Paskhaver has repeatedly warned Yuschenko that privatization reviews spook investor confidence
Oleksandr Paskhaver, 60, serves part-time as an economic advisor to President Viktor Yushchenko. Paskhaver, president of the Center for Economic Development, is often referred to as a liberal economist. He has been one of the biggest critics of last year’s privatization reviews, championed by then-Prime Minister Yulia Tymoshenko. Paskhaver has repeatedly warned that privatization reviews spook investor confidence. In this March 3 interview with the Post, Paskhaver reflects on changes in Ukraine during Yushchenko’s first year as president, admitting that he was surprised by some successes in the last year.
KP: What was President Viktor Yushchenko’s biggest achievement in the last year?
OP: Being an economist, at first I was more negative and expected difficulties. But it turned out better than I had expected. The Ukrainian economy reacted quite calmly, and even positively, to the Orange Revolution’s main mission.
It was reasonable to expect an agitated and negative reaction, because economies generally do not react positively to political upheaval. However, Ukraine’s economy responded positively in aspects.
The population’s trust in government is on the rise. They have positive expectations for their future. The economy is stable and consumption by the poorest strata of the population is on the rise, meaning that poverty is diminishing.
These are qualitative parameters. Now the economy was hindered in a quantitative sense, as the rate of growth slowed down. Generally, you would expect qualitative parameters to also worsen, so I didn’t expect these improvements.
This means that the subjects of the economy weathered the political storms with relative calm and the population is generally positive about the mission declared by Ukraine’s leadership.
KP: What was the biggest failure of Yushchenko’s first year at the helm as president?
OP: Re-privatization was a big mistake. There are many other mistakes that could have been handled much better.
But the important point is that these mistakes were not catastrophic.
We did not have to have such a sudden change of the bureaucratic layers through which old bureaucrats were replaced by new ones.
It was necessary to change the politicians who held top posts, but not the lower level official employees.
The Orange coalition was supposed to reach a prior agreement on economic issues, setting out a clear economic policy, but they didn’t.
On the other hand, it’s easy to talk about this being in our shoes. I’m saying this and at the same time I’m wondering how I would behave in the place of the new administration. I’m afraid I would act worse than they (laughing).
KP: What kind of coalition in the future parliament will be the best for ensuring that reforms are implemented?
OP: I cannot say. I am confused, since it’s difficult to tell which political parties will best fit into such a coalition. As an economist, it’s important that the coalition has a unified view on the economy. But I do not see any such coalition now. I don’t have an answer to this. I would tell you if I had it.
KP: Should Ukraine go in the direction of the European Union or the Common Economic Space being advocated by Russia?
OP: This is a weird question. We are a European country. The European civilization paradigm, if we are speaking within the Christian world, is the most attractive in my opinion.
Of course, the Chinese or Buddhists have something else. But we are who we are. The Common Economic Space is not civilization. This means that we would have to remain in the shadow of the Russian Empire.
This is the same as asking ‘where do you want to live – in a park or in a prison?’
I’m not saying that Russia is a prison. I’m saying that these things are mismatched.
Russia is a great country with great culture, but it has always been an empire. So, if you want to live in an empire and be a part of that empire, good for you. But if you want to live as an independent state, the choice is Europe.
KP: Was the gas agreement that was reached with Russia earlier this year a failure or a success?
OP: I think it is impossible for any analyst to evaluate the gas agreement without speaking emotionally about it. The biggest disadvantage of this gas agreement is that the details are still kept a secret from society. What can be secret about the agreement? I still do not know the details. And this is the most unpleasant aspect of the agreement, making it quite suspicious.
At first there is one agreement, then there are four more, and then some seven more contracts appear. I do not feel I can assess it until I see the full version.
KP: How often do you see the president?
OP: Very seldom. The last time I had a meeting with him in person was four months ago.
KP: How can you advise the president adequately if you see him rarely and don’t have access to important information, such as the details of the gas agreement?
OP: I don’t have to see the president very often, since I work closely with officials from the State Secretariat of the presidential office. I could get a personal meeting with him anytime I want, upon request, but I understand that he’s a busy person and I know that he gets my advice through submitted reports. You can advise a president without personally meeting with him. As far as the gas issue, I am not an expert in this area.
KP: Who advises the president most of the time if it isn’t you, or other advisors who told the Post that they rarely meet with Yushchenko?OP: I don’t know. There are a lot of advisors right now. The economy is a broad issue. If there is an issue involving nuclear power, then experts from the nuclear power industry would be present to advise [the president], for example.
