The economic reforms in Ukraine
consumer market – споживчий ринок
due to – завдяки
fuel supply – постачання топлива
to account for – складати, відповідати
severance – руйнування, розрив
disruptive – руйнівний
to tackle problems – займатися проблемами, вирішувати проблеми
transition – перехід
expenditure – витрати
a coherent programme – узгоджена (послідовна) програма
hard-currency – тверда валюта
energy consumption – енергоспоживання
to implement – здійснювати, забезпечувати виконання
beneficiary – особа, що одержує прибутки; бенефіціарій
nuclear safety – ядерна безпека
framework –структура, побудова
conducive – сприятливий, корисний
energy efficiency – енергетична продуктивність
payment arrears – заборгованість по оплаті
equity finance – акціонерний капітал
joint stock company – акціонерна компанія
to resume loans – відновлювати, продовжувати надання позик
Having recently gained its independence Ukraine is a country comparable in geographical size and population to Italy and France. The country possesses numerous competitive strengths, namely a strategic geographical position and mild climate, rich natural resources, sizable consumer market, highly-educated labour force, well-developed transport infrastructure, significant achievements in natural sciences and military-related research, and a sophisticated research and development infrastructure.
However, the Ukrainian economy is currently in a critical position. This is due to the fact that the economy of Ukraine was previously quite isolated, not oriented towards satisfying the national interests of the country. The pricing policy was basically inappropriate because the prices for raw materials and fuel supply were very low and were not stimulating their rational use and the introduction of high technology to industry. Prior to independence, inter-republic trade accounted for more than 80 per cent of total “imports” and “exports”. Needless to say, the severance of the inter-republic links had a particularly disruptive effect on Ukrainian enterprises and on the national economy as a whole.
That Ukrainian economy needs reforming as well as external assistance in tackling its problems for the period of transition towards a market economy is obvious. The main lines of reform now need to be introduced. Some of the main requirements are:
to pursue a macroeconomic policy which will balance government
income against expenditure;
to close down inefficient factories and to invest in new industries,
especially export-oriented;
to introduce a coherent programme of privatisation;
to stimulate exports, especially hard-currency producing;
to curb imports so far as possible and to develop import substitution
industries;
to reduce further total energy consumption;
gradually to introduce free market mechanisms, which will eliminate
the need for price and wage control;
to attract Western investments without sacrificing traditional interests
and links with Russia and the CIS;
to educate and train a new generation of managers who have the
ability to implement coherent market reforms at all levels.
Nowadays some European Community member states along with the European Bank for Reconstruction and Development (EBRD) seek to encourage the transition process in Ukraine.
The Tacis Programme of the European Union provides grant finance for know-how to support the process of transformation to market economies and democratic societies in the New Independent States and Mongolia. Tacis activities are focused on four key areas:
Institutional Reform and Development.
Support for Economic Reforms and Private Sector Development.
Energy and Environment.
Nuclear Safety.
In Ukraine the EBRD, for instance, seeks to increase the availability of much needed equity finance for the local private sector by investing in various venture capital funds in the region. For example, the Bank took an equity subscription of ECU 2.9 mln in the Ukrainian Venture Capital Fund.
The Bank has also been involved in the Ukrainian privatisation process, working with the Ukrainian State Property Fund and the Ukrrichflot Joint Stock Shipping Company as a financial advisor for its privatisation.
The EBRD has lowered its growth forecast for Ukraine's GDP in 2003 from 4.5% to 4%. Moreover, the bank says that there are risks connected with implementation of Ukraine's 2003 national budget, considering the fact that the International Monetary Fund and the World Bank do not plan to resume loans to Ukraine soon because of the slow pace of reform in the country.
Nevertheless, the Bank believes that Ukraine should deepen economic reforms, reform its banking sector, and accelerate investment activity among enterprises in order to achieve higher growth.
There is no doubt about the importance of an independent, stable and prosperous Ukraine for the stability and prosperity of Europe as a whole.
What do you think, are the main reasons for the critical position of the present-day Ukrainian economy?
Do you agree with the following statement: “Ukraine can do without the external assistance in tackling its economic problems”? Give your reasons.
Are the European Community and the EBRD taking an active part in the international affairs of Ukraine? Is it merely a matter of friendship and goodwill? Give your piece of mind.
One of the main lines of reform is “educating and training a new generation of managers”. How much can they do for the transition to an open market-oriented economy?
What does the Tacis Programme provide and is focused on? Back up your opinion.