On Monday the Verkhovna Rada committee on Industrial Policy and Entrepreneurship hosted a roundtable, which was attended by famous Norwegian economist Erik Reinert. The topic was extremely relevant: “The end of the free market or a new globalization? How can Ukraine become successful.” Den has earlier published an interview with Reinert and even organized its own roundtable to discuss his ideas.
“Our country mostly ignores Reinert’s ideas, but there is a growing number of those who listen to him – in the society, in the industrial circles, and the Parliament,” says Viktor HALASIUK, head of the Verkhovna Rada committee on Industrial Policy and Entrepreneurship, President of the Ukrainian Association of the Club of Rome. “I got the same impression from the roundtable meeting with Mr. Reinert. When we organized a similar meeting in the Parliament past year, it was attended by several dozen people. This time there were hundreds – parliamentarians, entrepreneurs, experts, and youth. The people come to understand some of Reinert’s principal ideas. Thus, when the society is ready, it will elect the government that would listen to these ideas. In particular, a number of myths will be gone. For example, the myth that free trade is always a good thing and beneficial to everyone. In fact, free trade is beneficial when it happens between countries that find themselves at about the same level of technological development; it is beneficial to a more developed country trading with less developed countries. And we see how weak countries can become donors. Look at Brexit, at the election of Donald Trump as President of the US: they are the particular evidence of public dissatisfaction with the economic policy that is being implemented. Reinert said that this dissatisfaction has already reached developed countries. Yet it is important to understand what ours specializes in. A person has a profession and earns their income from certain activities – and countries have their main revenue sources likewise. This is called the dominant specialization. Today, Ukraine makes money mainly on exports of raw materials, on money transferred from migrant workers in other countries, and on borrowing from the IMF, EU, and other lenders. As a result, our country, so to speak, specializes in poverty. The main conclusion of the meeting with Reinert is such that Ukraine finds itself in desperately urgent need to change its specialization. It should become a manufacturing country, the country with the industry, the country of innovation and entrepreneurship. Professor Reinert has described in great detail the way it should be done in his book How Rich Countries Got Rich... and Why Poor Countries Stay Poor. Every country has passed this stage: France, Germany, the US, and earlier the UK.”
