Ostroumova A., Rieznik M.

Oles Honchar Dnipropetrovsk National University, Ukraine



The economic situation in Ukraine, which differs from that of other CIS and Eastern European countries that have embarked on economic reforms, causes great alarm. According to the official statement of the ex-President of Ukraine Leonid Kuchma, «things that took place in the economy of Ukraine are similar to no other events in history». The problem of economic policy is the low efficiency of its means, the lack of effect on real economic indicators, such us the growth rates of GDP, the level of employment, the volume of investment, etc. 

We can’t stay aside when Ukraine, which had been among the developed industrial countries, as a result of poor market reforms, transformed into a minor country. Leading positions in the aerospace branch, in a number of directions of military and technical production, which were taken by Ukraine, are unfortunately lost, as these industries are either not being developed at all or are paid very little attention. Opportunities which Ukraine had, for instance, in the field of cybernetics are used very poorly, especially in comparison with India, that in the last decades turned into the world leader in production of the software, exporting it for $20–30 bln annually. Intellectual products are connected with the small material expenses, the cost of which is defined by highly skilled work of programmers and contain the high added value that makes this area profitable and effective. 

At the same time, we have dug over the half of Ukraine for the sake of production of ore and coal, metal smelting, which is considerably polluting the environment and having a negative impact on the human health, while earning on it only $7–8 bln annually. Therefore, improvement of the economic structure remains an unresolved topical problem.

Another dramatic and sore issue is the technical and technological rearmament of the economy, its transition to the innovative type of development. During the years of independence, there has hardly been any upgrade of equipment and technologies, the equipment has become morally and physically outdated, that have led to low efficiency of the economy. All these facts testify clearly that there is growth without development in Ukraine, which can’t be recognized either constant or prospective for the country. 

  There is a very important question now: «What conditions should be created to make it possible to change an economic situation to the better side?» It is clear that there are many factors involved in the development of economy of any country. First of all, it is the political stability in the country, when economic legislation provides favorable conditions for the development of domestic production and adoption of the appropriate measures by the government, its deliberate policy of production stimulation. The European Bank for Reconstruction and Development has reduced expectations of the growth of economy of Ukraine from 2,5 % to 1,5 % in 2015, which it predicted in May, 2013. According to its report, the Ukrainian economy, as well as Belarusian, whose forecast of growth for 2015 has worsened from 2,5 % to 1 %, lag behind among the economies of Eastern Europe and the Caucasus. In particular, the EBRD expects growth by 4 % in Georgia next year, by 3,5 % in ​​ Moldova, Azerbaijan and Armenia. The IMF predicts Ukraine’s GDP growth for 1,5 % in 2014, the World bank – 1,5–2 %. The experts have no common vision of development of the country when forecasting the main macroeconomic indicators for a medium-term prospect. The consensus assessment of the growth of the economy of Ukraine for 2016–2017 is 4,1 %. It is generally supposed that the main lever of the economic growth will be extension of private consumption: the average value of real augmentation of private consumption is 5,7 %. According to the forecasts of experts, the expenses of the nation-wide government will grow.

  The opinion of experts about the price situation differs significantly, too. Generally, experts predict a rather low rate of inflation: the average expected indicators of consumer price index and producer price index (per year) are 105,2 % and 107,2 %, correspondingly.

In search of answers to numerous «rhetorical» questions about the future of our economy we are always devising new principles, foundations, approaches, «special ways», «national economic miracles» and other innovative economic configurations. Decline in production, underestimation of the role of the state have led to the following consequences in Ukraine: physical extinction of a considerable part of the population, citizens’ exodus abroad for earnings, low level of remuneration of labor and retirement payments, existence of the critical majority of the enterprises which work at a third and below their rated capacity, ultralow providing of local budgets. The economy of Ukraine is heavily affected by imperfection of public administration and inefficient macroeconomic policy. High level of the government expenditures has led to quick accumulation of internal and external debts that Ukraine has no opportunity to pay off in the conditions of recession in real sector of the economy.