The Ukraine

April 9, 2002

April 9, 2002

Today's commentary may be from Washington, DC but next week I will be talking to you from the Ukraine. The Annual Convention of the Citizens Network for Foreign Affairs will be held in Kiev, the Capitol City.

The Citizens Network is a non-profit organization that I have been a part of for over 10 years. Our objective is to encourage U.S. investment and trade in the former Soviet states, introducing Democracy and free market principles.

I will be moderating one of the panels, hoping to enlighten the leaders from Russia, Ukraine, Romania and other states about how this business of agriculture in the United States works and how it could work for them.

From what I can tell, Ukraine has made some very real progress since I was last there nine years ago. At that time, the deep rich black land that stretched as far as the eye could see, made my mouth water. What potential! But with the rule of law almost non-existent, an oppressive government and the land owned by the government. What hope did the farmer or food distributor have? The economy was in a met down in 1998.

Here is just one example of what the government was doing then. At that time the government owned most of the grain storage. The farmers would deliver their grain to the government storage. Then the farmer would want to pay the chemical company, the seed company, and the fuel company by selling some grain. Surprise! The government confiscated their grain! No one got paid except the government. That doesn't encourage foreign investment.

The government of Ukraine has made some reforms. But not enough. They still do not have a western style tax cod. If they had that, they might not have to resort to stealing grain. There is a better way. They don't have to look very far either. Russia has instituted a simple and fair 13% flat tax. And the tax money is skyrocketing. We should be so lucky. After the cost and anguish of filling out all the complicated tax forms that the Congress and the Internal Revenue Service burdens us with.

I look forward to reporting to you next week from the Ukraine... which used to be the breadbasket of Europe. I am John Block from Washington.