First, I want to say that I really enjoy hearing from our readers. I will always invite your comments, questions and criticism. On Wednesday, I shared with you some comments about an article I wrote on Russia's natural gas monoploy, and this stand-off between Russia and Ukraine. I was lucky enough to get a comment from a gentleman with some specific insight into the situation. I'm posting it here for you all to read, and again, feel free to comment if you wish...

Hi Sara, I have family in Ukraine, and several growing small business’s and I am in the country maybe every two months for extended periods. I can tell you that the political and emotional situation is very dire. This is a country that has been under the rule of the USSR for a very long time, and the people have an outlook that is not quite in tune with our, free democratic outlook. Corruption at all levels is widespread and a normal course of doing business. This extends to the political elite who view the privilege of power as a route to obtain vast back handers and favours. They are in power supported by the people with money and not by their political accumin or skill, nor for that matter their great passion to reform and build a sophisticated country. The same is also true of the Russian system. Putin did not accumulate his vast wealth through a good salary package or astute business acumin, but through backhanded favouritism. All of this escapes any legal recourse because of the corrupt control of the judicary. The current gas situation for Ukraine is very much routed in the goal of the Kremlin to control all gas resources throughout Europe. They are systematicaly discrediting Ukraine, creating crisis, and by extension of the old soviet control mechanism, people are very afraid and intimidated by everything that is going on. In addition, the pipeline network, being of Soviet origin, is not designed or equiped for sophisticated directional control of gas flows. Whilst the pipeline is full and the flows are continuous there is little problem. However, the direct investment over many years has been minimal and insufficient to create a modern pipeline that is robust and efficient. The impact of gas costs at current EU levels will be devastating and without doubt will cripple the country. The consequence of all this is unimaginable. People are fearfull and afraid which is leading to anger. If a suitable strong political candidate were to appear, it is not inconceivable for another mass reform to happen, which is exactly what the Kremlin is engineering. P from Poland is quite correct in the assement of European leadership. They have been very comfortable with the staus quo and not disposed to rock the boat. Now we must endure countless committee reviews, and discussions from all sides whilst they fudge around with the energy debacle. Of course Germany is in an enviable postion. The country inherited Eastern Germany on amalgamation, which although the infrastructure was appaling, nevertheless had a gas system already connected to the Soviet network. Germany had the means and technology to vastly improve this network and gain massive energy advantage over the rest of Europe. In addition, they also inherited an industry with bilateral trade systems in place, which gave Germany the almost exclusive position of being a trade partner of ‘prefered choice’ with Russia. If I can provide any further information on Ukraine that would be of assistance, then I would more that happy too. Best Regards. R. Isle of Man/Ukraine

To me, it seems like Russia is holding Ukraine's economy hostage, and the country is constantly in debt for the natural gas that's shipped through its pipelines. This will certainly be an interesting area to watch over the next few years. If Eastern Europe's emerging markets get back on track, we may see foreign direct investment start to trickle even farther east, and end up in Ukraine. I'll be commenting more on this story in Taipan Insider, a privately circulated e-letter for all Taipan Publishing Group service members.