New government support. The Ukrainian government announced a package of an additional US$155 million of financial support for agriculture. This is in keeping with a recent increase in other general supports for agriculture. While officials have long favored consumers in their agricultural-food policies, it now appears to be pursuing a program of greater budgetary assistance for the sector.
For most Americans, Ukraine is a faraway country of which they know nothing — except that it now dominates their television screens, newspapers and social media. How did this happen? In fact, Ukraine has been a strong underlying force (and sometimes a corrosive one) in the official life of the United States for over a generation.
The tectonic plates of Washington politics are shifting violently. President Trump is in more immediate danger of an impeachment process than at any time before, with Russia for once not the issue. Ukraine is.
Armed incident in Kerch strait. Russia reportedly seized two Ukrainian naval vessels and a tug, firing shots and injuring Ukrainian sailors in the process, in a dispute over right of access to the Sea of Azov. Immediately after the incident, Russia closed access to the Azov Sea by placing a tanker across the narrow access created when the Kerch Bridge was constructed. Soon after the Russians reopened the passage as it appears that Moscow was content in having made its point and wants to avoid escalating the conflict.
Pro-Zelensky landslide. The Rada elections turned out to be much better than expected for President Volodymyr Zelensky. Although he got less than 50% of the popular vote, he won enough single mandate seats to gain control of the Rada. Ukraine has not had a single party controlling the Rada since 2004.
This is the third of a six-part series of introductions to Smart City programs, which have been launched, or which are planned, across the CIS-Eurasia region. Other reports in the series look separately at programs in the Caucusus, Belarus, and Russia and also across the Central Asia region. These reports aim to only provide an overview of existing smart city and technology projects and of current state and future plans for developing “e-” and technology projects in each of the countries across the region.
Growth. GDP is expected to have expanded by 3.1% in 2018. Household consumption and agriculture have been big contributors while the restrictions on trade and power from the conflict in Donbass have held back growth. This year’s growth is expected to be a little less due to the elections.
Monetary. Inflation rose to 8% in November because of the near 24% rise in gas prices (IMF requirement). The National Bank is still confident that it can get the rate back to 6% by end-2020. Because of the inflation spike, the NBU policy rate was increased to 18% in September. That should be a peak and fall this year. But the NBU will move cautiously and slowly.
Before he is even sworn in as Ukraine’s new president, Volodymyr Zelensky is already a casualty of America’s electoral combat. This is not a short-term issue, but is likely to poison relations for months to come, perhaps even beyond the November 2020 national elections in the United States. The most toxic issues — the origins of the Mueller investigation, Paul Manafort, and Joe Biden’s son Hunter — are simply too valuable as political ammunition for both the Trump White House and the Democratic Party not to be exploited, with collateral damage to Ukraine. Moscow is certain to be portrayed as a villain in these disputes.
Most people in Washington expected Poroshenko and Co would do a better job of organizing votes in the first round. True, they may be holding their fire for the second round, but to obtain only one vote in six in the first creates a real problem for their friends in Washington.
Strong GDP recovery in 2016. Economic recovery accelerated into the end of last year, GDP expanding by 4.7% YoY in Q4. That brought full-year growth to 2.2%, reversing the near 10% contraction of 2015. That trend continued into 2017 but much of it is based on one-off factors.