses out to most regions in Goods
market efficiency (25th). Business leaders are not satisfied with intensity of local competition (27th) or extent of
market dominance (25th).Other indicators related to the
domestic market environment in the region are also below the national average (except for the extent and effect
of taxation). At the same time, the oblasts competitiveness in the foreign market has received a more positive
assessment.
Chernihiv Oblast has relatively low scores in Health
and primary education (25th). Business executives
ranked the business impact of HIV/AIDS and tuberculosis the highest in the country. Life expectancy, quality
of primary education and primary education enrollment
rate rank below Ukraines average.
Chernivtsi
Rank 21
Chernivtsi Oblast scores high in Institutions, Health and primary education and Labor market efficiency.
The oblast loses out to most regions in the Macroeconomic environment, Market size and Business sophistication pillars.
Chernivtsi Oblast ranks 26th among 27 regions of

Ukraine by population (1.97%) and 26th by share in the
national GDP (0.93%). Its GRP per capita is the lowest in
Ukraine - UAH 9,383, or 47% of Ukraines average.
Chernivtsi Oblast received 3.77 points in the 2011
the Ukraines regions competitiveness index (against a
national average of 3.87 points), taking 21st position in
the national ranking between Khmelnytsky Oblast and
the Autonomous Republic of Crimea. The region placed
high in the Basic Requirements group of indicators (12th)
Chernivtsis performance by 12 pillars of competitiveness

Chernivtsi
7
4.3
3.8
4.5
4.3
4.0
3.9
4.9
3.6
4.3
3.9
6.0
5.9
4.2
3.4
5.0
4.3
4.0
3.7
4.9
4.9
4.1
3.7
4.2
2.7
3.6
1.1
3.7
3.1
4.2
3.6
2.7
3.3
cal readiness (25th).

The region has a rather efficient Labor market (8th).
So, the oblast has performed higher than Ukraines average in terms of pay and productivity (3rd) and reliance
on professional management (12th). In addition, the region has a relatively high ratio of female participation in
labor force (second after Zhytomyr).Yet, regional business executives are concerned about brain drain - the
oblast is in 27th and 104th places in the national and
global indexes, respectively.
The second relatively strong competitiveness pillar
of the region is its Institutions (14th). The oblast ranks
9th in property rights and has done better than the
Ukrainian average in the irregular payments and bribes,
diversion of public funds, burden of government regulation and transparency of government policymaking
indicators. The region is the highest ranked in business
costs of crime and violence (45th globally). However,
Chernihiv Oblast has achieved much worse results (below Ukraines average) in ethical behavior of firms and
efficacy of corporate boards.
The indicators of the Innovation and Sophistication
Factors sub-index are the biggest weakness of the region
(27th). In most indicators of this group, the oblast has
performed the worst in Ukraine: for example, in availability of scientists and engineers and in government
procurement of advanced technology products. The exceptions (e.g. third place in control of international distribution) do little to change the general pattern.
Chernihiv Oblast has also received low scores for
Technological readiness (25th place). Business managers
have put the region in the last place in the country for
availability of latest technologies and (25th place) for FDI
and technology transfer and firm-level technology absorption. Finally, the region has a relatively small number of Internet users (24th), but exceeds the Ukrainian
49

50
Figure 5.11
The most problematic factors for doing business in Chernivtsi

Tax regulations
15
Corruption
13
Policy instability
11
16
15
12
Tax rates
Access to financing
Inflation
7
6
7
4
3
6
6
5
3
1
Crime and theft
Poor public health
2
2
2
Chernivtsi

2
yet ranks 23rd and 25th in the other two sub-indexes.

The region gets the highest rankings for Institutions
(2nd), Health and primary education (4th) and Labor
market efficiency (4th), but lags behind most oblasts in
Macroeconomic environment (25th), Market size (26th)
and Business sophistication (25th).
Chernivtsis second-place ranking in the Institutions pillar is the biggest achievement of the oblast. Business executives do not see big problems in diversion of
public funds or irregular payments and bribes. The level
of public trust of politicians is high. The region also leads
in judicial independence in Ukraine (rank 83 in the
global index) and low burden of government regulation
(25th). At the same time, Chernivtsi Oblast performed
lower than Ukraines average in terms of ethical behavior
of firms and efficacy of corporate boards.
The second strong pillar for Chernivtsi in the national competitiveness index is Labor market efficiency
(4th). The oblast outperforms most regions because of its
efficient cooperation in labor-employer relations (2nd),
pay and productivity (4th) and reliance on professional
management (2nd). At the same time, Chernivtsi Oblast
has lower-than-average scores in a number of other indicators in this pillar, such as flexibility of wage determination, hiring and firing practices and brain drain.
The regions performance in the Health and primary
education pillar also gets a high (4th place) ranking. The
oblast can boast higher-than-average scores in infant
mortality and life expectancy (8th and 3rd, respectively)
and high marks in quality of primary education (2nd).
Chernivtsi Oblast is less competitive than other regions in terms of its Market size (27th). It takes last place
for foreign market size and 26th for domestic market
size, ahead of Sevastopol only.
The region is among the worst national performers in Macroeconomic environment (25th) and Business
sophistication (25th). The oblast has a wide interest rate
spread (26th), while inflation is lower than the national
average. In the Business sophistication pillar, the region
scores lower than average for local supplier quantity
and quality. Chernivtsi Oblast ranks 25th in value chain
10
15
20
25
breadth and last in extent of marketing.

Finally, Innovation (24th) is another pillar in the regions competitiveness requiring improvement. To a large
extent, the oblast has performed badly because of low
scores in company spending on R&D (26th) and university-industry collaboration in R&D (22nd). At the same
time, the region has received higher-than-average scores
for availability of scientists and engineers.
Dnipropetrovsk
Rank 2
Dnipropetrovsk Oblast has competitive advantages in Business sophistication, Goods market efficiency and Market size.
The oblast is behind other regions in the Health and primary education and Institutions pillars.
Tax policy and corruption are the most problematic factors for doing
business in the region.
Dnipropetrovsk Oblast ranks 2nd out of 27 Ukrainian regions by population and per capita GRP, and 3rd
by contribution to the nations GDP. The region is home
to about 7.3% of Ukraines total population and generates
about 10% of the countrys GDP. As calculated per capita,
GRP of the region is 140% of Ukraines average (UAH
27,737 per capita in 2009).
Dnipropetrovsk Oblast has been ranked 2nd in the
national index for the second year running, and trails
only Kyiv. In 2011, the aggregate score of the oblast totals
4.10, which is 0.02 points lower year-on-year, and 0.23
points higher than the national average. The oblast takes
1st and 2nd places for the Innovation and Sophistication Factors and Efficiency Enhancers sub-indexes, respectively. However, the regions indicators for the Basic
Requirements sub-index (7th) worsen the position of the
oblast.
The region has received the highest scores for Business sophistication (1st among 27 Ukrainian regions),
Goods market efficiency (2nd), Market size (2nd) and
Macroeconomic environment (2nd). At the same time,
it is lagging far behind other regions in the Institutions
Dnipropetrovsks performance by 12 pillars of competitiveness

Dnipropetrovsk
7
4.3
4.1
4.5
4.4
4.0
3.7
4.9
4.0
4.3
4.2
6.0
5.7
4.2
4.0
5.0
4.7
4.0
4.0
4.9
4.9
4.1
4.0
4.2
3.3
3.6
2.9
3.7
3.7
4.2
4.2
3.3
3.2
Figure 5.13
Figure 5.12
The most problematic factors for doing business in Dnipropetrovsk

Tax regulations
17
Corruption
13
51
16
15
Tax rates
Policy instability
Inflation
Access to financing
7
12
7
6
6
6
5
3
4
3
Crime and theft
Poor public health
2
2
2
2
Dnipropetrovsk
1
1
0
(15th) and Health and primary education (19th) pillars.

The region is at the very top of the list in the national competitiveness ranking for three indictors included
under the Business sophistication pillar: local supplier
quantity, local supplier quality and reliance on professional management. In addition, the region takes 30th
place in the global ranking of local supplier quantity.
Dnipropetrovsk Oblast has also demonstrated very good
results for state of cluster development: it has a high 12th
position in the overall GCI ranking (at the level of Germany and Malaysia) and takes 2nd place in the national
ranking, behind Donetsk only.
Strong indicators in Goods market efficiency can
be explained by a high degree of customer orientation,
10
15
20
25
high intensity of local competition and effectiveness of

anti-monopoly policy. In these indicators, Dnipropetrovsk Oblast ranks either 1st or 4th among 27 Ukrainian
regions, respectively. On the other hand, business executives note a high extent of market dominance (23rd in the
regional ranking), business impact of rules on FDI (21st)
and burden of customs procedures (16th). The oblast
ranks 131st out of 142 countries for burden of customs
procedures in the global ranking (at the level of Burundi
and Yemen).
Dnipropetrovsk Oblast scores high in Market size
due to the size of its domestic and foreign markets. Its
domestic market is the second biggest in Ukraine after
City of Kyiv. In terms of foreign market size, the region

52
ranks 3rd in the national ranking, behind Donetsk and

Kyiv. The oblasts share of Ukraines export is very high:
5th and 50th positions in the national and global rankings, respectively.
Low scores for the oblast in the Basic Requirements
sub-index can be explained by its 19th position for Quality of health and primary education. The oblasts ranking for this pillar has significantly declined since last year
when it was in 11th place. The reasons for the low ranking can be explained by high HIV/AIDS prevalence (the
oblast is at the very bottom of the ranking table), high
TB incidence (26th), high infant mortality rate (21st),
low life expectancy (23rd) and poor quality of primary
education (23rd out of 27 regions). At the same time, its
position is somewhat strengthened by a relatively high
score for primary education enrollment rate (7th).
One more competitive disadvantage of the oblast is
the level of Institutions development. Compared to last
year, Dnipropetrovsk Oblast has moved two positions
down for this pillar to 15th in the national ranking. This
can be explained by low efficiency of public rather than
private institutions. The major contributors to the low
score of public institutions include judicial dependence
and favoritism in decisions of government officials, both
of which earned the oblast 25th place among 27 Ukrainian regions. Globally, the oblast holds a very low 127th
position for judicial dependence, at the level of Algeria.
Business executives also see problems with reliability of
police services (24th) and irregular payments and bribes
(20th). At the same time, transparency of government
policymaking is evaluated high (4th position among
the regions of Ukraine). In terms of private institutions,
business executives believe that the level of protection of
minority shareholders interests is very low. However, the
respondents are happy with the ethical behavior of firms
and efficacy of corporate boards (both of which took 2nd
place).
Figure 5.14
Donetsk
Rank 5
Donetsk Oblast has competitive advantages in the Financial market

development, Market size, Business sophistication and Innovation
pillars.
The oblast ranks poorly compared to other regions in Macroeconomic environment, Health and primary education and Labor market
efficiency.
problematic factors for doing business in the oblast.
Donetsk Oblast ranks 1st in Ukraine by population

(accounting for almost one-tenth of Ukrainian citizens)
and 2nd by contribution to the nations GDP (9.7%). Its
gross regional product (GRP) is UAH 23,137 per capita,
which is 135% of the countrys average.
The oblast comes 5th in the national ranking, between Kyiv and Zaporizhzhya oblasts. Its competitiveness
scored 4.03 points, which is 0.16 points above the average for 27 Ukrainian regions (3.87 points). Compared to
its performance in the Ukraine Competitiveness Report
2010, Donetsk Oblast has improved its ranking this year,
moving up one position. The region lost one position in
the Basic Requirements sub-index, but gained one place
in the sub-index Efficiency Enhancers, and two places in
Innovation and Sophistication Factors.
Donetsk Oblast scores its best marks in the pillars
Financial market development (2nd out of 27 regions),
Market size (3rd), Business sophistication (2nd) and
Innovation (2nd). At the same time, the oblast lags behind in Macroeconomic environment (15th), Health and
primary education (24th) and Labor market efficiency
(15th).
This year, Donetsk Oblast has improved its positions in the Financial market development pillar, moving up two places in the national index. Business lead-
Donetsks performance by 12 pillars of competitiveness

Donetsk
7
4.0
4.3
4.4
4.5
3.8
4.0
4.1
4.9
4.0
4.3
5.6
6.0
3.8
4.2
4.5
5.0
3.8
4.0
4.8
4.9
4.1
4.1
3.2
4.2
2.7
3.6
3.7
3.7
4.1
3.2
4.2
3.3
Figure 5.15
The most problematic factors for doing business in Donetsk

Tax regulations
16
Corruption
15
16
15
10
Policy instability
12
Tax rates
7
6
4
Inflation
Access to financing
7
5
6
6
1
Poor public health
Crime and theft
2
2
3
3
2
Donetsk
ers polled believe that the oblast enjoys Ukraines best

financing through local equity market and a high level
of affordability of financial services (with the oblast receiving overall ratings of 2nd 3rd places for these indicators, respectively). Donetsks score for affordability of
financial services, corresponds to a relatively good 53rd
position in the global rating. At the same time, the region still confronts problems with the ease of access to
loans and venture capital availability (12th and 14th out
of 27 Ukrainian regions).
The oblasts high rankings in Market size are due to
good scores in the indicators of this pillar. Donetsk ranks
1st nationally for domestic market size, a position determined particularly by a high share of exports in GRP,
which puts the oblast in 17th position in the global ranking of 142 countries.
Donetsk Oblast ranks 2nd in two pillars of the Innovation and Sophistication Factors sub-index due to its
high positions in most indicators of the sub-index. In
particular, the region takes leading positions in the state
of cluster development (1st out of 27 Ukrainian regions),
company spending on research and development (2nd)
and university-industry collaboration (2nd). Business
leaders in the region have given a high assessment of the
state of cluster development, whose score gained one and
a half points since last year and corresponds to a very
high 6th place in the global ranking.
Similar to last year, Health and primary education is
the biggest problem for Donetsk Oblast, as the statistical
and executive opinion survey data suggest. The region
ranks 24th in the pillar nationally and scored low for:
HIV/AIDS prevalence (26th), infant mortality (27th)
and life expectancy (26th). HIV prevalence in Donetsk
ranks 106th place in the global ranking. Also, the survey
results have corroborated poor quality of primary education, which has prevented the oblast from taking a higher
place nationally (22nd).
The region has demonstrated a decline in the Labor
market efficiency pillar, compared to its performance last
year, taking 15th position out of 27 Ukrainian regions,
and losing an equivalent of nine places on the global
10
15
20
25
scale. Insufficient flexibility of wage determination (19th)

and brain drain are the most problematic indicators of
this pillar. Despite a significant loss of points in both indicators, Donetsk Oblast still ranks 4th in brain drain nationally because of the even worse performances of other
Ukrainian regions in this area.
53
Ivano-Frankivsk
Rank 19
Ivano-Frankivsk Oblast received relatively high scores for Labor market efficiency and Health and primary education.
The oblast is least competitive in Business sophistication, Institutions and Infrastructure.
The most problematic factors for doing business in the region include tax policy, corruption and government policy instability.
Ivano-Frankivsk Oblast ranks 13th among 27 regions of Ukraine by population (3.1%) and 15th by share
of Ukraines GDP (1.9%). The regions GRP per capita is
UAH 12,485, or 63% of the national average.
The Oblast takes 19th place in the Ukraines Regions Competitiveness Report between Zakarpattya and
Khmelnytsky regions. Its aggregate competitiveness score
is 3.78 points, against the national average of 3.87 points.
Compared to the 2010 report, the oblast has fallen two
rankings, scoring low in all three major components of
competitiveness. Thus, it ranks 21st in the Basic Requirements sub-index, with low scores in Infrastructure and
Institutions outdoing high scores in Health and primary
education.
Ivano-Frankivsk Oblast is a relatively good performer in Labor market efficiency (7th) and Health and
primary education (13th). The region loses out to others
by Business sophistication (24th), Institutions (20th) and
Infrastructure (20th).
For several years, the oblast has scored high in Labor
market efficiency (7th), the regions obvious competitive
advantage. The strong performance is achieved due to the
regions flexible labor market - effective cooperation in labor-employer relations (4th), hiring and firing practices
Figure 5.16
Ivano-Frankivsks performance by 12 pillars of competitiveness

Ivano-Frankivsk
7
4.3
3.8
4.5
4.2
4.0
3.7
4.9
3.5
4.3
4.0
6.0
5.8
4.2
3.5
5.0
4.3
4.0
3.7
4.9
4.8
4.1
3.8
4.2
2.7
3.6
1.6
3.7
3.3
4.2
3.6
3.3
2.9
Figure 5.17
54
The most problematic factors for doing business in Ivano-Frankivsk

Tax regulations
20
Corruption
16
Policy instability
Tax rates
15
16
15
12
8
7

Access to financing
Inflation



Crime and theft

Poor public health
6
6
6
6
7
4
4
3
3
3
5
2
1
1
2
1
2
Ivano-Frankivsk
1
2
0
(6th) and flexibility of wage determination (7th). On the

other hand, businesses in the region do not attach much
importance to hiring professional managers (25th), and
the region ranks 20th on brain drain. The labor market is
also negatively affected by a poor performance in Higher
education and training (18th). Ivano-Frankivsk Oblast,
however, has good pay and productivity ratio (5th in
Ukraine and 3rd in the world). But salary in the oblast is
one of the lowest in the country.
Ivano-Frankivsk Oblast also received relatively good
scores in Health and primary education (13th). Thus, the
region takes 5th position by health and can boast one of
the lowest figures in terms of HIV prevalence (2nd). At
10
15
20
25
the same time, business executives give a relatively negative assessment of business impact of HIV/AIDS (10th),
and infant mortality is higher than Ukraines average
(23rd).
The oblast is surpassed by other regions in Ukraine
in the Business sophistication pillar, taking only 24th
place. Except for local supplier quantity (4th) and state of
cluster development (9th), the scores of the region in other indicators of this pillar do not exceed Ukraines average. Businesses are particularly critical about the control
of international distribution (24th), production process
sophistication (25th) and value chain breadth (26th). In
the last two indicators, the regions position dips below
Kharkiv
Rank 3
Strong aspects of Kharkiv Oblast include Innovations, Higher education and training, Infrastructure and Market size.
The oblast ranks poorly in its Institutions, Labor market efficiency

and Goods market efficiency.
The most problematic factors for doing business in the region

are corruption, tax policy and government policy instability.
Kharkiv Oblast ranks 4th in Ukraine by population

and contribution to the countrys GDP. It accounts for 6%
of Ukraines population and generates 6.5% of Ukraines
GDP. As calculated per capita, GRP of the region amounts
to 107% of Ukraines average (UAH 21,228).
In the national ranking, Kharkiv Oblast takes 3rd
place. Its aggregate score is 4.05 points, which is 0.18
points higher than the nations average (3.87). ComFigure 5.18
pared to last year, the oblast has gained 0.01 points in the
index and climbed up four positions in the ranking. It
demonstrates more or less the same results in all the subindexes. Kharkiv Oblast ranks 5th out of 27 Ukrainian
regions in the Basic Requirements sub-index and 3rd in
the Efficiency Enhancers, and Innovation and Business
Sophistication sub-indexes.
The competitive advantages of Kharkiv Oblast include Innovation, Higher education and training, Infrastructure and Market size. The region ranks 1st and 2nd
in the first two pillars and 4th in the last two. The region
lags behind its peers in Institutions (a very low 25th position), Labor market efficiency (18th) and Goods market
efficiency (15th).
Kharkiv Oblast holds the leading position in the Innovation pillar due to good results in availability of scientists and engineers (2nd), capacity for innovation (3rd)
and university-industry collaboration in R&D (3rd). One
more strong position of the region includes the number
of utility patents: the Oblast ranks 3rd in this indicator
behind Sevastopol and Kyiv. However, in the international ranking, the position of the region for utility patents is
not so high (83rd out of 142 countries). Company spending on R&D (10th) and intellectual property protection
(18th) somewhat weaken the position of Kharkiv in this
pillar.
Kharkiv Oblast is ranked 2nd in the Higher education and training pillar due to very good results in tertiary and secondary education enrollment rates (1st and
6th respectively). Tertiary education enrollment rate in
the region exceeds 100%, which puts the oblast at the
very top (1st) position, along with Kyiv City, in the international ranking. Business executives have given a very
good assessment to the quality of management schools
(3rd) and the quality of education system in general (6th).
However, in the international ranking the quality of management schools occupies a much lower 117th position.
Kharkivs performance by 12 pillars of competitiveness

Kharkiv
7
4.0
4.3
4.4
4.5
3.4
4.0
4.2
4.9
4.1
4.3
5.8
6.0
3.9
4.2
4.9
5.0
3.8
4.0
4.8
4.9
4.1
3.9
3.2
4.2
2.5
3.6
3.6
3.7
4.0
3.3
4.2
3.3
the 100th-rank mark of the global index.

Ivano-Frankivsk Oblast scored relatively low for
Institutions (20th) because of problems with quality of
private institutions. In part, this substantiates the low
rank in the previous pillar, Business sophistication. Thus,
business leaders in Ivano-Frankivsk Oblast see problems
with ethical behavior of firms (24th), efficacy of corporate boards (27th) and protection of minority shareholders interests (26th).
The low-level ranking for Infrastructure (20th) in
the national index can be largely explained by low scores
in fixed telephone lines and mobile telephone subscriptions. Insufficient level of telephony infrastructure reduces also the aggregate score in the technological readiness
pillar (19th). Business leaders are unhappy with quality
of roads as well. In this indicator, Ivano-Frankivsk Oblast
scored 1.5 times less than the index leader, Kyiv, and
takes 24th place regionally (123rd globally).
55

56
Figure 5.19
The most problematic factors for doing business in Kharkiv

Corruption
19
Tax regulations
16
Policy instability
12
15
16
12
Tax rates
Access to financing
Inflation
Poor public health
6
7
6
7
6
3
5
4
3
2
2
1
Crime and theft
Kharkiv
1
0
Infrastructure is also among the strengths of the region. Business executives have given a high assessment
to the quality of railroad infrastructure (1st nationally),
quality of air transport infrastructure (2nd ) and quality
of electricity supply (4th). According to statistical data,
the number of fixed telephone lines and mobile telephone subscriptions is also quite high: 5th and 6th accordingly.
The high position of the region in Market size can
be explained by its domestic market size rather than its
foreign market size. The oblast ranks 3rd out of 27 Ukrainian regions in domestic market size and 8th in foreign
market size.
The weakness of Kharkiv Oblasts economy is the
Institutions pillar. In particular, the region has demonstrated the worst results for the organized crime and
reliability of police services indicators. Also, the region
has very poor scores for public trust of politicians (26th),
irregular payments and bribes (25th), efficiency of legal
framework in settling disputes (25th) and protection
of minority shareholders interests (25th). In the international ranking, Kharkiv Oblast is near the bottom of
the list consisting of 142 countries in all the above mentioned indicators. For example, it ranks 139th in protection of minority shareholders interests. Other indicators
of the Institutions pillar are also low, with the best reaching 19th place.
The reason for a low 18th position for Kharkiv
Oblast in Labor market efficiency is first and foremost a
low evaluation of the extent and effect of taxation (26th),
of cooperation in labor-employer relations (22nd) and of
dependence between pay and productivity (21st). Female
participation in labor force is also very low. The share
of women is only 85% of the share of men in the labor
force, which has put the region at a low 21st position in
Ukraine. However, globally the region is ranked higher
(55th out of 142 countries). On the other hand, the oblast
has performed well in hiring and firing practices (5th)
and the regions attractiveness for life and work (brain
drain is ranked 6th out of 27 regions of Ukraine).
The below-average results for the Goods market ef-
10
15
20
25
ficiency of Kharkiv Oblast are caused by extent and effect

of taxation (26th), business impact of rules on FDI (24th)
and burden of customs procedures (22nd). Other indicators in this pillar are either average or below average.
The oblast is only assessed highly in this pillar for buyer
sophistication.
Kherson
Rank 27
Kherson Oblast shows the least competitive weaknesses in Infrastructure, Institutions and Market size
The oblast takes last place in five pillars of competitiveness
The most problematic factors for doing business in the region are tax
policy, corruption and government policy instability
Kherson Oblast ranks 22nd among 27 regions of

Ukraine in population (2.38%) and 21st in contribution
to Ukraines GDP (1.47%). The gross regional product of
the oblast is UAH 12,256 per capita, or 62% of the national average.
The region takes last place in the 2011 national
ranking, with the lowest overall score (3.58 against a national average of 3.87). Compared to 2010 (when it received 14th place out of 20 regions indexed), Khersons
performance in the Efficiency Enhancers sub-index has
dropped the most. But the oblast has virtually equally low
scores in all three components of competitiveness: 27th
in Basic Requirements and Efficiency Enhancers, and
26th in Innovation and Sophistication Factors.
Kherson Oblast gets its highest marks for Infrastructure (18th), Institutions (23rd) and Market size
(23rd). In other indicators, the oblast is near the bottom
of the national ranking, receiving the lowest scores of all
27 regions in five pillars.
The oblast has slightly better national scores for
Infrastructure (18th). For example, Kherson ranks 5th
in quality of port infrastructure, although it is outperformed by all primary port oblasts. It takes 20th place for
quality of roads. The indicator for mobile telephone sub-
Khersons performance by 12 pillars of competitiveness

Kherson
7
4.3
3.6
4.5
4.1
4.0
3.5
4.9
3.6
4.3
3.7
6.0
5.6
4.2
3.3
5.0
4.1
4.0
3.5
4.9
4.6
3.4
4.1
4.2
2.6
3.6
1.5
3.7
3.0
4.2
3.4
3.3
2.6
Figure 5.21
Figure 5.20
The most problematic factors for doing business in Kherson

Corruption
16
Tax regulations
15
Policy instability
12
57
15
16
12
Access to financing
Inflation
Tax rates
Crime and theft
Poor public health
6
6
7
4
7
6
5
3
2
3
2
1
1
Kherson
2
2
0
scriptions scores above the Ukrainian average.

For Institutions, Kherson Oblast takes 23rd position
in the national index. Business managers give above-average scores for property rights, judicial independence
and efficiency of legal framework in settling disputes.
In the organized crime and business costs of crime and
violence indicators, the oblast is among the top 10 safest
regions in the country earning 6th and 10th places, respectively. Internationally, these slots correspond to 65th
and 73rd place.
For Market size, the oblast is also 23rd. The region
10
15
20
25
can boast a relatively large foreign market size (16th),

which means that exports are vital for development of
the oblast. However, the region is behind most oblasts in
Ukraine in domestic market size (25th).
In most other pillars, Kherson Oblast ranks last or
second to last. Nonetheless, the oblast has scored higher
than Ukraines average in a number of scattered indicators: buyer sophistication, flexibility of wage determination, hiring and firing practices, reliance on professional
management and university-industry collaboration in
R&D.
Khmelnytsky
The oblast ranks 20th in the national index, coming between Ivano-Frankivsk and Chernivtsi oblasts, and
taking 20th position in all three components of competitiveness. This is a significant drop in Khmelnytskys
ranking from last year, when the oblast took 10th place
nationally (among 20 regions). The aggregate competitiveness index of the oblast in 2011 is 3.77 points - against
a national average of 3.87 points.
Khmelnytsky Oblast has scored the highest in Institutions (3rd among 27 regions), Health and primary
education (8th) and Labor market efficiency (10th). At
the same time, the oblast is at the bottom of the national
ranking by Infrastructure (25th), Technological readiness (23rd) and Macroeconomic environment (26th).
Rank 20
Khmelnytsky Oblast has high scores in Institutions, Health and primary education and Labor market efficiency.
The oblast loses out to most regions in the Infrastructure, Technological readiness and Macroeconomic environment pillars.
Government policy instability, tax policy and corruption are the most
problematic factors for doing business in the oblast.
Khmelnytsky Oblast ranks 14th among 27 regions

of Ukraine by population (2.9 %) and 17th by share in
the countrys GDP (1.73 %). The gross regional product
of the oblast is UAH 11,780 per capita, which is 59% of
the national average.
Figure 5.22
Khmelnytskys performance by 12 pillars of competitiveness

Khmelnytsky
7
3.8
4.3
4.3
4.5
3.9
4.0
3.4
4.9
3.9
4.3
5.8
6.0
3.5
4.2
4.3
58
5.0
3.7
4.0
4.8
4.9
3.8
4.1
2.7
4.2
1.6
3.6
3.3
3.7
3.7
4.2
2.8
Figure 5.23
3.3
The most problematic factors for doing business in Khmelnytsky

Corruption
17
Tax regulations
15
Policy instability
14
12
16
15
Tax rates
7
6
Inflation
Access to financing
Crime and theft
Poor public health
7
5
6
3
4
6
2
2
2
2
3
Khmelnytsky

1
10
15
20
25
Kirovohrad
Rank 26
Kirovohrad Oblast exceeds the national average in Business sophistication and Institutions.
The oblast scores low in Health and primary education, Technological readiness, Higher education and training and Infrastructure.
The biggest obstacles for doing business in the region include tax
policy, government policy instability and corruption.
Kirovohrad Oblast ranks 25th in Ukraine by population and 22nd by contribution to national GDP. The region is home to 2.2% of Ukrainian citizens and produces
1.5% of GDP. The oblasts GRP per capita is UAH 13,096,
which is one-third less than Ukraines average.
Kirovohrad Oblasts competitiveness index was calculated for the first time this year. The oblast takes 26th
position in the national competitiveness report, ahead of
Kherson Oblast only. Its aggregate index is 3.68 points,
0.19 points below the average of 27 regions. Kirovohrad
Oblast takes second to last place in both the Basic Re-
quirements and the Efficiency Enhancers sub-indexes;

yet it performs a bit better in the sub-index of Innovation
and Sophistication Factors, taking 18th position.
The pillars Institutions and Business sophistication
brought the highest scores to the region (16th and 13th,
respectively), while in Higher education and training
(27th), Technological readiness (27th), Infrastructure
(26th) and Health and primary education (26th) Kirovohrad Oblast received its lowest scores.
Kirovohrads relatively good position in Business sophistication (13th, between Kyiv and AR Crimea) comes
from its strong control of international distribution (2nd,
0.5 points above the Ukraines average), nature of competitive advantage (11th), local supplier quality (11th)
and local supplier quantity (13th). Weak factors in this
pillar include modest production process sophistication
and extent of marketing (both 21st). These last two scores
correspond to those of countries above the one-hundred
mark in the global ranking.
The region performed better than average in Institutions, taking 16th place in the national index. Kirovohrad
Oblast outperformed other Ukrainian regions in intellectual property protection (5th), public trust of politicians
(7th), irregular payments and bribes (3rd), judicial independence (6th) and level of organized crime (5th).
The regions last-place ranking in Higher education
and training can be explained by its low scores in the
sub-pillars quality of education and on-the-job training.
The region has very poor quality of management schools
(24th), a low quality of the educational system in general
(26th) and poor Internet access in schools (25th). The
oblast lags noticeably behind other regions by tertiary education enrollment rate (24th : one-third below average).
At the same time, business leaders give local availability
of specialized research and training services an average
score(19th).
Kirovohrad Oblast is an outsider in the regional index in terms of Technological readiness, with very low
scores in FDI and technology transfer (26th) and availability of latest technologies (24th). In the last indicator,
the oblast loses out to all 142 countries in the global index. The region has few mobile telephone subscriptions
(25th, 38% below the average). However, it boasts a fairly
high level of firm-level technology absorption (8th).
The region received poor marks for Health and primary education, where it ranks only ahead of Mykolayiv
Oblast. This is due primarily to high infant mortality
(25th) and low life expectancy (25th). The latter indicator ranks in 102nd place among 142 countries. Business leaders also give a very low assessment to the quality of primary education (26th). At the same time, HIV
prevelance in the oblast is not as bad as in other regions
(10th position, 42% lower than average).
Regional business executives are negative about the
oblasts Infrastructure (26th). They call the quality of
roads the worst in Ukraine (27th, almost one point below
the average). By quality of railroad infrastructure, the region ranks 22nd, which is in line with Ukraines average
national score. The oblast has zero available seat kilometers due to low demand, although it has an airport with a
new international terminal. Kirovohrad Oblast also lags
behind in fixed telephone lines (23rd) and mobile telephone subscriptions (25th).
Institutions are the core strength of the oblast; in

this pillar, the region takes a high 3rd position. This is
largely due to high scores for quality of public institutions. Business managers give a high assessment to judicial independence (2nd), intellectual property protection (4th), the low level of irregular payments and bribes
(4th), reliability of police services (4th), and small business costs of crime and violence (2nd). The executives
polled believe that protection of minority shareholders
interests is the best in Ukraine (but takes a low 108th position in the global index). At the same time, the oblast
performs below the Ukrainian average in terms of ethical
behavior of firms and efficacy of corporate boards.
Health and primary education is the second pillar
where the region has relative advantages (8th). Khmelnytsky Oblast has low infant mortality (4th) and high life
expectancy (8th). In general, businesses are happy with
the quality of primary education (8th).
The oblast performs well in the Labor market efficiency pillar (10th), too. Business managers give high
scores to cooperation in labor-employer relations (5th),
extent and effect of taxation, brain drain (both 5th) and
pay and productivity (6th). However, the region has
scored low in terms of flexibility of wage determination
(25th).
Khmelnytsky Oblast is behind other regions in
Macroeconomic environment (25th). The region is in
second-to last place by interest rate spread and 17th by
inflation.
Also, the oblast lags behind most regions of Ukraine
in the Infrastructure pillar (25th). Business managers
note primarily the poor quality of roads (21st), but also
relatively few fixed telephone lines and mobile telephone
subscriptions (20th and 27th, respectively). At the same
time, businesses are relatively positive about quality of
electricity supply (7th) and overall infrastructure (10th).
Finally, the third pillar leading to a low aggregate
score for the region in the ranking is Technological readiness (23rd). Along with low telephone penetration, the
oblast performs badly in terms of availability of latest
technologies (19th) and firm-level technology absorption (23rd).
59
Figure 5.24
Kirovohrads performance by 12 pillars of competitiveness

Kirovohrad
7
3.7
4.3
4.2
4.5
3.7
4.0
3.3
4.9
4.0
4.3
5.5
6.0
3.4
4.2
4.1
5.0
3.7
4.0
4.8
4.9
4.1
3.7
2.6
4.2
1.4
3.6
3.3
3.7
3.8
4.2
2.7
Figure 5.25
60
The most problematic factors for doing business in Kirovohrad

Tax regulations
16
Policy instability
15
16
12
11
Corruption
15
8
6
Inflation
Access to financing
Tax rates
Poor public health
Crime and theft
7
6
6
7
4
3
2
5
2
2
3
2
Kirovohrad
1
0
Kyiv
3.3
Rank 1
The City of Kyiv has competitive advantages in Infrastructure, Higher

education and training, Market size and Technological readiness.
The city lags behind other regions in its Institutions and Financial
market development pillars.
The most problematic factors for doing business in the city include
tax policy, corruption and government policy instability.
Kyiv city ranks 3rd among 27 regions of Ukraine by

population, and 1st by contribution to the nations GDP
(18.6%). Per capita, GRP of the special-status city totals
UAH 61,088, or 3.55 times greater than the national average.
10
15
20
25
Kyiv city tops the Ukraines Regions Competitiveness Report, followed by Dnipropetrovsk and Kharkiv
oblasts. The aggregate score of Kyivs competitiveness is
4.26 points, which is 0.39 points (10%) higher than the
average competitiveness index of 27 Ukrainian regions
(3.87 points). Compared to last years index, also led by
Kyiv, the city has slightly increased its total score. And
while the city has outstripped other regions in the Basic
Requirements and Efficiency Enhancers sub-indexes, it
has lost 10 positions in the Innovation and Sophistication Factors sub-index.
Kyiv received the highest scores for Infrastructure
(1st among 27 Ukrainian regions), Higher education and
training (1st), Market size (1st) and Technological readi-
Kyivs performance by 12 pillars of competitiveness

Kyiv
7
4.3
4.3
4.5
4.5
3.2
4.0
4.9
4.9
4.3
4.2
6.0
5.8
4.2
4.2
5.0
5.0
4.0
3.9
4.9
4.9
4.1
3.8
4.2
4.2
3.6
3.6
3.7
3.4
4.2
3.9
3.0
ness (1st). At the same time, the city features in the bottom half of the list in the Institutions (27th) and Financial market development (17th) pillars. A significant loss
of rankings in the Innovation and Sophistication Factors
sub-index is also a concern.
Kyiv is unrivalled in Technological readiness, where
it leads in almost every indicator, performing noticeably
higher than the average score of 27 Ukrainian regions.
Compared to scores of 142 countries in the Global Competitiveness Index for this year and last, Kyiv has moved
up 18 positions. In particular, it is a global leader in terms
of Internet users (1st position), fixed telephone lines (6th
position) and mobile telephone subscribers (1st position). Despite relatively good performance in use of Internet and telecommunication technologies, the latest
technology absorption remains problematic compared
with other countries. So, in terms of FDI and technology
transfer the city has lost more than half a point and is in
the group of countries at the very bottom of the Global
Competitiveness Index (139th).
Kyiv is well ahead by Market size, where it scores
more than twice as high as the average score of 27 regions. Here a very high score in terms of imports as a
percentage of GRP should be mentioned, which takes
7th place globally.
Kyiv takes first place in the national index in the
Higher education and training pillar because it significantly surpasses other Ukrainian regions in terms of secondary and tertiary education enrollment rate (both 1st
position). At the same time, the city has lost half a point
in its score for quality of the educational system and has
gone down to 29 place in the global index equivalent
year-on-year. In the national index, Kyiv ranks only 17th
in quality of the educational system below even the average national score. In this indicator, the city has lost an
equivalent of 34 positions in the global index.
Figure 5.26
3.3
Kyiv is the rank outsider and received the lowest

score (3.18 out of 7) among Ukrainian regions in the Institutions pillar. This score is fully calculated on the basis
of the executive opinion survey. As with most other regions, the city scored very low in property rights (27th
position among 27 regions) and intellectual property
protection (22nd). Kyiv also ranks very poorly in public
trust of politicians (27th in the regional index, equivalent
to the last position among 142 countries), irregular payments and bribes (27th), judicial independence (27th),
burden of government regulation (27th), efficiency of
legal framework (27th), organized crime (26th) and protection of minority shareholders interests (24th . In all
these indicators, the city has scored worse than last year
and matches the performance of countries whose ratings
exceed the 100 mark in the global index. At the same
time, the indicator of wastefulness of government spending has evidently increased (almost by one point), moving up the citys rating from above 100 to 57th position in
the global index.
Similar to its 2010 performance, the city has received
a poor score (3.8 of 7) for Financial market development.
As a result, Kyiv can take only 92nd position among 142
countries. In contrast to last year, Kyiv has lost its ranking among the regional leaders for this pillar in the national index, dropping to 17th place in Ukraine. Financing through local equity market (4th position among
Ukrainian regions, but 101st in the global index), ease
of access to loans (1.99 of 7 points and 23rd regionally),
regulation of securities exchanges (22nd) and soundness
of banks (23rd) remain the most problematic indicators.
Curiously, although the city has improved its score in the
last indicator by almost one point, it has lost 19 positions
in the national index. This shows that trust in the banking system in other regions of Ukraine is increasing more
rapidly.
61
Figure 5.27
The most problematic factors for doing business in Kyiv

18
Tax regulations
16
Policy instability
12
15
16
12
Tax rates
Inflation
Access to financing
Crime and theft
Poor public health
6
7
6
5
7
6
2
3
4
3
2
2
1
Kyiv
1

2
Kyiv Oblast
62
Corruption
Rank 4
Kyiv Oblast has competitive advantages in Macroeconomic environment, Technological readiness and Health and primary education.
The oblast lags behind other regions in the Higher education and
training, Business sophistication and Innovation pillars.
Corruption, government policy instability and tax policy are the most
The region takes 7th place in share of Ukraines

GDP and 10th for population. It is home to 3.8% of the
countrys citizens, who produce 4.1% of the national
GDP. As calculated per capita, the oblasts GRP is 110%
of the Ukrainian average (UAH 21,769 in 2009).
The competitiveness index of Kyiv Oblast has been
calculated for the first time this year. The region immediately took 4th position in the ranking, between Kharkiv
and Donetsk oblasts, with an aggregate index of 4.04
points, which exceeds Ukraines average (3.87) by 0.17
points. The oblast received high scores in the Basic Requirements sub-index (3rd among Ukrainian regions)
and the Efficiency Enhancers sub-index (5th). Its rank in
the sub-index Innovation and Sophistication Factors is
slightly lower (13th).
Kyiv Oblast is the leader in Macroeconomic environment (1st), taking high places in Technological readiness (2nd) and Health and primary education (3rd) as
well. The relative weaknesses of the oblast include Higher
education and training, Business sophistication and Innovation, where it ranks 17th, 15th and 13th, respectively.
The region performed well in the Macroeconomic
environment pillar because of comparatively low inflation (7.9% - 2nd in the country) and small interest
rate spread (2nd). On the other hand, these scores are
not that high compared to the global index, where Kyiv
Oblast ranks 118th for inflation and 88th for interest rate
spread (a little lower than Greece and Estonia). The other
indicators in the Macroeconomic environment pillar are
national and do not influence individual regions posi-
10
15
20
25
tions in the ranking.

Kyiv Oblasts leading position in Technological
readiness is due to the high assessment it received for FDI
and technology transfer and number of Internet users.
Business executives in Kyiv Oblast give only 3.25 points
to the former indicator, yet a low national average (2.72)
puts the region in second place for technology transfer.
For number of Internet users, the oblast ranks second
(74.4%) in Ukraine as well, and 20th in the world (on par
with Estonia and Australia). At the same time, mobile
telephone subscriptions (12th) and fixed telephone lines
(11th) somewhat worsen the aggregate score of the oblast
in Technological readiness.
In the Health and primary education pillar, Kyiv
Oblast loses out only to two regions, Sevastopol City and
Zakarpattya Oblast. Education is a strong component.
The oblast shows the highest primary education enrollment rate (100%), sharing leadership in this indicator
with Zakarpattya Oblast in both the national and global
rankings. The quality of primary education is evaluated
relatively highly as well, putting the oblast in 7th place. In
terms of health, the region performed worse, except for
the infant mortality indicator. By life expectancy, business impact of HIV/AIDS and HIV prevalence, the oblast
takes positions 19th, 18th and 18th, respectively. Infant
mortality in Kyiv Oblast is the second lowest among
Ukrainian regions after Poltava. Tuberculosis incidence
is also relatively low 57.6 cases per 100,000 population
9th among 27 regions.
On the other hand, the oblast has scored low in
Higher education and training, primarily because of a
low tertiary education enrollment rate (24th). However,
this low score for the oblast is due to the fact that it is
administratively separated from Kyiv City, which attracts
students of college and vocations schools from all over
the region. Business leaders give low scores to availability
of research and training services (20th). Other indicators
of Higher education and training get better scores. In two
of them - Internet access in schools and secondary education enrollment Kyiv Oblast tops the rankings.
Low scores in state of cluster development (26th)
Figure 5.28
petitive weakness of the oblast. Kyiv Oblast is among the

worst performers in capacity for innovation and university-industry collaboration in R&D, taking 20th places in
each. The performance in the latter indicator is extremely
weak and corresponds to 122nd place in the global index
(at the level of Nicaragua). On the other hand, business
managers note quite a high quality of scientific research
institutions (3rd) and company spending on R&D (7th)
in the oblast.
Kyiv Oblasts performance by 12 pillars of competitiveness

Kyiv Oblast
7
4.0
4.3
4.5
4.5
3.8
4.0
3.9
4.9
4.3
4.3
5.9
6.0
3.8
4.2
4.3
5.0
4.0
4.0
4.8
4.9
4.1
3.9
3.6
63
4.2
2.4
3.6
3.3
3.7
3.8
4.2
2.9
Figure 5.29
3.3
The most problematic factors for doing business in Kyiv Oblast

Corruption
16
Policy instability
14
15
12
14
Tax regulations
16
8
6
Inflation
Tax rates
Access to financing
Poor public health
7
7
5
6
6
4
3
2
2
Crime and theft
1
3
2
Kyiv Oblast
1
0
and reliance on professional management (23rd) have

affected the overall pillar ranking of Business sophistication in the oblast. In the former indicator, the region is
0.77 points behind Ukraines average. The score of 2.96
points means that cooperation between firms, suppliers,
partners and specialist institutes within clusters is underdeveloped. On the other hand, the region leads in production process sophistication, with 3.77 points against
Ukraines average of 3.10.
The level of Innovations is the third relative com-
10
15
20
25
Luhansk
(UAH 16,562 in 2009).

In the 2011 national ranking, the oblast takes 13th
place, between Volyn and Vinnytsya oblasts. Compared
to last year, the oblast has lost 0.05% points but still
moved one rank up. This year, the aggregate score of the
oblast is equal to the national average - 3.87.
The strength of Luhansk Oblast is Innovation and
Business Sophistication Factors. For this sub-index, the
oblast ranks 9th out of 27 regions of Ukraine. For the
sub-indexes Basic Requirements and Efficiency Enhancers, Luhansk ranks 18th and 10th, respectively. It demonstrates the best results in Business sophistication (5th),
which falls under Innovation and Business Sophistication Factors, and in Market size (8th), which falls under
Efficiency Enhancers. Luhansk Oblast lags behind other
Rank 13
The competitive advantages of Luhansk Oblast are Business sophistication and Market size.
The oblast ranks poorly in Institutions, Labor market efficiency and

Health and primary education.
The most problematic factors for doing business in the region are
tax policy, corruption and government policy instability.
Luhansk Oblast ranks 7th among 27 Ukrainian

regions by population as well as by contribution to the
countrys GDP. It accounts for 5% of Ukraines population and generates 5% of Ukraines GDP. As calculated
per capita, GRP of the region is 84% of Ukraines average
Figure 5.30
Luhansks performance by 12 pillars of competitiveness

Luhansk
7
3.9
4.3
4.3
4.5
3.6
4.0
3.7
4.9
4.1
4.3
5.7
6.0
3.6
4.2
4.4
64
5.0
3.7
4.0
4.7
4.9
4.1
3.8
2.8
4.2
2.2
3.6
3.5
3.7
4.0
4.2
3.0
Figure 5.31
3.3
The most problematic factors for doing business in Luhansk

Tax regulations
18
Corruption
15
Policy instability
12
16
15
12
Inflation
Tax rates
7
7
4
Access to financing
6
6
6
5
2
2
2
3
2
3
2
Crime and theft
2
2
1
2
Poor public health
Luhansk
1
0
10
15
20
25
Lviv
Rank 10
Lviv Oblast has relative competitive advantages in the Health and

primary education, Higher education and training and Market size
pillars.
The oblast trails other regions in Institutions, Labor market efficiency

and Innovation and sophistication factors.
The most problematic factors for doing business in the oblast include tax policy, corruption and government policy instability.
Lviv Oblast ranks 5th in Ukraine by population and

9th by contribution to national GDP (3.9%). The regions
GRP per capita totals UAH 14,093, or 82% of Ukraines
average.
The region places 10th in the Ukraines Regions
Competitiveness Report, between Poltava and Mykolayiv
oblasts. The aggregate score of Lviv Oblast in the Competitiveness Report is 3.88, which just exceeds the average competitiveness index of 27 Ukrainian regions (3.87).
Compared to the 2011 report, the oblast has lost six positions in the ranking. The region performed noticeably
worse in the Basic Requirements and Innovation and
Sophistication Factors sub-indexes, and has gone slightly
down in the Efficiency Enhancers sub-index.
Lviv Oblast received the highest scores for Health
and primary education (6th among 27 Ukrainian regions), Higher education and training (7th) and Market
size (7th). At the same time, the oblast features at the bottom of the ranking in Institutions (24th), Labor market
efficiency (22nd) and Business sophistication (20th).
The executive opinion survey has shown that the
oblast performs fairly well in terms of Health and primary education, with a score almost half a point higher
than last year. This corresponds to a 51st position in the
global index of 142 countries. The oblast is in the top 10
among 27 regions of Ukraine for HIV prevalence (5th),
life expectancy (5th), primary education enrollment rate
and quality of primary education (10th and 6th, respectively). At the same time, business sees high risks from
the business impact of tuberculosis and HIV (19th and
21st, respectively).
Lviv Oblast retains a high national score in the
Higher education and training pillar primarily because
of its leadership in the tertiary education enrollment rate
(4th among 27 Ukrainian regions) and quality of regional
management schools (6th). Yet, the region lags significantly behind in the last indicator globally, with its score
corresponding only to 126th place.
Lviv Oblast takes 7th place in the regional ranking
for Market size due to its 7th place in the domestic market size index. At the same time, the indicator of exports
as a percentage of GRP is one-third lower than Ukraines
average, which puts the region only in 20th place in the
national ranking and 127th in the global ranking.
In contrast to last year, Institutions are the most
problematic pillar for the oblast in the Index 2011. The
region has lost 21 positions in the national ranking, with
a score that puts it at 102nd place in the GCI ranking.
This sudden drop is primarily caused by the loss of points
and positions in intellectual property protection (25th
among 27 Ukrainian regions, and one point down compared with last years score), diversion of public funds
regions in the pillars: Institutions (21st), Labor market

efficiency (19th) and Health and primary education
(17th).
The region scored 3.98 points for Business sophistication, which makes for a relatively high 63rd position
in the global ranking. According to Executive Opinion
Survey, the regions strengths include control of international distribution (4th out of 27 regions), local supplier
quality (5th) and state of cluster development (6th). In
the global index, the oblast occupies a high 14th position
in control of international distribution. At the same time,
company executives give a poor evaluation to local supplier quantity in Luhansk Oblast (17th).
One more competitive advantage of Luhansk Oblast
is its Market size. The oblast takes 8th place in the national ranking for this pillar, which is the same rating the
oblast gets for GRP and share of Ukraines population
(according to statistical data). The oblasts good results
for foreign market size (6th) largely contribute to a higher position of the region in the Market size pillar.
The weak points of Luhansk Oblast include the Institutions pillar (21st). The situation is the worst with
business costs of terrorism (on the bottom of the national
ranking in 27th position). However, in the global ranking, the regions score for this indicator occupies a relatively high, 49th, position. Other low-ranking components that contribute toward a poor overall index for the
oblast include ethical behavior of firms (25th regionally
and 123th globally), business costs of crime and violence
and, as a result, organized crime (24th position for both
indicators in the national ranking). Compared to last
year, the oblasts scores on these indicators have significantly dropped: by 0.63 and 0.61 points accordingly. The
oblast also moved down in intellectual property protection (minus 0.78 points). For diversion of public funds
the region, on the contrary, has significantly improved its
position: this year business executives gave a higher evaluation of this indicator (plus 0.98 points). Other strong
components of the Institutions pillar include efficiency
of legal framework in settling disputes (4th) and a relatively low level of irregular payments and bribes (5th).
Labor market efficiency is also a weak spot of Luhansk Oblast (19th in the national ranking). Business
executives are unhappy with the first two components
of the pillar: labor-employee relations and flexibility of
wage determination. They believe that labor relations
in the region are more about conflicts than partnership
cooperation, while the salary is determined on the basis
of legal requirements and trade union agreements. For
these indicators, the region ranks 26th and 27th out of 27
Ukrainian regions respectively.
Health and primary education is also a problematic
factor for the oblast (17th regionally). The region has low
scores on almost all indicators of this pillar. The worst situation is with primary education enrollment rate (23rd),
TB incidence (23rd) and infant mortality (19th). Despite
high TB incidence (82.5 people for 10,000) company executives do not regard it as a big obstacle to doing business (13th). However, in the global ranking the oblast
is near the bottom of the list for TB Incidence 128th.
Luhansk Oblast is also ranked 18th on life expectancy in
Ukraine (68 years).
65
Figure 5.32
Lvivs performance by 12 pillars of competitiveness

Lviv
7
4.3
3.9
4.5
4.2
4.0
3.5
4.9
3.6
4.3
4.1
6.0
5.9
4.2
3.7
5.0
4.6
4.0
3.8
4.9
4.7
4.1
3.8
4.2
3.0
3.6
2.3
3.7
3.3
4.2
3.7
3.3
2.9
Figure 5.33
66
The most problematic factors for doing business in Lviv

Tax regulations
17
Corruption
15
16
15
12
Policy instability
12
Inflation
Access to financing
Tax rates
Crime and theft
Poor public health
7
6
6
6
7
3
5
4
3
1
2
2
2
Lviv
1
0
(24th, minus 0.9 points) and in the entire sub-pillar of security indicators, particularly business costs of crime and
violence (22nd) and reliability of police services (26th).
As with last year, the oblast is behind others in the
Labor market efficiency pillar, taking 22nd position in
the national ranking. Lviv Oblast has not seen many
changes in most indicators of this pillar compared to last
year. Exceptions are the indicators of hiring and firing
practices and brain drain, where the region has lost almost one point in each area, taking 25th and 26th positions, respectively. The brain drain score corresponds to
10
15
20
25
a very low 130th position in the global index.

In terms of Business sophistication Lviv Oblast
ranks 20th in the index of Ukrainian regions, after losing
four positions against last year. The oblast still scores low
for local supplier quality (24th) and value chain breadth
(21st). In both indicators the regions rank corresponds
to country scores exceeding the one-hundred mark of
the global index. At the same time, the region has shown
positive change in the state of cluster development, moving up eight positions regionally and improving its score
by more than a full point from last year.
Rank 11
The relative competitive advantages of Mykolayiv Oblast include

Innovation, Goods market efficiency and Macroeconomic environment.
The oblast is behind other regions of Ukraine in Health and primary

education, Labor market efficiency and Higher education and training.
Mykolayiv Oblast ranks 18th in Ukraine by population and 12th by share of national GDP. The region is
home to 2.6% of Ukrainian citizens and produces 2.2%
of GDP. The gross regional product of the oblast is UAH
17,050 per capita, which is 14% less than Ukraines average.
Mykolayiv Oblasts competitiveness index has been
calculated for the first time. The region has immediately
taken a relatively high 11th position, between Lviv and
Volyn oblasts, with the aggregate score of 3.87 points
equal to the average index calculated for Ukraines 27
regions. As compared with other regions, the oblast gets
its competitive advantages from the third sub-index of
Innovation and Sophistication Factors (5th). In the other
two sub-indexes, Efficiency Enhancers and Basic Requirements, the oblast takes middle positions - 15th and
12th, respectively.
Mykolayiv Oblast has received the highest scores
for Innovation (5th), Goods market efficiency (6th) and
Macroeconomic environment (7th). The worst results
are in Health and primary education (27th), Labor market efficiency (20th) and Higher education and training
(19th).
Mykolayiv Oblast is in Ukraines top five for InnoFigure 5.34
vation owing to its having the countrys best capacity for

innovation and government procurement of advanced
technology products. In these two indicators, its performance is significantly higher than Ukraines average. The
regions capacity for innovation corresponds to a high
23rd place in the global index. Also, business managers
highly assess the company spending on R&D (5th). On
the other hand, the oblast is significantly behind other
regions in quality of scientific research institutions (24th
among 27 regions).
The goods market is highly efficient in Mykolayiv
Oblast (6th) because of low extent of market dominance
(3rd) and high degree of customer orientation (5th).
Also, the region has relatively high imports as a percentage of GDP (7th) and intensity of local competition
(8th). On the other hand, the low prevalence of foreign
ownership (24th) and large extent and effect of taxation
(17th) weaken the oblasts position in the Goods market
efficiency pillar overall.
The region takes last (27th) place in Health and primary education, with low scores in both components of
the pillar. HIV prevalence in the region is 2.5 times higher than the national average (25th) and corresponds to
106th place in the global index. Thus, the business impact
of HIV/AIDS is also high (26th in Ukraine and 115th in
the world). The oblast also has a high tuberculosis prevalence (25th) and low life expectancy (68 years, 26th in
the regional index). The enrollment rate and quality of
primary education are also among the worst - the region
takes 25th and 24th places in these indicators, respectively.
The poor performance of Mykolayiv Oblast in Labor
market efficiency (20th) can be explained by the regions
low ratio of female participation in labor force (24th)
and no flexibility of wage determination (23rd). Business
executives give low points to hiring and firing practices
Mykolayivs performance by 12 pillars of competitiveness

Mykolayiv
7
4.3
3.9
4.5
4.3
4.0
3.7
4.9
3.8
4.3
4.1
6.0
5.5
4.2
3.6
5.0
4.3
4.0
3.9
4.9
4.7
3.8
4.1
4.2
3.1
3.6
1.8
3.7
3.5
4.2
3.9
3.2
3.3
Mykolayiv
67

68
Figure 5.35
The most problematic factors for doing business in Mykolayiv

Tax regulations
18
Corruption
16
Policy instability
13
16
15
12
Inflation
Access to financing
Tax rates
6
6
7
6
7
5
Crime and theft
Poor public health
4
3
2
2
1
2
3
Mykolayiv
1
0
(20th). Despite a relatively low place in the national index for pay and productivity (20th), the score of the region is comparable to 8th place among 142 countries. At
the same time, its good 8th position among 27 regions
for brain drain corresponds only to 103rd place in the
global ranking.
Mykolayiv Oblast ranks low in the Higher education and training (19th) pillar. The indicators of the quality of education are the weakest. The region is among the
outsiders in quality of math and science education (25th)
and quality of management schools (16th). This last indicator was assessed by businesses leaders at the level
of 135th globally. Secondary education enrollment and
tertiary education enrollment rates are not high either 17th and 18th, respectively. In terms of on-the-job training the region shows low extent of staff training (23rd).
On the other hand, availability of research and training
services (6th) and Internet access in schools (10th) raise
the regions score somewhat in higher education and
training.
Odesa
Rank 8
Odesa oblast received high marks for Infrastructure, Technological

readiness and Higher education and training.
Odesa lags behind other regions Institutions, Labor market efficiency and Financial market development.
Corruption, tax policy and government policy instability are the most
Odesa Oblast ranks 6th among 27 regions of

Ukraine by population (5.2%) and 5th by share of national GDP (5.3%). The regions GRP per capita totals
UAH 20,341, or 118% of Ukraines average.
In 2011, the oblast took 8th place in the national
index, coming between the city of Sevastopol and Poltava
Oblast. Compared to last year, the region is up four positions, receiving 3.95 score (over last years 3.94 score).
In contrast to most regions of Ukraine, Odesa shows a
relatively wide range of scores under different pillars of
10
15
20
25
economic competitiveness. Thus, in the first two subindexes, Basic Requirements and Efficiency Enhancers
the region takes 8th and 6th places, respectively; while in
the third sub-index, Innovation and Sophistication Factors, it is only 22nd. The region could have performed
even better in the Basic Requirements sub-index if it had
had higher scores for Institutions and Macroeconomic
environment.
Odesa Oblast received the most points for Infrastructure (3rd), Technological readiness (4th) and Higher education and training (5th). At the same time, it loses
out to other regions in Institutions (26th), Labor market efficiency (25th) and Financial market development
(24th).
Business managers give relatively high scores to
Odesas quality of overall infrastructure (13th). The
oblast also tops the national ranking in quality of port
infrastructure and performs better than average in telephone penetration. At the same time, the quality of roads
and electricity supply is lower than Ukraines average
(14th and 27th, respectively).
The oblasts Technological readiness (4th) contributes to its overall competitiveness. Thus, the region takes
third place for information and communication technologies, primarily because of penetration of fixed telephone
lines and a moderate level of mobile telephone subscriptions, where Odesa takes 2nd and 18th places, respectively. However, firm-level technology absorption is assessed
much lower (26th).
The oblast is a relatively strong competitor in Higher education and training (5th). As with technological
readiness, in this pillar Odesa outperforms other regions
mostly in quantitative indicators. At the same time, business managers give low scores to extent of staff training
(27th) and quality of the educational system (19th).
The region has scored low in the sub-index of Innovation and Sophistication Factors (22nd), performing
badly in both the Innovation and Business sophistication
pillars. Businesses give few points to capacity for innovation and government procurement of advanced technology products 19th and 25th, respectively.
Odess performance by 12 pillars of competitiveness

Odesa
7
4.0
4.3
4.4
4.5
3.3
4.0
4.3
4.9
4.0
4.3
5.9
6.0
3.8
4.2
4.7
5.0
3.8
4.0
4.6
4.9
4.1
3.7
4.2
3.3
3.6
2.5
3.7
3.2
4.2
3.7
3.3
2.8
Figure 5.37
Figure 5.36
The most problematic factors for doing business in Odesa

Corruption
18
69
15
Tax regulations
17
Policy instability
Access to financing
Inflation
16
12
6
7
3
6
6
Tax rates
5
4
7
2
Crime and theft
3
2
Poor public health
2
2
Odesa
1
0
As with Kyiv Oblast, Odesa Oblasts business leaders

assess the regions Institutions, both public and private,
extremely low (26th). The most problematic factors for
doing business are the following aspects of governmental
institutions: diversion of public funds, judicial independence, favoritism in decisions of government officials,
wastefulness of government spending and irregular payments and bribes. In all these indicators, Odesa Oblast
takes 26th place. The region also has received low scores
for protection of minority shareholders interests (21st)
and ethical behavior of firms (20th).
Labor market efficiency is another competitiveness
pillar downgrading the aggregate score of Odesa Oblast
(25th). Inefficient use of skilled employees is the big-
10
15
20
25
gest issue here: pay and productivity ratio is the worst in

Ukraine. Also, the region has a relatively low ratio of female participation in the work force. However, the oblast
scores high in labor market flexibility 2nd by flexibility
of wage determination and hiring and firing practices in
the national index.
Finally, Odesa Oblast demonstrates poor performance in Financial market development, taking 24th position in this pillar. Business executives believe that the
oblast is behind others by availability of financial services
(26th) and ease of access to loans (25th). In the latter indicator, the region scored 1.8 points, which is at the level
of Argentina (134th in the global index).
Poltava
to 3.3% of Ukraines population, producing 3.7% of the

countrys GDP.
Poltava Oblast ranks 9th in the Ukraines Regions
Competitiveness Report, falling between Odesa and Lviv
regions. Its aggregate score of 3.94 points is 0.07 higher
than the average for the entire country. The oblast has
dropped one rank since 2010. Poltava Oblast has comparative advantages in the sub-indexes Efficiency Enhancers
and Innovation and Sophistication Factors (ranking 8th
in both). The region takes 10th place in the sub-index Basic Requirements among Ukrainian regions.
The oblast has performed the best in Financial market development (4th), Institutions (6th) and Innovation
(7th). On the other hand, Macroeconomic environment,
Rank 9
Poltava Oblast has competitive advantages in Financial market development, Institutions and Innovation
The oblast trails other regions in Macroeconomic environment,

Health and primary education and Technological readiness
The biggest obstacles for doing business in the region include tax
policy, government policy instability and corruption
Poltava Oblast is 12th in Ukraine by population and

10th by share of national GDP. As calculated per capita,
the gross regional product of the oblast is UAH 22,337,
or 13% higher than Ukraines average. The oblast is home
Figure 5.38
Poltavas performance by 12 pillars of competitiveness

Poltava
7
3.9
4.3
4.3
4.5
3.8
4.0
3.9
4.9
4.0
4.3
5.7
6.0
3.7
4.2
4.6
70
5.0
3.9
4.0
4.8
4.9
4.0
4.1
2.9
4.2
2.1
3.6
3.5
3.7
3.9
4.2
3.1
Figure 5.39
3.3
The most problematic factors for doing business in Poltava

Tax regulations
18
Policy instability
16
Corruption
13
16
12
15
Tax rates
Inflation
7
7
6
Crime and theft
Access to financing
Poor public health
4
6
3
2
1
2
2
6
2
5
Poltava
1
0
10
15
20
25
Figure 5.40
The moderate ranking (16th) in Health and primary

education comes primarily from low enrollment rate and
poor quality of primary education. Poltavas primary education enrollment rate ranks 16th in the Ukrainian index
and 69th in the global index. Quality of primary education puts the oblast in the somewhat poor 18th place. Poltava Oblast also has a low life expectancy (69 years, 15th
in Ukraine) and a relatively high HIV prevalence (14th).
In addition, the region has room to grow in Technological readiness (11th out of 27 regions). Business executives underline limited availability of latest technologies
(22nd) and a low level of FDI and technology transfer
(20th). In the latter indicator, the oblast rides the bottom
line in the global index. Scores for firm-level technology
absorption correspond to the national average and put
Poltava Oblast in 11th place among 27 regions.
Rivne
Rank 17
The competitive advantages of Rivne Oblast are Labor market efficiency and Institutions.
The oblast lags far behind other regions in Technological readiness,

Infrastructure and Market size.
Tax policy, corruption and tax rates are the greatest obstacles to doing business in the Oblast.
Rivne Oblast is placed 20th among 27 Ukrainian regions in terms of both its population and its contribution
to the countrys GDP. It accounts for 2.5% of Ukraines
population and generates 1.5% of Ukraines GDP. As
calculated per capita, the GRP of the region is 59% of
Ukraines average (UAH 11,699 in 2009).
In 2011, Rivne places 17th in the Ukraines Regions
Competitiveness Index. Its aggregate score totals 3.81
points, which is 0.06 points below the national average.
Rivnes performance by 12 pillars of competitiveness

Rivne
7
4.3
3.8
4.5
4.3
4.0
3.8
4.9
3.5
4.3
4.1
6.0
5.7
4.2
3.5
5.0
4.5
4.0
3.8
4.9
4.9
4.1
3.8
4.2
2.6
3.6
1.5
3.7
3.3
4.2
3.8
2.9
3.3
Health and primary education and Technological readiness are the weakest factors of the regions competitiveness.
The regions high position in Financial market development comes from the best soundness of banks score
in the country (4.84 points, which is 0.38 points more
than Ukraines average), ease of access to loans (3rd) and
affordability of financial services (7th). Yet soundness of
banks in the oblast takes only 88th position among the
142 countries in the global index.
Poltava Oblast takes a high 6th place in the Institutions pillar, primarily because it has the nations lowest wastefulness of government spending (1st out of 27
regions), low business costs of crime and violence (4th)
low business costs of terrorism (5th) and strong ethical
behavior of firms (5th). In the first indicator, the oblast
beats the Ukrainian average and takes 21st place globally.
Transparency of government policymaking (23rd) and
efficiency of legal framework in challenging regulations
(20th) bring down the overall position of the region in
this pillar.
The oblasts good score in Innovation (7th) results
from the relatively high opinion of business managers of
Poltavas government procurement of advanced technology products (3rd; 0.5 points above the average) and a
relatively large number of utility patents (5th). Poltava
Oblast has received three times more patents than the
average Ukrainian region. Also, the oblast shows good
results for capacity for innovation (9th in Ukraine; 28th
in the world). Quality of scientific research institutions
(17th out of 27 regions) is the weakest indicator in this
pillar.
The oblast lags behind in terms of Macroeconomic
environment (22nd), which is primarily due to its wide
interest rate spread (23rd). On the other hand, the region has relatively low inflation (8.4% and 7th place in
the ranking).
71

72
Figure 5.41
The most problematic factors for doing business in Rivne

Tax regulations
17
Corruption
16
16
15
Tax rates
Policy instability
Inflation
Access to financing
Crime and theft
7
12
7
5
6
6
6
3
4
3
2
2
Poor public health
2
2
Rivne
1
0
Compared to last year, the oblast has lost 0.06

points, but managed to keep its positions in the ranking. The oblast does better in the third sub-index, Innovations and Sophistication Factors than in the first and
second sub-indexes: Basic Requirements and Efficiency
Enhancers. In the sub-index of Innovations and Sophistication Factors, the oblast ranks 14th regionally, while in
the other two sub-indexes, it places 17th.
Rivne scores its best marks for Labor market efficiency (1st out of 27 regions) and Institutions (7th). It
received the lowest scores in Technological readiness
(24th), Infrastructure (22nd) and Market size (22nd).
The high scores of the oblast for Labor market efficiency can be explained by its efficient use of talent
and the flexibility of the labor market. Rivne Oblast also
has close correlation between pay and productivity (2nd
position in the national index) and high level of female
participation in labor force (4th). In the first indicator,
the region exceeds the top scores in the Global Competitiveness Index, and in the second it occupies a high 10th
position. Business executives are quite satisfied with the
oblasts hiring and firing practices. For this indicator, the
region places 20th in the overall GCI and at 10th position
in Ukraine. Rivne oblast has significantly improved its
labor-employer relations year-on-year (plus 0.7 points).
The oblast also has a relatively high score in the Institutions pillar. Business executives note a lower level
of favoritism in decisions of government officials (1st
in Ukraine) and diversion of public funds (2nd) but a
higher level of protection of intellectual property rights
(3rd). On the other hand, weak spots of the region that
contribute to its lower scores in the Institutions pillar
include high business costs of terrorism (22nd) and low
reliability of police services (19th). In terms of private institutions, business executives also point to low efficacy
of corporate boards (25th) and protection of minority
10
15
20
25
shareholders interests (16th). Poor efficacy of corporate

boards is the result of low accountability of the companies management to the companys owners.
The poor performance of the oblast in the Technological readiness pillar can be explained by a low number
of Internet users (26th in Ukraine), fixed telephone lines
(24th), mobile telephone subscriptions and level of FDI
and technology transfer (24th). On the other hand, the
relatively high availability of latest technologies is a positive factor contributing to a higher score of the region in
the Technological readiness pillar (13th in regional ranking).
A small domestic market size is the most likely reason for the low scores of Rivne Oblast in the Market size
indicator (21st regionally). The Foreign market size index
is not high, but it scored better (19th). Compared to last
year, Rivne Oblast has lost more than three points in the
Market size pillar, but this was the result of using regional
macroeconomic data in index calculations rather than
the loss of competitive advantages by the region.
The weakest spots in the Infrastructure pillar in
Rivne Oblast include mobile telephone subscriptions
(24th in the national ranking: 87% of population) and
91st in the overall GCI ranking) and fixed telephone lines
(24th and 67th accordingly). Business executives do not
like the quality of air transport infrastructure either. Its
ranking is the worst in the overall GCI but is still better than in some other Ukrainian regions. However, the
oblast can boast about its quality of electricity supply,
which is the third best in Ukraine. The quality of railroad
infrastructure is also relatively high (10th). Rivne Oblast
has demonstrated a big breakthrough in the quality of
overall infrastructure and the quality of roads. It gained
1.33 and 1.24 points for each indicator, respectively, yearon-year, and received 15th and 12th positions in the
overall GCI ranking.
(UAH 16,966 in 2009).

This year is the first time Sevastopol has been included in the ranking. The city scores 3.96 points and
comes in 7th in the national ranking. Its aggregate score
exceeds the national average by 0.09. Sevastopol is a
leader in the three sub-indexes. The city ranks 2nd on the
Basic Requirements sub-index, and it ranks 3rd and 4th
on Efficiency Enhancers and innovation and Business Sophistication sub-indexes, respectively.
The city shows the best results in Healthcare and
primary education (ranked 1st out of 27 regions), Infrastructure (2nd) and Higher education and training (3rd).
The weakest points of the city include Market size (26th),
Macroeconomic environment (24th), Labor market efficiency (24th) and Institutions (17th).
Rank 7
Sevastopol has competitive advantages in Healthcare and primary

education, Infrastructure, and Higher education and training.
The city lags behind other regions in Market size, Labor market efficiency, Macroeconomic environment, and Institutions.
The most problematic factors for doing business in the city include
corruption, tax policy and government instability.
The City of Sevastopol is the smallest region in

Ukraine both by population and contribution to GDP.
The city is home to about 0.83% of Ukraines total population and generates 0.71% of the countrys GDP. Per
capita GRP makes up 86% of the nations average index
Figure 5.42
Sevastopols performance by 12 pillars of competitiveness

Sevastopol
7
4.0
4.3
4.5
4.5
3.7
4.0
4.3
4.9
3.9
4.3
6.0
6.0
3.6
4.2
4.9
5.0
3.9
73
4.0
4.7
4.9
4.0
4.1
3.2
4.2
1.2
3.6
3.6
3.7
4.0
4.2
3.2
Figure 5.43
3.3
The most problematic factors for doing business in Sevastopol

Corruption
16
Tax regulations
14
10
15
16
6
Policy instability
Inflation
Tax rates
6
7
12
2
7
5
Access to financing
Crime and theft
3
4
6
2
Poor public health
2
1
2
Sevastopol
3
1
0
Sevastopol
10
15
20
25

74
The citys high scoring on Healthcare and primary

education can be explained by high quality and high enrollment rate of primary education in the city. Sevastopol ranks 1st on the first indicator and 5th on the second
indicator in the national ranking. In the global ranking,
the city also takes fairly high positions for these indicators: 39th place for primary education enrollment and
45th for the quality of education. The city ranks 2nd in
terms of business impact of tuberculosis in the country,
but only takes 14th place for TB incidence. Sevastopol
also exhibits a high HIV prevalence (23rd , 99th in the
global ranking).
High positions in the Infrastructure pillar are due
to high scores in the quality of transport infrastructure
and telecommunication service penetration. Business
executives were highly satisfied with the quality of roads
(2nd position) and port infrastructure of the city (2nd
position). The quality of railroad infrastructure is also
relatively high (9th position). In terms of the quantity
of fixed telephone lines and mobile telephone subscriptions, Sevastopol ranks 3rd and 4th accordingly.
Sevastopol is among the top four regions in all pillars except for Higher education and training. The city
is a national leader in secondary education enrollment
rate and quality of math and science; it ranks 2nd on
the quality of management schools, Internet access in
schools and the extent of staff training. However, in the
international ranking, these indicators seem to be quite
low. For example, the quality of management schools is
ranked 115th out of 142 countries and the extent of staff
training 109th. Sevastopol also scores relatively low on
tertiary education enrollment rate among other regions
9th position in the ranking.
The low score of Sevastopol for the Market size indicator can be explained by the relatively small economy
of this city with a special legal status (27th). Due to having the countrys highest inflation rate, the city has also
received low scores on Macroeconomic environment.
Business executives give fairly low scores to cooperation in labor-employer relations (25th), pay and productivity ratio (26th) and reliance on professional management (24th). This explains the low position of the
city in the Labor market efficiency pillar. On the other
hand, in the global ranking, the city ranks 17th out of
142 countries on the pay and productivity ratio. It also
has a relatively high place both in the national and global
indexes for female participation in labor force (10th and
24th positions respectively).
One more competitive disadvantage of Sevastopol is
the level of institution development. The city scores low
on ethics and corruption: it ranks 25th on diversion of
public funds and 23rd on irregular payments and bribes.
Business executives note high judicial dependence
(23rd), business costs of terrorism (25th) and business
costs of crime and violence (21st). On the other hand,
business executives give a positive evaluation of the
ethical behavior of firms (3rd position), transparency of
government policymaking (5th position) and efficiency
of legal framework in challenging regulations (6th position). However, in the global ranking of these indicators,
Sevastopol is placed in the much lower 83rd, 47th and
101st positions, respectively.
Sumy
Rank 15
Sumy Oblast has relative competitive advantages in Innovation and

Sophistication Factors and Institutions.
The oblast is behind other regions in the Goods market efficiency

and Health and primary education pillars.
Sumy Oblast takes 19th place in Ukraine by population and 16th by share in Ukrainian GDP (1.8%). The
gross regional product of the oblast is UAH 13,631 per
capita, or 79% of Ukraines average.
The region ranks 15th in the Ukraines Regions
Competitiveness Report, between Vinnytsya and Cherkasy oblasts. The aggregate score of Sumy Oblast is 3.84,
which almost equals the average in the competitiveness
index of Ukraines 27 regions (3.87). Compared to the
2010 report, Sumy Oblast has climbed three positions.
However, the region has lost three positions in the Basic
Requirements sub-index, gained three ranks in the Efficiency Enhancers sub-index and gone up 13 positions in
the sub-index of Innovation and Sophistication factors.
In the sub-index that determines the regions capacity for sophistication and innovation, Sumy Oblast
has shown the best results in the Business sophistication and Innovation pillars. The oblast made the biggest
breakthrough in the state of cluster development (15th
among 27 regions) and value chain breadth (1st), having improved last years scores by 1.5 points. In the latter
indicator, the regions score is 0.8 point above Ukraines
average and corresponds to a high 33rd ranking in the
global index of 142 countries. Sumy Oblast has also
moved up significantly in capacity for innovation (5th)
and university-industry collaboration in R&D (1st), with
the region raising its score by one point in both indicators
since last year. The region takes a relatively high place in
the national index for control of international distribution (5th regionally and 14th internationally), extent of
marketing (6th place), willingness to delegate authority
(6th) and reliance on professional management (7th). At
the same time, Sumy lags behind in local supplier quantity (23rd) and production process sophistication (22nd)
in the national and international ratings, placing on par
with countries above the 100 mark in the global index.
Sumy Oblast is ahead of the leaders of the national
report in terms of Institutions, improving its score by
0.3 points and climbing two positions year-on-year. The
upgrade was caused firstly by improvements in property
rights (3rd place in the national index and a one point
increased over last year), diversion of public funds (4th
place; plus 0.5 points), wastefulness of government
spending (10th place; plus 1.2), and business costs of
terrorism (2nd place; plus 1.2 points). In the last indicator, the region scored as high as leaders of the index
of 142 countries. At the same time, the oblast is significantly behind other Ukrainian regions in transparency
of government policymaking (27th) and business costs
of crime and violence (26th), rounding out the national
index. Despite its high score among 27 Ukrainian regions
in judicial independence (3rd), the performance of the
region in the global index for this indicator corresponds
Sumys performance by 12 pillars of competitiveness

Sumy
7
3.8
4.3
4.3
4.5
3.8
4.0
3.7
4.9
4.0
4.3
5.6
6.0
3.6
4.2
4.6
5.0
3.7
4.0
4.8
4.9
4.1
3.9
2.8
4.2
1.7
3.6
3.5
3.7
3.9
4.2
3.1
Figure 5.45
Figure 5.44
3.3
The most problematic factors for doing business in Sumy
75
Corruption
16
Tax regulations
16
Policy instability
10
15
16
12
Tax rates
Inflation
Access to financing
7
7
6
6
6
3
2
4
5
3
Crime and theft
Poor public health
2
2
1
Sumy
2
1
0
only to rank 88.

Sumy Oblast received the lowest scores in Goods
market efficiency, taking 24th position, which is almost
the same as last year. The most problematic indicators are
burden of customs procedures (26th), buyer sophistication (26th), extent and effect of taxation (24th), agricultural policy costs (21st) and intensity of local competition (20th). In burden of customs procedures, the region
is 0.8 points below the national average and 1.5 points
behind the national leader, but loses out to all 142 nations in the global index.
Although Sumys overall index score in the Health
10
15
20
25
and primary education pillar has improved year-on-year,

the oblast has dropped from 18th to 22nd position nationally. Local businesses express negative assessments
of the business impact of tuberculosis (25th among 27
regions), business impact of HIV/AIDS (25th) and primary education enrollment rate (27th). In all three of
these indicators, the regions rank corresponds to those
of countries from the bottom half of the global index. Remarkably, the region has received such a low score and
25th place in the national index for business impact of
tuberculosis, with statistics putting Sumy in 3rd place in
Ukraine for TB incidence.
Ternopil
Rank 24
Ternopil Oblast received relatively high scores in Health and primary

education, Institutions and Higher education and training.
Ternopil loses out to most regions in the Infrastructure and Market

size pillars.
Corruption, tax policy and government policy instability are the

most problematic factors for doing business in the region.
of Ukraines average.
The oblast takes 24th place in the national competitiveness ranking with 3.74 points, below the Ukrainian
average calculated for 27 regions (3.87 points). The oblast
holds relatively low places in all three sub-indexes. Despite a moderate rank of 17 in the sub-index Innovation
and Sophistication Factors, the oblast fails to make it into
the top 20 of the regional index because of its 25th position in Basic Requirements and 22nd in Efficiency Enhancers.
Ternopil Oblast performs relatively well in Health
and primary education (9th), Institutions (10th) and
Higher education and training (10th). At the same time,
the oblast is behind most regions in Infrastructure (27th)
Ternopil Oblast ranks 23rd among 27 Ukrainian regions by population (2.37%) and 25th by the share of its
contribution to the countrys GDP (1.2%). The oblasts
gross regional product per capita is UAH 10,240, or 52%
Figure 5.46
Ternopils performance by 12 pillars of competitiveness

Ternopil
7
4.3
3.7
4.5
4.2
4.0
3.8
4.9
3.3
4.3
3.9
6.0
5.8
4.2
3.5
5.0
4.5
76
4.0
3.7
4.9
4.7
4.1
3.8
4.2
2.7
3.6
1.3
3.7
3.3
4.2
3.6
3.3
2.9
Figure 5.47
The most problematic factors for doing business in Ternopil

Corruption
17
Tax regulations
15
Policy instability
13
15
16
12
Access to financing
Inflation
Tax rates
Crime and theft
6
6
7
5
6
7
3
4
3
2
2
Poor public health
2
1
Ternopil

2
10
15
20
25
Vinnytsya
Rank 14
The competitive advantages of Vinnytsya Oblast include Goods market efficiency, Labor market efficiency and Institutions.
Higher education and training and Financial market development are

the Oblasts weak points.
Corruption, tax policy and government policy instability are the main
obstacles for doing business in the region.
Vinnytsya Oblast takes 11th place in Ukraine by

population and 13th by contribution to the countrys
GDP. Being home to 3.6% of Ukraines citizens, the region produces 2.2% of the national GDP. As calculated
per capita, Vinnytsya Oblasts GRP is 60% of the average
Ukrainian value (UAH 12,145 in 2009).
Competitiveness Report. Its aggregate score of 3.86

points is slightly less than the Ukrainian average (3.87).
Compared to last year, Vinnytsya has added 0.1 point to
its score, climbing six notches in the index. It ranks 14th
in the first two sub-indexes - Basic Requirements and Efficiency Enhancers. In the third sub-index, Innovation
and Sophistication Factors, the region performed better,
taking 10th position among 27 regions.
Vinnytsya Oblast received its highest scores for
Goods market efficiency (3rd), Labor market efficiency
(5th) and Institutions (5th). Higher education and training and Financial market development are the weaknesses of the regions economy.
The goods market in Vinnytsya received one of the
best scores in the country thanks to its leading position
in extent of market dominance and buyer sophistication.
The scores of these indicators correspond to relatively
high places in the global index, 30th and 39th, respectively. Also, business leaders note a marginal extent and
effect of taxation (3rd) and a light burden of customs procedures (3rd). The prevalence of foreign ownership, however, is low (18th), which is partially due to negative business impact of rules on FDI (16th). The score of the first
indicator is low in the global index as well, corresponding
to 135th position among 142 countries.
The oblasts strong performance in Labor market efficiency comes from an outstanding pay and productivity ratio (1st in Ukraine): Vinnytsya received 5.69 points,
which is above other Ukrainian regions and even some
countries in the global ranking. Also, the oblast gets good
marks for hiring and firing practices (8th) and reliance
on professional management (8th). The overall score in
this pillar is negatively affected by brain drain (19th) and
a low share of female participation in labor force (18th).
The Institutions in Vinnytsya Oblast take high positions in the regional index primarily because of transparency of government policymaking and reliability of
police services. In these indicators, the Oblast outshines
other regions of the country and occupies top positions
in the index. Transparency of policymaking puts Vinnytsya Oblast on a quite high 26th place in the global ranking. The score of Institutions is also strong because of low
business costs of crime and violence (3rd), low business
costs of terrorism (4th), judicial independence (4th) and
high public trust of politicians (4th). On the other hand,
protection of minority shareholders interests, efficiency of legal framework in settling disputes and property
rights worsen the position of Vinnytsya Oblasts institutions. In these indicators, the oblast ranks 19th, 18th and
17th, respectively.
The poor performance in Higher education and
training can be explained by low qualitative and quantitative scores for education. In both secondary and tertiary
education enrollment rates, the region takes 22nd place
in the national report. For the quality of the educational
system, the oblast is 20th. And on quality of management
schools - 21st, but only 136th place among 142 countries.
The strongest indicators in this pillar include extent of
staff training (5th) and quality of math and science education (7th). However, these scores are not that high from
a global perspective where the oblasts performance in
the former gives it a standing of only 116th place among
142 countries, in the latter - 48th.
and Market size (25th).

It has received relatively good scores for Institutions
(10th), which are above the average in Ukraine. Business
managers give higher-than-average scores to the quality
of public institutions: property rights (10th), diversion of
public funds (8th), irregular payments and bribes (7th),
favoritism in decisions of government officials (3rd),
business costs of terrorism and business costs of crime
and violence (3rd and 6th, respectively). At the same
time, the efficiency of the government is assessed noticeably lower. The region takes 24th position in wastefulness of government spending and 25th in transparency
of government policymaking.
Another comparative strength of Ternopil Oblast
is Health and primary education (9th). Along with Zakarpattya and Ivano-Frankivsk, Ternopil is among the
lowest three oblasts for HIV prevalence in Ukraine. Also,
Ternopil has a relatively good situation with TB incidence. As a result, the oblast ranks 2nd in Ukraine (after
Kyiv) in terms of life expectancy (72.04 years). The region shows contradictory results in primary education: it
is behind other regions in quality of primary education,
yet ranks fairly high by enrollment rate (8th).
The oblast is in the Top-10 for higher education
(10th). In general, businesses are satisfied with the quality of education in secondary and tertiary schools. Ternopil Oblast performs higher than Ukraines average in
quality of math and science education (5th). A relatively
poor secondary education enrollment rate is a potential
problem (23rd). Extent of staff training is not large in the
Oblast either (26th). In the last indicator, the region is at
the level of the bottom 10 countries of the global ranking.
Ternopil Oblast loses out to other regions in Infrastructure, bottoming out in this pillar. Businesses point
out poor quality of overall infrastructure (24th) and
quality of roads in particular. In this indicator, the Oblast
is second to last, ahead of Kirovohrad Oblast only. The
Oblast is also far behind others by telecommunications
infrastructure because of few fixed telephone lines and
mobile telephone subscriptions 22nd and 26th, respectively.
The oblast ranks 25th in the Market size pillar. It has
relatively low scores for both domestic and foreign market size. Ternopil Oblast holds 26th place for its foreign
market size, followed by Chernivtsi Oblast only.
77
Figure 5.48
Vinnytsyas performance by 12 pillars of competitiveness

Vinnytsya
7
4.3
3.9
4.5
4.3
4.0
3.8
4.9
3.6
4.3
4.1
6.0
5.7
4.2
3.6
5.0
4.3
4.0
4.0
4.9
4.8
4.1
3.8
4.2
2.9
3.6
1.8
3.7
3.5
4.2
4.0
3.3
3.0
Figure 5.49
The most problematic factors for doing business in Vinnytsia
78
Corruption
16
Tax regulations
14
Policy instability
13
15
16
12
Tax rates
Access to financing
7
6
6
4
5
Inflation
7
5
5
4
6
3
2
3
3
2
3
2
Poor public health
2
2
Crime and theft
2
2
Vinnytsia
1
0
The region received few points for Financial market development because of obstacles for raising finance
for business. The oblast ranks 27th on ease of access to
loans, 21st in venture capital availability, 17th in financing through local equity market and 16th in availability
of financial services. At the same time, affordability of
financial services received a higher score, putting the
oblast in 6th place in the regional index.
10
Volyn
15
20
25
Rank 12
The competitive advantages of Volyn Oblasts economy are Institutions, Financial market development and Goods market efficiency.
The oblast lags behind other regions by Infrastructure, Market size

and Macroeconomic environment.
Government policy instability, tax policy and tax rates are called the
most problematic factors for doing business in the region.
Volyn Oblast holds 24th position in Ukraine by both

population and share of national GDP. About 2.26% of
Ukraines population resides in the oblast, which produces 1.34% of the countrys GDP. As calculated per capita,
Volyns performance by 12 pillars of competitiveness

Volyn
7
4.3
3.9
4.5
4.3
4.0
4.0
4.9
3.5
4.3
4.0
6.0
5.8
4.2
3.6
5.0
4.4
4.0
3.9
4.9
4.8
4.1
4.1
4.2
2.9
3.6
1.5
3.7
3.4
4.2
3.9
3.3
2.9
Figure 5.51
Figure 5.50
The most problematic factors for doing business in Volyn
79
Policy instability
15
Tax regulations
14
Tax rates
12
12
16
7
Corruption
Inflation
15
7
Access to financing
6
6
5
6
4
3
2
3
3
2
1
2
2
2
Poor public health
Volyn
Crime and theft
GRP of Volyn Oblast is 41% less than the Ukrainian average and totaled UAH 11,796 in 2009.
Competitiveness Report, with an aggregate score of 3.87
points, which is the Ukrainian average. Compared to last
year, the region has lost 0.01 points in the index but still
moved up three spots. Its scores in three sub-indexes are
about the same: In Basic requirements and Efficiency enhancers, the region takes 13th place, and ranks 12th in
Innovation and sophistication factors.
Volyn leads the index in two pillars - Institutions
and Financial market development. Also, the oblast takes
a rather high 5th place for Goods market efficiency. On
the other hand, it has received low scores for Infrastruc-
10
15
20
25
ture (23rd), Market size (21st) and Macroeconomic environment (18th).

The region dominates in Institutions, with high
scores in ethics and corruption as well as government inefficiency. In particular, the oblast takes first place in both
diversion of public funds and public trust of politicians.
Also, Volyn Oblast leads in efficiency of legal framework
in settling disputes and efficiency of legal framework in
challenging regulations. However, these relatively high
scores in the national report correspond to low positions
in the global index: for example, efficiency of legal framework in settling disputes corresponds to 74th position,
and efficiency of legal framework in challenging regulations to 75th in the WEF Global Competitiveness Index.

80
Property rights, transparency of government policymaking and burden of government regulation weaken the
rank of the oblast in this pillar, placing it 24th, 20th and
17th, respectively.
The region is among the indexs leaders in Financial
market development because of its excellent availability of financial services (1st), venture capital availability
(2nd) and ease of access to loans (5th). Regulation of securities exchanges also received a high assessment (2nd
place) yet much lower in the international index (111th).
At the same time, in financing through local equity market, Volyn took 10th position.
Its high place in Goods market efficiency is explained primarily by its effectiveness of anti-monopoly
policy (1st) and degree of customer orientation (2nd). In
the international comparison, the effectiveness of antimonopoly policy placed only 94th. Business managers in
the oblast point out a high prevalence of foreign ownership and positive business impact of rules on FDI (3rd in
both). On the other hand, they mention a large extent of
market dominance (20th) and heavy burden of customs
procedures (20th; 138th in the global index).
The scores for Infrastructure in the region are
among the lowest in the country. Road and telephony
infrastructure have been assessed as poor. In particular,
business executives give few points to the quality of railroad infrastructure (25th), quality of port infrastructure
(26th) or quality of air transport infrastructure (24th). At
the same time, in the first indicator the oblast ranks 22nd
among 142 countries. Volyn Oblast is among the worstperforming regions by mobile telephone subscriptions
(26th). On the other hand, it ranks 9th and 11th by quality of electricity supply and quality of roads, respectively.
The poor score in Market size comes more from the
small size of the oblast than from the small volume of its
international trade. In the domestic and foreign market
Figure 5.52
size indicators Volyn takes 20th and 21st place, respectively in the regional report; although in the share of export and import in GRP, it ranks 15th and 8th , respectively.
The oblast scored low for Macroeconomic environment because of a wide interest rate spread (22nd).
However, the inflation in the region is the third lowest
in Ukraine.
Zakarpattya
Rank 18
Zakarpattya Oblasts strongest pillars are Goods market efficiency,

Health and primary education, and Institutions.
The Oblast is behind other regions in the Higher education and training and Financial market development pillars, and the Innovation and
Sophistication Factors sub-index.
Zakarpattya Oblast holds 17th position in Ukraine

by population and 23rd by share of Ukraines GDP (1.4%).
The gross regional product of the Oblast is UAH 10,081
per capita, which is 59% of Ukraines average.
The region ranks 18th in the Ukraines Regions Competitiveness Report between Rivne and Ivano-Frankivsk
oblasts. The aggregate score of Zakarpattya Oblast is 3.80,
which is below the average competitiveness index of 27
Ukrainian regions (3.87).
The oblast received its highest marks for Goods
market efficiency (1st among 27 Ukrainian regions),
Health and primary education (2nd) and Institutions
(4th). However, the oblast significantly loses out to other
regions in Higher education and training (26th), Financial market development (25th) and in pillars of the innovation and Sophistication Factors sub-index (24th).
Zakarpattyas performance by 12 pillars of competitiveness

Zakarpattya
7
4.3
3.8
4.5
4.3
4.0
3.8
4.9
3.6
4.3
4.1
6.0
5.9
4.2
3.5
5.0
4.1
4.0
4.0
4.9
4.7
3.7
4.1
4.2
2.7
3.6
1.6
3.7
3.2
4.2
3.6
2.8
3.3
Figure 5.53
The most problematic factors for doing business in Zakarpattya

Tax regulations
18
Corruption
14
Policy instability
12
Inflation
11
16
15
12
7
Tax rates
Access to financing
Crime and theft
6
6
7
5
3
4
6
3
2
2
1
1
Poor public health
Zakarpattya
2
0
Despite its overall rank of 18th place, the region

leads the country in Goods market efficiency, having
improved its score in this indicator year-on-year. Yet its
leadership among Ukrainian regions pales in comparison with scores of other countries in the global index,
where Zakarpattya Oblasts performance earns it only
92nd place. Within this pillar, the region leads among its
26 peers in Ukraine by prevalence of foreign ownership
(1st), degree of customer orientation (3rd) and imports
as a percentage of GDP (2nd). In the last two indicators,
Zakarpattya Oblast performs at the level of the top 50
countries in the global index. The regions significant increase in scores in extent of market dominance and business impact of rules on FDI should be noted as well.
Zakarpattya Oblast has retained its leading position
in the Health and primary education pillar. It takes a high
2nd place thanks to its top scores for primary education
enrollment rate and HIV prevalence, which correspond
to those of global leaders. At the same time, poor performances in infant mortality (26th among 27 regions)
and business impact of tuberculosis (26th) are a matter
of concern. In the latter indicator, the oblast ranks 137th
globally.
Compared to other Ukrainian regions, assessment
of Zakarpattyas Institutions by business leaders is quite
favorable, putting the oblast in 4th position in this pillar. The region is one of the best performers in property
rights (1st), burden of government regulation (2nd),
transparency of government policymaking (3rd), organized crime (2nd) and protection of minority shareholders interests (2nd). And the score for the sub-pillar of
government inefficiency has grown by almost a full point
year-on-year.
The Oblast performs the worst in Higher education
and training, taking second to last position in the regional index. Zakarpattya scored badly for tertiary education
enrollment rate (27th), quality of management schools
(25th) and local availability of specialized research and
training services (24th). The score for the quality of
management schools (2.6) is much lower than Ukraines
average, ranking 139 among 142 countries in the global
10
15
20
25
index.
Zakarpattya Oblast still has serious weaknesses in
Financial market development (25th) among Ukraines
27 regions, ranking above the 100 mark in the global index. Local business executives see the biggest problems
with availability of financial services (22nd), ease of access to loans (24th) and soundness of banks (26th). In almost every indicator of this pillar, the oblasts results were
lower than the average for other regions across Ukraine.
Zakarpattya Oblast features at the rankings bottom
in the innovation and Sophistication factors sub-index:
23rd in the Business sophistication pillar and 22nd in the
Innovation pillar. In most of these scores, the oblast has
lost many points compared to last year. The region has
shown the weakest performance in nature of competitive
advantage (27th), value chain breadth (24th), reliance on
professional management (26th), capacity for innovation
(27th) and availability of scientists and engineers (26th).
Zaporizhzhya
Rank 6
The competitive strengths of Zaporizhzhya Oblast include Business

sophistication, Higher education and training and Macroeconomic
environment.
The oblast trails behind other regions in Institutions, Labor market

efficiency and Health and primary education.
Zaporizhzhya Oblast ranks 9th in Ukraine by population and 8th by contribution to the countrys GDP. It is
home to about 3.9% of Ukraines population and generates 4.1% of Ukraines GDP. As calculated per capita, GRP
of the region is 104% of Ukraines average (UAH 20,614
in 2009).
Zaporizhzhya Oblast is ranked 6th in the national
competitiveness index. Its aggregate score is 3.98 points,
which exceeds the nations average by 0.11 points. Since
last year, the region has gained 0.03 points in its aggre-
81
Figure 5.54
Zaporizhzhyas performance by 12 pillars of competitiveness

Zaporizhzhya
7
4.3
4.0
4.5
4.4
4.0
3.7
4.9
4.0
4.3
4.1
6.0
5.8
4.2
3.7
5.0
4.8
4.0
3.9
4.9
4.8
4.1
3.8
4.2
2.9
3.6
2.2
3.7
3.5
4.2
4.0
3.3
3.0
Figure 5.55
82
The most problematic factors for doing business in Zaporizhzhya

Tax regulations
15
Corruption
13
Policy instability
13
16
15
12
Tax rates
Inflation
Access to financing
Poor public health
7
7
6
5
6
6
3
3
4
2
2
2
1
Crime and theft
Zaporizhzhya
1
0
gate score and moved up five positions. It has received

almost the same scores on all three sub-indexes: For Basic Requirements, the region occupies 6th position in the
ranking, for Efficiency Enhancers and Innovation and
for Business Sophistication, it is ranked 7th.
Zaporizhzhya Oblast demonstrates its best results
in Business sophistication, Higher education and training and Macroeconomic environment. The Oblast is
among the top three regions in the first indicator (3rd)
and occupies 4th position in the other two. However, it
has a number of weaknesses: Institutions (19th), Labor
market efficiency (16th), and Health and primary education (12th).
Zaporizhzhya Oblast retains its leading position in
10
15
20
25
Business sophistication due to high scores in value chain

breadth (2nd nationally) and state of cluster development
(3rd). In the international ranking, it also has very good
rankings in these indicators: 22nd and 33rd respectively.
The region takes an impressive 4th position in the regional ranking of reliance on professional management,
which means that senior positions in companies are occupied by professional managers. However, the regions
competitiveness in the Business sophistication pillar is
weakened by a low level of production process sophistication (16th): Labor-intensive methods and outdated
production technology prevail in the region.
High scores in Higher education and training can
be explained by good quantitative indicators. In the re-
Zhytomyr
Rank 23
The competitive strengths of Zhytomyr Oblast include the labor

market efficiency and institutions pillars.
The oblast is among the poorest performers in the regional ranking

with respect to infrastructure, health and primary education, goods
market efficiency and financial market development.
The most problematic factors for doing business in the region are
corruption, tax policy and government policy instability.
Zhytomyr Oblast ranks 16th in Ukraine by population and 18th by contribution to the countrys GDP. The
Oblast accounts for nearly 2.8% of Ukraines population
and generates 1.6% of Ukraines GDP. As calculated per
capita, GRP of the region is 58% of Ukraines average
(UAH 11,419 in 2009).
Zhytomyr Oblast rates among the five worst regions

in the ranking, taking 23rd position among Ukrainian regions. Its aggregate score is 3.76, which is 0.11 points below the national average. The region declined 4 positions
and 0.08 points from its 2010 ranking. It shows the worst
performance in the Basic requirements sub-index (24th
out of 27 regions of Ukraine). In the Efficiency enhancers
and innovation and business sophistication sub-indexes
the Oblast ranks 16th.
Zhytomyr Oblasts best scores were received for Labor market efficiency and Institutions (13th each). But
even in these pillars, the region has more weaknesses
than strengths. The weak spots include Infrastructure
(24th regionally), Health and primary education (21st),
Goods market efficiency (21st) and Financial market development (21st).
Overall, the Oblast demonstrated quite a poor performance in the Labor market efficiency pillar. It only
managed to take 13th position due to its 1st place in female participation in labor force, and 15th place in hiring and firing practices. In the international ranking,
the region also has a high position on the first indicator
(3rd place). On other indicators of this pillar, the region
ranked between 19th and 25th. The worst situation is
with the ability of the Oblast to attract and retain talents:
the region ranks 25th regionally and 128th globally on
the brain drain indicator.
The Oblast occupies quite a good position in the
Institutions pillar due to the high assessments it got for
property rights (2nd) and government spending. It ranks
3rd on wastefulness of government spending and 5th
on diversion of public funds. The region also has quite
low business costs of terrorism, the same as elsewhere
Ukraine. However, business executives believe that in
Zhytomyr Oblast it is the lowest. The weakest spots in the
institutions pillar include burden of government regulation (26th in the regional ranking and 132nd in the overall GCI) and efficiency of legal framework in challenging
regulations (25th in the regional ranking and 129th in the
overall GCI).
The Oblast took a low 24th position in Infrastructure for low quality of electricity supply (26th), quality of
air transport infrastructure (21st) and quality of port infrastructure (19th). The low scores on the last two indicators can be explained by the absence of a need to improve
the quality of air transport infrastructure in the vicinity
of high quality Kyiv airports, and the remoteness of the
region from the sea. The oblast also has a low number
of mobile phone subscriptions (98.4% or 18th position
in the regional ranking). On the other hand, the quality
of overall infrastructure and quality of roads are placed
relatively high in the national ranking, 7th and 9th positions respectively.
Health and primary education also received a poor
assessment. The main problems, which lowered the overall score of the region, include low life expectancy (67.8
years and 24th position among Ukrainian regions) and
primary education enrollment rate (92.4%, 24th). The
oblast ranks 19th on TB incidence and 22nd on business
impact of tuberculosis. On the other hand, the region
ranks well for HIV prevalence: 0.25% of the population
aged 15-49, 12th regionally).
In Zhytomyr Oblast, the Goods market efficiency is
gional index, Zaporizhzhya Oblast ranks 3rd in higher

education enrollment rate and 7th in secondary education enrollment rate. It is in the top 10 regions for Internet access in schools (9th). Its weakest spots are quality
of management schools and extent of staff training. The
region takes 14th position in these indicators regionally
and 134th and 127th globally.
Zaporizhzhya Oblast gets relatively good scores under Macroeconomic environment due to a small interest rate spread between typical lending and deposit rates
(7.2% - 4th position in the national ranking). Even the
high level of inflation in the region (19th) has not really
affected its position under this pillar.
The Oblast received a low 19th position in Institutions due to a number of factors. First of all, public trust
of politicians is ranked 24th regionally and 120th globally. But also, business leaders express dismay at burden of
government regulation (21st), diversion of public funds
(20th), the low level of judicial independence (20th) and
relatively high business costs of organized crime (20th).
On the other hand, they are happy with private institutions. Efficacy of corporate boards is the best in the country and protection of minority shareholders interests
ranks 4th in the international ranking.
Zaporizhzhya Oblast demonstrates low scores in
Labor market efficiency as the result of strictly regulated
hiring and firing practices (24th) and a weak link between pay and productivity (24th). Female participation
in labor force (19th) weakens the position of the region
in this pillar. On the other hand, reliance on professional
management and cooperation in labor-employer relations illustrate the regions strengths (4th and 7th positions respectively).
The oblast is among the poorest performers in the
ranking with respect to Health and primary education
- primarily due to high infant mortality and a low level
of primary education enrollment. It ranks 24th out of
27 Ukrainian regions on the first indicator and 19th on
the second. Zaporizhzhya Oblast has high levels of HIV
prevalence 16th position in the regional ranking. At the
same time, company executives do not see any serious
business impact of HIV/AIDS (4th) and they note a high
quality of primary education in the region (3rd nationally).
83
Figure 5.56
Zhytomyrs performance by 12 pillars of competitiveness

Zhytomyr
7
4.3
3.8
4.5
4.2
4.0
3.7
4.9
3.4
4.3
4.0
6.0
5.7
4.2
3.5
5.0
4.3
4.0
3.7
4.9
4.8
4.1
3.8
4.2
2.9
3.6
1.6
3.7
3.3
4.2
3.8
3.3
2.8
Figure 5.57
84
The most problematic factors for doing business in Zhytomyr

Corruption
16
Tax regulations
15
15
16
Policy instability
Inflation
Tax rates
Access to financing
Poor public health
Crime and theft
12
4
7
7
6
6
6
5
2
3
3
2
2
1
Zhytomyr
2
1
0
one of the worst in Ukraine (21st position in the regional

ranking). The reason is low intensity of local competition
(26th), high agricultural policy costs (23rd) and high
extent and effect of taxation (22nd). The region demonstrates the worst performance on intensity of competition and agricultural policy costs (135th and 140th positions out of 142 countries). On the other hand, a good
performance on business impact of rules on FDI (1st out
of 27 regions regionally) and burden of customs procedures (5th) somewhat strengthened the position of the
10
15
20
25
region in the Goods market efficiency pillar.

The financial market of the region is not well developed, which puts the oblast in 21st place in the regional
ranking. Business executives gave a poor assessment
to the availability and affordability of financial services
(24th and 23rd accordingly), financing through local equity market (23rd) and regulation of security exchanges
(23rd regionally and 131st globally). However, Soundness of banks is a competitive strength of the oblast (it is
the 5th most reliable in the country).
Competitiveness Profiles
Key indicators
Population (m), 2010................................................................ 2.0
Gross Regional Product (UAH m), 2009.............................. 27 396
GRP per capita (UAH), 2009................................................ 13 933
Share in Ukraine's GDP (%), 2009............................................. 3.0
AR Crimea
Stage of development: transition from 1 to 2

Index 2011
Rank (out of 27)
Institutions
Subindex : Basic requirements ...................................................................................................................

1st pillar: Institutions .................................................................................................
2nd pillar: Infrastructure ............................................................................................
3rd pillar: Macroeconomic environment ....................................................................
4th pillar: Health and primary education ....................................................................
11
22
7
5
20
7
Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
Subindex B: Efficiency enhancers .................................................................................................................. 24

5th pillar: Higher education and training ..................................................................... 23
6th pillar: Goods market efficiency ............................................................................. 26
7th pillar: Labor market efficiency .............................................................................. 26
8th pillar: Financial market development .................................................................... 26
9th pillar: Technological readiness ............................................................................. 22
10th pillar: Market size ............................................................................................... 11
2
Health and
primary education
Market size
Technological
readiness
Subindex C: Innovation and sophistication factors ............................................................................ 23

11th pillar: Business sophistication ............................................................................ 14
12th pillar: Innovation ................................................................................................. 25
87
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
AR Crimea
Ukraine Regions Average
The most problematic factors for doing business, number of answers in %

AR Crimea
Ukraine
Regions'
Average
Corruption .....................................................................................................................15 ..................15

Tax regulations .............................................................................................................14 ..................16
Policy instability............................................................................................................13 ..................12
Tax rates ....................................................................................................................... 8 .................. 7
Local and national government instability .................................................................... 7 .................. 6
Inflation ......................................................................................................................... 7 .................. 7
Permit and licensing system for doing business ......................................................... 7 .................. 5
Inefficient government bureaucracy ............................................................................. 6 .................. 6
Inadequately educated workforce ................................................................................. 5 .................. 4
Inadequate supply of infrastructure .............................................................................. 5 .................. 3
Access to financing ...................................................................................................... 4 .................. 6
Regional customs policy .............................................................................................. 2 .................. 3
Restrictive labour regulations ....................................................................................... 2 .................. 2
Access to land plots ..................................................................................................... 1 .................. 2
Poor work ethic in the national labour force ................................................................ 1 .................. 1
Foreign currency regulations ....................................................................................... 1 .................. 1
Crime and theft ............................................................................................................. 1 .................. 2
Poor public health ........................................................................................................ 1 .................. 2
10
15
20
AR Crimea
Source: Foundation for Effective Governance, Executive Opinion Survey

Note: From a list of 18 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between 1 (most problematic) and 5.
The figure show the responses weighted according to their rankings 20102011.

88
AR Crimea
+ Better than the Ukraine's average
INDICATOR
RANK /27
SCORE
VS AVG
Worse than Ukraine's average
REGIONS'
AVERAGE
BEST PERFORMING
REGION
Basic requirements ........................................................................................................................ 11 ......................... 4.34 ................................... ........................................ 4.31 ......................... 4.52 Kyiv
Efficiency enhancers..................................................................................................................... 24 ......................... 3.42 ................................... ........................................ 3.62 ......................... 4.22 Kyiv
Innovation and sophistication factors ............................................................................... 23 ......................... 3.22 ................................... ........................................ 3.36 ......................... 3.70 Dnipropetrovsk
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1st pillar: Institutions .................................................................................................................... 22

Property rights ...........................................................................................14
Intellectual property protection ................................................................. 21
Diversion of public funds........................................................................... 17
Public trust of politicians........................................................................... 19
Irregular payments and bribes................................................................... 15
Judicial independence............................................................................... 17
Favoritism in decisions of government officials ........................................ 16
Wastefulness of government spending ..................................................... 27
Burden of government regulation ............................................................. 24
Efficiency of legal framework in settling disputes ..................................... 14
Efficiency of legal framework in challenging regs ..................................... 10
Transparency of government policymaking............................................... 19
Business costs of terrorism....................................................................... 24
Business costs of crime and violence ....................................................... 23
Organized crime ........................................................................................ 17
Reliability of police services ...................................................................... 16
Ethical behavior of firms ........................................................................... 21
Strength of auditing and reporting standards .........................................
Efficacy of corporate boards ..................................................................... 6
Protection of minority shareholders interests .......................................... 18
Strength of investor protection, 0 10 (best)*......................................... 1
......................... 3.58 ................................... ........................................ 3.69

..................4.19 ........................+ ........................... 4.18
.................. 2.74 ........................ ........................... 2.89
.................. 3.46 ........................ ........................... 3.57
.................. 2.16 ........................ ........................... 2.33
.................. 3.89 ........................ + ........................... 3.87
.................. 2.85 ........................ ........................... 2.87
.................. 2.92 ........................ ........................... 2.99
.................. 3.25 ........................ ........................... 3.90
.................. 2.78 ........................ ........................... 3.10
.................. 2.87 ........................ ........................... 2.89
.................. 2.91 ........................ + ........................... 2.87
.................. 4.26 ........................ ........................... 4.38
.................. 6.16 ........................ ........................... 6.48
.................. 4.29 ........................ ........................... 4.65
.................. 5.00 ........................ ........................... 5.10
.................. 3.87 ........................ ........................... 4.00
.................. 3.21 ........................ ........................... 3.37
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
2nd pillar: Infrastructure ............................................................................................................. 7 ......................... 3.99 ................................... ........................................ 3.77 ......................... 4.89
Quality of overall infrastructure ................................................................. 20 .................. 3.95 ........................ ........................... 4.15 .................. 4.73
Quality of roads ......................................................................................... 6 .................. 3.71 ........................ + ........................... 3.29 .................. 4.29
Quality of railroad infrastructure ............................................................... 20 .................. 4.71 ........................ ........................... 4.92 .................. 5.54
Quality of port infrastructure ..................................................................... 5 .................. 3.75 ........................ + ........................... 2.73 .................. 5.24
Quality of air transport infrastructure ........................................................ 4 .................. 4.45 ........................ + ........................... 3.08 .................. 5.30
Available airline seat Kms/week, millions*................................................ 10 .................. 0.05........................ ........................... 7.19 ................101.27
Quality of electricity supply ....................................................................... 21 ................4.22 ........................ ........................... 4.40 .................. 5.13
Fixed telephone lines/100 pop.*................................................................. 10 ..................25.80 ........................ ...........................26.73 ..................58.60
Mobile telephone subscriptions/100 pop.*................................................ 6 ..................125.00. ...................... + ...........................112.47 .............. 303.80
3.01
3.02
3.03
3.04
3.05
3.06
3rd pillar: Macroeconomic environment.......................................................................... 5 .........................

Government budget balance, % GDP*....................................................... ..................
Gross national savings, % GDP*................................................................ ..................
Inflation, annual % change* ...................................................................... 17 ..................
Interest rate spread, %*............................................................................. 5 ..................
General government debt, % GDP*........................................................... ..................
Country credit rating, 0 100 (best)*........................................................ ..................
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
4th pillar: Health and primary education .......................................................................... 20 ......................... 5.65 ...................................
Business impact of malaria ....................................................................... n/a .................. n/a ........................
Malaria cases/100.000 pop.*..................................................................... 1 .................. 7.00 ........................
Business impact of tuberculosis................................................................ 6 .................. 3.80 ........................ +
Tuberculosis incidence/100.000 pop.*...................................................... 24 .................. 83.80........................
Business impact of HIV/AIDS .................................................................... 24 .................. 4.27 ........................
HIV prevalence, % adult pop.* .................................................................. 22 .................. 0.58 ........................
Infant mortality, deaths/1,000 live births*.................................................. 12 .................. 8.80 ........................ +
Life expectancy, years*.............................................................................. 14 .................. 69.30........................
Quality of primary education ..................................................................... 27 .................. 3.25 ........................
Primary education enrollment, net %*...................................................... 7 .................. 96.20........................ +
........................................ 5.75 ......................... 5.97

........................... n/a ..................
........................... 7.00 ..................
........................... 3.64 .................. 4.29
........................... 66.88 ..................34.60
........................... 4.56 .................. 5.08
........................... 0.36 .................. 0.03
........................... 8.90 .................. 6.00
...........................69.43 ..................72.72
........................... 3.78 .................. 4.43
...........................94.55 ................100.00
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5th pillar: Higher education and training.......................................................................... 23 ......................... 4.09 ...................................

Secondary education enrollment, gross %* .............................................. 10 ..................95.30 ........................+
Tertiary education enrollment, gross %*................................................... 25 .................. 41.50........................
Quality of the educational system ............................................................. 24 .................. 3.43 ........................
Quality of math and science education...................................................... 27
. .................. 3.58 ........................
Quality of management schools ................................................................ 26 .................. 2.51 ........................
Internet access in schools ......................................................................... 22 .................. 4.05 ........................
Availability of research and training services ............................................ 10 .................. 4.58 ........................ +
Extent of staff training ............................................................................... 24 .................. 2.99 ........................
........................................ 4.45 ......................... 4.99

...........................94.39 ...............100.00
........................... 61.01 ................100.00
........................... 3.92 .................. 4.39
........................... 4.21 .................. 4.69
........................... 2.97 .................. 3.60
........................... 4.37 .................. 4.93
........................... 4.48 .................. 4.91
........................... 3.15 .................. 3.53
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
6th pillar: Goods market efficiency ................................................................................... 26 ......................... 3.54 ................................... ........................................ 3.79 ......................... 4.02 Zakarpattya
Intensity of local competition .................................................................... 18 .................. 4.24 ........................ ........................... 4.33 .................. 4.96 Kyiv
Extent of market dominance...................................................................... 24 .................. 3.54 ........................ ........................... 3.94 .................. 4.50 Vinnytsya
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
.................. n/a ........................ ...........................
..................
.................. 5.26 ........................ + ........................... 5.05 ..................
.................. 3.15 ........................ ........................... 3.27 ..................
.................. 4.70 ........................ ........................... 4.70 ..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv
4.12................................... ........................................ 4.03 ......................... 4.28 Kyiv Oblast

n/a ........................ ........................... 4.42 ..................
n/a
n/a ........................ ...........................14.28 ..................
n/a
9.60 ........................ ........................... 9.24 .................. 7.00 Vinnytsya
7.86 ........................ + ...........................10.12 .................. 6.53 Dnipropetrovsk
n/a ........................ ...........................39.50 ..................
n/a
n/a ........................ ........................... 37.00 ..................
n/a

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy ..................................................... 26........................... 2.50 .......................... .......................... 3.03 ...................3.65
Extent and effect of taxation ......................................................................23.......................... 2.96 .......................... .......................... 3.19 ...................3.70
Total tax rate, % profits* ........................................................................... ......................... n/a........................... ...........................55.50 ..................
No. procedures to start a business*......................................................... ......................... n/a .......................... ......................... 10.00...................
...................................................................... ......................... n/a .......................... ......................... 27.00..................
Agricultural policy costs ............................................................................ 24.......................... 2.45 .......................... .......................... 2.89 ...................3.49
Prevalence of trade barriers....................................................................... ......................... n/a........................... .......................... n/a ...................
Trade tariffs, % duty*................................................................................. ......................... n/a........................... .......................... 2.95 ...................
Prevalence of foreign ownership.............................................................. 26.......................... 2.72.......................... .......................... 3.29.................. 4.24
Business impact of rules on FDI................................................................ 14.......................... 4.09.......................... .......................... 4.17.................. 4.84
Burden of customs procedures................................................................. 19.......................... 2.85.......................... .......................... 2.92.................. 3.71
Imports as a percentage of GDP*............................................................. 27.......................... 5.83 .......................... .......................... 24.98 ............. 103.20
Degree of customer orientation ............................................................... 26.......................... 4.26.......................... .......................... 4.68.................. 5.11
Buyer sophistication.................................................................................... 8 .......................... 3.32.......................... + .......................... 3.18.................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
7th pillar: Labor market efficiency ......................................................................................26...................................... 4.63 ..................................... ...................................... 4.77 ...................... 4.95
Cooperation in laboremployer relations ................................................. 16.......................... 4.81.......................... .......................... 4.84.................. 5.27
Flexibility of wage determination ............................................................. 15.......................... 4.97.......................... .......................... 5.01.................. 5.76
Rigidity of employment index, 0100 (worst)*........................................ .......................... n/a ........................... .......................... 31.00.................
Hiring and firing practices ........................................................................ 12.......................... 4.60.......................... .......................... 4.61.................. 4.90
Redundancy costs, weeks of salary*........................................................ .......................... n/a ........................... .......................... 13.00..................
Extent and effect of taxation ..................................................................... 23.......................... 2.96.......................... .......................... 3.19.................. 3.70
Pay and productivity .................................................................................. 8 .......................... 5.16.......................... + .......................... 5.09.................. 5.69
Reliance on professional management ................................................... 20.......................... 4.16.......................... .......................... 4.25.................. 4.54
Brain drain................................................................................................... 18.......................... 2.40.......................... .......................... 2.63.................. 3.36
Women in labor force, ratio to men*........................................................ 26.......................... 0.80.......................... .......................... 0.88.................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomir
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development ..................................................................... 26..................................... 3.64..................................... ...................................... 3.83 ........................ 4.08
Availability of financial services................................................................ 27.......................... 4.17.......................... .......................... 4.52.................. 4.89
Affordability of financial services ............................................................. 27.......................... 3.36.......................... .......................... 3.78.................. 4.18
Financing through local equity market...................................................... 25.......................... 2.10.......................... .......................... 2.67.................. 3.55
Ease of access to loans ............................................................................. 18.......................... 2.09.......................... .......................... 2.18.................. 2.77
Venture capital availability ....................................................................... 24.......................... 1.70.......................... ......................... 1.96.................. 2.30
Soundness of banks .................................................................................. 7 .......................... 4.69.......................... + ......................... 4.46 .................. 4.84
.................................................................... 25.......................... 2.70.......................... ......................... 3.06.................. 3.63
Legal rights index, 010 (best)*................................................................ .......................... n/a ........................... ......................... 9.00 ..................
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
9th pillar: Technological readiness..................................................................................... 22 .................................... 2.68 ................................... ...................................... 2.95 ........................ 4.21
Availability of latest technologies.............................................................. 26.......................... 2.80.......................... ......................... 3.47.................. 4.22
Firmlevel technology absorption............................................................. 27.......................... 3.56.......................... ......................... 4.08.................. 4.67
FDI and technology transfer....................................................................... 23.......................... 2.28.......................... ......................... 2.72.................. 3.36
Internet users/100 pop.*
.............................................................................. 10..........................15.77.......................... ......................... 20.81............... 130.79
Broadband Internet subscriptions/100 pop.*.......................................... .......................... n/a........................... ......................... 8.04...................
Internet bandwidth, kb/s/capita*.............................................................. ........................... n/a ........................... ......................... 2.64 ...................
Fixed telephone lines/100 pop.*................................................................ 10..........................25.80......................... ......................... 26.73............... 58.60
Mobile telephone subscriptions/100 pop.*................................................ 6 ........................ 125.00........................ + ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
10th pillar: Market size ................................................................................................................11 ................................... 1.92 ................................... ...................................... 1.91 ........................ 3.58
Domestic market size index, 17 (best)*................................................. 11.......................... 1.77.......................... + ......................... 1.71.................. 3.44
Foreign market size index, 17 (best)*.................................................... 14.......................... 2.36.......................... ......................... 2.50.................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
11th pillar: Business sophistication....................................................................................14 ................................... 3.81 ................................... . .................................... 3.81 ........................ 4.18
Local supplier quantity............................................................................... 20.......................... 4.41.......................... ......................... 4.65.................. 5.20
Local supplier quality ................................................................................ 26.......................... 3.77.......................... ......................... 4.02.................. 4.35
State of cluster development ................................................................... 4 .......................... 4.58.......................... + ......................... 3.73.................. 5.13
Nature of competitive advantage.............................................................. 3 .......................... 3.73.......................... + ......................... 3.24.................. 3.87
Value chain breadth ................................................................................... 15.......................... 3.48.......................... + ......................... 3.47.................. 4.23
Control of international distribution.......................................................... 6 .......................... 4.78.......................... + ......................... 4.59.................. 5.16
Production process sophistication .......................................................... 26.......................... 2.66.......................... ......................... 3.10.................. 3.77
Extent of marketing.................................................................................... 26.......................... 3.26.......................... ......................... 3.80.................. 4.50
Willingness to delegate authority ............................................................. 18.......................... 3.41.......................... ......................... 3.47.................. 3.93
Reliance on professional management.................................................... 20.......................... 4.16.......................... ......................... 4.25.................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
12th pillar: Innovation ................................................................................................................... 25 .... .............................. 2.63 ................................... . .................................... 2.91 ........................ 3.27
Capacity for innovation ............................................................................. 18.......................... 3.31.......................... ......................... 3.52.................. 4.22
Quality of scientific research institutions................................................. 27.......................... 2.78.......................... ......................... 3.75.................. 4.58
Company spending on R&D ..................................................................... 23.......................... 2.33.......................... ......................... 2.64.................. 3.26
Universityindustry collaboration in R&D................................................. 21.......................... 2.82.......................... ......................... 3.02.................. 3.69
Govt procurement of advanced tech products........................................ 14.......................... 3.00.......................... + ......................... 2.98.................. 3.63
Availability of scientists and engineers.................................................... 22.......................... 3.12.......................... ......................... 3.49.................. 4.29
Utility patents granted/million pop.*......................................................... 14.......................... 0.00.......................... ......................... 0.01.................. 0.04
Intellectual property protection ................................................................ 21.......................... 2.74.......................... ......................... 2.89.................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Notes: n/a data are not available for a region; 'multiple' means that more than one region get the maximum score.
Empty cell means that national but not regional data are used.
AR Crimea
89
Key indicators
Population (m), 2010................................................................ 1.3
GRP per capita (UAH), 2009................................................14 393
Share in Ukraine's GDP (%), 2009.......................................... 2.05
Cherkasy

Index 2011
Rank (out of 27)
Institutions
Subindex : Basic requirements ................................................................................................................... 19

1st pillar: Institutions ................................................................................................. 12
2nd pillar: Infrastructure ............................................................................................ 17
3rd pillar: Macroeconomic environment .................................................................... 13
4th pillar: Health and primary education .................................................................... 18
Subindex B: Efficiency enhancers ..................................................................................................................15
5th pillar: Higher education and training .....................................................................13
6th pillar: Goods market efficiency .............................................................................18
8th pillar: Financial market development ....................................................................20
9th pillar: Technological readiness .............................................................................15
Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
1
Market size
Health and
primary education
Technological
readiness
Subindex C: Innovation and sophistication factors ............................................................................21

11th pillar: Business sophistication ............................................................................21
12th pillar: Innovation .................................................................................................19
91
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Cherkasy

Cherkasy
Ukraine
Regions'
Average
Tax regulations..............................................................................................................16 .................. 16

Corruption .....................................................................................................................15 .................. 15
Policy instability ............................................................................................................11 .................. 12
Access to financing....................................................................................................... 9 .................. 6
Inflation ......................................................................................................................... 8 .................. 7
Tax rates........................................................................................................................ 6 .................. 7
Inadequate supply of infrastructure............................................................................... 4 .................. 3
Permit and licensing system for doing business .......................................................... 4 .................. 5
Access to land plots...................................................................................................... 3 .................. 2
Regional customs policy ............................................................................................... 3 .................. 3
Poor work ethic in the national labour force................................................................. 2 .................. 1
Poor public health ......................................................................................................... 1 .................. 2
Crime and theft ............................................................................................................. 1 .................. 2
Foreign currency regulations ........................................................................................ 1 .................. 1
10
15
20
Cherkasy
Source: Foundation for Effective Governance. Executive Opinion Survey

Note: From a list of 18 factors. respondents were asked to select the five most problematic for doing business in their country and to rank them between 1 (most problematic) and 5.
The figure show the responses weighted according to their rankings 2010-2011.

92
Cherkasy
INDICATOR
RANK /27
SCORE
VS AVG
- Worse than Ukraine's average
REGIONS'
AVERAGE
BEST PERFORMING
REGION
Basic requirements ........................................................................................................................ 19 ......................... 4.26 ................................... - ........................................ 4.31 ......................... 4.52 Kyiv
Efficiency enhancers ..................................................................................................................... 15 ......................... 3.56 ................................... - ........................................ 3.62 ......................... 4.22 Kyiv
Innovation and sophistication factors ............................................................................... 21 ......................... 3.25 ................................... - ........................................ 3.36 ......................... 3.70 Dnipropetrovsk
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1st pillar: Institutions .................................................................................................................... 12 ......................... 3.74 ................................... + ........................................ 3.69

Property rights ........................................................................................... 21 .................. 4.00 ........................ - ........................... 4.18
Intellectual property protection ................................................................. 17 .................. 2.85 ........................ - ........................... 2.89
Diversion of public funds........................................................................... 7 .................. 3.87 ........................ + ........................... 3.57
Public trust of politicians........................................................................... 3 .................. 2.77 ........................ + ........................... 2.33
Irregular payments and bribes................................................................... 6 .................. 4.15 ........................ + ........................... 3.87
Judicial independence............................................................................... 8 .................. 3.06 ........................ + ........................... 2.87
Favoritism in decisions of government officials ........................................ 12 .................. 3.08 ........................ + ........................... 2.99
Wastefulness of government spending ..................................................... 20 .................. 3.77 ........................ - ........................... 3.90
Burden of government regulation ............................................................. 22 .................. 2.88 ........................ - ........................... 3.10
Efficiency of legal framework in settling disputes ..................................... 19 .................. 2.78 ........................ - ........................... 2.89
Efficiency of legal framework in challenging regs ..................................... 13 .................. 2.89 ........................ + ........................... 2.87
Transparency of government policymaking............................................... 21 .................. 4.23 ........................ - ........................... 4.38
Business costs of terrorism....................................................................... 13 .................. 6.57 ........................ + ........................... 6.48
Business costs of crime and violence ....................................................... 12 .................. 4.74 ........................ + ........................... 4.65
Organized crime ........................................................................................ 3 .................. 5.50 ........................ + ........................... 5.10
Reliability of police services ...................................................................... 11 .................. 3.98 ........................ - ........................... 4.00
Ethical behavior of firms ........................................................................... 12 .................. 3.36 ........................ - ........................... 3.37
Strength of auditing and reporting standards ......................................... .................. n/a ........................ ...........................
Efficacy of corporate boards ..................................................................... 14 .................. 5.06 ........................ + ........................... 5.05
Protection of minority shareholders interests .......................................... 17 .................. 3.16 ........................ - ........................... 3.27
Strength of investor protection, 0 10 (best)*......................................... 1 .................. 4.70 ........................ - ........................... 4.70
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
2nd pillar: Infrastructure ............................................................................................................. 17 ......................... 3.57 ................................... - ........................................ 3.77 ......................... 4.89
Quality of overall infrastructure ................................................................. 14 .................. 4.18 ........................ + ........................... 4.15 .................. 4.73
Quality of roads ......................................................................................... 17 .................. 3.15 ........................ - ........................... 3.29 .................. 4.29
Quality of railroad infrastructure ............................................................... 18 .................. 4.79 ........................ - ........................... 4.92 .................. 5.54
Quality of port infrastructure ..................................................................... 23 .................. 1.71 ........................ - ........................... 2.73 .................. 5.24
Quality of air transport infrastructure ........................................................ 26 .................. 1.39 ........................ - ........................... 3.08 .................. 5.30
Available airline seat Kms/week. millions*................................................ 12.................. 0.00........................ - ........................... 7.19 ................101.27
Quality of electricity supply ....................................................................... 6 ................ 4.71 ........................+ ........................... 4.40 .................. 5.13
Fixed telephone lines/100 pop.*................................................................. 12 ..................24.60 ........................ - ...........................26.73 ..................58.60
Mobile telephone subscriptions/100 pop.*................................................ 14 ..................107.30. ...................... - ...........................112.47 .............. 303.80
3.01
3.02
3.03
3.04
3.05
3.06
3rd pillar: Macroeconomic environment .......................................................................... 13 ......................... 4.05 ................................... + ........................................ 4.03 ......................... 4.28 Kyiv Oblast
Government budget balance, % GDP*....................................................... .................. n/a ........................ ........................... -4.42 ..................
n/a
Gross national savings, % GDP*................................................................ .................. n/a ........................ ........................... 14.28 ..................
n/a
Inflation, annual % change* ...................................................................... 13 .................. 9.00 ........................ + ........................... 9.24 .................. 7.00 Vinnytsya
Interest rate spread, %*............................................................................. 13 .................. 10.02........................ + ........................... 10.12 .................. 6.53 Dnipropetrovsk
General government debt, % GDP*........................................................... .................. n/a ........................ ........................... 39.50 ..................
n/a
Country credit rating, 0 100 (best)*........................................................ .................. n/a ........................ ........................... 37.00 ..................
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
4th pillar: Health and primary education.......................................................................... 18 ......................... 5.68 ................................... - ........................................ 5.75 ......................... 5.97
Business impact of malaria ....................................................................... n/a .................. n/a ........................ ........................... n/a ..................
Malaria cases/100.000 pop.*..................................................................... 1 .................. 7.00 ........................ ........................... 7.00 ..................
Business impact of tuberculosis................................................................ 15 .................. 3.61 ........................ - ........................... 3.64 .................. 4.29
Tuberculosis incidence/100.000 pop.*...................................................... 12 .................. 59.50........................ + ........................... 66.88 ..................34.60
Business impact of HIV/AIDS .................................................................... 12 .................. 4.69 ........................ + ........................... 4.56 .................. 5.08
HIV prevalence, % adult pop.* .................................................................. 17 .................. 0.31 ........................ + ........................... 0.36 .................. 0.03
Infant mortality, deaths/1.000 live births*.................................................. 22 .................. 10.00........................ - ........................... 8.90 .................. 6.00
Life expectancy, years*.............................................................................. 9 .................. 69.85........................ + ...........................69.43 ..................72.72
Quality of primary education ..................................................................... 17 .................. 3.71 ........................ - ........................... 3.78 .................. 4.43
Primary education enrollment, net %*...................................................... 20 .................. 92.70........................ - ...........................94.55 ................100.00
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5th pillar: Higher education and training.......................................................................... 13 ......................... 4.46 ................................... + ........................................ 4.45 ......................... 4.99
Secondary education enrollment, gross %* .............................................. 24 ..................91.40 ........................ - ...........................94.39 ...............100.00
Tertiary education enrollment, gross %*................................................... 12 .................. 62.25........................ + ........................... 61.01 ................100.00
Quality of the educational system ............................................................. 8 .................. 4.12 ........................ + ........................... 3.92 .................. 4.39
. .................. 4.03 ........................ - ........................... 4.21 .................. 4.69
Quality of management schools ................................................................ 17 .................. 2.88 ........................ - ........................... 2.97 .................. 3.60
Internet access in schools ......................................................................... 6 .................. 4.72 ........................ + ........................... 4.37 .................. 4.93
Availability of research and training services ............................................ 17 .................. 4.40 ........................ - ........................... 4.48 .................. 4.91
Extent of staff training ............................................................................... 6 .................. 3.28 ........................ + ........................... 3.15 .................. 3.53
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
6th pillar: Goods market efficiency ................................................................................... 18 ......................... 3.74 ................................... - ........................................ 3.79 ......................... 4.02 Zakarpattya
Intensity of local competition .................................................................... 13 .................. 4.39 ........................ + ........................... 4.33 .................. 4.96 Kyiv
Extent of market dominance...................................................................... 18 .................. 3.88 ........................ - ........................... 3.94 .................. 4.50 Vinnytsya
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of anti-monopoly policy ..................................................... 5 ........................... 3,27 .......................... + .......................... 3.03 ...................3.65
Extent and effect of taxation...................................................................... 15 .......................... 3,14 .......................... - .......................... 3.19 ...................3.70
Total tax rate, % profits*........................................................................... .......................... / .......................... ...........................55.50 ..................
No. procedures to start a business*......................................................... .......................... / .......................... ..........................10.00 ..................
No. days to start a business*...................................................................... .......................... / .......................... ......................... 27.00 ..................
Agricultural policy costs ............................................................................ 2 .......................... 3,46 .......................... + .......................... 2.89 ...................3.49
Prevalence of trade barriers...................................................................... ......................... /........................... ......................... n/a ...................
Trade tariffs, % duty*................................................................................. ......................... /........................... ......................... 2.95...................
Prevalence of foreign ownership .............................................................. 22.......................... 3,00 .......................... - .......................... 3.29 .................. 4.24
Business impact of rules on FDI................................................................ 8 .......................... 4,35 .......................... +.......................... 4.17 .................. 4.84
Burden of customs procedures................................................................. 7 .......................... 3,22 .......................... +.......................... 2.92 .................. 3.71
Imports as a percentage of GDP*............................................................. 18 ..........................14,96.......................... - .......................... 24.98 ............. 103.20
Degree of customer orientation ............................................................... 24.......................... 4,35 .......................... - .......................... 4.68 .................. 5.11
Buyer sophistication.................................................................................... 18.......................... 3,07 .......................... - .......................... 3.18 .................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
7th pillar: Labor market efficiency ...................................................................................... 6 ...................................... 4,84 ..................................... + ...................................... 4.77 ...................... 4.95
Cooperation in labor-employer relations ................................................. 17.......................... 4,81 .......................... - .......................... 4.84 .................. 5.27
Flexibility of wage determination ............................................................. 18.......................... 4,90 .......................... - .......................... 5.01 .................. 5.76
Rigidity of employment index, 0100 (worst)*........................................ .......................... / ........................... .......................... 31.00 .................
Hiring and firing practices ........................................................................ 4 .......................... 4,82 .......................... +.......................... 4.61 .................. 4.90
Redundancy costs, weeks of salary*........................................................ .......................... / ........................... .......................... 13.00 ..................
Extent and effect of taxation ..................................................................... 15.......................... 3,14 .......................... - .......................... 3.19 .................. 3.70
Pay and productivity .................................................................................. 10.......................... 5,15 .......................... +.......................... 5.09 .................. 5.69
Reliance on professional management ................................................... 15.......................... 4,24 .......................... - .......................... 4.25 .................. 4.54
Brain drain................................................................................................... 13.......................... 2,75 .......................... +.......................... 2.63 .................. 3.36
Women in labor force, ratio to men*........................................................ 7 .......................... 0,91 .......................... +.......................... 0.88 .................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development ..................................................................... 20 ..................................... 3,76 ..................................... - ...................................... 3.83 ........................ 4.08
Availability of financial services................................................................ 6 .......................... 4,75 .......................... +.......................... 4.52 .................. 4.89
Affordability of financial services ............................................................. 21.......................... 3,61 .......................... - .......................... 3.78 .................. 4.18
Financing through local equity market...................................................... 24.......................... 2,42 .......................... - .......................... 2.67 .................. 3.55
Ease of access to loans ............................................................................. 4 .......................... 2,46 .......................... +.......................... 2.18 .................. 2.77
Venture capital availability ....................................................................... 20.......................... 1,84 .......................... - ......................... 1.96 .................. 2.30
Soundness of banks .................................................................................. 24.......................... 4,19 .......................... - ......................... 4.46 .................. 4.84
.................................................................... 19.......................... 2,93 .......................... - ......................... 3.06 .................. 3.63
Legal rights index, 010 (best)*................................................................ .......................... / ........................... ......................... 9.00 ..................
Volyn
Volyn
Zaporizhzhya
Donetsk
Ivano-Frankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
9th pillar: Technological readiness..................................................................................... 15 .................................... 2,83 ................................... - ...................................... 2.95 ........................ 4.21
Availability of latest technologies.............................................................. 18.......................... 3,30 .......................... - ......................... 3.47 .................. 4.22
Firm-level technology absorption ............................................................. 14.......................... 4,05 .......................... - ......................... 4.08 .................. 4.67
FDI and technology transfer....................................................................... 14.......................... 2,73 .......................... + ......................... 2.72 .................. 3.36
.............................................................................. 14.......................... 9,94 .......................... - ......................... 20.81...............130.79
Broadband Internet subscriptions/100 pop.*.......................................... .......................... / ........................... ......................... 8.04 ...................
Internet bandwidth, kb/s/capita*.............................................................. ........................... / ........................... ......................... 2.64 ...................
Fixed telephone lines/100 pop.*................................................................ 12..........................24,60......................... - ......................... 26.73............... 58.60
Mobile telephone subscriptions/100 pop.*................................................14........................ 107,30 ........................ - ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
10th pillar: Market size ................................................................................................................14 ................................... 1,72 ................................... - ...................................... 1.91 ........................ 3.58
Domestic market size index, 17 (best)*................................................. 13.......................... 1,54 .......................... - ......................... 1.71 .................. 3.44
Foreign market size index, 17 (best)*.................................................... 15.......................... 2,28 .......................... - ......................... 2.50 .................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
11th pillar: Business sophistication ....................................................................................21 ................................... 3,69 ................................... - . .................................... 3.81 ........................ 4.18
Local supplier quantity............................................................................... 21.......................... 4,38 .......................... - ......................... 4.65 .................. 5.20
Local supplier quality ................................................................................ 9 .......................... 4,12 .......................... + ......................... 4.02 .................. 4.35
State of cluster development ................................................................... 18.......................... 3,48 .......................... - ......................... 3.73 .................. 5.13
Nature of competitive advantage.............................................................. 20.......................... 3,04 .......................... - ......................... 3.24 .................. 3.87
Value chain breadth ................................................................................... 16.......................... 3,44 .......................... - ......................... 3.47 .................. 4.23
Control of international distribution.......................................................... 18.......................... 4,50 .......................... - ......................... 4.59 .................. 5.16
Production process sophistication .......................................................... 19.......................... 3,03 .......................... - ......................... 3.10 .................. 3.77
Extent of marketing.................................................................................... 17.......................... 3,66 .......................... - ......................... 3.80 .................. 4.50
Willingness to delegate authority ............................................................. 20.......................... 3,32 .......................... - ......................... 3.47 .................. 3.93
Reliance on professional management.................................................... 15.......................... 4,24 .......................... - ......................... 4.25 .................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
12th pillar: Innovation ................................................................................................................... 19 .... .............................. 2,81 ................................... - . .................................... 2.91 ........................ 3.27
Capacity for innovation ............................................................................. 23.......................... 3,22 .......................... - ......................... 3.52 .................. 4.22
Quality of scientific research institutions................................................. 8 .......................... 4,06 .......................... + ......................... 3.75 .................. 4.58
Company spending on R&D ..................................................................... 14.......................... 2,55 .......................... - ......................... 2.64 .................. 3.26
University-industry collaboration in R&D................................................. 24.......................... 2,56 .......................... - ......................... 3.02 .................. 3.69
Govt procurement of advanced tech products........................................ 4 .......................... 3,39 .......................... + ......................... 2.98 .................. 3.63
Availability of scientists and engineers .................................................... 25.......................... 2,85 .......................... - ......................... 3.49 .................. 4.29
Utility patents granted/million pop.*......................................................... 16.......................... 0,00 .......................... - ......................... 0.01 .................. 0.04
Intellectual property protection ................................................................ 17.......................... 2,85 .......................... - ......................... 2.89 .................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Notes: n/a - data are not available for a region; 'multiple' means that more than one region get the maximum score.
Cherkasy
93
Key indicators
Population (m), 2010................................................................ 1.1
Share in Ukraine's GDP (%), 2009.............................................1.6
Chernihiv

Index 2011
Rank (out of 27)
Institutions

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
1
Market size
Health and
primary education
Technological
readiness

95
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Chernihiv

Chernihiv
Ukraine
Regions'
Average
Policy instability ............................................................................................................ 15 .................. 12

Tax regulations ............................................................................................................. 14 .................. 16
Corruption ..................................................................................................................... 14 .................. 15
Tax rates ....................................................................................................................... 10 .................. 7
Inflation ......................................................................................................................... 8 .................. 7
Inefficient government bureaucracy ............................................................................ 7 .................. 6
Poor public health......................................................................................................... 3 .................. 2
Restrictive labour regulations ...................................................................................... 3 .................. 2
Regional customs policy............................................................................................... 2 .................. 3
Crime and theft ............................................................................................................ 2 .................. 2
10
15
20
Chernihiv


96
Chernihiv
INDICATOR
RANK /27
SCORE
VS AVG
Basic requirements ........................................................................................................................ 23 ......................... 4.20 ...................................

Efficiency enhancers ..................................................................................................................... 25 ......................... 3.41 ...................................
Innovation and sophistication factors ............................................................................... 27 ......................... 2.98 ...................................
REGIONS'
AVERAGE
BEST PERFORMING
REGION
........................................ 4.31 ......................... 4.52 Kyiv

........................................ 3.62 ......................... 4.22 Kyiv
........................................ 3.36 ......................... 3.70 Dnipropetrovsk
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1st pillar: Institutions .................................................................................................................... 14 ......................... 3.71 ................................... ........................................ 3.69

Property rights ........................................................................................... 9 ..................4.33 ........................ + ........................... 4.18
Intellectual property protection ................................................................. 26 .................. 2.46 ........................ ........................... 2.89
Public trust of politicians........................................................................... 18 .................. 2.18 ........................ ........................... 2.33
Wastefulness of government spending ..................................................... 25 .................. 3.42 ........................ ........................... 3.90
Burden of government regulation ............................................................. 4 .................. 3.51 ........................ + ........................... 3.10
Efficiency of legal framework in settling disputes ..................................... 21 .................. 2.78 ........................ ........................... 2.89
Efficiency of legal framework in challenging regs ..................................... 21 .................. 2.77 ........................ ........................... 2.87
Transparency of government policymaking............................................... 8 .................. 4.44 ........................ + ........................... 4.38
Organized crime ........................................................................................ 10 .................. 5.29 ........................ + ........................... 5.10
Reliability of police services ...................................................................... 22 .................. 3.74 ........................ ........................... 4.00
Ethical behavior of firms ........................................................................... 19 .................. 3.30 ........................ ........................... 3.37
Efficacy of corporate boards ..................................................................... 20 .................. 4.89 ........................ ........................... 5.05
Protection of minority shareholders interests .......................................... 9 .................. 3.39 ........................ + ........................... 3.27
Strength of investor protection, 0 10 (best)*......................................... 1 .................. 4.70 ........................ ........................... 4.70
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 22 .................. 2.93 ........................ ........................... 3.29 .................. 4.29
Quality of port infrastructure ..................................................................... 22 .................. 1.76 ........................ ........................... 2.73 .................. 5.24
Quality of air transport infrastructure ........................................................ 23 .................. 1.60 ........................ ........................... 3.08 .................. 5.30
Available airline seat Kms/week, millions*................................................ 12.................. 0.00........................ ........................... 7.19 ................101.27
Fixed telephone lines/100 pop.*................................................................. 7 ..................27.80 ........................ + ...........................26.73 ..................58.60
3.01
3.02
3.03
3.04
3.05
3.06
3rd pillar: Macroeconomic environment .......................................................................... 19 ......................... 3.98 ...................................

Government budget balance, % GDP*....................................................... .................. n/a ........................
Gross national savings, % GDP*................................................................ .................. n/a ........................
Inflation, annual % change* ...................................................................... 16 .................. 9.50 ........................
Interest rate spread, %*............................................................................. 16 ..................10.74........................
General government debt, % GDP*........................................................... .................. n/a ........................
Country credit rating, 0 100 (best)*........................................................ .................. n/a ........................
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
4th pillar: Health and primary education .......................................................................... 25 ......................... 5.58 ................................... ........................................ 5.75 ......................... 5.97
Malaria cases/100,000 pop.*..................................................................... 1 .................. 7.00 ........................ ........................... 7.00 ..................
Business impact of tuberculosis................................................................ 27 .................. 3.22 ........................ ........................... 3.64 .................. 4.29
Tuberculosis incidence/100,000 pop.*...................................................... 18 ..................68.00........................ ........................... 66.88 ..................34.60
Business impact of HIV/AIDS .................................................................... 27 .................. 4.13 ........................ ........................... 4.56 .................. 5.08
HIV prevalence, % adult pop.* .................................................................. 19 .................. 0.37 ........................ ........................... 0.36 .................. 0.03
Infant mortality, deaths/1,000 live births*.................................................. 5 .................. 8.00 ........................ + ........................... 8.90 .................. 6.00
Life expectancy, years*.............................................................................. 22 ..................67.89........................ ...........................69.43 ..................72.72
Quality of primary education ..................................................................... 25 .................. 3.40 ........................ ........................... 3.78 .................. 4.43
Primary education enrollment, net %*...................................................... 20 ..................92.70........................ ...........................94.55 ................100.00
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5th pillar: Higher education and training.......................................................................... 24 ......................... 4.08 ................................... ........................................ 4.45 ......................... 4.99
Secondary education enrollment, gross %* ..............................................11 ..................94.50 ........................ + ...........................94.39 ...............100.00
Tertiary education enrollment, gross %*................................................... 21 ..................47.30........................ ........................... 61.01 ................100.00
Quality of the educational system ............................................................. 23 .................. 3.54 ........................ ........................... 3.92 .................. 4.39
. .................. 4.04 ........................ ........................... 4.21 .................. 4.69
Quality of management schools ................................................................ 27 .................. 2.44 ........................ ........................... 2.97 .................. 3.60
Internet access in schools......................................................................... 21 .................. 4.06 ........................ ........................... 4.37 .................. 4.93
Availability of research and training services ............................................ 27 .................. 3.96 ........................ ........................... 4.48 .................. 4.91
Extent of staff training ............................................................................... 22 .................. 3.02 ........................ ........................... 3.15 .................. 3.53
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
6th pillar: Goods market efficiency ................................................................................... 25 ......................... 3.61 ...................................

Intensity of local competition .................................................................... 27 .................. 3.70 ........................
Extent of market dominance...................................................................... 25 .................. 3.50 ........................
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv
........................................ 4.03 ......................... 4.28 Kyiv Oblast

........................... 4.42 ..................
n/a
........................... 14.28 ..................
n/a
........................... 9.24 .................. 7.00 Vinnytsya
........................... 10.12 .................. 6.53 Dnipropetrovsk
n/a
........................... 39.50 ..................
n/a
........................... 37.00 ..................
........................................ 3.79 ......................... 4.02 Zakarpattya

........................... 4.33 .................. 4.96 Kyiv
........................... 3.94 .................. 4.50 Vinnytsya

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy..................................................... 25........................... 2.71 .......................... .......................... 3.03 ...................3.65

Extent and effect of taxation ...................................................................... 9 .......................... 3.33 .......................... + .......................... 3.19 ...................3.70
Total tax rate, % profits* ........................................................................... ......................... n/a........................... ..........................55.50...................
No, procedures to start a business*......................................................... .......................... n/a .......................... ..........................10.00..................
No, days to start a business*
...................................................................... .......................... n/a .......................... ......................... 27.00..................
Agricultural policy costs............................................................................ 25.......................... 2.31 .......................... .......................... 2.89 ...................3.49
Prevalence of trade barriers....................................................................... ......................... n/a........................... ......................... n/a ....................
Trade tariffs, % duty*................................................................................. ......................... n/a........................... ......................... 2.95....................
Prevalence of foreign ownership.............................................................. 20.......................... 3.10 .......................... .......................... 3.29.................. 4.24
Business impact of rules on FDI................................................................ 9 .......................... 4.31 .......................... + .......................... 4.17.................. 4.84
Burden of customs procedures................................................................. 4 .......................... 3.32 .......................... + .......................... 2.92.................. 3.71
Imports as a percentage of GDP*............................................................. 13..........................18.06.......................... .......................... 24.98............. 103.20
Degree of customer orientation ............................................................... 13.......................... 4.72 .......................... +.......................... 4.68.................. 5.11
Buyer sophistication.................................................................................... 24.......................... 2.88 .......................... .......................... 3.18.................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
7th pillar: Labor market efficiency ...................................................................................... 8 ...................................... 4.83 ..................................... + ...................................... 4.77 ...................... 4.95
Cooperation in laboremployer relations ................................................. 14.......................... 4.82 .......................... .......................... 4.84.................. 5.27
Flexibility of wage determination ............................................................. 21.......................... 4.85 .......................... .......................... 5.01.................. 5.76
Hiring and firing practices ........................................................................ 19.......................... 4.51 .......................... .......................... 4.61.................. 4.90
Extent and effect of taxation ..................................................................... 9 .......................... 3.33 .......................... + .......................... 3.19.................. 3.70
Pay and productivity .................................................................................. 3 .......................... 5.48 .......................... + .......................... 5.09.................. 5.69
Reliance on professional management ................................................... 12.......................... 4.30 .......................... +.......................... 4.25.................. 4.54
Brain drain................................................................................................... 27.......................... 2.08 .......................... .......................... 2.63.................. 3.36
Women in labor force, ratio to men*........................................................ 2 .......................... 0.96 .......................... +.......................... 0.88.................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development ..................................................................... 23..................................... 3.73 ..................................... ...................................... 3.83 ........................ 4.08
Availability of financial services................................................................ 20.......................... 4.36 .......................... .......................... 4.52.................. 4.89
Affordability of financial services ............................................................. 16.......................... 3.79 .......................... + .......................... 3.78.................. 4.18
Financing through local equity market...................................................... 5 .......................... 2.90 .......................... + .......................... 2.67.................. 3.55
Ease of access to loans ............................................................................. 19.......................... 2.09 .......................... .......................... 2.18.................. 2.77
Venture capital availability ....................................................................... 27.......................... 1.63 .......................... ......................... 1.96.................. 2.30
Soundness of banks .................................................................................. 25.......................... 4.09 .......................... ......................... 4.46 .................. 4.84
.................................................................... 15.......................... 3.00 .......................... ......................... 3.06.................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Availability of latest technologies.............................................................. 27.......................... 2.71 .......................... ......................... 3.47.................. 4.22
Firmlevel technology absorption............................................................. 25.......................... 3.74 .......................... ......................... 4.08.................. 4.67
FDI and technology transfer....................................................................... 25.......................... 2.09 .......................... ......................... 2.72.................. 3.36
Internet users/100 pop*.............................................................................. 24.......................... 7.34.......................... ......................... 20.81............... 130.79
Broadband Internet subscriptions/100 pop* .......................................... .......................... n/a ........................... ......................... 8.04...................
Fixed telephone lines/100 pop* ................................................................ 7 ..........................27.80......................... + ......................... 26.73............... 58.60
Mobile telephone subscriptions/100 pop*................................................ 2 ........................132.50 ........................ + ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*................................................. 17.......................... 1.44 .......................... ......................... 1.71.................. 3.44
Foreign market size index, 17 (best)*.................................................... 22.......................... 1.91 .......................... ......................... 2.50.................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity............................................................................... 26.......................... 4.14 .......................... ......................... 4.65.................. 5.20
Local supplier quality ................................................................................ 23.......................... 3.87 .......................... ......................... 4.02.................. 4.35
State of cluster development ................................................................... 24.......................... 3.09 .......................... ......................... 3.73.................. 5.13
Nature of competitive advantage.............................................................. 26.......................... 2.74 .......................... ......................... 3.24.................. 3.87
Value chain breadth ................................................................................... 20.......................... 3.25 .......................... ......................... 3.47.................. 4.23
Control of international distribution.......................................................... 3 .......................... 4.93 .......................... + ......................... 4.59.................. 5.16
Production process sophistication .......................................................... 27.......................... 2.56 .......................... ......................... 3.10.................. 3.77
Extent of marketing.................................................................................... 24.......................... 3.29 .......................... ......................... 3.80.................. 4.50
Willingness to delegate authority ............................................................. 25.......................... 3.19 .......................... ......................... 3.47.................. 3.93
Reliance on professional management.................................................... 12.......................... 4.30 .......................... + ......................... 4.25.................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Capacity for innovation ............................................................................. 13.......................... 3.42 .......................... ......................... 3.52.................. 4.22
Quality of scientific research institutions................................................. 25.......................... 3.08 .......................... ......................... 3.75.................. 4.58
Company spending on R&D ..................................................................... 16.......................... 2.53 .......................... ......................... 2.64.................. 3.26
Universityindustry collaboration in R&D................................................. 26.......................... 2.43 .......................... ......................... 3.02.................. 3.69
Govt procurement of advanced tech products........................................ 27.......................... 2.29 .......................... ......................... 2.98.................. 3.63
Availability of scientists and engineers.................................................... 27.......................... 2.56 .......................... ......................... 3.49.................. 4.29
Utility patents granted/million pop,*......................................................... 17.......................... 0.00 .......................... ......................... 0.01.................. 0.04
Intellectual property protection ................................................................ 26.......................... 2.46 .......................... ......................... 2.89.................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Empty cell means that national but not regional data are used
Chernihiv
97
Key indicators
Population (m), 2010................................................................ 0.9
Chernivtsi

Index 2011
Rank (out of 27)
Institutions
Subindex : Basic requirements ....................................................................................................................

12
2
16
25
4

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
Health and
primary education
Market size
Technological
readiness

99
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Chernivtsi

Chernivtsi
Ukraine
Regions'
Average
Tax regulations.............................................................................................................. 15 .................. 16

Corruption..................................................................................................................... 13 .................. 15
Policy instability............................................................................................................ 11 .................. 12
Tax rates ....................................................................................................................... 9 .................. 7
Inflation ........................................................................................................................ 8 .................. 7
Inadequate supply of infrastructure ............................................................................. 6 .................. 3
Inefficient government bureaucracy............................................................................... 4 .................. 6
Permit and licensing system for doing business.......................................................... 4 .................. 5
Crime and theft ............................................................................................................. 1 .................. 2
10
15
20
Chernivtsi


100
Chernivtsi
INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
Basic requirements ........................................................................................................................ 12 ......................... 4.33 ................................... + ........................................ 4.31 ......................... 4.52 Kyiv
Efficiency enhancers ..................................................................................................................... 23 ......................... 3.44 ................................... ........................................ 3.62 ......................... 4.22 Kyiv
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1st pillar: Institutions .................................................................................................................... 2 ......................... 3.92 ................................... + ........................................ 3.69 .........................
Property rights ........................................................................................... 18 ..................4.13 ........................ ........................... 4.18 ..................
Intellectual property protection ................................................................. 24 .................. 2.53 ........................ ........................... 2.89 ..................
Diversion of public funds........................................................................... 2 .................. 4.22 ........................ + ........................... 3.57 ..................
Public trust of politicians........................................................................... 2 .................. 2.79 ........................ + ........................... 2.33 ..................
Irregular payments and bribes................................................................... 1 .................. 4.31 ........................ + ........................... 3.87 ..................
Judicial independence............................................................................... 1 .................. 3.43 ........................ + ........................... 2.87 ..................
Favoritism in decisions of government officials ........................................ 2 .................. 3.58 ........................ + ........................... 2.99 ..................
Wastefulness of government spending ..................................................... 8 .................. 4.10 ........................ + ........................... 3.90 ..................
Burden of government regulation ............................................................. 1 .................. 3.90 ........................ + ........................... 3.10 ..................
Efficiency of legal framework in settling disputes ..................................... 2 .................. 3.41 ........................ + ........................... 2.89 ..................
Efficiency of legal framework in challenging regs ..................................... 2 .................. 3.31 ........................ + ........................... 2.87 ..................
Transparency of government policymaking............................................... 11 .................. 4.41 ........................ + ........................... 4.38 ..................
Business costs of terrorism....................................................................... 16 .................. 6.49 ........................ + ........................... 6.48 ..................
Business costs of crime and violence ....................................................... 11 .................. 4.77 ........................ + ........................... 4.65 ..................
Organized crime ........................................................................................ 3 .................. 5.50 ........................ + ........................... 5.10 ..................
Reliability of police services ...................................................................... 5 .................. 4.38 ........................ + ........................... 4.00 ..................
Ethical behavior of firms ........................................................................... 13 .................. 3.35 ........................ ........................... 3.37 ..................
..................
Efficacy of corporate boards ..................................................................... 21 .................. 4.84 ........................ ........................... 5.05 ..................
Protection of minority shareholders interests .......................................... 6 .................. 3.47 ........................ + ........................... 3.27 ..................
Strength of investor protection, 0 10 (best)*......................................... 1 .................. 4.70 ........................ ........................... 4.70 ...................
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
2nd pillar: Infrastructure .............................................................................................................

Quality of overall infrastructure .................................................................
Quality of roads .........................................................................................
Quality of railroad infrastructure ...............................................................
Quality of port infrastructure .....................................................................
Quality of air transport infrastructure ........................................................
Available airline seat Kms/week, millions*................................................
Quality of electricity supply .......................................................................
Fixed telephone lines/100 pop,*.................................................................
Mobile telephone subscriptions/100 pop,*................................................
3.01
3.02
3.03
3.04
3.05
3.06
3rd pillar: Macroeconomic environment .......................................................................... 25 ......................... 3.87 ................................... ........................................ 4.03 ......................... 4.28 Kyiv Oblast
Government budget balance, % GDP*....................................................... .................. n/a ........................ ........................... 4.42 ..................
n/a
n/a
Interest rate spread, %*............................................................................. 26 ..................14.50 ........................ ........................... 10.12 .................. 6.53 Dnipropetrovsk
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
4th pillar: Health and primary education .......................................................................... 4 ......................... 5.94 ................................... + ........................................ 5.75 ......................... 5.97
Malaria cases/100,000 pop,*..................................................................... 1 .................. 7.00 ........................ ........................... 7.00 ..................
Business impact of tuberculosis................................................................ 9 .................. 3.77 ........................ + ........................... 3.64 .................. 4.29
Tuberculosis incidence/100,000 pop,*...................................................... 2 ..................49.20 ........................ + ........................... 66.88 ..................34.60
HIV prevalence, % adult pop,* .................................................................. 4 .................. 0.10 ........................ + ........................... 0.36 .................. 0.03
Life expectancy, years*.............................................................................. 3 ..................71.83 ........................ + ...........................69.43 ..................72.72
Quality of primary education ..................................................................... 2 .................. 4.39 ........................ + ........................... 3.78 .................. 4.43
Primary education enrollment, net %*...................................................... 13 ..................93.90 ........................ ...........................94.55 ................100.00
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5th pillar: Higher education and training..........................................................................

Secondary education enrollment, gross %*..............................................
Tertiary education enrollment, gross %*...................................................
Quality of the educational system .............................................................
Quality of math and science education......................................................
Quality of management schools ................................................................
Internet access in schools.........................................................................
Availability of research and training services ............................................
Extent of staff training ...............................................................................
6.01
6.02
Extent of market dominance...................................................................... 8 .................. 4.10 ........................ + ........................... 3.94 .................. 4.50 Vinnytsya
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
16 ......................... 3.61 ................................... ........................................ 3.77 ......................... 4.89

19 .................. 3.98 ........................ ........................... 4.15 .................. 4.73
20 .................. 3.00 ........................ ........................... 3.29 .................. 4.29
27 .................. 4.26 ........................ ........................... 4.92 .................. 5.54
16 .................. 2.19 ........................ ........................... 2.73 .................. 5.24
6 .................. 4.37 ........................ + ........................... 3.08 .................. 5.30
9 .................. 0.08 ........................ ........................... 7.19 ................101.27
25 ................3.95 ........................ ........................... 4.40 .................. 5.13
18 ..................22.70 ........................ ...........................26.73 ..................58.60
9 ..................114.60. ...................... + ...........................112.47 .............. 303.80
20 ......................... 4.30 ................................... ........................................ 4.45 ......................... 4.99

21 ..................92.10 ........................ ........................... 94.39 ................100.00
16 ..................53.59 ........................ ........................... 61.01 ................100.00
4 .................. 4.27 ........................ + ........................... 3.92 .................. 4.39
4 .................. 4.48 ........................ + ........................... 4.21 .................. 4.69
22 .................. 2.73 ........................ ........................... 2.97 .................. 3.60
23 .................. 3.95 ........................ ........................... 4.37 .................. 4.93
22 .................. 4.26 ........................ ........................... 4.48 .................. 4.91
12 .................. 3.14 ........................ ........................... 3.15 .................. 3.53
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy.....................................................13...........................3.10 .......................... + .......................... 3.03 ...................3.65

Extent and effect of taxation ...................................................................... 4 ..........................3.40 .......................... + .......................... 3.19 ...................3.70
Total tax rate, % profits* .......................................................................... ......................... n/a ........................... ...........................55.50 ..................
No, procedures to start a business*......................................................... .......................... n/a .......................... ..........................10.00 ..................
No, days to start a business*
...................................................................... .......................... n/a .......................... .........................27.00 ..................
Agricultural policy costs ............................................................................ 8 ..........................3.16 .......................... + .......................... 2.89 ...................3.49
Prevalence of trade barriers....................................................................... .......................... n/a ........................... ......................... n/a ....................
Trade tariffs, % duty*................................................................................. .......................... n/a ........................... ......................... 2.95....................
Prevalence of foreign ownership.............................................................. 16 ..........................3.20 .......................... .......................... 3.29 .................. 4.24
Business impact of rules on FDI................................................................ 7 ..........................4.36 .......................... + .......................... 4.17 .................. 4.84
Burden of customs procedures................................................................. 17 ..........................2.88 .......................... .......................... 2.92 .................. 3.71
Imports as a percentage of GDP*............................................................. 23 ..........................10.00.......................... ..........................24.98 ............. 103.20
Degree of customer orientation ............................................................... 9 ..........................4.80 .......................... + .......................... 4.68 .................. 5.11
Buyer sophistication.................................................................................... 23 ..........................2.95 .......................... .......................... 3.18 .................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
7th pillar: Labor market efficiency ...................................................................................... 4 ......................................4.85 ..................................... + ...................................... 4.77 ...................... 4.95
Cooperation in laboremployer relations ................................................. 2 ..........................5.21 .......................... + .......................... 4.84 .................. 5.27
Flexibility of wage determination ............................................................. 14 ..........................4.98 .......................... .......................... 5.01 .................. 5.76
Rigidity of employment index, 0100 (worst)*........................................ .......................... n/a ........................... ..........................31.00 .................
Hiring and firing practices ........................................................................ 18 ..........................4.51 .......................... .......................... 4.61 .................. 4.90
Redundancy costs, weeks of salary*........................................................ .......................... n/a ........................... ..........................13.00 ..................
Extent and effect of taxation ..................................................................... 4 ..........................3.40 .......................... + .......................... 3.19 .................. 3.70
Pay and productivity .................................................................................. 4 ..........................5.41 .......................... + .......................... 5.09 .................. 5.69
Reliance on professional management ................................................... 2 ..........................4.53 .......................... + .......................... 4.25 .................. 4.54
Brain drain................................................................................................... 16 ..........................2.52 .......................... .......................... 2.63 .................. 3.36
Women in labor force, ratio to men*........................................................ 15 ..........................0.87 .......................... .......................... 0.88 .................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development ..................................................................... 7 .....................................3.94 ..................................... + ...................................... 3.83 ........................ 4.08
Availability of financial services................................................................ 21 ..........................4.36 .......................... .......................... 4.52 .................. 4.89
Affordability of financial services ............................................................. 14 ..........................3.83 .......................... + .......................... 3.78 .................. 4.18
Financing through local equity market...................................................... 15 ..........................2.64 .......................... .......................... 2.67 .................. 3.55
Ease of access to loans ............................................................................. 13 ..........................2.19 .......................... + .......................... 2.18 .................. 2.77
Venture capital availability ....................................................................... 1 ..........................2.30 .......................... + ......................... 1.96 .................. 2.30
Soundness of banks .................................................................................. 17 ..........................4.43 .......................... ......................... 4.46 .................. 4.84
.................................................................... 1 ..........................3.63 .......................... + ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
9th pillar: Technological readiness.....................................................................................21 .................................... 2.71 ................................... ...................................... 2.95 ........................ 4.21
Availability of latest technologies.............................................................. 20 ..........................3.28 .......................... ......................... 3.47 .................. 4.22
Firmlevel technology absorption............................................................. 26 ..........................3.60 .......................... ......................... 4.08 .................. 4.67
FDI and technology transfer....................................................................... 22 ..........................2.56 .......................... ......................... 2.72 .................. 3.36
.............................................................................. 25 .......................... 7.23 .......................... ......................... 20.81...............130.79
Internet users/100 pop,*
Broadband Internet subscriptions/100 pop,*.......................................... .......................... n/a ........................... ......................... 8.04 ...................
Fixed telephone lines/100 pop,*................................................................18..........................22.70......................... ......................... 26.73............... 58.60
Mobile telephone subscriptions/100 pop,*................................................ 9 ........................114.60 ........................ + .........................112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*................................................. 26 ..........................1.04 .......................... ......................... 1.71 .................. 3.44
Foreign market size index, 17 (best)*.................................................... 27 ..........................1.37 .......................... ......................... 2.50 .................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity............................................................................... 24 ..........................4.23 .......................... ......................... 4.65 .................. 5.20
Local supplier quality ................................................................................ 25 ..........................3.81 .......................... ......................... 4.02 .................. 4.35
State of cluster development ................................................................... 21 ..........................3.23 .......................... ......................... 3.73 .................. 5.13
Nature of competitive advantage.............................................................. 21 ..........................3.03 .......................... ......................... 3.24 .................. 3.87
Value chain breadth ................................................................................... 23 ..........................3.06 .......................... ......................... 3.47 .................. 4.23
Control of international distribution.......................................................... 24 ..........................4.33 .......................... ......................... 4.59 .................. 5.16
Production process sophistication .......................................................... 20 ..........................3.02 .......................... ......................... 3.10 .................. 3.77
Extent of marketing.................................................................................... 27 ..........................3.25 .......................... ......................... 3.80 .................. 4.50
Willingness to delegate authority ............................................................. 2 ..........................3.83 .......................... + ......................... 3.47 .................. 3.93
Reliance on professional management.................................................... 2 ..........................4.53 .......................... + ......................... 4.25 .................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
12th pillar: Innovation ...................................................................................................................24 .... .............................. 2.67 ................................... . .................................... 2.91 ........................ 3.27
Capacity for innovation ............................................................................. 14 ..........................3.41 .......................... ......................... 3.52 .................. 4.22
Quality of scientific research institutions................................................. 23 ..........................3.21 .......................... ......................... 3.75 .................. 4.58
Company spending on R&D ..................................................................... 26 ..........................2.21 .......................... ......................... 2.64 .................. 3.26
Universityindustry collaboration in R&D................................................. 22 ..........................2.74 .......................... ......................... 3.02 .................. 3.69
Govt procurement of advanced tech products........................................ 21 ..........................2.63 .......................... ......................... 2.98 .................. 3.63
Availability of scientists and engineers.................................................... 13 ..........................3.59 .......................... + ......................... 3.49 .................. 4.29
Utility patents granted/million pop,*......................................................... 4 ..........................0.03 .......................... + ......................... 0.01 .................. 0.04
Intellectual property protection ................................................................ 24 ..........................2.53 .......................... ......................... 2.89 .................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Chernivtsi
101
Key indicators
Population (m), 2010................................................................ 3.3
Share in Ukraine's GDP (%), 2009.........................................10.22
Dnipropetrovsk

Index 2011
Rank (out of 27)
Institutions

4th pillar: Health and primary education ....................................................................19
Subindex B: Efficiency enhancers ..................................................................................................................
5th pillar: Higher education and training .....................................................................
6th pillar: Goods market efficiency .............................................................................
7th pillar: Labor market efficiency ..............................................................................
8th pillar: Financial market development ....................................................................
9th pillar: Technological readiness .............................................................................
10th pillar: Market size ...............................................................................................
2
6
2
3
3
3
2
Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
Health and
primary education
Market size
Technological
readiness

103
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Dnipropetrovsk

Dnipropetrovsk
Ukraine
Regions'
Average
Tax regulations ..............................................................................................................17 ..................16

Corruption .....................................................................................................................13 ..................15
Tax rates ....................................................................................................................... 9 .................. 7
Policy instability ............................................................................................................ 9 ..................12
Inflation ......................................................................................................................... 8 .................. 7
Inefficient government bureaucracy .............................................................................. 6 .................. 6
Local and national government instability..................................................................... 6 .................. 6
Crime and theft ............................................................................................................. 2 .................. 2
Access to land plots ...................................................................................................... 2 .................. 2
Poor work ethic in the national labour force ................................................................. 1 .................. 1
10
15
20
Dnipropetrovsk


104
Dnipropetrovsk
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
Efficiency enhancers ..................................................................................................................... 2 ......................... 3.95 ................................... + ........................................ 3.62 ......................... 4.22 Kyiv
Innovation and sophistication factors ............................................................................... 1 ......................... 3.70 ................................... + ........................................ 3.36 ......................... 3.70 Dnipropetrovsk
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights ........................................................................................... 19 ..................4.13 ........................ ........................... 4.18
Diversion of public funds........................................................................... 18 .................. 3.46 ........................ ........................... 3.57
Irregular payments and bribes................................................................... 20 .................. 3.71 ........................ ........................... 3.87
Judicial independence............................................................................... 25 .................. 2.52 ........................ ........................... 2.87
Favoritism in decisions of government officials ........................................ 25 .................. 2.71 ........................ ........................... 2.99
Wastefulness of government spending ..................................................... 14 .................. 3.91 ........................ + ........................... 3.90
Business costs of crime and violence ....................................................... 17 .................. 4.51 ........................ ........................... 4.65
Organized crime ........................................................................................ 15 .................. 5.15 ........................ + ........................... 5.10
Ethical behavior of firms ........................................................................... 2 .................. 3.84 ........................ + ........................... 3.37
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09

Quality of roads .........................................................................................
Fixed telephone lines/100 pop.*.................................................................
Mobile telephone subscriptions/100 pop.*................................................
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
Inflation, annual % change* ...................................................................... 15 .................. 9.30 ........................ ........................... 9.24 .................. 7.00 Vinnytsya
Interest rate spread, %*............................................................................. 1 .................. 6.53 ........................ + ........................... 10.12 .................. 6.53 Dnipropetrovsk
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Business impact of malaria ....................................................................... n/a.................. n/a ........................ ........................... n/a ..................
Tuberculosis incidence/100.000 pop.*...................................................... 26 ..................93.70........................ ........................... 66.88 ..................34.60
Infant mortality, deaths/1.000 live births*.................................................. 21 .................. 9.50 ........................ ........................... 8.90 .................. 6.00
Primary education enrollment, net %*...................................................... 7 ..................96.20........................ + ...........................94.55 ................100.00
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
Secondary education enrollment, gross %* .............................................. 5 ..................97.00 ........................+ ...........................94.39 ...............100.00
Tertiary education enrollment, gross %*................................................... 6 ..................74.10........................ + ........................... 61.01 ................100.00
. .................. 3.81 ........................ ........................... 4.21 .................. 4.69
Quality of management schools ................................................................ 1 .................. 3.60 ........................ + ........................... 2.97 .................. 3.60
Internet access in schools ......................................................................... 20 .................. 4.07 ........................ ........................... 4.37 .................. 4.93
Availability of research and training services ............................................ 4 .................. 4.81 ........................ + ........................... 4.48 .................. 4.91
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
6th pillar: Goods market efficiency ................................................................................... 2 ......................... 3.99 ................................... + ........................................ 3.79 ......................... 4.02 Zakarpattya
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
6 ......................... 4.00 ................................... + ........................................ 3.77 ......................... 4.89

17 .................. 4.14 ........................ ........................... 4.15 .................. 4.73
18 .................. 3.10 ........................ ........................... 3.29 .................. 4.29
3 .................. 5.33 ........................ + ........................... 4.92 .................. 5.54
9 .................. 3.23 ........................ + ........................... 2.73 .................. 5.24
10 .................. 4.05 ........................ + ........................... 3.08 .................. 5.30
3 .................. 14.32........................ +........................... 7.19 ................101.27
11 ................4.43 ........................+ ........................... 4.40 .................. 5.13
5 ..................32.80 ........................+ ...........................26.73 ..................58.60
15 ..................106.70. ...................... ...........................112.47 .............. 303.80
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy ..................................................... 4 ...........................3.29 .......................... + .......................... 3.03 ...................3.65

Extent and effect of taxation ......................................................................11 ..........................3.27 .......................... + .......................... 3.19 ...................3.70
Total tax rate. % profits* ........................................................................... .......................... n/a ........................... ..........................55.50..................
No. procedures to start a business*......................................................... .......................... n/a .......................... ..........................10.00.................
No. days to start a business*...................................................................... .......................... n/a .......................... ......................... 27.00.................
Prevalence of trade barriers....................................................................... ......................... n/a ........................... ......................... n/a ...................
Trade tariffs, % duty*................................................................................. ......................... n/a ........................... ......................... 2.95...................
Prevalence of foreign ownership.............................................................. 9 ..........................3.43 .......................... + .......................... 3.29.................. 4.24
Business impact of rules on FDI................................................................ 21..........................3.97 .......................... .......................... 4.17.................. 4.84
Burden of customs procedures................................................................. 16..........................2.91 .......................... .......................... 2.92.................. 3.71
Imports as a percentage of GDP*............................................................. 6 ..........................33.27.......................... + .......................... 24.98 ............. 103.20
Degree of customer orientation ............................................................... 1 ..........................5.11 .......................... + .......................... 4.68.................. 5.11
Buyer sophistication.................................................................................... 5 ..........................3.40 .......................... + .......................... 3.18.................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Cooperation in laboremployer relations ................................................. 11..........................4.89 .......................... + .......................... 4.84.................. 5.27
Flexibility of wage determination ............................................................. 5 ..........................5.18 .......................... + .......................... 5.01.................. 5.76
Hiring and firing practices ........................................................................ 1 ..........................4.90 .......................... + .......................... 4.61.................. 4.90
Extent and effect of taxation ..................................................................... 11..........................3.27 .......................... + .......................... 3.19.................. 3.70
Pay and productivity .................................................................................. 11..........................5.13 .......................... + .......................... 5.09.................. 5.69
Reliance on professional management ................................................... 1 ..........................4.54 .......................... + .......................... 4.25.................. 4.54
Brain drain................................................................................................... 3 ..........................3.07 .......................... + .......................... 2.63.................. 3.36
Women in labor force, ratio to men*........................................................ 23..........................0.84 .......................... .......................... 0.88.................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
Availability of financial services................................................................ 11..........................4.60 .......................... + .......................... 4.52.................. 4.89
Affordability of financial services ............................................................. 5 ..........................3.97 .......................... + .......................... 3.78.................. 4.18
Financing through local equity market...................................................... 8 ..........................2.81 .......................... + .......................... 2.67.................. 3.55
Ease of access to loans ............................................................................. 2 ..........................2.57 .......................... + .......................... 2.18.................. 2.77
Venture capital availability ....................................................................... 7 ..........................2.16 .......................... + ......................... 1.96.................. 2.30
Soundness of banks .................................................................................. 10..........................4.61 .......................... + ......................... 4.46 .................. 4.84
.................................................................... 7 ..........................3.23 .......................... + ......................... 3.06.................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
9th pillar: Technological readiness..................................................................................... 3 .................................... 3.30 ................................... + ...................................... 2.95 ........................ 4.21
Availability of latest technologies.............................................................. 4 ..........................3.95 .......................... + ......................... 3.47.................. 4.22
Firmlevel technology absorption............................................................. 5 ..........................4.40 .......................... + ......................... 4.08.................. 4.67
FDI and technology transfer....................................................................... 5 ..........................3.09 .......................... + ......................... 2.72.................. 3.36
.............................................................................. 4 ..........................33.16.......................... + ......................... 20.81............... 130.79
Broadband Internet subscriptions/100 pop,*.......................................... .......................... n/a ........................... ......................... 8.04...................
Fixed telephone lines/100 pop.*................................................................ 5 ..........................32.80......................... + ......................... 26.73............... 58.60
Mobile telephone subscriptions/100 pop.*................................................15........................106.70 ........................ ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
10th pillar: Market size ................................................................................................................ 2 ................................... 2.88 ................................... + ...................................... 1.91 ........................ 3.58
Domestic market size index, 17 (best)*................................................. 2 ..........................2.60 .......................... + ......................... 1.71.................. 3.44
Foreign market size index, 17 (best)*.................................................... 3 ..........................3.70 .......................... + ......................... 2.50.................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
11th pillar: Business sophistication.................................................................................... 1 ................................... 4.18 ................................... + . .................................... 3.81 ........................ 4.18
Local supplier quantity............................................................................... 1 ..........................5.20 .......................... + ......................... 4.65.................. 5.20
Local supplier quality ................................................................................ 1 ..........................4.35 .......................... + ......................... 4.02.................. 4.35
State of cluster development ................................................................... 2 ..........................4.91 .......................... + ......................... 3.73.................. 5.13
Nature of competitive advantage.............................................................. 8 ..........................3.39 .......................... + ......................... 3.24.................. 3.87
Value chain breadth ................................................................................... 10..........................3.64 .......................... + ......................... 3.47.................. 4.23
Control of international distribution.......................................................... 14..........................4.63 .......................... + ......................... 4.59.................. 5.16
Production process sophistication .......................................................... 5 ..........................3.26 .......................... + ......................... 3.10.................. 3.77
Extent of marketing.................................................................................... 2 ..........................4.42 .......................... + ......................... 3.80.................. 4.50
Willingness to delegate authority ............................................................. 4 ..........................3.64 .......................... + ......................... 3.47.................. 3.93
Reliance on professional management.................................................... 1 ..........................4.54 .......................... + ......................... 4.25.................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
12th pillar: Innovation ................................................................................................................... 3 .... .............................. 3.23 ................................... + . .................................... 2.91 ........................ 3.27
Capacity for innovation ............................................................................. 7 ..........................3.86 .......................... + ......................... 3.52.................. 4.22
Quality of scientific research institutions................................................. 14..........................3.86 .......................... + ......................... 3.75.................. 4.58
Company spending on R&D ..................................................................... 1 ..........................3.26 .......................... + ......................... 2.64.................. 3.26
Universityindustry collaboration in R&D................................................. 5 ..........................3.40 .......................... + ......................... 3.02.................. 3.69
Govt procurement of advanced tech products........................................ 13..........................3.10 .......................... + ......................... 2.98.................. 3.63
Availability of scientists and engineers.................................................... 1 ..........................4.29 .......................... + ......................... 3.49.................. 4.29
Utility patents granted/million pop.*......................................................... 7 ..........................0.02 .......................... + ......................... 0.01.................. 0.04
Intellectual property protection ................................................................ 16..........................2.87 .......................... ......................... 2.89.................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Dnipropetrovsk
105
Key indicators
Population (m), 2010................................................................ 4.4
Gross Regional Product (UAH m), 2009..............................103 739
Donetsk

Index 2011
Rank (out of 27)
Institutions

7
Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3

2
1
Market size
Health and
primary education
Technological
readiness

107
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Donetsk

Donetsk
Ukraine
Regions'
Average
Tax regulations ............................................................................................................. 16 ..................16

Corruption ..................................................................................................................... 15 ..................15
Tax rates ....................................................................................................................... 8 .................. 7
Inefficient government bureaucracy............................................................................... 7 .................. 6
Inadequately educated workforce ................................................................................ 6 .................. 4
Inflation ......................................................................................................................... 6 .................. 7
Access to financing ....................................................................................................... 5 .................. 6
Crime and theft ............................................................................................................. 2 .................. 2
10
15
20
Donetsk


108
Donetsk
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights ........................................................................................... 4 ..................4.53 ........................+ ........................... 4.18
Intellectual property protection ................................................................. 8 .................. 2.95 ........................ + ........................... 2.89
Business costs of terrorism....................................................................... 18 .................. 6.48 ........................ ........................... 6.48
Organized crime ........................................................................................ 21 .................. 4.82 ........................ ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
2nd pillar: Infrastructure ............................................................................................................. 5 ......................... 4.11 ................................... + ........................................ 3.77 ......................... 4.89
Quality of roads ......................................................................................... 3 .................. 4.01 ........................ + ........................... 3.29 .................. 4.29
Quality of railroad infrastructure ............................................................... 6 .................. 5.28 ........................ + ........................... 4.92 .................. 5.54
Available airline seat Kms/week, millions*................................................ 4 .................. 10.75........................ + ........................... 7.19 ................101.27
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
Inflation, annual % change* ...................................................................... 23 ..................10.30........................ ........................... 9.24 .................. 7.00 Vinnytsya
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
4th pillar: Health and primary education .......................................................................... 24 ......................... 5.59 ...................................
Business impact of malaria ....................................................................... n/a .................. n/a ........................
Malaria cases/100.000 pop.*..................................................................... 1 .................. 7.00 ........................
Business impact of tuberculosis................................................................ 17 .................. 3.57 ........................
Tuberculosis incidence/100.000 pop.*...................................................... 21 ..................80.20........................
HIV prevalence, % adult pop.* .................................................................. 26 .................. 0.96 ........................
Infant mortality, deaths/1.000 live births*.................................................. 27 ..................11.80........................
Life expectancy, years*.............................................................................. 26 ..................67.65........................
Quality of primary education ..................................................................... 22 .................. 3.52 ........................
Primary education enrollment, net %*...................................................... 18 ..................93.30........................
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
Secondary education enrollment, gross %* ..............................................27 ..................88.50 ........................ ...........................94.39 ...............100.00
. .................. 4.07 ........................ ........................... 4.21 .................. 4.69
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
........................................ 5.75 ......................... 5.97

........................... n/a ..................
........................... 7.00 ..................
........................... 3.64 .................. 4.29
........................... 66.88 ..................34.60
........................... 4.56 .................. 5.08
........................... 0.36 .................. 0.03
........................... 8.90 .................. 6.00
...........................69.43 ..................72.72
........................... 3.78 .................. 4.43
...........................94.55 ................100.00
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy ..................................................... 8 ...........................3.16 .......................... + .......................... 3.03 ...................3.65

Extent and effect of taxation ......................................................................15 ..........................3.14 .......................... .......................... 3.19 ...................3.70
Total tax rate. % profits* ........................................................................... .......................... n/a ........................... ..........................55.50..................
No. procedures to start a business*.......................................................... .......................... n/a .......................... ..........................10.00 .................
No. days to start a business*...................................................................... .......................... n/a .......................... ......................... 27.00 .................
Trade tariffs, % duty*................................................................................. ......................... n/a ........................... ......................... 2.95...................
Prevalence of foreign ownership .............................................................. 8 ..........................3.55 .......................... + .......................... 3.29 .................. 4.24
Business impact of rules on FDI................................................................15 ..........................4.07 .......................... .......................... 4.17 .................. 4.84
Burden of customs procedures.................................................................10 ..........................3.06 .......................... + .......................... 2.92 .................. 3.71
Imports as a percentage of GDP*.............................................................14 ..........................16.97.......................... .......................... 24.98 ............. 103.20
Buyer sophistication....................................................................................19 ..........................3.07 .......................... .......................... 3.18 .................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
7th pillar: Labor market efficiency ......................................................................................15 ......................................4.79 ..................................... + ...................................... 4.77 ...................... 4.95
Cooperation in laboremployer relations .................................................15 ..........................4.82 .......................... .......................... 4.84 .................. 5.27
Flexibility of wage determination .............................................................19 ..........................4.89 .......................... .......................... 5.01 .................. 5.76
Rigidity of employment index, 0100 (worst)*........................................ .......................... n/a ........................... .......................... 31.00 .................
Hiring and firing practices ........................................................................13 ..........................4.59 .......................... .......................... 4.61 .................. 4.90
Redundancy costs, weeks of salary*........................................................ .......................... n/a ........................... .......................... 13.00 ..................
Extent and effect of taxation .....................................................................15 ..........................3.14 .......................... .......................... 3.19 .................. 3.70
Pay and productivity ..................................................................................23 ..........................4.88 .......................... .......................... 5.09 .................. 5.69
Brain drain................................................................................................... 4 ..........................3.04 .......................... + .......................... 2.63 .................. 3.36
Women in labor force, ratio to men*........................................................16 ..........................0.86 .......................... .......................... 0.88 .................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
Availability of financial services................................................................ 2 ..........................4.83 .......................... + .......................... 4.52 .................. 4.89
Financing through local equity market...................................................... 1 ..........................3.55 .......................... + .......................... 2.67 .................. 3.55
Ease of access to loans .............................................................................12 ..........................2.19 .......................... + .......................... 2.18 .................. 2.77
Venture capital availability .......................................................................14 ..........................1.96 .......................... ......................... 1.96 .................. 2.30
Soundness of banks .................................................................................. 9 ..........................4.62 .......................... + ......................... 4.46 .................. 4.84
.................................................................... 3 ..........................3.37 .......................... + ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Availability of latest technologies.............................................................. 2 ..........................4.10 .......................... + ......................... 3.47 .................. 4.22
Firmlevel technology absorption ............................................................. 3 ..........................4.60 .......................... + ......................... 4.08 .................. 4.67
FDI and technology transfer....................................................................... 3 ..........................3.21 .......................... + ......................... 2.72 .................. 3.36
.............................................................................. 7 ..........................21.70.......................... + ......................... 20.81...............130.79
Broadband Internet subscriptions/100 pop.*.......................................... .......................... n/a ........................... ......................... 8.04 ...................
Fixed telephone lines/100 pop.*................................................................16 ..........................23.50......................... ......................... 26.73............... 58.60
Mobile telephone subscriptions/100 pop.*................................................7 ........................119.40 ........................ + ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
10th pillar: Market size ................................................................................................................3 ................................... 2.66 ................................... + ...................................... 1.91 ........................ 3.58
Domestic market size index, 17 (best)*................................................. 6 ..........................2.20 .......................... + ......................... 1.71 .................. 3.44
Foreign market size index, 17 (best)*.................................................... 1 ..........................4.04 .......................... + ......................... 2.50 .................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
11th pillar: Business sophistication .................................................................................... 2 ................................... 4.10 ................................... + . .................................... 3.81 ........................ 4.18
Local supplier quantity............................................................................... 5 ..........................5.02 .......................... + ......................... 4.65 .................. 5.20
Local supplier quality ................................................................................14 ..........................4.02 .......................... ......................... 4.02 .................. 4.35
State of cluster development ................................................................... 1 ..........................5.13 .......................... + ......................... 3.73 .................. 5.13
Nature of competitive advantage..............................................................13 ..........................3.24 .......................... ......................... 3.24 .................. 3.87
Value chain breadth ................................................................................... 4 ..........................3.86 .......................... + ......................... 3.47 .................. 4.23
Control of international distribution.......................................................... 8 ..........................4.71 .......................... + ......................... 4.59 .................. 5.16
Production process sophistication .......................................................... 7 ..........................3.21 .......................... + ......................... 3.10 .................. 3.77
Extent of marketing.................................................................................... 4 ..........................4.29 .......................... + ......................... 3.80 .................. 4.50
Willingness to delegate authority .............................................................22 ..........................3.30 .......................... ......................... 3.47 .................. 3.93
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Capacity for innovation .............................................................................11 ..........................3.54 .......................... + ......................... 3.52 .................. 4.22
Quality of scientific research institutions.................................................12 ..........................3.97 .......................... + ......................... 3.75 .................. 4.58
Company spending on R&D ..................................................................... 2 ..........................3.10 .......................... + ......................... 2.64 .................. 3.26
Universityindustry collaboration in R&D................................................. 2 ..........................3.69 .......................... + ......................... 3.02 .................. 3.69
Govt procurement of advanced tech products........................................ 5 ..........................3.32 .......................... + ......................... 2.98 .................. 3.63
Availability of scientists and engineers .................................................... 3 ..........................4.15 .......................... + ......................... 3.49 .................. 4.29
Utility patents granted/million pop.*......................................................... 9 ..........................0.01 .......................... ......................... 0.01 .................. 0.04
Intellectual property protection ................................................................ 8 ..........................2.95 .......................... + ......................... 2.89 .................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Donetsk
109
Key indicators
Population (m), 2010................................................................ 1.4
IvanoFrankivsk

Index 2011
Rank (out of 27)
Institutions

21
20
20
16
13

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
Health and
primary education
Market size
Technological
readiness

111
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
IvanoFrankivsk

IvanoFrankivsk
Ukraine
Regions'
Average
0
Tax regulations ............................................................................................................. 20 .................. 16

Corruption ..................................................................................................................... 16 .................. 15
Tax rates ....................................................................................................................... 8 .................. 7
Inflation.......................................................................................................................... 5 .................. 7
Regional customs policy................................................................................................ 4 .................. 3
Crime and theft ............................................................................................................. 1 .................. 2
10
15
20
IvanoFrankivsk


112
IvanoFrankivsk
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights ...........................................................................................22 ..................3.96 ........................ ........................... 4.18
Burden of government regulation ............................................................. 15 .................. 3.09 ........................ ........................... 3.10
Efficiency of legal framework in settling disputes ..................................... 6 .................. 3.05 ........................ + ........................... 2.89
Organized crime ........................................................................................ 9 .................. 5.30 ........................ + ........................... 5.10
Reliability of police services ...................................................................... 10 .................. 4.04 ........................ + ........................... 4.00
Protection of minority shareholders interests .......................................... 26 .................. 2.90 ........................ ........................... 3.27
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 24 .................. 2.69 ........................ ........................... 3.29 .................. 4.29
Available airline seat Kms/week, millions* ................................................ 6 .................. 0.89 ........................ ........................... 7.19 ................101.27
Quality of electricity supply....................................................................... 15 ................ 4.34 ........................ ........................... 4.40 .................. 5.13
Mobile telephone subscriptions/100 pop.*................................................ 21 ..................90.00. ...................... ...........................112.47 .............. 303.80
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
Interest rate spread, %*............................................................................. 19 ..................11.23........................ ........................... 10.12 .................. 6.53 Dnipropetrovsk
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Tuberculosis incidence/100.000 pop.*...................................................... 15 ..................66.10........................ + ........................... 66.88 ..................34.60
Infant mortality, deaths/1.000 live births*.................................................. 23 ..................10.10........................ ........................... 8.90 .................. 6.00
Life expectancy, years*.............................................................................. 4 ..................71.67........................ + ...........................69.43 ..................72.72
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
Quality of math and science education...................................................... .6 .................. 4.43 ........................ + ........................... 4.21 .................. 4.69
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy..................................................... 18.......................... 2.92 .......................... .......................... 3.03 ...................3.65

Extent and effect of taxation ..................................................................... 19.......................... 3.07 .......................... .......................... 3.19 ...................3.70
Total tax rate. % profits*........................................................................... ......................... n/a........................... ..........................55.50...................
No. procedures to start a business*......................................................... .......................... n/a .......................... ..........................10.00..................
...................................................................... .......................... n/a .......................... ......................... 27.00..................
Agricultural policy costs............................................................................ 22.......................... 2.51 .......................... .......................... 2.89 ...................3.49
Prevalence of trade barriers....................................................................... ......................... n/a........................... ......................... n/a .....................
Trade tariffs, % duty*................................................................................. ......................... n/a........................... ......................... 2.95.....................
Prevalence of foreign ownership.............................................................. 5 .......................... 3.62.......................... + .......................... 3.29.................. 4.24
Business impact of rules on FDI................................................................ 12.......................... 4.26.......................... + .......................... 4.17.................. 4.84
Burden of customs procedures................................................................. 6 .......................... 3.26.......................... + .......................... 2.92.................. 3.71
Degree of customer orientation ............................................................... 12.......................... 4.75.......................... + .......................... 4.68.................. 5.11
Buyer sophistication.................................................................................... 22.......................... 3.02.......................... .......................... 3.18.................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Cooperation in laboremployer relations ................................................. 4 .......................... 5.03.......................... + .......................... 4.84.................. 5.27
Flexibility of wage determination ............................................................. 7 .......................... 5.15.......................... + .......................... 5.01.................. 5.76
Hiring and firing practices ........................................................................ 6 .......................... 4.81.......................... + .......................... 4.61.................. 4.90
Pay and productivity.................................................................................. 5 .......................... 5.37.......................... + .......................... 5.09.................. 5.69
Brain drain................................................................................................... 21.......................... 2.30.......................... .......................... 2.63.................. 3.36
Women in labor force, ratio to men*........................................................ 5 .......................... 0.92.......................... + .......................... 0.88.................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development ..................................................................... 14 ..................................... 3.84..................................... + ...................................... 3.83 ........................ 4.08
Financing through local equity market...................................................... 19.......................... 2.58.......................... .......................... 2.67.................. 3.55
Ease of access to loans............................................................................. 1 .......................... 2.77.......................... + .......................... 2.18.................. 2.77
Venture capital availability ....................................................................... 8 .......................... 2.12.......................... + ......................... 1.96.................. 2.30
Soundness of banks .................................................................................. 19.......................... 4.37.......................... ......................... 4.46 .................. 4.84
.................................................................... 21.......................... 2.87.......................... ......................... 3.06.................. 3.63
Legal rights index, 010 (best)*................................................................ .......................... n/a ........................... ......................... 9.00..................
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Availability of latest technologies.............................................................. 23.......................... 3.20.......................... ......................... 3.47.................. 4.22
Firmlevel technology absorption............................................................. 20.......................... 3.83.......................... ......................... 4.08.................. 4.67
FDI and technology transfer....................................................................... 9 .......................... 2.95.......................... + ......................... 2.72.................. 3.36
.............................................................................. 21.......................... 8.07.......................... ......................... 20.81............... 130.79
Internet bandwidth, kb/s/capita*.............................................................. ........................... n/a ........................... ......................... 2.64...................
Mobile telephone subscriptions/100 pop.*................................................21........................ 90.00 ........................ ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*................................................. 14.......................... 1.51.......................... ......................... 1.71.................. 3.44
Foreign market size index, 17 (best)*.................................................... 20.......................... 2.01.......................... ......................... 2.50.................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity............................................................................... 4 .......................... 5.04.......................... + ......................... 4.65.................. 5.20
Nature of competitive advantage.............................................................. 24.......................... 2.90.......................... ......................... 3.24.................. 3.87
Value chain breadth ................................................................................... 26.......................... 2.77.......................... ......................... 3.47.................. 4.23
Control of international distribution.......................................................... 23.......................... 4.38.......................... ......................... 4.59.................. 5.16
Production process sophistication .......................................................... 25.......................... 2.72.......................... ......................... 3.10.................. 3.77
Extent of marketing.................................................................................... 23.......................... 3.49.......................... ......................... 3.80.................. 4.50
Willingness to delegate authority ............................................................. 21.......................... 3.30.......................... ......................... 3.47.................. 3.93
Reliance on professional management.................................................... 25.......................... 3.93.......................... ......................... 4.25.................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Quality of scientific research institutions................................................. 7 .......................... 4.13.......................... + ......................... 3.75.................. 4.58
Universityindustry collaboration in R&D................................................. 8 .......................... 3.19.......................... + ......................... 3.02.................. 3.69
Govt procurement of advanced tech products........................................ 12.......................... 3.16.......................... + ......................... 2.98.................. 3.63
Utility patents granted/million pop.*......................................................... 8 .......................... 0.02.......................... + ......................... 0.01.................. 0.04
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
IvanoFrankivsk
113
Key indicators
Population (m), 2010................................................................ 2.8
Kharkiv

Index 2011
Rank (out of 27)
Institutions

4th pillar: Health and primary education ....................................................................11
7
Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3

7th pillar: Labor market efficiency ..............................................................................18
2
1
Market size
Health and
primary education
Technological
readiness

115
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Kharkiv

Kharkiv
Ukraine
Regions'
Average
0
Corruption ..................................................................................................................... 19 .................. 15

Tax regulations.............................................................................................................. 16 .................. 16
Inefficient government bureaucracy.............................................................................. 8 .................. 6
Tax rates ....................................................................................................................... 6 .................. 7
Inflation ......................................................................................................................... 5 .................. 7
Crime and theft ............................................................................................................. 2 .................. 2
Foreign currency regulations......................................................................................... 1 .................. 1
10
15
20
Kharkiv


116
Kharkiv
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights ...........................................................................................23 ..................3.87 ........................ ........................... 4.18
Transparency of government policymaking............................................... 16 .................. 4.34 ........................ ........................... 4.38
Organized crime ........................................................................................ 27 .................. 4.19 ........................ ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 7 .................. 3.58 ........................ + ........................... 3.29 .................. 4.29
Available airline seat Kms/week, millions*................................................ 12.................. 0.00........................ ........................... 7.19 ................101.27
Quality of electricity supply ....................................................................... 4 ................4.74 ........................+ ........................... 4.40 .................. 5.13
Fixed telephone lines/100 pop.*................................................................. 6 ..................29.40 ........................+ ...........................26.73 ..................58.60
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
4th pillar: Health and primary education.......................................................................... 11 ......................... 5.80 ................................... + ........................................ 5.75 ......................... 5.97
Infant mortality, deaths/1,000 live births*.................................................. 13 .................. 9.10 ........................ ........................... 8.90 .................. 6.00
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
. .................. 4.29 ........................ + ........................... 4.21 .................. 4.69
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy ..................................................... 21 ..........................2.85 .......................... .......................... 3.03 ...................3.65

Extent and effect of taxation ..................................................................... 26 ..........................2.82 .......................... .......................... 3.19 ...................3.70
Total tax rate, % profits*............................................................................ .......................... n/a........................... ..........................55.50...................
No, procedures to start a business*.......................................................... .......................... n/a .......................... ..........................10.00 ...................
No, days to start a business*...................................................................... .......................... n/a .......................... ......................... 27.00 ...................
Agricultural policy costs ............................................................................ 15 ..........................2.86 ......................... ......................... 2.89 ...................3.49
Prevalence of trade barriers....................................................................... .......................... n/a .......................... .......................... n/a ....................
Trade tariffs, % duty*................................................................................. ......................... n/a........................... ......................... 2.95 ....................
Prevalence of foreign ownership .............................................................. 10.......................... 3.34 .......................... + .......................... 3.29 .................. 4.24
Business impact of rules on FDI................................................................ 24.......................... 3.81 .......................... .......................... 4.17 .................. 4.84
Burden of customs procedures................................................................. 22.......................... 2.67 .......................... .......................... 2.92 .................. 3.71
Imports as a percentage of GDP*............................................................. 10 ..........................24.16.......................... .......................... 24.98 ............. 103.20
Degree of customer orientation ............................................................... 17.......................... 4.67 .......................... .......................... 4.68 .................. 5.11
Buyer sophistication.................................................................................... 7 .......................... 3.32 .......................... + .......................... 3.18 .................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Cooperation in laboremployer relations ................................................. 22.......................... 4.69 .......................... .......................... 4.84 .................. 5.27
Flexibility of wage determination ............................................................. 9 .......................... 5.06 .......................... + .......................... 5.01 .................. 5.76
Hiring and firing practices ........................................................................ 5 .......................... 4.81 .......................... + .......................... 4.61 .................. 4.90
Extent and effect of taxation ..................................................................... 26.......................... 2.82 .......................... .......................... 3.19 .................. 3.70
Pay and productivity .................................................................................. 21.......................... 5.01 .......................... .......................... 5.09 .................. 5.69
Reliance on professional management ................................................... 18.......................... 4.16 .......................... .......................... 4.25 .................. 4.54
Brain drain................................................................................................... 6 .......................... 2.89 .......................... + .......................... 2.63 .................. 3.36
Women in labor force, ratio to men*........................................................ 21.......................... 0.85 .......................... .......................... 0.88 .................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development ..................................................................... 8 ..................................... 3.92 ..................................... + ...................................... 3.83 ........................ 4.08
Availability of financial services................................................................ 5 .......................... 4.79 .......................... + .......................... 4.52 .................. 4.89
Affordability of financial services ............................................................. 11.......................... 3.87 .......................... + .......................... 3.78 .................. 4.18
Financing through local equity market...................................................... 3 .......................... 3.09 .......................... + .......................... 2.67 .................. 3.55
Ease of access to loans ............................................................................. 20.......................... 2.09 .......................... .......................... 2.18 .................. 2.77
Venture capital availability ....................................................................... 4 .......................... 2.20 .......................... + ......................... 1.96 .................. 2.30
Soundness of banks .................................................................................. 8 .......................... 4.68 .......................... + ......................... 4.46 .................. 4.84
.................................................................... 24.......................... 2.79 .......................... ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Availability of latest technologies.............................................................. 5 .......................... 3.87 .......................... + ......................... 3.47 .................. 4.22
Firmlevel technology absorption ............................................................. 9 .......................... 4.24 .......................... + ......................... 4.08 .................. 4.67
FDI and technology transfer....................................................................... 6 .......................... 3.01 .......................... + ......................... 2.72 .................. 3.36
.............................................................................. 5 ..........................30.14.......................... + ......................... 20.81...............130.79
Broadband Internet subscriptions/100 pop,*.......................................... .......................... n/a ........................... ......................... 8.04 ...................
Fixed telephone lines/100 pop,*................................................................ 6 ..........................29.40......................... + ......................... 26.73............... 58.60
Mobile telephone subscriptions/100 pop,*................................................ 5 ........................125.60 ........................ + ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*................................................. 3 .......................... 2.41 .......................... + ......................... 1.71 .................. 3.44
Foreign market size index, 17 (best)*.................................................... 8 .......................... 2.90 .......................... + ......................... 2.50 .................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity............................................................................... 3 .......................... 5.09 .......................... + ......................... 4.65 .................. 5.20
Local supplier quality ................................................................................ 10.......................... 4.09 .......................... + ......................... 4.02 .................. 4.35
State of cluster development ................................................................... 11.......................... 3.67 .......................... ......................... 3.73 .................. 5.13
Nature of competitive advantage .............................................................. 4 .......................... 3.72 .......................... + ......................... 3.24 .................. 3.87
Value chain breadth ................................................................................... 3 .......................... 3.97 .......................... + ......................... 3.47 .................. 4.23
Control of international distribution.......................................................... 21.......................... 4.40 .......................... ......................... 4.59 .................. 5.16
Production process sophistication .......................................................... 14.......................... 3.11 .......................... + ......................... 3.10 .................. 3.77
Extent of marketing.................................................................................... 8 .......................... 4.02 .......................... + ......................... 3.80 .................. 4.50
Willingness to delegate authority ............................................................. 12.......................... 3.51 .......................... + ......................... 3.47 .................. 3.93
Reliance on professional management.................................................... 18.......................... 4.16 .......................... ......................... 4.25 .................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Capacity for innovation ............................................................................. 3 .......................... 3.98 .......................... + ......................... 3.52 .................. 4.22
Quality of scientific research institutions................................................. 4 .......................... 4.22 .......................... + ......................... 3.75 .................. 4.58
Company spending on R&D ..................................................................... 10.......................... 2.76 .......................... + ......................... 2.64 .................. 3.26
Universityindustry collaboration in R&D................................................. 3 .......................... 3.65 .......................... + ......................... 3.02 .................. 3.69
Govt procurement of advanced tech products........................................ 10.......................... 3.23 .......................... + ......................... 2.98 .................. 3.63
Availability of scientists and engineers .................................................... 2 .......................... 4.26 .......................... + ......................... 3.49 .................. 4.29
Utility patents granted/million pop,*......................................................... 3 .......................... 0.03 .......................... + ......................... 0.01 .................. 0.04
Intellectual property protection ................................................................ 18.......................... 2.83 .......................... ......................... 2.89 .................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Kharkiv
117
Key indicators
Population (m), 2010................................................................ 1.1
Kherson

Index 2011
Rank (out of 27)
Institutions
Subindex : Basic requirements .................................................................................................................... 27

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
Health and
primary education
Market size
Technological
readiness

Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Kherson

Kherson
Ukraine
Regions'
Average
0
Corruption ..................................................................................................................... 16 .................. 15

Tax regulations.............................................................................................................. 15 .................. 16
Inflation ......................................................................................................................... 7 .................. 7
Tax rates ....................................................................................................................... 5 .................. 7
Crime and theft ............................................................................................................. 2 .................. 2
10
15
20
Kherson

119

120
Kherson
INDICATOR
RANK / 27
SCORE
VS AVG
Basic requirements ........................................................................................................................ 27 ......................... 4.10 ...................................

Efficiency enhancers ..................................................................................................................... 27 ......................... 3.29 ...................................
Innovation and sophistication factors ............................................................................... 26 ......................... 2.99 ...................................
REGIONS'
AVERAGE
BEST PERFORMING
REGION
........................................ 4.31 ......................... 4.52 Kyiv

........................................ 3.62 ......................... 4.22 Kyiv
........................................ 3.36 ......................... 3.70 Dnipropetrovsk
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1st pillar: Institutions .................................................................................................................... 23 ......................... 3.53

Property rights ........................................................................................... 12 ..................4.20
Intellectual property protection ................................................................. 27 .................. 2.43
Diversion of public funds........................................................................... 22 .................. 3.18
Public trust of politicians........................................................................... 25 .................. 1.85
Irregular payments and bribes................................................................... 22 .................. 3.62
Judicial independence............................................................................... 12 .................. 2.98
Favoritism in decisions of government officials ........................................ 21 .................. 2.76
Wastefulness of government spending ..................................................... 21 .................. 3.65
Burden of government regulation ............................................................. 23 .................. 2.87
Efficiency of legal framework in settling disputes ..................................... 10 .................. 2.95
Efficiency of legal framework in challenging regs ..................................... 23 .................. 2.71
Transparency of government policymaking............................................... 22 .................. 4.18
Business costs of terrorism....................................................................... 17 .................. 6.48
Business costs of crime and violence ....................................................... 10 .................. 4.81
Organized crime ........................................................................................ 6 .................. 5.41
Reliability of police services ...................................................................... 25 .................. 3.70
Ethical behavior of firms ........................................................................... 27 .................. 2.90
Strength of auditing and reporting standards ......................................... .................. n/a
Efficacy of corporate boards ..................................................................... 22 .................. 4.80
Protection of minority shareholders interests .......................................... 7 .................. 3.46
Strength of investor protection, 0 10 (best)*......................................... 1 .................. 4.70
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 19 .................. 3.10 ........................ ........................... 3.29 .................. 4.29
Available airline seat Kms/week, millions*................................................ 12.................. 0.00 ........................ ........................... 7.19 ................101.27
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
Inflation, annual % change* ...................................................................... 26 ..................10.60 ........................ ........................... 9.24 .................. 7.00 Vinnytsya
Interest rate spread, %*............................................................................. 27 ..................14.91 ........................ ........................... 10.12 .................. 6.53 Dnipropetrovsk
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Business impact of malaria ....................................................................... n/a.................. n/a ........................ ........................... n/a ..................
Infant mortality, deaths/1.000 live births*.................................................. 19 .................. 9.40 ........................ ........................... 8.90 .................. 6.00
Life expectancy, years*.............................................................................. 21 ..................67.94 ........................ ...........................69.43 ..................72.72
Primary education enrollment, net %*...................................................... 26 ..................92.10 ........................ ...........................94.55 ................100.00
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
Secondary education enrollment, gross %* .............................................. 12 ..................94.30 ........................ ...........................94.39 ...............100.00
Tertiary education enrollment, gross %*................................................... 19 ..................50.54 ........................ ........................... 61.01 ................100.00
. .................. 3.77 ........................ ........................... 4.21 .................. 4.69
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
................................... ........................................ 3.69

........................ + ........................... 4.18
........................ ........................... 2.89
........................ ........................... 3.57
........................ ........................... 2.33
........................ ........................... 3.87
........................ + ........................... 2.87
........................ ........................... 2.99
........................ ........................... 3.90
........................ ........................... 3.10
........................ + ........................... 2.89
........................ ........................... 2.87
........................ ........................... 4.38
........................ ........................... 6.48
........................ + ........................... 4.65
........................ + ........................... 5.10
........................ ........................... 4.00
........................ ........................... 3.37
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
........................ ...........................
..................
........................ ........................... 5.05 ..................
........................ + ........................... 3.27 ..................
........................ ........................... 4.70 ..................
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16

Extent and effect of taxation ..................................................................... 8 ..........................3.34 .......................... + .......................... 3.19 ...................3.70
Total tax rate, % profits*............................................................................ .......................... n/a ........................... ...........................55.50 ..................
No. procedures to start a business*......................................................... .......................... n/a .......................... ...........................10.00 ..................
No. days to start a business*...................................................................... .......................... n/a .......................... ......................... 27.00 ...................
Agricultural policy costs ............................................................................ 19 ..........................2.67 .......................... .......................... 2.89 ...................3.49
Prevalence of trade barriers....................................................................... ......................... n/a ........................... .......................... n/a ....................
Trade tariffs, % duty*................................................................................. ......................... n/a ........................... ......................... 2.95.....................
Business impact of rules on FDI................................................................ 27.......................... 3.67 .......................... .......................... 4.17.................. 4.84
Burden of customs procedures................................................................. 21.......................... 2.75 .......................... .......................... 2.92.................. 3.71
Imports as a percentage of GDP*............................................................. 25 ..........................7.51 .......................... .......................... 24.98 ............. 103.20
Degree of customer orientation ............................................................... 27.......................... 4.22 .......................... .......................... 4.68.................. 5.11
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
7th pillar: Labor market efficiency ......................................................................................27......................................4.63 ..................................... ...................................... 4.77 ...................... 4.95
Cooperation in laboremployer relations ................................................. 24.......................... 4.66 .......................... .......................... 4.84.................. 5.27
Flexibility of wage determination ............................................................. 6 .......................... 5.16 .......................... + .......................... 5.01.................. 5.76
Hiring and firing practices ........................................................................ 7 .......................... 4.75 .......................... + .......................... 4.61.................. 4.90
Pay and productivity .................................................................................. 16.......................... 5.05 .......................... .......................... 5.09.................. 5.69
Reliance on professional management ................................................... 14.......................... 4.27 .......................... + .......................... 4.25.................. 4.54
Brain drain................................................................................................... 20.......................... 2.37 .......................... .......................... 2.63.................. 3.36
Women in labor force, ratio to men*........................................................ 27.......................... 0.77 .......................... .......................... 0.88.................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development ..................................................................... 27 ..................................... 3.43 ..................................... ...................................... 3.83 ........................ 4.08
Affordability of financial services ............................................................. 20.......................... 3.63 .......................... .......................... 3.78.................. 4.18
Financing through local equity market...................................................... 27.......................... 2.00 .......................... .......................... 2.67.................. 3.55
Ease of access to loans ............................................................................. 26.......................... 1.77 .......................... .......................... 2.18.................. 2.77
Venture capital availability ....................................................................... 23.......................... 1.73 .......................... ......................... 1.96.................. 2.30
Soundness of banks .................................................................................. 27.......................... 3.54 .......................... ......................... 4.46 .................. 4.84
.................................................................... 26.......................... 2.64 .......................... ......................... 3.06.................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
.............................................................................. 13..........................10.09.......................... ......................... 20.81............... 130.79
Broadband Internet subscriptions/100 pop.*.......................................... .......................... n/a ........................... ......................... 8.04...................
Mobile telephone subscriptions/100 pop.*................................................ 4 ........................126.00 ........................ + ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity............................................................................... 27.......................... 4.13 .......................... ......................... 4.65.................. 5.20
Nature of competitive advantage.............................................................. 25.......................... 2.80 .......................... ......................... 3.24.................. 3.87
Value chain breadth ................................................................................... 27.......................... 2.74 .......................... ......................... 3.47.................. 4.23
Control of international distribution.......................................................... 12.......................... 4.65 .......................... + ......................... 4.59.................. 5.16
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Capacity for innovation ............................................................................. 26.......................... 3.00 .......................... ......................... 3.52.................. 4.22
Universityindustry collaboration in R&D................................................. 10.......................... 3.16 .......................... + ......................... 3.02.................. 3.69
Utility patents granted/million pop.*......................................................... 17.......................... 0.00 .......................... ......................... 0.01.................. 0.04
Intellectual property protection ................................................................ 27.......................... 2.43 .......................... ......................... 2.89.................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Kherson
121
Key indicators
Population (m), 2010................................................................ 1.3
Khmelnytsky

Index 2011
Rank (out of 27)
Institutions

20
3
25
26
8

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
Health and
primary education
Market size
Technological
readiness

123
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Khmelnytsky
The most problematic factors for doing business. number of answers in %

Khmelnytsky
Ukraine
Regions'
Average
Corruption ..................................................................................................................... 17 ..................12

Tax regulations ............................................................................................................. 15 ..................16
Tax rates ....................................................................................................................... 8 .................. 7
Inflation ......................................................................................................................... 6 .................. 7
Crime and theft ............................................................................................................. 1 .................. 1
10
15
20
Khmelnytsky


124
Khmelnytsky
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights ........................................................................................... 7 ..................4.35 ........................ + ........................... 4.18
Organized crime ........................................................................................ 7 .................. 5.39 ........................ + ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 21 .................. 2.97 ........................ ........................... 3.29 .................. 4.29
Available airline seat Kms/week, millions* ................................................12 .................. 0.00 ........................ ........................... 7.19 ................101.27
Quality of electricity supply....................................................................... 7 ................ 4.69 ........................ + ........................... 4.40 .................. 5.13
Fixed telephone lines/100 pop.*
................................................................. 20 ..................22.40........................ ........................... 26.73 ..................58.60
Mobile telephone subscriptions/100 pop.*................................................ 27 ..................76.00........................ ...........................112.47 .............. 303.80
3.01
3.02
3.03
3.04
3.05
3.06
3rd pillar: Macroeconomic environment .......................................................................... 26 ......................... 3.87 ...................................

Government budget balance, % GDP*....................................................... .................. n/a ........................
Gross national savings, % GDP*................................................................ .................. n/a ........................
Inflation, annual % change* ...................................................................... 17 .................. 9.60 ........................
Interest rate spread, %*............................................................................. 25 ..................12.97........................
General government debt, % GDP*........................................................... .................. n/a ........................
Country credit rating, 0 100 (best)*........................................................ .................. n/a ........................
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Infant mortality, deaths/1.000 live births*.................................................. 4 .................. 7.50 ........................ + ........................... 8.90 .................. 6.00
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
. .................. 4.11 ........................ ........................... 4.21 .................. 4.69
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv
........................................ 4.03 ......................... 4.28 Kyiv Oblast

........................... 4.42 ..................
n/a
........................... 14.28 ..................
n/a
........................... 9.24 .................. 7.00 Vinnytsya
........................... 10.12 .................. 6.53 Dnipropetrovsk
n/a
........................... 39.50 ..................
n/a
........................... 37.00 ..................

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy ..................................................... 11...........................3.11 .......................... + .......................... 3.03 ...................3.65

Extent and effect of taxation ...................................................................... 5 ..........................3.40 .......................... + .......................... 3.19 ...................3.70
Total tax rate. % profits* ........................................................................... .......................... n/a........................... ..........................55.50...................
No. procedures to start a business*......................................................... .......................... n/a .......................... ..........................10.00..................
...................................................................... .......................... n/a .......................... ......................... 27.00..................
Prevalence of trade barriers....................................................................... ......................... n/a........................... ......................... n/a ...................
Trade tariffs, % duty*................................................................................. ......................... n/a........................... ......................... 2.95...................
Business impact of rules on FDI................................................................ 10.......................... 4.30 .......................... +.......................... 4.17.................. 4.84
Burden of customs procedures................................................................. 1 .......................... 3.71 .......................... +.......................... 2.92.................. 3.71
Degree of customer orientation ............................................................... 23.......................... 4.44 .......................... .......................... 4.68.................. 5.11
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
7th pillar: Labor market efficiency ...................................................................................... 10...................................... 4.81 ..................................... + ...................................... 4.77 ...................... 4.95
Cooperation in laboremployer relations ................................................. 5 .......................... 5.03 .......................... +.......................... 4.84.................. 5.27
Flexibility of wage determination ............................................................. 25.......................... 4.72 .......................... .......................... 5.01.................. 5.76
Hiring and firing practices ........................................................................ 11.......................... 4.62 .......................... +.......................... 4.61.................. 4.90
Extent and effect of taxation ..................................................................... 5 .......................... 3.40 .......................... +.......................... 3.19.................. 3.70
Pay and productivity .................................................................................. 6 .......................... 5.18 .......................... +.......................... 5.09.................. 5.69
Reliance on professional management ................................................... 13.......................... 4.28 .......................... +.......................... 4.25.................. 4.54
Brain drain................................................................................................... 5 .......................... 2.90 .......................... +.......................... 2.63.................. 3.36
Women in labor force, ratio to men*........................................................ 20.......................... 0.86 .......................... .......................... 0.88.................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development ..................................................................... 13..................................... 3.84 ..................................... + ...................................... 3.83 ........................ 4.08
Affordability of financial services ............................................................. 13.......................... 3.86 .......................... +.......................... 3.78.................. 4.18
Financing through local equity market...................................................... 13.......................... 2.68 .......................... +.......................... 2.67.................. 3.55
Ease of access to loans............................................................................. 22.......................... 2.02 .......................... .......................... 2.18.................. 2.77
Venture capital availability ....................................................................... 10.......................... 2.04 .......................... + ......................... 1.96.................. 2.30
Soundness of banks .................................................................................. 11.......................... 4.61 .......................... + ......................... 4.46 .................. 4.84
.................................................................... 11.......................... 3.10 .......................... + ......................... 3.06.................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
9th pillar: Technological readiness..................................................................................... 23.................................... 2.67 ................................... ...................................... 2.95 ........................ 4.21
.............................................................................. 18.......................... 8.55.......................... ......................... 20.81............... 130.79
Mobile telephone subscriptions/100 pop.*................................................27........................ 76.00 ........................ ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
11th pillar: Business sophistication.................................................................................... 18 ................................... 3.74 ................................... . .................................... 3.81 ........................ 4.18
Local supplier quantity............................................................................... 8 .......................... 4.90 .......................... + ......................... 4.65.................. 5.20
Nature of competitive advantage.............................................................. 9 .......................... 3.38 .......................... + ......................... 3.24.................. 3.87
Value chain breadth ................................................................................... 14.......................... 3.49 .......................... + ......................... 3.47.................. 4.23
Control of international distribution.......................................................... 7 .......................... 4.74 .......................... + ......................... 4.59.................. 5.16
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
12th pillar: Innovation ................................................................................................................... 20.... .............................. 2.78 ................................... . .................................... 2.91 ........................ 3.27
Capacity for innovation ............................................................................. 2 .......................... 4.19 .......................... + ......................... 3.52.................. 4.22
Universityindustry collaboration in R&D................................................. 25.......................... 2.56 .......................... ......................... 3.02.................. 3.69
Utility patents granted/million pop.*......................................................... 17.......................... 0.00 .......................... ......................... 0.01.................. 0.04
Intellectual property protection ................................................................ 4 .......................... 3.17 .......................... + ......................... 2.89.................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Khmelnytsky
125
Key indicators
Population (m), 2010................................................................ 1.0
Kirovohrad

Index 2011
Rank (out of 27)
Institutions

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
Health and
primary education
Market size
Technological
readiness
127
Higher education
and training

Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Kirovohrad

Kirovohrad
Ukraine
Regions'
Average
0
Tax regulations..............................................................................................................16 .................. 16

Corruption .....................................................................................................................11 .................. 15
Inflation.......................................................................................................................... 7 .................. 7
Tax rates ....................................................................................................................... 5 .................. 7
Poor public health ....................................................................................................... 4 .................. 2
Crime and theft ............................................................................................................. 3 .................. 2
10
15
20
Kirovohrad


128
Kirovohrad
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 20 .................. 4.08 ........................ ............................ 4.18
Organized crime ........................................................................................ 5 .................. 5.49 ........................ + ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
2nd pillar: Infrastructure ............................................................................................................. 26 ......................... 3.33 ...................................

Quality of overall infrastructure ................................................................. 26 .................. 3.53 ........................
Quality of roads ......................................................................................... 27 .................. 2.38 ........................
Quality of railroad infrastructure ............................................................... 22 .................. 4.65 ........................
Quality of port infrastructure ..................................................................... 12 .................. 2.59 ........................
Quality of air transport infrastructure ........................................................ 17 .................. 2.32 ........................
Available airline seat Kms/week, millions* ................................................12 .................. 0.00 ........................
Quality of electricity supply....................................................................... 20 ................ 4.28 ........................
................................................................. 23 ..................21.10........................
Mobile telephone subscriptions/100 pop.*................................................ 25 ..................81.40........................
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Infant mortality, deaths/1.000 live births*.................................................. 25 ..................10.50........................ ........................... 8.90 .................. 6.00
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5th pillar: Higher education and training.......................................................................... 27 ......................... 4.06 ...................................

Secondary education enrollment, gross %* ..............................................20 ..................92.40 ........................
Tertiary education enrollment, gross %*................................................... 24 ..................
........................
Quality of the educational system ............................................................. 26 .................. 3.39 ........................
. .................. 4.00 ........................
Quality of management schools ................................................................ 24 .................. 2.63 ........................
Internet access in schools ......................................................................... 25 .................. 3.90 ........................
Availability of research and training services ............................................ 19 .................. 4.37 ........................
Extent of staff training ............................................................................... 21 .................. 3.02 ........................
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
........................................ 3.77 ......................... 4.89

........................... 4.15 .................. 4.73
........................... 3.29 .................. 4.29
........................... 4.92 .................. 5.54
........................... 2.73 .................. 5.24
........................... 3.08 .................. 5.30
........................... 7.19 ................101.27
........................... 4.40 .................. 5.13
........................... 26.73 ..................58.60
...........................112.47 .............. 303.80
........................................ 4.45 ......................... 4.99

...........................94.39 ...............100.00
41.54
61.01 ................100.00
...........................
........................... 3.92 .................. 4.39
........................... 4.21 .................. 4.69
........................... 2.97 .................. 3.60
........................... 4.37 .................. 4.93
........................... 4.48 .................. 4.91
........................... 3.15 .................. 3.53
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv
INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16

Total tax rate, % profits*........................................................................... ......................... n/a ........................... ...........................55.50 ...................
No. procedures to start a business*.......................................................... .......................... n/a .......................... ..........................10.00 ...................
No. days to start a business*...................................................................... .......................... n/a .......................... .........................27.00 ...................
Agricultural policy costs ............................................................................ 17 ..........................2.80 ......................... ......................... 2.89 ...................3.49
Prevalence of trade barriers....................................................................... ......................... n/a ........................... ......................... n/a ....................
Trade tariffs, % duty* ................................................................................. ......................... n/a ........................... ......................... 2.95....................
Prevalence of foreign ownership .............................................................. 27 ..........................2.50 .......................... .......................... 3.29 .................. 4.24
Burden of customs procedures................................................................. 14 ..........................2.92 .......................... + .......................... 2.92 .................. 3.71
Imports as a percentage of GDP* ............................................................. 24 ..........................9.11 .......................... ..........................24.98 ............. 103.20
Degree of customer orientation ............................................................... 25 ..........................4.34 .......................... .......................... 4.68 .................. 5.11
Buyer sophistication.................................................................................... 9 ..........................3.28 .......................... + .......................... 3.18 .................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
7th pillar: Labor market efficiency ......................................................................................17 ......................................4.76 ..................................... ...................................... 4.77 ...................... 4.95
Flexibility of wage determination ............................................................. 10 ..........................5.05 .......................... + .......................... 5.01 .................. 5.76
Pay and productivity .................................................................................. 14 ..........................5.05 .......................... .......................... 5.09 .................. 5.69
Reliance on professional management ................................................... 17 ..........................4.18 .......................... .......................... 4.25 .................. 4.54
Brain drain................................................................................................... 24 ..........................2.24 .......................... .......................... 2.63 .................. 3.36
Women in labor force, ratio to men*........................................................ 9 ..........................0.89 .......................... + .......................... 0.88 .................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development .....................................................................22 .....................................3.74 ..................................... ...................................... 3.83 ........................ 4.08
Availability of financial services ................................................................ 19 ..........................4.38 .......................... .......................... 4.52 .................. 4.89
Ease of access to loans ............................................................................. 21 ..........................2.04 .......................... .......................... 2.18 .................. 2.77
Venture capital availability ....................................................................... 26 ..........................1.67 .......................... ......................... 1.96 .................. 2.30
Soundness of banks .................................................................................. 22 ..........................4.21 .......................... ......................... 4.46 .................. 4.84
.................................................................... 12 ..........................3.09 .......................... + ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
9th pillar: Technological readiness .....................................................................................27 .................................... 2.62 ................................... ...................................... 2.95 ........................ 4.21
.............................................................................. 20..........................8.12 .......................... ......................... 20.81...............130.79
Broadband Internet subscriptions/100 pop.* .......................................... .......................... n/a ........................... ......................... 8.04 ...................
Fixed telephone lines/100 pop.*................................................................23..........................21.10 ......................... ......................... 26.73............... 58.60
Mobile telephone subscriptions/100 pop.*................................................25 ........................ 81.40 ........................ ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
11th pillar: Business sophistication ....................................................................................13 ................................... 3.82 ................................... + . .................................... 3.81 ........................ 4.18
Local supplier quality ................................................................................ 11 ..........................4.05 .......................... + ......................... 4.02 .................. 4.35
Nature of competitive advantage .............................................................. 11 ..........................3.31 .......................... + ......................... 3.24 .................. 3.87
Reliance on professional management.................................................... 17 ..........................4.18 .......................... ......................... 4.25 .................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Capacity for innovation ............................................................................. 8 ..........................3.84 .......................... + ......................... 3.52 .................. 4.22
Availability of scientists and engineers .................................................... 21 ..........................3.19 .......................... ......................... 3.49 .................. 4.29
Utility patents granted/million pop,*......................................................... 17 ..........................0.00 .......................... ......................... 0.01 .................. 0.04
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Kirovohrad
129
Key indicators
Population (m), 2010................................................................ 2.8
Kyiv

Index 2011
Rank (out of 27)
Institutions

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
Health and
primary education
Market size
Technological
readiness
Higher education
and training

Goods market
efficiency
Labor market
efficiency
Kyiv

Kyiv
Ukraine
Regions'
Average
0
Corruption ....................................................................................................................18 .................. 15

Tax regulations .............................................................................................................16 .................. 16
Policy instability ...........................................................................................................12 .................. 12
Tax rates ...................................................................................................................... 7 .................. 7
Local and national government instability ................................................................... 6 .................. 6
Inflation......................................................................................................................... 5 .................. 7
Crime and theft ............................................................................................................. 4 .................. 2
10
15
20
Kyiv

131

132
Kyiv
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights ...........................................................................................27 ..................3.49 ........................ ........................... 4.18
Organized crime ........................................................................................ 26 .................. 4.61 ........................ ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09

Quality of roads .........................................................................................
Fixed telephone lines/100 pop.*.................................................................
Mobile telephone subscriptions/100 pop.*................................................
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Tuberculosis incidence/100,000 pop.*...................................................... 1 ..................34.60........................ + ........................... 66.88 ..................34.60
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
100.00........................+ ...........................94.39 ...............100.00
Secondary education enrollment, gross %* .............................................. 1 ..................
Quality of math and science education...................................................... .9 .................. 4.36 ........................ + ........................... 4.21 .................. 4.69
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
1 ......................... 4.89 ................................... + ........................................ 3.77 ......................... 4.89

5 .................. 4.49 ........................ + ........................... 4.15 .................. 4.73
4 .................. 3.89 ........................ + ........................... 3.29 .................. 4.29
5 .................. 5.30 ........................ + ........................... 4.92 .................. 5.54
8 .................. 3.33 ........................ + ........................... 2.73 .................. 5.24
1 .................. 5.30 ........................ + ........................... 3.08 .................. 5.30
1 ..................101.27
........................ +........................... 7.19 ................101.27
5 ................4.71 ........................+ ........................... 4.40 .................. 5.13
1 ..................58.60 ........................+ ...........................26.73 ..................58.60
1 ..................303.80. ...................... + ...........................112.47 .............. 303.80
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy ..................................................... 27.......................... 2.35 .......................... .......................... 3.03 ...................3.65
Extent and effect of taxation ..................................................................... 25.......................... 2.91 .......................... .......................... 3.19 ...................3.70
Total tax rate, % profits* ........................................................................... .......................... n/a........................... ..........................55.50...................
No. procedures to start a business*......................................................... .......................... n/a .......................... ..........................10.00 ...................
Agricultural policy costs ............................................................................ 26.......................... 2.22 .......................... .......................... 2.89 ...................3.49
Buyer sophistication.................................................................................... 11.......................... 3.25.......................... + .......................... 3.18.................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Flexibility of wage determination ............................................................. 1 .......................... 5.76.......................... + .......................... 5.01.................. 5.76
Hiring and firing practices ........................................................................ 2 .......................... 4.86.......................... + .......................... 4.61.................. 4.90
Pay and productivity .................................................................................. 15.......................... 5.05.......................... .......................... 5.09.................. 5.69
Reliance on professional management ................................................... 3 .......................... 4.53.......................... + .......................... 4.25.................. 4.54
Brain drain................................................................................................... 2 .......................... 3.10.......................... + .......................... 2.63.................. 3.36
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development ..................................................................... 17 ..................................... 3.80..................................... ...................................... 3.83 ........................ 4.08
Availability of financial services................................................................ 9 .......................... 4.66.......................... + .......................... 4.52.................. 4.89
Affordability of financial services ............................................................. 8 .......................... 3.93.......................... + .......................... 3.78.................. 4.18
Financing through local equity market...................................................... 4 .......................... 2.97.......................... + .......................... 2.67.................. 3.55
Ease of access to loans ............................................................................. 23.......................... 1.99.......................... .......................... 2.18.................. 2.77
Venture capital availability ....................................................................... 11.......................... 2.01.......................... + ......................... 1.96.................. 2.30
Soundness of banks .................................................................................. 23.......................... 4.20.......................... ......................... 4.46 .................. 4.84
.................................................................... 22.......................... 2.86.......................... ......................... 3.06.................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Availability of latest technologies.............................................................. 1 .......................... 4.22.......................... + ......................... 3.47.................. 4.22
Firmlevel technology absorption............................................................. 2 .......................... 4.60.......................... + ......................... 4.08.................. 4.67
.............................................................................. 1 ..........................130.79
.......................... + ......................... 20.81............... 130.79
Fixed telephone lines/100 pop.*................................................................ 1 .......................... 58.60......................... + ......................... 26.73............... 58.60
Mobile telephone subscriptions/100 pop.*................................................ 1 ........................ 303.80........................ + ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
10th pillar: Market size ................................................................................................................ 1 ................................... 3.58 ................................... + ...................................... 1.91 ........................ 3.58 Kyiv
Domestic market size index, 17 (best)*................................................. 1 .......................... 3.44.......................... + ......................... 1.71.................. 3.44 Kyiv
Foreign market size index, 17 (best)*.................................................... 2 .......................... 4.01.......................... + ......................... 2.50.................. 4.04 Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity............................................................................... 2 .......................... 5.13.......................... + ......................... 4.65.................. 5.20
Local supplier quality ................................................................................ 3 .......................... 4.20.......................... + ......................... 4.02.................. 4.35
State of cluster development ................................................................... 20.......................... 3.38.......................... ......................... 3.73.................. 5.13
Value chain breadth ................................................................................... 9 .......................... 3.65.......................... + ......................... 3.47.................. 4.23
Production process sophistication .......................................................... 12.......................... 3.15.......................... + ......................... 3.10.................. 3.77
Extent of marketing.................................................................................... 1 .......................... 4.50.......................... + ......................... 3.80.................. 4.50
Willingness to delegate authority ............................................................. 9 .......................... 3.57.......................... + ......................... 3.47.................. 3.93
Reliance on professional management.................................................... 3 .......................... 4.53.......................... + ......................... 4.25.................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Universityindustry collaboration in R&D................................................. 7 .......................... 3.28.......................... + ......................... 3.02.................. 3.69
Govt procurement of advanced tech products........................................ 23.......................... 2.48.......................... ......................... 2.98.................. 3.63
Availability of scientists and engineers.................................................... 8 .......................... 3.79.......................... + ......................... 3.49.................. 4.29
Utility patents granted/million pop.*......................................................... 2 .......................... 0.04.......................... + ......................... 0.01.................. 0.04
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Kyiv
133
Key indicators
Population (m), 2010................................................................ 1.7
Kyiv Oblast

Index 2011
Rank (out of 27)
Institutions

3
9
9
1
3

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
Health and
primary education
Market size
Technological
readiness

135
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Kyiv Oblast

Kyiv Oblast
Ukraine
Regions'
Average
0
Corruption .................................................................................................................... 16 .................. 15

Tax regulations ............................................................................................................. 14 .................. 16
Inflation ......................................................................................................................... 8 .................. 7
Tax rates ....................................................................................................................... 7 .................. 7
Crime and theft ............................................................................................................. 1 .................. 2
10
15
20
Kyiv Oblast


136
Kyiv Oblast
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 6
Organized crime ........................................................................................ 16
......................... 3.75 ................................... + ........................................ 3.69

.................. 4.42 ........................ + ............................ 4.18
.................. 2.89 ........................ ........................... 2.89
.................. 3.82 ........................ + ........................... 3.57
.................. 2.68 ........................ + ........................... 2.33
.................. 3.86 ........................ ........................... 3.87
.................. 2.67 ........................ ........................... 2.87
.................. 3.17 ........................ + ........................... 2.99
.................. 4.19 ........................ + ........................... 3.90
.................. 3.39 ........................ + ........................... 3.10
.................. 2.96 ........................ + ........................... 2.89
.................. 2.87 ........................ ........................... 2.87
.................. 4.41 ........................ + ........................... 4.38
.................. 6.62 ........................ + ........................... 6.48
.................. 4.64 ........................ ........................... 4.65
.................. 5.03 ........................ ........................... 5.10
.................. 3.84 ........................ ........................... 4.00
.................. 3.48 ........................ + ........................... 3.37
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
.................. n/a ........................ ...........................
..................
.................. 4.76 ........................ ........................... 5.05 ..................
.................. 3.12 ........................ ........................... 3.27 ..................
.................. 4.70 ........................ ........................... 4.70 ..................
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
2nd pillar: Infrastructure ............................................................................................................. 9

Quality of overall infrastructure ................................................................. 1
Quality of roads ......................................................................................... 1
Quality of railroad infrastructure ............................................................... 17
Quality of port infrastructure ..................................................................... 11
Quality of air transport infrastructure ........................................................ 8
Available airline seat Kms/week, millions* ................................................ 2
Quality of electricity supply....................................................................... 18
................................................................. 11
Mobile telephone subscriptions/100 pop.*................................................ 12
......................... 3.94 ................................... + ........................................ 3.77 ......................... 4.89

.................. 4.73 ........................ + ........................... 4.15 .................. 4.73
.................. 4.29 ........................ + ........................... 3.29 .................. 4.29
.................. 4.81 ........................ ........................... 4.92 .................. 5.54
.................. 2.61 ........................ ........................... 2.73 .................. 5.24
.................. 4.16 ........................ + ........................... 3.08 .................. 5.30
..................65.21........................ + ........................... 7.19 ................101.27
................ 4.29 ........................ ........................... 4.40 .................. 5.13
..................24.80........................ ........................... 26.73 ..................58.60
..................109.40........................ ...........................112.47 .............. 303.80
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
4th pillar: Health and primary education .......................................................................... 3 ......................... 5.94 ................................... +
Business impact of malaria .......................................................................n/a .................. n/a ........................
Malaria cases/100,000 pop.*..................................................................... 1 .................. 7.00 ........................
Business impact of tuberculosis................................................................ 10 .................. 3.73 ........................ +
Tuberculosis incidence/100,000 pop.*...................................................... 9 ..................57.60........................ +
HIV prevalence, % adult pop.* .................................................................. 18 .................. 0.34 ........................ +
Infant mortality, deaths/1,000 live births*.................................................. 2 .................. 6.90 ........................ +
Life expectancy, years*.............................................................................. 19 ..................68.17........................
Quality of primary education ..................................................................... 7 .................. 3.90 ........................ +
Primary education enrollment, net %*...................................................... 1 ..................100.00........................ +
........................................ 5.75 ......................... 5.97

........................... n/a ..................
........................... 7.00 ..................
........................... 3.64 .................. 4.29
........................... 66.88 ..................34.60
........................... 4.56 .................. 5.08
........................... 0.36 .................. 0.03
........................... 8.90 .................. 6.00
...........................69.43 ..................72.72
........................... 3.78 .................. 4.43
...........................94.55 ................100.00
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5th pillar: Higher education and training.......................................................................... 17

Secondary education enrollment, gross %* .............................................. 1
Tertiary education enrollment, gross %*................................................... 26
Quality of the educational system ............................................................. 13
.
Quality of management schools ................................................................ 8
Internet access in schools......................................................................... 1
Availability of research and training services ............................................ 20
Extent of staff training ............................................................................... 4
........................................ 4.45 ......................... 4.99

...........................94.39 ...............100.00
........................... 61.01 ................100.00
........................... 3.92 .................. 4.39
........................... 4.21 .................. 4.69
........................... 2.97 .................. 3.60
........................... 4.37 .................. 4.93
........................... 4.48 .................. 4.91
........................... 3.15 .................. 3.53
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
......................... 4.34 ...................................

100.00........................+
..................
..................35.06........................
.................. 4.01 ........................ +
.................. 4.28 ........................ +
.................. 3.13 ........................ +
.................. 4.93 ........................ +
.................. 4.37 ........................
.................. 3.39 ........................ +
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

BEST PERFORMING
REGIONS'
REGION
AVERAGE
Effectiveness of antimonopoly policy ..................................................... 20 .......................... 2.88 .......................... .......................... 3.03 ...................3.65 Volyn
Extent and effect of taxation ..................................................................... 2 .......................... 3.63 .......................... + .......................... 3.19 ...................3.70 Kirovohrad
n/a
Total tax rate, % profits*............................................................................ .......................... n/a........................... ..........................55.50...................
.......................................................... .......................... n/a ........................... ...........................10.00 ...................
n/a
INDICATOR
RANK /27
SCORE
VS AVG
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
No. procedures to start a business*

No. days to start a business*...................................................................... .......................... n/a ........................... .......................... 27.00 ...................
Agricultural policy costs ............................................................................ 4 .......................... 3.39 .......................... + .......................... 2.89 ...................3.49
Prevalence of trade barriers....................................................................... .......................... n/a........................... ......................... n/a .....................
Trade tariffs, % duty*................................................................................. .......................... n/a .......................... .......................... 2.95 .....................
Buyer sophistication.................................................................................... 6 .......................... 3.33.......................... + .......................... 3.18.................. 3.91
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
7th pillar: Labor market efficiency ......................................................................................11...................................... 4.79 ..................................... + ...................................... 4.77 ...................... 4.95
Flexibility of wage determination ............................................................. 17.......................... 4.90.......................... .......................... 5.01.................. 5.76
Hiring and firing practices ........................................................................ 23.......................... 4.46.......................... .......................... 4.61.................. 4.90
Extent and effect of taxation ..................................................................... 2 .......................... 3.63.......................... + .......................... 3.19.................. 3.70
Pay and productivity .................................................................................. 25.......................... 4.74.......................... .......................... 5.09.................. 5.69
Brain drain................................................................................................... 1 .......................... 3.36.......................... + .......................... 2.63.................. 3.36
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
Ease of access to loans ............................................................................. 7 .......................... 2.36.......................... + .......................... 2.18.................. 2.77
Venture capital availability ....................................................................... 12.......................... 1.97.......................... + ......................... 1.96.................. 2.30
.................................................................... 9 .......................... 3.13.......................... + ......................... 3.06.................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Availability of latest technologies.............................................................. 6 .......................... 3.80.......................... + ......................... 3.47.................. 4.22
Firmlevel technology absorption............................................................. 4 .......................... 4.51.......................... + ......................... 4.08.................. 4.67
.............................................................................. 2 ..........................74.44.......................... + ......................... 20.81............... 130.79
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*................................................. 5 .......................... 2.20.......................... + ......................... 1.71.................. 3.44
Foreign market size index, 17 (best)*.................................................... 9 .......................... 2.82.......................... + ......................... 2.50.................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity............................................................................... 15.......................... 4.58.......................... ......................... 4.65.................. 5.20
State of cluster development ................................................................... 26.......................... 2.96.......................... ......................... 3.73.................. 5.13
Value chain breadth ................................................................................... 13.......................... 3.54.......................... + ......................... 3.47.................. 4.23
Production process sophistication .......................................................... 1 .......................... 3.77.......................... + ......................... 3.10.................. 3.77
Extent of marketing.................................................................................... 13.......................... 3.82.......................... + ......................... 3.80.................. 4.50
Willingness to delegate authority ............................................................. 10.......................... 3.56.......................... + ......................... 3.47.................. 3.93
Reliance on professional management.................................................... 23.......................... 4.04 .......................... ......................... 4.25.................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
12th pillar: Innovation ...................................................................................................................13 .... .............................. 2.93 ................................... + . .................................... 2.91 ........................ 3.27
Company spending on R&D ..................................................................... 9 .......................... 2.77.......................... + ......................... 2.64.................. 3.26
Universityindustry collaboration in R&D................................................. 20.......................... 2.83.......................... ......................... 3.02.................. 3.69
Govt procurement of advanced tech products........................................ 15.......................... 2.97.......................... ......................... 2.98.................. 3.63
Utility patents granted/million pop.*......................................................... 10.......................... 0.01.......................... ......................... 0.01.................. 0.04
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Kyiv Oblast
137
Key indicators
Population (m), 2010................................................................ 2.3
Luhansk

Index 2011
Rank (out of 27)
Institutions

18
21
12
12
17

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
Health and
primary education
Market size
Technological
readiness
Higher education
and training

Goods market
efficiency
Labor market
efficiency
Luhansk

Luhansk
Ukraine
Regions'
Average
0
Tax regulations ............................................................................................................. 18 .................. 16

Corruption ..................................................................................................................... 15 .................. 15
Inflation ........................................................................................................................ 7 .................. 7
Tax rates ...................................................................................................................... 6 .................. 7
Crime and theft ............................................................................................................. 2 .................. 2
10
15
20
Luhansk

139

140
Luhansk
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 13 .................. 4.20 ........................ + ............................ 4.18
Organized crime ........................................................................................ 24 .................. 4.70 ........................ ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 16 .................. 3.18 ........................ ........................... 3.29 .................. 4.29
................................................................. 19 ..................22.50........................ ........................... 26.73 ..................58.60
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
. .................. 4.15 ........................ ........................... 4.21 .................. 4.69
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy ..................................................... 19 .......................... 2.91 .......................... .......................... 3.03 ...................3.65
Extent and effect of taxation ..................................................................... 6 .......................... 3.39 .......................... + .......................... 3.19 ...................3.70
No. procedures to start a business*......................................................... .......................... n/a .......................... ..........................10.00...................
...................................................................... .......................... n/a .......................... ......................... 27.00..................
Agricultural policy costs ............................................................................ 14 .......................... 2.90 .......................... + .......................... 2.89 ...................3.49
Prevalence of trade barriers....................................................................... ......................... n/a........................... ......................... n/a ...................
Trade tariffs, % duty*................................................................................. ......................... n/a........................... ......................... 2.95....................
Prevalence of foreign ownership.............................................................. 19 .......................... 3.10.......................... .......................... 3.29.................. 4.24
Business impact of rules on FDI................................................................ 13 .......................... 4.21.......................... + .......................... 4.17.................. 4.84
Burden of customs procedures................................................................. 8 .......................... 3.09.......................... + .......................... 2.92.................. 3.71
Imports as a percentage of GDP*............................................................. 15 ..........................16.88.......................... .......................... 24.98 ............. 103.20
Degree of customer orientation ............................................................... 11 .......................... 4.77.......................... + .......................... 4.68.................. 5.11
Buyer sophistication.................................................................................... 21 .......................... 3.04.......................... .......................... 3.18.................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Cooperation in laboremployer relations ................................................. 26 .......................... 4.53.......................... .......................... 4.84.................. 5.27
Flexibility of wage determination ............................................................. 27 .......................... 4.63.......................... .......................... 5.01.................. 5.76
Hiring and firing practices ........................................................................ 14 .......................... 4.58.......................... .......................... 4.61.................. 4.90
Extent and effect of taxation ..................................................................... 6 .......................... 3.39.......................... + .......................... 3.19.................. 3.70
Pay and productivity .................................................................................. 12 .......................... 5.09.......................... + .......................... 5.09.................. 5.69
Reliance on professional management ................................................... 9 .......................... 4.34.......................... + .......................... 4.25.................. 4.54
Brain drain................................................................................................... 14 .......................... 2.71.......................... + .......................... 2.63.................. 3.36
Women in labor force, ratio to men*........................................................ 13 .......................... 0.88.......................... + .......................... 0.88.................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development .....................................................................16 ..................................... 3.81..................................... ...................................... 3.83 ........................ 4.08
Availability of financial services................................................................ 14 .......................... 4.47.......................... .......................... 4.52.................. 4.89
Affordability of financial services ............................................................. 25 .......................... 3.49.......................... .......................... 3.78.................. 4.18
Ease of access to loans ............................................................................. 17 .......................... 2.12.......................... .......................... 2.18.................. 2.77
Venture capital availability ....................................................................... 25 .......................... 1.70.......................... ......................... 1.96.................. 2.30
.................................................................... 14 .......................... 3.02.......................... ......................... 3.06.................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Availability of latest technologies.............................................................. 14 .......................... 3.43.......................... ......................... 3.47.................. 4.22
Firmlevel technology absorption............................................................. 19 .......................... 3.89.......................... ......................... 4.08.................. 4.67
.............................................................................. 15.......................... 9.67.......................... ......................... 20.81............... 130.79
Fixed telephone lines/100 pop.*................................................................19..........................22.50......................... ......................... 26.73............... 58.60
Mobile telephone subscriptions/100 pop.*................................................11 ........................ 111.60........................ ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*................................................. 8 .......................... 1.92.......................... + ......................... 1.71.................. 3.44 Kyiv
Foreign market size index, 17 (best)*.................................................... 6 .......................... 3.05.......................... + ......................... 2.50.................. 4.04 Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity............................................................................... 17 .......................... 4.54.......................... ......................... 4.65.................. 5.20
Local supplier quality ................................................................................ 5 .......................... 4.18.......................... + ......................... 4.02.................. 4.35
Nature of competitive advantage.............................................................. 10 .......................... 3.37.......................... + ......................... 3.24.................. 3.87
Value chain breadth ................................................................................... 8 .......................... 3.66.......................... + ......................... 3.47.................. 4.23
Control of international distribution.......................................................... 4 .......................... 4.91.......................... + ......................... 4.59.................. 5.16
Production process sophistication .......................................................... 11 .......................... 3.16.......................... + ......................... 3.10.................. 3.77
Extent of marketing.................................................................................... 11 .......................... 3.90.......................... + ......................... 3.80.................. 4.50
Willingness to delegate authority ............................................................. 7 .......................... 3.60.......................... + ......................... 3.47.................. 3.93
Reliance on professional management.................................................... 9 .......................... 4.34.......................... + ......................... 4.25.................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Capacity for innovation ............................................................................. 12 .......................... 3.46.......................... ......................... 3.52.................. 4.22
Quality of scientific research institutions................................................. 21 .......................... 3.41.......................... ......................... 3.75.................. 4.58
Company spending on R&D ..................................................................... 8 .......................... 2.85.......................... + ......................... 2.64.................. 3.26
Universityindustry collaboration in R&D................................................. 15 .......................... 2.96.......................... ......................... 3.02.................. 3.69
Govt procurement of advanced tech products........................................ 8 .......................... 3.26.......................... + ......................... 2.98.................. 3.63
Availability of scientists and engineers.................................................... 7 .......................... 3.81.......................... + ......................... 3.49.................. 4.29
Utility patents granted/million pop.*......................................................... 17 .......................... 0.00.......................... ......................... 0.01.................. 0.04
Intellectual property protection ................................................................ 15 .......................... 2.88.......................... ......................... 2.89.................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Luhansk
141
Key indicators
Population (m), 2010................................................................ 2.5
Lviv

Index 2011
Rank (out of 27)
Institutions

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
Health and
primary education
Market size
Technological
readiness
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Lviv

Lviv
Ukraine
Regions'
Average
0
Tax regulations .............................................................................................................17 .................. 16

Corruption .....................................................................................................................15 .................. 15
Policy instability............................................................................................................12 .................. 12
Inflation ........................................................................................................................ 8 .................. 7
Tax rates ....................................................................................................................... 5 .................. 7
Permit and licensing system for doing business.......................................................... 3 .................. 5
Crime and theft ............................................................................................................. 2 .................. 2
Poor public health ...................................................................................................... 1 .................. 2
10
15
20
Lviv

143

144
Lviv
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 26 .................. 3.55 ........................ ............................ 4.18
Organized crime ........................................................................................ 11 .................. 5.24 ........................ + ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 23 .................. 2.84 ........................ ........................... 3.29 .................. 4.29
................................................................. 12 ..................24.60........................ ........................... 26.73 ..................58.60
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
. .................. 4.11 ........................ ........................... 4.21 .................. 4.69
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy ..................................................... 14 ..........................3.05 .......................... + .......................... 3.03 ...................3.65

Prevalence of foreign ownership.............................................................. 4 .......................... 3.69 .......................... + .......................... 3.29.................. 4.24
Business impact of rules on FDI................................................................ 20 .......................... 3.98 .......................... .......................... 4.17.................. 4.84
Burden of customs procedures................................................................. 25 .......................... 2.39 .......................... .......................... 2.92.................. 3.71
Degree of customer orientation ............................................................... 22 .......................... 4.48 .......................... .......................... 4.68.................. 5.11
Buyer sophistication.................................................................................... 4 .......................... 3.40 .......................... +.......................... 3.18.................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Cooperation in laboremployer relations ................................................. 27 .......................... 4.44 .......................... .......................... 4.84.................. 5.27
Flexibility of wage determination ............................................................. 4 .......................... 5.20 .......................... + .......................... 5.01.................. 5.76
Hiring and firing practices ........................................................................ 25 .......................... 4.41 .......................... .......................... 4.61.................. 4.90
Pay and productivity .................................................................................. 18 .......................... 5.02 .......................... .......................... 5.09.................. 5.69
Reliance on professional management ................................................... 16 .......................... 4.20 .......................... .......................... 4.25.................. 4.54
Brain drain................................................................................................... 26 .......................... 2.20 .......................... .......................... 2.63.................. 3.36
Women in labor force, ratio to men*........................................................ 6 .......................... 0.91 .......................... +.......................... 0.88.................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development .....................................................................12 ..................................... 3.84 ..................................... + ...................................... 3.83 ........................ 4.08
Availability of financial services................................................................ 12 .......................... 4.52 .......................... .......................... 4.52.................. 4.89
Affordability of financial services ............................................................. 17 .......................... 3.75 .......................... .......................... 3.78.................. 4.18
Financing through local equity market...................................................... 6 .......................... 2.88 .......................... + .......................... 2.67.................. 3.55
Ease of access to loans ............................................................................. 8 .......................... 2.33 .......................... +.......................... 2.18.................. 2.77
Venture capital availability ....................................................................... 5 .......................... 2.20 .......................... + ......................... 1.96.................. 2.30
Soundness of banks .................................................................................. 20 .......................... 4.34 .......................... ......................... 4.46 .................. 4.84
.................................................................... 20 .......................... 2.90 .......................... ......................... 3.06.................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Availability of latest technologies.............................................................. 7 .......................... 3.71 .......................... + ......................... 3.47.................. 4.22
Firmlevel technology absorption............................................................. 13 .......................... 4.06 .......................... ......................... 4.08.................. 4.67
FDI and technology transfer....................................................................... 12 .......................... 2.86 .......................... + ......................... 2.72.................. 3.36
.............................................................................. 8 ..........................21.66.......................... + ......................... 20.81............... 130.79
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*................................................. 7 .......................... 2.15 .......................... + ......................... 1.71.................. 3.44
Foreign market size index, 17 (best)*.................................................... 12 .......................... 2.57 .......................... + ......................... 2.50.................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity............................................................................... 16 .......................... 4.55 .......................... ......................... 4.65.................. 5.20
Local supplier quality ................................................................................ 24 .......................... 3.84 .......................... ......................... 4.02.................. 4.35
State of cluster development ................................................................... 10 .......................... 3.70 .......................... ......................... 3.73.................. 5.13
Nature of competitive advantage.............................................................. 15 .......................... 3.18 .......................... ......................... 3.24.................. 3.87
Value chain breadth ................................................................................... 21 .......................... 3.15 .......................... ......................... 3.47.................. 4.23
Control of international distribution.......................................................... 22 .......................... 4.39 .......................... ......................... 4.59.................. 5.16
Production process sophistication .......................................................... 9 .......................... 3.20 .......................... + ......................... 3.10.................. 3.77
Extent of marketing.................................................................................... 15 .......................... 3.72 .......................... ......................... 3.80.................. 4.50
Willingness to delegate authority ............................................................. 19 .......................... 3.40 .......................... ......................... 3.47.................. 3.93
Reliance on professional management.................................................... 16.......................... 4.20 .......................... ......................... 4.25.................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Capacity for innovation ............................................................................. 24 .......................... 3.18 .......................... ......................... 3.52.................. 4.22
Quality of scientific research institutions................................................. 15 .......................... 3.83 .......................... + ......................... 3.75.................. 4.58
Company spending on R&D ..................................................................... 20 .......................... 2.48 .......................... ......................... 2.64.................. 3.26
Universityindustry collaboration in R&D................................................. 11 .......................... 3.13 .......................... + ......................... 3.02.................. 3.69
Govt procurement of advanced tech products........................................ 19 .......................... 2.83 .......................... ......................... 2.98.................. 3.63
Availability of scientists and engineers.................................................... 6 .......................... 3.82 .......................... + ......................... 3.49.................. 4.29
Utility patents granted/million pop.*......................................................... 12 .......................... 0.01 .......................... ......................... 0.01.................. 0.04
Intellectual property protection ................................................................ 25 .......................... 2.52 .......................... ......................... 2.89.................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Lviv
145
Key indicators
Population (m), 2010................................................................ 1.2
Mykolayiv

Index 2011
Rank (out of 27)
Institutions

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
1
Market size
Health and
primary education
Technological
readiness
147
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Mykolayiv

Mykolayiv
Ukraine
Regions'
Average
0
Tax regulations .............................................................................................................18 ..................16

Corruption .....................................................................................................................16 ..................15
Policy instability ............................................................................................................13 ..................12
Inflation.......................................................................................................................... 6 .................. 7
Tax rates ....................................................................................................................... 5 .................. 7
................................................................................. 4 .................. 3
Crime and theft ............................................................................................................. 3 .................. 2
10
15
20
Mykolayiv


148
Mykolayiv
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 15
Organized crime ........................................................................................ 23
......................... 3.68 ................................... ........................................ 3.69

.................. 4.19 ........................ + ............................ 4.18
.................. 3.04 ........................ + ........................... 2.89
.................. 3.60 ........................ + ........................... 3.57
.................. 2.33 ........................ ........................... 2.33
.................. 3.66 ........................ ........................... 3.87
.................. 3.04 ........................ + ........................... 2.87
.................. 3.28 ........................ + ........................... 2.99
.................. 4.22 ........................ + ........................... 3.90
.................. 3.54 ........................ + ........................... 3.10
.................. 3.10 ........................ + ........................... 2.89
.................. 2.88 ........................ + ........................... 2.87
.................. 4.46 ........................ + ........................... 4.38
.................. 6.43 ........................ ........................... 6.48
.................. 4.21 ........................ ........................... 4.65
.................. 4.73 ........................ ........................... 5.10
.................. 4.33 ........................ + ........................... 4.00
.................. 3.19 ........................ ........................... 3.37
.................. n/a ........................ ...........................
.................. 4.89 ........................ ........................... 5.05
.................. 2.73 ........................ ........................... 3.27
.................. 4.70 ........................ ........................... 4.70
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09

Quality of roads ......................................................................................... 25
Available airline seat Kms/week, millions* ................................................12
................................................................. 9
......................... 3.85 ................................... + ........................................ 3.77 ......................... 4.89

.................. 3.75 ........................ ........................... 4.15 .................. 4.73
.................. 2.67 ........................ ........................... 3.29 .................. 4.29
.................. 4.59 ........................ ........................... 4.92 .................. 5.54
.................. 5.07 ........................ + ........................... 2.73 .................. 5.24
.................. 2.76 ........................ ........................... 3.08 .................. 5.30
.................. 0.00 ........................ ........................... 7.19 ................101.27
................ 4.30 ........................ ........................... 4.40 .................. 5.13
..................26.50........................ ........................... 26.73 ..................58.60
..................118.20........................ + ...........................112.47 .............. 303.80
3.01
3.02
3.03
3.04
3.05
3.06
3rd pillar: Macroeconomic environment .......................................................................... 7

Government budget balance, % GDP*.......................................................
Gross national savings, % GDP*................................................................
Inflation, annual % change* ...................................................................... 22
Interest rate spread, %*............................................................................. 7
General government debt, % GDP*...........................................................
Country credit rating, 0 100 (best)*........................................................
......................... 4.10 ................................... + ........................................ 4.03 ......................... 4.28 Kyiv Oblast

.................. n/a ........................ ........................... 4.42 ..................
n/a
.................. n/a ........................ ........................... 14.28 ..................
n/a
..................10.00........................ ........................... 9.24 .................. 7.00 Vinnytsya
.................. 7.87 ........................ + ........................... 10.12 .................. 6.53 Dnipropetrovsk
n/a
.................. n/a ........................ ........................... 39.50 ..................
n/a
.................. n/a ........................ ........................... 37.00 ..................
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Business impact of malaria .......................................................................n/a .................. n/a ........................ ........................... n/a ..................
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08

Secondary education enrollment, gross %* ..............................................17
.
Internet access in schools ......................................................................... 10
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
......................... 4.31 ................................... ........................................ 4.45 ......................... 4.99

..................93.30 ........................ ...........................94.39 ...............100.00
..................52.55........................ ........................... 61.01 ................100.00
.................. 3.75 ........................ ........................... 3.92 .................. 4.39
.................. 3.80 ........................ ........................... 4.21 .................. 4.69
.................. 2.88 ........................ ........................... 2.97 .................. 3.60
.................. 4.53 ........................ + ........................... 4.37 .................. 4.93
.................. 4.67 ........................ + ........................... 4.48 .................. 4.91
.................. 3.02 ........................ ........................... 3.15 .................. 3.53
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16

Total tax rate, % profits* ........................................................................... .......................... n/a ........................... ..........................55.50...................
Trade tariffs, % duty*................................................................................. ......................... n/a ........................... ......................... 2.95....................
Prevalence of foreign ownership .............................................................. 24 .......................... 2.87 .......................... .......................... 3.29 .................. 4.24
Business impact of rules on FDI................................................................ 19 .......................... 3.98 .......................... .......................... 4.17 .................. 4.84
Burden of customs procedures................................................................. 11 .......................... 3.00 .......................... + .......................... 2.92 .................. 3.71
Degree of customer orientation ............................................................... 5 .......................... 4.90 .......................... + .......................... 4.68 .................. 5.11
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Cooperation in laboremployer relations ................................................. 3 .......................... 5.07 .......................... + .......................... 4.84 .................. 5.27
Flexibility of wage determination ............................................................. 23 .......................... 4.81 .......................... .......................... 5.01 .................. 5.76
Hiring and firing practices ........................................................................ 20 .......................... 4.49 .......................... .......................... 4.61 .................. 4.90
Extent and effect of taxation ..................................................................... 17 .......................... 3.14 .......................... .......................... 3.19 .................. 3.70
Pay and productivity .................................................................................. 20 .......................... 5.02 .......................... .......................... 5.09 .................. 5.69
Reliance on professional management ................................................... 11 .......................... 4.32 .......................... + .......................... 4.25 .................. 4.54
Brain drain................................................................................................... 8 .......................... 2.84 .......................... + .......................... 2.63 .................. 3.36
Women in labor force, ratio to men*........................................................ 24 .......................... 0.83 .......................... .......................... 0.88 .................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
Availability of financial services................................................................ 23 .......................... 4.33 .......................... .......................... 4.52 .................. 4.89
Affordability of financial services ............................................................. 18 .......................... 3.70 .......................... .......................... 3.78 .................. 4.18
Financing through local equity market...................................................... 20 .......................... 2.55 .......................... .......................... 2.67 .................. 3.55
Ease of access to loans ............................................................................. 9 .......................... 2.31 .......................... + .......................... 2.18 .................. 2.77
.................................................................... 6 .......................... 3.24 .......................... + ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
.............................................................................. 12..........................12.03.......................... ......................... 20.81...............130.79
Fixed telephone lines/100 pop.*................................................................ 9 ..........................26.50......................... ......................... 26.73............... 58.60
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
10th pillar: Market size ................................................................................................................12 ................................... 1.77 ................................... ...................................... 1.91 ........................ 3.58 Kyiv
Domestic market size index, 17 (best)*................................................. 19 .......................... 1.37 .......................... ......................... 1.71 .................. 3.44 Kyiv
Foreign market size index, 17 (best)*.................................................... 7 .......................... 2.97 .......................... + ......................... 2.50 .................. 4.04 Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quality ................................................................................ 7 .......................... 4.16 .......................... + ......................... 4.02 .................. 4.35
State of cluster development ................................................................... 22 .......................... 3.14 .......................... ......................... 3.73 .................. 5.13
Nature of competitive advantage.............................................................. 2 .......................... 3.79 .......................... + ......................... 3.24 .................. 3.87
Control of international distribution.......................................................... 13 .......................... 4.64 .......................... + ......................... 4.59 .................. 5.16
Production process sophistication .......................................................... 6 .......................... 3.24 .......................... + ......................... 3.10 .................. 3.77
Extent of marketing.................................................................................... 20 .......................... 3.60 .......................... ......................... 3.80 .................. 4.50
Willingness to delegate authority ............................................................. 11 .......................... 3.53 .......................... + ......................... 3.47 .................. 3.93
Reliance on professional management.................................................... 11 .......................... 4.32 .......................... + ......................... 4.25 .................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Quality of scientific research institutions................................................. 24 .......................... 3.15 .......................... ......................... 3.75 .................. 4.58
Company spending on R&D ..................................................................... 5 .......................... 2.98 .......................... + ......................... 2.64 .................. 3.26
Govt procurement of advanced tech products........................................ 1 .......................... 3.63 .......................... + ......................... 2.98 .................. 3.63
Availability of scientists and engineers .................................................... 4 .......................... 3.90 .......................... + ......................... 3.49 .................. 4.29
Utility patents granted/million pop.*......................................................... 15 .......................... 0.00 .......................... ......................... 0.01 .................. 0.04
Intellectual property protection ................................................................ 7 .......................... 3.04 .......................... + ......................... 2.89 .................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Mykolayiv
149
Key indicators
Population (m), 2010................................................................ 2.4
Odesa

Index 2011
Rank (out of 27)
Institutions

7
Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3

2
Health and
primary education
Market size
Technological
readiness
151
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Odesa

Odesa
Ukraine
Regions'
Average
0
Corruption .................................................................................................................... 18 ..................15

Tax regulations ............................................................................................................. 17 ..................16
Policy instability............................................................................................................ 9 ..................12
Inefficient government bureaucracy ............................................................................. 9 ..................6
Inflation ........................................................................................................................ 6 ..................7
Regional customs policy .............................................................................................. 6 ..................3
Local and national government instability .................................................................... 6 ..................6
Access to financing ...................................................................................................... 6 ..................6
Permit and licensing system for doing business.......................................................... 5 ..................5
Inadequately educated workforce ................................................................................. 5 ..................4
Tax rates ....................................................................................................................... 3 ..................7
Access to land plots ..................................................................................................... 3 ..................2
Inadequate supply of infrastructure .............................................................................. 2 ..................3
Poor public health ........................................................................................................ 2 ..................2
Restrictive labour regulations ....................................................................................... 1 ..................2
Crime and theft ............................................................................................................. 1 ..................2
Poor work ethic in the national labour force ................................................................ 1 ..................1
Foreign currency regulations ........................................................................................ 1 ..................1
10
15
20
Odesa


152
Odesa
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 25 .................. 3.79 ........................ ............................ 4.18
Organized crime ........................................................................................ 22 .................. 4.73 ........................ ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09

Quality of roads ......................................................................................... 14
Available airline seat Kms/week, millions* ................................................ 7
................................................................. 2
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08

.
Internet access in schools......................................................................... 11
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
......................... 4.27 ................................... + ........................................ 3.77 ......................... 4.89

.................. 4.19 ........................ + ........................... 4.15 .................. 4.73
.................. 3.26 ........................ ........................... 3.29 .................. 4.29
.................. 4.92 ........................ ........................... 4.92 .................. 5.54
.................. 5.24 ........................ + ........................... 2.73 .................. 5.24
.................. 4.20 ........................ + ........................... 3.08 .................. 5.30
.................. 0.33 ........................ ........................... 7.19 ................101.27
................ 3.77 ........................ ........................... 4.40 .................. 5.13
..................50.20........................ + ........................... 26.73 ..................58.60
..................114.50........................ + ...........................112.47 .............. 303.80
......................... 4.69 ................................... + ........................................ 4.45 ......................... 4.99

..................99.00 ........................+ ...........................94.39 ...............100.00
..................80.79........................ + ........................... 61.01 ................100.00
.................. 3.80 ........................ ........................... 3.92 .................. 4.39
.................. 4.26 ........................ + ........................... 4.21 .................. 4.69
.................. 3.14 ........................ + ........................... 2.97 .................. 3.60
.................. 4.48 ........................ + ........................... 4.37 .................. 4.93
.................. 4.70 ........................ + ........................... 4.48 .................. 4.91
.................. 2.74 ........................ ........................... 3.15 .................. 3.53
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16

Trade tariffs, % duty* ................................................................................. ......................... n/a ........................... ......................... 2.95....................
Prevalence of foreign ownership .............................................................. 11..........................3.33 .......................... + .......................... 3.29 .................. 4.24
Business impact of rules on FDI................................................................ 25..........................3.77 .......................... .......................... 4.17 .................. 4.84
Burden of customs procedures................................................................. 27..........................1.89 .......................... .......................... 2.92 .................. 3.71
Imports as a percentage of GDP* ............................................................. 4 ..........................44.36.......................... + ..........................24.98 ............. 103.20
Degree of customer orientation ............................................................... 19 ..........................4.58 .......................... .......................... 4.68 .................. 5.11
Buyer sophistication.................................................................................... 10..........................3.27 .......................... + .......................... 3.18 .................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Cooperation in laboremployer relations ................................................. 23..........................4.66 .......................... .......................... 4.84 .................. 5.27
Hiring and firing practices ........................................................................ 3 ..........................4.84 .......................... + .......................... 4.61 .................. 4.90
Extent and effect of taxation ..................................................................... 27..........................2.65 .......................... .......................... 3.19 .................. 3.70
Pay and productivity .................................................................................. 27..........................4.47 .......................... .......................... 5.09 .................. 5.69
Reliance on professional management ................................................... 22..........................4.07 .......................... .......................... 4.25 .................. 4.54
Brain drain................................................................................................... 12..........................2.76 .......................... + .......................... 2.63 .................. 3.36
Women in labor force, ratio to men*........................................................ 25..........................0.81 .......................... .......................... 0.88 .................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
Availability of financial services ................................................................ 8 ..........................4.69 .......................... + .......................... 4.52 .................. 4.89
Affordability of financial services ............................................................. 26..........................3.47 .......................... .......................... 3.78 .................. 4.18
Financing through local equity market...................................................... 21..........................2.54 .......................... .......................... 2.67 .................. 3.55
Ease of access to loans ............................................................................. 25..........................1.80 .......................... .......................... 2.18 .................. 2.77
Venture capital availability ....................................................................... 18..........................1.86 .......................... ......................... 1.96 .................. 2.30
Soundness of banks .................................................................................. 13..........................4.58 .......................... + ......................... 4.46 .................. 4.84
.................................................................... 27 ..........................2.63 .......................... ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
9th pillar: Technological readiness ..................................................................................... 4 .................................... 3.28 ................................... + ...................................... 2.95 ........................ 4.21
Availability of latest technologies.............................................................. 12..........................3.51 .......................... + ......................... 3.47 .................. 4.22
Firmlevel technology absorption ............................................................. 12..........................4.09 .......................... + ......................... 4.08 .................. 4.67
FDI and technology transfer....................................................................... 19..........................2.60 .......................... ......................... 2.72 .................. 3.36
.............................................................................. 3 ..........................39.95.......................... + ......................... 20.81...............130.79
Mobile telephone subscriptions/100 pop.*................................................10 ........................114.50 ........................ + ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*................................................. 4 ..........................2.26 .......................... + ......................... 1.71 .................. 3.44 Kyiv
Foreign market size index, 17 (best)*.................................................... 5 ..........................3.25 .......................... + ......................... 2.50 .................. 4.04 Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
11th pillar: Business sophistication ....................................................................................19 ................................... 3.73 ................................... . .................................... 3.81 ........................ 4.18
Local supplier quantity............................................................................... 12..........................4.76 .......................... + ......................... 4.65 .................. 5.20
Local supplier quality ................................................................................ 20..........................3.94 .......................... ......................... 4.02 .................. 4.35
Nature of competitive advantage .............................................................. 19..........................3.06 .......................... ......................... 3.24 .................. 3.87
Value chain breadth ................................................................................... 22..........................3.08 .......................... ......................... 3.47 .................. 4.23
Control of international distribution.......................................................... 15..........................4.55 .......................... ......................... 4.59 .................. 5.16
Production process sophistication .......................................................... 23..........................2.90 .......................... ......................... 3.10 .................. 3.77
Extent of marketing.................................................................................... 12..........................3.82 .......................... + ......................... 3.80 .................. 4.50
Willingness to delegate authority ............................................................. 24..........................3.21 .......................... ......................... 3.47 .................. 3.93
Reliance on professional management.................................................... 22..........................4.07 .......................... ......................... 4.25 .................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Intellectual property protection ................................................................ 23 ..........................2.55 .......................... ......................... 2.89 .................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Odesa
153
Key indicators
Population (m), 2010................................................................ 1.5
Poltava

Index 2011
Rank (out of 27)
Institutions

10th pillar: Market size ...............................................................................................10
7
Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
Health and
primary education
Market size
Technological
readiness
155
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Poltava

Poltava
Ukraine
Regions'
Average
0
Tax regulations.............................................................................................................. 18 .................. 16

Corruption .................................................................................................................... 13 .................. 15
Tax rates ...................................................................................................................... 9 .................. 7
Inflation ........................................................................................................................ 9 .................. 7
Crime and theft ............................................................................................................ 2 .................. 2
10
15
20
Poltava


156
Poltava
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 5
Organized crime ........................................................................................ 17
......................... 3.83 ................................... + ........................................ 3.69

.................. 4.43 ........................ + ............................ 4.18
.................. 2.93 ........................ + ........................... 2.89
.................. 3.66 ........................ + ........................... 3.57
.................. 2.43 ........................ + ........................... 2.33
.................. 4.05 ........................ + ........................... 3.87
.................. 3.01 ........................ + ........................... 2.87
.................. 3.14 ........................ + ........................... 2.99
.................. 4.39 ........................ + ........................... 3.90
.................. 3.08 ........................ ........................... 3.10
.................. 2.82 ........................ ........................... 2.89
.................. 2.82 ........................ ........................... 2.87
.................. 4.16 ........................ ........................... 4.38
.................. 6.66 ........................ + ........................... 6.48
.................. 5.05 ........................ + ........................... 4.65
.................. 5.00 ........................ ........................... 5.10
.................. 4.27 ........................ + ........................... 4.00
.................. 3.63 ........................ + ........................... 3.37
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
.................. n/a ........................ ...........................
..................
.................. 5.05 ........................ ........................... 5.05 ..................
.................. 3.38 ........................ + ........................... 3.27 ..................
.................. 4.70 ........................ ........................... 4.70 ..................
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09

Quality of roads ......................................................................................... 8
Available airline seat Kms/week, millions* ................................................12
................................................................. 8
......................... 3.89 ................................... + ........................................ 3.77 ......................... 4.89

.................. 4.73 ........................ + ........................... 4.15 .................. 4.73
.................. 3.58 ........................ + ........................... 3.29 .................. 4.29
.................. 5.44 ........................ + ........................... 4.92 .................. 5.54
.................. 2.33 ........................ ........................... 2.73 .................. 5.24
.................. 2.07 ........................ ........................... 3.08 .................. 5.30
.................. 0.00 ........................ ........................... 7.19 ................101.27
................ 4.90 ........................ + ........................... 4.40 .................. 5.13
..................27.50........................ + ........................... 26.73 ..................58.60
..................104.50........................ ...........................112.47 .............. 303.80
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08

Secondary education enrollment, gross %* ..............................................15
.
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
......................... 4.58 ................................... + ........................................ 4.45 ......................... 4.99

..................93.90 ........................ ...........................94.39 ...............100.00
..................65.73........................ + ........................... 61.01 ................100.00
.................. 3.83 ........................ ........................... 3.92 .................. 4.39
.................. 4.28 ........................ + ........................... 4.21 .................. 4.69
.................. 2.87 ........................ ........................... 2.97 .................. 3.60
.................. 4.75 ........................ + ........................... 4.37 .................. 4.93
.................. 4.86 ........................ + ........................... 4.48 .................. 4.91
.................. 3.20 ........................ + ........................... 3.15 .................. 3.53
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16

Extent and effect of taxation .....................................................................14 ..........................3.19 .......................... .......................... 3.19 ...................3.70
Prevalence of trade barriers....................................................................... ......................... n/a ........................... ......................... n/a .....................
Trade tariffs, % duty* ................................................................................. ......................... n/a ........................... ......................... 2.95.....................
Imports as a percentage of GDP* ............................................................. 16 ..........................16.12.......................... ..........................24.98 ............. 103.20
Degree of customer orientation ............................................................... 4 ..........................4.92 .......................... +.......................... 4.68 .................. 5.11
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Cooperation in laboremployer relations ................................................. 18 ..........................4.78 .......................... .......................... 4.84 .................. 5.27
Hiring and firing practices ........................................................................ 9 ..........................4.73 .......................... +.......................... 4.61 .................. 4.90
Extent and effect of taxation ..................................................................... 14 ..........................3.19 .......................... .......................... 3.19 .................. 3.70
Pay and productivity .................................................................................. 7 ..........................5.17 .......................... +.......................... 5.09 .................. 5.69
Brain drain................................................................................................... 10 ..........................2.78 .......................... + .......................... 2.63 .................. 3.36
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
Availability of financial services ................................................................ 7 ..........................4.73 .......................... +.......................... 4.52 .................. 4.89
.................................................................... 18 ..........................2.98 .......................... ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
.............................................................................. 9 ..........................19.28.......................... ......................... 20.81...............130.79
Mobile telephone subscriptions/100 pop.*................................................16 ........................104.50 ........................ ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
10th pillar: Market size ................................................................................................................10 ................................... 2.12 ................................... + ...................................... 1.91 ........................ 3.58
Domestic market size index, 17 (best)*................................................. 9 ..........................1.90 .......................... + ......................... 1.71 .................. 3.44
Foreign market size index, 17 (best)*.................................................... 10 ..........................2.80 .......................... + ......................... 2.50 .................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Willingness to delegate authority ............................................................. 26 ..........................3.17 .......................... ......................... 3.47 .................. 3.93
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Utility patents granted/million pop.*......................................................... 5 ..........................0.03 .......................... + ......................... 0.01 .................. 0.04
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Poltava
157
Key indicators
Population (m), 2010................................................................ 1.2
Rivne

Index 2011
Rank (out of 27)
Institutions
Basic requirements ................................................................................................................................................ 17

7
Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3

2
1
Market size
Health and
primary education
Technological
readiness

159
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Rivne

Rivne
Ukraine
Regions'
Average
0
Tax regulations..............................................................................................................17 ..................16

Corruption ....................................................................................................................16 ..................15
Tax rates ....................................................................................................................... 8 .................. 7
Policy instability............................................................................................................ 8 ..................12
Inflation ........................................................................................................................ 8 .................. 7
Crime and theft ............................................................................................................. 3 .................. 2
10
15
20
Rivne


160
Rivne
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 11 .................. 4.23 ........................ + ............................ 4.18
Organized crime ........................................................................................ 17 .................. 5.00 ........................ ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 12 .................. 3.32 ........................ + ........................... 3.29 .................. 4.29
................................................................. 24 ..................19.90........................ ........................... 26.73 ..................58.60
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
. .................. 4.14 ........................ ........................... 4.21 .................. 4.69
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy .....................................................15 ..........................3.04 .......................... + .......................... 3.03 ...................3.65

Extent and effect of taxation .....................................................................10 ..........................3.32 .......................... + .......................... 3.19 ...................3.70
Total tax rate, % profits* ........................................................................... .......................... n/a........................... ..........................55.50....................
No. procedures to start a business*......................................................... .......................... n/a .......................... ..........................10.00....................
No. days to start a business*...................................................................... .......................... n/a .......................... ......................... 27.00....................
Agricultural policy costs ............................................................................16 ..........................2.83 .......................... .......................... 2.89 ...................3.49
Prevalence of trade barriers....................................................................... ......................... n/a........................... ......................... n/a ......................
Trade tariffs, % duty*................................................................................. ......................... n/a........................... ......................... 2.95......................
Prevalence of foreign ownership.............................................................. 13 .......................... 3.31 .......................... + .......................... 3.29.................. 4.24
Business impact of rules on FDI................................................................ 22 .......................... 3.90 .......................... .......................... 4.17.................. 4.84
Burden of customs procedures................................................................. 11 .......................... 3.00 .......................... + .......................... 2.92.................. 3.71
Degree of customer orientation ............................................................... 8 .......................... 4.83 .......................... + .......................... 4.68.................. 5.11
Buyer sophistication.................................................................................... 2 .......................... 3.49 .......................... + .......................... 3.18.................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Cooperation in laboremployer relations ................................................. 8 .......................... 4.92 .......................... + .......................... 4.84.................. 5.27
Flexibility of wage determination ............................................................. 20 .......................... 4.87 .......................... .......................... 5.01.................. 5.76
Hiring and firing practices ........................................................................ 10 .......................... 4.72 .......................... + .......................... 4.61.................. 4.90
Pay and productivity .................................................................................. 2 .......................... 5.53 .......................... + .......................... 5.09.................. 5.69
Reliance on professional management ................................................... 10 .......................... 4.33 .......................... + .......................... 4.25.................. 4.54
Brain drain................................................................................................... 7 .......................... 2.84 .......................... + .......................... 2.63.................. 3.36
Women in labor force, ratio to men*........................................................ 4 .......................... 0.93 .......................... + .......................... 0.88.................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development .....................................................................18 ..................................... 3.78 ..................................... ...................................... 3.83 ........................ 4.08
Availability of financial services................................................................ 18 .......................... 4.38 .......................... .......................... 4.52.................. 4.89
Affordability of financial services ............................................................. 9 .......................... 3.92 .......................... + .......................... 3.78.................. 4.18
Financing through local equity market...................................................... 26 .......................... 2.06 .......................... .......................... 2.67.................. 3.55
Ease of access to loans ............................................................................. 16 .......................... 2.14 .......................... .......................... 2.18.................. 2.77
Venture capital availability ....................................................................... 6 .......................... 2.18 .......................... + ......................... 1.96.................. 2.30
.................................................................... 15 .......................... 3.00 .......................... ......................... 3.06.................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Availability of latest technologies.............................................................. 13 .......................... 3.45 .......................... ......................... 3.47.................. 4.22
Firmlevel technology absorption............................................................. 21 .......................... 3.83 .......................... ......................... 4.08.................. 4.67
FDI and technology transfer....................................................................... 24 .......................... 2.21 .......................... ......................... 2.72.................. 3.36
.............................................................................. 26 .......................... 6.62.......................... ......................... 20.81............... 130.79
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*................................................. 21 .......................... 1.33 .......................... ......................... 1.71.................. 3.44
Foreign market size index, 17 (best)*.................................................... 19 .......................... 2.02 .......................... ......................... 2.50.................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity............................................................................... 14 .......................... 4.62 .......................... ......................... 4.65.................. 5.20
Local supplier quality ................................................................................ 22 .......................... 3.90 .......................... ......................... 4.02.................. 4.35
State of cluster development ................................................................... 16 .......................... 3.53 .......................... ......................... 3.73.................. 5.13
Nature of competitive advantage.............................................................. 12 .......................... 3.24 .......................... + ......................... 3.24.................. 3.87
Value chain breadth ................................................................................... 11 .......................... 3.56 .......................... + ......................... 3.47.................. 4.23
Control of international distribution.......................................................... 20 .......................... 4.46 .......................... ......................... 4.59.................. 5.16
Production process sophistication .......................................................... 15 .......................... 3.10 .......................... ......................... 3.10.................. 3.77
Extent of marketing.................................................................................... 16 .......................... 3.69 .......................... ......................... 3.80.................. 4.50
Willingness to delegate authority ............................................................. 16 .......................... 3.44 .......................... ......................... 3.47.................. 3.93
Reliance on professional management.................................................... 10 .......................... 4.33 .......................... + ......................... 4.25.................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Capacity for innovation ............................................................................. 16 .......................... 3.36 .......................... ......................... 3.52.................. 4.22
Quality of scientific research institutions................................................. 5 .......................... 4.21 .......................... + ......................... 3.75.................. 4.58
Company spending on R&D ..................................................................... 27 .......................... 2.17 .......................... ......................... 2.64.................. 3.26
Universityindustry collaboration in R&D................................................. 14 .......................... 2.98 .......................... ......................... 3.02.................. 3.69
Govt procurement of advanced tech products........................................ 24 .......................... 2.47 .......................... ......................... 2.98.................. 3.63
Availability of scientists and engineers.................................................... 11 .......................... 3.66 .......................... + ......................... 3.49.................. 4.29
Utility patents granted/million pop.*......................................................... 13 .......................... 0.01 .......................... ......................... 0.01.................. 0.04
Intellectual property protection ................................................................ 3 .......................... 3.25 .......................... + ......................... 2.89.................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Rivne
161
Key indicators
Population (m), 2010................................................................ 0.4
Sevastopol

Index 2011
Rank (out of 27)
Institutions

2
17
2
24
1

7
Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
1
Market size
Health and
primary education
Technological
readiness
163
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Sevastopol

Sevastopol
Ukraine
Regions'
Average
0
Corruption ..................................................................................................................... 16 ..................15

Tax regulations.............................................................................................................. 14 ..................16
Inflation ........................................................................................................................ 9 .................. 7
Local and national government instability..................................................................... 8 ..................12
Tax rates ....................................................................................................................... 5 .................. 7
Crime and theft ............................................................................................................. 2 .................. 2
Poor public health ...................................................................................................... 2 .................. 2
10
15
20
Sevastopol


164
Sevastopol
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 16 .................. 4.18 ........................ + ............................ 4.18
Organized crime ........................................................................................ 12 .................. 5.24 ........................ + ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 2 .................. 4.11 ........................ + ........................... 3.29 .................. 4.29
................................................................. 4 ..................33.80........................ + ........................... 26.73 ..................58.60
Mobile telephone subscriptions/100 pop.*................................................ 3 ..................129.50........................ + ...........................112.47 .............. 303.80
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5th pillar: Higher education and training .......................................................................... 3

Quality of math and science education...................................................... 1.
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
......................... 4.85 ................................... + ........................................ 4.45 ......................... 4.99

100.00........................+ ...........................94.39 ...............100.00
..................
..................69.05........................ + ........................... 61.01 ................100.00
.................. 4.27 ........................ + ........................... 3.92 .................. 4.39
.................. 4.69 ........................ + ........................... 4.21 .................. 4.69
.................. 3.42 ........................ + ........................... 2.97 .................. 3.60
.................. 4.89 ........................ + ........................... 4.37 .................. 4.93
.................. 4.81 ........................ + ........................... 4.48 .................. 4.91
.................. 3.45 ........................ + ........................... 3.15 .................. 3.53
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16

Total tax rate, % profits* ........................................................................... .......................... n/a ........................... ..........................55.50....................
No. procedures to start a business*......................................................... .......................... n/a .......................... ..........................10.00 ....................
No. days to start a business*...................................................................... .......................... n/a .......................... ......................... 27.00 ....................
Prevalence of trade barriers....................................................................... ......................... n/a ........................... ......................... n/a .......................
Trade tariffs, % duty*................................................................................. ......................... n/a ........................... ......................... 2.95.......................
Business impact of rules on FDI................................................................ 18 ..........................4.00 .......................... .......................... 4.17 .................. 4.84
Imports as a percentage of GDP*............................................................. 26 ..........................7.41 .......................... .......................... 24.98 ............. 103.20
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Cooperation in laboremployer relations ................................................. 25 ..........................4.61 .......................... .......................... 4.84 .................. 5.27
Brain drain................................................................................................... 15 ..........................2.63 .......................... .......................... 2.63 .................. 3.36
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
Availability of financial services................................................................ 4 ..........................4.81 .......................... + .......................... 4.52 .................. 4.89
Affordability of financial services ............................................................. 24 ..........................3.50 .......................... .......................... 3.78 .................. 4.18
.................................................................... 5 ..........................3.32 .......................... + ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
FDI and technology transfer....................................................................... 10 ..........................2.91 .......................... + ......................... 2.72 .................. 3.36
.............................................................................. 10 ..........................15.77.......................... ......................... 20.81...............130.79
Fixed telephone lines/100 pop.*................................................................ 4 ..........................33.80 ......................... + ......................... 26.73............... 58.60
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity............................................................................... 22 ..........................4.34 .......................... ......................... 4.65 .................. 5.20
Willingness to delegate authority ............................................................. 23 ..........................3.27 .......................... ......................... 3.47 .................. 3.93
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Quality of scientific research institutions................................................. 13 ..........................3.95 .......................... + ......................... 3.75 .................. 4.58
Availability of scientists and engineers.................................................... 5 ..........................3.85 .......................... + ......................... 3.49 .................. 4.29
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Sevastopol
165
Key indicators
Population (m), 2010................................................................ 1.2
Sumy

Index 2011
Rank (out of 27)
Institutions

7
Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3

2
1
Market size
Health and
primary education
Technological
readiness
167
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Sumy

Sumy
Ukraine
Regions'
Average
0
Corruption ..................................................................................................................... 16 ..................15

Tax regulations.............................................................................................................. 16 ..................16
Tax rates ....................................................................................................................... 9 .................. 7
Inflation ........................................................................................................................ 7 .................. 7
Restrictive labour regulations........................................................................................ 4 .................. 2
Regional customs policy................................................................................................ 3 .................. 3
Crime and theft ............................................................................................................. 2 .................. 2
10
15
20
Sumy


168
Sumy
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 3 .................. 4.63 ........................ + ............................ 4.18
Organized crime ........................................................................................ 14 .................. 5.17 ........................ + ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 15 .................. 3.23 ........................ ........................... 3.29 .................. 4.29
................................................................. 15 ..................23.70........................ ........................... 26.73 ..................58.60
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
Inflation, annual % change*...................................................................... 11 .................. 8.90 ........................ + ........................... 9.24 .................. 7.00 Vinnytsya
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
Quality of math and science education...................................................... 2. .................. 4.63 ........................ + ........................... 4.21 .................. 4.69
Internet access in schools......................................................................... 19 .................. 4.17 ........................ ........................... 4.37 .................. 4.93
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
6th pillar: Goods market efficiency ................................................................................... 24 ......................... 3.66 ...................................

Intensity of local competition .................................................................... 20 .................. 4.10 ........................
Extent of market dominance...................................................................... 22 .................. 3.79 ........................
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv
........................................ 3.79 ......................... 4.02 Zakarpattya

........................... 4.33 .................. 4.96 Kyiv
........................... 3.94 .................. 4.50 Vinnytsya

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16

Total tax rate, % profits* ........................................................................... .......................... n/a ........................... ...........................55.50 ...................
No. procedures to start a business*......................................................... .......................... n/a .......................... ...........................10.00 ....................
No. days to start a business*...................................................................... .......................... n/a .......................... ..........................27.00 ...................
Prevalence of foreign ownership ..............................................................14 .......................... 3.31 .......................... + .......................... 3.29 .................. 4.24
Business impact of rules on FDI................................................................ 4 .......................... 4.56 .......................... + .......................... 4.17 .................. 4.84
Burden of customs procedures.................................................................26 .......................... 2.15 .......................... .......................... 2.92 .................. 3.71
Degree of customer orientation ...............................................................10 .......................... 4.78 .......................... + .......................... 4.68 .................. 5.11
Buyer sophistication....................................................................................26 .......................... 2.73 .......................... .......................... 3.18 .................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Cooperation in laboremployer relations .................................................21 .......................... 4.70 .......................... .......................... 4.84 .................. 5.27
Flexibility of wage determination .............................................................24 .......................... 4.77 .......................... .......................... 5.01 .................. 5.76
Hiring and firing practices ........................................................................17 .......................... 4.53 .......................... .......................... 4.61 .................. 4.90
Extent and effect of taxation .....................................................................24 .......................... 2.95 .......................... .......................... 3.19 .................. 3.70
Pay and productivity .................................................................................. 9 .......................... 5.15 .......................... + .......................... 5.09 .................. 5.69
Brain drain...................................................................................................17 .......................... 2.48 .......................... .......................... 2.63 .................. 3.36
Women in labor force, ratio to men*........................................................ 3 .......................... 0.94 .......................... + .......................... 0.88 .................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development .....................................................................10 .....................................3.88 ..................................... + ...................................... 3.83 ........................ 4.08
Availability of financial services................................................................10 .......................... 4.65 .......................... + .......................... 4.52 .................. 4.89
Affordability of financial services ............................................................. 2 .......................... 4.06 .......................... + .......................... 3.78 .................. 4.18
Financing through local equity market......................................................14 .......................... 2.67 .......................... .......................... 2.67 .................. 3.55
Ease of access to loans .............................................................................11 .......................... 2.25 .......................... + .......................... 2.18 .................. 2.77
Venture capital availability .......................................................................19 .......................... 1.85 .......................... ......................... 1.96 .................. 2.30
Soundness of banks ..................................................................................12 .......................... 4.58 .......................... + ......................... 4.46 .................. 4.84
....................................................................13 .......................... 3.03 .......................... ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Availability of latest technologies..............................................................17 .......................... 3.31 .......................... ......................... 3.47 .................. 4.22
Firmlevel technology absorption .............................................................18 .......................... 3.89 .......................... ......................... 4.08 .................. 4.67
FDI and technology transfer.......................................................................17 .......................... 2.62 .......................... ......................... 2.72 .................. 3.36
.............................................................................. 16 .......................... 9.44 .......................... ......................... 20.81...............130.79
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*.................................................18 .......................... 1.39 .......................... ......................... 1.71 .................. 3.44
Foreign market size index, 17 (best)*....................................................13 .......................... 2.46 .......................... ......................... 2.50 .................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity...............................................................................23 .......................... 4.31 .......................... ......................... 4.65 .................. 5.20
Local supplier quality ................................................................................13 .......................... 4.05 .......................... + ......................... 4.02 .................. 4.35
State of cluster development ...................................................................15 .......................... 3.55 .......................... ......................... 3.73 .................. 5.13
Nature of competitive advantage .............................................................. 7 .......................... 3.42 .......................... + ......................... 3.24 .................. 3.87
Production process sophistication ..........................................................22 .......................... 2.95 .......................... ......................... 3.10 .................. 3.77
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Quality of scientific research institutions.................................................18 .......................... 3.50 .......................... ......................... 3.75 .................. 4.58
Availability of scientists and engineers ....................................................10 .......................... 3.67 .......................... + ......................... 3.49 .................. 4.29
Utility patents granted/million pop.*.........................................................11 .......................... 0.01 .......................... ......................... 0.01 .................. 0.04
Intellectual property protection ................................................................19 .......................... 2.79 .......................... ......................... 2.89 .................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Sumy
169
Ternopil
Key indicators
Population (m), 2010................................................................ 1.1

Index 2011
Rank (out of 27)
Institutions

25
10
27
23
9
Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3

2
1
Market size
Health and
primary education
Technological
readiness
171
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Ternopil

Ternopil
Ukraine
Regions'
Average
0
Corruption ..................................................................................................................... 17 ..................15

Tax regulations .............................................................................................................. 15 ..................16
Inflation ......................................................................................................................... 7 .................. 7
Tax rates ....................................................................................................................... 6 .................. 7
Crime and theft ............................................................................................................. 2 .................. 2
10
15
20
Ternopil


172
Ternopil
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 10 .................. 4.26 ........................ + ............................ 4.18
Organized crime ........................................................................................ 13 .................. 5.19 ........................ + ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 26 .................. 2.52 ........................ ........................... 3.29 .................. 4.29
................................................................. 21 ..................22.00........................ ........................... 26.73 ..................58.60
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
Interest rate spread, %*............................................................................. 24 .................. 12.84........................ ........................... 10.12 .................. 6.53 Dnipropetrovsk
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Tuberculosis incidence/100,000 pop.*...................................................... 6 .................. 54.70........................ + ........................... 66.88 ..................34.60
Life expectancy, years*.............................................................................. 2 .................. 72.04........................ + ...........................69.43 ..................72.72
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
Tertiary education enrollment, gross %*................................................... 8 .................. 69.67........................ + ........................... 61.01 ................100.00
Internet access in schools......................................................................... 5 .................. 4.72 ........................ + ........................... 4.37 .................. 4.93
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy .....................................................22 ..........................2.84 .......................... .......................... 3.03 ...................3.65

Total tax rate, % profits* ........................................................................... .......................... n/a........................... ..........................55.50....................
No. days to start a business*...................................................................... .......................... n/a .......................... ......................... 27.00 ....................
Agricultural policy costs ............................................................................11 ..........................3.06 .......................... + .......................... 2.89 ...................3.49
Prevalence of trade barriers....................................................................... ......................... n/a........................... ......................... n/a ......................
Trade tariffs, % duty*................................................................................. ......................... n/a........................... ......................... 2.95......................
Prevalence of foreign ownership .............................................................. 7 .......................... 3.55 .......................... + .......................... 3.29 .................. 4.24
Buyer sophistication.................................................................................... 27 .......................... 2.68 .......................... .......................... 3.18 .................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
7th pillar: Labor market efficiency ......................................................................................23 ...................................... 4.67 ..................................... ...................................... 4.77 ...................... 4.95
Hiring and firing practices ........................................................................ 26 .......................... 4.33 .......................... .......................... 4.61 .................. 4.90
Extent and effect of taxation ..................................................................... 20 .......................... 3.02 .......................... .......................... 3.19 .................. 3.70
Pay and productivity .................................................................................. 22 .......................... 4.90 .......................... .......................... 5.09 .................. 5.69
Reliance on professional management ................................................... 27 .......................... 3.90 .......................... .......................... 4.25 .................. 4.54
Brain drain................................................................................................... 23 .......................... 2.25 .......................... .......................... 2.63 .................. 3.36
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development .....................................................................11 ..................................... 3.84 ..................................... + ...................................... 3.83 ........................ 4.08
Availability of financial services................................................................ 17 .......................... 4.40 .......................... .......................... 4.52 .................. 4.89
Ease of access to loans ............................................................................. 14 .......................... 2.16 .......................... .......................... 2.18 .................. 2.77
Venture capital availability ....................................................................... 16 .......................... 1.91 .......................... ......................... 1.96 .................. 2.30
.................................................................... 4 .......................... 3.37 .......................... + ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Availability of latest technologies.............................................................. 21 .......................... 3.27 .......................... ......................... 3.47 .................. 4.22
Firmlevel technology absorption............................................................. 10 .......................... 4.12 .......................... + ......................... 4.08 .................. 4.67
FDI and technology transfer....................................................................... 15 .......................... 2.65 .......................... ......................... 2.72 .................. 3.36
.............................................................................. 23 .......................... 7.80.......................... ......................... 20.81...............130.79
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*................................................. 24 .......................... 1.26 .......................... ......................... 1.71 .................. 3.44 Kyiv
Foreign market size index, 17 (best)*.................................................... 26 .......................... 1.41 .......................... ......................... 2.50 .................. 4.04 Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity............................................................................... 19 .......................... 4.42 .......................... ......................... 4.65 .................. 5.20
Local supplier quality ................................................................................ 17 .......................... 3.95 .......................... ......................... 4.02 .................. 4.35
Nature of competitive advantage.............................................................. 23 .......................... 2.93 .......................... ......................... 3.24 .................. 3.87
Value chain breadth ................................................................................... 25 .......................... 2.90 .......................... ......................... 3.47 .................. 4.23
Control of international distribution.......................................................... 16 .......................... 4.55 .......................... ......................... 4.59 .................. 5.16
Willingness to delegate authority ............................................................. 15 .......................... 3.46 .......................... ......................... 3.47 .................. 3.93
Reliance on professional management.................................................... 27 .......................... 3.90 .......................... ......................... 4.25 .................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Capacity for innovation ............................................................................. 15 .......................... 3.40 .......................... ......................... 3.52 .................. 4.22
Company spending on R&D ..................................................................... 21 .......................... 2.45 .......................... ......................... 2.64 .................. 3.26
Universityindustry collaboration in R&D................................................. 18 .......................... 2.88 .......................... ......................... 3.02 .................. 3.69
Availability of scientists and engineers .................................................... 16 .......................... 3.40 .......................... ......................... 3.49 .................. 4.29
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Ternopil
173
Key indicators
Population (m), 2010................................................................ 1.6
Vinnytsya

Index 2011
Rank (out of 27)
Institutions

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
Health and
primary education
Market size
Technological
readiness
175
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Vinnytsya

Vinnytsya
Ukraine
Regions'
Average
0
Corruption .....................................................................................................................16 .................. 15

Tax regulations ..............................................................................................................14 .................. 16
Policy instability.............................................................................................................13 .................. 12
Tax rates ....................................................................................................................... 9 .................. 7
Inflation ......................................................................................................................... 5 .................. 7
Crime and theft ............................................................................................................. 2 .................. 2
Restrictive labour regulations........................................................................................ 1 .................. 2
10
15
20
Vinnytsya


176
Vinnytsya
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 17 .................. 4.15 ........................ ............................ 4.18
Judicial independence ............................................................................... 4 .................. 3.14 ........................ + ........................... 2.87
Organized crime ........................................................................................ 8 .................. 5.35 ........................ + ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 5 .................. 3.75 ........................ + ........................... 3.29 .................. 4.29
................................................................. 22 ..................21.20........................ ........................... 26.73 ..................58.60
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5th pillar: Higher education and training .......................................................................... 22 ......................... 4.26 ................................... ........................................ 4.45 ......................... 4.99
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16

Prevalence of foreign ownership .............................................................. 18 .......................... 3.18 .......................... .......................... 3.29 .................. 4.24
Degree of customer orientation ............................................................... 16 .......................... 4.67 .......................... .......................... 4.68 .................. 5.11
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Flexibility of wage determination ............................................................. 13 .......................... 5.00 .......................... .......................... 5.01 .................. 5.76
Hiring and firing practices ........................................................................ 8 .......................... 4.73 .......................... + .......................... 4.61 .................. 4.90
Extent and effect of taxation ..................................................................... 3 .......................... 3.59 .......................... + .......................... 3.19 .................. 3.70
Pay and productivity .................................................................................. 1 .......................... 5.69 .......................... + .......................... 5.09 .................. 5.69
Brain drain................................................................................................... 19 .......................... 2.40 .......................... .......................... 2.63 .................. 3.36
Women in labor force, ratio to men*........................................................ 18 .......................... 0.86 .......................... .......................... 0.88 .................. 0.99
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
Availability of financial services ................................................................ 16 .......................... 4.46 .......................... .......................... 4.52 .................. 4.89
Financing through local equity market...................................................... 17 .......................... 2.58 .......................... .......................... 2.67 .................. 3.55
Ease of access to loans ............................................................................. 27 .......................... 1.63 .......................... .......................... 2.18 .................. 2.77
Venture capital availability ....................................................................... 21 .......................... 1.78 .......................... ......................... 1.96 .................. 2.30
.................................................................... 8 .......................... 3.14 .......................... + ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
FDI and technology transfer....................................................................... 18 .......................... 2.61 .......................... ......................... 2.72 .................. 3.36
.............................................................................. 17 .......................... 8.90 .......................... ......................... 20.81...............130.79
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*................................................. 12 .......................... 1.59 .......................... ......................... 1.71 .................. 3.44
Foreign market size index, 17 (best)*.................................................... 16 .......................... 2.24 .......................... ......................... 2.50 .................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Nature of competitive advantage .............................................................. 17 .......................... 3.10 .......................... ......................... 3.24 .................. 3.87
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Universityindustry collaboration in R&D................................................. 19 .......................... 2.86 .......................... ......................... 3.02 .................. 3.69
Govt procurement of advanced tech products........................................ 18 .......................... 2.84 .......................... ......................... 2.98 .................. 3.63
Availability of scientists and engineers .................................................... 16 .......................... 3.40 .......................... ......................... 3.49 .................. 4.29
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Vinnytsya
177
Key indicators
Population (m), 2010................................................................ 1.0
Volyn

Index 2011
Rank (out of 27)
Institutions

13
1
23
18
10
Innovation
5
Business
sophistication
Macroeconomic
stability
4
3

6th pillar: Goods market efficiency ............................................................................. 5 Market size
Technological
readiness
Infrastructure
2
Health and
primary education
179
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Volyn

Volyn
Ukraine
Regions'
Average
0

Tax regulations..............................................................................................................14 .................. 16
Tax rates .......................................................................................................................12 .................. 7
Corruption ..................................................................................................................... 9 .................. 15
Inflation ......................................................................................................................... 8 .................. 7
Crime and theft ............................................................................................................. 1 .................. 2
10
15
20
Volyn


180
Volyn
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 24 .................. 3.81 ........................ ............................ 4.18
Organized crime ........................................................................................ 1 .................. 5.55 ........................ + ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 11 .................. 3.42 ........................ + ........................... 3.29 .................. 4.29
Fixed telephone lines/100 pop.*................................................................. 26 ..................19.60........................ ........................... 26.73 ..................58.60
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
3
8.10
+
Inflation, annual % change* ...................................................................... ..................
........................ ........................... 9.24 .................. 7.00 Vinnytsya
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5th pillar: Higher education and training .......................................................................... 15 ......................... 4.41 ................................... ........................................ 4.45 ......................... 4.99
Secondary education enrollment, gross %* .............................................. 8 ..................95.80 ........................ + ...........................94.39 ...............100.00
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16

Agricultural policy costs ............................................................................18 ..........................2.72 ......................... ......................... 2.89 ...................3.49
Trade tariffs, % duty*................................................................................. ......................... n/a ........................... ......................... 2.95....................
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Brain drain................................................................................................... 11 ..........................2.76 .......................... + .......................... 2.63 .................. 3.36
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
Availability of financial services................................................................ 1 .......................... 4.89 .......................... + .......................... 4.52 .................. 4.89
Ease of access to loans ............................................................................. 5 .......................... 2.42 .......................... + .......................... 2.18 .................. 2.77
.................................................................... 2 .......................... 3.60 .......................... + ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Firmlevel technology absorption ............................................................. 17 ..........................3.96 .......................... ......................... 4.08 .................. 4.67
.............................................................................. 19 .......................... 8.40 .......................... ......................... 20.81............... 130.79
Mobile telephone subscriptions/100 pop.*................................................17 ........................101.60 ........................ ......................... 112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Nature of competitive advantage.............................................................. 16 ..........................3.16 .......................... ......................... 3.24 .................. 3.87
Control of international distribution.......................................................... 25 ..........................4.21 .......................... ......................... 4.59 .................. 5.16
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Availability of scientists and engineers.................................................... 23 ..........................2.91 .......................... ......................... 3.49 .................. 4.29
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Volyn
181
Key indicators
Population (m), 2010................................................................ 1.2
Zakarpattya

Index 2011
Rank (out of 27)
Institutions

13
1
23
18
10
Innovation
5
Business
sophistication
Macroeconomic
stability
4
3

6th pillar: Goods market efficiency ............................................................................. 5 Market size
Technological
readiness
Infrastructure
2
1
Health and
primary education
183
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Zakarpattya

Zakarpattya
Ukraine
Regions'
Average
0
Tax regulations ............................................................................................................ 18 ..................16

Corruption ..................................................................................................................... 14 ..................15
Inflation ........................................................................................................................ 11 .................. 7
Tax rates ....................................................................................................................... 5 .................. 7
Crime and theft ............................................................................................................ 1 .................. 2
10
15
20
Zakarpattya


184
Zakarpattya
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 1 .................. 4.74 ........................ + ............................ 4.18
Organized crime ........................................................................................ 2 .................. 5.52 ........................ + ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 10 .................. 3.47 ........................ + ........................... 3.29 .................. 4.29
................................................................. 27 ..................15.90........................ ........................... 26.73 ..................58.60
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Infant mortality, deaths/1,000 live births*.................................................. 26 ..................10.90........................ ........................... 8.90 .................. 6.00
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
. .................. 4.33 ........................ + ........................... 4.21 .................. 4.69
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of anti-monopoly policy .....................................................12 ..........................3.11 .......................... + .......................... 3.03 ...................3.65

Trade tariffs, % duty* ................................................................................. ......................... n/a ........................... ......................... 2.95 ....................
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
7th pillar: Labor market efficiency ......................................................................................21 ...................................... 4.72 ..................................... - ......................................4.77 ...................... 4.95
Cooperation in labor-employer relations ................................................. 1 .......................... 5.27 .......................... + .......................... 4.84 .................. 5.27
Hiring and firing practices ........................................................................ 27 .......................... 4.24 .......................... - .......................... 4.61 .................. 4.90
Extent and effect of taxation ..................................................................... 7 .......................... 3.35 .......................... + .......................... 3.19 .................. 3.70
Pay and productivity .................................................................................. 13 .......................... 5.07 .......................... - .......................... 5.09 .................. 5.69
Reliance on professional management ................................................... 26 .......................... 3.91 .......................... - .......................... 4.25 .................. 4.54
Brain drain................................................................................................... 22 .......................... 2.29 .......................... - .......................... 2.63 .................. 3.36
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8th pillar: Financial market development .....................................................................25 ..................................... 3.66 ..................................... - ...................................... 3.83 ........................ 4.08
Availability of financial services ................................................................ 22 .......................... 4.33 .......................... - .......................... 4.52 .................. 4.89
Financing through local equity market...................................................... 16 .......................... 2.62 .......................... - .......................... 2.67 .................. 3.55
Ease of access to loans ............................................................................. 24 .......................... 1.83 .......................... - .......................... 2.18 .................. 2.77
Venture capital availability ....................................................................... 17 .......................... 1.86 .......................... - ......................... 1.96 .................. 2.30
Soundness of banks .................................................................................. 26 .......................... 3.90 .......................... - ......................... 4.46 .................. 4.84
.................................................................... 15 .......................... 3.00 .......................... - ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
Ivano-Frankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
9th pillar: Technological readiness .....................................................................................18 .................................... 2.75 ................................... - ...................................... 2.95 ........................ 4.21
Availability of latest technologies.............................................................. 16 .......................... 3.31 .......................... - ......................... 3.47 .................. 4.22
Firm-level technology absorption ............................................................. 24 .......................... 3.75 .......................... - ......................... 4.08 .................. 4.67
.............................................................................. 27 .......................... 6.21 .......................... - ......................... 20.81...............130.79
Fixed telephone lines/100 pop.*................................................................27..........................15.90......................... - ......................... 26.73............... 58.60
Mobile telephone subscriptions/100 pop.*................................................12 ........................109.40 ........................ - .........................112.47............. 303.80
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
10th pillar: Market size ................................................................................................................16 ................................... 1.65 ................................... - ...................................... 1.91 ........................ 3.58
Domestic market size index, 17 (best)*................................................. 22 .......................... 1.32 .......................... - ......................... 1.71 .................. 3.44
Foreign market size index, 17 (best)*.................................................... 11 .......................... 2.63 .......................... + ......................... 2.50 .................. 4.04
Kyiv
Kyiv
Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
11th pillar: Business sophistication ....................................................................................23 ................................... 3.65 ................................... - . .................................... 3.81 ........................ 4.18
Local supplier quantity............................................................................... 18 .......................... 4.49 .......................... - ......................... 4.65 .................. 5.20
Local supplier quality ................................................................................ 19 .......................... 3.95 .......................... - ......................... 4.02 .................. 4.35
State of cluster development ................................................................... 12 .......................... 3.63 .......................... - ......................... 3.73 .................. 5.13
Nature of competitive advantage .............................................................. 27 .......................... 2.71 .......................... - ......................... 3.24 .................. 3.87
Value chain breadth ................................................................................... 24 .......................... 2.98 .......................... - ......................... 3.47 .................. 4.23
Control of international distribution.......................................................... 26 .......................... 4.13 .......................... - ......................... 4.59 .................. 5.16
Extent of marketing .................................................................................... 9 .......................... 3.96 .......................... + ......................... 3.80 .................. 4.50
Reliance on professional management .................................................... 26 .......................... 3.91 .......................... - ......................... 4.25 .................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
12th pillar: Innovation ...................................................................................................................22 .... .............................. 2.75 ................................... - . .................................... 2.91 ........................ 3.27
Capacity for innovation ............................................................................. 27 .......................... 2.76 .......................... - ......................... 3.52 .................. 4.22
Quality of scientific research institutions ................................................. 2 .......................... 4.42 .......................... + ......................... 3.75 .................. 4.58
Company spending on R&D ..................................................................... 25 .......................... 2.25 .......................... - ......................... 2.64 .................. 3.26
University-industry collaboration in R&D................................................. 23 .......................... 2.65 .......................... - ......................... 3.02 .................. 3.69
Availability of scientists and engineers .................................................... 26 .......................... 2.84 .......................... - ......................... 3.49 .................. 4.29
Utility patents granted/million pop.*......................................................... 17 .......................... 0.00 .......................... - ......................... 0.01 .................. 0.04
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Notes: n/a - data are not available for a region; 'multiple' means that more than one region get the maximum score.
Zakarpattya
185
Key indicators
Population (m), 2010................................................................ 1.8
Zaporizhzhya

Index 2011
Rank (out of 27)
Institutions

7
Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3

2
1
Market size
Health and
primary education
Technological
readiness
187
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Zaporizhzhya

Zaporizhzhya
Ukraine
Regions'
Average
0
Tax regulations ............................................................................................................. 15 ..................16

Corruption ..................................................................................................................... 13 ..................15
Tax rates ....................................................................................................................... 8 .................. 7
Inflation ......................................................................................................................... 7 .................. 7
Permit and licensing system for doing business........................................................... 6 .................. 5
Crime and theft ............................................................................................................. 1 .................. 2
10
15
20
Zaporizhzhya


188
Zaporizhzhya
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 8 .................. 4.34 ........................ + ............................ 4.18
Organized crime ........................................................................................ 20 .................. 4.85 ........................ ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 13 .................. 3.29 ........................ ........................... 3.29 .................. 4.29
................................................................. 3 ..................34.30........................ + ........................... 26.73 ..................58.60
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
Inflation, annual % change*...................................................................... 19 .................. 9.70 ........................ ........................... 9.24 .................. 7.00 Vinnytsya
4
7.24
+
Interest rate spread, %*............................................................................. ..................
........................ ........................... 10.12 .................. 6.53 Dnipropetrovsk
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Infant mortality, deaths/1,000 live births*.................................................. 23 ..................10.10........................ ........................... 8.90 .................. 6.00
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5th pillar: Higher education and training .......................................................................... 4 ......................... 4.75 ................................... + ........................................ 4.45 ......................... 4.99
. .................. 4.34 ........................ + ........................... 4.21 .................. 4.69
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16

Trade tariffs, % duty* ................................................................................. ......................... n/a ........................... ......................... 2.95.....................
Prevalence of foreign ownership .............................................................. 12 ..........................3.32 .......................... + .......................... 3.29 .................. 4.24
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Brain drain................................................................................................... 9 ..........................2.84 .......................... + .......................... 2.63 .................. 3.36
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
Availability of financial services ................................................................ 3 ..........................4.81 .......................... + .......................... 4.52 .................. 4.89
Venture capital availability ....................................................................... 15 ..........................1.95 .......................... ......................... 1.96 .................. 2.30
.................................................................... 10 ..........................3.11 .......................... + ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Firmlevel technology absorption ............................................................. 16 ..........................3.98 .......................... ......................... 4.08 .................. 4.67
.............................................................................. 6 ..........................22.91.......................... + ......................... 20.81...............130.79
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*................................................. 10 ..........................1.79 .......................... + ......................... 1.71 .................. 3.44 Kyiv
Foreign market size index, 17 (best)*.................................................... 4 ..........................3.30 .......................... + ......................... 2.50 .................. 4.04 Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Nature of competitive advantage .............................................................. 14 ..........................3.21 .......................... ......................... 3.24 .................. 3.87
Reliance on professional management .................................................... 4 ..........................4.49 .......................... + ......................... 4.25 .................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Zaporizhzhya
189
Key indicators
Population (m), 2010................................................................ 1.3
Zhytomyr

Index 2011
Rank (out of 27)
Institutions

Innovation
Infrastructure
6
5
Business
sophistication
Macroeconomic
stability
4
3
2
1
Market size
Health and
primary education
Technological
readiness
191
Higher education
and training
Financial market
sophistication
Goods market
efficiency
Labor market
efficiency
Zhytomyr

Zhytomyr
Ukraine
Regions'
Average
0
Corruption ....................................................................................................................16 .................. 15

Tax regulations .............................................................................................................15 .................. 16
Inflation ......................................................................................................................... 7 .................. 7
Tax rates ....................................................................................................................... 7 .................. 7
Crime and theft ............................................................................................................. 2 .................. 2
10
15
20
Zhytomyr


192
Zhytomyr
INDICATOR
RANK / 27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21

Property rights........................................................................................... 2 .................. 4.67 ........................ + ............................ 4.18
Organized crime ........................................................................................ 25 .................. 4.69 ........................ ........................... 5.10
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
Quality of roads ......................................................................................... 9 .................. 3.54 ........................ + ........................... 3.29 .................. 4.29
................................................................. 14 ..................23.90........................ ........................... 26.73 ..................58.60
3.01
3.02
3.03
3.04
3.05
3.06
n/a
n/a
n/a
n/a
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
Sevastopol
n/a
Multiple (27)
Kyiv
Kyiv
Rivne
Zakarpattya
Poltava
Kyiv
Sevastopol
Multiple (2)
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
Kyiv
Multiple (3)
Multiple (2)
Sumy
Sevastopol
Dnipropetrovsk
Kyiv Oblast
Donetsk
Volyn
6.01
6.02
.........................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
4.01
4.74
3.60
4.44
3.00
4.31
3.43
3.60
4.39
3.90
3.50
3.44
5.00
6.78
5.29
5.55
4.45
3.94
n/a
5.43
3.74
Volyn
Zakarpattya
Sevastopol
Volyn
Volyn
Chernivtsi
Chernivtsi
Rivne
Poltava
Chernivtsi
Volyn
Volyn
Vinnytsya
Zhytomyr
Chernigiv
Volyn
Vinnytsya
Volyn
n/a
Zaporizhzhya
Khmelnytsky
Multiple (27)
Kyiv
Kyiv Oblast
Kyiv Oblast
Kharkiv
Odesa
Kyiv
Kyiv
Sumy
Kyiv
Kyiv

INDICATOR
RANK /27
SCORE
VS AVG
REGIONS'
AVERAGE
BEST PERFORMING
REGION
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15
6.16
Effectiveness of antimonopoly policy .....................................................17 ..........................2.96 .......................... .......................... 3.03 ...................3.65

Total tax rate, % profits* ........................................................................... .......................... n/a ........................... ..........................55.50..................
No. procedures to start a business*......................................................... .......................... n/a .......................... ..........................10.00 ..................
No. days to start a business*...................................................................... .......................... n/a .......................... .........................27.00 ..................
Trade tariffs, % duty* ................................................................................. ......................... n/a ........................... ......................... 2.95...................
Prevalence of foreign ownership ..............................................................15 ..........................3.26 .......................... .......................... 3.29 .................. 4.24
Imports as a percentage of GDP* .............................................................11 ..........................24.02.......................... ..........................24.98 ............. 103.20
Degree of customer orientation ...............................................................21 ..........................4.51 .......................... .......................... 4.68 .................. 5.11
Buyer sophistication....................................................................................20 ..........................3.05 .......................... .......................... 3.18 .................. 3.91
Volyn
Kirovohrad
n/a
n/a
n/a
Poltava
n/a
n/a
Zakarpattya
Zhytomyr
Khmelnytsky
Kyiv
Dnipropetrovsk
Vinnytsya
7.01
7.02
7.03
7.04
7.05
6.04
7.06
7.07
7.08
7.09
Cooperation in laboremployer relations .................................................19 ..........................4.73 .......................... .......................... 4.84 .................. 5.27
Flexibility of wage determination .............................................................22 ..........................4.82 .......................... .......................... 5.01 .................. 5.76
Hiring and firing practices ........................................................................15 ..........................4.57 .......................... .......................... 4.61 .................. 4.90
Extent and effect of taxation .....................................................................22 ..........................2.98 .......................... .......................... 3.19 .................. 3.70
Pay and productivity ..................................................................................19 ..........................5.02 .......................... .......................... 5.09 .................. 5.69
Reliance on professional management ...................................................21 ..........................4.14 .......................... .......................... 4.25 .................. 4.54
Brain drain...................................................................................................25 ..........................2.22 .......................... .......................... 2.63 .................. 3.36
Rivne
Zakarpattya
Kyiv
n/a
Dnipropetrovsk
n/a
Kirovohrad
Vinnytsya
Dnipropetrovsk
Kyiv Oblast
Zhytomyr
8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
Availability of financial services ................................................................24 ..........................4.31 .......................... .......................... 4.52 .................. 4.89
Affordability of financial services .............................................................23 ..........................3.51 .......................... .......................... 3.78 .................. 4.18
Financing through local equity market......................................................23 ..........................2.45 .......................... .......................... 2.67 .................. 3.55
Ease of access to loans .............................................................................15 ..........................2.15 .......................... .......................... 2.18 .................. 2.77
Venture capital availability .......................................................................22 ..........................1.77 .......................... ......................... 1.96 .................. 2.30
....................................................................23 ..........................2.81 .......................... ......................... 3.06 .................. 3.63
Volyn
Volyn
Zaporizhzhya
Donetsk
IvanoFrankivsk
Chernivtsi
Poltava
Chernivtsi
n/a
9.01
9.02
9.03
9.04
9.05
9.06
2.08
2.09
Availability of latest technologies..............................................................11 ..........................3.57 .......................... + ......................... 3.47 .................. 4.22
Firmlevel technology absorption .............................................................15 ..........................4.00 .......................... ......................... 4.08 .................. 4.67
FDI and technology transfer.......................................................................11 ..........................2.88 .......................... + ......................... 2.72 .................. 3.36
..............................................................................22 .......................... 7.93 .......................... ......................... 20.81...............130.79
Kyiv
Kyiv
Sevastopol
Kyiv
Kyiv
n/a
n/a
Kyiv
Kyiv
10.01
10.02
Domestic market size index, 17 (best)*.................................................16 ..........................1.46 .......................... ......................... 1.71 .................. 3.44 Kyiv
Foreign market size index, 17 (best)*....................................................18 ..........................2.04 .......................... ......................... 2.50 .................. 4.04 Donetsk
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
7.07
Local supplier quantity...............................................................................25 ..........................4.20 .......................... ......................... 4.65 .................. 5.20
Local supplier quality ................................................................................21 ..........................3.93 .......................... ......................... 4.02 .................. 4.35
State of cluster development ...................................................................17 ..........................3.50 .......................... ......................... 3.73 .................. 5.13
Value chain breadth ...................................................................................18 ..........................3.42 .......................... ......................... 3.47 .................. 4.23
Control of international distribution..........................................................18 ..........................4.50 .......................... ......................... 4.59 .................. 5.16
Extent of marketing....................................................................................18 ..........................3.65 .......................... ......................... 3.80 .................. 4.50
Reliance on professional management ....................................................21 ..........................4.14 .......................... ......................... 4.25 .................. 4.54
Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk
Donetsk
Sevastopol
Sumy
Vinnytsya
Kyiv Oblast
Kyiv
Volyn
Dnipropetrovsk
12.01
12.02
12.03
12.04
12.05
12.06
12.07
1.02
Capacity for innovation .............................................................................21 ..........................3.28 .......................... ......................... 3.52 .................. 4.22
Company spending on R&D .....................................................................13 ..........................2.58 .......................... ......................... 2.64 .................. 3.26
Universityindustry collaboration in R&D.................................................12 ..........................3.13 .......................... + ......................... 3.02 .................. 3.69
Govt procurement of advanced tech products........................................22 ..........................2.48 .......................... ......................... 2.98 .................. 3.63
Availability of scientists and engineers ....................................................20 ..........................3.23 .......................... ......................... 3.49 .................. 4.29
Utility patents granted/million pop.*.........................................................17 ..........................0.00 .......................... ......................... 0.01 .................. 0.04
Intellectual property protection ................................................................13 ..........................2.91 .......................... + ......................... 2.89 .................. 3.60
Kharkiv
Mykolayiv
Kyiv
Dnipropetrovsk
Sumy
Mykolayiv
Dnipropetrovsk
Sevastopol
Sevastopol
Zhytomyr
193
Charitable Foundation for Effective Governance
The Foundation for Effective Governance (FEG) was established in 2007 to de
velop and implement projects and programs focused on the longterm develop
ment of the Ukrainian economy and to further public debate on the most important
economic challenges facing Ukraine. FEG is a nonprofit, independent organization
serving the interests of Ukrainian citizens.
The International Advisory Board includes people with extensive expertise and im
peccable reputations and ensures the Foundations independence and its strict
dedication to its mission and principles. Among them is former Prime Minister of
Canada Kim Campbell, former President of the National Bank of Hungary Gyorgy
Suranyi, Director of Morgan Stanley Ukraine Ihor Mitiukov etc.
One of FEGs fundamental principles is to engage top international experts. Each
project is carried out in partnership with leading international organizations that
have extensive expertise in solving similar challenges. International experts in
close cooperation with Ukrainian specialists directly interact with the appropriate
State authorities to take into account the best world practice as well as the features
of the Ukrainian economy.
194
Currently, FEG concentrates on the following projects: assisting the State au
thorities in developing and implementing economic reforms, annual study of the
competitiveness of Ukraines regions, assisting Ukraines regions to develop and
implement economic growth strategies, and public debates on important topics of
economic and business development in Ukraine.
Detailed information can be found on the website of the Foundation
www.feg.org.ua
Competitiveness portal of Ukraine:
www.competitiveukraine.org

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Ukrainian National Competitiveness

Ukrainian National Competitiveness Report 2011

The Foundation for Effective Governance

Layout and design: Print House Kolo.

All rights reserved. No part of this publication may be

This year, the foundation releases its fourth edition

Macroeconomic stability has become a priority

of the impact of Ukraines transportation infrastructure

Ukrainian National Competitiveness Index 2011

The 12 pillars of competitiveness

Chapter 1. Assessing Competitiveness of Countries and Regions:

Chapter 1. Assessing Competitiveness of Countries and Regions:

activity and the kinds of activities or sectors that can

nesses can adjust wages independently to a large extent

The interrelation of the 12 pillars

1.2 Competitiveness and the stages of

Subindex weights and income threshholds for stages of development

Weights for basic requirements subindex, %

Weights for efficiency enhancers subindex, %

GDP per capita (USD) thresholds*

Weights for innovation and sophistication factors subindex, %

Chapter 1. Assessing Competitiveness of Countries and Regions:

Chapter 1. Assessing Competitiveness of Countries and Regions:

1.3 The Global Competitiveness Index

depending on their level of development.

Countries/economies at each stage of development

Bosnia and Herzogovina

Iran, Islamic Rep.

Hong Kong SAR

Trinidad and Tobago

United Arab Emirates

Chapter 1. Assessing Competitiveness of Countries and Regions:

Chapter 1. Assessing Competitiveness of Countries and Regions:

Appendix : Calculation and structure of Global Competitiveness Index in 2011

2nd pillar: Infrastructure..............................................25%

3rd pillar: Macroeconomic environment.....................25%

Government budget balance *

4th pillar: Health and primary education....................25%

6th pillar: Goods market efficiency..........................................17%

10th pillar: Market size...................................................................17%

INNOVATION AND SOPHISTICATION FACTORS

12th pillar: Innovation................................................50%

7th pillar: Labor market efficiency...........................................17%

8th pillar: Financial market development............................17%

9th pillar: Technological readiness.........................................17%

b. As described in the chapter, the weights are the

GDP per capita (USD) thresholds*

Weights for basic requirements subindex

Weights for efficiency enhancers subindex

Weights for innovation and sophistication factors subindex

. The standard formula for converting hard data

(country score - sample minimum)

The sample minimum and sample maximum

Chapter 1. Assessing Competitiveness of Countries and Regions:

responds to the worst and best possible outcomes, respectively:

(country score - sample minimum)

d. For those groups of variables that contain one

Efficiency of legal framework in challenging regulations

Source: Foundation for Effective Governance, Executive Opinion

Source: Foundation for Effective Governance, Executive Opinion

Intellectual property protection

Transparency of government policymaking

Source: Foundation for Effective Governance, Executive Opinion

Are firms in your region usually informed clearly by the government