Marshall Plan for Ukraine’s economy

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In the beginning of April Kiev will be hosted the International Investor`s Forum. $15 billion is planned to gather in order to save Ukraine from bankruptcy.
And this is does not include IMF support and other international donor and programs, which promising Ukraine to collect more than $40 billion within the next 4 years.
Experts say money itself could not solve Ukraine’s finance crisis. Ukraine desperately needs reforms – this is the way to attract investors.
Do you have a plan?
So called, ”Marshal Plan” developed by U.S. and successfully used in Europe after the World War II. U.S. Economy Project launched in 1948. It worth mention, the plan effectiveness was 100%. The best effect was reached in Western Germany – close to 1950, Germans resolved all post-war problems.
However, ”Marshal Plan” is not just a financial support. Yes, U.S. economy has granted to Europe $13 billion that is equal now to around $116. Though, much more significant was the political and management aid of U.S. specialists. The Objective was not just to restore shuttered economy, but to develop an American type of capitalism with prospective. Of course, Americans did help not for free! These investments (Marshal Plan didn’t expects money back guarantee) have killed 2 birds with one stone. First, for balancing, U.S. build up the powerful opponent – as Western Europe actually was. Later on, NATO was was established and later on the European Union. Last, but not the leasr, we have subjugate the economics of Europe. They are making investments in European Economy – buying cheap manufactures, and at the same time we have increased significantly export goods to West Europe. There was and a third target.
“Corporate US Elite looked at the Europe like on a big and not touched yet a export market for American products and with unlimited potential for investment – said independent expert of economics, V. Starinets). – To 1963 American companies controlled over 40% of French fuel market, 65% of film tapes photo printing market, 65% of telecommunication equipment and agricultural machinery markets, 45% of synthetic rubber. As the issue, “Marshal Plan” let US government to resolve its main post-war problem: not let Americans to feel economical misbalance within the country. It`s possible to achieve when all excess of production exporting to other countries. And the Market of Western Europe was as a target”.
Is that story looks similar with present situation in Eastern Europe? No! As experts thinking, a recovery program for Ukrainian Economy, if the one exists, properly should be called, not Marshal Plan, but the Dawes plan: “We will assist you how is better pay the checks back, and nothing else…”.
1. Government debt and GDP
As an example, we can take EU aid for countries of Euro zone, such as: Greece and Ireland. EU, during 2010 – 2014 in Greece economy was invested $293 millions, in Ireland, in 2010 – 2013 – $89 millions. Those money should be returned with a fee, and to get those money, the recipient country have to conduct a range of economic reforms within the country. Ireland escaped from those schemes pretty fast, at 2013 declaring, they don`t need any help from abroad. And Greece now trying to act at the same manner. Greeks are not happy with “tighten your belts” programs. As the result, in Greece now ruling ultra-left party. Greece`s government debt at the end of 2013 was 176% from annual GDP (gross domestic product) for the whole country. It`s about $363 bln.
For comparison we`ll take Ukrainian government debt, which is 68% from annual GDP, it`s about $68 bln, and it`s also too much. IMF`s, EBRD`s and WB`s financial aid can makes your entire debt up to 90-100% to the end of this year.
”It is tremendous value. That sort of things can afford just a few. US emission centers could handle it, where government debt equal 110% of annual US GDP and Japan with its 220% of annual GDP,- said Oleg Ustenko, executive of International Blazer`s Foundation. – During 2014 government debt of Ukraine grew up to 23% in compare to annual GDP (from 45 to 68%). Government debt of 60% to annual GDP considers as a norm, but when it exceeds – it`s a problem. Furthermore, even if the average rate to this debt is 10% per year, then, from 2016 Ukraine would have to pay about 1% commissions out of its annual GDP”.
Ukrainian Anchor
What Ukraine should do now? Would Ukrainians go into the debts or be compliant to Marshal Plan to submit its Economy closer to the European standards? Or should they go any special way? Ukraine now forced to operate with all available means to find the way out of its severe crisis.
“I think Marshal Plan is not fit to Ukraine, `cos USA not pursuing to increase its own sales out there. Ukraine soon would be losing the feasibility to service inner government debts, – convinced V. Starinets. – If we wanted to enter the foreign markets, we should pay more than 15% per year – what we can`t afford now”.
Expert thinks, that more appropriate for Ukraine would be follow by its own logical way: raising productivity, reducing unnecessary officials, withdrawing the economy from the shadow, offshore, providing absolutely transparency of judicial decisions and public procurements, setting the funded pension system mechanisms, raising tariffs while protecting the most vulnerable.
“Until we are not reduce up to 25% of our budget (unnecessary officials, incomplete schools, hospitals), stop printing the money and save inefficient banks due to the emission – Marshal Plan won`t save us, – emphasized V. Starinets. – Yet, reform implementation means belt-tightening for the public. Therefore, Ukraine must negotiate its debt relief program with the EU, as Greece, Poland and Germany have done”.
In European Union said, that there would be no “Donor Conference” in Ukraine. That meeting planned since September last year. In April in Kiev can be possible only International Investor`s Conference.
“The name “Donor Conference” need to forget – now we just talk about investments for Ukraine”, – said European Commissioner for Enlargement and Neighborhood Policy, Johannes Hahn. How can we talk about investments if the country is in actual war? First of all, EU hopes that Minsk agreements will be carried out and the conflict in the East of Ukraine gradually to be resolved. In its turn, Ukrainian government has offered an alternative for investors.
“A certain recovery plan for Donbass was supported by Brussel, – said A.Yatsenuk, Prime-Minister of Ukraine. – As for investments, the Western partners are ready to consider the security of Ukrainian exports and investments”. It`s going to be a real step to insure investors not be afraid to invest in our country”. Prime Minister said, Ukraine have to focus onto development of the agricultural sector, as well as the reducing of energy consumption, increasing production and the construction of a new grids and generated power.
“Before we should talk about such a large-scale program for Ukraine, first, we have to present business plan, shows our movements and some ideas to implement possible investments, – said Director of the Institute for Socio-Political Engineering “Dialogue”, Andrey Miseluk. – Western donors and investors must clearly understand how their aid would be used in future. They must be sure, the allocated funds won`t be stolen, therefore they need to have some levers to control this process and to make necessary adjustments. But Ukraine still can`t create such a transparent environment. And West feels tiredness of Ukraine – they are still don`t see any real steps for changes from within Ukraine”.
Our inactivity – this is a main anchor that pulls Ukraine not towards to the EU, but to the collapse of the economy.
Original article in russian language is available on www.aif.ua
EMPR, Dutcho contributed to this publication.

 

  • Stanislav Chekalin

    ЧТОБЫ НОВЫЙ “ПЛАН МАРШАЛА” ПОМОГ УКРАИНЕ,КАК ПОМОГ ГЕРМАНИИ – НАДО,ЧТОБЫ УКРАИНЦЫ НАУЧИЛИСЬ РАБОТАТЬ КАК НЕМЦЫ.

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