Reforms and Consumer Confidence

ICPS's latest consumer confidence report has a rather misleading title

"GOVERNMENT PLANS SPOIL CONSUMER MOOD"

which the press has gladly copied

http://www.kyivpost.com/news/business/bus_general/detail/80364/

I have a hard time believing that government policy is the main issue here.

And, when reading the press release even ICPS doesnt seem to blame the government that much either:

“The Government’s plans to institute a series of unpopular reforms, especially to raise rates for energy and increase the pensionable age have been received rather coldly by most Ukrainians,” says ICPS Social Economy Program Manager Maksym Boroda, “although the pressure to do so is the result of revived cooperation with the IMF. At the same time, a slowdown in the economic revival coupled with a heatwave that has been threatening this year’s grain harvest has caused Ukraine’s consumers to feel more pessimistic about economic prospects.”


Internationally, pessimism has grown (stock markets have been declining), something one cannot blame on the Ukrainian government, and something that should also affect the Ukrainian economy and the Ukrainian mood.

Moreover, if there indeed will be unpopular reforms, while in the short run having possibly a negative effect on the mood of people, shouldn't they have a positive effect in the long run? In fact, people that understand the need for reforms, even unpopular reforms, should have an improved mood even in the short run when they see the government will actually implement such reforms.

Carjackers are most active on Fridays!

Always useful to know:

"Ukrainian car thieves prefer VAZ, Zhiguli in Kyiv"


"According to the road police, the second place is taken by Mitsubishi followed by Toyota, Daewoo and Honda. The carjackers are most active Fridays."


http://www.ukrinform.ua/eng/order/?id=196570


note that research has shown that car color also matters for the likelihood that a car will be stolen - see http://www.voxeu.org/index.php?q=node/5262

Non Tariff Barriers

In words, Ukraine does the right thing

"Ukraine said on Wednesday it had put off introducing curbs on grain exports because the world market had settled after Russia's export ban and the Ukrainian home market was no longer threatened by demand from abroad."

But in practice,things seem to be different

"But Ukrainian customs continued to enforce de facto export restrictions by blocking grain shipments from sea ports on the grounds that cargoes had been wrongly labelled."

http://www.kyivpost.com/news/business/bus_general/detail/79776/

This nicely connects to yesterday's blog - even regulators can be cunning in avoiding rules.

Avoiding regulation

This is a very interesting article as it shows that not only in Ukraine, but also in the States people are very creative when it comes to avoiding government regulation

http://www.theatlantic.com/magazine/print/2010/09/the-news-merchant/8194/

Critical level of Debt -36% vs 60%

According to Tihipko Ukraine's external debt, now at 36% of GDP has reached a critical level(http://www.ukrinform.ua/eng/order/?id=195205&ulq=tihipko


According to Reinhart and Rogoff's research

"Our main findings are: First, the relationship between government debt and real GDP growth is weak for debt/GDP ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more. We find that the threshold for public debt is similar in advanced and emerging economies. Second, emerging markets face lower thresholds for external debt (public and private)—which is usually denominated in a foreign currency. When external debt reaches 60 percent of GDP, annual growth declines by about two percent; for higher levels, growth rates are roughly cut in half."


So while Tihipko is right to warn about excessive debt levels, from a growth perspective, Ukraine seems still not to be over-indebted.

Odessa cited as top 'yet to be discovered' place

The main Belgian newspaper De Standaard puts Odessa as the most 'yet to be discovered' town for tourists!

http://www.standaard.be/artikel/detail.aspx?artikelid=DMF20100809_097

Stray Dogs Research

A very interesting column on smth that is also very relevant for Kyiv

http://www.scientificamerican.com/blog/post.cfm?id=cur-cognition-do-stray-dogs-have-qu-2010-07-16

Illegal Mines in Ukraine

A nice article on 'illegal' mines appeared in this weeks Den

Ukraine and the EU/ EU and Ukraine

Some people are disappointed about the level of awareness in Ukraine about the EU

"A poll carried out in Ukraine, ordered by the European Com mission, shows that Uk rai nians know little about the Euro pean Union. Despite the overall positive public attitude, 62 percent Uk rai nians are not sufficiently familiar with the international body and cannot name all the member count ries. They also fail to distinguish between the EU and other inter national organizations."

http://www.day.kiev.ua/305010

I think these numbers aren't that bad - if you'd ask in the EU about knowledge about Ukraine, you might get even worse results...

Grain Export Quota

Some organizations are lobbying to introduce export quota for grain, under the guise of 'food security'. In reality, they prefer to have a lower price for grain for themselves.

" Chairman of the All-Ukrainian Union of Food and Processing and Allied Industries, Anatoliy Telnykh said that any grain export may be useful only with the availability of grain stocks in the country."

Luckily, so far the government is resisting this pressure

"KYIV, August 3 /UKRINFORM/. Any decisions of the authorities, which lead to illegal delays in export shipments of grain, must be immediately revoked, Deputy Prime Minister for Economic Affairs Serhiy Tihipko has said.

...

"There are no economic reasons for hindering exports of grain," he said noting that the recent wrongful decisions of the State Customs Service and Ukrzaliznytsia, Ukraine's railway operator, have actually halted the export of grain.

"As a result of such unlawful acts manufacturers and exporters of agricultural products are suffering losses, the business and investment climate in the country are worsening, which adversely affects the international image of the state," he stressed.
"

http://www.ukrinform.ua/eng/order/?id=194354