UKRAINE AND ITS FINANCIAL PROSPERITY
Wojciech Dudkiewicz
Petro Poroszenko, the president of Ukraine, in the beginning of February this year, could feel a victory: the parliament accepted a bill draft of changes in the constitution which are to provide immutability of pro-European and pro-NATO way of Ukraine. It sounded like enchantment of reality, an amendment to the constitution is not enough to join the NATO and the EU. However, according to the president, the act mobilizes everyone for further changes in the country.
By a hair’s breadth
The victory was not certain – Poroszenko won by a hair’s breadth, and the defeat might make it difficult to access the NATO or the EU and tarnish his weak authority, a short time before the presidential election which Ukraine is experiencing now. There is no doubt that establishing the orthodox church of Ukraine, independent from Moscow, to which Poroszenko contributed, was not accidental on the day before the presidential campaign. Presidential election in March and the parliamentary one in autumn may decide about the pace and range of Ukrainian reforms if not about their fate.
It was sure that for election reasons Poroszenko signed a decree last year, concerning dismissing representatives of the country from all cells of the Community of Independent Countries (why so late – it is not known), and recently it has been publicized that the process of Kiev leaving the organs of this organization had ended.
COST OF FREEDOM
When the so-called revolution of dignity ended, nobody thought what course of events would be like. Supporters of reforms and relations with the EU were looking at the future optimistically, after the massacre on Majdan nothing could be better. Unfortunately – an open conflict taking place in the east of Ukraine for five years, annexation of Crimea, caused one of the most serious social crisis in the country. The cost of freedom and normality, which are not forever, was high. A few dozen thousand people were killed and nearly 30 thousand were wounded. The country lost 7 per cent of its territory. As a result of the fights, over 40 thousand residential buildings were destroyed, a hopeless economic situation and criminalization of areas under the control of separatists forced – officially – 2 million people to escape. Ukraine is facing up the biggest humanitarian crisis in its history. A lot is going to be said in both election campaigns.
They will not feel it
Similarly as about high prices and poverty. The material situation is showed by the Gross National Product of Ukraine which was 112 milliard dollars in 2017 (there are no data from 2018 for now). It is not known when Ukraine will reach the level of the National Gross Product from 2013 – over 183 milliard dollars.
According to official data, in December 2013, the average national salary was 3.6 thousand hryvnia (equivalent to 1450 zlotys). In last December this amount was 9 thousand hryvien (the equivalent to 1.2 thousand zlotys). The cost of water and electricity in Kiev increased by 5 times in the years 20133 – 17, gas – by seven times, central heating of flats – by eleven times.
The richest will not feel it. In 2017 the total amount of the assets of three richest Ukrainians exceeded 6 per cent of the National Gross Product; nearly twice times more than in Russia, three times more than in Poland, four times more than in the USA. It is difficult to carry out reforms when there are so powerful influential groups as in Ukraine.
On Majdan
When in November 2013 the president of Ukraine Wiktor Janukowicz resigned from signing an association contract with the EU, saying that profits from it would be lower than the losses caused by the loss of the Russian market, a few months later was defeated.
The association contract of Ukraine with the EU led to an agreement about free trade which had been pursued in the beginning of 2016. It turns out that trade between the EU and Ukraine is on the similar level today like in 2012 when it was over 30 milliard dollars. In the years 2016 – 18 the EU had a few milliard surplus in trade. The EU countries benefited form it, but Ukraine did not.
The most important effects of following the association contract by Kiev are open borders and the growing labour emigration. It is reflected in economy.
Searching for work
Poroszenko did not praise with his achievement of his governing in this campaign: from June 2017, when the EU opened borders, it was visited by 2 million Ukrainians without visas. Why did they visit it? For many the journey means emigration in search for work.
Officially speaking, in the four recent years the Ukrainians employed in Poland transferred to their homeland much more: from the equivalent amount of 1.4 milliard to 3.6 milliard dollars. In total, last year the Ukrainian economy was empowered with the amount o fabout 11.6 milliard dollars in this way, and the prognosis for 2019 says about 12.2 milliard dollars.
Money transfers is an important part of income in Ukraine. According to the World Bank, they have been higher than the National Gross Product by 10 percent for the three years. They are saving the exchange rate of hryvna and the balance of payments of Ukraine.
Translated by Aneta Amrozik
Niedziela 8/2019 (24 II 2019)