Ukraine has thousands of deposits, but most of them are not in operation: Novak explains why
23 April 16:04
In Ukraine, only 3,500 of the 20,000 discovered oil and gas fields are currently being developed. The reason is not a lack of technology, but rather the economic landscape and the war, which further deters investors. Economist Andriy Novak made this statement in an interview with the YouTube channel "Komersant Ukrainian".
“The reason is definitely not that we lack technology. Because technology is constantly evolving. It is well-known. Science and the global world—both economic and scientific—do not allow for any new technologies to be kept secret.”
According to the expert, the key problem lies in the country’s economic system, which for years has failed to stimulate the industry’s development and create conditions for investment.
“The problem is the economic system, legislation, and the rules of the game. And even before the war, we didn’t see any particular boom in this sector. Why? Again—the economic system. It wasn’t attractive,” he adds.
Novak emphasizes: even if Ukraine attracts partners for resource extraction, the main question is what happens next with these raw materials.
“Extract, please, go ahead and extract, but build a plant in Ukraine, process the raw materials into finished products, and sell them to the world. But if we just extract and export—we’ll never get rich that way,” he added.
The economist emphasizes that the current model is essentially a road to nowhere, where the country sells raw materials and then buys expensive finished goods made from them.
“This is a path that will lead to us having 50 very rich people, while the rest of the country remains poor. And forced to leave the country,” says Novak.
In his view, the fundamental solution is to change the country’s economic model: from a raw materials-based economy to one focused on processing and manufacturing.
“The economic model must be directed solely toward highly industrialized development. Otherwise, we will remain poor, just as we have been throughout the years of independence,” he believes.
In conclusion, Novak emphasizes: it is not resources that determine the standard of living, but how the state manages them.
