As some of the economics commentary in this issue indicate, the Yushchenko Cabinet is under attack, and if Yushchenko goes, I think that the consequences for both Ukraine and the international community would be disastrous. Just look at what is being proposed: a new “environmental” tax while lowering the overall tax burden (and how do we propose to pull that off in a country where just about all enterprises were built without any consideration of environmental consequences?), telling the IMF to take a flying leap (we have great reserves; we simply have to find and tap them; we just don’t know where they are yet), plus more protectionism and controls on the flow of cash (propping up inefficient enterprises is one thing dragging this country down, and the currency exchange costs associated with Ukrainian regulations is already one factor retarding investment, so let’s make it even worse). We print what people here are writing, but this all sounds pretty strange me. Read carefully and decide for yourself.
My contacts in Ukraine’s financial community who know the Prime Minister best, having dealt with him as head of the National Bank (incidentally, my brother-in-law was running the biggest bank in Galicia while the current Premier was running the NBU and I have been known to raise a goblet with the head of the Association of Ukrainian Bankers), say that while the head of this country may not quite be Einstein, he is competent and there is simply nobody better around. All this leads me to believe it is time for the West, especially the IMF, to give him some concrete support by, for example, unfreezing the EFF program and even loosening the conditions a little. The West’s primary interest in Ukraine is that this country actually
does something to implement its enunciated European choice by making its economy compatible with the European one, and the current government under fire simply is not strong enough at present to do much more of what everybody understands needs to be done. I regret this, but it looks to me that the alternatives being offered to Mr. Yushchenko’s policies tend to run in precisely the opposite direction. Hence, my august readers in the international community, it looks to me like it is time for you to think about what to do. Solon once said he had not given the Athenians the best possible laws, only the best the Athenians could accept. Viktor Yushchenko might not be the best Prime Minister, but I think he is the best Ukraine can currently accept. And he needs some success right now. I think he deserves some help.
