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Ukraine “on the brink of economic breakthrough”

Украина «на грани экономического прорыва»

The current ruling team there’s a cute habit, whose roots date back to its artistic past. Senior officials and politicians make statements not to describe or analyze reality, because once learned how to put words into striking phrases

For some reason they still think that political art is a little different from acting — and in that and in other case it is necessary to be able to entertain the audience through improvisation on a given topic. What happens there after sketch played out, the actor usually does not think.

This time the area of improvisation was the economy — one of the sore points of today’s Ukraine. The Minister of Economics Tymofiy mylovanov at the conclusion of his visit to America was written on the page in Facebook the following: “We are on the verge of an economic breakthrough. It was felt in all the meetings in the United States. People, business, investors, government officials with interest, looking at Ukraine, all recognize the ability of the new government to change the country”. In order that the economic miracle occurred, we need only to fulfill four conditions. Potential investors are primarily interested in whether the current leadership full and independent political and economic entity.

In addition, says Milovanov, the need for reform of the judiciary and law enforcement, the judiciary must be truly independent. And finally, you should put a point in the fight against those unscrupulous “owners of the banks, which caused damage to the taxpayers and customers.” This is already a stone in the garden of the oligarch Igor Kolomoisky, whose protege I think Vladimir Zelensky. The last condition — “the same rules for all” and “deoligarchization of Ukraine”, writes the Minister.

Those are the recommendations or rather the requirements of the International monetary Fund. But in addition to these Milovanov, there are still a number of conditions from which performance depends on the allocation of loans. The Fund insists on land reform and privatization of state assets.

At the end of 2018, the Fund has agreed to Kiev’s new loan program stand-by arrangement in the amount of $3.9 billion for a period of 14 months. But lists were only part of the funds. Kiev has received $1.4 billion, and the rest of the loan will be provided in tranches, as the implementation of the requirements of the Fund. It was assumed that the money will come in June, then in may, it was agreed that the credit program is working, when the new government is formed. It happened, and the negotiations with the IMF resumed.

21 Oct-Prime Minister Alexey Goncharuk declared that in a few weeks, representatives of the Fund will arrive to Ukraine. The dependence of the new government credit to the needle higher than at predecessors, in which the economy still showed signs of life. Now the situation is that most of the high-tech industrial assets are lost, lost the Russian market. The budget rests on the high taxes on business, which the IMF proposes to retain, without reducing it in any case.

Meanwhile, the tax cuts would somehow “accelerate” the Ukrainian economy and attract investments to the country. Privatization imposed from abroad, Ukraine will hardly help solve the problem with the budget deficit and accelerate economic development. The fact that the public sector in the economy is very low — only 11%. So its sale does not promise fabulous profits.

 

Land reform in General, things are not easy. Not only that, this idea is highly questionable due to the fact that the land market to foreigners will dominate, and the opponent of this reform are right-wing radicals, to whom the command Zelensky instantly folded.

Thus, the threshold of “economic breakthrough” only saw the Minister of economy. To comply with the IMF conditions is extremely difficult, if not impossible. In addition, the Fund requirements are very little correlated with the Ukrainian realities and, according to most experts, are likely to inflict damage to the economy and people than will really help to bring the country out of the crisis. However, Milovanov associates are busy creating scenic effects on the principle of “crow, and there though do not dawn”.

 

 

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