Prof. Janusz Szyrmer's statement that nobody really understands
how the Ukrainian economy works deserves special emphasis. Not without
reason did our artist liken it to a Rube Goldberg contraption: it is. The
interview with unfailingly sensible Yuri Yekahnurov makes it abundantly
clear that there are people like him who know the basic things that need
to be done (like real private ownership of the means of production), while
Volodymyr Skachko's material on collective farmer in chief and Parliament
Speaker Oleksandr Tkachenko makes it clear why they aren't: such
steps run counter to the interests of those in a position to take them,
like Ukraine's number one feudal lord and deadbeat. As Iryna Klymenko makes
clear, the whole system that has evolved fosters sucking everything out
of the economy and not putting anything back in. This, dear readers, is
a short road to the Third World.
The greatest myth in this country is that nobody knows what to do about
the economy. In truth everybody but a complete idiot knows what to do:
make it worthwhile to invest in providing goods and services at a profit.
British Ambassador Roy Reeve makes it fairly clear why British (or, for
that matter, other foreign firms) stay away. An investor faces one set
of rules today and maybe another tomorrow. Some months ago we ran an abridged
interview Tetiana Kyseliova of the State Committee on Standardization and,
frankly, every foreign investor's worst nightmare. Her committee, for example,
forced Procter & Gamble to fly a delegation to Belgium to see how the
firm made its products and decide if they were good enough for the Ukrainian
consumer. In her interview last December 1, she stated that in the last
few years Ukrainian experts have developed over 2000 standards, 60% of
which either meet or take into account foreign requirements. One need not
have a Ph.D. in math-ematics to figure out that this means there are over
800 standards which have nothing to do with anything anywhere else. Try
doing business in that kind of environment!
The crux of the matter, however, is deeper. Ukraine has more state than
it can afford, too many bureaucrats trying to do too many things, and the
economy simply cannot pay for it. This makes taxation confiscatory and
either strangles economic activity or drives it into the shadows. Until
this changes, things simply will not get any better. An economy cannot
grow if its first rule of survival is "take the money and run."






