How to correct the declared priorities of the new government headed by Goncharuk? Some of the ministries of works better, and who expects to be replaced? Executive Director of the Center for economic strategy Hlib Vyshlinsky analyzed for 24 channels the work of the government during the first months.
The growth of the economy by 40% within five years possible under certain conditions
How would you rate the course of the new government, Alexey Goncharuk, as well as the draft state Budget for 2020?
In fact, it is the government’s budget Groisman with some edits. From the point of view of economic ideology the previous and the present government stand on the principles of macroeconomic stability and moderate center-right policies.
The state budget is focused on private, not public sector. The budget deficit was slightly lower than in 2019. There was no time to fundamentally change everything. But it speaks about the moderation of the government. And the previous government have left giant holes.
Goncharuk announces 40% growth in five years. Is that possible, given certain government priorities?
To achieve economic growth by 40% over five years is possible. But you need to do really radical things in economic policy and the issue of plavovlasky. Economic policy is the opening of the land market at the most liberal model that entered Ukraine more foreign investment. Rapid privatization of large state enterprises with the aim of attracting large investments.
In parallel, steps should be taken in pravovest. The rejection of the return of “PrivatBank” or compensation for its previous owners, which is a prerequisite of the cooperation program with the IMF. And the destruction of key corruption in such schemes, which hinder investment. Without regard to political compromise or expediency. In these conditions, a 5-7% annual growth is possible. Otherwise, we smolder with 3% of GDP. And the expectations of the Ukrainian voters will gradually dissipate.
The Cabinet calls itself a government of technocrats. Their criticism, charging that officials should not be politicians. Do you see this technocracy at work? Do we need technocrats to conduct the announced reforms?
In Ukraine the political government is impossible. We or technocrats, or embezzlers. When we talk about the government of technocrats does not mean that they do not have a state policy. In the technocrats there should be a clear expert understanding of what will be the policy in the relevant field. If the Minister of education it is necessary to increase or decrease funding of higher, secondary and pre-school education. The Ministry of economy or not to sell land to foreigners, to reinforce or not the regulation in the sectors. In developed democracies the government has a position that is part of the party platform. But in Ukraine it is mixed concepts.
The Ministry of economy and Finance have weaknesses, but they are effective
That managed to make the Minister of Economics Tymofiy mylovanov, which has announced five priorities in the work? Whether the Ministry of economy paves the strategy?
The Ministry of economy for the amount of work done – one of the leaders. In spite of the complications. First, large scale of responsibility of the Ministry. Second, the accession of the former agricultural Ministry. As a result, the Ministry of economy was able to create a draft law on circulation of agricultural land, to find a compromise. In addition, much has been done in the direction of privatization of state enterprises.
The weak point of the Ministry – the land bill had to be taken in turbo mode and not allow to politicize the issue. Now there are stakeholders who want to preserve the “gray” and “black” schemes in the agricultural sector. They are trying to delay the process. Second – not strong enough communication. Public perception of the Ministry is weaker than it should be.
And the Ministry of Finance? Said the leader Oksana Markarova, which remained from the previous government, have been given until the end of the year to prove yourself?
In a classic political governments the Minister of Finance is often a key to realizing the vision of economic policy of the party-winner. The Ministry of Finance guards the hard-won macroeconomic stability.
Main objectives – improvement of administration of taxes and customs work. After all, the main problem of the development of the economy – not the tax rates, and their administration. The same goes for customs. Ukrainian companies within the free trade zone with the EU would make more profit. But these opportunities are not used because of the inability to transport our goods quickly through customs. Not to mention the smuggling, the unequal rules of the game for importers.
Work on the state Budget professional. Markarova has managed to maintain a working relationship with the various political forces in the context of fundamental changes in the political elite. This led to the fact that all the money is lacking in terms not of the strongest economy.
Is it possible to replace Markarova?
Maintaining macroeconomic stability is the precondition for any growth. It is better to give Markarova the opportunity to take a clear position on tax and budget policy. The team of the Ministry of Finance – not a weak link compared to other. This is a professional Ministry.
The Ministry of infrastructure loudly talked about her new projects, encouraged investors… the Minister of Crickley will be able to make it happen?
Infrastructure – long-term projects. To give an evaluation difficult. It is necessary to consider certain evaluation criteria. It is the destruction of corruption schemes in state enterprises. The processes of privatization and concession assets, which are more efficiently managed by the private sector.
The main should be the opportunities provided to us by the EBRD and the European investment Bank. In Ukraine, there is no cheap capital. Unlike Poland, Slovakia, there are no subsidies in the EU, due to which built infrastructure in Poland. The only way to take cheap loans from the EBRD and the European investment Bank for infrastructure development and quick to master.
The Ministry of health went down the wrong path
And how are things at the Ministry of education?
The program of the Ministry one of the best. There is a clear link with the needs of the labour market. To change the education system to meet the needs of the labour market and the economy as a whole. We are not just an educational system that operates to skip a certain number of students. It raises the question: why do we train them? There is a good synergy with the Ministry of economy on demand and suggestions.
And the Ministry of health?
With the Ministry of health more difficult. Question: was it worth so much to change the team? All said, the reform is correct, but those who invented and introduced, it is necessary to change. This dissonance continued after the new appointments. Itself the teacher Zoryana Skaletska instead of making it smooth and continue with the implementation of the reform, have made personnel moves that led to conflict. The weak Ministry, and the Minister – the applicant for a replacement.
The Ministry of energy has combined with ecology. The correct link?
We have not heard substantive arguments about the merger of these two ministries. There are obvious risks. There is a large part of the so-called dirty energy – coal-fired power plants and coal mining. This is contrary to the direct order of the Ministry of ecology. A compromise is needed. But can be and Vice versa. A weaker environmental component “will peck”. It will not be heard. A full-fledged Minister would put and defend their positions on the reduction of environmental pollution.
As for results, we say about long projects. But there is a difficult winter, which you have to pass the power system in conditions of strong enemy – Russia, which is interested to create problems for us and pressure for energy supplies. The level of tactical leadership we will see in the spring.
With regard to large development projects the power system, transmission system, something that we in the management of this sector has received from the previous government, not worsen. The energy part of the government Groisman was weak.
But The Ministry Of Justice?
The Ministry of justice one of the key ministries. But there will be enough power for the destruction of raider schemes which are being implemented practically, with the assistance of the previous management? This will cost a lot of money and interests, need a lot of effort and courage to overcome it. Because 5-7% economic growth we will not achieve.
There is one combined the Ministry of culture, the informality of youth and sports.
The formation of a unified cultural and information space in the country is a good strategic priority. From an economic point of view, too. Ukraine lacks a strong brand, clear perception. What are the strengths of Ukraine, what is interesting in the world?
Goncharuk – a politician, not a technocrat
How Goncharuk leader and an effective Prime Minister?
There are issues of consistency of management performance of the government. How many correct decisions the Cabinet is able to extradite for probation month of work. And indicators not ideal. At a certain stage this can be attributed to the beginning of work.
There is the destruction of the mechanisms that have been under the previous government. But the best people with the right principles and ideology, than the perfect leader who has no principles.
What do you think Goncharuk?
The question is, how Goncharuk be ready to make bad compromises. He calls the Cabinet a government of technocrats. But he, in fact, a politician. Goncharuk was the head of a political party (“power of the people” – approx. 24). The man who inwardly is a technocrat, not fighting in the inner-party competition for the position of Chairman. This means that he sees himself as a politician. Then it is necessary to take a clear political position. Not just to be part of a team some names.
When you can evaluate the activities of the government as a whole?
Somewhere in the spring of 2020. Winter is a kind of test. For half a year, no reason to say that something is not understood.