Yulia Tymoshenko
EU-Ukraine relations
Gas disputes
Chornobyl
Georgiy Gongadze
Ukrainian vs. Russian language
Rich Man In A Poor Country
Dec. 17, 2010, 3:29 a.m. | Ukraine — by Mark Rachkevych
With a fortune approaching $24 billion, Donetsk industrial titan Rinat Akhmetov has pulled away from the pack in Dragon Capital investment bank’s latest rankings of the nation’s 50 richest Ukrainians. The elite list, meanwhile, keeps pulling away from the rest of Ukraine’s 46 million citizens, about one-third of whom are economically destitute and desperate. Many see the wealth disparities as unhealthy for the nation’s future, especially since many of these fortunes came from acquiring Soviet assets rather than creating new wealth.
SEE ALSO
Nation’s 50 richest have banner year.
Click here to see table 'Akhmetov pulls away from rest of nation’s richest citizens, with $23.6 billion net worth.'
See also 'Huge gap between No. 1 and No. 50 in Ukraine compared to these nations' scheme.'
The good times are back for Ukraine’s richest, after the country’s top 50 saw their collective net worth jump by 57 percent compared to last year’s crisis-hit group.
Added up, Ukraine’s richest 50 had a combined net worth of $67 billion – slightly less than half of the nation’s estimated 2010 gross domestic product.
The 2010 rich list, compiled by leading Kyiv investment bank Dragon Capital, found that one man has soared through the crisis better than anyone else, and now stands above all others in terms of wealth – industrial titan Rinat Akhmetov.
His dominance was most prevalent in metals and mining.
He accounted for 61.3 percent of that sector’s sales.
He also prevailed in the energy sector, with 25.1 percent of sales.
He also has interests in banking, machine building, media and perhaps his favorite asset, the Shakhtar Donetsk football club.
Alone, Eastern Europe’s richest man accounted for a quarter of the nation’s industrial output and was 103 times richer than the 50th richest Ukrainian -- carmaker Tariel Vasadze, at $230 million.
While the enormous growth in net worth is a sign that the country is recovering from the financial meltdown, most in the nation have not prospered as well as the super set.
“This is typical for a country of Ukraine’s level of development,” said Vasily Astrov, an analyst for the Vienna Institute for International Economic Studies based in Austria. “The situation resembles Latin American countries where there are few rich and many poor people. In Ukraine, the capitalist entrepreneurs win out, so you have disparities in income distribution, plus trade and labor unions play no role.”
Moreover, economists noted that – although the companies of many on the list had impressive revenue growth in the last year – reported profits were either miniscule or non-existent.
In theory, low profit margins mean companies have little to re-invest. And there’s little to tax from narrow margins.
Experts say much of the cash generated by the country’s wealthiest ends up abroad, owing to tax-avoidance schemes with holding and off-shore registered companies.
Partly as a result, the nation’s coffers have fallen short of revenue targets.
Moreover, Ukraine remains dependent on loans, including a $15 billion credit from the International Monetary Fund.
Ukraine’s estimated government debt is $53 billion, according to BG Capital., including nearly $13 billion to the IMF.
Analyst Astrov said one way of achieving more equitable wealth and income distribution is to attract foreign direct investment (FDI), but he said the government must step in and play an enabling role to promote this.
“FDI is the way to go to bring in innovation and for the government to harness the Ukrainian business groups who are interested in export markets like in agriculture, which has huge potential for the country,” Astrov said.
The richest list is dominated by lawmakers or people with strong ties to government. Consequently, they are sometimes seen as having such a strong stake in the status quo that economic competition is blocked – hence, Ukraine’s low rate of foreign investment.
“Not everyone is in the same basket, but there are many oligarchs who want to keep out competition. Many markets are dominated by cartels or virtual monopolies. This leads to price agreements and markups at the expense of the labor force, but this isn’t exclusive to Ukraine,” Astrov said.
This could explain why heavy Soviet-era industries of metals, mining, energy, oil and gas, machine building and chemical are the dominant sources of fortunes.
Agriculture and food production are increasingly present, with at least 10 people engaged in this sector in the 2010 richest club.
It’s still a man’s world at the top: only two women made the list – vodka producer Olha Nechytayilo-Ridzhok and pharmaceuticals maker Filya Zhebrivska, who are worth $471 million and $238 million, respectively.
Wealth inequality, Astrov noted, is fueled partially by government corruption and weak tax collection.
A 2006 U.S. Agency for International Development report on corruption, which still holds true today, stated: “In elite cartel countries such as Ukraine, top political and business figures collude behind a facade of political competition and colonize both the state apparatus and sections of the economy.”
Seventeen on the richest list are either in government or are elected officials, 12 of whom are members of parliament, including Akhmetov.
“Ukraine is a closed insider economy run by an elite network that limits foreign entry, including Russian business interests in many sectors of the economy,” said Volodymyr Lanovy, a former economy minister and president of the Center for Market Reforms. “The way it functions is it creates obstacles for real economic growth and integration with the world economy.”
Kyiv Post staff writer Mark Rachkevych can be reached at rachkevych@kyivpost.com.
UKRAINE'S RICHEST:
See also 'Huge gap between No. 1 and No. 50 in Ukraine compared to these nations' scheme.'
The good times are back for Ukraine’s richest, after the country’s top 50 saw their collective net worth jump by 57 percent compared to last year’s crisis-hit group.
Added up, Ukraine’s richest 50 had a combined net worth of $67 billion – slightly less than half of the nation’s estimated 2010 gross domestic product.
The 2010 rich list, compiled by leading Kyiv investment bank Dragon Capital, found that one man has soared through the crisis better than anyone else, and now stands above all others in terms of wealth – industrial titan Rinat Akhmetov.
In Ukraine, the capitalist entrepreneurs win out, so you have disparities in income distribution, plus trade and labor unions play no role.”Akhmetov’s net worth was estimated at $23.6 billion, far ahead of the trailing pack.
-Vasily Astrov, an analyst for the Vienna Institute for International Economic Studies.
His dominance was most prevalent in metals and mining.
He accounted for 61.3 percent of that sector’s sales.
He also prevailed in the energy sector, with 25.1 percent of sales.
He also has interests in banking, machine building, media and perhaps his favorite asset, the Shakhtar Donetsk football club.
Alone, Eastern Europe’s richest man accounted for a quarter of the nation’s industrial output and was 103 times richer than the 50th richest Ukrainian -- carmaker Tariel Vasadze, at $230 million.
While the enormous growth in net worth is a sign that the country is recovering from the financial meltdown, most in the nation have not prospered as well as the super set.
“This is typical for a country of Ukraine’s level of development,” said Vasily Astrov, an analyst for the Vienna Institute for International Economic Studies based in Austria. “The situation resembles Latin American countries where there are few rich and many poor people. In Ukraine, the capitalist entrepreneurs win out, so you have disparities in income distribution, plus trade and labor unions play no role.”
FDI is the way to go to bring in innovation and for the government to harness the Ukrainian business groups who are interested in export markets like in agriculture, which has huge potential for the country.”According to the State Statistics Committee, 12 million out of a population of 46 million have an average income below the minimum subsistence level of just over $100 per month.
-Vasily Astrov, an analyst for the Vienna Institute for International Economic Studies.
Moreover, economists noted that – although the companies of many on the list had impressive revenue growth in the last year – reported profits were either miniscule or non-existent.
In theory, low profit margins mean companies have little to re-invest. And there’s little to tax from narrow margins.
Experts say much of the cash generated by the country’s wealthiest ends up abroad, owing to tax-avoidance schemes with holding and off-shore registered companies.
Partly as a result, the nation’s coffers have fallen short of revenue targets.
Moreover, Ukraine remains dependent on loans, including a $15 billion credit from the International Monetary Fund.
Ukraine’s estimated government debt is $53 billion, according to BG Capital., including nearly $13 billion to the IMF.
Analyst Astrov said one way of achieving more equitable wealth and income distribution is to attract foreign direct investment (FDI), but he said the government must step in and play an enabling role to promote this.
“FDI is the way to go to bring in innovation and for the government to harness the Ukrainian business groups who are interested in export markets like in agriculture, which has huge potential for the country,” Astrov said.
The richest list is dominated by lawmakers or people with strong ties to government. Consequently, they are sometimes seen as having such a strong stake in the status quo that economic competition is blocked – hence, Ukraine’s low rate of foreign investment.
Not everyone is in the same basket, but there are many oligarchs who want to keep out competition."
-Vasily Astrov, an analyst for the Vienna Institute for International Economic Studies.
“Not everyone is in the same basket, but there are many oligarchs who want to keep out competition. Many markets are dominated by cartels or virtual monopolies. This leads to price agreements and markups at the expense of the labor force, but this isn’t exclusive to Ukraine,” Astrov said.
This could explain why heavy Soviet-era industries of metals, mining, energy, oil and gas, machine building and chemical are the dominant sources of fortunes.
Agriculture and food production are increasingly present, with at least 10 people engaged in this sector in the 2010 richest club.
It’s still a man’s world at the top: only two women made the list – vodka producer Olha Nechytayilo-Ridzhok and pharmaceuticals maker Filya Zhebrivska, who are worth $471 million and $238 million, respectively.
Wealth inequality, Astrov noted, is fueled partially by government corruption and weak tax collection.
A 2006 U.S. Agency for International Development report on corruption, which still holds true today, stated: “In elite cartel countries such as Ukraine, top political and business figures collude behind a facade of political competition and colonize both the state apparatus and sections of the economy.”
Seventeen on the richest list are either in government or are elected officials, 12 of whom are members of parliament, including Akhmetov.
Ukraine is a closed insider economy run by an elite network that limits foreign entry, including Russian business interests in many sectors of the economy.”The 22nd richest, Valeriy Khoroshkovsky, worth $568 million, for example, has been a member of parliament, has served a number of advisory roles in government, was first deputy head of the presidential administration, the economy minister, head of customs and today, leads Ukraine’s state security service. Until recently he sat on the High Council of Judges that appoints and fires the nation’s judges.
- Volodymyr Lanovy, a former economy minister.
“Ukraine is a closed insider economy run by an elite network that limits foreign entry, including Russian business interests in many sectors of the economy,” said Volodymyr Lanovy, a former economy minister and president of the Center for Market Reforms. “The way it functions is it creates obstacles for real economic growth and integration with the world economy.”
Kyiv Post staff writer Mark Rachkevych can be reached at rachkevych@kyivpost.com.
UKRAINE'S RICHEST:
- #1 Richest: Rinat Akhmetov, 44
- #2 Richest: Ihor Kolomoisky, 47
- #3 Richest: Gennady Bogolyubov, 48
- #4 Richest: Viktor Nusenkis, 56
- #5 Richest: Kostyantyn Zhevago, 36
- #6 Richest: Viktor Pinchuk, 50
- #7 Richest: Oleksiy Martynov, 44
- #8 Richest: Yuriy Kosiuk, 42
- #9 Richest: Oleksiy Vadatursky, 63
- #10 Richest: Dmytro Firtash, 45
- #11 Richest: Andriy Verevsky, 36
- #12 Richest: Vitaliy Haiduk, 53
- #13 Richest: Oleksandr Yaroslavsky, 51
- #14 Richest: Leonid Chernovetsky, 59
- #15 Richest: Ivan Huta, 54
- #16 Richest: Oleh Bakhmatyuk, 36
- #17 Richest: OSerhiy Taruta, 55
- #18 Richest: Oleg Mkrtchan, 44
- #19 Richest: Mykola Yankovsky, 66
- #20 Richest: Volodymyr Boiko, 72
- #21 Richest: Anatoliy Yurkevych, 42
- #22 Richest: Valeriy Khoroshkovsky, 41
- #23 Richest: Sergiy Tigipko, 50
- #24 Richest: Heorhiy Skudar, 68
- #25 Richest: Valentyn Isak, 59
- #26 Richest: Yevhen Sihal, 55
- #27 Richest: Olha Nechytailo-Ridzhok, 57
- #28 Richest: Ihor Dvoretsky, 47
- #29 Richest: Oleksandr Slobodyan, 54
- #30 Richest: Vyacheslav Bohuslayev, 72
- #31 Richest: Eduard Shifrin, 50
- #32 Richest: Artur Abdinov, 50
- #33 Richest: Oleksandr Gerega, 50
- #34 Richest: Petro Poroshenko, 45
- #35 Richest: Leonid Yurushev, 64
- #36 Richest: Borys Kolesnikov, 48
- #37 Richest: Vasyl Khmelnytsky, 44
- #38 Richest: Volodymyr Zahory, 58
- #39 Richest: Vitaliy Antonov, 48
- #40 Richest: Serhiy and Oleksandr Buryak, 44 and 40
- #41 Richest: Ihor Yeremeyev, 42
- #42 Richest: Stepan Ivakhiv, 41
- #43 Richest: Oleksandr Feldman, 50
- #44 Richest: Mykola Tolmachev, 48
- #45 Richest: Oleksandr Kardakov, 46
- #46 Richest: Viktor Ivanchyk, 54
- #47 Ihor and Hryhoriy Surkis, 61 and 52
- #48 Richest: Yevhen Chernyak, 41
- #49 Richest: Filya Zhebrovska, 58
- #50 Richest: Tariel Vasadze, 63
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Facts and figures, bkrevel. Facts and figures.
What KP has done is no different than what Forbes Magazine has done for years, listing the wealthiest people from all over the world.
It's not boasting by KP at all - it's factual reporting.
You can then decide for yourself whether it's disgusting or not.
Akhmetov, Pinchuk, Yanukonvikt, Firtash, Khoroshkovsky, Kolomoisky, Friedman, Buryak, and the rest obviously have a different view.
The jerks in silly Donbass and elsewhere who kept voting the mafiosos into office, dating back before Kuchma, can also decide if they like what they see.
Ukrainians deserve to know the facts, instead of just guessing at them.
You have no right to be angry at KP - it's misdirected anger.
Now - what will Ukrainians do with this information?
Build a just country?
Form the best system of government in the world, which was Tymoshenko's challenge?
Nothing?
Leave the country?
Until and unless the Post reports on the massive ill-gotten gains of types such as Chumachenko (the so-called children's hospital), Yushchenko (shall we mention RUE, again?) and all the Orange criminals, this publication is nothing but a front for Tymoshenko and her clan and allies, past and present.
Nothing has been said about Yulia's past with her convicted criminal partner Lazarenko. She learned everything she knew from him and seemingly put it into very effective practice as PM.
When will the Post be even-handed and report with honesty and integrity, criticizing without fear nor favor on all fronts? I know, that may be an impossible task but one worth mentioning openly.
Until then, the Post can only be viewed as a highly partisan and extremely prejudiced publication.
You seem to indicate that you know much about yulia's dealings.
If so....state your source.
Hearsay is worthless!
This article is about the 50 wealthiest.
Apparently Tymoshenko did not make it.
Firtash, of RUE fame, did make it - at #10.
As far as the hospital is concerned, Yushchenko was on the "Big Politics" show just recently, and was questioned about it - and fund-raising for the hospital - very sharply by the panel of reporters. He answered their questions.
Lazarenko was convicted of violating US law - not Ukrainian "law." He was not ever charged in Ukraine with any criminal conduct.
Lazarenko's criminal activity in the US had nothing to do with Tymoshenko.
So where is Tymoshenko in this list?
I guess it means this list is for those who may have more or less "legally" or heaven forbid in Ukraine, "honestly" earned their money.
In her case, given the latest Wikileaks, all she did was steal much much more than most of the members of this list of infamy.
Hey, Post writers and editors, investigate the richest woman in Ukraine who cannot and will not publicly acknowledge that she is one of the very richest and most corrupt women in Ukraine. The more so now that it has come out that she has engaged in widespread graft while she was prime minister.
Of course, honest investigation may be impossible for you since there seem to very close ties between Tymoshenko and your publication.
Since yulia is not on this list....then you must be fabricating your accusations.
If you have proof....state your source.
If not....shut up with the slander.
How many Jews are on that list?
most of them. hardly any ukrainians on that list. it's pretty much a jewish-tatar-russian-polack occupationist lobby
Well, here is the situation in Ukraine. It has one of the poorest populations in Europe. The Government doesn't do anything to develop decent jobs or a decent economy for average workers, so many people immigrate. So in a sense Ukraine is outsourcing it's duty and responsibilities to other countries, which is another way of saying that Ukraine is a parasite. Next, the whole social and public infrastructure in Ukraine is decrepit and badly in need of investment. But the money for this has been captured by the richest in Ukraine. How is it that Ukraine has some of the most outdated industrial facilities in the world and yet their owners are the most profitable? The short answer is government subsidies - this is where most of Ukraine's ruling elite make a killing. So no health care, no pensions, no schools, no parks, and so on for the people because all the money for those things paid for subsidies for the rich. By the way the same thing is happening in the US and the average American is just as much a worm as the average Ukrainian. And finally I want to say that although I oppose the World Bank and the IMF I am really glad that the Ukrainian government took IMF loans. There is no doubt in my mind that the Ukrainian government will not be able to pay these loans back. That is when the IMF will swoop in an force Ukraine to open its market and industries to competition. That is when the ruling elite's strangle hold on the Ukrainian worker and economy will come to an end. Unfortunately, this will probably mean austerity measures for workers as well. But like the average American worker, the Ukrainian chump is used to taking it up the @#$! If they had any dignity, they would at least fight for their children.
Ukraine gov't should protect the cartels with understanding they provide jobs.
How could Dragon Capital be so wrong?
The Vienna Economics Institute has a very weird and not credible statistical methodology. It says that the Czech Republic in 2030 will only be 90% of EU average. Which is rubbish cause the Czech Republic has already caught up to the EU Average.
VEI is useless and I don't and a lot of economists that I know don't trust. Its too biased with "Western Europe". Its not trustworthy.
VEI when it comes to certain parts of economic stats is not credible and cannot be taken into account.
Would be nice if the Kyiv Post also could publish how much tax each of these 50 richest Ukrainians paid for the year 2009 in Ukraine.
Or how much profits their companies made in the year 2009 and how much tax these companies paid in Ukraine for the year 2009.
Kyiv Post, they want to close you down: time for some investigative journalism
The last part of the Story is why many outside of Ukraine do not invest into Ukraine to make it's economy more diverse,fair and spread the wealth.
“Ukraine is a closed insider economy run by an elite network that limits foreign entry, including Russian business interests in many sectors of the economy,” said Volodymyr Lanovy, a former economy minister and president of the Center for Market Reforms. “The way it functions is it creates obstacles for real economic growth and integration with the world economy.”
The asses in power in Ukraine do not want outside interference in their dirty dealings and want to keep themselves rich while everyone else is poor.They want to make Ukraine courts look so unlawful that anyone investing in Ukraine would fear that they would lose all the money they invest there by corrupt asses (politicians,mafia(top millionaires and billionaires in Ukr),judges,police and anyone else that does not want anyone cutting into their gravy train).
Well Fook all of you corrupt asses. There is going to be Change in Ukraine wether you like it or not. Screw you rich worthless idiots that hoard money and flaunt how stupid you are instead of helping spread the wealth. Keep people poor and sooner rather than later the rich run out of customers to sell junk to.
People should start trading their work for food and other things they want instead of using worthless paper collected by the Oligarches.
Anyone that is a billionaire has failed to reinvest in the people and things around them.Anyone can hoard money ,but making things grow and flourish takes a sound mind,true entrepeneurship and kindness for everyone around them. Greed is ignorance to the highest level.
It makes me sick to keep seeing propaganda that Ukraine is a poor country. That is a lie; as the evil soviets who were in position to grab Ukraine's wealth when the Evil Empire collapsed continue to rob Ukraine's wealth for themselves. Whereas before the collapse their greed was controlled by the foreign occupier, after the collapse their parasitic greed knew no bounds as they grabbed the levers of power and continued to rob and rape the nation without bounds as they continue to destroy the Ukrainian culture and language to boot with Ukrainophobes in vital national ministries. Perhaps Ukraine too needs a Libyan type of solution to its foreign element that should have been repatriated after the collapse of the Evil Empire.
WOW, you took the words right out of my mouth. "
It makes me sick to keep seeing propaganda that Ukraine is a poor country. That is a lie; as the evil soviets who were in position to grab Ukraine's wealth when the Evil Empire collapsed continue to rob Ukraine's wealth for themselves. Whereas before the collapse their greed was controlled by the foreign occupier, after the collapse their parasitic greed knew no bounds as they grabbed the levers of power and continued to rob and rape the nation without bounds as they continue to destroy the Ukrainian culture and language to boot with Ukrainophobes in vital national ministries. Perhaps Ukraine too needs a Libyan type of solution to its foreign element that should have been repatriated after the collapse of the Evil Empire."