The Ukrainian media have begun lately to carry more and more materials on the selection of a state model (Den/The Day, Zerkalo nedeli/Dzerkalo tyzhdnia, Biznes, Kommersant). Similar debates can be observed in Russia (Ekspert, Nezavisimaya gazeta, etc.). It is no wonder Ukraine and Russia are doing so: fate has decreed that they choose their future actively and openly. The Western world is also preoccupied with this problem (World Development Report, 1999; press interviews of such world-class reformers as George Soros, Jeffrey Sachs, et al.). The scale of debates on this subject and interest of the countries themselves (from the developed to less developed) shows that the world, in its aspiration to create, if not the best, at least a rational model of state and world order, is approaching a certain critical point, the point beyond which the old paradigm no longer works. A whole Gordian knot of extraordinary phenomena — economic and financial crises, ethnic, political, and military conflicts, ecological problems, etc. — indirectly proves this. The clusters of such phenomena inevitably accompany periods when the social development paradigm is changing. So to speak, a worldwide time of troubles.
WORTH PONDERING ON
This kind of thing is decisive not only for each isolated country but also for humanity as a whole. They precede the emergence of a qualitatively new social order and new processes of socioeconomic development. These things also require minute scrutiny for the reason that any change of paradigm means not only transition to a new path of development but also the need to choose such a path. And choice means that mistakes are inevitable. No one — rich or poor — is immune to mistakes. The only point is that the former and the latter could face radically different consequences, the losses ranging from negligible to irreplaceable.
On the global scale and under the conditions of highly advanced countries, the mechanisms of self-regulation (within certain limits) are the most acceptable instruments for making such a choice. Quite different is the situation of the Third World and former socialist states which, following the collapse of the socialist camp, found themselves in deep systemic crisis, although some of them are quite well developed industrially. They are also allowed (to be more exact, were forced) to choose a strategy of self regulation. I fear that in this case they will have to forgo the idea of independence, for they will fall under a strong influence of external (i.e., from First World countries) rather than internal mechanisms of self regulation.
In other words, in choosing such a strategy these countries doom themselves to eternally second rate (if not lower) status. Vertical ascent in the world order is only possible, as a rule, in the periods of massive cataclysms, when the ties holding the world system’s members at certain levels of the hierarchy become so weak as to be unable to create systems. An elementary particle can never become an atomic nucleus. What can put them on a par is only a nuclear explosion. And what of such a prospect with us?
THE ARRAY OF INTERESTS
As you see, which model of state setup is the most acceptable for Ukraine is by no means an idle question. What is desirable to specify is for whom exactly it is acceptable. For it is an open secret that the decision on the selection of this model is made by the authorities under the pressure of corporative interests.
Those favoring methods of giving orders, for example, are guided by the motives of gaining administrative rents, an attribute of any distributive system. This practice reached its peak in the former Soviet Union and was then inherited by Ukraine. In this system, the size of rental income varies directly with the place a bureaucrat (patriotic figure, politician, etc.) holds in the official hierarchy. This is in no way hampered by slogans about the power of people exercised through non-government oversight bodies, various commissions, committees, etc. All these bodies are also subject to receiving rent and thus do not run counter to the theory of management by means of directives or to the foundations of an “equitable” distribution of society’s product.
This passes over several things in silence. First, the directive model means a huge army of bureaucrats which decreases, not increases, the share of the “equitably distributed” national wealth. As Odesa dwellers claim, Russian scientist Mikhail Lomonosov, when passing through the capital of humor, said, “Nothing emerges from nothing, nothing vanishes nowhere, and if something is missing, it was stolen.” We have lived (and still do) according to this pattern. Secondly, state administration should be present where society needs it, not where the state itself, i.e., its upper crust, has decided. Thirdly, the enhancing role of state is needed when and where state administration has proven effective. It is the absence, to put it mildly, of such proof that brings about attempts to replace the role of state in the life of society with mechanisms of self-regulation.
In contrast to the followers (literally and figuratively) of rule by directive, the homegrown followers of the liberal model have no time to comprehend their interests (what I mean is not the, so to speak, liberal movement within but the process of pushing these ideas through the power structures). They are most probably driven either by ambitious aspirations to be on the list of the founders of some “independent Ukrainian model” or by the thirst for rewards from domestic and foreign customers. This does not preclude the fruits of their theoretical probes from being utilized by those who, having gained the right to manage budget funds, are utterly uninterested in the latter being controlled by the state. It has been said more than once that all the capital amassed in Ukraine during the years of independence originated from the budget. This constitutes the chief interest. All the rest is nonsense. The maxim — “rich merchants can only exist when buyers are rich” — is not for our oligarchs (for it is written nowhere that the rank-and-file citizen of Ukraine should be an affluent buyer). They are not against the laws, they only want to have as many laws as possible. Another maxim works here: the more laws, the lower their quality; the more reciprocal contradictions, the more loopholes for hiding in the shadows.
WHAT DO WE NEED MOST?
Ukraine is facing a real danger of slipping to the fringe of world development. It is this danger that demands that those involved in the debates on this subject become aware of their responsibility for the destiny of this country. Instead of wasting their time on defending theoretical postulates and their equally theoretical advantages, they should assume an attentive and, I would say, careful attitude toward the opinion of their opponents in search of compromise ways for this country to overcome its crisis and embark on a path of post-crisis development. The “overlapping” of different viewpoints is the only instrument humanity possesses for coming closer to the objective truth. What is left is to learn how to use it for peaceful purposes.
Ukraine needs a long-term strategy which determines its place in a fickle world and the options of behavior in the time of dynamic ongoing changes. It is only on this basis that Ukraine will be able to finally choose the directions and methods of its accelerated development. Those prodding us to follow the route of trial-and-error are all too well aware that in this case whoever has the ability (experience, resources, public solidarity) to go this way faster than his opponents and with minimal losses will stand to gain. Ukraine will become mired on this path for a long time because it now lacks such opportunities.
The most acceptable development strategy for Ukraine is a step- by-step and purposeful approach to world standards of human and societal well-being insofar as existing resources make this possible. Moreover, the goals should be gauged not by today’s or even tomorrow’s standards. It is like a problem in a school math textbook: “we are approaching them at a speed of X, they are running away from us at a speed of Y, so when shall we catch them?” Much depends on the method of solving the problem, i.e., the chosen model of state setup (directive, liberal, or mixed) which sets the required pace of societal development. The wrong choice of tools or error in solution are fraught not with a poor grade in a report card but with a less than prestigious place for Ukraine (compared to what it claims) in the world table of ranks.
WHAT DO WE HAVE?
An instrument is a means, but what is also needed is brains. Ukraine is a special case, as far as brains are concerned. Lack of experience in state administration (when the Soviet inheritance was being divided, such brains went mostly to Moscow) seems to have triggered an effect of audacious ignorance. Those who have derived their knowledge of the problems of state budget management and state administration in general from Soviet textbooks began audaciously to solve these problems, making so many mistakes in the shortest possible time that it will take several generations to put them right. Then, in the early 1990s, they wanted everything at once. Tasks were assigned with the deadline of tomorrow (i.e., while one has not yet been fired). Taking into account realistic social requirements and available resources for fulfilling a task was considered heresy. A different thing became a reality: the possibility “to make money out of the air.” The setting of untimely targets, oriented toward no concrete results, and the investment of funds to meet them yielded dividends to nobody but those who lobbied for such targets, turning financial flows in the direction needed.
I must admit that our politicians are gradually, if belatedly, understanding the truth that the policy of papering over the cracks is detrimental. The country has been plundered over this decade precisely by cashing in budgetary funds ostensibly allocated for noble purposes. Where are the results of the host of programs adopted in Ukraine and supposed to take the latter to the new horizons of development? Where is the repayment of the loans issued under government guarantees? There is no end to such questions.
At the moment, Ukraine displays a symbiosis of the administrative command and liberal models of state administration, typical of a transition period. The main feature is that all remain with their own interests intact: the bureaucrat with the rent, the oligarch with generous budgetary “injections” and preferences, People’s Deputies with decent salaries and pensions, and the “engaged” elite with rewards for serving all of the above. At the receiving end are only the ordinary citizen and the lower middle classes robbed by the those on high in order to build its own prosperity.
The following facts amply characterize a paradoxical situation in state administration. With more than 500 applicable tax-setting instruments and 61,500 tax officials in Ukraine, budget revenues for the first quarter of 2000 fell short by UAH 13.2 billion (half the annual budget). In spite of officially combating it, corruption is on the rise: while in 1999 there were 4300 administrative reports on corruption among civil servants, there were over 2000 ones in the first quarter of this year alone. In contrast to government assurances of social concern, average wages in Ukraine have dropped over and the number of the unemployed has gone up 12-fold since the early nineties. High-level speakers report about economic revitalization (alleged increase in GDP), but in practice the state is in a deep debt pit (domestic and foreign debts exceed GDP), while the shadow economy has long since overtaken the real one.
In assessing the current situation in Ukraine, we can conclude that neither our hopes for improvement nor fear for these hopes will come true. What inspires hope is that the latest, of February this year, address of the President to Verkhovna Rada contains one progressive idea: in the existing conditions there can be no question of progressive development without breaking the enduring tendencies in our political order, structural development of the economy, attracting investment, the presence of our commodity producers on foreign markets, social security of the population, defense capability, and in many other fields. What encourages me is that progressive ideas sound not only from the mouths of scholars but also from the Olympus of power. Our revamped government also seems to share such ideas, at least judging by the goals declared in its program.
But the direction of the shifts gives us pause. Does parliament produce too few results? One can agree: losses due to low effectiveness of Verkhovna Rada number in the billions. But what we can never accept are the attempts to remove the legislative branch or at least to reduce its role in the solution of important state problems. Parliament is an element of any democratic societal order, and one has to learn to work with it. Incidentally, why not channel the propaganda capabilities of the executive branch, similar to those displayed in the referendum campaign, into the formation of a viable parliament by means of democratic elections? But if somebody cherishes the illusion that one can first “guide” a little and then begin to learn democracy, this makes me suspect that such “guidance” will drag on for a long time and end in collapse (Ukraine is not Chile).
Is a parliamentary majority necessary? Undoubtedly. But what is difficult to accept is that it should be formed to back the government. Ideally, it should be formed to support a chosen political course, which, incidentally, some governments might fail to do. Meanwhile, attempts to mobilize the parliamentary majority in order to support certain personalities in the government again testifies to an intellectual crisis of the Ukrainian elite.
Should regional representation be increased in the legislative body? No objections. But what has it got to do with the upper chamber which resembles, in terms of effectiveness, an additional element in a short-circuited supply unit?
Is it necessary to reduce the number of the central bodies of power? Everybody is in favor. But how did it become possible to increase the number of civil servants by 13,000, while reducing the number of offices?
No signs of a visible economic growth? Wait a minute, gentlemen! Have you forgotten (or don’t know?) the laws of the existence of socioeconomic systems: initial reforms are always followed by a stage of slump whose depth, pace, and duration depend on the situation in which the reforms started, as well as on the degree of preparedness and decisiveness in carrying them out? Thus, while changing government teams, one should have been guided not by the presence or absence of immediate results but by the team’s ability to present a clear, decisive, and comprehensive program of actions intended at least for the medium term.
Unfortunately, we have to conclude that practically all of the failures mentioned (which is by no means a final list of) were caused by subjective factors. Alas, the team of Ukrainian statesmen has a too short substitution bench. In this situation, one cannot help doubting the role of state in the development of society and casting a glance at the mechanisms of self-regulation.
WHAT THEN?
Of course, all these shortcomings are the excesses of a transition period and have nothing to do with the liberal model. In all probability, they result from the unsystematic employment of this model. Nor should we forget that economic liberalization, self-regulation in society and nature in general, promote the survival and development of the fittest, to which Ukraine does not belong. Moreover, world experience shows that implementation of the liberal forms of governance yields positive results at the stages of post-crisis stabilization and development (Eastern Europe and Southeast Asia) rather than in the times of crisis. Moreover, world experience has no examples of “pure” liberal models; there are only examples (and not always positive ones) of the different extent to which the functions of a state have been liberalized.
It would be a good idea for us to start drawing up a strategy of step- by-step transition from the directive to the liberal model.
Among the imperative conditions for a civilized market economy and liberal methods of management are trust in and respect for the authorities, partners, and oneself, as well as the ability to appreciate and defend freedom and rights. These conditions are lacking in Ukraine. And the point is not in the national mentality but in the Soviet-style obsequiousness before power ingrained in us during the seventy-year triumph of communist ideology. Our society’s “nature” cannot be changed in the stretch of time allotted for the administrative reform. If we go by the words of Niels Bohr, who never denied himself the pleasure of cracking a biting joke, the old paradigm dies with its bearers, while the new one makes its way with the younger generation and gets sucked in with its mother’s milk. From the viewpoint of an optimist, this means that the convalescence of Ukrainian society (squeezing the slave out of ourselves) and the process whereby the system of state administration assumes more or less definitive forms could take 25-30 years.
First, the operation must be performed on a live patient who is moving (it is impossible to stop the activities of state apparatus), and without anesthetics (if we do not form a shadow cabinet). The main method of treatment is carrying out a comprehensive, well-balanced, and resolute administrative reform. The problem is that the doctor and the patient are the same person.
Secondly, it is difficult to count on revitalization of the authorities unless the system of state administration forms a certain center, which can accumulate the state’s ability to plan in the long term (not only in the economy) and enjoy sufficiently high status. The concrete examples of the solution of this problem exist not only far away but also in the near abroad, e.g., in Russia. If political actions are not calculated several steps forward, social development is bound to be replaced by marking time.
Thirdly, for the patient to recover, he needs ideological and cadre infusions. This suggests stringent demands on the elite, political forces, society as a whole, and its democratic institutions. Bringing together such forces has to cause a qualitatively new paradigm of development to emerge in Ukraine. This paradigm must in turn be instilled in the awareness of the masses, which means several generations educated in absolutely different dimensions. This is a long and arduous way, but Ukraine in any case has to go through it.
