Thursday, May 29, 2014

Crimean Property in Limbo

By Kateryna Dronova (Berekely, CA)

Two days before the historical Election Day in Ukraine Russian President Vladimir Putin announced at the St. Petersburg International Economic Forum that “Russia will respect the choice of Ukrainian people” and Kremlin “will work with the newly elected structure.” Shortly afterwards he made several remarks that this cooperation with the newly elected head of Ukraine will unavoidably deal with Ukraine’s $3.5 billion debt for natural gas. But the issue of who owes who and who owns what goes much, much deeper. It is particularly acute after Russian unlawful annexation of Crimea.

Monday, May 26, 2014

Poroshenko Elected Ukraine President

Putin Dodges Promise To 'Respect' Results

By Paul Gregory (Hoover Institution and University of Houston)

Ukraine’s 35.5 million voters gave Petro Poroshenko, the so-called Chocolate King, a rousing 56 percent of the votes from 21 candidates on the ballot. He will be Ukraine’s fifth president. These figures are based on two separate national exit polls. Two days before the election, Vladimir Putin publicly backtracked on his pledge to honor the results of the election. In the days and weeks that follow, it will become evident that he never meant to recognize the results of the Ukraine presidential election. Let’s see how the world reacts.

Six Reasons Why Putin Seems To Have Lost In Eastern Ukraine

By Paul Gregory (Hoover Institution and University of Houston)
There is a growing consensus that Vladimir Putin has abandoned his campaign to take control of east Ukraine. The fog of war, such as the killing of nearly 20 Ukrainian soldiers yesterday, is obscuring the distinct turn in the tide. Putin’s goal has changed from dismantling Ukraine as a united state to destabilizing Sunday’s presidential election in the east. Ukraine has a chance for a third lease on life. It cannot afford to blow this chance by returning to its old ways of governing. Ukraine’s third lease on life will likely be its last if wasted.

Sunday, May 25, 2014

Elections in Ukraine

By Yuriy Gorodnichenko (UC Berkeley)
Results from exit polls [1, 2] show that Petro Poroshenko is elected the President of Ukraine. At the same time, dismal performance of candidates affiliated with Viktor Yanukovych and the Party of Regions, the former ruling party in Ukraine.
All-Ukrainian TV exit-poll
National exit-poll
Tygipko (former Party of Regions)
Dobkin (Party of Regions)
 Update: Yarosh, the leader of the Right Sector, got less than 1%. Epic fail of Russian propaganda.

Inflation target for Ukraine

By Yuriy Gorodnichenko (UC Berkeley)
In a recent report, IMF recommends that Ukraine switches to inflation targeting where the target range is 3 to 5 percent per year. Is this a reasonable regime for monetary policy in Ukraine? This blog reviews some issues related to this question.

Tuesday, May 20, 2014

An Unauthenticated Document Planning the Retreat of Russian Special Forces from East Ukraine


By Paul Gregory (Hoover Institution and University of Houston)

We have reason to believe that the self-appointed leaders of the self-proclaimed Peoples Republic of Donetsk (PRD) understood quite well the message of the May 11 referendum. Less than 12 hours after the polls closed, the PRD military commander, Colonel Strelkov alias Strelok (real name Girkin), purportedly issued alarmed instructions to a restive, unsupportive east Ukraine, beset by lawlessness and chaos, from which the Russian “volunteers” might have to flee.

Wednesday, May 14, 2014

Separatists May Be Exaggerating Ukraine Referendum Turnout By 300%

By Paul Gregory (Hoover Institution and University of Houston)
Separatists in Luhansk oblast have officially announced that 96 percent of eligible voters approved the referendum on independence (See: Ukrainska Pravda). According to the KyivPost election update, separatist officials are reporting 89 percent for seceding and 10 percent against in Donetsk Oblast. Donetsk and Luhansk make up the lion’s share of the contested Donbass region.

East Ukraine separatists are celebrating what they claim is a huge electoral victory in the May 11 referendum. These Crimean-scale election results are pure falsification.  I report here more believable results that show one third the turnout of the separatist claims and confirm earlier polling data that show 70 percent of East Ukrainians want to keep a united Ukraine.

Tuesday, May 13, 2014

Growth of Ukraine’s Economy

By Yuriy Gorodnichenko (UC Berkeley)
The IMF’s Staff report predicts that Ukraine’s economy is likely to grow at approximately 4 percent per year in the medium run. While this rate is respectable by the standards of developed economies (for example, the U.S. economy grew about 3 percent per year since World War II and only 1 percent since the start of the Great Recession), it is quite low when compared to the growth rate of transition and developing economies. For example, China’s economy has been growing 7 to 10 percent a year for several decades now. Poland’s economy has been growing  about 5 percent a year since mid 1990s. Why did these and similar economies grew so fast and what does it mean for Ukraine?

Thursday, May 8, 2014

Putin's 'Human Rights Council' Accidentally Posts Real Crimean Election Results

By Paul Gregory (Hoover Institution and University of Houston)

As you may recall, the official Crimean election results, as reported widely in the Western press, showed a 97 percent vote in favor of annexation with a turnout of 83 percent. No international observers were allowed. The pro-Russia election pressure would have raised the already weak vote in favor of annexation, of course.

Yesterday, however, according to a major Ukrainian news site,, the website of the President of Russia’s Council on Civil Society and Human Rights (shortened to President’s Human Rights Council) posted a report that was quickly taken down as if it were toxic radioactive waste. According to this purported report about the March referendum to annex Crimea, the turnout of Crimean voters was only 30 percent. And of these, only half voted for the referendum–meaning only 15 percent of Crimean citizens voted for annexation.

Saturday, May 3, 2014

Federalization Problem: Russia vs. Ukraine

by Kateryna Dronova (Berkeley, CA)

Shortly after Russia swallowed Crimea, its appetite grew even stronger: next day after March 16 Crimean referendum Russian Foreign Ministry called upon Ukrainian government to create a new constitution providing for “democratic federal state”. On April 17 Vladimir Putin questioned Ukrainian current borders and called its eastern and southern part “Novorossiya” (New Russia, Russian-speaking regions formerly controlled by Russia during the imperial times). By the end of the month federalization in Ukraine has become #1 issue in Russian-Ukrainian dialogue. Sergey Lavrov, Russian Minister of Foreign Affairs, in his interview stated that Russia must insist on federalization “not because we want this, but because it is a request of the southern and eastern regions.” Ukrainian Transitional Government strongly opposes the idea of creating a “federation” out of a unitary state and views Russian suggestion as an attempt to “dismember” a country. At the same time the idea of decentralization of power has acquired recognition and support from Ukrainian officials and is currently promoted to become central in the reforms package. Unexpectedly President of Belarus Alexander Lukashenko (old Russian ally) joined Ukrainian side and commented that federalization would "split the country" and “destroy the Ukrainian state.” This post makes humble attempt to distinguish between Russian “federalization strategy” and Ukrainian “decentralization ambition” and clarifies whether one should follow Mr. Lukashenko’s example.