Wednesday, July 30, 2014

Planning for the post-Putin era  

By Stefan Siewert (Germany), Ph.D. 

How the Ukrainian crisis might look like in five years? We look at performance and identify most-probable growth trajectories for the EU, Russia and the Ukraine, analyze drivers, the internal logic of change and the influence of global trends when good or bad political decision-making by the involved parties disappears.  

Tuesday, July 29, 2014

A brief history of mortgages in Ukraine

By Sergii Meleshchuk (UC Berkeley)

On Thursday, July 3, Verkhovna Rada accepted the bill onto conversion of foreign currency mortgages into hryvnyas (286 votes for). According to the law some individuals can convert the dollar-denominated mortgage liability into Ukrainian currency preserving the interest rate but at exchange level effective on January 1st 2014. The law was adopted at the third attempt, after Speaker Turchynov threatened to close underground exits from Verkhovna Rada so that MPs would have to face angry debtors who meanwhile demanded adoption of the law under the walls of Parliament. Those debtors suffered from the rapid devaluation of Ukrainian currency in the first half of 2014.  When UAH/USD nominal exchange rate plunged from roughly 8 UAH per USD to slightly less then 12, dollar liabilities denominated in Ukrainian currency increased by almost a half in nominal terms.  According to the new law debtors who made their payments on time and whose mortgage level is below 1 mln UAH can benefit from interest-preserving currency conversion of their loans.  This episode is the second currency crisis in the last 6 years; both had adverse effects on Ukrainian mortgage market, however, the main is problem high cost of funds for Ukrainian banks that makes hryvnia lending unattractive and makes consumers borrow in foreign currency.

Monday, July 28, 2014

Times Report Casts Shame on Obama's Handling of Ukraine Crisis

By Paul Gregory (Hoover Institution and University of Houston)

To the surprise of many, but not to those who understand him, Vladimir Putin has upped his aggression against Ukraine in the wake of the shooting down of MH17 by his separatist allies. (For a definitive account of separatist guilt, see AP What Happened: The Day Flight 17 Was Downed.) The Russian military is now routinely shelling Ukrainian positions from across the border, hoping to elicit a response so they can claim a Ukrainian attack. Russia’s drones are targeting troop positions. Even more sophisticated missiles are flooding across the border, ignoring the lesson of the Malaysian jet tragedy. Russian MIGs are shooting down antiquated Ukrainian SU fighter aircraft, depriving Ukraine of control of its own skies. (After shooting down MH17, a rebel commander called east Ukraine air space “our skies.”) Putin’s propaganda war continues unabated, spinning fantastic conspiracy theories and accusing Ukraine of war crimes as they fight back against professional Russian mercenaries. Russian state television informs its viewers that the true enemies are the United States and NATO. Ukraine is just a lackey carrying out orders from above.

Sunday, July 27, 2014

Comments on anti-corruption effort in Ukraine

By Tymofiy Mylovanov (University of Pittsburg)
There is a broad consensus that corruption is the number one problem in Ukraine. This is a cross-cutting issue and no reform can be successful without eradicating or, at least, minimizing corruption. How can this goal be achieved? In my capacity as an economist with expertise in design of institutions and incentives, I would like to offer some remarks on the anti-corruption effort in Ukraine.

Saturday, July 26, 2014

Responsibility for MH17 tragedy: The Good, the Bad and the Ugly

by Kateryna Dronova (Berkeley, CA)

On July 17, 2014 Malaysia Airlines Flight 17 (MH17) from Amsterdam to Kuala Lumpur was shot down with a (reportedly) BUK surface-to-air missile system in the conflict zone of the ongoing Donbass insurgency, killing 298 people on board. This is the world's deadliest aviation incident since 9/11. Immediately after the information supplemented with gruesome photos from the crime scene reached the media, politicians got engaged in the intricate game of finger pointing and making mutual accusations. Apart from major political players we have three figures facing each other with triggered guns and blaming each other: Ukraine, Russia and Donbass People's Militia. The tension within this triangle reminds of the famous movie scene. The key question are: who is actually responsible for this tragedy and who will be held responsible for the crime committed? Let’s have a look at each party’s legal position in our attempt to answer these questions.