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Sergiy Lyovochkin: The government is not ready to face the truth
01.04.2008, 15:56
People's Deputy, the Party of Regions parliamentary faction Deputy Head Sergiy Lyovochkin comments on the course of inflation processes in Ukraine.
- It seems that a threat of inflation rate acceleration in Ukraine for the time being is evident for everyone, except the Ukrainian Government. Early in March I warned about the negative impacts and prospects of the fiscal policy in an article 'Hryvnya revaluation: yes or no' ('Voice of Ukraine').
Not much time has passed, but the World Bank and leading international rating agencies have already revised their forecasts for price advance rates in Ukraine in 2008. Particularly, yesterday Standard&Poor's published Ukraine's inflation index at a rate of 20%.
It seems that the Government is not ready to face the truth. A strategy of 'not washing one's dirty linen in public' may cost much for the national economy and average citizens.
The measures which are resorted by the government team fail to be efficient. It is obvious for experts: a 'course games' tactic is inadequate reaction on the influence of deep economic drivers that untwist inflationary spiral. Under present circumstances, hryvnya revaluation will not make expected effect.
I also call on the Government not to hope for miracles of nature and Ukrainian agrarians, and not to rely on that a good harvest will cease price growth on its own.
The Government is expected to introduce a comprehensive range of anti-inflation measures instead of political 'invocations'.
The anti-inflation policy primarily requires balanced policy of the government spending, including social ones. A desire to get election dividends through social populism is obvious, but responsible politicians will never put their interests above the state ones.
Secondly, administrative voluntarism on the fuel and energy market should be cut. Smooth and profitable performance of the agroindustrial complex cannot be ensured without stable prices on gas, oil, and oil products.
Thirdly. The control over credit, financial and bank sector of the national economy should be strengthened along with the National Bank. As the world has experienced, this segment indeed may become a source of troublesome surprises.
And the main point, the Government has to give up working in a 'fire-team' style finally. The events occurring now in the Ukrainian economy, particularly high price growth rates, are not the occasional coincidence. The long-term lack of fundamental reforms is behind the current inflation problems.
Political will and political responsibility are necessary. If the present government lacks them – it should quit.
The Party of Regions Press-service | |
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