- Romania, Moldova and Ukraine are negotiating restoring a 400 km, Soviet-era high voltage transmission line that ran from South Ukraine Nuclear Power Plant in Mykolaiv region to Isaccea, a Romanian border town on the right bank of the Danube. This north-south line would be rebuilt for 400kv and would be integrated with ENTSO-E, the European Network of Transmission System Operators. The Ukrainian portion would cost EUR226 million. The project is expected to be approved next October at a European Council of Ministers meeting. At present, most of Ukraine’s electricity exports come from Burshtyn, a coal-fired power plant in northern Ivano Frankivsk. The plant is disconnected from the main Ukrainian network and synchronized to the European grid. Burshtyn power enters the Hungarian grid through a substation in Ukraine’s border city of Mukachevo.
- Through November, Ukraine’s electricity exports increased by 34.4%, the Ministry of Energy and Coal Industry tells Interfax. Burshtyn thermal power plant supplied 60% of the 4.7 billion kWh in exports. All exports went to Europe.
- Ukrzaliznytsia, the state railroad, plans to build or buy 32 locomotives and 8,780 gondola cars for moving grain in 2018. This one year capital expense of almost half a billion dollars comes after loud complaints from farmers about rail bottlenecks between farmgates and the Black Sea ports.
- Transit of Russian natural gas through Ukraine’s gas transportation system increased by 13% in 2017, hitting 93 billion cubic meters, the highest level since 2011, Naftogaz reports. Separately, coming from the West, five European countries now store gas in Ukraine, taking advantage of a new customs regime that allows duty free storage for 1,000 days. As a result of the break up of pre-2014 supply monopolies, 54 gas importing companies now work in Ukraine.
- Ukraine’s trade with Russia is rebounding, seeing a 28.6% rise through November. Imports jumped by 38.6%, while Ukraine’s exports east rose 11.9%, the National Bank of Ukraine reports. The bilateral deficit with Russia, once Ukraine’s largest trading partner, is $3 billion. To the west, Ukraine’s exports to the EU jumped by almost one third, hitting $12.8 billion. Ukraine’s trade deficit with the EU is $3.7 billion.
- Poland’s exports to Ukraine exceed pre-crisis levels of 2013. During the first three quarters of 2017, Polish exports to Ukraine grew by one third, to almost $4 billion, according to Dziennik Gazeta Prawna, citing Poland’s Main Statistical Office.
- New car sales in Ukraine jumped by one quarter in 2017. Last year, 80,271 new passenger cars were sold, 24.5% more than in 2016. For the first time since the 2014, two brands were at or near the 1,000 sales mark for one month, according to AUTO-Consulting. In December, Ukrainians bought 1,121 Renaults and 967 Toyotas.
- Ukraine’s new Road Fund starts this week with $1.7 million to be allocated this year for highway construction and repair, Prime Minister Groysman writes on Facebook. About one third of this money is to go to regions. Under a new system, Ukravtodor, the state highway agency, is responsible for 50,000 km of roads, and the regions are responsible for 120,000 km.
- Kredmash increased production and sales of asphalt mixing machines by 53%, to 49. Decentralization of tax revenue and of road repair responsibilities was behind the big jump in 2017, Vladimir Ponomarenko, sales director Kremenchuk-based company told Interfax. He said: "2017 will really go down in history as a year of extraordinary recovery. For a long time we did not work so hard. Now, we have orders for two quarters ahead."
- Ukraine’s government plans to extend $225 million, a record amount, in support to the nation’s ‘agro-industrial complex,’ Interfax reports. Although this year’s harvest is down slightly, exporters are drawing on stocks, pushing farm exports through November up by 19%, compared to the same period last year, hitting $16.4 billion.
- “Ukraine’s Ban on Selling Farmland Is Choking the Economy” reads a new article in Bloomberg/Business Week. The article says: “While Ukraine boasts one of the world’s richest concentrations of fertile black soil, its crop yields are among the lowest in Europe…Wheat yields are less than half of those in Germany.” The reporters quote farm managers saying they would invest more if they owned the land. Instead, the system of leases, often for only 3-5 years, leads to checkerboard fields and low incentives to invest in modern fertilizers.
- Anders Aslund writes a downbeat forecast for 2018: “Which Will Be Europe’s Poorest Country? Ukraine or Moldova?” Posted on the Ukraine Alert blog of the Washington-based Atlantic Council, the Swedish economist says foreigners soured on Ukraine in the second half of 2017, when “investors began to realize that the complex judicial reform that was underway would not cleanse the judicial system and thus reliable property rights would not materialize.” After Ukraine’s successful $3 billion Eurobond sale last September, politicians were emboldened to slow free market changes, antagonizing the IMF and EU. Aslund predicts: “At present, it looks doubtful whether either of these institutions will provide Ukraine with any funding in 2018, as their compassion has been replaced with distrust.” Finally, he writes: “Sadly, the ruling coalition does not seem to be interested in a real independent anti-corruption court or electoral reform even if legislation is under way..they should focus on securing real property rights so that Ukraine can boost its investment ratio to 25-30 percent of GDP and grow by 6-8 percent a year.”
- As Ukraine’s economy becomes more export-oriented, five food items far outstripped the 2017 inflation rate, forecast at 13%. According to Oleksiy Doroshenko, director of the Ukrainian Association of Trade Networks Suppliers, the biggest price jumps were: lard +68%; beets +58%; carrots +57%; pork +37% and beef +30%. Increasingly Ukrainian consumers compete with foreign buyers. For example, during the first three quarters of 2017, Ukraine exported 185 tons of sausage – a 54% increase over the same period in 2016.
- Former prime minister Arseniy Yatsenyuk has sold 30% of shares in Espreso.TV to Atmosphere Entertainment, Inc., a New York-based company controlled Ivan Zhevago, son of MP Kostiantyn Zhevago. The price was $1.5 million, Yatsenyuk's spokesperson Olha Lappo wrote on her Facebook page.
- Ukraine started Monday to selectively collect biometric data, largely fingerprints, from foreigners crossing the nation’s international control points. Aimed at citizens of 71 countries, including Russia, border guards collected biometric data in the first 24 hours from 3,300 foreigners, about half of them Russians, the Border Guard Service reports.
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UBJ a.m. is reported by UBJ Editor in Chief James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow bureau chief. For comments and story tips, Brooke is reachable at firstname.lastname@example.org