KIEV: Economic reform is central for today’s Ukraine. The capacity of the Ukrainian nation—leadership and population together—to deliver a modern and efficient economy, if achieved, would constitute the winning asset in the West’s current struggle with Russia in Eastern Europe. Success on the economy would represent the most convincing argument Ukraine could offer to all those who doubt the country’s ability to stand as a modern and efficient state. Producing tangible economic results is the best way to dispel these doubts.
The economic challenge is one of the most pressing as Ukraine strives to stabilize its internal and external accounts, relaunch its productivity growth, and engage in the long-term process of modernizing its manufacturing sector. Yet, far from being a lost cause, economic reform in Ukraine is one of the domains of government policy in which some optimism can be nurtured. Indeed, in spite of current ups and downs, achieving a prosperous economy in a reasonable time span remains a realistic prospect for Ukraine.
Progress is on its way with some first positive results in Ukraine’s macroeconomic stabilization program. But modernization of the economy is lagging behind. Renewed efforts are necessary to ensure the implementation of newly adopted laws, and the country must consider its priorities and strategic goals with a special emphasis on building up substantial state capacity. In addition, a focused plan aimed at achieving some quick wins is essential both to convince the population to throw its support behind the government and to progressively remove the obstacles that inhibit a business-friendly atmosphere.
To fulfill such objectives, Ukraine should use its new sense of national identity and concentrate its energy on building up a solid economy rather than looking back at the country’s confrontation with Russia. Ukraine’s international partners, especially the EU, should not wobble in their support of Kyiv’s economic reform, which is the area where they can deliver the most tangible and direct assistance. Achieving this reform will have implications far beyond the Ukrainian domestic scene: by helping Ukraine at last secure a recognized and stabilized status in Europe, it will make a substantial contribution to the future stability of the whole continent.
