Ukraine at the Crossroads : Economic Reforms in International Perspective

Axel Siedenberg, Lutz Hoffmann 1 The specificity of transformation in Ukraine When the Soviet empire collapsed in the very early 1990s, the new era that dawned was commonly given the name 'transformation', implying the systemic change from socialism towards some form of market economy. Almost ten years later, 'the' transformation process does not exist any more; instead, a whole variety of transformations are taking place in Eastern Europe and the CIS: Whereas some countries are heading towards EU membership (e. g. Poland), others are still pondering on what economic system to adopt (e. g. Russia) and yet others have rejected a market-oriented transformation outright (e. g. Belarus). Within this variety of transformations, Ukraine clearly stands out as a specific case: Whilst initially considered to be one of the stronger post-Soviet Republics, it descended into economic depression in 1992 and has hardly recovered since; on the other hand, once considered to be a potential centre of ethnic unrest and political instability, it has turned into a democratic, peaceful civil society that is firmly establishing itself within the new European and world order. This book takes a critical look at economic reform in Ukraine as compared to other East European and CIS countries. Our hypothesis is that Ukraine is going through a transformation process peculiar to itself, which can be traced at both macroeconomic and microeconomic level.

"There is no alternative to reforming the Ukranian economy. The benefit of this research is that it makes it possible to view the situation in Ukraine from the outside and to correct reforms in time."
Serhiy Tihipko, Vice-Prime Minister of Ukraine

"This book, compiled by the German Advisory Group with the Ukranian Government, is testimony to close German-Ukranian cooperation. In supporting this advisory project within the framework of its TRANSFORM programme, the German Federal Government is making an important contribution to the transformation to a social market economy in Ukraine."
Walter Kittel, Former State Secretary, Commissioner of the Federal Government of Germany for Technical Cooperation with Central and Eastern Europe

"Transition to most economists means Russian collapse or success in Poland or Hungary. Ukraine is by and large ignored even though the country's experience is dramatic. This excellent book documents the tough reform battle. "This country is different" has always been the first step to bad analysis. This book rightly insists on viewing Ukraine's experience in an international perspective. It is not only the only serious source, it is an outstanding one."
Rudi Dornbusch, Ford Professor of Economics and International Management, MIT

"The analysis and solutions presented in these papers show an immense depth of understanding and originality."
Charles Clover, Financial Times