History gives Ukraine a second chance – Financial Times

История дает Украине второй шанс - Financial Times

History does not often give second chances. But she just gave it to Ukraine where a new political party of President Vladimir Zelensky “servant of the people” confidently won the parliamentary elections. It is a moment of 1989: Ukraine has the opportunity to get rid of the legacy of dysfunction that hindered the country, and to follow their neighbours from Europe 30 years later, writes the Financial Times.

The author notes that experience shows that Ukrainian politicians-neophytes left quite a bit before I closed the window of opportunity. The duty of the international community to do everything possible to help Ukraine in this.

Ukraine’s problems since independence, constitute a separate class: not one lost decade, but three. Chief economist of the European Bank for reconstruction and development Sergei Guriev notes that in 1989, Poland’s GDP per capita was comparable with Ukrainian; today, Poland’s GDP is three times more than in Ukraine.

The newspaper writes that the causes of this slow disaster in the country, rich in staff and resources are well known. Deeply corrupt institutions has led to more or less than legalized plunder of the assets of a small group of oligarchs, exacerbated by the destabilizing pressure from Russia, including the invasion of the East of the country, the theft of Crimea and continuing aggression on land, at sea and in cyberspace.

If there is a surprise, then, that in Ukraine things are not bad. After the revolution of 2014 and the beginning of the war, the economy stabilized. Annual growth close to 3 percent for several years. Guriev believes that inflation could decline to 5 per cent target by next year. Economist Anders Aslund stresses that the rise of the currency led to the reduction of public debt to 55 percent, compared to 80 percent of GDP in 2016. Investors are optimistic.

But Ukraine should be much better than just avoiding collapse. For the economy, starting well below the European level, growth and investment should be much higher.

The fact that the economy is constrained, simply means that absolute priority is to use this opportunity for radical institutional change, as it was in 1989 in many other countries.

There are some good signs. The President and the majority of deputies are new in establishment of persons and acutely aware that they came to power because the people demanded an end to the grotesque level of corruption. The new party self-aware enough to conduct trainings to the elected legislators to prepare for work.

The first priority is cementing a new Foundation of deliveryzetia – clean up the rotten parts of the judicial system, the removal of immunity, and increase transparency throughout the Parliament – and to strengthen those foundations that already exist. Strong reformers were allowed to do good work in institutions such as the Ministry of Finance and the Central Bank. It is essential to maintain the independence of the latter, in particular, the nationalization of his troubled Bank, previously owned by Kolomoisky.

Followed by further economic reform, the author continues, which should be directed?? to increase productivity, as well as the weakening of the influence of oligarchs on the economy. More competition is important; after the outbreak of war to the Russian companies have been sanctioned, a side effect of which was to gain local monopolies.

Europe has a special responsibility and is able to help. Ukraine’s aspiration for integration into Europe led to the Euromaidan in 2013-14. While Russia waged war, the EU concluded an Association agreement. Visa-free regime, which he provides, “existential changed the direction of Ukraine to the West”, according to one Ukrainian source. Zelensky promises prosperity; the EU can help him in this.

The EU needs Ukraine no less. The tolerance of the pipeline “Nord stream-2” is forcing Ukraine losing the gas transit. The Association agreement is not deep enough; that import quotas should be eased and eventually eliminated. The EU should also insist on compliance with rules that it ensures that EU companies could provide competition and performance.

However, a third party must resist the temptation to turn the new rulers of Ukraine to its own customers through excess conditions. The biggest struggle of the new group will be to stay United, warns Tymofiy mylovanov, an economist who led an accelerated course “servant of the people”. Only setting the true representative relationship with the electorate, even politicians with the best intentions can avoid the fact that those who want to maintain the status quo, will not be deceived.

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