Monday,
21 August 2017
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OpinionFinance Ministry on "silence mode"

Over the last two weeks, the media have been rarely lucky to see the Ukrainian Minister of Finance, Oleksandr Danylyuk. In September two problems at once fell on his shoulders: to do everything possible so that the International Monetary Fund finally allocated the next loan tranche for Ukraine, and to submit to Parliament a draft budget before the deadline established by law.

And while the first issue gives certain grounds for optimism as Ukraine has even introduced the infamous electronic declaration system, the issue of drafting the country’s major financial estimates raises concerns.

Everyone, from the prime minister to ministers, has the same answer to media inquiries on whether the draft budget is to be submitted on time: "On September 15, it will be in Parliament." However, it seems almost impossible to learn at least some details of the draft.

The ministers only report that the Ministry of Finance, according to a long-lasting tradition, remains "greedy", failing to satisfy the ministries’ and other agencies’ funding requests. At the same time, the finance minister simply chose to evade reporters.

The author of this column has twice witnessed Mr Danylyuk skipping town right after his speech at public events, not wishing to answer any questions of the media.

Moreover, the situation becomes absurd when certain celebration events with the participation of high officials and representatives of the European Union are held with no camera crews invited – in order to avoid the unwelcome questions to the finance minister. "Why call the camera crews? They’ll certainly run to the minister afterward with the questions relating not to the event but the budget," the organizers say.

The ministers only report that the Ministry of Finance, according to a long-lasting tradition, remains "greedy", failing to satisfy the ministries’ and other agencies’ funding requests. At the same time, the finance minister simply chose to evade reporters

But, excuse me, that’s because you have driven the situation to the point that no one can accurately answer ahead of tabling the draft budget in Parliament, what provisions this document will include! An earlier practiced scheme was when the government would submit to the Verkhovna Rada an incomplete draft, then immediately recalling it back for revision. And now, there is a risk that this scheme will be applied once again. So, even though Ukraine, for the first time in many years, will see a draft budget on time, as required by the Budget Code, we will not get to read the actual figures this fall.

The problem is, it seems that even the finance ministry doesn’t see these figures. If you try to contact Danylyuk and his deputies, they will most likely be at a meeting with the prime minister, or preparing to go there. As the sources in the ministry say, the meetings on the budget figures are held almost on a daily basis, lasting until late at night.

The problem is that the participants of this process even fail to agree among themselves. Each minister insists on the priority of allocation of funds for the needs of their ministries, threatening the ministry of finance with halting reforms in case the decision is negative.

This is complimented by the prime minister’s grand plans to establish a Road Fund and Energy Efficiency Fund, the need for increased funding of the army, as well as the entry into force of the law on civil service, which provides for an increase of salaries to officials.

All this makes an “honest” budget, announced by the finance ministry, which would be possible to accomplish, maintaining the established deficit of 3.1% of GDP, almost unrealistic.

Besides, the Cabinet of Ministers has a "budget battle" with the Rada ahead of it. There much more groups of influence in Parliament than within the walls of the Cabinet on Hrushevskogo, 12. Many of these groups will have to be properly catered, to secure the much-needed votes.

Instead of informing the public and voicing their proposals, albeit too bold, or “reformist”, as they say these days, the finance ministry has switched to a "silence mode"

The Government could get some help from experts and social activists, already keen on exposing populist and corrupt officials, willing to stick their dirty hands in the state coffers. But potential allies remain in the dark about the government's proposals for budget allocations.

Instead of informing the public and voicing their proposals, albeit too bold, or “reformist”, as they say these days, the finance ministry has switched to a "silence mode".

This means, no leaks to the press about the budget figures and less criticism toward the legislators. The officials in high offices are too afraid to call any figures, almost under pain of dismissal.

Well, maybe that is one option to hide everything up to the last moment and delay the inevitable. We should only hope that we don’t have to have to turn on the siren after this "silence mode", when the MPs some time closer to the New Year holidays squeeze some changes to the budget, jeopardizing cooperation with the IMF and the visa-free regime with the EU.

Dmytro Sydorenko

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