How do we reset the Ukrainian economy in the midst of crisis and war?

Guest Contributor:

By Irina Akimova, PhD

Ukraine is experiencing the most dramatic period in its recent history. After the revolution of dignity, which confirmed Ukraine’s European choice, our society must now address the reforms that will bring the country closer to European standards of social and economic development. A window of opportunity has opened, but for a limited time. Now that a year has passed, expectations of rapid change for the better were replaced with the disappointments of the ongoing armed conflict in eastern Ukraine, which destroyed 20% of the Ukrainian industrial capacity, and spurred a deep economic recession.

Fear and mistrust accumulated both inside and outside the country. Our international partners are concerned about the protracted armed conflict that takes human lives, and the economic crisis deepens and creates a constant source of tension on the borders of Europe. Keeping up the sanctions against Russia – so far — and providing moral support to Ukraine, these international partners constantly remind us of the need to fulfill the Minsk agreements and actively search for ways to resolve the situation. Despite the rapid growth of public debt (from 40,6% in 2013 to 72.7% of GDP in 2014) and a double-digit deficit, the IMF, World Bank, United States and European Union have jointly pledged unprecedented international financial support of Ukraine worth $40 billion to help us avoid an uncontrolled default. Ukraine’s international partners will welcome the efforts made by the Ukrainian authorities towards reform in recent months, however, they also emphasize the need for a more rapid pace of reform implementation.

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published 2 May 2015: Democracy, Economics, EU, Europe, Russia