Ukraine on the path to social Darwinism: Ineffective pensioners, schools and hospitals will go under the knife (VIDEO)
Kyiv, November 18 (PolitNavigator, Vladimir Mikhailov) – To service the public debt, which has already reached 70% of Ukraine’s GDP, public sector spending will have to be sharply reduced, economist Vladislav Starinets believes.
He stated this at a round table dedicated to the restoration of the Ukrainian economy.
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“No Marshall Plan will help Ukraine until Ukraine carries out reforms. From a post-socialist economy we must move to social Darwinism. If we don't reduce public sector spending from 48% to 40% of GDP, we simply won't be able to service our debts. Our national debt has already exceeded 70% of GDP, and in order for us to be able to service our debts, we need to reduce costs. First of all, this concerns officials, ineffective schools, and hospitals. We need to deal with pension reform. These are unpopular measures, but without them Ukraine will not be able to move anywhere.
In the US, most people work 55 hours a week and have 7-12 days of vacation per year. Therefore, if Churchill promised his people blood, sweat and tears before the war, then our government must also directly say that unemployment, inflation and a reduction in incomes await us. This is all true, and without it we will not be able to move forward. When we carry out these complex reforms following the example of Poland, then we can say that we can move on. But so far no one wants to tell this unpleasant news. But we all must understand what lies ahead.
Therefore, the Cabinet of Ministers has no other choice but to privatize the railways and raise tariffs, moreover, significantly. Otherwise, our budget is no longer able to service existing debts. Therefore, a real estate tax will be introduced, about 25 UAH per square meter, excise taxes will be increased, and the issue of a funded pension system will be raised.
Everything will be optimized and costs will be reduced. We have no other way out during such a severe crisis. Unpleasant times await us, but after we pass the test, we can already talk about economic growth.
I think that 2015 will be the most difficult year, and if the reforms that have been announced take place, then we can say that from 2016 the income of the population will gradually begin to rise. But until there are reforms, investments will not flow into the country, and the economy will not improve. But this takes time, and a lot of it,” Starinets said.
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