Elton John, Too Old to Adopt a Child According to Ukrainian Law

Maria Danilova, Associated Press journalist, writes in today's The Washington Post that Elton John won't be able to adopt a 14-month-old HIV-positive child from Ukraine because the pop star is too old and isn't married. Family, Youth and Sports Minister Yuriy Pavlenko told the Associated Press that the adoption wouldn't happen because adoptive parents must be married and because the pop star was too old. Elton John is 62 and his life partner David Furnish is 47. But Ukraine's law requires a parent to be no more than 45 years older than an adopted child. Oh, common! Does it really make a difference whether a parent is 46 or 45 years older? Another problem with John & Furnish is that Ukraine does not recognize gays unions as marriages. In 2005 John & Furnish tied the knot in one of the first legalized civil unions in Britain. So what is good enough for England is not good enough for Ukraine, ha? Even John's Ukrainian connections did not help with the child adoption situation. His friend, Elena Franchuk, a founder of ANTI-AIDS charity, and her husband, the richest man in Ukraine, Viktor Pinchuk, could not do anything. Minister Pavlenko said that "Elton John would not be able to adopt a Ukrainian child anyways. The law is the same for everybody: for a president, for a minister, for Elton John". At least, it's good to know that no one is above Ukraine's law. But I wonder whether the child situation would have the same outcome if it were heterosexual couples such as Angelina Jolie with Brad Pitt or Madonna? Brad Pitt is 46 yo and Madonna is 51 yo. Dear Minister Pavlenko, what will be your decision in this case?

If You Think that Eastern Europe has Problems with Democracy, Think Again!

Tyler Cowen, professor at George Mason University, writes in today's New York Times:

One disturbing portent came over the summer when it was reported that the Obama administration had promised deals to doctors and to pharmaceutical companies under the condition that they publicly support health care reform. That's another example of creating favored beneficiaries through politics.

Dr. Cowen also uses the U.S. banking sector as another example of the American democracy at work. He writes that:

If bankers criticize the Treasury or the Fed, they risk losing their gilded cages and could get a bad deal when the next bailout comes. When major economic sectors can be influenced in this way, are we really very far from the nightmare depicted by Ayn Rand in "Atlas Shrugged"?

Another professor at George Mason University, Robin Hanson, discusses pros & cons of the gag deals. Thus, a democracy is not a perfect system of governance. Log-rolling and lobbying are standard attributes of the modern democracy not only in Eastern Europe but also in North America. If log-rolling and lobbying produce policies that promote economic progress, then ends justify means. However, it is a completely different game if the democracy transfers wealth from voters to ruling elites.

British American Tobacco Will Advise Ukraine’s President on FDI

According to the Presidential Decree #613, President Yushchenko appointed several foreign CEOs to the Presidential Committee on Foreign Direct Investments. Now the FDI committee includes CEOs of several foreign companies such as British-American Tobacco, Siemens AG, ArcellorMittal, Hungary's OTP Bank, and Austria's Raiffeisen Bank. In other words, President Yushchenko's advisers will represent tobacco, steel, electronics, and banking industries. Lakshmi Mittal, a 58-year-old CEO of ArcellorMittal, is the most interesting choice among all new advisers. One, Mr. Mittal is extremely rich. The Forbes places Mr. Mittal with $19.3 billion in net worth on the eighth place in the World's Billionaires List. Two, Mr. Mittal represents British-Indian steel company that is the major rival of Ukraine's steel tycoons such as Rinat Akhmetov and Viktor Pinchuk.

Ukraine’s List of Billionaires Got Much Shorter

The 2008 recession hit Ukraine pretty well. Almost 40% of small-scale firms filed for bankruptcy. Ukraine's GDP shrank by 18%. Industrial output dropped by almost 30%. A 4% growth of agro-producing output is one of the few bright spots in a dismal picture of Ukraine's economy.

According to the Forbes, the Ukrainian billionaires also got hit by the 2008 recession really hard. Ukraine had seven billionaires listed on the Forbes's World's Billionaire List in 2008. Now there are only four billionaires on the Forbes' list. Approximately, a net worth of Ukraine's top CEOs dropped more than by three-fourths. It's just crazy. Moreover, Rinat Akhmetov, who was the richest CEO all those years before the recession, had to step down from the first place.

Btw, I wonder how the 2008 recession will affect the 2009 presidential campaign in Ukraine. Will it be the cheapest campaign in the modern history of Ukraine?

Table 1. Forbes' List of Ukraine's Billionaires, 2006-2009.

Year   Name, Corporation	2006	2008	2009
	Net Worth (USD bln) & Forbes' World Rank (#)
Ihor Kolomyisky, CEO Privat	n/a	4.2 (#253)	1.2 (#601)
Sergei Taratuta, CEO ISD	1.2 (#645)	2.7 (#428)	n/a
Rinat Akhmetov, CEO SCM	1.7 (#451)	7.3 (#127)	1.8 (#397)
Viktor Pinchuk, CEO Interpipe	1.2 (#645)	5.0 (#203)	2.6 (#246)
Henadyi Boholubov, CEO Privat	n/a	4.0 (#260)	1.2 (#647)
Konstantine Zhivago, CEO F&C	n/a	3.4 (#327)	n/a
Vitaly Haydook, CEO ISD	n/a	2.7 (#428)	n/a
Total Net Worth	4.1	29.3	5.6

Why is Gangster Music So Popular in Russia and Ukraine?

Russians and Ukrainians love gangster music that is often referred to as Shanson. It has nothing to do with French chanson and chansonniers such as Charles Aznavour or Mireille Mathieu. Neither Aznavour nor Mathieu sang about taking a prisoner's train to Siberia or stabbing ex-girlfriend for snitching. One of the Shanson masters, Michael Shufutinsky, sang about it a lot.

If you've never heard the Shanson song, it usually sounds like a light rock. It is quite often just a guitar solo that is actually considered to be the original GULAG's Shanson. Its lyrics are a mix of reggaeton and gangster rap with a Russian flavor. To become a well-respected Shanson performer, you must have a criminal record and tattoos that describe your crimes and prison sentences. Btw, a movie Eastern Promises did a really nice job with breaking down a meaning of the Russian criminal tattoos.

Shanson is so popular that there are several Shanson-oriented radio stations in Russia and Ukraine. They all have similar names such as Shanson-RU, Shanson-UA, RussianShanson etc. Ukraine's Radio Shanson is extremely popular among certain groups of population. If you happen to take a cab or a shuttle in Ukraine, you are 100% guaranteed to listen to the Shanson your entire trip. Shanson is very popular among cab/shuttle/delivery/truck-drivers. It's funny that Shanson is equally popular among both law enforcement officers and criminals. I never understood why the police officers liked Shanson songs which always portrayed them as violent and corrupt outlaws. But it's 100% guarantee that you can hear the Shanson song requests made by the police or attorney district's officers when they celebrate the Law Enforcement Day (December 20^th) or the Criminal Investigation Unit Day (October 5^th).

So why is Shanson so popular in Russia and Ukraine even though the times of GULAG are far gone? I have two theories. First, cab/shuttle-drivers use Shanson to signal their customers that they are tough and you shouldn't mess with them. In other words, pay for a ride and don't comment on their aggressive driving habits. I guess that police officers and their counterparts listen to it for the similar reasons. Truck-drivers also use it to signal their toughness to hitchhikers. The second theory is that cab/shuttle/delivery/truck-drivers used Shanson to protect their or their company's private property in the sketchy 1990s. The mechanism was the same signaling of toughness. In this case, a number of Shanson fans must have a negative correlation with a rule of law. It is actually true. A number of Shanson listeners reached its peak in the late 1990s and since then it was down the hill.

And let me finish by showing you a picture of one of the best-selling Shanson artists, Gregory Leps, that speaks for itself.

Party of Regions has Much Older and Less Educated Constituency than Its Counterparts

Here are results of the 2006 Parliamentary Elections. I know that data is a bit outdated. However, it still says a lot about demographic differences among constituencies of three major political parties: Party of Regions (POR), Bloc of Yulia Tymoshenko (BYUT), and Our Ukraine (OU). Actually, OU is now OUNS since Lutsenko's party National Self-defense joined it. Both figures indicate that POR enjoys much larger support of the "50+" group. So its constituency is older than both BYUT's and OUNS's. Moreover, POR also receives significantly larger public support among voters without a college/university degree. So its constituency is also less educated than of its counterparts, BYUT and OUNS. In the light of the upcoming presidential elections, it will be interesting to see whether these trends in the public opinion are still the same.

My prediction is that a poor economic performance under the Tymoshenko government has diverted a group of well-educated and working-age voters from BYUT. Moreover, a continuous gridlock in a relations between the Orange Revolutionaries, president Yushchenko and prime-minister Tymoshenko, also took away some public support from both BYUT and OUNS. Let's see whether POR will be able to capitalize on the current situation.





Data source: Kyiv International Institute of Sociology and the Razumkov Center, 2006.

The Happy Planet Index Places Ukraine between Chad and Yemen

Here is a new index that I've just come across. The Happy Planet Index measures "the ecological efficiency with which human-being is delivered". The HPI consists of three measures: life expectancy (data comes from UN), life satisfaction (source: the World Values Survey), and ecological footprint (source: Ecological Footprint Atlas). According to the HPI, Ukraine and Latvia are the least satisfied countries among the FSU countries. Moreover, the Ukrainians enjoy their life a bit more than the Yemenis and a bit less than the Chadians. The ecological footprint situation is OK in Ukraine. Finally, Ukraine has a pretty high rate of life expectancy (67.7 years) as compared to the rest of the FSU region. Btw, data is a bit out of date but the HPI still provides a pretty easy comparative framework for the whole world.

Political and Economic Events around the Grand Opening of the DONBASS ARENA

1. Ukraine opens the largest soccer stadium in Eastern Europe – DONBASS ARENA. A new stadium has 50,000 seats. It is the first stadium with a five-star UEFA ELITE rating built in Eastern Europe. Around $400 mln were spent on its construction.
   
2. BEYONCE performed at the DONBASS ARENA opening ceremony. President of FC SHAKTAR (eng. Coal-miner) and member of POR party, Rinat Akhmetov, said that Beyonce received $2 mln for her performance.
   
3. Donbass region demonstrates its support of POR party once again. President Yushchenko got booed at the opening ceremony of DONBASS ARENA. Prime-minister Tymoshenko who was at the opening ceremony refused to make a speech after she saw how the audience "welcomed" President Yushchenko.
   
4. The grand opening of DONBASS ARENA was so grandiose that it almost looked like the opening ceremony of the 2008 Olympic Games in Beijing (video 1, video 2).
   

Ukraine’s Economy in the Q2 of 2009

According to a new data released by Ukraine's State Committee of Statistics (UKRSTAT), Ukraine's GDP in Q2 of 2009 fell by 18% as compared to Q2 in 2008. Most of GDP's fall is attributed to a drastic contraction in a volume of industrial production, in particular, steel industry and construction sector. Ukraine's industrial output shrank by almost 30% as compared to Q2 of 2008. A volume of construction works dropped almost in half. Consumer prices have increased by 15% since July 2008. Unemployment rate is at 10% level. On a bright side, Ukraine's agricultural output increased by 3.8% in the same period of time.

If we compare Ukraine's economy to Russia's, an overall economic situation is better in Russia than in Ukraine. According the latest issue of the Economist, Russia's GDP declined by 10.9%, industrial production shrank by 10.8%, consumer prices increased by 12%, and unemployment rate is 8.3%.

Now It’s Much Easier to Go Bankrupt in Ukraine

In May 2009 a 28-year-old real estate developer from Kharkiv, Artem Misyura, won a seminal case in the Supreme Court. His real estate development business as many others went bankrupt. So the entrepreneur filed for the bankruptcy of his privately-owned firm. Ukraine's Law on Bankruptcy would allow a liquidation of the private firm if the owner as a judicial entity took a responsibility for all firm's financial liabilities. Basically, the bankruptcy of the private firm was virtually a masochistic process because it would still hold you as an individual responsible for all loans, delinquent payments, etc. Moreover, it will affect your credit history so that you cannot start a new business or even take a loan to buy a car. However, Mr. Misyura who holds a Law Degree from Kharkiv Law School and his former classmates who are corporate lawyers filed a law suit to the Supreme Court where they requested a revision of the Law on Bankruptcy by appealing to the Constitution of Ukraine. And they won a case. As a result, any entrepreneur can file for the bankruptcy with his individual credit history staying intact. Ukraine's lawyers have already nicknamed the case after the entrepreneur. The Misyura Case is really a seminal change in Ukraine's Corporate Law that was a very convoluted and business-hostile piece of legislation. The Law on Bankruptcy was one of the major obstacles to the business in overcoming the current economic crisis. Since it's much easier to file for a bankruptcy and liquidate business, Ukraine's private sector might have a second wind to rebound from the economic crisis.