Perhaps the U.S. Ambassador to Ukraine will help us?

Author : Olexandr Honcharov

Source : 112 Ukraine

Yesterday it was high time to offer the Prime Minister a national socio-economic paradigm, but we hear populist appeals instead
10:05, 1 March 2016

Naive mistake is to think that our financial authorities cannot take wrong independent decisions despite our large overseas partner. And we, the citizens of Ukraine, continue to suffer huge losses, and our economy is rapidly weakening. What is it? During the last year talks with the Deposit Guarantee Fund on the implementation of the Ukrainian market of high standards of practice of the FDIC (Federal Deposit Insurance Corporation) has been taking place.

Related: Level of shadow economy in Ukraine decreased to 40% of GDP

What is needed to do it? First of all, Directorate of the Fund must conduct open and transparent selection of financial advisors in accordance with DGF Regulation "On the procedure of attracting Agent of the Fund Deposit Guarantee advisers, auditors, lawyers and others who work in the course of the interim administration or liquidation of the bank ". I must say, under various pretexts, this selection is not made by financial advisors DGF Directorate.

The U.S. side even organized a retreat for training specialists Deposit Guarantee Fund in the offices of financial advisors in the U.S. market. They traveled to America, got some skills, but in Ukraine things are there, where there were two years ago. Accordingly, the management of the Fund does not start and a pilot project using the American practice of methodological and organizational framework for the sale of assets of insolvent banks.

And this is not an isolated case of failure of our government to implement high standards of market actors. Here is another telling example of such neglect. As it is known, the temperature and humidity do not determine weather in agriculture of Ukraine. Failure to sell the grown products at fair market prices greatly affects the pocket of every farmer. And especially in recent years, playing by the rules was not easy. And neighboring countries haunt needs of new markets in Asia and North Africa.

So now in Ukraine it is not the best period for the agricultural business, although it came in first place in terms of foreign exchange earnings. Just to survive it is not an option. Our American and European colleagues offered us the new technology. Thus, thanks to the technical support of the U.S. Agency for International Development (USAID) and the European Bank for Reconstruction and Development in early 2014 together with our working group of experts, stage of preparation of two draft laws "On commodity exchange market", "On financial derivatives" was completed.

Related: Would Ukraine become an agricultural monster?

But, unfortunately, these laws still are not even passed to the Parliament. And our American colleagues, especially representatives of the Chicago Stock Exchange, are very interested in using our unique logistics capacity and moving agricultural products exchange trading center in Eastern Europe from Romania to Ukraine. But then someone in our country brings insurmountable barriers to high-tech quality western economies.

It's hard to believe, but it is actually the case. That is why, especially now, a small shift in the minds of our officials and financially well-off citizens is required to change the ineffective approaches to funding and functioning of our real economy. Where should we now take the money and what should we do? The main problem is, above all, the sovereignty of our financial system; restructuring of troubled loans and a civilized exchange market are required.

In the meantime, in terms of our severe crisis and high risk everyone is running in the U.S. dollar (a safe haven, which should be in the reserves for "black day"). Why? Because the Cabinet and National Bank, in addition to the above outstanding issues, has not created their own system of the formation and protection of savings. Moreover, if there is nothing to accumulate, then there is no need to invest.

Related: Doing business in Ukraine: how to make it more "user-friendly"

So now we must create a national system that would contribute to the formation of savings, or "long" money, which means the development of private pensions, collective investment institutions and services of insurance companies. That, in turn, will give a powerful impetus to the project financing of the real economy.

Returning to Kyiv after the roundtable in Borodyanka, Kyiv region, this weekend I have closely followed the feed. Whar if Yatsenyuk voices at least one structural economic statement. Unfortunately, there is a panic on the currency market, and we are rapidly leading to a deeper recession, plus we have continued to tighten credit quagmire. We must immediately take measures, and the Cabinet remains inactive. Legislators are in districts. In Kyiv there are only a political showdown and populist appeals. And yesterday it was time to offer the Prime Minister a national socio-economic paradigm. However, listening to speakers of Friday’s talk show, I understand that they will not help us. Perhaps the U.S. Ambassador to Ukraine will help us?

Related: Ukraine topped by Economic Growth Index in 4th quarter of 2015

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