Oleksandr Klymenko Official website
Articles | 335 | 25.10.2016

Doing Business-2017: spoilers by Poroshenko and real situation in Ukraine

Alexander Klimenko said the statement Poroshenko about Doing Business-2017

Today Poroshenko made spoilers about the Doing Business-2017 rating, which was officially published by the World Bank and International Finance Corporation (IFC) only a few minutes ago.

According to the owner of the Roshen corporation, Ukraine has already «risen in the Doing Business ranking by 73 positions in the context of tax climate of economy» and can rise by another 30 positions.

Well, such great results. Especially the fact that, according to the President, quoting, «in 2012-2013 Ukraine took 181st place, one of the worst tax climate of the economy in the world, it comes about the times of Klymenko, Yanukovych, Arbuzov», is inspiring me.

Of course, thanks to Petro Oleksiyovych for such flattering assessment. However, I do not need achievements of other people. The Ministry of economy has always been responsible for the Doing Business rankings. Let’s open the Wikipedia: “March 23, 2012, President Viktor Yanukovych signed a decree on the appointment of Poroshenko as a Minister of Economic Development and Trade of Ukraine”. We cant throw away the words of a song.

While the head of state is entertained by numbers, we (mere mortals) are waiting for official release of the rating. I would like to note some moments of illiteracy eliminating (likbez) for Mr. Poroshenko.

Let me remind that the Doing Business-2016 (based in results of late 2014 – early 2015) fixed zero efficiency of the so-called reforms, especially in the tax sphere. Ukraine has moved to four positions up, from 87th to 83rd place (among the 189 other countries). In terms of “Taxation”, last year Ukraine has fallen by one position – from 106th to 107th place. Raising positions of Ukraine in the Doing Business-2016 became possible only due to one formal reform in business registration field. All the declared changes and simplifications were related to two procedures – the abolition of the stamp and necessity to pay UAH 170 (51) of registration fee.

At the same time, during the times of “criminal power”, which was mentioned by Poroshenko, in terms of “Taxation”, Ukraine has moved up from 157th to 106th place – by 56 position – in the Doing business-2015, which covered the period of tax payments during late 2013 – early 2014. According to international experts, it was the result of implementation of electronic tax services and procedures, as well as reducing the amount of fees and payments from 135 to 28 per year, decreasing of spent time on administration of taxes by two times – to 350 hours a year. In other words, it comes about tax reforms, which were carried out by Ministry of revenue and duties under the leadership of that odious Klymenko.

During my work in government, I paid much attention to this rating. However, it has never been end in itself. It is worth mentioning that this rating evaluates the ease of doing business de jure, meanwhile actual problems are not taken into account.

Analysts of the project do not conduct interviews. They define a set of procedures, which they are interested in, and analyse the sum of money and the period of time in a particular country, which you spend for carrying out such procedures. In one word, they analyse the situation de jure, not de facto.

I always knew that the Doing Business rating – is, first of all, a signal to foreign investors: whether or not to invest in the country. What do you think about current situation?  Will the investors make decision to invest in Ukraine even after such a growth of Ukraine in the ranking?  In particular, it comes about the country with the undeclared war and open corruption. It would be easier to invest in Syria, for instance.

If there is a growth Ukraine this year, it will rather be a kind of “charity” of the international financial institutions. We will not give a credit, but you can take a rating.

The most important and objective rating – is a rating of Ukrainian entrepreneurs themselves. Me and by team of the Uspіshna Kraina team have been communicated with thousands of entrepreneurs across the country during our business forums, on the markets and enterprises, just on the streets of Ukrainian cities and online.

What is the result? 65% of Ukrainian businessmen believe that the state of their business has deteriorated during the last year. 55% of entrepreneurs are dissatisfied with the current tax system. 75% of them feel social injustice. They understand that nowadays, the government is working only for the benefit of oligarchs, meanwhile nobody protects the interests of ordinary entrepreneurs.

It is the most objective rating of Doing Business in Ukraine. Would you announce about it with the same pathos, Petro Oleksiyovych?

P.S. When I headed the Ministry, me and my team have a tradition – each year we were waiting for the publication of the Doing Business ranking and its indicators. We were analysing it until the morning. It was similar to waiting for Santa Claus on the New Year’s night 🙂 We do not betray our traditions. Thus, by tomorrow morning you’ll find interesting facts and objective assessments of the Doing Business rating in Ukraine. Meanwhile, we keep on listening to the tales of Poroshenko.

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