Yakiv Smolii wants to tell you all a story. According to Mr. Smolii, the governor of the Bank of Ukraine, Ukraine is about to make yet another move which will draw it closer to the EU – liberalization of its foreign-exchange controls.
This, Mr. Smolii tells us, will “make Ukraine a much more investor-friendly place and will help the country take its rightful spot amongst the major European and global economies”. Ukraine, he goes on to say, has come a long way since the Glorious Maidan, what the western media sometimes likes to tout as the Revolution of Dignity.
I guess the spot it is currently in is less than its ‘rightful’ ranking – although I’m not quite sure what he means by that, except that Ukraine’s political leaders frequently allude to its ‘right’ to be better than it is – which is 50 out of 190 on the GDP-adjusted-for-purchasing-power ranking, which I am told is the fairest way to rate national economies. That’s according to the IMF, but it occupies similar if not identical rankings according to the World Bank and the CIA World Factbook. Interestingly, although not particularly germane to the present discussion, Russia is the sixth-largest economy in that ranking, breathing down Germany’s neck, while the USA has fallen to third, behind China and the European Union. There is still an enormous difference between the USA’s economy and that of Russia, but I hope you will raise an eyebrow next time you hear some smug western pundit proclaim that the Russian economy is smaller than that of Los Angeles or Peru or whatever. Bear in mind that the country is moving up the ranks despite being the target of international sanctions which seek to wreck its economy, led by the United States.
Anyway, back to Ukraine. Mr. Smolii tells us that for the last four years or so, his team has worked hard to stabilize the macroeconomic situation and create a solid foundation for economic growth in Ukraine and prosperity for all who live and work there. And he appears to believe they have succeeded; in his estimation, the banking system is in better shape than it ever has been in the history of independent Ukraine, thanks to the clean-up and reforms implemented since 2014. Ukraine stands ready to welcome foreign investors, and is a great place to put your money if you like to make money with it.
Is that true? What do you think? Continue reading “When You Shake Hands with Ukraine, Count Your Fingers Afterward.”