Week's balance: Rada launches Bureau of Economic Security, Cabinet caps utility tariffs, wages keep rising

The Verkhovna Rada has greenlighted the founding of the Bureau of Economic Security and elimination of tax police, the Cabinet promised to curb the rise in heating and hot water tariffs for households, while the State Statistics Service reported an increase in wages over 2020 – these are the main economic developments of the last week of January.

This week, Ukraine came out of the tough quarantine and started to gradually return to normalcy. For the first time in two weeks, Ukrainians were able to enjoy simple things like dining out or buying clothes, accessories, or hardware – the goods banned from selling on lockdown. The last week of January saw some nice snowy weather in many regions and brought important news as regards the country's economy.

Ukraine's parliament has finally adopted a law to establish the Bureau of Economic Security (BES), tasked with preventing, suppressing, and solving crimes related to the country's financial. The Bureau's detectives will perform the exclusive function of investigating such violations, while other law enforcement agencies will no longer deal with the said type of offenses.

Photo from UNIAN, Oleksandr Kuzmin

Prime Minister Denys Shmyhal has welcomed the creation of the new body and the dissolution of tax police.

"This is a significant event, without exaggeration. Ukraine is taking another step towards Europe and the civilized world. Tax police are becoming a thing of the past, and a new analytical body will emerge in its place to investigate financial and economic crimes without corruption and persecution," the head of government wrote on Telegram.

The Bureau's director shall be appointed by the Cabinet following an open competition for the post. Candidates for the top position are yet to be announced.

Also in the outgoing week, the Rada adopted a law on an all-Ukrainian referendum, submitted by President Volodymyr Zelensky. New legislation will potentially allow Ukraine to resolve a number of reverberating and controversial issues, for example, on whether to allow foreign actors to purchase farmland.

Meanwhile, the government further remains without a full-fledged energy minister. On Thursday, for the second time in recent weeks, the Rada failed to appoint the current acting minister Yuriy Vitrenko, former top manager of NJSC Naftogaz of Ukraine, for the post of first deputy prime minister, minister of energy.

Vitrenko has been "acting minister" since late December 2020. According to Ukraine's' legislation, an acting minister shall be appointed for a period of no more than 30 days.

Tariff caps

Due to the increase in tariffs for gas, heating, hot water and electricity, a wave of rallies swept across Ukraine throughout January. Unhappy citizens demanded a prompt response on the part of the authorities. And the authorities delivered.

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"The issues of tariffs should be analyzed and resolved comprehensively, on my instructions, the government and [energy regulator] NEURC are now dealing with this. To put it shortly, we're working to keep your homes warm and save your wallets from depletion," said President Volodymyr Zelensky.

Last week, the government held consultations with the energy regulator, legislators, local authorities, and gas suppliers, after which Prime Minister Shmyhal reassured Ukrainians that heating and hot water bills won't be going up any time soon.

"Tariffs for heating and hot water will not increase until the end of the heating season. We've managed to reach a certain consensus with local authorities," he said.

Also, the Cabinet expanded the effect of the natural gas price cap at UAH 6.99 per cubic meter for February-March 2021 for associations of apartment building owners. Previously, such a tariff was set for household consumers.

Also, the prime minister has assured that Ukrainians would not have to pay fines or penalties for failing to pay their January gas and heating bills on time.

As for the more expensive electricity, the government has proposed to allocate from the budget UAH 1.4 billion to compensate for electricity consumption in the first quarter of 2021 to households using electric heating. Already on Friday, the Rada adopted the corresponding law.

Multiple children families and family-type orphanages will also get compensation.

Wage growth and pension indexation

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Last week, the State Statistics Service said the average wage in December 2020 increased by 15.6% on year, to UAH 14,179. This is almost triple the minimum wage.

The average wage in Kyiv as of late December 2020 amounted to UAH 21,812. Residents of Chernihiv region receive the least – an average of UAH 9,615.

The State Statistics Service also noted a positive trend as regards wage arrears, which in December 2020 decreased by 21.8% compared to the previous month, amounting to UAH 3.1 billion as of January 1, 2021.

Also this week, the government initiated the introduction of mandatory indexation of pensions for all categories of pensioners, starting next year. The Cabinet endorsed a bill required to this end, to be soon submitted to parliament.

"From 2022, no later than March 1, an annual indexation of pensions is envisaged. The bill will fix the injustice where pensions for certain categories of citizens have not been indexed for several years," the prime minister said.

Besides, the Cabinet proposed an interesting idea to support labor migrants and approved a bill according to which migrant workers returning to Ukraine will be offered a grant of up to UAH 150,000 for opening their own business in Ukraine.

The coming week promises to be no less interesting. The mission of Ukraine's key creditor, the International Monetary Fund, which has been in Kyiv for the past weeks, decided to continue its work for another seven to ten days. In early February, the first deliveries of COVID-19 vaccines should take place, although the exact dates are yet to be announced. Also, Sweden's IKEA will open its first store in Ukraine on February 1.

Hanna Nahorna

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