A new model of the economy and the geopolitical balance: how will the Ukraine after the coronavirus (Apostrophe, Ukraine)

Pandemic coronavirus in a few months changed the established world order, affecting the vast majority of spheres of life. Ukraine, of course, is no exception: the fall of the economy, challenges in domestic and foreign policy, defense and energy sector in the near future will be felt more acutely.


This area most critically affected by the pandemic covid-19, because the business was practically stopped, and now, despite the easing of the quarantine, many areas of business activities are in suspended animation. However, according to experts, the worst is yet to come, and the real decline in income and living standards of Ukrainians will feel in the fall.

According to the macroeconomic forecast of the government, in 2020 Ukraine’s GDP will fall by 4.8 per cent (although the opposite was expected to grow by 3.7%), and unemployment rate of 9.4 percent. The IMF draws for Ukraine is even less optimistic prospects: 8.2 percent drop in GDP and over 12 percent unemployment.

“The IMF forecast is closer to reality, says the head of the Board of the Institute of social and economic research Anatoly Maksyuta. — In addition, of particular concern to the industry decline, which began last year, and this year continued. Pandemic only hasten this process, because the company stopped, people did not go to work. We can conclude that the export-raw model of the economy cannot withstand the stress tests. Yes, falling and Europe and the whole world, but Ukraine has not yet recovered after the crisis 2014. Gradually, our economy shrinks and primitiveservlet: is the production of complex goods, we turn to the scheme of the production and export of raw materials. We do not see prospects in this model”.

According to experts, a lifeline for the Ukrainian economy would be a radical change in the domestic economic models, aiming at supporting national producers and a reduction of dependence on imports.

“There must be economic policy that would be focused on creation of added value in Ukraine, the transfer of production to Ukraine, and not the export of labor outside the country, assured Maksyuta. — The government would have to work on a dynamic model, with emphasis on the processing industry and the development of small and medium business, which is more flexible and could take on some of the innovative solutions in this new model. As regards large enterprises, the state would have to maintain those large enterprises, which could become international corporations and even monopolies in the international markets”.

However, strategic decisions on the economic field, must first take the Cabinet, but in the meantime, the government can’t even write an adequate program of action, which would be approved in Parliament.

Foreign policy

Pandemic coronavirus has affected the global political processes. Escalated the confrontation between the U.S. and China, increased tensions between the US and the EU, the European Union and Russia.

“The world has become multipolar. If you’ve had an argument, then today neither in the USA nor in the EU no one denies that. Yes, the United States and will continue to be the most powerful state in the world, but the US hegemony will be gone in the world,” said Ambassador extraordinary and Plenipotentiary of Ukraine Oleksandr Chaly. In this situation Ukraine will have to balance in the quadrangle, the EU, China, USA and Russia.

“And in recent years we have actually gone from any balance, subject to its policy only to the strategic interests of the United States economic and strategic interests of the EU. USA is our main strategic partner, which nobody questioned, but in the relationship with any partner in postcoronary world should be based on national interests of Ukraine. Covid-19 testified that the basis of international life are national interests, not values. Even member countries of the EU first put its own national interests. In this context, Ukraine needs a new national security strategy and the new concept of foreign policy,” concluded Chaly.

Domestic policy

However, according to doctor of political Sciences, ICPS expert Igor Petrenko, transformation needs and the internal policy of the country, because the coronavirus pandemic, have highlighted the systemic problems of the country, which were accumulated during the years of independence: medical reform, destroyed the system of epidemiological protection.

“Also a big problem in the relationship between the centre and the regions, which even resulted in open confrontation between mayors of individual cities with the head of state, — said Petrenko. — Observed and poor communication heads yeah with the mayors: heads of regional state administration report to the President and the Cabinet of Ministers, that they are well enough the same of personal protective equipment and medical ventilators, and then go to the mayors and say that’s not good.”

According to Igor Petrenko, the confrontation between regions and the centre could reverse the increasing role of civil society. “It can be changed, when is spliced and civil society will be formed, the so-called counter-elite of the democratic persuasion, willing to work under the new rules, not to blackmail the Central government,” — said the expert ICPS.

In addition, a special role in the formation of a new political reality needs to play the President’s office. “It must be an intellectual centre which would attract the expert community to analyse the situation, develop recommendations to transfer them to the level of the government and Parliament” — summed Petrenko.