Roughly $170 Billion of Ukraine’s Budget Hidden In Offshores

Offshore accounts of  Ukrainian origin amount to $117 billion, according to Global Financial Integrity or $167 billion accodring to the Tax Justice Network, ZN.ua [the text of this hyperlink is in the Ukrainian language] reports results of research by Dr. Serhiy Korablin.

Experts have estimated that Ukraine loses $11—12 billion yearly, which equals the amount of loans received from the International Monetary Fund in 2014–2015.

Dr. Korablin claims these losses cause a significant drop in fixed capital formation. "Ukraine, just like China, is a country with an average income level. During 2000–2008 fixed capital formation was steadily increasing. However, this trend later changed and yearly volumes of capital formation dropped by 2.6 times in 2014, while countries with the same income level got a 1.6 times increase, and China almost tripled its results (by 2.6 times)," Dr. Korablin states, emphasizing certain regress in Ukraine’s strategic development.

"As a result, our investments in the country’s future ($800 per employee) are closer to that of the World’s poorest nations ($370) rather than economies with a decent income level ($3000).  The richest countries, including EU members, have fixed capital formation per employee at 18-20 times higher [than Ukraine]. This gap is growing each year," notes Mr. Korabins, pointing out that Ukraine is falling behind even in a relative fixed capital formation (17.5% of GDP in 2013 whereas 21.9% was the worldwide average).

In 2014, fixed capital formation dropped to 14% of GDP.

Source: Ekonomichna Pravda