Podcast Host, Professor, Writer

Tag: Poland

Warsaw 2012

The DJ was pumping summer specials (“Call me Maybe” anyone?), the drinks were free flowing and the bride and the groom looked spectacular, but yesterday at my table all were glued to my cousin’s phone watching the final between Spain and Italy. There were grumbles about how Poland should have done better in its division, but overall awe and joy at Poland and Ukraine getting their moment in the sun after years behind the Iron Curtain.

Though I am not a soccer devotee, it is hard to not be impressed by the spectacle of Eurocup 2012. And even more impressed at how far Poland and Ukraine have come.

I first saw the new Warsaw stadium last year on my return to Poland. Pretty impressive and now how everyone sees Warsaw in their mind’s eye after stupendous event coverage and smashing soccer tourism.

Last year I came back to Warsaw for the first time since 1985. Back then, Poland was just shaking off the ill will of martial law and suffering from a crumbling planned economy. I remember waiting to buy a refrigerator for my great-grandmother who lived in a small village outside Cracow and still did not own one. My family had tried sending her money to buy one, but each time there was none to be had. In the winter, having no icebox was no problem – milk and butter stayed fresh out in the cold; in the summer, these were kept in the well or in the cellar.

At the time, I was 12 and didn’t really understand, or appreciate, why everything was so Little House on the Prairie. I knew we wanted to make my great-grandmother’s life a bit easier. So one day, we got a tip from someone about a truck arriving at an appliance store. Rumor had it that the drivers would be selling the refrigerators straight off the back of the truck before they even had a chance to hit the shelves. We weren’t the only ones getting that same tip. There was queuing, pushing, haggling — dozens of frenzied voices and bodies ready to carry these refrigerators on square backs if need be.

It was the same everywhere. Enormous lines or empty shelves. We went into a restaurant one time, got a menu only to be told they were out of everything. Hours later, somehow a chicken was found and we had our dinner.

Now faded photographs of that time before remain (see my 1985 vintage photo). Today Warsaw is full of four and five star hotels that are at your service 24/7 (including going back to the airport to pick up a forgotten stroller!) and the restaurants are packed, from hip and trendy (U Kucharzy on ul. Ossolinskich, run by the Gessler family which have a restaurant empire a la Batali, www.gessler.pl) to excellent pubs (BrowArmia on ul. Krolewska) and even a superb wine bar (Mielzynski on ul. Burakowska).

Warsaw is also safe and child friendly! The Chopin Museum (ul. Okólnik) is an excellent place to spend an afternoon with a special children’s room full of musical games to a room where you can sit quietly and listen to his music — actually my favorite was reading George Sand’s letters to Chopin! Another fun place: Teatr Malego Widza u(l. Jezuicka 4 ) in Old Town which has shows for little ones.

Indeed, the arts are thriving in Warsaw, especially around the area where the once imposing Palace of Science and Culture (built between 1952 and 1955 as Joseph Stalin’s “gift” to Warsaw) doesn’t seem so imposing anymore. It’s now more on an arts complex, surrounded by half a dozen theaters. I also went to my first theater piece this year in Warsaw, Ingmar Bergman’s Wiarolomni (aka “Faithless”).

The acting was powerful, the neighborhood very Williamsburg. (check out the company site: (http://www.trwarszawa.pl/wydarzenia/wiarolomni). I felt at home. Then I met the cousin of my best friend who is starting a gallery specializing in antique photographs. He moved from Paris a year ago, enticed by the artistic opportunity in Poland.

And much more! One of Warsaw’s mall offerings, Arkadia (al. Jana Pawla), is the antithesis of my 1985 experience. Shelves are stuffed, shoppers overflowing. There are imported foods from around the world, designers galore, an English language bookstore. You can even get your Starbuck’s fix (on Krakowskie Przedmieście) where I love sitting so I can to feel the youthful vibe of the Warsaw University students passing by.

Warsaw 2012. I may have missed the soccer, but I think the city is amazing!

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Forbes Billionaires and the Global Economy

GDP (PPP) Per Capita based on 2008 estimates h...

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This is the eighth year I have worked on Forbes’ World’s Billionaires. As always, I find the personal tales fascinating. I met with new Ukrainian billionaire Yuri Kosiuk at the Four Seasons in New York last fall when he was pitching Wall Street for investment dollars for his poultry producer. We had coffee and a long chat about how his business is faring in Ukraine’s often fraught political environment. His take: if you know how to play the game you can succeed. We heard the same from Aliko Dangote, the Nigerian billionaire who increased his fortune six-fold when he took his cement operations public. He is convinced he can maneuver the politics in Africa to build a continental (and global) cement giant.

On a macro level, the total net worth and number of billionaires says a great deal about how a country is doing. My thesis: in Ukraine and Russia, a disproportionate amount of wealth looks to be accumulated in a few hands, the relic of a centralized Soviet system (in Kazakhstan we don’t see the same because the state still controls many assets under the tight grip of President Nursultan Nazarbaev) (Caveat: some of the wealth is held in investments in other countries but I think my thesis holds true for the most part). Meanwhile, in Eastern Europe, though central planning was also instituted, the political systems and opposition to communism emerged differently and there appears to be more spreading of wealth and perhaps the opportunity to still amass wealth. (see stats below) Indeed, Poland’s robust stock exchange has regional players flocking to go public. Poland is serving as a model for wealth creation.

We can also see where money is coming from – US’ biggest billionaire names come from tech, investments/finance and retail – think Bill Gates, Warren Buffet and Waltons of Wal-Mart whereas Western Europe is all about luxury brands like LVMH’s Bernard Arnault or Tod’s Diego Della Valle. In Eastern Europe, we see finance as a leader, and agribusiness. In the CIS, commodities dominate, though agribusiness is growing.

US

  • Total 2011 Billionaires Net Worth: $1.3 trillion
  • GDP 2011 forecast (World Bank): $15.3 trillion
  • 8% of country’s GDP
  • Total 2011 Billionaires: 412
  • Total Population: 315 million

Russia

  • Total 2011 Billionaires Net Worth: $432.7 billion
  • GDP 2011 forecast (World Bank): $1.6 trillion
  • 27% of country’s GDP
  • Total 2011 Billionaires: 101
  • Population: 140 million

Ukraine

  • Total 2011 Billionaires Net Worth: $30.3 billion
  • GDP 2011 forecast (World Bank): $165 billion
  • 18% of country’s GDP
  • Total 2011 Billionaires: 8
  • Population: 45 million

Kazakhstan

  • Total 2011 Billionaires Net Worth: $12 billion
  • GDP 2011 forecast (World Bank): $144 billion
  • 8% of country’s GDP
  • Total 2011 Billionaires: 5
  • Population: 15.6 million

Poland

  • Total 2011 Billionaires Net Worth: $8.9 billion
  • GDP 2011 forecast (World Bank): $472 billion
  • 2% of country’s GDP
  • Total 2011 Billionaires: 4
  • Population: 38 million

Czech Republic

  • Total 2011 Billionaires Net Worth: $12.3 billion
  • GDP 2011 forecast (World Bank): $185 billion
  • 6% of country’s GDP
  • Total 2011 Billionaires: 3
  • Population: 10 million

Romania

  • Total 2011 Billionaires Net Worth: $3.3 billion
  • GDP 2011 forecast (World Bank): $163 billion
  • 2% of country’s GDP
  • Total 2011 Billionaires: 2
  • Population: 21 million

Nigeria

  • Total 2011 Billionaires Net Worth: $15.8 billion
  • GDP 2011 forecast (World Bank): $230 billion
  • GDP/NW: 7% of country’s GDP
  • Total 2011 Billionaires: 2
  • Population: 160 million
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Ukraine’s Gas Wells and Windmills

Ukraine is currently debating grain quotas and the jury is still out on the country’s new president but the energy sector is making waves.

Poland’s richest man, billionaire Jan Kulczyk, who bought into Ukraine’s natural gas production in June, has already started drilling. Kulczyk Oil Ventures launched the M-19 well at the Makiivka gas deposit in Donetsk region.

Earlier this summer, Kulczyk Oil Ventures, through its subsidiary, Loon Ukraine Holding, bought a 70% stake in of one of Ukraine’s largest private producers of natural gas, KUB-Gas, for $45 million. Kulczyk Oil Ventures, which went public in May on the Warsaw Stock Exchange (symbol: KOV); used part of the proceeds from the IPO to close deal in Ukraine.

In a press release, Tim Elliott, the President and Chief Executive Officer of Kulczyk Oil, stated. “We are pleased to be starting the drilling of our first well in Ukraine only a few months after closing our acquisition. The timely implementation of this first step in our plan to increase the production and reserves of KUB-Gas was made possible by the diligence and teamwork of the technical and operational teams of both KUB-Gas and Kulczyk Oil.”

Meanwhile, startup, UkrWindEnergo, just announced it is partnering with New Power Technologies to jointly develop, own and operate a 400 megawatt wind power park in Sovetskiy District, Autonomous Republic of Crimea, Ukraine. In August, Ukrainian President, Viktor Yanukovych, stated he was focused on bringing such projects to Crimea.

Ukraine’s wind potential, according to The Institute of Energy, Dnepropetrovsk State University, is estimated at about 140,000 wind turbines with up to 10 kWh each in annual capacity. Currently, the Ukrainian Wind Energy Association says the total capacity of wind power plants set up in the country is 1,200 kWt.

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Polish billionaire buys Ukrainian gas firm in middle of Naftogaz debate

Polish richest man, billionaire Jan Kulczyk, whose fortune was estimated by Forbes to be $2.1 billion in March, is increasing his energy investments in Ukraine.

His Kulczyk Oil Ventures, through its subsidiary, Loon Ukraine Holding, bought a 70% stake in of one of Ukraine’s largest private producers of natural gas, KUB-Gas, for $45 million; the deal was completed last Friday. Kulczyk Oil Ventures, which went public in May on the Warsaw Stock Exchange (symbol: KOV); used part of the proceeds from the IPO to close deal in Ukraine.

Dariusz Mioduski, the president of Kulczyk Oil Ventures, told the Polish press that, “We plan to increase production in Ukraine and KUB-Gas has enough potential to at least double its current production.” Kulczyk Oil is also exploring opportunities across  Central and Eastern Europe as well as in other hydrocarbon basins in the Middle East and Southeast Asia.

Poland’s foray into Ukraine comes in the midst of news from Russia that its Gazprom gas monopoly has offered to merge with Ukraine’s state energy firm, Naftogaz. Ukraine has significant gas resources that need development investment.

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Only 2 Women Billionaires in Eastern Europe, Russia and rest of CIS

Where are all the women? We’re Half the Sky as but we’re always underrepresented as Catalyst reasearch points out (see my previous post titled International Women’s Day). The same is true for Eastern Europe, Russia and the rest of the CIS where only 2 women reached Forbes billionaire ranks out of some 40 or so total women on the 1,011 long list.

The richest in the region is Elena Baturina who returned to the list after a rebound in Russia; her net worth: $2.9 billion. The wife of Moscow Mayor Yuri Luzhkov (who has been in power since 1992) runs Inteko which started out in furniture and crockery then moved into construction. Her real estate projects were hard hit by the 2008 financial crisis but she is back building affordable housing for Russia’s rising middle class. She also reportedly has interests in Africa, a continent where several CIS oligarchs are looking to expand. Though rumors swirl about favoritism in winning city contracts because of her family connections, nothing sticks; Baturina is aggressive about maintaining a clean reputation.

The other is Dinara Kulibaeva, the media-shy second daughter of Kazakhstan’s long-serving president Nursultan Nazarbaev and wife of Timur Kulibaev, also a billionaire and rumored to be a potential successor to Nazarbaev. She also returns to the Forbes billionaires list; her fortune is estimated at $1.1 billion resting on her shared stake in Halyk Bank which received hundreds of millions of dollars in bailout funds from the government post 2008/2009 financial crisis.

The common thread between the two is the connection to powerful men. Though the Soviet State introduced equal gender rights and formal equality under law and this should have been grandfathered into newly independent states, the theory has not always played out in practice. Some states in Central Asia (Tajikistan and Uzbekistan) have even taken steps backward since the 1991 dissolution of the Soviet Union with discrimination against women rising.

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More Billionaires in Eastern Europe, Russia and rest of CIS says Forbes

2009 was a year of recovery for the World’s Billionaires as a whole reports Forbes (for whom I have been freelancing). The wealthiest in Eastern Europe, Russia and the CIS states improved their fortunes as commodities markets recovered and world stock markets rose.

Poland, a success story among transition economies, but which had only 1 billionaire on the list last year, Zygmunt Solorz-Zak, is back with 4 billionaires. In addition to Solorz-Zak, Jan Kulczyk, Leszek Czarnecki and Michal Solowow return to the Forbes billionaires list. Kulczyk, who was  last on the Forbes list in 2006, is strengthened by his energy holdings.

Dinu Patriciu, Romania’s richest billionaire, is also making a big push in energy, going after licenses  to explore for oil and metals in the Black Sea; in January he even got patent for a method of mining and processing seabed sediment.

Despite the fact Romania’s GDP contracted an estimated 7% in 2009 and its hopes to introduce the euro by 2014 may be thwarted by collapsing euro-economies like Greece, the country saw the return of former tennis ace, Ion Tiriac, to the Forbes billionaires list and added one new billionaire, Ioan Niculae, who has interests in agriculture.

Indeed it was a good year for agriculture – the world’s rising population needs to be fed.  Andrej Babis joined the Forbes list as a new billionaire from the Czech Republic; his Agrofert agricultural holding company keeps growing and may be looking at European expansion plans. Along the same theme, two new Russian billionaires, Andrei Guriev, and Anatoly Lomakin, made their fortune in fertilizers; and fellow Russians Pyotr Kondrashev and Vyacheslav Kantor return to the billionaires list based on their interests in the fertilizer business.

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