Sunday, February 28, 2010
Tuesday, February 23, 2010
Price Discrimination Opportunity
"Donetsk Railway introduces separate compartments in trains for men and for women from March 30, reads a statement made by the railway's press service, a copy of which Ukrainian News has obtained.
"From March 30, as an experiment, passengers of trains formed by the Donetsk Railway will have the ability to choose from travelling in compartments for ladies or for gentlemen," the statement reads.
In particular, the service will be provided in train 88 bound for Luhansk - Kyiv, train 83 Mariupol (Donetsk region) - Kyiv, and train 120 Donetsk - Kyiv.
Tickets to such compartments will cost the same as ordinary tickets."
The Railway misses a great opportunity for price discrimination here as it could easily charge slightly more for separated compartments. Another question now is what will happen if the last empty place is in a women-only compartment and the last potential buyer is a man...
Monday, February 22, 2010
Saturday, February 20, 2010
The Danger of Being a Mono-City
"In Soviet times Stepnohorsk was a small populated area located about half-hour by bus from Zaporizhzhya where slightly over 1,000 people lived.
“Then it was a typical village whose inhabitants were mostly farmers,” Chair of Stepnohorsk Village Council Iryna Kondratyuk told Weekly.ua, “However, in the 1980s, deposits of high-grade mineral resources were discovered, which had no analogs in the country, I think.”
Literally within a few years, construction of two mines was in its final stage, the first processing enterprise was built and 9-story residential buildings were raised. The provincial authorities projected that by the end of the 1990s there would be around 75,000-100,000 residents, predominantly coal miners and employees at local plants and their families in the small town. The first new high-rise buildings were occupied mostly by young specialists from the north of Russia and provinces neighboring Ukraine.
...
In the mid-1990s, all Stepnohorsk enterprises were shut down. Everybody here knows about the reasons why the government made such a decision, but nobody likes to recollect them. “There is a similar deposit in the neighboring oblast, which was discovered much earlier than ours,” the local residents told Weekly.ua. “Our products were greatly competitive, which why we were shut down.”
As a result, around 10 thousand people remained in the town without work or money hoping that everything was just a grave mistake. The experienced specialists who for decades were recruited from across the entire Soviet Union had to leave with their families to earn a living in neighboring big cities or abroad."
The Benefits of Lobbying
"Parliament postponed a routine hike in the excise tax on cognac for a year. According to the government plan approved in late 2008, the excise tax on cognac and brandy should have been raised 40% since the beginning of the current year. Now this increase has been postponed
to January 1, 2011.
Cognac in Ukraine is produced by fourteen enterprises. They lobbied the deferral of the increase in the excise tax in the Verkhovna Rada. The threat of moving production of cognac abroad to Moldova has played a key role here. After all, unlike the producers of vodka, wine and beer, cognac producers could have easily carried out their threat seeing as most cognac spirits in Ukraine are imported anyway,” said Maria Kolesnyk, Director of the Analytical Department of the AAA agency. “Now, vodka could lose up to 15-20% of the market to cheap cognac that costs up to UAH 100 a bottle,” she added."
Friday, February 19, 2010
Who Benefits from Quotas?
clearly somebody...
"Only one company gets license for privileged sugar imports
KYIV, February 19 /UKRINFORM/. Only one company has received the license for preferential sugar imports under the quota of the World Trade Organization, President of the Ukrainian Agrarian Confederation Leonid Kozachenko has said, refusing to name the company.
Some 267,000 tons of sugar could be imported to Ukraine at a preferential customs rate of 2%.
The production of beet sugar of the 2009 harvest in Ukraine totaled 1.267 million tons. The domestic consumption of sugar in Ukraine is estimated at two million tons."
Thursday, February 18, 2010
Wednesday, February 17, 2010
University Rankings
Also in Ukraine, university rankings are controversial - see f.e. the discussion about the criteria used to make rankings
Of course, the main problem is that just ranking ukrainian universities is hiding the most important problem: Ukrainian universities have a hard time competing internationally, see. f.e.
Tuesday, February 16, 2010
Advice to the New President
Many are now offering advice to the new president
Like the Independent International Expert Commission
or Akhmetov's Foundation for Effective Governance
So there's no shortage of advice - now only hope somebody actually takes the advice into account...
Monday, February 15, 2010
Some Links
For some advice on how to improve trust in banks, go to
For a short article on prizes and awards, go to
And if you still have some new year's resolutions left, check
Saturday, February 13, 2010
Economics and Winter Olympics
given the start of the winter Olympics, some work on the relation between sports and economics seems appropriate.
According to this study, the climate is a more important determinant of success at the Winter Olympics than at the Summer Olympics.
And according to this study, success in sports competitions (like medals in the Olympics) does not increase happiness in a country.
Friday, February 12, 2010
Political Business Cycle in Employment
Elections as a stimulus to the economy
"According to Director of the Sociological Service of the Razumkov Center for Economic and Political Studies Andriy Bychenko, this January the unemployment rate temporary became lower thanks to the election.
"Many enterprises get additional orders and the people - temporary work," Bychenko has said.
However, he believes that after the new President swears an oath there will be more jobless persons since the state of the economy has not fundamentally changed.
"According to our data, today there are 12.5% of the unemployed in the country. There are many persons among them who are not registered at employment centers," Bychenko said.
According to him, the future election to local councils can improve the situation temporary"."
Thursday, February 11, 2010
The Winner of the Elections: the Ad Agencies
"During the presidential election campaign in Ukraine, candidates for the presidential post spent on advertising and PR services from USD 2 billion to USD 3 billion (1 USD - 8.009 UAH), representatives of the advertising and PR market told a press conference today."
I wrote a column on this in July 2009 which you can find here
Tuesday, February 9, 2010
Impaired Loans in Ukraine - The Case of Swedbank
Swedbank's latest report gives some interesting stats on its Ukrainian branch (see p37)
The number of employees has been decreased from 3870 to 2880, that's (about) minus 1000.
Share of impaired loans (gross), defined as
"Loans where payments are unlikely to be made in accordance with contract terms. Such loans are not considered impaired if there is collateral that covers principal, interest and any late fees by a safe margin. Impaired loans, gross, less specific provisions for loans assessed individually and provisions for homogenous loans assessed collectively constitute impaired loans, net.http://www.swedbank.se/arsredovisningar/2007/en/adrregdef/definitioner.html
reach 54% in 2009 vs 4% in 2008.
For the Russian branch this share is at 18%, for Sweden less than 0.5%.
As far as I can judge, the transparency of this Swedbank report is impressive.
Monday, February 8, 2010
Price Control
From the Law Firm ANK newsletter
"
We would like to inform you that on January 20, 2010 the list of the objects of the state price control had
been approved by the Decree №40 of the Cabinet of the Ministers of Ukraine. The period of the state price
control is determined as 2010-2011.
The list had been supplemented with new objects – dry milk and butter, which are not included to the list on
the present marketing year, and are subjects to the regulation from April 1, 2010 till December 31, 2010.
Yuriy Melnyk - Minister of Agricultural Policy of Ukraine had noticed that introduction of the state price
control under the milk products is connected, in particular, with necessity of prevention of summer price
collapse related to purchase of these products for state intervention fund.
Besides that to the list for 2010-2011are included: soft and hard wheat, grain mix of wheat and rye, winter
rye and spring wheat, barley, wheat flour and rye. State price control under the following goods is supposed
to be implemented from July 1, 2010 to June 30, 2011.
Granulated sugar (beet bin) and corn are also included into the list from September 1, 2010 to August 31,
2011 and October 1, 2010 to July 30, 2011
The Cabinet of the Ministers annually determines the list of the objects of the state price control, on which
minimal and maximal intervention prices are settled. In this case depending on the situation through the
Agrarian Fund is carried out purchase or sale of these objects.
Thus, in 2009-2010 marketing year objects of the state price control is soft and hard wheat, winter and
spring rye, barley, wheat flour and rye flour, granulated sugar (beet bin) and corn.
Full list of the objects of the state price control
In accordance with the Law of Ukraine on Agriculture State Support objects of the state price control are
such kinds of agricultural products (goods) as:
- Wheat firm;
- Soft wheat;
- Grain mix of wheat and rye (meslin);
- Corn;
- Barley;
- Winter rye;
- Rye spring;
- Peas, buckwheat;
- Millet
- Oats;
- Soya;
- Sunflower seeds;
- Rapeseed;
- Flax seeds;
- Hop cones;
- Sugar (beet bin);
- Wheat flour;
- Rye flour;
- Meat and offal of slaughtered animals and poultry;
- Milk powder;
- Butter;
- sunflower oil.
"
Sunday, February 7, 2010
Mail Men Become Pharmacists
The Ukrainian government has no money but plans to 'invest' in starting a public network of pharmacies to compete with the private pharmacies.
"KYIV, February 7 /UKRINFORM/. The government opens a network of state drugstores where prices will be 30% less against commercial drugstores.
For this, the authorized fund of the Ukrposhta (Ukrainian state-run mail service enterprise) will be increased by UAH 150 million (USD 1/UAH 8.00), so that by the end of 2010, 500 state drugstores will be set up on its basis, First Vice Prime Minister Oleksandr Turchynov has said following a ceremony of opening the first state drugstore in Kyiv on the basis of the Ukrposhta enterprise."
Likely scenarios for the future
1) optimistic scenario: there will no money to actually implement this plan
2) pessimistic scenario: a couple of years from now, the low price public pharmacies are in need of constant subsidization. Private pharmacies cannot compete in the subsidized market segment and concentrate on the higher quality import segment. Given their lower turn-over, prices they charge are higher than before the start-up of the public network.
The Cost of Protest
"To recap, an average sum that the loser of the race will have to cough up for a Maidan protester a day will be from 40 to 60 dollars. With 50 thousand persons needed only in Kyiv, the defeat in the run-off will cost the sponsors of one of the candidates a pretty penny of USD 2-3 million a day. Considering that at least two or three weeks will be needed to announce a second run-off, the costs of the Kyiv rallies will run into USD 60-65 million."
Friday, February 5, 2010
Ukrainian Election Forecasts from Bookmakers
All the bookmakers place a higher probability on a Yanukovych win, and the gap in the odds is quite substantial.
Google as a State Owned Company in Ukraine
A very nice blog on how one would do a Google search if Google was owned by the Ukrainian state
Wednesday, February 3, 2010
Tuesday, February 2, 2010
McDonalds In Russia
A very interesting article on how McDonalds gradually outsourced its production to local producers - it would be interesting to see how far McDonalds has succeeded in doing this in Ukraine
Monday, February 1, 2010
Teaching Entrepreneurship
Below is an interesting initiative but the practical implementation might be another issue
and the last paragraph of this announcement shows part of the problem - 'state order for training such workers'. Rather than giving students info on the demand for specific skills and let students make decisions, the government will 'order' the training of workers...
Ukrainian schoolchildren to study principles of entrepreneurship
KYIV, February 1 /UKRINFORM/. The Ukrainian government has ordered the Education and Science Ministry to work out within three months the question of introducing at schools the study of a new discipline entitled "The Principles of Entrepreneurship," UKRINFORM has reported, citing the osvita.org.ua educational portal.
The statement reads that the ministry should also put forwards proposals on a plan of measures on the development of the system of training qualified workers from schoolchildren and issuing respective certificates to them.
The Labor and Social Policy Ministry and other executive government agencies were ordered to submit to the Economy Ministry each year reports on the labor market's demand for qualified workers with the goal of forming state order for training such workers.
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