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Elections 2019 and worsening of economic situation in Ukraine

Author : Olexandr Honcharov

Unfortunately, our ministers and people's deputies are not able to conduct elegant social and economic policies, they only learned to act in a straightforward way and with gross errors
22:37, 6 February 2019

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Summing up all the criticism that experts write about the lack of economic reforms in Ukraine, the main reasons for their failure are, firstly, lack of leadership, secondly, corruption and, thirdly, incompetence of the government and legislators.

Unfortunately, our ministers and people's deputies are not able to conduct elegant social and economic policies, they only learned to act in a straightforward way and with gross errors. Their rhetoric, even in English, can impress only certain poorly educated people.

Well, how was it possible in such a short time and with such a huge investment potential to turn Ukraine into the poorest country in Europe!

Although, we are the richest in Europe in terms of reserves of natural mineral resources, ranking 1st in the world in manganese ore reserves, 1st in the world in titanium ore reserves, 1st in Europe (6th in the world) in uranium ore reserves, 2nd place in the world in iron ore reserves, 2nd place in the world in mercury ore reserves, 7th place in the world in coal reserves, 1st place in Europe in arable land and 3rd place in the world in the area of black soil (25% of the world volume).

However, until now no one in our country, nor in the United States or the European Union, knows and understands what to expect in 2019 from the work of the Cabinet of Ministers and the Verkhovna Rada.

But remember, the current politicians in power promised to destroy the entire old world of Yanukovych, and then ... What then?! Although at that time, pragmatic Americans advised creating a new government in Ukraine without corruption and the overwhelming influence of oligarchs, so that the state would not collapse, so that the economy would not collapse, and what would happen to Yanukovych and his top officials should be the least worried.

The most important thing is to preserve financial and economic stability and prevent chaos. But what did we get? Now even the most optimistic experts have lost the hopes of support for Petro Poroshenko, Volodymyr Groysman and Andriy Parubiy from the side of Western partners.

The latest statement of the International Monetary Fund convincingly testifies to this: its financial analysts urged all governments to try to complete economic reforms as soon as possible, otherwise it would be impossible to rely on central banks in the event of a global financial crisis.

And this sobering statement was made at the moment when the Cabinet of Ministers had already consumed all future earnings. Now it is necessary to service debts with huge interest and take new loans in order to pay off old loans.

By the way, in the beginning of 2019 we already gave the IMF the first payment in the amount of $ 88.5 million. The next payment should be paid on February 5 in the amount of 257.25 million under the stand by program (in general, the debt to IMF in 2019 will amount to $ 2 billion).

Related: Meet 44 candidates running for president in Ukraine


Where does the government get money to pay off debts? Of course, the easiest way is to place domestic government bonds and Eurobonds, rather than launching Ukraine’s economy at full capacity. And now, on January 29, the Ministry of Finance again placed bonds for a total amount of UAH 18.3 billion! Who will serve such record expensive borrowing?

So isn’t it the time to tell the truth to people that we have entered a strip of constant and sharp fall in living standards? And this fall will continue for a long time. For example, after the increase in prices for heating and hot water, the authorities prepared another surprise for us on February 1: The National Commission, which regulates energy and utilities, increased the water supply and drainage rate for Kyevvodokanal by 11.4% to UAH 20,376 for 1 cubic meter.

I also remind you that since January 1, 2019, heating tariffs have grown on average by 16.6% due to the increase in the cost of gas for the population. The IMF's credit money alone will definitely not be enough for us to restore our utilities sector! And the decline is no longer cyclical, but systemic.

But apparently, the Cabinet of Ministers knows only one way to deal with the crisis, when they do nothing to help ordinary citizens, as well as small and medium businesses, but allow the crisis to burn out to the end.

In this regard, at the very beginning of 2019, President Petro Poroshenko stated with optimism: "The most difficult things have already passed and the worst part is also over. The gradual growth of the economy and the restoration of living standards are ahead."

Alas, this is slyness. Only the elimination of damage from a barbarous and corrupt approach to economic policy will take at least 12-15 years. And, for example, according to experts, the debt on utility bills over the past 5 years has grown from UAH 12 billion to 55.3. What to do with it?

Moreover, February is traditionally the worst month for the national economy. Sadly, but we will have to tighten our belts. Plus, these days of the presidential race Ukrainian politicians must be closely monitored: they are capable of causing the greatest harm to our economy.

No matter how bitter it is to admit, but now the biggest problem is that the burden of making key management decisions is lying on politicians who are not able to do that. However, after March 31, the winner will inevitably end up at a crossroads and he will have to make a choice.

Here and now, the choice is very difficult: either the Ukrainian economy will collapse by the end of 2019 (taking into account negative external factors, huge public debts and internal "skill" of the Cabinet and Verkhovna Rada), or we will start crawling away from the edge of the deepest financial abyss.

Related: Russia tries using YouTube for political purposes, - Ukraine's Information Policy Ministry

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