Friday, July 29, 2005

Two problems in Ukraine 

The press both in Ukraine and outside is making a big deal about the lavish lifestyle of Andriy Yushchenko, son of President Viktor Yushchenko. The short story: The press investigated his use of a BMW M6 that is quite rare and quite expensive in Ukraine, and his possession of a platinum-shell cellphone popular with the oligarchs of Ukraine and Russia. His father is rather put out by this and lights into the press at a conference, using rather harsh words to tell them to butt out of his family's private affairs. Letters of protest and explanation (not an apology) are exchanged.

It's pretty rough stuff, and undoubtedly part of it is the stress that Yushchenko pere is feeling with his struggles in government. As Taras Kuzio noted in testimony to Congress on Wednesday, it's imperative that Yushchenko remain seen as somehow different than the politicians of the Kuchma era. He has tried to appear above the fray,

Meanwhile the government continues to act like it needs a lesson in principles of economics.
Yulia Tymoshenko stated that 2005 harvest grain will be exported by state traders " State Reserve Committee and JSC Khlib Ukrainy. The objective of this is to minimize involvement of intermediaries who buy grain from farmers at very low prices and sell it at world prices. "The government is not looking to pressure grain traders," added Economy Minister Serhiy Teryokhin. "We are simply creating a system that will not allow a number of major grain traders to dictate prices to producers." On this issue, Tymoshenko and Teryokhin have the same position as the Agrarian Policy minister, Socialist Party member Oleksandr Baranivskiy, who has recently had serious arguments on other issues with the two officials. SPU leader Oleksandr Moroz also insists on holding the price through the state acquisitions: "If the government does that, the grain traders will not lower the prices lower than the state. Farmers should be given an opportunity to sell grain to the state at the price they like."
Scott Clark correctly calls this a big part of the problem. Has nobody in Ukraine learned the word monopsony? I might have chalked up things to a bad appointment in the privatization minister, but these analyses suggest something far worse.

And now there's a report of an attempt on Tymoshenko's life. Plus ca change...