When the leaders of the world powers sonorously call Ukraine a strategic partner it is nothing more than obedience to diplomatic protocol. They simply do not need an economically powerful Ukraine: nobody is interested in having another competitor.
Representatives of various international and national financial organizations, analysts of all kinds, and politicians promising loan money keep coming to Ukraine. Now many people are aware of the real cost of such dubious aid, although the country’s top officials try to preserve an appearance of solidity for our relationship with Western partners.
The relationship between business structures, especially when the negotiations are held abroad, is on another plane. The author had a chance to experience it while visiting Israel.
A sales manager of a Jerusalem firm, small by our standards, producing scientifically complicated products talked me into giving up the idea of cooperation. He justified such a stance with his assumption that such expensive products would not sell in Ukraine as successfully as in South America, Europe, and Southeast Asia. The fact that the Ukrainian budget level can be compared with the whole stock of one, albeit the largest, Israel bank, Leumi, was listed among the reasons.
During another unofficial meeting a prominent Israeli chemist irritated by my speculations about freedom of trade spoke out openly: “You are wrong to think we need your money. The negotiations with Ukrainian entrepreneurs usually end with no commitments and will not lead to a signed agreement anyway. Still, we spend tens of thousands dollars for them and simultaneously negotiate with richer Russia, Poland, the Czech Republic, other post-socialist countries, and the USA, Germany, and Japan. The artificially created competitiveness will help us sell our expensive products to a buyer able to pay more. Thus, the benefits from a good bargain will make up the money wasted for the negotiations with you. People are rare in Ukraine who can afford to pay $10,000 for one ampoule of medicine, while in the USA there are thousands.
Unfortunately, the Israeli chemist is largely right. The average salary in Ukraine is twenty times less than that in Israel and forty times than in the USA. The social and economic problems in these different countries are simply incomparable. As for Israel, 1.2% GDP growth in the first half of 1998 is simply a disaster that has led to freezing wages and a rise in unemployment. Meanwhile, for Ukraine 0.5-0.7% growth would be considered as an indicator of economic recovery. At the same time, most economists, taking the inaccuracy factor into account, are highly critical of this figure.
Former Soviet scientists and engineers who for the last ten years have established a powerful infrastructure of designing, implementing, and producing scientifically complicated products think that Ukrainian industry still remains quite competitive in terms of its enterprises’ manufacturing potential and engineering staff quality. However, the country cannot manage to make use of it: inventors do not feel they are the owners of intellectual property; they are unable to receive the compensation they have earned.
The notions of private, corporate, and social interests are intertwined in Ukraine. Foreigners are amazed that the enterprises which become joint-stock companies work even worse than they did, while such a move, as Israelis think, is a step forward to the further development of an enterprise and enhancing its profitability. They just cannot understand the property redistribution process carried out by means of destroying production on the basis of the current casuistic Ukrainian law with the authorities’ connivance.
I would like to hope that the time will come, and Ukraine will at last awaken from lethargic slumber and adopt the world’s best achievements in social development. And then it will not be viewed by foreigners as something unfathomable and exotic.
By the end of my visit to Israel Yuri Stern, a Knesset member from the Israel Ba Alya Party told me openly and rather coarsely: “It is not true that Ukraine is unable to solve its major economic problems unless being helped by the West. It only has to want very strongly to do so.” One can hardly disagree with such a statement of the Ph.D. in Economics.






