20 Years Of Achievement? - Part 2

By Author: People First Foundation
Total Articles: 17
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Business climate - Worst in Europe
According to Forbes magazine Ukraine has the worst business climate in Europe and ranks 98th out of 128 in the world along side Russia and Senegal (1).

People First comment: For business to succeed you need three things, a viable and well presented product, enough finance to deliver the product to market and finally a climate in which business can flourish. In Ukraine we have a climate that stifles business, banks that have little or no money to lend and as a result we don't create viable products. It all comes down to the fact that successive Ukrainian governments have never really had really any idea how modern business works or what it needs to be successful. Most seem stuck in a neo-soviet time warp.

Coal mines - 2nd worst in the world
Ukrainian mines are the second most dangerous in the world after China killing over 3,500 miners since 1990. 75% are officially considered dangerous as a result of coal bed methane gas. Since independence Ukrainian mining accidents have killed more miners than in the whole of the European mining industry over the same period ...
... (2).

People First comment: Stalin is reported to have said that the death of one man is a tragedy whilst the death of a million is a statistic how true this is for the people who have no choice but to work the mines. Ukrainian mines are deadly, but what causes these terrible accidents is that miners are paid only for the coal they cut. In order to feed their families they cut corners on safety and cut coal when the risks are unacceptably high subsequently paying for it with their lives. The whole industry needs fundamental reform.

Competitiveness -2nd worst in Europe
Ukraine is the 2nd least competitive country in Europe after Albania and ranks 89th out of 139 countries, alongside Gambia, Albania and Honduras, according to the World Economic Forum (3).

People First comment: How can a nation that once manufactured 40% of everything made in the USSR be so totally uncompetitive today? The answer is that government policy coupled with the tax police has totally undermined Ukraine's competitive edge. Small enterprises that could grow into the industries of tomorrow are taxed into oblivion, legislation coupled with bureaucracy and corruption make it virtually impossible to harness entrepreneurialism and as a result the nation is dependent on monolithic industries that should have been shut down decades ago. The government need to completely rethink economic policy

Gross domestic product per capita - 3rd worst in Europe
Ukrainian GDP per capita is now 30% lower than it was at the time of independence in 1990 and is the 3rd worst in Europe after Moldova and Georgia (4).

People First comment: The policies of successive governments and the opposition have been driving the country backwards and unlike almost all our near neighbours the Ukrainian people are getting progressively poorer. There is only one solution and that is to become a real democracy where government works in the interests of the nation and not in the interests of a select few

Illegal migration - Worst in Europe
Ukraine has the highest level of illegal migration in Europe with 5 to 6 million Ukrainians now working abroad. Only around 5% of Ukrainians living and working abroad have the legal right to do so (5).

People First comment: Over 5 million Ukrainians are prepared to risk deportation from their host country rather than seek employment in Ukraine such is the standard of living and salaries at home. The government is seeking to establish visa free travel into the EU. When Poland joined the EU over a million young Poles moved to the UK alone therefore if the government are successful, one has to ask who will be left in Ukraine to run the country and look after the sick and elderly.

Investment climate - 2nd worst in Europe
Ukraine has the 2nd worst investment climate in Europe after Albania according to the World Bank European Region survey of 2010 (6).

People First comment: Foreign Direct Investment has fallen 75% this year alone making it the worst year on record. FDI into Ukraine has always been well below that of our neighbours. The international community have just lost patience with the games, lies and false promises of the Ukrainian political elite and there are now easier places to invest. Ukraine is losing out on millions of much needed new jobs and ironically the value of the investments and assets of Ukraine's financial elite is now starting to tumble.

Life expectancy and mortality rate - Worst in Europe
Ukraine has the lowest average life expectancy in Europe at 67.9 years and is ranked 123rd out of 194 countries alongside North Korea, Azerbaijan and Uzbekistan. Ukraine also has the highest mortality rate in Europe and is equal 17th in the world ranking with Somalia, Burundi and Russia (7).

People First comment: An aging population coupled with real poverty, a failing health service coupled with alcoholism and environmental pollution Is it any wonder that the life expectancy is falling and the mortality rate rising so markedly? Somalia and Burundi are failed states ravaged by war whilst Ukraine is supposed to be a modern western leaning democracy. They have an excuse, Ukraine does not.

Poverty - 2nd highest in Europe
12.5 million Ukrainians are now official recognised as living below the poverty line. Ukraine's level of poverty is defined at $105 dollars per person per month or $3.38 per day. Poverty in Ukraine today is 11% higher than the European average whilst the World Bank reports that 26.4% of Ukrainians now live in real poverty, a similar level to Moldova, slightly lower than in Armenia at 28,7% but appreciably higher than Georgia at 18% and Russia at 13.6% (8).

People First comment: Poverty as a result of natural disaster the world can understand, poverty as a result of selfishness and incompetence the world will not accept. Ukraine has more natural wealth that many countries of Europe put together and one of the most highly educated work forces. How can it be that with all this wealth 26.4% of the nation live on less than $4.00 per day? The answer is that our political system is geared to making a select few extremely wealthy whilst the rest are left to fend for themselves.

Press Freedom - Highest fall ever in one year
According to the international media freedom watch-dog ‘Reporters without borders' Ukraine has fallen 42 places on their index in 2010 alone, one of the highest annual falls since their index began. In 2009 Ukraine was 89th out of 175 nations, in 2010 Ukraine has slipped 42 places to 131st. Russia on the other hand rose 13 places from 153rd to 140 (9).

People First comment: There is no state sponsored censorship in Ukraine, what we have is far more insidious. The President quickly established vertical power and as a result media owners, even in his own party, are frightened by the memory of the vertical power of the former era. As a result they do not want to incur the wrath, imagined or otherwise, of the President or his administration thus they have imposed restrictions on what their editors can publish. This is a very unhealthy position as the public now receive more and more information from the internet which often runs directly opposite to the propaganda at home.

Small and medium sized enterprise (SME) development - Lowest in Europe
The average SME contribution to GDP of countries of the European Union is 57%, in Ukraine the contribution is barely 16%, the lowest in Europe and ranking Ukraine 34th out of a 44 nation survey carried out by the European Commission (10).

People First comment: The main reason why Ukraine suffered most in the recent world economic crisis was the absence of an economic cushion of small and medium sized enterprises that were relatively unaffected by the crisis. Yet running a small or medium sized company in Ukraine is a bureaucratic nightmare as 85% of the tax police are focused on this area alone. When compared to other European nations the majority of the paperwork is completely unnecessary, the accounting systems encourage fraud and tax rates encourage evasion. The whole sector needs to be completely modernised.

Software Piracy - Worst in Europe
85% of all the software used in Ukraine is pirated according to the 7th Annual IDC Software Piracy Study. Ukraine has the worst record in Europe and the 9th worst record in the world and it is costing the government $260 million a year in lost tax revenue alone (11).

People First comment: Software piracy is theft which the government through their inaction seems to condone. The music industry agreed a reduce royalty fee to legitimise music CD production in Ukraine, the government should do the same for the software developers. The loss to the government is not simply revenue it is also national reputation which is far harder to rebuild.

Summary
Ukraine cannot be proud of this litany. It is a national disgrace that the nation has been allowed to slide in this way. Clearly successive governments have had other priorities but this cannot be allowed to continue as people are suffering and dying as a result of government inaction. The current system of governance does not produce politicians that look to the national interest. It needs to change and power must be returned to the people through effective democracy so that the national interest can supplant personal interest. Ukraine can greatly benefit from international experience as almost all of the above issues have been solved somewhere in the world at some time. Ukrainian politicians can no longer afford to play politics whilst the nation suffers. It is time for action.

The full list of all 21 ‘achievements' can be found on our website at www.peoplefirst.org.ua