The breakup of the state or the transition to policy-making economy

The breakup of the state or the transition to policy-making economy

Given the fact that a new parliament was elected yesterday, the most important and urgent task faced by it is the stabilization of the economy and, above all, through the stabilization of the hryvnia exchange rate. This fundamental moment for the socio-economic and political stability of the country should be prescriptive by the decision of the Verkhovna Rada of Ukraine.

I hope that it is clear to everyone that in the event of a complete collapse of the economy there will be a new, but this time, armed revolution that will capture the capital and affect all regions of Ukraine. Such a situation can become more devastating and turn into a bloody tragedy. We have no right to admit it.

The new Verkhovna Rada, the new Cabinet and the National Bank should do everything for the steadfastness of the hryvnia, and, preferably, its return to the former course – 8-10 UAH. per dollar The depreciation of the dollar against the hryvnia will reduce prices and products, especially domestic production, and, most importantly, for food. Lowering prices will increase the purchasing power of citizens, which will a priori stimulate the production of goods of national origin. A compulsory lowering of the dollar at the expense of the directives of the country’s leadership, will reduce panic in the currency market, and will contribute to a real reduction in demand for the dollar from the population, which further stabilizes the hryvnia.

Purchase of currency for critical imports should also be made at the official exchange rate set by the National Bank of Ukraine (UAH 8-10 per dollar). Due to this, there will be no increase in the price of imported energy and medicines (which have no analogues in the country), in parallel, the cost of production of all domestic producers (due to lower energy prices) will decrease. Reducing the cost of our goods will also increase the solvent purchasing power of the country’s population. The fall in energy prices, by bringing them to critical imports, will lower the cost of goods and increase the competitiveness of our production both in the domestic and foreign markets, that is, will actively stimulate the domestic economy.

To combat the shadow turnover of the dollar and the cessation of profits of currency speculators that cause enormous damage to the state budget, it is necessary to introduce systematic currency auctions for noncritical imports, where the exchange rate does not need to be restrained artificially, but make it absolutely free. The first auctions to conduct a proposal to sell small amounts of currency, which will facilitate the gradual satisfaction of the exuberant demand for the dollar. Constant holding of currency auctions will also lead to a natural drop in the dollar and the euro.

Such a system of policy-making state regulation of the currency market will steadily reduce the volume of non-critical imports, which will have a positive impact on the foreign trade balance of Ukraine, and will not worsen the living standards of poor people and the middle class of the country. At the same time, these measures will fundamentally protect the domestic producer and promote its development. At the same time, those imported goods, the import of which will be significantly reduced, as a result of the measures taken, will be replaced by goods revived national producer. Lower prices for domestic products that will replace similar imports will indirectly increase the purchasing power of the population and will stimulate the purchase of national producer goods. This will further activate the business inside Ukraine and increase the revenues of the state budget.

Here is one of the most important mechanisms of direct policy state regulation of the economy, in the critical socio-economic situation in the country. I want to emphasize again that the described mechanism should be applied in the country immediately, while the economy of Ukraine has not fallen into the abyss!

Public figure, Academician
and Vice-President of the Academy of Economic Sciences of Ukraine

Anatoly Peshko

“Moskali and our Salo” or as officials continue to rob Ukraine

“Moskali and our Salo” or as officials continue to rob Ukraine

The infection of the PR campaign, it seems, struck not only candidates but also state figures. Recently, the minister of economic development of Ukraine clearly showed it.

The official said that agriculture is the only industry that gives GDP growth in our country (8%). How would you like to believe that the minister is simply sincerely wrong, not deliberately and cynically distorting false information. Despite all the efforts of farmers, the agricultural sector was on the brink of bankruptcy. And, unfortunately, even an effective pace of work can not withstand politicians, swing the pendulum of inflation. As a result of a sharp jump in the dollar, all the necessary materials for agricultural production went up by more than 200%. And this is gas, electricity, gasoline, herbicides, fungicides, insecticides, fertilizers, spare parts …

At the same time, the price level for agrarian products remained at the level of last year. Many farmers are forced to sell their grain at a loss – below cost. But it worries officials. They are more worried about the stability of corruption schemes, for example, the same kickback when returning VAT to exporters.

The hopelessness of the situation adds to the inaction of the Antimonopoly Committee and all law enforcement agencies. It seems that in collusion with the trader-exporters who receive the profits, they block natural growth of prices for agricultural products. The size of the loss from such activities is difficult to assess – it’s hundreds of billions of dollars.

It is important to draw attention to one more factor – Russia. By earning political points, our state officials are not the first year to declare that Ukraine should stop “feeding the Muscovites with our lard.” However, they are silent about the fact that it is not necessary for them for a long time. The economy is built not in words, but in cases – these are numbers and results.

Having lost 80% of the Russian food market, Ukraine suffered huge losses. For comparison, in 1991 we produced 51 million tons of grain, while our neighbors are 40-50 million tons. During 23 years of independence Ukraine has maximally improved its result for 5 million tons in 2013 to 56 million tons of grain. During this time, Russia has increased its volume to 92 million tons last year, and this year it already has an increase of 104 million tons. Already these few figures clearly demonstrate how the vanity and politics of our leaders left the tramp on the spot one of the most priority sectors of the country’s economy. To date, Russia is calmly getting markets in the Middle East, South Africa, South-East Asia and China, easily displacing Ukrainian agricultural products. In this situation, the bankruptcy of the industry will come in a few months.

But while hopelessly lost time, only three radical solutions can withstand the situation. First and foremost, this is a dollar rate. It should be brought to the level of 8-9 hryvnia, especially for critical imports. To tell the truth, to date, the course threshold is irrelevant for many industries and types of business that have already died. In our country and now (given the current crisis situation in the economy), this is, in principle, a very relative value that has no relation to reality. But still working industries like agriculture, the dollar at 8-9 hryvnias will give an opportunity to stay afloat and even to grow in its economy.

Secondly, the Antimonopoly Committee and law enforcement agencies need to urgently deal with the issue of import of petroleum products to Ukraine! Who “crumbles” only 3-5 firms, who are allowed to import petroleum products to the country? Where did the more than 200 oil traders who previously supplied petroleum products to Ukraine before coming to power by current top officials? The aforementioned corruption phenomenon leads to an unjustified increase in prices for petroleum products in our country. This arbitrariness must be stopped immediately!

And thirdly, the bureaucracy with permissive documents and the deliberate dumping of prices for agricultural products should be not only foreseen, but applied to the criminal liability of employees of the Antimonopoly Committee of Ukraine and the corresponding, supervising these actions, to law enforcement officers.

Otherwise, we will remember very soon that such a famine is not in the books of history, but in real life!

Public figure, Academician
and Vice-President of the Academy of Economic Sciences of Ukraine

Anatoly Peshko

Real exchange rate, dollar including …

Real exchange rate, dollar including …

Unfortunately, we were not at that time in the wrong place. Began to lose world control and realizing the strength of its old enemy of the USSR, and then Russia, the United States decided to weaken it. Armed conflict – The ideal way, and the experience of organizing such operations, Americans do not lend. They worked perfectly, without realizing the consequences, even Europe picked up the wave. After all, here is the “struggle with the oligarchic clans”, “for democratic values”, and “for raising the consciousness of nations”.

But from somehow unnoticed, but almost a year passed. And if you compare the slogans and the real result during this time, then it becomes not at all. In our country there are military actions. Yesterday’s friends kill each other, and families divide into their own, and others. Recognizing the economic consequences of the escalation of the conflict with Russia, the Allies quietly turn aside. Europe shyly shields with penny aid and several hundreds of body armor, allowing our eastern neighbor to build gas pipelines bypassing Ukraine.

Meanwhile, under the guise of artificial propagation of the hryvnia inflation issue, a planned and skilful robbery is carried out in the country, which exceeds the appetites of the former government. The new team headed by Alexander Turchinov, Arseniy Yatsenyuk and former head of the National Bank Stepan Kubivym has nothing to deny. And about the London real estate of the former Attorney General of Ukraine Oleg Mechnitsky for tens of millions of dollars are already legends. Moreover, this tendency did not affect the presidential elections and new appointments, including the heads of the National Bank.

The complex of restrictive factors that are currently applied to Ukraine put our country in a state of bankruptcy. To date, even the most liquid enterprises of industrial and agro complexes are beginning to operate at a loss. The main reason for this is hyperinflation and the lack of an effective fight against it. Only the areas with fiscal rehabilitation can support their viability. But a month later, they can be on the verge of foul. Ordinary people began the struggle for survival and preparation for hunger and cold winter. Politicians take forces from us, exhaust our statements and push for a miracle to wait. Meanwhile, for a real alignment of the situation, only a few steps are needed.

No matter how it sounds, first of all, you need to stop the war. Do not succumb to provocations and bid favors of help. After all, none of the so-called allies will return us our children, brothers, parents and men with no money.

Second, the currency for critical imports should be bought at the National Bank at the rate of 8-10 hryvnia per dollar. Business is still working with this indicator and understands that everything else is an artificial twist. It is for such an index that we have to purchase vital goods that we do not produce. And first and foremost, these are energy carriers, military-industrial complex equipment, pharmaceuticals, spare parts for the agro-industrial complex, necessary fertilizers and plant protection products. All other areas can serve their currency needs at relevant auctions.

The actions of the authorities should be aimed at the growth of the domestic market and the real increase in the purchasing power of the population. These conditions in the very short run will allow not only to equalize the situation in the economy, but also to get to the already partially empty, through so-called sanctions, the markets of Europe and Russia. Such steps of power will increase the welfare of every citizen of the country, preserving thousands of lives of Ukrainians.

Public figure, Academician
and Vice-President of the Academy of Economic Sciences of Ukraine

Anatoly Peshko