With Euro-2012 expenses threatening the already burdened economy, trade unions lobby for greater transparency inside the markets. With the link between political authority and personal wealth clearly illustrated, Verkovna Rada raises allowances for Deputies.
National Deputy of Ukraine: cost-effective?
The parliament of Ukraine is implementing probably the most stringent social and economic reforms within the country?s history, yet simultaneously sees fit to improve the annual maintenance allowance for each Deputy to 700,000 UAH ? at the Ukrainian citizens expense.
Ukraineis characterised by one of many highest international debts in Europe, an immediate growth of inflation with an unrelenting decline in the population's well-being and social-security. Nevertheless, the general budget of Verkhovna Rada was recently set at 980 million UAH - a 170 million UAH increase from 2010. The government has risen its allowance for travel expenses (from 7 to 9.5 million UAH) and also the vacation budget, with 9 thousand UAH allotted to each Deputy for health resort treatment ? very similar to half a year living expenses for up to 50% of Ukrainians.
It will be worth noting that whilst their official salary is placed at 17 thousand UAH (the average salary in Ukraine is under 2,500 UAH) Deputies receive at the very least that amount again, each month, for ?working expenses? without any requirement to declare how a money was spent. One might question whether Deputies really need a real comparatively large salary. It is no secret the primary selling point of learning to be a people?s Deputy in Ukraine is either to protect personal business interests, or to work as an oligarchical proxy. For example Ukrainian Deputies Akhmetov, Zhevago and Verevskyi are named one of many richest people in the world by Forbes Magazine, with fortunes making up 16, 2.4 and 1.1 billion US dollars respectively. Whilst Ukraine is constantly on the suffer some with the worst social and economic performance in Europe, Deputies show no need to continue with the example of the European Parliament, which froze expenses this season in sympathy to the population struggling with overall economy. However, in March the European Parliament increased legislators' expenses for assistants by 17,800 Euro for each Deputy, which brought ordinary Europeans out to the streets. For the length of time will Ukrainians be ready to fund the whims of their elected representatives?
People First Comment:
Forbes magazine has named three Ukrainian deputies to be among the richest people on this planet with a combined personal fortune more than $19.5 billion. One of these three may be conspicuous by his absence through the Rada for some of the current convocation. Therefore you have to inquire about firstly why such wealthy individuals needs to be paid a great deal compared to the national salary level for his or her services and secondly what value they deliver to the world to warrant this kind of salary. In the Soviet era there was clearly always confusion over price and value. In the Russian language a similar word is employed for both mainly because it was assumed that you just got whatever you paid for. Warren Buffet?s description is a bit more applicable ?costs are whatever you pay whilst value is whatever you get?. In this example it really is fair to express that the everyone is paying excessive and achieving not enough.
The profligacy of the current government belies an underlying contempt to the nation. They cut budget allocations for state salaries, social protection, healthcare and education by simply enough to create sure that the people tend not to rebel whilst as well they increase shelling out for regions of personal enrichment and aggrandisement. This points too they've got no morality, no concern for the public good with out aim of expanding the total wealth with the nation unless they've a direct interest. Ukraine is rolling out within the last 20 years not in to a functioning democracy but from the fledgling democracy in a classic Oligarchy and when it remains unchecked it might only worsen because protagonists challenge each other for ultimate control.
Is Euro-2012 costlier than it may be worth?
Expenses to the organisation of European football championship Euro-2012 may exacerbate financial crisis in Ukraine. Experts are convinced that Euro-2012 should bring in between 200 and 400 million USD profit (about 650,000 tourists are anticipated to come to Ukraine), however gross expenses may exceed 10 billion USD. Greece, as an example, spent 11 billion USD on preparations for the Olympics but received only 2 billion USD inturn. Outset estimates pitched the specified developments for Euro-2012 at 280 million USD with the Ukrainian people anticipated to front 12%. The low investment attractiveness of Ukraine, misallocation of public funds along with the lack of experience may potentially turn Euro-2012 from your celebration of football in a national economic disaster.
After visiting the partially constructed central football stadium in Kyiv, Vice-Minister Borys Kolesnikov noted the 550 million USD already spent was quite reasonable and sits at 20% under the price for your Warsaw stadium. President Yanukovych also visited the Kyiv stadium and promised that this construction can be completed in accordance with UEFA requirements by autumn at the latest. This year Ukraine faces the enormous pressure of handing over back its multi-billion international debt, however the new budget provides 18 billion UAH for the preparations for Euro-2012. To put the figures into perspective 9 and 18.5 billion UAH will be spent on health care and education in Ukraine this year respectively. A more covert issue is the overvaluation and non-transparency of championship expenditures. With the numbers to hand and the economic context in hand the solution to whether Ukraine are able to afford hosting Euro-2012 becomes quite obvious.
People First Comment:
When will the us government of Ukraine understand which you can?t spend the right path out of debt. The government?s debt mountain is one of the largest international debts regarding GDP inside the world and eventually somebody is going to have to pay for the money back. The tariff of Euro 2012 is very unmanageable. How can Ukraine spend an estimated $10 billion on half in the Euro 2012 , Greece only spent $11 billion dollars generally speaking in the Olympic Games whilst South Africa spent just $4.5 billion about the World Cup as both versions are appreciably larger competitions. Financial control has simply been dumped in the window and all for the excuse that the previous government messed things up?
In the government?s new budget the allocation for Euro 2012 is $2.4 billion, that?s quantity allocated for medical care and just a fraction below that allocated for education next year. But the whole bill might be around $10 billion, in case the revenues are on target and also the budget money is real the federal government is going to have to find an additional $7.2 billion and this will likely be on top with the two tranches close to $25 billion each needed to spend international debts that can fall due concurrently. The chances from the nation being able to locate $57.2 billion over time are unlikely especially when we percieve such profligate spending; therefore the people had better start planning now to the austerity measures that may undoubtedly follow.
In addition government entities are predicting 650,000 tourists but Kyiv only has just been able to meet the minimum UEFA feature 7,500 hotel beds to the competition and few with the new hotels will be operational with time. Does this imply much more government expenditure to make enough accommodation available over time or will they envisage another tent capital of scotland- type planned for Eurovision?
Absolute opacity inside the Ukrainian "market economy"
Whichever market a business operates on in Ukraine non-transparency is an everyday norm. This issue is enshrined in a recent open letter to the President and Prime-Minister from the Ukrainian Union of Industrialists and Entrepreneurs, the Ukrainian Agrarian Confederation and also the Ukrainian Grain Association. Entrepreneurs are particularly concerned with state price administration about click here the grain market, which among additional circumstances is stifling competition. "Khlib Investbud" is now establishing a monopoly around the grain market of Ukraine after being allocated large grain export quotas along with other privileges. The Mass media has reported that local businessmen and Russian capital close to the President stand behind this potential monopolist. "Ukrtelekom", circumstances owned advertising group that held a powerful monopoly, was sold-off which observers noted as indicative from the not enough transparency inside the country. The new owner ESU - a subsidiary company of "EPIC" the Austrian investment and financial syndicate - bought "Ukrtelecom" for 10.575 billion UAH. Due towards the fact that there were no competition, with only 1 potential buyer entered for the tender, and considering the buyers non-transparent financial assets, oppositional politicians as well as the marketing have pointed fingers at ties between your company and also the President.
Olexandr Ryabchenko, head from the State Property Fund of Ukraine, commented recently on the privatisation plans for 2010-2014, which are anticipated to draw in about 10 billion UAH each and every year. His remarks reflected concern over the possible lack of transparency from the privatisation process and suggested he fears state assets may be sold at reduced prices to folks near to Ukrainian government. Monopolization from the Ukrainian economy, the development of non-transparent "game rules" with pro-government businesses having each of the advantages might ultimately jeopardise the investment attractiveness of Ukraine leaving the modernisation of Ukrainian economy utterly unviable.
People First Comment:
How can a European Investment company situated in Austria be the only company to comply using the terms with the tender to purchase Ukrtelecom? Only when the tender was specifically written to ensure this was the only company that may comply. The only thing which is transparent about the sale of Ukrtelecom could be the blatancy with which the federal government have sought deceive people. This is exactly the identical scenario that we saw within the initial sale of Krivorozhstal. It was sold off to ?friends?, simply to be repossessed from the following government and sold to legitimate bidders in the transparent auction. No doubt a similar cycle could happen again?
What is more confusing about this auction is that next year this government is going to have to find billions to settle national debts. These assets were a ready way to obtain real income which they now appear to have been squandered. This is not going to go unnoticed from the IMF from whom this government is planning to borrow billions or syndicates of banks who expect to be repaid pick up. Perhaps government entities is basing their hopes on negotiating a flip in the debts but this will probably be just a few them proving their economic management credentials. Privatisations on this sort do little to inspire confidence and also the financial world features a extended memory.
Power means personal enrichment in Ukraine
According towards the "Focus" magazine rating of the wealthiest people in Ukraine for 2011, personal fortunes advance concurrently with political careers. Currently, Deputy Prime-Minister Andriy Klyuev and his brother Sergiy Klyuev are stored on 25th place with 900.8 million USD - a 100% increase considering that the Focus rating in 2010. Sergiy Tigipko, Minister of Social Policy of Ukraine, takes 30th place with assets increasing from 572 to 796 million USD.
The fortune of Valeriy Khoroshkovskyi, head in the Ukrainian Security Services, (42nd place) has grown from 357 to 430 million US dollars whilst Vice Prime Minister Borys Kolesnikov has appeared on the 59th place with 293 million US dollars.
"Focus" also reports that this quantity of Ukrainian multi-millionaires almost tripled - from 8 in 2010 to 21 people this year. The total private capital among them is the reason for 58 billion US dollars. Vadym Novynskyi (US$2.63 billion) and Kostyantyn Grygoryshyn (US$2.169 billion) have grown to be the wealthiest foreign citizens resident in Ukraine. Their fortunes are dwarfed however by those in the wealthiest locals, Rinat Akhmetov (US$15.59 billion), Igor Kolomoiskyi (US$ 5.323 billion) and Gennadiy Bogolyubov (US$4.975 billion). Ukraine remains crippled by major social problems and huge external debts with all the majority from the population existing on a salary of lower than 200 US dollars per month. It seems the combination of politics and business, prohibited inside European Union along with other democracies, continues to be the most profitable activity in Ukraine.
People First Comment:
The average development of the superior 50 oligarchs in Ukraine is in excess of 25% per year that's extraordinary bearing the top degrees of growth seen by western banks that have some from the finest economic brains inside world is only around 8% over exactly the same period. Are these oligarchs such brilliant business people or would they perhaps have some alternative reasons for profit they are not admitting to?
According to your recent report by the respected investment house Sigma Bleyzer the Ukrainian economy may be expanding but only in direct proportion towards the expanding world interest in garbage. The whole Ukrainian economy isn't only predicated about the fact that this world needs more and also it can be focused for the business interests associated with an elite few. Future economic stability of the nation is totally dependent for the whim in the steel, chemicals and coal barons? in fact they now literally control Ukraine and with it not able to everybody living here. Is it any wonder therefore that 34% in the nation wishes to leave and 39% with the labor pool already has?
The President might think he is within charge but actually he to is just as much a hostage as every other citizen as if your barons opt in another direction you'll find nothing he is able to do about it. If they wish to they are able to control the courts, the legislature, the militia and the security services mainly because on this environment almost everything is for sale for the highest bidder. However we are able to take comfort in the idea that all Empires eventually implode through their particular greed and Ukrainian oligarchies are no different.
Quote in the week:
We might have democracy with this country, or we could have great wealth concentrated in the hands of a couple of, but we can't have both.
Louis D. Brandeis
Associate Justice about the Supreme Court of the United States (1916-1939)