Peace and Economic Development in Donbass
(Rehabilitation plan for Donbass)
KYIV 2014
CONTENT
І. Special parliamentary-governmental commission on post-conflict settlement in the Donetsk and Lugansk oblasts. 4
ІІ. Formation of government - a model for transition period. 6
ІІІ. Measures on restoring public safety and establishing a peaceful life 8
ІV. Measures for economic rehabilitation of Donbass. 10
V. Solving social problems of region's residents and internally displaced persons (IDPs). 13
VI. Cultural and humanitarian component of the process of social stabilization. 15
VII. Establishment of subsidiary institutions to accelerate the rehabilitation and development of the region 17
Post-conflict settlement in the Donbas based on the scenario that includes the restoration of the Donetsk and Lugansk oblasts as part of a unitary state may be successful with an active, and consistent state policy. This public policy must be formed by an appropriate institution and formalized in the form of an operational and strategic plan that will be consistently implemented in practice.
І. Special parliamentary-governmental commission on post-conflict settlement in the Donetsk and Lugansk oblasts.
A special parliamentary-governmental commission on issues of post-conflict settlement in Donetsk and Luhansk oblasts (hereinafter - the Commission) must become a single center.
The mission of the parliamentary-governmental commission is to initiate the process of developing a state program of rehabilitation and socio-economic recovery of Donbass.
Within the parliamentary-governmental commission 3-5 standing working groups will be organized that will work under the direction of 2 co-chairs (CMU and VR representatives).
The Commission shall be chaired by a specifically appointed Deputy Prime Minister. MPs, including Chairpersons of the VR Committees on Construction, Urban Development, Housing and Regional Policy, State-Building and Local Government, Industrial and Investment Policy and others must be invited to participate in the work of the Commission. They will be invited to meetings should issues that apply to their jurisdiction arise.
In addition to profile ministers (or their deputies), heads of other central bodies of executive government, companies, the Commission should include representatives of Donetsk, Luhansk and a number of adjacent oblasts, financiers, industrialists, businessmen, representatives of churches.
The staffing of the Commission shall be ensured by the Secretariat of the Cabinet of Ministers of Ukraine. Special attention should be paid to the legal support of the process, funding and anti-corruption control.
Amendments to the legislation should be promptly considered in the Parliament as urgent (the development of appropriate initiatives of the President of Ukraine should be properly organized).
The Commission priorities include:
1. Monitoring the current status of territories under the government control and creating a “map of problems” - the state of local governments, life support systems, critical infrastructure, housing, objects of social infrastructure, technological security, crime, epidemiological situation, etc. Developing the list of affected citizens and identifying the scope of necessary targeted assistance.
2. Defining the personnel reserve that can be used to form regional and local governments, law enforcement, and local police. Making necessary appointments, allocation of resources for priority needs. Restoring local authorities on a consensus basis - appointed local leaders must be accepted by the people and at the same time be prepared to work with the central government.
3. Creating a relevant State Program with International Assistance ("Plan of Peaceful Restoration of Donbass").
4. Creating public projects in various sectors - roads, transport, urban development, health care, etc.
5. Adopting the Inter-Regional Program on Donbass Support - involvement of other regions of Ukraine in the process of Donbass recovery.
6. Involving international financial, technical and humanitarian assistance (World Bank, IMF, EBRD, UN, OSCE, OECD, EU, Council of Europe, the USAID, the International Committee of the Red Cross (regional delegation), the International Red Cross (National Committee).
7. Due to the persistence of war risks the problem of relocation of defense enterprises deep into the territory of Ukraine; relocation of military units to the eastern border and strengthening defensive capacities; engineering border management remain relevant. Discontinuing the territorial principle in forming border control troops and units of the Armed Forces of Ukraine.
ІІ. Formation of government - a model for transition period.
1. Implementing a combined governance model in the region. Switching to a zonal principle in the formation of a transition governance model in Donetsk and Lugansk oblasts. In particular, singling out the following three zones:
• peaceful areas and cities that have not been part of a war zone, where presidential elections were held and which are managed by respective Oblast Administrations and Local Self-Government;
• blocked areas and cities (under the control of illegal armed groups that operate under the auspices of or in alliance with DNR-LNR and which have been liberated in the course of the ATO from any illegal armed groups) that are passed under the control of temporary administrations of areas affected by a regional emergency;
• areas and cities, some of which are partially controlled by representatives of the Ukrainian authorities and ATO units.
2. Defining “unblocked” areas and communities (cities, metropolitan areas, settlements) as areas affected by a social emergency. A special status shall be set by a resolution of the Cabinet of Ministers of Ukraine on the basis of the existing regulatory framework and opinions of special expert commissions (e.g. the urban areas of Sloviansk-Kramatorsk, Lysychansk-Siverskodonetsk, some cities - Gorlivka, Druzhkivka, Kostiantynivka).
3. Implementing a set of measures and procedures aimed at restoring full law enforcement in unblocked areas (SBU, PGO, police, courts).
4. The CMU defines the legal regime of areas affected by the social emergency, enters into contracts for works with other states and international organizations.
5. The CMU defines the full scope of international economic activity on territories affected by the social emergency.
6. The coordination of work in these areas shall be carried out by a central executive body that implements the state policy in the sphere of managing a zone affected by the social emergency - the Administration of Territory affected by a regional-level emergency.
7. Emergency response measures shall be funded by the State Budget of Ukraine and other revenues. The regulation of economic activity, including a temporary tax exemption and the principles of foreign economic activity of the area affected by the social emergency of a national or regional level.
8. The Cabinet of Ministers of Ukraine provides the population with the necessary information on the status of the territory.
9. The CMU defines the full scope of international economic activity on territories affected by the social emergency.
10. Control over the observance of the legal regime in the areas affected by the emergency situation is carried out by the envoys.
11. It is advisable that the CMU prepare and submit to the Verkhovna Rada a Draft Law “On the Temporary Regime in the Areas of Emergency Situations.”
Re-elections of local authorities
The decision to hold early elections may be taken only after a full stabilization is achieved, the elimination of street banditry is ensured, the work of law enforcement agencies is restored in respective oblasts and individual settlements.
It is of principle importance that early elections were held in two phases:
• during the first phase elections should be held to local self-government bodies at the level of local territorial communities (city, town, townships);
• during the second phase oblast-level elections should be held (Donetsk and Luhansk oblasts).
ІІІ. Measures on restoring public safety and establishing a peaceful life.
1. Measures on demining territories, eliminating threats to life and health of the population, including the decontamination of areas affected by man-caused emergencies resulting from armed clashes.
2. Monitoring of the living conditions of the population, determining threats arising from chemical pollution, radiation, presence of toxic waste products resulting from armed clashes. Disposing toxic waste, ensuring their safe storage.
3. Detection of unburied bodies, places of irregular burial. Registering, accounting and identifying unidentified corpses. Organizing proper burial of the victims.
4. Taking incremental steps to ensure disarmament of the population: from voluntary surrender of weapons, to paying money for surrendered weapons; organizing registration of traumatic and hunting weapons.
5. Organizing investigation of military and war crimes prosecution of individuals, who committed such crimes. Accepting applications from victims, fixation of evidence. Ensuring the possibility of reparation for victims, return of stolen (expropriated) property, real estate, businesses to legal owners. Overcoming criminogenic risks, organizing the work of local police - a network of precinct officers, patrol service.
6. Taking measures to improve the epidemiological situation: recovery of sewers, containers and treatment facilities. Recovery of water, gas and power supply, sewage, removal of household garbage. Cleaning in homes and surrounding areas.
7. Construction of temporary points of health care (based on mobile hospitals of the State Service for Emergency Situations and the MoD). Taking steps to restore fixed medical stations, health care providers (MoH).
8. Restoration of payments of pensions and social assistance; targeted assistance to those left without property. Organizing food and humanitarian aid supplies.
9. Organization the work of public transport.
10. Repair of dwellings affected by the emergency.
11. Restoration and maintenance of uninterrupted power, gas and water supply to technologically dangerous objects.
12. Taking measures to prepare for the heating season, insulation, development of alternative sources of heat for the population in cases of emergency.
13. Organizing ongoing monitoring of the status of facilities with technogenic risks - mines, quarries, power plants, water utilities, gas and water supply pipelines, sewerage, man-hazardous enterprises to determine the level of damage resulting from clashes and determining the amount of work necessary to locate and eliminate man-made threats. Establishing the regime of continuous monitoring of man-dangerous objects.
ІV. Measures for economic rehabilitation of Donbass.
Large business and infrastructure:
1. Restoring damaged infrastructure: roads, railroads, electricity and water supply networks at the expense of the state budget and attracted financial support of Western partners, international financial institutions (World Bank, EBRD, etc.).
2. Developing state programs of rehabilitation of basic industries in Donetsk and Luhansk oblast (metallurgy, coal industry, power industry, chemical industry, engineering) in cooperation with industry associations.
3. Organizing donor conferences and creating special funds for financial assistance with the help of Western partners and international financial institutions to implement industry rehabilitation programs and support projects to reconstruct and restore infrastructure in Donetsk and Luhansk oblasts.
4. Creating a Regional Bank of Reconstruction and Development with the support of international organizations.
5. Forming government contracts to implement infrastructure projects to increase local demand for domestic products (metal products, building materials, machinery).
6. Setting a priority to return VAT to exporting enterprises in the region in order to provide working capital required to maintain operating cycle amid limited access to credit environment.
7. Ensuring full payment of accounts receivable on behalf of the state and state-owned enterprises to regional enterprises, particularly in the sphere of power generation, housing and utility sector.
8. Providing assistance in restructuring loan commitments of enterprises in Donetsk and Luhansk oblasts. In particular, in consultation with representatives of financial institutions, we should introduce a temporary deferral of loan payments (3 months, on “old” loans) for regional enterprises to Ukrainian banks and provide targeted refinancing to banks from the National Bank of Ukraine.
9. Establishing the State Insurance Agency for export-import operations. First of all, to provide insurance coverage against military, political and infrastructural risks.
10. Streamlining administrative procedures related to tax payments and customs clearance at import and export operations.
11. Creating conditions to increase investment in rehabilitation and reconstruction of infrastructure in the region by domestic enterprises. In particular, apply accelerated rate of depreciation; grant energy supply and energy generation companies a right to use tariffs with an investment premium.
Small and Medium Enterprises:
1. Implementing measures on maximum deregulation and liberalization of administrative procedures that regulate activities of small and medium-sized businesses - tax, customs, licensing procedures and other regulatory procedures. These measures may be implemented as a pilot project of “regulatory guillotine”. In case of successful realization this experience could be further applied in the rest of Ukraine.
2. Introducing tax breaks for small and medium businesses, for up to 6 months.
3. Introducing temporary moratorium on inspections and audits of business (1 year), operating in fields, which do not pose a threat to human life and health.
4. Introducing temporary deferral of credit payments (6 months) by regional enterprises to Ukrainian commercial banks, providing targeted refinancing to banks by the NBU.
5. Maximal simplification of the procedure of starting a business and creating a special fund for financial support of small and medium enterprises, including the those supported by Western partners and IFIs (grants / soft loans).
Financial and Banking Sector:
1. Providing refinancing to banks suffering from the deterioration of payment discipline in Donbass by the NBU;
2. Expanding the list of security instruments used to provide NBU refinancing. This list should include corporate issuers with high credit ratings in Donetsk and Luhansk oblasts with priority given to export-oriented enterprises.
3. Introducing loan repayment breaks to individuals and entities (temporary delay in servicing loans) registered in the ATO area, subject to refinancing of banks by the National Bank.
V. Solving social problems of the region's residents and internally displaced persons (IDPs).
1. Providing for the needs of the most vulnerable social groups (disabled, elderly, children deprived of parental care) by creating a special support service in Donetsk and Luhansk oblast in the areas of greatest concentration of refugees and internally displaced persons.
2. Ensuring a stable operation of emergency medical care in areas of social emergency. In particular, providing protection of medical teams, if necessary.
3. Creating conditions for children’s education in the areas of social emergency. In particular, organize transportation of children to functioning schools, guarantee opportunities for graduates to pass SATs, provide textbooks, allocate state subsidies for school meals.