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7 Years On, Ukraine's Economy Fails to Impress
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Now from the onset, I want to make a few things clear that I made in my last major Ukraine sitrep from 2018:

  • Ukraine hasn’t collapsed (desires of more deluded pro-Russians aside) nor has it come closer to it.
  • While Ukraine’s economy remains in the gutter, ahead only of Moldova in Europe, it is the more Russophone East and South that have, on average, been worse affected.
  • Ordinary Ukrainians still live far better than in the 1990s, even if living standards have if anything regressed over the past decade by most measures.

But on to the bad news: Despite occasional outbursts of optimism on the part of observers…

Now here’s the thing. I actually agree that Ukraine probably has the highest potential/reality gap of any country outside Best Korea. This a straightforward conclusion from national IQ vs. GDP per capita stats.

Problem is, Ukraine can remain “irrational” longer than you can remain solvent.

According to most indices of consumer well-being, Ukraine remains about as mired in the mud as it was in 2016. Here are some representative examples.

Construction

5.7M sqm of residential housing was constructed in 2020, down almost 50% from 2019. This is only 50% higher than in 4.1M sqm in Belarus (a country with 1/4 of its population that had an abortive color revolution). It is also a tiny fraction of the 80.6M sqm constructed in Russia. Many individual Russian regions have as much or almost as much construction as all of Ukraine. For instance, even outside the capitals, Krasnodar oblast (official pop: 5.2M) had 4.5M sqm of construction. Crimea inc. Sevastopol had 1.3M, or almost a quarter of the Ukrainian total. It’s evidently doing very well without Ukraine.

Manufacturing

Ukraine appears to have lost about 30% of its manufacturing capacity relative to 2010. (The graph based on Ministry of Finance statistics compiled/analyzed by a correspondent called “IC”).

The past few years haven’t been good ones for automobilization in general in the ex-USSR. Still, whereas Ukraine once did have a small car manufacturing industry, today it’s as good as non-existent (<5,000 produced in 2020).

In fairness, Ukraine did see 200% growth in Q1 2021. Apparently, a small factory producing a few hundred cars per month started up in Zaporozhye. However, closer analysis shows that all it does is just simply assembly of Ladas (!) and Renault Arkanas from imported Russian subcomponents. So, basically doing for Russia, and at a very small scale at that, what the likes of Slovakia do for Germany. Eurointegration going from strength to strength!

In terms of car sales, less than 100,000 new cars were sold or registered in Ukraine in 2020. This is less than twice as much as the 52,000 in Belarus, and a tiny fraction of the 1 .63M in Russia. Now in fairness, some of that just accrues to евробляхи illegally imported from Poland and the like, but can it explain a twofold per capita gap with Belarus (let alone an eightfold one with Russia)? Press X for doubt.

The aerospace industry has as good as vanished since the Euromaidan. The sole foreign attempt (by the Chinese) to get something going again by buying up Motor Sich was blocked by American influence.

Tourism

7.6M passenger flights in 2019, vs 115M in Russia. This 1:10+ ratio is typical.

Agriculture

Saw this blog post by genby on meat production a few weeks ago.

This shows the ratio of Ukrainian to Russia meat production going down from 43% in 1990 to 23% by 2019.

This is reflected in meat consumption, which in Russia is comparable to OECD levels and almost twice as high as in Ukraine up to at least 2019.

Contra various claims, the price of a Big Mac (a standard product used to assess international differences in prices) in Russia is cheaper than in Ukraine. In mid 2020, the average Russian can buy almost twice as many Big Macs per month as a Ukrainian (a correlation that has held steady since at least the early 2000s).

In fact, genby makes an interesting argument that, based on prices in the Auchan supermarket chain, Russia might have the cheapest products relative to both Ukraine and Poland.

***

Hi Tech

You might rejoinder, why am writing about boring stuff like food and housing. What about high tech?

The reason is – I’m not sure it exists in Ukraine, period.

Now I certainly don’t want to create the (false) impression that Russia is any kind of technological superpower, in reality, the situation, while much improved in the last few years, is still decidedly uninspiring. It is not an O-Ring dense economy.

Nonetheless, it does produce 10% of the world’s power turbines and 40% of the commercial NPPs under construction, the world’s only nuclear icebreakers, the Armata and various nuclear Wunderwaffen. It created Sputnik, one of the most successful and effective Corona vaccines (even if adaption is low, because most Russians are anti-vaxxer idiots – but in that sense, it is in fact kindred souls with Ukraine).

A factory in Ukraine purportedly produces… 60% of the skis used in Europe. Impressive if accurate, but it’s telling that this is what one has to reach for to find examples of Ukrainian manufacturing success.

If you had invested into the Ukrainian stock market on the upsurge of good feeling immediately following the Euromaidan, you would only be barely up in grivna terms and massively down in dollar terms (you’d be up 3x in ruble terms with the MOEX and about 25% in USD terms). This is at once both remarkably in light of the noises made about opening up to Western investment, as well as what it says about their failure to come and what it implies for the Ukrainian economy.

(Incidentally, I note that, very unusually for Ukrainian institutions these days, the website of the Ukrainian stock market has a Russian translation to go along with English and Ukrainian. This says a lot about the ultimate limits of svidomism – it ends where money begins).

IT

Ukrainian economy respecters hype Ukraine’s thriving IT outsourcing sector, which produced $4.2B worth of exports in 2019 (vs. $5.4B for Russia).

But this is actually a good illustration of what I have been getting at.

IT exports apparently similar and 3x higher for Ukraine in per capita terms, meanwhile in terms of what their respective IT spheres have actually create:

Russia: Yandex (inc. AI, cloud services, self-driving cars – basically, a parallel Google, that is its close technological peer, often coming to solutions at the same time as it or slightly ahead); mail group (Vkontakte, Russia’s Facebook); several e-commerce giants; world’s largest digital bank, TCS Group (Tinkoff). These are the foundations of a self-contained tech ecosystem replicating most everything that you can find in Silicon Valley (or Shenzhen) and which no other European country, not even Germany, possesses. There’s even a 23andme-equivalent (Genotek).

Ukraine: 4A Games and GSC make good video games, I don’t want to diss them. But they’re not Yandex or Vkontakte, and they’re not even CD Projekt Red (Poland). Otherwise, <1% of the population (freelancers) lead very nice lives, enjoying Western salaries with Ukrainian prices. Good for them, many of us aspire to the lifestyle of a geo-arbitraged NEET, but it’s hard to see how that will make a lasting contribution to Ukraine’s economic development.

Why do Ukraine (and Belarus) “export” IT services? Because they do not have a Yandex, an Ozon, or a Vkontakte to hire many of their talented software professionals. That Belarus apparently has half of Russia’s IT exports while its only IT company of any international stature is World of Tanks says it all.

In fact, one comparison could be to Moscow in the 1990s, which hosted one of Boeing’s most important global R&D centers and, as I recall, playing a rather a central role in designing the Boeing 787 Dreamliner. This was good for Russian programmers who stayed employed, but it was Boeing and the US that derived 99% of the added value from this. Much of the Ukrainian IT outsourcing sector can be described in the same veins. But today, many of those engineers would be working on places like the Irkut MC-21.

***

Again, as per above, I don’t want to give the impression that Ukraine is some Sub-Saharan African tier economic hole. Some of the unsatisfactory raw statistics are belied by things such as the propensity of Ukrainians to buy second hand cars from Europe, which accounts for the paucity of new car sales. Ukraine’s depopulation coupled with open labor markets with ECE have produced upwards pressure on wages for those who remain there. This has allowed them to float upwards and, anecdotally, improve their ability to do things like budget international travel (though the extent of it should not be overestimated – see the airline flight statistics).

But does any of this resulting in the appearance of the type of complex O-Ring industries that are the true foundation of long-term international wealth and First World convergence? There’s scant evidence of that. It remains an economy based on unmodernized metallurgical enterprises, some new fangled simple assembly work factories in the west, and geo-arbitraging IT service exporters based in Kiev and Lvov (who live very well, but whose contributions to development must be seen as minimal).

So Ukraine, which was already far behind, continues slipping back even further. Nothing particularly surprising, you can’t build an economy on Atlanticist cargo cultism and IT outsourcing.

 

 
• Category: Economics • Tags: Development, Economics, Russia, Ukraine 
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  1. Please keep off topic posts to the current Open Thread.

    If you are new to my work, start here.

    Commenting rules. Please note that anonymous comments are not allowed.

  2. Will there be another post titled “Russia’s Economy Fails to Impress Even More”?

    Because:

    Ukrainian wage over 3 past years in USD 272 —>490
    Russian wage over 3 past years in USD 679 —> 689

  3. Svevlad says:

    One could predict that by the end of the century, countries that have no complex developed “o-ring” economies, at least those in Europe, will simply disappear by either mass depopulation, or by literally being bought out of existence. Probably becomes a dumping ground for immigrants that can’t behave.

    • Replies: @El Dato
  4. @Concerned Citizen

    The wealth of real consumption stats I have cited clearly don’t tally with such a modest difference. Ukraine also now claims to be richer than Belarus.

  5. @Concerned Citizen

    You are such an adorable hatefan.

  6. @Concerned Citizen

    Someone got triggered hard. Nominal wages mean nothing and it’s all about purchasing power, inflation rates, and cost of goods over the measured years. And even all of those a very short term metrics that can rise and fall over the short term. Karlin discussed long term “o-ring” level development which is pretty much non-existent на Украине. But if it warms your soul, Russia isn’t doing so hot either.

    Russia with stagnant wages (in constant USD) is just doing what developed, democratic, progressive, and gay economies do, see below. Tell Ukraine to get on fully on board with it and start stagnating wages.

  7. yeAh3336 says:

    @AK Are you taking into account the shadow economy? Ukrainians always mention this but IDK if it really make that much of a difference in terms of living standards overall, are Ukrainians still better off than Belarusians?

    • Replies: @Anatoly Karlin
  8. @Concerned Citizen

    Considering that ruble is the most undervalued currency in the world right now, your objection is irrelevant .

  9. @yeAh3336

    Consumption statistics and surveys get around much of the shadow economy problem. I think Belorussians even today are still de facto wealthier than Ukrainians, though the gap has undoubtedly shrunk over the past decade (back when Belorussian prosperity was sort of comparable to Russian, and perhaps even somewhat higher in certain areas, like quality of infrastructure – this is no longer true, incidentally).

    • Replies: @yeAh3336
  10. Carlo says:

    My bet is that, with extremely pro-Western ideologues, Ukraine will not colapse as the Saker has been forecasting since 2014, but will be a kind of Latin American country with a weak state, high corruption, most of the population poor, and an almost completely deindustrialized economy. UE and US have no intentions of assisting Ukrainian industry to couple with the Western (which would need huge investments also, which no one is willing to do). It will be a worse version of the Baltics, which were also completely deindustrialized but at least receive funds from the UE and young people can emigrate to work more easily and send money to their relatives.

    • Agree: Aedib
    • Thanks: showmethereal
  11. Yay, another khokhlosratch in making…

  12. Aedib says:

    It created Sputnik, one of the most successful and effective Corona vaccines (even if adaption is low, because most Russians are anti-vaxxer idiots – but in that sense, it is in fact kindred souls with Ukraine).

    You should make a separated thread about the sad vaccination rate in Russia. Sputnik-V turned out to be a quite successful high added value Russian product in some countries (especially in Latin-America) but it seems that Russians are mostly indifferent to it.

  13. UNIT472 says:

    One wonders what reasonably large economy has done well in the last 7 years? I guess I’m with Gail Tverberg.

    https://ourfiniteworld.com/

    The global economy has entered into a slow decay which we can’t get out of because of resource constraints. We get by only by lowering interest rates and increasing debt but that will run out of room soon too.

    Increasing automation ( technology) seems to lead to lower wages/ higher unemployment/greater inequality. It is the industrial revolution in reverse. Instead of kicking surplus agricultural workers off the land and into factories. we have a surplus industrial workforce and no place to kick them too.

    • Agree: Bashibuzuk, Mr. Hack
    • Replies: @Max Payne
    , @Daniel Chieh
  14. I don’t agree. I suppose we all guess a brutal financial tsunami is going to happen, sooner than later. When it happens, real production (tangible things) will be what matters, not Artificial Stupidity which, in fact, needs electronic hardware that someone have to make. The world is plenty of giants with a feet of clay. That’s the reason the world is fast coagulating in economic blocks, ones with more success than others, apart from China which in fact is trying to put a feet in all of them. The US for instance (like the EU) is being evacuated from many of these, e.g. Africa (displaced by China, and not only). On the other hands, Western banks are in the verge of complete collapse, and they are going to finish the same as the once all-powerful steelmaker companies (a lot of them in Europe merely 50 years ago, now only one), I mean, there will be 1-2 megabanks in the Eurozone if it is not the case they were purchased by China. About the US, maybe there will be 1 or zero, depending of what is going to happen the USD.

    Joke countries like Ukraine simply will cease to exist. Nobody pays for eccentricities in the midst of a shipwreck. The clown, I mean Zelensky, gave an interview to the FAZ basically demanding more money and insulting Merkel and Macron (it will be funny to see what happens if the Greens finally aren’t needed at all). France is not going to pay when they are being expelled from its colonies in Africa, a critical matter. Germany will follow, and they won’t forget all this picaresque war about the NS2. Ukraine is a house of cards, whatever the reason the US stops to support it, it will collapse. I don’t think they are in a very good position.

    This kind of situations, by the way, was pretty normal in the 1890-1900s. It is supposed WWI changed it (indeed it did). Many people are saying a lot of nonsenses about the desintegration of the US, such a thing won’t happen, like the Russian Empire, they will look for a new ideological building to remain united and avoiding being disintegrated, we know this phenomena, we call them Revolutions but in fact are air accidents.

    • Replies: @showmethereal
  15. yeAh3336 says:
    @Anatoly Karlin

    I see, do you think Ukraine will be totally depopulated of young people like Moldova is now in another 20 years or does it’s large size and less people getting EU passports prevent that doomsday scenario?

  16. Max Payne says:
    @UNIT472

    we have a surplus industrial workforce and no place to kick them too.

    That’s what wars are for baby.

    If only I can solve the vagina issue…. a generation of weapons that have never been fired in anger and not a single man left on the planet to fire them. God must hate me.

    • Agree: mal
  17. @Concerned Citizen

    Why does everyone fall for such bad bait

  18. @Concerned Citizen

    Ukrainian wage over 3 past years in USD 272 —>490
    Russian wage over 3 past years in USD 679 —> 689

    This stat is plainly perplexing, and I wish someone more patient than I am could investigate this subject in great detail, so we could understand how the Ukraine managed to double its wages since 2015, despite a stagnating economy.

    Real wages in the Ukraine continued to grow during 2020, despite the sharp recession and lack of economic stimulus, which seems to violate the laws of economics. Is there a limit to how high they can go?

    Common sense suggests that there is some serious market dislocation going on, which will eventually resolve in Argentian style financial crisis.

    • Replies: @Anatoly Karlin
    , @zn
  19. Some Guy says:
    @Anatoly Karlin

    What do you think the main cause of Ukrainian under-performance is?

    Some (new?) corruption index I stumbled upon: https://risk-indexes.com/global-corruption-index/

    The GCI is composed of two sub-indexes related to corruption and white collar crimes:
    Corruption

    4 indicators are considered to measure corruption, weighted as follows:

    The ratification status of key conventions (OECD, UN), 15%
    The level of perceived public corruption (Transparency International’s Corruption Index, World Bank data, World Justice Project Organisation data), 25.5%
    The reported experience of public and private corruption (Transparency International’s Global Corruption, Barometer, World Bank’s Enterprise Survey), 17%
    A selection of country characteristics closely linked to corruption, 42.5%

    Country characteristics are meant to capture prevention mechanisms, related effects, causal effects and consequential effects, with the objective of unearthing latent corruption information. This indicator aggregates results related to 4 different indicators:

    Citizen’s voice and Transparency
    Government Functioning and Effectiveness
    Legal Context
    Political Context

    White collar crimes

    The remaining weight (20%) is dedicated to White Collar Crimes, a measure based on (1) the Basel Institute’s AML Index and (2) the membership to FATF and / or related bodies

    • Replies: @jimmyriddle
  20. utu says:

    FYI:

    DATACRUNCH: Ukraine starts to close the gap with Russia
    https://www.intellinews.com/datacrunch-ukraine-starts-to-close-the-gap-with-russia-209626/

    And here more critical look from Atlantic Council perspective:

    What is Ukraine’s economic outlook for 2021?
    https://www.atlanticcouncil.org/blogs/ukrainealert/what-is-ukraines-economic-outlook-for-2021/

    “Unfortunately, no good deed goes unpunished. While most foreign economic observers regard the post-2014 role of the National Bank as the greatest achievement of Ukraine’s entire reforms agenda, the Zelenskyy administration chose to treat it as a mistake. During the early months of 2020, the rent-seeking Ukrainian elite cried out for lower interest rates, lower exchange rates, and higher inflation, so that they could earn more by doing less. Unfortunately, the voice of the people, whose dollar wages were stagnating, was ignored.”

    “Strangely, the main aim of the government became to castrate the National Bank, the country’s greatest success story. ”

    “Judicial reform was supposed to be at the top of the Zelenskyy government’s agenda in 2019, but since the sacking of the previous prosecutor general in March 2020, everything has gone backwards. During the second half of 2020, the allegedly corrupt Constitutional Court ruthlessly dismantled the whole framework of anti-corruption institutions established since 2014. President Zelenskyy rightly protested, but he has yet to demonstrate that he can actually do anything to counter the outrageous actions of the Constitutional Court.”

    • Replies: @Anatoly Karlin
  21. @Felix Keverich

    About 5 million Ukrainians work as guest workers in ECE, and to a lesser extent, in Russia. This is approximately a fourth of its entire labor force. With such a strong outflow, most of it to countries with much higher wages, there must be strong upwards pressure on wages to retain the remaining workers. There is a similar effect in the Baltics and Romania. It does improve living standards back home, I don’t doubt e.g. AP’s anecdotes that his Ternopil relatives have been able to afford budget holidays in Turkey for the first time ever. But is this the kind of growth that creates conditions for long-term convergence? I doubt it.

    • Replies: @AP
  22. @utu

    I linked that article in my introductory Tweet at the top of the post.

    If you look at it in detail, the graphs don’t correlate with the actual claims made in the article, e.g. is this supposed to represent Ukraine catching up?

    It’s not even gaining. Considering the actual per capita differences on that measure, Ukraine should be growing at East Asian tiger-rates (10%+) for such claims to be valid.

    • Agree: Dnought
    • Replies: @Felix Keverich
  23. El Dato says:
    @Svevlad

    Like British Imperial Australia, just for black arrivals, with less deserts and there already is someone there beside Kangus and a few Aborigenes.

  24. @Anatoly Karlin

    That headline is a blatant clickbait. If anything it shows, that “bne” is pandering to Russophobic audience.

    About 5 million Ukrainians work as guest workers in ECE, and to a lesser extent, in Russia. This is approximately a fourth of its entire labor force. With such a strong outflow, most of it to countries with much higher wages, there must be strong upwards pressure on wages to retain the remaining workers.

    Well, it’s not like Ukrainian businesses got much more productive, so where the extra money to pay wages is coming from? This looks like a monetary policy issue.

    • Replies: @sudden death
  25. @Felix Keverich

    Well, it’s not like Ukrainian businesses got much more productive, so where the extra money to pay wages is coming from?

    Maybe business owners simply are forced to share/allocate bigger percentage of overall income to the worker wages? This would also imply lesser real profits, but is it really a bad thing overall, thus should reduce Gini index somewhat? Also that is just a blind guess without looking into any data.

  26. Mr. Hack says:
    @Concerned Citizen

    If you add in the declining economic growth of most large economies in the world today, Ukraine actually seems to be holding its own, if not slowly improving. Serious talk of Ukraine’s economy overcoming Belarus is something you wouldn’t even hear just a few short years back. I’m waiting to read AP’s resounder that will help put things here more into balance.

    • Replies: @zn
  27. zn says:
    @Felix Keverich

    LOL – Ukrop stats are the most BS, least believed by their own people or anybody sane on the planet.

    Forgetting about the fact they are so self-evidently incorrect and lies, I should add:

    1. In desperation, millions of ukrops are moving into the cities from the rural areas….. this artificially “increases” wages of course because of the higher costs of living in city areas

    2. Pension age increase + plus catastrophic mass emigration of young unskilled labour to Russia and EU also artificially increases average wage because the lower wage jobs are removed from the market, and there is a 6-7% increase in experienced workers who are on higher wage jobs already , because of Yanukovich-era pension age reform – increasing working age for population age demographic that is the biggest in Ukraine ( even without emigration the young adult demographic in Ukraine extremely much worse than 90s-era formulation of same problem for Russia)

    3. Fake wage “increase” of 4% or whatever is accompanied by 500% or 2000% cost increases in everything essential outside of electricity. It’s a tragicomic situation.

    4. Poverty rate increase by 3 times since the coup.

    5. I seriously believe they could be including Crimea wages in here – there the GDP has increased by nearly 300%,which invites the question, outside of gay parades, NATO weapons gifts ( some decent, most junk and overpriced) and creating a fake church – what exactly have the Americans done for Banderastan? LOL.

  28. AP says:
    @Anatoly Karlin

    About 5 million Ukrainians work as guest workers in ECE, and to a lesser extent, in Russia. This is approximately a fourth of its entire labor force

    Correct, and this fact affects the validity of new housing construction as an indicator of consumer spending in Ukraine (I will post more in a few hours, been a busy weekend). Unlike Crimea, Ukraine isn’t getting an influx of new residents.

    • Replies: @Felix Keverich
  29. @AP

    Are you suggesting that selyuks sell their hatas before taking a bus to Poland?
    Causing abundance of quality housing on the market, so there is no need to build new.

    • Replies: @Mr. Hack
    , @AP
  30. mal says:
    @Daniel Chieh

    It’s true that Earth is not running out of resources, but it does run out of people who know what to do with them.

    If you gave an average person some farmland, a barrel of oil, a wagon of timber, any resource basically, they wouldn’t know what to do with it.

    And people who do know, are all concentrated in a few giant megacorporations owned by the usual suspects. It causes significant imbalances in the economy which we must address with debt levels because megacorporations will go bankrupt if they can’t achieve their sales growth targets. And we can’t have that.

    • Agree: Daniel Chieh
  31. Mr. Hack says:
    @Felix Keverich

    Your question indicates that you’ve never been to Ukraine and know little about it. One can spot large unfinished homes being slowly built throughout the country, especially within small towns and the perimeters of villages, waiting for the gasterbeiters to return home and live off of their earnings from abroad.

    Near Kyiv

    • Replies: @AP
  32. AP says:
    @Felix Keverich

    With a declining population there is simply less need for new housing, relative to places where 1/4 of the workforce isn’t living abroad at a given moment.

    • Replies: @Felix Keverich
  33. AP says:
    @Mr. Hack

    If it’s near Kiev it probably isn’t a gastarbeiter.

    • Replies: @Mr. Hack
  34. zn says:
    @Mr. Hack

    A country that has suffered an immediate 20% GDP contraction after the Nazi coup and 3x increase in poverty level…… and is well-known for BS about their statistics, should not be compared to actual, normal countries for economic progress you stupid idiot.

    They are not even past recovering half the massive gdp losses from evromaidan……and they are not close to pre 2008 crash or pre-orange levels of economy…… and are disastrously short of end of Ukrainian SSR levels.

    Not only lying about their statistics – their economic performance since the coup far behind Belarus, Gruzia, most notably Armenia, Moldova and all the central Asian republics. Tajikistan and Kyrgyzstan is exactly what Banderastan should be compared to ( even that unfair as they haven’t had double-digit recession, so less chance for immediate higher growth)… and as usual 404 fails abysmally.

    BTW, in this freakshow is their any rational explanation for Naftogaz having sizeable losses in 2020? Yes, there were some structural changes and some further companies created off it – but that comes nowhere near to explaining the losses for a company that received 3 billion dollars in lawsuit money from Gazprom ( strong Q1 profits), had no increased expenditure in 2020 on infrastructure upgrades and even in a epidemic year should not have had such bad losses after a 3 billon payoff.

    Of course in this disaster the one thing the US is moaning about in 404 is the replacement of the idiot who headed Naftogaz – doing these loss-making “reforms” and general svidocretinism that Americans love to encourage.

  35. GMC says:

    Great article Sir – It’s a real shame that Ukraine couldn’t become fairly prosperous country. It had the resources, some decent people and the makings of great place to hang out in. The corruption was always a problem and I think the people got sooo used to it, that they were just overwhelmed and grew accustomed to it and didn’t want to address it. The Maidan was a long term operation and with a crook like Yanukovych at the helm, – the take over was mission accomplished . I see Monsanto/Bayer, Carghil, and the rest of the globalists are doing quite well in the breadbasket industry. As Expected.

  36. UNIT472 says:
    @Daniel Chieh

    The article you linked to mentions water and desalination as a solution to obtain additional fresh water supplies. It assumes the energy required to desalinate a cubic meter of saltwater as the major cost. WRONG. The major cost is the energy and infrastructure to get the water to where it is needed.

    Let’s take California’s Central Valley where 25% of the US food supply is grown. It happens to be having a severe drought and farmers are not planting as much land because their usual sources of water irrigation have been cut off. They can use ground water but , after years of pumping, wells have to go deeper and deeper and it costs money, lots of money, to power pumps to bring it to the surface.

    Fresno, a major agricultural center in the Central Valley, sits 100 meters above sea level. There is also a coastal mountain range between the Central Valley and the Pacific Ocean so you would need to either bore through the mountain range or pump water over it get desalinated water to the Central Valley. Let’s say you’d need two feet of water per square mile of farmland ( about the amount of rain that falls in San Francisco per year ) and you’ve got 20,000 square miles of farmland. That 2 feet times 20,000 or the equivalent to a column of water 40,000 feet high on one square mile of land.

    Ignoring the cost of the enormous pipeline needed to transport that much water ( and the coastal mountain range) just pumping that much water up 100 meters to get to Fresno would require stupendous amounts of electric power. That is why California builds reservoirs to capture the snowmelt from the mountains on the Central Valley’s eastern side. Gravity moves the water for free.

    • Thanks: RadicalCenter
    • Replies: @mal
  37. @AP

    Most Russian regions have declining population. All of them outperform the Ukraine on per capita basis.

    People are always looking to improve their housing situation, it’s just that Ukrainians are desperately poor.

    • Replies: @AP
  38. • Replies: @Blinky Bill
  39. @Blinky Bill

    All the Vietnamese students in Singapore go back to Vietnam after graduation, despite been from a much poorer country. When the Ukrainians do the same, you’ll know things are changing for the better.

    [MORE]

    2009

    • Replies: @zn
    , @GMC
  40. mal says:
    @UNIT472

    If only there was a way to generate massive amounts of dirt cheap reliable electrical power (post capital costs) that would pump all that water..

    It is true that nuclear has high capital costs, but at negative interest rates that governments are paying now and will be paying well into the future capital costs are non factor. Capital is worthless when you are paid to borrow.

    It’s not just free for the state to build a powerplant today, in real terms, banks and hedge funds will pay the government to borrow and make it happen. They want government securities and they want them bad. They will pay anything just so the government is flush with cash and can spend, as long as they get those bonds.

    It’s not electricity or gravity problem that we have, it’s more of a political problem. People don’t see what’s right in front of them.

  41. @Some Guy

    Because, instead of de-oligarchization they started a stupid conflict with Russia, hoping to ingratiate themsleves with the West.

    It’s an object lesson in what happens when “civil society” idiots who take people like Bernard Henri Levy, Robert Kagan and Timothy Garton Ash seriously, have influence.

  42. zn says:
    @Blinky Bill

    But crucially, the ones on the Soros/USAID faggot courses DO return, Lenin from Germany – style

    It’s a very clever tactic from the Americans. Banderastan goes further into the gutter, of course, but anti-russia project progresses.

    All of these students going to America on these “journalism” courses, or “leadership” BS, or anything with any space for subversion like Ukrainian history or finance, law or whatever is sent back by the Americans, in the hope to cause chaos.

    Engineers, doctors etc, not sent back very much

    • Agree: AltanBakshi
    • Thanks: Blinky Bill
  43. Mr. Hack says:
    @AP

    I couldn’t say for sure. The photo was identified as near Kiev, and I was pressed for time and this is the best that I could come up with. If you’ve ever been in and around Western Ukraine, you’ll know what I mean. A lot of really large houses that are clearly not finished most poignantly represented by houses where the windows are still not filled in with window panes. Whole communities of such houses too. I’ve only been to Western and Central Ukraine where you can see such “long term projects.”

  44. 7 Years On, Ukraine’s Economy Fails to Impress

    who are they trying to impress?

  45. AP says:
    @Felix Keverich

    Most Russian regions have declining population.

    Sure. Declining a such as Ukraine’s?

    All of them outperform the Ukraine on per capita basis.

    Of course, No one is claiming that Ukraine is as wealthy as Russia.

    People are always looking to improve their housing situation

    Of course. Otherwise, with Ukraine’s declining population, their would be zero new construction.

    My point was that if one wants to use new housing construction as a measure of spending power, one should account for the effect of population growth when doing so. A country with declining population would see less construction of new housing than one would expect given its wage growth.

  46. Dmitry says:

    Big Mac (a standard product used to assess international differences in prices) in Russia

    Big Mac Index measures inversely what is the minimum cost of labour that Macdonald’s is able to attain in each country, as most of the cost input of a Big Mac is local, human labour, while Macdonald’s Corporation is infamous for using every legal loophole to minimize its workers’ income.

    If Big Mac is cheaper in Russia than Ukraine, then somehow Macdonald’s has been able to pay even less for labour in Russia than in Ukraine.

    While the possibility of Macdonald’s being able to attain even lower labour cost than Ukraine (which is a third world country), seems improbably, it is not impossible, as reportedly MacDonald’s in Russia pays workers $1,90 per hour. Moreover, MacDonald’s in Russia doesn’t pay $1,90 per hour for its entry workers, but less than this in reality – as it allowed (and shouldn’t be) to introduce unpaid breaks between the workers’ day.

    So workers in Macdonald’s Russia have compulsory breaks during the day, for which they are not being paid, and their true salary is therefore likely falling below minimum wage per hour. This said, Macdonald’s in Ukraine does not sound like much more “civilized” employer than in Russia. (Worker reviews in Ukraine: https://otrude.net/employers/24530 )

    • Replies: @mal
  47. @Concerned Citizen

    “Poroshenko Chocolates a Division of Waltzman Enterprises to soon be listed on New York Stock Exchange– for what ails industrial magnets” and David Peterson knows his business inside out.

  48. Dmitry says:

    GDP per capita in Russia is almost three times higher than in Ukraine.

    For salary comparison, Ukraine doesn’t provide a measure of median salaries, but only mean salaries, which seem to fluctuate wildly.

    Something unusual in Ukraine, is a very high minimum wage that they plan to be at $240 ( https://sud.ua/ru/news/ukraine/202600-v-ukraine-vyrastet-minimalnaya-zarplata-kogda-i-na-skolko )

    Minimum wage in Russia is like $175. Median salary in Russia is usually something like $500 per month (mean salary is $700) .

    Surely something looks strange in Ukrainian figures? As it’s difficult to understand how a country can have 1/3 of GDP per capita, but a higher minimum wage.

    Perhaps I confused something here?

    • Replies: @AP
  49. AP says:

    Overall a good article, not in the same league as nonsense written by the likes of Saker or some of the commenters here like AnoninTN, but still not completely free of some sour grapes biases:

    Ordinary Ukrainians still live far better than in the 1990s, even if living standards have if anything regressed over the past decade by most measures.

    Here is Ukrainian GDP per capita in constant 2010 dollars:

    By 2019 Ukraine’s GDP per capita in constant dollars surpassed every post-Soviet year except for the peak year of 2008 (under Yushchenko), and if not for Covid it was set do so in 2020.

    Construction

    5.7M sqm of residential housing was constructed in 2020, down almost 50% from 2019. This is only 50% higher than in 4.1M sqm in Belarus (a country with 1/4 of its population that had an abortive color revolution).

    With declining population and 1/4 of workforce working abroad, it would make sense that construction of new housing units wouldn’t be so high. Any comparison would have to take that into account.

    In terms of car sales, less than 100,000 new cars were sold or registered in Ukraine in 2020. This is less than twice as much as the 52,000 in Belarus, and a tiny fraction of the 1 .63M in Russia.

    Ukraine has had a huge “problem” with peopel driving nto UKriane with cars, not having to pay duty on them:

    https://www.kyivpost.com/business/ukrainians-buy-8-more-new-automobiles-in-2019.html

    The state was facing a completely uncontrolled mass of EU-registered automobiles, the owners of which practically did not pay anything to the budget. In addition, the situation was also threatening in terms of monitoring traffic safety, as it was almost impossible to hold drivers of those cars accountable.

    In March 2019, over 263,000 cars still not complied with the new fiscal rules.

    Most of the EU-registered cars were imported from Poland, online data aggregator Opendatabot reported in 2018. Over 110,000 cars re-registered later in Ukraine came from Poland, 51,000 came from Lithuania, 20,000 – from Germany, and 14,000 – from Bulgaria.

    Tourism

    7.6M passenger flights in 2019, vs 115M in Russia. This 1:10+ ratio is typical.

    This is the best measure but your choice to use Russia as a yardstick is a very silly one. Russia is a vast country where air travel is necessary: someone from Moscow visiting family in Chelyabinsk would usually fly rather than spend 2 nights and one day on a train. How many people would drive rather than fly from Novosibirsk or Saint Petersburg to Sochi? But most Ukrainians can fly to their Black Sea places.

    Why not compare Ukraine to its neighbors?

    Ukraine (pop. 35 million), 7.6 million travelers.
    Poland (pop. 37 million): 10.2 million travelers.
    Romania (pop. 19 million): 5.6 million travelers.
    Belarus (pop. 9.4 million): 3.2 million travelers.

    Ukrainians fly about 80% as much as to Poles and Romanians.

    Of these, Belarussians fly the most. I suspect that this is because they’d rather fly to Crimea or Sochi than drive to the Baltic Sea.

    Ukraine has had a dramatic increase in foreign tourism post Maidan:

    https://en.interfax.com.ua/news/press-release/669100.html

    Turkey has become the most popular summer holiday destination among Ukrainians. Over the past four years, the number of tourists from Ukraine at Turkish resorts has increased by 52%. During 2019, 1.2 million Ukrainians visited the country.

    :::::::::::

    Here is total Ukrainian consumer spending:

    https://www.macrotrends.net/countries/UKR/ukraine/consumer-spending

    Ukraine consumer spending for 2019 was $115.82B, a 27.56% increase from 2018.
    Ukraine consumer spending for 2018 was $90.80B, a 20.66% increase from 2017.
    Ukraine consumer spending for 2017 was $75.25B, a 21.04% increase from 2016.
    Ukraine consumer spending for 2016 was $62.17B, a 0.8% increase from 2015.

    This shows the ratio of Ukrainian to Russia meat production going down from 43% in 1990 to 23% by 2019.

    Does meat also include poultry? Ukraine has shifted its production from meat to poultry.

    Ukraine has 24% of Russia’s population but produces 23% of Russia’s meat.

    Your link shows that despite the loss of Crimea and much of Donbas, Ukrainian meat production in 2019 has been the highest since the early 1990s:

    So it’s about the depth of the 90s collapse, rather than any problems post Maidan. In fact, the increase of meat production is a positive factor.

    This is reflected in meat consumption, which in Russia is comparable to OECD levels and almost twice as high as in Ukraine up to at least 2019.

    Ukraine’s meat consumption in 2019 was about 60% Russia’s. Ukrainian meat consumption was lower every year from 2010-2015 than in 2019. Low point was 2015 (of course). High point was 2017.

    ::::::::::::

    Overall, your statement that “living standards have if anything regressed over the past decade by most measures” is incorrect. Ukraine certainly has not been booming, but it is better not only than in the 1990s but also better than 10 years ago.

    • Agree: Mr. Hack
    • Thanks: Anatoly Karlin
  50. mal says:
    @Dmitry

    Your methodology is actually not that terrible, and it got me googling about the life of the poors.

    The data here are somewhat dated but still, 2016, should be representative.

    How many Big Macs McDonalds employee could buy in different countries?

    Australia looks like a massive outlier with 3.5 BigMacs/hr.

    Russian poor makes 1.2 BM/hr, three times more than Mexican poor (0.4) and almost double Chinese poor (0.7).

    Canada and US do somewhat better at 1.8 and 1.9, Europe is at 2.0+.

    Basically, Russian McDonalds worker makes 2/3 of US McDonalds worker in real terms. Seems reasonable.

    https://www.cleveland.com/datacentral/2016/06/mcdonalds_wages_and_the_price.html

    • Replies: @Boomthorkell
    , @Dmitry
  51. @mal

    I always wanted to know what it would be like to have my life measured in Corpsestarch Rations.

    • LOL: mal, AP
  52. Dmitry says:
    @mal

    Macdonald’s prices in wealthy Western countries, is closer to going to cafe for coffee to drink coffee – cost of the restaurant is mainly the workers’ labour, while cheap raw material of the processed food is only a minority of cost for which you pay.

    But Macdonald’s are also like a stereotype of exploitative capitalists, who skim as much surplus value from their labour, according to different levels of worker protection in different countries. This is a corporation that uses every legal loophole to pay the minimum possible for their labour in each market, depending on the laws and economic situation in each country.

    Australia has a very high minimum wage (despite its anglosaxon, supposedly neoliberal politics), so Macdonald’s has to pay its entry level workers $14-15 per hour. The end result, is very expensive Big Mac – $6.45.

    In Ireland, for example, Big Mac on its own is €4.33 (and with fries and drink the bourgeois price of €7.19).

    In Russia – 130 rubles.

    In Russia Macdonald’s, entry workers are paid $1,90 per hour (excluding unpaid compulsory breaks), so you are eating in Macdonald’s not that far from the raw material cost + electricity, taxes and rent, plus slave wages for its workers, and some profits.

    I feel sad for the cows; nobody pays cows a salary for their contribution – this is absolute exploitation of the cows by the capitalists; so we cannot say lucky humans working for Macdonald’s for the $1,90 (and not losing any bodyparts) are suffering absolute exploitation, just a relative one.

    McDonalds worker makes 2/3 of US McDonalds worker in real terms

    If it means we have to eat our own labour. It’s a circle – if I am paid $1 to make you a cup of coffee in a cafe, then you pay $2 for coffee. Then my salary will be half a cup of coffee. If I am paid $500 to make cup of coffee in a different cafe, and you pay $1000 for coffee. Then my salary will be a half cup of coffee. It’s the same salary?

    My hypothetical “life advice” to not be scammed, is that if you are to decide between these two jobs – is that you should prefer to work in the second cafe,

    • Replies: @mal
  53. mal says:
    @Dmitry

    Then my salary will be a half cup of coffee. It’s the same salary?

    If everything else scales the same, then of course it will be the same salary. And of course, things don’t scale the same, but that’s not really an argument in your favor.

    US McDonalds worker has to pay rent and healthcare, and possibly education, and he will have to have a car – at least $600/mo all in with insurance and fees. Those things are vastly cheaper in Russia. US McDonalds worker is one emergency away from bankruptcy, Russian one is on a far more solid foundation.

    My hypothetical “life advice” to not be scammed, is that if you are to decide between these two jobs – is that you should prefer to work in the second cafe,

    Not really. Costs of living are a key criteria for me. Which is why I’m in the Deep South. Sure, its not fancy here, but i have no debt, substantial savings, and can work or not and spend time with kids without fear of bankruptcy. A friend from Ohio took a job in Connecticut, for a fairly big nominal pay raise. Despite that, she couldn’t even afford a haircut there! And sure, Connecticut is much nicer than Ohio probably, but she came back after two years. Another friend works for Facebook (material science, not brainwashing), fairly big money, but he rents, it will take him like 10 years to scrape enough for a house over there. And social atmosphere, not sure i would want to bring my kids there these days, no offense. I’m sure its nice in California, but being a debt slave for the rest of your life doesn’t sound appealing.

    That second cafe may look nicer, but that’s actually rather deceiving.

    • Agree: Bashibuzuk
    • Replies: @Thorfinnsson
    , @Dmitry
  54. AP says:
    @Dmitry

    Something unusual in Ukraine, is a very high minimum wage that they plan to be at $240

    Minimum wage in Russia is like $175. Median salary in Russia is usually something like $500 per month (mean salary is $700) .

    Surely something looks strange in Ukrainian figures? As it’s difficult to understand how a country can have 1/3 of GDP per capita, but a higher minimum wage

    Ukraine is being more like Europe. Ukraine’s minimum wage if $240 is about half of it’s average wage of $490. In France, the minimum wage of 1500 Euros is also half of the country’s average wage of 3000 Euros.

    But in the USA, the minimum wage of $1300 is only 27% of its mean wage of $4000.

    Russia is more like the USA.

  55. GMC says:
    @Blinky Bill

    Good video – thanks ! My post may not be up to date , but when I was in Vietnam in 70 and 71 , I was in the engineers in the Delta and I was either living next to the Vietnamese or next to an ARVN or Cambodian outpost. The children , when they saw us, called us My – My – for GI. I got to know the people pretty good and I would look at their school books. I had 1 1/2 years at a US University , prior to my military 2yr. service. Those children were being taught some very good math, science, literature, geography etc. and I’m talking about 12 and 13 yr. old kids. I remember being very surprised at their school curriculum. Unfortunately the boys had to join the military at 15yrs old and if they weren’t KIA by 1975 , they would be put in a Re-education camp for 5 to 10 years. I ran into some of these guys that worked for us or were Arvns during the war, and in 2019 { I went back – 1st time- to see Nam } and they still spoke our english { they used the same words they learned from our military times} . In other words, I think they still believed in a Free country, not a communist one. It doesn’t surprise me that they are still being well educated, esp. with no war on.

    • Thanks: Blinky Bill
  56. @AP

    Agree with you AP. Ukraine is not booming not collapse. Like most of East Europe, there’s not much space for higher economic growth. Industries are privatized, government have other problems, boost from dotation pan out. I would say that Ukraine is doing above expectations.
    Russia on the other hand… Everything lower then 4-5 economic growth is bad.

    • Replies: @AP
    , @Dmitry
  57. Mr. Hack says:
    @AP

    So how, in your opinion, is Ukraine’s economy doing in comparison to its neighbor Belarus?

    • Replies: @AP
  58. AP says:
    @Mr. Hack

    Per capita GDP is higher in Belarus (perhaps due to the money Belarus gets from refining Russia’s oil and selling it?) but wages are about the same.

  59. AP says:
    @Demografie

    Agree with you AP. Ukraine is not booming not collapse

    This what our host also concluded, but he furthermore stated that Ukraine has regressed in 10 years, in reality there has been modest but real improvement in various areas. The west and center have done better than the East. Visiting Lviv over the years has been like visiting Moscow in the sense that one sees improvement with every visit.

    • Replies: @Californian Candidate
  60. AP says:

    Otherwise, <1% of the population (freelancers) lead very nice lives, enjoying Western salaries with Ukrainian prices

    Another point: the money these guys make is often spent within Ukraine, it supports an ecosystem of services and goods within the country. It isn’t mostly foreign tourists supporting Lviv’s restaurant scene or the Carpathian ski places. Probably a smaller % of Ukraine’s 4+ billion outsourcing money earned by local programmers ended up sitting in Cyprus or elsewhere than does money made by Ukrainian or Russian oligarchs.

  61. @AP

    The west and center have done better than the East.

    Could the success of the western/central regions be attributed to their proximity to Poland/EU? As in, the Western Ukrainians (who work abroad) are more likely to work in the EU where salaries are high. As opposed to Eastern Ukrainians who (if they work abroad) are more likely to work in Russia where salaries aren’t high like in the EU. The net result being that Western Ukraine is being boosted by much larger remittances thereby improving local economies at rates the East cannot match.
    Just an idea. I understand this is without considering other factors such as internal industry location or internal salary differences between West and East.

    • Replies: @AP
  62. @mal

    US McDonalds worker has to pay rent and healthcare, and possibly education, and he will have to have a car – at least $600/mo all in with insurance and fees. Those things are vastly cheaper in Russia. US McDonalds worker is one emergency away from bankruptcy, Russian one is on a far more solid foundation.

    I’m not going to pretend that McDonald’s line workers enjoy a high standard of living, but this needs to be put in context.

    First, a large fraction of McDonald’s line workers in the USA (and likely many other countries) are people with lower income requirements than the typical adult worker. Teenagers living with parents, retirees receiving Social Security, and Third World immigrants make up much of the McDonald’s workforce.

    Second, poor workers in America enjoy various assistance programs from the federal and state governments. McDonald’s workers not living with their parents are likely to qualify for Section 8 (subsidized rent), Medicaid (single-payer healthcare for the poor), subsidies for heating and even telecommunications, and the Earned Income Tax Credit.

    Obviously McDonald’s workers don’t need to pay for education, but if they are pursuing additional education then it should be pointed out that McDonald’s provides tuition assistance as well as the opportunity to study on company time.

    Your estimate of transportation cost is plainly excessive. Some basic math here:

    60-month 5% note on a $5,000 car: $94/mo

    State minimum liability insurance with maximum deductible full collision: $50 (arbitrary figure, fwiw $114 is the average for the whole country and this includes high cost states and people with much more comprehensive insurance policies)

    Gasoline (assuming 1,000 miles driven per month, 30 mpg, and $3/gallon gas): $100

    Maintenance (assuming decade old Honda Civic or Toyota Corolla): $31 (see this resource: https://repairpal.com/cars/honda/civic/2010)

    Registration: $8 (using arbitrary $100/yr figure)

    Monthly total: $283

    Fwiw here are average car ownership costs by state across the whole country: https://www.move.org/average-cost-owning-a-car/

    Some McDonald’s workers of course may not need a car either.

    Lastly, McDonald’s offers its employees discounts on food. If I recall correctly they have an opportunity to purchase McDonald’s meals at half-price. The Big Mac is also a “premium” sandwich which is extravagantly priced relative to its modest quantity of beef (3.2 ounces), whereas the savvy McDonald’s employee sticking to the 1-2-3 Dollar Menu can feed himself very cheaply and without needing to invest energy after his shift into food preparation.

    • Agree: AP
    • Thanks: AltanBakshi, Blinky Bill
    • Replies: @mal
    , @Blinky Bill
  63. AP says:
    @Californian Candidate

    That might play a role, although Eastern Ukrainians have started working in Poland also. The light manufacturing factories that make stuff like electronic cables for German cars are mostly being built in the west and center. The largest number of IT jobs are in Kiev, followed by Lviv (which has the most such jobs per capita).

    • Replies: @Demografie
  64. @AP

    There is same situation in Czechia. A lot East Ukraine start to appear in recent years. They’re working in all kinds of jobs. Older generation appears ready to come back. Younger educated almost always want to stay.

  65. @AP

    Good comment.

    With declining population and 1/4 of workforce working abroad, it would make sense that construction of new housing units wouldn’t be so high.

    To some extent, yes. But even Russia’s Far East (population ~6M, also depopulating) has 2.5M sqm, or 44% of Ukraine’s figure.

    Bad no matter how you look at it.

    Ukraine has had a huge “problem” with peopel driving nto UKriane with cars, not having to pay duty on them

    Yes, евробляхи. But can this explain a twofold per capita difference with Belarus in new car sales? That’s seems a stretch.

    … Ukrainian meat production in 2019 has been the highest since the early 1990s:

    More accurate to call it stagnation. (4% increase since 2013 is not really growth).

    This is what growth looks like:

    Ukraine has better climatological conditions for meat production than Russia.

    Good points on air flights though, I agree that a better index of tourism consumption should be found. That said, ~80% of air passenger traffic is domestic Russian.

    ***

    Ukraine certainly has not been booming, but it is better not only than in the 1990s but also better than 10 years ago.

    Better than 1990s, but I would say only marginally better than 10 years ago. (On some indicators, clearly worse).

    No meaningful reduction of the gap with Russia, as could have been expected not just from Maidanist rhetoric, but from the fact of a lower base.

    Moreover, large underperformance even relative to what I was expecting. I wasn’t expecting miracles, but I did expect when I wrote Ukrotriumph that Ukraine would modestly close the gap with Russia in subsequent years, with the singular if important exception of average nominal wages (and it remains to be seen how stable that development is), that hasn’t happened at all. So actually Ukraine has surprised me to the downside, if that is even possible.

    ***

    Aircraft industry no longer exists. Sole foreign attempt (by the Chinese) to get something going again was blocked by the American masters. https://asia.nikkei.com/Business/Business-deals/Ukraine-blocks-Chinese-takeover-of-jet-engine-maker-on-US-urging

    Who, Russiagate regardless, don’t even deign to give Zelensky a summit before Putler.

    • Replies: @AP
  66. mal says:
    @Thorfinnsson

    Second, poor workers in America enjoy various assistance programs from the federal and state governments. McDonald’s workers not living with their parents are likely to qualify for Section 8 (subsidized rent), Medicaid (single-payer healthcare for the poor), subsidies for heating and even telecommunications, and the Earned Income Tax Credit.

    I don’t know about the rest, but Medicaid cutoff is about $17,300.

    In 2010, as part of a broader health coverage initiative, the Affordable Care Act (ACA) expanded Medicaid to nonelderly adults with income up to 138% FPL ($17,236 for an individual in 2019) with enhanced federal matching funds (Figure 3).

    https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-medicaid-setting-the-facts-straight/

    If you are close to full time at $8.40/hr average wage, you just might squeeze by. But even at $8.70/hr you might lose it. Also, prepare to do a lot of driving – a lot of medical establishments don’t take Medicaid.

    Monthly total: $283

    That’s way too low.

    From your own link:

    According to our data, it costs roughly $5,264.58 every year to own a car in the United States. This includes the average costs for car payments, gas, car insurance, and replacement parts across every state in the country—some of which have much higher costs than others.

    The lowest state is Alaska at $299. Michigan is highest at $775. Average is $439. If you are poor in a bad neighborhood with an old car, your insurance and repair costs will be far higher than average. My recommendation for transportation budget is $600, or you won’t be able to make it to McDonalds job one day (won’t have emergency fund for transmission failure or some other major repair, or get your car stolen) and will get fired. But even at $439 average, it is rather substantial chunk of your pay.

    • Replies: @Thorfinnsson
  67. @mal

    I don’t know about the rest, but Medicaid cutoff is about $17,300.

    https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-medicaid-setting-the-facts-straight/

    If you are close to full time at $8.40/hr average wage, you just might squeeze by. But even at $8.70/hr you might lose it. Also, prepare to do a lot of driving – a lot of medical establishments don’t take Medicaid.

    Medicaid eligibility rules vary by state, and critically they also vary by household size. In my state, even though it rejected Medicaid expansion, people remain eligible for Medicaid at a household income limit of 306% of the Federal Poverty Limit per household member. For an individual this is nearly $3,300 per month. And thanks to SCHIP, children are often eligible even when parents are not.

    Those not eligible for Medicaid will qualify for subsidized Obamacare plans through the exchanges.

    There are medical providers who refuse to accept Medicaid and Medicare, but these are very much in the minority. The Medicaid and Children’s Health Insurance Program Payment and Access Commission Report found that 71% of providers accept Medicaid: https://www.healthcaredive.com/news/doctors-less-likely-to-accept-medicaid-than-other-insurance/546941/

    Full report: http://www.macpac.gov/wp-content/uploads/2019/01/Physician-Acceptance-of-New-Medicaid-Patients.pdf

    There is also always the option of simply not paying medical bills.

    That’s way too low.

    My math is based on the purchase of an affordable, reliable used car by a person with decent but not great credit and choosing a frugal form of car insurance. The costs constructed by me are deliberately constructed to be below average, because average includes the entire population. The average price of a new car sale in the USA now exceeds $40,000.

    It is true that living in a poor neighborhood will drive up full coverage insurance premiums, but the main drivers of insurance premiums (other than state regulations) are driver history, age, sex, and the value of the car. But even if we increase the cost to the national average of $114/mo (which, again, includes far more expensive cars and people selecting zero deductible) the monthly transportation budget goes from $283 to $347.

    That said your advice to establish an emergency fund is very good, and it’s even more important for poor people since they tend to lack access to credit and usually don’t have friends or family with money.

    • Replies: @mal
  68. AP says:
    @Anatoly Karlin

    With declining population and 1/4 of workforce working abroad, it would make sense that construction of new housing units wouldn’t be so high.

    To some extent, yes. But even Russia’s Far East (population ~6M, also depopulating) has 2.5M sqm, or 44% of Ukraine’s figure.

    Bad no matter how you look at it.

    Of course Russia is doing better than Ukraine. Ukraine’s greater rate of depopulation accounts for at least some of the construction gap, though.

    Ukraine has had a huge “problem” with peopel driving nto UKriane with cars, not having to pay duty on them

    Yes, евробляхи. But can this explain a twofold per capita difference with Belarus in new car sales? That’s seems a stretch

    .

    It probably closes the gap considerably. More cars are brought into Ukraine as are bought in Ukraine:

    https://www.wcshipping.com/blog/ukraine-lowers-import-duties-on-cars-in-2019

    “From January to October 2018, the number of cars imported to Ukraine grew to 83,900 cars, a 90% increase over last year.”

    In the entire year of 2018, only 82,000 new cars were bought in Ukraine.

    This speaks poorly of Ukraine’s corruption and government effectiveness, but indicates that car buying is similar to Belarus.

    ::::::::::::::::::

    Ukrainian meat production in 2019 has been the highest since the early 1990s:

    More accurate to call it stagnation. (4% increase since 2013 is not really growth).

    In 2013 Ukraine included Crimea, which accounted for a high % of its meat production (not sure about beef, but 8% of poultry.

    Probably at least 5% of Ukraine’s meat production was lost by geographical changes in 2014. So Ukraine not only made up the loss of the 5% but gained a further 4% – it’s more like 9% growth in meat production. Not bad.

    Of course meat is not the major portion of Ukraine’s agriculture production – around 25% IIRC. It’s telling that your source just focused on meat production. Most Ukrainian agriculture involves grain. Grain production has been doing great. Overall, Ukraine’s agricultural production has been a success post Maidan.

    Pre-Maidan:

    Post-Maidan:

    “Ukraine certainly has not been booming, but it is better not only than in the 1990s but also better than 10 years ago.”

    Better than 1990s, but I would say only marginally better than 10 years ago. (On some indicators, clearly worse).

    Compared to 10 years ago Ukraine’s agricultural output has improved significantly. It’s industrial production has done worse, with losses in high value production such as airplanes and complete automobiles. These losses have been compensated for, to an extent, by addition of various light manufacturing and more importantly a boom in IT outsourcing (programming, R & D). Wages in Ukraine have improved significantly, as low wage workers have moved West where they can work legally and send money home and local employers have been forced to increase wages in order to compete with this pressure.

    Yes, one can focus on zero planes produced in 2016-2020 compared to 22 planes in 2010-2014, but the overall picture has been modest but not insignificant improvement.

  69. Dmitry says:
    @mal

    everything else scales the same,

    Even assuming everyone around you was paid the same, everything else doesn’t scale unless a large part of its cost input will be labour intensive, and localized (mostly services), or based on what only local people can pay (like rents).

    If I am paid $1 or $500 to make a $2 or $1000 cup of coffee – I will be able to drink the same amount of my own coffee.

    But if I wanted to use the income to buy microchips, bars of gold, OLED televisions, bags of sugar, litres of milk, pianos, pieces of steel, etc, (things where the price is not determined by local labour costs) then I would be able to purchase 500 times more for that salary from the second cafe.

    McDonalds worker is one emergency away from bankruptcy, Russian one is on a far more solid foundation

    But compare Russian Macdonald’s labour, not with cowboy capitalist America, but with the same labour in comfortable Western European welfare states like UK, Ireland, etc.

    In the UK, minimum wage fulltime MacDonald’s worker would receive $23,000 per year as their salary (35 hourly salary per week in minimum wage, which is $12 per hour), and they would pay 0% income tax payment for the first $18,000 they earn. In UK there is 0% income tax rate for the first $18,000 you earn each year. They would receive free advanced healthcare that is given to all residents.

    In the Russian Federation, MacDonald’s worker would receive $3500 per year as their salary (35 hours per week for $1,90 each), and then they have to pay 13% income tax on all. And you had access to free notadvanced healthcare.

    In terms of expenses, rent and public transport would be significantly more expensive in the UK, but generally other basic expenses (including your food expenditures, if you avoided eating away from your home) can be not so much different.

    A low income worker has more labour protection (including in the minimum wage and tax structure) in the UK, than in Russia. Dry sarcastic humour of history, that had presented the ideological conflict of the 20th conflict around the empowerment of the proletariat

    Not really. Costs of living are a key criteria for me. Which is why I’m in the Deep South.

    If you are someone who can move around, then it is a fair preference how important it is for you local costs of services.

    Perhaps the cost of labour hurt you more, if you are married with children (and had to pay for your wife’s hairdresser and nail salon, or your daughter’s dance lessons, or your divorce lawyer etc).

    But in my case, I almost don’t spend anything on services. Only regional difference I noticed to be negatively costed by is high rental cost. Although the benefit of the high rental cost, is to live in a bourgeois environment and walk to work.

    Also I was fortunately in locally a middle class peoples’ employment environment. My service payments like moving services, or gym membership – are the ones which were paid for by my employer. Non-leisure travel expenses – also paid for by employer.
    .

    Cost of living differences – this is an issue I remember people told me a lot about. In reality, they were less than expected.

    Another thing is that I found that cost of living also falls after some time, as you learn from experience of living in the same place. So that tourists are immediately scammed, and so are new residents. When I was a new resident, I was paying much higher prices than I needed to, from my own stupidity.

    After you lived for some years in the same place, you eventually learn you were going naively to the local aristocrats’ shops without realizing it, and it’s better to look for the shops and services of the working class.

    • Replies: @mal
  70. Dmitry says:
    @Demografie

    Ukraine should be able to benefit from the rule that after you fell into the bottom of a hole, then there is nowhere to fall anymore.

  71. mal says:
    @Thorfinnsson

    Medicaid eligibility rules vary by state, and critically they also vary by household size. In my state, even though it rejected Medicaid expansion, people remain eligible for Medicaid at a household income limit of 306% of the Federal Poverty Limit per household member. For an individual this is nearly $3,300 per month. And thanks to SCHIP, children are often eligible even when parents are not.

    Children also drive up costs rather significantly, and complicate things – you are unlikely to be able to keep a McDonalds job with kids to get to that 306% FPL limit. You will end up on a full on welfare that will doom you to poverty. Also, Wisconsin is the max allowed, Lousiana – doesn’t allow such expansion and stays at 138% FPL.

    median eligibility level for family planning services is 206% FPL, but eligibility levels range from 138% FPL in Louisiana and Oklahoma to a high of 306% FPL in Wisconsin.

    https://www.kff.org/report-section/medicaid-and-chip-eligibility-and-enrollment-policies-as-of-january-2021-findings-from-a-50-state-survey-report/

    Those not eligible for Medicaid will qualify for subsidized Obamacare plans through the exchanges.

    Those subsidies must be rather hefty, keep in mind we are talking about $9/hr job here. Unsubsidized Obamacare plans are terrible, it was cheaper for me to pay $1,600/month COBRA when we had our daughter than get Obamacare.

    The Medicaid and Children’s Health Insurance Program Payment and Access Commission Report found that 71% of providers accept Medicaid:

    Physicians in general/family practice were less likely to accept Medicaid patients (68%) than Medicare (90%) or private insurance (91%). Only 36% of psychiatrists accepted new Medicaid patients compared to 62% who took Medicare patients and also 62% who accepted on private insurance.

    So about 1/3 doesn’t take it. I guess ease of access would depend on where you are.

    There is also always the option of simply not paying medical bills.

    Won’t collection agencies hunt you down?

    It is true that living in a poor neighborhood will drive up full coverage insurance premiums, but the main drivers of insurance premiums (other than state regulations) are driver history, age, sex, and the value of the car.

    Also location.

    Location, location, location – Due to higher rates of vandalism, theft and accidents, urban drivers pay a higher auto insurance price than those in small towns or rural areas. Where you park your car (on the street or in a secure garage) and anti-theft features may impact the bottom line as well.

    https://www.iii.org/article/what-determines-price-my-auto-insurance-policy

    Don’t get me wrong, you can be a great driver. But if others around you aren’t, they are going to wreck you. I mean, Michigan has the highest cost of car ownership at $775/mo. And that’s not because everybody in Detroit or Flint, MI is driving super expensive Ferrari. If you live in a poor area, prepare to get wrecked or have your wheels stolen. $350/mo ain’t gonna cut it.

    • Replies: @Thorfinnsson
  72. mal says:
    @Dmitry

    A low income worker has more labour protection (including in the minimum wage and tax structure) in the UK, than in Russia.

    Maybe. My knowledge of UK and European laws and real economies is rather limited. I once got lost in Heathrow and ended up in UK by accident, but that’s all the experience i have with the place.

    Perhaps the cost of labour hurt you more, if you are married with children (and had to pay for your wife’s hairdresser and nail salon, or your daughter’s dance lessons, or your divorce lawyer etc).

    We were able to get a babysitter who was hot, religious, and a good singer and a musician for $8/hr. And daycare is significantly cheaper too, so its a big deal.

    But in my case, I almost don’t spend anything on services. Only regional difference I noticed to be negatively costed by is high rental cost. Although the benefit of the high rental cost, is to live in a bourgeois environment and walk to work.

    Well, as i mentioned before, you are an exception to the rule. Most people spend on services, price of goods is less relevant. At least in the US. UK may be different, i don’t know.

    • Replies: @RadicalCenter
    , @Dmitry
  73. @Thorfinnsson

    Lastly, McDonald’s offers its employees discounts on food. If I recall correctly they have an opportunity to purchase McDonald’s meals at half-price. The Big Mac is also a “premium” sandwich which is extravagantly priced relative to its modest quantity of beef (3.2 ounces), whereas the savvy McDonald’s employee sticking to the 1-2-3 Dollar Menu can feed himself very cheaply and without needing to invest energy after his shift into food preparation.

    [MORE]

    • Replies: @Blinky Bill
  74. Godot says:

    Well, it would be quite surprising if Post-Soviet country A with massive revenues from hydrocarbon and other mineral exports weren’t substantially richer than Post-Soviet country B without such revenues. Wouldn’t it?

  75. @Godot


    Black Gold

    [MORE]

    • Replies: @Godot
  76. Godot says:
    @Blinky Bill

    Chernozem is fine (Russia has it, too btw), but by far not as lucrative as giant hydrocarbon deposits (for now at least).

  77. @Blinky Bill

    A self proclaimed Russian nationalist returning from USA and advertising for American megacorp, can we be sure that Karlin is not a State Department plant among us?

    Im just jesting, it’s nice to eat in McD couple times in a year, especially somewhere in Asia, after eating healthy rice and plant based foods for too long. I remember how once I stayed in the holy city of Dwarka, and even eggs were not allowed there(and alcohol!), the pain, the hunger! How nice it was to eat MaharajMac afterwards in Rajkot.

    Btw something must be done for the revitalisation of Russian Far Eastern regions, those lands are strategically exremely important for Russia’s future, too much of money flows from Siberia and Far East to Moscow, in Australia and Canada many remote areas are surprisingly wealthy, in Russia there are also such areas, like Yamalo-Nenetsia and Sakhalin, but they are more like exceptions to a rule.

    • Agree: Blinky Bill
  78. @mal

    Children also drive up costs rather significantly, and complicate things – you are unlikely to be able to keep a McDonalds job with kids to get to that 306% FPL limit. You will end up on a full on welfare that will doom you to poverty. Also, Wisconsin is the max allowed, Lousiana – doesn’t allow such expansion and stays at 138% FPL.

    Kids certainly aren’t free, but the costs can be exaggerated. They eat less than adults, school is mostly free, and most children’s toys and accessories are fairly affordable. Childcare can be a challenge, but costs vary substantially by state owing to regulations. Additionally, quite a lot of people have relatives who can provide childcare. This is if anything more common with the poor as they are more likely to live near large extended family networks.

    As for being doomed to poverty, most of the permanently poor remain in that state for essentially biological reasons. And being poor in America, while not delightful, is not like being poor in an actual poor country. The poor in America generally don’t lack for housing, food, energy, telecommunications, transportation, or even material amenities generally regarded as luxuries in most of the world. The main problems with poverty here are instability and living among other poor people with who frequently have undesirable neighborly characteristics.

    Those subsidies must be rather hefty, keep in mind we are talking about $9/hr job here. Unsubsidized Obamacare plans are terrible, it was cheaper for me to pay $1,600/month COBRA when we had our daughter than get Obamacare.

    The subsidies are indeed hefty and income-based. Feel free to play around with this yourself on the exchanges. As an intelligent Unz Review commenter, you are probably not poor yourself.

    Awareness remains a problem. Many Americans, more than a decade after Obamacare, continue to believe that health insurance is a magical commodity only obtainable via employers.

    Won’t collection agencies hunt you down?

    They will make phone calls and send letters–yawn. If the debt is large enough legal proceedings may be instituted, and that can result in court orders to seize assets (generally nonexistent among the poor) and wage garnishment (amount limited by various rules to ensure people can continue living).

    Don’t get me wrong, you can be a great driver. But if others around you aren’t, they are going to wreck you. I mean, Michigan has the highest cost of car ownership at $775/mo. And that’s not because everybody in Detroit or Flint, MI is driving super expensive Ferrari. If you live in a poor area, prepare to get wrecked or have your wheels stolen. $350/mo ain’t gonna cut it.

    State regulations in Michigan are responsible. Undesirable, but not characteristic of the whole country.

    Not every area that’s poor puts residents at high risk of crime either. On this site I think we all know that crime is substantially just a black problem. There’s no hope for them anyway.

    • Agree: RadicalCenter
  79. @Anatoly Karlin

    Let’s look at real consumption: retail turnover growth in Ukraine has averaged consistently above 10%since 2019; in Russia it had been stagnating until march 2020, after which point it’s been shrinking.

    You’ve read the article on the shrinking gap, but preferred to omit this inconvenient fact.

  80. @mal

    PS having too hot a babysitter can lead to alimony payments, if you catch my drift.

    • LOL: mal
  81. Aerospace and automotive industries were the domain of a higher culture, the Russian culture. Derussification goes hand in hand with deindustrialisation.

    • Replies: @Californian Candidate
  82. AP says:
    @Daniel Chieh

    Well at least it imports less than Romania. Why do the Netherlands import so much, most in Europe? They don’t seem to have a lot of room

    • Replies: @demografie
  83. @Insomniac Resurrected

    Correct. Maidan was all about pushing the nation back to its historic roots.
    Вышиванки > Soviet legacy industries. I guess low level assembly work in Poland is more fun than trying to build lasting industries at home.

  84. Dmitry says:
    @mal

    Most people spend on services,

    You said that before, but it’s only true in America because healthcare and housing is classified as services. https://www.thebalance.com/personal-consumption-expenditures-3306107 So, if we exclude healthcare and housing, then the services constitute 30% of American peoples’ expenses.

    In the rest of the developed world, except for America – healthcare is funded by the government, and provided to all citizens. So this high healthcare expense is an American specialty, exacerbated by the incredibly high incomes of their medical doctors.

    In many countries including the USA, a high proportion of citizens own their housing, and therefore rent is not an expense for many people, although a high cost for a minority of the population (if rent should be classified as a service).

    UK and European laws and real economies is rather limited. I once got lost in Heathrow and ended up in UK by accident, but that’s all the experience i have with the place.

    These are more typical developed countries than USA, in terms of their prioritizations, and we saw protections given to low income workers, including 0% tax rates, free advanced healthcare and high minimum wages determined by hour, like $12,75/hour minimum wage of the UK workers.

    However, in areas like higher education, UK and Ireland are half-way to America, with very expensive universities. But there are countries like Netherlands or Sweden, that have elite education with very low tuition fees.

    USA is a far outlier in terms of developed countries, where some of the prioritizations of the system, had been described, not without some justification, as: “high risk, high reward”, and “private opulence and public squalor”.

    • Replies: @mal
  85. @AP

    Dutch collect trash and ship it back to China (before 2020) or India (after Chinese ban on import of recycled trash). BTW. Almost no trash is recycled in Europe. It is either burn or shipped to countries which process – China, India, Pakistan.

    • Agree: Blinky Bill
  86. @Godot

    Not if:

    1. Subtracting those natural resource exports still makes Russian GDP over 10 times bigger than Ukraine’s you stupid idiot

    2. Having the world’s largest country being low population density, but high population, with the majority of large settlements experiencing extreme cold for much longer than any major Scandinavian settlement makes it automatically impossible to have the most efficient GDP accumulation

    3. Russia tax revenues utilised for benefit of Russian people, a million times better than Ukraine does for theirs.

    4. There was any reason as to why Banderastan does near zero-oil refining but Belarus does alot

    5. All the wealthy people in ukropia owe their wealth to Russian Market and patronage you imbecile.

    6. Ukraine f**kedup Soviet era infrastucture and training in 7 very high-skilled industries that should have resulted in 404 generating $10 billion dollars in exports at least, for each of those industries.

  87. mal says:
    @Dmitry

    So this high healthcare expense is an American specialty, exacerbated by the incredibly high incomes of their medical doctors.

    I agree with that.

    But there are countries like Netherlands or Sweden, that have elite education with very low tuition fees.

    Those are tiny specialized countries though, they can fit into Los Angeles or great New York area.

    In terms of services, US spends the most (outside of financial casinos like Hong Kong and Macau), but developed countries, don’t seem to be that far behind.

    https://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition

  88. @Carlo

    How does what your saying will happen not perfectly fit the model of collapsed state you dummy?

    For Russia, Armenia, Moldova, Belarus etc. if even 10% of what has happened in Ukraine or what is expected to happen, ocured in those countries then everybody would be describing it as a collapse.

    Amusingly its clear that the Utopia for Ukraine is exactly what is happening in Crimea – huge investment, infrastructure improvement from specifically Russian money on internationally unrecognised land…. that they fantasise and hope to claim back for free.
    Russia is STILL the top trading parter and investor in Ukraine

  89. @Carlo

    “It will be a worse version of the Baltics, which were also completely deindustrialized but at least receive funds from the UE and young people can emigrate to work more easily and send money to their relatives.”

    My question is why on earth did the Baltic states sign up for that????

    • Replies: @Bashibuzuk
    , @Mitleser
  90. @Air Accident

    “France is not going to pay when they are being expelled from its colonies in Africa, a critical matter. ”

    Yes – one of the main reasons they and the US engineered the killing of Ghaddafi in Libya is still coming to pass anyway. Just desserts it would seem. On top of it – they have to absorb all of the migrants that they hate from some of those same country who now use the chaos in Libya to skip across the Mediterranean. You reap what you sow.

  91. @showmethereal

    My question is why on earth did the Baltic states sign up for that????

    Because “muh evil Putler”. A very useful tool for NATO and EU integration. You know like if you do not join EU and NATO (both come together anyway) the Evil Russkyi Putler Bear (ERPB for short) will come by night and eat you while spitting back your pajamas. That’s how evil (and useful) he is…

  92. Mitleser says:
    @showmethereal

    They did receive a lot of money and opportunities.

    • Replies: @showmethereal
  93. @Mitleser

    Ahhhh… Now that makes sense.

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