Ukraine (closed; covers till August 2014)

[Firn]

I did a little bit of research to understand more about the aweful economic growth of the country. In this short time you can get only a very limited and fragmented view, but I found the impact of monopolies and the interactions with politics interesting:

The Ukrainian Week does as far as I can tell a fine job at covering the economic fallout of concentrated power of the oligarchs and their influence within politics. The combinations of power and money is a very dangerous ones and can result in a vicous cycle in which both push each other. More money means more political power and more political power more money.

A good example is the position of Rafael Kuzmin, First Deputy Chair of the Antimonopoly Committee, who insists that Dmytro Firtash and Rinat Akhmetov, two Ukrainian tycoons referred to as key Party of Regions’ sponsors until recently, are not monopolists. Meanwhile, independent economists estimate that DTEK, a group of power plants owned by Rinat Akhmetov, controls over 35% of the electricity supply market. Dmytro Firtash’s entities control 100% of facilities producing ammonium nitrate and nearly 50-60% of ammonia and urea production facilities. Meanwhile, Mr. Kuzmin refers to the Privat Group as a monopolist. The group is owned by Ihor Kolomoyskyi and Hennadiy Boholiubov who are still outside the Party of Regions. However, Mr. Kuzmin admitted that the Antimonopoly Committee had no proof of Privat Group’s monopolistic activity because its different companies are owned by various offshore entities.

Ukrtelecom, a major Ukrainian telephone operator, has recently been bought by a little known company linked to the president’s family, according to The Ukrainian Week’s sources. Prior to being sold to private investors, Ukrtelecom had been on the list of natural monopolies dominating the nationwide markets for local telephone service and telecommunication channel rental. However, it was removed from that list in June 2011 although the company controls nearly 70% of the city landline telephone market and 75% of the intercity and international telephone connection markets.

Very bad incentives indeed. It should not surprise anybody that the oligarchs have mostly built their empires from heavy industry investments in the east. Of course there are also other players with a similar background not least the famous pro-European prisoner. All in all the situation has become also so dangerous because the control of the state power has become so important to conserve the personal wealth and freedom. I have little doubt that the current president fears that the roles could become reversed. There is likely even enought dirty laundry around to get a lot of political opponents into prison by a fair trial.

[davidbfpo]

A FP article goes behind the shields we've seen of late; the headline gives away the theme:

Ukraine's Public Enemy Number One: The Police
Why Ukraine's brutal riot police are one of the biggest obstacles on the path to reform.

Link:http://www.foreignpolicy.com/article...one_the_police

Added. A report using open sources to identify the ammunition used in the Kiev clashes, which may have killed two people. The title tells you 'not fit for purpose':

Report: Lethal ‘car stopper’ bullets used against protesters during Hrushevskoho Street clashes

Link:http://www.kyivpost.com/content/ukra...es-335579.html

[Firn]

Seems like somebody pro-Russian is having fun with leeking internal US and EU conversations.

The professional Americans which will have amused the EUropeans even more then they have been amused about the US before. After hearing the US opinion on Klitschko I'm pretty sure he is a right guy for the future.

I'm pretty sure there are some broad grins around the diplomatic world when it heard the first tape.

[Firn]

Shocking news from Ukraine. A tragedy right here in Europe and a very dangerous situation. I wrote about the dominance of the Eastern Oligarchs in their economy and the dark flows between them and the current political leadership. Now the latter has pushed itself into a much smaller corner, it was not acting exacatly in a (Western) democratic manner before and now it has much blood on his hands. They engineered prison and abuse for their lected political opponents for much less, so they are perhaps rightly even more afraid of losing power. There are also extremist on the other side. A bad, bad situation.

I will have to collect my thoughts on that.

P.S: Looking at this footage there is no surprise how a considerable share of the victims died. Such a waste of life.

[davidbfpo]

At last a clear concise expert explanation what is going on in the Ukraine, by Anne Applebaum:http://www.telegraph.co.uk/news/worl...ole-story.html

Even so it is easy to see that events in Kiev have moved at a pace which may invalidate her explanation.

There is much more to what has and is happening in the Ukraine, far beyond the scenes in the centre of Kiev. A truly corrupt state, which was starting to split not so much geographically as institutionally - most clearly shown by the police refusing national orders - and the reports of a mass protest in Kharkov against the government.

[JMA]

Tomorrow - 23 Feb - the Sochi Olympics end then Russia will be free to enter the fray... openly.

At last a clear concise expert explanation what is going on in the Ukraine, by Anne Applebaum:http://www.telegraph.co.uk/news/worl...ole-story.html

Even so it is easy to see that events in Kiev have moved at a pace which may invalidate her explanation.

There is much more to what has and is happening in the Ukraine, far beyond the scenes in the centre of Kiev. A truly corrupt state, which was starting to split not so much geographically as institutionally - most clearly shown by the police refusing national orders - and the reports of a mass protest in Kharkov against the government.

[Firn]

The events of the last days showed once again how difficult it is to make political predictions, especially about the future. I wrote about a president backed into a small corner and (rightly) afraid to lose his power, but I did not imagine that he was so afraid that he would decide to flee out of the country...

It was much easier to anticipate the luxury and wealth in which he lived, as he and mostly eastern oligarchs have plundered the state and the people, but the ship in the artificial lake was still a surprise. As well as the pheasants I should add.

It is difficult to understand what drove him into the political exile but losing control of most of the country, the refusal of a large part of the military and the more then doubtful loyality of the security forces seem to have been the most important elements. Who knows.

Overall it would be disgraceful if the EU, IMF and USA would miss once again a chance to support the Ukraine in it's difficult task to become a working democracy. Russia under Puntin is clearly only interested in keeping it in it's orbit. There is no doubt that in the mid to long run an Ukraine better integrated into the Western economic and political system will result in a higher standard of living for most citiziens.

The huge advantage of the Western world is it's vast financial strenght (yes, despite crisis and all). It would be amazingly stupid and possibly costly to be once again stingy. A 30 billion credit line feels like a good deal, most from the EU, maybe some of the USA and the IMF. Braking the monopolies of the oligarchs would be a good string to attach, cutting the subventions for gas a stupid one, talk about own goal. If this goes against the IMF rules, the EU should step up quickly. Raising 30 billions over a couple of years should cost the EU as a whole, even if we include some write-off, only a couple of billions at the most, perhaps at most some 10 € per capita*. The sucess is of course not secure but it should greatly increase the chances to move the Ukraine in the right direction for the good of it's citiziens.

Even 5 billons are pretty cheap for a good chance to greatly increase the political and economic stability of a rather large European country and to greatly reduce the Russian influence on it if you think how much money, possibly 100+ billion, was thrown by European nations into that far away dustbin called Afghanistan.