Future Generator: Media Sentiment Trending Positive in Ukraine
The ‘Future Generator’ is a highly unique and cutting-edge approach to forecasting ‘media sentiment’, developed by a partnership between Global Risk Insights (GRI) and Ethnographic Edge (EE). The aim of the forecast is to determine how media sentiment towards a country’s political environment might develop in the future. Considering the impact of media sentiment on trading and investments, our forecasts will give readers more time and context to maximize on market opportunities.
The following is an analysis of Ukraine.
EE Signal: On the 15th of March, EE’s sophisticated data analytics produced a signal which stated that media sentiment regarding Ukraine political environment will continue to be positive over the next two weeks. Considering the strong correlation between media sentiment and political events, EE draws the conclusion that Ukraine’s political environment will remain positive through at least the remainder of March.
GRI’s team of directors and our Ukraine expert have assessed the signal provided by EE. Based on local expertise and political risk training, we agree with the data analytics produced that Ukraine’s media sentiment and political developments will trend positive throughout the second half of March. This is likely due to the following reasons:
Optimism about reform
Ukraine received two critically important positive bits of news in the last few weeks. Roman Nasirov, the suspended chief of the Fiscal Service, was charged with embezzling $74 million and although his wife was released on bail, the courts have upheld his pre-trial detention. Though the hearings have yet to take place, the news has been a boon for President Poroshenko in the West because the case has become an important bellwether of the success or failure of Ukraine’s slow-moving reform process. The fight against corruption remains the single most important predictor of Ukraine’s economic growth in the near-term.
The European Commission also decided to disburse a 600 million Euro loan to Ukraine, providing critical support to the country’s budget. It is expected that the IMF will disburse a $1 billion payment from its $17.5 billion assistance program on Monday once it accounts for the economic effects of the Ukrainian blockade on the Donbas. The disbursements are important votes of confidence in the reform process and come at a sensitive moment as Kyiv has opted to levy sanctions against 5 Russian banks operating in Ukraine. These quiet background developments complement the more visible signs of reform, and general bode well for Ukraine’s future.
Trade wins encourage confidence
In the first week of March, Ukrainian Financial-Industrial Group Altcom finished construction of a key railway bridge in Turkmenistan that will aid Trans-Caspian and Trans-Caucasian trade. The project parallels with a recent visit by Azerbaijan’s Economy Minister Shahin Mustafayev to Kyiv, in which Poroshenko and Mustafayev committed to deepening their partnership in Ukraine’s Black Sea ports.
This has been particularly important for privatization and trade, given that the Donbas and annexation of the Crimea have killed Chinese investment. At the same time, Azerbaijan’s relative success building up Baku Seaport and Alyat make it a useful partner. Most importantly, a Ukrainian delegation met with EU counterparts to discuss industrial policy at the beginning of March. The goal is to integrate Ukrainian firms into European supply chains, improve Ukraine’s value-added industries, and encourage greater SME cooperation.
Optimism about reform and good political news for trade will create more positive coverage for Ukraine the next two weeks.