Ukrainian president signs decree on 2017 military spending
Ukrainian President Petro Poroshenko has signed Decree No. 278/2017, entitled "On the Ukrainian National Security and Defense Council (NSDC) resolution of September 13, 2017, 'On proposals to the Ukrainian draft law on the 2018 national budget' on articles relating to the provision of the national security and defense of Ukraine."
The decree brings the resolution into effect and entrusts control over implementation to NSDC Secretary Oleksandr Turchynov, according to the president's website.
The NSDC ordered the government to set aside at least 5% of GDP for the security and defense budget in 2018. Ukraine's national security and defense sector would need at least UAH 165,372,300,000, including at least UAH 158,997,300,000 from the general national budget fund and UAH 6,375,000,000 from a special national budget fund.
In particular, funding for the Defense Ministry in 2018 should consist of UAH 81,689,200,000 from the national budget's general fund, and 1,625,300,000 from the special fund.
For the National Guard and National Police, the figures would be UAH 10,354,000,000 (the general fund) and UAH 739,000,000 (the special fund), and UAH 24,277,200,000 and UAH 90,000,000, respectively.
The administration of the State Border Guard Service is to be allocated UAH 9,010,600,000 from the general national budget fund and UAH 33,200,000 from the special fund; the State Emergency Services, UAH 9,774,600,000 and UAH 969,400,000; and the Security Service, UAH 7,491,100,000 and UAH 160,900,000, respectively.
The government was also to consider funding in 2018 for a state target program to create and launch the production of ammunition and special chemical products by 2021 and a state target program to reform and develop the defense-industrial complex by 2021, at 0.5% of Gross Domestic Product (but no less than UAH 6 billion) on top of the funding for the national security and defense sector, as defined by the national security and defense development concept approved by the presidential decree N92 of March 14, 2016.
The government is also to plan annually for the spending on national security and defense needs at the expense of the special national budget fund, in accordance with their submitted justified proposals.
Starting from 2018, the government is to leave all special-fund receipts for financing the needs of the national security and defense entities that ensured such receipts.
Also in 2018 the government is to provide primary funding for national security and defense entities in the following priority areas: strengthening Ukraine's air defense system and Air Force capabilities; implementing the state cybersecurity policy; implementing measures to develop and upgrade special communications and information security; implementing the 2016-2020 national intelligence program reinforcing counter-intelligence protection and counter-terrorism and counter-sabotage measures; conducting intensive combat training of the Ukrainian armed forces and other legitimate military forces; securing the national border; implementing social guarantees for servicemen, primarily by increasing the proportion of wages and rank pay in the structure of their salaries.
The government also has ten days from the effective date of the 2018 national budget law to draft key indicators of the 2018-2020 state defense order and submit them for consideration to the NSDC.
In addition, the government has until November 1, 2017 to consider introducing a mechanism of favorable mortgage lending for troops, rank-and-file and senior personnel and their family members.
The official exchange rate as set by National Bank of Ukraine for September 18, 2017 is UAH 26.224 /$1.
On September 13 Poroshenko told the National Security and Defense Council: "In accordance with Ukrainian cabinet proposals, UAH 163 billion [about US$6.26 billion] is to be sent for the national security and defense needs in 2018. That is UAH 20 billion [$0.77 billion] more than in the current year."