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Old 15th May 2014, 18:39
ColinEaston01 ColinEaston01 is offline
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Whatever the outcome in the east (and the world hopes it will be a peaceful one) Ukraine must now look toward the furture and admit things cant go on as they have done. There is no reason why Ukranians cant stand shoulder to shoulder with the rest of the world with a brighter economy. Starting with bribery and curruption and nepotism. Transparency and keeping the general populace in touch with the everyday keeps them sweet and informed.
Get the tourists in is a good money spinner. The UK makes about £19 Billion per annum just from tourism for example.
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Old 16th May 2014, 12:38
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One more anti-corruption “warrior” Alla Dubrovyk 15 May, 2014
EBRD President and Arsenii Yatseniuk signed a memorandum on the establishment of the business ombudsman agency in Ukraine. However, its powers, sources of funding, and name of the potential head are unknown as of yet

“The initiative of establishing the business ombudsman agency to combat corruption in Ukraine originated with the EBRD. They are doing a lot to improve the business climate here. The rest of the signatories of the memorandum and the people who contributed to this idea, of course, support the EBRD. After all, corruption is really one of the major issues of concern for the business community in Ukraine.

“Whether it will work is what we are concerned today with as signatories of this memorandum. We would like to have the business ombudsman granted effective powers for fighting corruption, making that agency into an effective tool. As the Association, we, of course, will provide systematic data on corruption, should our members face it, and it is important for us to see a response from the state. One more anti-corruption “warrior” | The Day newspaper
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Old 20th May 2014, 15:50
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Why do exporters want to pay double taxes?
Alla Dubrovyk May 20, 2014 The Day
Roman KHMIL: “Today Ukraine just gives away tens if not hundreds of millions in dollars to the European, American or some other IT industry”
Every year Ukraine spends about 900 million dollars to train nearly 15,000 programmers, even though 5,000 of them go to work abroad. Meanwhile the remaining 10,000 manage to earn billions of US dollars for the Ukrainian economy. In particular, only last year Ukrainian IT specialists sold two-billion-dollar-worth codes worldwide. They could do even more: if the state does not stand in the way, they promise to increase exports to 10 billion dollars; if the state is helpful, the exports can exceed 20 billion. The Day learned all this from an interview with Roman KHMIL, operations manager, Ciklum (Ukraine). This company is known to have successfully organized close cooperation with the new government’s economic block (namely, with the economy minister Pavlo Sheremeta), which has already resulted in two draft laws and a platform for training IT specialists, Brain Basket. Why do exporters want to pay double taxes? | The Day newspaper
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Old 15th August 2014, 16:08
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Kenneth Rapoza Contributor - Forbes Magazine
Opinion 8/15/2014 @ 9:00AM
Saving Ukraine's Currency Will Help Save Ukraine from Putin

“Ukraine’s Currency Hits a New Low” blared a Wall Street Journal headline earlier this week. The hryvnia’s woes are attributed to Russia’s none-too-subtle efforts to annex, Crimea-style, a piece of eastern Ukraine and force the rest of the country into becoming a de facto Kremlin satrap. Putin believes wealth and power come from conquest.

The pressure on Ukraine is all too real. However, its woes are unnecessarily compounded by misbegotten economic policies foisted on it by the IMF , with the blessings of the U.S. and the EU, in particular, imposing higher taxes and “floating,” i.e., devaluing, the hryvnia to “spur” exports. Both policies are utterly counterproductive. The IMF is Putin’s unwitting ally.

Ukraine should immediately implement a currency board, under which the hryvnia would be tied directly to the dollar. The nice thing about such an arrangement is that the process operates automatically, and market confidence is enhanced precisely because there is no central bank discretion. Every hryvnia would be backed by dollars at a fixed rate. Ukrainians would be willing to hold hryvnias knowing they could easily turn them in for greenbacks.

This is not theory. Currency boards have been used successfully for more than 150 years. When Hong Kong fixed its dollar to our dollar in 1983, it did so with a currency board. Today such countries as Bulgaria and Lithuania use this mechanism to tie their monies to the euro. Estonia did the same thing for years before it switched to the euro itself.

A stable hryvnia would do wonders for the beleaguered Ukrainian economy. It would be a stark and enticing contrast to Russia’s wobbly ruble.

Israel has demonstrated that a country can devote considerable human and monetary resources to defending itself and still possess a vibrant, innovative economy amidst deadly threats and all-too-frequent acts of terror.

Alas, such a crucial and sensible move seems remote. As evidenced by the EU, the IMF, the Federal Reserve and every other economic body, ignorance about monetary policy is the greatest threat to our future.
Saving Ukraine's Currency Will Help Save Ukraine from Putin - Forbes
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Old 15th August 2014, 16:21
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Washington 8/11/2014 @ 11:23AM 5,259 Loren Thompson
New Energy Sources: How To Make Ukraine More Secure Without Using U.S. Military Forces

The Obama Administration faces a dangerous dilemma in trying to defuse the current crisis in Ukraine, because that country sits on the doorstep of a nuclear-armed rival with massive local superiority in every dimension of military power. If Russia chooses to invade its former republic, Washington isn’t likely to send forces; in fact, it is reluctant to even send military aid for fear of provoking Moscow. Yet it shares a concern with its NATO allies that successful Russian annexation of Ukraine’s Crimea province — the first forcible revision of European borders since World War Two — could foster further aggression. What to do?

Economic sanctions are certainly a start, but when winter comes in a few months, Moscow will have a powerful source of leverage in the form of natural gas supplies that the West currently can’t match. Ukraine imports much of the natural gas that powers its electricity plants, steel mills and chemical complexes from Russia. In addition, roughly 20% of Europe’s natural gas supply is piped through Ukraine from the east in what the International Energy Agency describes as “the largest gas transit infrastructure in the world.” Most European countries have alternative sources of supply, but a cutoff by the Russian state-controlled energy enterprise Gazprom during the cold months could cause hardship far beyond Kiev.

Of course, any such cutoff would hurt Russia too, given the dependence of its economy on energy exports. But the gas is Russian leader Vladimir Putin’s most potent tool for working his will without going to war. Simply forcing Kiev to pay the same price for gas as the rest of Europe could have a devastating effect on its economy, which became dependent on energy subsidies during the Soviet era. If Gazprom’s current cutoff of gas supplies to Ukraine persists into the fall — ostensibly due to billions of dollars in unpaid bills for past deliveries — then the country may once again resort to siphoning off gas transiting its territory that is intended for the West.

That could lead to a breakdown in the sanctions regime as shivering Europeans decide they’d rather be warm than stand up for Ukraine. Washington has led the way in pushing for economic sanctions against Russia over its aggression in Ukraine, but America is less vulnerable to energy disruptions than Europe and will suffer less from the depressing effects of sanctions on trade and capital markets. What the Obama Administration needs to do is help Ukraine become less dependent on Russian energy supplies — thereby depriving Moscow of its most important non-military source of leverage over Kiev (not to mention the rest of Europe).

I should note that Kiev’s energy vulnerability is largely of its own making. Its economy is hugely inefficient in the use of energy, lacking either a realistic cost structure or the means to meter usage. Furthermore, its energy industry and regulatory system are corrupt, an inheritance of previous regimes that continued to follow Soviet-style practices long after the USSR had disappeared. In fact, the government of deposed president Viktor Yanukovych had close ties to organized crime. Experts such as Stephen Blank of the American Foreign Policy Council and Edward Chow of the Center for Strategic and International Studies have argued forcefully that Kiev needs to clean up its act if it wants to escape the stranglehold that Moscow currently exerts on energy supplies.

However, it will take a long time to fix the demand side of the Ukrainian energy equation. Eliminating subsidies, installing meters, and reforming regulatory practices will only unfold gradually, in part because many Ukrainians will not want to give up the benefits they receive from the present inefficient and corrupt system. So as a practical matter, if President Obama wants to make any real progress in reducing Russia’s leverage over Ukraine while he is still in the White House, the focus needs to be on the supply side. In other words, Washington needs to help Kiev find alternatives to Russian gas as soon as possible.

It turns out that is not so hard, and might actually prove beneficial to U.S. industry. Ukraine has abundant potential in virtually every form of useful energy. The country already meets a third of its natural gas needs from domestic sources, it has abundant reserves of coal, it is one of the world’s top-ten producers of nuclear fuel, and its potential for exploiting renewable sources of energy is impressive. The problem is that Kiev’s past governments have done too little to exploit this potential and break the power of the country’s indigenous energy mafia. Here are three fairly quick ways in which Washington could help Ukraine find alternatives to Russian gas.

Shale gas. You’d think a country that depends on imports for 39% of its energy needs must have limited indigenous reserves, but in Ukraine’s case the opposite is true. The country already produces a significant amount of natural gas and oil domestically using conventional means, and its reserves of recoverable shale gas — gas that must be extracted using newer technology such as fracking — are estimated at 42 trillion cubic feet. That’s over 500 times the country’s current annual rate of consumption. Two major basins where shale gas is known to exist in quantity stretch across the country’s northeastern and southwestern expanses, making it one of Europe’s most promising prospects for new gas exploration.

The International Energy Agency says Ukraine could eliminate its reliance on Russian gas imports by more vigorously developing indigenous sources while moving forward on renewables and initiatives aimed at reducing waste. But Kiev lacks a legal and regulatory framework for stimulating the shale oil sector, and exploration for unconventional sources of fossil fuel didn’t even begin until 2010. Washington has signaled an interest in helping Ukraine to develop its shale-oil reserves, an area where U.S. industry leads the world. What is needed now is an aggressive package of financial incentives and regulatory protections that would encourage international energy companies to focus on Ukraine so that commercial production for domestic use can commence.

Clean coal. Ukraine is one of the world’s largest producers of coal, and has significant unused mining and distribution capacity owing to a decline in output following collapse of the Soviet Union. It would be a relatively straightforward project to convert the country’s 22 large thermal plants generating electricity and heat from natural gas to clean coal. The U.S. company Babcock & Wilcox estimates the five biggest plants could be converted in 24-36 months using U.S. technology and the local workforce, at a cost of $200-250 million per plant. It says that if all 22 plants were converted, the country’s ten-year energy savings — coal costs less than gas — would be $22 billion. (Disclosure: Babcock & Wilcox is a modest contributor to my think tank.)

Clean coal has not been a prominent part of proposals to achieve energy independence in Ukraine, but in some ways it is the most attractive near-term option. The country already has capacity to produce more coal and the boiler-conversion process from gas to coal is well understood. Conversion would stimulate the local economy while providing an opportunity to install modern pollution-control equipment to capture noxious gases and particulate matter. And although carbon dioxide generated by burning coal is often cited as a cause of climate change, the methane escaping from creaky Soviet-era gas distribution networks is actually 85 times more potent over a 20-year period in contributing to greenhouse effects. Babcock & Wilcox says a federal loan-guarantee program could jump-start clean coal efforts in Ukraine.

Renewable energy. Ukraine only meets about 1% of its energy needs today using renewable sources, but the International Energy Agency and other authoritative sources say the country has huge potential to generate energy from hydropower, biomass, wind and solar collectors. The most developed renewable source is hydropower, which provides about 6% of electricity needs and has installed capacity equivalent to 10% of electric consumption. Wind energy potential for the country is estimated at 30,000 gigawatts, with about half the country suitable for siting of wind farms. And the country has been making rapid progress in deploying solar equipment — although current solar installations have less than 1% the capacity of Germany’s, a country that gets less sun

Collectively, renewables could make a sizable dent in Ukraine’s reliance on Russian gas, and they tend to require less investment than nuclear and fossil-fuel plants. However, it appears that new fossil-fuel sources such as shale gas and clean coal can bring about the quickest reduction in imports, given the way in which the Ukrainian energy system is organized. With some modest inputs of assistance in the form of loan guarantees and legal protections, the Western allies could help Ukraine to become energy independent within a few years, reducing the country’s vulnerability to Russian pressure. That won’t solve all of Ukraine’s problems, but it will help to achieve U.S. goals in the region without the use of military forces.
New Energy Sources: How To Make Ukraine More Secure Without Using U.S. Military Forces - Forbes

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Old 18th August 2014, 15:39
Hannia Hannia is offline
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Where to get money for the Donbas’s reconstruction?
Experts suggest that those who have “plundered this region in all the years of independence” take up this problem
Vitalii Kniazhansky 13 August, 2014 - 16:48

“I believe that our country will see peace return and reconstruction start someday, and we will need our industry at that very moment to ensure that people have jobs, taxes are paid, and social guarantees implemented,” general director of Metinvest company (a subsidiary of the SCM group) Yurii Ryzhenkov said. He also reported that all production units of his company were in operation as he spoke, but plants in cities of Yenakiieve and Khartsyzk, still held by the so-called Donetsk People’s Republic, were still in a difficult situation, just as mines of Krasnodonvuhillia concern located in the territory held by the so-called Luhansk People’s Republic, as coal shipments were impossible due to problems on the railway, and the concern was running up its inventory. According to Ryzhenkov, Mariupol, where two largest of the company’s metallurgical plants are located, was in good working order (the integrated plants decreased output in early August due to shortages of raw materials, but the problem had been solved), and Azovstal plant had even put its third blast furnace back into operation. Avdiivka Coke Plant, the top manager believed, was still a hot spot on the map of Donetsk region, as fighting continued in Yasynuvata. Moreover, Ryzhenkov stated that this chemical plant was receiving power via only one of its four power lines, forcing all the shops to operate at low rates – “we are again teetering on the edge of a stoppage.”

It can be seen from these reports that the industrial empire of the uncrowned king of the Donbas Rinat Akhmetov is still holding fast (Ryzhenkov said they were not counting losses yet, prioritizing preservation of personnel and equipment), and does not look as a colossus with feet of clay even in this situation. In the current situation, the company, according to Ryzhenkov, had August and September output contracted, and Metinvest was able to repay eurobonds out of its own cash flow.

However, the empire, which was omnipotent just a short time ago, has almost lost its former political influence. It seems that it wants to compensate for this loss on the humanitarian front, becoming a center of assistance for peaceful people of the Donbas, above all children, the sick, the disabled, retirees, and those who have lost their homes or are persecuted. This work has been conducted by Rinat Akhmetov’s Development Foundation. Just as Ryzhenkov informed the press about his company’s efforts to survive under war conditions, the foundation’s chief Anatolii Zabolotny told us how many people and at what cost in human effort and risk had been rescued from the warzones and pulled out of the rubble by its volunteers.

Is it just a PR drive? SCM’s director for PR Natalia Yemchenko expected such a claim. “If it was PR on our part, we would have brought here a pile of photos depicting children, women, and the disabled who have been rescued by us,” she told the press. The same press conference saw SCM announcing establishment of the dedicated humanitarian headquarters at the foundation. Yemchenko introduced to the public its coordinator Rymma Fil. “Previously, our most important task was to take people out of the warzones,” Fil said, “and help them find some temporary housing, but the crisis’s scale has gone up enormously. According to the UN, half the population of Luhansk has left the city, and it is a huge number. A lot of people have left Donetsk as well, with numbers easily in tens of thousands. This is happening on the eve of September 1, when school-age children are to go to school, and students are to go back to university. The evacuees just have nowhere to live. They are mostly staying at summer resorts and children’s camps for now, but starting in mid-September, and in any case from October on, these places will become unlivable. Meanwhile, the issue of humanitarian aid is being suddenly transformed from personal problems to ones involving entire cities. It is especially scary when people are bedridden...” Fil promised that the humanitarian headquarters would continue the foundation’s work, just on a larger scale.
read further: Where to get money for the Donbas’s reconstruction? | The Day newspaper
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Old 20th August 2014, 02:49
Hannia Hannia is offline
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VOA News / Economy Gabe Joselow August 18, 2014 7:34 PM
Ukrainian Businesses Look for Alternatives to Russia

KHARKIV, UKRAINE—

With tensions continuing to rise with Russia, Ukrainian businesses are looking for opportunities elsewhere.

In the eastern Ukrainian city of Kharkiv, near the Russian border, economic change is underway. On a warm summer's day riding the cable cars at an amusement park in Kharkiv, you would never guess there is a war going on next door.

Just a few hundred kilometers from here the Ukrainian military is battling pro-Russian separatists in a months-long conflict that has divided the country.

Kharkiv has remained relatively peaceful despite the conflict in neighboring Donetsk province, but the economy has taken a hit because of tensions with Russia.

So, business owners are looking for opportunities elsewhere.

Industries in places like Kharkiv were built around serving the needs of the former Soviet Union. Ukraine still exports about 25 percent of its products to Russia.

These include agricultural goods like sunflower seed oil, as well as other food and heavy machinery.

But new Russian trade restrictions on Ukrainian products have started to affect local businesses.

Dmytro Kutovyi runs a successful construction business in Kharkiv, his wife owns a popular upscale cafe, and they are active with a leading civil society forum.

“Probably in the short perspective, the Ukrainian economy will suffer losses because cooperation with Russia has lessened and in some fields has stopped," Kutovyi said. "But nothing extremely awful has happened during these months.”

Russia has already put restrictions on food imports from Ukraine and exporters have complained about new, prohibitive customs requirements to access Russian markets.

Kutovy says the increased pressure from Moscow has encouraged businesses in Kharkiv to start looking increasingly inward to Ukraine for opportunities.

“No economy can be dependent on one, even a really large, customer," he said. "Even now, companies are slowly starting to work on the domestic market, which is traditionally important for such fields as the defense industry.”

One of Kharkiv's biggest industries is the production of military vehicles bought by Russia. Ironically, the rebels fighting against the Ukrainian military are accused of using Russian-supplied equipment.

A new regional administration is focusing on shifting the defense industry to support the local economy, as well as the country's armed forces.

The head of the Kharkiv state authority, Igor Baluta, says the industry was long neglected under the previous government.

“Things for many years have been falling into pieces, say, sabotaged, by the leaders of the Ministry of Defense. We are trying to restore it now,” he said.

The new government of President Petro Poroshenko has agreed to trade deals with the European Union to encourage more economic cooperation with the West.

But Russia remains the economic powerhouse in the region, its greatest leverage stemming largely from the supply of natural gas.

In the meantime, as war rages, Kharkiv is optimistic the most promising business horizon is at home. Ukrainian Businesses Look for Alternatives to Russia
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