Kiev Post article on Ukraine economic situation

[WmGO]

http://www.kyivpost.com/nation/30551

[BC]

http://www.kyivpost.com/nation/30551

May be perceived as a result of flirtation with democracy and capitalism.

Interesting times..

[Makkin]

  Maybe it sheds some light on how the average Ukrainian will and is suffering but ScottinCrimea suggested this would not happen and also asked for very hard for specifics on how this could possibly happen.

  Scott here is a small taste of things to come.

Makkin

[BC]

  Maybe it sheds some light on how the average Ukrainian will and is suffering but ScottinCrimea suggested this would not happen and also asked for very hard for specifics on how this could possibly happen.

  Scott here is a small taste of things to come.

Makkin

Well, many years ago I bought our house with a decent bit of land around it.. enough for a good garden and some chickens.. dunno why I did it but as the days go by it might have been a good decision after all..

Scott is probably not far off the mark with their little plots of land and a good understanding of barter for the 'normal' UA citizen.  The 'normal' UA citizen though does seem to know what's going on around them via the media etc and will likely get a sour taste from goings on before they cast their vote.

[kievstar]

Not sure if any of you know writers for the Kiev Post?? Do not believe everything their saying.  Kiev Post is a very western Ukraine view paper.  Kiev and Donetsk is going to suffer the most as many people took credit there and business are failing.  Cities like Simferepol and Kharkov will not really be impacted. 

[wxman]

Latest article on Ukraine economic crisis. Some saying the hryvnia could fall to 9 to 1 vs the dollar, with the best estimate at 6.8 to 1.  Not good for Ukraine when most of their debt is in dollars.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aJa3AyESRhLw&refer=home

[Nat]

Latest article on Ukraine economic crisis. Some saying the hryvnia could fall to 9 to 1 vs the dollar, with the best estimate at 6.8 to 1.  Not good for Ukraine when most of their debt is in dollars.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aJa3AyESRhLw&refer=home

Dollar has been falling recently - it was already more than 7, then 6,3, then 6,1, and I was told it was even cheaper today. It's all panic - nothing more. I hope

[wxman]

Borrowing $16 billion from the IMF will cause economic hardships for Ukrainians. By accepting the bailout, Ukraine is required to have a balanced budget, and being in debt $20 to $30 billion already, it will mean massive government cuts. If Ukrainian leadership actually follows through, then the tough measures will eventually strengthen the currency, and in  the long run will be good for Ukraine. Of course, if the Ukrainian government actually collected the taxes that were due, they probably would not have such huge debt versus GDP ratio that they have now.

[Nat]

BTW, dollar is 5,99 today. Is it time to buy it up?

Borrowing $16 billion from the IMF will cause economic hardships for Ukrainians. By accepting the bailout, Ukraine is required to have a balanced budget, and being in debt $20 to $30 billion already, it will mean massive government cuts. If Ukrainian leadership actually follows through, then the tough measures will eventually strengthen the currency, and in  the long run will be good for Ukraine. Of course, if the Ukrainian government actually collected the taxes that were due, they probably would not have such huge debt versus GDP ratio that they have now.

Well, as they put it on TV, $16 billion - it's a very small sum comparing with loans of other countries, and the debt is not so big as it used to be in previous years, so everything seems to be ok. Pesonally I don't know, who is right, but what I know for sure - in our country it's useless to make any forecasts - dollar can be 4,6 or 8 till the end of the year Speaking of crisis - the only thing which shows that there is some sort of crisis now is that banks stopped giving mortages and most of other lons. Nobody buys flats and houses because of this and estate agensies are going bankrupt (as well as building companies).

[kievstar]

How much of the $16B will Ukraine politicians take.  Maybe $4B.  Wonder why the three political parties are getting along today as the IMF almost pulled the loan from them unless they quit fighting.  Ukraine has a fundamental problem - all the high quality steal is gone.  They export nothing else of value to the world right now. But 6 to 1 exchange rate will keep the economy going.  I was just in Kharkov and besides falling housing prices the restaurants and discos were more busy than ever.  Kiev is a real mess if you own housing or a restaurant.   But housing still higher today in Ukraine than 2004.  Exchange rate of 5 to 1 will destroy Ukraine.  Also, Ukraine has to float their currency now with agreement with IMF loan.  It is predicted to go to 6.5 to 15 to 1 unless a drastic change occurs.  I think 15 to 1 prediction by Dragon Capital is a little silly but who knows. I got 6.5 on Saturday in Kharkov on local exchange stores but bank machines were giving 5.89. 

[Nat]

How much of the $16B will Ukraine politicians take.  Maybe $4B.

But even in this case this money will still get to the market - because they'll spend it

They export nothing else of value to the world right now.

But 6 to 1 exchange rate will keep the economy going.  I was just in Kharkov and besides falling housing prices the restaurants and discos were more busy than ever.  Kiev is a real mess if you own housing or a restaurant.   But housing still higher today in Ukraine than 2004.  Exchange rate of 5 to 1 will destroy Ukraine. 

I don't get the idea. If Ukraine exrports nothing of any value, then why does it need a high dollar? To have expensive import?

[wxman]

A high dollar is very bad for Ukraine. That makes the loans they have even more expensive. Every time the dollar goes up, it takes more hryvnia to pay the interest. This creates even higher inflation as the currency continues to weaken. That's why Ukraine does not want to float their currency now. But they won't have a choice by accepting the IMF bailout. But on the other hand, a strong dollar, makes the cost of Ukrainian steel cheaper. Eventually cheaper Ukrainian made products will bring a greater influx of western capital to invest, thus bringing more money to Ukraine. How does this help the average Ukrainian in the short term? It doesn't, they have to suffer through the high inflation due to the weak currency.

[Makkin]

  The reason the dollar is high is because the Chinese have been buying them for some reason??

   Makes sense if you buy the dollar in high volume like them as to prop up trade and such things but how long can or will they buy if at all anymore. In anymore I mean at the same rate they bought.

Makkin

[Nat]

Btw, dollar is 5.85 already. An I bought it at 5.99. Again the same mistake  

[kievstar]

Investment in Ukraine stopped when currency went below 5 to 1.  The average Ukraine worker is good for low paid labor jobs.  So when wages got too high new foreign investment slowed and than credit crunch made things worse.  

This past summer they had a bunch of USA dollars in their currency reserve and sold several billion when they thought Ukraine dollar was going to 4 to 1.  Not a good idea to sell high and buy low.  

Average Ukraine citizen has always been poor and future looks the same.  It is a country run by the rich with little middle class.  To many people work very hard for nothing.  

Dollar got strong for many reasons but the Japaneses Yen has done better. Many countries have cut interest rates and printed more money to deal with credit crunch.  This makes their currency weaker.  China buys USA dollars because China equals USA manufacturing.  When USA hurts so does China.  India, China, and USA are connected.

Regarding the loans of Ukraine.  Maybe Russia will buy Ukraine when their bankrupt or Ukraine can get more involved with agriculture.  Ukraine has to invent / make something they can sell the World wants.  Military manufacturing and steal not going to get it done.  

[Tangodave]

A gal I dated in Odessa says she can't find any kind of a job, and she was just cleaning restaurants.  When I was in Odessa last month, even before the dollar's recent climb, the cost of renting apartments seemed to be falling.  I got an internal flight at the end of my trip, online Aerosvit, ODS to KBP, one way for $45, really, really cheap.  Whatever happens here in the states, it is obvious that it is going to come down harder in Ukraine.  Maybe by the end of it though, families will be able to afford apartments in Kyiv, again. 
They are very curious about the U.S.  Mortgage crisis, in Ukraine.  An interpreter asked me to volunteer to explain it to students at the Economics school in Odessa.   I am not an expert, but I guess they are about to learn a lot about one, first hand...

[BC]

The 'higher' your lifestyle, harder is the fall you take when the rug gets swept out from beneath you.  Overall, I think those in FSU that are still used to living with the basics and haven't hocked themselves to the ears will survive ok, or at least better than comrades in other countries.

Yes, the 'flirt' with the 'highs' of capitalism will leave some with hangovers.

[I/O]

Much of Ukraine's "New Found" has been / was driven by that oh so familiar thing. We think this property will be worth..................and the next week someone thought it would be worth more. On the day, it was so in came the construction and sales all based on what it would be worth in an ever increasing market. Who was the bastard who asked the question which popped the bubble? What IS THIS ACTUALLY worth? The answer........................give it another 6 to 12 months and you'll have it.

I/O

[aikorob]

Reported from MIL in Odessa yesterday---no one is allowed to take cash from bank deposits. People are paying by card, or hoarding what cash reserves they have.

[kievstar]

Depends on the bank in Odessa.  Tell them to go inside the bank they use and not use ATM machine. 

[Mir]

Maybe Russia will buy Ukraine when their bankrupt

Well Russia itself will do well to avoid going bankrupt in next 2 years.

Come to think of it most countries are facing the same fate.

[WmGO]

More on this subject, looks like it is getting worse:


http://www.nytimes.com/2009/03/02/world/europe/02ukraine.html?_r=1

[Mir]

http://www.kyivpost.com/city/38253

[Muddy]

Thanks for the articles

[giants11]

You know what does this come as a big surprise. What is Ukraine's economy farming oh great another agriculture based country that's a great way to get your country going. Oh ya they have industry not much but not enough to get them through.

The other industry is women! Now that is an industry that will last forever. Poor ukrainian ladies being exploited by the mafia and being shipped to Western Europe and North America. Promise of a new life and end up being prostituted out. Anyone see the movie Eastern Promises well all the prostitutes were Ukranian.

Not at all surprised that Ukraine economy faltering and will continue to do so. They were better off under the Soviet system!!