USA: Russia undermines independence in Ukraine and Georgia

Very True:

USA: Russia undermines independence in Ukraine and Georgia

The Government of Russia undermines independence of the neighboring states, Ukraine and Georgia, with military threats, economical boycott and limitation of the supplied energy recourses, states chairman of the U.S. Senate Foreign Affairs Committee Joseph Baiden in the draft resolution, introduced yesterday to the upper chamber of the legislative body of the USA. 

The resolution, addressed to the leaders of Big Eight with a proposition to ensure the more effective and constructional relations with Russia, was placed on the official web page of Senator Baiden. 

The Senator appreciates highly the role and importance of the Russian Federation in the global system of international relations. Though, Baiden said the internal and external policy of Russian leaders put their country in opposition to the USA and other members of Big Eight, as UNIAN reports. 

According to the resolution, in December last year, Russia suspended the implementation of the Agreement about general military forces in Europe, which is basic for regional stability.
ForUm

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A stroll through Lviv by Kyiv Post

Something about Lviv.

A stroll through Lviv

Lviv is the country's undisputed architectural pearl, a maze of narrow cobbled alleys spilling into squares lined by 17th-century town houses and towering Baroque, Gothic and Renaissance churches. Formerly part of Poland, Austria and then Poland again, Lviv did not fall under Soviet rule until after WWII, so unlike most Ukrainian cities it still feels like the true Central European city that it once was – and that it's striving to be again. Its European character is especially noticeable if you are entering the city after several weeks in the Soviet east. Of course almost no tourists ever do this because no tourists visit Eastern Ukraine. So I was breaking new ground with my abrupt East-to-West transition. The hope was that I didn't go into shock.

I arrived in the city at 5.30 a.m., having slept roughly one hour on a train that I boarded in Khmelnytsky. I'm apparently in the minority among foreign tourists in that I loathe Soviet trains. Yes, I understand their quaint Ukrainian-village-on-wheels appeal. But for me that appeal fails to make up for the discomfort of sharing a furnace-hot kupe car with three strangers who may or may not snore, and/or have stinky feet and/or loudly swill vodka until the wee hours of the morning. When I arrive at my destination in the morning, almost always at some ungodly early hour (another drawback of Soviet trains), I'm usually not in the greatest of spirits.

A groggy early-morning stroll through the streets of Lviv hardly appealed, but as I had nothing else to do, I checked my bag at the train station, grabbed a Nescafe and set out. Arriving in the centre I immediately realized I was in for a treat. The streets and squares were deserted save for the odd early-rising churchgoer or bleary-eyed reveller escaping the disco. The sun was just rising above the 16th- and 17th-century facades of the townhouses on central ploshcha Rynok, illuminating the church spires in fiery shades of green, silver and bronze. Church music wafted through the otherwise silent squares, which normally brim with tourists in midsummer. I felt like I was walking around an abandoned movie set of a perfect Central European city.

Unfortunately reality's intrusion was inevitable. Within two hours, the march of tourists into Ploscha Rynok had begun. Before long the museums and restaurants were open too, a reminder that I had work to do. The mood's destruction was complete when a set of thunderheads rolled in, blotting out the sun and dispossessing the church spires of their giddy morning sheen.

In addition to plenty of old-world panache, Lviv shares something else in common with much of its eastern European brethren – a nasty streak of Xenophobia that goes back centuries. I was aware of Lviv’s reputation as a hotbed for nationalists and skinhead types, but it's really not something that I had noticed on previous visits to the city.

This time was different. In a foreboding sign, when I arrived in town a pair of two-story Nazi banners were hanging from the facade of Lviv's gorgeous Hapsburg-era opera house. It turned out the banners were just props for a movie, but seeing these banners was a chilling experience. Lviv was a major Jewish center before the war, with Jews making up about one-third of the city's population. The Nazis killed virtually every one of them at two notorious camps – Janowska, now a prison northwest of the city centre, and Belzec, an unspeakably hideous and largely forgotten extermination camp located north of Lviv in present-day Poland.

Throughout Eastern Europe, the Nazis were adept at recruiting local collaborators to assist in the slaughter of other human beings, and Ukraine was no different. For obvious reasons this controversial subject is taboo in Ukraine. Is it not just a mite strange, then, that city officials allowed these banners to be hung so nonchalantly from Lviv's most venerated edifice? Had I not spotted the video cameras, I might have actually been alarmed. Surely the banners could not help but open up old wounds from an era when genuine Nazi banners hung from the Opera House.

Perhaps they could have chosen a lower-profile venue, or at the very least made it clearer to passers-by that this was a movie set and not an actual neo-Nazi political rally.

Rather than draw conclusions about the city’s alleged xenophobic streak, I chalked the incident up to clumsiness. But the banners put me on my guard. And sure enough, that same evening I would come face to face with an ugly side of present-day Lviv’s personality. But that we’ll save for the next column.

One more note about Belzec. Nary a trace of Belzec remains today, and the camp receives little attention next to more famous camps like Dachau and Auschwitz. But in many ways Belzec was more awful. Victims sent to Belzec were killed immediately, often by hideous, experimental methods. That only one person survived Belzec is one reason why so little is known about it today. But it’s not the only reason. Wandering around Lviv for three days, I searched largely in vain for vestiges of the city’s Jewish past. There are a few scattered testaments lying around – mostly small plaques marking the sites of synagogues blown up by the Nazis. There’s a plaque at Janowska prison, and a poignant Holocaust monument in the old Jewish ghetto. But by and large the city’s Jewish past has, like Belzec, been burned and buried.

The small but resilient local Jewish community is planning to rebuild the Golden Rose Synagogue in the Old Town, blown up by the Nazis in 1941. Hopefully this will be an important step for the city in reconciling with its Jewish past.

Read more articles about Bloom's travels in Ukraine at http://mytripjournal.com/blukeblog

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The Reason Why Putin Does Not Want Ukraine in NATO and EU

There are many reasons why Putin does not want Ukraine to go West and joing the European Union and NATO.  But I read this article and a lot of this makes sence.

Ukraine broke of from the Solviet Union.  Ukraine became independant.  Putin is betting that we will split up and we will not succeed.  If we joing EU and NATO and we succeed, then people in Russia will want the same type of independance that Ukraine has.  Thats the way I interpreted this article.

Ukraine is Russia’s best hope for geopolitical and cultural survival

Russia and the West are losing each other yet again. The process of attraction and rejection between these two has been taking place for many centuries, and the next "repulsion" phase should be taken philosophically. Historians have counted nearly 25 such phases since the reign of Ivan “The Terrible."

However, the issues prompting today's sharp anti-Western themes inside Russia are not getting addressed.

The image of the Western world as a sinking ship, unfortunately, has a right to exist, but with only one remark: Russia is a part of this ship. No matter how much we flirt with Hamas, Hezbollah, Iran … no matter how often we remind them of the Soviet Union’s contribution to their development … no matter how well we stand up for them in the United Nation’s Security Council, Russia remains a part of the “devilish” West from the perspective of Muslim extremists who are conducting the "holy war” against the West. And Russia could be seen by them as the most vulnerable, therefore the most attractive target for expansion and takeover.

So, how could we stop this selfdestructive movement of Russia towards such a phantom target, redirecting it from its wasteful confrontation with the West?

There is only one circumstance which is able to influence this process essentially, as well as to affect the outcome of all centuriesold conflicts between "Westerners" and "Eurasians." Ukraine must succeed on its way towards European integration.

Indeed, Ukraine is a threat, however, not to the safety of Russia, but to Vladimir Putin's authoritarian state model, which is absolutely hostile to the West. It is essential for the Kremlin masters that the experience of their former neighbors who have chosen their own directions and models will never seem appealing to Russian citizens. They fear Ukraine, and its success, because it could offer an alternative to their path for Russia.

Success of the Baltic countries is not a major concern for them, as they don’t share the Slavic blood as Ukrainians do. They were perceived as strangers in the USSR. Ukrainians, however, are seen by Russians as a nation with similar mentality and culture. “If they have made another choice and succeeded, then why can't we?” many Russians would ask. Therefore Ukraine’s success equates to the political death of Putinism.

Kremlin guards dream of resurrecting Moscow’s influence of its USSR days. In recent years, when they realized that all their efforts to steal Ukrainian freedoms were futile, they adopted a strategy to split the nation. Putin, meanwhile, tries to persuade Western colleagues that Ukraine is an artificial state that will split if accepted into NATO. 

If Ukraine survives and demonstrates viability and irreversibility of its European choice, it will become the main argument against centuriesold disputes inside of Russian culture. The best way to help Russia today is to help Ukraine to confirm the fact that it belongs to European civilization. It will have an essential impact on Russian consciousness.

This scenario would be very positive for Russia, showing the way for its northern neighbor. Moscow’s strong hatred of the West, and efforts to emphasize selfaffirmation, have driven Moscow eastwards.

Standing to the east, eager to capitalize on this eastward shift by Moscow, is China, which has adopted a policy of economic and demographic absorption of parts of Russia. The goal is to draw Russia further into an antiAmerican bloc, thereby cutting its political ties to the West only to kick­start the absorption process.

If antiWestern paranoia and Eurasian fantasies in Moscow continue, the East will absorb Russia’s energy and rawmaterial rich Siberian region. Then Russia will lose control of the Caucasus region to a growing Muslim population. The rest of Russian territories will have the only choice left—to join Ukraine, which will have become a successful member of the European Union by that time. When Moscow returns to Kyiv Rus after a 1,000year journey along Eurasia, a new page in both countries’ histories will begin.

Andrei Piontkovskiy is a member of Russia’s Yabloko party. He is currently a research fellow at the Hudson Institute in Washington, D.C.

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Does this make sence to you?  Or do you think there are more reasons why Russia does not want Ukraine to move closer to the West.  Of course Russia might see NATO as a threat, but I think this story has a lot of truth to it.

Ukraine: undiscovered Europe

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More women breaking into business

Women all over the world have begun to work in business and are even dominating top positions.  And I "all over the world" i am including Ukraine.  I think there is still a lot of sexism in Ukraine (and many other countries) but it is dropping.  Some positive talk about this:

More women breaking into business

Tetyana Radomyslskaya embodies what appears to be an emerging trend: more women entering the traditionally male-dominated world of business in Ukraine. 

Juggling a family and a career, Ukrainian women are beginning to climb the corporate ladder in search of financial independence and stability. Their paths are assisted by an increasing number of foreign companies — some of which have long histories of providing equal employment opportunities to women. But women also appear to be joining Ukrainian companies in greater numbers as well. 

“In the last three years, I have met more women in top positions,” Radomyslskaya says. Before then, she remembers encountering sexism. Men have said to her in job interviews that “there is no doubt about your professional knowledge and your abilities, but there are some concerns that you are a woman,” she says.  

Statistics are lacking, but the anecdotal evidence does suggest a clear trend of greater workforce participation by women. 

Associate Professor of Kyiv Mohyla Academy’s Business School, Mychailo Wynnyckyj, believes that the boost of women in business is a result of more Ukrainian women studying foreign languages, one of the skills employers look for when hiring. Wynnyckyj points to the disproportional number of women studying at the Kyiv National Linguistic University, which includes 70 percent of female students to 30 percent of male students.

“Demand for talented individuals for high level positions is extremely high, especially for people with both foreign language skills and knowledge of Western business practices,” he says. 

According to a study conducted by the League of Professional Women in partnership with the International Institute of Sociology and funded by USAID, since 2002, women in Ukraine are becoming more involved in business and entrepreneurship. However, the study found that Ukrainian women are still less active in business than their Western counterparts. 

Recent United Nations research indicates that women in Ukraine only control 5-10 percent of economic resources and make up 38 percent of the total number of business self-starters. According to the research published in 2008, Ukrainian women manage 26 percent of small enterprises, and 15 and 12 percent of medium and large ones, respectively. 

Although, Ukrainian women are slowly making up larger numbers of the workforce than before, their role continues to be too low, according to the United Nations Development Program in Ukraine. 

Despite this, more Ukrainian women are benefiting from the growing market, says Radomyslskaya, who believes there has been a surge in the number of female professionals. As more multinational companies open offices in Ukraine, women are getting hired. They are the majority of the workforce at some places, such as the Ernst & Young office in Kyiv, according to Anna Kozeletska, human resources manager of Ernst & Young. 

Radomyslskaya, chief financial officer at KDD Group, a Ukrainian realestate developer listed on the London Stock Exchange’s secondary market, believes the influx of foreign companies has helped Ukrainian women gain valuable business experience. These companies bring Western business standards to Ukraine and teach women good business practices, something that didn’t exist in the past, Radomyslskaya says.

“Many young people have the theoretical business knowledge, but you need the experience. For young women starting out, they need internships and job placements at one of the multinational companies that are properly structured. They need to learn how to work in an organization that is properly managed so that this knowledge can be retained and used later on in her career,” she says.

A graduate of Kyiv State Economic University, she began her career at Ernst & Young and later worked at KPMG as an audit assistant. She soon moved on to become chief financial officer of Rise, an agribusiness company. She was later chief financial officer of Slobozhanska Budivelna Keramika (SBK), a brick producing company in Ukraine. Radomyslskaya is now one of the youngest chief financial officers in Ukraine. She says working at multinationals, in her case Ernst & Young and KMPG, helps women develop important skills. 

“Once you learn how to make a deal with a big European bank you can do it again, and once you implement a budget in one company you can do it in another,” Radomyslskaya said. “You will know how to do it in the future.”

Radomyslskaya thinks women in Ukraine have the opportunity to rise up within the emerging corporate structure. “Maybe a glass ceiling exists when a woman does not have the motivation to go forward,” she says, noting that being a woman has not stopped Yulia Tymoshenko, the nation’s prime minister. 

“In business there are new opportunities, new challenges, new partners and new contacts,” she says. “I have the possibility to make decisions every day and some sort of freedom on decision making and building my life.”

Many Ukrainian women are feeling the same way. The Kyiv metro is filled with women heading off to work in power suits and high heels eager to contribute to society. “The challenges of working are not any different than a man’s, but it is about getting men to realize that women can work too,” Radomyslskaya says. 

Natalie Gurieva, Ukraine’s representative for The Leading Hotels of The World, an international association that includes more than 450 hotels, says she has professionally benefited from Ukraine’s rapidly growing market and sees more women in the workplace, especially in business. 

Gurieva manages the Ukrainian market for the association, which includes the new Opera Hotel in Kyiv and the Donbass Palace Hotel in Donetsk. 

 “It isn’t easy to start but now there are more opportunities for women,” she says. She credits her internships in Holland and Britain for opening up her eyes to the outside world and getting her excited about business.

Since Leading Hotels of the World expanded into Ukraine in March 2008, under Gureiva’s leadership, the Ukrainian market has shown the strongest results in Eastern Europe, she says. “It is hard work, but I cannot devote my whole life to just my family. I have to be creative, I have to develop new skills, and business allows me to unlock my potential.” 

Gurieva says her family life has suffered because she decided to pursue a career. “My husband wanted me to stay home, but I couldn’t do it,” she says. Gurieva, now divorced, has struggled to find a balance between her professional and personal life. “But now my daughter sees me and she wants a career and knows she doesn’t need a man to support her.”

Alexandra Stadnyk can be reached at Stadnyk@kpmedia.ua or 4964563 ext. 1092.

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Update 2: Germany & Ukraine

Some more talk about Germany and how much trust it has in Ukraine.  Article states how important it is for Germany to have trusted Ukrainian partners.

Germany high on Ukraine’s economic upside despite the risks

Dr. Uwe Kumm is head of the Roland Berger Strategy Consultants Kyiv and Moscow offices. Currently, he is also the managing partner of Roland Berger Strategy Consultants for Russia, CIS and the Baltic States, and a member of the Management Committee Central and Eastern Europe. Dr. Kumm graduated from Kharkiv University and from the Technical University Bergakademie in Freiberg, Germany. Between 1983 and 1990, he held various management positions in Riesa, a German steel manufacturer. In 1990, he joined Roland Berger Strategy Consultants, where he was elected partner in 1996 and managing partner in 1998.

In an interview with the Kyiv Post, Kumm says that finding a trusted Ukrainian partner is extremely important for German companies.

KP: Generally speaking, is the investment climate favorable for German businesses operating in Ukraine? What about your company’s experience?

UK: The attractiveness of Ukraine as an investment destination is growing. We have been operating in the Ukrainian market since 1993. Development here has been akin to being on a rollercoaster; there have been peaks and valleys. Regardless, we are determined to serve our Kyiv office clients, of which Ukrainian companies now make up approximately 50 percent.

We are also hopeful Ukraine in the future will engage in further efforts to improve the overall investment climate, including introducing future measures and reforms to reduce bureaucracy and combat corruption. Giving foreign companies the right to own land and ensure that they always receive reimbursement for paying the valueadded tax would also help to improve the investment climate. While these questions are unsolved, the importance of finding a trusted partner is extremely high for German companies. About a half of the FDI (foreign direct investment) in Ukraine is divided among the three most dynamic industries: industrial production, financial services, and consumer goods and retail.

KP: Please outline some of the most important trends taking place in Ukraine today?

UK: Consolidation is a major trend today. Foreign players from Western Europe and from Russia are actively looking at market entry opportunities. They realize the need to occupy the most attractive niches before the market gets saturated. As a result, M&A activities are on the rise as a fast way to gain a market share. Ukrainian companies are actively looking for resources to finance their growth, which explains the recent trend of IPOs of Ukrainian companies in places such as London, Frankfurt, and Euromarkets. Foreign investment is courted much more assiduously than before. Ukraine is becoming a much more attractive investment market for international investors also in part because of its recently completed negotiations to join the WTO.

KP: What are the major problems your business faces today in Ukraine? 

UK: Having a strong presence here is important – those without a firm grasp of the situation are bound to have problems in such a turbulent environment. As a partnership we decided that Eastern Europe is a strategic focus for us. We recognized the importance of the Ukrainian market early on. Our first projects here began in 1992, and in 1993 we opened our office in Kyiv. Having over 15 years of experience working in Ukraine has provided our Kyiv office with good country knowledge, strong insights, and networks, everything you need for good consulting. 

We have noticed that Ukrainian businessmen are very intuitive. They are often ready to invest tens of millions of Euros in a project just based on their gut instincts and are not used to doing the proper preliminary research and market analysis, a process that is standard for Western European businessmen. Western investors and business partners are often surprised when they can not get a proper business plan, based on proper analysis – which is a common practice abroad. However business owners are generally openminded – we have often experienced that our clients start implementing our suggestions even before the project is finished and take advantage of the international expertise.

KP: Compared with other European countries, how would you describe demand on the Ukrainian market?

UK: With its dynamic growth and new players entering the market, strategy is currently the hottest topic. After a company has determined its strategy, their focus usually shifts to organization, motivation, and corporate management, all of which are gaining importance. Fast growing companies are quick to realize that they need new ways to manage themselves when they have a 100 million euro turnover as opposed to 10 million. Operational efficiency and costcutting are relevant for the industries with the fiercest competition, like with telecoms. We expect more assignments on these topics in the future, when more industries step from current rapid growth phase into a more mature phase. 

KP: What business sector in Ukraine has the fiercest competition? Construction? Retail?

UK: Telecom. Two players compete in the first echelon and two in the second echelon. It can be explained by market saturation and with the fact that the market was traditionally divided between these two operators. Golden Telecom is also an old player, but its subscriber base is almost unchanged after eight years. Two new powerful players that entered the market in 2005 control about 15 percent of the market, and their share won’t change significantly, ranging from 15 to 25 percent at most in the coming years. The new wave of competition can be expected in 3G, where only Ukrtelecom has the license, but the serious fight now is about 2G. Otherwise, retail banking is hot. 

Industries fueled by growth of consumption, like retail and construction, are booming, but the situation is far from saturated here. There is still room for many small (and even less efficient) players. 

KP: How will Ukraine’s WTO membership alter the business environment? 

UK: On the one hand, Ukraine has a free trade agreement with Russia and other CIS countries, who are Ukraine’s major trade partners. On the other hand, accession to WTO will surely affect Ukrainian companies and the national economy in a similar way that WTO accession affected other countries after they became full members. It is a milestone that opens new opportunities for the country in terms of transformation to a more competitive economy and further integration into the global marketplace, where only the fittest survive. With WTO accession Ukraine gets longterm advantages as it will enjoy access to new markets, growth of goods turnover, growth of state income, and 710 percent export growth. However, it may be painful for many in Ukraine in the short term as less protectionism will be there to shelter inefficient producers and companies.

Yulia Golub can be reached at Golub@kpmedia.ua or 4964563 ext. 1081.

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German Businesses in Ukraine

I think many of us know that Germany is good at many things.  On my recent trip to Ukraine, I saw a couple of large super stores and later found out that they were German businesses.  I was happy to see that.  The article below talks a bit about what attracts Germany to Ukraine and some hardships that Germany has when it wants to do business with Ukraine.

Germany building a lead in Ukraine

Germany is Ukraine's largest European economic partner. In 2007, German direct investment reached over $6 billion ($4.8 billion being represented in the Mittal Steel purchase by a German subsidiary), narrowly trailing Cyprus (which represents a wide variety of capital interests including Ukrainian and Russian reinvestment in the country). 

Germany is also Ukraine's leading European importer, trailing only Russia, whose import value is mainly derived from energy. 

German businesses are drawn to Ukraine by the size of the country, the population's growing purchasing power and the growing demand for high quality goods and products. Compared to Western European markets, which are mature, Ukraine offers great opportunities for business growth for commercial and manufacturing companies. With dynamic growth in construction and other markets in Ukraine, German companies are flooding the domestic market with products and services. 

"Ukraine's construction sector is one of the most dynamic market segments, which increased dramatically during the last several years," said Andrii Pavlyk, general manager of Knauf Insulation Ukraine. "The demand is really high for new residential and commercial buildings, along with the renovation of old housing, which boosts the development of the construction materials markets."

With a population of over 46 million people, Ukraine is the largest European country by land mass and has a rapidly growing economy. "Eastern Europe, with Russia and Ukraine, represents important countries to provide substantial growth for our group operators," noted Axel Hluchy, managing director of METRO Cash & Carry Ukraine. According to the results of a Planet research report, Ukraine's retail market grew by 22 percent last year alone. 

Opening their first outlet in Ukraine in 2003, METRO Cash & Carry now operates 19 wholesale outlets in 14 Ukrainian cities, with a total investment since opening the first store of over $530 million and a turnover in 2007 of nearly $1.3 billion, according to Hluchy. As the Ukrainian retail market matures and begins to emulate the Western models, the more German investors expect to gain in market share, Hluchy added.

But, apart from fast growing sectors like construction, agriculture and retail, there are some that demonstrate that Ukraine is still far behind most European countries. "One trend which is still very slowly taking place but which has to gain more importance is the need for environmental sustainability and protection," noted Rudolf Hartmann, managing director of OSRAM Ukraine, a lighting manufacturer.

Another trend important for clients is experience. That is the key to success for German companies in Ukraine. Most German companies have distinguished histories and arrive here with excellent reputations and find it easy to find Ukrainian partners. 

"There isn't such a big interest in the origin of the business partner any more. When choosing a partner, investors pay more attention to their experience in the market," explained Yana Gorelina, managing director for Scholz & Friends Kyiv.

Generally speaking, the investment climate is favorable for German businesses operating in Ukraine, market insiders say. But there are numerous problem areas that have to be worked around. Major German manufacturers striving to enter a new business area have difficulty finding modern, energy-efficient partners. "Energy saving is the most crucial issue that needs immediate action, first on the governmental level," explained Pavlyk. "Energy efficient approach in all industry sectors will benefit companies that manufacture and sell high quality products, consumers who use these products, and the country's economic development."

The notorious Ukrainian legal system still hampers operations in the market. German businesses lament the widespread arbitrariness and shifting of rules by authorities and bureaucracy. "This makes any investment a risky undertaking. This, however, is being compensated by the market's huge potential," said Kaijo Meyer, general manager of LION-Group.

But there is a bright side to the difficulties of doing business here. "Ascension of Ukraine into WTO will lead to overall liberalization of the market, adding more market stability and transparency," said Hluchy. This will benefit all, especially foreign investors. Ukraine's participation in WTO will be monitored with great interest by German and other foreign investors in Ukraine. "In the first quarter of 2008 alone, the level of foreign direct investment considerably outpaced last years indexes," said Andryi Gotun, accounts director at Scholz & Friends Kyiv. This means that the material incentive of foreign investors increased permanently, and it ensures a steady inflow of foreign capital.

Describing demand in Ukraine, all market insiders agreed that it is as high as in European countries. But again, there are problems that need immediate solutions. One of the main obstacles for German companies are Ukraine's Soviet era customs procedures. "If it was not for this obstacle, I believe our fleet of trucks would be larger than it is today," noted LION's Meyer. Ukrainian customs negatively affects all businesses operating in the country, particularly the daytoday arbitrariness of their decision making, Hartman emphasized.

Regardless, Ukraine, now a WTO member, is exhibiting more transparency and attractiveness to German companies and their international competitors. "Clearly, membership in WTO and attempts of current Ukrainian leaders towards membership in the EU are declaring to the world Ukraine's intentions to move forward on a positive path," said Gorelina.

Yulia Golub can be reached at golub@kpmedia.ua or 4964563 ext. 1081.

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The article also talks about how much influence Ukraine's WTO membership had on business relations.  Have you been in any of these stores?

Housing Costs in Ukraine

The second currentcy of Ukraine is the USD.  But since the dollar is weak right now, some are  now selling properties in hryvnias.  Even though I like the idea of using  Ukrainian currentcy, people say that it makes the price higher.  I think prices are fair, but the peoples salaries are not.  There are some interesting facts in this article along with prices.

House dream dashed

The Vakhovskys are a typical Ukrainian family. Having married four years ago, the couple — both born outside the capital — are looking to buy an apartment in Kyiv, where they studied, met and work.

But soaring housing prices, relatively low salaries and tighter lending practices by banks rattled by a shaky U.S. dollar have left the family frustrated.

Like many other Ukrainians looking to buy property after flocking to Kyiv in search of jobs, the Vakhovskys are now exploring cheaper options – such as buying a place outside the city.

"We've been looking for apartments for the last six months and, in fact, found some options, but when the dollar started tumbling the sellers decided to sell apartments in hryvnias, which made the price much higher. We had to put off buying an apartment," said Iryna Vakhovska, a 23-year-old married marketing specialist and recent graduate of Kyiv Mohyla Academy.

With about $2,000 in monthly income, below the average cutoff by banks for issuing loans, the Vakhovsky family is feeling Ukraine's real estate squeeze.

They are currently looking at a two-room apartment in Bucha, a suburb 20 kilometers from Kyiv. They are ready to accept a 20-year loan with monthly payments starting at $1,500. The payment is less than half of what monthly payments can be for purchasing a similar apartment in Kyiv.

"We know that we will have to say no to many things we enjoy now, but we are ready to sacrifice," Vakhovska said, adding that she and her husband are waiting for banks to resume mortgages to take one.

The dilemma facing the Vakhovskys is one faced by many families. It is rooted in strong demand for flats, foremost in Kyiv. In turn, real estate prices have surged to astronomical levels, but buyers still brave enough to pay top dollar for average property now face tighter lending practices by banks.

Serhiy Kostetskyi, a property expert at Kyiv's SV Development, said prices for Soviet apartments that were selling in the $10,000$20,000 range in the early 1990s have surged since, increasing sixfold in the past six years alone.

Not all Ukrainians are ready to assume the burden of mortgage payments because of a dramatic gap between average salaries and housing costs.

"This is real serfdom," said Iryna Yaroshenko, a married university graduate. "The prices are very high, and I know very few couples who risk taking a mortgage. Most rent apartments," Yaroshenko said, noting she and her husband live in her aunt's apartment, which relieves some of the financial burden the family faces.

"A family needs at least $3,000 of income to be able to pay a mortgage and make ends meet," says Yaroshenko, who once worked as a consultant in one of Kyiv's real estate agencies.

As of May this year, state figures suggested the average monthly salary in Ukraine was some $300, and slightly higher in Kyiv, $550. Yet experts said official figures do not provide a full picture, suggesting salaries are higher but households conceal much of their income to evade taxes.

Nevertheless, compared to real salaries, the cost of a square meter in Kyiv is shockingly high. An average of $3,200 per square meter in Kyiv was the listing cost in June, Planeta Obolon real estate agency reported. At such prices, dilapidated two to three room Sovietbuilt flats start at $200,000. Flats considered average in Western countries, but located in downtown Kyiv, cost from $500,000 to millions of U.S. dollars.

Experts said sales have been sluggish in the past year, partly due to high prices and the mortgage crisis. But caution that prices are not expected to drop as demand is strong across the country, foremost in Kyiv where jobs are most plentiful.

"Today the housing real estate market is practically paralyzed," said Kostetskyi, adding that prices are unlikely to drop, because sellers will keep their sale and rent prices high until the end.

Ordinary Ukrainians, meanwhile, remain hopeful that prices will drop. Some are even attempting to burst Ukraine's wouldbe real estate bubble.

Denis Oleinikov, a 30 yearold owner of the Internetshop Futbolka.ua, launched a separate web blog, which aims to raise awareness of the coming real estate crisis called "Yes to Crisis."

"The price per square meter here does not conform to world tendencies nor to a fair price, which would be set if there were transparent procedures of land use, planning, equal accessibility for developers and if there weren't hidden cartel agreements among the largest developers," Oleinikov said in defense of his cause.

"Do we live in such a successful country that we can afford paying four times more than people pay for housing in Tokyo when taking into account an average salary?"

"Is it fair to give 2030 years of your life for a miserable corner of lowquality housing?"

Dariya Orlova can be reached at Orlova@kpmedia.ua or 496¬4563,ext. 1105.

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Do you think housing is affordable in Ukraine?

Bribery Grows in Ukraine

I think if you live in Ukraine, at one time or another you have seen bribery.  Whether its you, your friend, or  a person you just see on the street.  So many people are used to it already, but the main problem is that it keeps growing.  It is very difficult of get something done without bribery.  Think about it.  If you have a choice between getting paid and getting paid + a bribe, which person would you help more?

The article below outlines how bribery has risen with growing inflation.  60% of bribery cases involve real estate.  A large amount of the rest has to do with education and medical institutions.

Bribery in Ukraine grows together with inflation

The sum of bribes grows daily in Ukraine. The last year, the amount of "extra money" to the official was at about 3,000 US dollars. For the previous 5 months of the year, it grew to 6,000 US dollars, and reached 14,000 US dollars for the previous month. 

For 1 month, the Ukrainian officials received twice more bribes than for the previous 5 months. In January-May 2008, the total amount of bribes was 18 million hryvnias. But in a month the State service for combating economical crime announced new figure - 56.3 million hryvnias. Besides, if compared to the last year, the number of bribes exceeding 10,000 hryvnias increased in 2 times and exceeding 30,000 hryvnias – in 3 times. 

The figures in the statistic documents of MIA and SSU are the result of high attention to this problem, because corruption is officially recognized as the threat to national safety and the law machinery began a real hunting for corrupted officials. But the more important are the other reasons: economical, legal and social, as Pravda-Ukraine reports. 

"Bribery - is a tax, an additional tax on all economical activities," - the definition given by President of the Centre of economical development Oleksandr Paskhaver. It is so hard to disagree. Both SSU and MIA admit that the sums of bribes grow proportionally to the price growth for land and real estate. 

It is not surprisingly: "rewards" for a land plot or for the rent comprise 60% of all bribery cases. The rest is bribery in educational and medical institutions, and in the sphere of entertainment. 

Although, the main reason for the growing bribery and corruption is a silent consent for this phenomenon in the society. Thus, according to the national research of corruption in Ukraine, made by USAID (the US Agency on International Development), 67% of Ukrainians, which deal with the state officials, are involved in the corruption actions.
ForUm

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Have you ever witnessed bribery?

Richest Man in Europe is Ukrainian

Rinat Akhmetov is the richest man in  Europe and is from Ukraine.  According to the article his net worth is $31.1 billion.   He is very proud of his success and I guess he should be.  He donated $150 million to start  the Foundation for the Development of Ukraine and $50 million for the Foundation for Effective Governance.  That to him is nothing.

My opinion is that he did not make this money 100% legally, but I am not sure many billionaires did.  According to Wikipedia, his political party is the Party of Regions which is run by Viktor Yanukovych.  That makes me think why?  I would think that a man who is so rich would support a fair government (to side with Victor Yushchenko), but maybe he made his fortunes with that unfair government.  Something to think about.

Rich Rinat says to world: I'm No.1 in Europe

Rinat is rich, and he wants the world to know it.

The "New Richest Man in Europe" is not shying away from the crown, given to him by Korrespondent magazine's most recent ranking of Ukraine's 50 richest people.

Far from a denial, Akhmetov's public relations gurus are apparently embracing the title and, with it, the figure of $31.1 billion as his net worth.

There is no word on whether Akhmetov, 41, is planning to take his publicity a step further, perhaps by writing an autobiography. Such a book could be titled: "How I became Europe's richest man in one of Europe's poorest countries" or "I'm just a heavy-metal guy from the Soviet era."

A PR Newswire press release, issued in New York and Kyiv on July 1, touts how Akhmetov displaced the previous richest European title holder, Ingvar Kamprad, founder of IKEA furniture giant, by more than $100 million. It cites the rankings from Korrespondent, the Kyiv Post's Russianlanguage sister publication, based on asset valuations by Ukrainebased investment bank Dragon Capital.

The press release came from Ronn Torossian of 5W Public Relations, a New Yorkbased agency, on behalf of one of Akhmetov's charitable arms, the Foundation for Effective Governance.

The increasing visibility of Ukraine's kingpin – he scheduled a July 10 press conference to announce he's giving money to fight cancer – moves the Regions Party parliamentarian further from his previous persona as a publicityshy guy.

Akhmetov's financial empire consolidates companies from various industries, including mining, oil, energy, finances, engineering and mass media. Akhmetov's System Capital Management manages a portfolio of more than 90 companies he controls.

A look at his assets shows he started making it big with acquisitions rooted in the violent, crony capitalism of the 1990s.

The Azovstal metallurgical company he owns alone generated some $3.2 billion in net sales last year, and a net income of $420 million. Azovstal is the most lucrative asset in Akhmetov's Metinvest steel holding.

The news release traces Akhmetov's rise since graduation from Donetsk National University. He went on to become head of Donetsk City Bank and eventually the president of the city's Shakhtar soccer team. The release does not mention his business mentor, Akhat Bragin, killed in a 1995 explosion at Shakhtar stadium in Donetsk.  

The release lauds Akhmetov's philanthropic side, including his gift of $150 million to start the Foundation for the Development of Ukraine, and another $50 million for the Foundation for Effective Governance. The donations amount to less than 1 percent of his estimated net worth.

So what's behind the publicity drive from a guy whose lawyers have filed and won lawsuits against journalists for getting their facts wrong about him?

Many business analysts say that favorable publicity and transparency are simply good for business, especially for a company that wants to attract foreign investment.

Andriy Bespyatov, an analyst at Dragon Capital, said Akhmetov's companies actively raise funding from foreign lenders, issue Eurobonds and could go public through an initial public offering. So, "they must be open to investors," he said.

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Either way, this is still a wonderful accomplishment for Ukraine, right?