Donbass, Economy Weigh Heavy in Ukraine’s Elections

  • One of the key election issues since 2014 is the issue in Donbass, which continues to be a significant problem.
  • Ukraine needs candidates who are ready to resume the Minsk Process.
  • One of the biggest problems in Ukraine is widespread corruption.

Ukraine is going to hold local elections in October 2020. Due to the Coronavirus, campaigns for the autumn elections must be adapted to the new norm, with coronavirus restrictions and social distancing. Therefore, it is difficult to hold a rally or a large gathering of people to convey your platform message.

The War in Donbass is an armed conflict in the Donbass region of Ukraine. In the aftermath of the Euromaidan movement and the 2014 Ukrainian revolution, protests against the newly formed government took place in the Donetsk and Luhansk oblasts of Ukraine, an area commonly collectively called the “Donbass.”

Ukraine has been dealing with the coronavirus pandemic, as it has affected almost all countries around the world. Currently, there are more than 9.7 million infected people, and more than 492,000 deaths worldwide.

More than 41,000 cases and more than 1,000 deaths have been registered in Ukraine. According to the demographic survey, the population of Ukraine in 2020 is 43,736,546 million people.

One of the key election issues since 2014 is the issue in Donbass, which continues to be a significant problem.  Just this week, Donbass held simultaneous parades with Russia throughout the region, dedicated to the 75th anniversary of victory in World War II. The original date of the parade was moved from May to June due to COVID-19 restrictions. Russia is one of the countries  that is most affected by the coronavirus.

The conflict in Donbass is a serious problem for Ukraine, not only from a geopolitical point of view, but also from the point of view of expenditures. Ukraine’s additional military spending on the Donbass conflict is 2.7% of GDP. There was less than  1% of GDP spending in 2013 on the conflict.  The increase  of 1.7% of GDP is a significant issue for Ukraine.

This would translate in  additional expenditures of 150 billion hryvnias ($5.6 billion). This year, Ukraine’s budget deficit was supposed to be 2.09%. However, it is very likely that due to the coronavirus pandemic, and other mitigating factors, the deficit this year will be higher than predicted. In addition, reducing military spending will reduce the budget deficit.

Ukraine consistently borrows funds from the IMF. This is a black hole, a money pit that will never pay off. The only interest Ukraine holds for NATO is its strategic location. Since it borders Russia, it is a buffer between Russia and the borders of NATO allies.

Ironically, the Ukrainian President, Volodymyr Zelensky recently tweeted that Ukraine demands to be a member of the European Union. Basically, Zelensky wants to use the EU to get access to EU funds, but never contribute.

The crisis in Italy and other EU member countries over COVID-19 earlier this year has already stretched EU funds as it is. The EU officially entered recession last month due to the Coronavirus economic strain.

Moreover, Donbass was an excellent source of cheap energy resources. It has great mining and metallurgical capabilities. If the conflict can be resolved, it will partially restore industry in cities such as Dnepropetrovsk. Therefore, this would allow the resumption of exports, and significantly contribute to the Ukrainian economy, including a belated increase in GDP.

It is understandable, that Ukraine has great difficulties with Russia. Nevertheless, Russia has always been Ukraine’s largest trading partner. It is extremely important for Ukraine to find a solution in the conflict zone in order to start rebuilding. Voters will be more favorable to candidates who find such solutions, especially in Eastern Ukraine.

Eastern and Western Ukraine generally have very different views. Historically, part of Western Ukraine used to be part of Poland. The Eastern side has always been closer to Russia. Therefore, opinions tend to differ significantly. This is similar to the northern and southern states of the United States, which differ in political views.

Ukraine needs candidates who are ready to resume the Minsk Process and work hard on the provisions of the Minsk agreements in order to find amicable diplomatic solutions. However, this is difficult, especially since Russia annexed Crimea.

One of the biggest problems in Ukraine is widespread corruption. Even with the creation of NABU in 2014, it continues to be a serious problem. This issue weakens the government and its effectiveness.

The national anti-corruption Bureau of Ukraine (NABU) is a Ukrainian law enforcement anti-corruption Agency that investigates corruption in Ukraine and prepares cases for prosecution. Note that the NABU can only investigate, but not bring charges.

Volodymyr Zelensky (born 25 January 1978) is a Ukrainian actor, screenwriter, comedian, director and politician serving as the 6th President of Ukraine, inaugurated 20 May 2019.

Interestingly, Nabu is also the name of the ancient Mesopotamian god of literacy, rational art, scribes and wisdom. NABU became the source of many comical jokes and demeaning comments on Ukrainian television. Despite the fact that this is a big initiative, the organization itself has similar problems.

After the revolution of 1917, Nikolai Kondratiev, one of the greatest economists whose cycles of economic predictions I tend to track even myself, helped implement the NEP. He was killed by the brutal dictator, Stalin. Corruption was widespread during the Stalinist era, and has since taken root in the former Soviet bloc.

Another topic that is important for the Ukrainian electorate is the reduction of utility tariffs, since they are among the highest in the former Soviet bloc. The appointment of candidates should be based on merit. In small areas, it is based on favors, etc.

President Zelensky is losing support and experiencing dwindling approval ratings, and had many conflicts with the heads of regions. Some of the recent conflicts have been related to restrictions imposed to minimize the spread of coronavirus across the regions. Other conflicts were related to the lack of progress in Ukraine from a socio-economic point of view and the rising cost of living.

Ukraine really deserves better. Democratic principles should be instilled at every level and corruption must stop. Only time will tell what awaits Ukraine in the future.

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Christina Kitova

I spent most of my professional life in finance, insurance risk management litigation.

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