#Official Commentary of Marina Zheynova on catastrophic situation in Ukrainian economy
One has to admit that Ukraine’s economy is rapidly approaching collapse. While the rest of the patriots advocate the de-communization and rewrite history, and propagandists scream at each corner of a bright European future, economists are just in shock…
Credit and financial system
Over the past six months the banking system of Ukraine has suffered a loss of 9.2 billion. What will happen next, no one has any questions. It remains only to wait.
It’s no longer a secret that, even if the issue of Ukraine to allocate the next tranche will be considered, it will not happen until the autumn, to which it is necessary to live. And then in addition, there is Russia and the debt which is like a bone in the throat, doesn’t move off dead center, and can significantly affect the next vitally important financial injection in state’s economy that depends on credits.
The situation is close to catastrophic. Despite the fact that 2015 was a frank failure for manufacturing, in June 2016, according to the State Statistics Committee of Ukraine, it has collapsed by 3.4%. At the time of writing comment the data for July were not published, but the picture is so clear.
While on paper, of course, everything is not so sad: paper, as they say, can’t blush. Against this background miners’ strikes are no surprise, because they do not receive salaries, and it even comes to self-immolation.
So, one of the nomenclators of the Ukraine’s Independent Trade Union of Miners Trifonov during the strike, which took place in Kiev, tried to commit self-immolation, as a result, he turned out to be in a hospital bed with burns. And there are a lot of such examples in Ukraine now, and this indicates, to put it mildly, at the government’s inability to work. Unfortunately, the economic situation in Ukraine brings people to despair and leads to irreversible processes.
Housing and public utilities
Here everything is predictably moves to collapse too. The next increase in tariffs from September 1, this year will finish off an ordinary citizen completely.
The total bill for utility services for Ukrainians as of July 1, totaled 35.57 billion hryvnia. For comparison this figure on July 1, 2015, was 2.9 billion hryvnia, that is, it has increased by more than 12 times a year. The average size of subsidies for housing and communal services in June 2015 was 205 hryvnia, and by June 2016 it increased only to 217 hryvnia. The increase in the 12 hryvnia with the increase in tariffs in several times – it’s just outright mockery.
The deficit of the Pension fund exceeds 145 billion hryvnia. Not surprisingly, the Ukrainian leadership by hook or by crook is trying to find all sorts of mechanisms in order to avoid paying pensions to our residents that they honestly earned in this ‘substate’.
Lack of investment in the Ukrainian economy, as I recently wrote in more detail, also speaks of incapacity of the economy.
Sphere of the oil and gas sector
Everything goes to the fact that national joint stock company “Naftogaz” will soon officially be in private hands, and if then the Kiev authorities will not understand that it’s the ultimate failure in economy and finance system, then, as they say, “we are where we are.” Consumers of Russian gas do not need the risks associated with the whims of the Ukrainian owners of gas transportation system.
Even Turkish President Erdogan at a meeting with Putin in St. Petersburg said that they have never stopped working on joint projects in the sphere of gas transportation for, and now, after the settlement of all disputed points, the work on the construction will go twice as fast. After launching of the “South Stream” and the “Nord Stream – 2”, it will be possible to play coronach not only over the Ukrainian gas transportation system, but also on its economy.
It should be noted that the Turkish President proved to be much wiser than his Ukrainian counterparts. Despite all the conflicts between Turkey and Russia, they have managed to find ways to solve them, and this has led to significant positive economic effect, while Ukraine can’t even dream about it.
There is only one conclusion: do not chase the cheap “cookies” of short-term benefits for individual oligarchs, sacrificing the interests of own people. Such actions lead to tragic consequences, and all the crimes you have to be punished.
Marina Zheynova, the DPR People’s Council deputy
Official website of the DPR People’s Council