Recently the Tymoshenko government has passed a line, beyond which conclusions can be made about its performance with certain statistical credibility and forecast these results for the foreseeable future. The matter concerns the Ukrainian economy’s outcome in the first quarter of 2008. As practice testifies, a three-month period is enough to set planned tendencies of the economic and social development, to enhance or loosen one or another vectors of this development, to correct the predecessor’s mistakes or augment their achievements. However, the first quarter results of 2008 demonstrate that the Tymoshenko government eventually failed to proceed with great deeds of the previous government, lost the dynamics of economic growth, committed a lot of grave drawbacks and faults while managing the economy. The policy of social populism contiguous with undisguised demagogy and cynical adventurism has outshined all other rational areas of activity.

As it was in 2005, the domestic economy has slowed down again and some industries have even reduced their production volume. Particularly, the growth rate of gross domestic product decreased from 8.9 to 6%, of industrial production – from 12.9 to 7.8%, of agricultural products – from 5 to 0.2%. The building sector has slowed down significantly, which last year enjoyed a high growth rate. The growth in the industry fell from 16.5 to 1.7% and in 13 regions the volume of building works sank at all.

Production of basic resources vital for the economy has been reduced, in particular oil products. Production of petrol decreased by 27.3%, of diesel fuel – by 41.6%, of fuel oil – by 47.7% (almost by half!). Under conditions of acute problems with energy supplying the domestic extraction of oil and gas is shrinking – by 3.8%. Hydroelectric power plants reduced electricity generation by quarter. Growth rates of one of the key industries of the domestic industry – metallurgy – dropped steeply. Its growth decreased from almost 18% to 1.7%. Meanwhile, metal is the main item of Ukraine’s export. Production of pipes of large and small diameter was reduced by 10.8%, of radiators for central heating – by 13.4%, etc. Summing up the results of the first quarter of 2008, industrial production volume diminished in Ivano-Frankivsk (by 25.7%) and Poltava (by 5.9%) regions, although last year all regions performed with growth.

Threatening tendencies are traced in the food industry, where growth rates fell from 13.7 to 10.3%. Manufacture of beef, oil and margarine products shrank, the resource basis of the industry diminished. In Poltava region the meat production volume decreased by 20%, in Mykolaiv – by 18%, in Chernigiv – by 15%, etc. Overall milk production comparing to January-March of 2007 has been reduced in 18 regions, mostly – in Odesa and Zaporizhzhya regions (by 15-17%). In the light of galloping inflation, which by the first quarter results has already exceeded the government’s prognosis, increase in arrears of wages was recommenced.

According to statistical data in January-March of 2008 these arrears grew by UAH 23.7 million, although since September of 2007 it had been reduced diminishing constantly. Growth of people’s revenues occurs notwithstanding the state’s economic potential and primarily due to the income directly not connected with results of work. It considerably undermines incentives for labour and social groundwork of fair allocation of social labour outcome.

The current economic situation testifies lack of the Tymoshenko government’s systematic work on ensuring high dynamics of its sustainable growth. Ukraine is losing its strong positions in such industries as metallurgy, building, food industry, where the Yanukovych government used to provide considerable production growth.

The situation of 2005 recurs almost similarly when the Tymoshenko government behind populist arrangements actually stopped to meet the real economic challenges. The basis for potential growth is being lost every day and the main source of making unproductive payments excessive for the present economy is determined to be revenues from selling national wealth, property of strategic enterprises and land. This source is not inexhaustible and, in fact, is nothing else but using descendants’ belonging. But it does not bother Tymoshenko and her team who are striving only for absolute power and have not even a slightest idea what should be done for strengthening the state and its economy.

As in 2005, once again we observe nice slogans, glowing appeals and utter helplessness against mounting challenges. All these are clearly and convincingly testified by the Tymoshenko government’s performance results in the first quarter.