Weekly analytical review No. 102 of 02/07/2021

Weekly analytical review No. 102 of 02/07/2021

ANALYTICAL REVIEW OF THE MOST IMPORTANT DOMESTIC, FOREIGN POLITICAL AND ECONOMIC EVENTS OF THE WEEK

CONTENT:

INTERNAL POLICY.

1. The situation around the TV channels "112 Ukraine", NewsOne and ZIK. Causes and consequences of blocking by the President.

2. Exclusion from the party of Alexander Dubinsky. What will happen to the faction?

3. Zelensky's sanctions against the Chinese company Skyrizon, which tried to buy Motor Sich engine company.

4. The state of public opinion.

FOREIGN POLICY.

1. Sentencing of A. Navalny, Anti-Corruption Fund (FBK)'s requests for sanctions and preparation by the United States of a new package of personal anti-Russian sanctions.

2. The coup in Myanmar in the context of the interest of the great powers in the region.

3. An American destroyer for the first time during Biden's presidency sailed in the Taiwan Strait.

4. The United States announced the end of support for the military operations of the Saudi coalition in Yemen.

ECONOMY.

1. The parliament of Ukraine adopted in the first reading a draft law on the resumption of privatization of large objects of state and communal property.

2. The Anti-Corruption Committee of the parliament of Ukraine proposes to put under control all bank accounts and cells of individuals.

3. The freed-up capacity of the nuclear power plants will be directed to the mining of cryptocurrencies. At the same time, Ukrainian coal power plants run the risk of being left without coal.

4. Economic forecast of the government until 2024.

CONCLUSION.

INTERNAL POLICY.

Briefly:

The main domestic political events of this week were: The blocking of opposition TV channels 112, NewsOne, and Zik, falling approval rate of the government, growing protest sentiments, the exclusion of deputy Alexander Dubinsky from the Servant of the People faction, and the imposition of sanctions by President Volodymyr Zelensky on the Chinese company Skyrizon.

All of them are a continuation of several trends. The orientation of the current government towards external control from the United States, which is becoming more and more obvious: the exclusion of A. Dubinsky from the faction, the imposition of sanctions against the Chinese company Skyrizon. The split and crisis within the ruling team continue: the head of parliament increasingly demonstrates autonomy from the president and distances himself from his decisions that could negatively affect his reputation. Protest moods in society are growing. The authorities are trying to eliminate the drop in the ratings of the President and his party against the backdrop of unfulfilled promises and the flow of the electorate to the opposition by suppressing dissent, in particular by imposing sanctions against opposition television channels. In the West, such actions are approved, as they fear a "pro-Russian revenge" in Ukraine and its potential exit from the American sphere of influence.

1. The situation around the TV channels "112 Ukraine", NewsOne and ZIK. Causes and consequences of blocking by the President.

On February 2, President of Ukraine Volodymyr Zelenskyy approved the decision of the National Security and Defense Council on the introduction of personal sanctions against the People's Deputy from the “Opposition Platform “For Life” (OPL) Taras Kozak. The sanctions will last for 5 years. Given the approval of restrictive measures against the owner, several enterprises of the “Novyny” media holding, which include the TV channels ZIK, NewsOne, and 112 Ukraine, opposition to the current government, were also sanctioned. The TV channels stopped broadcasting, but the work of their Youtube channels is still ongoing.

In response to sanctions against TV channels, the Opposition Platform - For Life Party announced the initiation of an impeachment procedure against President Volodymyr Zelensky, the implementation of which is currently extremely unlikely. On the one hand, this statement was supposed to demonstrate the opposition of the OPL, and on the other, it actualizes the question of the legitimacy of V. Zelensky

The International and European Federations of Journalists (IFJ and EFJ) have condemned state censorship against opposition channels in Ukraine, calling it "an extrajudicial and politically motivated ban and a flagrant attack on press freedom that urgently needs to be reversed." According to these journalistic organizations, the imposed sanctions do not correspond at all to international legal standards of freedom of speech and broadcasting.

It should be noted that the head of the parliament of Ukraine, Dmitry Razumkov, abstained during the voting on sanctions at the NSDC meeting. He explained his decision with a desire to abide by the letter of the law. The decree on the introduction of sanctions contradicts international standards and the Constitution of Ukraine. At the same time, the speaker of parliament is increasingly demonstrating a desire for political autonomy from Vladimir Zelensky and his team. This is an application for a "solo political career." This week, Dmitry Razumkov also released a video that looks more like an election campaign.

The above events of recent weeks indicate that the closure of the 112, NewsOne and Zik channels are not a one-time action, but a part of a large-scale policy of tightening the screws. Its reasons are simple:

• The fall in the ratings of the president and his party amid rising tariffs and failure to fulfill key campaign promises. This week, two sociological studies were published: from the Kyiv International Institute of Sociology (KIIS) and the Sociological Group "Rating". The results of the latest poll confirm the fall in the President's ratings and the loss of leadership of the Servant of the People, as well as the growth of protest moods in society. More than 60% of those polled support the resignation of the parliament (63%) and the government (62%), about 50% support the resignation of the president, and 89-91% support tariff protests. The rating of Volodymyr Zelensky dropped by almost 5% compared to December 2020 (21-22% are ready to support him), and Servant of the People is no longer the leader of the party rating, and with a result of 18.6%, it takes second place. At the same time, the growth in the ratings of opponents, in particular, the OPL, which now ranks first in the party "standings", is increasing due to the flow of a part of the electorate of Zelensky's team. It is expected that the decline in the presidential team's rating due to the blocking of channels will only intensify.

• Growth in the ratings of OPL as a political force offering an alternative (not pro-Western and not neo-liberal) course. According to the results of various sociological studies, the "Opposition Platform" ranks first in the party standings with an indicator of 18-24%, leaving behind the "Servant of the People". This is because, for a year and a half in power, Volodymyr Zelenskyy and the mono-majority "SN" in parliament have not responded to the key requests of the population, namely: the settlement of the armed conflict in the Donbas, the poverty (at the end of the first half of 2020, 50% of Ukrainian citizens lived below the poverty line).

• The growing public awareness of the external control of the Ukrainian authorities by the United States and growing dissatisfaction with this. The topic of external control in all its diversity was widely covered on TV channels that fell under the sanctions. They discussed the requirements of the G7 ambassadors to the Ukrainian authorities, the summons of the head of the Ministry of Health Maksim Stepanov to the American embassy demanding not to buy the Russian coronavirus vaccine, and much more than our western partners would not like to see on-air.

Under these conditions, the Ukrainian authorities, with the obvious approval of the Biden administration (at home, it fights against opponents using the same methods), began a campaign to suppress political competition. Its first victims were the anonymous Telegram channels, accused of "working for the Kremlin"; then there were sanctions against three channels from the holdings of Taras Kozak; a day later - attacks by aggressive radicals (which are traditionally under the influence of special services) on the "NASH" channel. The trend is clear. Its continuation, most likely, will be the appeals to the United States with a request to block all Ukrainian opposition channels (including personal blogs) on YouTube, as well as repressions and criminal cases against individual journalists.

The blocking of TV channels, although situationally suppresses criticism of the authorities, strategically anticipates the defeat of Volodymyr Zelensky's team in the information struggle against political opponents, and strengthens the opposition. V. Zelensky demonstrated unexpected flexibility and toughness, a willingness to fight for power with any available tools, even illegal ones. The suppression of dissent seriously discredits Ukraine in the international arena, calls into question its existence as a democratic and legal state. The imposition of any sanctions against a citizen of Ukraine who is on its territory without a court decision is illegal.

2. Exclusion of Alexander Dubinsky from the “SN” faction. What will happen to the mono-majority?

On Monday, February 1, People's Deputy Aleksandr Dubinsky was officially excluded from the Servant of the People ruling faction. The reason was the American sanctions imposed on the deputy due to his alleged involvement in attempts to influence the electoral process in the United States. 198 members of the faction voted for his exclusion, 29 - against, 19 - did not vote. There was no discussion, Dubinsky was not given the floor. The MP himself called his expulsion a "manipulative story" and "pure farce."

Nevertheless, the expulsion has not yet provoked a massive withdrawal from the faction of other deputies, who, like Dubinsky, are associated with co-owner of the Privat group Igor Kolomoisky. Consequently, this group, due to its rather large size, will continue to influence the voting of the faction and its other activities.

At the same time, the contradictions between the deputies oriented towards Kolomoisky and other influences will worsen. A group of businessman Ilya Pavlyuk and pro-Western members of the faction will continue to attack the positions of his associates. Accordingly, the corresponding fragmentation and disintegration of the mono-majority will continue.

The choice of the position of Volodymyr Zelensky in the growing confrontation between politicians oriented towards the US Democratic Party and Western embassies and Ukrainian business, which is trying to prevent the expansion of external control of the country, will be of key importance for the future of the faction. Intra-party conflicts, from time to time brought to the public, deal a serious blow to the already falling rating of "Servants of the People".

In general, the exclusion of Alexander Dubinsky from the faction demonstrates that in a situation of choice between maintaining a balance of power within his extremely heterogeneous party and a desire to please the Biden administration, Vladimir Zelensky chooses the latter.

3. Ukrainian sanctions against the Chinese company Skyrizon, which tried to buy the Motor Sich plant.

On January 29, President of Ukraine Volodymyr Zelenskiy imposed sanctions against Skyrizon, a Chinese investor in the Motor Sich plant, one of the world's largest manufacturers of engines for aviation technology, as well as industrial gas turbines.

The sanctions against the shareholders of Motor Sich were introduced for three years, they provide for the following:

• • blocking of assets - temporary restriction of the right to use and dispose of property;

  • restriction of trading operations;

  • restriction, partial or complete termination of the transit of resources, flights, and transportation through the territory of Ukraine;

  • preventing the withdrawal of capital from Ukraine;

  • complete prohibition of transactions with securities, the issuers of which are persons who are subject to sanctions;

  • refusal to grant visas and cancellation of those already issued;

  • ban on the concentration of business entities.

The Chinese Foreign Ministry, in response to the decision of the Ukrainian government, stated that China opposes any government imposing sanctions on Chinese companies.

After the loss of access to the Russian market, the profit of the Motor Sich plant fell from $ 1.1 billion to $ 450 million, and the attraction of Chinese investments was seen as a way out of the difficult situation. In 2016, 56% of the company's shares were acquired by the Chinese investor Skyrizon together with other companies, including those from the PRC. In 2018, the SBU arrested 56% of Motor Sich shares under the pretext of preventing the illegal export of equipment to China. On December 5, 2020, Chinese investors announced they were filing a $ 3.5 billion claim in international arbitration. They believe that the SBU violated their rights by opening a criminal case on the purchase of Motor Sich shares and getting them arrested.

In turn, on August 26, 2020, during a telephone conversation with Ukrainian President Volodymyr Zelensky, US Secretary of State Mike Pompeo expressed concern about China's plans to acquire the Zaporizhzhia Motor Sich enterprise. He stressed that there are "evil intentions" behind the Chinese investments.

Analyzing this news, we note that Ukraine has become involved in the American-Chinese confrontation and, due to its dependence on the United States, becomes its victim. Trade contradictions have been escalating between Beijing and Washington in recent years, and there is competition for influence in several regions, including the Asia-Pacific region, Africa, and South America. The United States fears that thanks to the Motor Sich plant, the Chinese aircraft industry (first of all, the military) will reach a qualitatively new level, therefore, they prevent its purchase. Washington sees this as a prerequisite for strengthening the military power of its geopolitical rival.

At the same time, urging Ukraine to prevent the sale of the Motor Sich plant to the Chinese, the United States does not offer anything in return. On the one hand, Ukraine runs the risk of spoiling relations with the United States, which is categorically against the sale of the plant to China. On the other hand, it can suffer economic losses. China remains Ukraine's largest trading partner. Trade turnover in 2020 amounted to $ 15 billion. President of the People's Republic of China Xi Jinping is one of the few who congratulated Vladimir Zelensky on his birthday. Ukraine signed an agreement with the Chinese company Sinovac Biotech for the supply of 5 million doses of vaccine to Ukraine.

The abrupt failure of the deal on the Motor Sich plant may turn into serious problems for trade and economic relations between Ukraine and China. In particular, if Beijing regards such actions as unfriendly, Kyiv risks losing the opportunity to supply certain types of agricultural and metallurgical products to the PRC.

4. The state of public opinion.

On February 2, the Kyiv International Institute of Sociology (KIIS) published a poll, according to which V. Zelensky continues to lead in the presidential rating, but his support has decreased by almost 5% compared to December 2020 (22.1% are ready to support him, against 27% in December 2020).

The second-third places, as in December 2020, are shared by Poroshenko (13.7%) and Boyko (13.5%).

It is worth noting that President Volodymyr Zelenskyy is no longer the leader of the country's population trust, as it was during his entire tenure. According to the survey, most respondents trust V. Klichko - 37.5% (51.8% - do not trust, balance - (-14.3%)), V. Zelensky is trusted - 35.6% (do not trust -59.6 %, balance - (-24%)). At the same time, V. Klitschko's balance of trust is almost 10% higher than that of Zelensky.

The leader in the party rating is "OPZZH" with a result of 24.1%. If we compare the indicators that were published by KIIS on January 22, 2021. the rating of "OPL" increased - 3.4%. "Servant of the people" - (18.2%), the indicator improved by 7% (from 11.2%), the party moved up to the second place from fourth.

The loss of leadership of "Servant of the People" is confirmed by a survey by the Sociological Group "Rating" (dated 04.02.2021). According to the rating, the Servant of the People party also takes second place (the first place is “HLP” -18.9%) with almost the same result -18.6%. According to the "Rating", the level of support for V. Zelensky is 21.2%.

The results of the "Rating" poll confirm the growth of protest moods in society.

The idea of ​​dissolving the Parliament is supported by 63% (according to the results published by KIIS - 60.7%).

The resignation of the Government is supported by 62% (KIIS - 55.4%).

The idea of ​​the President's resignation is supported by 50% (KIIS - 47.6%).

89% - support protests demanding lower tariffs. (KIIS - 91.1%).

At the same time, 36% of respondents believe that the Cabinet of Ministers bears the greatest responsibility for the increase in tariffs.

29% put the responsibility on the parliament of Ukraine,

24% - for the President.

Over the past two months, support for early parliamentary elections has increased from 58 to 63% (5%), presidential - from 39 to 50% (11%), the election of a new CMU - from 60 to 62% (2%).

Several erroneous decisions, tariff increases, as well as indecisive actions concerning the fulfillment of the main election promises - all this continues the tendency for the ratings of President Zelensky and his Servant of the People party to sink, and also provokes an increase in protest moods in society. At the same time, due to the overflow of a part of the electorate of Zelensky's team, the ratings of opponents are growing, in particular, "OPL", which now ranks first in the party rating. It can be expected that the blocking of opposition TV channels will only increase the decrease in the rating of the pro-government team, and will contribute to the flow of the electorate of V. Zelensky (especially in the South-East) to the "OPL" and several other parties.

FOREIGN POLICY.

Briefly:

The passing of a verdict with a real prison term to Alexei Navalny, who returned to Russia, and the fading (and not exacerbation) of the protests in his support that occurred against this background, marked the failure of another attempt by external and internal forces to shake the situation in the Russian Federation from within.

Meanwhile, the foreign policy contours of the Biden administration are becoming more tangible. On the one hand, she intends to continue and build up the confrontation with China, as evidenced by the next passage of the American destroyer in the Taiwan Strait. On the other hand, the White House is ready to make certain concessions to Iran in the hope of concluding a new "nuclear deal". One such concession will be the end of support for Saudi military operations against the pro-Iranian Houthis in Yemen.

1. Sentencing of A. Navalny, Anti-Corruption Fund (FBK)'s requests for sanctions and preparation by the United States of a new package of personal anti-Russian sanctions.

On Tuesday, February 2, for violating the terms of serving the sentence, the court replaced opposition leader Alexei Navalny's suspended sentence in the Yves Rocher case with a real one and sent him to a general regime colony for 2 years and 8 months.

The protests in the Russian capital, accompanied by clashes with police officers, became the most massive and violent in the last ten years. Based on this, the Anti-Corruption Foundation (FBK), an organization headed by Alexei Navalny, appealed to the US President with a request to impose sanctions against several Russian oligarchs and officials: Roman Abramovich, Anton Vaino, Andrey Kostin, and others. In total, the list published by the Executive Director of the Fund Vladimir Ashurkov, 35 people.

It can be assumed that one of the objectives of the protests organized by the FBK was precisely to induce Western governments to impose sanctions against the Russian elite. This, in particular, is indicated by the fact that Navalny's return to Russia coincided with the coming to power of Joseph Biden in the United States and the election of a new head of the ruling German party, the CDU. Nevertheless, at the end of the past week, the West did not approve a new package of anti-Russian sanctions. On the contrary, it seems that the European Union and the United States have ignored the imprisonment of Alexei Navalny.

In particular, despite the loud statements, the EU, as of February 5, did not approve but did not even put forward official proposals on sanctions. The head of European diplomacy, Josep Borrell, who arrived in Moscow, said that Russia remains a key foreign policy partner of the EU, expressed the hope that the EU countries would register the Russian Sputnik V coronavirus vaccine and, contrary to initial forecasts, did not meet with Navalny. The draft sanction put forward by the United States is quite general and does not pose any significant threat to Russia. Against this background, the Russian ruble over the past week has strengthened from 75.4 to 74.5 against the US dollar.

In turn, the Russian opposition suffered two setbacks. First, the Russia Today TV channel published a recording of operational footage of the FSB, which captured the executive director of FBK Ashurkov, negotiating with a British diplomat to provide funding to Navalny's organization. The search for financial support from foreign powers, along with a request to the Western powers to impose sanctions against the Russian elite, put Ashurkov in an extremely difficult situation when any step was guaranteed to worsen his position and raised the question of opening a criminal case on suspicion of high treason. Also, the head of Navalny's headquarters, Leonid Volkov, after the verdict was passed to Navalny, said that the FBK would not gather protest actions until spring. This decision caused a flurry of negativity on social networks and accusations against Volkov of "leaking the protest."

It can be assumed that in the coming weeks, protests in Russia will stop or significantly weaken, which will be caused by the need for the opposition to reconsider its approaches to the struggle, to form a new headquarters, and prepare for the parliamentary elections scheduled for September this year. In turn, in the policy of the Russian authorities, a rather tough approach has been established to the non-systemic opposition, which, although it creates certain challenges in terms of possible radicalization of the protest, is still a guarantee that the situation will not slide into the scenario of a “color revolution”.

Summing up the history of the protests of Navalny's supporters, it should be noted that the main reasons why his Western sponsors decided to “rock” the political situation in Russia are the smooth strengthening and institutional fixation of the ruling Russian regime after the changes to the Constitution introduced last summer (the further, the stronger the state will be and the more hopeless the protest) and the objective deterioration of the socio-economic situation in connection with the pandemic and related problems. However, as of the current moment, it can be argued that another attempt to "swing" the Russian Federation from within has failed.

2. The coup in Myanmar in the context of the interest of the great powers in the region.

Last week, a coup took place in Myanmar (formerly Burma), as a result of which the country's civilian leaders were arrested and the military came to power. Given the significant geopolitical position of Myanmar, it seems important to determine the country's development prospects under the new regime.

For much of the time since independence in 1948, Myanmar has been under military rule. The country occupies a unique position in the west of the Indo-Chinese Peninsula, bordering China, Thailand, Bangladesh, Malaysia, and India. For China, Myanmar is important from the point of view of building alternative routes to the Strait of Malacca for goods from Asia to Europe.

The country is also known for being part of the so-called golden triangle - a zone in Southeast Asia where the production of various drugs is developed. Thus, the Myanmar state of Shan is considered the world center for the production of methamphetamine. The activities of drug manufacturers are associated with the Cantonese crime syndicate Sam Gor, a kind of super-corporation of Chinese triads, which annually earn about $ 10-15 billion from the production and sale of drugs.

In 2011, a transition of power to a civilian government began in the country, but as a result of the parliamentary elections held in November 2020, the military announced falsifications, arrested the leadership of the ruling party on February 1, and promised to hold fair democratic elections in the indefinite future.

The United States and the European Union condemned the coup, India and several other Asian countries expressed their concerns. In turn, China and Russia took an emphatically neutral position. It seems that this is because the Russian Federation and the PRC are more than complementary to the military who came to power.

In particular, the head of the country's armed forces, Min Aung Hlaing, met with Russian Defense Minister Sergei Shoigu ten days before the coup. During the meeting, the parties reached agreements on deepening military-technical cooperation, in particular, on the supply of Pantsir-C1 air defense systems and Orlan drones, as well as on a simplified procedure for Russian ships to enter the ports of Myanmar. Also, Mr. Hline is a regular guest at the Victory Parades in Moscow and actively maintains a VKontakte page.

The United States is interested in transforming Myanmar in an anti-Chinese way. At the same time, the country has close ties with Beijing and is not interested in starting an open confrontation. Myanmar remembers that in the 1960s, China supported the local Communist Party against the central government, and is now in every possible way avoiding the possibility of subjugation to Beijing. Russia, on the other hand, can provide guarantees of security, the supply of weapons and equipment - and at the same time does not interfere in the country's existing political system. This is the reason for the good relations between the local military leadership and the Russian Federation.

China, in addition to the aforementioned shadow interests, is also a major investor in the Myanmar economy. Thus, it is investing in the development of the Kyaukpyu port on the shores of the Indian Ocean, as well as in projects of joint oil and gas pipelines. If these projects are implemented, the PRC will not only ensure the development of its border provinces but, more importantly, bypass the narrow neck of the Malacca Strait and provide itself with access to the Indian Ocean, which will fundamentally improve China's geopolitical position. In this regard, information about the possible nationalization of Chinese enterprises by the military seems unlikely.

In turn, India, Myanmar's closest neighbor, is also deeply involved in the geopolitical processes around this country. It has long-standing plans to involve Indochina in its zone of influence, for which, in particular, a 1,600-kilometer highway was built, linking the entire peninsula with Hindustan. Myanmar is also an important partner of India in cooperation with the ASEAN countries, which determines the importance of promoting India's trade interests in Southeast Asia. Finally, Myanmar possesses colossal oil and gas reserves, making the development of its reserves extremely profitable for all investors.

Summing up, we note that a military coup in Myanmar, on the one hand, will certainly strengthen the position of Russia, China, and India in the country, on the other hand, it will intensify the competition between Beijing and New Delhi for the extraction of resources in this state and the development of infrastructure projects on its territory.

3. An American destroyer for the first time during Biden's presidency sailed in the Taiwan Strait.

 

On February 4, USS John S. McCain, a guided-missile destroyer, crossed the Taiwan Strait separating mainland China and Taiwan

According to the press officer of the 7th US Navy Fleet Lt. Joe Kelley, “The passage of the ship through the Taiwan Strait demonstrates the US commitment to the preservation of the free and open Indo-Pacific region. He also added that the US military "will continue to fly, sail and operate wherever permitted by international law."

In turn, China expressed a strong protest to the United States in connection with the passage of an American destroyer through the Taiwan Strait. Zhang Chunhui, the spokesman for the Eastern Military District of the PRC, said on Friday that "the United States is deliberately creating tension, harming peace and stability in the region." Also, he said, "the troops will firmly defend the state sovereignty, security and territorial integrity of the PRC."

The last phrase is fraught with a snag, because of which the United States uses the Taiwan Strait for anti-Chinese provocations. Official Beijing is committed to the principle of "One country - two systems", and considers Taiwan to be an integral part of China, although this part has not been controlled by the central government since 1949.

Until recently, the United States refrained from any official contact with Taiwan, not wanting to spoil relations with China. However, in the second half of 2020, the situation changed. Last September, the head of Taiwan, Tsai Ing-wen, in the presence of an American delegation and at the suggestion of the Americans, called for the formation in East Asia of an "alliance of democratic states to resist Chinese aggression." This means that Washington is trying to form a kind of military-political bloc off the coast of the PRC to “contain China” under its auspices.

It was after these intentions were announced that the passage of American destroyers through the Taiwan Strait, which, according to Beijing, is its territorial waters, became more frequent.

As we wrote in the last review, with the arrival of Joe Biden in the White House, the trend towards the strengthening of the US-China confrontation has remained unchanged. It is due to objective economic and geopolitical competition between the two countries. It is within the framework of this trend that it is worth considering the "disturbing actions" of the American fleet off the coast of the PRC. So far, the Americans are getting away with this, but as new Chinese warships are commissioned under the fleet development program in the coming years, the risk of military clashes with such provocations in the Taiwan Strait will increase significantly. Immediately after Biden's inauguration, the Chinese already made it clear by simulating an attack on a US aircraft carrier.

4. The United States announced the end of support for the military operations of the Saudi coalition in Yemen.

On February 4, US President Joe Biden announced that Washington intends to end support for the Arab coalition's military operations in Yemen and to intensify efforts for a peaceful settlement in this Arab country.

Fighting between the Yemeni government and the Houthi rebel movement began in 2014. They escalated a year later when Saudi Arabia and eight other Arab states, backed by the United States, Britain, and France, began airstrikes against the Houthis. Then the Saudis directly intervened in ground operations in Yemen, bringing in their troops and units of Sudanese mercenaries. All actions of Saudi Arabia in Yemen against the Houthis were unconditionally supported by the United States. This statement became especially relevant during the presidency of Donald Trump, who sought to form in the Middle East a kind of "self-sufficient bloc" of all American allies in the region (including Saudi Arabia, some other "oil monarchies", and Israel).

As we can see, now Joe Biden intends to revise this policy. The most compelling reason for this decision is the desire of his administration to revive the Joint Comprehensive Plan of Action on Iran's nuclear program (the so-called "Iranian nuclear deal"), concluded under Obama. The essence of the deal is simple: in exchange for stopping uranium enrichment beyond the limits prescribed in it, Tehran was allowed to trade its goods (primarily oil) on Western markets and some of the sanctions were removed from it.

In 2018, during the Trump presidency, the United States withdrew from the "Iranian nuclear deal", which provoked a significant deterioration in relations with the Islamic Republic.

In the war in Yemen, Iran has been actively supporting the Houthis fighting the Saudi coalition. This support is paying off. Over the past year, the Houthis have been able to carry out several successful offensive operations, during which they have crushed Saudi forces. In some cases, they even managed to attack military and critical infrastructure facilities in Saudi Arabia itself, and not in Yemen.

After Biden's inauguration, Iranian President Hassan Rouhani has already signaled his readiness to normalize relations with the United States, expressing the hope that their new leader will return to the “Iranian policy” of the Obama era.

Biden's intention to end support for the Saudis' military operations in Yemen, in this regard, should be seen as a step towards Tehran and a groundwork for future negotiations on a new "nuclear deal".

ECONOMY.

Briefly:

The main trend in the Ukrainian economy continues to be an attempt by the current government to collect as many funds as possible to cover the budget deficit and repay debts to creditors. The intentions to resume "large-scale privatization", as well as to unlawfully grant all power structures and control bodies the right to access information about the contents of citizens' bank safes are yet another manifestation of this trend.

1. The parliament of Ukraine adopted in the first reading a draft law on the resumption of privatization of large objects of state and municipal property.

On February 4, the parliament of Ukraine adopted in the first reading a bill on the resumption of the privatization of large objects of state and municipal property in Ukraine, the process of which was suspended due to quarantine in the country.

The quarantine measures of 2020 became the reason for the suspension of the privatization program of enterprises in Ukraine, begun by Honcharuk in 2019. An explanatory note to the bill stated that it was necessary to remove all restrictions on the privatization of large enterprises, and also that the privatization of large enterprises was seen as a way to replenish the budget of Ukraine. The list of enterprises for privatization was published back in 2019. There is Artyomsol company, as well as, within the framework of another bill, such strategic enterprises as Naftogaz, Trunk Gas Pipelines of Ukraine, Ukrtransgaz, Ukrnafta, Ukrgazdobycha, Chernomornaftogaz, many defense factories, "Ukrzheldoroga", "Ukrposhta" company Artem, Kyiv plant "Radar", plant "Mayak", Research and Production Association "Kyiv Automation Plant", Ukrainian Scientific Institute of Aviation Technology and more than 400 more companies throughout the country.

The head of Naftogaz, Andrey Kobolev, proposed to privatize the monopoly enterprise at the beginning of 2020. People's Deputy Andrei Gerus spoke out categorically against. Gerus is associated with Kolomoisky, and thus, the analysis of the Ukrainian energy market consistently reveals the strategic confrontation between Akhmetov as an energy producer playing to increase prices for it and Kolomoisky as an energy consumer playing to lower prices for it. An attempt to sell Naftogaz's Egyptian assets in 2020 was thwarted by SBU. Regarding the privatization of Naftogaz, the sovereign Ukrainian forces (large Ukrainian businesses and the security bloc) are still resisting external pressure on this issue.

Regarding the privatization of the main gas pipelines of Ukraine, in 2017 the Cabinet of Ministers banned it, but in 2020 partial privatization was allowed (without losing a controlling stake from the state). Back in 2019, Radio Svoboda published an investigation containing the assumption that Ukrtransgaz was already being prepared for privatization.

In 2018, fugitive Russian politician Ilya Ponomarev gave an interview to Economic Pravda, in which he stated that Soros was interested in buying shares in Ukrgasvydobuvannya.

In February 2020, the Cabinet of Ministers submitted a bill banning the privatization of Energoatom, Ukrenergo, Ukrhydroenergo, and the main gas pipelines of Ukraine.

The resumption of the so-called "big privatization" in the eyes of the Ukrainian authorities looks like one of the means of obtaining finance to cover the budget deficit and repayment of loans taken from Western creditors. Also, the Ukrainian big capital, actively lobbying for the sale of strategically important enterprises, has its interests in “big privatization”. From the point of view of state interests, the policy of indiscriminate sale of everything in a row at low prices is extremely flawed. In the future, it will turn into a continuation of de-industrialization and an uncontrolled rise in prices for goods and services of the monopolies, given to private hands.

2. The Anti-Corruption Committee of the Verkhovna Rada proposes to put under control all bank accounts and cells of individuals.

It became known this week that in preparation for the second reading of Bill 4135 ("On the basics of anti-corruption policy for 2020-2024"), the Anti-Corruption Committee of the parliament of Ukraine proposes to create a single register of bank accounts and individual bank safes of Ukrainian citizens (absolutely all, and not only civil servants or politicians) and provide access to these registers for NAPK, NABU, SAP, tax, financial monitoring, customs, and ARMA.

The National Bank of Ukraine treats the creation of such a register not just skeptically, but rather negatively. Since an open registry can lead to a deterioration in the protection of private information and a decrease in confidence in banks. As a result, the very concept of "banking secrecy" can be forgotten.

Previously, to obtain personal data from the employees of the Tax Service or the National Police, it was necessary to indicate the basis - a court decision or open criminal proceedings. And in the new realities, we are talking about a registry with automatic access by regulatory authorities without any permits.

Innovations of this kind will affect ordinary citizens of Ukraine, labor migrants, and entrepreneurs. Experts believe that at its core, bill 4135 is an attempt to infiltrate the privacy of citizens, ignoring their demands for privacy and economic security.

Note that if third parties gain access to financial information, the situation may get out of the control of the state and lead to a wave of massive economic crimes.

The main scientific and expert department of the parliament of Ukraine also spoke out against the creation of this unified register of accounts of individuals and legal entities and individual bank safes and the provision of direct access to it for NAPK, NABU, SAP, ARMA, tax, Customs Service, and State Financial Monitoring.

Note that this initiative of the anti-corruption committee of the parliament is not an accident, but part of the general trend towards total fiscalization carried out by the current government. The idea is extremely simple: provide citizens with access to safes and safety deposit boxes, check their contents against their official income, and if they do not coincide, confiscate the funds stored in the cells. As we have already written many times, in search of funds to cover the budget deficit and repay IMF loans, the current Ukrainian authorities are ready to introduce any anti-social and even outright illegal (as in this case) measures to collect this money from citizens.

3. The freed-up capacity of the nuclear power plant is planned to be directed to the mining of cryptocurrencies. At the same time, Ukrainian coal power plants risk being left without coal.

In mid-2020, the Ministry of Energy and Coal Industry of Ukraine announced an electricity surplus. Based on this logic, a private company for the production of cryptocurrency mining equipment held a meeting with representatives of the State Enterprise “NAEK” “Energoatom” in January 2021. Back in May 2019, Ukrainian law enforcement officers exposed mining in the restricted areas of the South Ukrainian nuclear power plant, and, judging by press reports, employees of the National Guard of Ukraine who were involved in protecting the nuclear power plant could be involved in the scam. In December 2020, a law “on virtual assets” was adopted.

At the same time, at the end of January 2021, the National Commission for State Regulation of Energy and Utilities (NKREKU) began checking TPPs for fuel supply. According to Ukrenergo, as of January 31, 2021, fuel reserves in TPP warehouses since November 2020 have decreased by 5-7 times - to 436.8 thousand tons. 48 percent of coal is concentrated at two stations - Lugansk and Slavyanskaya TPP. According to the Ministry of Energy of Ukraine, as of February 2, 2021, the coal reserves at TPPs are 431.9 thousand tons (291 thousand tons of gas coal and 140.9 thousand tons of anthracite). The current coal reserves are 5.5 times less than those of February 4, 2020 (2.4 million tons).

To understand the situation with coal reserves, according to Ukrenergo, NEURCU began extraordinary inspections at the enterprises of DTEK, Centrenergo, Donbaseenergo to check the availability of a fuel reserve to ensure the heating season 2020/2021.

The above situation indicates that even against the background of problems with coal reserves at TPPs, specialized structures are not averse to making extra money on "left" contracts with private traders who squander coal for cryptocurrency mining.

4. Economic forecast of the government until 2024.

This week, the Ukrainian media reported that the Ministry of Economic Development, Trade, and Agriculture of Ukraine has prepared scenarios for the development of the economy until 2024.

According to this forecast, until 2024, a gradual increase in the value of the American currency is expected to 28.8 UAH / dollar under the optimistic scenario and up to 29.7 UAH / dollar under the pessimistic scenario.

The authors of the document estimated the growth of foreign investment, depending on the scenario, in 2021 from 0.5 to 2 billion dollars, and in 2024 from 5 to 5.5 billion. It should be noted here that “investments” in the Ministry of Economic Development mean both attracting foreign loans for specific purposes, and not just investing in business projects in our country.

The ministry also predicts that the volume of transfers from Ukrainian labor migrants will grow. In 2024, they will range from $ 13.3 billion under the pessimistic scenario to $ 14.4 billion under the optimistic scenario. On the territory of Ukraine, according to the same forecast, by 2024 there will be more than 600 thousand fewer people, and therefore an increase in receipts from labor migrants may be associated with the continuation of mass emigration to work in search of a better life.

According to the forecast, the minimum wage will increase by an average of 7-10% annually and in 2024 will amount to UAH 7,665.

As for the rise in tariffs, it will continue. According to the optimistic scenario, gas prices for the population in 2021 will grow by 20%, in 2022 - by 10%, and in 2023-2024. 5% annually.

For centralized heating and hot water in 2021 will have to pay 16-18% more than in 2020. In 2022, growth will be 6-9%, in 2023-2024 - 3-5%.

According to the forecast of the Ministry of Economic Development, electricity prices in 2021 will increase by 38% under the optimistic scenario and by 52% under the pessimistic scenario. In 2022, electricity will rise in price by another 15-20%.

In 2021, it is planned to borrow UAH 701.8 billion in foreign markets. In 2022-2024, government borrowings will amount to more than UAH 550 billion. annually.

The costs of paying off and servicing the public debt will remain significant over the next three years.

By the end of 2022, the government plans to pay off UAH 468.4 billion. the body of debt and UAH 158.7 billion. interest on it. In total - 627.1 billion UAH. In 2022, the state will spend UAH 555.2 billion on debt. In subsequent years, the cost of repaying and servicing the state debt will exceed UAH 600 billion. annually.

As you can see, the forecast is rather pessimistic. The key points in it are those that relate to the growth of payments on the state debt and, as a consequence, the growth of the cost of utilities (hidden taxes at the expense of which the government plans to pay off the debt). Interestingly, the forecast does not contain data on the expected GDP growth in the years indicated. Probably, against the background of the continuation of the pandemic, the crisis caused by it, and the redistribution of world markets (including in connection with political contradictions), it is too difficult to predict it.

CONCLUSION.

Summarizing the analysis of the events of the outgoing week, it is worth noting that:

Firstly, in the domestic policy of Ukraine, there is a tendency to “tighten the screws” for those who criticize the current government from anti-Western, or neutralist positions. Its manifestations were: accusations of several Telegram channels in "working for Russia", the closure of the TV channels "112 Ukraine", "NewsOne" and "Zik" (the main informational mouthpieces of the OPL) under the pretext of imposing sanctions against their formal owner, and attacks by radicals on the TV channel "OUR/NASH". The reasons for the turn of the current authorities to such a policy were the drop in the ratings of the president and his party, the growth of the ratings of the OPL, and the dissatisfaction of the Western partners with the spread of the discourse on external governance in Ukraine.

Secondly, trying to enlist the support of the Biden administration, the President's Office makes very serious concessions to the Americans, sacrificing not only the state interests of Ukraine but even the stability of its political power. The expulsion of the People's Deputy Alexander Dubinsky from the SN faction after the imposition of American sanctions against him was vivid evidence of this. It happened even although it will inevitably provoke conflicts between various influence groups in the faction. In turn, the imposition of sanctions against the Chinese company "Skyrizon" threatens Ukraine with serious problems in economic relations with the PRC, which is our country's largest trading partner.

Thirdly, the “moment of truth”, which became for the protests of Alexei Navalny's supporters, his conviction for a real term, showed that the current attempt to initiate the scenario of a “color revolution” in Russia has failed. The timing was chosen based on considerations of the increased social discontent in the country caused by the pandemic and its aftermath. Another reason why they tried to "shake" Russia right now is the smooth strengthening of the state power system and the formation of checks and balances that can keep it from collapse even without Vladimir Putin. For this reason, many opponents of the Russian Federation in the West, felt that "if not now, then never."

Fourth, the contours of the foreign policy of the White House under Biden are becoming more and more visible. We can say that the course of confrontation with China will continue. This is evidenced by the recent provocative passage of an American destroyer through the Taiwan Strait and some other news. At the same time, to conclude a new "nuclear deal" with Iran, the United States seems to be ready to make some concessions to the Islamic Republic. The intention to curtail support for Saudi military operations in Yemen against the pro-Iranian Houthis confirms this.

Fifth, the main goal that the Ukrainian authorities set themselves in the economic sphere is still raising money to pay off Western loans and patching holes in the budget. The news of the outgoing week indicates that they are planning to do this, including through "large-scale privatization" and the confiscation of "illegal" savings of citizens in safe deposit boxes.

Edited by:

Ruslan Bortnik,

Daniil Bogatyrev.

Authors:

Daniil Bogatyrev,

Maxim Semyonov,

Oksana Krasovskaya,

Andrey Timchenko.