MBS Blog

The tension between Europe and Ukraine is increasing on another front. This article at www.unian.net seems to confirm some of the rumours swirling about; Ukraine is threatening to end the visa free regime that Europeans enjoyed over the last several years.  No word on how or if this will affect citizens of the United States or the U.K.

Several years ago, Ukraine broke with the cumbersome and expensive Soviet visa scheme still practiced in Russia. This has brought a small but measurable wave of investment, new business and tourism into Ukraine.

It has certainly made it easier for entrepreneurs to work and develop new businesses here. The continuation would certainly go a long way towards increasing further investment when the global economic crisis eases, and will facilitate an even greater transfer of wealth from West to East.

Many companies in Europe will relocate their manufacturing in the next decade. A positive atmosphere as evidenced by a visa free regime, would help with this process just as a streamlined visa process did in China during the 1990s. This does not take into account the agricultural sector which will see a flood of Euro investment when laws regarding the sale and leasing of land change.

As expats who look towards the future with optimism and hope for even more business and opportunities, let’s hope that this latest threat is merely a negotiation ploy designed to get the attention of bureaucrats in Brussels.

The Ukrainian government is certainly correct about the lack of reciprocity from the EU in terms of visa issues as well as immigration. The EU continues to treat Ukraine more as a threat than as an asset and until this mentality changes within the councils of Europe, Ukraine will have to swallow some pride, be tough and creative with regards to policy, and walk the “tightrope” between the EU and Ukraine’s powerful neighbor to the East.

Ukraine considers re-introducing visas for Europeans soon - official

Kiev, Apr 04, 2009 (BBC Monitoring via COMTEX) – 

Visa-free travels between Ukraine and Europe will be cancelled soon, maybe even before 7 May, the deputy head of the presidential secretariat, representative of the president [Viktor Yushchenko] in the Supreme Council [parliament], Ihor Popov, said in an interview with the Radio Liberty on Saturday [4 April].

“We will cancel visa-free regime with Europe soon and we will benefit from this. This will happen very soon, maybe even before the summit in Prague on 7 May 2009,” Popov said.

He said that “law-enforcement agencies complain that since Europeans come to Ukraine without visas, every three months police catch some kind of a ‘paedophile’ or a ‘maniac’”.

“Entering Ukraine, a foreigner shows a passport on the border, 10 seconds and off he goes. Later it appears that the man should not have been let in. As a result, he is put on the national wanted list since he entered without a visa and is not registered in the database,” Popov said.

Popov also said that this action can “push Europeans to cancellation of visas for us”.

Source: UNIAN news agency, Kiev, in Ukrainian 1843 gmt 4 Apr 09

Incredible deal on Wizz Air!! Cheaper than a cup of coffee.

Ukraine is the next market for discount airlines. At some point, we suspect that Ryanair, Easyjet will have also have flights from the U.K to Ukraine.

From www.unian.net:

Wizz Air Ukraine proposes tickets to London at less than 1 euro

 Wizz Air Ukraine, the first Ukrainian low fare - low cost airline, announced on Tuesday that it would proposes its passengers to buy one-way tickets to domestic and international flights at only 9 hryvnias [to compare, 1 euro makes 9.6 hryvnias, $1 – 7.5 hryvnias].

The company’s press-service disclosed this to UNIAN.

According to the information of the press-service, during January 12 – March 29 of the year 2009, the company will put for sale 10 thousand one-way tickets at this price on flights from Kyiv to Lviv, Symferopol, Dortmund, and London Luton.

The tickets for these flights may be booked during December 15-21 of the year 2008.

Technorati Tags: Wizz Air Ukraine, low fare, Kyiv, Lvov, Symferopol, Dortmund, London Luton, Ukraine, London, U.K., Anton Olff, www.unian.net,

This article is from one of our favorite bloggers: Mike Hewitt provides the “big picture” of individual nations relative to the global economy.  The picture is not pretty for many.

http://www.financialsense.com/fsu/editorials/dollardaze/2008/1205.html

The extreme level of public debt in developed nations in particular…and these charts don’t measure corporate and private debt…portend an almost certain re-alignment of economic power.  China for example, can be compared to the United States at the beginning of the 20^th century. The United States is now like post World War II Britain. It may never fully recover.

The  result of the changes is the full emergence of transition economies.  Unburdened by massive debt, with growth oriented economies that have incorporated  free market mechanisms,  emerging market economies could  take the lead a lot faster than previously reckoned. Indeed, that may be the “silver lining” in the current economic cloud.

Technorati Tags: China, United States, World War II, Britain, www.dollardaze.org, Mike Hewitt, Wealth of Nations, debt, transition economies, emerging markets, corporate debt, private debt, Anton Olff, Intermational Monetary Fund, IMF, G-7, Japan, Germany, UK, France, Italy, Canada, government liabilities, Foreign Reserves, Sovereign Wealth Funds, United Arab Emirates, Abu Dhabi Investment Authority, Dubai Workd, Singapore, Temasek Holdings, Norway, Government Pension Fund of Norway, Kuwait, Kuwait Investment Authority, China, China Investment Corporation, Australia, Australian Government Future Fund, Qatar, Qatar Investment Authority, Libya, Libya Investment Authority, Alaska Permanent Fund, Brunei, Brunei Investment Agency, South Korea, Korea Investment Corporation, Kazakhstan, Kazakhstan National Fund, Chile, Copper Stabilization Fund, Russia, Russian National Wealth Fund, Malaysia, Khazanah Nasional, Canada, Alberta Heritage Fund, Taiwan, National Stabilization Fund, Bahrain, Bahrain Mumtalakat Holding Company, Iran, Oil Stabilization Fund, Oman, State General Reserve Fund, Saudi Arabia, Saudi Arabia Sovereign Wealth Fund, foreign reserve holdings, India, Brazil, Algeria, Mexico, Switzerland, Turkey, Hong Kong, Poland, Nigeria, Indonesia, Argentina, Romania, Venezuela, Netherlands, Spain, CIA,

We have all heard the “war stories.”  Sit at any pub, club, bar or cafe in Ukraine where ex-pats congregate, and the topic of conversation will eventually turn to the difficulty in getting things done here.  The inevitable comparsions between how easy things are accomplished in the United States, the U.K. compared with Ukraine begets the question: “why are you here then?”

Of course, we know the reasons.  We are here to make  money, and lots of it.

Here is the attraction: excellent geographic location between Europe and Russia, a developing market with a population the size of France,  rising incomes, burgeoning consumer demand, and a seemingly less anti-business regulatory and tax environment than the mature economies of the United States and Western Europe.

That all sounds great. So why is so difficult? Why do businessmen, particularly foreign businessmen feel like they are pioneers or as one American real estate developer said to me, “like one of those characters in the HBO TV series Deadwood.”  Yes indeed!! Here are the top reasons, in no particular order.

1. Corruption- you always pay…and then pay some more…and everyone has their hand out.
2. The Government- or should we say, lack thereof. The rules change on a daily basis.
3. Business Culture- not exactly Western, not exactly Soviet. The customer is wrong!!!
4. Work Ethic- more for less…work that is. I get my salary whether I do a good job or bad job.
5. Bureaucracy- you always need one more paper or permit…but the office is closed today.
6. Transparency- you always find out afterwards. Information is seldom volunteered.
7. Punctuality- are you kidding? Ukrainians rarely show up on time for meetings.
8. Contract Negotiation- signed, sealed, delivered…and then undone. Just when you think you are ready to move forward, the contract needs to be renegotiated. Of course, you are the one who must “negotiate.”
9. Visibility- you want to be noticed. You want your product and services to be recognized …but you have to be discreet too.
10. Bias- not xenophobia on the part of Ukrainians which can certainly be a factor, but more importantly the bias of foreigners. Ukraine is not, and may never be an easy place to conduct business. Hard to accept. Even harder to deal with, but a fact unlikely to change.

Anton Olff

Technorati Tags: Asia, Bias, Bureaucracy, Business Culture, Contract Negotiation, corruption, Europe, France, mature economies, Punctuality, Russia, Soviet, tax environment, The Government, Transparency, U.K., ukraine, United States, Visibility, Western Europe, Work Ethic