Deliberate strategy and pragmatic tactics rather than confusion and chaos – this is the right path for Ukraine to not merely survive but to become prosperous despite huge shifts in the global politics and economics. This was a resulting conclusion of the round table with a world famous economist Prof. Erik Reinert “The End of Self-Regulating Markets or New Globalization? How Can Ukraine Become Prosperous” held jointly by the Parliamentary Committee on Industrial Policy and Entrepreneurship and the Ukrainian Association for the Club of Rome.
“Each country has its own “profession” – prevailing specialization. Today Ukraine earns its living by raw materials export, cash remittances by emigrant Ukrainians, IMF loans and other foreign credits. Therefore, Ukraine specializes in poverty. So it should fundamentally change its “profession”! And become a manufacturer, innovator and entrepreneur!
Obviously, we went wrong way – so we should embrace new concepts and search for new decisions. Ukraine’s GDP per capita is 21% of what the EU has, 14% of what the USA has and nly 12% of what Norway has. The Economist forecasts that Ukraine’s GDP will be growing by avg. 1% annually till 2050 and the population of Ukraine will decrease to 32 mln people by 2050. World Bank foresees the same level of depopulation for Ukraine. It means that international analysts expect Ukraine to be on the outskirts of the world economic map. And we are not satisfied with such a scenario”, – President of the Ukrainian Association for the Club of Rome, MP (Radical Party faction), Chair of the Parliamentary Committee on Industrial Policy and Entrepreneurship Viktor Halasiuk said.
Among other high-ranking guests who participated in the parliamentary round table there were Vice-President of the Ukrainian Association for the Club of Rome, associate member of the Club of Rome, Deputy Chair of the Parliamentary Committee on Foreign Affairs Viktor Vovk and Chair of the Council of the Ukrainian Association for the Club of Rome Anatoliy Maksyuta.
This idea was also reinforced by prof. Erik S. Reinert, the author of the bestselling book “How rich countries got rich…and why poor countries stay poor” which, according to the World Economics Association ranking, is among top 50 most important economic books for the last 100 years. He believes that even a weak industry is better than none at all because deindustrialization causes outflow of the population abroad.
Moreover, the world famous Norwegian economist marked out that free trade was fair and mutually beneficial only for the countries which demonstrated equal technological development. Otherwise, rich countries get richer and poor countries get pooper: “Free trade can be effective provided it is symmetrical, that is the partner countries are at the same level of economic development. Tiny export quotas to the EU will not drive your economy up. Actually, you will never manage to get rich through export of agricultural products to the EU”.
Prof. Erik S. Reinert informed that Germany’s trade surplus was 8.9% of DP, and it was even higher than China’s one in absolute numbers. While
Ukraine’s trade deficit was 3.6% of GDP: “Ukraine and most of its neighboring countries got caught in the trap of “debt slavery”. How can you get out of it? You should help the national industry to increase exports of high-tech products with high added value instead of raw materials export; and you should also devaluate the national currency, even though it might be painful”, – professor advised, having pointed out that it was highly important to create special conditions to boost industrial development, e.g. to establish tax incentives for manufacturers and to facilitate national export.