Oleksandr Danyliuk: “Donbas should become the face of reforms”
Official Kyiv is set to launch an international economic recovery plan for Ukraine's eastern territories, which are under the control of the Ukrainian state on the front lines with the so-called DPR and LNR supported by Russia. Since 2014, after the annexation of Crimea by the Russian Federation, Ukraine is experiencing rough times with the epicenter of hostilities in the East. Oleksandr Danyliuk, Secretary of the NSDC of Ukraine, outlined his vision of the situation in an interview with the Spanish newspaper El Pais.
"Donbas should not be seen as a problem, but as a place where Ukraine should focus its resources on reforms. Of course, it's hard to put them into practice, but we must do this", - Danyliuk, a 44-year-old engineer, financier, and economist explains. Previously he was an adviser to President Viktor Yanukovych, a representative of President Petro Poroshenko to the Cabinet of Ministers of Ukraine, a Minister of Finance (from April 2016 to June 2018), and an international financial adviser. He is now one of the most influential representatives of the new Volodymyr Zelenskyy's Presidential Administration and the Secretary of the NSDC of Ukraine, the coordinating body on national security and defense under the President of Ukraine.
"We should concentrate financial resources in the East of Ukraine. The most important thing is to create a critical mass. No one will feel the impact without it", - he says. The city of Mariupol was chosen to launch a plan to rebuild Eastern Ukraine, where an investor forum will be held in October. Mariupol is close to the front line, in the territory "where there is a large number of internally displaced persons, there is also small and medium-sized business, which is underdeveloped because people have little money", - Mr. Danyliuk said. In this region, "the prospects of starting a business are risky if the front line changes unexpectedly and forces you to leave from there as far away as possible", - he explains.
"The army gives a special atmosphere to this place due to its presence, because military equipment destroys roads and there is no incentive to build them if the war continues". "Moreover, there is the influence of Russia, which creates a constant sense of threat", - he adds. As a supporter of the idea of "fundamentally changing it all", Oleksandr Danyliuk suggests a "new concept" for the development of the eastern regions. According to him, "new hospitals" and "new schools" should be established in the East for "Donbas to become the face of reforms" in medicine and education. "We should also create the conditions for business development by preparing a relevant package of measures to stimulate small and medium-sized businesses, first of all, to create infrastructure and build roads, to move call centers there as part of the solution". The NSDC Secretary also looks forward to the involvement of international organizations such as the World Bank with its structures, such as the International Finance Corporation, the European Bank for Reconstruction and Development (EBRD); local budgets should also be engaged, he is convinced. "We have to do this now. I submitted this concept to the government", - he says. Recently announced projects by President Zelenskyy include irrigation plans for the South of Ukraine and the establishment of a High-Tech Center in Kharkiv.
In July, the Head of State stated that the restoration of Donbas would require 10 billion euros. Danyliuk does not want to give figures. "Everything has to be calculated accurately", - he says. "Will Russian investments be involved?" - we ask him. "We don't need Russian investment". They'd better keep it for payment to the territories after their reintegration for the enormous damage they have done there, he says, referring to the scale of destruction in the temporarily occupied territories of the separatist-controlled Donetsk and Luhansk regions. How to act in the so-called "people's republics" is what "we'll see after reintegration", he says.
"The war is very expensive, but we did not start it", - Danyliuk said not wishing to give a global estimate of costs but providing examples. "We spend 5,4% of our GDP on defense and security, and pay pensions, in particular, to those who reside in the temporarily occupied territories, as well as to internally displaced persons, who are now over 1,3 million", - he explains. In addition to these costs, we have other losses. "We do not receive taxes from companies that had given significant budget revenues. As a result of the war, we have reduced trade with Russia, which uses its transit levers, preventing us from trading with other post-Soviet countries, such as Kazakhstan. However, he elaborates: "Ukrainian companies find new alternative markets in Europe, so losses on the one hand turn into achievements on the other".
Danyliuk noticed that the end of the war will not reduce spending on security and defense: "Even after the war, we will not spend less on the army and security". We must create a powerful army, completely re-equip and modernize it, as well as reform key organs of the security and defense sector, otherwise it will cost us dearly", he said.
One of the most controversial points in the agreement in the East is the so-called "special status of Donbas". In this concept, there are different interpretations of the parties to the conflict, which are being negotiated in Minsk, the capital of Belarus, under the auspices of the OSCE. The Russian media interpret "special status" as the autonomy of the so-called DNR and LNR, or federalization, the status of which should be enshrined in the Constitution of Ukraine. The Ukrainian media describe this process as "decentralization", which does not require amendments to the Constitution.