Everything's against Ukraine's sustainable development, authorities cover it

Author : Olexandr Honcharov

Ukrainian PM Oleksiy Honcharuk talked about a new economic miracle last week; didn’t he know about what the National Bank, Ministry of Finance, and Naftogaz Company were doing?
23:22, 5 November 2019

Open source

Ukrainian PM Oleksiy Honcharuk talked about a new economic miracle last week; didn’t he know about what the National Bank, Ministry of Finance, and Naftogaz Company were doing? PM tried to convince us that in a few years the country's economy has the prospect of growing by 40%: "Everything starts with a dream. I want to tell people: just trust me."

Honestly, I believe that in January-September, the Ministry of Finance has already attracted 194,8 billion UAH (7,9 billion USD), 3.8 billion USD, and 189 million EUR into the budget for 2019 through the placement of government bonds. But who will pay them back, and even with 15% or more profitability?! Someone could sleep peacefully after the words of our prime minister: "In November, we will go to Brussels to sign the first agreement for 300 million USD"? Or should one consider a banknote of 1,000 hryvnias as an undoubted achievement of power, since the previous banknote of the highest denomination of 500 hryvnias was put into circulation 13 years ago?

Related: Ukraine's Cabinet approves updated macroeconomic forecast

The world banking industry has entered the last phase of the next economic cycle, in which more than 60% of the world's banks are rapidly destroying their value. According to McKinsey analysts, in the event of a failure, for example, in our project “Transformation of the Ukrainian Financial Market”, supported by USAID, selling it to the stronger competitor is almost the only one. In this regard, experts recommend taking urgent action in two areas:

  • Developing the new technologies (for example, Big Data);
  • Planning large mergers to increase capital reserves.

Thus, already in 2020, many experts expect large foreign capital to enter our market to absorb weak and inefficient domestic capital. To all this, Germany does not care that in November, Naftogaz would present claims to Gazprom as compensation for the possible termination of gas transit through Ukraine from January 1, 2020. Yuriy Vitrenko, Naftogaz commercial director, recently boldly stated that the amount of Naftogaz’s lawsuit against Gazprom could amount to about 12 billion USD. In other words, he warns us taxpayers in advance that, following the example of the previous time, when he and Kobolev won a lawsuit against a Russian company that has still not returned a cent to Ukraine; they would again write record bonuses of several million dollars.

Related: Zelensky meets leadership of Japan Association of New Economy

But, alas, last week it only became known that Denmark gave the go-ahead for the construction of Nord Stream-2, which means that Germany would complete the construction of its own energy hub in a matter of weeks (our main competitor in the transit of Russian gas). A spokesman for the project said the Nord Stream 2 consortium, which includes private companies Uniper and Wintershall DEA (Germany), Shell (UK - Netherlands), OMV (Austria) and Engie (France), will work to complete the project in soon. And this year the contract for the transit of Russian gas through Ukraine will expire, through which the main route for export to Europe ran.

By the way, Russia has recently been discussing bilateral agreements with the European Union, which will allow them to resolve trade disputes within the framework of the World Trade Organization (although the United States is blocking this process so far).

Related: Ministry of Economy expects GDP to grow by 3.7% in 2020

Is there a way out? Where are we moving to, what to expect from it? We have a chance. Will we be able to implement it? Not sure yet.

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