Page 13 - BNE_magazine_05_2019

bne May 2019 Companies & Markets I 13
Millions of Ukrainians have left their country, at least temporarily, to work in Poland and other EU member states.
in the footsteps of the smaller Visegrad countries in attracting FDI, taking advantage of the labour squeeze in nearby states like Poland and Slovakia with its much larger working age population. But investments like these are the exception rather than the rule. The country’s tumultuous politics and official corruption are deterring investment, as highlighted by the slump in production at the Eurocar plant close to the Slovakian and Hungarian borders after two economic crisis,
a change of government and a war with Russia, as reported by bne IntelliNews’ Fabrice Deprez last year.
Millions of Ukrainians have left their country, at least temporarily, to work in Poland and other EU member states.
Instead, incomes well below those in CEE – Ukraine slipped behind Moldova to become Europe’s poorest nation according to the IMF – and the failure to deliver on the Maidan promises of a better standard of life for ordinary Ukrainians, not to mention the war in the East, have led to the working age population leaving in their millions to seek a better life in nearby EU countries, a process that snowballed after President Petro Poroshenko won a much-desired visa-free travel
deal between Ukraine and the EU in November 2016. It’s not entirely clear how many Ukrainians have left the country, several million people are estimated to have left for Poland, at least temporarily. Not only that, but Russia recently started looking to Russian speakers in Ukraine and other ex-Soviet countries to move to Russia and revive its own flagging demographics.
Turkmenistan to overtake Hungary in 2055
Ukraine’s politics are so turbulent it’s hard to see far into
the future, but the presidential election offers hope to many Ukrainians, as comic and outsider Volodymyr Zelenskiy
swept to a crushing victory over unpopular oligarch Petro Poroshenko. However, whether Zelenskiy will manage to make real reforms, and, critically, if his party can win enough seats in the autumn general election, remains to be seen. Longer term, unless there are radical reforms and a change for the better in terms of living conditions, the exodus from Ukraine won’t be reversed, and this comes on top of the natural decline seen across Eastern Europe.
Turkmenistan is the true basket case of the post-socialist countries. The desert nation has the world’s fourth largest
gas reserves, which with a population of only around 5mn should mean prosperity. But the bizarre regime of current President Gurbanguly Berdymukhamedov and even more so his predecessor Saparmurat Niyazov have driven the country close to bankruptcy with economic mismanagement and lavish prestige projects if reports coming out of Ashgabat are correct.
Turkmenistan remains in the midst of an economic crisis.
The country’s budget was drained after the oil price shocks
of 2015-2016 rocked the hydrocarbon export-dependent economy and Russia stopped buying Turkmen gas. The remote, tightly controlled nation has embarked on an
attempt to diversify its economy, such as with petrochemical production facilities, and introduce some reforms, mostly based on recommendations from the IMF. The pace and scope of the reforms, however, has not been significant.
In December, Berdymukhamedov said that Turkmenistan needs to adopt a “new economic model” for the years through to 2025, but did not elaborate what the model would entail. He has also ordered the government to control the prices of essential groceries, merchandise and social services as it scrambles to balance the public’s growing discontent and its own cost-cutting measures. Last year, there were reports of passport-based bread rationing in the remote nation.
Even accurate data on population and migration is hard to come by from the secretive desert state, but reports that tens of thousands of Turkmens have been placed on a blacklist and banned from leaving the country indicates Ashgabat is worried about losing educated, working age people in particular.
Turkmenistan’s population is at least growing strongly, which is not the case in Hungary, whose population is expected
to dwindle from over 9.7mn today to just 6.4mn in 2100, dropping below Turkmenistan’s around the 8mn mark in 2055.
In an attempt to address what is seen as the country’s demographic crisis, Prime Minister Viktor Orban announced a seven-point family protection action plan in his state of the nation address, seen as the start of his campaign for the May European Parliament elections, in February.
Hungary’s population is decreasing by 40,000-50,000 each
www.bne.eu