Economist Hawrylyshyn comments on Ukraine's movement toward Europe (06/29/03)

Economist Hawrylyshyn comments on Ukraine's movement toward Europe

by Roman Woronowycz
Kyiv Press Bureau

KYIV - Even with its economy expanding this year at a rate that exceeds forecasts and after three previous years of strong growth, Bohdan Hawrylyshyn, noted economist and advisor to the Ukrainian government, believes that Ukraine has little chance of achieving European levels and entering the European Union in the next decade.

"Is 2012 a reality? I would say it is too optimistic a date," stated the Ukrainian born Canadian citizen who now calls Geneva home.

Dr. Hawrylyshyn, who has been an aide to several Ukrainian prime ministers and has offered advice to nearly all of the chairmen of the Verkhovna Rada since Ukraine declared independence in 1991, said there is reason to believe that economic growth will be sustained, but that extensive political and social development must take place before Ukraine ascends to the European paradigm.

The 77-year-old semi-retired author and scholar who helped found the International Management Institute in Kyiv 13 years ago explained that Ukraine needs additional, and extensive, political and administrative reform - including changes in its still much too Sovietized legislative base - to bring it into line with European legislative norms.

"The harmonization of laws is a tremendous process and takes a long time," said Dr. Hawrylyshyn.

Dr. Hawrylyshyn noted that on an objective basis, to enter the European Union Ukraine had to meet the Copenhagen criteria, a list of stringent requirements to which all potential EU members must conform. However, Ukraine also had to meet another, more subjective criteria, he added.

"We also need to clean up our international image, some of which is deserved and some of which is undeserved," explained Mr. Hawrylyshyn.

The economist said that Europe could help Ukraine to move economically closer by reducing strict quotas on the import of Ukrainian products, including textiles and wheat.

Dr. Hawrylyshyn sounded a warning to Ukraine if it expects economic development to continue: strong growth will not continue without a substantial infusion of foreign direct investment, something in which Ukraine has lagged way behind its neighbors to the west as well as the east. He explained that Kyiv must complete economic reforms, develop transparency in government and business practices, reduce corruption, and achieve better predictability in policy-making for foreigners to take advantage of the economic and business opportunities the country offers.

He said that much of Ukraine's growth over the last years was domestically driven and was more easily attainable after a long economic decline, which he cited as having started in the late 1960s.

He said the economy began regenerating in 2000 after government officials finally brought the energy sector out of the shadow economy and dismantled the barter system, which coincided with the development of a policy of enforced tax collection. The economist noted that the presidential decree of 1999 on agricultural reform did much to rejuvenate that important economic sector, which also helped stimulate the economy in general.

"It is not so much that it was carried out all that well, but it created expectation and movement," Dr. Hawrylyshyn noted.

The economist criticized Kyiv's inability to break free of Moscow's economic influence and the initiative of the administration of President Leonid Kuchma to develop a free trade zone and an open economic space with Russia and three other members of the Commonwealth of Independent States. Dr. Hawrylyshyn said the cooperative effort could further hinder Ukraine's faltering effort to enter the World Trade Organization, which is a basic requirement for EU membership.

"On March 18, we signed a protocol with the EU for accession individually, not collectively," explained Dr. Hawrylyshyn. "I happened to be in the delegation, and I can tell you there were last-minute attempts by Russia to prevent it from happening."

According to Dr. Hawrylyshyn the upcoming presidential elections could prove another watershed for Ukraine. He explained that the way in which the elections are conducted - the degree of the electoral process' honesty, openness and integrity - would also determine the speed at which Ukraine enters the EU.

He said that most EU leaders, including his longtime friend, EU President Romano Prodi, were not at all concerned with the political reforms proposed by President Kuchma because they fell into line, for the most part, with European norms.

However, Dr. Hawrylyshyn said he believes it would be to Ukraine's benefit to reduce the number of political parties in the country "I think the greatest political ill in Ukraine is the number of parties. How can you build a political roof with 120 parties? Ideally, you have a roof with two sides - a left side and a right side - and a center, maybe five-six political parties at most."

Dr. Hawrylyshyn pointed out that critics of the political reforms initiated by President Kuchma explain that the reason for the presidential effort is to ensure that the current Ukrainian president has a hand in picking his successor or that Moscow has some influence over the process.

He stated that it would be more important for Ukraine's future to make sure that local and regional government state representatives do not have the ability to manipulate and control the elections through electoral fraud and intimidation of the local population.

And so who does Dr. Hawrylyshyn believe will win the presidential elections in 2004? He wouldn't come right out and state that, of course, but he did give an indication of what he thought of some of the "could be" undeclared contenders:

On Viktor Yushchenko: "Yushchenko can be criticized because he has not been tough as an oppositionist leader, but he is genuine. And he is genuinely a person who wants to unite rather than polarize."

On Viktor Yanukovych: "He is a person who has shown a willingness to learn. He is a rather strong personality and, with the economy doing rather better rather than worse and if the budget stays on course, his popularity could rise. But I don't think he can rise to the level of Yushchenko because people have preconceived ideas of how he came to power."

On Viktor Medvedchuk: "He is extremely intelligent, but I don't believe he has political appeal and the trust of the people at large."

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