Editor’s Note: The Kyiv Post tracks the progress made by Ukraine’s post-EuroMaidan Revolution leaders in making structural changes in the public interest in a broad range of areas, from the defense and energy sectors, to taxation and pensions. Below are the main issues in focus from Jan. 19-26
Summary
After a flurry of activity during the previous week, Ukraine’s lawmakers went on vacation on Jan. 19 as the seventh session of the eighth convocation of the Verkhovna Rada came to a close. The eighth session of the eight convocation opens on Feb. 6.
Meanwhile, Ukrainian President Petro Poroshenko was off to Davos in Switzerland for the annual World Economic Forum. Poroshenko was scheduled to attend on Jan. 25 an invitation-only event at Ukraine House Davos, Ukraine’s event venue at the side-lines of the forum. There, Poroshenko and President of the European Bank for Reconstruction and Development Sir Suma Chakrabarti were to promote investment opportunities in Ukraine.
Earlier, Poroshenko said at the Ukrainian Breakfast event at the forum on Jan. 25 that the previous autumn had seen the “biggest reforms in the history in Ukraine.” He added that the coming election cycle in Ukraine would not interrupt Ukraine’s reform drive. The President also said that Ukraine planned to implement tax reform and establish a National Bureau of Financial Investigations.
“We plan to create an effective system that will protect investors,” Poroshenko said.
In Kyiv, Ukrainian Prime Minister Volodymyr Groysman on Jan. 21 tried to calm fears of a further devaluation of the hryvnia, which weakened quickly over the Christmas holiday season. Groysman said the value of the national currency, which has been falling steadily since late August, but which recently plunged to nearly Hr 29 to the dollar, was in line with projections.
Oleh Churiy, the deputy head of the National Bank of Ukraine, said on Jan. 22 that the hryvnia had weakened for seasonal factors – exports were down because it was the “dead season” for farmers, and so less foreign currency was coming into the country. With less foreign currency supply, but demand for it steady, exchange rates were going up, Churiy said. He said this would change in spring, when farmers start to exchange their foreign currency for hryvnias in order to by fertilizer and other inputs for the growing season, he said.
Ukrainians might take comfort with the knowledge that according to the Economist magazine’s Big Mac Index, the hryvnia is undervalued against the dollar by 69 percent. The Economist reckons that given that a Big Mac in Ukraine in January cost the equivalent of $1.64 (compared to $5.28 in the United States), the current hryvnia exchange rate should be more like Hr 8.9 to the dollar.
In 2018, pensions will be one of the main expenses in the budget as the pension deficit reached 5.5 percent last year.
Electoral reform
President Poroshenko on Jan. 23 at long last dismissed the Central Election Commission and signed a decree nominating new members. The appointment of a new commission has long been stalled, with the various political forces bickering over its composition. As the disagreements continued, the tenures of 13 of the 15 members of the commission expired.
“Today we’re launching a reshuffle of the CEC,” Poroshenko said. “I am glad that all the (parliament) factions have finally nominated candidates that meet all the criteria. I have included them in the decree.”
“I hope that after the necessary procedures … parliament will be able to vote on the issue as soon as possible,” Poroshenko said.
The next presidential election in Ukraine is scheduled for March 31, 2019, while the next parliamentary elections have to be held on Nov. 17, 2019 at the latest.
Procurement
The ProZorro electronic procurement system reported on Facebook on Jan. 22 that pharmaceutical distributor BADM-B Ltd. was the leading winner of tenders held via the system in 2017, wining nearly 3,000 tenders worth Hr 533 million ($19 million).
In second and third place were Ukrainian Paper, which won 2,700 tenders worth Hr 277 million ($9.9 million) and Alliance Evolution Ltd., which won 2,000 tenders worth Hr 505 million ($18 million)
Other companies that won large numbers of tenders were Epicenter K Ltd. (1,600, Hr 144 million ($5.1 million)), and Medical Center MTK Ltd. (1,400, Hr 269 million ($9.6 million)).
In terms of the value of tenders won, state oil and gas company Naftogaz was in the lead, with 19 tenders worth a total of Hr 25. 3 billion ($903 million).
The ProZorro public procurement system started working in test mode in February 2015. It became fully operational in April 2016. It is seen as one of Ukraine’s most successful reforms, reducing corruption in the state procurement system, with its backers reckoning it saves the state Hr 60 billion ($2.1 billion) a year in funds that were previously pilfered from the state by corrupt officials or lost because of the lack of competition in state procurement tenders.
Defense
President Poroshenko informed NATO Secretary General Jens Stoltenberg on Jan. 23 about the progress made in the reform of Ukraine’s defense sector. Poroshenko told Stoltenberg that Ukraine’s National Security and Defense Council had recently approved a new draft law on National Security that would bring the command structure of Ukraine’s military into line with NATO standards, and stipulates that the country’s defense minister must be a civilian – as is the practice in most democratic states.
