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Introduction to the Defense Industry of Public Administration: While out of the Field of View of the Leadership of Ukraine

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Introduction to the Defense Industry of Public Administration: While out of the Field of View of the Leadership of Ukraine At the beginning of August, we published some results of the analysis of the state of affairs in the sphere of reforming the national military-industrial complex (MIC) and recommendations for the introduction of proper support for the formation and implementation of the state military-industrial policy (SMIP), as well as management of the enterprises, institutions and organizations of industry and science that are part of this complex (hereinafter – subjects of MIC) [1]. However, in the three months since then, a number of important events have taken place that encourage further discussion around these recommendations. First of all, while we, as well as the ex-Secretary of the National Investment Council and ex-member of the Supervisory Board of the State Concern (GC) "Ukroboronprom" D. G. Arakhamiya and a member of the Board of the Ukrainian Institute of Security research V. Badrak considered it appropriate to recommend to the leadership of Ukraine to form a new profile Ministry (of Industrial and Military- Industrial Policy) to perform the following main tasks: ensuring the formation and implementation of SMIP; determining priority areas for the development of the defense industry; ensuring normative-legal regulation in this area; analyzing the state and trends in the development of the Defense industry, State management of its subjects; developing and organizing the implementation of State programs for the development of the Defense industry, etc. [1], [2]. As a last resort, it was recommended to form an Agency, for example, of the Defense Industry. However, his activities would be directed and coordinated directly by the Cabinet of Ministers of Ukraine by analogy (at the time) with the State Space Agency of Ukraine or the Cabinet would implement it through a specific Minister. As of today, taking into account a number of the following events, the recommendation on education for managing the defense industry entities of the new profile Ministry (of Industrial or Military-Industrial Policy) is no longer relevant. After all, on August 29, the Verkhovna Rada of Ukraine approved a new, significantly reduced Cabinet of Ministers of Ukraine. Compared to the previous Government, there are only 2 (not 6) Deputy Prime Ministers and 14 (not 19) Ministers who Head the Ministries. In addition, this Cabinet, in particular, introduced the post of Minister of Economic Development, Trade and Agriculture of Ukraine instead of the eliminated positions of Minister of Economic Development and Trade of Ukraine and Minister of Agrarian Policy and Food of Ukraine. On August 30 of this year, the President of Ukraine appointed A. Abromavicius as the General Director of Ukroboronprom [3], who thus received a carte Blanche from the Head of State to implement the plans he had previously published in the media to reform this main subject of the Defense industry. This is a very important issue that should be discussed separately and carefully. The Cabinet of Ministers of Ukraine (CMU) on September 2 of this year, in order to optimize the system of Central Executive Authorities, among other things, renamed the Ministry of Economic Development and Trade on the Ministry of Economic Development, Trade and Agriculture of Ukraine (Ministry of Economy) [4], to which it joined, after reorganization, the former Ministry of Agrarian Policy and Food of Ukraine. Based on this decision of the Government, a number of relevant changes were made to the regulations on the Ministry of Economy. But at the same time, its powers and main tasks in the field of Defense remained in the previous versions [5]. Recall that according to this provision, the Ministry of Economy, in particular: is the main body in the system of Central Executive Authorities that ensures forming and implements military-industrial policy, the State policy in the sphere of technical regulation, standardization, metrology and metrological activity, State policy in the sphere of state ownership objects management, including corporate rights of the state, public-private partnerships, intellectual property, state and public procurement and State order on training of specialists, scientific, scientific-pedagogical and personnel, advanced training and retraining; ensures the formation and implementation of the state export control policy; it is the authorized body for coordinating the implementation of the state defense order. prepares and summarizes proposals for the formation and implementation of state policy in the field of functioning and development of the Defense industry, the development of scientific and technical potential in the field of weapons and military equipment, improving the mechanism of state regulation in this area; determines together with other bodies of the security sector and defense priorities for the development of the defense industry, provides legal regulation in this sphere, analyzes the status and trends of development of the Defense industry, develops and organizes the implementation of State programs of the Defense industry development; ensures coordination of activities carried out by Central and Local Executive Authorities in the field of functioning and development of the Defense industry; performs a review of the Defense industry, develops a strategy for the development of the Defense industry of Ukraine; forms and submits a draft of the State Defense order to the Cabinet of Ministers, coordinates activities for the implementation of the State Defense order; together with the Ministry of Defense: organizes and coordinates the activities of the Central Executive Authorities in the field of military-technical cooperation; submits to the Cabinet of Ministers the draft laws, international agreements of Ukraine, and other normative legal acts in the field of military-technical cooperation; ensures the establishment of state control over the implementation of activities related to international transfers of military and dual-use goods. In such circumstances, it is unrealistic to expect that the Government will go to the formation of an additional narrow-profile Ministry for Industrial or Military-Industrial Policy. In this context, the former Secretary of the National Security and Defense Council of Ukraine (NSDC) O. A. Danyluk said on September 7 of this year that the "Shareholder" of the Ukroboronprom group will be the Ministry of Defense of Ukraine [6]: "Now (its) shareholder is the Cabinet of Ministers, my position is that the Cabinet cannot be a shareholder, some one of the Ministries should be a shareholder. The Ministry of Defense is the best option that we have discussed. This option also provides an appropriate link with the President (emphasized by us)," - Danylyuk said, adding that this decision has allegedly already been approved. "The most correct model is to turn it into a holding company, where a well-thought-out management system is the Supervisory Board, clear procedures — how the management is appointed, how its work is evaluated, audit, and procurement. In other words, all this should be built according to clear rules, as in a normal business. This is the kind of transformation we want to do now." On September 13 of this year, The General Director of Ukroboronprom group A. Abromavichus opposed this proposal [7]: "now the shareholder, as it were, of Ukroboronprom group is the Ministry of Economic Development, Trade and Agriculture of Ukraine. And the view that it may be the Ministry of Defense is not a final decision. In my opinion, the Ministry of Defense has a conflict of interest, and the Ministry of Defense also has other defense companies that are in a very bad state. Therefore, the Ministry of Defense, unfortunately, does not have a quality approach to managing the State-owned enterprises. Therefore, I would like to see Ukroboronprom remain (we stressed) under the Ministry of Economic Development, Trade and Agriculture of Ukraine." It should be recalled that even before that, in early July of this year, the former Secretary of the National Security Council of Ukraine O. A. Danylyuk made proposals on implementing reforms in the defense industry that were incorrect in legal and politically inappropriate. In particular, he announced the creation of a coordination center for the implementation of Defense Industry reforms, as a working body of the National Security Council, whose priority task will be to reform the SE Ukroboronprom. According to him, this Center should implement"... a quick and comprehensive analysis of the current situation, choose the optimal model for reforming the Defense sector, in particular, in terms of completely eliminating the possibility of committing corruption and the participation of politicians in this area, and effectively coordinate (we emphasized) the process of reforms implementing." Then we criticized this proposal. Because, firstly, such a Center, according to the Constitution of Ukraine, will only have the status of an Consultant Advisory or other subsidiary body. Therefore, it will not be able to coordinate the implementation of reforms in the Defense sector, but only to prepare proposals for the National Security Council on measures for such coordination. Secondly, there is still an Interdepartmental Commission on the Defense Industry as a similar working body of the National Security Council [8]. And to create another such body would be nonsense. It has not been working for more than six months. And the Chairman of this Commission, former Deputy Minister of Economy Yu. P. Brovchenko, was recently accused of treason and is under investigation. Thirdly, after a number of other well-known scandals in the Defense sector, in particular associated with the actions of the former first Deputy Secretary of the NSDC of Ukraine O. V.Gladkovskyi, we drew attention to the inexpediency of continuing the work established for the first years of independence of the State in the presidential structure (NSDC) in 2015, referred to the Interdepartmental Commission, given the fact that under the legislation the provision of activities in this sphere is the prerogative of the Executive branch [1].
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