Ukrainian Gas Deals

An interesting article on the gas dealings of Ukraine in Der Spiegel, with some interesting claims about the Stockholm Arbitration Court's decision:

SPIEGEL has since been able to review copies of the "Stockholm decision. A passage on page 4, under item 4, reads: "Although 'Naftogaz' initially claimed, during the course of this arbitration, that the procurement of the 11 billion cubic meters of gas was sufficiently justified from a legal standpoint, it now states that this was not the case." In a different passage, Naftogaz suddenly admits that this gas "belongs to and has always belonged to RUE.""

Putting Former Ministers in Jail

Ministers that violated the law while in office should be punished. If however, one targets only former ministers that do not belong to the current government's parties, one can hardly speak of an independent judicial power.

"Radio Liberty reported that Lutsenko had become the seventh representative of former Prime Minister Yulia Tymoshenko's government who would see in the New Year in jail.

Nearly twenty criminal cases have already been opened against the members of the previous Cabinet of Ministers."

One interpretation is that the current government officials will be very careful in what they do, as they can expect a similar treatment once they are out of office. An alternative interpretation, however, is that the current government officials think they will stay in power forever.

More on Central Bankers

A relevant study:

"Central bank governor changes in emerging markets may convey important signals
about future monetary policy. Based on a new daily data set, this paper has examined the reactions of foreign exchange markets, domestic stock market indices and
sovereign bond spreads to the announcement of a central bank governor change.
The sample comprises all emerging markets with reliable data for all three financial
market indicators, covering 20 emerging economies over the period 1992-2006.
Our results show, first, that the resignation of a central bank governor negatively
affects financial markets on the announcement day, with average market reactions
between 0.5 to 1.5 percent. While these effects are economically relevant and relatively large in comparison to announcement effects known from changes in sovereign
risk ratings, we find less evidence that appointments of new governors incorporate
relevant news for investors. Second, comparing our results to the previous literature,we find that our results for emerging market economies are distinct from industrialized countries in an interesting aspect. Newly appointed central bank governors apparently suffer from a systematic credibility problem at the beginning of their tenure. In contrast to their counterparts in industrialized countries, emerging market governors initially have to face (at least) a transitory rise in inflation expectations because investors are uncertain about the true type of the central bank governor ("hawkish" vs. "dovish"). Third, the negative announcement effect for resignations is mainly driven by irregular changes, i.e. changes occurring before the scheduled end of tenure. We offer two interpretations. First, foreign exchange market participants are apparently sensitive to signals about perceived central bank independence, expecting higher inflationary bias. This also holds true, when we explicitly control for perceived changes in conservatism. Second, more generally, investors in domestic stock and international bond markets may simply demand higher risk premia due to negative policy signals from the incumbent government.
27 As we find negative announcement effects exclusively for the inflation sensitive foreign exchange market, however, our results are more in line with the hypothesis that irregular resignations send a negative signal about central bank independence to foreign exchange market participants. The governor’s degree of conservatism does not seem to matter for market reactions. Finally, there is little evidence that personal characteristics of the central banker matter for market reactions."

Unhappiness Bottoms at Age 62 in Ukraine

"Since then, interest in the U-bend has been growing. Its effect on happiness is significant—about half as much, from the nadir of middle age to the elderly peak, as that of unemployment. It appears all over the world. David Blanchflower, professor of economics at Dartmouth College, and Mr Oswald looked at the figures for 72 countries. The nadir varies among countries—Ukrainians, at the top of the range, are at their most miserable at 62, and Swiss, at the bottom, at 35—but in the great majority of countries people are at their unhappiest in their 40s and early 50s. The global average is 46."

Independent Central Bank Governor Needed?

The idea that having an independent national bank can have advantages for an economy has not sunk in yet in Ukraine - for an illustration, one should read this article

The bottom line: " Previously unknown on the national scale, Arbuzov was appointed first deputy head of the central bank in September after working six years for a small Donetsk-based bank, Ukrainskyi Biznes Bank (UBB). He landed the top job at the central bank solely for being a trusted friend of the Yanukovych family, said Volodymr Fesenko, a political analyst and head of the Kyiv-based Horshenin Institute of Management."

Cabbage

" According to information of Fruit-Inform Project, wholesale and retail prices for cabbage in Ukraine are currently at the record-breaking level. Moreover, this category is currently the most expensive in borsch (popular Ukrainian soup) set of vegetables, notwithstanding cabbage production costs are the lowest among traditional vegetables and potatoes."

Robert Shiller Lectures

on Financial Markets can be watched on YouTube

Interesting stuff on Behavioral Finance, linking psychology and economics/finance.

Extreme Tourism Bis

"Ukraine announced plans to open Chernobyl, their nuclear disaster site, to tourists. They say it's just like Disneyland, except the 6-foot mouse is real." —Conan O'Brien

More on the National team's coach wage

"The Federation of Football of Ukraine (FFU) has offered the former head of Italy's national team 6.6 million dollars plus incentives for an 18-month contract, according to the report.
Lippi is demanding a minimum of 9.6 million dollars along with incentives, according to the report."

A Birthday Party

of 4 million British Pound...

Financial Education and Awareness - the Report

More details on Financial Education and Awareness in Ukraine can be found in this report

Ukrainian Metro

an interesting history of the metro in Ukraine can be found here

5 million is not enough

"Lippi is said to have agreed under writing a pre-contract with Ukraine, but there are questions at hand over pay.

Ukraine are offering him €5 million for an 18-month tenure, but the coach wants more."

So that's a salary of more than €3 million a year! Not bad...

Orphanages vs Family Homes

Some interesting Ukrainian research is reported here. One wonders whether results would be different if the researchers would take into account possible selection effects.

Giving Bribes

"one in three Ukrainians (34%) reported giving a bribe at least once this year."

Search in Ukraine

"According to Google, in 2010, in particular, the Ukrainian Internet audience was mostly interested in social networks (vkontakte, odnoklassniki, Facebook) and other Internet services (YouTube, Skype, Google, online shops).

The Ukrainians also queried for photos, weather, games, cars, and traditionally for Ukraine, election returns.

The event of the year was the dance music festival Kazantip in the Crimea."

Chernobyl as Tourism Destination for EURO 2012

Even some government people now start realizing the potential of extreme tourism:

"The Chornobyl zone could be one of the most popular tourist destinations during the UEFA EURO 2012 European Football Championship, Deputy Head of the State Tourism and Resorts Service Dmytro Zaruba said at a press conference on Monday.

"The Chornobyl zone is an interesting tourist route that could be in demand. Of course, this is a tragic page in Ukraine's history, but this facility is unique in the world. This, in effect, is a museum of Soviet-era history and the tragedy that occurred there. If it is promoted properly, then this will give an opportunity for many people to see how the Soviet system worked and how the tragedy occurred, which claimed many lives and caused considerable damage to the environment," Zaruba said.

With proper logistics, in his opinion, the Chornobyl zone may receive up to a million people per year. "The only thing required is to clearly regulate the scheme of travel and tourist escorts. Still, it's a restricted area, and therefore, some logistics is required," he said."

Financial Education and Awareness

"Almost half of Ukrainians (43%) do not follow financial news, InMind company came to such a conclusion that carried out studies named Financial Education and Awareness in Ukraine. Facts and Opinions.

Financial issues that are followed by the majority of the population are the following: dynamics of the inflation index (20%), changes in the rate of pension provision (10%) and changes of prices on the real estate market (10%)."

More Extreme Tourism Opportunities in Ukraine

Another radiation site to visit in Ukraine:

" The abandoned uranium mine, located in the Ukrainian village of Dovhyvka, poses a great danger to people and the environment, Oleksiy Vedmidsky, the head of a local group of ecologists, said.
"My particle detector measured 2611 micro Roentgen per hour there," the environmentalist said adding that normal exposure is 30 micro Roentgen per hour. "Even in the Chernobyl zone near the reactor the exposure is 500-600 micro Roentgen per hour," he said."

The government's reaction is very typical:

""People who are spreading alarm used a particle detector not certified in Ukraine," Serhiy Milyutyn, spokesman for Dnepropetrovsk region's administration said when asked.
Vedmidsky said he used a Geiger counter manufactured by a reliable U.S. firm and emphasized that he trusts its readings."

Aliens

Lots of strange things happen in Ukraine, so one should not be that surprised that some Ukrainians want to establish a memorial for fallen aliens.

More Extreme Tourism

Ukraine has a niche for extreme tourism - there is Chernobyl which definitely is worth a visit. And now there is also this underground nuclear base

http://www.theglobeandmail.com/life/travel/touring-ukraines-underground-nuclear-base/article1821053/

How to Do Reforms

Appointing young foreign-trained ministers seems to help, at least in Georgia

" Finance Minister Kakha Baindurashvili, 32, studied at Williams College in Massachusetts; Georgian-born Economy Minister Vera Kobalia, 29, spent over half her life in Canada and studied at the British Columbia Institute of Technology; Energy Minister Aleksandre Khetaguri, 34, participated in World Bank and USAID training programs in the United States; Defense Minister Bachana Akhalaia, 30, worked at Tbilisi's liberal Liberty Institute, many of whose founders were elected to parliament after the Rose Revolution; Justice Minister Zurab Adeishvili, 38, earned his LLM degree in the Netherlands; Education Minister Dimitri Shashkini, 35, served as country director for the U.S. International Republican Institute; National Bank chief Giorgi Kadagidze, 30, earned his B.A. from Preston University in the United States. Saakashvili, 42, studied at Columbia University Law School in New York, the International Institute of Human Rights in Strasbourg, and George Washington University. Prime Minister Nikoloz Gilauri, 35, earned a masters in international business management from Temple University in Philadelphia and studied economics at Ireland's University of Limerick."

http://www.kyivpost.com/news/opinion/op_ed/detail/91695/