No one is doing anything about the economy of Ukraine

In the next few days the EU sanctions against Ukraine are to come into effect. This decision was made at an emergency ministerial meeting of the EU on Ukraine, at which the law enforcement agencies finally were given combat weapons. However, European ministers have not yet decided who to include on the "blacklist", the members of which will be denied entry to Europe, and whose financial assets are to be frozen. The EU Council adopted a "political decision to start work on the creation of this list," the head of the Foreign Ministry of Ireland Eamon Gilmore said.  Apart from introducing target visa restrictions and freezing the bank accounts of those who, in the European officials' opinion, are to blame for the escalation of violence in Ukraine, the EU also wants to freeze licenses for arms and machinery supplies, "which can be used for internal repression" in Ukraine. Economic sanctions have not yet been declared.  

Meanwhile , according to the deputy director of the Institute of Economic Forecasting, Alexander Shirov, no one is doing anything about the economy of Ukraine: "The situation has been let to go its way. The Ukrainian economy still lags behind the achievements of  Russia, and probably even Belarus. The indicators that Ukraine's economy has reached for over 20 years, make you think, why has this happened? Why is the level of average salary in Ukraine 3 times lower than in Russia, and why such trivial indicators as, say, cars per thousand people, for Ukraine are more than 2 times lower? There are 22 cars per 1000 people in Ukraine, and in Russia 54."  

According to Mr Shirov, "the problem is that Ukraine is trying to develop, like Russia, based on its raw materials complex. But this raw materials complex, even at the stage of post-crisis economic recovery, was insufficient. The economic policy held in Ukraine for the past 20 years proceeded from a mistaken notion that the ability of the metallurgical complex, agriculture and chemical industry of Ukraine is enough to finance the development and recovery of the economy."  

The expert hears no theses (neither from the opposition, nor from the power structure representatives) about what Ukraine should do to achieve some success in economic development. The hryvnia is getting weaker, and external financing is needed to stabilize the situation. "This external financing can be obtained from Russia, from the European Union, or from the IMF. The question is, under what conditions and to what extent?" Mr Shirov says.  

He also believes that "what needs to be done is to increase the production of the Ukrainian economy, because if the situation continues as it is, a 2% growth of the Ukrainian economy in the condition in which it is now, it is in fact zero or even negative growth. Well, that is, if the economy grows 2% in Germany, it is a normal and decent growth, which allows the economic structure to be improved, in a way, to raise the standard of living. For Ukraine and Russia two percent growth is almost stagnation. That is, the challenge is to dramatically increase the rate of growth. And it can be done only by quickly investing the capacities that are still there in the Ukrainian economy. Otherwise, this stagnation can last for 3-5 years.