“Ukraine will cease being an agricultural country”–Koltunovich

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 2/12/2015

Ukraine, having lost its industry, is now also losing agriculture: Ukrainian Economist.

Translated from Russian by J.Hawk

The agriculture of a country once considered the Soviet
Union’s granary is now facing the heaviest crisis since independence.

Ukraine is risking a totally failed sowing season for the
first time since it gained independence, since the agricultural sector is
facing many unresolved problems, argues Ukrainian economist Aleksandr
Koltunovich.

“The state of Ukraine’s economy in 2015 shows that
agriculture had disappeared from the list of main budget-forming branches of
the economy, even though it was one of the institutional foundations for the
development of many other sectors of the country’s economy,” Koltunovich sums up
last year’s depressing results.

The agricultural sector is facing major problems of internal
and international nature: the rapid devaluation of the hryvnya will increase
agribusiness losses. “The 2015 sowing campaign is still ahead of us, and the
price of fuel and lubricants is rigidly tied to the course of the dollar.
Therefore all expenditures on fuel and on the actual sowing have to come out of
someone’s pocket, either the farmer’s or the state’s. One way of the other,
this will affect the consumer. Therefore Ukraine faces the possibility of
having a failed sowing campaign for the first time since it gained independence,”
argues Koltunovich.

Weak leadership by Ukraine’s government also played a major
role. “There are many other problems in agriculture, just as in the economy as
a whole. One has to keep in mind Ukraine still has considerable untapped
potential in its agriculture. But if all leadership positions in
agriculture-related agencies are occupied by such ‘effective and talented’
management as we have had and still have, then Ukraine’s agriculture will also ‘go
far’. Just as it ceased being an industrial country, it will cease being an
agricultural one as well,’  Koltunovich
concludes.

J.Hawk’s Comment:
But why bother with restoring the
industry or the agriculture, if it is so much easier, and considerably more
glamorous, to wage a “short victorious war” or two? One of the crucial factors
that pushed the junta into a conflict with Russia was the magnitude of the
problems the country was facing, which was compounded by the leadership’s
inability to cope with them. But the war only accelerated the economy’s
collapse—it’s unlikely Kiev could manage another major military campaign this
year, now that it’s debt has skyrocketed, the hryvnya has collapsed, and gold
and currency reserves have evaporated. Ironically, the end result is a country that is far
less likely to be accepted into European institutions than it was on the eve
of the Maidan. 

 

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