WHAT'S NEW ----- 
About The Portal To Russia
----- 
Email Dr. Palms
From: Ukrainian Canadian Profession Business Association
University of Toronto, Canada
Dear Dr. Palms:
We have randomly selected 200 individuals (from the Ukes-Directory maintained by Orest Dorosh) to participate in our first issues management survey. You are one of the participants that has been selected.
The Insight Foundation (formerly Media Watch Ukraine) is trying to anticipate new and emerging issues that could effect Ukraine or its Diaspora communities around the world. The goal of the survey is to identify as many new "wildcard" issues or trends as possible. From that baseline, it will be possible develop likely growth scenarios and suggest strategies to mitigate any of the negative consequences or to take full advantage of any positive ones.
Example: In the area of Politics. A majority win by Russian Communists in the upcomming elections in Russia, could lead to a revoking of private property in Russian Federation. This could initiate a wholesale business exodus from the Russian Republic. Ukraine could, in this scenario, be a recipient of this business migration.
Feel free to be as creative and innovative as you can. Remember, how many people anticipated the collapse of the Berlin Wall or even the former Soviet Union. I predicted both extensive writings and articles in 1989 giving exact dates (within 60 days) and explaining the rationale. No one believed me, particularly American -Ukrainians The growth of these newly identified potential issues and trends will be tracked and monitored by members of the Insight Foundation, several think tank groups that we are working with in Ukraine, as well as students at the National University-Kiev Mohyla Academia in Ukraine.
Absence of international bank legislation will cause crisis in 1996. Absence of sensible tax legislation will erupt in 1996. Regulatory policy will destroy GDP below tolerable levels in 1996 No grand-father clauses in legislation, overnight-laws will chase away international investors in 1996.
The Russia and some CIS countries may petition the United Nations to provide food, medical teatment and shelter for its populations and to take steps to protect the CIS and the planet from imminent environmental threats of radiation poisoning. As a condition for such assistance, the UN may require the establishment of a protectorate and trustee government under the leadership of the UN, until a government can be trained and elected to replace what now exists.
The development of Ethics has been neglected in the economic revitalization process in the CIS. Adequate Social and Humanitarian services cannot be supported by international grants. Mechanism have to be created for rebuilding the connection between Commerce and Social Services. The West will be unable to support CIS social needs with grants,. Critical issues will erupt in health services, pensions, environment (Chernobyl shutdown contingent upon Western "grants" is an approach that will not work). Critical evaluations by U.S. Congress of USAID use of funds in CIS will reduce appropriations. Health care aid faces 80% cuts.
Grass roots training of the population is occurring by Peace Corps, Corps of Retired Executives, Treasury Department, Former U.S. Mayors on loan to CIS Mayors, NGO and NPO activity in law, health, environment, etc etc etc. Policy is directed at creating an informed electorate which can ultimately elect a responsible government.
Bankruptcy of many Defense Industries will occur in 1996. More than half CIS banks are technically bankrupt with up to 80% of their loan portfolios non-performing. Crisis is avoided only through central bank subsidies. The finale will play out in 1996. Exchange rate stabilization will fail in 1996 with the ruble reaching 10,000 to the dollar. Failure to admit foreign banks to provide banking facilities for Western investors will continue to disrupt economic progress. Failure to reverse confiscatory tax policies will result in mass non-compliance and collection of only 50% of projected government revenues in 1996.
Cessation of further IMF "subsidies" will begin in 1996 as political goals of demilitarization are reached. This will invite accelerated reform but not before economic crisis. CIS is not post WWII Germany. Marshall Plan cannot work because recipients cannot implement self-help. They lacks an orientation. On the job training is not working. Regulatory policy prevents economic reconstruction by outside forces and maintains the systematic decline of GDP and employment. Unemployment will exceed 15% in 1996. The emperor has no clothes. Western political policy considers it is not yet time to address that issue. Accordingly further economic decline is unavoidable until CIS hits bottom. Economic recovery has not yet started because it is not yet being implemented by Western governments.
The CIS will rediscover the Third World and redefine it as a customer for simple, basic, low-technology, no technology products which it can consume and pay for (thanks to economic aid of the industrialized nations) in huge quantities. This will enable CIS industry to utilize exisiting manufacturing capacity without quality constraints.
An estimated $280 billion dollars of flight capital belonging to CIS citizens awaits positive legal, regulatory and political developments before being repatriated. By 1998 post-bottom repatriation will become viable and visable. Flight capital disguised as Western investment in the hands of multi-nationals is starting to show up in the CIS.Western companies are receiving unprecedented and historic "grants" of equity capital from Western government tax revenues to enable them to set up models at a very high very visable level where corruption, bribes, arbitrary over-night changes in tax laws, etc cannot be employed by present government due to international political implications. This is salvaging some portion of vital industry.
The introduction of the new $100 bill in January will attack the problem of international counterfeiting. The dollar has $390 billion in cash circulation in the world ( 1/5th of total world money supply) of which an amazing 2/3rds is in circulation in the CIS. The new bill will cause 'seggregation' into verifyable and unverifyable currency. Although both will remain in circulation, the new bills will attach to "clean" business. Gradually the remainder will find an increasing difficulty in confidence level in the CIS. CIS banks will use this development to dump their counterfeits on their customers, further lowering confidence in CIS banks. The Securities Exchange Commission of the U.S. has agreed to accept applications from Russian firms for registration of American Depository Receipts, thereby making it legal for U.S. pension funds and institutional investors to invest in Russian equities. The European Bank for Construction & Development is proceeding as if it were already the landlord and making improvements to infrastructure without regard for immediate economic viability, counting on its ability to ultimately make a good tenant of the former owner, such tenant having a repurchase option.
The creation of access to "Internet" service by all who have a use for it will revolutionize training, education, marketing, and management. The cost of travel association with economic aid programs will be cut by 90%. The speed of everyuthing will accelerate including recovery. The cost of implementation will diminish exponentially.
Go to TOP of this page
RETURN to Palms' Lobby
RETURN TO HOME PAGE