March 24, 2014
Ukraine’s economy is now facing new challenges which evolved from former Government’s inadequacy in dealing with managing funds and assets.
It’s not ever more obvious that a $15bln loan deal with Russia, signed by Yanukovich in Moscow after a dramatic U-turn from a pro-European vector, was never intended to work out in case of any changes in the state’s power. And that was definitely used in process of negotiations with Opposition during protests in Kiev. But, at the time, a will of People was at stake, and that will was to get a new chance to build a corruption-free society, to regain trust in law-enforcement authorities, to move on with democratic aspirations.
A huge amount of cash was withdrawn by some state officials and oligarchs close to them from Ukrainian banking system before they fled the country. And there is no hope of getting back any money from numerous offshore schemes that have been blooming during the past several years.
A cold shower for Ukrainian economy – a ridiculous $4mln remaining on State Treasury accounts after a new Government came to power – this is what’s left to deal with in the face of a strong and urgent need to adopt some breakthrough economic policies.
It’s obvious that Ukraine needs financial aid from its foreign partners – international financial institutions – to overcome the ruins and get back on track. Sovereignty and territorial integrity of a young striving democracy in the center of Europe is on today’s agenda.
Further destabilization of Ukrainian economy may also affect European and other regional interests, for Ukraine is also one of those serious markets for international producers.
Ukraine’s currency reserves have dropped dramatically, and there is an extraordinary level of budget deficit. Former Government’s actions have led to a $75bln foreign debt, while national currency has deteriorated by 20%.
New Ukrainian authorities show readiness to implement reforms unpopular among Ukrainian citizens in social support and regulatory legislation. It is aimed to form a transparent, investment-oriented budget; to develop Ukrainian industry so that foreign companies feel safer to do business in Ukraine; to give new impulse to international partners.
As an example of “new approach”, there are numerous initiatives coming from newly-appointed authorities to involve a wide range of expert community in the process of finding ways to get rid of corruption. A new chief of State Customs Service Vitaliy Naumenko has addressed the community to help regain trust and break down corruption pyramids that had made this entity one of the most notorious criminal cliques in minds of Ukrainian people. Experts feel cautious about any predictions as of how the Customs Service will be developing, but there surely are some good signals that new authorities are more open and sincere about their intentions.
Now, Ukrainians really hope that world leaders and international monetary organizations go beyond declarations of support for Ukrainian democratic aspirations and help implement economic reforms.