Khrushch G. Y., PhD Poturaeva L. V.

Oles Honchar Dnipropetrovsk National University, Ukraine

PROSPECTS FOR ECONOMIC DEVELOPMENT OF UKRAINE

Proclamation of Ukraine as an independent state in 1991 and its transition to a market economy has fundamentally changed the further development of the productive forces of the country and its regions. Ukraine has the main types of resources for independent functioning of the economy and can compete in an open market environment. Practical implementation of these provisions is a highly complex, dynamic and long time process. Today, the country is in a transitional stage of economic transformation and seeking ways to overcome obstacles to transition to a new era of development, based on market relations and overcoming the remnants of the Soviet system of the economy state regulation.

New conditions require drastic changes of all social and economic relations, the restructuring of production, qualitatively new approaches focused on innovation of all market participants.

For the future, Ukraine should build relations with its international partners solely on practical basis grounding on national interests and mutual benefit. It is time to put an end to the hopes of humiliating mercy of foreign capital. So today Ukraine must synthesize and use the best practices of the strongest players on the world market: German consistency, Chinese strategic planning, American innovation and thought-out personnel policy.

More than 20 years has passed since Ukraine gained independence, but so far the country has not developed any concept of a long-term development strategy for 25–30 years. There have been attempts to develop strategies for the development of separate spheres and sectors of the economy, but they have not started to work.

However, in recent years, Ukraine has seen a steady improvement in the economic situation: rapidly rising GDP, increased real incomes, reduced levels of public debt, the credit rating of the country reached the level of investment.

But at the same time, a number of disturbing symptoms have been observed: inflation is out of control, the pension budget deficit has become chronic, and the level of labor productivity is five times as low as in most developed countries. The rising cost of factors of production, higher energy prices and rising wages, worsening demographic situation and depreciation of fixed assets may significantly reduce the competitiveness of the Ukrainian economy in the coming years. To maintain competitiveness and the momentum of economic growth, it is necessary to improve the overall performance of the economy.

A huge number of unresolved problems of the transition period hamper productivity growth. The formation of basic markets – land, labor and capital – is not completed. The infrastructure is worn out, and investments in its renewal are still not sufficient. High state ownership does not promote economic efficiency and stimulate the development of corruption. Burdensome tax system, outdated economic legislation, weak judiciary deter foreign investors and prevent to develop local companies. Massive corruption has long been a part of the system and is perceived by most people as inevitable. Significant risks may be caused by a high energy dependence and low energy efficiency of the Ukrainian economy. Socio-demographic problems can affect productivity and competitiveness in the coming years. This way, the reduction of the working population, together with the ongoing flow of personnel abroad has already led to a shortage of staff in growing industries, and in the future, this problem will only worsen. The education system does not meet the needs of a rapidly growing economy not only by the number of graduates in each specialty, but also by the quality of their training.

The challenge of sustainable economic growth requires a few, and in a number of cases, many years of systematic work.

Variety, scope and the number of barriers require that the state and society create a single integrated and coherent reform program, which can not be limited to the cycle of election campaigns. A key factor in the program’s success will be consistency in the implementation of major reforms and ensuring their continuity at the changes of the government.

Legislation disorder, including granting preferences to business, is still a great minus of Ukraine. So, today the responsibility of the new composition of the Verkhovna Rada and the Cabinet of Ministers of Ukraine should be to improve the constitutional and legal conditions that regulate the economy, to balance the relationship between the state and private investors in the system of public-private partnerships, to increase the attractiveness of Ukraine for investments of national and foreign capital in the innovative development of the country.

Ukraine has the potential to accelerate the development of activities in the priority research areas, including basic science, energy, environmental management, prevention and treatment of the most common ailments, modern information, communication and space technologies, new substances and materials.

The World Bank has estimated the economic prospects of Ukraine in 2014 in the pessimistic context. As the main scenario, the option of «deferred compensation» is assumed in which the situation in Ukraine will remain unchanged, and in other developed countries welfare will increase. The effects of the introduction of structural reforms in Ukraine are also considered including improving attractiveness, optimizing targeted assistance to low-income citizens, possibly increasing gas prices.

In its study, the World Bank has designated Ukraine as a country exposed to a very great risk of possible capital outflows and deteriorating terms of trade positions. At the same time, the bank specialists noted that the country’s business conditions have improved.

According to analysts of the World Bank, Ukraine implements existing economic prospects inefficiently. They mean a favorable geographical position, large domestic market, the availability of land resources and industrial base. In addition, the experts pointed out that the country needs improvements in the segments of small and medium-sized business, as well as the involvement of an effective anti-corruption system.