The discussion in this issue by officially renowned economists should be closely read by those in the West who want to understand why this country simply does not work. The wisest words are those by Prof. Anatoly Halchynsky: if there is no force in society giving the president (or premier, or anybody else) the support necessary to implement a given policy, it will simply not happen. And this is where we are: those with power are not interested in following the proven models of countries like Poland, Hungary, and the Czech Republic. They would rather talk about the specifics of the Ukrainian national character and try to talk some foreign investor or international institution into underwriting “new investment” to put existing Soviet-era enterprises on their feet. After getting the investment or loan, as this issue’s item on what has happened with World Bank loans indicates, the money then goes mainly to give managers a fat bonus, little if any real investment is made, the recipient enterprise sinks (as it would have anyway), and the state picks up the tab. Perhaps those who want to reject such loans are right. If so much of the money is, as the same material indicates, has been the case in the past, simply being stolen anyway, obviously such loans will do no good.
Actually, the crux of the issue is how such official experts think and the kind of advice they must be giving to those who listen to them. Small business is either not mentioned or viewed with mistrust as a link to the shadow economy (because it is forced there). One learned discussant says that he viewed reform as a mistake from the beginning. Perhaps more should have been done to keep afloat all those Soviet-era industrial white elephants that are never going to be either competitive or profitable both because of how they were designed and the mindset of those still running them. Another professor calls for increasing the economic role of a state that the economy cannot support, systematically relies on the fiscal expediency of not paying its bills on time, and is strangling the economy with excessive regulation and taxes. In fact, I scarcely noticed the word business. My Ph.D. may not be in economics, but I always thought that this particular discipline was supposed to study the economy, and business is the heart of a market economy. Create an environment where people can make money in business, and you can have prosperity. Do the opposite, create an environment where the name of the game is to squeeze everything out and put nothing back, and you will have... today’s Ukraine.
