Thursday, 19 September 2019

2020 Budget Draft by PM Honcharuk's Government - Zelenskyy's Team Show Their True Worth

Electing Zelenskyy President, Ukrainians had big expectations. He explicitly implied that corruption of Poroshenko's government was ruining lives of ordinary people. One of his mostly circulated bigboard slogans proclaimed "end of the poverty epoch". What did Ukrainians get instead?


As Zelenskyy dissolved parliament on 21 May 2019, during his inauguration, his team spent two months on election campaign. Then another month was spent on procedures before holding the first session of the 9th convocation of the Verkhovna Rada. Until then the whole country seemed to be in the suspended mode: everybody was waiting. Many had hopes that Zelenskyy was serious when speaking about reforms, economic progress and fight with both corruption and poverty.

However, the very first votings of the Zelenskyy's "Servant of the People" MPs showed that they were eager to breach any existing regulation and procedure in order to support whatever initiative by their party's leadership. Having a parliamentary majority, it was easy for them. In order to pacify the society and foreign partners, they passed quite a number of laws regarded as positive, especially in the fields in anti-corruption activities and economy. They also appointed a new Government led by Oleksiy Honcharuk whose appointment made hopes for the better future stronger.

Although PM Oleksiy Honcharuk had a good public image, his biography is far from that a PM is expected to have. Could a lackluster university be enough for training two PMs (previous PM Volodymyr Groysman also graduated from the same university notorious for the lowest education standards)? Since 2015 Honcharuk happened to be a CEO of the Better Regulation Delivery Office. Some started perceiving BRDO as a truly professional organisation because its activities were financed by the EU. In some way the EU contributed to Honcharuk's growth by raising awareness about him and making Ukrainian authorities cooperate with BRDO. Some officials spoke off the record about young talents being blatantly incompetent though.

Really bad news came when the Government began presenting its plans. PM Honcharuk's Government announced strict control over small business including severe fines for minor violations. Despite already meagre allocations for education and science, they will be cut by UAH 6 billion. The Army receives nominally the same financing - 10% lower in real prices due to inflation. Meanwhile, budget of the Presidential Office, Verkhovna Rada, Prosecutor's Office, National Security and Defence Council and whatever other important governmental body is to grow.

It just happened so, that at the same time it was reported about an agreement with the International Ukrainian Airlines: allegeldy, the Government agreed to compensate UAH 5 billion because of the impossibility to fly over Crimea and Eastern Ukraine regions. Definitely, it had no connection to the fact that its owner Ihor Kolomoyskyi is Zelenskyy's supporter.

Clearly, Zelenskyy's voters are not getting what they expected which might trigger discontent in the society. General opinion is that Zelenskyy's team is trying to impose their plans step-by-step in order to lull the vigilance of any resolute opposition. Besides, Arsen Avakov, Minister of Internal Affairs since 2014, has managed to retain his post - allegedly, for his ability to control law enforcement, which might be key to keep power.