The funeral of Ukrainian economy

The Cabinet of Ministers of Ukraine has sharply worsened the macroeconomic parameters, allowing inflation at 42.8% rate and GDP falling to 11.9% in 2015, that is, in fact recognizing the possible catastrophic scenario.

Let’s start with the fact that Ukraine many years was in fact living in debt, and wasn’t thinking of increasing the competitiveness of its economy. In principle, for example cheap gas in exchange for the political loyalty for Russia was a form of credit for consumer spending, as there was not economic modernization.

The first red flag appeared at the Yushchenko presidency: the Kremlin made it clear that Russophobic regime will not have “free ride”. Kiev didn’t react adequately but there were perturbations that “it was not friendly”. And the of as ruthless as before exploitation of metallurgical and chemical industries (the most energy-intensive, but high-profitable) continued.

The next red flag had appeared in the spring of 2013, six months before Ukraine was planning to sign the Association agreement with the EU. All the experts insisted that Europe doesn’t need Ukrainian industry, but Kiev decided to the cook a walnut sauce from the goose that lays the golden eggs.

With the beginning of the “euromaydan” nobody cared about the revenue side of the budget: in the minds of the people nationalist frenzy and pink Euro-Atlantic illusions prevailed. In this impulse of dashing bravado they with the use of artillery could shamelessly destroy factories and mines of the Donbass, and also without a single shot bankrupt high technologies flagships – Yuzhmash or Antonov aviation technological complex.

And the war also demands huge expenses on tens of thousands of people, who are not involved in the production process, but are consuming resources at a very high level. According to the most conservative estimate the punitive operation against the Donbass stands Kiev in $1 million daily. If count without great precision, for a month into the mouth of the war flew as much money as Ukraine used to spend for a year of education financing or for 6 months of the health care system financing.

Today Ukraine is at the last line, when the recent strategic enterprises and fertile lands are old. The bankrupt state has no more assets left. And it means that the most pessimistic falling macroeconomic indicators promulgated by the Cabinet can be still be considered as very optimistic forecasts. In fact, behind these numbers is a trivial fact of death of the Ukrainian economy.