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With a buzzing economy, Eastern Europe is nurturing a set of young billionaires who have taken advantage of new technologies and privatization to stake their claims in the industrial, media and financial sectors.
Most of the 15 billionaires Forbes found in the the region when we put our list together last March come from either Poland or the Ukraine. Just three come from elsewhere, including the first billionaires for the Czech Republic and Romania, as Forbes states.
The richest in the region is Petr Kellner of the Czech Republic, with a $6 billion fortune as of last March, ranking him 119th among the world's billionaires. The 43-year-old got his start when the government began privatizing nationalized companies in 1992. He leveraged a $1 million loan he got through his small office-supplies business into a controlling stake in Pojistovna Ceska, the largest Czech insurer. That company is now worth $2.7 billion.
Seven of the 15 in the region had recent net worths of $2 billion or more. Rinat Akhmetov of the Ukraine amassed his $4 billion fortune in coal and steel during the mid-1990s by forging ties with then Prime Minister Viktor Yanukovych. At the World Economic Forum in Davos, Switzerland, last January, Akhmetov announced plans to list his diversified conglomerate, System Capital Management.
Poland's richest billionaire is Michal Solowow, with $2.3 billion. The avid race car driver and newspaper entrepreneur made his fortune in an investment in the chemical company Dwory. He funded the company's expansion with debt, taking advantage of low interest rates, and then diversified into ceramic tiles, wood floors and real estate.
Foreign investment has been flooding the region on its prospects for economic growth. Ernst & Young said earlier this year that 11 billion euros in foreign direct investment had gone into Poland alone last year, and it's expected that as much would flow into Poland this year.
"Growing investment, consistently increasing consumption and rapidly rising exports have combined to spur the Polish economy into a period of intense development," Ernst & Young said in a July report on the region. Poland joined the European Union in 2004. Gross domestic product rose 6.1% last year, the highest in nine years.
Meanwhile, unemployment in Poland is down to 14.9% at the end of 2006 from 17.6% in 2005. The forecast is for unemployment to dip to 10% by the end of this year, Ernst & Young said.
In the Ukraine, growth was expected to continue last year's 6.5% gross domestic product growth, according to the World Bank.
But two recent developments cloud the immediate prospects for the country. On the one hand, Ukraine is preparing to join the World Trade Organization next year, which will expand its trade prospects.
Political instability raises concerns, however. Last month, the two warring pro-Western political parties agreed to put their differences aside to form a coalition government and retake power.
That puts former Prime Minister Yulia Tymoshenko back in the post, backed by President Viktor Yushchenko. The new prime minister says she wants to move Ukraine closer to the European Union and further from Moscow's influence. Will the fight short out growth? Wait and see.
// 08.11.2007 11:33
News URL: http://news.mediaport.info/eng/society/2007/3633.shtml
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