Before and immediately after the Orange Revolution Ukraine’s current president, Viktor Yushchenko, was known as a talented economist, who consistently and tenaciously adhered to the principles of market economy. It will be also recalled that Mr. Yushchenko made a name for himself as an economist and a politician by combating inflation and working for a stable hryvnia. We have no grounds at all to claim that the president has betrayed his principles. But it looks as though priorities have changed somewhat.
Last Tuesday the Ministry of Economy hosted a high-profile conference called “The Analysis of Performance in the First Six Months of 2005 and the Ministry’s Long-Term Plans.” The ministry press service announced shortly before that President Yushchenko would take part in the conference and hear reports by Minister Serhiy Teriokhin, his deputies, departmental heads, and representatives of subordinated organizations (the State Price Control Inspection and the State Committee for Material Reserves).
Instead, the president chose to attend a meeting of the Security Service’s (SBU) top executives. According to SBU spokesperson Maryna Ostapenko, he did not express any serious criticism of this service. He merely emphasized the need to replace staff and discontinue illegal telephone eavesdropping, creating the impression that unknown persons, rather than the SBU, are engaged in this objectionable practice (without a court’s sanction). No doubt, the SBU has a lot to do in this country, and the president is obliged to demand that it work effectively and in strict compliance with the law. It would be better still if as few people as possible turned to this service (for we have neither terrorism nor class war here) and the latter kept a low profile and did its business efficiently, without distracting the president (his press service reports that the SBU conference lasted for about five hours).
Meanwhile, the president could have devoted his skills as a top-notch economist and financier not to the placement of traffic policemen (undoubtedly a very important matter that ensures the support of the motorized electorate, but somewhat beneath the president’s dignity) but to genuine debates about the economy, especially since the latter sector, unarmed as it is, is more important for the nation than traffic policemen with itchy palms, who have to take bribes because of their inadequate salaries, which are in turn caused by an equally inadequate economy.
All that the president has to do to ensure that the economy is a top-priority item is to look at the graph charting the growth of the gross domestic product and inflation. If we imagine that the forecast projected by the Ministry of Economy is more or less a straight lateral line, the GDP will plunge and inflation will soar. If the two continue moving in the same direction, the economy will be facing serious trouble in the fall, according to The Day’s experts. In June the GDP growth rate closely approached the zero mark and then stopped at 1.1%, perhaps because of statisticians’ efforts, while during the same period last year the GDP grew by 19.9%. (Explaining this glaring difference, the Cabinet of Ministers, and later the SBU, alleged that last year’s statistics were largely doctored. But it would be better if these agencies looked forward, not backward — they would see another figure that shows a decline in output: in the first six months of this year Ukraine’s transport facilities reduced transportation of goods by 1.7% compared to the same period in 2004.) At the same time, inflation, which quickly offsets all social payments to the poorest strata of the population, reached 6.4% in only six months, while the economy ministry’s outlook was 9.8% for the entire year.
Today, even the friends of the government and the president are shouting this from the rooftops. “When is the government going to come to grips with the real economy and develop and set in motion an efficient mechanism of fast economic growth based on our well-known competitive advantages?” asks Viktor Lysytsky, ex-governmental secretary in Yushchenko’s cabinet in a letter to The Day. “The answer is silence,” he concludes. This is what the president should have discussed last Tuesday at the Ministry of Economy. He should have taken to task those in charge of the economy for the three consecutive commodity crises in the last six months, which have cut the ground from under the feet of entrepreneurs, who have been unable to plan the manufacturing process, as well as for many other things that are now modestly called “technical errors.” Moreover, a proficient economist would have asked these questions not only of the government but himself.
