"The budget of several wars": how Ukraine will spend $30 billion in 2017

On Wednesday morning, the Ukrainian Parliament adopted the state budget for 2017, which is linked to the IMF tranche in January 2017. The government said the document was "social", the experts called it "the security budget".  
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On Wednesday, December 21, at 4:53 am The Verkhovna Rada adopted the state budget for 2017. The vote was the culmination of a 17-hour session, the parliamentarians were stopped four times, going to technical breaks. Approval of the document was preceded by brief debate, as well as the prolonged meeting of the budget committee of Parliament.

Prime Minister Vladimir Groisman described the budget as "chelovekotsentrichny". According to him, the document provides for the increase of social standards, support for the agricultural sector, the construction of roads. "We have provided the costs of defense, we will build roads, to support the agricultural sector, to raise salaries for teachers, doctors, <...> allocate funds for medicines," - said Groisman. "You will witness large-scale decentralization", - he added. Ukrainian reform on decentralization involves the union of local budgets in order to consolidate financial resources for development in the regions.

According speaking in Parliament Finance Minister Alexander Danyluk, the government has kept the budget for 2017 the priorities identified in the first reading: improving defense capabilities, social standards, education, health care, targeted support for agriculture, the development of road structure, promote energy efficiency and the development of culture and support local budgets and regional projects within the framework of the decentralization policy.

The adoption of the state budget was one of the conditions for the continuation of assistance programs of the International Monetary Fund (IMF) to $ 17.5 billion, of which Kiev is received only $ 7.6 billion in three tranches. The last tranche of Ukraine received in September 2016 ($ 1 billion). The next tranche should total $ 1.3 billion, the Ukrainian authorities expect it received in January 2017.

Social spending and macro

Ukrainian budget provides for an increase in the minimum subsistence level in three phases: from January 1, 2017 - up to 1,544 UAH ($ 58), from May 1 - 1624 UAH ($ 61) from 1 December - 1700 UAH ($ 64). The minimum wage should be from January 1, 2017 increase by half - to 3,200 UAH ($ 120). The minimum pension in the next year will be increased twice in May - from 1247 to 1312 UAH ($ 49), in December - up to 1373 UAH ($ 52).

The budget in 2017 laid the following macro: GDP growth - 3%, inflation - 8.1%, the unemployment rate - 8.6%, the level of public debt - 66.4% of the projected GDP, the exchange rate - 27.2 UAH per $ 1, limit the budget deficit - 77.5 billion UAH ($ 2.9 billion), or 3% of GDP. The deficit is expected to decline from 3.7% of GDP in 2016.

Revenue Budget of Ukraine is expected to grow by 20% to UAH 721.4 billion ($ 27.1 billion). Of this amount, 17.1 billion UAH ($ 643 million) plan to gain from the privatization of state enterprises. Expenditures will increase by 17% to 790.4 billion USD. ($ 29.7 billion). Taking into account the cost of loans (granting minus return) budget expenditures increased to almost 800 billion UAH. The document also laid UAH 86.89 billion ($ 3, 26 billion) of foreign loans.

Defence and security

On defense and security in 2017 the Ukrainian government budgeted 129.3 billion UAH ($ 4.86 billion at current exchange rates), or 5% of GDP. This is about 16% of all budget expenditures. The growth of spending on these items relative to 2016 (114.8 billion USD) is 14.5%, follows from the presentation of the Ministry of Finance of Ukraine to the draft budget. Compared with 2013 the year before euromaidan and the crisis in eastern Ukraine, the military-police budget has grown nearly three-fold (from 45 billion USD, or 3% of GDP).

Under the heading "Defense" in 2017, the Ukrainian government plans to allocate about 80 billion UAH ($ 3 billion), the money will go to the Ministry of Defense, the Defense Ministry Chief of Intelligence, State Service special vehicles and National Guard.

"Many analysts have drawn attention to the fact that the budget is drawn up in favor of law enforcement agencies, it is the budget of the police state. This is due to the war in the Donbass, the internal war, a war with the opposition, with corrupt officials. We have a lot of wars, for which you want to show the prosecutor's office, NABU [National Anti-Corruption Bureau], create new law enforcement bodies ", - quotes the edition of the Kiev" Segodnya.ua "former Economy Minister Viktor Suslov.

For comparison, Russia on "national defense" in the budget for 2017 laid the 2.8 trillion rubles. (3.3% of GDP). In the "national security and law enforcement," the country plans to spend 1.93 trillion rubles. (2.2% of GDP). Together, "Power" article, the Russian government will allocate in 2017 4.78 trillion rubles., Or 5.5% of GDP and almost 30% of all federal spending.

Military questions

The Ministry of Defense has received the highest funding among Ukrainian power unit departments. Its budget has increased by 7.7% in 2017, from 59.42 billion to 64 billion hryvnias ($ 2.4 billion). This is 40% less than requested by military means - the budget department request was 108.147 billion UAH, wrote on his page on Facebook MP of Ukraine ( "Popular Front") Dmitry Tymchuk.

The second most secured power department was the National Guard (9.89 billion USD, or $ 372 million). The budget request of the formation, controlled by the Interior Ministry, with more than three times the amount allocated - 31.3 billion UAH.

On the third place in terms of appropriations - the main Intelligence Ministry of Defense of Ukraine. It received 1.42 billion UAH ($ 53.4 million).

Budget controlled by the Ministry of Infrastructure of the State security services of transport (GSST) amounted to USD 492 million ($ 18.5 million). GSST ensures the functioning of the transport infrastructure in peacetime and in wartime conditions and the state of emergency.

All four structures entrusted with ensuring the defense of the country - in the amount of these departments will have available a minimum of USD 75.8 billion ($ 2.9 billion), follows from the budget documents.

Ministry of Internal Affairs of Ukraine in 2017 will receive UAH 48.4 billion ($ 1.82 billion). SBU appropriations amounted to 6.2 billion UAH ($ 233 million). Budget Office request was 12.44 billion USD.

For the needs of the State Border Service is reserved 7.06 billion UAH ($ 266 million). The budget of the General Prosecutor's Office - UAH 5 billion ($ 189 million). The National Police will receive 16.7 billion UAH ($ 627 million).