Coronavirus has become a great accelerator of history

Author : News Agency

Respondent : Iryna Vereshchuk

Source : 112 Ukraine

Ukrainian MP Vereshchuk on Ukraine-IMF relations, corona-crisis, Ukrainian small and medium business, and unemployment
22:10, 4 June 2020

MP from Servant of the People party
Open source

Today our guest is MP from Servant of the People party Iryna Vereshchyk. Mrs. Vereshchuk, the government predicts a drop in the economy from 4% to 8% in 2020. The export will fall - minus 10%, import - minus 14.5%. We should expect an expanded budget deficit of up to 8% of GDP, unemployment will increase to 9.5%. How threatening are those numbers and what would it lead to?

Vereshchuk: This would lead to an even deeper crisis in the economy, to even greater unemployment, to the closure of, possibly, entire business clusters and the reorientation of the economy. On the one hand, this is a crisis, while from the other, this is an opportunity. I attended a meeting of the Cabinet of Ministers, and the Minister of Economy presented the government’s action plan. However, nothing else was presented apart from usual forms and slogans. We heard about the protection of the Ukrainian commodity producer, about economic nationalism, we have already heard these words. Three days later they promised a new plan, more detailed, finalized. These three days expire on Monday. May 29, we had a strategic session, the president has arrived at the government, and now these models for overcoming the economic crisis will be presented to him. What I hoped for and wanted to hear, but so far I have not heard a way out of the crisis in these models, because there should be several ones. Now we are talking about a fall of 8%, but the fall is actually deeper - 12%. We have just recently said that 500,000 jobs would be created, and as an irony of fate: the end of May - and minus 500,000 jobs, that is, 500,000 unemployed persons.

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Where did the previous promises go? Is there really a strategy where to find these jobs? Where to find people who will work for them?

I saw a presentation of how the government sees creating of employment creation in various areas. It did not impress me. I do not believe in it, as I did not believe in it from the very beginning. Let's stop telling tales to our people. Let's talk about the real steps. Because it is impossible to create 500,000 jobs under any conditions.

Related: Ukraine’s economy to reduce by 5% due to pandemic, global crisis

 Was there any reaction to your comments?

In addition to the negative, of course not. But I voted for this government, supported this Prime Minister, I really want us to show the result. I really want the criticism to be constructive and not go, as they think, contrary to the position of the faction, president or Cabinet. I want criticism to be beneficial to all of us. If we are now hiding the truth, and I am part of the team, and the reality is negative... It is the duty of every MP to tell the truth. And this truth will slowly come up with real solutions. We say: protect our national manufacturer. Let's start with the farmers. We are an agricultural country, the agricultural sector is now very much in demand because everyone wants to eat. On the shelves of supermarkets, we see a bunch of imported vegetables and fruits. I understand large supermarkets - it’s easier for them. And where is our farmer here? Our farmer throws carrots, potatoes, because he can’t sell it anywhere, and we see it.

But can the government intervene in this and settle it?

It must do it. The government might introduce an import entry tax for a quarantine period and plus two months. This was done during Kuchma’s presidency when they introduced a fee and stopped the dominance of goods. For example, 25% - even the WTO allows this. To protect our agricultural sector, we need to put a little barrier, and we would see how the situation would change in a month.

They explained to you why they do not go for it?

This is beneficial for large businesses, large supermarkets that do not want to play with our small farms. This is beneficial for those who want to earn millions and do not want to do tedious daily work. Markets were closed.

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Let us take the light industry. Our people made hundreds of thousands of masks, protective suits - it turned out that we had saturated the market inside, so open the market for export, there is an order. No, we say that we will no longer buy goods from them and will not allow them to be sold for export. Why don’t we protect the Ukrainian manufacturer? We made those suits, we want and we can sell them, why do not we have such an opportunity?

Small and medium-sized businesses need help too. But are these goals achievable?

Affordable loans sound very beautiful, sounds right. We have a “5–7–9” loan program. But how many people took advantage of the availability of such a loan? Not even 10% of the amount, reserved in the budget. Because it is impossible when deposits in the banking system are at 12–13%, and loans at 10%. Why then will the bank earn? Do you really think that they are charity organizations that will subsidize others? Do you really think that there are billions in the budget that will subsidize such affordable loans?

Will the lustration law be repealed?

Regarding the law on lustration. Indeed, the ECHR issued a decision which indicated to Ukraine that if we do not want to pay billions to people who are now recognized as illegally dismissed, we must immediately amend the law on lustration. I criticized this law and continue to criticize it. Then it was called political revolutionary expediency. They solved their problems: Poroshenko found a loophole to appoint those whom he needed. We have slandered our governance system, our real state sectors, and we must recognize that this was a strategic mistake of the authorities. The new government should also not flirt with the new law on lustration, which we will amend. We must clearly say what we can do (for example, to restore the rights) and what we cannot. For example, we cannot pay an unpaid salary for five years, because it is hundreds of billions hryvnias that we do not have.

Related: How crisis hit Russian oil and gas industry?

You will not vote for the government program if it does not contain specific numbers again?

If we look at the program, then it provides for a veiled increase in tariffs. I really do not want the authorities to try again now to do everything to say again: we must raise it. They say that from July 1 they will raise tariffs for water and wastewater, electricity. I sharply criticize Poroshenko because, according Biden-Poroshenko tapes, he said that the IMF demanded to raise it by 75%, and we even raised it by 100%. I saw how it hit the pocket of every Ukrainian, how it drove our budget into debt bondage because the billions that people could not pay burdened the budget. We write off those debts, and utility companies that provided services cannot get out of bankruptcies. The memorandum with the IMF says: raise tariffs for the population. I will be categorically against it because we have a situation that is 100% similar to the situation of 2014-2015 years, if we talk about income. Incomes of the population fell. If you raise tariffs against this background, can you imagine what this will lead to?

To date, the debt for housing and communal services in Ukraine is 2,2 billion USD.

It will be just a bankruptcy of the utility sector.

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What to do with these IMF “recommendations,” and why are they appearing right now?

Yes, I’ve also loudly asked this question. At first, I really hoped that we were partners. I thought that the people who are at the head of such large transatlantic corporations are working to ensure that the state develops, and then can pay off debts. I could not be involved in the development of the last memorandum, and, as it turned out, my colleague sent a deputy request to the government, where he asked to open a secret, who is the negotiator from Ukraine and allows such memoranda? Why do we see the final document like this and not another? Why don’t we say: “Dear IMF, we have national interests, and if you think that you can so uncontrollably, thoughtlessly demand the full independence of Naftogaz and raise tariffs, then we reserve the right to thank you for your cooperation and remain in your own interests, seeking for the new markets, new credit lines.” My colleague was told that this is confidential information, and we cannot know who is authorized from Ukraine. Some group of people signed something from Ukraine, and now we have to do it all, tighten our belts. But the people who got into Forbes will not tighten their belts, they don’t care what the price will be, they are interested in how to get the Ukrainian out of this even more. Now there’s no one to appeal to. I can’t name the names of those who made such structural memoranda.

What can you as MP from the Servant of the People faction do in this situation?

I do not believe that the memorandum has already been signed, and we have already undertaken to fulfill these requirements. Although they did not sign such memoranda, although they did not comply. 40% of memoranda were not implemented. But I do not want us to deceive our creditors. We are not some kind of miser, we must work sincerely and say that this will never happen. We cannot afford what other states that take loans can do. Argentina is already suffering its ninth technical default. They stated that they could not repay their debts. I am not saying that it’s good, because being a world debtor is bad. Otherwise, we would become non-contractual.

Related: WHO notes stabilization of coronavirus situation in Ukraine

Will cooperation with the IMF continue or not?

Let's see how firm the IMF will be in its intransigence and how we can defend our national interests.

How long will Ukrainian citizens live in this crisis?

Coronavirus has become a great accelerator of history. And now we will either unite, take certain steps for 2021 that will lead us out of the crisis, or the process will become so long that it will simply become the norm. We must get out of this state because the processes are very aggravated. And not only in Ukraine, in the world. No one knows what will happen in a year, but we must realize that it would never be, as it used to be.

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