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Could Ukraine adopt experience of Kazakhstan's reforms?

Author : Oleksandr Okhrimenko

Source : 112 Ukraine

Kazakhstan calls itself the "Asian panther". It means the sharp growth of Kazakhstan's economy in recent years. The GDP of Kazakhstan for 2017 grew by 7%. Against the background of Ukrainian with 2.5% growth, it looks cool.
23:37, 2 April 2018

Read original article at 112.ua

112 Agency

Some patriots of Ukraine may think that it is unpatriotic to talk about Kazakhstan reforms, while in Ukraine it is fashionable to talk about European reforms. But it is worth recalling two figures. The average salary in Ukraine for 2017 was $ 253, and in Kazakhstan - $ 460. As for GDP per capita in Ukraine, this figure for 2017 was $ 2.5 thousand, and in Kazakhstan - 8.7 thousand dollars.

Kazakhstan calls itself the "Asian panther". It means the sharp growth of Kazakhstan's economy in recent years. The GDP of Kazakhstan for 2017 grew by 7%. Against the background of Ukrainian 2.5%, it looks cool.

It is clear that Ukraine can not apply all methods of economic reforms implemented in Kazakhstan, but some should be considered and pondered.

Although Kazakhstan is a member of the Eurasian Union, about 50% of Kazakhstan's total exports go to the EU. Most of the direct foreign investments in Kazakhstan also came from the EU and the US.

At the same time, Kazakhstan is developing cooperation with China. First, Kazakhstan actively joined the creation of the New Silk Road from China to the EU countries. For this purpose, together with China, it provided a reconstruction of old and construction of new railway roads and ports. Ukraine says a lot about the fact that it would be beneficial for us to become a hub for Chinese goods, but it says more than does. Although now there is a unique opportunity "to jump in the wagon" of a new world transport trend. By the way, Belarus also actively cooperates with China in the field of logistics. And not only this country. But Ukraine does not notice this. The Ukrainian government is more concerned with prohibitions and restrictions and thinks that a miracle will come from nowhere. In fact, all this talk about the fact that it is possible to make a strong economy of Ukraine by bans and breaking of trade relations is a way to a dead end. Ukraine loses more from these prohibitions and loses constantly.

Kazakhstan on the border with China made a free economic zone, where it allowed Chinese and Kazakh companies to conduct business activities under the "offshore Hong Kong" scheme. Tax rates for business are either very low, or none at all, but ERUs and taxes on income of individuals who work in this economic zone are paid to the state budget of Kazakhstan. And most importantly, many Kazakh companies pay taxes to Kazakhstan, but they cooperate with companies that work in this free economic zone. What prevents Ukraine from creating such free economic zones on the border with Poland, Hungary, and Romania? These zones would indeed become international hubs. And if it is competent to do customs legislation and logistics, then it would be possible to lay a very successful new international route between free economic zones on the border with China and on the border with the EU. Revenues for Ukraine would be very large. This really would be a great economic reform, which Ukraine needs so much. But not a fence repainting or streets' renaming, as our government does.

One of the most interesting economic reforms that are being implemented in Kazakhstan simply begs to be done in Ukraine. On the territory of Kazakhstan, a separate economic zone of priority development was introduced, and it gives an unprecedented economic growth. The highlight of this economic zone is the English legal right there. There are courts where judges from England work, they judge according to the methodology of the English system. As a result, many foreign companies from the US and the EU are investing tens of billions of dollars in the development of Kazakhstan's economy. But they pay taxes on a par with Kazakh business. In this situation, foreign business has received protection from the "specific court" of Kazakhstan, which is very similar to our specific Ukrainian court. At the same time, the specifics of the operation of English law in a separate territory of Kazakhstan were registered in the Constitution of Kazakhstan. These are the changes needed in the Constitution of Ukraine!

There are no ideal economic models. We have to constantly learn from the experience of other countries, but it is to learn, not to do stupid things, as it is customary in our country. The Ukrainian government did not understand that for the economic growth of Ukraine reforms are needed, not profanity and silly slogans. While Ukrainians will be engaged in repainting fences, their salary will never be higher than in Kazakhstan. Here we have such a paradox.

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