VOXUKRAINE NEWSLETTER

This year’s Nobel Prize in Economic Science is awarded to Angus Deaton, a British-American economist of Princeton University. The Nobel Prize committee emphasized three related achievements: an approach to estimating demand for different goods, the studies of the relationship between income and consumption, and the work on measuring living standards and poverty.

Sometimes, the central banks get it really wrong, know they got it really wrong, but can’t do much about it (due to domestic politics). Sometimes, they get it really wrong, don’t know they got it really wrong, and, go on bragging about it. The latter is what I think happened in Ukraine in 2011. During 2011, the balance sheet of the NBU shrinks by 17.2 percent. Also during that year, notes and coins in circulation were reduced by 13 percent. By doing so, the NBU starved the nascent economic recovery that was just barely taking hold.
The article initially was published at Huffington Post

Ukraine is slowly moving towards creating a semi-autonomous anti-corruption unit of prosecutors. As international experience has demonstrated, if cases of systemic corruption, any serious attempt to reduce corruption requires a special, i.e., separate and independent from existing structures, unit of detectives, a special unit of prosecutors, and a special unit of judges.

The MinFin’s proposal for the tax reform doesn’t help to escape the economic trap. It even does not try to address any of major issues of the Ukrainian tax system, while the most dramatic change suggested by the Ministry – cut of the payroll tax rate (“single social contribution”) is already stipulated by acting legislation. Actually, the laws of 28.12.2014, in which it was stipulated, have more right to be called a “tax reform” than current proposal – although, of course, they were not a reform either.