The need for Ukraine Economic reform came to the fore with the collapse of Soviet Union. The elite group in Ukraine had weakened owing to the collapse and dearth of well versed economists was felt. This in due course gave rise to “rent seekers”. All of the above factors contributed to a very sluggish commencement of Ukraine economic reform.
Ukraine economic reform and rent seekers:
It was assessed by few economists that Ukraine economic reform could include privatization, and stability in the macro economy. These reforms would in a way benefit the rent seekers. One reform, which the authorities were fearing to implement owing to the interest of the rent seekers was Ukraine economic reforms pertaining to rent in the agricultural and energy sector.
Obstacles in the implementation of Ukraine economic reform:
One of the main obstacles proved to be the political power exercised by the rent seekers.
Mismanaged public expenses and a system, which encourages monopoly in matters of rent highlights this. However, economy of Ukraine has picked up and it was found in the year 2000 that the gross domestic product of the country had increased by 5.3%.
This increase was due to Ukraine economic reform as well as political reform. It was observed that in Ukraine economic reform followed several political reforms. The Ukraine economic reform included bettering the budgeting procedure, reduction in the arrears of the government, reducing public expenditures, budget balancing, decreasing taxes imposed on non monetary bills.
Ukraine was able to accomplish all of the above without taking assistance of the International Monetary Fund or the IMF. Ukraine economic reform pertaining to the energy sector was also undertaken. Land reform was qualitatively reformed. Although the process was not at all transparent, it increased the incidence of the system of private land ownership.
Impact of Ukraine economic reform:
Positive impact of Ukraine economic reform:
The economic reform promoted the light as well as the food processing industry, foreign trade was liberalized to a considerable extent. Russia could be held responsible for the growth as it was Ukraine’s main export trading partner. The Ukraine economic reform led to the inculcation of concepts related to land code, tax code and civil code.
Causes of worry:
The media functioning in Ukraine was not well coordinated and was biased. The process of decision making in the country was anomalous as decisions taken went against the norms of the International Monetary fund and the World Bank.
Last Updated on : 26th June 2013