Inside Ukraine 45 the Government Policy the Government Policy

Inside Ukraine March 20, 2015 № 45 Content The Government Policy ................................................................................................ 1 The potential for conflict escalation in Donbas ........................................................................... 1 Officers demand changes in the General Staff ............................................................................ 2 Delay with the appointment of the Head of Anticorruption Bureau ........................................ 3 Economic situation ...................................................................................................... 5 The impact of a new IMF bailout program on financial system ........................................................................................... 5 The salvation of «Naftogaz» as an example of anti-reforms ..................................................... 7 Political Competition ................................................................................................... 9 The preconditions for the government restructuring ................................................................ 9 The potential competitors of “Opposition bloc” ......................................................................... 10 Inside Ukraine 45 The Government Policy The Government Policy The militants’ disregard of the Minsk agreements, vation and military discipline in the army -requires the concentration of their armed forces along the an immediate response from the authorities. front line and the need for a symbolic victory on At the same time, the competition for the head the eve of May 9 indicate an increased likelihood of of the National Anti-Corruption Bureau is about the deterioration of the situation in Donbas in the to be completed. Although the selection process coming weeks. was transparent and public, the authorities are now Taking this into consideration, the criticism from trying to influence the results because they do not military officers who demand changes in the General consider any of the candidates to be loyal enough. Staff - namely the optimization of staff, the career ad- Such approaches undermine the credibility of the vancement of commanders who have distinguished Ukrainian authorities among domestic society and themselves in combat and an improvement in moti- foreign partners. The potential for conflict escalation in Donbas Ukraine continues to adhere to the Minsk agree- on the principle “all for all” within five days after the ments unilaterally, while the militants’ actions are withdrawal of weapons. According to Petro Porosh- aimed at simulation rather than the actual with- enko, as of March 15, 2015, militants have violated drawal of heavy weapons. Not only does the capture the “ceasefire” regime more than 1,100 times. of Debaltseve after the Militants simulate These factors indicate the probability of an ceasefire reflect the mili- the withdrawal aggravation of the situation in Donbas in the tants’ deliberate ignoring coming weeks. The additional arguments for this of the Minsk-2 agree- of heavy weapons. scenario are: ments but also the disregard of provisions including • The increase of militant groups along the front the withdrawal of heavy weapons within 14 days af- line (according to experts’ estimates, there are ter the ceasefire, the OSCE’s inability to use drones 35-40 thousand militants in Donbas now, of to verify the process, the exchange of hostages based which 10 thousand are Russian militaries); Inside Ukraine 45 1 The Government Policy • The vigorous actions in Mariupol, Donetsk and • The improvement of conditions for sabotage Luhansk areas (frequent shelling of Shyrokino, operations with the arrival of spring (green Avdiivka and Stanytsia Luhanska); forests greatly increased the efficiency • The Kremlin’s pursuit to raise stakes in the of Russian commandos at the beginning confrontation with the West (a propaganda film of the conflict last year). “Crimea. Back home”, The Kremlin The recent attack of pro-Russian militants Vladimir Putin’s order continues to raise in Stanytsia Luhanska, Foreign Minister Sergii to put on full combat stakes in the con- Lavrov’s disapproval of the changes to the law alert the Northern fron tation “On special order of local government in cer- Fleet and certain units tain districts of Donetsk and Luhansk regions” with the West. of the Western Military and the statements of the Russian Federation District from March 16, 2015); President’s Press Secretary Dmytro Peskov that • The Kremlin’s understanding of the propaganda DPR/LPR signal on the failure of the Minsk importance of the 70th anniversary of Victory agreements are other proofs that this scenario Day symbolism; is possible. Officers demand changes in the General Staff The possibility of the conflict’s escalation and President written by commanders of the units who full-scale hostilities again shows the need for the retreated from Debaltseve was published in the me- improvement of Ukraine’s defense capacity and an dia, in which they wrote about the inaction of head- analysis of previous mistakes made by the military quarters in preparation for this operation. command of the country. The fact that, during anti- Major elements of their criticism included the terrorist operation (ATO), 65 % of Ukrainian losses low competence of the Officers draw in armored vehicles and General Staff and opera- Most of Ukrainian attention to the 70% of Ukrainian losses tional headquarters, insuf- incompetence of in artillery were a result losses in vehicles ficient work with hu man of pockets near Izvarino, and artillery resources, which means the General Staff. Illovaisk and Debaltseve were caused by no promotion possibilities for the most talented proves that the military “pockets”. commanders, a lack of motivation for military command - not the mili- men to stay in the army and the sporadic work of tary units - is to be blamed. These encirclements military prosecutors that does not ensure disci- led to considerable human losses. Recently, military pline in the troops. prosecutors published their conclusions, according Military headquarters continue functioning as to which 360 Ukrainian soldiers died, 180 people if there is no war. They have an excessively large were missing and more than 500 were wounded as staff, a complicated structure and extremely bu- a result of the Illovaisk pocket. Most of these losses reaucratic procedures. Military command does took place on August 29, 2014, when there was an not use intelligence enough, is unaware of the real order to retreat through the corridor provided by situation on the front line and often cedes initia- the Russian troops. tive to the separatists. The actions of the General Staff are criticized not A complex manage- A complicated only by public experts, but also by combatants. On ment system can be ex- management March 11, 2015, the media published an interview of plained with high num- sys tem is explained Colonel Viktor Pokusa, who analyzes mistakes of the bers of senior officers with excessive command and gives recommendations how to avoid who are to be employed at numbers of generals them in future. On March 12, 2015, an address to the respective positions. Ac- in Ukraine. 2 Inside Ukraine 45 The Government Policy cording to the army reform supported by the Presi- An increase in army size and an improvement in its dent, there is an initiative to create several more morale are directly related to increased motivation, in- headquarters and increase the number of general- cluding of a financial nature. After a year in the ATO level positions from 121 to 151. Combatants em- zone many units return home for demobilization. It is phasize that the staff of headquarters should be de- necessary to use these officers at least to transfer their creased by 3-4 times and all the officers employed experience to new conscripts who have just started there should go through the ATO zone first in order their training at the firing ground. Currently the gov- to understand the specific nature of current hostili- ernment uses only administrative methods – the presi- ties. Further, this would revive the soldiers’ trust in dential administration offered to oblige demobilized the General Staff. people to serve in the military reserve. Another way to return trust to headquarters and The officers have specific recommendations increase their efficiency is through the promotion of how to improve management in the army. Military commanders who have proved their efficiency in mili- command will show their tary operations. It is also important to work more with maturity if they consider Criticism should be conscripts whose appointment to higher positions is such remarks without try- considered, blocked due to the resistance of career officers. ing to deny any criticism. not denied. Delay with the appointment of the Head of Anticorruption Bureau On February 7, 2015, Petro Poroshenko stated of Justice, the Ministry of Education, the Ministry that the Head of the National Anticorruption Bu- of Healthcare and the State Fiscal Service. reau (NAB) would be appointed within the follow- The commission granted the strongest sup- ing week. Since then, six weeks have passed, but port to Viktor Chumak, MP from “Bloc of Petro no one knows who will head the new agency deal- Poroshenko” and deputy head of the anticorrup- ing with the fight against corruption. The problem tion committee at the Verkhovna Rada (7 votes), is that both the President and the Prime Minister Artem

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