New rating according to the Property Rights Protection Index: where is Ukraine?

In early October, the Property Rights Alliance published its annual report on the protection of property rights around the world. 125 countries of the world, including Ukraine, were evaluated according to three criteria:
 

• legal and political environment (independence of the judiciary, rule of law, control over corruption, political stability);
• protection of material property rights;
• protection of intellectual property.

 
The following are some of the key findings regarding the protection of property rights in the world and in Ukraine.
 
Legal arbitrariness is indicators from 1.9 to 3.7 points. This group includes 19 countries with a population of ~947 million (13% of the world’s population). They produce only 2.3% of the world’s GDP.
 
Ukraine is not far from this most toxic, dangerous zone for economic development. It was included in the group of 38 countries with a Property Rights Protection Index of 3.8 to 4.7 points. It has 1.79 billion people (24% of the world population). They produce 10.1% of the world’s GDP.
 
The world leaders with the most reliable protection of property rights are 20 countries with indicators from 6.8 to 8.7 points. Only ~832 million people live there (17% of the world population). They produce 51.1% of the world’s GDP. This phenomenon should be especially emphasized. A total of 20 countries produce more than half of the world’s GDP. 60% of GDP is produced by 41 countries with 15.6% of the world’s population. They have a reliable property rights protection system (from 5.8 to 8.7 points).
 
The average indicator of the Index is 5.21 points. The maximum in Finland is 8.1 points, the minimum in Venezuela is 1.9 points. Ukraine scored 4.0 points. We lag behind the world average by 23%. In the EU, the index is 6.56 points. Ukraine lags behind the EU average by more than 39%.
 
Regarding the criteria: in “political and legal environment” Ukraine lags behind the EU by 48%, in “protection of material property rights” – 32%, in “protection intellectual property” — by 31%.
 

Indicators of the Property Rights Protection Index correlate with other indicators related to economic development:
 

• The more reliable the protection of property rights, the higher the income per capita;
• The more reliable the protection of property rights, the greater the volume of investments in fixed capital;
• The more reliable the protection of property rights, the greater the volume of venture capital and the attractiveness of private assets;
• The more reliable the protection of property rights, the better the conditions for entrepreneurship;
• The more reliable the protection of property rights, the more opportunities for innovative development.

Based on the data of the Index and other studies of economic growth, we will name five basic elements of Ukraine’s success in long-term development:
 

• strong armed forces, reliable security system.
• Ukrainian spirit of entrepreneurship, striving for well-being and achievement.
• personal, political and civil freedom within the state with only necessary functions;
• economic freedom. In the 21st century, this form of capital is the main one for rapid, long-term development and growth, because it mobilizes the rest.
• property rights protection. Without them, no country in the world has become successful and prosperous throughout the history of mankind.

The combination of these five elements guarantees success for Ukraine. Neither economic science nor history knows any other way with the least costs, maximum speed and maximum benefit for the greatest number of people.