Arseniy Yatseniuk’s Cabinet of Ministers has passed the 100-day barrier, after which the moratorium on the criticism of the government’s work ends. But the majority of the experts surveyed by Forbes are not hasty to make use of this right now. Their verdict: under conditions of war, the Cabinet of Ministers has done everything possible, and it is at least naïve to demand reform, even those they had promised and those that are very relevant. Continue reading
Mines and heavy industrial productions give the possibility of providing jobs for a huge number of people. However the experience of successful developed countries of the world shows that future is not guaranteed for the mines and plants.
The UK, and Wales especially, have a lot in common in terms of their past with Donbas, and may become an example for the future.
In the 19th century Wales, following England, underwent industrial revolution.
In 1851 two-thirds of the Welsh families had nothing to do with work in agriculture. Strong hands, male, for the most part, were needed in mines and metallurgic productions.
The Welsh in Ukraine
The Welsh businessman John Hughes arrived in the steppes of Eastern Ukraine in 1869 to the region which we now call Donbas.
70 other Welshmen and himself founded the village of Yuzivka and started the steel industry, which, together with coal extraction, became the basis of heavy industry on the territory of Ukraine.
Yuzivka is now the city of Donetsk, with a population of over a million. There have not been any Welshmen for a long time there, but Donbas is now experiencing approximately the same processes as Wales.
The national statistics service of Great Britain noted in their population census that in 1841, 36% of working population in Wales and England were involved in the production sphere. However in our time (as of 2011) this number constituted only 9%.
In the 21st century the leading economy sectors of many developed countries are those that are part of the service industry: finances, telecommunications, transport, tourism, healthcare, education etc.
As of 2011 in England and Wales, the service sphere involved 81% of the workforce, and only 9% were part of the industrial sphere.
The process of such change was not easy and many even now disagree with the policies of Margaret Thatcher’s government, who decided to rid the losing industries, such as coal mining, of governmental support. Her government closed the unsustainable mines and privatised the rest.
The trade unions of coal miners of South Wales and Northern England led a de facto war to protect the workers. The last peak of this fight took place in 1984-1985.
Margaret Thatcher proved that she did not want war with the miners, but a more effective economy, where the market decides which industry or which business brings revenue, and therefore is necessary, and which is losing and therefore has no right to exist.
Deindustrialisation of the West
The combination of the process of closing the losing mines and other businesses as well as the privatisation of national companies in the heavy industry, energy and communication, turned Britain into a post-industrial state.
Deindustrialisation or forced structure reforms deeply influence both European con tries and North America.
Mark Adomanis, American expert commentator in issues of economics and demographics, talks about the political consequences of the changes.
“In many Western and other developed countries such regions very quickly lost their political weight, because in America, for example, political weight is concentrated where there is economical growth and there is a big population. As soon as these regions started losing people, which moved to the so-called “sunny states”: California, etc. As America is very liberal economically, they very swiftly lost their economical weight and political significance. In Ukraine it is different – oligarch groups and clans, which control the heavy industry, have de facto captured state power and were able to create an incredibly beneficial regime for themselves, in particular a price regime for the produce of these industries. I think that this cannot go on forever, for the internal price on Ukrainian coal to be five times larger than the coal prices on the world market. And the more we postpone the solution of this problem, the more painful the change process will be. It will be more difficult to carry them out later,” said Mark Adomanis in an interview to Radio Svoboda.
With structural reforms, the government’s task lies in providing strict rules which would create the conditions for business and guarantee the protection of investments. Factors such as provision of the necessary infrastructure, both transport and communication, are important in this affair.
Possibly, the key sphere in the long-term perspective is education and in particular the ability to requalify the workers, as well as to provide their mobility within the country.
National equality and oligarchs
American economist, laureate of the Nobel Prize in 2001, Michael Spence is one of those who are convinced that porr countries may catch up with the richest and most developed countries in the world under certain conditions.
“We need to have a functional market system, for business interest to exist. The right to private property and encouragement of investment are necessary. A relatively stable situation in the country with direct laws that are fairly implemented is needed. You also need a high level of savings and investments. If we look at fiasco countries, we can see that the economy did not grow where there were political problems, and they did not approach the development of the economy. There may be different circumstances. It may be that the government is given to a group of people that are only concerned with enriching themselves. The reason may be the squabble over natural resources, control over property. There may be a simple issue of stealing. In the extreme cases wars, the lack of national equality etc. may become negative factors,” explains the economist.
Michael Spence said this in an interview long before the highly negative factors, such as Russian aggression with the loss of the Crimean peninsula and military action in Donbas, emerged in Ukraine.
His mention of political and economical consequences of national equality problems also give grounds for serious debate over the east of Ukraine.
The current Ukrainian problems are only unique to a certain extent, as the economy is developing by global rules.
Mark Adomanis says that even the problem with the oligarchs has analogues in particular in US history.
“It is possible to gradually gain control and rid yourselves of the influence of oligarchs, how it happened in the US with industrial barons. Morgan and Rockefeller did not disappear. They were slowly involved in the system that limited their activities. They gradually ended up under political pressure and were forced to behave better for their own interests. They understood that if there had been no change on their part, assertive action could have been taken against them and, possibly, they could have had their property taken away, or something similar. Ukrainian oligarch groups have such deep roots in the Ukrainian system that getting rid of them faster than over a decade will be impossible,” thinks Mark Adomanis.
Source: Radio Svoboda
Translated by Mariya Shcherbinia
Anna Agafonova, economist, member of the business community IZOne, Donetsk
The reasons for what is happening in our country are the same as the reasons that led to World War II. In the beginning of the previous century, in Europe, as a result of instances of industrial monopoly the capital and power were concentrated in the hands of oligarchs and technocratic managers.
Liberal economies, oligarchy, corruption and lack of social lifts cost thousands of people their lives. The events in Ukraine can be easily compared with the police and private security service shooting of the peaceful demonstration “Hunger March” of the fired workers at the factories of a well-known figure, Ford. Continue reading
Ukrainian Italians, and there are 250 thousand of them, are the biggest European diaspora and one of the biggest, permanent and stable currency donors for the Ukrainian economy.
Within the last 20 years, a separate category of self-employed people has been formed, which is being serviced by our working migrants in Italy. These are the bus drivers. Continue reading
A small, shabby shop in the centre of Donetsk. There are practically no customers. I am greeted by the owner of the shop Petro, a smart phlegmatic middle-aged man.
“We are working more as security guards here,” he says almost in a whisper, even though there is nobody there to eavesdrop. “Recently, I have been coming here every day myself, to prevent anything from happening. They are not messing with us yet, what is the point? However, there is no point to mess with others either, but they still do it…”
May 27th, 2014
It seems the issue of Petro Poroshenko’s presidency has already been solved. On the eve of the announcement of the official election results, LIGABusinessInform found out the expectations of the market participants have of the future head of state.
“Vasha Svoboda” guest: Andriy Veselovskiy, Special Ambassador of the Ukrainian MFA.
Olexandr Lashchenko: Recently the President of France Francois Hollande met with Petro Porohenko. Having congratulated him with the victory at the elections, he invited him to the celebration ceremony of the anniversary of the allied army invasion in Normandy during World War II. The ceremony will take place on June 6th. This ceremony is to be attended by the leaders of many countries, particularly the US President Barack Obama will be present, as well as Queen of England, Elizabeth II.
Brussels – The EU expects Russia to further remove its army from the border with Ukraine, to begin cooperation with the newly-elected President of Ukraine Petro Poroshenko and to use its influence on the separatists in the eastern regions of Ukraine for the de-escalation of the conflict. This message was put into a statement regarding Ukraine by the heads of states and governments of the European Union, affirmed at the informal summit in Brussels on May 27th. This is the first meeting on the highest level in the EU after the elections to the European Parliament and the presidential elections in Ukraine.
Sergiy Leshchenko, UP
Petro Poroshenko is surely leading in the elections of the President of Ukraine. His story is an example of what kind of dramatic changes politics undergoes in the period of revolution and how rapidly ratings may change in an unstable society.
A year ago Poroshenko did not brave announcing his will to become mayor of Kyiv, being unsure of his own victory. And today he has a threefold advantage over his pursuers at the elections of the President, caused by loss of trust to oppositional party leaders on Maidan and Yanukovich’s flight, as a result of which 30 per cent of the voters have lost the representative of their interests in politics. Continue reading
May 26th, 2014 | 13:56
Two months have passed since the moment when the Crimea was annexed. “Sobering” is hitting many Crimeans already, however, it should be noted, not all. There are still those who are ready to live with an empty wallet and fridge, but also to “die in Russia.”
Meanwhile it is difficult to find a really positive side to current everyday life in the Crimea. Let’s speak of the most profane – the prices on food and goods of primary importance.
The Crimeans are lamenting the empty shelves in shops and supermarkets, the ridiculously high prices – meat for 100 UAH on average, buckwheat almost for 20 UAH, bread which has become 50% more expensive… This is Russian reality in the Crimea today.