Par­lia­ment’s un­fin­ished busi­ness

Kyiv Post - - National -

Ukrainian politi­cians are head­ing back into par­lia­ment from va­ca­tion sea­son on Sept. 5. But it’s not go­ing to be an easy re­turn as the new ses­sion will bring a lot of work for law­mak­ers.

The gov­ern­ment is hop­ing for pas­sage of 50 pieces of leg­is­la­tion, in­clud­ing key pro­pos­als — some lan­guish­ing for months and years — to move the na­tion ahead in its trans­for­ma­tion from Soviet repub­lic to a demo­cratic, mar­ket-ori­ented na­tion.

Be­fore the Verkhovna Rada went on va­ca­tion on July 14, law­mak­ers failed to fin­ish the health­care and pen­sion re­form, ap­prove the cre­ation of agri­cul­tural land mar­ket, speed up the pri­va­ti­za­tion of state-owned en­ter­prises, cre­ate the anti-cor­rup­tion court and much more.

Some of the men­tioned re­forms are needed to main­tain co­op­er­a­tion with the In­ter­na­tional Mon­e­tary Fund. The IMF has al­ready al­lo­cated $13 bil­lion out of the $17.5 bil­lion bailout pro­gram for Ukraine agreed in 2015.

But the fund sus­pended lend­ing in April due to stalled re­forms in Ukraine. Law­mak­ers ap­proved only one bill of the two needed to launch health­care re­form, post­poned land re­form in­def­i­nitely again, and failed to pass laws to up­grade Ukrainian schools to in­ter­na­tional stan­dards.

Al­though the Ukrainian gov­ern­ment has been promis­ing to rec­og­nize the con­flict in the Don­bas as a full-fledged war with Rus­sia, and not an anti-ter­ror­ist op­er­a­tion, for a cou­ple of years al­ready, Ukraine’s Se­cu­rity and De­fense Coun­cil chair­man Olek­sandr Turchynov promised to present the bill on that in Rada only this fall.

The gov­ern­ment has al­ready sig­naled that work­ing on im­prov­ing the busi­ness cli­mate, the ef­fec­tive man­age­ment of state prop­erty, pri­va­ti­za­tion, state fi­nance man­age­ment, en­ergy, law en­force­ment and de­fense will be ma­jor themes.


Dur­ing the cabi­net meet­ing on Aug. 30 Ukrainian Prime Min­is­ter Volodymyr Groys­man said the gov­ern­ment hoped this fall the Rada would give the green light to the long-stalled pri­va­ti­za­tion of more than 890 of the 3,000 state-owned en­ter­prises in Ukraine.

Only state-owned com­pa­nies that are strate­gi­cally im­por­tant for Ukraine’s econ­omy would stay un­der gov­ern­ment con­trol. Oth­ers would be passed into con­ces­sions liq­ui­dated, or sold to pri­vate in­vestors.

The new pri­va­ti­za­tion law the gov­ern­ment plans to present in the Rada this fall is to speed up the pri­va­ti­za­tion process and pro­tect the rights of for­eign in­vestors in Ukraine.

The pri­va­ti­za­tion of state-owned en­ter­prises was one of the IMF’s de­mands to con­tinue co­op­er­a­tion un­der the bailout pro­gram agreed with Ukraine in 2015.

If the Rada ap­proves the gov­ern- ment’s bill dur­ing the fall ses­sion, it will speed up the process of pri­va­ti­za­tion by cut­ting the time Ukraine’s State Prop­erty fund needs to pre­pare the state en­ter­prise for sale to pri­vate busi­nesses.

For ex­am­ple, the fund will be given one year in­stead of two to cor­po­rate the ma­jor en­ter­prises, like Odesa Port­side Plant fer­til­izer or the state al­co­hol pro­ducer UkrSpirt, for pri­va­ti­za­tion.

Agri­cul­tural land mar­ket

Ukraine is one step away from be­com­ing a Europe’s farm­ing su­per­power, given that 70 per­cent of its ter­ri­tory is suit­able for agri­cul­ture. How­ever, the coun­try has been un­able to open its land mar­ket for sales for 16 years, which has ham­pered the de­vel­op­ment of the agri­cul­tural sec­tor.

The ex­ist­ing mora­to­rium on land sales also de­prived the sec­tor of credit: for­eign in­vestors are re­luc­tant to in­vest and banks won’t pro­vide loans, as land can’t be used as col­lat­eral. It also puts at risk an­other in­stall­ment of the IMF loan.

First in­tro­duced in 2001 for three years, the mora­to­rium has been ex­tended every year since. The cur­rent ban ex­pires on Jan. 1, and this fall the Verkhovna Rada has to de­cide whether to lift it, or pro­long it yet again. The main op­po­nent of the land re­form in the par­lia­ment is Yu­lia Ty­moshenko’s 19-mem­ber bloc, Batkivshchyna, backed by the agrar­ian unions, who are afraid that farm­land will be lost to for­eign­ers and large agro-hold­ings.

The Cabi­net of Min­is­ters has to come up with a model for a land mar­ket that would sat­isfy both par­lia­ment and farm­ers.


There are two key draft laws to be backed this fall that will help to trans­form Ukraine’s health­care sys­tem.

A bill on state fi­nan­cial guar­an­tees for med­i­cal ser­vices would help to re­duce the prac­tice of mak­ing un­of­fi­cial pri­vate pay­ments for med­i­cal ser­vices. An­other bill would en­able Ukraini­ans to choose from a list of pri­mary care doc­tors, not de­pende-ing on the place where they are reg­is­tered as liv­ing, and with whom they will be re­quired to sign a con­tract.

Of­fi­cials hope that stim­u­lat­ing com­pe­ti­tion be­tween in­di­vid­ual care providers will dras­ti­cally im­prove the qual­ity of med­i­cal ser­vices and al­low doc­tors to earn higher salaries of be­tween $500–600 per month, as well ad­di­tional bonuses for the ser­vices pro­vided.

Ukraine’s bud­get cur­rently pays for health­care based on the size of in­puts, for in­stance, the num­ber of pa­tient beds and the area of hos­pi­tal rooms. Af­ter the re­form, med­i­cal in­sti­tu­tions will be paid for based on con­tracts linked to out­put in­di­ca­tors, like the num­ber of en­rolled pa­tients or the pa­tient case mix.


The new law on ed­u­ca­tion is part of an over­haul of Ukraine’s cur­rent ed­u­ca­tional sys­tem. It in­cludes in­tro­duc­ing a 12-year school sys­tem to re­place Ukraine’s cur­rent 11-year school pro­gram. If sup­ported by par­lia­ment, chil­dren who start school in 2018 will en­ter a 12-year school pro­gram sim­i­lar to ones al­ready in place in France, the United Kingdom, and the United States.

Schools will be able to form their own cur­ric­ula, de­velop syl­labi for school sub­jects in ac­cor­dance with sec­ondary ed­u­ca­tion stan­dards, and se­lect text­books and teach­ing meth­ods. The law will also en­able school stu­dents to choose be­tween aca­demic or pro­fes­sion-ori­ented sub­jects.

Anti-cor­rup­tion court

The cre­ation of an in­de­pen­dent anti-cor­rup­tion court as a fi­nal in­stance in the fight against cor­rup­tion was an­other of the main de­mands of the In­ter­na­tional Mon­e­tary Fund.

Ukraine’s par­lia­ment failed to pass a spe­cial bill be­fore the IMF’s dead­line (mid-June) which would en­tail es­tab­lish­ing anti-cor­rup­tion courts by spring 2018.

Ac­cord­ing to Ukrainian law, Pres­i­dent Petro Poroshenko was to have pre­sented his own pres­i­den­tial al­ter­na­tive bill in a short term af­ter.

His and Gen­eral Pros­e­cu­tor’s Yuriy Lut­senko’s idea of cre­at­ing spe­cial anti-cor­rup­tion panel of judges within the old court sys­tem of Ukraine gen­er­ated a great deal of op­po­si­tion from watch­dogs and law mak­ers, who cre­ated the draft law on set­ting up the anti-cor­rup­tion court.

They said the pan­els would be highly in­flu­enced by the pres­i­den­tial ad­min­is­tra­tion.

On July 13, dur­ing the EU-Ukraine Sum­mit in Kyiv, Poroshenko man­aged to per­suade Euro­pean Com­mis­sion Pres­i­dent Jean-Claude Juncker that an anti-cor­rup­tion court is not needed, just an anti-cor­rup­tion panel in the reg­u­lar court sys­tem.

“We pre­vi­ously in­sisted on the es­tab­lish­ment of a new spe­cial anti-cor­rup­tion court in Ukraine, but Pres­i­dent Petro Poroshenko per­suaded us that … it would be bet­ter to cre­ate a spe­cial anti-cor­rup­tion panel of judges, who would con­vict high-pro­file cor­rupt of­fi­cials in Ukraine,” Juncker said.

In May Poroshenko Bloc law­maker Ser­hiy Alek­seev reg­is­tered amend­ments to in­clude the cre­ation of a spe­cial anti-cor­rup­tion panel. Par­lia­ment is to con­sider it dur­ing the fall ses­sion.


Pen­sion re­form is also needed to un­lock IMF loans. If backed, the re­form bill will abol­ish spe­cial priv­i­leges for re­tirees: pen­sions for years of ser­vice will be as­signed only for the mil­i­tary. The re­form also stip­u­lates that from Jan­uary 1, 2018 the right for pen­sions for years of ser­vice for em­ploy­ees in ed­u­ca­tion, health, so­cial pro­tec­tion and other cat­e­gories will be re­voked.

Start­ing in Oc­to­ber, the gov­ern­ment pro­poses to abol­ish a 15 per­cent re­duc­tion of pen­sions for work­ing pen­sion­ers. The draft law also pro­poses that those who work, should re­ceive wages and pen­sions in full. The min­i­mum pen­sion will be set at Hr 1,373 or $54. The in­crease in pen­sions will af­fect some 9 mil­lion pen­sion­ers.


Na­tional Se­cu­rity and De­fense Coun­cil chair­man Olek­sandr Turchynov claimed on Aug. 30 that a new bill on state pol­icy of rein­te­gra­tion and re­con­struc­tion of the wartorn Don­bas is ready to be brought in dur­ing au­tumn ses­sion.

The doc­u­ment is ex­pected to de jure scrap the so-called anti-ter­ror op­er­a­tion in the east with­out im­pos­ing mar­tial law. It would pro­claim Rus­sia an ag­gres­sor, re­spon­si­ble for main­tain­ing the ter­ri­to­ries it oc­cu­pies, the of­fi­cials say.

Nev­er­the­less, it is also to pave the way for the peace­ful rein­te­gra­tion of the Don­bas into the rest of Ukraine. To do so, it en­hances the role of the Min­istry of Oc­cu­pied Ter­ri­to­ries. And al­though the draft bill states that the Minsk agree­ments are the only way to end the war, it nev­er­the­less re­serves Ukraine’s right to de­fend it­self against fur­ther Rus­sian of­fen­sives.

A law­maker in Ukraine’s par­lia­ment yawns dur­ing a ses­sion on July 11. Par­lia­ment went on a six-week va­ca­tion on July 14, leav­ing much un­fin­ished busi­ness to at­tend to on its re­turn. (Oleg Pe­tra­siuk)

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