Ukraine IV: Economics

Ukraine is usually talked about as an economic basket case, where cleptocracy and economic mismanagement and structures inherited from the Soviet Union cause continued misery. What this account overlooks is that there has been dramatic improvement during the PM-ship of both Yushchenko and Yanukovych. The turnaround was during the latter - see data below I took from here (which are inidcative of a general trend even if government statistics aren't to be trusted competely).

Yushchenko supporters think the economic upturn was because of Yushchenko's reforms and is in danger from fiscal irresponsibility and cleptocracy, Yanukovych supporters believe it was because of Yanukovych's calm hand and is in danger from Yushchenko's adopting of Western economic policies. (See the last quoted article in my previous Ukraine post, too.)

Indicator	2001	2002	2003	2004/Q1-Q3
Real GDP	-0.2%	+5.9%	+9.0%	+13.4%
Capital Investment[*]	+0.4%	+14.4%	+17.2%	+32.2%
Real Income	-8.0%	+9.9%	+9.0%	+24.7%
Inflation	-19.2%	+25.8%	+6.1%	+5.6%

[*] I note that most investment is local - that is, some oligarchs are doing something good. Regarding the oligarchs and their influence, I also note that Yushchenko made all the oligarchs richer when he pushed through a round of privatisation as PM, but now is against (most of) them - so oligarch-politician relations aren't that straightforward or permanent. (My guess is that if he succeeds, Yushchenko will curb the power of oligarchs, not out of idealism but out of fear that they will turn on him again. But foreign investors is another question.)