December 14, 2012

True colors ... of Ukrainian Politicans

That's how Ukrainian politicians were caught on tape recently fighting over the "right" to plunder their fellow citizens. That of course is what an election is, after all: a contest to see who gets the "right" to be the chief thief, plunderer, and destroyer of liberty (ht to Thomas DiLorenzo)

December 12, 2012

One Third of Ukrainians Had Mental Disorder in Their Lifetime

Here is a very interesting paper about psychiatric and alcohol disorders in Ukraine.
Here is its abstract:
This study presents the lifetime, 12-month, and 1-month prevalence estimates of nine psychiatric and alcohol disorders in Ukraine assessed as part of the World Health Organization (WHO) World Mental Health (WMH) research program. The Ukraine WMH survey is the first psychiatric epidemiologic study in a former Soviet Union country to administer a structured psychiatric interview to a nationally representative sample. Method In 2002, a national probability sample of 4,725 respondents ages
18 and older were interviewed with the WMH version of the Composite International Diagnostic Interview (WMH-CIDI). Prevalence estimates, age-of-onset curves, comorbidity, demographic and geographic risk factors, and treatment seeking were examined.

Results: Close to one third of the population experienced at least one Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition (DSM-IV) disorder in their lifetime, 17.6% experienced an episode in the past year, and 10.6% had a current disorder. There was no gender difference in the overall prevalence rates.
In men, the most common diagnoses were alcohol disorders (26.5% lifetime) and mood disorders (9.7% lifetime); in women, they were mood disorders (20.8% lifetime) and anxiety disorders (7.9% lifetime). The odds ratios for most pairs of disorders were highly significant. Age of onset was primarily in the teens and early 20s. Age, education, and living in the Eastern region of Ukraine
were significant risk factors across disorders, with respondents older than 50 years having the highest prevalence of mood disorder and the lowest prevalence of alcoholism and intermittent explosive disorder. Only a minority of respondents talked to a professional about their symptoms.

Conclusion: Prevalence estimates of alcoholism among men and recent depression among women were higher in Ukraine than in comparable European surveys. The results argue for the need to develop and implement educational programs focused on the recognition and treatment of mental and alcohol disorders for the general population, psychiatrists, and general medical providers, who are the main source of mental health care.

December 11, 2012

A Lesson of History: From Sir Robert Walpole to President Victor Yanukovych



History can teach us really good lessons. For example, the British history can shed light on the current events in Ukraine and other former Soviet states.
So here is a tough question for you. What do Sir Robert Walpole (1676-1745) and President Yanukovych have in common? If your answer is political corruption, you are the history buff.

In the 18th century the House of Commons was useless link in the British government. The House of Commons stood aside doing nothing when the British government expenditure got out of control. The British National Debt experienced a ten-fold increase over the course of the 18th century.



While the British government was approaching the debt crisis, the government of Sir Robert Walpole, First Lord of the Treasury and the de facto first British Prime Minister (1721-1742), went in all history textbooks as the "government by corruption". Walpole who was the Crown's favorite manipulated individual members of the parliament and the aristocratic groups to wield control over parliamentary nomination. He bought and sold seats in the British parliament. The parliamentary members also received bribes for their votes. The legislative branch of the British government became a commodity that was sold and bought. Does it sound familiar?

So what happened to the pervasive corruption in the British Empire? The government implemented several reforms to eradicate the corruption. Intellectual elite actually pressured the government to change the situation. The main advocate for the change was Adam Smith, Scottish political economist. Yes, the same Adam Smith who wrote the Wealth of Nations (1786). Actually, his seminal work was the foundation for critical review of the British government policy.

The British government had economic advisers who represented the Mercantilist school of economics. The Mercantilist economists believed that international trade can reduce the government debt if the British Empire exports more than imports. The Mercantilists were fools who believed that free market is a zero-sum game because someone always gets hurt. The connection between the Mercantilism, socialism, communism, and interventionism is obvious, right? All these fools believe that free market is a bad institution. By the way, American electronic libraries are reporting a significant increase in online search requests for "the Mercantilist school" from China, Russia, and Argentina.  


December 9, 2012

Agricultural Staticulation



Staticulation is a manipulation of statistics (ht Darrel Huff). Here is an example. Since 2009 production of corn has doubled in Ukraine. The output of corn increased from 10.5 to 21 mln. tons between 2009 and 2012. Great news! It looks like "free market" economy allocated resource efficiently in Ukraine. 
Wait a sec. The corn yield, however, declined slightly from 5 to 4.8 tons per hectare. If the corn yield declines, the total output of corn must decline too, right? Yes, unless the harvested area increases enough to offset the decrease in the crop yield. Indeed, the harvested area has also doubled since 2009. The harvested area increased from 2.1 to 4.4 mln. hectares. Something tells me that farmers foregoing the conventional crop rotation in Ukraine. To double the cropland area for corn, you need to decrease the harvested area of other crops. Otherwise, where did the additional 2.3 mln of arable land come from? 

November 22, 2012

Ukrainian Vodka

My friends always ask me what is the best Ukrainian vodka?  I am not an expert. But these two that you can see on the following picture are pretty good.
On the left-hand side of the picture,  you can see Zoloto Polubotka (Polubotka's Gold) vodka. It's made in Lviv. It's pretty pricey because it contains golden flakes in the bottle. Basically, it looks like the Goldschlager schnapps liqueur. But it's still vodka.
On the right-hand side of the picture, you can see Nemiroff Medova z Pertzem (Honey-based with Pepper). Nemiroff is a world-known brand of vodka so it's pretty easy to find it here in European/Russian deli stores. The honey-based Nemirroff with red hot chili peppers has a yellow color because the vodka is infused with honey. It also has a sweet and spicy taste because of both honey and red hot chili peppers. Nemiroff vodka is made in a small town of Nemiroff in Vinitsa province.
Both brands of vodka are from the Western Ukraine. I don't have an explanation for this spatial pattern. And on the final note I have to say that both companies avoid classifying their brands as vodka. The Polubotka's Gold is actually horilka (Ukrainian word for vodka). The Nemiroff considers its vodka a liqueur. As I recall, Poland as the EU members filed a request to patent the vodka brand as a hard liqueur made from potatoes. Since both Ukrainian companies don't use potatoes to make their vodka, these companies can't use the term vodka.


Happy Thanksgiving!

 

November 20, 2012

Lviv, Lvov, and Lemberg

I always mention Lviv every year when we celebrate Ludwig Von Mises' birthday. Mises who is a famous economist, political philosopher, historian, and social scientists was born in the Jewish family in Lemberg, Galicia province, the Austro-Hungarian Empire. Now, Lemberg is know as .... Lviv, Ukraine. During the Soviet regime Lemberg became Lvov. And now it's finally Lviv.
Anyways, here are very beautiful pictures of Lviv. You should check it out (ht to Roman Skaskiw). You should also follow Roman in Ukraine blog. Roman is an American journalist of Ukrainian origin traveling in Ukraine.

November 7, 2012

Admin Resource

Administrative resource or admin resource is what Ukrainians say when they refer to government's abuse of power. I had a blog post about how the Yanukovych administration rigged the 2012 parliamentary elections using their admin resource to affect election results in hospitals, prisons, armies, public schools, and the rest of the public sector. Now I can show cool data from NGO Maidan. The following charts show that public support of the Party of Regions and voter turnouts are shooting through the roof at the special polling stations like hospitals and prisons. Basically, if you don't know how it's done, you must see that mainly sick people and prisoners support the Party of Regions.

http://world.maidan.org.ua/wp-content/uploads/2012/11/SpecialPS.jpg

November 6, 2012

Even China Can't Handle Ukraine

Here is a very interesting story. Chinese businessmen wanted to build a factory in Ukraine. They spent about a year on filling paperwork, getting permits, and bribing government officials. I assume that they have to do the same in China so that their learning curve is pretty insignificant. Then Chinese businessmen told their Ukrainian partners that they need to put their project on hold for couple months. Couple months turned in a full year. When Ukrainian partners contacted their Chinese partners about a status of their joint venture, Chinese partners said that they just finished building the same factory in China. So you can build a factory in China in less time than it takes you to get a permit to build a factory in Ukraine. I knew that Ukrainian bureaucracy is terrible. Now I know how terrible it is to do business in Ukraine for foreign investors. Unfortunately, the story is literally told by the book. Here is the book - the Mystery of Capital by Hernando de Soto. Ukraine's economy must have a significant issue of the dead capital. Many businesses cannot work legally in Ukraine because of extraordinary corruption and bureaucratic red tape.  

So what's happening to the net foreign direct investment (henceforth, FDI) in Ukraine?  The following graph shows that the FDI dropped from a 9-percent to 5-percent share of Ukraine's GDP between 2005 and 2010. You can also see that Ukrainians who work overseas transfer back to their families or friends the amount of dollars that is almost equal to the amount of the net foreign direct investments between 2009 and 2010.

It's also interesting to see how foreign direct investments and international remittances behave during the economic downturn (2007-2009). While the net FDI dropped from 7 to 4 percent share of GDP, the international remittances increased from 3 to 4 percent share of GDP. Please, keep in mind that 1 percent of Ukraine's GDP is $1,3 billion. So the one-percent increase of the personal money transfers is a pretty large raw figure. That's the case when percentage is not impressive as much as raw figure is itself.

You can also see that the amount of the net FDI and international remittances are different from their benchmarks under the Yushchenko presidency and the Yanukovych presidency. Of course, we cannot really compare averages with a single year observation. Let's just agree that the net FDI jumped from 2.6% to 9.1% after the 2004 Orange Revolution when President Yushchenko and Prime-minister Tymoshenko came to power. Since then the net FDI has had a declining trend.