Yanovskyi K. E., Mudrenko A. A.

Oles Honchar Dnipropetrovsk National University


Corruption is the main issue of the global economy. After the disintegration of the USSR, the Ukrainian authorities had to decide either to continue following a conservative way of developing the economy and not to change into the administrative-command one or completely transfer the model of the planned economy into the market economy. On 24th August, 1991 Ukraine gained independency and stepped into a long, harsh way in order to get benefits in the future. The government of Ukraine decided to denationalize the following domains: industry, constructing and agriculture by passing public property to private individuals. Private property is a key to success and also to the successful development of the economy. The main issue of businesses in the formerUSSR was to complete scheduled requirements. However, the main target of an entrepreneur is a profit maximisation. In order to achieve a desirable result, private companies should use modern technologies and the most qualified workforce. Moreover, it is necessary to raise the rates of productivity, which will lead to the growth in GDP. Consequently, an increase in GDP leads to a rise in pensions, scholarships, salaries, etc. In this case the government will be able to allocate some money for road reconstructions, bridge reparations, etc. The expansion of production is likely to boost a demand for labour force and as a result the problem of unemployment will be solved.

The procedure of the state ownership privatization is almost finished in Ukraine. However, the result is not obvious for the public. The parliament of Ukraine has to consider why the real GDP in Ukraine is significantly lower than GDP in some Western European countries? The formation of a local budget directly depends on the regional and country budgets. People are seeking loopholes in the legislation in order to get some money not only from a regional budget but also from the government one. Why are we talking about budgets? Let's recall an ordinary visit to the doctor, most cases in the court are made out with money and don’t forget about our corruptible road inspectors. The faster corruption will disappear, the more advanced progress there will be.

Corruption is the main problem of the Ukrainian economy. Let's find out how this problem evaluated. Ukraine was one of the countries of the former USSR until 1991. In Soviet times, a lack of products took place. It was extremely difficult to buy candies, fruit, dairy products, meat, etc. In order to get such products you had to stand in long queue and we don't mention overseas goods, which were not available to ordinary people. People used connections and money to solve their problems. Since that time, they have got used to getting desirable commodities by paying incredible fees. Entering the university, getting accommodation ahead of shedule, a car purchase were received with a help of a bribe. Planned economy itself hides actual incomes of enterprises and citizens. People had no idea how taxes were charged. The model of the market economy is “clear”, open for the economic community. People know precisely how much work they do. Futhermore, we are informed of the amount of taxes we have to pay in a current month. If taxes are a little bit higher, an individual can complain to the law court, as indirect taxes are fixed.

What ways of corruption cleanup can be used in our country? There are two ways to get rid of corruption. Western Europe brings up people who are not interested in giving bribes. This means that a Western European resident spends approximately 30% of his income on essential commodities . The rest money is spent on purchasing of electrical appliances, cars, luxury items, etc while the majority of the Ukrainians spend all their money on food, accommodation medicine and also protection. For the officials bribes are such incomes which they are able to spend on expensive domestic electrical appliances, modern car, etc. An ordinary Ukrainian official breaks law for easy money. In Europe this issue has been solved by raising average wages for managers and officials. But, a rise in salaries for officials means higher taxes for citizens. There is an opinion that by following such rules, Ukraine won’t able to cope with corruption. Another way of preventing corruption which is applied in socialist countries is to control all domains. For instance, the government controls incomes of households and create a database where information about the income of a particular family, including money received from a deposit, amount of money spent on goods per month is kept. Therefore, when a person unexpectedly buys cars, houses, travels around the world representatives of special organizations come and clarify how this individual has managed to earn so much money. This method is quite harsh but at the same time it strengthens the middle-class, helps to tackle poverty and reduce excessive wealth. Powerful middle-class is a graphic evidence of a developed country.