“The Ministry of the Economy will cease to exist, but Ukraine’s economy will remain”–Yatsenyuk

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Ukraine’s Ministry of the Economy announces self-liquidation

Translated from Russian by J.Hawk

Minister of the Economy Ayvaras Abromavichyus said in a
report on the first 100 days of the new government’s work that his ministry is
in the first stage of liquidation, and by the fall it will lose half of its

He said that the ministry is undergoing restructurization. “Prime
Minister Yatsenyuk and President Poroshenko told me that by the time my tenure
as Minister expires,  my ministry should
no longer exist. We are moving in that direction.”

He added that “we are now at the first stage: I already
signed all directives, and in a month and a half we’ll lose 30% of ministry’s
staff, the next stage is another 20%, and by year’s end we’ll lose 50% of the

“The ministry has 247 functions. They’ve been operating as
if it were still the Gosplan [Soviet state economic planning agency responsible
for the 5-year-plans]. Our goal is to become a modern, mobile Ministry of the
Economy of a European country. I was forced to part ways with all the old
deputies, because you can’t make a new soup with old cadres. The old cadres
have zero desire to carry out reforms.”

Yatsenyuk confirmed the plan to liquidate the ministry. “The
Ministry of the Economy will cease to exist, but Ukraine’s economy will remain.”

Abromavichius talked about disbanding the ministry already
in January. However, at that time the government was considering two possible
options. One was to transfer some of its functions to the Ministry of Finance,
others to the NBU, and then shut down the ministry. The second option was to
reform the ministry, which would retain those functions which are necessary to
implement reforms.

Abramavichius is a Lithuanian entrepreneur, a co-owner and
one of the director of the Swedish investment company East Capital. He was
named the Minister of the Economy in December 2014. He received Ukrainian
citizenship, and gave up Lithuanian one. He studied at the Concordia University
in the United States (state of Wisconsin). The first year of his studies was
paid by the Soros Fund. He is also a minority owner of shares in the Sberbank.

J.Hawk’s Comment: At first I thought this was some kind of
an April Fool’s joke. “The Ministry of the Economy will cease to exist, but
Ukraine’s economy will remain”??? Seriously? What kind of an idiot would make a
statement like that? And then I remembered—the Prime Minister of Ukraine would…

From the policy perspective, transferring the ministry’s
functions to Finance and NBU is equivalent to having to industry policy at all.
These two agencies’ ideal preference (in any country, really) is to spend as
little money as possible. Their objective is to minimize deficits, cut
spending, and bolster the value of the currency by keeping inflation down.
However, those objectives incompatible with economic growth and development. In
effect, the disbandment of the MinEcon is equivalent to institutionalizing
fiscal austerity in Ukraine for a very long time to come. 

As a side note: Nemtsov and much of Russia’s so-called “opposition” would like to implement similar policies in Russia. Abromavichius is a hero to them, a brave “reformer” who is cutting through the red tape in order to unleash the productive forces of the market! Except the problem with all these reformers is that they only know how to destroy. Creating jobs, well, that’s someone else’s problem. And as to the unemployed and the homeless, they are responsible for their own plight. If this sounds all too familiar to those of us who live under the neo-liberal economic regime in the West, it should: all of the Western countries are undergoing a forced experiment similar to Ukraine’s, one which will end just as badly. 

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