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Thursday, 13 March 2014

EconoMonitor » Plenty of Reasons for Pessimism in Ukraine | #EuroMaidan

EconoMonitor : EconoMonitor » Plenty of Reasons for Pessimism in Ukraine:



"Author: Marvin Zonis  ·  March 13th, 2014



My mother’s family fled Ukraine for the U.S. in 1921 when Bolshevik troops overran their town, Berdichev, extinguishing an independent Ukraine that had been declared when the Tsar collapsed in 1917. Those who remained did not have a bright future. The Bolshevik troops were savage in executing the wealthy and confiscating property.
In the 1930s, Stalin ordered the collectivization of Ukraine’s agricultural land, forcing a famine. In 1932-1933, between 2.4 and 7.5 million Ukrainians perished in what the post-1990 independent Ukraine declared a “genocide.”
The Nazi invasion introduced another level of pain to Ukraine. More than 1.3 million died in Nazi concentration camps spread around Ukraine. The Germans needed Ukraine’s food and stopped supplying rations to its cities. General Walter Reichenau declared in 1941 that feeding locals and prisoners of war was an ‘unnecessary humanitarian gesture.’ As a result, Kiev lost 60% of its population while 80,000 people died of starvation in Donetsk.
A special fate awaited Ukraine’s Jews. Before the Germans even thought of the “final solution,” Nazi soldiers carried out their own murders. As many Jews as possible were shot by German military squads. ‘The Last Jew in Vinnitsia,’ a town adjacent to my mother’s home, is the title of a Nazi photograph.
The Jewish population of Kyiv, more than 33 thousand, were machine gunned in the Baby Yar ravine in the autumn of 1941. More than 200,000 Jews perished in the Yanic concentration camp outside Lviv. Some 200,000 residents of Odessa and the surrounding region were murdered in December 1941 by Romanians allied with Germany.
At the end of World War II, the Soviets estimated that more than 5 million Ukrainians were killed by the Nazis.
Ukraine’s economy grew relatively rapidly after the war, particularly because Nikita Khrushchev and Leonid Brezhnev came from Ukraine. (It was Khrushchev who attached the Crimea to Ukraine in 1954.) Heavy industry was fostered and even nuclear capable  missiles were produced in Ukraine for the Soviet armed forces.
But the woes were to return. The collapse of the Soviet Union was a disaster for Ukraine’s economy as customers in the other former Soviet Republics disappeared. After 1990, Ukraine’s economy fell by an average of 8.9% per year for 10 years. For the next 12 years – through 2012 – the economy grew by an average of 3.9% per year. But prosperity was elusive and economic growth was captured largely by a class of indigenous oligarchs with close ties to the rulers.
Corruption was rife. Ukraine scores worse on corruption than Russia and is tied with Iran, Nigeria, and Papua New Guinea as among the most corrupt countries in the world (144 out of 175).
In short, Ukraine’s situation was pathetic before the Russian seizure of Crimea. None of that justifies the seizure and, of course, Putin hardly bothered to justify the seizure at all. He certainly did not suggest he would rescue Ukraine from its troubles.
Ukraine, for all its well-deserved outrage, has few options. Its military has been woefully under-funded. Its air force has been mothballed. It stands no chance in a military conflict with Russia. Nor will the U.S. or Europe challenge Russia militarily.
So Ukraine will have to ‘suck it up,’ deal with the restive Russians in the east and get on with trying to build a democracy with fewer oligarchs, less corruption, and more economic growth.
Don’t look to any of the major players for help. Yulia Tymoshenka, recently released from jail, is as corrupt as the rest.
The odds are not favorable.
Marvin Zonis is Professor Emeritus at the Booth School of Business, The University of Chicago. He can be reached at marvin.zonis@chicagobooth.edu.


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Gazprom's pipeline pledge: We don't want Ukraine economy to collapse - YouTube #EuroMaidan

Gazprom's pipeline pledge: We don't want Ukraine economy to collapse - YouTube:



"Russia's biggest gas producer Gazprom said Thursday it doesn't want a 'gas crisis', and hopes Ukraine can pay its outstanding $1.8 billion debt - READ MORE http://on.rt.com/odgllg



)"



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MIDEAST STOCKS-UAE shares rebound on technicals; Kuwait slumps on regulatory crackdown | Reuters

MIDEAST STOCKS-UAE shares rebound on technicals; Kuwait slumps on regulatory crackdown | Reuters:



"* Dubai, Abu Dhabi bounce from technical support levels



* But valuations remain stretched



* Q1 earnings could set further direction



* Other Gulf markets mixed



* Kuwait falls after regulator suspends broker, stocks



By Nadia Saleem

DUBAI, March 13 (Reuters) - Shares in the United Arab Emirates on Thursday recovered some losses from the previous session on a technical rebound, while other regional markets were mixed after the global sentiment turned cautiously positive.



Surprisingly weak Chinese data and concerns over the Ukrainian crisis took down global equities this week. That triggered a long-awaited correction in UAE markets.



Renewed buying at chart support levels, however, helped the UAE rebound from multi-week lows. Dubai's bourse rose 1.2 percent, partly recouping losses from the past two days. Abu Dhabi's benchmark climbed 2.2 percent, snapping a five-session loss."



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Merkel: Russia to face massive damage if no progress made on Ukraine — RT News #EuroMaidan

Merkel: Russia to face massive damage if no progress made on Ukraine — RT News:



"Germany’s Chancellor Angela Merkel has warned that Russia risks “massive political and economic consequences” if it sticks to its position on Ukraine. On behalf of her EU and Western counterparts, she said they support imposing sanctions.



"We would not only see it, also as neighbors of Russia, as a threat. And it would not only change the European Union's relationship with Russia," Angela Merkel said. "No, this would also cause massive damage to Russia, economically and politically."



Speaking in Germany’s Reichstag on Thursday, Merkel said that EU members and other western nations, if necessary, are prepared to freeze bank accounts and impose travel restrictions on people and firms that Brussels suspects of being involved in violating Ukraine's territorial integrity.



"The territorial integrity of Ukraine cannot be called into question," Merkel told German MPs."



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Ukraine Billionaire Firtash Jailed in Vienna on FBI Warrant (1) - Businessweek #EuroMaidan

Ukraine Billionaire Firtash Jailed in Vienna on FBI Warrant (1) - Businessweek:



"Dmitry Firtash, the Ukrainian billionaire who made his fortune on Russian natural-gas imports, was arrested in Vienna on a warrant issued by the U.S. Federal Bureau of Investigation.



Firtash was taken into custody yesterday by the organized-crime unit of the Austrian police, according to a statement by the country’s Interior Ministry today. His lawyers and spokesmen didn’t immediately respond to phone calls.



“The arrest took place without incident,” the ministry said in the statement. Firtash, 48, is alleged to have paid bribes and formed a criminal organization, according to the warrant, issued after an FBI investigation that began in 2006, the ministry said."



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Implosion of Ukrainian equities continues with no bottom in sight - Ukraine Business Online #EuroMaidan

Implosion of Ukrainian equities continues with no bottom in sight - Business - News - Ukraine Business Online:



"KYIV, Mar 13, 2014 (UBO) – The Ukrainian hryvnia after some weakening has now reached what appears to be a fairly sustainable level [USD1 = UAH9.30]. However, the market for Ukrainian stocks is an entirely different and much more depressed – and depressing – reality. More of the bad news in Concorde Capital’s daily market comment:
 



“The slaughter of Ukrainian equities continued on Wednesday, March 12. The WIG Ukraine Index of Warsaw-traded stocks plunged 6.2%, extending its loss streak to six sessions at an 18.7% collapse. It has reached its lowest depths since its December 2010 debut. Its biggest component, grain trader and sunflower oil producer Kernel (KER PW -7.2%), has plummeted 12.5% in three straight negative sessions to its lowest price since April 2009. Farmer Agroton (AGT PW -5.6%) has plunged 40.1% in five straight losing sessions to its lowest price since Feb. 17. KDM Shipping (KDM PW -9.4%) has collapsed 53.0% in three negative sessions to its lowest price since its August 2012 debut. Sugar producer Astarta (AST PW -5.6%) has plummeted 20.8% in six straight losing sessions to its lowest price since January 2010."



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Can tiny northern emirate outshine Dubai and Abu Dhabi? - CNN.com

Can tiny northern emirate outshine Dubai and Abu Dhabi? - CNN.com:



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Q&A With Dubai Islamic Bank’s CEO Adnan Chilwan - Middle East Real Time - WSJ

Q&A With Dubai Islamic Bank’s CEO Adnan Chilwan - Middle East Real Time - WSJ:



"Dubai Islamic Bank is the biggest shariah-compliant lender in the United Arab Emirates. In the past four years, the bank kept a low profile, focusing on replenishing its balance sheet and completing the takeover of a troubled, local mortgage provider in the wake of the global financial crisis and the region’s real estate downturn which had dented the bank’s profits. Now, international expansion is back on the agenda in tandem with a domestic push into mortgage lending, the company’s Chief Executive Adnan Chilwan tells the Wall Street Journal."



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Ukraine Fears Trigger Conference Cancellations and IPO Postponements | The Moscow Times

Ukraine Fears Trigger Conference Cancellations and IPO Postponements | The Moscow Times:



"Sberbank, Russia's largest bank, has decided to postpone its Russia Forum business conference until the fall.



The company said that the decision was made due to "the uncertain economic dynamics and elevated volatility in capital markets" caused by international tensions over the situation in Ukraine,  Reuters reported Wednesday.



The forum, a major international business conference scheduled to be held in Moscow from April 10 to 12, is dedicated to discussing economic and social-political issues, as well as investment opportunities in Russia. 




Past attendees have included figures such as President Vladimir Putin and Alan Greenspan, ex-chairman of the U.S. Federal Reserve. The 2013 Russia Forum was attended by more than 2,000 people from 40 countries."



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Qatar's Barwa Real Estate profits up 27.3% - Property - ArabianBusiness.com

Qatar's Barwa Real Estate profits up 27.3% - Property - ArabianBusiness.com:



"Qatar's Barwa Real Estate said on Thursday that its 2013 net profit rose 27.3 percent, indicating that the Gulf Arab state's largest listed developer made a significant fourth-quarter net profit.



Barwa, which agreed a $7.1bn financial assistance package with state real estate firm Qatari Diar in June, made QAR1.4bn ($384.5m) in 2013, up from QAR1.1bn in the prior year, according to a bourse filing.



The firm did not provide a quarterly breakdown.



However, given that the nine-month profit reported in October was 40 percent lower year-on-year at QAR467.5m, this points to Barwa making a net profit of more than QAR900m in the final three months of the year."



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Paris court halts Printemps sale to Qatar - Banking & Finance - ArabianBusiness.com

Paris court halts Printemps sale to Qatar - Banking & Finance - ArabianBusiness.com:



"A Paris court has ordered a halt to the €1.75bn ($2.33bn) sale of French department store chain Printemps to a group of Qatari investors while it undergoes further consultation with unions, it was reported.



Printemps unions last year complained they were not sufficiently consulted and informed about the transaction or its terms, as the law requires, and had called for the deal to be halted.



In August a court found no irregularities in the sale to Qatari investors of Borletti Group's 30 percent stake and the 70 percent owned by Deutsche Bank's RREEF real estate investment unit.



However, this week the Paris Court of Appeal found the procedures around consultation had not been met, Le Telegramme daily newspaper reported."



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Iran says seals gas export deal with Oman | Reuters

Iran says seals gas export deal with Oman | Reuters:



"

Oman's Sultan Qaboos bin Said (R) walks with Iran's President Hassan Rouhani upon Rouhani's arrival 
in Muscat March 12, 2014.
CREDIT: REUTERS/SULTAN AL HASANI
(Reuters) - Iran has sealed an agreement to export 10 billion cubic meters of gas per year to Oman, Iran's state news agency IRNA said on Wednesday, in a deal that also involves building a pipeline across the Gulf at a cost of about $1 billion.



The accord, signed during Iranian President Hassan Rouhani's first visit to Muscat since his election last year, came out of a memorandum of understanding between the countries in August for the sale of Iranian gas to Oman from 2015, in a 25-year deal valued at around $60 billion.



Energy-hungry Oman agreed to buy gas from Iran as far back as 2005 and a later draft deal in 2007 included plans for Oman to process Iranian gas for export as liquefied natural gas (LNG).



But the two sides had never finalized terms and Oman had been pressured by the United States to source fuel from alternative suppliers such as Qatar, according to U.S. embassy cables released by Wikileaks."



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Bahrain 'faces budget deficit, inflation challenges' | Al Bawaba

Bahrain 'faces budget deficit, inflation challenges' | Al Bawaba:



"An increased budget deficit plus a rising inflation rate are key challenges facing Bahrain, a leading banker has warned.



According to BBK chairman Murad Ali Murad, inflation reached a high of 3.8 per cent during late last year, primarily driven by a rise in housing and utility costs and also affected from an increase in food prices. 




"This has to be seen against a backdrop of depleting oil reserves and a recovering socio-political arena," he was quoted as saying in the Gulf Daily News, our sister publication.



Murad said that in a move to prevent the budget deficit widening further and avert the possible risk of a future fiscal crunch, the government is looking to introduce new ways to redirect subsidies to those most in need and create a more long-term sustainable public spending model."



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Saudi budget airline launches direct flights to London and Manchester « ASHARQ AL-AWSAT

Saudi budget airline launches direct flights to London and Manchester « ASHARQ AL-AWSAT:



"

London, Asharq Al-Awsat—Saudi budget airline Flynas has launched two new long-haul flight routes to the UK, the first step in the company’s expansion into Europe. 




The carrier will launch three weekly flights from Jeddah to London’s Gatwick Airport on April 8, and three per week from Jeddah to Manchester Airport on May 2.



At a news conference in London on Tuesday, Sulaiman Al-Hamdan, the chief executive of Nas Holding, the company which owns the carrier, told Asharq Al-Awsat that launching new routes to destinations such as London and Manchester reflected the importance of the destinations, and was a response to the growing demand for flights to the UK to and from Saudi Arabia.



Speaking to Asharq Al-Awsat, Flynas Chief Executive Raja Azmi said: “Long-haul flights were part of our vision for the future and part of the five-year plan that started in 2009.”"



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Op-Ed on the future of Azerbaijani gas exports

Op-Ed on the future of Azerbaijani gas exports:



"Advantages and Opportunities



A positive factor regarding demand in Europe is that Turkey – the largest and most reliable buyer of Azeri gas – is almost the only European country where demand significantly increased and it accounts for 50% of incremental power generation in the continent.



The fact that Azerbaijan is Turkey' is in favor of the former in terms of partially securing sales of its oil and gas in the long-run, though with discount. However, Turkey’s launched or ‘increased’ gas imports from the KRG, said to cost three times less than Caspian gas, could also to some extent damage Turkish demand security of Azeri gas.



In general, projections saying that gas in Europe will stop lagging behind coal and oil after 2020 can also be referred to as an indirect and implicit positive factor for Caspian gas.



Another minor advantage for Azerbaijan is that several Central and Eastern European countries do not have a convenient geographic location for LNG imports, thereby constraining options pipeline imports. Despite Russian dominance in those regions, Caspian gas is not unattractive. There are still coinciding interests between the region and Azerbaijan, regardless of the TAP selection."



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Copper bottoms? - YouTube

Copper bottoms? - YouTube: ")"



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Dubai in talks over India hub at DWC, says Emirates Airline president Tim Clark | The National

Dubai in talks over India hub at DWC, says Emirates Airline president Tim Clark | The National:



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Gulf companies behind the mark for corporate responsibility reporting | The National

Gulf companies behind the mark for corporate responsibility reporting | The National:



"Not enough companies in the GCC are including corporate responsibility data in their financial reporting, lagging global best practices, warned industry experts yesterday.



“Rethinking corporate reporting will ensure that these sorts of issues do not occur,” said Imelda Dunlop, the executive director of Pearl Initiative, the not-for-profit organisation focused on raising levels of governance in the region. “Integrated reporting is not just about value creation, it is about assessment of risk as well,”



She was speaking on the sidelines of an event about corporate reporting organised between Pearl Initiative and the Acca, the global body for professional accountants."



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Chief of Saudi Arabia's Sabic urges regional innovation in petrochemicals industry | The National

Chief of Saudi Arabia's Sabic urges regional innovation in petrochemicals industry | The National:



"Gulf petrochemical makers need to step up their efforts in research and development to catch up with more established competitors, said the head of the region’s top producer.



Two threats – a shale boom in North America that has fuelled a chemicals revival and a crunch on gas resources in the Arabian Gulf – are putting pressure on regional producers, said Mohammed Al Mady, the chief executive of Saudi Basic Industries, also known as Sabic."



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Structural reforms key to GCC growth and job creation | GulfNews.com

Structural reforms key to GCC growth and job creation | GulfNews.com:



"The GCC economies need strong commitment to structural reforms to address its relatively high youth unemployment and boost efficiency in terms of national labour productivity, said Marie Owens Thomsen, Chief Economist, Crédit Agricole Private Banking, on Monday.



Fiscal and monetary policy options have been tested to their limits across the world in order to mitigate low growth, unemployment and high debt levels that resulted from the great recession. The new frontier of policy reforms lies in structural reforms according to Thomsen.



Reforms needed



Although the GCC region with its strong macro fundamentals can be said to be one of the rising stars in the globalised economy, she said these economies too require strong structural reforms to fight the entrenched youth unemployment."



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Ukraine’s Yatsenyuk Sees Commitment to Change Helping IMF Loan - Bloomberg

Ukraine’s Yatsenyuk Sees Commitment to Change Helping IMF Loan - Bloomberg:



"Ukrainian Prime Minister Arseniy Yatsenyuk sought financial aid from Western donors and promised to adopt measures needed to steady an economy beset by a plunging currency and widening budget deficits. 




“The new Ukrainian government is ready to deliver changes,” Yatsenyuk said in Washington yesterday during a visit that included a meeting with President Barack Obama and Christine Lagarde, managing director of the International Monetary Fund.



“We fully realize that the IMF program is not a sweet candy, but on the other hand, my country desperately needs real reforms to stabilize the Ukrainian economy,” he said at a forum at the Atlantic Council, a research institute."



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Saudi Allies Have Few Economic Weapons to Bring Qatar Into Line - Bloomberg

Saudi Allies Have Few Economic Weapons to Bring Qatar Into Line - Bloomberg:



"Saudi Arabia’s drive to make Qatar abandon its embrace of the Muslim Brotherhood may founder because of the limited leverage the Saudis and their allies can exercise over the world’s richest country.



Qatar traded more with Singapore in 2012 than it did with the three Gulf neighbors -- Saudi Arabia, the United Arab Emirates and Bahrain -- that withdrew their ambassadors from Doha last week to protest the Brotherhood connection. With markets for its natural gas in the U.S. and Asia, and a portfolio of overseas investments that includes stakes in Volkswagen AG (VOW) and Barclays Plc, Qatar is well placed to resist the diplomatic pressure, though it’s vulnerable if Saudi Arabia were to close its land border.



“Direct economic leverage is of little impact,” said John Sfakianakis, chief investment strategist at MASIC in Saudi Arabia, in response to e-mailed questions. “Qatar could go it alone, as long as the world is in need of gas, and as long as they don’t get all their neighbors to be their enemies.”"



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Serbia’s Vucic Promises U.A.E.’s Billions in Election Bid - Bloomberg

Serbia’s Vucic Promises U.A.E.’s Billions in Election Bid - Bloomberg:



"Aleksandar Vucic, the favorite to become Serbian prime minister after elections this month, is campaigning as the candidate who can bring home investment from the United Arab Emirates, including a $4 billion plan to redevelop Belgrade’s waterfront. 




The former nationalist, known in the 1990s for his anti-Muslim rhetoric, is stressing his ties with the Persian Gulf nation’s business and political leaders as a source of investment ahead of the March 16 ballot. Critics say there’s little information about what lies behind the deals.



The project in the Serbian capital, known as Belgrade on Water, would be the biggest development in the country’s history, capped by a tower modeled on Dubai’s Burj Khalifa skyscraper. The price tag is more than six times last year’s total foreign direct investment and 138 times the 2013 tally from the U.A.E. In addition, the 44-year-old deputy prime minister and Progressive Party leader has announced another $8 billion of U.A.E. investments and loans in the past 12 months."



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