Sunday, December 10, 2006

The Ukrainians are RICH

I just walked through Pushkiskaya Street. I counted 2 Bentleys, 3 Hummers, 1 Masarati, about 10 Mercedes, maybe 5 BMW's, 4 Range Rovers, 4 Porsches and 1 flat red Ferrari. All cars were pretty new, and all in the same street.
I've been here too long to still notice the Ukrainians impressive cars. I heard Ukraine is the 11th biggest car market in Europe, and the number of sold Porsches has exceeded Poland. It is true that many people will choose to live in a tent and drive a Porsche, but the purchasing power is impressive. And it's mainly cash funded - not credit funded like in the West.

On Friday I was told by a Danish official, that what business forget about Ukraine, is the 2 million EXTREMELY rich and the 8 million with the same living standard and purchasing power as the Danes. Most people (me incl.) mainly thinks about the 37 million poor people.

But all this is about to change. Not by the government, not by the foreigners - but by the banks.

Many banks are beginning to give their customers credit lines without security for a fair interest (not Western fair, but Eastern fair).

This could be a breakthrough. Giving people the opportunity to consume their way out of poverty. I think it's plausible. I think it might be a great solution. The politicians are crooks anyway.

But thinking about what the Ukrainians have been able to do with their cash in 10 years, it's scary what they'll be able to with a credit line :-)

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