Re­form Watch

Kyiv Post - - National -

Edi­tor’s Note: The Kyiv Post tracks the progress made by Ukraine’s post-EuroMaidan Rev­o­lu­tion lead­ers in mak­ing struc­tural changes in the pub­lic in­ter­est in a broad range of ar­eas, from the de­fense and en­ergy sec­tors, to tax­a­tion and pen­sions. Be­low are the main is­sues in fo­cus from Sept. 29 to Oct. 6.

Sum­mary

Ukraine’s law­mak­ers got their vot­ing cards out start­ing Oct. 3 to ap­prove some long-awaited leg­is­la­tion to over­haul the na­tion's dis­trusted courts and deficit-rid­den pen­sion sys­tem. The changes, how­ever, are hard to pro­nounce as im­prove­ments. In par­lia­ment, for in­stance, the ef­fects of last-minute, lit­tle-de­bated amend­ments are still be­ing an­a­lyzed.

Ju­di­cial

Ukraine un­veiled its new Supreme Court on Sept. 29. Few out­side gov­ern­ment were im­pressed. Of the 111 ap­pointed to the court by the High Coun­cil of Jus­tice, 25 had ear­lier been ve­toed by the Pub­lic In­tegrity Coun­cil, a civic watch­dog oversee­ing the over­haul of Ukraine’s dis­cred­ited ju­di­cial sys­tem. More­over, another 60 judges ap­pointed, while not hav­ing been ve­toed by the coun­cil, were given neg­a­tive as­sess­ments.

One of the Pub­lic In­tegrity Coun­cil’s mem­bers, Vi­taly Ty­tych, said the High Coun­cil of Jus­tice and the High Qual­i­fi­ca­tion Com­mis­sion, which tested the newly ap­pointed judges, ig­nored the views of the Pub­lic In­tegrity Coun­cil.

Crit­ics com­plain that the au­thor­i­ties sab­o­taged ju­di­cial re­form to en­sure a loyal bench. Ac­cord­ing to Leonid Maslov, a former mem­ber of the Pub­lic In­tegrity Coun­cil, judges such as Vik­toriya Mat­sendon­ska, who spoke out against the ban on EuroMaidan pub­lic demon­stra­tions while Ukraine was un­der the cor­rupt regime of former Pres­i­dent Vik­tor Yanukovych, was not ap­pointed to the Supreme Court be­cause she had demon­strated that she was not loyal to the ex­ec­u­tive.

Mean­while, Ukraine’s par­lia­ment on Oct. 3 passed a pres­i­den­tial bill in­tro­duc­ing a raft of amend­ments to Ukraine’s Eco­nomic Pro­ce­dure Code, the Civil Pro­ce­dure Code, the Code of Ad­min­is­tra­tive Pro­ceed­ings and other leg­is­la­tion.

Amend­ments will in­tro­duce an elec­tronic court doc­u­ment sys­tem, in which par­tic­i­pants in a trial, in­clud­ing the judge, pros­e­cu­tor, de­fense team and the de­fen­dant will be able to ex­change case ma­te­ri­als elec­tron­i­cally, us­ing elec­tronic sig­na­tures for se­cu­rity. Leg­is­la­tion on a new court telecom­mu­ni­ca­tions sys­tem will also reg­u­late court ap­pear­ances via video­con­fer­enc­ing.

Par­lia­ment started con­sid­er­ing the pres­i­den­tial ver­sion of court re­form on Sept. 7, and 4,383 amend­ments to the bill were sub­mit­ted. How­ever, the changes will make it more dif­fi­cult to pros­e­cute ma­jor crimes and cor­rup­tion cases be­cause of a six­month dead­line be­tween the start of a crim­i­nal case and the fil­ing of charges.

Pen­sions

Ukrainian Prime Min­is­ter Volodymyr Groys­man was in par­lia­ment on Oct. 3 to over­see the vote on over­haul­ing Ukraine's debt-rid­den pen­sions, which take up 12 per­cent of the na­tion's gross do­mes­tic prod­uct yet pro­vide re­cip­i­ents with pal­try ben­e­fits of $70 monthly.

Par­lia­ment re­sponded with a clearly ma­jor­ity — 288 votes in fa­vor.

Law­mak­ers balked at rais­ing the re­tire­ment age to 63, as the In­ter­na­tional Mone­tary Fund wanted, keep­ing it at 60 for men and 58 for women. How­ever, it raised the min­i­mum amount of work­ing years in which to qual­ify for a pen­sion from the present 15 years to 25 years. That will rise again, to 35 years, by 2028. Ac­cord­ing to ex­perts, rais­ing the num­ber of work­ing years needed to qual­ify for a pen­sion ef­fec­tively in­creases the pen­sion age, as those who start work later in life may have to work be­yond the of­fi­cial re­tire­ment ages in or­der to re­ceive a pen­sion.

Some crit­ics com­plained that the changes are cos­metic. “This is just a me­chan­i­cal mod­ern­iza­tion,” op­po­si­tion law­maker Olena Sot­nyk said. “Be­cause of the de­mand of 35 years of work ex­pe­ri­ence, some peo­ple might not make it to pen­sion age."

Av­er­age life ex­pectancy in Ukraine is 66 for men and 76 for women. The prob­a­bil­ity that a Ukrainian will die be­fore 60 is 21 per­cent, with Ukraine rank­ing 137th in the world.

Land

Ukraine pen­sion prob­lems partly stem from a small econ­omy and low growth. Cut­ting the pen­sion deficit and in­tro­duc­ing an agri­cul­tural land mar­ket could dou­ble growth and raise liv­ing stan­dards for all Ukraini­ans, the World Bank says.

Ukraine suf­fered a mas­sive fall in its GDP in the wake of the EuroMaidan Rev­o­lu­tion, Rus­sia’s an­nex­a­tion of the Ukrainian ter­ri­tory of Crimea and the start of the Krem­lin’s war in the Don­bas. The econ­omy halved — from $180 bil­lion in GDP in 2013 to just $90 bil­lion in 2014 — ac­cel­er­ated by a 2/3 de­val­u­a­tion in the value of the hryv­nia com­bined with re­ces­sion.

Growth, of 2.3 per­cent an­nu­ally, only re­turned in 2016.

The mora­to­rium on agri­cul­tural land sales de­presses the en­tire sec­tor, one of Ukraine's main eco­nomic en­gines. Land can­not be used by farm­ers as col­lat­eral to raise cap­i­tal to de­velop their busi­nesses. Ac­cord­ing to the Agri­cul­ture Min­istry, the ban costs the sec­tor $3 bil­lion a year in lost pro­duc­tion gains, and some econ­o­mists es­ti­mate that lift­ing the mora­to­rium could stim­u­late $50 bil­lion in lend­ing and in­vest­ment. With the agri­cul­ture sec­tor ac­count­ing for nearly 14 per­cent of Ukraine’s GDP, that in­vest­ment would boost growth of the econ­omy.

Ukraine could see its growth rise to 4 per­cent in 2018, ac­cord­ing to World Bank es­ti­mates. While that is still far off the dou­ble-digit in­creases that econ­o­mists say Ukraine needs to re­coup its past losses, sin­gle-digit growth could at least sta­bi­lize the liv­ing stan­dards for many Ukraini­ans.

But while the IMF has made land re­form another of its con­di­tions for dis­burs­ing fur­ther loans, an in­creas­ingly pop­ulist par­lia­ment fac­ing re-elec­tion in 2019, looks to be in no mood to end the mora­to­rium when it comes up for re­newal at the be­gin­ning of next year.

(Wla­dys­law Musi­ienko)

Left to right: Deputy Prime Min­is­ter, Min­is­ter of Eco­nomic Devel­op­ment and Trade of Ukraine Stepan Ku­biv, Ukrainian Prime Min­is­ter Volodymyr Groys­man and So­cial Pol­icy Min­is­ter An­driy Reva re­act af­ter par­lia­ment adopted pen­sion re­form on Oct. 3.

(Volodymyr Petrov)

A farmer checks land at his field on May 31 in Kyiv Oblast.

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