Economy

The prime minister expects the economic situation to improve, and also wants to help the ailing construction sector. In addition, the prime minister is trying to reassure state employees and pensioners that they will be paid.  Bloomberg  reports on the weak conditions of the Ukrainian economy and again warns of dire consequences for Ukraine if internal political turmoil continues. 

Ukraine hasn’t been so fragile since the early 1990s, following the breakup of the Soviet Union. The economy may shrink as much as 10 percent this year, which would be the deepest recession in Europe except for Iceland’s. 
***

A Dec. 17-28 survey conducted by the Kiev-based Democratic Initiatives Foundation showed that 84 percent of respondents believed the country was moving in the wrong direction even before the gas crisis started. That compares with 48.6 percent in 2007. The poll of 2,012 people had a margin of error of 2.2 percent.

Poll Results

The poll also found that if presidential elections scheduled for January 2010 were held today, 22.3 percent would support former Prime Minister Viktor Yanukovych, the pro-Russian opposition leader. Another 13.9 percent would pick Timoshenko and 2.4 percent would choose Yushchenko. Almost half said no politician could deal with the financial and economic crises.


The Party of Regions wants the government to put in place an anti-crisis program. The prime minister is trying to assure the public that the government is meeting its obligations, while also emphasizing the global nature of the economic crisis.  Yet, political turmoil continues as the Tymoshenko government tried to force out the NBU head, as noted in Eurasia Daily Monitor (V.6, Issue 20).
 

 The uncertainty about the NBU leadership may make matters worse for Ukraine’s ailing banking sector. Prominvestbank, the country’s fifth largest bank and the first to send out bad signals last fall, has apparently been rescued as the NBU managed to find a buyer for it in Moscow—Vnesheconombank, which is chaired by none other than Russian Prime Minister Vladimir Putin (Ekonomicheskie Izvestia, January 16). RODOVID, another one of Ukraine’s top 20 banks seriously weakened by the financial crisis, is about to be sold to ISTIL, a company belonging to a British national, Mohammad Zahoor (Kommersant Ukraine, January 12). Several other large banks are on the brink of disaster.

 

Tycoon Dmytro Firtash has reportedly lost interest in the Nadra Bank after RosUkrEnergo, his joint venture with Russia’s Gazprom, was eliminated from the gas trade between Ukraine and Russia under the recent agreements between Tymoshenko and Putin. Firtash declared his interest in Nadra last November (Segodnya, January 27). Nadra is seriously short of cash, and the Fitch international rating agency recently gave it the lowest rating among post-Soviet banks (Kommersant Ukraine, January 21). Shapovalov, speaking in parliament, accused the Tymoshenko cabinet of sinking Nadra, because at the cabinet’s request a court in Kyiv forbade the NBU to continue refinancing the bank (Ukrainska Pravda, January 26). Tymoshenko insists that Nadra is being refinanced illegally on Yushchenko’s orders (Ukrainska Pravda, January 22).

The NBU has appointed a temporary administrator for another large cash-strapped bank, Ukrprombank (RBK-Ukraine, January 21). Ukraine’s largest private bank, PrivatBank, denied rumors that it was going to buy Ukrprombank (www.finblog.com.ua, January 12).

at Friday, January 30, 2009

0 comments:

Post a Comment