To help Ukraine, cancel its foreign debt
What they say is not true. Ukraine was the northern part of the Global South and the poorest country in Europe, vying for that spot with Moldova.
Below, I provide some comparative data on our economic development:
Thus, in terms of national income per capita, Ukraine lags far behind the European Union, and even more so than the United States. The latest data indicates the poverty of our people, with average salaries below five hundred euros per month:
After the start of the war in the East, the economic crisis of 2014 and the loss of markets, people’s incomes have barely recovered in recent years. But even this level was still too low. The reasons were:
— Extraction of wealth to offshore companies, often formed in former Soviet industries after privatization.
— An emphasis on the export of raw materials (cereals, metals, chemical industry).
— Bad debt policy. IMF loans were given on terms that required even the remnants of the welfare state to be reduced. Payments intended simply to service the public debt have become one of the largest parts of state budget expenditure (amounting to 8.5% of the total in 2021).
— Lack of support for Ukrainian high-tech products, especially due to unfair trade agreements with foreign partners (including the Association Agreement with the EU).
The war that started in 2014 blocked the flow of investments and only worsened the situation. Since then, we have also been restricted in terms of political participation. Socio-economic protests were marginalized and “displaced” during the war.
As a result, instead of fighting for a better future in Ukraine, Ukrainians have gone abroad in droves. Thus, according to the UN, in 2020 Ukraine ranked eighth in the world in terms of labor migration. Millions of Ukrainians have already left in recent years to Eastern EU Member States (eg Poland, Czech Republic). There they replaced the workforce that left those countries in search of a better life in Germany, Britain and other central countries. With this war, the EU predicts that up to five million more people will arrive from Ukraine – more skilled labor to integrate into European society.