After Ukraine became independent its residents, now reform-oriented, began to expect changes that will culminate in an economic miracle of sorts. The latter-day liberals attributed subsequent reforms and attainments to a model worked out using an IMF recipe. As an illustration of all those romantic expectations never destined to come true, I remember Bohdan Havrylyshyn, a member of the famous Rome Club, an Academician of the Ukrainian National Academy of Sciences, noting, rather proudly, that he was directly involved with Ukraine's admission to IMF and that it happened several weeks prior to Russia's. There seemed to be such beautiful prospects at the time...

As it was, that victory was shortly followed by a series of disheartening setbacks. Poland, which had embarked on the same road a little earlier, had to resort to "shock therapy" climaxing in an emotional outburst resulting in the retirement of the principal IMF mouthpiece [Finance Minister] Leszek Balcerowicz. In fact, the political leadership changed hands on the crest of a wave of public outrage. Not so in Ukraine, where the people, brainwashed into silent patience over the decades of Soviet rule, grit their teeth and struggled to survive each in his own way.

Natalia Vitrenko, Ph.D. (Economics), was among the first to say out loud that the IMF recommendations were, mildly speaking, not yielding positive results. In fact, the odious Progressive Socialist leader heavily relied on the topic in her political performance, going out of her way to expose the "subversive" activities of American imperialism. This caused idiosyncrasy in the population sick and tired of Communist verbiage.

Today, however, prestigious Ukrainian periodicals carry slogans that seem to have been borrowed directly from that tragicomic character of our political show. A recent meeting of the Presidium of the Ukrainian National Academy of Sciences heard a report by Academician Yuri Pakhomov who pointed to mistakes committed while implementing IMF recommendations. In an interview he declared that there is "ample factual evidence and an analysis of the Czech and Polish experience deflating the myth that these countries used the same recipes as we did, except that they did so more consistently and decidedly. In actuality, they did precisely the opposite. The most important result of these studies is that none of the readymade reformist models is acceptable for Ukraine, because they are meant for countries living under market conditions..."

All serious-minded governments, looking for ways of reform, selected recommendations that best suited them under the circumstances. Some accepted Keynesian, others institutional, still other IMF recipes, whereas the Ukrainian government followed the IMF prescriptions to a T. At present, almost all economists admit that the only objective of the recommendations at the time was to curb the military-industrial complex in Russia and Ukraine. Many an analyst are convinced that after the Soviet Union's collapse the United States mostly feared the CIS following in China's footsteps and would restore the world's most powerful military-industrial potential within the Russian-Ukrainian boundaries. And so depression and chaos were necessary to destroy that part of the economy, for which purpose a model was worked out that would surely weaken that economy and put money out of circulation. Without money that economy would go down, of course, with the fundamental sciences and high non-market technologies suffering the worst.

IMF architected Latin-American-like transformations in the post-Soviet countries, relying on the good old "reform matrixes". Given this formula of development, the countries undergoing reforms had no way to reach the "gold billion". A society experiencing IMF's "charitable care" remains at a lower rung in the evolution ladder long afterwards.

Ukraine's ten-year path following the IMF milestones is evidence that we have long developed all the Latin American economic hallmarks: a narrow domestic market, mostly export-oriented economy, factual absence of the middle class, and a lot of other dangerous characteristics... One is left wondering how the Ukrainian elite allowed this scenario to be acted out.

Yuri Pakhomov has an answer to that one. "Our biggest trouble is that this country was not cleansed of all that filth after toppling the old political system. Our western neighbours had spent decades cultivating a patriotic spirit. There was constant unrest in Poland under the Soviets. A social movement is not only replacing an obsolete political order, but also selecting new people, with the most decent, daring, incorruptible emerging from the masses and championing a certain idea, prepared to be thrown behind bars and even sacrifice their lives for the common good. This movement is an excellent criteria in choosing true leaders genuinely concerned about the future of their society.

"In Ukraine, this movement has never become truly massive. What dissidents we had were unable to come out with a sufficient number of followers that would head this country at an historical turning point. Instead, conformists were cultivated in all structures. Such people cannot beget new ideas in a dying political system, and nor can they head a new system when it becomes a reality by the will of history. Here people came to power that did not have a firm moral stand and nor were they ideologically tempered; they lacked a sense of responsibility and basic organizing experience. The new elite was composed mainly of lumpen turncoats determined to get their piece of cake at all costs. They represented an essentially different human product, with most scandalous characters suddenly turning into leaders. Just imagine this cocktail of nouveaux riches and surviving apparatchiks!

A Pole, Hungarian or Czech, having gone through prison camps and never giving up the struggle, would resist the temptation of rising from the dunghill. Not so our "democrats" who, together with partocrats [i.e., former Communist party functionaries finding ways to important posts at all levels] proved an ideal environment for corruption. They quickly realised they could not smuggle their loot abroad themselves, because there was a considerable risk of being caught red-handed, but that it was easier to hide it somewhere at home, amidst the chaos. Such was the atmosphere in which our capitalist class was born and bred. Worst of all, the existing recipes of enrichment were also ones of ruining this country..."

The other part of the centrists supported the idea of state regulation. They are convinced that the chosen course requires drastic readjustments. They believe that the market reform should be combined with some strong form of state regulation. Europe has obviously lost control over transformations in the so-called post-Soviet space (Ukraine included, of course) and that the United States has taken over. This situation must be corrected.

We have quite a few exponents of the Western European model. Many view it as exemplary post-industrial evolution. This part of the Ukrainian elite believes that the Western European option has a greater potential than the American one.

Some of us are (others are not) fond of repeating that Ukraine is geographically in the heart of Europe, in a roundabout way saying that Britain, for example, is on the continent's periphery. Yet economic realities are far more important to understand than geographical paradoxes. One such reality is Ukraine's rating with Europe's poorest countries, while possessing a large territory and a sizeable population. So far this is not to Ukraine's advantage. Rather, it is a considerable disadvantage, turning this country not into the investor's haven but a jigsaw puzzle still to be pieced together, an ill-provided-for monster one has to figure a way to put to good use.

Reaching average European labour productivity and living standards in Ukraine would in many ways improve the situation all over Europe. In this sense, the situation in Ukraine is really important for the rest of the continent. Economic estimates, however, show that it will take Ukraine at least a hundred years to cross the abyss separating it from Europe, given all conceivable, even the most favourable situations. In fact, if given the stunning Chinese rate of development, Ukraine would have had to spend another fifty years getting close to the European standard. East Germany's example of integrating into the West pattern serves as graphic evidence of the hardships awaiting Ukraine, considering that the latter's situation is even less attractive.

The foreign inward investment is too low in Ukraine. There is a great difference between such investments being made in Britain and in Ukraine. No Japanese businessman would ever think of taking investment revenues away from the UK; he would be interested in leaving them [and reinvesting them] there. It is good that Arabs, Japanese, and Koreans buy everything they can lay their hands on in Britain, because it means capital saturation. And it is very bad for countries such as the Argentine, Brazil, and Ukraine. The Argentine once received heavy investments, there was progress, but the unemployment rate kept rising and the living standard continued to lower, because of the exodus of capital. This is an example of how important a country's reputation is. It is dangerous to leave one's money in Latin America, but you can surely leave it in Communist China which is receiving huge investments and they stay there, unlike the Argentine.