Donetsk. June 10, 2008. Donetsk Oblast is ranked 7th out of 12 regions in the Ukrainian regions’ competitiveness rating and 74th in the Global Competitiveness Rating just behind Vietnam. This modest position contradicts the reputation of the wealthiest region of Ukraine. Such research data were made public during the round table with CEOs of Donetsk Oblast, local business elite and expert community by the Director of the Foundation for Effective Governance Natalia Izosimova.

The project on Ukraine’s competitiveness at the national and regional level was carried out by the Foundation for Effective Governance in cooperation with the World Economic Forum (WEF). The result of the project was the final Ukraine’s Competitiveness Report. Before that, starting from 1997, WEF had analyzed Ukraine’s competitiveness within the framework of its annual reports on global competitiveness. This year, thanks to support of the Foundation, along with the global rating among 131 countries Ukraine received the rating of competitiveness of its 12 regions: Dnepropetrovsk, Zakarpatye, Lvov, Sumy, Khmelnitsk, Donetsk, Poltava, Vinnitsa, Kherson, Cherkassy, Kyiv and the Republic of Crimea. The Oblasts were selected considering different geographical parts of the country and different structures of economy and cultural characteristics.

In the words of the Foundation’s Director, Natalia Izosimova, the in-depth analysis of 12 regions is the first research of this kind in Ukraine, which allows us to understand the underlying strengths and weaknesses of each region’s competitiveness. “Such approach can help develop the regional state policy as well as help each region define the priority areas of their development”, stated the Director of the Foundation for Effective Governance, Natalia Izosimova. –“It can help understand what can be done at the regional level now to improve the life in the region”.

Along with the statistical data 50 business leaders were interviewed in each of the regions. The questions were the same as those asked for assessment of the country as a whole, in particular, regarding healthcare and education, efficiency of market for goods and services, labor market efficiency, financial market sophistication, capacity for technological innovations, business competitiveness, etc. This made it possible to compare every separate region with the Ukraine’s indicators as well as with other countries covered by the Global Competitiveness Rating.

Infrastructure quality is one of the strongest pillars of Donetsk Oblast. In this indicator Donetsk Oblast is in the third place behind Kyiv and Dnepropetrovsk Oblast. Internationally, in this indicator Donetsk Oblast is close to Pakistan and Poland. Financial market of the region is developed; however, technological readiness is low. It is ranked 12th on business sophistication pillar being at the same level as Kherson. Internationally it is on the level of Ecuador and Uruguay.

Donetsk Oblast is much behind Dnepropetrovsk Oblast in its capacity for innovations. In this indicator it is ranked 9th in Ukraine and 89th internationally being at the same level with Macedonia.
A high rate of infant mortality and TB infection as well as low level of primary education enrollment put the Oblast on the last place in the national rating and on the 99th in the global rating behind Mongolia, Kazakhstan and Kirghizia (ranked 100th).

The region is ranked an impressive 64th place in the level of higher education and training being within the top half of the ranking at the same level with Rumania. The Oblast is at the same level with Japan in science education. However, the penetration rate of computers at schools is average in Ukraine; internationally the Oblast is ranked 114th in this indicator.
The labor market is very weak. It is ranked a rock bottom in Ukraine and 103rd place internationally being approximately at the same level with India. In particular, the Oblast is on the last place on cooperation in labor-employer relations, where it ranks 128th in the global rating, 86th in hiring and firing practices and 120th in brain drain. It is ranked on the next to last place as for relations between productivity and pay in the country and on the 70th in the global rating.

According to the Report Ukraine is ranked 73rd out of 131 countries in the Global Competitiveness Index Ratings. The country is in its transition stage of economic development that is between the stage at which economic growth depends on primary factors of production (non qualified working force and natural resources) and the stage at which the economic growth improves with better productivity (development of market for goods and capacity for technological innovation).

For more detailed information on the Foundation’s comprehensive competitiveness research of the 12 Ukrainian regions, please, visit our official website: www.feg.org.ua.

Profile of FEG

The Foundation for Effective Governance (FEG) www.feg.org.ua was established in 2007 by Ukrainian businessman, Rinat Akhmetov with a mission to develop and implement long-term projects and programs which encourage the long-term economic development of Ukraine. FEG is committed to help reach public and political consensus on the key areas of the economic transformation programs.

To reach the objective the Foundation attracts leading Ukrainian and international experts with impeccable reputation. A Board of Trustees, which includes famous public and political figures from different countries, ensures the Foundation’s independence. Among its board members are former Canadian Prime Minister, Kim Campbell, former U.S. Senator Lincoln Chafee, former president of the National Bank of Hungary, György Surányi and General Director of the Financial Policy Institute Igor Mityukov. The Board of Trustees takes an active part in building the Foundation’s strategy, selecting the priority projects and representing FEG both inside and outside Ukraine.

Dear colleagues, for any additional information please, contact: Inna Gordienko, PR-Director of the Foundation for Effective Governance
Tel.: (+38 044) 501-41-07
mobile telephone. (+38 095) 290-59-60
E-mail: igordienko@feg.org.ua