I would like to make some posts about post-soviet economies and their pecularities.
One of the main differences of post-soviet economies was that we really needed capital because in Soviet Union all the capitals were taken out from all the people and when finally we got our country in 1991, all people were poor. Of course, a lot of them got their flats and presumable share of all the countries property, which they could claim once with a special right (voucher). And,of course, they could not understand the value of the flats and finally it became obvious that though all people according to soviet rules had nearly same square meters, the prices of those square meters were very different.
And when you have a society in which nobody ever owned any property or business (since Soviet Union lasted for majority of them 70 years – with the exception of Baltic countries which were occupied afther the Second World War), people just could not understand what they could do with those vouchers and were cheated or sold them for 100-200 dollars.
Hostility to the “western” world due to Soviet Union propaganda added more problems with hindering foreign capital to participate in privatization. All that hostility was used by certain criminal groups and/or smart people who caught the ideas of capitalist world more quickly and all the enterprises were given (almost given) for a very cheap price to those limited groups. Companies which income based on resources continued extracting resources in favour of their new owners, but lots of enterprises were destroyed because of metal prices, and just selling enterprises in details was extremely profitable, and that profit was simple and quick in a country without basic understanding of business processes, of searching suppliers and clients, of motivating employees, of logistics and project management... lots of soviet union assets were “gone with the wind”. Though the idea of quick creation the owners in our country meant that even if we give the property to the most active and smart people they will create new jobs and they will pay taxes, and our economy will work finally in an efficient way (because state property is almost every time not properly managed). We had just a few successful stories. One of which is the story of our fifth president Poroshenko, who created a huge sweets holding starting with the soviet candy factory.
And looking back to all the reasons for what happened in last 30 years I am quite sure that it was the most probable way for my country. I can not even blame criminal groups for being smarter than all the others. In a society where nobody trusted each other because of millions of delations to “militia” even about neighbours and relatives, criminal groups coming from box clubs and previous military units were those who could stand for each other. And they did.
Unforturnately if we compare the role of mafia for korean or japan economics we can see again the Soviet Union problem of internationalism. We still have just two from five richest people in the country who started to care for the country after they got there fortune. In one way or another, in culture, in politics, in sponsorship for army or volunteers' groups. Thinking about national interests is something that is still hardly understood by homo soveticus, and we have a lot of state traitors who defend themselves with the words of being Soviet Union citizens, having been born in those times (like me in fact, but I was lucky enough to accept my nationality).
Here we are, first ten years of our independence was the time of grabing and stealing. And only after that period we started to learn economical development with each individual making their own private effective decisions. Growth is natural attribute of free economy. People made decisions about education which they needed in new society, people saw where is the payable demand for the goods and started small businesses and a lot of people went abroad for having their first capital.
This is the price we paid for not trusting loans, credits and foreign investors (all those quick ways of getting capital to the country). Of course, we have higher interest rates than other countries, but we can easily understand it, because we still are creating legal system, and we still have too much corruption ties in society.
But in times of political stability our economy is growing much more quickly than those of developed countries. And businesses and asset prices are growing more quickly. We are still underestimated as we can see from GDP based on puchasing power parity.
And I would like to show you figures for my country (Ukraine) which is considered one of the least lucky in post-soviet world economically, but with the exception of Baltic countries, Ukraine and Georgia, all the others are again building mini-ussr's.
This is GDP in dollars, it was twice going down with the world crisis and devaluation of domestic currency, and with the Russian-Ukrainian war and again devaluation of domestic currency to balance the budget.
2020 we finished with 163 milliard dollars economy, and we can cosider it even to the 183 of 2013 year, because 12 percent of our economy is under russian occupation now. So the economy controlled we totally renewed.
And I can be especially proud of the fact that Russia didn't (even having extra with Crimea, that they are adding now to russian stats). Sanctions work!
It was hard. We fought with all the traumas of soviet people, and we are finally here. And only ten days later we, in Ukraine, were we have 25% of all the world black soil, will open the agricultural land market. And finally people will be able to buy and sell land and to have normal farms.
This soviet trauma is the most expensive that we paid for. Since agriculture is the simpliest way of learning entrepreneurship and our country is naturally prepared for that. We waited 30 years. And we paid even more with the land quality, because land was divided with 2-3 ha pieces to different owners. This amount is hardly enough for making money to support the family. It's a good way to start, but without possibility to grow it keeps people on a very low income. So lots of village people already moved to towns and cities. And those people moving to cities and even to other countries could not even sell their property according to the law.
That's how it happened that almost all the lands now are rented by huge agricultural holdings for 15-30 years. And they are using tons of chemicals, and do not preserve the quality of rented lands. Right now I decided to check what land is for sale in the places we would consider interesting... and I found out that nobody is selling the land because it's all contracted. Just I found 2 pieces of 2 ha hills without electricity, water and so on. Though according to the polls almost 10% of land owners have the intention of selling their land.
But even developing with this pace waiting for the generations to be changed we are still moving forward. And at least we got democracy, other post-soviet countries, with the exception of Baltic countries and Georgia, failed. They had the choice to learn something new or to come back to the authoritarian regime controlling economies and people, and in fact it was more natural for them to surrender.
Glory to Ukraine! Thank you!
