Ukraine’s problems are mainly political
Wednesday, November 4th, 2009There is a recognition amongst businesspeople here as well as in the foreign investment community, that an economic recovery in Ukraine could be stalled for a long time. Most Ukrainian businessmen that we have spoken with say that there will probably be a runoff after the Presidential election between the two top candidates and that it will be next summer at the earliest, before the bureaucracies have been re-staffed and a direction is known.
Businesses are not going to make any purchases or hire until they see which way the politicians in Kyiv go. The consensus seems to be that a President Tymoshenko will continue reforms with an eye towards greater integration with Western Europe…while many believe that Yanukovich will lean more towards Russian interests. A win by Yushenko is not considered likely.
Nobody really knows for sure since both candidates say many things which may turn out to be just talk. Until that time, many projects and investment could be put on hold.
Ukraine Remains ‘Very Much at Risk’ in Crisis, Zoellick Says
By Timothy R. Homan
Nov. 3 (Bloomberg) — World Bank President Robert Zoellick said Ukraine is having difficulty emerging from the global financial crisis.
“They remain very much at risk,” Zoellick said today during a speech in Washington. He noted that nearby countries such as Poland are in better shape.
Last month, an International Monetary Fund report projected the world economy will expand 3.1 percent next year after shrinking 1.1 percent in 2009. In that same report, Ukraine was forecast to contract 14 percent this year before growing 2.7 percent in 2010.
“The region still faces dangers,” Zoellick said, before adding that Eastern Europe “should be able to stabilize the conditions” affecting its economy and financial system.
