Bohdan Danylyshyn: Yulia Tymoshenko’s government gave tough resistance to the crisis

Former Minister of Economy and head of the Council for Ukraine’s Productive Forces Studies of the National Academy of Sciences of Ukraine, Bohdan Danylyshyn, has rejecting accusations by Prime Ministers Mykola Azarov that Yulia Tymoshenko’s government brought the economy to crisis levels.

"I disagree with such statements. We must identify what measures Yulia Tymoshenko’s government took, the conditions, and circumstances that were the result of Ukraine’s economy being in crisis," Bohdan Danylyshyn said today on Radio Era FM.

According to Bohdan Danylyshyn, the sectors that were hardest hit by the crisis were those that were export-oriented and least reformed. "This includes metallurgy, chemicals and machine building. During the best economic times in 2002-2007, when metallurgical products were most competitive, there was no modernization in the sector. Dependence on exports was very high, more than 40%, and naturally after the fall in global prices, there was a drop in metals and chemicals production, as well as machine building," he explained.

Bohdan Danylyshyn added that once the banking system stopped providing loans to the real sector of the economy, it was very difficult to carry out anti-crisis measures. "No economist in the world has provided an answer to the question of how to develop the economy without interaction with the banking system. Lending stopped, there was an outflow of fictitious capital, that came in not only during the government of Yulia Tymoshenko, but also during the previous government," said the ex-minister.

According to him, a drop in output in these industries also led to a drop in the construction industry. "Of course, the global economic crisis contributed to an outflow of financial capital, and this effected real financing of economic programs. That’s why we had a drop in construction, and in industries that are dependent on construction. This, in one way or another, impacted the decline in GDP and other industries," added Bohdan Danylyshyn.

At the same time, ex-economy minister said that the government had developed anti-crisis program in a timely manner. "The first government anti-crisis program was approved on October 17, 2008. The issue was then considered at a meeting of the National Security and Defense Council. Later, on November 20, the government approved the second anti-crisis program, which was sent to the Verkhovna Rada, and I think because of political circumstances no one passed it," he said.

"We must learn lessons from the crisis, and the measures taken by the government are already beginning to yield results," said Bohdan Danylyshyn.