+12 Kyiv
The situation in the Ukrainian economy may only be improved by express reforms, the prominent economic expert and President of the Centre for Economic Development Alexander Paskhaver said in the comment to the GORDON .
"I do not know how much and how long the hryvnia may continue falling. I can say what factors influence it. Certainly, the war influences it, other factors include the restriction on the currency turnover, expectations of people who do not trust the state, absence of money from the Intenrational Monetary Fund, and the economic recession. All these factors taken together provide an unfavourable estimate of what the currency may be. We have no restrictions on hryvnia’s getting cheaper from the top. And there are no factors that might stop this process. Probably, if the war stopped… Though it will hardly help because if the war stops, I suppose that the majority will support spending money on arms to defend the country in the future. Thus, there are no grounds to speak about improvements so far. The only thing that may improve the situation is express reforms like in Singapore. We need openness of economy and absolute simplicity of entrepreneurship. Perhaps, it would help," he said.
According to the economist, the prices for imported goods are growing in proportion to the hryvnia-dollar rate.
"Think of the share of imported foods in any family budget. Prices for them are growing in proportion to the hryvnia-dollar rate. The price for other goods is also growing because of the energy sector, but it is growing slower. Naturally, the average prices are growing not as fast as the hryvnia is getting cheaper. There is a close correlation, but it is not linear, i.e. the prices are growing slower than the hryvnia is falling in relation to the dollar. There are food products and services that one cannot refuse. There will be a change in the structure. People will buy domestic-made medicine, they will replace food products with cheaper ones. People will adapt themselves. They will buy more long-use goods, i.e. they will live worse. The question is how long it will last?" he said.
Paskhaver considers that the economic situation will hardly change in the nearest future.
"I see no grounds why Russia should stop fighting against us. In my opinion, it is a major factor of economic problems. And it is not a consequence factor, but rather a factor of Russia’s planning this situation. What can help it? A golden rain of loans. However, it seems that those who grant them do not expect us to give them back. There is no such rain. There are constant promises, and it means that the country has to cope by itself," the expert noted.
In his opinion, Western countries are not hurrying to help Ukraine.
"What means waiting for help? All countries are selfish. If they provide help, they expect to gain benefits from this. There is no unselfish help among countries. It was only at the time of empires that it could occur to an emperor or an absolute tsar or a king to provide some disinterested help to his brother. Such a process does not exist now. Everything is done exclusively for selfish reasons. If someone helps a country, they keep in mind their problems and risks that may be fixed with this help. That is it. Nobody will help us selflessly, and especially fast," Paskhaver reported.
"Panic is a major factor of the decrease in the value of the country’s currency. Thus, I have named two factors already: the policy of the National Bank and reforms, as well as business revival. One may ask if there can be business revival during war. However, our war is not total. Most of the country lives outside the war though it is connected with it economically," the expert noted.
