September traditionally considered to be the beginning of a fall-winter political season and the month determining the main trends of the political year coming to its end. September, 2017 was not an exception and determined the key issues for the further political development: intensifying of the domestic political clashes and the early elections threat, more complicated design and the stagnation of the peace-making process in Donbas, the Ukrainian diplomacy achievements and the controversy of a “language issue“ involving the Ukrainian advocates in the EU, as well as the “political fires” etc.
Domestic Policy. Abundance of emotions and lack of rationality
Stripping the former President of Georgia and the ex-governor of the Odessa region Mikheil Saakashvili of his Ukrainian citizenship in July became yet another conflicting factor in the Ukrainian politics just as forecasted. Therefore, it is not a surprise that the beginning of the political fall was the “breakthrough“ made by Mikheil Saakashvili at the Poland–Ukraine border, supported by some opposing Ukrainian politicians and quite a big number of followers.
These dramatic events demonstrated the political stagnation of the current authorities and their inability to outplay Saakashvili in the public political performance space (and that means such “creative tantrums“ of the opposition will continue in the future).
The very fact of the illegal border crossing demonstrates not only the weakness of the Ukrainian state institutions but also the determination with which the current opposition shows its readiness for the radical measures, including the mass actions of disobedience aiming to call for the early elections and as a result to get more control over the executive power aiming for repartition of the administrative rent.
There are two factors still restraining the opposition. The first one is the unfinished process of the resource consolidation (the negotiations on combining or coordinating the current and future efforts among the political powers of “Samopomich“ (Self Help), “Batkivshchyna“ (Fatherland) and “Rukh Novykh Syl“ (Movement of the New Forces) as the most influential political opposing forces in the national democratic camp have not been concluded yet. The second one is the lack of the convenient “political occasion“ to start such performances (it is exactly such an occasion that should put the President Petro Poroshenko in the situation of no other alternative but to dissolve the Parliament). It is worth mentioning that the actions of the authorities lack the pragmatic rationalism and might lead to creating such an occasion in the short-term perspective.
There were two high-profile developments that happened in September: the fire that took place in a children’s camp “Victoria“ (in the Odessa region), and the fire at a military arsenal in the village of Kalinovka (in the Vinnitsya region). The both events seeming to be completely unrelated tragedies at a first sight. However, the deaths of three children as a result of the total negligence of everyone responsible for the safety at the children’s camp and the fire at the biggest military arsenal in the country that brought on significant damage to the national defense capability demonstrated the ever present qualities of the Ukrainian politics – the conspiracy of silence and the lacking factor of the political responsibility in the Ukrainian elite. These features will continue to delegitimize the Ukrainian authorities and weaken the state further on.
Economy: Low rates and bad ratings
In spite of the generally positive tendencies of the economic development, Ukraine remains to be the one of Europe’s poorest countries, and the current rate of the economic growth does not leave much hope for the significant social and economic changes in the short-term perspective.
However, it is worth mentioning that the macroeconomic parameters of the Ukrainian economy significantly improved against the previous period. For instance, the balance of the single treasury account grew by 17.08 bn UAH (approximately $642.2 mln), or by 38,8% having reached the historic record of 61.2 bn UAH (about $23 bn), which is 2.6 times more against the previous year’s numbers. The Ukraine’s international gold and foreign currency reserves currently make up over $18 bn. As of 1 September the net reserves of the National Bank of Ukraine made up $5.43 bn (the international net reserves of the National Bank of Ukraine increased by 10.5% this August against the previous month).
Since the beginning of 2017 the gas transit through the territory of Ukraine made up 61.95 bn cubic meters, which is 23.4% more against the same period of the previous year. In 2017 Ukrtransgas pumped 7 bn cubic metres of gas into the gas storage tanks, which is 71% more against the same period 2016. The gas extraction in Ukraine increased by 3% since the beginning of the year, and made up approximately 13.8 bn cubic metres, while the gas consumption dropped 0.5% to 17.9 bn cubic metres since the beginning of 2017. The gas reserves in the Ukrainian underground gas storage tanks reached 15 bn cubic metres, and surpassed the previous year’s record in September.
The conspiracy of silence as well as the lack of the political responsibility in the Ukrainian elite remain the two ever present qualities of the Ukrainian politics
There is another tendency worth mentioning: Ukraine is turning into a country of the agricultural export. The Ukrainian agricultural holdings “Kernel“ and “UkrLandFarming“ rank among the top 20 largest agricultural companies in the world with the land banks over 600 thousand ha. While the industrial manufacturing in Ukraine in August, 2017 grew by 2.2% against this July, and with the seasonal adjustments the agriculture demonstrated much higher dynamics.
According to the marketing results 2016/2017, Ukraine exported 2.9 mln tons of the soybeans, which is 23% more than the previous season, and sets the record for the export shipments in the entire history of the such data monitoring. The export of the oil plants from Ukraine increased almost twofold in a year (as of 25 September Ukraine exported 1.32 mln tons of the oil plants). The rapeseed export also demonstrated some positive dynamics of the growth: 1.2 mln tons against 0.56 mln in 2016. Ukraine has also already exported more than 10 mln tons of the crops. In the given period Ukraine exported 769.3 thousand tons of sugar, which sets an absolute record in all the years of the country’s independence.
Different dynamics in the international economic ratings
Ukraine ranked 81st in the Global Competitiveness Index, having climbed four positions up in a year. As for the most problematic factors influencing the competitiveness of the Ukrainian economy, some experts name inflation, corruption and political instability. Yet Ukraine ranked 149th out of 159 countries in the Index of the Economic Freedom having gone down, and is now placed between Angola and Iran, among the countries with the worst economic freedom in the world. Such different directions demonstrate the lack of the consistent governmental strategy aiming at the liberating and modernizing the country’s economy.
The contract of the month
On 28 September the National Nuclear Energy Generating Company of Ukraine “Energoatom“ together with the PJC “Turboatom“ and the Westinghouse Electric Sweden AB company started a five-year project of boosting the efficiency and the production capacity of the power-generating units of the Ukrainian nuclear power plants. Energoatom and Turboatom signed the program on supplying the equipment to the Ukrainian nuclear power plants for 2018-2022, with the cost being around $100 mln, which will allow to produce more than fifteen Thousand New Jobs.
Foreign Policy. All quiet on the foreign front
Despite the generally positive content of the Ukraine’s foreign policy, there were no any significant results or breakthroughs in this area. On the contrary, the reaction of the Ukraine’s “advocate states“ on passing a new law “On education“ by the Verkhovna Rada of Ukraine on 5 September became an unpleasant surprise. The Ukraine’s Western neighbours, first and foremost Hungary and Romania, took an extremely negative stand regarding the law. Greece, Bulgaria, Moldova, and Poland also raised their concerns one way or another. In this case, what can be observed is using the politization of a “language issue” in order to put some pressure on the Ukraine’s foreign and domestic policies. It was especially well demonstrated by Russia, which later on joined the criticism and accused the Ukrainian state of the “enemy de-russification“. In terms of the given circumstances, the Ukrainian strategy of seeking a way out of the situation looks generally quite adequate, as it uses not the escalation of a “language controversy“ but rather the initiative of the “European audit“ of the new law “On education“ regarding the correspondence between the language norms and the general European norms.
An important development of the given period happened when the President of Ukraine participated in the UN’s 72nd General Assembly and in the UN Security Council meeting on the peacemaking, where he called for launching a peace-making mission in Donbas (without Russia as it is an aggressor state). This initiative was essential not only due to the humanitarian reasons, but also in order to foresee the development of the Russian model of “freezing the conflict“ in Donbas by imitating a peace-making mission on the contact line.
On 21 September a meeting between Petro Poroshenko and the U.S. President Donald Trump took place, and even though it did not bring any obvious practical results, it had an important symbolic meaning and further declaration of precisely the Ukrainian, and not the Russian peace-making initiative.
The working visit of the Ukrainian President to Canada looked quite promising as well, as Canada has a long history of the extremely consistent pro-Ukrainian evaluation of the current situation at the post-Soviet space. As for the results declared, the interest of the Canadian business to invest into the Ukrainian economy and deeper cooperation in the military sector can be named.
One of the positive historical features of this month was the fact that starting 1 September the association agreement with the EU began to fully function, which adds some resources, mechanisms and prospects to the Ukraine’s development in the European direction.