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Thursday, 28 August 2014

#Russia will be the major loser in #Ukraine – beyondbrics - Blogs - FT.com

Russia will be the major loser in Ukraine – beyondbrics - Blogs - FT.com:



It has been a shocking day in the progress of the crisis in Ukraine. As evidence mounts of yet more direct and duplicitous Russian military activity on Ukrainian soil, Russian assets have taken a hammering. The rouble fell 1.5 per cent against the dollar even after paring earlier losses and the RTS index of Russian stocks was down 3.3 per cent on the day, also after staging a recovery.
President Vladimir Putin denies Russia is involved in Ukraine at all, even as the Russian people hail him as a conquering hero with popularity ratings to match. But the chances that his adventure will be to their benefit are looking increasingly slim. As Neil Shearing of Capital Economics argued in a note on Thursday, “Russia is likely to be the major loser from any further escalation in the conflict.”
He told beyondbrics, “Its economy is on the brink of recession, if not already in recession. None of the measures needed to fix that are among the government’s priorities now.”
Shearing thinks the consensus view on the outcomes for both Russia and the eurozone are wrong, for a string of reasons. Europe’s dependence on Russia both as an export market and as a source of energy is overstated, he told beyondbrics. (It is notable that, since the crisis began, energy prices have actually fallen – not a sign of an impending energy crisis.)
Russia’s economy, already slowing sharply before the crisis, is more vulnerable than ever, he says. GDP growth had already fallen from 4.2 per cent in 2011 to 1.3 per cent in 2013. It was just 0.8 per cent year on year in the second quarter and is heading into recession.
Source: central bank, Capital Economics
Those who argue that Russia’s balance sheet is strong – after all, it had $468bn in foreign exchange reserves at the end of July – miss significant pockets of weakness such as the high levels of debt in the corporate sector. Those borrowers have been shut off from global capital markets by western sanctions and will be hard pressed as repayments approach. The state can use its forex reserves to ease some pressures but, Shearing notes, it doesn’t take long to burn through $200bn or $300bn in a crisis.
Russia’s ban on food imports in response to the sanctions will add to food price inflation and make it harder to reverse the interest rate rises enacted by the central bank since the crisis began. “It is hard to see inflation coming down quickly and easy to see it going up sharply,” Shearing said. “If unwinding ever does become possible it won’t happen quickly. The structural problems in Russia’s economy mean that weaker growth has not been accompanied by lower inflation.”
Those problems are well known: a lack of investment, weak productivity growth, a bad business environment, failure to attract foreign direct investment and so on – all things that recent events in Ukraine only work against.
The net result is that Russia is unlikely to enact structural reform or be able to cut interest rates while the nation’s attention is on foreign conquest. Those investors who expected Russia to bounce quickly back to the 3 or 4 per cent growth of recent years will be disappointed – and ordinary Russians, even more so.
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Wednesday, 27 August 2014

29 years in Ukraine | gypsy by trade @gypsytrade

29 years in Ukraine | gypsy by trade:

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My birthday comes near the end of August.  Once again, I dine amongst distant relatives near the village where my grandfather was born.  Twelve months ago these people were all unknown to me, but we’re closer relatives than before, even if I still don’t know exactly how we’re related.  What I know is that when we arrive in town everyone wants to feed us, house us, and spend time with us.  That’s family. 
Overnight rain from Volovets in the Karpaty to Vinnytsia.  This is the Uzhorod-Kyiv train line.
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Bus from Vinnytsia to Bershad.
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You can take a bus from far eastern Ukraine all the way to Munich.  Or at least, at one time you could.
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First business in town is to visit with Lida and Lonya.  Lonya is my mom’s first cousin and our closest relative in Bershad and in the nearby village of Romanivka.  His father Simeon visited us in New York when I was young, shortly after Ukraine gained independence in the 1990’s.
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Last year, a kind young man drove us to Romanivka and patiently assisted us as we visited with family.  Not until the end of the first day did we realize that our driver is also our cousin, Yaroslav.  His mother Olya and his father Vitaliy provide a place to stay on our brief visit this year.  They have a simple house near the edge of town.  Their location allows them the space to keep animals and grow most of their food.  They buy bread and some specialty items.  
In addition to fruits and vegetables, they also keep cows, pigs, and chickens; make homemade samohon and fruit compote; and keep nearly twenty young pigs for sale.  Both keep jobs in the small city of Bershad as well. 
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No such thing as too much garlic.
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As in the mountains, I suspect the nearby forest is also a food source.  In the right season, mushrooms are abundant, although in general, much of Ukraine is hot and dry in the summer.
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We return from a walk to a house transformed, with a table set for 15 people.
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Even the kovbasa is made of their own pork.
Слава Україна!  Героим Слава!  
Glory to Ukraine! Glory to its heroes!
We all drink to Ukraine.  We all drink to my birthday, and to our family, and to Ukraine a few more times.  
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Moments before dark, we all find our way outside for pictures.  All throughout the day we’ve looked at every personal photo archive at each house.  For the older generation in Ukraine, and elsewhere around the world, real photos are powerful and memorable.  I’ve got to remember to print and share more photos.  The young people all want to know if I have Фейсбуки, or Facebook.  
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The young man on the left is on the right in the next photo, all grown up.
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Our hosts Olya and Vitaliy, and my mom.  
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High ISO, a 12-second timer, and a flash make 15 smiling faces.
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Inside for some cake, coffee, more samohon, sleep, and in the morning another 30 hours of travel back to our bikes.  It is a brief visit and at one time I questioned whether it is worth it.  It was.  
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Sunday, 24 August 2014

#Lviv, #Ukraine; August 18-19, 2014 | gypsy by trade

Lviv, Ukraine; August 18-19, 2014 | gypsy by trade:



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Following a few days at the hostel in Kolochava, and a few more days of riding, I finally received word from my mom that she was coming to visit us in Ukraine, again.  Last year, as we selected an eastward trajectory from France, we conspired to set a date and she bought a plane ticket to Ukraine.  We would meet just before my birthday.  We planned to visit her father’s family in the southwest, and her mother’s family in the far east, near Luhansk. 
Last Monday she wrote, telling me that she would not be able to come visit again this year, regretfully.  On Wednesday she wrote again, telling me that she had bought a plane ticket.  On Friday, she and my brother arrived in Kyiv and immediately boarded a train to Lviv.  Lael and I composed a roundabout route back towards Strij though the mountains.  We boarded an electro-poyizd (regional electric train) for the final 60km to Lviv.
Lviv is busy and beautiful, full of pedestrian boulevards and sidewalk cafes.  There are tourists, but mostly they are Ukrainian or from elsewhere in nearby Eastern Europe.  The city is rustic but not rusting; while many historic structures remain, they are artfully maintained, not artificially renovated as in more popular destinations.  To my tastes the city feels more like an improvement upon Prague and even Bratislava.  The streets are narrow and cobbled, not wide as in Kyiv, part of which was planned during the Soviet era.  And while comparisons to both Paris and Prague are in order for any charming European city, I’d choose neither of those over Lviv. The time to visit Lviv is now, before Ukraine’s economy booms upward and the city becomes more expensive and the cafes are replaced with tourist shops and the Ukrainians are replaced by English and German and Japanese tourists.  I believe Lviv is experiencing yet another high period in its long history.  It is exceptional.  
Lviv may also be the most Ukrainian city, not because it is the most even slice of the country.  Rather, the people here intend to preserve Ukrainian language and culture more than anywhere else in Ukraine.  Western Ukraine– hundreds of miles from Russia– is also the most Ukrainian part of Ukraine.  However, Ukrainianism here is not without fault.  The popular red and black flag of the УПА  (Ukrainian Insurgent Army)– an organization notorious for fighting both the Nazis and the Russians during WWII, under the leadership of Stepan Bandera– stands as one of several symbols important to nationalistic Ukrainians.  This militaristic organization is also responsible for the death of coutless Poles in the region.  Nationalism, in almost any form, often has a dark side.  Incidentally, the grave of Bandera was recently vandalized in Germany.  And yesterday,several Ukrainians ascended a high-rise structure in Moscow, repainting a soviet star in the blue and yellow pattern of the Ukrainian flag, marking their work with a Ukrainian flag atop the 32-story building.  These are a sign of the times in this part of the world, although the actual situation is much more grave.  
We have been unable to make calls to our family in Stakhanov, in the Luhansk Oblast near the Russian border for several weeks.  We hope they are safe.
Into Lviv.
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This region is known for changing borders.  The former Galician empire included much of the Ukrainian Carpathian region, and some of Slovakia, Poland, Romania, and Hungary. 
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Someone has decided that smashing the windows of the Russian bank is a good idea.
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No military presence is felt in Lviv, although memorials are scattered throughout the city.  
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As is lighter fare, such as this toilet paper being sold at the touristic market.
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Mostly, life continues for residents of Lviv.  Tourism is down.  Young men and mothers worry about being drafted.  Over 2000 Ukrainians have died in the “anti-terrorist” conflict since this spring.
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A walk around the city reveals characteristic scenes of Lviv.  The aging Lada sedan is ever-present in Ukraine.
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Chruches are full on Sunday.  We’ve discovered that while riding through the country, we can visit as many as five or six churches on a Sunday morning, during active service.
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The Armenian cathedral in Lviv dates to the 1300’s.
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Taras Shevchenko is the most famous Ukrainian.  A poet, painter, and a fervent supporter of the idea of an independent Ukrainian nation, his likeness or bust stands tall in most every Ukrainian city.  He was born a serf in 1814.  He died briefly after a period of exile in Russia.  He died seven days before the official emancipation of serfs in tsarist Russia in 1861.
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Mostly, life continues as usual in Lviv.
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