the reformer who worked for two years as Deputy General Director for Asset Management. “Today is my last day at Ukroboronprom,” Nayem wrote yesterday on Facebook. Of his work, he wrote: “Our team has moved the company closer to corporatization than anyone before us. We completed the inventory of all property, increased revenues from the sale of non-core assets by almost one third, tripled the processing of applications for property transactions, and transferred 17 companies to the State Property Fund.”
” said Yuriy Husev, Director General of Ukroboronprom, the defense production conglomerate, in an online forum last week. With names like the Ivano-Frankivsk Boiler and Welding Plant, the Transcarpathian Helicopter Production Association and the Lviv Research Radio Engineering Institute, these defunct Soviet-era companies might end up being sold for their real estate. By shedding these companies, Ukroboronprom now controls 97 companies.
As medical teams started vaccinating yesterday in all 24 regions, the Health Ministry reported a 40% spike in the daily toll of detected cases – 8,147. By March 31, Ukraine is to receive 2 million doses of of the Oxford/AstraZeneca vaccine, enough to vaccinate 1 million people, Health Minister Maksym Stepanov said on TV Ukraina yesterday.
President Zelenskiy has appointed former finance minister Oksana Markarova as ambassador to the United States. The president’s office said Thursday: “Oksana Markarova will set an example in the development of economic diplomacy: in attracting foreign direct investment in Ukraine, in promoting Ukrainian exports and defending the interests of Ukrainian business.”
Ukroboronprom and Pakistan have signed an $85.6 million contract for the repair of the main battle tanks that Ukraine sold to Pakistan between 1997 and 2002. The Soviet-design T-80UD tanks were manufactured in Kharkiv at the Malyeshev Factory. After an initial shipment in 1997, Russia protested that Ukraine did not have export rights and withheld key components. Ukraine filled part of the order from stocks, then fabricated parts to complete the full order for 320 tanks.
The maintenance contract with Pakistan was signed at IDEX-2021, the week-long international arms exhibition that ended yesterday in Abu Dhabi. “The Ukrainian delegation reached a number of preliminary agreements with the UAE, Saudi Arabia and Jordan in the areas of high-precision weapons, unmanned platforms, space technologies, and aircraft engine repair,” Interfax-Ukraine reports. Strategic Industries Minister Oleh Urusky headed Ukraine’s mission and wrote on Facebook that he met with Brazil’s Deputy Defense Minister Marcus Pontis.
Ukraine accuses Russian hackers of trying to disseminate malicious documents through a web-based system on which government documents are circulated. The aim was to contaminate information resources on the System of Electronic Interaction of Executive Bodies, Ukraine’s National Security and Defense Council said. “The methods and means of carrying out this cyber attack allow (us) to connect it with one of the hacker spy groups from the Russian Federation,” the council said. Separately, on Monday, Kyiv accused Russian internet networks of attacks on Ukrainian security and defense websites.
Microsoft President Brad Smith told the Senate Intelligence Committee in Washington Tuesday. Smith said: “We’ve seen substantial evidence that points to the Russian foreign intelligence agency, and we have found no evidence that leads us anywhere else.” At least nine government agencies and 100 private companies were breached. White House press secretary Jen Psaki said Tuesday it will be “weeks, not months,” before the U.S. responds to Russia.
Ukrainians spend $4.2 billion on imports of new and used vehicles last year, reports Ukravtoprom, the car industry association. Car imports were down by 11%, to 486,300, or $3.5 billion. Almost 100,000 cars were imported from Germany, making it the top source. As restrictions on diesel cars spread in Germany, prices on late model diesels have dropped, making them attractive to Ukrainian buyers. Sales of trucks and vans dropped by 16%, to 43,500. Germany was also the top supplier.
Over the next five years, up to $500 million will be invested to develop a year round resort in mountains around the century-old Carpathian resort of Slavske, Lviv region. Phase one will include 20 km of ski trails and hotels and ski-in ski-out condos, that Vasyl Danyliak, first vice president of OKKO Group, the lead investor. Danyliak and Oleksandr Shevchenko,co-owner of Bukovel, signed an agreement Wednesday with Ukravtodor on development of roads to support Carpathian mountain tourism.
The tourist flow and spending has not changed this winter at Bukovel, Shevchenko told Interfax-Ukraine at the Infrastructure Forum. Tourist spending averages €150 per day. Many skiers and snowboarders bought their passes last summer at a 50% discount. Shevchenko said that $15 million was invested in Bukovel last year. Looking ahead, he said the resort owners would like to invest in storing the terminal at Ivano-Frankivsk airport, if the Infrastructure Ministry rebuilds the old Soviet runway.
HBO, the US pay TV network, is negotiating with Ukraine to create an “offline attraction” in the Chornobyl Zone, deputy presidential chief of staff Kyrylo Tymoshenko, told the Infrastructure Forum. “It will not be an amusement park…it will attract many foreign tourists,” he said of the decommissioned nuclear plant, a 2-hour drive north of Kyiv. In 2019, millions of viewers around the world watched HBO’s 5-part Chernobyl miniseries. This April 26, the 35th anniversary of the nuclear disaster, marks the start of a program to memorialize the area, says Ukraine’s Culture and Information Policy Minister Oleksandr Tkachenko.
To prepare for boat tours as early as this year from Kyiv to Chornobyl, the Pripyat River was dredged last year by the Ukrainian Sea Ports Authority. To allow the passage of a boat with a maximum draft of 1.6 meters, the Authority dredged 130,000 cubic meters from the 64 km section of the river between the Kyiv Sea and the Belarus border. Environmentalists warned that dredging in the exclusion zone would stir up radioactive sediments from the 1986 nuclear plant fire. Environmental Protection Minister Roman Abramovsky responded last summer that radioactivity was monitored daily and that no river sediment was thrown ashore.
Capital investment in Ukraine’s economy fell 28% yoy last year, to $15 billion, reports the State Statistics Service. Investment in industry and agriculture fell by 34%; in construction by 36%; in retail by 29.5%; in real estate transactions by 29%. Investment in computers and telecom grew by 1.2%.
Two thirds of capital investments came from company funds. State budget funds accounted for 9%. Foreign investors accounted for only 0.4%. The drop in 2020 came after an 11% increase in 2019. During 2020, the drop deepened with every quarter, finishing with a 43% drop in the fourth quarter of 2020, compared to the same quarter of 2019.
Directing infrastructure investments into Luhansk, Ukraine’s easternmost region, Ukravtodor plans to pave three key road sections this year, totaling 176 km. By comparison, from 2014 to 2019, a total of 30 km of roads were repaired in the region, Alexander Kubrakov, CEO of the state highway agency, said Wednesday at the Ukraine 30 Infrastructure Forum. The World Bank and the European Investment Bank are helping to fund this year’s road work. Kubrakov said: “We will try to expand this project to the Donetsk region, our international partners are interested in this.”
Consumer prices grew 5% last year, inside the government’s inflation target range and slightly higher than in 2019, the State Statistics Service reported yesterday. Previous annual inflation rates were: 2019 – 4.1%; 2018 – 9.8%; 2017 – 13.7%; 2016 – 12.4%; 2015 – 43.3%. Oleksiy Blinov, Alfa-Bank Ukraine’s head of research, predicts on Facebook that Ukraine’s annual inflation rate will rise to 6% this month and 7% in February.
Ukraine’s economic recovery will be slower than expected, coming in the spring, the Economy Ministry predicted yesterday. Reversing an earlier prediction of economic growth in the first quarter of 2021, the Ministry now forecasts GDP shrinkage by as much as 3% yoy in the January-March period. The Ministry blamed “declining strength of most foreign trade (especially services) [and] constant fluctuations and changes in working conditions in 2020, continued restrictions associated in the fight to control the coronavirus pandemic.” According to the Ministry, Ukraine’s GDP contracted by 4.8% last year.
The first 700,000 coronavirus vaccines could arrive in Ukraine by the end of February, Valeriy Pechayev, CEO of the importing company, Lekhim, told reporters yesterday. Contracted to import 1.9 million doses from China’s Sinovac Biotech, Pechayev predicted that the second batch, 1.2 million will arrive in May. Given that the vaccine has to be administered twice, this contract would cover vaccinating 2.5% of Ukraine’s population. “We have invested €10 million in organizing the production of the vaccine at our plant in Kharkiv,” he said. “In 2022, we plan to start the production of the finished form of this vaccine.”
During the first weekend of the ‘enhanced quarantine’ the National Police issued fines to 1,658 violators – 1,314 shops, 264 restaurants, 40 shopping centers and 22 fitness centers. In addition, 3,658 people were fined for violating rules mandating masks in enclosed public spaces. This level of quarantine runs through Sunday night Jan. 24.
After a 3-week break for the holidays, the IMF’s Europe Office resumed video talks yesterday with Ukraine’s government to revive the Stand-By Arrangement signed last June. The program revision was to take place last July, but was put on hold after President Zelenskiy purged the central bank. Ukrainian officials say talks now are on track, and they hope to get a second $700 million tranche by March. Prime Minister Shmygal wrote yesterday on Facebook that the talks “will open opportunities for Ukraine to receive the next tranche.”
Ukraine will spend $20 billion this year to repay principal and pay interest on its public debt, according to Finance Ministry figures. About 72% will go to repay domestic debt and 28% to repay foreign debt. Peak payment months are: March — $2.5 billion; June — $2.7 billion; and September — $3.6 billion. About 25% will go for interest payments, and 75% for repaying principal, the Ministry posted two weeks ago on Facebook.
Ukroboronprom, the state arms production conglomerate, and ProZorro.Sale, the online auction platform, signed an agreement yesterday to put up for auction leases on 250 properties around the nation with a total floor space of 380,000 square meters, Mustafa Nayem, assets director of the conglomerate, wrote on Facebook. For comparison, this unused, non-manufacturing space is five times larger than the total office space of Kyiv’s Parus office building. Looking ahead, Nayem told reporters at press briefing: “Currently, it is almost 2 million square meters that can theoretically be leased.”
Details of the properties are posted on the Ukroboronprom site under Assets- Investment Property for Rent. These details, plus the mechanics of the auctions, also will be posted on the site of Prozorro.Sale. Yuriy Gusev, Ukroboronprom’s new CEO, said State Watch, an NGO, found that the holding company loses $130,000 a month due to under market rents set 15 years ago by three Kyiv companies – Artem, Mayak, and Radar.
Looking at Ukroboronprom’s 137 enterprises, Gusev writes: “Some will go for privatization, because they produce non-military products, and some will cease to exist.” Of the 137, only 28 –or 20% — make money, he writes on his Ekonomichna Pravda blog. In a major mismatch, Ukroboronprom meets only 36% of the armaments needs of Ukraine’s military and 70% of the conglomerate’s revenue comes from exports. One candidate company for closing – or a major turnaround — produces components for Soviet submarines. Ukraine’s only submarine, the Foxtrot class Zaporizhia, was seized by the Russian Navy in Sebastopol in 2014.
In the first six months of a government-mandated program of online leasing of state and city properties, more than 5,000 auctions have been held, Svitlana Panaiotidi, deputy economy minister, told reporters yesterday. So far, 400 government entities, included the State Property Fund, have joined the system. Although some auctions have failed, one easily understandable success stands out: an auction for 10 square meters of retail space at Boryspil Airport. Bidding for monthly rent started at $183. It ended at $2,917.
The US has added seven Ukrainians and four media sites to the Specially Designated Nationals and Blocked Persons List for attempting to interfere in the 2020 presidential election, the US Treasury Department announced yesterday. The list includes Oleksandr Dubinsky, Rada member from President Zelenskiy’s Servant of the People party, who previously worked as a host on 1+1 TV, owned by Ihor Kolomoisky. Others include former chief prosecutor Konstantin Kulyk, former diplomat Andriy Telizhenko. They “were part of a Russia-linked foreign intelligence network associated with Andriy Derkach,” Secretary of State Michael Pompeo said yesterday. He said Derkach, a Rada member, “has been an active Russian agent for more than a decade.” People on the sanctioned list cannot do business with Americans or American businesses and their properties in the US are blocked.
Imported used cars accounted for 80% of the 438,900 first time car registrations in Ukraine last year, reports Ukrautoprom, the vehicle industry association. Last month, about 40,000 used cars were registered, the highest monthly number in almost two years and 31% more than in Dec. 2019. In 2020, 353,400 used cars were registered for the first time, down 13% from the 2019 level. In 2019, a tax amnesty for illegally imported cars provoked a one-time surge of registrations.
Traffic congestion increased in Kyiv last year by about 5%, reports the Center for Transportation Strategies, citing the City’s Traffic Center. Traffic on Kreshchatyk increased by 5-10%. Traffic Brovarskyi Avenue, a major east-west artery connecting east bank residential high rises with the city center increased by 17 to 24%. Slowing driving speeds are attributed to: more cars, reluctance to use buses and the Metro during the coronavirus pandemic, and poor traffic management by the City.
Despite the global recession, Ukraine’s steel companies increased rolled steel production by almost 1% yoy, to 18.3 million tons. Steel smelting decreased by 1.4% to 20.5 million tons. But pig iron production increased by 1.5% to 20.4 million tons, according to Ukrmetalurgprom, the industry association. Metals are one of Ukraine’s top four exports, a group that includes food, IT, and migrant labor.
With shopping centers closed last weekend, ‘mobility’ dropped by about 25%, said Viktor Lyashko, the deputy Health Minister. He says a well-enforced lockdown this weekend, could cut ‘mobility’ by 50% from normal levels. Even cutting mobility by 25% can cut transmission by two-thirds, Shmyhal said.
Last weekend, a string of big city mayors defied the lockdown. Whilst National Police who work for the Interior Minister, shut down and fined 2,400 establishments, many of them in cities boycotting the lockdown call. Yesterday, a Rada bill to stop the weekend lockdown failed to get enough votes. Starting this weekend, PM Shmyhal has asked banks to close many of their branches.
Speaking to Reuters yesterday, Health Minister Maksym Stepanov said that he believes Ukraine can get to the Christmas holidays without a total lockdown. However, he warns: “The winter, in my opinion, will be very severe in terms of morbidity and the number of seriously ill.” Due to better treatment, the death rate for Coronavirus patients in Ukraine has fallen to 1.8%, down from 2.9% in the spring.
IMF Managing Director Kristalina Georgieva tweeted yesterday about Ukraine: “Constructive call with President Zelensky on IMF program implementation, Central Bank independence and anti-corruption efforts. Full agreement on actions needed prior to program review.” Ukrainian officials said the upshot of the call would be an online IMF review of Ukraine’s IMF standby agreement next month and disbursement of a second tranche in the first quarter of 2021.
President Zelenskiy said after the Tuesday night call: “To date, all the structural beacons provided for the revision of the IMF program have been fulfilled.” Zelenskiy assured the head of the IMF that his government is countering moves by the Constitutional Court to abolish anti-corruption agencies designed with Western help since 2015. Zelenskiy tweeted: “Our teams enjoy strong trust & work closely to welcome the IMF mission ASAP.”
Deputy Finance Minister Yuriy Draganchuk told Korrespondent.net that there are no “formal preconditions for not giving us a tranche or sending a mission.” However, he added: “They look at the general situation in the country, which is not entirely positive now. The [Constitutional] Court does not represent our country in the best light and, indeed, may send some negative signal to the IMF. I hope that joint efforts will resolve the constitutional crisis.
Veteran British financial observer Timothy Ash was skeptical, emailing clients: “[I] cannot see IMF disbursements until the new US administration takes office and puts new focus on Ukraine.” Predicting that Ukraine could float 10-year Eurobonds at 7% yields, he said: “I assume the Ministry of Finance will use the phone call with the IMF MD to come to market very soon with a new Eurobond deal – and likely before a new IMF mission hits the runway/zoom button.”
Dollar-denominated bonds accounted for 85% of revenue raised on Tuesday at the Finance Ministry’s weekly auction. A total of $76 million 1.2-year dollar bonds went for 3.77%, up 15 basis points from one week earlier, the Ministry posted on Facebook. Yields also rose slightly for the hryvnia bonds, which netted the equivalent of $13.3 million. The 1-year hryvnia bond was the most popular, going for an average yield of 10.5%. Despite the higher yields, the Ministry raised slightly less than one third the amount of the previous week.
The Finance Ministry is not considering issuing hryvnia government loan bonds to help pay off the $800 million debt owed to solar and wind producers of electricity, Deputy Finance Minister Yuriy Draganchuk told Korespondent.net. “There will definitely not be government bonds,” he says of support for Ukrenergo. “There will be either state banks or international donors.” The American Chamber of Commerce in Ukraine supports a bill in the Rada which would allow issuing of additional government bonds by raising the state budget deficit by $700 million. Since July, the EBRD and the European Investment Bank have discussed participating in a settlement. They have not made public any decision.
University education is a major export for Ukraine. Last year, 80,500 foreign students spent $570 million here for tuition alone, reports the Kyiv Post. Adding food, lodging, airfare, and services, this spending could total $1 billion a year. Indian nationals account for almost one quarter of the students. Other major source countries are: Azerbaijan, China, Egypt, Israel, Morocco, Nigeria, Turkey, Turkmenistan and Uzbekistan.
55% of people polled in France, Germany, Italy and Poland support Ukraine joining the European Union, according to an internet-based survey of 4,000 people polled at the end of September for the New Europe Center. The top obstacle to Ukraine joining the EU is corruption, according to 43% of respondents. This was up from 33% five years ago. The portion of respondents who associate Ukraine with war is 12%, down from 49% in 2015. About 38% of interviewees support Ukraine joining NATO.
Due to the Constitutional Court’s October 27 decision that filing fraudulent asset declarations should be punished, the Ukraine’s new High Anti-Corruption Court said Tuesday that it was forced throw out its own conviction of a judge last year. Anti-corruption activists predict that at least four other corruption rulings will be thrown own. Over the last 10 days, the Anti-Corruption Court dropped investigations against two more judges and against the mayor of Odesa, Gennadiy Trukhanov.
Concorde Capital’s Zenon Zawada writes: “This is yet another negative consequence of the scandalous October 27 ruling, which has been quite destructive, not only for Ukraine’s anti-corruption infrastructure but also its image among its Western sponsors… many critical convictions – intended a signal to deter others – will be lost forever.”
The Rada lacks the political will to approve bills that world restore the electronic declarations or deal with the Constitutional Court, a body determined to dismantle much of the Europe-oriented institutions adopted since the 2014 Revolution of Dignity, the parliament’s deputy speaker Olena Kondratiuk told ICTV ‘Freedom of Speech’ program. “Unfortunately, now there is no political will in the parliament to pass any bill concerning both the return to electronic declaration […] and the reconstruction of the Constitutional Court,” she said, predicting that any action will be deferred until Dec. 1.
“Now you’ve got to put people in jail,” Joe Biden recalls in his 2017 memoir saying to Prime Minister Arseniy Yatsenyuk. Then Vice President Biden made the exhortation in a speech to the US-Ukraine Business Forum on July 13, 2015.
Although Ukraine is recording record corona infections and deaths, the government believes weekend lockdowns will be enough to stop the nation’s rising infection rate. The nation is recording about 12,500 new infections a day. Without the Saturday-Sunday lockdown, the infection rate would jump by 50% to 20,000 new infections a day; Prime Minister Shmyhal told a government meeting yesterday.
With the third departure in six weeks, the purge of pro-Western reformers from Ukraine’s defense industry continued with Monday’s abrupt firing of Volodomyr Usov, the head of Ukraine’s Space Agency. On Nov. 4, Oleksandr Los resigned as CEO of Antonov, ending four months on the job. On Oct. 6, Aivaras Abromavičius resigned as director general Ukroboronprom, the defense production conglomerate. All three men advocated ‘corporatization,’ or the creation of smaller, profitable companies to save an industry starved by lack of budget funds.
By creating transparently run companies, the directors hoped to open doors to join ventures with foreign, NATO-standard companies wary of getting tarred by corrupt practices at state defense manufacturers. Usov was fired four days after he signed the Artemis Accords, a US-led alliance of Western space programs which has the goal of landing “the first woman and the next man” on the Moon by 2024. “Congratulations to Ukraine!” the US Embassy tweeted apparently unaware the Usov was about to be fired. “On Nov 12, it became the 9th country to sign the Artemis Accords.” Russia harshly criticizes the program.
Behind the firings is Oleh Uruskiy, a Soviet-trained, three-decade veteran of Ukraine’s defense industry. Appointed First Deputy Prime Minister last summer, Uruskiy is creating a ‘mega-ministry’– the Ministry for Strategic Industries. This ministry is to include Antonov, the space industries and the two rocketry giants, Pivdenne design bureau and Pidvenmash factory.
Critics say modernization is stopping and new structures are opaque. “With the choice of this manager, Volodomyr Zelenskiy really made a mistake,” Ivan Sergienko writes in Lenta.ua. “Uruskiy is not only incapable of dealing with a rocket construction project, but also, in principle, of carrying out elementary things to launch the work of the ministry… of the declared 330 employees of the ministry, at the moment there are only seven people working – the minister, his deputies and advisers…The ministry is needed to block real reforms in the defense industry.”
The Chinese investors in Motor Sich have hired three well known international law firms to pursue their claim against Ukraine for $3.5 billion in compensation for being blocked from taking over the aircraft engine manufacture. As reported by their Ukrainian partner, DCH, the firms are: WilmerHale, DLA Piper and Bird & Bird. Arzinger will act as an advisor on Ukrainian law in international arbitration. DLA Piper was in the headlines last week when it was announced that one of their Washington partners, Doug Emhoff, will leave the firm next month to avoid conflicts of interest. He is the husband of Kamala Harris, who is to be sworn in as Vice President on Jan. 20.
With e-commerce booming, Nova Poshta is hiring 2,500 drivers, couriers and sorters. Although the hiring is for the Christmas rush, Alexander Bulba, CEO of the delivery company, says: “After the high season, new employees can stay on a permanent basis.” So far this year, Nova Poshta has opened 1,300 new offices in Ukraine, increasing its network by 22%, to 7,145.
With the first snow falling yesterday, Ukravtodor announced that it reached 93% of its target of rebuilding 4,200 km of roads during the 2020 highway construction season. Next year, the state highways agency plans to oversee the repair or rebuilding of 6,800 km of roads, almost 75% more than the amount completed this year. Ukravtodor CEO Oleksandr Kubrakov reports three main sources of money for this year’s roadbuilding: $1 billion from the Road Fund; almost $1 billion from the Stockholm arbitration with Gazprom; and $540 million from international organizations, such as the World Bank and the European Investment Bank.
Roads were paved in all 24 regions this year. Six were leaders: Kharkiv — 262 km; Zakarpattia – 248 km; Zaporizhia — 220 km; Sumy -197 km; Khmelnytskyi –194 km; Cherkasy 163 km; and Lviv 155 km. Next year, Ukravtodor plans to rebuild 150 bridges. Two big ticket projects start next year: Kyiv’s $3 billion ring road; and construction of a new $430 million bridge over the Dnipro, in Kremenchuk.
The number of foreigners entering Ukraine has plunged by 75% so far this year. Through September, 2.7 million foreigners visited Ukraine, down from 10.7 million during the first nine months of last year, according to the State Border Guard Service. Spending by foreign tourists is estimated to finish this year at 80% below last year’s level of $1.6 billion, forecasts the National Bank of Ukraine. Spending by Ukrainians for foreign travel is down by 55% yoy, to $3.3 billion through September.
The EU plans to sign an ‘open skies’ agreement with Ukraine in the first quarter of next year, Katarína Mathernová, the European Commission’s deputy director-general for Neighborhood Policy and Enlargement Negotiations. First initialed in 2013, the deal was held up over the Britain-Spain standoff over Gibraltar airport. After Britain leaves the EU at the end of next month, the agreement can be signed.
Notable and Quotable:
“It’s not a coincidence the Constitutional Court decided to demolish anti-corruption reform right in the middle of an American election,” Daria Kaleniuk, executive director of the Anti-Corruption Action Center, tells Dan Peleschuk for a Slate article, “Don’t Forget About Ukraine.” The goal, she adds, is to “make Ukraine truly look like a failed state.”
“Oligarchs are further coopting Rada members, judges, and others to undermine the President’s agenda,” Kristina A. Kvien, US Embassy Chargé d’Affaires in Kyiv, said at the Ukraine Reform Conference, as reported by UNIAN. “Their primary goal is their own personal enrichment achieved by any means possible, including bribery, coercion, and even joining with outside forces that wish to see Ukraine’s Euro-Atlantic integration fail ultimately.”
“As US vice president, Biden was at the forefront of an anti-corruption reform agenda that aimed to facilitate Ukraine’s integration into the Euro-Atlantic community,” Peter Dickinson writes in an Atlantic Council blog, “What can Ukraine expect from a Biden presidency?.” “Some hope Biden will now revive these efforts and help undermine an attempted counter-revolution that is currently gaining momentum in Kyiv with support from Ukraine’s pro-Russian political forces and the country’s oligarchs.”
Do the math: Ihor Kolomoisky’s Windrose airline is receiving its 14th aircraft, a leased ATR-72-600. Within a year, Windrose is to receive another five of these regional turboprops, bringing its fleet to 19. At the same time, Kolomoisky’s UIA is cancelling leases and cancelling orders. Currently. UIA’s fleet is down 33, with 14 in storage. In 2013, Kolomoisky’s airline Aerosvit filed for bankruptcy and several jets were transferred to UIA.
“This will be the beginning of your end, you will go down on your knees like in Ukraine,” Belarus President Aleksandr Lukashenko warned 40,000 supporters in Minsk Sunday, rebutting calls for his resignation. A few hours later, participants at mass opposition rally of 220,000 chanted for Lukashenko to go. After a week of violent police attacks on protesters, policing was light. Workers at key state factories walked out on Friday. Today, state television workers threaten to strike, demanding an end to censorship.
On Saturday, Lukashenko asked President Putin for Russia to intervene militarily. But, according to the Kremlin readout of the call, Putin only promised to keep talking to the besieged 65-year-old leader. In Belarus, protesters do not call for withdrawal from two Moscow-led organizations – the Eurasian Economic Union and the Collective Security Treaty Organization. Without an anti-Moscow slant to the Belarus protest, some analysts drew parallels last night to the 2018 revolution in Armenia. They predict the Kremlin will work with a Belarus democracy movement that does not take aim at Russia.
Belarus is Ukraine’s fourth largest trading partner, largely a transit country for goods restricted by the Russia-Ukraine trade war. Despite this close economic relationship, President Zelenskiy probably will not travel to Grodno, Belarus on Oct. 8-9, for an annual bilateral trade and investment conference. Ukraine’s Foreign Minister Dmytro Kuleba told UA: Ukrainian Radio on Friday: “Until the situation in Belarus stabilizes, it would be reckless to announce any visit or initiative.”
Eying Belarus’ dynamic IT industry, Ukraine’s Digital Transformation Minister posted an appeal to Belarus IT companies and specialists to relocate south of the border — to Ukraine. “Belarus has been going through one of the deepest political crises in its history,” Mikhalo Fedorov posts on his Facebook page. He says that, under a new recruitment program, foreign IT specialists can get their Ukraine work permits in 5-7 days – “that’s all.” Noting that this year’s quota is 5,000 “highly qualified IT specialists,” he says the national distribution is: Dnipropetrovsk, Odesa and Lviv regions – 600; Kharkiv – 700; and Kyiv – 2,500.
A near doubling of exports to China reduced Ukraine’s trade deficit to $1.3 billion for the first half of this year, the lowest level in recent years. The State Statistics Service reports exports to China rose 93%yoy to $3 billion, to Poland dropped 14%, to $1.5 billion; and to Russia dropped 17%, to $1.3 billion. Overall, Ukraine exported $22.9 billion worth of goods and imported $24.2 billion. For imports, Ukraine’s imports from China dropped 7%, to $3.6 billion; from Germany dropped 17%, to $2.5 billion; and from Russia dropped 43%, to $2.2 billion.
China’s purchase of ship parts and R&D services for aircraft engines made it the largest buyer of military equipment from UkrOboronProm during the first half of this year. Of $145 million in sales, the biggest buyers from the state defense conglomerate were: China, Turkey, Pakistan, India, Jordan, Vietnam, Azerbaijan, Algeria, Morocco, and Ethiopia. Of all deliveries, 56% went to Asia-Pacific.
China Railway Construction Corporation is talking with Vadym Novinsky’s Smart Holding about building a deep water port at Ochakiv, a Black Sea port 60 km south of Mykolaiv city. A strategic chokepoint controlled by at least 10 different peoples over the last 2,500 years, Ochakiv is 3.6 km across from the Kinburn Spit, a position that controls shipping to the mouth of the Dnipro. Smart Holding reports the Chinese are discussing doubling the depth of the harbor, to 15-18 meters, building a 70 km rail spur to Mykolaiv, and building port terminals for grain and iron ore, two products that dominate Ukraine’s trade with China, now its largest trading partner.
Given Ochakiv’s strategic location, facing Crimea 100 km to the south, US Navy Seabees built last year a $700,000 operations center at Ochakiv for Ukrainian Navy. When construction was announced, Vladimir Zhirinovsky, the Russian nationalist politician, announced: “This is Russian land – Ochakiv.” Next year, several US-supplied Mark VI fast patrol boats are to be based at Ochakiv.
Last month, CRCC, China’s second largest state-owned construction company, signed a memorandum of understanding with Ukraine’s Infrastucture Ministry about modernizing Ukraine’s inland waterways. These are the Dnipro, which flows through Kherson, and the Southern Bug, Ukraine’s second longest navigable river, which passes through Mykolaiv. For both projects, the Chinese team was led by Li Junqiang, executive director of CRCC’s subsidiary CRCC14 Overseas Construction and Development Co Ltd., and Wang Chuang, deputy general director of CRCC’s 14th Bureau Group.
Nibulon, the largest shipper on the Dnipro, is building a Black Sea port complex in Ochakiv and restoring the fish canning factory. To supply the cannery with fish, crustaceans and mollusks from the Dnipro-Buzky estuary, Nibulon’s CEO Oleksiy Vadatursky writes on his Facebook page that he is considering building shallow water fishing vessels at Nibulon’s shipyard in Mykolaiv.
Fresh from announcing a deal with Chinese investors to take over Motor Sich, Ukraine’s jet engine factory, Alekander Yaroslavsky offers to raise $1 billion to revive the aviation plant in his home city of Kharkiv. Earlier, Yaroslavsky’s DCH group rebuilt the terminal of Kharkiv airport and revived production at the Kharkiv Tractor Plant. Kharkiv Aircraft Plant has not made a plane since 2014. It largely survives by making spare parts and performing maintenance. It owes $8 million in back salaries. On Friday, Yaroslavsky offered to raise: $100 million to pay off debts; $500 million to complete airplanes on the production line and to start new ones; and $400 million for design development.
Today, flights resume between Kyiv and Yerevan, Armenia and between Kyiv and Almaty, Kazakhstan. Air service to the two countries was suspended five months ago as part of the coronavirus travel restrictions.