With the possible exception of Oleksiy Plotnykov, Iryna Klymenko has
done more to help us understand the riddle of the Ukrainian economy, and
that also means Ukrainian politics, than anyone else. This week's material
on Ukraine's virtual reality economy is but one example of how she can
cut through the official verbiage of the President's advisers to explain
that this country is moving not toward a market economy but toward a weird,
deformed sort of state capitalism (de facto copied from Russia's equally
nonviable model) that is in principle not viable but manages to stumble
along on credit by promising to do things nobody really has any intention
of doing. Viktor Zamyatin's sorrowful column on what we are capable of
also underscores the frustration more and more thinking Ukrainians feel
as they watch this country's government fumble aimlessly, losing one chance
after another.
While we hand out the kudos, one should not forget George Soros, who
finally gave vent to his frustrations that this country is simply not on
the right road, neither economically nor politically (which in the absence
of a real market economy is pretty much the same thing). Both the financier-philanthropist
and our own lady journalist seem to have realized that nobody can save
Ukraine from outside, not even by such efforts as the Renaissance Foundation.
It can only be saved from the inside by people who know what they are doing,
what is happening in the outside world, and how to integrate Ukraine into
the world economy. Thank God that Mr. Soros has realized that nobody currently
in power in this country should be in charge of one of his foundations;
they should not be in charge of even a small business. Or maybe they should.
Then they might learn what bankruptcy is all about. After all, bankruptcy
is unpleasant for those involved but it is a very good thing for the economy
as a whole: it frees up inefficiently used resources for more efficient
utilization.
In previous issues it has been noticed that for every enterprise in
Ukraine that actually produces something, move than two are standing idle.
Maybe we should start by shutting down the more hopeless half of those
that are doing nothing and half the bureaucracy that is enforcing the regulations
that strangle small business, get rid of the regulations they enforce,
and let people do their own thing. That could even mean real economic growth.
But do you think anybody will actually let that happen? That would make
far too much sense for those who now run this country.






