At the end of last week the President of Ukraine Poroshenko announced that his representative in the government becomes the author of the Polish economic miracle Leszek Balcerowicz. The arrival in the Ukrainian presidential staff of former Deputy Prime Minister and Minister of Finance of Poland, who grabbed her painful transition from post-Soviet countries and brought into the circle of countries with a market rapidly growing economy, probably, will symbolize the end of an era of populism in economic policy of Ukraine.
In the current historical period in our society with approval and even with admiration belong to Poland. Poland is a friend and an example of success. We don’t remember three difficult years, they survived in Poland on the way to this miracle, society of Poland paid a high price for success. But is there any other way? Former Prime Minister Mykola Azarov in an interview with the author of these lines on the issue of experience Balcerowicz argued that reform should not be a shock, because it’s painful for people. And in the history Azarov will remain Prime Minister of the colonial economy, in principle, incapable of reform and renewal. Probably, the appointment of Balcerowicz is a signal of our elites — I’m ready for change and you? Signal to the West — I’m ready for transparency and decisive steps, a signal to society — even will not be easy, but with me, the man who held his country on the path of success.
From now on, all tough and unpopular steps will have to be borne by the authority of the person who made the economy of Poland open to de-monopolize it, introduced market mechanisms. His view on the events in Ukraine Leszek Balcerowicz expressed in a public lecture, which we’ve decided to highlight today.
History is full of surprises. The collapse of the USSR is one of them
Socialism — a ban on private property. Never was and never will be good socialism from the point of view of economic development. Does not exist and cannot exist in a democratic socialism, if democracy stands for civil and economic freedom and competition. We (countries of the former Soviet camp) lost a lot of time living in the socialist system of Central planning, which took away people’s most important freedom.
Democracy — a guarantee that the policy should be competition. And ensure civil liberties and elections. After all, no civil liberties and turnover of politicians — not democracy. But democracy itself does not guarantee wise decisions of politicians. Remember, in Greece, too, were free elections, so what happened? Stagnation. Many of the politicians clothed in a dangerous way of Santa Claus. “I’ll give you money,” says Santa Claus, bad knowing that the money for distribution — it’s just the taxes, the conditions for which he owes the new, and.
In Poland in 1988, the year there were many people who believed that in two years we will be free. I dreamed about it, but never thought it will come in my lifetime. From time to time the history of the pleasant surprises — the Soviet Union crumbled. We all were faced with the need to make reform, to build a state with market economy and private property. I, incidentally, met with Yeltsin saw him as a great politician and believed that he too would go this way. But he made a mistake — chose Putin.
The competition of political ties in the economy is not much better than socialism
In his development of post-Soviet States often disappointed — sometimes it seems that they all are in line with the legal state. But the legal state is the state which, among other things, effectively limits the appetite. After the first steps to a free market and Russia and Ukraine began to build a political capitalism. It is capitalism, when the fate of companies and industries decides not to market competition, and the competition of political relations. Political capitalism (jokingly I call it the capitalism of individual enterprises) slightly better than socialism. If there is no economic development, is the development of corporations and industries, which are dominated by persons associated with the government.
So for you very important policy reform. The most important reform after socialism is reform policy. The most important indicator of your economic freedom is economic growth, growth in gross domestic product. The abroad will not help just like that. It is necessary to increase economic growth. And another indicator — the emigration of young people. People are leaving their country, if there is no work.
I was responsible for reforms in Poland. In 1989, in September I hired a team, and for three months, I launched major reforms. By the way, I was always interested in radical reforms, but did not think that it will be useful to my country so quickly. We had a fairly dramatic situation: a large external debt, constantly falling production. But if there is a team, the desire and political support, it is possible to do everything quickly. One Minister of Poland, said to me move slowly, because quick move is a fast social spending. And this argument: rapid reforms — social spending, one of the most important, though popular, absurdities. Can you compare it with the advice: don’t chase the patient, he is still sick. Serious illnesses should be treated promptly. The expression “shock therapy”, which outlined our work, I don’t like it very opastno, because everyone is afraid of shock. And terminology in the designation of the reform is very important, because the words are projecting emotions. And those who do not like reform, they always say esakova therapie.
I was imbued with the meaning of the words, and from the beginning I worked with a group of journalists, ready to explain to reform society. Of course, there were critical articles of the journalists, but it wasn’t important because I found supporters among the media. You ask me what to do if in the free media some oligarchs blamed the other, and there is a continuous war of oligarchs. But I will say that it is still better than a state monopoly on the media. Let it be and the third and the fourth oligarch with its mass media, and even the entire consortium, the more the reader-spectator opportunities for different sources of information.
No money if no problem are not solved
Do not think that if you have not started the reforms in 1989, it is now all gone and it’s late. You need to move forward quickly. We were the first country where the transition from socialism to capitalism took place in a dramatic situation of hyperinflation. But over the last 25 years we have accumulated vast experience. What it should rest on the logic of the reforms? The budget deficit should not be large. Social costs should be high. High taxes and the deficit mean that the social costs are very high and must be reduced. The consequence is a fall in the exchange rate and other unpleasant things. If you have a huge budget deficit, it is necessary to eliminate huge subsidies. And we did it in Poland 25 years ago. This can be done because it weakens your economy. We must create a system, it was not possible to steal. It is necessary to suppress the threat of economic, financial fire.
If you need to invest, we could ask: where is the money. No money, no problems if not solved and you have potential for growth. Spend deregulation, it reduces opportunities for corruption. For cheap gas, but you were busted many countries, but it’s time to deal with the fees. The owners of the palaces should not receive subsidies, assistance should be targeted. You have the lowest retirement age. We have the retirement age was raised to 67 years.
Need a professional to prepare the privatization and break the monopoly, to competition. If we are talking about companies that the most effective mechanism for improving their performance is privatization. There may be exceptions, but in principle, privatization means that politicians lose their power over individual companies. In Poland managed to privatize all the necessary enterprises, in particular, the state coal mine, which now has the problematic situation connected with necessity of financing of this sector at the expense of other sectors of the economy. You have a team of very good economists. You have very good economists here, I know them, they are Ukrainian, and know what to do. There are also counselors.
Many reforms depend on the people. Use democracy in order to actively develop the market, to eliminate subsidies, since it leads to the collapse of the budget. You have many fans in Poland and a huge number of fans in Europe. Especially when we see that up you Russia. And it is very important that Ukraine has shown, which makes reforms that you not only want money from other countries. Reform is to protect your country in a difficult situation.
War is not a reason not to implement reforms
I have twice heard this question: can a country fighting to reform? You need to invest in the army. War is not total, it is in the South-East. And it does not prevent to change a bad system. You have a lot of good economists, and I personally know a lot of decent people-be reformers. Change the system, do not hesitate, where to take pictures, but just change them. Easy to change frame is received only in East Germany, because they had footage of the West. But it is necessary to do. Commanders start with, then gradually move on. At the same time do not have to begin personnel changes in the sphere of culture. Start with the ministries of Finance, economy, national Bank.
Another threat is a politician in power is afraid that if he will reform, it will lose the election. This risk of loss is. Politicians who lost elections, half reform did, and half did not. But the difficult economic situation, the lack of reform will only exacerbate it, and then of popular politics-the head and without it will fall. And for the country, of course, it is better to reform. My observation is: the risk of losing the election above, if there is no reform. The chances of those who took on the responsibility of the Supreme. I was a politician from the task, and my situation was not typical. We completed the task, and I feel like a winner.
And once again about image reserves
During independence all the major news channels showed the girl in good English explains what is happening in the country. It was perfect. You, people of creative professions, artists and scientists, should promote Ukraine. Propaganda in Russia is now such, which was not even in the Soviet Union, dexterous and cunning. One day, in his “Twitter” wrote: “If the West supported the Mujahideen in Afghanistan, why can’t he support Ukraine. Why can’t he deploy a wide range of humanitarian assistance including in the Donbas. What a double standard?”
I always say that Ukraine is the first line of defense against Russia. Poland first wrote off 50% of the external debt. It is the result of the reforms and diplomacy. I met everyone, including the Pope. But for such negotiations need arguments. No arguments at such meetings do not go. Maidan did not create the institution of power, but you have to use the energy of independence in all areas of your life.
Afterword
When I typed in search “UKRINFORM”, the word “experience”, he gave the news 1999. Quote: “Deputy Prime Minister and Minister of Finance Leszek Balcerowicz announced in an official statement that not only remains to work in the government, but does not intend to abandon the implementation of tax reforms, partially blocked by President Aleksander Kwasniewski. His decision was motivated by the fact that his ally in the government coalition agreed on the implementation of the Balcerowicz intentions to carry out radical changes in the tax system of Poland. Deputy Prime Minister also said that the Ministry of Finance has already started to work on regulations that would mitigate the negative consequences for small businesses rejected from President Kwasniewski of the law on taxation of physical persons”.
“Balcerowicz remains to work in the government” — somehow this news seemed symbolic.
