A sign of weakness from the Prime Minister of Ukraine?

Well dear readers, having already had one attempt at an agreement with the IMF, then reneged upon bu then Prime minister Yulia Tymoshenko, Ukraine managed to convince the IMF to have another go with the new government.

As part of the deal was pension reform which is much needed.

Yet here is the current Prime Minister seemingly signaling his departure from the IMF agreement.

Reuters
The Ukrainian government may cancel an IMF-backed plan to raise the retirement age for women if the public speaks up against it, Prime Minister Mykola Azarov said on Monday.

Under its $15 billion deal with the International Monetary Fund, Ukraine said it would raise the retirement age for women to 60 from 55, bringing it into line with that for men. A draft bill on pension reform is now with the parliament.

Analysts, worried by the government’s earlier decision to back down on an unpopular tax reform, say the pension reform’s implementation will be the key indicator of Ukraine’s willingness to comply with IMF programme policies.

But, in a move that could displease the Fund, Azarov said he was ready to drop parts of the plan after its review by the wider public.

“Let us listen to our people, if they say they don’t like such a system then no International Monetary Fund is going to stop me,” Azarov told a briefing. “We will say that our people don’t want (a reform), they want to live like they live now.”

Pensions are relatively small on an individual basis — about $140 a month on average — but total pension expenditure is a big burden on the ex-Soviet republic’s budget, amounting to 18 percent of gross domestic product (GDP) in 2009, one of the highest rates in Europe.

There are nine pensioners for every 10 working people paying into the pension fund in Ukraine — and this ratio is set to get worse as the population ages. (Writing by Olzhas Auyezov; Editing by Ruth Pitchford)

There is nothing wrong with the pension plan as proposed, at least as far as the gradual increase in qualifying age is concerned.  Reform is not for the weak leader and international agreements are not to be broken if you are trying to transform the nations image.

This statement will come back and haunt Ukraine if this reform does not happen.

A question of balance

Well dear readers, given the recent heavy criticism of the Russian legal system with the continuing saga of Mikhail Khodorkovsky and the statements to the effect it “raises serious questions about selective prosecution”, how much main stream media time do you think this will get?

The Moscow City Court said Tuesday that Igor Izmestyev, a former senator and oil trader from the central region of Bashkiriya, financed a mob that killed 14 people between 1992 and 2004.

Judge Yelena Guchenkova said in televised remarks that the mob also attempted to blow up the son of the regional president. Izmestyev challenged the president in an election in 2003.

The court sentenced four more mobsters to up to 23 years in jail. Their so-called Kingisepp mob was known for finishing their victims off with a shot in the eye.

Do you think it will get the same headline coverage or do you think it will be covered as a footnote on page 32?

How much does a stadium cost to build?

Well dear readers, Ms Tymoshenko wishes to open a criminal investigation into the current government over the costs of the construction of the the Olmpiysky Stadium in Kyiv for the 2012 Euro football tournament.

“I think that I will bring a statement about another crime, which is being committed in Ukraine, to the next examination,” she said on Monday after questioning at the Prosecutor General’s Office.

Tymoshenko explained that the matter concerns doubling the cost of the construction of the Olympiysky national sports complex for the Euro 2012 European Football Championship.

She noted that the previous government allocated about Hr 2.144 billion for the stadium construction. “The cost has been changed and now it is Hr 4.5 billion”, Tymoshenko said.

Hmmm.

Let us look at the costs of recent stadium builds.

We will work on UAH 8 = $1.00 or UAH 12.2 = £1.00 which is close enough for comparison.

Therefore her government decided that UAH 2.144 billion…..or £175 million……or $268 million……was enough for the new sports complex?

So, recent stadiums…….. Wembley Stadium £757 million……or  $1 billion……..or UAH 9.2 billion.

Staying in Ukraine, the Donbass Stadium in Donetsk cost $400 million…….or UAH 3.2 billion.

I have no idea where Ms Tymoshenko’s government got their figures from but for $268 million there is no way that amount of money would produce a world class stadium/sports complex in Kyiv, particularly considering this is not a straight build but required demolition in the costs as well.

Obviously their estimators/quantity surveyors from whom they took “advice” have absolutely no clue, even if they worked from a matrix system, of how to cost.  I quick flick through the Internet shows how far off $269 million would be in most nations when it comes to delivering something worth while.

Considering the apparent prestige holding the Euro 2012 football tournament may give Ukraine, if it happens successfully, and considering it was her government that submitted a joint bid to host it with Poland, the production of a safe and quality stadium experience for the visiting international community (which FIFA will have concerns over quite rightly)  will not be produced on the budgeted figures her government allocated……as is clear in Donetsk and London in recent years.

I’m not sure this would be the best stick to hit back at the current government as it has just as much chance of showing ineptitude of her government than the corruption of this one .

Lutsenko detained for embezzlement

Now it is not unknown for Yuri Lutzenko to allegedly enjoy a drink or carry out some rather bizarre actions that the more mature adults on the planet would question as rational when he was Interior Minster of Ukraine.

However, having been detained for embezzlement by the Prosecutor Generals Office of Ukraine, he made this public statement:

“I congratulate Viktor Yushchenko that after six years of investigation into his poisoning, there is finally a detainee”

A rather bizarre comment for somebody detained for embezzlement and not his alleged involvement in the poisoning of the ex-President of Ukraine, particularly when Ms Tymoshenko, currently under investigation herself for alleged illegal actions when she was Prime Minister, is claiming that the current investigations into her past government are politically motivated to remove any opposition.

Whilst Ms Tymoshenko is using every opportunity to blame current President Yanukovich for political repression, her formally stalwart ally  in government at the time, now defuses her accusations by claiming that ex-President Yushenko is responsible for his detention relating to his alleged involvement in the ex-President’s poisoning, despite his detention being for embezzlement which would have assisted the claims by Tymoshenko, had he stuck with the charges against him and blamed the current President.

That said, they were dysfunctional in government so it is hardly a surprise they are dysfunctional in opposition.

Still, it does seem to be a schoolboy error to select a different target as responsible to that identified by Tymoshenko when you are trying to focus all attention on the current government and President.

Unfortunately, nobody in Ukraine believes either he or Tymoshenko were not corrupt anyway, so they are not going to get a sympathetic audience in the court of public opinion, where all politicians of Ukraine are believed to be corrupt.

Libel, defamation, UK law and Ukraine

Well dear readers, not being a reader of the Kyiv Post for many years, sometimes this media outlet gets mentioned in and amongst the expat community here as it is media platform written in English……and many expats are either too busy, rude or stupid to learn either Russian or Ukrainian allowing for a different source of media input into the happenings within Ukraine.

For those who are not aware of the Kyiv Post…….well you are not missing out on anything.

However, over in another part of Ukrainian expat cyberspace, came the announcement that “The Kyiv Post, effective Dec. 14, 2010, is blocking access to all web traffic originating from the United Kingdom in protest of the draconian libel laws there that hinder legitimate free speech and threaten the work of independent journalists, authors, scientists and others worldwide. In a phenomenon known as “libel tourism”, rich and powerful plaintiffs file lawsuits in London “the libel capital of the world” to exploit laws stacked in their favor, stifling journalism and threatening news organizations and others with costly lawsuits.”

A statement on the face of it, that would lead their readership, (as they usually do, independent and unbiased journalism there really does not exist), to believe the Kyiv Post has joined forces for the moral good with others in an effort to overhaul UK law in this area……which is fine if it is a cause you believe in and are making a stand from the moral high-ground based solely on principle.

The fact that the UK libel and defamation laws they have suddenly taken umbrage at have existed for a very long time and previously has not ever bothered them, the reader may put down to the fact that they really do not get out much and have only just discovered this “cause”…….well the Kyiv Post readers are being led to believe that anyway from their statement.

One can only assume that this has absolutely no link to the fact they have recently been found guilty in the same UK courts of libel against a Ukrainian……and this is simply a coincidence.

http://www.economist.com/node/12903058

As always, there is two sides to every story……..not that you would ever read both sides in the Kyiv Post.

Pension reform…..and critics

Well dear readers, the government has announced its proposed pension reform, a reform that is much needed given the extremely young retirement age and drain on the public purse, but as in every nation, be it the UK, France or indeed Ukraine, it has its decentors.

Interfax-Ukraine: According to Head of the National Forum of Ukrainian Trade Unions Myroslav Yakibchuk, first of all, it is necessary to carry out labor reform, raise livings standards and only then conduct pension reform.

“Pension reform will fail, it is premature and it will not improve living standards. This is large-scale fraud by the government,” he said.

Deputy Head of the National Forum of Ukrainian Trade Unions Hryhoriy Kabanchenko, in turn, noted a negative aspect in this pension reform, which, in his opinion, would directly concern servicemen and law enforcement officers. According to him, it is not clear what law enforcement officers without any civil profession will do while waiting for the retirement age of 60 years.

Kabanchenko also noted that the pension reform proposed by the government, in fact, contradicted the Constitution of Ukraine, because Article 22 notes that it is impossible to worsen the position of workers and infringe on their rights.

As reported, the Ukrainian government proposed gradually increasing the retirement age for women from 55 to 60 years, annually adding six months starting from February 1, 2011, and for men working in the public service from 60 to 62 years starting from 2013.

Now of course, readers of this blog will understand that I will have to defend such a plan in principle, having identified the very same system to raise the retirement age many months ago (in fact hoping that the system I outlined would be one similar to that which the government would take……so obviously a carbon copy of what I said here in July being adopted can hardly be criticised by myself).

To me, at the time of writing that post many months ago, and it remains the case today,it seems  that this is the fairest and least aggressive way to raise the pensionable age over a sustained period without any major shocks to the system or those approaching retirement.

As for Article 22 of the Constitution of Ukraine, as mentioned in the quote by Mr Kabanchenko, well here it is in all its glory:
Article 22. Human and citizen rights and freedoms affirmed by this Constitution shall not be exhaustive.

The constitutional rights and freedoms shall be guaranteed and shall not be abolished.

The content and scope of the existing rights and freedoms shall not be diminished by an adoption of new laws or by introducing amendments to the effective laws.

One has to assume he is referring to the emboldened sentence I have……errrm…..emboldened.

Now if we are to play the devil’s advocate on behalf of the Ukrainian Government, I would argue that firstly the right to a state pension will not be diminished by the introduction of the pension reform.  That right is still very much there.

Those currently collecting pensions do not have any monetary value removed, which is fortunate as the majority of pensioners get very little by way of pension anyway.

The union gentleman in question does not even dismiss the idea of pension reform but claims living standards must increase prior to any pension reform, although when living standards do increase, the Constitution will still contain the sentence it contains now, so difficult is it to change the Constitution, so his objection should still remain valid.  If it is a point of principle and Constitutional right that he is using to state the pension reform is illegal, then whether it happens when living standards are as they are now, or far better or far worse in years to come, it will still remain un-Constitutional whenever any pension reform was made.

Quite frankly, as devil’s advocate, I do not see he has a valid argument under Article 22.

Merry Chrsitmas to all my readers……who’s Christmas Day is today

Ukraine, NATO, missile defense……and common sense

Well dear readers, the steps towards pragmatic approaches to issues continue in Ukrainian foreign policy, this time in relation to the NATO missile defense initiative.

Ukraine will decide on the specific steps for participation in building NATO missile defense system, after the experts in the alliance work out the details of this political decision, said the head of Ukraine’s mission to NATO, Ukraine’s ambassador to Belgium and Luxembourg, Ihor Dolhov.

In an exclusive interview with Interfax-Ukraine, the Ukrainian diplomat said that NATO’s decision to build a missile defense system taken at the Lisbon summit was political.

“I believe that the coming period should be used to step up the activities of experts both in the countries of NATO and within the expert groups. When we see a clear prospect and opportunities, then we will talk about the concrete steps in this direction. I see no other way so far – the decision must go through the stage of transformation from political into specific project,” he said.

Quite right.

A far better strategy than making knee-jerk rash promises towards something that is yet to be anything more than an agreed general principle……at least as far as the public domain is aware.

In the meantime Ukraine should content itself in with its assistance to NATO in civil disasters, humanitarian efforts, peace keeping and the few bomb disposal experts it has in Afghanistan.