A new draft law on amending the Ukrainian budget aims to help the country battle the global COVID-19 pandemic.
But the bill also appears to quietly increase funding for Ukraine’s most powerful and controversial minister, while delivering a serious blow to state institutions tasked with fighting corruption, according to a breakdown of the changes obtained by the Kyiv Post.
Ukraine’s parliament is scheduled to consider the budget amendments on April 13.
According to the new budget proposal, Interior Minister Arsen Avakov will receive more funding for his ministry, despite broad cuts to other ministries and state agencies.
During over six years in office, the longest tenure of any minister, Avakov has grown into the most powerful official in the Cabinet of Ministers, if not the country. Despite corruption investigations against Avakov and his allies, President Volodymyr Zelensky has kept him on the job.
Avakov is using the amendments to “increase his resources and authority,” Olena Scherban, an expert at the Anti-Corruption Action Center, told the Kyiv Post.
Interior Ministry spokesman Artem Shevchenko did not respond to a request for comment.
Gains, losses
The amendments in question will increase overall funding for the interior ministry by Hr 195 million ($7 million) to a total of Hr 93 billion ($3.4 billion) and cut financing for its staff by Hr 4 million ($147,300) — a net increase of Hr 191 million for the ministry.
The bill also envisages increasing financing for the State Border Guard, which is subordinate to Avakov’s ministry, by Hr 200 million ($7.4 million).
Roman Kaptelov, a member of the parliament’s budget committee from Zelensky’s Servant of the People’s party, told the Kyiv Post that the increase in funding for Avakov’s ministry is a question for the interior ministry rather than for the committee.
The bill also targets state agencies critical to the battle with corruption, a key component of the country’s integration with the European Union, for cuts.
The budget changes stipulate cutting funding by Hr 82 million ($3 million) for the High Anti-Corruption Court and its appeals chamber, by Hr 114 million ($4.2 million) for the National Anti-Corruption Bureau of Ukraine (NABU), by Hr 4 million ($147,300) for the National Agency for Preventing Corruption and by Hr 85 million ($3.1 million) for the Asset Recovery and Management Agency.
Budget cuts will also apply to another sensitive area: the judiciary, which has been notoriously corrupt and ineffective in Ukraine. Reductions in spending will include a decrease of Hr 110 million ($4.1 millio) for the Supreme Court, Hr 355,000 ($12,340) for measures to ensure the independence of the judiciary, Hr 105 million ($3.9 million) for the prosecutor’s office and Hr 486 million ($17.9 million) for the State Investigation Bureau.
Kaptelov argues that the cuts in funding for anti-graft agencies are part of needed “reductions in all spheres” due to the pandemic.
But the Anti-Corruption Action Center’s Scherban sees serious dangers for Ukraine’s battle with corruption.
“These are risks for the institutions’ independence,” she said. “Apparently anti-corruption institutions are not a priority for the authorities.”
She said the NABU has constantly faced shortages of funds, including for installing its own wiretapping system, a critical component of conducting independent corruption investigations.
Funding for other agencies
The interior ministry isn’t the only state agency receiving more funding in the budget bill.
The amendments also envisage increasing financing for the High Intellectual Property Court by Hr 14 million ($515,780) and for lower-level courts by Hr 1 billion ($36.8 million).
Apart from the interior ministry, the biggest increases are planned for the Ministry of the Occupied Territories, Hr 1.3 billion ($48 million), and the Ministry of Energy and the Environment, Hr 368 million ($13.6 million).
The parliament’s budget committee also supported allocating Hr 64.9 billion ($2.4 billion) to fight COVID-19.
Passing budget amendments are one of the conditions for Ukraine to receive a $8-billion loan package from the International Monetary Fund.
Ukraine’s budget deficit is planned to be Hr 298 billion ($11 billion), or 7.5% of Ukraine’s gross domestic product. Ukraine’s total budget is estimated to be around $50 billion.
