22 REDUCING MARKET DISTORTIONS FOR A MORE PROSPEROUS UKRAINE statistically signi昀椀cant di昀昀erences in economic outcomes between politically connected and non-connected 昀椀rms, even when controlling for 昀椀rm size, age, and sector. Not only are politically connected 昀椀rms less productive than non-connected 昀椀rms, they also tend to have slower turnover, employment, and total factor productivity (TFP) growth rates. Estimated di昀昀erences range from –5.7 to –16.2 percentage points for the turnover growth rate, –13.0 to –28.9 percentage points for 35 the employment growth rate, and –4.6 to –10.1 percentage points for the TFP growth rate. An anemic competition environment in upstream sectors increases input costs and weakens service quality, undermining e昀케ciency across the economy. SOEs and politically connected 昀椀rms are especially prevalent in productivity-enabling services (e.g., utilities, transpor- tation, and logistics) and sectors that supply industrial inputs (e.g., cement, steel, fertilizers, and oil products), and competitive distortions in these markets negatively a昀昀ect overall domestic produc- tion and export competitiveness. Ukraine ranked 83rd out of 140 countries on the 2017–2018 Global Competitiveness Index (GCI), and its overall score (4.11 out of 7) has improved little over the past 昀椀ve years. Among Eastern European countries, only Moldova and Bosnia and Herzegovina scored lower on the GCI. Ukraine’s iCT sector is the weakest among comparator countries—a serious liability for an economy in which services account for 60 percent of GDP. Ukraine scores poorly on the ICT Development Index, lagging regional comparators such as Moldova and Romania (Figure 24). Ukraine’s internet bandwidth per internet user is especially low at just 45 percent of the European average. FIGURE 24 ICT Development Index 2017 10 8 6 4 2 0 ia a ia y g key v tia via aine oa t onia r eor ur hstan oland r La Uk G T oldo omania Bulgar P Hungar epublic C Est M R azak Lithuania K ech R z C Source: International Telecommunication Union (2018) 35 World Bank Group and UK Good Governance Fund (2018). Crony Capitalism in Ukraine: Impact on Economic Outcomes.