Interviewed by Ihor MYROSHNYK
In its July 1999 review, the International Center Business Policy Studies
notes that "enterprises are even more pessimistic than last quarter about
the possibility of positive changes in the economy; the change ratio has
dropped from - 0.17 to -0.20."
We decided to illustrate this data in the course of an interview between
The Day's reporter, Vyacheslav Kredisov, Chairman of the Coordinating
Council, New Formation Businessmen's Association of Ukraine, and Mykola
Heorhiyevsky, President of Enran Co.
VYACHESLAV KREDISOV
Kredisov: It is true that despite our efforts to influence the
economic situation in general Ukraine's business climate is worsening.
MYKOLA HEORHIYEVSKY
Heorhiyevsky: We cannot assume responsibility for what is happening
in this country, because we do not have the levers of power. For this reason,
those acting on the principle of keeping away from those in power and as
close as possible to where one can get money are absolutely right.
The Day: Are we to understand that money and power in Ukraine
are in different places?
H.: Everybody able to do so has already positioned themselves
next to money-power sources. No room is left there. Yet New Formation businessmen
would not bother trying to elbow their way in; they operate completely
different markets. We do not use energy resources or metals in our business,
nothing, which is traditionally considered the domestic oligarchs' feedbag.
Nor do we need budget money. In other words, we have nothing to do with
what is going on at the level where state funds and other vital resources
are allocated. After losing 30-40% of our assets in the aftermath of Russia's
crisis last August and the following hryvnia fall, we fell prey to the
government's economic policy. Yet I could bet there are certain structures
that made quite some profit there. We all know that once there is lack
of something at one end, there is surplus at the other end. This is especially
true of the financial realm.
K.: I want to say that private business in Ukraine has made no
progress, and that there is an alarming trend, for we all know that quite
a few businessmen have received government posts of late. Now this is evidence
that these people see no other alternative to protect and enhance their
businesses but by accepting such appointments, thus receiving an additional
opportunity to influence the process of dividing budget money. New Formation
people have no access to budget money, so they are not so much prospering
businessmen as victims of this economic policy.
H.: Rather, they are victims of a system that has taken shape
and which does not protect the private sector at at any level. Just think
of all those laws passed that the existing regime is unable to implement.
Everything is now in the hands of bureaucrats handling such business starting
at the administrative district level or city. No one can control these
bureaucrats and they feel free to operate like medieval princes. And they
have their superiors and the latter behave the same way; in other words,
there is no limit to bureaucratic corruption. Take our licensing or tax
concession system. After all has been said and done it is just an improvisation
meant to supply the interests of certain financial-industrial groups and
those of the bureaucracy.
The Day: Does this mean that the deregulation campaign has
gone down the drain in Ukraine?
H.: I regret to say so, but it has. As an official of the State
Business Development Committee, I am constantly confronted by bureaucratic
arbitrariness in Kyiv. Of course, there are many shortcomings in current
legislation, but how can I, a man with a law degree, be convinced that
there should be special laws to correct today's situation? All it takes
is the proper application of the laws that we have. Our laws would work
if there were the political will. There is none.
The Day: Oleksandra Kuzhel, Chairperson of the State Committee
for Business Development, believes that we have better business laws than
Russia, yet business is better developed there. Why?
K.: She is right in the sense of how these laws are implemented.
In this sense Ukraine is lagging behind not only Russia, but any other
more or less developed country.
H.: Contradiction is the guarantee of progress in any given field.
By contradiction I mean competition. By way of competition any society
selects the best option out of the statistical multitude and proceeds to
develop on that basis. Anyway, this is the underlying principle of the
market economy and political democracy. In Russia they have strong competition
among various oligarchic groups vying for power and access to power. In
other words, they have the rudiments of democracy there. There are none
in Ukraine. Ukraine is one big private joint stock company and its stockholders
are generally known. So what kind of competition can one expect here? All
of us off the stockholders' list cannot compete them. Thus, we cannot make
proper headway, because in this country the final choice is not made considering
all of the competitors, but just that selected company list, and in 90
cases out of 100 this choice does not reflect the interests of most members
of this society. And so Russia remains ahead of Ukraine; even if a bill
is passed in Russia lacking in length and depth it will be enacted more
effectively due to competition and selection.
The Day: Is there no hope that the Ukrainian private joint
stock company will ever become open to other stockholders?
K.: Much would change if our society overcame its stagnation.
Besides, there is no way our general public can control the powers that
be.
The Day: What about the New Formation? Couldn't this and other
such organizations exercise societal control?
H.: Social control means public opinion and this is something
the regime either reckons with or not. In the latter case there is no feedback,
and without it any system is doomed. In this sense our society has sluggish
feedback at best. Decisions are made belatedly and in most cases they are
never carried out. The inference is obvious: those wielding power make
up a structure totally isolated from the rest of society.









