Outlook on the Exchange Rate and Financial Stabilization in Ukraine

November 25, 2014  

Professor Alexander Savchenko

By now it is clear that Ukraine’s economy is entrenched in a deep economic crisis, and the current state of affairs of Ukraine’s banking and financial system is moving toward a collapse. Over the past year the value of the hryvnia fell twofold, while more than 25 percent of the banks went bankrupt. In my assessment, Ukraine’s GDP in 2014 will decrease by 6% and inflation will increase to 22%. As to a forecast for 2015, I will consider three possible scenarios for the development of events.

Last Updated on Friday, 05 December 2014 22:18

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A New Law on Identification of Ultimate Beneficiaries: Nuisance or Necessity?

November 17, 2014 

Ukrainian law makers are notorious for passing ambiguous laws that appear to have good intentions, but ultimately cause negative consequences for the economy. As a rule, the full ramifications of these laws are not adequately considered prior to their passage, and the impact on foreign investment is usually not taken into consideration at all during the legislative drafting process. In the end, these laws are heavily amended or simplified once the practical problems related to their implementation come to the forefront (e.g., see the personal data protection legislation). 

Last Updated on Monday, 17 November 2014 16:07

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Interview with the Dean of the International Institute of Business, Alexander Savchenko

October 13, 2014

Which companies and state organizations are making money off of the military conflict taking place in the eastern part of Ukraine?

The main principle of war is that all of society and the economy are losers in a war. I would measure the scale of losses from war at 3% in 2014 without even factoring in capital flight. If we were to take into account capital flight from Ukraine, then the losses would increase by $10-15 billion. This is the overall loss for society and the economy.

Last Updated on Friday, 10 October 2014 14:51

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War of Civilizations

October 10, 2014

The influence of sanctions on the behavior of Vladimir Putin and the Russian economy are two entirely different processes. Therefore, I will start with the question that I asked myself right after the military annexation of the Crimea by Russia and the start of the bloody war in the eastern part of Ukraine: what for and why was war chosen? Why is there no diplomacy or finances involved?

Last Updated on Friday, 10 October 2014 14:54

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War and Economic Reforms in Ukraine

October 07, 2014

Are economic reforms possible during times of war? This question is too narrow for Ukraine. The better question is whether reforms, in general, are possible in Ukraine. Our 22-year history, including the 6-month history of our “new” government, proves that Ukraine and reforms are simply incompatible. Why? The answer seems simple: the Ukrainian “elite” makes only populist decisions and clearly, under this guise, steals. Until today the population stood against corruption, but never against populism. Real economic reforms are not compatible with either populism or corruption. Their result is always increased salaries, income and profit of those who productively, creatively, innovatively, diligently and honestly work, while decreasing the amount and income of corrupt bureaucrats, social parasites, shadow business and those who work very little at an unproductive rate.

Last Updated on Friday, 10 October 2014 14:57

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