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The headlines coming out of Ukraine are tragic—and inspiring. Ukrainians are risking their lives and property for independence, a path to Europe, and freedom from political oppression. They are also demonstrating for economic freedom, courageously challenging a repressive government that has turned to Stalinist tactics to try to destroy them.
One look at Ukraine’s score on the 2014 Index of Economic Freedom, published by The Heritage Foundation and The Wall Street Journal, explains what has driven people into the streets.
With an overall score of less than 50 points, Ukraine ranks 155th out of 178 countries. That is the worst in Europe. Under President Victor Yanukovich, the country has registered steadily deteriorating scores on property rights, corruption, financial freedom, and investment freedom. Ukraine is now in the lowest Index category: “repressed.”
The lack of economic freedom has been a major obstacle for businesses (and democracy) in Ukraine.
A proposed Deep and Comprehensive Free Trade Area (DCFTA) between Ukraine and the European Union (EU) would have made cross-border trade easier by eliminating custom barriers for businesses both in Ukraine and in Europe. For example, import duties on textiles and clothing from Ukraine to the EU would fall from 11 percent to zero; on Ukrainian food exports, the current 10.4 percent level would be reduced to less than 2 percent. In addition, the DCFTA would have promoted investment in Ukraine, increased overall transparency of capital flows, and reduced capital flight.
It was not to be. As reported by Heritage’s Ariel Cohen, when Yanukovich derailed three years of negotiations with the EU and refused to sign the Association Agreement with the EU, tens of thousands of people filled the Independence Square (the Maidan) to launch “EuroMaidan,” an ongoing mass demonstration.
Since then, Ukraine’s “Orange Revolution” has faded to black as the Yanukovich government has sent men with truncheons using clouds of tear gas to break up protesters who have been demonstrating against corruption and Russian influence. Violence escalated in the past few weeks, with government-sanctioned shootings of protesters. Recent news that the most draconian anti-dissent laws were repealed and the premier and the rest of the government ministers have resigned does not change much. Yanukovich remains in power and is still calling all the shots, including those that killed the protesters.
We hope the brave and persistent fight for freedom by Ukrainians in the EuroMaidan will succeed in forcing peaceful and positive economic and political changes in Ukraine. So long as barriers to democracy and economic freedom remain, the barricades on the streets are not likely to come down.
Read more about Ukraine Economy.
See more from the 2014 Index.
