We Have Not Been Able to End the Crisis

No doubt, we were pleased and surprised to hear from our head of state, who announced implementation of market reform only yesterday (in 1994), that today (in 1998) we finally have “grounds to claim that for the most part, a market structure is in place.” Moreover, “significant progress has been made in foreign economic activity,” while in the country itself, “there is a model of open economy being implemented in practice, with an intensive (!) formation of a class of entrepreneurs currently underway.” To illustrate this last conclusion, Leonid Kuchma gave an example: every fourth member of Ukrainian Parliament is a businessman. It seems that all of them have gathered there, otherwise it would be impossible, without having any influence on the legislative framework, to counteract the pseudo-market aspirations of the government.

Further, there has been some growth of domestic and direct foreign investment in Ukraine. Yet, according to the President, its total ($413 million in foreign investment) “still cannot satisfy us”. Of course, not. This country needs $40 billion in investment.

The President courageously acknowledged that the government had not been able to ensure stabilization of industrial output, fully cope with the financial crisis, and stop the decline in people’s living standards (apparently referring to those who are actively joining the ranks of entrepreneurs).

The remarks culminated in the following statement, “Ukraine has more than once been criticized for a slow, according to some experts, pace of economic reform, but, at the same time, it is the policy of sound conservatism (!) that has rescued us from destructive turmoil and collapses.”

According to Kharms, Russian poet Pushkin liked to throw stones. Our President’s contemporaries can now claim that Pushkin was not the only one. “At the initial stage of Ukraine’s independence, our economic policy was unstructured, unfocused, fragmentary, and thus of little effectiveness,” said the second Ukrainian President, thereby casting a stone at his predecessor. One should think that this policy, “having undergone the theoretical test of reform implementation,” is structured, focused, and now very effective. The Day's Commentary

Vitaly Marhulis, General Director of the Association of Ukrainian Consulting Firms:

"We do not have an investment climate as such. The cancellation of tax breaks for joint ventures did not boost our confidence in the government, and the conversion of domestic government bonds under the slogan, "We have fooled you less than Russia has," seems to have driven investors away for a long time to come. Nevertheless, Ukraine has many potential areas for investment, and there are investors who would like to work in this country. With a sound economic policy, we just have to show them that it is worthwhile."