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  • Ze Wakes Up and Fights Back
  • Foreign Construction Cos. Study Toll Road Plan
  • Ukravtodor to Fix 30% More Roads Next Summer
  • New UZ Chief Drops US Locomotive Deal
  • Kyivstar’s 4G Data Usage Jumps 50%

Rada members must prepare new bills marked ‘urgent’ to restore anti-corruption legislation invalidated last Tuesday by the Constitutional Court, President Zelenskiy said in an emergency National Security and Defense Council meeting. “The electronic [asset] declaration system in Ukraine will work,” he said, ordering its restoration. “Draft laws for its renewal should be prepared and sent to the Verkhovna Rada as urgent.” The Rada reconvenes this week. After the ruling party’s poor showing in local elections, it is not clear if the President still has a working majority.

If the National Security Council identifies the Constitutional Court’s actions as a threat to Ukraine’s security, Zelenskiy might propose a draft law that would reboot the court and fire all of its 15 judges,” writes the Kyiv Post. Hinting at this, Zelenskiy said: “The devastating blows inflicted on the country’s achievements in the fight against corruption and in corruption prevention in Ukraine cannot be ignored. The decisions of individuals whose actions are becoming increasingly socially dangerous have to be assessed immediately and rigorously.”

Court actions dismantling anti-corruption bodies drew fire from the EU and G-7 ambassadors in Kyiv. Analysts say at risk are: visa-free access to the EU and the IMF Stand-by Agreement.

Foreign and national construction companies will be able to participate in up to $2 billion worth of contracts to rebuild 1,500 km of highways in Ukraine through 2023, government officials announced at a webinar on Public-Private Partnerships in the Road Sector. Tenders are to be drawn up next year for six sections of ‘M’ or international highways, said Infrastructure Minister Vladyslav Krykliy. The six sections are the first phase of a $9 billion, 4,500 km project that is to stretch through the decade.

The first phase focuses on ‘brownfields’ – upgrading existing roads. These highway sections will be become Ukraine’s first toll roads, but will be “installment roads,” Krykliy said. Under this system investors first pay for construction, then recoup their investments through highway infrastructure, largely gas stations, restaurants and billboards. Ukraine is one of a few major countries in the world without toll roads. The online information session drew 310 participants from 43 countries and 38 companies, Krykliy later wrote on his Telegram channel.


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Ukraine’s PPP system is being developed with the advice of the World Bank’s IFC Group. Since 2014, IFC has advised governments on 147 public-private partnerships, an effort expected to draw $33 billion in private financing. In Ukraine, IFC advised on the recently completed concession contracts for Kherson and Olvia ports, contracts that are to bring in investments totaling $137 million.  Now, IFC is advising preparation of a tender for the concession of a container terminal in Ukraine’s Chornomorsk port and is analyzing concessions at rail stations. This project that could bring in over $150 million, says Jason Brett Pellmar, the IFC’s regional manager.

Ukravtodor plans to repair 6,800 km of roads next year, almost 30% more than the target for 2020, Alexander Kubrakov, head of the state highway agency, said at the presentation of the public private partnership plan for roads. Funding sources are: the Road Fund, funds raised under state guarantees, loans from international financials institutions, such as the World Bank, and possibly the first public private partnership.

Two months into the job as head of Ukraine’s state railroad, Volodymyr Zhmak announced last Thursday he will drop a $1 billion framework agreement signed in 2018 to buy as many as 200 diesel locomotives from Wabtec Corporation, formerly GE Transportation. “As for cooperation with General Electric, today I do not see the need for further purchase of General Electric locomotives,” he said at a press conference in Kyiv. “Our goal is to switch to electric locomotives, because it is much more economical.” Of Ukrzaliznytsia’s 23,300 km of track, only 44% is electrified.

Through late July, Ukrainian officials repeatedly said they are negotiating to sign a contract by the end of this year to buy another 40 locomotives from Wabtec – a purchase that would carry a $185 million price tag. This would build on an initial purchase of 30 Wabtec diesel locomotives in 2018-2019. Last January, President Zelenskiy told visiting US Secretary of State Mike Pompeo: “The Ministry of Infrastructure and Ukrzaliznytsia are already negotiating the purchase of a new batch of American-made locomotives.”

Most of UZ’s rolling stock have passed their intended life expectancies, Zhmak gave these ‘depreciation rates: UZ’s 958 electric locomotives and 227 diesel locomotives – 96%; 41,138 freight cars – 89%; and 2,040 passenger cars – 88%. To accelerate renewal of the fleet, he said UZ will spend $250 million next year to produce 4,200 new freight cars and to overhaul up to 20,000. The railroad plans to spend $145 million to overhaul locomotives. Ukraine has six locomotive repair plants. The nation’s sole locomotive production plant is in the part of Luhansk Region now under Russian control.

Austria’s Rail Cargo Group is launching a new weekly container freight train from central China to Vienna, through Ukraine. Separately, Rail Cargo, a unit of Austrian Federal Railways (ÖBB), recently announced that it is doubling – to twice a week – the frequency of its freight trains from Xian, China to Budapest, also through Ukraine. Previously, some China-Central Europe trains passed through Belarus. The China-Kazakhstan-Russia-Ukraine route provides “the best geopolitically, the fastest and most stable solution for the transportation of small goods between Xi’an and Vienna on a stable rail route,” the Austrian company told Ukraine’s Center for Transportation Strategies.

In the latest move to remove big trucks from Odesa’s residential areas, Euroterminal has started to build a rail spur to the Odesa-Peresyp rail cargo sorting yard, about five kilometers north of the historic port. As present, 80% of containers enter and leave Odesa Port by truck.

4G mobile telephone usage by Kyivstar subscribers was up 50% yoy in the third quarter, reports Ukrinform. The 4G network of Kyivstar, the nation’s largest mobile company, now reaches 84% of Ukraine’s population, the company reports. Of Kyivstar’s 25.8 million sim card holders, 65% use their phones for data. Due to the quarantine, “subscribers are using more digital products,” said Kyivstar President Oleksandr Komarov.

Belarus closed its borders last Thursday with Lithuania, Poland and Ukraine, reported Belarus’ State Border Committee, citing “the existing epidemiological situation in neighboring countries.” Although Russia’s coronavirus infection rate is 50% higher than Belarus, the Russian border was not closed. This leads some analysts to conclude that Alexander Lukashenko, the self-proclaimed president of Belarus, is preparing a crackdown before today’s US presidential election. Belarus is not blocking trucks from Ukraine, a major trading partner.

 

  • French Leads in Race to Supply Electric Locomotives
  • Ukraine Becomes EU’s Gas Station
  • PM Meets with IMF Europe Director
  • UIA Closes Offices
  • Rising Corona Infections Boost Remote Working
  • 4G Now in Kyiv Metro

French Treasury financing may push Alstom over the top in the race to provide Ukrzaliznytsia with 205 electric locomotives for the 2020s, according to reports from a meeting in Kyiv between Ukrainian officials and executives of the French rolling stock manufacturer. After meeting with Henri Poupart-Lafarge, CEO of Alstom, Arsen Avakov, Ukraine’s Internal Affairs Minister, said: “We have been working on the details of a common project with the French side for a long time and in the near future we can reach the signing of an intergovernmental agreement that will fully meet the needs of Ukraine.”

Both sides are to meet again this month to discuss what could be a €1 billion contract. President Zelenskiy stressed to the visiting Alstom executives the need to localize in Ukraine some of the locomotive production.

Ukraine started the winter heating season last week with natural gas reserves at a record 28.4 billion cubic meters. And today’s level is 30% above the level of this time last year, also a record, reports Naftogaz. With a total storage capacity of 31 million BCM, Ukraine’s underground reservoirs are 92% full, also a record. In the seven months since Naftogaz started storing gas last spring, the state company increased stocks by 80%.

Europe’s gas glut this summer benefitted Ukraine as 79 EU traders used Ukraine’s new duty free warehouse regime to store gas in 12 underground reservoirs. This fall, gas stored in this customs regime hit 11 bcm, triple the level of 2017. With the five largest reservoirs within 160 km of Hungary, Ukraine supplied Hungary with a record 9 bcm this year. “Thanks to market reform, Ukraine became Europe’s indisputable storage hub in 2020 as markets were facing suppressed demand linked to the pandemic and an underlying supply overhang,” writes Aura Sabadus, a senior energy journalist for London’s Independent Commodity Intelligence Services, or ICIS.

Prime Minister Denis Shmygal met in Kyiv with Alfred Kammer, the IMF’s new European Director. “We are rapidly converging positions with the IMF,” Shmygal wrote on his Telegram channel. “We just had a productive meeting with our international partners from the Fund. Ukraine has made significant progress in fulfilling its obligations. Many thanks to Alfred Kammer and the IMF for the dialogue. Strong partnership with the IMF is a guarantee of Ukraine’s long-term stability.” There was no comment from the IMF side.

In one concession to the IMF, the Cabinet of Ministers removed restrictions on salaries to government officials and members of supervisory boards. Last April, the government placed a $1,700 a month cap on remuneration. This move prompted some officials to leave public service over the summer and others to seek under the table cash payments from the Presidential Administration.

The online registry of officials’ asset declarations was closed last week, due to a Constitutional Court ruling, said the National Agency for Preventing Corruption, the agency that maintained the registry. The Court ruled unconstitutional public access to officials’ declarations and the agency’s authority check officials’ declarations and lifestyle. The ruling also cancels penalties for officials who lie in their asset declarations.

In protest, Oleksandr Novikov, head of the anti-corruption agency, told reporters: “The Constitutional Court returns Ukraine not even to 2013, but to 1991, when there was no anti-corruption legislation at all…The court has canceled all anti-corruption tools developed since Ukraine became independent.” 

In response, President Zelenskiy’s office said: There are still corrupt politicians who cannot tolerate the fact that their lifestyle, property and income can be under control.”  The president assured: “Relevant tools in Ukrainian legislation will be kept or at least reinstated.”

The EU delegation to Ukraine reminded UNIAN news agency of the “huge EU assistance, including financial, in various fields, respectively is directly related to anti-corruption bodies, which work independently, effectively and free from political or other pressure.” Addressing the ‘unconstitutionality’ of Ukraine’s anti-corruption institutions, the EU Mission said it “will be ready to provide assistance in choosing ways to restore the necessary legal certainty.”

The Rada’s Freedom of Speech Committee was forced to restore the accreditation of reporters who work with Slidstvo.info, Anna Babinets, editor-in-chief of the investigative project, writes on Facebook.  Over the last year, the group has produced a series of reports alleging corruption by Rada members, prompting the Committee to pull the press credentials of its reporters. Public outcry forced a reversal by the committee which is chaired by Nestor Shufrych, from the pro-Russian Opposition Platform party.

Two new checkpoints between the Russia-controlled and Ukraine-controlled portions of Luhansk Region will open Nov. 10, according to a decision of the Trilateral Contact Group  – Ukraine, Russsia and the Organization for Security and Co-operation in Europe, or OSCE. For the last six years, there has only been one crossing in Luhansk, at Stanytsia Luhansk. Ukraine banned trade between the two sections of the Donbas in 2017.

UIA is closing its offices in Austria, Germany, Italy, Spain and Switzerland to save money. Last month, the airline, based in Boryspil, closed its offices in Belarus, Turkmenistan and Uzbekistan.

Pavel Ryabkin, general director Boryspil Airport, is to become Ukraine’s third Customs Service director in a year, according to reports from the Cabinet of Ministers meeting. Later Finance Minister Sergei Marchenko told Interfax-Ukraine that he expects to quickly raise more money to help cover the government’s budget deficit and to continue the work of his predecessors to transform “Customs into a modern, transparent, efficient European standard service.”

Anatoly Fedorchuk, mayor of Boryspil, the Kyiv Region city that is home to Boryspil International Airport, died from Covid-19 three days after winning re-election. A new election will have to be held.

After almost 7,500 new cases were announced Wednesday morning, the Cabinet of Ministers decided to extend until Dec. 31 the emergency regime adopted last March to fight Covid. Prime Minister Shmyhal asked companies to switch to remote work to prevent the spread of the virus. He said: “I call on Ukrainian companies to switch to online meetings as much as possible so that we can create conditions for breaking the epidemiological chain.”

4G mobile service now covers 98% of Kyiv’s metro, according to a press release by the three participating cellphone companies – Kyivstar, Vodaphone Ukraine and lifecell. The fast service was extended to 23 stations. In December, Teremky, the southern Terminus of the Blue line, is to be last of the rail system’s 52 stations to connect to 4G. Already about one third of the system’s 800,000 daily riders are using the service, which averages 40 Mb/s. After starting in March, work is ahead of schedule in part due to the 2-month shutdown of the system last spring in an effort to block the spread of coronavirus.

 

  • Courts Move Against Western Reforms
  • Britain’s MI6 Reportedly Tells Zelenskiy His Chief of Staff is a Russian Agent
  • As Hopes Dwindle For IMF Tranche, Bond Auction Flops
  • Klitschko Wins on First Round
  • Farmers Thresh 50 Million Tons

Threatening Ukraine’s IMF accord and potentially its visa-free agreement with the EU, Ukraine’s Constitutional Court has ruled invalid the law on illegal enrichment and penalties for false declarations of assets and income, Sergii Leshchenko, a former Rada member, wrote on Facebook. The Court’s move comes as four judges are under investigation for potentially lying on their asset declarations. Earlier this month, in advance of President Zelenskiy’s visit to Brussels, several key members of the European Parliament said Ukraine’s failure to combat corruption threatens the 2017 visa-free deal.

Separately, the Kyiv District Administrative Court, has ordered the dismissal of a Western-supported anti-corruption investigator that was investigating corruption in the Court. Justice Minister Denys Malyuska responded on Facebook that he would not dismiss the investigator, Artem Sytnyk, head of the National Anti-Corruption Bureau of Ukraine. The Bureau said of the Court ruling. “Its purpose is to block the work of an institution that has exposed large-scale violations and an attempt to usurp power by the Kyiv District Administrative Court’s judges…investigations of multi-billion corruption in the Ukrainian government will be blocked.”

Concorde Capital’s Zenon Zawada writes of the Kyiv Court judge, Pavlo Vovk: “A critical battle is underway in the Zelensky administration that could mark a fatal rift in its relations with the IMF and the West…Not only does Zelensky need to keep Sytnyk in place (even as a mere symbolic gesture towards the West), but now he needs to get rid of Vovk, who is actively working to undermine Ukraine’s relations with the West.”

Vitaliy Shabunin, head of the Anti-Corruption Action Center, writes on Facebook that the ultimate goal is to cut off Western support for Ukraine: Who is organizing this? [Zelenskiy Chief of Staff Andriy] Yermak and [Yermak’s deputies Oleh] Tatarov and [Andriy] Smyrnov. This trio is responsible for the attack through the Constitutional Court, covering up for the Kyiv Administrative District Court and assaults on the NABU and a lot of other stuff.”

Richard Peter Moore, the new head of Britain’s MI6 intelligence service, warned President Zelenskiy in a face to face meeting in London earlier this month that his chief of staff, Andriy Yermak, is a Russian agent, reports PolitUA. The news site bases the charge on an extensive interview with Andrei Piontkovsky, the Russian mathematician and dissident living in the US since 2016. One week after Zelenskiy’s Oct. 7-8 trip to London, it became public that Moore met with Zelenskiy and warned him about leaks from his office.

Piontkovsky tells PolitUA’s Ksenia Kirillova that his knowledge of Yermak’s code name and Russian ties comes from his own “insider information from Moscow, from people close to Putin’s ‘bunker.’” But, Piontkovsy adds, “the actions of Andriy Yermak speak about this much more than any operational pseudonyms. He consistently harms the national interests of Ukraine by fulfilling ‘the desires’ of Moscow.”

Appointed Presidential Aide for Foreign Policy Issues in May 2019, Yermak offered a series of concessions to Russia and Russia-controlled Donbas. These moves were blocked by protests from Ukrainian civil society. On Feb. 11, Zelenskiy promoted Yermak to Head of the Presidential Office. Three weeks later, Zelenskiy purged most of the prominent, Western-oriented cabinet members, including Prime Minister Honcharuk, who previously ran a thinktank funded by EU and Canada. Over the summer, Yermak was seen as behind the purge of Ukraine’s central bank, a move contrary to the $5 billion Stand-By Arrangement signed June 9 with the IMF.

With skepticism growing about the IMF accord, the Finance Ministry managed to sell only 400 million in hryvnia bonds – about 7% of the volumes of the previous two auctions. After consulting with bidders, the seller decided not to put up for auction 6-month and 21-month bonds. After offering 4-year bonds, the seller rejected all six bids, for rates ranging from 11.4% to 12.5% ​​per annum. In the only successful offer, the Ministry sold the equivalent of $14 million worth of 1-year bonds at the previous rate of 10.3%. The seller rejected six bids at rates up to 11%.

State-owned Ukreximbank has offered to buy back up to $300 million its Eurobonds maturing in 2022 and 2025. The bank will use its own money to buy back the bonds in an operation designed to cut debt costs. Goldman Sachs International is the dealer-manager.

Kyiv Mayor Vitaliy Klitschko narrowly won reelection on the first round, eliminating the need for a runoff vote in Kyiv on Nov. 15, Sonya Koshkina, editor of LB.ua reports on Telegram. With 99.5% of the vote tabulated, Klitschko, a former champion boxer, won 50.6%. In voting for City Council, Klitschko’s UDAR [Punch] and Maryna Poroshenko’s European Solidarity scored 20% each. Other party votes were: Yednist [Unity] – 8.6%; Opposition Platform — For Life – 7.7%; Yulia Tymoshenko’s Batkivshchyna – 7.4%; Zelenskiy’s Servant of the People – 7.4%; and Holos [Voice] – 5.9%.

Ukraine’s farmers have threshed 50.5 million tons of grains and legumes from 12.9 million hectares, or 84% of the projected area, reports the Ministry of Economic Development, Trade and Agriculture. Harvests of the big crops are: sunflower – 11.6 million tons from 92% of the planted land; soybeans – 2.2 million tons from 80% of the land; corn – 14.5 million tons from 56% of the land; and 3.7 million tons of sugar beets dug from 41% of the planted land. Looking ahead, as of Tuesday, farmers have sown 89% of their winter crops, including 91% of winter wheat.

In the first four months of the grain marketing year, Ukraine has exported 15 million tons, down 16% from this time last year, reports the Agriculture Ministry, citing Customs Service statistics. After drought slowed the corn harvest, wheat and barley accounted for 90% of exports. With Black Sea wheat prices strengthening, Ukraine exported 57% of its 17.5 million ton self-imposed annual export quota. Due to poor weather last summer, the National Bank of Ukraine has cut its total grain and legume harvest estimate for 2020 to 67 million tons, down 11% from last year’s 75 million tons.

South Korea’s Posco International imported last week its first load of 41,000 tons of feed wheat from Posco’s new terminal at Mykolaiv. Last year, Posco completed construction in Mykolaiv of its terminal with an annual capacity of 2.5 million tons. At the time, Ju Si-bo, president and CEO of Posco International, said of his company, largely known as a steel maker: “In the face of growing instability in the global grain market, the company seeks to turn the food business into the next engine of growth and create a stable food procurement system to ensure the country’s food security.” Since then, due to the coronavirus pandemic, 22 countries, have partially or completely stopped exporting food.

 

  • Poor Election Showing Could Prompt Zelenskiy to Fire Economic Ministers
  • Government Predicts IMF Mission Will Come After US Vote
  • China-Ukraine Sign 5-Year Deal on Space Research
  • More Chinese Trains Roll to EU
  • Kyiv Metro Has Not Recovered from Covid Shutdown

Exit polls indicate that President Zelenskiy’s ruling Servant of the People Party did not win mayoral races in any of Ukraine’s 10 most populous cities, including Zelenskiy’s home town, Kryvyi Rih. Although no national party did well in a day dominated by local politicians, Sunday’s election spells hard times ahead for the neophyte president who was overwhelmingly elected 18 months ago.

“Less than a year and a half since his inauguration, the Zelenskiy presidency appears to be in grave trouble…Zelenskiy’s Servant of the People party looks to be in terminal decline,” Anders Åslund, the Swedish economist, writes in an Atlantic Council blog.  “These local election results appear to have confirmed that Ukraine no longer has the basis for a functioning parliamentary majority. Indeed, in the months ahead, it may even prove problematic to form coalitions of convenience for specific pieces of legislation.”

With a budget debate looming next week in the Rada, Zelenskiy may reshuffle the cabinet again, writes Timothy Ash. “Zelenskiy probably won’t be able to help himself, but will likely respond with a far reaching cabinet reshuffle,” he writes from London. “Likely we will see the minister of economy changed again, and likely also the minister of finance.”

Dragon Capital emailed clients that the weak showing “could precipitate potentially significant changes on the central government level, such as a reconfiguration of the parliamentary majority and/or a cabinet shuffle.”

The low turnout – 37% – and the failure of national parties to dominate regional strongholds means that no national political leader of party can claim victory. However, the poor showing of the Servant of the People party is expected to erode its once solid majority.

Voters were skeptical of the only economic proposal on Zelenskiy’s nonbinding referendum of five questions. Asked about a free trade zone for Kyiv-controlled Donbas, only 45% supported the idea, well below the 70% favoring legalizing cannabis for medical purposes. Final vote results are expected by the end of this year.

Ukraine expects an IMF review mission to come to Kyiv in mid-November, Yulia Kovaliv, Zelenskiy’s deputy chief of staff, tells Bloomberg. Approval by the team would lead to the release of a $700 million tranche, a move that would trigger the release of an additional $1 billion in EU and World Bank aid, says Kovaliv, who is in charge of cooperation with foreign donors. After Naftogaz pulled its $500 million Eurobond placement last week, Kovaliv said Ukraine will only return to the Eurobond market with an IMF program on track.

Two issues cloud a resumption of IMF disbursements for Ukraine: the budget deficit and central bank independence.

Through September, Ukraine’s budget deficit is $2.9 billion – four times greater that it was for the first nine months of last year, according to the State Treasure Service.  About 80% of the deficit stems from the creation last April of a special fund to fight Covid. About half of this money ended up being spent on road construction.

Central bank independence returned to the headlines with angry public statements by two Board members who were reprimanded two weeks ago. Both members, Kateryna Rozhkova and Dmitro Sologub, are the only holdovers from the National Bank of Ukraine Board that carried out the massive bank cleanup of 2015-2017.

Rather than leave quietly, Rozhkova, first deputy governor, posted a blast on her Facebook page. Such a decision destroys collegiality and poses threats to the National Bank’s truly impartial decisions,” she said, reacting to last week’s decision to strip her of almost all her power inside the central bank. “This does not comply with the principles of independence that were laid in the basis of the transformation of the National Bank in 2014-2015. I will remind you that this transformation was carried out with the IMF requirements.”

Sologub, also a deputy governor, tweeted that the attempted purge “was done in a murky and non-transparent way.”

China and Ukraine have signed a 5-year space research cooperation deal that encompasses 69 projects. The work is valued at “over 70 million,” reports Ukraine’s signatory, the State Space Agency. SpaceWatch.Global, a news site based in Bern, Switzerland, writes of Thursday’s deal for new information exchanges: “China has been pushing into countries like Ukraine for some time. Ukraine has a lot of technological knowhow that could (presumably) be acquired at relatively low prices, and with relatively less political resistance.” In 2016, an analysis by Kyiv’s Institute of World Policy totaled 21 China-Ukraine space contracts, worth $67 million.

Nippon Express, one of the top five global logistics services providers, plans to double its China-Europe container trains to 5,000 a year, reports RailFreight.com. Due to Covid restrictions, air freight is now 10 times the cost of rail. Before Covid, it was four times as expensive. With the rail gauge break in Belarus struggling to cope with the surge in traffic, Ukraine hopes to win more and more Chinese freight destined for Central Europe and the Balkans. At Kazakhstan’s main rail crossing point, Dostyk, expansion is underway to handle 1 million containers a year.

More Turkey-Ukraine military joint ventures are under discussion and negotiation. These include: joint production of mobile anti-tank missile systems, joint production of drone and helicopter engines in Turkey, and participation in a possible Turkish advanced combat aircraft. Oleh Urusky, deputy Prime Minister for Strategic Industries, told reporters in Kyiv that Ukraine’s Defense Ministry also is interested in Turkish corvettes, for production first in Turkey, then in Ukraine.

Five months after the Kyiv metro reopened after the strict coronavirus shutdown, its ridership is only 40% of capacity, Natalia Makogon, deputy head of the underground rail system told an online conference. At peak periods last year, the system carried 90% of its capacity of 2 million daily riders. Last year, the system carried 495 million riders, or 1.35 million a day.

In time for the fall foliage season, the Zhitomir Cardboard Factory, has produced its first paper – 1.5 tons – from fallen tree leaves. We are currently preparing to convert the paper batch into paper bags, paper dishes and cardboard,” Valentyn Frechka, the inventor, writes on his Facebook page. He posts a video of this new industrial process.

 

  • Turkey Becomes Ukraine’s New Best Friend
  • List of Arms Joint Ventures Gets Longer
  • Ukraine Benefits from Belarus Brain Drain
  • Klitschko Gets Covid – and a Nov. 15 Runoff

Turkey and Ukraine seem “to be edging toward a strategic partnership that could challenge Russia’s standing in the Black Sea region,” Metin Gurcan, a former Turkish military advisor, writes in a highly detailed article for Al-Monitor, a Washington-based English-Turkish regional affairs news site.

Ukraine today stands out as Turkey’s chief partner in a series of critical military technologies such as turbo prop and diesel engines, avionics, drones, anti-ship and cruise missiles, radar and surveillance systems, space and satellite technologies, robotic systems, active and passive armor protection systems and rocket engines and guidance systems,” writes Gurcan, who served as a Turkish military advisor in Afghanistan, Kazakhstan, Kyrgyzstan and Iraq before writing his Phd dissertation on Turkey’s changing military. “Technological cooperation between the two sides has dramatically increased over the past two years, laying the ground for a techno-scientific alliance with far-reaching implications for the geopolitical balance of power in the Black Sea basin.”

 

Highlights:

  • Drones: A new joint venture between between Ukrspecexport and Baykar Makina, manufacturer of Bayraktar combat drones “will finally resolve the Turkish defense industry’s long-running shortcomings in engine production.”
  • Space and intelligence satellite technologies. “Ukraine agreed to transfer technical knowledge to Turkey to boost Turkey’s fledgling space agency and a satellite research and development lab at Roketsan, Turkey’s leading state-owned manufacturer of missile and rocket engines and satellites…Havelsan and…Ukroboronprom have already signed a deal to cooperate in the production of satellite technology.”
  • Motor Sich engines: The sale of about a quarter of the shares of Ukraine’s engine manufacturer Motor Sich to Turkish firms, coupled with terms regarding know-how transfer, Turkey’s sale to Ukraine of surface-to-sea Atmaca anti-ship missiles with a range of 200 kilometers — a development that might change the geostrategic balance in the Black Sea region at the expense of Russia if both Ukraine and Turkey deploy those systems on their coastlines…Ukrainian assistance for jet engine development in Turkey’s TFX fighter jet project.”
  • Airlift: “Turkey’s recent military involvement in Libya and other conflict zones has underscored a pressing need for a jet engine-powered airlifter and Ukraine’s AN-178 aircraft is being considered as an option.”
  • Tanks:Ukraine might also help in overcoming the protracted engine problem in Turkey’s Altay national tank project, including the prospect of Ukraine supplying the diesel engine and other components of the first batch of tanks.”
  • Navy ships: “The two sides also began discussions on the prospect of joint ship maintenance and even Ukraine’s purchase of Turkish MILGEM-type frigates and gunboats.”

 

Looking ahead, this Ankara-based military analyst sees:Bilateral cooperation in the defense industry field might lead to joint military exercises and training enhancing the interoperability of the Turkish and Ukrainian militaries — a prospect that could alter the geostrategic balance in the Black Sea region. Moscow is doubtless keeping a close eye on the growing Turkish-Ukrainian rapprochement.”

Turkey is considering financing the completion of the second Ukrainian An-225 Mriya cargo plane, the world’s largest aircraft, Oleh Urusky, deputy Prime Minister – Strategic Industries Minister, said at a press conference at Ukrinform, the state news agency. Ukrinform reported that Urusky “also reminded that during the visit of the President of Ukraine to Turkey in October, a document was signed outlining the parties’ intentions to launch joint projects for the construction of warships, UAVs and all types of turbine engines.”

Dozens of Belarusian IT companies and at least 2,000 Belarusian workers have moved to Ukraine in the three months since Alexander Lukashenko violently cracked down on post-election protests, according to Ukraine’s Digital Transformation Ministry. The moves include hundreds of workers for Wargaming, developer of such world famous online games as World of Tanks, World of Warships and World of Warplanes, Oleksandr Borniakov writes on Facebook.

Other companies moving employees include PandaDoc, Viber, and Gismart. Each arriving worker generates $100,000 in foreign currency earnings, Ilya Neshodovsky, director of the Ukraine’s Institute for Socio-Economic Transformation, tells Deutche Welle. This would mean an extra $200 million for Ukraine.

After the disputed election, Ukraine’s labor short IT industry immediately courted workers and companies from neighboring Belarus. A trilingual website – in English, Russian and Belarussian – BelarustoUkraine.com – touts the advantages: 180-day visa-free stay, residency permits in three days, and tax rates about half the level of Belarus rates. Earlier this month, President Zelenskiy enshrined these perks in a special law. Ukraine’s European Association of Software Engineering embellishes the recruiting pitch noting that member companies have 500 job openings and that IT salaries in Ukraine are generally higher than in Belarus.

With Lukashenko determined to cling to power, 45% of Belarussian startups surveyed by Imaguru say they plan to leave. One year ago, the IT industry in Belarus, employed 55,000 people, accounted for 22% of exports, and six percent of GDP. In addition to the police violence since the Aug. 9 presidential election, there have been regular Internet shutoffs, losses of service that cost the industry millions of dollars and several damage its reputation for reliability.

Meest, the cargo delivery company, is launching direct air cargo service between New York and Lviv, Rostislav Kisil, president of Meest Group, said at a welcoming ceremony for a LOT Polish Boeing 787-9 Dreamliner. The Lviv-based cargo company is working out frequencies and which air company will be the main carrier. Tatiana Romanovskaya, the airport director said: “From now on, Lviv airport is becoming not only a passenger, but also a cargo aviation hub.” Before corona pandemic, the airport had a passenger route network of 50 destinations – three domestic and 47 international.

40 Ukrainian cities and regions entered the strictest ‘red’ quarantine zone, a nearly 60% increase. Kyiv remains ‘orange.’ Here are some ‘red’ cities: Boryspil, Chernihiv, Chernivtsi, Ivano-Frankivsk, Kharkiv, Khmelnytskyi, Mykolaiv, Poltava, Rivne, Sumy, and Ternopil. ‘Red’ means no mass events. Nationwide, the Health Ministry registers 61% occupancy rate for hospital beds allocated for coronavirus patients. Most patients are treated at home.

Kyiv Mayor Vitali Klitschko announced that he tested positive for coronavirus. “I feel good, but I must self-isolate,” he wrote on his Telegram channel. “I will be working from home.” Kyiv registered almost 600 new cases daily last week.

The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: www.ubn.news.

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