A man walks by a burned car and a piece of exploded missile, outside an apartment building in Mariupol, Ukraine, January 25, 2015.
Photo: Evgeniy Maloletka, The Associated Press

The VoxUkraine Brief: Ukraine Needs To Sue Russia For War Damage

#VoxUkraine weekly selection of best articles on Ukraine.

by Oleksandr Zholud and Volodymyr Bilotkach, VoxUkraine Editorial Board

produced by Maxim Eristavi

For the last two weeks, the main news from Ukraine came from the battlefield. First, Donetsk airport has been all but obliterated as the result of the fresh offensive by the Russian and local illegal militia forces. After being constantly shelled and attacked, Ukrainian forces had to withdraw from what remained of the airport terminal buildings, and the “DNR” militia jointly with the Russian armed forces are rumored to be in control of most of the airport’s territory. While the strategic importance of the airport is negligible, because it is destroyed to an extent that it cannot be used for its main purpose i.e. receiving planes, it became a symbol for both sides of the conflict, often compared to Stalingrad or Verden. In held for 242 days.

Then, on January 24th, the border city of Mariupol was shelled, which caused 30 deaths and over 100 injuries among civilians, the largest one day death toll of non-combatants (excluding MH17 catastrophe). Even the usually neutral OSCE stated that the DNR militia was responsible for the tragedy.

The situation is currently in a flux. There is, as one can imagine, no shortage of short-term forecasts, with the general consensus leaning towards continued fighting and deepening problems within the Russian economy. Alexander Motyl, professor of political science at Rutgers University-Newark, for instance, suggests that Putin’s regime might in fact disintegrate as a result of the combined effect of economic sanctions and the civil unrest.

While majority of politicians both in Ukraine and in the West agrees that Russia is responsible for the current situation, there is no formal attempt to sue it. VoxUkraine published a piece by Sasha Borovik, a London attorney, who proposes just that:

Mr. Dirken, an American politician from 60s, once said: “A billion here, a billion there, sooner or later it adds up to real money”, writes in his VoxUkraine op-ed Sasha Borovik, a London attorney. Time is now for Ukraine to go for that real money, he suggests.

Anders Aslund of the Peterson Institute for International Economics is also not very optimistic about the prospects of Russian economy.

VoxUkraine’s Tim Mylovanov and Samuel Sharap, however, urge Kyiv to neither overestimate the West’s perception of Ukraine’s strategic importance, nor underestimate the Moscow’s resolve.

If Kyiv assumes that Western leaders consider Ukraine too strategically important to let fail, then they will likely be in for an unpleasant surprise. It must clearly make its present difficulties an asset — not a weakness.

Ukraine’s president Petro Poroshenko has made appearance in Davos at World Economic Forum 2015, and delivered a lecture in Zurich to defend and further Ukraine’s cause.

VoxUkraine analysed the content of the Ukrainian President speeches, showing that word ‘reforms’ is not used as often as ‘war’ or ‘Europe’ or ‘corruption’, which may suggest that while goals are set, the path to them is still in shadows.

Also, this week on #VoxUkraine

The Ukrainian budget and its huge deficit remains in the focus. There is a VoxUkraine piece by Ivan Miklos, former Deputy Prime Minister and Minister of Finance of Slovakia on the urgency of reforms, including the need of much better communication between the MPs and the Cabinet

http://voxukraine.org/2015/01/20/the-budgetary-trap/

There are some good news on Ukraine’sbudget as well, for example Oleg Nivievskyi from Institute for Economic Research and Policy Consulting in his VoxUkraine op-ed argues that the cancellation of agricultural subsidies will have no adverse effect on the sector:

http://voxukraine.org/2015/01/23/budget-2015-an-opportunity-to-decrease-corruption-in-agriculture/

The Ukrainian budget needs additional funds without increasing tax rates. Luc Vancraen, a Kyiv entrepreneur in his VoxUkraine op-ed proposes to organise privatization agency akin to German Treuhandanstalt in order to actively decrease the share of state involvement in the economy.

Historically, Ukraine’s proceeds from privatization have been much lower than expected because the best enterprises were sold at low prices to oligarchs close to the government. Creating an independent foreign-managed privatization body will raise confidence of investors and attract capital while at the same time reducing government sector and thus raising efficiency of the economy.

http://voxukraine.org/2015/01/23/outsourcing-privatization-attracting-capital-while-raising-efficiency/

Ukraine’s largest fully state owned oil and gas extraction and transportation company Naftogaz plans to significantly increase gas tariffs for population and in order to better defend the hike, it published its new calculations of its costs. While making Naftogaz self-sufficient is important, the presented calculations are strange to say the least. VoxUkraine has published several pieces on this hot topic this week.

Aleksandr Mertens, Professor of Finance at National University of Kyiv-Mohyla Academy argues that the real issue is not even in the calculations per se but in the inefficiency of Ukrainian public policy:

http://voxukraine.org/2015/01/26/calculation-%D0%BEf-gas-cost-%D0%B0nd-public-policy-problems/

Despite the fact that Ukrainian population pays for gas less than in even gas-rich Russia, if we account for all the actual costs, the gas price is much higher:

http://voxukraine.org/2015/01/22/how-much-ukraine-pays-for-gas/

While multiple gas prices create distortions and encourage corruption in Ukraine, it is wrong to rush with equalizing them prior to establishing the technical capability for users to control their demand, due to de facto monopolization of the market by state oil and gas company Naftogaz:

http://voxukraine.org/2015/01/29/increase-natural-gas-prices-but-carefully/


VoxUkraine weekly TwitterBook

among many people who followed our Twitter this week, were:

✔️Clint Martin

@TCS_Clint

Senior Trade Commissioner @ Foreign Affairs, Trade & Development. Embassy of Canada to Ukraine.

✔️Mannfred Nyttingnes

@MannfredNikolai

Passionate about Human Rights, Democracy & Freedom Of Press. Oslo, Norway

✔️Kirill Rodionov

@k_rodionov

An independent journalist. He has got his Master’s degree from the University of Kent (Canterbury, UK). From 2008 to 2013, he was a research fellow at the Gaidar Institute for Economic Policy (Moscow, Russia).


Have a great weekend!

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