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 Post subject: Economics
Posted: Sun Jul 17, 2005 10:17 pm 
 
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Joined: Sun Jul 17, 2005 1:25 pm
Posts: 102
A commentary by: Steve
Added: 7:37 28th.Feb.2005

Someone please explain the economics... "monthly" salaries are $60.00 to $100.00 in Ukraine yet it cost that much for one night in an apartment? Shouldn't it be 25 cents a night? $10.00 for a restaurant meal? Shouldn't it be 10 cents? Why aren't prices in line with salaries?

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 Post subject: A commentary by: Brett Ousley Owner-Manager
Posted: Sun Jul 17, 2005 10:18 pm 
 
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A commentary by: Brett Ousley Owner-Manager
Added: 8:12 28th.Feb.2005

You are assuming that people here live like they do in America and the exact infrastructure exist here as in America but at a dramatically lower price.

Prices for the same quality goods and services that you are used to in America are dramatically higher here than in the US. If you would like a nice apartment here the cost will be the same as in the west or more likely dramatically higher.

For instance, the DSL Internet connection in our Kiev office cost over $400.00 per month but is about the same quality as AOL dial up in the US. My Dell laptop that I purchased in the US for $1,000.00 is $3,000.00 here. Our office landline telephones cost $0.10 per minute to make an outgoing local call and I am happy to have it even though the installation was $300.00.

Brett Ousley Owner-Manager

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 Post subject:
Posted: Mon Jul 18, 2005 11:42 pm 
You can say that Ukraine is a land of contrasts. Yes you are right, salaries are low for the majority of people. But there are people who make $1000-$2000. As for price for apartments, it's also differ: if apartment downtown, remodeled up to date, it`s gonna cost. But also, there are apartments for Ukrainians who come to Kiev to work and the cost of one bedroom apartment is about 200$ in outskirts of Kiev. People also, renting rooms within apartment, which is approx. $80-100. Others rent a bed, which is $35-50. So, it's really big price gap.
You don't have to take the statistics as the most reliable source of info. FYI, they legalize a lot of business, who for years didn't pay taxes, only a couple of years ago. Government forgave the debt as long as they would start filing taxes every year from there on. So, there are some pretty wealthy people in Ukraine. They come to Kiev and buy apartments outright for $60,000-70,000 cash. There is also shaping up middle class. People who make form 700$-1000$/month. They can afford a lot of things, like mortgage for an apartment, summer travel to Turkey, Bulgaria, Croatia (if they save up and believe me they know how to save up)
The prices are different too. Ukraine depends on Russia lot (oil, gas) and on Europe. Goods produced in Ukraine (mostly agricultural goods) are much cheaper. Constrictions materials, European cars, clothes, appliances come from abroad and depend on Euro. So, their cost is pretty steep. The same with telecommunications. Ukraine pay for those line in Euro too. And now Euro is higher than Dollar. So prices go up too. Honestly, I don't know how Ukraine survives. Major production still doesn't work or uses only half capacity. Old plants need modernization even if they are privatized. That's why there are lot of joint ventures with foreign manufactures, who can invest in buying new equipment. The only thing that Ukraine could always use is it's location. It's connects Western Europe and Russia and Balkans. That's why Ukraine used to get good prices on Russian oil, since they were using Ukrainian pipe lines but now Russia decided to build a new pipe line around Ukraine through Poland. I don't know what's the progress on it now, though. Ukraine in it's turn tries to get it's oil from Kazakhstan (former USSR republic too).
Hope it help a bit to understand Ukrainian economics.

 
   

 

  Please note: Forum is closed. Unfortunately, our forum was hit with an enormous amount of spam postings and was constantly being hacked. I just do not have the time to spend countless hours updating the forum. Consequently, what you see here is an HTML copy of the original forum. You can read these great postings but nothing new can be added. Brett

 

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