Авторы публикации
Ukraine launched a struggle for a strategic military initiative. A counteroffensive reinforced the counteroffensive of the Armed Forces of Ukraine near Kherson in the Kharkiv direction (which probably became possible due to the transfer of Russian forces from Kharkiv to the Kherson region). At the same time, the RF Armed Forces continue to advance in the area of Donetsk.
The counter-offensive near Balakliya may be aimed at "pulling apart" Russian reserves to prepare for a more severe strike in the Zaporizhzhia or Energodarsk direction.
Also, Ukrainian forces seek to disable key logistics hubs supporting Russian units in the south and undermine the military potential of the Russian Armed Forces. Attacks are being made on ammunition depots of the Russian Federation and bridges across the Dnieper, complicating the Russian supply.
The success or failure of Ukraine's counter-offensive largely determines the parameters of military and financial assistance to the country of Western partners in the following periods in the brutal winter and spring of 2023. The counteroffensive is also crucial in terms of public opinion. The lack of significant success in the counter-offensive (announced many times since May) may negatively affect public view within the country.
One of the essential tasks of the Ukrainian counter-offensive is also the disruption of the so-called. "referendum" on the entry into the Russian Federation of the occupied territories, which is quite likely to be held on November 4, the Day of National Unity of Russia. It has already been possible to achieve at least the transfer of the so-called. "referendum" in the Kherson region. Likely, the “referendum” in the Kherson region will be synchronized with the “referendum in the Lugansk and Donetsk regions.
Also, the counter-offensive of Ukraine should disrupt the administrative process in the occupied territories. For its part, the Russian Federation invests heavily. It pays much attention to the launch of schools in the occupied territories since they are the most critical infrastructural element in building the occupation “power” in the occupied territories, conducting campaigning, and implementing political initiatives.
The situation at the Zaporizhzhia nuclear power plant remains challenging, and the surrounding areas continue to be shelled. As a result of another shelling, the Zaporizhzhia NPP was again disconnected from the Ukrainian energy system. The IAEA mission released a report calling for the immediate creation of a safe zone around the station. In general, the situation around the Zaporizhzhya NPP remains a conflict switch, which can lead to an escalation of the conflict, its transition to a new phase, and its freezing. But based on this crisis, a new "nuclear" negotiating track can be created.
In the internal politics of Ukraine, the struggle for influence on the heads of the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor's Office (SAP) manifested itself. In particular, the Committee on the Organization of State Power recommended that the Parliament adopt draft law No. 7654, “On Amending Certain Laws of Ukraine Regarding the Unification of Requirements for the Heads of Certain State Bodies,” which in general may call into question the independence of the directors of NABU and SAPO. Such a step could negatively affect the process of Ukraine's accession to the EU. That's probably why bill No. 7654 was later removed from the agenda of the Parliament.
In general, the United States and its allies continue to provide military and financial assistance to Ukraine and, at the same time, develop the most effective sanctions mechanism that would strike the Russian Federation to a greater extent and European countries to a lesser extent.
New decisions are expected on Russian oil, which they want to set a price ceiling from 40 to 70 dollars per barrel, cheaper than the market, which could force Russia to cut off supplies, at least for a while altogether. The Nord Stream's shutdown may be the Russian Federation's reaction to the impending restrictions on Russian oil. On September 3, Gazprom completely stopped the Nord Stream, which had previously been under repair.
The European Commission also proposes to limit the price of gas from Russia to 50 euros per megawatt-hour (about $512 per thousand cubic meters), which is almost five times cheaper than on the stock exchange in Europe.
Fossil fuels continue to replenish Russia's military budget due to high prices. Russia earned 158 billion euros in revenue from fossil fuel exports in the first six months of the war.
The financial situation in Ukraine remains difficult. In general, state budget expenditures continue to increase. This entails rising external and internal debt and dependence on external assistance from foreign donors. The total amount of financing of the state budget of the NBU through the issue of the hryvnia has reached UAH 300 billion. By the end of the year, the National Bank will likely not meet the emission plan at the level of UAH 400 billion. Issuing the hryvnia leads to inflation and devaluation of the hryvnia.
As part of the work of the grain corridor for the first month, 86 ships took out about 2 million tons of food from Ukrainian ports to 19 countries.
Thus, the throughput of Ukrainian ports remains relatively low. Given the ongoing hostilities, it won’t be easy to increase the export of products through ports to 3 million tons. The "grain deal" was concluded for 120 days with the possibility of extension, and in November, it will expire. The limited duration of the agreement allows Russia to haggle over the terms of its potential extension. At the end of the time, the Russian Federation will be able to stop fulfilling its obligations.
Military situation
The counteroffensive of the Ukrainian troops.
The Armed Forces of Ukraine and the political leadership of Ukraine practically do not comment on the counteroffensive in the South. The official summary of the General Staff of the Armed Forces of Ukraine still does not say anything about the offensive of Ukrainian troops near the city of Kherson. Also, nothing is said about the hostilities in the town of Balakliya (Kharkiv region), where the Armed Forces of Ukraine went on the offensive on September 6. The American Institute for the Study of War reports this in its new report.
The Ministry of Defense of Ukraine says that active hostilities in Ukraine are now taking place in the Donetsk direction.“ There are certain settlements in the Donbas and in the south that are coming under our control. De-occupation is underway,” said the Deputy Minister of Defense Anna Malyar. The entire front line in Ukraine is 2,500 km, of which active hostilities continue for 1,300 km. The operational command "South" stated they "continue to work in the southern front sectors." And also that the Armed Forces of Ukraine are working to stop the transport communication of the Russian troops to deprive them of the opportunity to pull up reserves.
Judging by information from various Internet sources, the Ukrainian army advanced in the area of the village of Vysokopolye in the north of the Kherson region (closer to the border of the Kryvyi Rih district of the Dnipropetrovsk region). Soldiers of the Armed Forces of Ukraine raised the flag of Ukraine in the village of Novovoznesenskoye, which is located under the town of Vysokopolye in the Kherson region.
Sources report that in the Kherson direction, the settlement was recaptured. Blagodatovka, Vysokopolie, and Lyubimovka moved deep into the occupied territory. According to Russian sources, the Russian troops withdrew from the southern outskirts of Vysokopolye to avoid encirclement. The Armed Forces of Ukraine are conducting active offensive operations in the area of Andreevka. There, Ukrainian troops entrenched themselves in the size of the settlement of Sukhoi Stavka and the settlement of Kostromka. Attempts by the Armed Forces of Ukraine to transfer additional forces in the direction of the Arkhangelskoye-Olginka-Vysokopolie line, as well as to the Andreevsky bridgehead on the river. Ingulets. To the south of Davydov Brod, the Armed Forces of Ukraine moved away from Bruskinskoe, an essential point on the highway along which Davydov Brod is supplied from the south. The units of the Armed Forces of Ukraine entered the village of Bezymennoye to the west of Karlomarksovsky.
In general, Russian sources recognize the difficult situation for the Russian army on the right bank of the Dnieper River. Attacks on bridges across the Dnieper impede the supply of the right-bank grouping of Russian troops and the collection of reserves. Massive strikes are also inflicted on the ammunition depots of the Russian Federation. So far, according to their estimates, the Armed Forces of Ukraine are being attacked by insignificant forces, and the Russian army currently has enough reserves on the right bank to repel these attacks.
It is possible that due to the transfer of Russian forces from Kharkiv to the Kherson region, where the counteroffensive of Ukrainian troops continues, the offensive of the Armed Forces of Ukraine near the city of Balakleya in the Kharkiv region became possible. In the Kharkiv region, there are reports of intensified fighting from both sides. As a result of the Ukrainian counter-offensive in Balakleya, the RF Armed Forces were probably experiencing an operational crisis. They retreated to the left bank (northern side) of the river. Seversky Donets and r. Srednyaya Balakleyka and the Ukrainian Armed Forces captured the village of Verbovka, less than 3 km northwest of the city of Balakleya. Russian sources report that to the south of the town of Balakliya, the Armed Forces of Ukraine occupied the settlement. Krasnaya Gusarovka to the south-east of Bayrak.
Fighting on other fronts
In Donbas: the main fighting took place in the area of the city of Seversk, the town of Soledar, the city of Bakhmut, and the region of the city of Donetsk. In the Bakhmut direction, Russian troops advanced in the area of the settlement of Bakhmutsky and the settlement of Pokrovsky, as well as the city of Bakhmut itself. Armed Forces of Ukraine repelled strikes in the region’s settlements of the Dolina, Soledar, Novobakhmutovka, Kodemy, Zaitsevo, and Krasnopolye. On Avdeevsky - in the districts of Avdeevka and Maryinka. The Armed Forces of the Russian Federation tried to advance in the areas of the Peski settlement and the settlement of Pervomaisky.
The Ministry of Defense of the Russian Federation announces the capture of the settlement of Kodema in the Donetsk region, south of the city of Bakhmut. From the settlement of Kodema, a road opens to the settlement of Zaitsevo and from there to the southern outskirts of Bakhmut. Yesterday, Russian telegram channels wrote about the capture by the Wagner PMC of the town of Kodema and published a video from there. The Ukrainian side doesn't confirm the capture of the settlement of Kodema. Last night, the General Staff of the Armed Forces of Ukraine reported on enemy attacks in the area of this village.
Black Sea-Azov direction: no significant changes. The Coast of the Odessa region was subjected to regular Russian rocket and artillery attacks. There are three carriers of Caliber sea-based cruise missiles in the Black Sea. In Crimea, the transfer of a large column of Russian troops by rail was recorded.
The head of the Armed Forces of Ukraine, Valery Zaluzhny, together with the first deputy head of the Defense Committee of the Rada M. Zabrodsky (elected on the lists of the political party P. Poroshenko "European Solidarity") wrote an article "Prospects for the military campaign in 2023." It follows from the article that Russia's war against Ukraine will continue next year. According to V. Zaluzhny and M. Zabrodsky, the Russian Federation has "certain operational prospects" in the Izyum and Bakhmut directions to complete the occupation of the Donetsk region. There is also the prospect of moving towards the Zaporizhzhia direction, which poses a threat to the city of Zaporizhzhia and the city of Dnipro, and could potentially lead to the loss of control over a significant part of Left-Bank Ukraine. There is a threat of a repeated attack on the city of Kyiv from Belarus. The prospects for mastering Mykolaiv and Odesa are pretty accurate.
On the other hand, the creation of a threatening direction towards Kryvyi Rih, and in the future, a threat to Ukraine’s central and western regions. Thus, the Russian Federation will ensure the security of the "LDNR,” deprive Ukraine of access to the Black Sea, control over a critical element of the country's energy system - the South Ukrainian nuclear power plant and, in fact, the completion of the "special operation.” Crimea has been and remains the basis for lines of communication on the strategic southern flank of Russian aggression.
To effectively counter the counteroffensive of the Armed Forces of Ukraine, it is necessary to carry out several simultaneous counterattacks and try to return to Crimea. But, in his opinion, the current troops, which are now holding the front, are not enough for this. This requires 10-20 new brigades of the Armed Forces of Ukraine.
But even if Crimea can be liberated, this will not mean victory, but only a new stage in the war. Since Russia will be able to relocate its fleet to Novorossiysk and aviation to neighboring airfields and strike from there. Therefore, V. Zaluzhny proposes to the West to supply Ukraine with long-range ATACMC missiles for Haimars and to re-equip all the artillery of the Armed Forces of Ukraine. The Russian Federation has an advantage in long-range weapons. Ukraine needs such military means from the West to make the Russians feel the war at home.
V. Zaluzhny officially confirmed that Ukraine launched missile strikes on Crimea - particularly on the Saki airfield. This is the first confirmation from Kyiv of the fact of a missile strike.
V. Zaluzhny also focused on the fact that partners should balance the Russian nuclear threat - the threat of using nuclear weapons against Ukraine- and ensure the Russian Federation's nuclear deterrence.
Combat maps
The situation in the occupied regions
The situation at the Zaporizhzhia NPP
The situation at the Zaporizhzhia nuclear power plant remains challenging, and the surrounding areas continue to be shelled. As a result of another shelling, the Zaporizhzhia NPP was again disconnected from the Ukrainian energy system. Disconnecting the station from the Ukrainian energy system will cause significant damage to the country since the Zaporizhzhia Nuclear Power Plant generates up to 20% of all electricity in Ukraine and half of its production at Ukrainian nuclear power plants.
September 1 A group of IAEA experts headed by Director General R. Grossi arrived at the Zaporizhzhia NPP. A group of IAEA experts stayed there for several hours, after which five mission representatives remained at the nuclear power plant. On Monday, September 5, the IAEA mission left the station. During the inspection, it was decided that 2 IAEA experts would be permanently at the NPP. They will remain until the "stabilization of the situation."
On September 6, the IAEA published a report on the mission's visit to Ukraine's Zaporizhzhia nuclear power plant and radiation safety.
The IAEA called for the immediate creation of a safe zone around the station. The shelling of the ZNPP is an unprecedented situation threatening severe consequences for Ukraine and neighboring countries. The shelling of the station can lead to the release of radioactive materials into the atmosphere and outcomes comparable to the results of the disaster at the Chornobyl nuclear power plant.
According to the mission, buildings that store fresh and spent nuclear fuel and a building with an emergency system for the physical protection of the station were damaged. The IAEA stated that they are committed to providing Ukraine with all necessary assistance throughout the entire military conflict and after its completion. Experts also established that Russian military equipment was located on the territory of the Zaporizhzhia nuclear power plant. The Ukrainian staff of the station is in a depressed psychological and physical state and has problems with communications and technical devices.
Following the report of the IAEA mission to the ZNPP, President of Ukraine V. Zelensky said that the IAEA needs a broader mandate to force the Russian Federation to demilitarize the territory of the nuclear power plant and return complete control to Ukraine. Evaluation of the proposal to create a nuclear power plant safety zone has not yet been given.
In general, the situation around the Zaporizhzhya NPP remains a conflict switch, which can lead to an escalation of the conflict, its transition to a new phase, and its freezing. Ukraine and international partners will likely make every effort shortly to stop the station from functioning (despite the statements of the President of Ukraine) - it was completely blocked.
The parties can use the IAEA report on the situation at the ZNPP and create a new negotiation process (against the background of the blocked Istanbul format) - the "nuclear" negotiation track, which we spoke about earlier.
Preparations for a “referendum in the occupied territories.
One of the main goals of the Ukrainian counter-offensive is to disrupt the so-called. "referendum" on the entry into the Russian Federation of the occupied territories, preparations for which are almost completed. “Deputy head of administration” of the Kherson region, Kirill Stremousov, said that the Kherson region was ready for a “referendum” on joining the Russian Federation. Still, a pause was taken because of the security situation (it is obvious that we are talking about the Ukrainian counteroffensive). Thus, it was possible to achieve at least the transfer of the so-called. "referendum" in the Kherson region. The "referendum" in the Kherson region may likely be synchronized with the "referendum in the Lugansk and Donetsk regions (which has not yet been captured). In particular, the voting may partially take place online. The Russian Federation may also introduce voting "from home" that will last for a week, which will make it impossible for any independent control over the vote.
Secretary of the United Russia General Council Andriy Turchak says that "referendums" in the occupied territories of Ukraine will be held before the end of 2022: " Referendums" on joining the occupied territories of Ukraine to the Russian Federation "will be correct and symbolic to be held on November 4 ". November 4 is the National Unity Day in Russia.
The educational process begins in the occupied territories.
In the Russian Federation, much attention is paid to the launch of schools in the occupied territories since they are the most critical infrastructural element in building the occupation "power" in the occupied territories, conducting campaigning, and implementing political initiatives.
About 200 thousand school-age children are in Ukraine's temporarily occupied territories. This was announced by the Minister of Education and Science Sergei Shkarlet. Another 800,000 schoolchildren are currently abroad, where they can freely continue to study according to the Ukrainian program remotely or go to local schools.
In Ukraine, 300,000 fewer students started studying in the new academic year than in the previous one, as First Deputy Minister of Education and Science Andriy Vitrenko stated. “This year, the number of students has slightly decreased. Last year we had a total of 4 million 200 thousand students, this year 3 million 900 thousand students started their studies.”
In total, about 1,300 schools remained in the temporarily occupied territories of Ukraine. Ukrainian teachers must switch to the Russian education system under the threat of dismissal and other repressions. More than five thousand teachers from the "DPR" and "LPR" have already been retrained for the Russian program, and in total, this year, it is planned to retrain 15,000 teachers.
Education in schools will be in Russian. Ukrainian and Crimean Tatar languages will be taught as part of "native language lessons.” Children will be conducted "religious culture" and "secular ethics.” Russian teachers who have agreed to go to Ukraine are paid 8,000 rubles daily (about UAH 4,800, or about $130). 150-200 thousand rubles (90-120 thousand hryvnias per month).
Ukraine claims that teaching under the Russian program is illegal, teachers can be held liable and offers an alternative, distance learning in local schools under the Ukrainian agenda. As well as the opportunity to study remotely at a school located in a controlled area.
The internal situation in Ukraine
Financial situation
The financial situation in the country remains complex. In general, state budget expenditures continue to increase. This entails rising external and internal debt and dependence on external assistance from foreign donors.
In August 2022, formally, budget revenues exceeded expenditures by UAH 53 billion. State budget expenditures amounted to UAH 252.6 billion. Recall that in July, budget expenditures amounted to UAH 170 billion. Budget revenues (total external and internal resources) amounted to UAH 306 billion.
Financing the state budget at the expense of its revenues and resources in August amounted to about UAH 134 billion. External financing of the state budget amounted to $4.69 billion, UAH 172 billion at the official rate. Of these, non-repayable grants amounted to UAH 109.7 billion.
The total state budget expenditures for seven months of the war is 1.366 trillion. UAH Based on the total spending, the average monthly budget expenditures are approximately UAH 195 billion. At the same time, it should be considered that the parliament increased budget spending by another UAH 270 billion. (UAH 241 billion of which for the Ministry of Defense), the average expenditure will also increase in the coming months. Most spending is on defense - 31% and social needs 19%.
Foreign aid cannot go to military needs. Therefore, the state, at best, at the expense of internal resources, may cover the military spending of the month. At the same time, it is expected that Ukraine will not receive such volumes of external assistance from September. Autumn-winter is a period when the state spends more money.
On September 6, the Ministry of Finance of Ukraine placed domestic government bonds for only UAH 47.3 million ($1.27 million). Until now, the sale of government bonds on August 16 was considered the worst, when the government could borrow only UAH 71.5 million. The NBU purchased government bonds for UAH 15 billion.
The total amount of NBU funding through the printing of the state budget has already reached UAH 300 billion. Thus, it is likely that by the end of the year, the National Bank will not meet the emission plan at the level of UAH 400 billion. The process of issuing the hryvnia, which leads to inflation and devaluation of the hryvnia. According to the macroeconomic forecast of the Ministry of Economy in 2023, the dollar exchange rate may reach UAH 50, and the consumer price index will be 30.6%. Such indicators are included in the Ukrainian Pravda, citing sources in the Cabinet of Ministers. According to the macro forecast, at the beginning of 2023, the dollar exchange rate will be UAH 42, and at the end of the year, the hryvnia will devalue to UAH 50 per dollar. Ukraine's GDP next year should grow by 4.6%. At the same time, by the end of 2022, it will decrease by 33.2%. Prices for next year will continue to skyrocket. Inflation included in the macro forecast for 2023 should be 30.6% (as of June, it was 22.2%). The nominal salaries of citizens in 2022 decreased by -12 %, accounting for inflation of 27%.
Struggle for influence on NABU and SAPO.
On September 5, the Committee on the Organization of State Power recommended that the Parliament adopt bill No. 7654, "On Amendments to Certain Laws of Ukraine Regarding the Unification of Requirements for the Heads of Certain State Bodies." This bill may cast doubt on the appointment of Oleksandr Klymenko as the head of the SAP and holding a competition for the position of director of NABU, as well as simplify the procedure for their dismissal.
The bill proposes a rule that the head of the SAP "can be a person who has experience in senior positions in government bodies, institutions, organizations, including abroad, or in international organizations, for at least five years." A person who does not meet this requirement cannot be appointed head of the SAP. If this rule is passed, it will doubt Oleksandr Klymenko's ability to lead SAP, as he does not have five years of senior management experience. The current norm of the law prohibits candidates who have worked in the governing bodies of the party or have been in contractual relations with it for the last two years from introducing themselves. The new bill No. 7654 abolishes this - it is enough to stop such activities before submitting to the competition. The law proposes that the director of NABU, the head of the NACP, and the head of the SAPO could be dismissed if they were brought to administrative responsibility for an administrative offense related to corruption.
Holding an independent competition for the position of director of NABU and SAPO remains one of the requirements for starting negotiations on Ukraine's accession to the EU. One of the primary obligations of Ukraine is the independence of the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor's Office (SAP). These two organs are interconnected. One of them does not yet have a full-fledged leader, so the effectiveness of both is minimal. Such a move could negatively affect this process and the process of further financial and military assistance to Ukraine.
The G7 ambassadors issued a joint statement criticizing the project. “The G7 ambassadors, as longtime supporters of the fight against corruption, are concerned about draft law No. 7654, which we are closely following: it creates legal risks and uncertainty around the selection procedures for the leadership of key anti-corruption institutions in Ukraine,” the message says. The bill also drew a flurry of criticism from organizations associated with Western embassies. They accuse the authorities of trying to undermine the fight against corruption by rewriting the legislation on anti-corruption bodies.
As a result, voting for this bill did not take place, and it was withdrawn from consideration, and on September 7, the Verkhovna Rada voted based on the amendments to the account. For personal purposes" and were there for more than 21 days. The law states that a person who, after the introduction of martial law by Decree of the President of Ukraine No. 64/2022 dated February 24, 2022, was outside Ukraine for a total of more than 21 days without good reason, cannot be appointed director of the National Anti-Corruption Bureau of Ukraine. In particular, the restriction does not apply to persons outside Ukraine for more than the specified treatment period. The adoption of this law leveled scandalous bill No. 7654.
The situation around Ukraine
Foreign aid to Ukraine.
US President D. Biden, in addition to $11.7 billion for defense and direct financial assistance, proposed that the US Congress allocate another $2 billion to Ukraine to pay for energy resources. The tranches are planned for the first quarter of 2023. The Government of Ukraine is now looking for additional gas volumes for the heating season. Under various scenarios, this demand is about 3–4.9 billion cubic meters. m. But given the cost of the September gas futures at the TTF hub in the Netherlands, which reached - 3458 dollars, it will be difficult for the Government to purchase the required amount of gas without external assistance.
The European Commission has offered Ukraine an additional aid package of 5 billion euros. This adds to the €10 billion the European Union has already provided in financial, humanitarian, and military assistance. Also, this week, Ukraine and the European Union signed five agreements within the framework of European integration and countering Russian aggression, Prime Minister Denys Shmyhal said. The documents relate to the "digital visa-free regime,” cooperation in the customs and tax spheres, and EU budget support to Ukraine in the amount of 500 million euros.
Western assistance to Ukraine was also discussed at Prague's three-day informal summit of EU foreign ministers.
In general, Western countries continue to provide military and financial assistance to Ukraine and, simultaneously, develop the most effective sanctions mechanism, which would strike the Russian Federation to a greater extent and European countries to a lesser extent.
New decisions are expected on Russian oil, which they want to set a price ceiling. It will likely be from 40 to 70 dollars per barrel, cheaper than the market, forcing Russia to cut off supplies entirely for a while.
The European Commission also proposes limiting the price of gas from Russia to 50 euros per megawatt-hour (about $512 per thousand cubic meters), which is almost five times cheaper than on the European stock exchange on Tuesday (240 euros per MWh).
At the same time, there is an escalation of the conflict between the Russian Federation and the EU on the gas issue. The Russian Federation uses energy resources as political blackmail and puts pressure on Europe. On September 3, Gazprom completely stopped the Nord Stream, which had previously been under repair.
The Nord Stream's shutdown may be the Russian Federation's reaction to the impending restrictions on Russian oil. Regarding the "ceiling" of prices for Russian oil, the main question remains - whether India and China will join it. If this does not happen, the meaning of the decision will be lost. If China and India support the "ceiling" of oil prices, then the question is how ready Russia is, in reality, to cut off oil supplies to almost the entire world abruptly. The oil and gas sector is central to Russia's export earnings. In 2021, the contribution of the oil and gas sector to GDP was 17.4%. According to forecasts, by the end of 2022, Russia can earn about $321 billion from oil and gas exports, which is a third more than in 2021.
Fossil fuels continue to replenish Russia's military budget due to high prices. Russia earned 158 billion euros in revenue from fossil fuel exports in the first six months of the war. Reducing Russian fossil fuel imports cost the Russian Federation 170 million euros a day in July and August. The overall drop in export volumes was caused by a decline in exports to the EU, which fell by 35%. Rising fossil fuel prices keep Russia's current income well above previous years despite declining exports this year.
The situation regarding the export of Ukrainian grain.
In total, within the framework of the grain corridor for the first month of operation, 86 ships took out about 2 million tons of food from Ukrainian ports to 19 countries worldwide.
“ The first month of the Initiative shows how critical it is to our economy and global food security. We expect to reach the transshipment rate in September due to unblocked seaports at the level of at least 3 million tons of products. We plan to export at least 8 million tons by all means of transport,” Minister of Infrastructure Alexander Kubrakov said. Thus, the throughput of Ukrainian ports remains relatively low. Increasing the export of products through ports to 3 million tons will be problematic, given the ongoing hostilities. And taking into account that before the war, the main export of food was carried out precisely through seaports. It is unlikely that it will be possible to increase the total volume of exported products to 8 million tons. In total, 20 million tons of the old crop must be removed from Ukraine.
The conversation about the need to expand the food deal to export metal and iron ore from Ukraine has intensified. Earlier, Deputy Minister of Economy of Ukraine Taras Kachka said that the food agreement concluded in Istanbul could be extended to the supply of other goods, including metals. The production level of all metallurgical enterprises in Ukraine is only 10% of what it was before the war. But even such volumes of products cannot be taken out of the country. But there are significant reserves of metal ores and scrap metal, which can become the main export item.
As we wrote earlier, the conclusion and functioning of the food deal demonstrates an essential precedent that, if there is an international consensus, the parties to the conflict (Western countries, Ukraine, the Russian Federation) can negotiate. Therefore, proposals are beginning to sound so that the parties can agree on other issues, which, in particular, may relate to the export of metal ore, chemical products, unblocking imports, and so on.
The "grain deal" was concluded for 120 days with the possibility of extension, and in November, it will expire. The limited duration of the agreement allows Russia to haggle over the terms of its potential extension. After the expiration of the time, the Russian Federation will be able to stop fulfilling its obligations even without an official denunciation. Permanent Representative of the Russian Federation to the United Nations (UN) Vasily Nebenzya announced the possibility of terminating the grain deal. According to him, the part of the agreement, which concerns exporting Russian food and fertilizers, is not being implemented. For his part, Russian President Vladimir Putin blamed the European Union for the failure of the grain deal, which supposedly took away almost all the food destined for the poorest and developing countries.
Ruslan Bortnik, Oksana Krasovskaya, Andrey Timchenko
for the Ukrainian Institute of Politics
