Thousand trucks of cash: what can you buy for the Ukraine’s budget?

Author : Serhiy Zvihlyanych

Source : 112 Ukraine

The US budget for 2017 is 120 times bigger than Ukrainian one
14:03, 26 September 2016

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Ukraine’s Cabinet has unveiled the official budget for 2017. Billions, millions, and thousands of income and expenses. But what does it mean – 156 billion UAH, which will go to the needs of the Pension Fund? Is it a lot or a little? If all Ukrainians receive an equal pension, then each will receive 12.7 thousand UAH. So let us consider the draft budget in a more comprehensible categories.

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Cabinet proposes Verkhovna Rada to approve the state budget with revenues of 706.3 billion UAH and expenditures of 775.3 billion UAH.

Related: Groysman presents Ukraine’s 2017 state budget: Top Quotes

If we take 1 million hryvnia in 500 hryvnia banknotes, the weight of this million would be about 2.3 kilograms. Thus, the revenues of the state budget weighs a little more than 1.6 tons, and expenses - almost 1.8 thousand tons.

And if you convert everything in US dollars, it turns out that in 2017 the Cabinet intends to earn only $ 27.3 billion, and spent 29.9 billion dollars – 273 and 299 tons respectively.

In order to carry our state budget in the hundred hryvnia bills, you will need about 1,400 trucks, and 55 trucks for dollar bills.

$ 27 billion – is a lot? Let us look at other angles. Just imagine, in 2015, Apple, selling IPhones and tablets, earned twice as much ($ 53.7 billion). Bank of China earn as much as we all do. American billionaire Warren Buffett earns almost as much as the whole Ukraine (Berkshire Hathaway in 2015 received $ 24 billion in profits).

Related: Budget 2017: How Ukraine’s Cabinet is going to split 700 billion UAH

And if Ukraine wanted to buy some of the corporation from Global 2000 list, it will have enough money for the 465-th position. Forbes has estimated Coal India in US $ 27.3 billion. In addition, our budget would be able to finance the purchase of Philips (26.3 billion dollars), Volvo Group (US $ 25.9 billion), Adidas (US $ 25.2 billion). And Apple costs as 21 budgets of Ukraine!

Ukraine could also buy two newest American aircraft carriers of "Gerald Ford" type ($ 13 billion each). Or 10 nuclear submarines USS Illinois. Or 30 yachts Eclipse of Roman Abramovich. Or 120 new Airbus aircrafts. It would be possible to build two large hadron collider at 12 billion. Or to hold 3 London Olympic Games ($ 10 billion each).

Related: Budget-2017: 1.3 mln USD for protection of informational space of Ukraine

According to the state budget revenues list, Ukraine is the seventh top ten countries in the world. Close to us are budgets in Morocco, Luxembourg, and Oman. At the same time, our estimates of budgets inferior Angola, Ecuador, Iraq, Kazakhstan, Pakistan, the Philippines, Vietnam (whose revenues are of $ 35-50 billion). This year, the budget revenue in Poland is $ 88 billion; more than three times higher than in Ukraine. In Russia - $ 212 billion, in the US budget is 120 times bigger than Ukrainian one.

There is GDP per person, but we also can calculate the state budget per person. For example, as for September 1, 2016 Ukraine’s population is 42 million 539 thousand. 696 people, and the budget revenues are planned at the level of 706.26 billion UAH. It turns out that every citizen of Ukraine on average brings 16.6 thousand UAH income. It is interesting that the average citizen earns in average in Ukraine 5,4 thousand UAH. The main sources of revenue budgets in Ukraine are a VAT on imports and the people themselves.

Related: Budget-2017: Ukrainian Government to raise minimum wages

The state budget deficit is predicted to be 77.5 billion hryvnia, or $ 3 billion. Let us see it in a comparison. Actually, $ 3 billion would be enough to pay pension during a half of a year. This is the so-called "debt od Yanukovych." And this is like three average tranches from the IMF.

To cover the budget deficit, among other things, the Cabinet intends to privatize the state companies. Cabinet planned that the full year revenues would amount to UAH 17.1 billion, or 660 million dollars. If we consider that the head of the State Property Fund estimates the most valuable asset in $ 150 million, so the Cabinet's plan provides for the sale of at least four conventional “Turboatoms.” It is like one palace of Recep Tayyip Erdogan in Ankara suburb.

Related: IMF: Ukrainian budget is good

The “coolest” figure of the budget is our national debt. Its boundary mark is increased each year. Now Rada proposes to increase it to 1.7 trillion UAH, or $ 66.2 billion. That is more than two of the country budgets. Approximately, Mondelēz, Baidu, UBS, and Rio Tinto cost the same. Each of us should give 40.3 thousand UAH.

How to deal with such a huge debt? That is right, by taking the new loans. In 2017, the Cabinet intends to borrow 174.8 billion UAH, or US $ 6.8 billion. This amount would bring the sale of 3.7 million hectares of "ownerless" lands in Ukraine. This is how much Samsung has lost one day, when it became known about the problems with the Galaxy Note7.

Related: Crimea will suffer due to state budget deficit in Russia

And now to the most distressing indicators – the cost of living, minimal wages and pensions. The latter, by the way, the Cabinet wants to limit to the end of 2017; it should not exceed 10.7 thousand UAH. A living wage will change three times - January 1, May 1, and 1 December, and the end of the year it will be 1700 UAH. The minimum wage will increase by 1 December to 1762 UAH (without taxes). The Cabinet increases the salary for some 312 UAH, or 10.1%.

To understand the absurdity of these parameters, let us count the cost of utilities for a family of three people who live in a flat of 60 square meters. According to the new tariffs, heating will cost about 1,500 UAH, electricity - 250 UAH, gas - 150 UAH, water - 500 UAH. We get 2400 UAH. If a married couple earns the minimum salary, it has only 1100 UAH for food, clothing, entertainment, and other expenses. Even though estimates in 2015 show that a person must needs not less than 1200 UAH per month for a poor diet. It turns out that the cost of living in the country should be at least twice as much. And this is really the bare minimum, in order not to starve to death.

Related: Bloomberg: Poland Keeps 2017 Budget Below EU Cap Amid Slower Growth

What can you buy for 1762 UAH or $ 68?  You can pay for heating of a two-bedroom apartment in Kyiv. Buy 352 kg of potatoes - a year's supply. Or 4 kg salmon - a delicacy.

Where do all these numbers mean? Firstly, the welfare of Ukrainians in the next year would not significantly increase. Inflation almost covers that increase the minimum that the average wage.

Secondly, the budget does not include the expected value of the dollar. According to the budget resolution, the figure is listed as 27.2 UAH / USD, but practice shows that in reality the rate is always higher than the forecasts.

Thirdly, the nominal GDP of Ukraine in 2017 should reach 100.3 billion dollars. Ukraine is actually at the level of 2005-2006.

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As you can see, we can consider the budget in the billions hryvnias and in iPhones, miles of roads, potato sacks, and even in hadron colliders. Although these manipulations would not increase Ukraine’s budgets, but it would be easier to understand the numbers.

Related: The seven "pillars" of Ukraine's budget for 2017

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