There is an economic phenomenon in the US and Canada called the Penny Stock Market. Very small companies can float an IPO to gain capital for development, and the stocks sell for (you guessed it) pennies per share. Modern P. T. Barnum's ('there is a sucker born every minute') send out press releases to extol the virtues of the company underlying a stock. Rosy forecasts and pro-forma economic data abound. People looking to make a fast buck buy into this hype and the price of the stock rises, sometimes astronomically. The promoters then cash out, pocketing huge sums of money. After the hype ends, since there is no real fundamental support for the stock, the price plunges. Since the stock market is a 'zero sum' game, for every winner there is a loser. The promoters win, and everyone else is left with worthless pieces of paper.
I had a conversation yesterday with a friend from Odessa. She is pursuing a graduate degree in international diplomacy and she has a pretty good feel for what is really going on in Ukraine. She said, “My grandmother had to pay 1000 UAH for her apartment per month. (Her grandmother's pension is 2000 UAH per month. The average pension is 1300 UAH.) There are people starting to die or to kill themselves because of the economic situation. Most people here earn 1500-3000 UAH per month. Soon it will be impossible to live!”
On my daily walks through Odessa, I go to the markets, the shops, the restaurants and the cafes. I see a lot of shoppers but few buyers. Most cafes and restaurants are pretty much empty. Their staffs are standing around playing games on their smart phones. There are 'Help Wanted' signs to be seen, but my friends tell me that these jobs are for long hours that don't pay a living wage. The official figures published for Ukraine are Unemployment rate: 9.8%; Inflation rate: 45.8%; GDP growth -0.7%; USD exchange rate: 25:1. (For the first 4 years that I traveled to Odessa regularly, the rate was 8.25:1).
I know an expat who has lived in Odessa for the last 10 years. He has no 'outside' source of income. He lives and profits here from his own ingenuity and hard work. He also holds a gloomy view of the future. He stated many reasons, but the most poignant statement he made was, “It's not the country, it's the people that are the problem”. After 70 years of indoctrination of Communist ideology, the populace here cannot grasp the concept of business without corruption; good customer service; hope for a better future and the value of planning ahead, saving money and investing in an education in a field with a future. If someone does try to break out of the mold, it is like the crabs in a bowl. If one tries to climb out, the others pull him back in. Those with a little spark of ambition know that their only hope for a brighter future is to get out of Ukraine. But many won't take that step when the opportunity is placed before them.
I attend a weekly English language club put on by a local church. They put on a pretty good program for 2 hours and it is free. About 100 young people attend every week. I made an offer to those 100 people that I would meet with them in small groups (no more than 3 people) to give them the opportunity to learn and practice Conversational American English from a native English speaker. For that instruction, I would ask them to pay me 50 UAH ($2) per hour per person. Here, the knowledge of English is the ticket to a better future. There were no takers.
Could it be that the 'unbiased' publishers of the rosy forecasts from InterFax Ukraine are talking to the P. T. Barnumovsky's of Ukraine? Could it be possible that there are those putting out sugar-coated economic forecasts with the hope of raking in profits from foreign investments and then retiring to Belize? And we can never forget the 'Sword of Damocles (Putin)' that hangs over Ukraine. Who wants to predict what will come up on that roll of the dice? Lots of unanswered questions......
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