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Economy after Euromaidan: How Ukraine and other countries survive after color revolutions

Author : Oleksiy Kushch

Source : 112 Ukraine

Long-term "belt-tightening" is presented as an inevitable stage on the path to prosperity
19:06, 26 November 2020

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Any real reform should set itself a quite tangible goal – to achieve a new format of social welfare. But how to improve people's lives in comparison with the reality that must be replaced in the process of reform. Indeed, if living standards deteriorate as a result of the deconstruction of existing development mechanisms, then this is not a reform at all, but utilization, liquidation, restructuring and/or soft "euthanasia of society."

A priori reform cannot worsen people's lives, even the so-called "shock reform." Ukraine, in this regard, has a complete annihilation of meanings. We have not one structural reform, but "144" (that is, none). Every reformer in power tries to explain to ordinary citizens why the planned changes will make life worse and why it is "good" for them. We were caught in the trap of a whole heap of system errors. Let's list some of the most obvious ones.

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Long-term "belt-tightening" is presented as an inevitable stage on the path to prosperity. Any sane economist understands that a long-term drop in the effective demand of the population is fraught with the same long-term crisis and that in no other country in the world has total economy led to prosperity (proven by the experience of Romania during the time of the dictator Ceausescu). The lack of capital in the country leads to low productivity of the national economy, which, in turn, causes low labor incomes of the population.

Hence – the insufficient level of savings and consumer spending of the citizens of the country. Low motivation to invest, and as a result - a capital deficit. The vicious circle of poverty (formulated by the American economist, a native of the Russian Empire, Ragnar Nurkse), which is easier to get into than to get out of it and in which our economy has been floundering for many years. It is still being saved by the dualistic nature (according to Lewis): the capital deficit is compensated by the surplus of the labor force, which goes abroad and supports the economy thanks to labor transfers (the economy is a "sleeping area"). Plus the export of agricultural raw materials (the economy is a "cornfield").

Such a model still has potential, while the agricultural sector frees up capital from industry, cities absorb the resources of the countryside, and the capital - the provinces. But this parasitism is not endless. As a result of the "reforms" according to the IMF templates, we have formed an economic "pattern" in the form of a primitive unprocessed "casing": more than 50% of exports are represented by agricultural raw materials, corn, grain, and sunflower oil.

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Or the myth of "shock therapy" as an inevitable evil that must be endured. But the whole irony of this thesis lies in the fact that "shock therapy" takes place at the breakdown of economic models, as a rule, during the transition from one type (planned) to a conceptually different (market) one. "Shock therapy" is not used to make everyone feel bad, but to keep things from getting worse. "Shock therapy" cannot last for years, like any resuscitation. And it cannot be applied in the absence of a basic development model, especially when it has not been proven that the previous model was significantly worse.

The roadmap for modern development is the movement of investments in accordance with the road signs displayed. The outstanding Soviet semioticist Yuri Lotman formed his theory on the basis of sign systems, many of which have an "iconic character." Signs streamline the transmission of information and indicate real processes and objects.

Each state has a "text" in the form of laws, "discourse" in the form of an internal discussion of development models, and a "narrative" - ​​a story told to the world based on the first two actions.

Lee Kuan Yew carried out systemic reforms in Singapore, as a result of which a new social benefit appeared in this country, which is easy to measure - more than 65,000 dollars of GDP per capita per year. Let's compare with 3,500-4,000 dollars in our country. How did the country manage to make such an impressive spurt, which did not even have its own freshwater, which it imported from neighboring Malaysia? It all started with a national discourse on the development model (and without the participation of the IMF).

 At one time, Gene Sharp wrote a number of "manuals" on the non-violent change of power. Now his name is certainly associated with all the "color" revolutions, although this is unfair. After all, Sharp's "Gandhism" as a methodology ended in 2010 with the beginning of the "Arab Spring". Now "color" revolutions are not so peaceful and often end in bloodshed and civil war, and also create preconditions for external aggression.

Gene Sharp formulated the technology of nonviolent resistance to power in the form of three key sections:

  1. Nonviolent protest.
  2. Refusal of society from social and economic cooperation with the authorities.
  3. Nonviolent seizure of the country's governing mechanisms.

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Just a few hundred rules: picketing; pseudo-elections; hanging flags, using symbolic colors; wearing symbols; prayers and worship; symbolic lighting of lights (torches, lanterns, candles); installation of new street signs and names; fraternization with law enforcement officers; singing; convoys; symbolic and demonstrative funerals; worship in burial places; ostracism of individuals and social boycott; refusal to communicate; public disobedience; double sovereignty, the creation of a parallel government and even the issuance of counterfeit money...

But as a result of the loss of the ability for evolutionary movement forward, society generally loses the opportunity to develop as such: ideologized "norms" are formed in its inner space - myths, sacred themes, and semantic clichés that can either be accepted or be in the camp of the discriminated part of the expert community, the camp of outcasts or internal emigrants.

It is being replaced by an imposed external discourse, which, as a smokescreen, helps political elites remove the usual corruption rent from the economy. The economy dries up, but the rent remains constant. It is collected at the expense of social discrimination against broad strata of the population: first, the middle class, and then the poorest social groups.

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How do countries live after the color revolutions? Three main groups of states can be distinguished:

  1. Countries that have entered a state of homeostasis with the external environment: creeping labor migration, deindustrialization, soft "euthanasia" of scientific and educational potential.
  2. Countries that have plunged for many years into a state of chaos of civil wars and / or hybrid military conflicts, which are slowly "burned out" with the help of "controlled" fire, not too intense so as not to burn everything at once, but not so weak as to extinguish...
  3. Countries in which the "color" revolutions did not win, but they are considered in the world as a potential testing ground for the activation of systemic risks.

The first type includes Georgia, until recently – Armenia, Tunisia, Kyrgyzstan, Serbia; to the second – Ukraine, Syria, Libya; to the third – Belarus. Yes, we traditionally believe that the northern neighbor is an exception to the rule, where the political regime has retained power, and the opposition has failed to gain the upper hand. In fact, since 2006, Belarus has also been a country living in the regime of a permanent "color" revolution. This is how it is viewed by its geopolitical partners and assessed by potential investors.

We have been listening to stories about the Georgian economic "miracle" for a long time. It would seem that there is some reason for this statement: from 2003 to 2018, the country's GDP grew from $ 4 billion to $ 17.6 billion. But the whole veil of reforms dissipates when comparing this indicator with the growth dynamics of the same small countries of the post-Soviet space... Let's take the multiplication indicator, that is, how many times the economy of a particular country has grown over a specified period.

In Georgia, this indicator was 4.4. But in neighboring Armenia, where until recently no "great reforms" were carried out, this figure is also 4.4. And Moldova, which is usually called an economic outsider, has 6! Azerbaijan has 6.4, under a seemingly authoritarian rule. The great Georgian myth is debunked by a simple regional comparison. The entire growth of these countries is due to the conjunctural factors of external markets, the growth of debts, the growth in the value of domestic assets as a result of the disclosure of national economies and, most importantly, thanks to transfers of labor migrants, which account for 15-20% in the structure of the economies of Moldova, Georgia, and Armenia.

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The trajectories of the GDP curves of "reformed" Ukraine and "authoritarian" Belarus surprisingly coincide in terms of minimum and maximum extremes and in general dynamics: by 2019, Ukraine reached 85% of the 2013 level, and Belarus - 84%. By the way, the trajectories of the GDP curves of "reformed" Serbia and neighboring Croatia, which has become an EU member, also roughly coincide. This proves once again that opportunistic and regionally dependent growth practically does not correlate in any way with the nature of the "reforms." But the mechanism of distribution of GDP within the country correlates. If in Belarus these are social projects, then in Ukraine this growth goes into the pockets of external creditors and the largest financial and industrial groups.

Tunisia's GDP, which became the starting point of the Arab Spring, has been balancing since 2010 at almost the same level - in the range of $ 43-39 billion with a downward trend.

Egypt has experienced not only a revolution but also the rise to power of Islamists (elected in a general election), a military coup, and the establishment of an authoritarian rule by the army elites. As a result, the same treadmill, like that of Tunisia, and GDP at the level of 240-250 billion dollars. Well, the GDP of Syria during the civil war fell from 67 billion to 17 billion dollars, the average rate of economic decline was -18% in a year. The war led to the migration of 2.6 million inhabitants of the country. Every year the country lost about $ 7 billion of its economic growth potential.

Here are several conclusions on the situation:

After the color revolutions, small countries enter a state of economic homeostasis and soft sleep very quickly: their inhabitants go abroad in search of work, the domestic economy acquires a service character, and national assets are bought up by foreign capital. These are no longer countries, but territories whose existence is the result of the geopolitical consensus of the larger world players. True, the consensus sometimes has the ability to reboot, as happened in Armenia. As a result, a service country with a weak economy and massive labor migration was unable to defend itself and faced the threat of occupation.

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Countries with active military conflicts are gradually burning out along with their economic potential.

Medium and large states, such as Tunisia, Egypt, Ukraine, which cannot stretch their economies through labor migration and service specialization, are actually marking time – they practically do not develop while the whole world is moving forward.

In this regard, the desocialization of states is a direct consequence of the deindustrialization of national economies. And stimulating labor migration is not only a chaotic process but also an element of "controlled chaos", the purpose of which is to bring one or another economy into a state of dynamic equilibrium at a lower point of development when the population size and social burden on the budget correlate with a simplified economic profile. countries, and the process of the primary redistribution of capital to domestic assets, including land, is completed with the alienation of the population from these.

"Economically justified" population size, control over assets, and the leveling of elective mechanisms for governing the country, replaced by "technocratic" ones – this is the goal of Ukraine’s 144 reforms, and not at all the creation of a new social good.

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