Espreso. Global

Ukraine needs changes

5 September, 2022 Monday
23:20

A large pro-Russian rally in Prague and smaller rallies in other European cities are the first negative signal from the West for us. Russia will do everything to push the West to ease sanctions, because sanctions work, Mykola Kniazhytskyi writes

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Western sanctions return Russia to the crisis of the 90s. After the collapse of the Union, GDP in Russia began to fall and returned to the level of 1990 only at the end of 2007. Before the next crisis.

Why did the GDP fall? Ties with suppliers have been broken and sales markets have shrunk. Relatively speaking, parts stopped coming from Ukraine to Russian factories, and Russian goods were replaced by goods of a different origin. The same thing happened in other former republics.

What happened after the introduction of sanctions? The same. Components and spare parts do not arrive from Europe, and sales markets have closed.

For Russia, there are India and China, but not everywhere makes high-quality spare parts and there is competition, not all goods are needed for sale.

To restore all this, investments will be needed, as happened in Russia in the early 2000s. They won't be.

What about Ukraine? Because of the Association Agreement and the Western exchange rate, we have little dependence on supplies from Russia. But production was largely destroyed by the Russian aggressor, and exports were cut off from a large part of the transport routes.

We also need investments for recovery. For this, the country must be democratic, the courts must work, and investments must be protected. People who went abroad must return, because it is a scarce labor force.

All this is not available yet. And therefore, the West will still consider the possibility of lifting sanctions against Russia, and Russia itself will fuel such processes.

No matter how and when the war ends (I believe that with our victory and soon), reforming the country cannot be postponed. This should be done now.

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