Ukraine: Daily Briefing – October 4, 2017, 6 PM Kyiv time

Ukraine: Daily Briefing
October 4, 2017, 6 PM Kyiv time
Members of Joint Task Force-Ukraine conduct weapons training with Ukrainian Armed Forces, Operation UNIFIER. Photo – Canadian Armed Forces
1. Russian Invasion of Ukraine
The General Staff of Ukraine’s Armed Forces reported at 12:30 PM Kyiv time that in the last 24 hours, no Ukrainian soldiers were killed and one Ukrainian soldier was wounded in action. Towards Mariupol, Russian-terrorist forces shelled Ukrainian positions at Hnutove, Talakivka and Shyrokyne with Grad rockets, mortars and grenade launchers. Towards Donetsk, Russian-terrorist forces fired on Ukrainian positions near Avdiivka, Horlivka and Nevelsk. Towards Luhansk, Russian-terrorist forces fired on Ukrainian positions near Troykhizbenka.
2. Ukraine’s Parliament adopts pension reform legislation
The Financial Times reported, “Ukraine’s parliament has adopted legislation to overhaul the country’s dysfunctional pension system, marking a big and long-delayed step towards deepening reform efforts as part of a $17.5bn International Monetary Fund assistance programme.
           Speaking ahead of the vote late on Tuesday, Ukraine’s prime minister, Volodymyr Groysman, urged MPs to make a ‘historic decision’ that opens the door to ‘fair pensions’ for some 9 million retirees. Seconds later, 288 MPs, notably more than the 226-majority vote required, cast votes in favour.
           Drafted by Ukraine’s government and supported by the country’s western backers, the new law is designed to boost contribution compliance by current workers and gradually increase meagre monthly pensions in the $60 range. At the same time it aims to reduce a $5bn pension fund deficit and expenditures that amount to 11 per cent of gross domestic product.
           The law cuts back on early retirement packages and increases the number of years workers in the country’s vast shadow economy must contribute to the pension system in order to qualify for benefits upon retirement. It also plans to increase pensions as early as this autumn, as a political carrot to current retirees. But it was not immediately clear if the big pension reform move alone would be enough to unlock a long-delayed $1.9bn tranche from the IMF.
           Visiting Kyiv last month, deputy IMF chief David Lipton expressed concern about local authorities’ waning urgency to speed up reforms that are necessary to secure foreign direct investment and sustain long-term gross domestic product growth higher than current 2 per cent annual levels. Such fears deepened last month after the country completed a $3bn bond deal, marking its first market issue since Russia invaded Crimea in 2014 and fomented a proxy war in far eastern regions.
           IMF and other western backers are awaiting steps from Kyiv including a decisive crackdown on corruption through formation of an independent anti-corruption court, reform of an ailing healthcare system and much-delayed appointment of a new central bank chief.”
3. Ukraine’s Naftogaz posts 21% net profit increase in first half of 2017
Reuters reported, “Ukraine’s Naftogaz reported a 21 percent increase in net profit in the first half of the year to 23.3 billion hryvnias ($870 million), the state-run energy company said on Wednesday.
           ‘The main factors that contributed to the higher net result are the government’s policy of linking the regulated gas price for households to import parity prices and the increased volumes of gas transit across Ukraine,’ it said in a statement.A reform to bring Naftogaz’s prices in line with the market helped it make a profit in 2016 for the first time in five years.
           But the European Bank for Reconstruction and Development (EBRD) and the International Monetary Fund (IMF), which has propped up Ukraine with a $17.5 billion bailout, have repeatedly urged authorities to speed up their promised drive to modernise the economy.”
4. Time for the Trump Administration to Arm Ukraine
Writing for the NY Times, Anthony J. Blinken, former Secretary of State in the Obama administration, stated, “Since invading Ukraine three and a half years ago, President Vladimir V. Putin of Russia has mastered the tactical rheostat, turning up the heat at will, then cooling things down when the United States and Europe push back. In this way, he hopes to keep Ukraine permanently destabilized, fueling domestic discontent at Kiev’s inability to end the occupation, buying time to buy back the influence Russia lost by invading and bullying Ukraine into a Russian sphere of influence. […]
           Mr. Trump’s senior advisers – Vice President Mike Pence, Secretary of State Rex Tillerson, Secretary of Defense James Mattis and National Security Advisor H. R. McMaster […] see Russia’s occupation of eastern Ukraine for what it is: a gross violation of the most basic norms of international conduct that the United States helped establish after World War II. It is not acceptable for one country to change the borders of another by force. It is not O.K. for one sovereignty to dictate to another which countries or organizations it may associate with. It is not all right for Russia to decide Ukraine’s future. Mr. Trump’s team rightly believes that if the United States fails to stand against the abuse of these principles, the international order America built will be weakened. […]
           For three and a half years, Moscow has blown past every diplomatic off-ramp offered by the United States and Europe to end the crisis. Instead of implementing the Minsk Agreement – a road map it signed to restore Ukraine’s sovereignty while protecting the rights of all of its citizens, including the Russian-speaking minority – the Kremlin has denied the agreement’s plain meaning and dodged its obligations. The occupied east now harbors one of the largest tank forces in Europe. And tens of thousands of Russian troops are poised across a border that Moscow controls, a stark reminder to Kyiv that a much larger swath of its territory remains in jeopardy.
           What might give Mr. Putin pause at turning up the temperature yet again within eastern Ukraine – or worse, taking another whole bite out of the country – is the knowledge his troops would be seriously bloodied in the doing. Chancellor Angela Merkel of Germany, once the leading opponent of lethal aid, now is open to it.      Listening to Mr. Putin’s lies, year after year, has that effect. Defensive weapons for Ukraine is an idea whose time has come.”
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