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On the road to Europe

Do reforms have to be adjusted to society?
21 March, 00:00

International analysts, who have been studying the specifics of economic growth in the former Soviet republics, the countries of southeastern Europe, and the new EU members after the collapse of the socialist camp have reached the conclusion that economic growth in these countries was facilitated by favorable trends in the world market, European integration, and lower monetary crisis risks.

At the same time, each of these countries took advantage of the situation in its own way. Volodymyr Dubrovsky, a leading researcher with the CASE Center for Social and Economic Research in Ukraine, says it is not surprising that countries with authoritarian political systems have suffered fewer losses. Reforms have been either absent or acquired “very specific forms”, as in Kazakhstan.

For the most part these regimes have survived owing to the presence of energy resources, which has allowed them to institute tremendous rental charges. Nor is it surprising, Dubrovsky notes, that they have “caught up” with the Soviet GDP, which largely consisted of military production centered in Ukraine. “In those years, however, Ukraine, not only caught up with but even surpassed the USSR in terms of most social indices,” this expert believes.

The colossal transformations that have taken place in the world over the past 15 years would obviously have been impossible but for the maturity of civic societies in the European countries. “Countries that 15 years ago made a conscious choice on the foundations of a civic society and embarked on the road of reform and democratization have joined the EU and become ‘entirely European’,” Dubrovsky says. “Now it is the turn of the next wave, including Ukraine.”

Unfortunately, we are just in the process of establishing a civic society. According to Ihor Shumylo, the head of the Economic Section of the National Bank of Ukraine, this has weakened state institutions and political parties. The European community of nations is also not above reproach. This banker believes that the European community drew the line at the countries that are waiting to join the EU: “We see those countries as members, but not others.” Accordingly, the former were the first to receive technological aid so they could develop their institutional capacity, whereas Ukraine received technological aid mostly in the form of consultations relating to its preparedness for reforms.

Should Ukraine step up reforms without waiting for society to mature? Oleksandr Paskhaver, adviser to the president of Ukraine, is adamantly opposed to this. “This society knows well what it is prepared for,” he admonishes. “It is better to have an optimum rate of reforms and attendant socioeconomic consequences than to spur this society like a horse and force it to behave in a manner that is foreign to its very nature.” The Ukrainian economic growth rate with regard to Ukrainian society is actually higher than in the Czech Republic and its society, argues this expert.

Dubrovsky believes that at this turning point for Ukraine one shouldn’t expect a great increase in macroindices. The main point on the current agenda is a serious structural adjustment of the economy. Ben Slay, Director of the UNDP Regional Center in Bratislava, says that favorable economic conditions in the world will not last forever.

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