26 November 2010
Members and a few select guests came to hear presentations and short speeches from 'Brits' who live and work in Ukraine.
The evening was a great success and I still find it amazing when people come and thank me and tell me how they enjoy listening to British people talk. One of our special guests told me "I admire how you British people always see things in a positive way and turn everything into a joke".
I know what he means, I was reminded of that popular phrase that we Brits used many years ago "Mustn't grumble'.
We heard from Martin Nunn - Chief Executive of Whites Communications. Martin gave an excellent presentation 'The reality of Ukraine today'. We were all reminded on how far Ukraine still needs to go to catch up with the rest of Europe but at the same time offers many opportunities.
Glyn Thomas - Amstar Europe, shared with us his thoughts 'The glass is half full' and reminded us about the usual images of England and went on to share a few frustration regarding planning permissions in Ukraine. Peter Burningham told us about 'My life in Kyiv' and shared a very positive outlook on living and working in Ukraine. We would be suprised if Peter and his wife would ever want to leave Ukraine. Jason Crosswaite - Working on the Kyiv airport project, told us why he lives and works in Ukraine although he's only been here a couple of years.
Tony Wood entertained us about how he came to Ukraine from Russia after being impressed by the Orange Revolution back in 2004/5
Interesting that Glyn Thomas reminded us that 'There is no British community' in Ukraine.
What he means is that we do not all live together, we do not all meet together and there are many British people who live here who just do not want to be part of any 'community'.
But once you get to know the Brits who are active in Ukraine and lets face it most are in Kyiv city, you will be entertained and interested by the stories they have to tell you.
Kyiv city really is a 'small village' as the majority of British people living here know each other.
25 November 2010
24 November 2010
But tends to ring true for most of us.
This week I will meet with some people from the 'XYZ Regional Administration' who are interested in promoting their region to potential foreign investors. Admirable that they want to do something to start attracting inward investment to their own region in Ukraine.
The good news is that these people have already started to approach things in a different way.
We are already talking about - a one stop shop - for approvals of planning permissions and permits etc and the 'guarantee' that problems will be solved quickly. This is music to my ears. How I wish I could have heard the same many years ago in Ukraine.
Anyhow, I am sure many of the new Governors and Heads of 'Oblast' Councils want to make a good impression on the President by proving they are doing something to attract foreign investors to their region.
So, step forward the British Business Club in Ukraine. We can do many things to help these regions attract investors but as I always explain it is NOT easy. We are in competition with regions in Poland (inside the EU) who are already much more user freindly than Ukrainians can get their head around.
We actually need to start moving to towards the establishment of the first 'Inward Investment Agency' in Ukraine that has the full support of both national and regional governments.
We NEED to be able to convince potential investors that they will NOT have problems in establishing a presence in Ukraine. We need to show that obtaining planning permissions and construction permits are not a nightmare as in the past.
The big dream for most of us is to start attracting those British companies that are already brave enough to relocate and set up new production facilities in Poland. If only we could persude them to take a few steps further into Ukraine, where they would benefit from substantial savings even lower operating costs than in Poland and we would all be happy.
So the process starts this week. I will try to keep you updated.
23 November 2010
Meanwhile in Kyiv, thousands are on the streets protesting against the proposed new 'tax code' in Ukraine. The law has already been approved by parliament and is awaiting the signature of the President.
Ukraine certainly needs to introduce a new clear set of tax rules as the current system is one of the most complex and frustrating in the world. Businesses are subject to very close scrutiny by the 'Tax Police' and corruption among its employees is legendary. Moreover, the government needs...no MUST generate more income for the budget. But many people are objecting to the significant increases they will be required to pay from 1 Jan 2011. The current system offers an easy way for 'entrepreneurs' to pay tax. In Ukraine we have a system call the PE (Private Entrepreneur) system. It was designed to help small business owners to pay tax on a low level of turnover/profit. One of the forms of the PE system allows the tax payer to make a fixed payment of just UAH 200 (GBP16) each month. Provided the turnover of the business is less that UAH 300,000 (GBP 24000) per year.
If we had such a system in the United Kingdom, there would be thousands of people on the streets jumping for joy.
The new tax code (By the way no one outside government has been allowed to see it yet, so everything is based on leaks and inside information) proposes to increase the PE tax payments by three times plus a fixed payment to the governemnt pension fund. The total after all increases would be about UAH 840 (GBP 67) per month for each entrepreneur. Many people from outside Ukraine would say "So whats the problem? everyone should pay tax".
YES, but its a 320 percent increase.
The people protesting on the streets on Kyiv today claim that this new tax will force them out of business. Really? The real reason I suspect so many are unhappy is that the government is not hitting its so called friends in big business with any significant tax increases. To be fair, the government are claiming they are trying to make things easier for everyone to pay tax and this is understandable.
Maybe the good thing about all these protests is that it clearly shows that a small amount of freedom and democracy is still alive and kicking in Ukraine, unlike a certain country to the north where the governemtn comes down hard on anyone that disagrees with them.
Democracy will never be right for those who see it as something that gets in the way of order and control. So many are claiming that the new government and new President in Ukraine have at least brought 'order and stability' to the country. Democracy may still be a problem for them.
21 November 2010
Asked if he thought that Ireland’s crippled banks could cause the collapse of the EU currency, the Foreign Secretary gave a chilling two-word answer: ‘Who knows?’
It is so interesting to read the 'readers comments', one of the great advantages of newspapers on-line:
Read all here: http://www.dailymail.co.uk/news/article-1331518/William-Hague-doubts-survival-euro-Irish-bailout-talks-continue.html
20 November 2010
Commenting on the eve of the Summit, President of the European Council Herman Van Rompuy said: “Reform in Ukraine and the EU-Ukraine bilateral relationship will be at the top of the agenda. We will welcome the positive steps taken by Ukraine particularly in the economic and energy sphere. We look to Ukraine’s leadership to increase the reform momentum in these areas and as regards respect for human rights, the rule of law and democratic principles.”
President Barroso said: “Ukraine is a key partner for the EU and an important regional player. The ambitious agenda of this Summit reflects our dynamic and intense relationship. I am pleased that we will agree on an Action Plan towards the establishment of a visa free regime for Ukraine and on a Protocol which gives Ukraine access to EU programmes. These are two concrete examples of the EU's continued engagement with Ukraine.”
The agenda will include sectoral cooperation in areas as diverse as energy, transport and justice, liberty and security. In the energy sector the leaders will welcome Ukraine’s imminent accession to the Energy Community. On the issue of mobility, the leaders will discuss the next steps in the visa dialogue aiming at establishing a visa free regime for short stay travel as a long term perspective.
19 November 2010
In fact you could say have any countries NOT been affected by the downturn in business?.
You would think that in 2010 a few of the so called 'developed economies' would be seeing signs of recovery and optimism. But there are few signs showing recovery. Oh, there will be a few governements claiming an increase in GDP this year, but if you asked the average citizen in the street in one of these countries they would still be complaining about the state of the economy.
Maybe its going to take a long time to recover from the crisis. Period. In the 21st century most of us thought that 'by now' we should all be enjoying life and that we should have 'sorted' all these blips in the economies of our countries. What happened? Every country is struggling right now (or are they? is there some secret country tucked away where all the people are happy?)
The British are becoming the world leaders at complaining, yet this week we had Lord Young telling us that 'We have never had it so good" (Ok he is getting on a bit). He was referring to the low interest rates that people should be enjoying and their low mortgage repayments etc.
BUT THE AVERAGE BRIT IS NOT HAPPY, far from it.
In Ukraine it's probably much WORSE than we know, as this country has a great tradition of not telling people what is really going on. Plus the country does not have a media that is use to telling it like it is or investigating things in detail (The journalists are usually too afraid).
So, as winter is approaching the question is.....is Christmas going to be a happy one. Perhaps the New Year is definitely something to look forward to. Oh yes, next year is going to be much better.
Is there any other way?
18 November 2010
Many...no ALMOST ALL Ukrainians will tell you they do not like paying taxes purely because 'they will steal it'. They are referring to their own government and how many people in government will find ways of diverting money to projects and schemes that will be of personal benefit to themselves and or their families.
So, at a time when people are discussing the impact of the new tax code in Ukraine a story hits the headlines about a case of 'they ARE stealing it'. (Although it has not appeared in the English language media yet. Here it is:
The Klyuyev brothers are well known business people in Ukraine. Andriy Klyuyev is currently - First Deputy Prime Minister.
Step forward the well known and trusted 'Ukrainska Pravda' (Ukrainian Truth) web site. They claim and show documents to support their findings that Klyuyev has been involved during the past few weeks in making sure that USD 370 million in 'State Subsidies' were allocated to TWO companies owned by 'offshore companies' but later found to be controlled by the Klyuyev brothers. The full story can be seen here in Ukrainian (But using Google Translate will help):
Lets see what happens during the next few weeks if anything concerning this story.
This is Ukraine and reporters tend to disappear when investigations like this are announced.
How on earth can ANYONE stay positive about Ukraine when this kind of theft continues within the government. But then again, I am sure they will claim everything is 'normal' and nothing is illegal. .......Sigh.
17 November 2010
Questions I think people should be asking about Ukraine and the EU:
1. Does the EU….REALLY want Ukraine to be part of the club?
2. Do they REALLY want to offer visa free travel to Ukrainian citizens?
3. Do the Ukrainians REALLY understand the big opportunity this offers them
(Deep Free Trade Agreement)?
4. When will the EU have its accounts signed off by the auditors?
Until such time do not lecture any other countries or zones about corruption.
5. Why would Ukraine REALLY want to get involved in all these new ideas about ‘The Rule of Law’ etc?
6. If one day the EU finally says to Ukraine “Sorry but we do not want you”,
Do people REALLY think Ukraine would be upset and worried about this?
Politics is such a big game.
The latest World Bank report on the ease of doing business in countries around the world has no surprises for the top ten countries:
- Hong Kong (Ex British now China)
- New Zealand
- United Kingdom
Ukraine? – 145th from the list of 183 countries surveyed.
Quick Summary Table for Ukraine (1 is the best....183 is the worst)
Starting a Business 118
Dealing with Permits 179
Registering Property 164
Protecting Investors 109
Paying Taxes 181
Trading Across Borders 139
Closing a Business 150
Things are not getting much easier in Ukraine?
See BBCU web site for link to the report
16 November 2010
The president's decree named his ally Oleksander Popov as the capital's new chief executive, but gave no reason.
Yanukovich has been consolidating power since his election in February and Chernovetsky, 58, has in the past sided with former president Viktor Yushchenko, Yanukovych's opponent.
Chernovetsky has run the city of 3 million since 2006 and made headlines by releasing music videos, suggesting that business leaders pay to meet him and saying he would travel into space with his cat.
Chernovetsky had a controlling stake in the Ukrainian bank Pravex until 2008, when Italy's Intesa SanPaolo bought the bank for $750 million.
In line with Ukrainian legislation, Chernovetsky retains the post of the head of Kyiv city council. The Kyiv government has three Eurobonds outstanding, worth a total of $700 million.
(Above from the Kyiv Post)
Just like the Russian President fired the Mayor of Moscow recently, now the same happens here. What next many people begin to wonder?
At least the Mayor of Kyiv was elected by the people.
But the government claims he is STILL the peoples Mayor of Kyiv
The plot gets thicker in Ukraine.
Anyhow, tonight I decided to do something I have not done before. I opened a bottle of wine (ah..I have done that many times before), but I then decided to sit in my assistants chair at her desk. I do not know why but I just did.
I began to see how things look from her perspective. Many notes, stickers, reminders, calenders just to make sure the 'pain the the arse' (aka me) was taken care of and he was reminded about things in a timely manner. But I also saw how things look from where she sits each and everyday.
Looking at my personal bookshelf everyday for example and the 'crap' that I have collected over the years. Maybe also seeing the books that are considered 'current' in my life, but maybe not.
I began to see how she may see things that I do not see everyday. Photos of my daughters, old knicknacks, books, small 'British flags' and lots of garbage that probably represents "ME".
I started to wonder "Is this what she thinks of me?". I then went to look at some of the books on the shelves in front of her desk. The books I found include:
1. A dictionary of Idioms
2. Russian Phrasebook
3. The little book of lager (don't ask)
4. Sagittarious (Sun sign guides)
5. The little book of curry
6. The Gospel of John
7. You don't need experience if you've got attitude.
8. A simple guide to Russian
9. Control stress and stop worrying.
10. Winning Words - Quotations to Uplift, Inspire, Motivate and Delight
11. Conducting Business in Ukraine
12. New Testament and Psalms
13. One of those secure wooden books, I bought in Sri Lanka, that is designed to hide money, but very difficult to open and looks like a normal book and probably has some money inside
There are also lots of ornaments on the book shelf like "The worlds greatest dad"from my kids, plus one of those 'Thirst Aid' helmets that you win for being the fastest drinker in one of those pub competitions for drinking a lot of beer faster than anyone else. Sad but true. Plus lots of other crap. I began to think "This is how she sees me" and maybe "This is how other people see me".
Lesson: Be careful what you keep on your office bookshelves if anything. It sends out a message who you are.
Book shelf needs to be replenished tomorrow.
12 November 2010
Today 11th November was one of those days when I felt very proud to be British.
Wearing a poppy in my jacket lapel (purchased via the British Embassy), it was a symbol of 'something'. I say 'something', because the majority of Ukrainains have no idea why a foreign man would want to wear a 'flower' and a paper one at that while walking around the city even conducting formal business meetings with said paper flower in lapel.
I was happy to explain to the many people who enquired why I was sporting this 'flower'.
Different culture, different reasons. One man brought me down to earth when he asked (and I think he already knew the answer) 'How many British soldiers died in the 'Great Patriot War'
(aka - World War II) and for that matter how many in the First World War.
I had to point out that I knew full well that the Soviet Union had suffered far many more millions in dead soldiers than the British. BUT, numbers is not what its all about.
I also took great pride in explaining our Royal British Legion system and how the money raised via charity would be used to good effect. As usual the stories of how Ukrainains would NEVER trust anyone who raised money for charity knowing that the money would never get to the correct people was as normal.
But in the United Kingdom thats another thing we can be proud of. We can usually count of any money raised for a good cause WILL get through to where it needs to be.
The 11th of November will also be a day to remember those who have given their lives in the name of freedom and democracy. Not just in the two World Wars but also the Falklands conflict, Northern Ireland, Iraq and Afghanistan and any others I have forgotten.
As a child I grew up around men who had fought as soldiers in World War 2 and I remember listening to the real life stories at first hand as to what they did during those difficult times.
As children we took it for granted that almost all the men in our village had been involved in the war. I remember our next door neighbour was a man who had been shot in the legs during the war in Burma. I also remember the sad situation of children at our school sometimes mocking the man who walked past our school everyday who obviously suffered from 'shell shock' after the 2nd world war. As children they did not know until the headmaster brought this to everyones attention in assembly the next day. Shame on those kids. It was another part of the learning process and the horrors of war.
I have celebrated the 11th November in many ways, first as a child, then later as a boy soldier at the age of 16 and then as an adult soldier on many occasions. There are certain things that only the British can do well and the remembrance day ceremony at the cenotaph in Whitehall in London is one of those ocassions which you know is very much a British thing.
However, we all know that people who choose to live in Britain are very lucky in that they are provided with something called' freedom of expression'. The freedom and ability to say what you want without fear of any actions from the state.
Well today in London we saw people of 'Muslim' faith exercising that freedom by claiming that 'British Soldiers Burn in Hell'. Under British laws they have every right to express their opinions.
(God only knows how they would get away with this in any other country). But this kind of action from people who set out to upset the British public are a great cause for concern. If the famously passive great British public decide to rise up against the Muslim community in England please do not be surprised by their actions. I for one would not be.
Perhaps the British public need to wake up and think..'What makes us great any longer?'
See Daily Mail story
10 November 2010
see the article click here
Read what he says.......
"During Ukraine’s Oct. 31 local elections, I served as an international election observer on behalf of the Committee for Open Democracy The Committe for Open Democracy was the largest accredited observation mission from abroad with 96 observers from 14 countries.We focused our efforts on Odesa (Odessa) due to its history of problematic and competitive elections.
For example, the 2002 election results there were later overturned by the courts due to fraud and use of administrative resources. Our official statement criticized the intentionally slow vote counting process, hostility to some international observers, use of administrative resources, and wide scale use of technical parties (parties that exist only on paper) to staff commissions.Simply put, the Odesa election was a setback for democracy and free elections in Ukraine.The oldest and largest domestic observation organization, the Committee of Voters of Ukraine, characterized the Odesa election as “chaotic” and resembling “the 2004 presidential election.” They added that the Odesa election “represents a big step backwards.”
Well there you go again in Odesa Ukraine.
See the full article here:
09 November 2010
What does the RICS tell us:
Royal Institution of Chartered Surveyors will release data for housing survey for the month of October. House prices in England and Wales suffered their sharpest fall last month since May 2009. The RICS house price index dropped to -36 in the three months to September from -32 in the three months to August. RICS spokesperson Ian Perry said: "The fresh influx of property to the market combined with a lack of buyers remains the key problem affecting the sector.”
The Royal Institution of Chartered Surveyors' survey is expected to show a further weakening in house prices, in line with other recent data suggest-ing the housing market is continuing to weaken fast after a modest recovery last year.
Not good is it...
Step forward Ukraine...According to Ukraine Prime Minister Azarov:
VIENNA, Nov 8 (Reuters) - After a terrible 2009, Ukraine's economy will grow five percent in 2010, higher than earlier government predictions, and then another five to ten percent next year, the prime minister said in an interview on Nov. 8.
"The growth in gross domestic product will be about five percent this year. Next year the minimal growth we see is five percent. At maximum, we'd get to around 10 percent," Mykola Azarov told Reuters in an interview during a visit to Vienna.
Really? Ukraine's economy will grow by 5% in 2010.?
I hate being a negative person put right now all the evidence points in another direction about Ukraines economy. Each week I meet bankers, lawyers, accountants, and many people involved in 'making things'. I have yet to meet one of these people who can tell me that the economy is looking good for them. I heard one banker quote this last week:
"The sector (banking) is on a life support machine and very soon it will flat line"
Draw your own conclusions
06 November 2010
Events this week in Ukraine, if they are found to be accurate and true, are a cause for great concern about the climate for inward investment into the country.
To highlight these concerns let me turn things around and demonstrate how serious the situation really is. Imagine that a British company had invested say GBP 100 million into developing a leisure resort in Majorca, Spain. The investment proved successful and the resort employed over 1500 people and was a major contributor to local taxes and was a positive benefit for the Spanish economy. Imagine that the Spanish tax authorities then suspected the mayor of Majorca has been stealing money from state funds, so to find out what was happening they send in 100 armed security police together with the state security service and confiscate computers, files, all digital information and cause great stress to the employees of the resort complex. All this without any prior warning and an assumption that the resort owners must be doing something illegal. The British owners of the resort are also the owners of well known newspapers in London. By pure coincidence articles had recently appeared in these newspapers which criticized the Spanish government. (Obviously this kind of situation would never occur inside the European Union)
Well, this IS what happened this week in Alushta, Crimea. (Replace above instead of Majorca, Spain.)
Alexander Lebedev and his son Evgeny Lebedev, who is a British citizen and lives in London. Invested hundreds of millions into the Alushta complex and is one of the best resorts on the Crimean peninsular in Ukraine.
Alexander Lebedev is one of the richest men in Russia and faced a similar stressful situation in Moscow a few days earlier when his bank was raided by Russian authorities.
Maybe the Ukrainian authorities claim to have good reason to storm a hotel resort/complex looking for evidence related to a suspected crime, but it clearly demonstrates that here in Ukraine they operate on a totally different wave length when compared to civilised countries in the European Union.
When British people read about this in British national newspapers, how on earth can I start to defend any of the actions taken by the Ukrainian authorities?
How can I claim that it’s safe to invest in Ukraine and you do not have to worry about any actions from the state?
Maybe the Ukrainians think it’s OK to act in this way as the owners of the resort are just ‘Russians’?
The situation in Ukraine is not looking good for investors. This is very sad news.
05 November 2010
How on earth can it take five days to count the votes? More like it takes five days to make sure the desired result is announced. Anyhow the media are not happy, or should I say the media who are not afraid to say so are not happy.
01 November 2010
Electoral commissions have been quick to point out that 'everything has gone smoothly'.
The Council of Europe observers even reported: "In general the elections were conducted in a calm and peaceful atmosphere,".
However local observer groups like OPORA are reported to claim: "There have been so many violations that we cannot say that it was democratic, fair and open,".
No suprises that the Party of the Regions (POR) claim to have done well and are happy with the results. Lets be honest...IS ANYONE in Ukraine suprised that the POR did well?
It was a given from the start. The jokes circulating in Kyiv include: "I didn't vote, I didn't even leave the apartment, but I bet the POR managed to get my vote some how".
We all wait the official results with a little interest. APATHY is the word I would apply to these elections. People were just not so interested. Very sad, but that's democracy for you or....mmmnnn is it?
According to the International Business Times:
U.K. house prices recorded their largest fall since January 2009 in October signaling that the property market is cooling fast. The average cost of a
home dropped 0.9 percent as compared to the previous month dip of 0.4%. The average cost was at 156,200 pounds ($248,764) in October,
marking the fourth month of falling prices.
Buyers demand also fell 2 percent, while the number of homes for sale rose 1.9 percent. The number of home loans approved also stood about half
that seen at the peak of the boom in 2007.
The figures, were released soon after the latest Bank of England statistics which showed that September U.K. mortgage approvals fell, suggesting
that U.K. housing market is still fragile and might not be ready for another quantitative easing (QE) planned to be implemented by the national bank.
Mortgage approvals were little changed at 47,474 in September more than the economist forecasted.
Even Nationwide Building Society recently said that U.K. house prices fell to an eight- month low in October. Obtaining a mortgage will get even
more difficult after the new regulation kicks in. First time buyers will also face difficulties as lenders make it more difficult by asking for larger
deposits. Even the Bank of England have raised concerns over the increased number of borrowers that are unable to pay back their mortgage.
Despite strong economic growth between July and September, there are still concerns that the last month's government spending cuts may further
hit consumer confidence, making the recovery fragile.
What about Ukraine? - I would like to make a very clear and loud statement to the many property developers and owners in Ukraine, particularly in the city of Kyiv.
THE PRICE OF PROPERTY AND LAND WILL NOT COME BACK TO THE LEVELS IT WAS PRIOR TO 2008.
WE WILL NOT...REPEAT NOT... SEE A RETURN TO THE CRAZY PRICES WE SAW BEFORE.
SO IF YOU HAVE A CHANCE TO SELL A PROPERTY NOW, JUST SELL IT. IF YOU HAVE A BUYER TREAT THEM LIKE VIPS BECAUSE YOU DO NOT UNDERSTAND HOW LUCKY YOU ARE TO FIND SOMEONE WHO HAS CASH TO BUY ANY PROPERTY.
You would think it was easy being a BUYER in Ukraine when you are looking to buy land or a house. Plus when you do not need a mortgage. But no this is Ukraine, the owners/developers are still dreaming about selling property at higher prices. The banks are NOT providing mortgages unless a client has a large cash deposit and is prepared to pay very high interest on the loan.
There have been very few property sales in Ukraine during 2010. DO NOT let any agency or others involved in property tell you otherwise.
In fact come to think of it, winter is now fast approaching. My advice is DO NOT buy any property in Ukraine until Spring 2011