The orange revolution in Ukraine was a joyful event, a liberal revolution for democracy and freedom. Viktor Yushchenko was elected president and promised the population he would make them free of fear and corruption.
Unfortunately, the new Primer Minister, Yuliya Tymoshenko, a heroine of the revolution too, surprisingly opted for a socialist and populist economic policy. The results have been immediate. The growth has dropped from 12% last year to 5% and the inflation has surged to 15%. How could all these happen so soon?
The biggest blow to the economy was the re-privatization policy which nationalized the oligarchs’ companies to privatize them again. In the case of Kryvorizhstal, Ukraine’s biggest steel mill, the owners took the case to the European Court of Justice and the proceedings are still undergone. Since the government is trying to nationalize many enterprises, the owners prefer to sell them to Russia or to transfer their capitals there and, of course, they stop making investments. Besides, the statements of the new minister of privatization and those of the Prime Minister sounded like state capitalism. Finally, in order to finance pay raises the government has raised taxes despite the contrary promise made by Viktor Yushchenko. The new fiscal system has forced thousands of small entrepreneurs to close their businesses whereas the oil and meat prices control policy has caused shortages.
The friends of Ukraine need an explanation.

Washington Post (United States)

Betraying a Revolution”, by Anders Aslund, Washington Post, May 18, 2005.