The world is bracing for another economic crisis as stock markets have plunged amid concerns about slow economic growth and the size of state debts in Europe and the United States.
Economists say a repeat of the 2008 global crisis would hit Ukraine harder than more developed countries for the same reasons as three years ago: the country is over-reliant on exports of steel and chemicals; small- and medium-sized businesses are strangled by corruption, over-regulation and demand for bribes from officials; foreign investment is kept away by fears over the lack of the security of their investment; big businessmen keep profits offshore to avoid tax; state funds are wasted as officials prefer to line their own pockets.
Only fighting against these ills will allow Ukraine to insulate itself against future global shocks.
As long as this system is kept in place, Ukraine will remain without a prosperous middle class and vulnerable to external economic shocks.
But, so far, there is little evidence that President Viktor Yanukovych and his team have made big progress for any of these problems.
Top officials seem to have no interest in dismantling the system that brought wealth and power to them, their families and their business backers.
This system rejects the basis of liberal democracies and market economies – free and fair competition.
The lack of political and economic competition are closely connected. The trial and subsequent arrest of former Prime Minister Yulia Tymoshenko earlier this month served as a reminder for foreign investors that the courts serve those who are in power, rather than acting as independent arbiters of justice.
It is also becoming increasingly clear that other powerful institutions – such as the media and the police – are serving not the public, but the elites who rely on them to maintain their power.
As long as this system is kept in place, Ukraine will remain without a prosperous middle class and vulnerable to external economic shocks. This could, however, come back to haunt the current rulers.
After all, then-Prime Minister Yulia Tymoshenko seemed a dead cert for the presidency before the 2008 crisis hit, and look where she is now.
