Spring is the time for changes and hope for a brighter future and there is lack of both in Ukraine. Maybe that’s the reason why the German Economic Club decided to hold a discussion with an obviously positive motive in Kyiv. Its moderator Merle-Katrin Alex, deputy head of German Club Board, based on the research conducted by DHSBC Bank (Germany), which predicts bright long term perspective for Ukraine, declared that Ukraine is an economic “tiger that is getting ready to jump.”
According to the predictions of the bank’s analysts who have recently published their report “World in 2050,” Ukraine, despite the negative demographic development, is able to jump over 19 positions in the world ranking and get the 40th place among the most successful economies in the world that consistently show the highest growth rates. According to Alex, by 2050 Ukraine will have 36 million people, six percent of average annual GDP growth, and one of the highest GDP per capita. Is this scenario realistic? What needs to be done to make it reality?
While answering these questions Anatolii Kinakh, MP and president of the Ukrainian Union of Industrialists and Entrepreneurs defended the well-established position of the government. According to him, European integration for Ukraine is an irreversible trend and it is not a short-term campaign but a long-term strategy. He also did not forget to mention that the need for modernizing Ukrainian economy, enhancing its competitiveness is inextricably linked to the task of forming democratic civil society. Kinakh is convinced that Ukraine will be able to fill the prediction of the DHSBC Bank with “real actions,” particularly, by continuing the dialogue between authorities and businesses and creating equal and fair rules for the latter. But he immediately hinted that there are no such rules today yet. He referred to the norm of the recently adopted Tax Code that says that an official guilty of not refunding VAT to a company must be hold accountable for it. However, according to him, there were no such cases reported so far. Kinakh considers German predictions with obvious delight. He has the same opinion as one of Western experts, who called Ukraine a sleeping beauty and hoped that our people would soon understand where they should aim for it to wake up.
Director of the Consulting Company BE Berlin Economics GMBH, head of the German Advisory Group on Economic Reforms in Ukraine Ricardo Giucci took the idea of Ukraine turning into the world’s economic tiger with somewhat skeptic attitude. He believes that our government departs from the course of fiscal consolidation and underlines the threats for economy, created in this situation. Professor advised to follow a more flexible exchange rate of the national currency and “not to make the cup run over by implementing social initiatives.” In his opinion, it is also very important to pay attention to the energy sector, where the biggest problem is the cross-financing of the population, who use the cheap gas, by the industrial sector. Giucci spoke about firm administrative course that is implemented in the country and noted that it continues to strengthen.
Independent expert Oleksandr Narbut also does not really trust the long-term fairy tale predictions. “No matter how many times you’d kiss a frog it would never turn into a princess,” he said. According to him, today more people in Ukraine are interested not in long-term but in short-term predictions which are not very favorable. Among the causes of possible “shrinkage” of the Ukrainian economy he sees disharmony in its relations with politics and the great hardships in forming the middle class.
