Ukrainian GDP Dropped by 35 Percent Since 1991, Worst Performance in World, Even Beating Basket-Cases Like Zimbabwe and the Central African Republic

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Ukrainian newspaper Zerkalo Nedeli (ZN) reported that, according to World Bank data, the Ukraine’s real GDP decreased by 35 percent, absolutely the worst performance in the world, over the past 24 years. As the Ukraine celebrates its Independence Day, its economists should be worried, as the country’s economy falls to the point of no return. Out of 166 countries that provided full access to their GDP data for 1991-2014, only five countries showed a decrease in GDP:

• Central African Republic (-0.94 percent)
• Zimbabwe (-2.3 percent)
• Georgia (-15.4 percent)
• Moldova (-29 percent)
• the Ukraine… an astonishing 35 percent drop since 1991

Amusingly, back in 1987, the Ukraine’s GDP was 25 percent that of the Peoples Republic of China. In early 2015, it was only 1.25 percent of the PRC’s figure… ZN said that the reason behind it wasn’t solely China’s economic growth over the past two decades. One can somehow comprehend how and why the Central African Republic and Zimbabwe appeared on the list, but the fact that even these two countries are ahead of the Ukraine should frighten Kiev politicians. This horrible turn of events isn’t the result of the Civil War in the Donbass. The process started earlier, when the Ukraine lost a large part of its domestic production. During the first decade of its independence, the Ukraine lost almost 60 percent of its GDP, which was twice as much as the USA did during the Great Depression in the 1930s. The main reason behind the collapse of the Ukrainian economy is technological degradation, so, the country ended up being dependent on the export of natural resources, helpless before fluctuations in the dollar and the euro.

23 August 2015

Sputnik International

http://sputniknews.com/business/20150823/1026104480/ukraine-gdp-economy-decrease-world-bank-independence.html

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Ukrainian Economy Unravelling

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The Ukraine is going through a perfect economic storm. Ravaged by civil war, left with no parliament, and led by a self-styled “kamikaze government”, the country is on the verge of a full-fledged economic disaster. Obviously, the Ukrainian economic crisis is self-inflicted, despite the government’s attempts to blame Russia’s allegedly hostile actions and the lack of Western help. According to estimates made by Ukrainian “Prime Minister” Yatsenyuk in April, the Ukraine needs at least 35 billion USD (1.29 trillion Roubles. 216 billion Renminbi. 2.12 trillion INR. 38 billion CAD. 37.4 billion AUD. 26.6 billion Euros. 21.1 billion UK Pounds) to keep the economy afloat until the end of 2014. The total sum of credit obtained so far from the IMF, the EU, and the World Bank is less than five billion USD (184 billion Roubles. 31 billion Renminbi. 303 billion INR. 5.43 billion CAD. 5.35 billion AUD. 3.8 billion Euros. 3 billion UK Pounds). It hasn’t yet received the IMF’s second tranche of a promised 17 billion USD (625 billion Roubles. 105 billion Renminbi. 1.03 trillion INR. 18.5 billion CAD. 18.2 trillion AUD. 12.9 billion Euros. 10.3 billion UK Pounds) loan, despite the fact that it was due in June. Given that the IMF made subsequent tranches contingent upon Kiev’s ability to regain control of Novorossiya, it’s likely that the Ukraine won’t get some or all the remaining tranches.

“President” Poroshenko worsened the situation with his decision to sign an EU Association Treaty, which resulted in a flurry of Russian measures enacted to protect the Russian market from the re-export of European goods through the Ukraine. This locked Ukrainian business out of the Russian market, which was its top export destination; yet, at the same time, it’s unable to penetrate the oversaturated European market in a meaningful way. Kiev received repeated warnings about this scenario, but Poroshenko made the stunningly unwise choice of ignoring Russian concerns and warnings. Now, the economy is suffocating, and faces a serious currency crisis. The Grivna is trading at around 13.89 Grivna/1 USD (having traded at about 8 Grivna/1 USD in the years following the 2008 economic crisis), causing investors to flee. On 22 August, Fitch Ratings downgraded local-currency-denominated Ukrainian debt to its lowest possible level (CCC). According to finance.ua, Yatsenyuk recently stated, “The Ukrainian economy can’t handle an exchange rate higher than 12 Grivna per dollar”. The exchange rate is 15 percent higher than its critical level and shows no signs of returning to previous levels. The central bank can’t use market interventions to prop up the Grivna because it has almost no hard currency left; a significant part of its currency reserves are in illiquid government bonds. The currency is collapsing and this is visible to everyone. Political analyst Mark Sleboda put it best in a scathing tweet:

#Ukraine currency, economy collapsing fast, nothing at all it can do to stop it (apart from begging #Russia)

http://t.co/bUSMcRCxvJ

On top of the currency crisis, there’s an energy crisis brewing. Last week, the government announced its intention to import coal, once considered a staple of the Ukrainian industrial economy, from Australia because its mines in Novorossiya are unusable. It depends on Russian gas and coal from its former eastern regions; now, it has neither. A week ago, the Cabinet outlined a procedure for declaring a state of emergency in the energy sector, so, blackouts are becoming more and more likely. It’ll be a long, cold, and probably dark autumn and winter for Kiev. Judging by its previous actions, the West won’t come to rescue the Ukraine from its economic misery.

28 August 2014

Stanislav Fisher

Rossiya Segodnya

http://en.ria.ru/authors/20140828/192433234/Ukraines-Economy-Is-Unraveling.html

EU Pressure on Argentina to Halt Food Imports to Russia Might Backfire

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Peter Koenig, a former World Bank economist, thinks that Argentina would laugh at the EU’s “ridiculously stupid” request not to increase food exports to Russia. A short while ago, the Financial Times reported that the EU was going to try to talk Latin Americans out of supplying Russia with foodstuffs. Several European diplomats visited the region and singled out Argentina as an obvious target for European pressure. Brussels failed to understand that Russia doesn’t need to import foodstuffs from Latin America. In fact, Koenig said that Moscow could help Argentina and other Latin American countries “free themselves from the economic and political pressures constantly exerted … by Washington”.

Commenting on Western sanctions imposed on Russia over the Ukrainian crisis, Koenig said that they’d positively affect Russia, as well as Argentina, Brazil, Chile, Peru, etc. They’d encourage those countries to “finally escape the claws of the predator empire of Washington, and go the way of independence, namely, towards a new area of economic sovereignty and a new world monetary system”. Koenig pointed up that sanctions promote greater integration of the BRICS countries. Brazil, Russia, India, China, and South Africa are likely to “come to a consensus … and issue their own currency, backed by about one-third of the world’s economic output and about half the world’s population”. Over the last few years, Russia and China “forged a solid political and economic alliance”. Therefore, they could be the first countries to introduce a new currency “delinked from the corrupt predatory western monetary system”. That currency could replace the dollar as a global reserve currency. Russia and China have a combined GDP of 21.1 trillion USD (762 trillion Roubles. 130 trillion Renminbi. 1.28 quadrillion INR. 23.2 trillion CAD. 22.7 trillion AUD. 16 trillion Euros. 12.72 trillion UK Pounds), about 27 percent of world economic output. Therefore, “a Sino-Russian currency would be backed by solid economic output and commodities”. On the other hand, Koenig explained that the US GDP (17 trillion USD (614 trillion Roubles. 105 trillion Renminbi. 1.03 quadrillion INR. 18.7 trillion CAD. 18.3 trillion AUD. 12.9 trillion Euros. 10.3 trillion UK Pounds)) is “mostly based on the output of the financial services industry and its military industrial complex, meaning it’s a GDP of destruction and overconsumption, as well as hollow financial and legal services”.

Koenig thought that Argentina could become the first country “to free itself from the economic sledgehammer of the immoral USA and at the same time enter into trade agreements with Russia and China”. That could be reasonable, considering that “90 percent of Argentina’s foreign trade takes place outside of the realm of the US dollar”, and that it’s likely to be an outsider in a dollar-based financial system. Koenig is confident that it’s only a matter of time until much of the rest of the world “jumps on the occasion and abandons the dollar. All it needs is one country that dares to take this first step, fearless of sanctions”. Koenig also said that if Brussels keeps on pushing Argentina, thus, “helping Obama and his blood-thirsty NATO war machine engage Russia in World War III”, Europe runs the risk of destruction. He asked, “Don’t they realise that Russia not only wants to save Europe from another humanitarian disaster, but would like to help them out of their Wall Street imposed economic disaster?” Koenig maintains that Europe must realise it should “get rid of their Washington-imposed neoliberal thieves” and seek a healthy alliance with the East. He emphasised that it’s never too late to make the right choice.

26 August 2014

Stanislav Fisher

Rossiya Segodnya

http://en.ria.ru/authors/20140826/192347091/Argentina-Would-Laugh-at-EU-Request-to-Decrease-Food-Export.html

World Bank Sez Ukrainian Economy to Shrink by at Least 3% in 2014

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On Friday, the World Bank (WB) predicted a 3 percent contraction for the Ukrainian economy in 2014 compared with the growth of 1.5 to 2 percent they estimated in October. The WB cited the Ukraine’s continuing political crisis, increased economic imbalances, decline in consumer demand, and lack of fresh investment as reasons for the gross domestic product (GDP) performance revision. WB economist Anastasia Golovach said, “First and foremost, the government should pay attention to macroeconomic and financial stabilisation. Moreover, the Ukraine should ensure cost transparency and reduce corruption”. She said that Kiev needed to make structural reforms in energy, financial, and business sectors to accelerate the nation’s economic growth. According to Fan Qimiao, the WB’s country director for Ukraine, Belarus, and Moldova, the Ukraine’s GDP might return to growth next year, saying, “If the Ukraine implements an appropriate set of rapid reforms, it’d resume economic growth in the early 2015”. The WB projected the pace of economic growth in Ukraine at 3 percent for 2015. The Ukraine’s economy stagnated last year, with a nominal GDP amounting to 180.7 billion USD.

4 April 2014

Xinhua

http://news.xinhuanet.com/english/business/2014-04/04/c_133239418.htm

Editor:

This is OPTIMISTIC. When the junta cuts pensions, it’ll cut demand; when demand falls, it’ll drag down the economy. Furthermore, when the junta cuts salaries to please the ravening crapitalists at the WB, it’ll cut demand further. In short, an economic disaster is in the making, and we can stamp it, “Made by the IMF and the WB”. Of course, they’ll wash their hands of it and sleep like babies… they’re soulless pigs who only care about money and power (they’re perfect bedmates with Zbig and Nuland). This is an economic perpetual motion Jack Kevorkian death machine that’ll end in a Weimar-style inflation. God preserve the poor Little Russian people… the WB and the IMF don’t give a hoot in hell for them. By the way, neither does Langley or K Street (or their denizens and hangers-on)…

With “friends” like these…

BMD