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Ukraine's Ministry of Economic Development and Trade has recently proposed new basic principles of economic reform, which are entitled "The Path to Prosperity." The ministry, which was a major contributor to the strategy, once again stresses the need for important structural reforms. However, President of the Ukrainian League of Industrialists and Entrepreneurs Anatoliy Kinakh says that the document lacks details and consistency. What is more, it neither offers efficient mechanisms for implementing reforms nor considers the factor of time, which does not allow for any delay.
Nowadays, the economy needs clearly articulated programs, which would take into consideration the depth of the social and economic crisis in the country. It is well known that economic downturn in the first quarter of 2015 alone was 17.6%. Industrial production showed a 21.2% decline in the first five months. In particular, industrial production in machine-engineering was 24.5% and transport engineering saw a 91% contraction. It is obvious that standard measures and calls for prosperity will not do in this situation.
"Priorities should be correlated to risks," Kinakh said.
"The government's new program does not mention the need to prevent de-industrialization, though the economy sees the manifestation of it. There are no clearly defined, systematic industry-oriented approaches towards adaptation to EU standards, to the introduction of technical regulations, standards, modernization and more. It doesn't offer any concrete steps for the development of the domestic market and an increase in its solvency. It also lacks import substitution programs and production localization. No prospects are seen for the development of small- and medium-sized businesses, which is important amid growing unemployment, the contraction of the middle class, and the impoverishment of the population. It doesn't suggest any mechanism to make loans available to producers," Kinakh said.
According to Kinakh, the program lacks clear priorities for export policy, as well as programs for export diversification. No steps are foreseen in the social sphere to reduce the reduced solvency of households, which has caused the crisis to last for longer.
The Ukrainian League of Industrialists and Entrepreneurs stresses that such documents and programs need to be developed with engagement of the business community and experts. Only then they will be effective, realistic and encouraging. Unfortunately, this is not the case at this time.