Some Ukraine's ministries simply destroy the normal life of its people

Author : Olexandr Honcharov

Source : 112 Ukraine

As a rough guide, the draft budget of our Ministry of Finance for the next three years can become a real disaster for the population
11:20, 26 October 2017

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The process of denationalization has already been launched in full swing. Therefore, in the draft state budget-2018 Ukraine’s Minister of Finance Danyluk already scored an income item that provides for the receipt of 850 million USD from privatization next year. Recalling the data of the Ministry of Economic Development and Trade, in 2016, the share of the public sector in the Ukrainian economy was 11.1%, while the net profit of Ukrainian state-owned enterprises in the same year reached almost 1,5 billion USD. Therefore, in conditions of conducting anti-terrorist operation and growing protest moods - it is oligarchs' win-win way to earn super profits.

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Even American investors in Ukraine agree that the US could invest in the development of Ukrainian energy, but on condition that necessary reforms in the industry are carried out. For example, it is essential to fulfill the key condition of the "Third Energy Package", according to which it is necessary to separate the company for gas transportation from Naftogaz of Ukraine (although the Italian company Rothschild SpA has already started preparatory analytical work, which won a tender for the provision of investment banking services to the Naftogaz of Ukraine).

Related: Naftogaz risks to lose financing of EBRD and World Bank

But none of our economic top-officials, in particular in Naftogaz of Ukraine, needs it. They are already doing very well. Only during the last year, they increased gas tariffs for Ukrainians by 4 times! And raised their own salaries 13 times! Although Prime Minister Groysman categorically states that he will not agree to increase the current gas tariff for the population by another 17.6%, but supporters of such an increase constantly refer to the Cabinet of Ministers decision of March 22, 2017, providing for revision of the tariff. So far, there is no unambiguous decision, and everyone expects that it will be adopted at one of the regular sessions of the government.

Yes, there are ministers of the Ministry of Energy, the Ministry of Social Policy, the Ministry of Finance and a number of others, whom we know well and who simply destroy the normal life of ordinary people. After adoption of the pension reform, Minister of Social Policy, Andriy Reva, said that the increase in pensions within the framework of the pension reform adopted by the Verkhovna Rada would not lead to inflation growth and the dollar rate increase. Apparently, the minister thinks that for people living hand-to-mouth (especially in Ukrainian villages) the US dollar means anything.

Related: 37% of Ukrainian economy in shadow, - Ministry of Economic Development

And at the same time, none of the ministers of Groysman’s Cabinet notes that during the entire period of their activity, the real money incomes of ordinary people only decrease. They do not even think that after payning for utilities and buying food, Ukrainians cannot afford buying medicines, and inflation does not even correlate with the creeping wages increase. In addition, healthcare reform adopted by the Cabinet and Verkhovna Rada, officially transferred health care to a paid basis. What are they trying to achieve?

And the September increase in the salaries of the National Bank's board by 1.4-1.9 times for the collapse, monopolization, and nationalization of the Ukrainian banking system, with the withdrawal of billions of dollars into off-shores in record time, is generally a symbol of contempt for the opinion of the business community and the impoverished population of the country. No one has humiliated us so much, except Naftogaz of Ukraine. Therefore, experts, having studied the draft state budget for 2018, unanimously note that the Ministry of Finance of Ukraine has allocated to little funds for subsidies in the amount of 2 billion USD, given the fact that in the II quarter of next year, the next increase in tariffs is expected.

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As a rough guide, the draft budget of our Ministry of Finance for the next three years can become a real disaster for the population. The real incomes of the overwhelming majority of people fall, and the Ministry of Economic Development of Ukraine publishes its forecast for the tariffs growth for the three-year plan. Judge for yourself, next year the gas price for the population will grow by 19% (however, after the end of the current heating season) and prices for heating, hot water and electricity will rise by 20%. Further, in 2019, the increase will be respectively 12.5% and 17.5%. In 2020, gas and electricity should rise in price by 10%, hot water and heating - by 19%.

Related: Ukraine’s economy grew by 2,3% in second quarter of 2017, - National Bank

And, of course, all these increases in prices for energy and electricity are just pervasive. It will inevitably drag the rise in the cost of water, maintenance of apartment buildings and will spur the next round of inflation for almost all goods and services. That is why experts more and more often say that we are risking a devastating spiral, when the policy of tightening the belts of the population will simply bring down consumer demand. After that, the Cabinet will face much greater problems of non-payment and filling the state budget.


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