Friday, October 30, 2009

No Comment

"Prime Minister Yulia Tymoshenko on Friday ordered a three-week closure of Ukraine's schools and cinemas in the toughest measures adopted yet to combat the swine flu virus in Europe.

...

The prime minister on Saturday held a mass outdoor rally in the center of Kiev attended by tens of thousands of people to mark her party's confirmation of her candidacy in the presidential race.

President Viktor Yushchenko, Tymoshenko's political arch-rival who is also standing in the elections, was due to hold his own rally on Sunday but it is now unclear whether this can go ahead."




and also


"
The virus is spreading across Eastern Europe, but it was not clear why Ms. Tymoshenko chose to undertake stronger moves, like closing schools nationwide, than her counterparts in Russia and Poland.

There were indications, however, that the government’s response was being influenced by electoral politics. Ms. Tymoshenko, one of the leading candidates, and her bitter rival, President Viktor A. Yushchenko, who is far behind in polls in his bid for re-election, both sought to make clear that they were aggressively addressing the outbreak."





"Campaigning for the hotly contested presidential contest in January has also been put off. Observers said the far sweeping moves to combat the flu are partly rooted in the political rivalry between Victor Yushchenko, president, and Yulia Tymoshenko, his prime minister, with each trying to outdo the other and be seen assertively handling the outbreak."



Thursday, October 29, 2009

IMF vs the Ukrainian Parliament - part II

An politically cunning, but economically disappointing move of the president...

"KIEV, Oct. 28 – President Viktor Yushchenko indicated Wednesday he will sign a controversial bill that dramatically increases social spending less than three months before the next presidential election.

The move, seen as politically motivated, will most likely force the International Monetary Fund to postpone its $3.4 billion Standby loan installment to Ukraine, scheduled for this year, reducing chances for Prime Minister Yulia Tymoshenko to win the presidency."

Wednesday, October 28, 2009

Ukraine's UFO database!


"The Ukrainian Ufologic Club (UFODOS) has released and placed on the Internet (ufobua.org.ua) a national archive of UFO evidences.

It was complied based on people's evidences about strange flying objects over Ukraine. The 'secret files' comprise about 500 eyewitnesses' testimonies who saw UFO in Ukraine starting from the 17th century. According to UFODOS chief Yaroslav Sochka, the materials were collected from various sources, basically, Hydrometeorological Center of Ukraine Air Force and public ufological organizations. In August 2009, the UK National Archives released new UFO files containing a wide range of UFO-related documents covering the years 1981-1996 and describing more than 800 UFO cases."




This makes excellent research material - f.e. one could estimate the determinants of UFO sightings!

Tuesday, October 27, 2009

Competition in the Retail Sector

If confirmed and they actually enter, this should be good news:

"German retailer Schwarz is mulling the launch of its Kaufland and Lidl hypermarkets in the Ukraine."


for some economic studies on this:

"Consumers often benefit from increased competition in differentiated product settings. In this paper we consider consumer benefits from increased competition in a differentiated product setting: the spread of non-traditional retail outlets. In this paper we estimate consumer benefits from supercenter entry and expansion into markets for food. We estimate a discrete choice model for household shopping choice of supercenters and traditional outlets for food. We have panel data for households so we can follow their shopping patterns over time and allow for a fixed effect in their shopping behavior. We find the benefits to be substantial, both in terms of food expenditure and in terms of overall consumer expenditure. Low income households benefit the most."



and

"This paper uses a case study approach to explore the effects of NAFTA and GATT membership on innovation and trade in the Mexican soaps, detergents and surfactants (SDS) industry. Several basic findings emerge. First, the most fundamental effect of NAFTA and the GATT on the SDS industry was to help induce Wal-Mart to enter Mexico. Once there, Walmex fundamentally changed the retail sector, forcing SDS firms to cut their profit margins and/or innovate. Those unable to respond to this new environment tended to lose market share and, in some cases, disappear altogether. Second, partly in response to Walmex, many Mexican producers logged impressive efficiency gains during the previous decade. "



IMF requirement nr II

"The International Monetary Fund (IMF) will demand the Ukrainian authorities refuse from financing of UEFA EURO 2012 preparations through using UAH 9.8 billion (USD 1 - UAH 7.99) revenues of the National Bank of Ukraine (NBU), as they believe this will cause a groundless emission, says the Information Center 'Ukraine - UEFA EURO 2012'."

Monday, October 26, 2009

IFC on Ukraine's Business Environment

The IFC has a new report on Ukraine's business environment - it's conclusion

"Implementation of key 2005 and 2007 laws on permits and inspection�s remains limited. Where implementation has progressed, the results are positive and entrepreneurs need less time in which to comply with regulations, such as permits and inspections. Nonetheless, a burdensome and
overly prescriptive regulatory system remains a problem for Ukrainian businesses. The slow pace of reforms threatens the ability of Ukraine’s businesses to compete in the international marketplace and to cope with the ongoing crisis."


The IFC has been doing this survey for many years now - and unfortunately, is not willing to share its dataset with outsiders. An example of over-regulation if you'd ask me...

Sunday, October 25, 2009

IMF vs the Ukrainian Parliament


"The International Monetary Fund asked Ukraine on Sunday to veto wage and pension increases that were approved by parliament last week before it decides whether to disburse further funds."


It's not too late yet for the IMF to start thinking about the hint I gave here

Saturday, October 24, 2009

Daylight Saving Time


One more hour of sleep this night!

Like the Kyiv Post, many people believe that 'The winter time is aimed at more efficient use of daylight and saving energy.'

There are several studies that are skeptic about whether this policy works, for example

"Our main finding is that—contrary to the policy's intent—DST increases residential electricity demand. Estimates of the overall increase are approximately 1 percent, but we find that the effect is not constant throughout the DST period. DST causes the greatest increase in electricity consumption in the fall, when estimates range between 2 and 4 percent. These findings are consistent with simulation results that point to a tradeoff between reducing demand for
lighting and increasing demand for heating and cooling."

At least, there's no impact on the stock market, according to this study:


Thursday, October 22, 2009

Reducing the Duration of Secondary Schooling


The latest law proposal (see below) to reduce the length of secondary schooling, if implemented, would create a nice natural experiment to see the effect of years of schooling on wages and other variables, especially since not long ago the duration was increased from 11 to 12!

At the same time, whether it would be good for Ukraine is another issue - in my eyes, Ukraine does not suffer from 'over'- education...

***

"People's Self-Defense Bloc MP Anatoliy Hrytsenko has submitted for consideration by parliament a bill of amendments to some Ukrainian laws on the introduction of a ten-year period of study required to receive complete general secondary education.

According to the bill, pupils will be enrolled to general educational institutions from the age of seven years, rather than six years as it happens now. The document proposes a reduction of in the period of study at schools from 12 to ten years - three years (1-3 years of study) at general educational institutions of the first degree, five years (4-8 years of study) at general educational institutions of the second degree, and two years (9-10 years of study) at general educational institutions of the third degree."


http://www.ukrinform.ua/eng/order/?id=172551

He Has an Economics Degree from Ukraine

Studying Economics in Ukraine apparently opens up various career opportunities.


"The FBI says Mogilevich, a Russian mobster, has been involved in arms trafficking, prostitution, extortion and murder for hire.

....

Authorities say Mogilevich, who has an economics degree from Ukraine, is known for his ruthless nature but also for his business acumen, which led to his nickname "the Brainy Don."

"He has a very sophisticated, well-educated, loyal group of associates that he works with," Dixon said. "He hires top-notch consultants, attorneys, risk management firms to assist him and protect him in his criminal ventures."

"The major criminal organizations in Russia have not only tapped into people with economics degrees," Shelley said. "They've tapped into people with PHDs in finance and statistics who assist them."


No Free Dailies

October 22nd, 2009

No free dailies were handed out at the Maidan Nezalezhnosti subway station entrance in Kiev this morning. Checking websites and journalists confirmed that there are no free dailies in the country anymore.

At the end of 2008 there were still four free dailies available. 15 Minut (KP Media) launched in 2006 and grew to six editions and a circulation of 270,000 at the end of 2008. Obzor (Telegraaf Media Group) launched in 2004 as a three-times-a-week paper and went daily in 2007. Free evening paper Vecherkom (by paid daily Segodnya) started in April 2008 while Puls Kiev launched in October. Joint circulation was around 500,000 according to claims of the publishers (there is no official circulation audit in the Ukraine).

Both 15 minut and Obzor closed in December 2008, and probably also Vecherkom shut down during that time. Some months later Pulsstopped publishing, their last issue is from March 13. The recession but also the heavy competition between the four papers caused problems.

Since some months a two-times-a-week paper, Tochka(point) is the only paper that is free available (left) although paid paper Blik was heavily sampled."


Wednesday, October 21, 2009

Statistics Seen through Pink Glasses

A lesson in positive thinking from the prime minister.

"Ukrainian Prime Minister Yulia Tymoshenko called the 1.9-percent monthly increase in September's industrial output a record.

She made a statement to this effect at a government meeting on Wednesday, saying this rise is an evidence of crisis slowdown and return to pre-crisis production volumes".


Of course, a good journalist should add the yoy statistics to the prime minister's statement.

Pay for Politicians - A Sequel


Let's hope they (have to) give them back once they leave office...

"The Verkhovna Rada of Ukraine has included 17 apartments in residential houses on a list of official, state-owned housing that ensures the parliament's activity.

A total of 352 out of 434 MPs voted for a respective resolution on Wednesday.

An explanatory note to the bill reads that according to the law on the status of people's deputies of Ukraine, MPs have the right to receive apartments when they are in office."

http://www.kyivpost.com/nation/51064

Tuesday, October 20, 2009

Price Regulation

Ukraine seems to like price regulation lately. The latest initiative targets medicines

"The parliament has decided that the prices of medicines produced in Ukraine are regulated by the state. As for the medicines produced abroad, they must be sold at prices effective as at July 1, 2008."

Medicines produced abroad must be sold at July 2008 prices - let's see how long it will take before there are shortages of such medicines.


Monday, October 19, 2009

Odesa Port-Side Plant Embarrassment - Part II

The cancellation of the auction of Odesa Port-Side Plant was rather embarrassing for the Ukrainian government.

Apparently, it's getting even more embarrassing

"Frunze-Flora Ltd. has filed an appeal to Kyiv Economic Court to demand that the UAH 400 million it sent as a bid deposit to participate in the tender to sell OJSC Odesa Port-Side Plant be returned by Ukraine's State Property Fund (SPF).
...
Grigorishin told the Ukrainska Pravda electronic publication that Frunze-Flora had been notified on behalf of the premier that the budget had no money and the bid deposit would be returned if the International Monetary Fund allocates money to Ukraine - if anything remains out of that sum - but this could happen no earlier than in November."

Education and the Labor Market

An interesting article on education and the labor market, with some insightful comments by experts ;-)

Friday, October 16, 2009

Fashion and Economics

"KYIV, October 15 /UKRINFORM/. The 15th Ukrainian Fashion Week opens at the ACCO International exhibition center in Kyiv. 40 designers from Ukraine, as well as from foreign countries will show new collections of the spring-summer season 2010.

In addition to Ukrainian celebrities, Hollywood actress Eva Longoria is expected to come and "James-Bond-girl" Olga Kurylenko who will come to Elie Saab's show planned for October 21."



Info on the 'Economics of Fashion' or 'Fashionomics' can be found at






The Future of Ukraine is Bright

if we can believe the experts, that is

"International actors of the real estate market could return to Ukraine by the end of this year, say analysts with Colliers International."


"The potential of the Ukrainian stock market will grow by 100% in the course of 6 - 12 months, Dmytro Isupov, managing director of the Dragon Asset Management company, told a press conference."

Wednesday, October 14, 2009

Smatchnoho!

"One person eats up UAH 18 a day"

More On Alcohol

"Total production of ethyl alcohol over nine months made up 18 million decaliters and it reduced against the same period of the previous year by 0.93 million decaliters, the Ukrspyrt Concern informed."


Important, however

"Supplies to the domestic market grew by 3.3 million decaliters."



"The Ukrainian Cabinet of Ministers has increased minimum retail prices for some kinds of alcoholic beverages."

My question is why the cabinet regulates the retail price - an increase in retail price should reduce demand but the increase in prices would benefit the producers - a tax would seem to make more sense

Sunday, October 11, 2009

30% up

The Ukrainian stock market is 30% up compared to one month ago, from 472 to 617


That's about half way from the top (over 1200) last year

Thursday, October 8, 2009

FDI and Spillovers

A nice example of technology transfer linked to FDI

"Nestle Ukraine is planning to increase the share of raw materials (ingredients) buying in Ukraine for the production of its branded products, according to the official representatives of Nestle Ukraine and Moldova Public Relations Division.
According to them, currently the company has some problems with its raw materials supplies, given the stringent requirements to the quality of ingredients, but Nestle will give maximum assistance to companies willing to provide Nestle with raw materials."

http://foodbizdaily.com/articles/93089-nestle-ukraine-to-save-on-costs-by-purchasing.aspx

Wednesday, October 7, 2009

Ukrainian Companies and the Economic Crisis

The EBA and E&Y have now already done for the 4th time a survey on how Ukrainian firms react to the crisis - it would be nice to get the data of these surveys and do a panel study to see how firms' reactions in the first survey then determine the outcomes in the later surveys


http://www.eba.com.ua/files/documents/EY_EBA_Economic_Crisis_Survey_4_Eng.pdf



http://www.eba.com.ua/files/documents/Economic_crisis_survey_Eng_08.pdf

Monday, October 5, 2009

Ukraine's Performance According to UNDP HDI

Ukraine doesn't score that well in the Human Development Index - it's substantially below the CEE-CIS mean. Belarus does better than Russia and Kazakhstan in the High Development Category - Ukraine doesn't even make that category, being at the top of the 'Medium Development Category'


Sunday, October 4, 2009

Wishful Thinking


October 3:

"They (domestic gas prices) are defacto subsidised, and Naftogaz year after year has a defacto deficit that has to be covered," World Bank vice president Philippe Le Houerou told a news briefing.

"One of the key measures we all agreed with the government is to increase the tariffs. It's a difficult measure but there was an agreement. Yes, we expect they will raise the prices."


October 4:

"Do not believe claims that gas prices for people will be raised. I promise you that the price of gas will not increase by one kopeck under any circumstances," Tymoshenko said.

Saturday, October 3, 2009

Non Performing Loans

Ukrainian banks are not the only ones having trouble getting their money back.

"The number of U.S. lenders that can’t collect on at least 20 percent of their loans hit an 18-year high, signaling that more bank failures and losses could slow an economic recovery.

[There are] 26 firms with more than one-fifth of their loans 90 days overdue or not accruing interest as of June 30 -- a level of distress almost five times the national average ..."

Friday, October 2, 2009

More Reasons to Study at KSE

"This paper explores the many avenues by which schooling affects lifetime well-being. Experiences and skills acquired in school reverberate throughout life, not just through higher earnings. Schooling also affects the degree one enjoys work and the likelihood of being unemployed. It leads individuals to make better decisions about health, marriage, and parenting. It also improves patience, making individuals more goal-oriented and less likely to engage in risky behavior. Schooling improves trust and social interaction, and may offer substantial consumption value to some students. We discuss various mechanisms to explain how these relationships may occur independent of wealth effects, and present evidence that non-pecuniary returns to schooling are at least as large as pecuniary ones. Ironically, one explanation why some early school leavers miss out on these high returns is that they lack the very same decision making skills that more schooling would help improve."

Vodka Sales Are Up


"Vodka sales on the domestic market increased by 48.8% totaling 24.6 million decaliters"

Interesting especially since beer consumption is going down