Ukraine faces a choice that will determine its future: to remain trapped in a resource economy or to transform into a complex, highly developed structure. The first option is the path of degradation of industry, infrastructure and export of labor, while the second is GDP growth, investments in education, science, medicine and a new industrial renaissance. However, will there be enough political will to transition to a development model, or will they again choose a simple but destructive path? Analyst Oleksiy Kushch told about this.
Discussing the model of using Ukrainian resources is simultaneously a discussion of the model of economic development in general. Either the “economy of resource exploitation,” or the model of economic transformation towards a new, more complex and developed structure.
In simple words, living off the meager raw material rent (no one will pay more) or at the expense of surplus value.
In the first case, further export of the population to other, more developed countries. Degradation of industrial megacities in the east and center. Deindustrialization and desocialization. Degradation of infrastructure, education, medicine and science systems. Low per capita income, GDP and deficit of defense investments. Environmental problems.
In the second - growth in labor productivity, investments in science, education, medicine, infrastructure. Creation of jobs. New industrialization and urbanization renaissance. Growth in GDP and income levels of the population, significant spending on defense, energy, ecology. Demand for highly skilled labor, repatriation of the population.
Despite the obvious advantages of the second option, the choice will most likely be made in favor of the first.
I give the odds as 70/30. And do you know why?
There are two reasons.
The first is simplicity. Our elites always follow what seems like a simple path. Whether this then leads to complex problems is another matter.
The second reason is rent-seeking.
Rent-oriented political elites always choose a rent-seeking, raw material, corrupt model of the economy, which allows them to withdraw “passive income” from it, as from a bank deposit.
A complex economy requires the presence of “development elites,” country building, “development elites” who earn a portion of the profits generated by the system, not a portion of the rent.
