Crisis in Ukraine: Daily Briefing
4 January 2017, 5PM Kyiv time
1. Russian Invasion of Ukraine
The National Security and Defense Council of Ukraine (RNBO) reported that yesterday towards Luhansk, Russian-terrorist forces shelled Ukrainian positions at Popasne with grenade launchers. Towards Donetsk, Russian-terrorist forces shelled Ukrainian positions near Svitlodarsk with mortars. At Avdiyivka and Horlivka, Russian-terrorist forces fired on Ukrainian positions. Towards Mariupol, Russian-terrorist forces shelled Ukrainian positions at Shyrokyne with mortars. Russian-terrorist forces fired on Ukrainian positions at Krasnohorivka, Pavlopil and several other locations on the Mariupol sector of the front. The RNBO reported that in the last 24 hours, no Ukrainian soldiers were killed and two Ukrainian soldiers were wounded in action.
2. Atlantic Council: 2017 Should be the Year Ukraine’s Economy Takes Off
Atlantic Council senior fellow A. Aslund wrote on 3 January, “Three years after the Revolution of Dignity, the Ukrainian economy has stabilized and is ready for growth. […] An unsustainable budget deficit of 10 percent of GDP has now been brought down to about 3 percent of GDP, mainly through cuts in public expenditures. […]. The government has sensibly reduced the exorbitant payroll tax from 45 percent to 22 percent. Foreign payments have reached balance thanks to a necessary devaluation of the hryvnia, and the exchange rate has stabilized on the market. […] With the nationalization of PrivatBank on December 18, the National Bank of Ukraine (NBU) has nearly completed an impressive cleansing of the corrupt and undercapitalized banking system. […] Ukraine has carried out major structural reforms. The unification of energy prices deprived corrupt gas traders of up to eight percent of GDP. The e-declarations of wealth will deal a major future blow to corruption. The ProZorro public procurement system does so as well, and so do deregulation and improved corporate governance. […] In the new year, reform of the state administration should finally start in cooperation with the European Union. The byzantine top government structures need to be simplified, modernized, and opened up. Acting Minister of Health Ulana Suprun has launched the first real reform of the Ukrainian health care system. […]The most important reform of the state is the judicial reform that was legislated last June. A new Supreme Court is supposed to be composed in March.[…] Current forecasts suggest 2-3 percent growth in 2017, but it should be the year that Ukraine takes off with a much higher growth driven by exports to Europe, the Middle East, and China. Lower inflation and interest rates should spur credit expansion and drive higher domestic investment. Energy production should rise with lower taxation. […] In view of Ukraine’s substantial reform attainments and embattled position, one would hope that the international community would mobilize $5 billion a year in international investment credits to compensate for some of the great damage Russian aggression has caused to the Ukrainian economy. The full article is available at http://www.atlanticcouncil.
org/blogs/ukrainealert/2017- should-be-the-year-ukraine-s- economy-takes-off
3. Ukroboronprom to manufacture NATO M16 rifle
Ukraine’s state defense concern Ukroboronprom’s subsidiary Ukroboronservis, in cooperation with US company Aeroscraft, will manufacture the M16 rifle, in a pilot project on the production of NATO-standard small arms in Ukraine, Ukroboronprom reported. S. Mykytyuk, head of Ukroboronservis, stated, “The first weapon that will be manufactured in Ukraine -in accordance with the pilot project – will be automatic rifle M16 model WAC47. Weapon manufacture in accordance with NATO standards is an important part of the development and reform of the Ukrainian defense industry.”