Spotlight: Ukraine emerges from economic crisis

The Ukrainian government led by Prime Minister Volodymyr Groysman appears to have taken control of the economic crisis, which had threatened to send the country's economy into free fall.

For now, the financial system has been saved from the abyss and is slowly recovering, but the struggle to ensure long-term prosperity is still underway.

WORST IS OVER

On April 20 this year, Groysman, speaking during his cabinet's first meeting, said that the three priorities of his government were stabilizing the economy, restoring economic growth and improving people's well-being.

Six months later, it is safe to say that at least two of those tasks have been accomplished -- Ukraine's economy has emerged from more than two years of recession, registering a growth rate of 1.4 percent in the second quarter, while key financial and industry indicators have significantly improved, paving the way for sustainable growth.

For instance, in the first nine months of 2016, the industrial output in Ukraine was up 2 percent from a year ago, the inflow of foreign direct investment to Ukraine rose 19 percent, while inflation slowed down to 6.4 percent in September from 43.3 percent at the end of 2015.

The government's efforts in dealing with the economic turmoil have received positive remarks from Ukrainian experts.

A recent survey conducted by the "European Initiative" association among 30 economists and economic analysts showed that 66 percent of the interviewees believe that the economic slump in Ukraine has already peaked, while only 7 percent think the opposite.

The outlook for the country's economic development is also optimistic, with most experts estimating that the gross domestic product (GDP) will not contract again, at least in the near term.

For the next year, most local experts are forecasting an economic growth rate of between 2.5 and 3 percent.

PEOPLE'S WELL-BEING IS IMPROVING

The average wage in the country has risen by 24 percent in the January-September period, while social welfare payments increased by 10.1 percent.

In October this year, the government announced plans to double the country's minimum wage to about 123 U.S. dollars per month next year, in an effort to reduce poverty and inequality.

If successful, the move would mean that the minimum wage in Ukraine will be enough to cover the cost of living for the first time since the country's independence in 1991.

"If the government pays the civil servants bigger salaries, private enterprises will also increase wages. It would have a positive impact on the labor market in Ukraine, reduce the outflow of workers abroad and boost budgetary revenues," said Taras Kozak, president of the investment group "Univer."

The government also launched a road construction program in the country, which ranked 134th among 138 countries and regions for the quality of roads in a recent World Economic Forum report.

As of mid-October, the government has started renovation and construction on 232 roads in 22 regions countrywide.

The establishment of the State Regional Development Fund, which enables territorial communities to raise money for everyday needs, such as renovating schools or lighting the streets, is another major step to facilitate the livelihood of the ordinary people.

MORE REFORMS NEEDED

Still, the pace of the reforms that are needed for long-term economic growth is slow, with corruption remaining the stumbling block in the government's policies.

The anti-corruption bureau, set up last year, has had very little authority to eradicate graft up until now as its work is highly dependent on other law enforcement bodies.

The electronic system through which the Ukrainian officials should file declarations about their assets and income, and meant to be formally launched by the end of October, is still not performing as it should.

"The main problem now is that the fight against corruption is selective: when most people are prohibited from doing something, other people are allowed," said Valery Ruban, an independent political analyst.

But corruption isn't the only challenge. Many other long-anticipated reforms, which were designated as key government short-term targets, have collapsed.

Particularly, the cabinet has failed to submit enough convincing arguments to the parliament for the abolishment of the moratorium on farmland sales to carry out the agriculture reform. Endi