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Changes in Ukrainian Economy: Reasons, Results, Outlook

Both in Ukrainian printed media, and in the statements of officials the substitution of notions in different spheres of human activity is a commonplace; economics is no exception. For example, the GDP, industrial output, social transfers, reduction of inflation etc. are used as criteria of soundness of economic reforms. However, a very important factor remains unaccounted for. There are countries in the world, where these indicators truly reflect the interests of people; meanwhile in Ukraine they reflect nothing but the visions of rulers and political elite. It is a truism that these indexes should be based on the supposition that the relations between the state and citizens should be determined by free market competitive exchange of services. While the macroeconomic models reducing the operation of economy to several simplified equations connected with industrial output and production output cannot predict real developments, be they catastrophic or positive.
Expert opinions
Despite the political instability the foreign companies coming to Ukraine initiate new projects
Hanna Derevyanko, Executive Director European Business Association
The political instability is only one risk in the investment estimation package. However, despite the political instability the foreign companies coming to Ukraine initiate new projects. Meanwhile the political instability prevents tackling the problem of risks and barriers. In particular, it concerns land legal relationships in Ukraine, corporate administration, and executive implementation.

The changes in current Ukrainian economic relations do not look like reforms
Yaroslav Matiychyk, Director of security programs of the Team for strategic and security studies
We feel that a kind of changes in our economy is under way. However, there is nothing like satisfaction, because only the elite benefits from the process. It is like bragging about an economic boom against the background of low wages and unjustified high prices for commodities and services.

Our parliament is not fit to reform our economy
Olga Nosova, Association of Financial Analysts, Chief scientist of the project “Analysis of financial-economic consecutions of programs and actions of political parties and blocs”
Meantime, the implementation of the new wave of economic reforms is not a priority for the parties. The political conflicts raise difficulties as well. In the absence of cardinal bills there are also no deep economical reforms.

Problems in economy as a consequence of transition to the “open access society”
Volodymyr Dubrovsky, economist, member of the supervisory board of the Center for socio-political studies CASE Ukrayina
The treatment of law and justice is the most urgent near-term problem.

The social integration and structural reforms are possible if a country has a national idea
Yuri Polunieyev, Chairman of the Council for the competitiveness of Ukraine, President of the International Management Institute
The outside experience shows that social integration is a major factor permitting to carry out fundamental and bitter structural reforms.

“The Ukrainian economy is immunized against political problems”
Olexandr Kava, independent expert
Some top and regional administrators try to profit on the protectionism of certain companies subduing the competition.

The labor force is a priority of economy
Myroslav Yakybchuk, Chairman of the national Forum of Trade-Unions of Ukraine
Today despite all artificial optimism of media and politicians Ukraine is a raw material appendage and supplier of labor force, both cheap and unskilled, and skilled and cheap. There is also a tendency of gradual pushing us out of global economy by more prosperous nations becoming the new centers of influence.

The competitiveness of the country must become its national idea
Olexandra Kuzhel, Deputy Minister of Regional Development and Construction, President of the analytical center Academy
We define our main idea as admission to the EU, but fail to get what’s what. If we set the competitiveness of our country as the main ideology, then everything is clear. Everybody wants social standards to be competitive, so that people feel good and living standards are high. If this is our target, the EU will plead us to join the community.

The land is the last resource of big business
Yuri Romanenko, political scientist
The land is the last resource of big business and in a short-term it will hit the target and the moratorium on land sale will be canceled. As a result the rural social opposition will increase and urban conditions will aggravate. The export-oriented latifundia will but deepen rural unemployment. Hundreds of thousands or millions of people will be out of job.

Meanwhile we have no friendly model privatization
Olexandr Riabchenko, Director of the International Institute of Privatization, Management of Property and Investing
We need our own friendly system of privatization; meanwhile we resort to the model of privatization developed in 1999 which met the requirements of the decade of economic slump.

“Economy cannot be independent from politics”
Yuri Zmiy, Director of the institute of reforms
The main disadvantages of our economy are the randomness of changes, lack of strategy and excessive influence of politics on economy.

“The lack of successive reformation has adverse impact on its dynamics”
Igor Burakovski, Director of the Institute of Economic studies and political advice
Such important events as the reform of social domain needs clear prospects and directions, as well as several years of implementation efforts. In our case every new government criticizes its predecessors and suggests its own vision.

“Only the consistent changes result in high growth rates”
Olexiy Blinov, director of the Department for economic analysis and publications of the International center for prospective studies
We have no national consensus on priority development; there are many objections to high techs, but the top administrators have no clear idea about it.

Carrying out reforms we should improve the quality of state administration
Kostiantyn Kuznetsov, economic programs expert of the Razumkov UTSEPI
Of course, the reforms are a must. We need transparent and honest privatization, protection of property and raiding control, protection of shareholders, and juridical reform. However, those are not new initiatives that matter, but quality performance and corruption control.

“Economic reforms in Ukraine are nothing but half measures”
Yaroslav Zhalilo, President of the Center for anti-crisis studies
We have fragmentary differentiated economy based on export-oriented manufactures, which grant competitiveness with obsolete methods or primitive factors, which need serious reforms.

Stalemate in Politics and Economy
Olexandr Shmorhun, leading researcher of the Institute of Global Economy and International Relations
Without control of political crisis we cannot tackle economical problems. The political crisis generates drawbacks in economy and prevents global comprehension; it blocks political will to realize even middle-term measures.

Recently there has been no strategy of reforms at all
Olexandr Paskhaver, President of the Center of Economic Development
The current conflicts contribute to the development of democracy in our country. I don’t think they hinder strategic reform; anyhow since the late presidency of Kuchma, i.e. 2002, there were neither serious changes in the infrastructure of economic institutions, nor strategic deepening of reforms.

Import-Aggressive Chameleon
Iryna Kriuchkova, Doctor of Economy, Head of the Department of the Institute of economics and prognostication of the NASU
Our economics reminds a chameleon changing under influence of political perturbation. In 2006 the new model became characterized by debts and aggressive import flooding domestic market.

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