Kyiv. July, 14. Kherson Oblast is ranked on the next to the last position (11th) in Ukraine’s regions’ Competitiveness Ranking, ahead of Cherkasy Oblast only. It is ranked 91st in the Global Competitiveness Index behind Bulgaria and Uruguay and ahead of Bosnia and Herzegovina.

The project on studying Ukraine's competitiveness on the national and regional levels has been realized by the Foundation for Effective Governance jointly with the World Economic Forum (WEF). The result of the project was the Ukraine’s Competitiveness Report. WEF has been analyzing Ukraine’s competitiveness in its annual global competitiveness indexes since 1997. This year the Foundation provided support, and along with the competitiveness ranking among 131 countries Ukraine also received ranking competitiveness of 12 selected regions: Dnipropetrovsk, Zakarpattya, Lviv, Sumy, Khmelnitskiy, Donetsk, Poltava, Vinnitsa, Kherson, Cherkasy, Kyiv City, and Crimea. The regions were selected by different geographic locations, economic structure and cultural background.

The Foundation’s Director, Ms. Natalia Izosimova, said that in-depth analysis of 12 regions is the first study of this type, which allows us to understand the underlying strengths and weaknesses of each region’s competitiveness. “Such approach can help develop regional state policy as well as help each region define the priority areas of their development. It can help understand what can be done at the regional level now to improve the life in the region”.
Along with the statistics, 50 business leaders were interviewed in each of the 12 regions. 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 Ukraine’s indicators as well as with other countries covered by the Global Competitiveness Index.

Kherson Oblast has been ranked as very low 121st position on institutional development in the global index; this is at the level of Zimbabwe. The region’s overall competitiveness performance is held back by a low rank for the institutional development as this factor is the basis of the region’s economic system. Among the most problematic areas are the high level of state interference and lack of transparency of government policy-making compared to other regions and countries (129th overall). This results in low public trust in politicians in the region.

Kherson Oblast is ranked 103rd in infrastructure development (Ukraine is ranked 76th in the global index) as a result of assessment of all types of transportation, energy infrastructure and telecommunications as poor. The Oblast is ranked 100th for the quality of infrastructure. Railway road network is more or less developed (62nd - at the level with Morocco). The level of road maintenance is below the average in the country.

The region suffers weaknesses in the areas of health and primary education (the lowest indicators in Ukraine 94th (Ukraine is ranked 78th), with poor health indicator because of TB problem. The TB rate in Kherson Oblast is at least two times higher compared to the average indicators in Ukraine. On higher education and training Kherson Oblast is also far below the average level in Ukraine.

The efficiency of market for goods is ranked 115th in the global index, which is behind Nicaragua and ahead of Ethiopia. The major problems, which affect the efficiency of goods market, include weak internal competitiveness, poor market competition, low share of foreign ownership and low buyers’ sophistication. In addition, the region is on the last position among the 12 regions by the foreign ownership indicator.

Other areas that need improvement to ensure higher competitiveness of the region include efficiency of goods market, financial market and innovation capacity. In addition, considering the low level of gross regional product (UAH 5,713 per capita) there is no surprise that Kherson Oblast is a little behind Ukraine in business sophistication and innovations.

It’s worth saying that the level of business security in the Oblast is higher compared to the average indicator in the country. For instance, the region has been ranked ahead of Ukraine (88th) by reliability of law-enforcement bodies, which contributes to low level of organized crime.

According to the Report, Ukraine has been ranked 73rd out of 131 countries in the Global Competitiveness Index for 2007-2008. 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 work force and natural resources) and the stage at which economic growth depends on higher productivity (development of goods market and capacity for technological innovations).