The Centre for Economic Development


Economic Crisis in Ukraine:
Effects and Efficiency of Anti-crisis Policies

(According to the Results of Nine Months of 2009)

Project Team Leader: . Paskhaver.
Composite authors: L. Verkhovodova, K. Ageyeva, and D. Zgortiuk.

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Big Business Relations with Government and Society.
World experience for Ukraine

O. J. Paskhaver, L. T. Verkhovodova, K. M. Ageeva.

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Privatisation and Re-privatisation in Ukraine After the Orange Revolution

The title follows the evolvement of the privatisation process in Ukraine before and after the Orange Revolution and summarises main upshots of that period. Historically, the privatisation came to be one of the important factors of economic reforms in the Ukrainian economy -- it provided the private sector with strategic positions and contributed to the emergence of market infrastructure and of big private businesses. In the same time, the privatisation led to deformations intrinsic for post-Communist countries with totalitarian regimes and incomplete market reforms. The privatisation also became a tool of public property re-distribution in favour of financial and industrial groups (FIGs) close to the old power. Oligarchic FIGs crafted a tandem with the old-time power they supported both financially and politically. The book analyse the way in which those historical moments transformed into one of the main objectives of the Orange Revolution, the one of restoring justice in the process of de-nationalisation and governmental re-privatisation policy implementation. Negative attitude towards the privatisation launched by the old regime prompted the dwindling of privatisation processes nation-wide first of all, in respect of efficient and strategic assets. The privatisation has started a functional transmutation into a source of budget revenues and a janitor of sorts destined to cleanse the public sector from petty and unattractive assets. The authors pay much attention to issues of privatisation restoration as the reformation process highlighting, specifically, the following important issues:
) a corroboration of the need for de-nationalisation process expansion onto strategic sectors and natural monopoly assets (and of the respective need for restructuring the privatisation mechanisms;
b) setting margins of the public sector within the mixed economy established in the country,
c) foreign to domestic capital ratio within the context of Ukraines transfer towards open economy policies,
d) finishing of the privatisation outcomes review process and assuring of ownership right guarantees.

The publication has been intended for scholars, civil servants, and all others having interest in the history and development perspectives of the national economy and national private capital.

O. J. Paskhaver, L. T. Verkhovodova, K. M. Ageeva.

Full version in Word (ukr. language)

Newsletter Power and Economy. November 2005 - March 2006 (in Ukrainian)

This Newsletter has been developed within the framework of the Centre for Economic Developments Project on Monitoring Economic Outcomes of the Orange Revolution.
The Centre professionals have been performing a monthly monitoring of governments actions and their impact on economy development since July 2005. Reactions of the economy are shown against the dynamics of key macroeconomic indicators (GDP, inflation rate, production volume, investment activity etc.), and from the microeconomic point of view (business environment, privatisation, review of ownership title etc.). In the same time, fluctuations in public reactions to certain government actions are also closely followed.
The first analytical newsletter Power and Economy: A Change of Milestones (October 2005) was prepared based on the results of the monitoring performed in July-October 2005. It summarised the performance of the first post-Revolution government of Yulia Tymoshenko and tracked the process of identifying new milestones for the second post-Revolution government of Yuriy Yekhanurov. The newsletter has been placed with the Centres web site at: www.c-e-d.info.
The newsletter Power and Economy: November 2005 March 2006 covers the whole period of the second post-Revolution government of Yuriy Yekhanurov at power before March 2006 Parliament elections. That was the times when emergency steps aimed at neutralising the aftermaths inherited from the first government were taken, and when the second cabinet started implemented a programme of its own. Particular attention was paid to the risks inherent to its period at power that became the key hindrances for the new power.

Project Leader Oleksandr Paskhaver. Authors: Lidiya Verkhovodova, Oleksandr Rogozinsky, Katerina Ageyeva

Newsletter POWER AND ECONOMY: A CHANGE OF MILESTONES, October 2005 (in Ukrainian)

In July 2005, the Centre for Economic Development launched its economic policies monitoring project to watch the most important actions of the new team of President V. Yuschenko that had come to power in the wake of the Orange Revolution. The monitoring process tracked the impact of the new team at power on national economy development. Reactions of the economy are shown against the dynamics of key macroeconomic indicators (GDP, inflation rate, production volume, investment activity etc.), and from the microeconomic point of view (business environment, privatisation, review of ownership title etc.)
That newsletter was prepared by the Centre specialists based on the outcomes of monitoring activities of the first post-Revolution government of Yu. Tymoshenko and the succeeding government of Yu. Yekhanurov that replaced Tymoshenkos cabinet in September 2005. The analytical review presents a retrospective view of sorts of economic policies formation and material changes to it in February October 2005.
Already after the Orange Revolution, the new power faced new considerable risks the majority of which, as efforts of the first post-Revolution government of Yu. Tymoshenko showed, it was unable to resolve. Intricacies of the transition period and the pressure of public expectations required from the government some really nifty efforts the efforts that team, so resolutely set for the total uncompromised fight against the corrupt old-time power and oligarchic capital, resulted incapable to take on. That background led to acute crisis trends to develop in the Ukrainian economy. The assessment of risks and impacts of the first government of Yu. Tymoshenko allowed the authors to evaluate the extent to which the cardinal change of milestones enshrined in Yu. Yekhanurovs Cabinet policies were adequate to realistic needs of the Ukrainian economy. There the focus was made on identifying new risks of potential danger for that government throughout the new way towards next transformation that embraced the post-Soviet countries that failed to bring to fruition the market and democratic transformations during their flee from Socialism.

Project Leader Oleksandr Paskhaver. Authors: Lidiya Verkhovodova, Katerina Ageyeva, Ganna Tsarenko


Big Private Capital Formation in Ukraine

This book is a summary observation of the process of big private capital formation in Ukraine pursued by its authors within the last three years. Using varied open sources of information, they managed to reveal key regularities and specific features of its emergence and growth. In the first section, the effect of specific historical conditions on the process of establishment of private business groups of most influence and power today is analysed. That process historically converged with the period of an in-depth transformation of the Ukrainian society characterised by: ) feebleness of statehood attributes (as the nation had then just gained independence after the breakdown of the USSR); b) a deep structural crisis that engulfed the economy; c) turtle-paced replacement of the administrative-command management system with a market one. Complex circumstances of the transformation period led to an overstatement of negative traits of Ukrainian private capital characteristically known to agglomerate with the power and to contract clan, oligarch-like qualities. Peculiar (shadow) rental income has become the key sources of capital formation. It were only economic stabilisation and further economic growth inside the country that contributed to improving conditions for national private capital development and its proactive civilisation.
The second part of the title illustrates how that process actually unfolded in the iron and steel industry, the principal domain within which the most powerful Ukrainian financial-industrial groups were formed. Big private capital formation and iron and steel sector development in Ukraine have historically become part and parcel of the common process within which they intertwine in a most natural and thorough way. The survey ends with an assessment of the impact powerful financial-industrial groups have on the nation's economic and political development. Big private capital is a vehicle of positive changes in Ukraine these days. However, potential risks and threats to its very existence come into shape in the strategic dimension. National capital has not reached yet that stage in its development when it will have interest and power enough to shape a would-be economy able to lead the country out of the sidetrack of the international community. Its existence further supports oligarchic traits in the political portrait of the society.
The book is intended for scholars, government officials, businesspersons and all those interested in the history and perspectives of development of the national economy and national private capital.

O. J. Paskhaver, L. T. Verkhovodova, L. Z. Suplin, Kyiv, Millennium, 2004.
ISBN 966-8063-48-1


An Analytical Overview of Iron and Steel Sector Development in Ukraine

The title is dedicated to the development of the iron and steel sector that has become an important basis for Ukraine's economy sustainable development. The sector is taken as an example that clearly demonstrates the country-specific mechanisms of economic crisis (which lasted for seven or eight years in a row) transformation into economic growth within the framework of limited national investment resources and also limited presence of foreign capital.
Unlike other transitional economies, exports have come to be an important growth factor in Ukraine. Iron and steel sector, one of the most export-oriented ones, has not only turned into a source of considerable currency proceedings to the central budget but also given an impetus to the revival of related industries and assisted establishment of big private capital. The history of Ukrainian iron and steel industry's entry on the world market may be truly named a phenomenon. Ukraine with its technically greatest and economically obsolete metallurgical production facilities entered the world market as one of the biggest and most influential iron and steel exporters.
A particular attention is paid in the book to those risks that may accompany such model of economic development of either the country in general, or of a specific industry, iron and steel in our case. Such development model when economic reindustrialisation processes and forced over-exploitation of the existing production facilities play the first hand may have only short-lived (in historical meaning) effect. This model may completely drain its resources in 5-7 years so that the country will face the need of finding new factors of securing further economic growth. The iron and steel industry which is currently living through its boom phase actually procrastinates its proper acute problems for the future. The society will not be able to avoid resolving the problem of an in-depth restructuring of the sector, its transfer onto revolutionary new technical and technological basis. Some of the available production capacities will have to be reduced, and this will move the social tasks of scale to the foreground.
The book is intended for scholars, government officials, specialists, economists whose sphere of interest extends to cover issues of economy and sources of economic growth development on the example of one of the strategic economy sectors, that of the iron and steel industry.

Superheader: World Bank. International Bank for Reconstruction and Development, Kyiv, Millennium, 2004.
ISBN 966-8063-50-3


Mechanisms of European Policy Coordination. Practice of EU Member- and Candidate States

The title expounds phases of EU integration process institutionalisation and measures taken to assure compliance of the system of public administration with applicable European standards of EU Member States and candidate states. The book comprises two parts: the first is dedicated to the definition of the notion of 'public administration' in the European Commonwealth law and to the commitments of the Member States with regard to their respective national administrations' operation that arise in connection with their membership in the European Union. The second part is presented in the form of case studies relating, in particular, to analysis of experience of selected Central and Eastern European countries (Hungary, Slovak Republic, Poland and Latvia) in the field of coordination of EU integration process. The accent is made on representing key approaches and characteristic features of EU integration- related issues in the countries participants of the last phase of Enlargement.
The publication will be of help for all those having interest in European integration and for professionals, either in the field of European Union, or in public administration domain.
Published with financial support from the International Renaissance Foundation.
The authors wish to express their gratitude for the support in handling the survey to Josef Mianovsky Fund (Warsaw, Poland).

Under the readershipi of: V. B. Averianov, Doctor in Law, Prof. G. M. Nemyria, Candidate of Historical Sciences, Assistant Professor.

N. Gnydiuk (Ed.), . Novak-Far, Ya. Gontsiazh, I. Rodiuk, Kyiv, Millennium, 2003, 384 pages.
SN 966-8063-91-15


The Final Stage of Privatisation in Ukraine

The title presents outputs of a survey carried out by the group of authors in the process of developing the draft 2003-2008 National Privatisation Programme. The survey allowed to evaluated the previous eleven years-long period of ownership reform in Ukraine with benefits and risks involved. Throughout the historically short period, the non-governmental sector adopted strategic positions within the real economy of Ukraine. However, the privatisation mechanism that was practically applied then failed to assure a required transition of privatisation onto other areas, those of system sectors and natural monopolies. The experience thus gained formed the basis for the development of crucially new approaches and specific mechanisms for the next phase of privatisation. The book outlines economic, political and social substantiations behind the need of proclaiming a new objective, the one of terminating the privatisation in Ukraine as a socio-economic project aimed at implementation of the ownership reform of scale. In this survey, the focus is made on the key tasks and measures to be performed for the attainment of the above objective.
For economists, scholars, members of the national and local parliaments, officials of the Executive, top managers of economic agents of all ownership forms, postgraduate students and studentship of economic departments.
Printed with financial support from the International Renaissance Foundation.

Editor: I. M. Zdorovets

. J. Paskhaver, L. . Verkhovodova, . Ye. Voronkova, N. V. Tereschenko.
Superheader: The Centre for Economic Development, Kyiv, Millennium, 2003, 78 pages.
ISN 966-8063-49-51


Administrative Reform: Might-Have-Been Dreams and Lost Opportunities. How to Find a Positive Way for Key Administrative Reform Components Implementation?

The book presents outcomes of a sociological survey held between highest officials who, by nature of their responsibilities, were responsible for the administrative reform in Ukraine; beside that, it analyses programmes of political parties with a view of the ways of government machinery reformation declared in them. The purpose of the survey was to attempt identifying major barriers and hindrances on the way of administrative reform and to suggest possible methods of overcoming them in order to increase chances of its implementation.
The book will be of value for all those interested in the issues of public administration system reform.
Printed with financial support from the International Renaissance Foundation.

Ya. Gontsiazh, N. Gnidiuk, Kyiv, Millennium, 2002, 136 pages.
ISN 966-8063-17-1


The Ukrainian Privatisation: Pluses and Minuses

The monograph reviews the experience of privatisation in Ukraine, its positive and negative effects. It is shown that the mass privatisation, by nature of a range of external reasons, from the outset faced unfavourable kick-off conditions: industrial production centralisation and concentration levels were unnaturally high, consumer industry's specific weight was critically low while primary sectors and military production complex demonstrated hypertrophic development rates, all that in absence of proper infrastructure and macroeconomic conditions. In spite of Ukraine's lesser (compared with other countries) readiness for deeper radical market reforms, was the mass privatisation that performed the role of an engine with which other reforms were brought to life, as well. Within historically short term, the non-government sector assumed a place in the national economy of a size commensurate with the place the public sector had, and in 1999-2000 the process of privatisation became on of the major factors of economic upturn of Ukraine.
For economists, scholars, members of the national and local parliaments, officials of the Executive, top managers of economic agents of all ownership forms, postgraduate students and studentship of economic departments.

Editor: I. M. Zdorovets

V. I. Dubrovskiy, O. M. Koshyk, O. G. Bilotserkivets. Under the editorship of: O. J. Paskhaver.
Superheader: The Centre for Economic Development, Kyiv, AlterPress, 2001. - 208 p.
SN 966-542-048-8

This publication has become possible thanks to the Freedom House's Partnership for Reforms in Ukraine Programme implemented under the auspices of the United States Agency for International Development (USAID) / Contract #121--00-98-00614-00.


Ukraine in the Transition Period. Experience and Strategy

The first section of the book provides an overview of the institutional structure of the macroeconomic policy, highlights issues of institutional development, virtual economy, importance of political factors and democracy for the success of reforms. The second section covers issues of financial reform (tax reform included), taxation in agriculture, budget deficit and arrears, local self-government and financial decentralization. Seven chapters of the third section are focused on resolving issues of fiscal instability and financial crises, and are dedicated to the evaluation of a host of issues related to considerable budget expenditures, demonetisation, monetisation, national debt increase and budget deficit.
For employees of the Executive and the Legislature, managers of economic agents, political figures, economists, scholars, lawyers, students, postgraduate students and professors of economy from higher educational institutions.
Printed with financial support from the International Renaissance Foundation.

Editor: I. . Zdorovets

Translated from English by: N. M. Diukanova, L. Ya. Sobko

Ed. by: Janosh M. Shirmer and Hwadja M. Sultan.
Subheader: Harvard Institute for International Development, (Kyiv), Centre for Economic Develoment, (Kyiv), Supreme Humanitarian School, (Pultusk), Alterpres, 2000, 214 pages.
SN 966-542-087-9

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