Currency wars over Ukraine?

Well, I was hoping to write something truly interesting from the meeting between the CIS Prime Ministers that has been held over the past few days in Yalta.

Unfortunately, not much worthy of real comment has been said or done – unless you want to include the nearing ascension of Kazakhstan and then Kyrgyzstan as formal members and any effect that may have on the thinking of Ukraine.

As it stands, Ukraine is interested in a Free Trade Agreement with the CIS but no more – things can change however – and may well do so if the Eurasia Union becomes a reality in 2015, especially so if Vietnam joins as it hopes to do.  Asia-Pacific space and all that!

Anyway, just as I was giving up hope on anything overly interesting, Russia via VTB bank, suggested that Ukraine make the Ruble a tier 1 currency, and considering that 40% of trade between Ukraine and Russia takes place in Rubles, that is a fair suggestion.

For Ukraine to do so, it would make the Ruble an official reserve currency held by the National Bank of Ukraine – along with the US$, Euro and Chinese Yuan.

As I wrote last November, currently 33% of all Ukrainian/Chinese trade occurs in Yuan – and the Chinese would like that to be a much higher percentage.

It is worthy of note that Russia, via Dmitry Medvedev whilst in Yalta, seems to be singling out the Yuan for a fight with the Ruble in Ukraine.  One therefore has to suspect that this suggestion put forward (undoubtedly at the insistence of the Kremlin) by VTB has much more to do with geopolitical influence than paying for trade in domestic currency.

It can surely not have gone unnoticed by the Kremlin, the amount of Chinese money that is heading into Ukraine, be that in agriculture, R&D, space, infrastructure, consulates opening all across Ukraine, loans, mine purchases etc in the past 18 months.  (Simply put “China” in the search facility of this blog to get an overview Chinese activity in Ukraine.)

Could it be that Russia now sees a new realistic geopolitical threat when it comes to Ukraine?  Not the pull of the EU but the growing influence of China instead?  Has it eventually recongised not only the polarity of West and East that attempt to influence Ukraine, but now one that comes from the Far East – one which has been building up slowly but surely for the past few years in every major economic sector within Ukraine?

The new battleground will be the NBU?

UDAR Rally – Odessa

A very short post today relating to the UDAR/Klitschko rally in Odessa two days ago.

Quite simply a lesson for the United Opposition when it came to engagement with the crowd, which was far bigger than that which the Yatseniuk/United Opposition managed to gather (although how much of that is “hero worship” of a Ukrainian sporting icon I’m not sure), far more up-beat and inspirational that that of the Yatseniuk and United Opposition, and it even contained something close to policy.

In short, a far superior performance.

Maybe it wasn’t quite as polished and professional as Sergey Tigipko when he was here, but Tigipko is one of the very few politicians from any party who actually acts and sounds like a politician that you could transpose from Ukrainian politics into any of the EU nations political classes seamlessly – It was though, far, far better than the Yatseniuk/United Opposition performance.

It remains to be seen if such rallies actually transfer into political voting gains, but if so, PoR and UDAR will certainly dominate the Odessa political landscape and only the occasional waif and stray from the United Opposition may get their seat at the RADA trough via Odessa via proportional representation – and quite possibly face a complete wipe-out in the head to head constituency seats.

To be honest, there is a chance that UDAR could well run the United Opposition a close race in coming second if recent public performances are anything to go by.  I’m fairly sure some proportional representation votes will have moved from the United Opposition to UDAR as a result of Klitscho’s performance in Odessa, even if their candidates are weak as far as the constituency seats here go.

Nevertheless, UDAR were impressive – at least compared to the United Opposition rally – which is rather sad considering Yatseniuk used to be part of the Odessa Administration during his career and thus has a connection with the city.

That said, UDAR also has the Odessa lift of the ex-Mayor, Eduard Gurvitz on its party proportional representation ticket, who can’t help but be popular compared to the current Party of Regions Mayor.

I am starting to think that the United Opposition will be closer to the lower 150 RADA deputy number than the upper 170 RADA deputy number within the scope that I predicted some weeks ago simply due to their dreadful campaign strategy.

UDAR, on the other hand, may exceed to 40 – 50 seats I predicted if they continue to campaign as they did in Odessa for the next month.

Quite a bit still to play for too, with about 25% of the nation as yet undecided as to which way they will vote (according to most polls) and it would be a major upset for UDAR to overtake and beat the United Opposition into third place.

Should that happen though, it is no more than UDAR and the United Opposition would deserve respectively on campaign performance and strategy alone.

If nothing else, this Ukrainian election is not short of competitiveness.

Mass privatisation ahead for Ukraine?

For those of you who follow me on twitter and in particular followed a conversation between Alex Nice (@AlexNicest) and myself (@OdessaBlogger) a few days ago, then the start of this blog entry is more of a summary of what was said – but don’t simply pass – it goes on to new ground that wasn’t subject to our 148 character sentence conversation.

For those who do not know who Alex Nice is, apart from being a very nice chap, he was also very active within the Russia/Eurasia sphere at Chatham House until not that long ago.  He has since moved on to another organisation of similar ilk.  Ergo he is a pretty smart and insightful chap with lots of clever things to say.

My connection with Alex is therefore quite obvious considering I am a Chatham House member living in part of the world which was, and still is, of particular interest to him.

Anyway, rumour reached me that Yushni docks has been bid for by a company called SCM.  That company is owned by Rinat Akhmetov, Ukraine’s richest man, the money behind Party of Regions and thus the power behind the thrown.  I casually mentioned the rumour to Alex in our twitter conversation.  The bid offer, I understand, is about $600 million.

To be honest, that seems way over a reasonable price as things stand today, even when including all the infrastructure, grandfather rights and hard assets.  Particularly so when Illychovsk was on the market (in an off-market way) for $235 million only a few years ago until the owner changed his mind and decided to keep it.

Illychovsk port is 49 square kilometers, has its own rail spur, and is far busier than Yushni.  In fact Illychovsk if not the busiest commercial port in Ukraine, it is certainly up there.

The only notable thing relating to Yushni as it stands today, it that it is the deepest port in Ukraine – but that would in no way account for the large bid.

However, back in 2010, I stated that the proposed LNG terminal Ukraine was seeking would be best suited to appear at Yushni due to the land around the port available for development.  Subsequently I have been proved right and indeed it is to be the site for the new LNG terminal as confirmed this year.

Necessarily, that puts a very different light on the future worth of Yushni Port.

However, Ukraine has a very, very long list of companies and State owned assets that are deemed “strategic”.  Amnogst those thousands (and I mean thousands) of companies and assets, are almost all the docks and ports, airport runways, Naftogaz Ukraine etc.

In fact the only port I knew that wasn’t a “strategic asset” was Illychovsk, which by some mysterious dealing was allowed into private ownership a long time ago.

So, wondering how SCM was going to buy what I believe is a listed “strategic asset” and therefore prohibited from sale, I did a bit of metaphorical digging a few days ago.

What I discovered, or rather more accurately, what I was told, is that after the elections there is a draft list of over 1000 currently “strategic assets” that are listed to become privatised as drawn up by the Party of Regions.

Now for any “strategic asset” to be privatised, it necessarily needs the approval of the RADA and thus it waits until after the elections when the composition of the new RADA is known.

One can only assume that Yushni is on the said list and that is why there is a “bid” by SCM at present and not a simple purchase.  It awaits being removed from the “strategic” list.

Of course questions follow as to what else is on the list, who has already offered up a bid and at what price?

Are there already bids in for the 1000 or more “strategic assets” apparently listed to be privatised?

Despite the nefariousness and insider shenanigans that appear to be happening in preparation for this mass privitisation, importantly for Ukraine and the Ukrainian economy will be whether the loss making behemoth that is Naftogaz is on the list and whether it will be broken up and parts of it privatised as is desperately required and advocated for by the EBRD – leaving only the pipelines as a government owned “strategic asset”?

Definitely something to keep a close eye on in the very near future, as one suspects this next large round of privatisation has as much to do with filling holes in the State budget and financing election promises as it does with expanding the oligarchy asset pool.  Especially so with the current President up for reelection in 2015 and remains, at least at present, the oligarchy’s preferred arbiter.

Failing to wait for the fat lady to sing? Ukrainian elections

There have been some rather presumptuous remarks about the Ukrainian elections by people who should probably know better.

Firstly, the ICES observers have already stated that thus far, the Ukrainian election campaigns have been acceptable and generally meet the standards necessary – whilst at the same time stating those in Georgia have already failed to meet the necessary standards.

Furthermore, to state “the elections should not be declared rigged in advance, and it was incorrect to act according to the principle “if I don’t win, the elections are invalid”, would appear to be a direct metaphorical slap directed at Ms Tymoshenko who has already declared the elections “rigged” and “stolen” – albeit she no doubt is trying to mitigate the current opinion polls.  For lovers of irony, it won’t escape them that ICES was invited to monitor the Ukrainian elections by her party, and yet it is she they have taken a thinly veiled public swipe at.

With both elections still to take place, possibly a little premature to make such comments, even if they are genuinely the observations they have thus far?

Is it even ethical to make such comments as “observers” before an election has taken place?  In making statements prior to the election, is that not crossing the line of being an “observer” and in some way managing to influence or actively change an on-going process defying the broadly accepted definition of “observe”?

Then there is Pawel Zalewski MEP who also expects the EU to recognise the Ukrainian elections as “free and fair” – but goes on to say when that happens, it won’t fundamentally change the differences between Ukraine and the EU or improve the relationship.  Quite probably true – but again a little presumptuous with 5 weeks to go before the elections?

On the upside, if they are deemed “free and fair”, it will at least add international legitimacy to the next parliament and any subsequent work it does, regardless of its eventual make-up – despite the fact that neither Party of Regions nor the United Opposition have any political ideology aside that of securing power, protecting what they have “acquired” over their political and business lifetimes, and hopefully grabbing a little more from the trough if they win – and at the moment it looks as though Party of Regions will win and continue their time at the trough.

That, quite simply, is the most fundamental and the driving ideology of both major political forces in Ukraine – a fact not lost on Ukrainians nor the neighbours of Ukraine.  The arbiter/rental society system of governance is alive and well in the ideology of both major Ukrainian political parties, no matter what they may profess to the contrary.

However, it has to be said that the EU’s EaP will probably be in desperate need of somebody having “free and fair” elections if it is to retain any credibility as an effective policy at governmental level in the immediate future.  Basket-case Belarus has already held its electoral farce – and failed miserably last week as far as EU sensibilities go.  EU influence on Belarus prima facie comes to a total sum of zero when it comes to rule of law, democracy, human rights and media freedoms etc.

If what has been said by the ICES observers relating to Georgia is correct, then it too will not be seen as “free and fair” by the international community.

That leaves Ukraine, this year at least, to be the EaP nation that manages to hold “free and fair” elections.  More importantly so as nations like Azerbaijan awash with oil money can no longer be swayed by EU handouts or beaten to any degree of real hurt by EU sticks.

Solace cannot really be found in the EaP nation of Moldova given the on-going frozen conflict and the fact that, quite simply, Moldavian EU integration costs only Euro 700 per person anyway on an individual basis if you know the right people- regardless of road maps and action plans.

So the EU needs an EaP success story, whether in the sphere of rule of law, democracy, media or human rights for 2012 – and that success story, judging by the comments of Mr Zalewski MEP and the ICES observers would seem to be the deeming of the Ukrainian elections “free and fair” – something that will be emphasied out of proportion as a positive given the concerns raised over the local elections not that long ago, no doubt.

After the elections are over, it remains to be seen whether EU/Ukraine relations improve – or not.  I suspect they will get worse before they get better.  What passes through the RADA in the aftermath of the elections may not be as EU orientated as it would like.

The answer, or at least part of the answer, will no doubt come from the European Council (EU foreign ministers) meeting on 14th November.  I say part of the answer as quite clearly the EU doesn’t really have a plan for Ukraine upon which all member states agree.  A little like Turkey, Ukraine sits in a kind of twilight zone when it comes to what the EU wants to do with its neighbour.

What weight to give the on-line debate? Freedom of Speech – Freedom House “Freedom of the Net report” and Ukrainian elections

For the first time, Ukraine has been included in the Freedom House, Freedom of the Net report.  Ukraine was ranked as being “Free”.

And, well why wouldn’t it be?  No bloggers have been arrested, there is no political interference that is noticeable, and no Internet applications are blocked by the government.

Further, the Ukrainian forums are very vibrant regardless of their subject, and especially so with issues of politics and policy, be it at local or national level.

All jolly good and a credit to governments past and present in equal measure.  Credit also for the ever increasing coverage around the nation by whatever method it is achieved.  Free wifi exists at almost all reasonable restaurants and cafes, an example that establishment owners of similar premises in the UK could do with following.

So how does this “free” Internet status sit along side the “partly free” status of the media as deemed by Freedom House?

As they rightly point out, the Internet content in Ukraine is not subject to political interference.  I can read domestic and international news and views relating to Ukraine without hindrance – as can more and more people in Ukraine be it via computers or mobile telephones, the ever increasing coverage allowing.

With more and more public content, be it generated by professional journalists or one person with a laptop sat somewhere in Ukraine who sees something interesting and writes about it, or uploads footage of it, printed media, radio and television are losing an ever increasing part of the media/news market.

Not a situation peculiar to Ukraine it has to be said.

However, how do such things equate in the OSCE electoral observations?

Aside from the more traditional media, I follow numerous journalists, politicians of all colours and stripes, commentators, academics and think tanks on facebook, VK, Live Journal, LinkedIn, twitter and futubra to name but a few social networking sites I use to keep track of who is doing what, where, when, how and why.  Not to mention official websites and other virtual platforms.

And then there are the Ukrainian forums of which I am a member.

I have recently been watching much more television than normal, simply to monitor several national television stations relating to the amount of time those running in the forthcoming elections are getting.  An attempt to see if there has been equal access for all concerned – or there or there abouts.  So far, no major issues relating to time or exposure on the national channels I have chosen to monitor, but there is time for that to change of course.

The regional channels however are quite obviously skewed in favour on the United Opposition on Odessa TV for example, and Party Regions on Grad TV when it comes to time and exposure.  Art TV is skewed towards Party Rodina.   That said, across all the Odessa regional channels, whilst individual channels may be skewed, on the whole, the regional broadcasters seem to be there or there abouts when offsetting one against another.

So how does the “free” net freedom status offset the “partly free” status of the media when OSCE monitoring?  How is it weighted?  It must surely be considered and in this medium, certainly the United Opposition have no problem with access or making their case.  I follow numerous United Opposition MPs, the United Opposition facebook election page, official party websites etc and my email inbox is consistently receiving mail stating new content from the United Opposition.

In fact, to doff my cap where necessary, the United Opposition are far more competent with the Internet than the current ruling coalition.  Unfortunately much of the content they produce is about as inspiring as the Yatseniuk led rally I attended in Odessa only last week.  In short, not content likely to win an election or increase their voter turnout – which is rather sad and self-defeating when all is said and done.

Looking forwards, not only relating to Ukraine but other OSCE nations, as more and more potential voters dump the traditional media for the Internet, how easy is it to monitor “equal media access”?  How can you identify those responsible for a DDoS on a rival party website?  Would trolling and/or spamming become a form of “political interference” during any official electioneering period?  How easy it is to identify a troll rather than a genuine commentator who disagrees with the content?  At what point do you acknowledge that the Internet, rather than traditional media, has become the main source of electoral information/disinformation/propaganda?

Difficult issues to address on the horizon.

Anyway, one of the issues to monitor after the October elections when it comes to OSCE reports, will be the weight, if any, they attach to an Internet free of political interference given its ever increasing prominence in Ukraine.

Off to the UK in November

Well, your author has to visit the UK in November.  As much as I would like to avoid it, there is no avoiding it.

The upside is that after 10 days in England I will be reminded of just why I emigrated in the first place.  The downside is now looking for flights to and from Blighty and explaining to the good woman that getting the cheapest flights is not a good idea!

Do play the video – so very funny and so very true!

Criminalisation of defamation – Ukraine

Well, much has been written in the Ukrainian press, many horrified tweets from Ukrainian journalists on twitter, (at least amongst those I follow and those that follow me), and many paragraphs have been blogged about the passing at the first reading, of the law to re-criminalise defamation (libel and slander).

I briefly mentioned it a few days ago and stated I would return to the subject.  Today I do just that, despite the fact that I usually stay well clear of mainstream headline news.

Now to be quite clear, I hold the steadfast and robust belief that defamation, libel and slander are not, and never ever should be criminal offences.  However, there must be necessarily civil recourse for completely false, scurrilous, inaccurate, besmirching of the character of both individual or entity.  If not, then the responsibility inherent to having free speech naturally, and rightly, comes under attack by those wronged.

After all, it is not defamation to ridicule or shame an individual or corporation, despite using ridiculing and shaming words, if those words are based on fact, truth and evidence thereof.  Only when such ridicule and shaming is based on lies and falsehoods does defamation occur.

However, this blog entry is not about the philosophical, moral or ethical limits of free speech.  It is not about the remedies, or lack thereof, available for those who are genuinely slandered, libeled and defamed.  Neither is it about the standards, or lack thereof, of journalists and editors across Ukraine – at least directly.

Today I am going to ponder the effects that the new law, if passed, and there is no guarantee it will be, would have on this blog in particular.

Prima facie, it would have none.  I go to great lengths to insure that anything remotely defamatory in the widest sense of the word, is backed up by quotes, citations, legal judgments etc.  All basic stuff for anybody remotely academic or who has written anything remotely academic.

There are a lot of things I could blog about that I simply don’t for one reason or another.  Very occasionally I invoke the Chatham House Rule, but state as much, when using what has been said but protecting the identity of those that have made the remarks in order to have a more rounded blog entry to read.  More often than not, it is not necessary to invoke the aforementioned rule.

However, that covers what I write, and not what is written in any comments that appear.

Now I have some rules of my own when it comes to comments.  The first and most steadfast rule is that I do not allow any comments sent from a commercial/corporate email address.  Amongst the more than 20,000 comments to blog entries I have made, almost 19,000 have never been published, despite some very good and very wise observations.  In almost all cases the reason is the commentators have used corporate/commercial email addresses – and I will not allow this blog to be used for free/second tier advertising.

I am far more likely to allow ping-backs from corporate bodies, and indeed have done so for many on-line regional newspapers and civil society organisations.  In short, they can quote me, they may even syndicate me, but all such things lead back to this blog when they do so.

So far so good in respect of the proposed new law with regards to what I write and the majority of comments.  However, there is then the issue of the comments from the private email addresses which I would consider publishing as they are not trying to get free advertising by the back door.  A lot of those have also never been published because they are either trolls, are spam, or are quite obviously defamatory and deliberately written to be so.

I am too old to entertain idiots and there really is no need to write like an idiot to make an argument for or against an issue.  It is at my discretion which comments are published and which are not.  Thus anybody who wants to comment here has their freedom of speech subjected to my whim – and that may well be an issue for me under any new proposals – because I have control not only over what I write, but also the comments I allow to be published.

Having read the new proposals, it remains unclear whether I will be responsible for any comments published that are not written by me.  They are, after all, published only by my allowing them to be, and hence the rather high bar I already have in place for comments – with or without any proposed changes to defamation legislation.

Quite obviously, I believe I do have a responsibility over what appears here, even in the comments section, or I would not act as I do.  Others entities though, may think differently when it comes to their comments section, and if that is their policy who am I to argue?

Quite how I would be held to account is another matter.  I write under a pseudonym/nom de plume and always have, and the blog is hosted in the USA.  To hide my IP is not a difficult thing to do, despite the fact I currently do not.  The few thousand readers I have are not really enough to concern anybody in the grand scheme of things either.  Thus to trace me, prosecute me etc, would be more trouble than it is worth should I suddenly become less considered in what I write or allow to be published by way of comments.  In fact any attempt to do so may well increase rather than decrease the profile of this blog.

Neither would the new law necessarily prevent any libelous tweets, facebook or VK entries, again all of which were created under my pseudonym/nom de plume and are all hosted outside of Ukraine.  I could also write libelous and defamatory material on any number of Ukrainian forums of which I am a member and thus, possibly, give the administrators and moderators a dilemma.

To repeat, my view is that defamation, libel and slander should never be a criminal offence.  However, if what is stated for public consumption has supporting evidence, it should not matter whether the course of redress is civil or criminal.  The writer, editor and publisher would be sure of their ground anyway.

I hope that Ukraine will not revert to 2001 when defamation was a criminal offence, but it has to be said that I also have a hope that the standard of reporting also increases where appropriate, as some of it is still rather poor on occasion.  As I have previously written here, to ridicule, shame, and be contemptuous towards another individual or entity is simply not defamation if there is evidence, facts and truths to back up the specifics of what is written.

In the meantime, whatever happens, any comments that may appear here, or not, are still subject to my whim!

A taste of Azerbaijan – Apsheron Restaurant, Odessa

As summer began in Odessa, not that far from me, a restaurant called Apsheron opened at Fontanskaya Doroga 20/3.  It is owned and run by a good citizen of Azerbaijan.

As is always the case with Odessa in summer, all restaurants are busy, and Apsheron was packed to the rafters from the moment of opening.  As such this is no inferred recommendation and the really good restaurants are those that are busy all year round.

Thus, despite passing it at least twice daily, only yesterday, on an overcast Saturday afternoon did I venture in.

At 3pm on a dull Saturday afternoon there were about 30 people inside the restaurant and about 20 sat outside on the patio.  I was quite surprised considering this restaurant, despite being on a busy street and situated in a fairly affluent area, is a long way from the city centre.

A closer look at the clientèle displayed what appeared to be a 50/50 mix of Slavs and those from the Stans/Jans.  Always encouraging when there are a decent amount of those ethnically able to tell good from bad when it comes to their national cuisine, sat eating.

I have to say the food was as good as any served in Baku, even at the most fancy and expensive restaurants there.

To say it was good would be an understatement.  It was somewhere between great and sublime.

The menu is in Russian but in small brown writing underneath each dish, it is also in English, though you may well miss that such is the bold Cyrillic Russian text.

For those who live in, or spend a lot of time in Odessa, discount cards are available for those who spend UAH 5000.  Before you fall from your chair and say “UAH 5000!!!” – You can simply keep the receipts until they cumulatively reach that figure.  Admittedly that may take you some time, as my total bill for 2 courses and coffee came to UAH 201.  Indeed I have a way to go to eat my way to a discount card it has to be said.

Anyway, for those ever passing along Fontanskaya Doroga, I absolutely and unequivocally recommend Aspheron if you are feeling a little hungry.

That is especially so if you are heading to visit me – as it means I won’t have to cook.  In fact, if you are coming to see me, then come here first and we will head back to Aspheron – where I will keep the receipt to add to my collection in an attempt to reach the UAH 5000 mark and get my discount card!