|
|
| | |
|
| “Komsomolska Pravda in Ukraine” |
16 March 2009 |
| Director of the Institute of Society Transformation Oleg Soskin: “This year in May the power will be swept away by labor armies” |
We talked about our economic realities in the thin capital café. Thought - because of the crisis or something people’ve become to spend less money on such places? And Oleg Igorevich was in a hurry, he hurried from one meeting to another. Also landmark moment is that in crisis the economists like hot cakes.
ECONOMIC CRISIS IN UKRAINE IS NOT CONNECTED WITH THE WORLD CRISIS
- Oleg Igorevich, where did the economic crisis come from? It came outside or we made an effort for this.
The Prime Minister says that we faced with the global crisis. This is absolutely false. Now the matter concerns not the crisis. In January 2009, we saw a collapse in industrial production by 34%, while GDP fell by 20%. In February, this trend will continue. Number of registered unemployed persons increased to one million. The banking system is on the verge of bankruptcy. These are the signs of collapse.
The crisis covered Ukraine so much because of bad financial and economic policies of the government and erroneous monetary policy of the National Bank. For example, in January 2008 the government took money to compensate deposits of Sberbank of the USSR not from the state budget but from their National Bank accounts where they were sterilized. Moreover, in December 2007 the government paid pensioners more than 11 billion hryvnia from their accounts. All this money is from emission. As a result in 2008 the level of inflation came to 25% - according to official data and 35% - by expert reviews. The same policy of social populism lasted during 2008.
The money-market was filled but businesses weren’t supported, so physical filling of GDP didn’t happen. By the end of 2008 cash mass of hryvnia increased by 40% in comparison with 2007 and cashless - by 30%. For the first time we went to the negative balance of payments last year. Balance of payments shows how much the country produces and consumes collectively. Turned out that we consume more than we produce, it means Ukraine is the country which lives on credit. We have become a carnival nation.
- Is it possible the President and the Government have not seen that?
The incompetence and greed of the country‘s leadership played a large role. Look who is at the helm, there are four groups: Donetsk, Yushchenko and Tymoshenko family groups and group of Kuchma - Pinchuk – Litvin. They are naturally not able to provide the property-sheet mode of economy.
This year the corporate sector should return the debts of 38 billion dollars and it has no money. Also Ukraine has 15 billion dollars of external debt and this is not counting the IMF loan, its first tranche amounted to 4.5 billion dollars. Altogether our state must serve nearly 20 billion debt and the country’s budget is empty.
The banking system has demonstrated its unwillingness to the crisis too. As a matter of fact the representatives of this sector behave themselves as money-lenders who lured people by offering loans in U.S. dollars.
The fault of the National Bank is that it admitted false hryvnia revaluation in summer 2008 and debased the dollar coinage. Indeed there were a lot of the dollar and the euro in the system at that instant but this money was attracted from the foreign markets and it was borrowed abroad by our corporations and banks. Consequently the economy was inflated by the money which didn’t have a real physical component. Once it was away, the bubble burst and we’ve got the collapse of the economy. Besides, the government will be unable to meet its pension and social payment engagements in April, also a huge deficit of the foreign trade balance had an influence (for the year 2008 it reached 13.5 billion U.S. dollars).
- So the default inside the country is taking place now, isn’t it?
We have its evidence but it hasn’t come out into the open yet. Ukraine’s rating was lowered to negative. Therefore, we won’t have GDP growth at all and it means there will be no money for filling the profitable part of the state budget.
EVERYBODY IS CORRUPTED, THIS SERPENT TANGLE MUST BE BURNT DOWN BY NAPALM.
- Some say that the crisis will lead to the purification…
It’s possible in the developed countries but not in Ukraine. Not cleanse of the capital is taking place now but its degradation. We are losing enterprises that were powerful economic tool in other words they formed and developed capital: constant and variable. Constant capital is basic funds and variable capital - labor force. People are fired from enterprises and variable capital has become to deteriorate. People who lost their job now are losing their skills. Companies have stopped, the basic funds are destroyed and so constant capital is degrading.
So, last year the current crisis short cycles that pulled down economy were launched: the money issue, the unreasonable issuance of credits, the government budget deficit, unbalanced export-import policy, unfounded massive external borrowings. They could be eliminated easily. But now strategic long cycles of fall have turned on: enterprises stop, trading networks are falling, the basic proportions of extended reproduction process are destroyed, the banking system splits and it’s very difficult to stop all these.
- But is it still possible?
It’s possible on conditions of carrying out radical economic and political transformations.
- And radical transformations mean unpopular?
Of course, unpopular, especially for the clan groups and the oligarchy as a whole. It is necessary to eliminate state budget deficit. It’s necessary to reduce needs of the unproductive, parasitic structures and they allocate only on the police 11.2 billion hryvnia for 2009.
In summer 2009 we need to hold elections to the Verkhovna Rada by open lists for separate electoral districts. Now each new population of deputies elected by the closed lists would be worse than the previous one. If you currently hold an election as usual, then place in the passage of the list would cost 20-30 million dollars, which means that mafia regime will be finally formed in Ukraine.
Does somebody from the elected representatives say that banks deceive investors and rob them? No, does not, because everybody is corrupted, from deputies to the courts - this serpent tangle must be burnt down by napalm.
- And who will get down to this business?
May be the President will, he has such authorities and the right of legislative.
- Does he want?
Otherwise he’ll die. Now Yushchenko is rejected by society, his rating fall from 80 to 1% for last 4 years. He behaves himself absurdly and defends the interests of his clan. Thus, he does not want to dismiss Stelmakh and cleanse the central bank from corruption, reasoning from his family interests.
IS THE REVOLUTION NOT PREVENTED?
- If Yushchenko has such rating, it means he won’t be the President. Will a new head of the NBU appear after the elections?
But will the elections take place? Will a new president appear? There is much time before January, and the crisis hasn’t started yet. Yushchenko thinks he can bring in the state of emergency but he has forgotten what happened with Kuchma in 2003-2005. Tymoshenko and Yanukovych consider that they are leaders of the society vainly, their ratings are falling and they won’t exceed 10% by June. And soon entirely different charismatic leaders that are proposed by the working masses will appear.
- Such as Lech Walesa?
Yes. The state should establish equal rules of game for everybody. But today you can not take your deposit from the bank, those who take credit have to pay it off at the higher rate and the President, the National Bank and the Government refuses to solve problems of ordinary citizens.
An open war between the state machine and the clans on the one hand and civil society - on the other has already started. For the present it manifests itself in demonstrations and strikes. But when the heads of major industrial establishments will join new trade unions, new leaders and labor armies will appear, they will move to the capital in May.
- What are variants of development?
Socio-economic and financial situation will deteriorate. In May and June entertainment, tourism and hotel businesses will fall. As the banks began to seize cars that are pledged, the car market collapse will occur and 13-percent import duty for goods promotes to this. Moreover, the trading networks will begin to collapse in April. The housing market will crash twice more: the square metre in capital hruschevka should cost not more than $ 500.
- I have a feeling that this is a horror movie script ...
But if you have any arguments – object me! I’ve spoken recently with one of the top managers of the large bank regarding the repayment of my deposit and heard stream of invectives. People are treated like rubbish. But the bank managers don’t understand that people are able and ready to fight, not with banks but with their owners and top managers, in a literal sense.
- Should we wait for the revolution?
Yes, we should. The similar situation was in Albania in 1997-1998. Banking system and trusts crashed there, the power transferred to the committees of national salvation, the weapon depots were captured and the country‘s chaos began. NATO forces were necessary to bring Albania back to normal for the year. But there is the population little more than 4 million, and we have 46 million!
Interview to “Komsomolska Pravda in Ukraine”, 16.03.09 |
| |
 [version for printing] |
|
|
| | |
|
|
