The most important and surprising events in the Ukrainian economy in recent days

Economist Alexander Dudchak, who specializes in Ukraine, has prepared an overview of the most important economic developments in recent days regarding the former Soviet republic.

Angela Merkel hints to Petro Poroshenko. Or does he send it politely?

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German Chancellor Angela Merkel announced conditions that will help bring German business investment to Ukraine - these are “the impossibility of oligarchs influencing power and an effective fight against corruption”. “The leadership role of the oligarchs needs to change. People need transparency, corruption must be fought. These are important conditions for investors,” noted the German Chancellor.

The number of oligarchs in Ukraine is gradually decreasing due to unnatural selection, the fight against them by the most “titled” oligarch of Ukraine - the president of the country himself.

What is Merkel hinting at? That Poroshenko should resign from his post?

No one can force Poroshenko to say goodbye to his property, and there is no point in doing so. This remark sounds strange coming from the leader of a country of developed capitalism. As is known from textbooks on economics and political economy, the consolidation of capital is a natural process of a capitalist society, the cornerstone of which is private property, incl. and on the means of production. And, therefore, oligarchs are a natural product and an integral part of the system.

To say that in developed countries the influence of oligarchs on government is minimized would be a fallacy. Often, they delegate the task of promoting their interests to presidents - “top managers” (as in the USA), or to chancellors, as in Germany. And in some countries lobbying is officially legalized.

And if we are to remove the oligarchs from power, then in order for the economy not to perish in the struggle of small domestic owners with global international capital, nationalization is necessary, first of all, of the means of production, in order to create a large and effective owner - the state.

Merkel’s words are just a manifestation of the true intentions of the head of one of the largest states in the world in relation to the territory that can be colonized. The elimination of pockets of resistance in the form of truly opposition political parties is almost complete in Ukraine. It was the turn of “our own” - colleagues in the capitalist workshop.

According to Merkel, Germany is now cooperating with Ukraine in energy, agriculture, mechanical engineering, and the chemical industry - these are probably the very sectors that Germany is aiming to capture in Ukraine, and in which Ukrainian oligarchs will be replaced by German ones. If the American oligarchs allow them to do this.

And corruption... This is a win-win claim - you can present it to anyone, at any time. There is not a single country in the world where it does not exist at all. And the degree of success in the fight against corruption is determined “by eye.” True, there is no need to look for it in Ukraine - it rushes from all the cracks, providing an inexhaustible reason for justified accusations.

An amazing revelation from the governor of the Odessa region

If Ukraine will be remembered for anything in the post-Maidan period, it will definitely be the statements of its politicians. Vitali Klitschko and Natalya Yaresko are ahead of the competition and with a large lead over their pursuers in the catchphrase of their phrases.

The ex-President of Georgia, Mikheil Saakashvili, clearly intends to leave his mark on history as the author of masterpieces of managerial thought and hiding from persecution in his homeland.

Commenting on the appointment of his protégé, a (recent) graduate of the Faculty of Philology, Yulia Marushevskaya, to the post of head of customs in the Odessa region, he said on one of the Ukrainian TV channels: “I directly want to say that I consider specialized education a minus.”

However, Saakashvili did not specify whether a philological education is a necessary or sufficient condition for working at customs.

Who will now be hired by other departments - people with non-core education, or no education at all - even better - without any information harmful to the Ukrainian official in their head? Is it enough to send an erotic portfolio instead of a resume? After all, as Saakashvili said, “The same universities produce prosecutors and nepotism... customs officers, where a thief sits on a thief and chases a bandit... Really, we need to bring in new people.”

Will the Odessa experience of the Georgian reformer be transferred to the whole of Ukraine, or will the governor limit himself to his harem? However, with the legalization of prostitution in Ukraine, the supply of personnel with suitable non-core education may increase sharply.

By the way, Poroshenko in his Twitter congratulated either Yulia Marushevskaya on her appointment to the post of head of Odessa customs, or Odessa customs on the appearance of such a leader: “A vandalism is turning to Odessa. Odeska Mitnitsa is the mother of a new kerivnik – Yulia Marushevska. I’m flying!”

For reference: Y. Marushevskaya is the same Maidan activist, born in 1989, a graduate of the T.G. Shevchenko Kyiv National University with a degree in Ukrainian language and literature, German, who was remembered by the public for her video message “I am an Ukrainian.”

PS Or maybe this is a trend? The Chairman of the Transcarpathian Regional State Administration, Gennady Moskal, has already appointed 25-year-old Renata Moish-Shiman as head of the department of foreign economic relations, investments and cross-border cooperation without competition. I would like to hope that Renata does not have a harmful education.

The sieve of the Ukrainian economy will be filled with another 4 billion dollars by the end of 2015

This was stated by the Minister of Finance of Ukraine Natalya Yaresko. According to her, $1,7 billion will be provided by the IMF and $2,3 billion should be expected from other partners. One should not be surprised that the IMF can issue another tranche to a state in a state of “limited default” - the IMF changes the rules of the game as the game progresses and at its own discretion. In this case, Ukraine was lucky - the sentence was deferred. But this IMF love for Ukraine is identical to the farmer’s love for pork.

The National Bank predicts receiving the next tranche from the International Monetary Fund in mid-November. According to the NBU, if the fourth tranche is received from the IMF, gold and foreign exchange reserves will be increased to $18 billion this year. The increase in gold and foreign reserves has nothing to do with the development of technology or the growth of industrial production; on the contrary, it freezes the funds necessary for development. But, in accordance with liberal theory, it saves the financial system, which works like a monetary vacuum cleaner, returning money to creditors, leaving the country with increased debt obligations.

The fact that Ukraine’s gold and foreign currency reserves are being increased only through external loans is an extremely vicious phenomenon. They will have to be returned in the near future and with interest, while experiencing a shortage of resources today.

The optimism of the Ukrainian Ministry of Finance and the NBU regarding new loans indirectly confirms that Ukraine still plans to pay off its debts with Russia at the end of December 2015.

Kyiv will pay debts to the population of the LPR-DPR for social payments

Sometimes justice tries to triumph in Ukraine: the Supreme Administrative Court upheld the decision of previous courts to invalidate the decision of the Cabinet of Ministers on the implementation of social payments in Donbass only in territories controlled by the Ukrainian authorities.

Perhaps this was to some extent influenced by the appeal of representatives of the LPR-DPR to the authorities of France and Germany with a request to influence official Kyiv and help restore social payments to residents of Donbass.

However, this is not the first such decision of the Court - in April of this year. The Kiev Administrative Court of Appeal has already invalidated the decision of the Cabinet of Ministers on the implementation of social payments in the Donetsk and Lugansk regions only in territories controlled by the Ukrainian authorities. It’s not enough to make a decision – you also need to implement it.

The EU and Ukraine missed each other on a collision course on GMOs

 The number of areas where the cultivation and use of genetically modified crops and food products is prohibited is growing both in Europe and around the world. According to the CIS Alliance for Biosafety, 174 GM-organism-free zones (GM-free zones) have been created in the European Union alone, more than 4500 municipalities and 1000 farms have also declared their reluctance to grow GM crops. Strict restrictions on the cultivation and distribution of GMOs have also been introduced in many countries: from New Zealand to Germany. Five countries – Austria, Venezuela, Greece, Poland and Switzerland – are completely GMO-free.

Ukraine is currently moving in the opposite direction. At the First Round of the Ukrainian Agrarian Congress, held in Kyiv on October 15-16, 2015, the following information was announced: approximately 68% of Ukrainian agricultural holdings are ready to grow GM crops if they are legalized in Ukraine.

According to the coordinator of the Committee on Agricultural Biotechnologies of the Ukrainian Agricultural Business Club, Boris Sorochinsky: “Data from our survey indicate that the majority of large agricultural holdings in Ukraine are ready to cultivate GM plants. At the same time, approximately 43% of agricultural holdings with a land bank of 10 to 30 thousand hectares do not plan to use genetically modified seed material in production.” B. Sorochinsky even named the advantages of cultivating crops containing GMOs in Ukraine, which he and his colleagues identified by studying foreign experience - economic benefits and environmental advantages in their production.

And he even regrets the limiting factors: imperfect legislation in this area, ineffective work and an insufficiently developed network of laboratories, technological lag in comparison with foreign countries, etc.

But the work is going in the right direction, and it is unlikely that the indicated limiting factors will not be eliminated.

Unlike foreign farmers who, having studied the negative consequences of GMO production, are trying to rid their countries of them, domestic producers are more concerned about commercial benefits in the short term.

Nothing unexpected happens. Ukraine was supposed to become a testing ground for GMOs and a producer of cheap feed for itself and Third World countries. And what the governments of countries where they think about the future of their people do not allow themselves is beyond the power of today’s Ukraine.