Archive for the ‘Tourism’ Category

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The imminent changes at the top occurred – Now what?

August 29, 2016

A few days ago an entry appeared forewarning of changes at the top within the Ukrainian political and civil service elite – forecasting that Boris Lozhkin would move on from Head of the Presidential Administration (as he has been trying to do for some time, wanting to return to the business world) and that in all probability Igor Rainin would cease to act as Head of Kharkiv Regional Administration and replace Mr Lozhkin (due to Mr Rainin being the least controversial choice for those that will be remaining within the Presidential Administration – and also the easiest to replace holding an Oblast level position).

It went on further to suggest Mr Lozhkin would not be completely released from the Presidential grasp/circle but could very well be appointed head of the newly invigorated National Investment Council.

Lo, all such predictions came to pass on 29th August – with the minor deviation of Mr Lozhkin assuming the position of Secretary to the National Investment Council.  (Nevertheless, hopefully most readers would agree the predictions made were close enough for a free to read blog.)

Mr Rainin will be a competent, adequately discreet (and fairly discrete) safe pair of hands as Head of the Presidential Administration.  Shocks to the system he will not cause.

Mr Lozhkin thereby leaves the Civil Service (prior to e-declarations going live with effect from 1st September) yet remains within the Presidential grasp and therefore presidential team no matter how indirectly it may appear.  Regardless of title and position, his unofficial “shadow rank” within the elite of the Ukrainian elite firmly keeps him within the inner sanctum of trusted Presidential advisers with easy access to the body (President).

He is now therefore free to return to the business world without annoying e-declarations and other such bureaucratic requirements, whilst also promoting (and to be blunt he will be driving) the National Investment Council.

Presumably the existing Investment Support Office will be rapidly (although probably not officially) subordinated to the NIC – and by extension to Mr Lozhkin.  Reading between the lines of Prime Minister Groysman’s statement regarding Mr Lozhkin’s new position such inference can certainly be drawn.

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A reader may ponder who Mr Lozhkin will attract to the newly invigorated National Investment Council as he is very well though of internally and externally of Ukraine – and it was he that invited and convinced the foreigners that formed part of the Yatseniuk Cabinet.  Ergo it would be no surprise to see some very competent people appear as leading lights within the NIC.

Clearly with Ukrainian GDP growing at about 1.5% per annum that is not enough to provide a “feel good” factor among the electorate to return President Poroshenko (and parliamentary team) to power when elections arrive.  Annual growth of approximately 5% however could well (and probably would) do so as long as elections can be kept to their projected timelines per statute and not forced to arrive early.

Although it may be wishful thinking, 2.5 years with GDP growth of 5% (or more) consecutively wins a lot of votes – especially in mercantile cities like Odessa.

Mr Lozhkin will therefore be faced with the same existing statute that prevents significant FDI that has frustrated Governor Saakashvili, whose long list of legislation that requires repealing and/or amending has seen no traction within the Verkhovna Rada.

It seems unlikely that Mr Lozhkin will succeed without forcing some (if not the majority) of the very same statutory and de-regulatory issues already raised and submitted to the Verkhovna Rada by the Odessa Governor.  The question therefore is whether Mr Lozhkin can gather Verkhovna Rada momentum swiftly in order to give himself a chance of changing the economic fortunes in time to support the president by the time elections come around?

Further where is FDI going to be most effective when it comes to national development (and no doubt also in his mind, winning the Poroshenko political entities votes)?

The days of mining and metals as economy leaders, and with both being major employers (and exporters) are on the wain.  Road and rail infrastructure projects, of which there are innumerable, are potentially significant employers.

The necessity to bring the Ukrainian Military Industrial Complex to the modern day also presents significant opportunity.

The IT industry which suffers no oligarchy market capture, and boasts a significantly high proportion of globally recognised qualified people, simply has to be left to do its innovative thing – with support where necessary/possible, but otherwise unobstructed or interfered with.

Agriculture is and will remain a major economic driver (and should any reader have $150 million(ish) for investment in a 230 hectare, high tech farming corporation – this blog is aware of one discreetly for sale “off market”).  Thus the agro-industrial complex will have to be a top priority for FDI if the sector is to become more efficient.

The Ukrainian aerospace industry appears to be doing fairly well, but can do much better with some smart investment and a “harder” sales initiative.

The continuing clean-up of the banking sector by the NBU presents an ever-improving market place for entry (and if a reader has $40 million(ish) the blog is aware of a particularly healthy bank for sale “off market”).

There is of course the impoverished yet potentially massive tourism industry (perhaps with the “added incentive” of legalised gambling returning one day).  The blog is aware of numerous experienced international gambling entities waiting to enter Ukraine – Turkey, Israel, Georgia etc have all contacted the blog regarding legislative updates and visited potential locations for casinos in the past 9 months.  FDI money for this there is – legislation prevents.  (Should a reader have $12 million(ish) the blog is aware of a small gated and profitable beach front resort for sale “off market”).

There is also the expansion of the existing pharmaceutical and chemical industry that should not be overlooked – neither should energy extraction/production/infrastructure.

(Getting out of the way of SME’s wherever possible will also bring about swift local economy benefits, but clearly this falls outside of the competence of a National Investment Council charged with finding and protecting big money investment.)

Thus it is not only going to be a question of how many $ billions Mr Lozhkin can attract (and protect) by way of FDI (and in what time scale), but also what areas are deemed a governmental priority and his ability to nudge investors that way.  Investors can be strange creatures and want to invest in areas that are not governmental priorities – unsurprisingly.  Some have no interest in PPP, others only in PPP.  Some are quite rigid in their internal governance and expectations, EBRD etc., where as others, for example “Investment Fund X”, may be far more flexible.

Having now written all this, a reader may perhaps ponder just how much time Mr Lozhkin will have to return to his own businesses, and the business world – which was the reason for his wanting to leave the Presidential Administration in the first place.

(As an aside – Teasers for the “off market” assets mentioned (and others) are available for investors subject to the usual NDA/contractual requirements.)

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If music be the food of love – play on!

August 28, 2016

The Bard knew a thing or two about humanity and life’s bemusement and intrigues – as all great writers do, for an acute sense of observation is somewhat key to prose able to retain interest (and with great prose distinctly lacking, it is why this blog will never have readers counted in millions).

Act 1 Scene 1, The Twelfth Night :  (The Duke) “If music be the food of love, play on.  (Give me excess of it; that surfeiting, the appetite may sicken, and so die.”)

The issue of Eurovision 2017 and which city will host it remains unresolved, despite a promised announcement on 1st August.  Then another canceled announcement on 24th August.  Time ticks away – and with it preparatory time for whichever city will eventually be announced as host.

That announcements continue to be postponed is not entirely unsurprising when the cynical gene within a reader is well aware that nefarious local governance in Kyiv, Dnipro and Odessa all to eagerly awaits the €15 million that will be allocated to insure the host city does Ukraine proud.  Continued delays in an announcement simply provides the cynical with the impression that horse trading and dirty deeds are occurring behind the political curtain.

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Odessa has a strong case being a cultural and tourist centre already.  It also was a city that was not chosen to host the Euro 2012 football championships unlike Dnipro and Kyiv.  Further Kyiv hosts international ice hockey championships at the same time as Eurovision.  The usually fractious, indeed internally hostile (as outlined in a recent entry about tourism policy – or the lack of it due to the dysfunctional governance) leadership of Odessa feels Ukraine owes it to the city.

Yet it is perhaps the openly fractious and extremely hostile relationships between Mayor and Governor, City and Oblast administrations that is the major reason to doubt the awarding of Eurovision to Odessa.  Indeed in another recent entry outlining the many woes of Mayor Trukhanov (and questioning his grip on City Hall), Odessa landing Eurovision may very well take pressure off, rather than place pressure upon the Mayor – “All of that said, there simply doesn’t “feel” to be any real desire to remove Mayor Trukhanov – yet.  Undoubtedly if Odessa is chosen to host Eurovision, then there will be no desire to do so until after the event anyway whilst the Ukrainian elite put on, and intensely buff, a veneer of respectability to the world peering in.  The ugliness and nefariousness of removing Mayor Trukhanov prior to that event if held in Odessa would be simply unthinkable.”

In short, if Odessa is chosen Mayor Trukhanov will undoubtedly remain unchallenged until after the event in May 2017 – to remove him before would be unthinkable.  Likewise the blatant political maneuvering by the parliamentarians of Odessa to remove Governor Saakashvili would be equally unthinkable.

Considering the outright animosity between Governor and Mayor and their respective administrations, the 28th August witnessed an exceptionally rare sight.  Extraordinary in fact.

The Governor and Mayor called a joint press conference promoting Odessa as the host city of choice for Eurovision 2017 and putting on something approaching political unity over the issue.

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It is a significant effort on their part to stand shoulder to shoulder and share the same press conference.  The last time they shared a press conference and stood shoulder to shoulder was on the 30th June 2015 – some 14 months ago.

Naturally since that time they have attended numerous functions as guests – for example at the recent film festival both were present – and sat 6 seats apart.  At a US Sea Breeze event aboard ship, when both attended, one more or less stood at the stern whilst the other at the bow.  The distance between them at all such functions about as far as possible, with ne’er a word spoken between them – the blog knows as the blog receives invitations to these events too and is acquainted with both men.

Official joint press events however, are as rare as rocking horse shit – thus this is a noteworthy event.

Ergo, this joint press conference, standing shoulder to shoulder to champion Odessa is a significant effort on their part to display to the leadership in Kyiv that they are willing to put Odessa first when it comes to hosting Eurovision.

If so there are potentially benefits for all – especially Kyiv, in granting hosting right to Odessa.

For Kyiv, something of a truce between them, no matter how temporary that armistice, would be something of a good result.  With no obvious alternatives to Mayor Trukhanov (without jailing him and keeping him out of any electoral race) there appears little option but to leave him in post – for now.  If Governor Saakashvili is also preoccupied with Eurovision, he may become just busy enough to relieve some pressure upon the current Cabinet through his persistent calls for early Verkhovna Rada elections, and also his consistent calls to throw Mayor Trukhanov out of office.

Also for Kyiv, the political efforts of the parliamentarians of Odessa to oust the Governor would also have to be put on ice.

For Odessa, even limited communication and cooperation between Oblast and City administrations would be a change from the current unhelpful situation – and may lead to cooperation in certain other areas too – at least until Eurovision 2017 concludes.   A window of opportunity, (albeit certainly a limited window until mid-May 2017 when open warfare would resume), with regard to cooperation between City and Oblast administrations presents itself, and despite their serious differences and barbed commentary about each other, both men in their own way would wish to put the best possible shine upon both a city and oblast they actually do care about (in their own ways).

The Bard will probably be proven astute once more, for if Odessa is successful, from the announcement until the Eurovision finale, “If music be the food of love, play on.” 

Thereafter however a return to the current political situation seems assured “Give me excess of it; that surfeiting, the appetite may sicken, and so die.”

T’will be interesting to see, should no announcement be forthcoming by 2nd September and the City’s birthday, whether both Governor and Mayor will appear together once again that day to insure the message to Kyiv is understood.

(Then again, it is perhaps at Kyiv’s orchestration that both men appeared together in a show of unity prior to any announcements.)

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A Eurovision test (of sorts) – Ukraine

June 7, 2016

When Ukraine emerged as the winner of the 2016 Eurovision contest, and thus became the host (and de facto loser of Eurovision 2017 – for nobody wins twice in a row), Kyiv was one of the first cities to offer to act as host city (together with Lviv and Odessa as serious alternatives).

Eurovision is known for many things – unofficially political and predictable voting, expectantly awful “music”, (for the most part – exceptions such as ABBA’s Waterloo for example), huge TV audiences that seem addicted to the often excruciating spectacle, and thousands (more often than not in the tens of thousands) of dedicated attendees  who are, energetic, vibrant, colourful, socially liberal, and with a very heavy dash of “camp” – to a degree that the socially conservative, the orthodoxy, the intolerant and the under-educated all find either disturbing, unnatural, and/or un-Godly (etc).

A reader may well question why Kyiv has offered to host such a competition with such a well known socially liberal fan-base, when the Kyiv City Council no sooner than offering to act as host city, then tries to ban the annual Equality March (LGBT parade) that are scheduled for 12th June via the local courts.

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It is rather questionable as to whether offering to host the most “camp” annual European competition, whilst simultaneously attempting to ban a domestic “camp” march, is in anyway consistent with the minority issues generally recognised with both events – specifically the rights of the LGBT community.

What message does that attempt at banning the Equality March send to Eurovision organisers and attendees regarding the suitability of Kyiv as a host city when considering the “socially liberal” undercurrent of Eurovision?

It seems however, both the Ministry of Interior and the National Police are of the opinion that the Equality March will definitely go ahead – before the court has made any decision/ruling over the Kyiv City Council attempt to ban it.

To be so certain of the judicial outcome allowing to march to occur (and charitably allowing for an independent judicial outcome), presumably Kyiv City Council attempted to ban the Equality March on the grounds of being unable to guarantee (as far as guarantees go) the safety of the participants, the police, or bystanders/the general public, thus with the Ministry of Interior and National Police stating that 5000 police officers will robustly enforce the law during the march, those grounds are seemingly null and void.

Indeed, 5000 police officers dealing policing the Equity March may well mean more police than marchers at the event.

If so, then so be it, for there is a requirement for Ukraine to project two important signals to the Eurovision fans and Eurovision bureaucrats.  The first is that the LGBT community do have their rights protected by the State (at least during official events).  The second is that the Ukrainian State can deal with any aggression toward such minority groups (at least during official events).

For the Ministry of Interior, and National Police in particular, the Equality March may yet become something of a dress rehearsal  for Eurovision.

Indeed there is something of an argument to treat the Equality March as exactly that (as far as is practicable) – not only as far as the march itself is concerned, but also regarding the safety of those involved both prior to, and after it occurs – for when Eurovision “camps-up” whichever Ukrainian city plays host, it doesn’t “camp it up” for a few hours, nor even one night.  The host Ukrainian city will be “camp” and “socially liberal” for a week or more.  The Ukrainian State and the host city will have to pay far more attention, for far longer, with maximum tolerance and unerring policing city-wide toward perhaps tens of thousands of people that generally are otherwise left to fend for themselves.

As such a reader may benefit from keeping a watchful eye not only upon events at the Equity March itself, but also any incidents that occur on buses, the metro, in bars or restaurants etc., prior to, or post, 5000 police officers (probably) keeping a lid on the march itself (and those that would offer violence during it).  If the Ukrainian State fails city-wide in Kyiv on a single day – how well will it cope for a week or more?

A policing learning curve presents, and a thorough debriefing post 12th June will undoubtedly offer many lessons for Eurovision 2017 if the policing is tactically set as a full practice run city-wide.  It will not be enough to have the parade occur without serious incident, but to then have marchers attacked far from the event location when it’s over, or before it even begins.

 

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Hiding your philharmonic under a bushel – Ukrainian Culture Policy

April 13, 2016

In the next 24 hours or so, the never-ending shuffling behind the Ukrainian political curtain will announce a new Prime Minister, Cabinet of Ministers and (wafer thin) majority coalition.

Following the unveiling, it will not come as any surprise, should Vyacheslav Kyrylenko be removed from his office as Minsiter of Culture, being replaced by somebody like Evgene Nyschuk.

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Indeed those within the Ukrainian cultural sphere subjected to the whims of Mr Kyrylenko will undoubtedly raise a glass (or two) at his departure – particularly those State financed entities that saw budgets cut by 10% for reasons unknown and unexplained.  There is surely no public record of such cuts being a Cabinet of Ministers decision, nor subject to Verkhovna Rada debate.  The cuts therefore, prima facie, the arbitrary decision of the Ministry of Culture for reasons undisclosed.

A reader may therefore ponder, as no doubt many State financed cultural entities do, what happened to that 10% of their budget?

Not even so much as “there’s a war on” was offered as a reason, despite many an inquiry.  There was simply no response, not to those within the world of Ukrainian culture, nor to parliamentarians such as Alexie Goncharenko that wrote officially asking on behalf of the Ukrainian cultural world.  The State budget for  culture is not enormous, but it is not so small that the apparent disappearance of 10% of funding to State financed cultural entities is an insignificant sum either.

It is actually quite difficult to find a State policy for culture.

One exists on paper undoubtedly, but where it manifests elsewhere is actually very difficult to define.  Quite what the policy is actually meant to achieve, how those achievements are measured, and over what time frame, is something of an enigma.

Indeed over the past 25 years, the only real noticeable change in cultural policy came under former President Yushenko, when culture became “folksy”.  There is nothing wrong with that, for it was at least a policy, but as much as the vyshyvanka is a beautiful garment, and valenki keep your feet warm, there is much more to culture and cultural reach than that – particularly if culture is to be used to both inwardly promote nationhood, and simultaneously externally to promote the nation.

In short, it is a cultural policy mistake to hide something like a world class philharmonic orchestra under a bushel (to tease the English idiom), or under-promote artists of truly world class acclaim.

Morris dancing is very quaint, of particular cultural heritage, seen as a little eccentric perhaps, and certainly reaches those that pass by, but does little to promote the national culture outside the local village green, summer fete (or Supermarket car park).  Other cultural events however have a far greater promotional impact both domestically and internationally – so much so fields fill with people to participate in all weathers.

And when it is done well, audience participation and fun with culture occurs – and more to the point it is forever remembered!

How many cellos does it take to sell out a stadium?  2 (if they are performing AC/DC it seems).

Now there is nothing wrong with the Morris dancers above, a part of cultural heritage undoubtedly, but a world class cultural entity (indeed institution) attracts not only world class performers, but a worldwide participation in a nation’s culture.  There is both domestic pride and international PR.

Indeed the little event above in Odessa has not been forgotten, and is actually to be shown at a cultural festival in France this summer as part of a large cultural event – not that the Ukrainian political class will know, nor that the Ukrainian Ambassador to France will attend (without prompting) and not that the Odessa Philharmonic that created this little gem will be attending to play it “live”.

More of live performance issues a few paragraphs from now, suffice to say the Odessa Philharmonic has played the USA, UK, Israel, Hungary, Australia, Spain, Austria and many more.  It would still be doing so now if there were the funds to actually send it and allow it to promote Odessa and Ukraine.

Before leaving the classical music giddy heights of the UK Proms, the Odessa Philharmonic has twice been encouraged to play at The Proms and has not done so because the airfare for 100 people (it is a full philharmonic) and the shipping of 30 cubic meters of instruments could not – or more precisely would not – be funded by Ukraine, or any exceptionally wealthy Ukrainians wishing to try and cleanse their otherwise grubby public personas.

(A reader may find it somewhat unbelievable that Ukraine cannot find $100,000(ish) to project itself at a global cultural pinnacle through what the UK Proms people clearly believe to be a philharmonic orchestra worthy of gracing its stage – especially so when that amount of money is stolen from the budget every other day.  No doubt such invitations will continue – as will the budgetary theft preventing the national promotion at the highest levels.)

Whatever the case, a reader might reasonably expect the promotion of an internationally acknowledged (if entirely domestically dismissed) cultural gem, especially when fighting a war on many fronts with The Kremlin – a war that includes culture.

Instead, in the case of the Odessa Philharmonic, aside from slashed State funding,  it relies on donations and the occasional philanthropic donation (which unsurprisingly is not tax deductible in Ukraine) to put on an annual “Black Sea Music Fest” for the local constituency and tourists present at the time.

A reader may ponder rightly, if such philanthropy is not tax deductible for the Ukrainian oligarchy and odiously/stupidly wealthy, what the motivation for any support actually is.

Kyiv, Lviv, Dnepropetrovsk have similar issues, but Odessa takes centre stage in this entry because it is the home of this blog and thus it knows the “what”, “why” and “wherefores” more intimately.

Perhaps what also makes the Odessa Philharmonic unique is that for as long as this blog has been running (and prior) it shares the Odessa Philharmonic Hall with an entirely illegal casino, remains partially refurbished (having had $50 million stolen from the refurbishment budget some years ago), and was given a gratis refurbishment programme by Russell Johnson, a world famous acoustics expert that described the Odessa Philharmonic Hall as a top class performing venue – notwithstanding it is is conducted by Hobart Earle, a People’s Artist of Ukraine, who as the name suggests is not a Ukrainian.

(There have naturally been numerous promises to complete the refurbishment, the last made by Igor Palitsa when he was Governor, but when a politician’s lips are moving, more often than not the truth is not forthcoming.)

In summer a reader may per chance be walking past the Philharmonic Hall when windows are open (as this blog does), and overhear the Hall Director complain that the Odessa Philharmonic rehearsing from 1000 – 1300 daily means it cannot be hired out to others for money during that time.  It must be quite a bore to run a State funded philharmonic hall, and have a State funded philharmonic orchestra want to rehearse there daily preventing external monetary flows for 3 hours a day.

Needless to say, with such a large amount of refurbishment funds stolen, the refurbishment is half completed – and has remained that way for years, to the point where the refurbishment now requires refurbishment..

Yet it is not only Ukraine that fails to promote its living and breathing international class cultural entities – neither Odessa Oblast nor Odessa City do so either.  It is an issue not unique to Odessa, an example from Dnepropetrovsk a little later.

Indeed, so shocking is the failure to promote the cultural gems within Odessa, it took this blog to get two old friends to do the simplest of things – because the idea had never occurred to them before.

A simple case of asking a regular dining chum Konstantin Rzhepishevsky, Head of the Odessa Ministry of Foreign Affairs to provide as gifts a DVD of the Odessa Philharmonic Orchestra to the regular visiting dignitaries, and almost 30 resident consulates on the one hand, and asking a far more irregular dining chum, Hobart Earle, the Conductor of the Odessa Philharmonic to give this blog a few dozen copies of the DVD to MFA Odessa to hand out.

These gifts after all, fall far below the financial threshold of refusing or handing over to others per diplomatic guidelines, yet promote the city and the Philharmonic.  Such gifts are very likely to stay with those that received them for many years.

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Before readers email asking to be sent copies of the DVDs, cheap as they are to produce, the shipping cost anywhere outside of Ukraine is entirely prohibitive – although for those in Odessa, for a donation to the Odessa Philharmonic NFP fund, undoubtedly copies can reach you.

For any of those external of Ukraine seeking to support the Odessa Philharmonic, undoubtedly they would receive any and all donations humbly and with sincere gratitude.  The NFP charitable account details as follows:

Beneficiary: Charitable Fund “Muzikant”
Account: 260073221236
Bank: Bank Pivdenny 
Odessa, Ukraine
SWIFT Code: PIVDUA22

Correspondent Bank: The Bank of New York
New York, NY
SWIFT Code: IRVTUS3N
Correspondent account: 890-0319-313

Thus, the MFA Odessa now does its bit to promote Odessa and the cultural icon that is the Philharmonic.  There are naturally other local cultural gems that should also be promoted that won’t be – albeit they are perhaps not as easy to hire, or sell out a concert hall, perform an entirely Polish repertoire in Poland or entirely Jewish repertoire in Israel.

Nothing however comes from the Odessa Oblast Administration, nor from Odessa City Hall when it comes to promoting a cultural asset that can hold its own across Europe and beyond – and a reader has to ask why that is?  They too can have a bag full of DVDs to hand out to visiting dignitaries.  They can have a list of hiring rates too, lest a nation wants to employ the philharmonic when holding the “Day’s off…….” cultural promotions in Odessa.

Just because Ukraine seems to have no identifiable cultural policy or national projection goals through the use of its quality cultural assets, that does not mean Odessa Oblast nor the City is excused from using its finest cultural assets from promoting itself.  It is something that is surely not dependent upon “decentralisation” legislation, but is entirely dependent upon realising the quality PR that is available from the assets held – even if the decision makers are little more than philistines and cultural Luddites.

In sum, there is an internationally recognised, domestically ignored, poorly accommodated, underfunded cultural gem that is not being used to promote the nation or the city to its full ability – which raises questions over cultural policy – local, regional, national and international.

Having previously mentioned Dnepropetrovsk, and for the sake of “theme” sticking to music rather than the other cultural arts, it too suffers from a Philharmonic Hall that requires refurbishment and would otherwise be a very good concert hall.  Despite having more than a few oligarchs hailing from the city, no refurbishment is on the horizon.

Yet Dnepropetrovsk, with a refurbished hall, would draw international artists and international attention if it were to rename it after what is surely its most famous classical music son.  Famous that is worldwide – but not in Dnepropetrovsk.

One of the greatest cellists ever to draw a bow, an internationally renowned son of Dnepropetrovsk, is (or rather was)  Gregor Piatigorsky.  Simply by refurbishing the hall and renaming it after Piatigorsky would bring it to global cultural attention and have a queue of acclaimed cellists wanting to play there by way of intellectual/musical homage.  International PR for Dnepropetrovsk awaits – and will probably continue to wait in the absence of meaningful cultural policy when it comes to international projection.

In the meantime, without an external cultural projection policy that maximises what the nation has that can stand shoulder to shoulder on a global stage, presumably Ukraine will be left to hoping that derivatives of the vyshyvanka remain fashionable in the shops of Europe, that Borscht recipe variations dominate in a niche market in cyberspace, and Ukrainian sportsmen and women continue to do well and Eurovision retains its excruciating but addictive nature.

Such hope is neither policy nor strategy.

(For those seeking a far more cultured peak behind the curtain at the Odessa Philharmonic, there is a piece in the Odessa Review – this blog doesn’t “do” culture as must be obvious! )

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Saakashvili calls out Kivalov for election manipulation (already)

September 10, 2015

Since the arrival of Governor Saakashvili, one of those ever-present questions that eddies beneath the apparent still waters of politics in Odessa was who, between the nefarious Mayor Trukhanov and the odious MP and Rector of Odessa Law Acadamy Sergei Kivalov, Governor Saakashvili would take on head to head.  (Though head to head is not necessarily the best way to deal with either.)

To be frank, with Mayor Trukhanov being about twice as popular as Governor Saakashvili, and MP Kivalov being far less popular than either of them, the dice were probably cast in advance.  That being particularly so as Mayor Trukhanov is at the very least prepared to be seen to go with the current political flow and be seen to be “on-side” (if not exactly trying to go on the straight and narrow, nor believing in the current political flow either).

So, if there is to be a head to head between the Governor and an infamous and entrenched political character from Odessa, Sergei Kivalov it will have to be (no others have the national recognition) – and as Mr Kivalov is known for his extremely nefarious hand in the election fraud that launched the Orange Revolution (amongst several other odious acts on a national scale) and locally for his grip on the judicial system, a better local opponent there probably could not be.

Certainly taking on both Mayor Trukhanov and Sergei Kivalov simultaneously would probably be too much of a task – but then taking on Sergei Kivalov who enjoys MPs immunity (and impunity) and who also has a strong influence over the local judicial system will not be easy either.

Thus choosing battles with Mr Kivalov wisely matters.  Indeed even shots across the bows need be well aimed.

Sergei Kivalov is the leader of a local Odessa political party called Morskaya.  His aim is to gain 10% in the city council elections – though that seems somewhat hopeful.  5 – 7% would be more realistic.  Nevertheless he will get his people into City Hall where they will do their very best to sabotage issues that would harm Mr Kivalov’s interests, chair a committee or two that progress his interests, and generally otherwise act as spies/informants to Mr Kivalov on daily City Hall matters, conspiracies and rumours.

Mr Kivalov will not make any headway in the Oblast Rada, but then he has no need to.  Almost all of his interests sit within Primorsky Rayon which falls within the City limits of Odessa and under the immediate custody of the Mayor – whom he knows well and has known for a long time.

However, not all of Mr Kivalov’s interests are within the city limits, but those interests elsewhere in the Oblast do not require Oblast Rada representation to protect them.  Targeting specific Village, or Town Councils will be enough to get the local decisions to go his way.

It is here that Governor Saakashvili has fired his first public shot directly and unmistakably across the Sergei Kivalov bow.

About one hours drive from the city of Odessa is a small town called Zatoka that runs along the beaches of Black Sea.  It is a Soviet era holiday resort, complete with (concentration) camps for children and numerous (now abandoned) hotels within a Soviet-looking Butlins holiday perimeter of large proportions.  (Indeed if film makers are looking for a Chernobyl (by the sea) looking deserted town minus the radiation, Zatoka fits the bill perfectly.)

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It is also Datcha-ville.

There are thousands of datchas in and around Zatoka, and the population of a few hundred most of the year, during the summer months grows to thousands and thousands.  As such land by the sea, or very close to the sea, is unbelievably expensive for a place that would otherwise qualify as a boil on the arse of Odessa.

It is here, Governor Saakashvili claims, Sergei Kivalov is already manipulating the local elections set to take place on 25th October.

With only a small number of permanently, and more importantly registered voters in Zakota, to sway the outcome of the Village Council vote by a sudden influx of registered voters is perhaps not so very difficult for a man that falsified the election results that led to the Orange Revolution in 2004/5.  This particularly so when there is a university full of voting age students who cannot really afford to upset the Rector lest their results become inexplicably poor regardless of the quality of their work.

According to the Governor, Mr Kivalov has been actively registering his students in Zakota, all of whom would naturally vote for Kivalov backed candidates, with the intention of inserting his people into the Village Council.  Once this is accomplished, prime land sales to Mr Kivalov, apparently at favourable prices, is the aim of this alleged grubby little plan.  The Governor further stating it was a classic example of election manipulation – which if true, it is at the very least a preparatory act.

The question is whether anything can or will be done about it.  Perhaps yet hundreds more students from the Odessa Law Academy will continue to be registered as voters in Zakota, or perhaps those registered will be subject to investigation following the Governor’s claims.

If there is any substance to the Governor’s claims, how to tie (more than circumstantially) the alleged events into anything substantial?  Certainly no “conspiracy” will stand up within a local court system heavily influenced by Mr Kivalov – who has MP’s immunity (and uses it with impunity) anyway.

The Rada were already due to consider stripping his immunity once, but the matter, for reasons unknown, slipped from the agenda on the day Sergei Klyuiev lost his.  Perhaps because Mr Kivalov generally, in fact almost always, votes in line with the coalition majority since it came to power – and individual votes will matter with several constitution changing issues before the Rada this session, and 300 plus votes being beyond the majority coalition alone.

So with the Governor having already alleged election manipulation some 46 days before voting day, what is going to be done about it – either proactively or reactively, and by whom?  Is it an act more than merely preparatory to the commission of an offence – or not?

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The ghosts of public rants past – Saakashvili and Odessa Airport

September 3, 2015

On 26th June, during a deliberately very public rant and accusations of protecting “oligarch interests” – in the case the interests of Ihor Kolomoisky – Governor Saakashvili tried to remove Chairman of the State Aviation Service of Ukraine, Denis Antoniuk, from the Odessa administrative scenery.

In short Governor Saakashvili accused Mr Antoniuk of deliberately monopolising the distribution of air routes for Mr Kolomoisky’s aviation company.

The public message, of course, was the new brush will sweep clean.

To be fair to Governor Saakashvili, Mr Antoniuk prima facie has always been seen to be a “Kolomoisky man” having worked for many years for the aviation company Mr Kolomoisky owns, and Odessa Airport being almost (but not entirely) serviced by that same aviation company both for domestic and international flights – with historical pricing being far beyond “reasonable”.

Following the much publicised rant, Mr Antoniuk was duly suspended from office on 1st July by Decree of the Cabinet of Ministers of Ukraine of 1.07.2015 №658-P whilst an official investigation was launched.

Mr Antoniuk took to social media and legal redress over damages to his reputation (which to be blunt is not particularly held in high esteem anyway).  Damages to be claimed cited at approximately $100,000.

As of a few days ago, 31st August to be exact, Mr Antoniuk has resumed his duties as Chairman of the State Aviation Service of Ukraine.

Oh dear!  It seems the Governor’s brush has not exactly swept clean.

Further, as of yet, there does not appear to be many, if any, new operators in and out of Odessa Airport either.  However, whilst the “scandal” was headline news, Mr Kolomoisky’s aviation company did indeed lower some ticket prices, although it claimed the high prices was due to the high price of aviation fuel at Odessa airport.

Odessa APT

Mayor Trukhanov rode the  PR tide and began trying to undo his odious predecessor’s sale of the majority shares of Odessa airport to Messrs Kauffman and Granovsky (the owners of the very recently (a week or two) renamed Finbank as locals will know it – now Platinum Bank) in a dubious privatisation deal.    Indeed the Mayor managed to get a few million Hryvnia in dividend for the city from its retained 25% shares.

The usual murky corporate structures have of course been employed to take ownership of the airport.  Ukrainian company OOO Odessa Airport Development (registered in Kyiv) is owned by UK company Odessa Airport Development Limited, whose shares are owned by Valafichita Holdings (Cyprus) and Letnon Ltd BVI.  Behind those sit Messrs Kauffman and Granovsky.

It would seem the Governor has either moved on to other things delegating the “airport issue” to others who have accomplished nothing, or he has struck a deal with Kyiv regarding insuring an opening of Odessa airspace regardless of Mr  Antoniuk keeping his job or not, or he has another plan as the existing structures are too entrenched to take on and beat swiftly enough for his political time frame.

The Governor may yet have success, in full or in part, regarding competing carriers to and from Odessa Airport.  It is too soon to say.  Whatever the case, Odessa Airport can certainly cope with more than a single flight per hour – and there is certainly room to build two new runways.  In fact there is more than enough room.

If the Governor is eventually successful then presumably prices will come down and stay down through a competitive market, which to be charitable was certainly a “limited market” if not the monopolised market due to nefarious vested interests between Messrs Kolomoisky and Antoniuk as charged.  Likewise whatever scams exist to drive the cost of aviation fuel far beyond the costs of aviation fuel in Kyiv will certainly then be curtailed.

The return of Mr Antoniuk is likely to wrangle the ego of Mr Saakashvili – regardless of whether the Governor was way off with his accusations (unlikely to be blunt), or whether a grubby deal was struck in Kyiv to keep Mr Antoniuk in his role – a lost skirmish to win a bigger battle, or a significant defeat for the Governor remains to be seen.

It may embolden those that have toned down their illicit activities, quietly watching from the shadows.  Perhaps it will also cast doubt upon the Governor’s ability to actually combat corruption amongst the “institutional ranks” close to Kyiv with the Odessa constituency too.

From the goodness of their hearts, it appears that Messrs Kauffman and Granovsky have graciously offered up their airy and natural light blessed modern foyer at what was until very recently Finbank HQ (now Platinum Bank), situated next to the Odessa Oblast Administration building to house the Governor’s One-Stop-Shop.

A far nicer working environment than a cold and dank Soviet bunker in which to one-stop-shop the creation of your new business empire.  How terribly generous and public spirited of Messrs Kauffman and Granovsky to offer that space when the Governor was coincidently publicly ranting about Odessa Airport – quite how grubby whatever deal was struck is, perhaps time will eventually tell.

But what is the Governor’s Plan B should  Mr Antoniuk continue to allegedly favour the company of Ihor Kolomoisky?  If that aviation company continues to charge unreasonably high prices?  If the aviation fuels scams continue?  If Messrs Kauffman and Granovsky continue to mismanage Odessa Airport?

Does he have a Plan B – or perhaps an alternative Plan A?

Situated about 90 kilometers north of Odessa is an abandoned/unused Ukrainian Air Force base in the middle of nowhere – that middle of nowhere is called Limanskoe.

As usual, the ever-leaky Governor’s Administration would seem to indicate that Governor Saakashvili has the idea (or has been fed the idea) that this would be a suitable place for Odessa Airport – or more precisely another Odessa Airport.

The fact it would require major investment not only in immediate airport infrastructure but also road infrastructure from the middle of nowhere to the city of Odessa is seemingly a mere detail.  Likewise the fact it would take approximately 90 minutes to reach the city from that location if a decent road existed.

In 2 hours, for a $50 taxi fare, it is possible to be at the Moldavian capital Chișinău and hop on a flight to Milan for €86.  Far cheaper than the existing Odessa Airport prices and the pain of changing flights at Kyiv, and if the alternative Limanskoe airport goes ahead, not much difference in travel time to and from  Chișinău or Limanskoe airports by car.

It has to be recognised that there would be gains for the Governor to carry out such a plan.  Firstly he is not Mayor of Odessa city, but Governor of the entire Oblast.  His duty is to the oblast, not only the city as the Mayor is duly tasked.

Building a new road to Rine (and on into the EU) instead of refurbishing the existing E87 that runs into the EU and on to Turkey, is clearly a deliberate development/reinvigoration choice despite the obvious financial additional costs.

An airport outside the city does not generate revenue for the city, but revenue for the oblast.  It also means more money from Kyiv for the oblast infrastructure (beyond that apparently promised for the new road to Reni).  It creates jobs.  It creates opportunities for international FDI/partners/privatisation.  It created development/rejuvenation opportunities for Limanskoe and the sparse surrounding pockets of humanity.  It creates the opportunity to compete with the existing airport if the entrenched interests at the existing airport simply cannot be undone by a Governor with limited powers.

However, Limanskoe is not a 15 – 20 minute drive to the city centre.  It is certainly not as “tourist/traveler” friendly, or that friendly for the business orientated visiting Odessa for the day.  It is not a logistics hub – yet anyway.

It is certainly not going to be anywhere near as cheap to develop, nor as convenient for most flying to Odessa, as putting two more runways at the existing airport and forcing the existing airport operation to handle more than a single flight an hour (of which it is more than capable even now).

Thus whether the Limanskoe idea is a stick to threaten vested interests with at Odessa Airport, or whether it is a very expensive Plan B – or alternative Plan A is difficult to say – although it does seem that the Limanskoe “project” certainly has legs amongst the “Governor’s people”.

Naturally media attention will be concentrated upon the return of Mr Antoniuk as Chairman of the State Aviation Service of Ukraine and Governor Saakashvili’s attempt to oust him – but the other issues behind the curtain briefly outlined above are going to be far more important as time marches on.

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Loaded dice? The return of (legal) gambling to Odessa

August 16, 2015

This entry has the potential to, and probably will, wander around the central theme of gambling and by extension events current in Odessa.

By way of background, in June 2009 populist Prime Minister Yulia Tymoshenko championed the banning of gambling in Ukraine.  This, despite her rhetoric at the time regarding the moral corruption of Ukrainian youth (a similar argument she employed to ban pornography around the same time), would be more accurate to perhaps associate with the deaths of 9 people in a gambling/gaming den in Dnepropetrovsk, a city from which she hails, and in a timescale that preceded the run up to the 2010 presidential elections in which she stood – ultimately losing to Viktor Yanukovych.

An argument for the usual knee-jerk populism associated with Yulia Tymosheko and the subsequent ban on gambling (and pornography) can easily be made – particularly when electioneering was on the horizon.

Needless to say, the ban on pornography was never enforced, and the ban on gambling simply pushed gambling (further) into the black economy.  Few gambling/gaming establishments that decided to continue have been prosecuted for pursuing their previously legal pursuits – A lot more Militsia and local politicians became richer through providing a “roof” from prosecution by way of corrupt payments in return for blind eyes or influence.

Now however, it seems the debate about the return of legalised gambling in Ukraine is about to (purposefully) begin – the debate in 57 days from now (countdown clock here).

“The Government wishes to review current legislation and introduce gambling back to Ukraine in a measured way using best practice from other countries.  The effect on jobs will be immediate, the increase in tourism will benefit the country as a whole and income from taxes will greatly assist our reform measures.”  – Arseniy Yatsenyuk.

So be it.

Undoubtedly if legally reintroduced the right way, without cronyism and licensing of family members, taxed and policed  properly, the government stands to see revenues in the $ hundreds of millions and a rapid up-tick in employment – both directly and indirectly associated with what used to be a very vibrant industry.

Naturally, if cronyism and flawed licensing, corrupt policing etc rules the industry, then government revenue will only be in the $tens of millions and whilst there will be a favorable trend in employment, it will be employment in the black/grey economy.

Thus, those “friends of Ukraine” that are currently supporting the nation would be perhaps wise to insure the re-legalisation of gambling is forced to remain in the light.

Red Roller

The re-legalisation of gambling would seemingly fit quite nicely with Governor Saakashvili’s “Singaporean dream” for Odessa.  It would fit with his anticipated drive to make Odessa a porto franco/free port – in his mind that porto franco status being far closer to that of Singapore/Hong Kong regarding degree of autonomy and economic benefit, than that Southampton docks in the UK with no autonomy but favourable customs regime.

Any which way, clearly somewhere in the Governor’s mind, Odessa (or parts thereof) requires becoming a “Special Economic Zone”.  The return of legalised gambling would therefore be a welcome economic “plug-in” where ever Odessa will fit across the spectrum of porto franco/special economic zones that vary vastly globally.  Indeed it would become a “project” to be developed.

It is perhaps little surprise then, that from within the information leaky Saakashvili administration, it is claimed that three casinos are either already under construction or have been given the tacit nod of preemptive approval in Odessa.

It is here that this entry will meander slightly, and readers may, depending upon how loaded their dice, draw inference as to whether future gambling and casinos in Odessa will be run in a way to maximise governmental revenues and white employment – or the alternative reduced government revenues and black/grey employment.

Some months ago the Governor made an appeal for western educated volunteers to assist the Oblast Administration in the gargantuan task ahead of it with regards to reforming the Oblast.  There has (unsurprisingly) been a very large response from such western educated people willing to work (unpaid) for the administration to effect reforms.

Indeed your author is aware of more than 80 such volunteers who have yet to be interviewed – all of whom yesterday receiving the following “holding/pending” email:

Дякуємо Вам за виявлену ініціативу працювати в якості волонтера в ОДА!

На даний час ми формуємо структуру роботи з волонтерами.

Ми плануємо вибрати серед Вас координаторів, через яких ми будемо спілкуватися з волонтерами Вашого профілю.

Робота волонтера-координатора передбачає повну робочу зайнятість, знаходження в ОДА найближчі два місяці.

Звертаємо Вашу увагу, що робота волонтера не передбачає оплати праці. Координатор буде отримувати завдання

від Департаментів ОДА, шукати серед Вас фахівців для вирішення поставлених завдань і відповідати за їх перевірку.

У разі готовності та бажання бути таким координатором надсилайте письмовий відгук та Ваше резюме.

З повагою,

Адміністрація ОДА

Now it has to be said, those in the boiler room behind the Governor are working hard – really hard.  Anybody who visits can see just how hard these people are working.  But that after several months there are still so many volunteers willing to freely help the administration that have not been seen raises questions over the transparency and efficiency of the process – considering there are already dozens of volunteers actively engaged.

Specifically concentrating upon those volunteers that end up with Sasha Borovick who looks after “projects” (are casinos and gambling projects for the Singaporean dream?) within the Administration, there have been some highly visible, and eyebrow raising incidents with regard to recruitment of those that have ended up as his volunteer pool/team.  Incidents that anybody who frequently drops into the Bristol Hotel in Odessa on a weekend cannot have failed to miss over the past months.

The Bristol Hotel on a weekend for the past few months has been home to regular visits (and stays) by a lot of successful businessmen and politicians from Georgia.  Somewhat questionably some of these people have apparently been pre-interviewing/pre-screening volunteers.  They claim to be (and perhaps they are) assisting Misha (Saakashvili) and Zarub (Adeishvili) in the processing of volunteers and their appropriate team placement.

Meanwhile Koba (Nakopia) it is rumoured is involved in the interviewing process for top Oblast positions, such as Oblast architect, customs chief etc –  Not a role for executive search and selection companies?

That this occurs in the open and in a public (if rather swanky) location may indeed make such events legitimate and deliberately transparent – or it may not.

Some may see it as a brazen way to select volunteers for Mr Borovick’s team in “projects” by those affluent and connected that will be submitting “projects” that get the approving nod of the volunteers and are passed further up the chain – rather than being dismissed upon initial presentation.

Questions of conflict of interest, transparency and indeed due diligence when it comes to the source of investment money for “projects” or donations to the “Odessa Development Fund” may arise for those of a cynical disposition in circumstances such as these.

Such cynicism is not necessarily dispelled when others close to certain individuals within the Oblast Adminstration “top table” team pull seemingly pointless stunts when issues of conflict of interest are rumoured.

Sergey Lesyk

Sergey Lesyk

No Sergey Lesyk

No Sergey Lesyk

Simply deleting photographs from website advisory board organigrams removes photographs – it does not remove potential or existing conflicts of interest.  It does raise questions that may have been easily answered.  Upon this matter no more will be said, though perhaps investigative journalists would disagree, and readers be disappointed.

Whatever the case, it is seemingly a far less transparent and organised system than that employed in the selection of district administration heads, and the on-going (and live streamed) prosecutor recruitment drive – although that is facing stiff institutional resistance unsurprisingly, and to the ire of Governor Saakashvili.

It may be that the voluntary and unpaid positions vis a vis paid and official positions, are deserving of less care and less respect for process.  A foolish perspective.

Within a somewhat “unusual” process, there may be nothing untoward.  It may be that all is above board, legitimate and entirely (potential) scandal free.

Certainly the last thing Governor Saakashvili will want is a bad smell around “his team”.  He will not be overly keen to have a bad smell around those that are around his team either.  It is beyond doubt that the actions of the Governor and his team are very closely monitored by those internal and external bodies that remain uncertain as to just how closely to hug him, but understand that he (and team) require continuous support (and guidance) if corruption reduction and development issues in Odessa are to be achieved.  That support Governor Saakashvili will not want to lose.

It is natural that a certain amount of Georgian interest and investment would head the way of Odessa whilst under the leadership of a former Georgian President.  The city and Oblast has huge potential without any shadow of a doubt and getting to see the Governor, be you Georgian or otherwise, has never been easier.

It is also natural to question matters that are not as organsied as they possibly could be.  Issues of efficiency and transparency arise.

It follows thereafter, that questions relating to three casinos apparently under construction/given the tacit administrative nod whilst gambling remains illegal, will also raise questions as to who, how much and from where this investment comes (not to mention how clean the money is) and why certain projects get approved and passed up the decision making tree and others are dismissed by some volunteers that have been in place for months, whilst there are at least 80 suitably qualified and willing people still being kept on “hold” prior to having their energies (freely) employed.

Is this messy impression all simply a matter of a discombobulated approach to the administrative issues surrounding voluntarism within public administration, when the paid administrative personnel are really working very hard in the boiler room generating and implementing change themselves in oder to make the boss look good?  A matter of daily administrative priorities resulting in a disjointed and ad hoc response to a very large response by volunteers?

Who knows what the cards hold?  0, 1, 2 or 3 Georgian owned/co-owned/financed casinos?  A favourable view taken on “projects” submitted from a Georgian origin?  Does it matter anyway as long as a monopoly is avoided?  How white does any investment money have to be – or perhaps how black before it will be refused?

Time will soon tell – but perhaps not until after the October local elections will anybody begin to show their hand.  The 2016 Oblast political landscape need be known before cards are put on the table.

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