Dalibor Rohac at the Cato Institute suggest the Ukraine should focus on getting its economy back on track:
….to really understand where Ukraine is headed, it’s important to understand the roots of the unrest that led to the ousting of President Viktor Yanukovych.
First, the country’s oligarchic elite, which ruled the country for the past two decades, cared little about the prosperity of ordinary Ukrainians. The evidence is not just in the tacky mansions of President Yanukovych and his men, but also in the fact that the average income in Ukraine is roughly one third of that in Poland even though both countries started from around the same point in 1990.
Second, the change of government in Ukraine follows a miscalculation on the part of the Kremlin, which long considered Ukraine as its client state, dependent on imports of natural gas from Russia. Ukrainians simply lost patience after their government effectively followed instructions from Moscow and canceled the broadly popular association agreement with the EU. Now that the plan to bully Ukrainians into submission has backfired, Russian President Vladimir Putin is likely to leverage the situation to push claims to parts of Russian-speaking Eastern Ukraine — most prominently Crimea and the port of Sevastopol.
Regardless of whether such territorial concessions become a reality, with an interim cabinet in place and a new presidential election scheduled for late May, it is time for Ukraine to reckon with the massive governance failure of the past twenty years.
The best response to Putin’s land grab would be to turn Ukraine into an economic success story and example to its large neighbor to the East.
Read more at How Ukraine Can Move Forward | Cato Institute.
Nice little story. Like a fairy tale that ends with “all ye who join EU shall live happily ever after”. The economic ghosts of Greece and Cyprus shudder. Several EU-/US-inspired events preceded the current crisis in Ukraine. A self-respecting analyst would have at least given them a honorable mention.
Let us take a look at the Poland vs. Ukraine economic comparison in this tale. While Poland ranks higher on real GDP growth, the difference is nothing to crow about: 1.3% to Ukraine’s 0.4% in 2013. In fact, just two years earlier in 2011, Ukraine had a higher real GDP growth of 5.2% to Poland’s 4.5%. Furthermore, Poland has higher unemployment, higher fiscal deficit, higher public debt, lower private consumption growth, lower exports and weaker infrastructure than Ukraine. Ukraine’s overall economic performance might not match Poland’s but the devil clearly lies in the details. These inconvenient details are not from the Russian Center for Strategic and International Studies. Alas, they are from the horse’s mouth: https://www.imf.org/external/pubs/ft/reo/2013/eur/eng/pdf/ereo1013.pdf.
I prefer Page 39 (GDP Per Capita in PPP Terms):
Indeed. But per capita income is a simplistic average that does not tell the story of income equality and human well-being, Poland actually fared worse than Ukraine on equality: Gini index ranking of 34.1 against Ukraine’s 28.2 in 2009. Ukraine was also ahead of several affluent European countries, such as Belgium, Germany, Spain, Switzerland and UK! Poland’s human development ranking was higher, but not spectacularly so: HDI score of 0.821 against Ukraine’s 0.74 in 2012. (https://en.wikipedia.org/wiki/List_of_countries_by_income_equality)
The fact of the matter is the average Ukrainian citizen is not all that worse off, economically or socially, for not having joined the EU. This is a spurious argument serving the Western geopolitical agenda, the end-goal of which is Russia’s natural resources. Ukraine is a pawn in the Great Game. The proposed IMF austerity measures in return for Western bailout, including a 50% reduction in pensions, imply pain rather than joy for Ukrainians in the medium term. Worth it in the long term? As Keynes famously quipped, in the long run we are all dead. (https://en.wikipedia.org/wiki/List_of_countries_by_Human_Development_Index#Complete_list_of_countries)
Maybe the best measure is the World Bank’s Happiness Index: Poland 51, Ukraine 87.
I’m not a fan of austerity, but one cannot ignore the long run. Keynes might be dead, but we have inherited the results of his failures.
Happiness is one of several alternating human emotions. All emotions are fleeting. A state of permanent happiness will make us grinning idiots. Neither possible, nor desirable. A happiness index is a foolish measure of people’s well-being. As ridiculous as a sadness index, anger index, jealousy index and so forth.
Happiness is a catchy name, but the index actually measures less fleeting emotions like stress or contentment.
You make a good argument though for not being able to measure something that is self-evident to the human eye: the difference in well-being of the average person living in Switzerland or Scandinavia and that of someone living in Rwanda — or China, India, Russia for that matter.
Interesting that the biggest difference between Denmark/Switzerland and the USA is in perceptions of corruption.