03-22-2014, 10:49 AM
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Confirmed User
Industry Role:
Join Date: Apr 2013
Location: Slovakia
Posts: 482
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Subsidy to Ukraine, 1991-present
EU: $20 billion
Russia: $200-$300 billion
Four Uncomfortable Truths About Ukraine
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1. Many of the new leaders helped shape policies that turned Ukraine into an economic basket case.
Yatsenyuk, Turchynov, Finance Minister Oleksandr Shlapak, and others in the interim government served in key roles under former President Viktor Yushchenko and former Prime Minister Yulia Tymoshenko. Their post-Orange Revolution regime prolonged the country?s disastrous track record on economic management.
Like their post-Soviet predecessors, they failed to curb rampant corruption and tackle economic inefficiency, while propping up the hryvnia currency and doling out crowd-pleasing increases in social spending, leaving the state with massive budgetary and trade deficits. Ukraine, a country of 45 million people with rich agricultural land and a large industrial base, is now Eastern Europe?s poorest country, apart from tiny Moldova.
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2. Ukraine has squandered a staggering amount of foreign aid.
The EU has provided Ukraine with ?13.8 billion ($19.1 billion) in grants and loans since 1991. Aid from the International Monetary Fund, and from individual governments that include the U.S., pushes the total well over $30 billion. On top of that, Ukraine has received massive aid from Russia in the form of discounted natural gas?a subsidy totaling $200 billion to $300 billion since 1991, says Emily Holland, a specialist on energy policy in the region who is a visiting fellow at the European Council on Foreign Relations in Berlin. Add it all up, and Ukraine has gotten far more aid than any country in the former Soviet Union, she says. And where has it gone? ?Into the pockets of an incredibly corrupt political elite and oligarchs,? says Holland. The EU and IMF say that any new assistance will be conditioned on strict adherence to a reform program. But a previous IMF bailout was derailed after Ukraine failed to follow through with reforms. As for the oligarchs? The new regime has appointed some of them to key regional government posts in eastern Ukraine.
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