Anders Aslund: "This country is not moving to the east or the west. One moves down "

Anders Aslund - Swedish economist, he received his doctorate at Oxford, who has twenty years of living in Washington. Since 1994 he has worked as a researcher at the Carnegie Endowment. And in 2006, Aslund moved to the other side of Massachusetts Avenue - stepped down as Russian and Eurasian Program at the Carnegie Endowment senior researcher at the Institute of Peterson.
Aslund - chief specialist on the Ukrainian economy in America. Confirmation of this - he has received an invitation to evaluate the hearings in the Senate two weeks ago.
Among other things, we have a powerful companion Aslund - Swedish Foreign Minister Carl Bildt, who in 1990 defended the economist from the attacks of local politicians - after Aslund criticized the government of Social Democrats of excessive government spending and support for authoritarian regimes.
It is obvious that one of the latest features Bildt on the situation in Ukraine today is based on estimates Aslund: "This country is not moving to the east or the west. One moves down »
true "Aslund comes complete news from Kiev - he closely followed the hundred thousand rally in the capital, and even noticed the change of the logo on our website. What awaits Ukraine after the collapse of the Association, we have tried to learn from Anders Aslund.
 - Mr. Aslund, tell me, how do you assess the action of the Ukrainian leadership to stop the European integration. What it looks like in the West?

 - It looks bad. I expected that Yanukovych will come to Vilnius without a final resolution of all issues, hoping that he will be able to leave Tymoshenko in prison and obtain the signature of the EU under the Association Agreement. But now we see that it is he personally does not want to sign an agreement with the EU. And the problem - not Tymoshenko and Yanukovych in the Russian.

 - Maybe the West crossed the line in relation to Tymoshenko? Yanukovych did not want to pay the price for the association?

 - It does not matter Tymoshenko, a matter of principle that you can not keep in prison opposition leaders without legitimate reasons. And that in such realities to do the West? Obviously, if a close eye on Tymoshenko in jail, tomorrow and Klitschko would defeat the right to run because of changes in the tax code, and against Yatsenyuk opened to some business ...

 - But with the Association or not, it is clear that Tymoshenko will remain in jail!

 - Yanukovych wanted a political prize and do nothing. The lesson that gave him the European Union, is that the implementation of the principles is important before signing the agreement. The EU did not insist on the principles when Greece joined the EU in 1980. And in the end Greece has never played by the rules. What happened in the end, they know everything.

When the EU realized that was wrong in relation to Greece, he insisted on the principles upon accession of Spain and Portugal. And it turned out much better. When a zone of "euro", Italy and Greece were allowed to enter there without doing the proper conditions - with the obvious consequences.

The EU has the opportunity to influence the behavior of the partner before signing the agreement - and Europe remains far less leverage after the signing. But, in fact, is the loss of Yanukovych that he will not be able to sign the Association. And it makes no sense to rely on concessions: The EU will continue to insist on the conditions - the release of political leaders and adopt a law on the prosecutor's office.

 - Maybe Yanukovych personally just do not be angry, received political and material support from Russia?

 - We do not know what he got. But the main question for Yanukovych today - how to win elections in 2015. Now these opportunities, there is much less. And after Euromaidan democracy in Ukraine will be much stronger than it seemed just a week ago.

And Yanukovych himself now at an impasse. Strangely, he does not understand this! This -ekonomichesky deadlock. Figures horrible. Ukraine needs a devaluation of the hryvnia in the next year. With it as soon as possible.

 - How deep devaluation?

 - Said today it is impossible. The depth depends on how and when it will be done devaluation.

 - What is the real exchange rate of hryvnia to the dollar?

 - 9, 5-10 hryvnia per dollar. But if a devaluation will occur under the pressure of new factors - such as difficulties with the Ukrainian state debt, the devaluation may occur much faster and uncontrollably. In the case of panic depth can be up to 50 percent. Remember two years ago in Belarus devaluation of 70 percent.

 - Do Association with the EU could decide for Yanukovych question looming financial crisis?

 - Yanukovych had to deal with economic problems. But he was already three years it does not. Ukraine has a huge current account deficit - 8 percent of GDP, twice as much than it should be. And a huge budget deficit - 6 percent. National debt - 40 percent of GDP, and the GDP has been declining for five consecutive quarters. Investments are also reduced. It is difficult to invent a worse economic policy than the one that leads Yanukovych in Ukraine!

 - Maybe Russia proposed Yanukovych block this deficit?

 - Look, Lukashenko had acquired a lot of money from Russia two years ago, he was given $ 20 billion, but he spent it, and he needs even greater amount.

Yanukovych similar situation. Companies close to the "Family Yanukovych" buying public and private companies at very low prices. The worse the economy in Ukraine, the cheaper "family Yanukovych" to buy assets. I think this is his main goal. It explains why he is not concerned about correcting the situation in the Ukrainian economy.

 - But if "Family Yanukovych" will own enterprises in the country bankrupt, they will be worth nothing. So it should have at least a "selfish" interest ...

 - The main question for Yanukovych - what will happen to him personally. When at last the Ukrainian citizens realize that he does not do anything for the people, but only for its "Family»?

The main thing for Yanukovich - to capture as much of the Ukrainian enterprises. Public procurements are distributed among friends of the president, and the rollback can be up to half the amount of the contract. The government is dominated by appointees son of President Alexander Yanukovych. But such a policy is impossible to have European values!

Quotes at the stock exchange in Ukraine since the beginning of 2011 decreased by 70 percent. It bothers Yanukovych? No, do not! Tax code encourages the transfer prices, and large corporations show losses because all profits remain abroad, and tax and minority shareholders get nothing.

The only companies that have listed on the stock market - agricultural companies, which were placed on the stock exchange in Poland, which are not related to the "family" and the oligarchs Yanukovych.

Anything that makes Yanukovych - is a dead-end economic policy. Asked when the Ukrainian people finally understand that the main thing in their lives - it's not a question of the West or the East, and normal economic policy.

 - What is included in a list of your recommendations Ukraine, except devaluation rate?

 - The IMF says it has three or four years: enter a more flexible exchange rate, spend rise in gas prices, that was not a huge deficit "Naftogaz" and reduce the deficit Ukrainian budget.

It's obvious why Yanukovych did not want to do this - it is economically disadvantageous. Someone in Ukraine buys gas at $ 53 and sells for $ 450. This someone's interest and protects Yanukovych. A devaluation is unacceptable for him, because it is unpopular among the people who supposedly feel poorer. In fact, people have "poorer»!

 - If Yanukovych will devalue or tariff increase, he clearly lost the election. And it's not part of his plans ...

 - If he does not go to the devaluation and tariff increases, then there will be more dramatic processes. It will be stormy financial crisis. Such a crisis would be much later than he had expected, but it will grow much faster than could have been foreseen. And the later it comes, the worse it will arise.

 - Yanukovych was looking for finance in the West, but nobody promised him money. Why?

 - Of course, nobody will give money - as well as Lukashenko nothing. Yanukovych now more and more looks like Lukashenko - both economically and politically.

 - How much was the pressure on Russia Yanukovych?

 - It was obvious pressure. Sergei Glazyev said in Yalta, Ukraine to join the Customs Union will receive $ 10 billion a year due to lower gas prices.

This is a typical Russian policy towards Belarus - to 10 billion privileges to Belarus remained in the Customs Union. This is a very bad policy for Russia and Belarus. Why Yanukovych makes the same mistake that Lukashenko - it is difficult to understand.

 - What really profitable to Ukraine - Customs or the European Union? Can you explain to the figures in hand?

 - It's very clear. The European market is 10 times larger than the Russian. And the Russian market is closed. Customs Tariff there an average of 10 percent, while Ukraine has 5 percent. This means that bad Soviet enterprises in Ukraine will live a little longer, but new investment will be much less.

Economic Research Institute and Kyiv School of Economics proved that if Ukraine will sign an Association, GDP increased by 12 percent. And GDP decreased by 4 percent, if Ukraine joins the Customs Union. Thus, in the case of the Association, exports will grow by 46 percent.

 - But one of the arguments of power - Ukrainian products are not in demand in the European market. Are they wrong?

 - If Ukraine signed the Association would be asymmetrical trade liberalization. EU for six months would remove 98 percent of all tariffs. Whereas Ukraine for many years could keep certain tariffs. However, there are many good companies in Ukraine, which can export their products. And another thing - if the Association has received to more foreign investments in Ukraine, because then investors would know that their businesses will have access to the European market.

 - It is more profitable for the oligarchs? For Akhmetov and Firtash, for example?

 - I think that all profitable agreement with the European Union. The first reason - because all the oligarchs are afraid "Yanukovych Families", which can pick up their businesses. The second reason - a protectionist attack from Russia. Neither exporter from Ukraine does not feel safe in Russia. And the third - the oligarchs have a chance to increase exports to Europe.

Advantages of the European market much more. Once, many years ago, I was told by one of the oligarchs: "I have no business in Russia and there are companies in Europe. The only thing I have in Russia - it is a competition ».

 - What is the meaning of the "customs union", you realize for yourself?

 - For Putin, it's just a neo-imperialist project. Economically, it is not profitable for everyone. Kazakhstan is dissatisfied, Nazarbayev went to the Customs Union, thinking that Putin will not work. Lukashenko does it just to get money from Putin. Belarus - the best manufacturer of Soviet goods that can still be sold in Russia. But Ukraine is no longer produces as much of Soviet goods.
The only motive for joining the Customs Union for Yanukovych may be getting money. But it will be much worse for the Ukrainian economy than it has entailed consequences for Belarus.
 - Do you think the refusal of Yanukovych's Association - a victory for Putin?
 - This is a Pyrrhic victory. Ukraine and so did not join the Customs Union. Then Putin did not want to lower gas prices. And Azarov said that while there is no specific promises from Russia over gas - promising only to restore access to the Russian market.

What just happened - a return to the starting point, the conversation Yanukovych and Putin in 2010. Today they are again in Kharkov in April 2010, and no further.
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