Tuesday, September 30, 2003

For a long time the streets of Kiev have been full of Mercedes and BMWs. The abundance of these expensive cars gives the appearance of prosperity. Ukraine must be doing well if the streets look like showrooms for luxury cars. The problem with using this horde of affluence as an economic indicator is that it gives a very lopsided view of economy. The packs of Volvos and BMWs are being driven by the drivers of a very small minority of the population.

In the past year or so, another more important automobile trend has developed. The is an upsurge of new, small cars filling the streets. These Skodas and VWs are a great sign of a growing middle class who can afford to spend the $10k required to buy these cars. There is even credit available to finance these new cars. The ability to gather enough cash to purchase these cars and the willingness to spend it is a very good economic signal.

It would be a mistake to place too much value on the growth of the small car market but it is a reasonable indicator. The Ukrainian economy does not have many reliable economic indicators, so it is important to gather knowledge where you can. The rise of the Skodas is just such an indicator.

The rationale for this blog is to provide a place to publish some thoughts on life in Kiev, the capital of Ukraine. My interests are in the micro-economic changes that are taking place. I have little interest in the political reality of the country.

I arrived in Kiev in late 1992 as part of the first group of Peace Corps volunteers. Somehow I found very good reasons to stay in Ukraine after my two years of Peace Corps service finished. I have been active in a broad range of activities; private business, development work and the US government. All through this time, the magic of Kiev and Ukraine in general, has been the relentless changes that have taken place. These changes are not easy to see and really only stand out when viewed over a long period of time. To a short-term observer the changes in Ukraine seem to moving at a snail’s pace, to a long term resident, the speed of real change is exciting. It is that excitement that I wish to record.

This is the first post on the "Notes from Kiev" blog. The blog
will try to describe life in the eastern European city of lights and love, Kiev.

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WWW http://notesfromkiev.blogspot.com