Ultima Thule

In ancient times the northernmost region of the habitable world - hence, any distant, unknown or mysterious land.

Wednesday, January 19, 2005

Yushchenko plans for quick and major reforms

By Aussiegirl

The Washington Times has an interesting article on Yushchenko's economic plans for bringing Ukraine quickly towards eventual membership in the European Union and NATO.
The outlined plan, recommended by a blue-ribbon panel including the Carnegie Institute and other experts on the Ukrainian and western economies, rightly addresses all the weaknesses in the present system and shows that Yushchenko is serious about swiftly moving Ukraine into the western sphere and permanently away from Moscow.

I think he rightly surmises that even after his administration is over, once the shift has taken place towards the west it will be an irreversible move and one that will not let the Ukrainian ship of state be turned once more towards Moscow.

A brave man indeed. Let's hope he can get most or at least some of this accomplished quickly.

Read the full article at:

(snip) The commission urged Yushchenko to rapidly institute root-and-branch social reforms and integrate his massive country into the World Trade Organization and move closer to the European Union as soon as possible.

Throughout his campaign, the pro-Western Yushchenko made no secret of his intention to run his nation of 50 million people covering an area the size of France away from its ancient dependence on Russia to bring it into the 25-nation European Union and the U.S.-led North Atlantic Treaty Organization as fast as possible. But the commission's report for the first time spelled out in great detail a step-by-step program to internally restructure Ukraine with that goal in mind.

Among the commission's key recommendations:

-- The relationship between state and citizens must change. The state machinery must become more efficient through real control by society and law.

-- Social spending in healthcare and education must be restructured to benefit the truly needy rather than mainly the well off, as is the case now.

-- The tax system and the legal foundation of the financial system need to be overhauled to make them effectively stimulate economic growth.

-- Property rights have to be given far more effective guarantees than they currently enjoy and a far clearer line has to be established between state and private property than has been the case so far in the 13 years since Ukraine became independent following the disintegration of the Soviet Union.

-- Ukraine must be integrated into the global economy as quickly as possible, especially by rapid accession into the World Trade Organization and forging far closer ties with the European Union.
The report further urges Yushchenko to "reform the judicial system to make judges independent and impartial, and to make the court administration more efficient." Other goals are also important for success, according to the report. It recommends:

-- Enacting "a territorial administrative reform, improving the delivery of public services by devolving power and resources to regional and local bodies;"

-- Setting up "a liberal tax code that reduces the number of taxes, lowers tax rates, eliminates exemptions, and eliminates competing revenue services;"

-- Reducing "public expenditures substantially by eliminating non-essential and harmful spending (such as enterprise subsidies) and target social benefits to the truly needy;"

-- Improving "corporate legislation (and pass a modern law on joint-stock companies) by enacting rules to introduce ownership transparency and protect minority shareholders;"

-- Creating "a level playing field for economic activity by abolishing regulatory discrimination and subsidies and halting state intervention in pricing and trade;" and --

-- Making "Ukraine's 'European Choice' a reality by adopting European legal standards and forging an initial action plan with the EU that paves the way to a free trade agreement and makes future membership of the EU a real opportunity."

Ukrainian sources close to Yushchenko told UPI the president-elect has carefully studied the failures of former Russian President Boris Yeltsin's crash privatization program more than a decade ago as well his own predecessor, outgoing Ukrainian President Leonid Kuchma's failure to implement any meaningful free market economic reforms.

Since independence at the start of 1992, Ukraine has remained a basket case economy tied to Russia's energy apron strings. Its economic growth has been extremely disappointing despite its enormous agricultural potential that could rival the American Midwest and its huge heavy industrial complexes, now badly obsolescent and desperately needing huge infusions of capital, in the Don Basin or Donbass.

Yushchenko is determined to change all that. But he also wants to avoid Yeltsin's catastrophic blunders that discredited both free market economics and democracy among tens of millions of Russians.

Yeltsin failed to establish transparency and genuinely open markets. As a result, control of vast swathes of the Russian economy was rapidly seized by little more than a dozen billionaire oligarchs. The Russian people suffered a catastrophic fall in living standards during which national death rates soared and a disastrous population implosion accelerated. Under Yeltsin's chaotic rule, no effective property laws were passed, especially for the free sale of agricultural land.


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