Economic revolution is inevitable in Ukraine

Author : Boryslav Bereza

Source :

Every resident of Ukraine feels the influence of disappointing macroeconomic indicators. So, you shouldn't be an economist to understand the future of our country
23:34, 16 November 2017

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The quickest way to win a war against poverty is to stop pretending that we are rich. (c) Unknown American

The economic revolution is inevitable. The evolutionary path of economic development will not save us. All Ukrainians should understand this. I will not write many pretentious words, but I will try to briefly outline the picture of the world that I see. Perhaps you will find that this picture of the world is somewhat wrong, then, well, leave your comments. From 2018 to 2021, annual payments for the repayment and servicing of public debt in foreign currency will exceed $ 7 billion. Annual! This is stated in the October inflation report of the NBU.

In spite of military operations, the worn-out energy system of the country, unfinished reforms we will have to pay loans. Of course, the government will go on debt restructuring, new loans, privatization of new, and possibly strategic, facilities. But is it enough? If you do not have enough money, you need to earn more, but not eat less. Because if you eat less all the time, you will not be able to earn more money.

And where will Ukraine and Ukrainians be able to make more money?

Fight against the shadow economy. According to the International Association of Accountants and Auditors, up to 46% of the country's economy is in shadow. The Ministry of Economy estimated this figure at 35%. I consider this not to be a matter of principle. The main losses in the economy, according to experts, are related to the offshore schemes, smuggling and gray imports. According to experts, the total amount of "hole" is from 75 billion UAH to 135 billion UAH (roughly 2.7 - 5 billion dollars).

Change in the structure of production. Unfortunately, there are no internal reserves for the growth of the economy. The Ukrainian economy is 90% dependent on commodity prices. We do not produce goods with added value. In the export structure of 2017 there are mainly low-competitive, semi-raw products of the agro-industrial complex and metallurgy. Machine building accounts for only 10.4%.

Related: EU allocated more than 12 billion euros to Ukraine

Foreign investments. Foreigners do not hurry to invest in our country. According to the NBU, in 2016, foreign direct investment amounted to $ 3.4 billion, of which only $ 1.1 billion came from real money. Of course, one of the key problems remains the war with Russia. But this is by no means the only problem why investments are not flowing in the country.

These macroeconomic indicators are felt by everyone. It is not necessary to be an economist, everyone understands exactly where our country is heading to. According to the optimistic forecasts of the International Organization for Emigration, the population of Ukraine taking into account the birth rate, life expectancy and migration in 2050 will be 32.9 million people. In just thirty-two years! And this is not a pessimistic forecast.

The media says a lot about the "Marshall Plan" for Ukraine. It has not been seen yet, but they believe in it. And could Ukrainians in this situation just sit and wait for another miracle?

What can be a solution? Small and medium business is the driver of the economy, which we have not yet used. And it is these people that we lose as the main capital of the country. In the EU countries, such business accounts for up to 60% of GDP, in Ukraine - up to 10%. For the growth of it, several factors are necessary:

- available state programs for crediting the real production sector;

- minimization of state regulation;

- demonopolization of markets;

- adoption of the law on the withdrawn capital, which will allow reinvesting income in the development of business.

From small and medium business the country is waiting for:

- total dislike of any form of corruption;

- fair payment of taxes;

- legalization of workers.

If Ukrainian officials and Ukrainian entrepreneurs do not combine efforts and take joint responsibility for the future of the country, we will live in expectations for the "Marshall Plan", and Ukrainians will continue to die and leave the country without the right to hope.

Therefore, the change in attitude towards small and medium-sized businesses at the state level should already look not only as an aid, but also as a lack of interference. The tax on the withdrawn capital, the liberalization of taxation, protection from state racketeering, and the protection of private property - all this will only help. All this is a direct task for the Cabinet and Verkhovna Rada. I understand that it's easier to talk about this than to do it, but we simply do not have time for talking. And there are bills for adoption. And this, oddly enough, is a simple solution to a complex problem. Problems of Ukraine will be solved by those who plan to live here, and not those who plan to enrich themselves and leave the country. The time will show who has such plans.

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