During the past few weeks I have come to the conclusion that the economic situation in Ukraine is BAD....VERY BAD. It is always difficult to find out what is really going on in Ukraine because people are reluctant to tell the truth. Perhaps now is the time for Ukrainians to admit that the situation is worse than most people realise.
The time has come for Ukraine to stop 'acting' like a rich country. Why do I say this? Well take a look at the price of property for sale in Kyiv for example or the price of Motor Vehicles. The price of property is way beyond prices in EU countries plus I'm sure most people already know that buying a car in Ukraine is one of the most expensive markets in Europe.
There is far too much ‘acting’ still going on in Ukraine. If you have ever visited a typical Ukraine company HQ office you find the very best quality usually Italian designed furniture, drinks cabinet, floors, reception etc. The whole place shows luxury at the so called VIP standard. (I admit it is not always the same outside Kyiv). I have visted many during the past years. They want to create the illusion that they are a very successful organisation and they assume that this is the only reason you will want to do business with them. As we say back in the UK, ‘’It’s all smoke and mirrors.’’ Just a trick. But more accurately I call it acting. Why? Well because you will also find the same company with the luxury show off office has not paid its employees for many months as it will have informed them that ‘due to the crisis’, we have no money for salaries.
I remember when we opened our first office in Kyiv and wanted to buy some office furniture. Each furniture retailer we talked to assumed that because we are a ‘foreign business’ we would be spending a lot on buying the very best/most expensive furniture. I remember our secretary at the time being very disappointed that we had not purchased the best Italian furniture instead of the boxed standard IKEA style furniture we did buy and still have today. I admit that in British culture a business never wants to show that it has wasted money in buying ‘fancy furniture’ for its first office or any office. It is the opposite in Ukraine culture.
The same applies to motor vehicles. In Kyiv you will still see some of the most expensive cars on the streets everyday. Black coloured top of the range Toyota Land Cruisers, Range Rovers, Porsche Cayenne, Mercedes Benz ‘S’ class are everywhere driven by so called ‘Successful Businessmen’. But yet again it is all part of the acting.
In 'normal' countries when in a crisis the prices of most things stay the same or usually come down significantly. We know that many people in Ukraine own their own properties without any mortgage and they are lucky when compared to the people in Western Europe. But I can assure you these people in the west would never pay the prices in Ukraine. Moreover banks in Ukraine are not so ready to provide mortgages these days.
The following countries offer LOWER property prices than in Ukraine.
Hungary, Portugal, Bulgaria, Cyprus, Lithuania, Croatia, Estonia, Latvia, Romania, Slovenia, Malta, Slovak Republic. This applies to both sales prices and rental prices.
In my opinion it would be better for Ukraine to face the truth and downscale.
Prices need to come down significantly before we see any signs of a recovery in the economy.
And stop all the acting. Get real.