Political Wars. How Petro Poroshenko Uses Manipulation In Political Struggle

“For five years, our team was implementing reforms that have made Ukraine stronger, more successful and more reliable. Today we see how the reforms are cut down”. With these words starts the post on Facebook by Petro Poroshenko, the former president of Ukraine, now chairman of the European Solidarity party.

2.5 million followers, more than 10 thousand likes and 2.7 thousand shares – this is only on the page of the former president. The post was shared by: Depo.ua, Pryamiy TV channel, Dilova Stolytca, ATR TV channel and smaller media. A few days before the publication, such media as Interfax , LB.ua, RBC, Obozrevatel, Espresso and others circulated the same abstracts, only with reference to the ES press office.

Back in the first quarter of 2018 Petro Poroshenko was one of Ukraine’s truest politicians – he said 65% of the truth, which was the second best figure since then Prime Minister Vladimir Groisman. But as the election approached, his positions weakened, he began to exaggerate his achievements and manipulated criticizing his opponents.

Even though Poroshenko did not talk much for some time after losing the presidential election, we expected that the ex-president would come back with a healthy critique that is often lacking in the Ukrainian political environment. Unfortunately, his correspondence, as well as the statement of the EU press service, did not add optimism.

According to our analysis, almost every point of criticism was manipulation or lies.

Abolishment of the rural medicine program

Manipulation. A subvention for the development of medicine in rural (countryside) areas, which amounted to UAH 1 billion in 2019 , is not really foreseen for 2020.

But this is not the cancellation of the program. The transitional provisions of the law on the medical reform Law on State Financial Guarantees of Health Care of the Population stated that this subvention was temporary – only for 2018-2019:

“Temporarily, during the period of 2018-2019, according to the decision of the Cabinet of Ministers of Ukraine, it is allowed to finance the provision of primary health care to public health care institutions that have not concluded public health care contracts with the Authorized Body by providing subventions from the state budget to the relevant local budgets. The terms, procedure and terms of granting such a subvention shall be determined by the Cabinet of Ministers of Ukraine. ”

The medical reform stipulates that primary care reform will be completed by the end of 2019. That is, by the end of this year, all “primary” establishments must enter into agreements with the NHSU and receive financing under the agreements. The reform of the next levels of health care facilities should start from 2020.

The activities of those medical institutions that have not concluded the contract can be provided only at the expense of local budgets.

In addition, according to The Accounting Chamber, as of 2018, only 17% of new outpatient’s clinics have been constructed from the planned volume, with the subsidy for the development of rural medicine. As of August 1, 2019, UAH 5 billion appropriation opened in Ukraine, under orders from the Ministry of Regional Development on the proposals of regional state administrations, 4.3 billion was allocated. Only UAH 1.9 billion was used. More than 61% of the funds – nearly UAH 3.1 billion – were not used and were in local budget accounts.

Priority increase of military funding is canceled

Manipulation. The budget for defense and specifically for the military servicemen payroll and cash security has been increasing annually since 2014. At the same time, there were even disparities between the cash support of the military and other law enforcement agencies. In 2020, funding for all agencies associated with the Ministry of Defense is also increasing:

• MO from UAH 101 billion in 2019 to UAH 117 billion in 2020;
• military intelligence from UAH 2.8 billion to UAH 3.6 billion;
• NSDC from 177 million UAH to 211 million UAH.

In terms of priority, annually, the NSDC decides on the priorities for spending the budget in the defense sphere:

• NSDC Decision for 2018, Item 5 “Take measures in 2018 to ensure the priority financing of the activity of the subjects of the security and defense sector of Ukraine in the following priority areas” subparagraph “E” states: implementation of social guarantees of military personnel, first of all increase in the structure of financial security for military servicemen the share of salaries, salaries by military rank.
• NSDC Decision for 2019 (the amounts of raises were specified in more detail): 1) to provide in the draft Law of Ukraine “On the State Budget of Ukraine for 2019” expenditures for ensuring national security and defense of Ukraine in the amount not less than the expenditures foreseen for 2018 , as a percentage of the gross domestic product, providing for an increase in the amount of cash security for servicemen, officers and police officers, not less than 30 percent, taking into account the minimum amount of cash security.

a) rank and file servicemen of the State Emergency Service of Ukraine and police officers – in the amount of not less than 9000 UAH;

b) military personnel of the first-year contract of not less than UAH 10,000.

c) To anticipate other expenditures taking into account the growth of the nominal gross domestic product in relation to the previous year (10%);

• NSDC Decision for 2020, paragraph 2, “Measures to ensure the first priority financing of the activities of the subjects of security and defense sector”.

In addition, payments are increased compared to 2019 for 2020, such as construction and purchase of housing for servicemen or social security.

Subvention to local budgets for extra payment for the third, fourth and further child is abolished

Manipulation. The 2020 budget does not have a separate program “State budget subventions to local budgets for the payment of assistance to families with children…” as it was in 2019.

But these expenses are not canceled – now they are part of expenditures of the Ministry of Social Policy under the program “Payment of some types of benefits, compensation…”

In addition, according to the the Budget Comittee conclusion, the Government plans to introduce assistance to citizens of Ukraine, foreigners and stateless persons who reside in Ukraine for the third and every subsequent child in the amount of UAH 1700 per month until the child reaches the age of 6, although at present, the issue is not regulated at the legislative level.

The “thirteenth pension” is abolished

Falsehood. There was no 13th pension in Ukraine. There were only reports of the possibility of its implementation.

Reducing the number of subsidies

Manipulation. In 2020 less subsidy money is actually budgeted – UAH 47.6 billion compared to UAH 55.1 billion in 2019.

But this does not mean reducing the number of subsidies themselves. In 2020, a real (taking into account the level of inflation) growth of the minimum wage and the subsistence minimum, as well as indexation of pensions, is planned. Therefore, the number of subsidies may remain the same, but the amount of compensation will be reduced as recipients will have more money.

In addition, part of the funds planned for the various subsidies are not used from year to year. For example, according to the State Treasury of Ukraine in January-September 2019 the payment of benefits and housing subsidies to citizens for the payment of housing and communal services in cash was made in the amount of UAH 15.2 billion out of the planned UAH 18.7 billion. This is due to the fact that the with renewed subsidy criteria turned out to be less number of people qualified for subsidy than expected, as since 2018 the conditions for granting subsidies are changing and their targeting is increasing. This is done to reduce the amount of fraud and subsidy schemes.

Cutting down spending on educational programs

Without a verdict. As a percentage of GDP, spending on the Ministry of Education and Science decreased from 1.04% in 2019 to 0.97% in 2020. The education subvention increased from 1.85% in 2019 to 1.91% in 2020.

According to the CES analysis, the expenditures of the consolidated budget for education as a percentage of GDP are reduced : from 6.1% in 2019 to 5.6% in 2020.

At the same time, expenditures on the Ministry of Education and Science and on education subsidies are increasing in absolute numbers. For Ministry of Education and Science from UAH 41.075 billion to UAH 44.550 billion. The subvention increases from UAH 73.043 billion to UAH 86.971 billion.

We leave this statement without a verdict, because we do not know in which units the expenditure is compared.

Downsizing EU standards regional development

Manipulation. Regional development by EU standards is largerly the standards of the European Charter of Local Self-Government. It is these standards, as well as other world practices, that underpin decentralization. Since no one cancels decentralization reform, our verdict to this statement – manipulation.

Curtailing decentralization reform

Falsehood. “One of the most successful reforms – the decentralization reform – has no place in the budget at all. In the last 5 years, through decentralization, local communities have been given the means and the right to determine their own directions of development and to use their resources effectively. And now their money is being taken to Kiev.

Through decentralization, local ATCs budgets have received:

• 60% tax on personal income;
• 100% of single tax revenues;
• 100% tax on profit of enterprises and financial institutions of municipal property;
• 100% property tax;
• 100% of the costs for providing administrative services;
• 5% excise tax on sales of excisable goods and excise tax on retail sale of fuel.

These funds are not taken from them.

On educational, medical, basic and reverse subventions were allocated UAH 132.668 billion in 2018 and UAH 142.503 billion in 2019. UAH 114.161 billion is planned for 2020.

This decrease is only due to a decrease in medical subvention by UAH 41 billion compared to the previous year. We have already explained the reasons above: since 2020, all primary care facilities should have a contract with NHSU and receive funding from the it, a secondary link will be transferred to the NHSU and in 2020 as well.

The educational subvention is planned in an amount of UAH 7.9 billion, which is more than last year, the basic subsidy increased by UAH 2.9 billion and the reverse one by UAH 1.9 billion.

Financing of the Armed Forces is 2.57% while the law stated for at least 3%.

Falsehood. By 2020, it is planned to allocate 3% GDP (including government guarantees) to the defense sector. 2,86% was allocated for 2019 (including government guarantees).