The Russian Federation continues to regularly attack the energy infrastructure of Ukraine, provoking an energy and, as a result, humanitarian and military-political crises in the country. So, on October 31, two days after the attack by drones of the Black Sea Fleet of the Russian Federation in the bay of Sevastopol, virtually the entire territory of Ukraine was subjected to massive missile attacks by the Russian Federation for the fourth time. As a result, electricity and water went out in many regions, and there were interruptions in mobile communications. Schedules of planned rolling blackouts have been introduced for almost the entire territory of Ukraine. Rocket strikes on Ukraine have already caused billions of dollars in damage. The Russian Federation damaged about 40% of the entire energy infrastructure of Ukraine, in particular thermal power plants, thermal power plants and hydroelectric power plants. Also, these strikes deplete the means of Ukrainian air defense and undermine the ability to ensure the functioning of the Armed Forces of Ukraine. If the trend of such attacks continues (since October 10, they have been happening virtually every week), this will result in extremely serious consequences for the country's energy and economy. The situation is aggravated by commercial conflicts between energy entities and the lack of repairs at many of them.
Against the backdrop of ongoing mass shelling of Ukraine, the High-Level International Energy Advisory Council was established under the Ministry of Energy of Ukraine, aimed at providing support and assistance to Ukrainian energy companies. The platform of this council will be used to manage Ukrainian energy and cooperation in this direction between Ukraine and Western partners.
In terms of information, missile terror on the part of the Russian Federation is also the intimidation of Ukraine and allies, and the satisfaction of the requests of the radical part of Russian society (for revenge for the attack on the bay in Sevastopol and the explosion on the Crimean bridge). It can be noted that the Russian leadership is acting according to the previously used principle, when they present their actions as a “response or revenge” to “aggression” against themselves (as was the case with the blowing up of the Crimean bridge).
Last week, the leadership of the Russian Federation also actively developed the topic of the nuclear threat, accusing Ukraine of developing a "dirty nuclear bomb." Subsequently, V. Putin's speech at the Valdai Club site somewhat defused the situation regarding the nuclear threat , but confirmed the invariability of the course of the Russian Federation in the confrontation with the United States and allies, and the war against Ukraine. Perhaps some change in V. Putin's rhetoric regarding the "nuclear threat" is connected with the opportunities for negotiations that have appeared, or the Russian Federation is simply trying not to look like an aggressor in the eyes of third countries. The Russian Foreign Ministry made a statement on the prevention of a nuclear threat, from which it follows that the country's first priority is to prevent any military clash of nuclear powers. At the same time, the Russian Federation continues to declare its readiness for negotiations on its own terms. So far, the most likely scenario is that nuclear escalation will continue in the political space (without the use of nuclear weapons), and the Russian Federation, in the coming weeks or months, will try to build on its success aimed at destroying the Ukrainian energy infrastructure and use the increase in the size of its army due to mobilization for local counteroffensives.
In parallel, the Russian Federation is also bargaining for the extension of the “grain deal”. The Kremlin openly stated that the security of the port infrastructure and the passage of cargo ships after the shelling of the Sevastopol Bay can no longer be guaranteed. The withdrawal of the Russian Federation from the "grain deal" has put Russian-Turkish cooperation on the verge of breaking. Since Turkey is the main beneficiary of the "grain deal", it has become a global grain trading hub. Moreover, there is probably a "Russian interest" in the Turkish food trade. In the process of negotiations, Turkey managed to return Russia to the implementation of the agreement before its completion. The Russian Federation stated that they had received written guarantees from Ukraine not to use the grain corridor for combat operations against the Russian Federation. It is known that in addition to the requirements for the partial lifting of sanctions for the export of Russian grain, the Russian Federation demands to ensure the safety of its ships in the Black Sea.
At the front, in October, the Armed Forces of Ukraine liberated about 2535 km² of the territory of Ukraine. Thus, the Russian Federation currently occupies ~ 17.30% of Ukraine. Despite the fact that there are no significant changes in the control over the territories (the Russian Federation controls 0.42% less of the total area of the country than at the end of September), the struggle for military initiative has resumed. So in the Donetsk region, the Novopavlovsk direction joined Avdeevsky and Bakhmutsky. The Armed Forces of the Russian Federation attempted to carry out offensives towards the city of Ugledar. At the same time, Ukrainian troops advanced somewhat in the Luhansk direction in the area of the Svatovo-Kremennaya highway. Evacuation continues in the occupied part of the Kherson region. Archives and documents are being taken out of the administrative buildings of Kherson. But there are no signs of the retreat of the RF Armed Forces to the left bank of the Dnieper yet. On the contrary, new mobilized units of Russian troops are arriving in the Kherson direction, which is probably a sign that the RF Armed Forces are not going to voluntarily leave the city of Kherson. Despite the formal completion of partial mobilization in Russia, summonses continue to be handed out, since November 1, the autumn conscription of conscripts began, which, according to the statements of the Russian authorities, they allegedly promise not to send to Ukraine.
The Ukrainian counteroffensive, as well as the situation on the front as a whole, largely depends on the supply of weapons from international partners. Which during this year provided Ukraine with weapons for a total of 41.3 billion euros. This is 86% of Russia's military budget. Military assistance from the allies exceeded the military budget of Ukraine for this year by 7.6 times.
In the domestic politics of Ukraine, a series of important personnel changes are taking place, the political struggle has intensified, and political and corruption scandals continue. In particular, the internal confrontation between the authorities and the opposition financial and political groups continues . Suspicion was reported to 15 persons involved in the introduction and operation of the so-called “Rotterdam +” formula (sale of Ukrainian coal for generating companies at the price of imported coal, including delivery), due to which Rinat Akhmetov’s DTEK and Centrenergo sold electricity to consumers overpriced from 2016 to 2019 Potentially, R. Akhmetov (as a co-owner of coal and generating companies) and P. Poroshenko (as the President of Ukraine, who politically “covered” this formula) could become the targets of this investigation. Also, this case may lead to another round of redistribution of property in Ukraine and / or the nationalization of some energy companies .
The change of the head of the board of NJSC Naftogaz Ukrainy Y. Vitrenko is probably due to the fact that the entire energy segment of Ukraine is moving into a more serious influence of international partners and its future will largely depend on their participation in Ukrainian energy projects. Probably, based on this situation, the replacement of Y. Vitrenko was necessary, given the fact that he has extremely conflicting relations with the previous chairman of the board of Naftogaz A. Kobolev and a whole list of anti-corruption, oriented to Western partners, political and public structures of Ukraine . Currently, Ukraine is entering a very difficult heating season and the future of the energy system will largely depend on international partners. And Naftogaz Ukrainy will be built into the model of relations with Western partners. Currently, Ukraine receives significant amounts of credit for the purchase of gas and energy resources for the autumn-winter season, as well as equipment for the repair of damaged energy facilities due to Russian attacks.
Domestic financial revenues to the State Budget of Ukraine continue to decline. Thus, compared to August, in October, internal budget financing decreased by 54% (- UAH 93.6 billion). Therefore, international financing will remain the main source of covering the budget deficit and maintaining macro-financial stability in the near future. In October, compared to September, international financial assistance increased by almost 85% (+UAH 61.5 billion). The volume of financing actually allocated to Ukraine by international partners since the beginning of the war is 24.1 billion dollars. Next year, it is planned to attract about 38 billion dollars of external assistance to the state budget.
The Government of Ukraine approved the draft Budget of Ukraine for 2023 for the second reading in Parliament as follows: GDP growth 3.2% (instead of 4.6% in the first reading); inflation 28% (was 30%); income UAH 1.3 trillion. (+50 billion UAH); costs UAH 2.6 trillion. (+66.8 billion UAH); a deficit of 20% BBB or $38 billion; the hryvnia exchange rate by the end of 2023 is 45.8 UAH / $ (instead of 50 UAH / $, as it was in the first reading). The priority of financing the state budget in 2023. there remains security and defense - more than 1 trillion hryvnias, which is more than 18% of GDP. It is also envisaged - UAH 35.5 billion. to the Fund for the Elimination of the Consequences of Armed Aggression.
Military situation
Combat actions.
The situation in the Kharkiv region: without significant changes. Kharkiv is subjected to significant shelling.
In the Donbas: The RF Armed Forces are trying to conduct offensive operations in the Bakhmut, Avdiivsky and Novopavlivsky directions. Attacks were made near the city of Avdiivka. Subjected to attacks - the city of Bakhmut, the city of Maryinka and the settlements of Yakovlivka, Bakhmutske, Alexandropol, Kamenka, Pervomayske, Makiivka, Nevsky Verkhnekamenske, Spirne, Mayorsk, Krasnogorivka, and Novomykhailivka, Vodiane, Pavlivka and Prechistivka (near the city of Ugledar) and the settlement of Belogorivka in the Lugansk region, Ukrainian troops are advancing in the Lugansk direction, and liberated the settlement. Nevsky highway Svatovo - Kremenna is practically under the control of the Armed Forces of Ukraine.
Situation in the South: At Kherson region, according to Russian sources, Ukrainian troops attacked the settlement Bruskinske from the side of the settlement David Brod. In the Pivdennobuzhsk direction, the RF Armed Forces continue the engineering equipment of positions. Another batch of mobilized Russian military personnel arrived in the settlements of Chervony Mayak, Novoraysk and Zmievka in the Kherson region. According to the General Staff of the Armed Forces of Ukraine, vehicles that were in the communal property of the city of Kherson were moved to the Crimea. The “authorities” of the Kherson region appointed by the Russian Federation decided to expand the evacuation zone by 15 kilometers from the left bank of the Dnieper. This applies to the settlements of the Novokakhovsk urban district, Golopristansky, Oleshkinsky, Kakhovsky, Gornostaevsky, Velikolepetikhsky and Verkhnerogachiksky municipal districts. Forced evacuation of the local population from Nova Kakhovka has been confirmed.
The Russian military continues to arrive in western Belarus.
Belarus and Russia are planning to create combat training centers for joint training of military personnel of the armed forces. That is, in fact, Belarus will play the role of a large "training center" for Russian troops. Military equipment from the Russian Federation is being transferred to the west of Belarus, to the area of Brest. The Russian military were seen in the settlements between Brest and Malorita (closer to the border with the Volyn region of Ukraine). Recently, in the Russian information space, they have been discussing the " necessity " of a strike from Belarus to the west of Ukraine - in order to block the border with Poland and disrupt the supply of Western military aid. Whether these plans are real or for now it is just a way to divert Ukrainian troops from the south-east of Ukraine is still not known exactly. With the development of such a scenario, the main logistical burden will fall on Romania, where American units have recently been transferred.
Attack of drones on the ships of the Black Sea Fleet of the Russian Federation in Sevastopol. On the morning of October 29, ships of the Black Sea Fleet of the Russian Federation were attacked by drones in the waters of the Sevastopol Bay. The attack, according to the Russian Federation, was carried out by nine drones and seven autonomous marine unmanned vehicles. The Ukrainian public reported that the UAVs attacked the Admiral Makarov frigate. Russian military telegram channels wrote that the radar system of the frigate was damaged. According to official Russian data, the sea minesweeper Ivan Golubets, as well as the barrier in the South Bay, received minor damage.
The Russian Federation said that " the attacked ships of the Black Sea Fleet are involved in ensuring the security of the grain corridor as part of an international initiative to export agricultural products from Ukrainian ports ." After that, Russia announced that it was suspending its participation in the "grain deal" indefinitely, which was notified to the UN and Turkey. Along the way, the Russian Federation accused Britain of preparing an attack on the city of Sevastopol, and of undermining the Nord Streams, in London they said that they were not involved in any of the above. Further, Russia notified the UN and Turkey of its withdrawal from the deal. Also in Russia, it was announced that drones on the ships of the Black Sea Fleet in Sevastopol were launched from a civilian ship, which was used as part of the “grain deal”. Secretary of the National Security and Defense Council of Ukraine Oleksiy Danilov called such a statement nonsense. And President of Ukraine V. Zelensky said that Moscow had long intended to block grain exports. Ukrainian Foreign Minister Dmitry Kuleba noted that the attack against Russian ships in the bay of occupied Sevastopol was just an excuse for Moscow to withdraw from the "grain deal", since steps to disrupt it began long before that.
The attack on the Black Sea Fleet in the city of Sevastopol gives the Russian Federation a formal justification and waiver of responsibility to the countries of the "third world" (Africa and Asia), which now could potentially experience food shortages due to the suspension of the "grain agreement".
The "dirty bomb" situation.
Last week, the leadership of the Russian Federation actively developed the topic of the nuclear threat, accusing Ukraine of developing a "dirty nuclear bomb."
Russian President Vladimir Putin at a meeting of law enforcement agencies of the CIS countries said that Ukraine allegedly has a "dirty bomb" that they plan to blow up, blaming Russia for this. And the Minister of Defense of the Russian Federation, having discussed this with colleagues from the United States, Great Britain, Turkey, India and China. The Russian state news agency RIA Novosti reported that the " Kyiv regime " was preparing a " dirty bomb " provocation. The entire source text was based on anonymous " sources familiar with the situation ", including supposedly in other countries. According to RIA Novosti, specialists from the Ukrainian enterprise Pivdenmash have prepared a dummy missile of the Iskander complex, it is planned to fill it with radioactive material, then allegedly shoot it down over the exclusion zone of the Chernobyl nuclear power plant by Ukrainian air defense forces and announce the launch of a nuclear charge by the Russian armed forces.
Ukraine refutes such intentions and invited IAEA experts to check whether illegal nuclear operations are being conducted in the country. The head of the IAEA, Rafael Grossi, requested the creation of a security zone around the Zaporozhzhia nuclear power plant.
Head of the Main Directorate of Intelligence of Ukraine, General Kirill Budanov called the Kremlin's claims that Ukraine was developing a "dirty bomb" something of a joke. " We absolutely support the visit of the IAEA mission and are waiting for them. We are waiting for them to visit all nuclear facilities ," Budanov also said, adding that the sooner they arrive, the sooner Ukraine will be able to drop the accusations from Russia.
At the same time, speaking at Valdai, V. Putin somewhat softened his rhetoric, saying that: " We do not need a nuclear strike on Ukraine, there is no point - neither political nor military", but "as long as nuclear weapons exist, there is a risk of their use ". At the same time, the Russian President said that in Russia "they never spoke about the use of nuclear weapons ," and this was always the reaction of Western politicians .
As in the situation with the Zaporizhzhia nuclear power plant, the activation of the “dirty bomb” theme can act as a conflict switch. As in the direction of nuclear escalation (a reason for the Russian Federation to use tactical nuclear weapons). So it is in the direction of concluding a peace agreement, since the nuclear threat frightens the population of countries around the world. Russia has already managed to provoke negotiations at the level of defense ministers.
Also, the Russian Federation made a statement on the prevention of a nuclear threat, from which it follows that the country's first priority is to prevent any military clash of nuclear powers. “We call on the other countries of the nuclear five to demonstrate in practice their readiness to work on this priority task and to abandon dangerous attempts to infringe on each other’s vital interests, balancing on the brink of direct armed conflict and encouraging provocations with WMD, which can lead to catastrophic consequences” - stated in a message on the website of the Russian Foreign Ministry.
Shelling of Ukrainian infrastructure.
morning of October 31, Ukraine was again subjected to massive missile attacks from the Russian Federation. Critical infrastructure facilities were damaged: the city of Kyiv and the Kyiv region, the city of Kharkov and the Kharkov region, Zaporozhzhia, Dnepropetrovsk, Lviv, Chernivtsi, Cherkasy, Khmelnytsky, Vinnitsa, Odessa regions, etc. The Dnipro hydroelectric power station also suffered from shelling. In many regions there is no electricity and water, there have been interruptions in mobile communications. So, as a result of morning strikes, a power facility was damaged, which feeds about 350 thousand apartments in Kiev. The city is partially without electricity and water. The authorities warn of an emergency power outage, 80% of Kyiv at some point remained without water supply. DTEK said that they had run out of stock of equipment for the restoration of the energy system. “ We have already used the stock of equipment that we had in stock. The cost of equipment is now measured in hundreds of millions of dollars. We are working on how to purchase it or receive it from our partners ,” said Dmitry Sakharuk, Executive Director of DTEK. The Ministry of Defense of the Russian Federation confirmed the strikes on the energy infrastructure of Ukraine. Claims that " all intended targets have been hit ."
Against the backdrop of ongoing mass shelling of Ukraine, the High-Level International Energy Advisory Council was established under the Ministry of Energy of Ukraine, aimed at providing support and assistance to Ukrainian energy companies. The platform of this council will be used to manage Ukrainian energy and cooperation in this direction between Ukraine and Western partners.
Combat map.
Internal situation in Ukraine
The Cabinet of Ministers dismissed Y. Vitrenko from the post of head of Naftogaz.
On November 1, the Cabinet of Ministers of Ukraine, by its decision, satisfied the statement of the chairman of the board of NJSC Naftogaz of Ukraine, Yuriy Vitrenko, about his dismissal. Previously, Yu. Vitrenko wrote a letter of resignation of his own free will. Recall that earlier the Cabinet of Ministers for the appointment of Yu. Vitrenko, who at that time was acting. Minister of Energy, dismissed, together with his predecessor A. Kobolev, the entire Supervisory Board of Naftogaz Ukrainy. It is already known that A. Chernyshev will be appointed to this position, who will be dismissed from the post of Minister for the Development of Communities and Territories. It is he who will head the NJSC Naftogaz of Ukraine. After that, the Ministry of Communities and Territories Development will be merged with the Ministry of Infrastructure , Alexander Kubrakov, who will remain in charge of the newly formed ministry.
These personnel changes are largely related to the situation around Naftogaz Ukrainy. Currently, Ukraine is entering a very difficult heating season and the future of the energy system will largely depend on international partners. And Naftogaz Ukrainy will be built into the model of relations with Western partners. The High-Level International Energy Advisory Council has already been established under the Ministry of Energy of Ukraine, aimed at providing support and assistance to the Ukrainian energy industry. It includes representatives of the EU and the US and other partner countries, who will basically coordinate the actions of this council. Ukraine is currently receiving significant amounts of credit for the purchase of gas and energy resources for the autumn-winter season, as well as equipment to repair damaged energy facilities due to Russian attacks. That is, the entire energy segment of Ukraine is moving into a more serious influence of international partners, and its future will largely depend on their participation in Ukrainian energy projects. Probably, based on this situation, the replacement of Y. Vitrenko was necessary, given the fact that he has extremely conflicting relations with the previous chairman of the board of Naftogaz A. Kobolev and a whole list of anti-corruption, oriented to Western partners, political and public structures of Ukraine .
A. Chernyshev, who, according to rumors, was going to be appointed as the new Prime Minister, enjoys the confidence of the Office of the President and should not cause antagonism among Western partners. Also, the union of the ministries for the development of communities and territories and infrastructure will strengthen another protégé of the OP - A. Kubrakov. Such personnel changes may probably indicate that the resignation of the government headed by D. Shmygal is not yet planned.
NABU and SAP reported 15 individuals suspected of being involved in the introduction and operation of the so-called “Rotterdam+” formula.
NABU and SAPO reported suspicions to 15 individuals, including former and current officials of the NEURC and officials of a group of private heat generating companies, in the case of the so-called Rotterdam + formula, due to which electricity consumers illegally overpaid more than UAH 20 billion. during 2018-2019, the NABU said in a statement. This is the second episode of the investigation by anti-corruption agencies, the NABU noted. The investigation of the first, on suspicion of six people, regarding the illegal overpayment of more than UAH 19 billion during 2016-2017, was completed in September 2022. According to investigators, the so-called “Rotterdam+” formula included expenses that did not actually exist, namely, the transportation of nationally produced coal to thermal power plants from the port in Rotterdam. The investigation states that it has evidence that the NEURC was persuaded to accept such a calculation formula by representatives of a group of private heat generating companies, which, in the end, received super profits.
Because of this formula, Rinat Akhmetov's DTEK and Centrenergo sold electricity at a higher price. It was canceled in July 2020 due to Ukraine's transition to a new electricity market. According to the investigation, the total damage from Rotterdam+ exceeds UAH 39 billion.
Please note that May 2021 ex-Prosecutor General Irina Venediktova replaced the senior group of prosecutors in the criminal proceedings "Rotterdam +" Vitaly Ponomarenko, who closed this proceedings three times. Denis Demkiv, the new head of the group of prosecutors, decided to close it fourth in the Rotterdam + case. The head of the Specialized Anti-Corruption Prosecutor's Office Oleksandr Klymenko decided to cancel the decision to close the so-called Rotterdam+ case as illegal and unfounded. At the same time, the head of the SAP completely changed the group of prosecutors in this case "because of the ineffective implementation of supervision over compliance with laws during the pre-trial investigation."
Financial situation.
In October 2022, budget expenditures amounted to UAH 223.3 billion. In September, expenses amounted to UAH 295.2 billion (in August - UAH 252.6 billion).
Total domestic revenues (excluding loans and grants) for October are about UAH 111 billion (less than 50% of expenditures). Including: customs - UAH 32.4 billion; tax - UAH 53.3 billion; National Bank: - UAH 25 billion. In September 2022, the general fund of the state budget of Ukraine received UAH 156.1 billion, which is less than in August (UAH 204.6 billion).
In October, the total amount of international assistance amounted to UAH 134 billion.
In September, UAH 72.5 billion was received. international assistance (in August - 109.7 billion hryvnia).
Thus, the total revenues to the state budget in October amounted to - 245 billion dollars. In September - 228.6 billion hryvnia , and in August - 314.3 billion hryvnia.
The volume of financing actually allocated to Ukraine by international partners since the beginning of the war to cover the state budget deficit as of October 26 amounted to $23.123 billion, and another $1 billion for restoration, or a total of 65% of the assistance they declared for a total of $36.959 billion, the Ministry of Finance of Ukraine reports.
The Cabinet of Ministers has already approved the draft budget for 2023 for the second reading, taking into account the proposals of people's deputies.
So, as part of the macro forecast, the economy next year will grow by (3.2% instead of 4.6%)
• inflation may reach (28% instead of 30%)
• the cost of living will be - 2589 UAH.
• the minimum wage will be - 6700 UAH.
the minimum pension will be - 2093 UAH.
• The dollar exchange rate in Ukraine in 2023 is projected to fluctuate around UAH 42.2/$.
At the end of 2023, it will amount to 45.8 UAH/$ (instead of 50 UAH/$, as it was in the first reading).
• Security and defense remains the priority for budget financing - more than 1 trillion UAH, which is more than 18% of GDP.
• UAH 35.5 billion is also provided for the Fund for the Elimination of the Consequences of Armed Aggression.
• The 2023 budget is planned taking into account UAH 1.32 trillion in revenues. It is proposed to increase the revenue part by more than UAH 50 billion.
• Costs will amount to UAH 2.58 trillion.
In total, by the second reading in the draft state budget, the expenditure side increased by UAH 66.8 billion.
• The state budget deficit next year will be more than 20% of GDP - UAH 1.29 trillion.
• It is planned to attract about - 38 billion dollars of foreign aid to the budget.
• State budget debt by the end of 2023. will amount to UAH 6.4 trillion.
Compared with the first reading, the most funds added were:
• To the Ministry of Communities and Territories of Ukraine +25% (+UAH 2 billion) - UAH 9.9 billion•
• Ministry of Culture - +22% (+1.6 billion UAH) -9.1 billion UAH. Most will go to the "Marathon".
• Supreme Court +14% (+UAH 245.4 million) - UAH 2 billion.
• Ukravtodor +12% (+UAH6.7bn) – UAH63.5bn. The subvention to local budgets increased by almost UAH 2.5 billion.
• Ministry of Social Policy +10% (+38.9 billion) – UAH 445.2 billion. Increased spending on the Pension Fund.
The NBU inflation report notes that inflation will accelerate to 30% in 2022, and the economy will contract by almost 32% due to the devastating effects of the war. In the future, inflation will slow down: next year, about 21%, and in 2024 - below 10%. Return of inflation to 5% is expected only in 2025.
A significant decline in the Ukrainian economy (-32%) due to the war is mainly due to a reduction in domestic demand, disruption of logistics, significant losses of labor and production potential.
Of all the components of Ukraine's GDP, investments will decrease the most - by 50%. But this forecast depends on working with investors. The NBU also expects that emission financing of the budget will be completely discontinued from 2023.
Unemployment this year will be almost 30%. The recovery of the economy in the coming years will lead to a revival in demand for labor and a decrease in the unemployment rate. However, it will remain above its natural level due to the loss of the economy and the deepening of the imbalances associated with the war. Nominal wages this year will decrease by 12-13%, and in real terms (ie, after inflation) - by a quarter.
The situation around Ukraine
The situation regarding the "grain deal"
After the drone attack on the ships of the Black Sea Fleet of the Russian Federation in the city of Sevastopol Russia has announced that it is suspending its participation in the "grain deal" indefinitely. What the Russian leadership notified about the UN and Turkey.
Ukraine called on Western countries and Turkey to influence Moscow. President V. Zelensky said that Moscow had long intended to block grain exports. NATO Allies are calling on Russia to reconsider its decision and urgently reopen the grain deal with Ukraine to ensure that food reaches those who need it most. Also, the Alliance demanded that V. Putin stop using food as a weapon.
But the Kremlin has explicitly stated that a deal to export grain from Ukrainian ports is hardly feasible. So the press secretary of the President of the Russian Federation Dmitry Peskov said: " In conditions when Russia talks about the impossibility of guaranteeing the safety of navigation in these areas, such a deal is hardly feasible, and it takes on a different character: much more risky, dangerous and unguaranteed ."
It is known that the Russian leadership as a condition requires the partial lifting of sanctions, in particular, in relation to Russian shipping and insurance companies. The Russian Federation is also seeking the possibility of exporting agricultural products from the territories seized from Ukraine. In Ukraine, the Russian Federation is accused of stealing Ukrainian grain and exporting it from the occupied territories with the help of Syrian ships.
At the same time, the Ministry of Agriculture of the Russian Federation stated that Russia is ready to completely replace Ukrainian grain on the world market. The head of the Ministry of Agriculture of the Russian Federation Dmitry Patrushev said that " Taking into account this year's harvest, the Russian Federation is ready to completely replace Ukrainian grain and deliver supplies at affordable prices to all interested countries ," D. Patrushev said. He noted that Russia is ready to supply the poorest countries with up to 500,000 tons of grain in the next four months “free of charge”. This will be done allegedly with the participation of Turkey 's " reliable partner ". In addition to the requirements for the partial lifting of sanctions for the export of Russian grain, the Russian Federation demands to ensure the safety of its ships in the Black Sea.
Oleg Ustenko, adviser to the President of Ukraine on economic issues, said that in general, about a third of the harvested crop is needed for the internal needs of Ukraine - 20 million tons of grain per year. While about 40 million tons are exported. After the start of the war, Ukraine had to take out another 22 million tons of grain. According to O. Ustenko , the action of the “grain deal” brought about $3 billion to the state budget. He also questioned that the Russian Federation is ready to replace the supply of Ukrainian grain on world markets. O. Ustenko said that the internal demand of the Russian Federation is about 100 million tons per year, while the harvest is about 130 million tons (in the Russian Federation it was announced - 150 million tons).
After the start of the “grain deal”, Ukraine managed to export about 10.8 million tons of food from Ukrainian ports (data from the Ministry of Agrarian Policy of Ukraine), as well as about 5 million tons by other means of transport. Thus, Ukraine needs to take out another 7 million tons of the old crop. Thus, from the point of view of budget revenues, it is very important for Ukraine to achieve the resumption of the "grain deal". Otherwise, grain prices are expected to fall in the country. The lack of prospects for the export of grain by sea will negatively affect the plans of Ukrainian farmers for the sowing season in the future.
In the process of negotiations, Turkey (the main beneficiary of the “grain deal”) managed to bring the Russian side back to the implementation of the agreement. The Ministry of Defense of the Russian Federation stated that they received written guarantees from Ukraine not to use the grain corridor for combat operations against the Russian Federation.
Ruslan Bortnik, Oksana Krasovskaya, Andrey Timchenko
for the Ukrainian Institute of Politics
