Ukraine 2013 - The Hopes for 2014

To say that this year has been difficult for business in Ukraine would be a great understatement. There are many people who would gladly sell up their businesses tomorrow and leave the country. But as Ukraine is not a member of the EU, leaving the country is still difficult. Those who remember the days of the ‘iron curtain’ where people living in the Soviet Union were not allowed to mix or meet with ‘westerners’, when people were shot trying to cross the Berlin Wall from east to west, will appreciate the freedom of movement that EU citizens enjoy today. Many of these EU countries are former Soviet states.

Ukrainians still need visas to visit EU countries. Many young professional Ukrainians have made visits to countries like Germany, France, UK, Austria, Spain and even many new member countries like Poland, Cyprus, Czech Republic, Hungary etc. They have witnessed a different and better way of life in these countries compared to life in Ukraine. Travelling along a road in Poland for example reminds people just how very bad the roads are back home in Ukraine. Poland was able to break away from the grip of the ‘soviet empire’ around the same time as Ukraine gained independence in 1991. The GNI per capita (2012) in Poland is $12660 compared to just $3500 in Ukraine. The big question is why? (Admittedly it is estimated that as much as 50% of the Ukraine economy is in the ‘black economy’.)

Why do these former soviet countries have a much better lifestyle and higher levels of freedom than Ukraine?  Maybe because Ukraine has never broke its close links with Russia. Maybe because the country has never had any real democratic leadership. Maybe because…..the list can go on.

The year 2013 just might be the year that ignited the flame of the people in Ukraine to finally say ‘’Enough, we are tired of living like this, we demand changes.’’ It could be the start of what takes the country away from the influence of the Russian Federation once and for all and the country becomes more aligned with European countries where freedom of speech and the rule of law are respected.

During 2013 the country was due to sign an Association Agreement and Deep and Comprehensive Free Trade Agreement with the EU. This agreement would have paved the way to Ukraine becoming a more ‘European style’ nation which one day could have led towards EU membership. Just a few days before an important ‘summit meeting’ was due to be held in Vilnius, Lithuania where the President of Ukraine was expected to sign this agreement on behalf of the nation, he changed his mind. He claimed along with his government that Ukraine would suffer economic losses if they went ahead with this agreement. Moreover, the Russian Federation had already made known the consequences Ukraine would face if it went ahead and signed the agreement with the EU.  The Russians had already started to block the imports of Ukrainian goods and were generally making life difficult for businesses that have Russian customers. The Russians still wanted Ukraine to join its own ‘Customs Union’ together with Belarus.

A great sense of disappointment and betrayal was felt amongst millions of Ukrainians as President Yanukovych had taken away their hopes of becoming closer to Europe. What happened next was a surprise to many.

Ukrainian people decided to come out and protest against what they saw as a gross injustice. They were sick and tired already of this President and a government who clearly showed no concern towards the everyday life of Ukrainians. The so called leadership were more interested in their own business interests and their own family fortunes than the interests of the nation and its people. Government corruption, lies, theft and the use of state assets for personal gain were just a few of the reasons why people decided they had had enough of being held back in the 21^st century by those in power and they decided to come out on to the streets of Kyiv and form what is now known as ‘Euromaidan’.

For the past month the centre of Kyiv has been taken over by ‘The People’. Initially there was no leadership from the official political opposition and due to the fact that there are three separate parties now involved the situation of opposition leadership is still unclear. However, one clear favourite has emerged from the opposition as former heavy weight boxing world champion Vitali Klitschko, already a member of parliament declared his intentions to run as a candidate in the Presidential elections in 2015.

The huge amount of people who turned out in the city centre of Kyiv to show their concerns surprised many. The crowds were even bigger than during the Orange Revolution in 2004. The people demanded change. They demanded the resignation of President Yanukovych and his Prime Minister Mykola Azarov.

Many students were active from the very start of ‘Euromaidan’, as young people they know only too well the changes that are required in Ukraine.  Unfortunately the police in Ukraine (there are many different forms of police in the country) are notorious for violence and total disregard for human rights. The riot police, Berkut, clearly demonstrated how they are out of control and caused many many injuries to peaceful demonstrators. Those injured included journalists and cameramen from other countries. This led to further outrage not only among demonstrators but throughout Ukraine and the rest of the world who were watching events unfold on television.  ‘Euromaidan’ gained strength and support and it became clear that this was not something that was going to blow over after a few weeks. It would appear that this time the Ukrainian people were going to see it all the way through until their demands was met.

President Yanukovych had been having meetings with the Russian President – Vladimir Putin.  It was strongly suspected by many that Putin would convince Yanukovych to join the customs union. It was also suspected that Putin was using threats that Yanukovych would find difficult to overcome. On 17th December, Yanukovych met with Putin in Moscow and during the next few days it was announced that the Russian Federation would buy $15 billion of Ukraine bonds plus a one third reduction in the price of gas supplied to the country. It was feared by many that Yanukovych had agreed to many things which he was not disclosing to the people. Yanukovych had sold out the country to the Russians.  Putin declared this was all ‘brotherly’ help towards a nation which shared its values. To the people of Ukraine it showed that they were still under the influence of the evil empire. All negotiations with the EU were halted.

Hopes for 2014

The 2014/5 period will be a clearly defining time for the future of Ukraine. If ‘Euromaidan’ continues the President and his government will be in for a hard time. During 2014 Ukraine will experience many more hardships and uncertainty. Yanukovych will not want to give up his Presidency before 2015 and he will not agree to early elections.

This period will allow the political opposition to get its act together. Vitali Klitschko will have a whole year to prepare for his presidential bid. At the same time the people will have an opportunity to try and clearly decide what kind of future they want for Ukraine.

Foreign direct investment in Ukraine will probably cease completely apart from some joint activities with Russia. Why would anyone want to invest in a country with such a high level of political uncertainty? If Yanukovych decides not to run for a second term this could be equally as threatening to the economy as ‘government connected people’ and the oligarchs connected to him would rape the country of any remaining assets and bribery and corruption would be even more rampant during the final days.

So far this all sounds very negative for the future of Ukraine. Well 2014 will be very negative, but at the same time positive. The negative aspects will be the continual conflict between the people who have joined ‘Euromaidan’ and the President and his government. The positive aspects will be the growth in the number of Ukrainian people who join the fight after they see that the only way forward is for Ukraine to become a free and democratic country. The main hope for 2014 is that by 2015 the people will have clearly decided who they want as their leader.

Many people will claim that they cannot wait until 2015. They want Yanukovych and his government to go now. Unfortunately the law (used loosely in Ukraine) is on the side of the current regime. There is no legal reason to hold an election until 2015 and Yanukovych will do all in his power to ensure he stays in office.

Therefore the year 2014 should be used as a great opportunity by the opposition to plan and develop clear strategies so that people can understand ‘The Way Forward’ for Ukraine. 

I wish them the very best of luck.

Business Wish List for 2014

Whilst Ukraine continues to be an Eastern European centre of conflict, the owners and managers of small and medium size enterprises in the country continue to try and survive among the daily conflicts of doing business. So, just as many people write out their list of hopes and intentions for the year ahead, here is my wish list for doing business in Ukraine in 2014.

I wish I could:

1.       Convince the government that all the money circulating in the economy does NOT belong to them.

2.       Go into a bank and do business WITHOUT the State Tax Service being involved.

3.       Send a payment of EUR 100,000+ to another country WITHOUT asking permission from the Ministry of External Affairs and Ministry of Economy.

4.       Persuade all my accounting people that they should be doing more WORK for my company than they do for the State Tax Service.

5.       Receive a service from a government agency WITHOUT them asking for a bribe.

6.       Persuade people to STOP asking me for my PASSPORT. I have told you my name already, just believe that I am telling you the truth.

7.       Provide people with copies of documents and NOT have to keep giving them the ORIGINAL document every time I want to do something.

8.       STOP using those stupid document stamps

Is this all too much to ask? Why not. Because in REAL European countries all of the above already happens. Let’s hope that one day Ukraine can break free from old soviet systems.

Bank of Cyprus posts loss of EUR 1.94 BILLION for the first nine months of 2013

Bank of Cyprus which recapitalised itself after seizing depositors savings earlier this year, posted a massive EUR 1.94 billion loss for the first nine months of 2013. The bank claims that most of these loses are due to the closer of its operations in Greece and continuing non-performing loans.

It is no joke that the majority of shareholders in the BoC are now Russians and Ukrainians who had their money ‘seized’ by the bank if they had more than EUR 100,000 in the bank.

The banks new CEO, John Hourican said in a statement ‘’Our priority remains to restore investor and customer confidence in the bank.’’ 

Well the best of luck mate.

Cyprus Tourism

Cyprus still enjoys a high number of tourists arriving on the island each month. The state statistics service reports that in November 2013 – 81,542 tourists visited Cyprus. The biggest increases were from Russia (7.9% increase) with 11,665 arrivals and the British (3.5% increase) but still a whopping 30,413 number of tourists. The island of Cyprus still sees almost 2.5 million tourists each year.

Some people will claim ‘The Russians have taken over Cyprus’. Well there are a fair number who stay here. Many have homes here and leave ‘The wife and kids’ here usually together with the ‘wife’s mother’ to enjoy the warm weather and safe environment. The good thing is that the Russians appear to behave themselves in Cyprus. I actually saw a young Russian man finish drinking a can of beer and walk a few metres off the beach to place the empty can in a waste bin. No way would he have done that back home, it would have been thrown to the ground immediately.

The British are everywhere in Cyprus. Some of the ‘British Pubs’ in Cyprus are so much better than any British Pub you will find in the UK. The Brits can enjoy ‘English style food’ here. Many Cypriots have spent time living in England and they know the score. There are a few nice places in Limassol which I can recommend. One such place is ‘The Woodman’ a sports bar/restaurant where they have over nine (9) TV screens inside and six(6) screens outside. The place is always packed when English and/or European league games are being played. Another ‘British Pub’ is the ‘Shakespeare’ where they serve some excellent meals. Unfortunately the owner is a Chelsea supporter but his wife is an Arsenal supporter. But there are also many other places providing a great service in Limassol.

Most restaurants/cafes have menus in Greek, English and Russian. The Greek Cypriots know what service is all about. You will not be kept waiting long for anything.

The streets are clean. The pavements are clean and easy to walk along but the main benefit is that there is NO SNOW (apart from up in the mountains). Cyprus is a great place to escape the European winter.

Limassol, Cyprus

I’m spending some time in Cyprus. Usually the island of Cyprus is warm all year around. But not this year. 

The people of Cyprus are still recovering from the economic/banking problems that set the country back. 

So the recent spell of cold weather has been treated like a natural disaster for long suffering Cypriots. 

It’s also not too funny for us foreigners. It even snowed in Cario, Eqypt for the first time since 1901.

For a few days this week Cyprus experienced the kind of weather they have in Northern Europe during winter and which usually lasts for three to four months. I have not seen any snow here in Limassol but have watched the TV reports of the small villages that have had a downfall of snow. Some villages had been left without electricity and many roads could not be used as the authorities in Cyprus just do not have the snow clearing equipment that we have in Northern Europe. Why should they? It should only snow in the Troodos national park where people can go to ski. It should never snow in other parts of the island.

The Cypriots handled the situation very well. The roads were cleared, electricity supply was restored to villages and people could visit the shops again. I was seriously thinking about booking a flight to escape to a warmer climate as I normally go to Sri Lanka about this time of year. But the weather has come back to normal and I was sat outside having breakfast this morning. We will see.

Being English - The Shipping Forecast Ritual

Having spent some time in England recently, I have just finished reading a book ‘Watching the English – The Hidden Rules of English Behaviour’.  A strange bunch we English, I always like to try and find out what makes us tick. But the man or woman who finally claims to understand the English would deserve a Nobel Prize.

A good example is the shipping forecast. Which could be described as a quintessentially English national institution?  Broadcast immediately after the late evening news on BBC Radio 4 the shipping forecast is an offshore weather forecast with additional information about wind strength and visibility, for the fishing vessels, pleasure craft and cargo ships in the sea areas around the whole of the British Isles.

I remember listening to the shipping forecast as a child with my mother. She always insisted on listening. God only knows why as we lived in Nottinghamshire probably the most land locked county in England.

I am brave enough to say that none of the information in the forecast is of the slightest use or relevance to the millions of land locked non seafarers who listen to it, but listen they do, religiously, mesmerized no doubt by the list of names of sea areas, followed by wind information, then weather, then visibility – but with the qualifying words (wind, weather, visibility) left out, so it sounds something like this: ‘Viking, North Utsire, South Utsire, Fisher, Dogger, German Bight.  Westerly or south westerly three or four. Rain later. Good becoming moderate, occasionally poor. And so on and on the radio announcer would cover all of the thirty one sea areas with an unemotional tone.

Millions of English people still listen to the shipping forecast, most of whom probably have no idea where any of these places are, or what the words and numbers mean. But having listened to the forecast they can then sleep sound in their beds at night. In the book it was described as the ‘cold poetry of information’.

Listening to the shipping forecast, for the English, is like hearing a ritual prayer – somehow profoundly reassuring, even for non-believers. Like with most things the English can always turn it into humour and some people will talk back to the radio. e.g ‘Thundery showers good’. ‘’I don’t think so.’’ Would be the reply.

If anyone would like to take on the task of explaining all this to foreign visitors to the UK, please feel free, be my guest. The best of luck.

Ukraine - A long cold period of discontent is ahead

So.....the President and government of Ukraine decided to cancel any further negotiations with the EU.
The signing of the Association Agreement is off the table. It would appear that the government are just too afraid of the consequences, i.e. the threats they have received from the Russian Federation and Mr Putin in particular cannot be ignored. The Russians are very good at threats and maybe we will never know just what took place in the 'secret' meeting between Yanukovych and Putin recently.

The EU officials have wasted a lot of time in trying to persuade Ukraine to forge closer links with western Europe. But maybe they still fail to understand the kind of people they have been dealing with in Ukraine.
Ukraine leaders are not seasoned or experienced politicians or negotiators. They are rough 'lets just see what's in it for us' characters. They do not think about the future of the country and its people. They do not think long term. The Russians and the Ukrainians certainly think alike. The Russians know only too well how to persuade their Ukrainian 'friends' to make decisions.

Yanukovych has agreed something with Putin. Maybe Yanukovych was forced to make a decision under severe duress. He needs to think about his personal future and just exactly where he will spend his retirement years. The Russian Federation is perhaps the only country where he could be safe.

Ukrainian people have taken to the streets of Kyiv to protest against the decisions made by their government. It is good to see people protesting for what they consider to be their future being taken away by a government/president that fails to understand them.

With just a few days to go before the meeting in Vilnius, I doubt if Yanukovych will change his mind and dare to incur the rath of Vladimir Putin. Therefore I can only conclude that Ukraine is in for a long cold period of discontent until at least 2015. When an election must be held to select a President.

Time to reject the evil empire

Another interesting week in the life of Ukraine. The President Victor Yanukovych and his Prime Minister Mykola Azarov are clearly afraid of the implications of entering into an Association Agreement and Deep and Comprehensive Free Trade Agreement with the EU. Due to be signed in Vilnius later this month.

Many of their loyal supporters are already complaining of the problems they are experiencing with their Russia clients/customers. The Russians – or should I say one in particular – President Vladmir Putin is making things as difficult as possible for all Ukrainian related matters. Putin will do almost anything to stop the whole process of Ukraine getting closer to the EU. Understandably many Ukrainians in the Eastern region are afraid of any deterioration in relations with their close cousins in the Russian Federation.

But it would appear many Ukrainians are only too ready to forge a closer relationship with Western Europe and are ready to sever all links with the ‘evil empire’. Unfortunately the President, Prime Minister and many members of parliament will be influenced in their decision making by short term thinking and will totally ignore the population of Ukraine.  The decision(s) will be taken based on the ‘what’s in it for us’ approach.

There is still time for Ukraine to step into the future by signing the agreement or if not running back into the arms of the evil empire.

Agreement with the EU is the only way forward.

Ukraine has no choice at this late stage but to sign the AA and DCFTA with the EU later this month. It is the only way forward for the country. Help from the IMF will be sure to follow. BUT.....if for some strange reason the President of Ukraine fails to ensure that former Prime Minister Yulia Tymoshenko is released from prison and given a FULL pardon, then do not be surprised if the EU decide not to go along with signing any agreements.

The president, the government, members of parliament and the people of Ukraine need to understand that Yulia Tymoshenko MUST be released without any conditions being attached.

Mistake or Government Dirty Tricks?

Our accountant informed me today that our VAT registration has been cancelled by the Tax Service. They claim that they had written to us to confirm our address and had not received a reply so they just cancelled it. Ignoring the fact that we are regular VAT payers and make payments to the benefit of the government it would appear they have ignored this fact. We did not receive any letter.

After some telephone research we discovered that many other companies have experienced the same situation and have lost their VAT registration. Ukrainian friends tell me this is a planned attack on the companies that make regular payments, by identifying the companies that provide inputs the tax service can cancel the VAT registration of the supplying company and ensure the receiving companies  pay more in VAT. But I’m sure the people in the Ukrainian Tax Service would not stoop so low…would they.

It takes about two months to get registered again for VAT.

YOU can because you are a foreigner.

Anyone who has ever tried to use a bank in Ukraine to send money to another country will know the automatic barriers that you encounter from bank staff and the ‘system’.

Recently I needed to send some money (privately and not business related) to the UK. I was lucky to be provided with all the details of the account including full name, address of the bank, the IBAN of the account, the branch sort code etc. but I did not have the SWIFT code of the bank. Within the EU we use the IBAN for all transactions to make life easier, but here in Ukraine an IBAN is not recognised. I knew this already and thought I would ask the bank to find the SWIFT code.

The young banking assistant who was ‘helping me’ simply stated that she could not complete the transaction until I supplied her with the SWIFT code and handed me back the documents.

I immediately adopted my ‘I am the customer’ attitude and I pointed out that she could easily look up the code from their system or from a web site. But she informed me that I would have to do this. Anger took over and at that moment I saw the branch manager walking past and immediately called him over and explained the situation and ask him WHY the bank was expecting me to do all this work even though the bank would be charging me a large fee for this transaction. Was he really expecting me to leave the branch and go and use my laptop to look up the information myself and then return to the bank? Plus I then went into a tirade about customer service. He was embarrassed enough to start looking up the SWIFT code himself on the nearest computer and he found it within a few minutes.  He then ‘instructed’ the young banking assistant to help me complete the transaction.

The banking assistant then pointed out that I could only send the money in EURO and not GBP. I said that’s OK no problem. She asked me ‘’How do you know it will be OK, I think I need to check’’. I said TRUST ME it WILL be OK do not worry about it, the EURO will be automatically converted to GBP when it arrives on the account. She failed to understand that banking in other countries could not be the same as in Ukraine. I then asked the manager to come back and speak to me again and kindly requested him to ‘’TELL HER to just do the money transfer and stop looking for reasons not to do it.’’(This is natural in Ukrainian mentality. Not to do something)

He did as I requested and the transaction was sent on its way.

Sometime later I was explaining this little problem in the bank to one of my Ukrainian friends who immediately replied ‘’Oh well you can talk to people like that because you are a foreigner, we could never do that.’’ I understand what she means and I know that a Ukrainian customer would not have challenged the bank or have even asked the manager for help. This attitude is not good in my opinion. Ukrainians need to be more proactive and stop accepting the status quo in business and general life. I will return to this subject later.

Work Permits, Temporary Residents Permits and Permanent Residence in Ukraine

The BBCU has been very busy recently helping people from many countries to obtain work permits and residents permits in Ukraine.
Foreigners from over 62 countries can enter Ukraine without a visa and stay for 90 days.
However some 'visitors' find themselves overstaying the 90 days and find themselves in breach of Ukrainian Law. It annoys me slightly that many foreign people think they can get away with staying in Ukraine illegally.
If a Ukrainian citizen visited the UK or another EU country or the USA they would find themselves in big trouble if they overstayed their visa or in fact started working in one of those countries without the correct legal documents like a work permit.
I'm sure that there are still many 'western foreigners' who are living and working here illegally.
We can help these people become legal. Moreover, I feel that many of these people have the best intentions of wanting to work as an English Teacher or set up their own businesses here in Ukraine.

Perhaps another reason for people avoiding the legal route is that the process of making a work permit and residents permit application is still a little bit tricky in Ukraine.  Even if you have all the correct documents we all know that Ukrainian civil servants have a habit of creating difficulties. This is where the BBCU can help and take away the worries of the application process.

Naturally we don't do this for free. We are a business and therefore charge a service fee for our work. But we do provide a guaranteed service. What we say is what we do.

I want to encourage more foreigners living and working in Ukraine to contact us and find out how we can help them. Anyone can contact me directly for further advice: gerald.bowers@bbcu.com.ua
or contact our office - Tel: +38067 320 1584 - administrator@bbcu.com.ua

6th September 2003 - 10 years living in Ukraine.

On Saturday 6^th September 2003 I left England for Ukraine. I had already spent time here during 2002 and early 2003 but this was the real thing. After selling my house and packing up my personal belongings into my Land Rover (plus a small trailer), I boarded a ferry from Hull to Rotterdam. Landing in The Netherlands on Sunday morning 7th September, I drove right across Germany and into Poland (before Poland joined the EU) and stayed the first night in Poznan.

The next day, 8^th September I drove to the Poland/Ukraine border. Five hours is the longest I have waited to cross any border and the slow process was due the the Ukraine side. I’m sure the border guards and customs officers still thought it their duty to protect the old Soviet Union. I remember a female customs officer telling me ‘’You must pay.’’ Why? I replied. ‘’Because you have a lot of stuff she replied.’’. I refused to pay any bribe and said I would be happy to turn the car around and go back to the UK. She then asked me ‘’Where are the documents from your government showing that you are allowed to come here.’’  I was delighted to reply ‘’The UK is a free democratic country, I don’t need to ask anyone for permission to come here.’’ A border guard officer then asked to see the visa in my passport, which was a personal visa as opposed to a business visa after which they just waved me through and I was driving into the wild countryside and very bad roads of Ukraine.

It was getting dark so I headed to the small city of Koval to find a hotel. My first experience of driving around a city in the dark where street lights were not working and other drivers just didn’t bother to use headlights. Eventually finding the only hotel in Koval I was happy to discover they had a secure parking area with a security guard. I think the hotel room was UAH 100 per night (about $20 in those days). The room was the worst room I have ever paid for in my life but I was just happy to be able to have a safe place to sleep. I went down to the bar/restaurant to find food and drink. In those days they didn’t get many foreigners so I was obviously someone of interest to locals and staff. During a period of about three hours I consumed what must have been a half bottle or more of what they called cognac or whatever it really was.

I cannot remember what time I went to sleep but I woke at 6am sharp the next day with one of the worst hangovers I have ever had and was happy to find my Land Rover and trailer still in one piece.  How I managed to drive I do not know. I found the road to Kyiv and off I went. A strange kind of road      made from concrete. I passed through small villages and forest after forest after forest and started to get a little worried that I was not seeing any other vehicles in any direction. Had I made a wrong turn? I was to later discover that I had found the ‘old military road’ instead of the more up to date Lviv to Kyiv road. I didn’t stop for six hours. I used my own jerry cans to refill the petrol tank on the Land Rover.

Eventually the big city of Kyiv came upon me and by lunch time on Tuesday 9^th September 2003          I was driving down Khreschatyk Street and I’m still here 10 years later 6^th September 2013.

Ukraine and the EU Association Agreement?

Maybe the best article I have seen concerning the relationships between Ukraine and the EU:

James Sherr is Senior Fellow of the Russia and Eurasia Programme at the Royal Institute of International Affairs (Chatham House) in London, expert on international security of Ukraine, Russia and post-communist states. His fields also include the EU and NATO expansion, as well as energy relations between Kyiv, Moscow and the EU. He is the author of the book Hard Diplomacy and Soft Coercion: Russia’s Influence Abroad out in 2013.

Quote:

Ukrainian Week: Isn’t the Association Agreement a program of reforms that Ukraine would have to implement?

Who is going to make Ukraine implement it? The past 20 years of relations between the West as a whole and the former Soviet world should persuade anyone that it is simply not possible to micromanage another country from outside it. If Ukraine had in power a government, a group of people, a group of decision makers and a group of people running the economy who really understand how the EU works, are determined to make these transformations and do all these things, then the Association Agreement would be very helpful. But today the political and economic elite of Ukraine do not want to see these changes take place because their power would be threatened by them. They want to maintain the powers they have over economic life, they want maintain the covert and opaque cash flows and rent-seeking.

See the full article here: http://ukrainianweek.com/Politics/86263

Stay Calm - Leave Ukraine - Often

One of the great benefits of holding an EU/British passport is that we British expats can leave Ukraine whenever we like and return whenever we like (provided we have the correct residents permits). Sometimes we visit the UK and sometimes other countries.

Although Kyiv Ukraine provides a constant stimulus of interests in many ways, the act of leaving the country is therapeutic.  In fact I am now an advocate for encouraging my fellow expats to ‘escape’ at least four times per year. Many of my Ukrainian friends have discovered the benefits of a Schengen visa allowing them to visit many EU countries. On returning to Ukraine they all feel a sense of being ‘recharged’.

Although many foreign businesses and investors are leaving Ukraine there are still many opportunities here. But……the current social and business environment in the country would make anyone want to leave and maybe not return.

I still believe that many business opportunities in Ukraine can be realised. The country still operates on a low cost base. The IT industry in Ukraine has proved to be one of the best ‘nearshoring’ successes in Europe and I’m sure there are many other sectors that will prove successful in providing professional services.

Ukraine & Europe - The Final Decision - November 2013

Chatam House (The independent Think Tank) in the UK has just released a report on the Ukraine and EU situation regarding the potential Association Agreement.

For a state that has defined itself as European since obtaining independence,
Ukraine has had an unusually frustrating relationship with the EU. At the root
of this frustration lies a cognitive dissonance that has never been fully
overcome. To the most principled Ukrainian proponents of EU integration,
Europe (and hence the EU) is an ethno-cultural, Greco-Roman and Christian
civilization – and Ukraine is organically a part of this, despite its Soviet past,
its self-aggrandizing political class and its decidedly uncivic state. To the
more opportunistic and ‘pragmatic’ part of the spectrum, the EU is a source of
wealth and markets. To almost everyone, the EU is also a geopolitical project
offering, for good or ill, an escape from the country’s historical dependency
upon Russia. In this conversation, far less attention is paid to the way the EU
actually perceives itself: as an increasingly multi-cultural entity defined by
values, standards and the harmonization of institutions. The technocratic
biases of EU elites and the dry nature of the integration process do not assist
clarity in this regard. Nor do real divisions within the EU-28 about Ukraine’s
significance and potential.

Download the full report here:
http://www.chathamhouse.org/publications/papers/view/193481

Health is the most important thing in your life

Its an old adage but true, without good health what is the point of anything else in your life.

Only yesterday the public discovered after the death of the famous British comedy actor Mel Smith that he was addicted to Nurofen Plus tablets and taking around 50 per day. Plus he had Gout which spread from his feet to his wrists and caused excruciating pain. He died of a heart attack at the young age of 60.

Although he was a very rich man he could not buy good health.

During the past few months I have experienced very bad health. With two problems connected to the heart and lungs (Pulminary Embolism) and a cancer scare which was later to be diagnosed as a virus infection. But one thing for sure. During this time of ill health I was not capable of performing the 'normal' functions of everyday life and it seriously effected my business activities. But thanks to God life is getting back to normal now.

24 hours in intensive care

Monday morning I drove into the city centre. It is always difficult finding a parking space in Kyiv city centre. But as this was the first working day since the schools broke up for the summer things were a little easier today. After parking up I had a short walk of only 50 metres to the office door carrying my briefcase and laptop. By the time I got to the office door the briefcase and laptop could easily have weighed one ton each.

My heart was racing, sure it would burst through my chest very soon, I was out of breath and it was not easy to remain standing. Oh I just needed a cup of green tea and all would be OK, I convinced myself.

Here is the difference between normal people and fools. I include myself as a fool here. Normal people would seek medical assistance by going to see a doctor or calling an ambulance. Fools like me think you don’t need to worry about it and it will just go away eventually.

It took me 30 minutes to calm down but I could still feel something was not right this time. I was even stupid enough to have a business meeting and then spend time checking my emails. Then the headaches started. Wow, surely my head would explode very soon, plus I was sure my heart would do the same.  On arrival at Boris Hospital a doctor who knew me said they had found something on the x-ray taken the previous Saturday. They whisked me into the intensive care unit.  I’m on my back with several faces looking at both me and the monitor above my head. Those ICU doctors and nurses swing into action very quickly. I had no idea what was my heart rate but I knew it was very fast and irregular. Something was wrong.

I was told they were going to give me ‘something’ to try and reduce my heart rate. They injected something into me and it didn’t work. The senior doctor then looked into my face and said ‘’Gerald we will need to restart your heart electronically’’.  You have an Arrhythmia of the heart.  (I had the same problem in 2009)  He was holding what I call ‘zappers’.  I was expecting someone to say ‘’CLEAR’’ before he zapped me.  My eyes must have been the size of tennis balls as I was thinking, ‘’NO surely he is not going to zap me while I’m still awake?’’.  He must have seen the shock on my face because he then said ‘’It’s OK we will give you something to calm you down first’’.

I woke up. Maybe I was out for only a short time. I could see four or more faces looking over me. All faces were without any emotional signs. Just blank looking. Here is the thing about Slavic people and Ukrainians in the main. They have no understanding about the importance of non-verbal communications. If I had woken up in a hospital in England I would have been reassured by the smiling faces of the nurses probably followed by a voice with a northern accent saying something like ‘’Everything’s all right Gerald love you made it don’t worry’’. Here in Ukraine…nothing.

The doctor finally said ‘’we did not have to restart you electronically, as soon as we put you to sleep your heart started to return to normal’’. Well that was a relief.

Intensive care units are busy places and this one no different. When you are a patient you spend most of the time on your back and never really see what is going on. That’s why you listen and try to imagine.  I could hear that the man in the next cubical struggling to create any comprehensible sentences as he tried to attract the attention of the nurses. Mnnn but this is a private clinic in Ukraine why would they accept a drunk into the ICU. Poor man had suffered a stroke.

Now that I was stabilised and all wired up to broadcast media the bips and pips became very important sounds. I disconnected the single wire connected to my index finger only to set off the alarm with staff running. Lesson learned. I’d managed to hang on to my mobile phone and was impressed to find a Wi-Fi network in the ICU. But they are not the places for rest and sleep and more busy than a metro station and noisy. Just as I was trying my best to get some sleep I heard the arrival of Sergey.

Still on my back I could detect the noise of ‘projectile vomiting’ and the noise associated with great gut wrenching pain. Sergey had eaten or drank something which was now churning his insides. Reminded me of my younger days. I had already developed empathy with Sergey. Problem is he never shut up for the next NINE hours. Why they did not knock him out I do not know. I was tempted to ask a nurse to give me something to help me sleep.

It wasn’t until 4pm the next day that things started to calm down. If fact the ICU was now empty apart from me. Most of the patients had been taken from the hospital. This is a Ukrainian technique. Pay for the real hard work required but don’t waste money with fancy after care services. Unless you are a foreigner or rich Ukrainian. The staff were sat around with nothing to do and one doctor said ‘’Maybe we will keep you here for another night Gerald’’. OH NO. NO NO NO NO. It might get like Piccadilly Circus again tonight. I want some sleep. A calm private room for me thanks.

Boris Hospital is OK. They are professional and will take care of you. I’m happy as a result of the four days I was there. It became obvious that they have had their fingers burned by many non-payers in the past and so now operate a very strict deposit and payment system. After I was stabilised in the ICU I was approached by someone from the admin staff who asked me how I intended to pay the $1000 deposit. By bank card please. But we can’t do that here. Our terminals only work on the first floor. So they disconnected me from the ICU systems and put me in a wheelchair and took me down to the first floor to swipe my card through a machine. A few minutes later I’m back in the ICU all wired up again. Perhaps you know what I’m going to say next. Can you imagine a hospital in Britain doing this? Maybe a lesson for the NHS? Oh the joys of the private sector.

Good for them but not for us – How can the British continue to encourage Ukrainians to work more closely with the EU when many in the UK would vote to leave the EU if given the choice.

This week a former member of Margaret Thatcher’s cabinet, (1981-89) and former Chancellor of the Exchequer – Nigel Lawson, declared that Britain would be better off OUT of the EU than in it.

See: http://www.dailymail.co.uk/debate/article-2320945/The-Euro-charade-Nigel-Lawsons-absolutely-right-The-idea-renegotiate-EU-pure-fantasy--voters-fall-it.html

 

He is the first leading conservative to share his views openly. Many suspect he is just one of thousands of members of the conservative party who share like minded views on Britain’s membership of the EU.  Moreover, many believe that the British Prime Minister David Cameron would be wasting his time in trying to renegotiate the terms of membership of the EU.

 

My opinion is that if the British government were brave enough to offer the British public a vote on EU membership, in answer to the simple question: ‘’Should the UK continue to be a member of the EU – Yes or No’’, the over whelming majority would vote NO

 

Britain’s continuing membership of the EU is going to be one of the most important topics of discussion right up to the next general election in 2015. The increased profile of UKIP (United Kingdom Independence Party) during the recent county council elections in the UK has further helped to challenge the British government.

 

So, how can the British continue to encourage Ukrainians to forge a deeper relationship with the EU by signing an Association Agreement and free trade agreement later this year?

 

Open for discussion.

Unicredit Bank in Ukraine - Please get things sorted out.

I recently changed banks. But I have lived in Kyiv long enough to know that before making the change I would do plenty of homework. I did the usual of checking with my friends and those who had close contact with the new bank. Questions like: Which is the best branch to open an account? How many staff can speak in English if required? Do they have good on-line and internet banking systems? and many other questions.

So, Unicredit Bank was selected and I quickly opened various accounts with them. I was impressed by how far things have changed inside and in dealing with staff in banks that operate in Ukraine. 

Unicredit group have obviously done a great job in training people in customer care. I was impressed with how they took care of me as a new customer. My new bank cards were issued within a few days and I was supplied with various passwords and codes for internet banking and other activities. Great.

A few days later I decided to activate my internet banking account and went to the Unicredit Bank web site.

Not having the bank as a bookmark on my browser I googled the word 'unicreditbank'

(Try it if you are using Google Ukraine or 'unicreditbank in ukraine' if outside).

It will come up as the first hit.  http://en.unicredit.com.ua/

So, I will now activate my internet account using the passwords etc. After several attempts I assume I must be stupid and not doing it correctly. I eventually give in and call the customer service help line. The operator tells me that I must first go to an ATM and obtain my special codes. No, I inform her that I already have them from the bank. She tells me this is impossible and I should go back to the bank.

I call my contact person at the bank and she tells me that all is OK...just try again. So I try again many times with out success. I call the on-line call centre for help. When the operator asks for my card number, she politely tells me I'm calling the WRONG bank. She claims...''this is Ukrsotsbank' you need to call Unicredit Bank.  I protest. ''But I'm in your web site now.....its says 'Unicredit Bank' on the web site, how can it be wrong?''. She explains that I need to insert the word 'bank' into the URL. This I do and now discover a new web site: http://en.unicreditbank.com.ua/

Ah....so this is MY Unicredit Bank. How can this be? Surely most people make the same mistake?

Later my contact at the bank tells me ''Sorry, most of our customers have the same problem''.

WHAT?

So WHEN will this misunderstanding be corrected.?

Because I have lived here for some time I'm already aware of the long standing intention to merge Ukrsotsbank within the rest of Unicredit group but it is obvious they are taking a VERY long time to bring this about.

So...be careful. You might think you are dealing with Unicredit Bank but really talking to Ukrsots Bank.

What is this doing to damage the brand and image of Unicredit Bank in Ukraine?

The Margaret Thatcher Era 1979-1990. How things changed

Margaret Hilda Thatcher, Baroness Thatcher, LG,OM,PC, FRS, (13 October 1925 – 8 April 2013), was a British politician, the longest-serving (1979–1990) Prime Minister of the United Kingdom    of the 20th century, and the only woman to have held the post. A Soviet journalist called her the ''Iron Lady'', a nickname which became associated with her uncompromising politics and leadership style.  As Prime Minister she implemented Conservative policies that have come to be known as Thatcherism.

This is how I remember it.  I remember Maggie Thatcher winning the 1979 election and becoming the first woman Prime Minister in the UK. My immediate reaction was shock and anger that a woman was now about to lead the country and a conservative one at that. As a young somewhat uneducated 21 year old from a staunch labour voting former mining community (it was already a ‘former’ mining community in 1979). At the time I was serving in the British Army and understood or cared very little about politics.

By 1981 I was a student at university reading business studies. The same year Margaret Thatcher had become a very unpopular prime minister. Becoming a student union representative I remember marching with fellow students in London where we all shouted ‘’Maggie, Maggie, Maggie, out, out, out’’. I even got to interview the buffoon known as Neil Kinnock. But I became a student because I was hungry to succeed in life and I knew I could only do this through a university education. So I began to read and read and read.

In April 1982 Argentina invaded the Falkland Islands. I admit to being one of those among the great majority who declared ‘’Where…? What are the Argentinians doing off the coast of Scotland?’’. Most people had no idea where to find the Falklands on a map. Mrs Thatcher dispatched a Task Force to the South Atlantic and it was the Falklands war that transformed her into the kind of leader the country really needed. It was good to be British.

Let’s go back to 1979. The UK had become known as the ‘Sick man of Europe’.

The trade unions controlled just about everything. In 1977 the country had to take a loan from the IMF. The Government still controlled major industries which were very badly managed.  Electricity power cuts were the norm due to industrial action by the miner’s union. Industrial disputes and strikes were common. Trades Union leaders were gaining more control and made increasing demands on the Government. The UK was almost unmanageable. Unemployment was high.

It was not easy being a ‘non-socialist’ student in the city of Sheffield. In fact the city had become known as ‘The Socialist Republic of South Yorkshire’ I had transformed my whole thinking about trade unions and the Labour party and could clearly understand why the country needed to change and the policies being offered by Margaret Thatcher through private enterprise and a free market economy seemed the best way forward for UK plc. Sheffield was a dream world for socialists and many of them were university academics.  On more than one occasion I demanded that lecturers stop talking politics and get on with the lecture, I still needed to understand much more about economics before my final year although it was being taught according to the socialist ideals of the academics. We were required to read a book ‘Public Policy and Administration in the Soviet Union’, because ‘‘you need to understand the alternatives’’.

In 1983 I wrote a ‘readers letter’ to my local newspaper to expressed my concern about the recent activities of the trade unions in the area plus the fact the local Labour controlled authority were blaming the Thatcher Government for just about everything. I explained that I was about to graduate soon, but if I didn’t find a job I would not be blaming the Government of the day in fact I was already tired of trade unions running the country or words to that effect. As a result of the letter being published I was contacted by the local Conservative Association and as the saying goes ‘’the rest is history’. It was the first time a ‘Vote Conservative’ poster appeared in our street. My parents said they were receiving threats about the possibility of bricks being thrown through our windows.

The Conservative party won the 1983 election and Maggie Thatcher was returned to power.   I’m sure the thought of Labour’s Michael Foot as Prime Minister scared most of the electorate.  The transformation of the UK economy and many industries continued. The introduction of the ‘Right to Buy’ council houses was perhaps one of the major benefits taken up by the majority of Labour supporters. The Conservatives continued to break the power of the unions.  A few weeks after graduating from university I quickly found a job. The job included the added benefit of a company car.

The miner’s strike and various protests during 1984 are probably most remembered by anti-Thatcher supporters. Perhaps Maggie Thatcher made a serious error by declaring Arthur Scargill and the miners as the ‘enemy within’. Although the previous Labour government closed more pits than the Conservatives it is Maggie who will be remembered for totally destroying the mining industry.

I remember the period 1984-1989 as an economic boom. In June 1987 Maggie Thatcher and her cabinet were re-elected and returned to power again.  In August the same year I was so confident and motivated I started my own business. My bank agreed to give me a business loan which was 75% guaranteed by the Governments DTI Small firms loan guarantee scheme.  Maggie Thatcher’s vision was for the UK to be transformed into a nation of business leaders and wealth creators. I was now a product of the Thatcher era.

I certainly remember 1989-90 as the economy was looking gloomy again. I remember the interest on my mortgage was at 15%.  Maggie Thatcher was clearly seen as a bully inside her own cabinet of ministers. She remained the only woman in the cabinet and dominated all cabinet meetings. Her ministers were later to ensure that it was time for her to go.   I clearly remember Michael Heseltine challenging Maggie Thatcher in the Conservative Party leadership contest. By this time I was a supporter of Heseltine as he was one of those politicians who had business experience and already a multi-millionaire he was not in the habit of being bullied by Mrs Thatcher. Many people blame Heseltine for her downfall but it was the lack of support from the remaining members of her cabinet that sealed her fate as leader.

Mrs Thatcher certainly aroused opinions. She was liked and disliked in equal proportion. She became a hate figure for those on the Left and many members of the Labour Party.  Perhaps her hatred of socialism and her following of the free market economist Friedrich Haydek were her driving forces towards changing the UK.  I agreed with her on many things but also disagreed on many things but overall I certainly agreed more. Particularly on business matters for example it was her understanding and quite rightly that only businesses created wealth, not governments and the privatisation of state owned industries was one of her best decisions.

During her period in office many public sector controlled services were privatised including British Airways, British Gas, British Steel and British Telecom plus the electricity companies and water and sewerage providers.  The British tax payer was no longer responsible for the large subsidies each one of these services required from the country each year. Today the government no longer has the burden of providing these services to the public. I have yet to find a service delivered by public/civil servants that is better than any provided by the private sector. However I think everyone agrees that the National Health Service would be a step too far towards any further privatisation.

Mrs Thatcher resigned on 22^nd November 1990. Her husband Denis died on 26^th June 2003 he was 88.She leaves a daughter Carol and a son Mark and grandchildren Amanda and Michael Thatcher.Many people report that she started to deteriorate both mentality and physically after the loss of Denis.She will be remembered all around the world. I’m sure a great many people will be paying tribute at her funeral in London tomorrow.

Cyprus Banking Situation

Trouble has been brewing for some time in Cyprus. But trouble is not new in EU countries using the EURO these days. It was anticipated that the ECB and IMF would work out some bail out agreement with Cyprus.

BUT.......who would have thought that part of the bail out would include a levy on all private bank account holders in Cyprus. The shock is being spread around the world. Stock markets across Europe are already down.

Private bank account holders with less than EUR 100,000 will pay a levy of 6.75% of the balance on their account.  Those holding more than EUR 100,000 will pay a higher 9.9%. On which day this will be calculated it is not known. But the levy amount has already been 'protected' to stop people taking all money from their accounts. During the weekend it was reported that many ATM's ran out of cash across Cyprus.

Much has been said about 'all that Russian money' in Cyprus. I'm sure that ECB, EU, IMF teams are fully aware of how much is held in Cyprus by Russians and other foreigners. Over 40% of money deposited in Cyprus is held by 'foreigners'. However I think this figure is too low. This situation could have been solved by an easier solution. If the levy proposal had included 'corporate accounts' it would not have been met with so many if any protests.

Almost ALL money finding its way to Cyprus from Russia and Ukraine is via company transfers. People do not transfer money in a private capacity. In Ukraine it is still illegal for a citizen to hold a bank account in another country without first obtaining permission from the government.

Cyprus has always attracted 'corporate investors' due to its low 10% corporation tax and ease of doing business.

So lets assume that most of the 'Russian money' has found its way to Cyprus via a company transaction.

Some of this money will still be sat in a Cyprus company bank account. (Cyprus company owned by Russians but held in trust by local Cypriot lawyers or accountants or other nominee shareholders and directors). I'm sure some of this money has been paid into 'private accounts' as dividends or via lawyers and accountants fees but not all.  A one off tax levy of 10 or 15% on the corporate sector 'overseas receipts' would have hurt for a short time but would not have been noticed. Who would be listening to the complaints of super rich Russians anyhow?

I cannot imagine that other EU member states will simply ignore what is proposed in Cyprus.

This will be a very interesting week in the EU and beyond.

Ukraine and the EU

Much has been said and much has been written about the signing of the Association Agreement with Ukraine and the EU in 2013.

Ukrainian President Viktor Yanukovych has assured everyone that ''Kyiv is working to remove the obstacles to the signing of the EU-Ukraine Agreement.'' Plus ''The signing of the Association Agreement and Free Trade Area agreement remains our priority and objective until November 2013.''

(It is expected that the agreement will be signed at the Eastern Partnership summit in Vilnius this November)

The question must be asked, ''who is conning who here?''

Various EU representatives have made it perfectly clear that no agreements will be signed while Yulia Tymoshenko and Yuri Lutsenko remain in prison on what are seen as politically motivated prison sentences.

Maybe Yanukovych really thinks that EU countries will agree to turn a blind eye and ignore what has happened since 2010. Maybe he truly believes this. Maybe he thinks that the EU are so desperate to bring Ukraine under their wing they will stop at nothing to achieve their goal.

The year 2013 will prove to be another interesting year in Ukraine.

Treating Ukrainians like Second Class citizens

It's a well known fact that Ukrainian people go through a hard time when they make an application for a visa to visit another country. More so when they want to visit an EU country. Worse still is when they want to visit the United Kingdom.  Much has been written over the years about the conduct of staff employed within Embassy/Visa offices around the world. It is fair to say that many of the people causing the problems are in fact Ukrainian people employed by these 'Visa Offices' in Kyiv. However EU nationals working in these places also must take a share of the blame for the bad reputations these places have developed.
Some of these Embassies/Visa Offices are actually informing Ukrainian citizens that they MUST report back to them when they return to Ukraine to prove they have returned.

The whole system is unfair and treats Ukrainians like second class citizens. Its as though the famous Iron Curtain was still in place. I have great empathy with all Ukrainians who have to go through the system.

A recent article in the Kyiv Post highlights yet again the problems. Quote:

Even those who can prove solid financial backing and who are married to EU citizens can run into problems. 

Kamaliya, the singer-actress married to multimillionaire investor and Kyiv Post publisher Mohammad Zahoor, recently got turned down for a 10-year long-term visa to the United Kingdom. Zahoor, a UK citizen, owns a house in London and his wife, born Nataliia Shmarenkova, has traveled to Great Britain 11 times on eight short-term visas for a total of 72 days since 2005.

Yet she got a two-page rejection letter on Jan. 16 from a UK consular officer in Warsaw, Poland, who concluded that she was attempting to circumvent UK immigration laws and hadn’t provided sufficient financial and other proof that her stays in the UK would be limited to two weeks at a time, as she stated on her visa application.

Zahoor says that his wife will reapply. The UK Border Agency said it does not comment on individual cases. 

See full article: http://www.kyivpost.com/content/ukraine/ukrainians-say-eu-nations-still-too-stingy-with-visas-319317.html

In another case, a British citizen who had been living in Ukraine for many years recently decided to return to live and work in the UK. His wife is Russian citizen (non EU citizen) therefore the UKBA applied the new rules regarding British citizens who return home with a spouse and family. These new rules mean that he had to prove that he was going to have a minimum income of £18,600 plus additional income to show he can support his wife and child. After some considerable delay the family are reunited again in the UK. But it was a worrying time.

Many people are unaware of some of the very crazy EU laws and how they conflict with UK laws.
A citizen of an EU country can go and live with his/her family in the UK without any special requirements.
This is EU law. The right to live anywhere in the EU. However immigration is a bad word these days in the UK and the British public are cautious about the new rights to be given to Bulgarian and Hungarian citizens later in 2013. The fear is that many of these citizens will be opting to live in the UK to 'enjoy' the generous state benefits to which they will be entitled. Try reading the Daily Mail each day and you will become aware.

However, in contrast to all this I was recently remind of the power of the 'Investment Visa', which many rich Ukrainian and Russian citizens are obtaining via the £1 million route to enter and live in the UK.
On a flight from Kyiv to London I met a Ukrainian man who tells me that he flies from Kyiv to London each Friday and back to Kyiv on Mondays. His wife, her mother and their young child all live in London thanks to the £1 million Investor visa system. They had no problems with getting a visa and have no problems with the UKBA.

Unfair system? - You bet.

Happy New Year & Happy Christmas in Ukraine

The long silence as been due to my winter exit from Ukraine to the warmer shores of Sri Lanka.
Today is Christmas Day (Orthodox) 7th January and many of us celebrate this day also.
I'm beginning to think that so many of my friends and Ukrainians decided to so the same this year and come to Sri Lanka to escape the winter. My Sri Lanka 'escape town' of Hikkaduwa has been invaded this year with Russians and Ukrainians on holiday.
Slavonic people are demanding customers these days and its obvious that the Sri Lankans are not used to dealing with people who complain about the food and service.
About time too I think as Sri Lankans have had an easy time of looking after the quieter Western Europeans (British, Germans, etc) who do not complain so much.

My message to Ukrainian tourists is.....keep up the good work. Things only change when people complain and/or take action.

Just a pity Ukrainians could not bring about some more important changes back in Ukraine.