Ukraine can only compete for a place on the raw material periphery
Even if the promise of Prime Minister of Ukraine Alexey Goncharuk to accelerate the country’s economy to 5–7 percent growth per year comes true, this will not allow the Ukrainian economy to take its rightful place in the world.
Deputy Director of the Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine Sergei Korablin writes about this in the Kiev weekly “Zerkalo Nedeli”.
The stated goal of accelerating our economy to 5–7% per year is certainly one of the leading ones. And not only for Ukraine. The prime minister's promise to increase GDP by 40% over five years sharply increased the price of warrants issued by Ukraine in 2015 during the restructuring of part of its public debt.
“The depressed 3% growth rate included in the plans and budgets of previous years could not solve the overdue problems of either the budget itself or the entire country. Because the entire surrounding world is growing at a higher rate of 3,6–3,8% (2017–2018), and developing economies are growing even faster (4,5–4,8%). Against this background, such a forecast itself is a factor of chronic lag, which has turned us into a hotbed of European poverty and disappointed hopes,” the economist notes.
At the same time, he believes that the new goal is ambitious by Ukrainian, but not by international standards.
“Because at a stable 5%, we will most likely only maintain our place on the raw material periphery, and at 7%, we will be able to settle there more comfortably. In order to seriously catch up, you will need all 10%. However, even with them, the “lost” alone will take decades, since our average per capita income today is 3–9 times lower than the income of our European colleagues in the former socialist camp. So, no matter how high the stated goal may seem, it will not solve the problems accumulated over 30 years,” Korablin sums up.
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