Ukrainian Veteran Fund, nontransparent procurements for Independence Day celebration, and additional payments for military retirees

While the Verkhovna Rada is on vacation, the Cabinet and the President will be changemakers of our state and our lives. Today we will address the last initiatives by the top executive body of Ukraine — the Cabinet of Ministers. Lately, it allowed the Ministry of Veteran Affairs to create the Ukrainian Veteran Fund, defined a list of works and services to be procured for the celebration of Independence Day via the negotiated procedure, and introduced additional payments for military retirees under the pressure of lawsuits and protests.

 

Creation of the Ukrainian Veteran Fund

Cabinet resolution #720 of July 2021

Who is affected: the Ministry of Veteran Affairs, war veterans, and family members of the deceased war veterans.

Summary of the resolution: the Ministry of Veteran Affairs got permission to create the Ukrainian Veteran Fund that has to start its work next year. The Fund will work on the development and implementation of projects helping veterans and their families, provide support for veteran businesses, in particular, by providing grants.

What is right: the creation of the Fund is a proper response to the needs of Ukraine since during the seven years of war the number of veterans is steadily increasing and many of them need state help: rehabilitation, employment assistance, and aid for their business initiatives.

What else: while appointing the top management of the Fund, it is important to avoid malpractices that took place during the similar selection of the management of the Ukrainian Cultural Fund and other institutions.

 

Simplified procurements for Independence Day celebration

Cabinet resolution #736 of June 15, 2021

Who is affected: Ukrainian citizens, businesses, and government bodies.

Background: this year in June MPs addressed the system of appeals in public procurements. In addition, they introduced changes that allowed to procure goods, works, and services necessary for celebrations of the 25^th anniversary of the Constitution and of the 30^th anniversary of the Independence of Ukraine via the negotiated procedure. It lets to award contracts after just 5 days after the procurement announcement was published via the electronic system.

Summary of the resolution: the Cabinet approved the list of goods, works, and services to be procured for the celebration of the 30^th anniversary of independence via the simplified negotiated procedure. In particular, leasing of stands, designing of the event, organization of exhibitions, fairs, and congresses, transport and hotel services, catering, etc.

What is wrong:

• in contrast to events like natural disasters and other unpredicted events, the preparations for the Independence Day celebrations could have started long ago. Most of the necessary goods, works, and services are available on the market, so there were no good reasons to resort to an emergency procurement procedure
• fast-track procurement procedure limits the participation of businesses, interferes with optimal market competition, and is prone to corruption.

Additional information: lately, government bodies tend to bypass electronic auctions for some procurements. Apart from procurements for the celebration of state holidays, there is also the construction of the Kyiv orbital road that will cost at least ₴85 bln. This tendency is a sign that authorities’ actions concerning budget funds become less transparent, thus, corruption risks are increasing.

Alternative solution:

• to plan public procurements necessary for the celebration of state holidays and other events in advance
• to use special procurement procedures only in emergency cases.

 

Additional payments for military retirees

Cabinet resolution #713 of June 14, 2021

Who is affected: military and law enforcement retirees.

Background: since changes to the law on pensions for military retirees came into force in March 2018, pensions for new military retirees are calculated by different rules than for those who retired before this date. In other words, persons that occupied the same positions and had equal ranks during their service now get different pensions. As a result, military retirees bombard courts with lawsuits and demand to recalculate their pensions.

Summary of the resolution:

• service members that retired after March 1, 2018, will get additional monthly payments of ₴2,000
• new minimum pension for former soldiers and law enforcement officers is set at ₴3,854

What is right: the decision will at least partially amend the problem and decrease the number of lawsuits concerning pension recalculation.

What is wrong: this unplanned increase of welfare payments and pensions will distort budget planning, increase spendings from the government budget and the Pension Fund thus contributing to higher inflation and budget deficit.