Ukraine – the results of the year
Dec. 27th, 2011 06:43 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
atytarenkoTymoshenko case
1. Almost dying opposition is revitalized, and had surpassed in popularity the PR. Treatment of Tymoshenko by the government makes it virtually impossible for a decent man to criticize her.
2. Case had clearly demonstrated the absence of an independent judiciary, which excludes any serious investments.
3. Yanukovych angered against him the leaders of Europe, USA, Canada, and Russia. No one will work with him, but extremely imperialist circles in Russia, and pariah states.
4. Case demonstrated that signing of any agreement with Ukraine could bring a court case against the signatory. The unconstitutional regime became now incapable to sign international treaties.
5. European integration has been lost, and as a result – there is no leverage in negotiations with Russia. The businesses with a European exposure (Akhmetov, Klyuyev, ISD), are likely to have problems. And Akhmetov also has the US Coal.
6. Firtash exposed himself as a businessman, driven by unreasonable considerations of revenge. This is also confirmed by his role in the cases of Makarenko and Didenko. All of this makes doing any business with Firtash extremely dangerous venture. Bright future hardly waits for his business outside Ukraine, along with his NF Trading company.
Economy – 2011
1. Foreign debt grew by 40% to $58bln, or 42% of GDP. It is a lot, but is not catastrophic. Full external debt – $126bln, at about the level of the “white” GNP. A lot of repayments will be due in 2012, which is not good. Reserves have decreased from $38 to $32bln. The trade deficit is $4bln, which is very much taking into account the “white” GNP only $133bln. Shadow economy turnover is 40% of the economy, 67% of “white”, with a tendency to increase. The IMF credit line has been lost, in consequence of subsidizing Firtash. Prices of housing have increased, “for the IMF,” but will not go down after the loss of the credit line, sure enough. Moody’s had downgraded the rating outlook for Ukraine to “negative”, so low-cost loans for “humane” conditions no longer apply to borrowing. Creditors will be cruel. But foreign liabilities, in principle, may be controlled until currency reserves are not depleted.
2. One shall expect populist spending from reserves in the autumn of 2012, after which, in principle, the default will be possible. One can expect tax police going off limits, payment delays from the budget, and rising prices for housing and utilities.
3. The internal situation: the impression is that GDP growth is reported and calculated without regard for inflation. The GNP growth repeated the growth of the metallurgy output (and there are problems already coming). Consumer prices inflation is 20%, and the official GDP growth of about 5.5%. At the same time debts written off for the oligarchs (basically – Firtash) as a minimum of $4.5bln, plus $1bln is spent on Euro-2012, and additional subsidies through the use of its natural gas – minimum $0.6billion. The Deficiency of the Pension Fund is $500mln. Internal borrowing is not less than $2.79bln. Plus there were plans for more in December. The first offerings failed. All internal borrowing is covered by buying of the government bonds by the National Bank in the secondary market, which is, in fact, simply printing the money.
4. The gas. The problem is serious, but not as serious as it is presented. Negotiations failed in disgrace for 2 reasons: failed the European integration (no leverage), and reserves for the winter were low. Ukraine entered the winter with approximately 21bcm (billion cubic meters) “on paper”, only 3bcm more than had received from Tymoshenko at the end of the season (March 2010), and 6bcm less than before “gas war – 2009.” The actual stocks are even lower.
5. Raiders. Almost unmanageable chaos, BUT deserters got nothing from their treachery. Quite opposite, they now have nowhere to go to seek protection.
6. Livela fraud: Lisichansk refinery had to stop (clear lesson for BP and for the UK), total mayhem was at least $600mln. No any official response, for obvious reasons. Plus (IMHO) angered Lukashenko.
6. More or less decent things are in the “Ivanyushchenko land” (grain and nuclear matters), but there is not without problems too – “Kopanca” and money laundering for Alex Yanukovych.
Other things
1. Ratings of PoR and of Yanukovych are low (below 30%, really – in the area of 10-15%), and falling. Propaganda about the “all of them are the same”, “no one to vote for” etc. is still “holding”, but apparently will break. Real processes will start, when people will start to compare the crisis of 2008 “under Timoschenko”, and the crisis of 2012 “under Yanukovych.” Surprises are in stock for the elections.
2. There was an invalid and unconstitutional behaviour in the regions (Lugansk, Odessa, Crimea), and zero response of Kiev.
3. In the social sphere – a string of failures, although the amount of the benefits in question is 20 times less than debts write-off for Firtash & Co.
4. Inside PoR one sees bickering, disunity and vacillation. Yatseniuk gets money from Ivanyushchenko, Pinchuk, and (probably) Akhmetov. Svoboda likely gets from Firtash. Raider attacks inside PoR are on the rise.
5. Russian Orthodoxy had affiliated itself with an unpopular regime, Kyrill behaves like a Tartar invader. The loss of the parish is inevitable.
6. Medvedchuk re-emerges.
Summary
1. The whole history of the persecution of Tymoshenko – pure idiocy from which absolutely no one benefited.
2. The government really has no control over the system; in reality the system is falling apart.
3. After a stagnation in Ukraine under Yushchenko country quickly turns into the “failed state”. This does not mean the loss of statehood, but requires a change of the regime. The alternative is chaos, and possibly external intervention. Degradation processes are relatively slow, given the size of the country, but are quite obvious. The present administration has failed to perform its core duties.
1. Almost dying opposition is revitalized, and had surpassed in popularity the PR. Treatment of Tymoshenko by the government makes it virtually impossible for a decent man to criticize her.
2. Case had clearly demonstrated the absence of an independent judiciary, which excludes any serious investments.
3. Yanukovych angered against him the leaders of Europe, USA, Canada, and Russia. No one will work with him, but extremely imperialist circles in Russia, and pariah states.
4. Case demonstrated that signing of any agreement with Ukraine could bring a court case against the signatory. The unconstitutional regime became now incapable to sign international treaties.
5. European integration has been lost, and as a result – there is no leverage in negotiations with Russia. The businesses with a European exposure (Akhmetov, Klyuyev, ISD), are likely to have problems. And Akhmetov also has the US Coal.
6. Firtash exposed himself as a businessman, driven by unreasonable considerations of revenge. This is also confirmed by his role in the cases of Makarenko and Didenko. All of this makes doing any business with Firtash extremely dangerous venture. Bright future hardly waits for his business outside Ukraine, along with his NF Trading company.
Economy – 2011
1. Foreign debt grew by 40% to $58bln, or 42% of GDP. It is a lot, but is not catastrophic. Full external debt – $126bln, at about the level of the “white” GNP. A lot of repayments will be due in 2012, which is not good. Reserves have decreased from $38 to $32bln. The trade deficit is $4bln, which is very much taking into account the “white” GNP only $133bln. Shadow economy turnover is 40% of the economy, 67% of “white”, with a tendency to increase. The IMF credit line has been lost, in consequence of subsidizing Firtash. Prices of housing have increased, “for the IMF,” but will not go down after the loss of the credit line, sure enough. Moody’s had downgraded the rating outlook for Ukraine to “negative”, so low-cost loans for “humane” conditions no longer apply to borrowing. Creditors will be cruel. But foreign liabilities, in principle, may be controlled until currency reserves are not depleted.
2. One shall expect populist spending from reserves in the autumn of 2012, after which, in principle, the default will be possible. One can expect tax police going off limits, payment delays from the budget, and rising prices for housing and utilities.
3. The internal situation: the impression is that GDP growth is reported and calculated without regard for inflation. The GNP growth repeated the growth of the metallurgy output (and there are problems already coming). Consumer prices inflation is 20%, and the official GDP growth of about 5.5%. At the same time debts written off for the oligarchs (basically – Firtash) as a minimum of $4.5bln, plus $1bln is spent on Euro-2012, and additional subsidies through the use of its natural gas – minimum $0.6billion. The Deficiency of the Pension Fund is $500mln. Internal borrowing is not less than $2.79bln. Plus there were plans for more in December. The first offerings failed. All internal borrowing is covered by buying of the government bonds by the National Bank in the secondary market, which is, in fact, simply printing the money.
4. The gas. The problem is serious, but not as serious as it is presented. Negotiations failed in disgrace for 2 reasons: failed the European integration (no leverage), and reserves for the winter were low. Ukraine entered the winter with approximately 21bcm (billion cubic meters) “on paper”, only 3bcm more than had received from Tymoshenko at the end of the season (March 2010), and 6bcm less than before “gas war – 2009.” The actual stocks are even lower.
5. Raiders. Almost unmanageable chaos, BUT deserters got nothing from their treachery. Quite opposite, they now have nowhere to go to seek protection.
6. Livela fraud: Lisichansk refinery had to stop (clear lesson for BP and for the UK), total mayhem was at least $600mln. No any official response, for obvious reasons. Plus (IMHO) angered Lukashenko.
6. More or less decent things are in the “Ivanyushchenko land” (grain and nuclear matters), but there is not without problems too – “Kopanca” and money laundering for Alex Yanukovych.
Other things
1. Ratings of PoR and of Yanukovych are low (below 30%, really – in the area of 10-15%), and falling. Propaganda about the “all of them are the same”, “no one to vote for” etc. is still “holding”, but apparently will break. Real processes will start, when people will start to compare the crisis of 2008 “under Timoschenko”, and the crisis of 2012 “under Yanukovych.” Surprises are in stock for the elections.
2. There was an invalid and unconstitutional behaviour in the regions (Lugansk, Odessa, Crimea), and zero response of Kiev.
3. In the social sphere – a string of failures, although the amount of the benefits in question is 20 times less than debts write-off for Firtash & Co.
4. Inside PoR one sees bickering, disunity and vacillation. Yatseniuk gets money from Ivanyushchenko, Pinchuk, and (probably) Akhmetov. Svoboda likely gets from Firtash. Raider attacks inside PoR are on the rise.
5. Russian Orthodoxy had affiliated itself with an unpopular regime, Kyrill behaves like a Tartar invader. The loss of the parish is inevitable.
6. Medvedchuk re-emerges.
Summary
1. The whole history of the persecution of Tymoshenko – pure idiocy from which absolutely no one benefited.
2. The government really has no control over the system; in reality the system is falling apart.
3. After a stagnation in Ukraine under Yushchenko country quickly turns into the “failed state”. This does not mean the loss of statehood, but requires a change of the regime. The alternative is chaos, and possibly external intervention. Degradation processes are relatively slow, given the size of the country, but are quite obvious. The present administration has failed to perform its core duties.
