by Anders Aslund, Peterson Institute for International Economics
Op-ed in the Korrespondent
September 26, 2011
To me, as an economist, the years 1992-93 were truly shocking because Ukraine had neither economic ideology nor policy. Consequently, Ukraine had hyperinflation of 10,200 percent in 1993 and an extraordinary economic collapse. Yet, President Leonid Kravchuk represented a compromise between West Ukrainian nationalism and the Nomenklatura establishment. He did reinforce the Ukrainian sense of nationality, and he left the presidential office when he lost reasonably free elections.
President Leonid Kuchma solidified the unity of Ukraine in many ways that are now too easily forgotten. He won his first election victory in 1994 in the East and his second in 1999 in the West. His great achievements were two economic reform waves. In 1994-95, he defeated inflation and established a reasonable market economy. In 2000, his government brought about a profound marketization allowing Ukraine to finally start to grow.
Yet, democracy and freedom were neglected. In late 2004, when Ukraine enjoyed extraordinary economic growth of no less than 12 percent, the popular Orange Revolution erupted. A large part of the nation stood up for freedom and justice, completely peacefully. But since the economy was doing too well and nothing but justice mattered, five years of political stalemate between three leading personalities followed.
In February 2010, Ukraine held free and fair presidential elections, which Viktor Yanukovych won with a small margin. This should have been the time to render the democratic system more effective, pursue long-forgotten economic reforms, and conclude a European Association Agreement with the European Union. Never had Ukraine had a better starting position.
But little has come out of it. The new regime allowed a limited group of people to enrich themselves at the cost of everybody else. Therefore, the new regime introduced more repression than Ukraine had seen after independence in 1991. Such a commitment to corruption and repression voids Ukraine of its entrance into the broader European community.
Policy Brief 14-24: An Economic Strategy to Save Ukraine November 2014
Testimony: Ukraine: How It Can Combat Corruption November 19, 2014
Peterson Perspective: Ukraine's Turmoil Without End? December 3, 2013
Policy Brief 13-22: Ukraine's Choice: European Association Agreement or Eurasian Union? September 2013
Policy Brief 11-9: Lessons from the East European Financial Crisis, 2008-10 June 2011
Book: How Latvia Came through the Financial Crisis May 2011
Book: The Last Shall Be the First: The East European Financial Crisis October 2010
Paper: Proposals for Ukraine: 2010—Time For Reforms February 2010
Book: The Russia Balance Sheet April 2009
Book: How Ukraine Became a Market Economy and Democracy March 2009