The Recession Chorus in Nigeria

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The Declining Role of The Steel Sub-Sector in Broadening the Productive Base of the Nigerian Economy

Over the years, the steel sub-sector has performed below expectation, in its defined role to broaden the productive base of the Nigerian economy.

Although it is supposed to make available raw materials to industry, in addition to forming the market for solid minerals like iron ore, bauxite, petroleum coke and pitch, soda ash and calcium, this has not been the case.

Indeed, Government’s involvement in this sub-sector for several years has not improved its fortunes, as the case has  been in the  steel plants in Osogbo, Ajaokuta and Aladja.  These steel rolling plants when operational, functioned at very low capacities.

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In the case of Aluminum, the Aluminum Smelter  Plant at Ikot Abasi, a joint effort of the Federal Government and some foreign private investors, began partial operation after almost a decade of construction, functioned for almost a year and half, before it shut down.

Appreciable development in the sub-sector has up till the present time, been haunted by below average planning and implementation of projects, mismanagement, poor working conditions, lack of maintenance culture, shortage  of  infrastructure, increasing  debts and the inability of certain category of stakeholders to access loans from financial institutions and misleading media propaganda.

For Government, to make an headway in the sub-sector, it should encourage the development of linkage sectors to steel and aluminum activities, understand, review and encourage private sector needs, and work towards the formulation of  a policy  on aluminum.

With the above mentioned as a basis for achieving a turn around of the steel sub-sector, devoid of sinister and self-centered motives, the  sub-sector will play  its expected role in broadening the productive base of the economy. Maybe.

Why Health Workers Did Not Join The Nationwide Fuel Strike Action-Allied Health Porfessionals

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Workers in Nigeria recently embarked on a nationwide strike action to show their displeasure over the decision of the Federal Government to unilaterally increase the pump price of Premium Spirit(PMS)from N86.50 to N145.00. In this interview with Federationews2day, Chairman of the Nigeria Union of Allied Health Professionals(NUAHP), Oulsegun Sotiloye, who doubles as the Deputy President(South) of the same union, gives reasons why his union did not join the strike. Excerpts :

Allied Health Professionals did not join the strike called by the Nigeria Labour Congress(NLC). Why ?

Before I answer the question directly, let me first and foremost say, the labour movement is all about loyalty, so as a labour person, I am loyal to my union and my union, NUAHP, IS affiliate of the Trade Union Congress(TUC), and therefore the union is very loyal to the Trade centre, Trade Union Congress. Therefore, whatever directives given from above has to be followed. The Nigeria Union of Allied Health Professionals as a body, went in line directly with what the Trade Union Congress directed.

All branches, units, state chapters were put on alert, until around 11.00pm on Sunday(before the strike commenced), when the directive came that we should suspend action. That is as far as the directive or loyalty to the union goes. Personally, I don’t believe that a strike  action will be of benefit to Nigerians, concerning this struggle.

The labour union had said what should be paramount, is increment in salaries, implementation of palliative to cushion the effects of the increment, I will be more comfortable with that. And that invariably is what the TUC and the Ajaero faction of NLC subscribed to eventually, that is a committee to look at the increment of salaries, making available palliatives to cushion the effects of the price increment, because let it be told, going back to N86.50, fuel was not available, even though we know people are suffering.

Africa Must Harmonize Its National Plans With Agendas 2063 and 2030

Addis Ababa — Meeting at the Headquarters of the ECA on the sidelines of the African Development Week, African leaders and senior officials of the United Nations have just appealed for coherent and harmonious implementation of Agenda 2063 (for Africa) and the Sustainable Development Goals.

This was within the framework of a high-level ministerial dialogue chaired by Mr. Carlos Lopes – Executive Secretary of the ECA, with participants including Mrs. Zaineb Shasuna-Ahmed – Nigeria’s Minister of State for the Budget and Planning, Mr. Maged Abdelaziz – Under-Secretary General of the United Nations and Special Adviser for Africa, and Mr. Anthony Mothae Maruping -Economic Affairs Commissioner of the African Union Commission.

According to the Nigerian Minister, Mrs. Zaineb Shasuna-Ahmed, her country participates in all regional initiatives and will mainstream Agendas 2030 and 2063 into its new four-year Government development programme under preparation in order to achieve growth, formalize the informal sector to broaden the tax base, ensure consistency of all national priorities with the two frameworks and use precise and relevant indicators to monitor the progress achieved for each goal.

For his part, Mr. Maged Abdelaziz harped on understanding the relations between the two programmes prior to any reflection thereon. “In carrying out participatory and consensual preparation of Agenda 2063, African thus greatly contributed towards the preparation of Agenda 2030 on SDGs”, he said. He then appealed to Africans to work harder to ensure coherence and harmony between these two frameworks for which the United Nations, the ECA and the African Union continue to work to raise funds.

In the opinion of the African Union Commissioner, Mr. Anthony Mothae Maruping, “Africa has to implement the goals of Agendas 2030 and 2063 through national development plans”. The Commissioner also emphasized that “agenda 2063 is already under implementation with 12 goals for a start, and thus there is need to intensify actions mindful of the continent’s available resources, given that the goal is to achieve sustainable, lasting and structurally transformative economies”.

For Ministers and country Delegates, their interventions focused on data partnership and its importance, indicators, strengthening community institutions, technical assistance to post-conflict countries and the need to have information at all times on agenda 2063.

At the end of the high-level Ministerial dialogue, Mr. Carlos Lopes made a strong appeal to African leaders to deploy huge efforts to mobilize domestic resources to tackle Africa’s development challenge.

 Source : United Nations Economic Commission for Africa

Nigeria Needs To Be Saved From Nigerians or Their Leaders ?

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With the best opportunity in terms of goodwill  and unprecedented recovery of looted funds, the lives of Nigerians are yet to change for the better. Although the guiding light of the present administration in the country is change.

Sadly, Nigeria a major oil producer, still imports petroleum products, while it grapples with the dynamics of industrialization

The agricultural and aggro-allied sectors are yet to go past the rudimentary stages.

Faced with an underdeveloped agricultural sector, poverty is the sign post in the rural areas, since agriculture is the main economic base at this level.

Of worry is the sickly state of the country’s petroleum refineries, this is further compounded by the sorry state of electricity supply, despite several billions of Naira that have gone down the drain over the years.

With the kidnapping and killing of an Army Colonel in Kaduna, recently, the security situation still remains unpredictable, while  education in the country remains prostate.

Curiously security agencies now act as if the country has already drifted to a state of ”contrary views cannot be tolerated”.

Basic necessities of life are already beyond the reach of helpless and common, working class Nigerians, who have for  several months now, not been paid their salaries, which could best be described as pittance.

Chinua Achebe of blessed memory, a Professor of English, while commenting on the state of the Nation had once said, ”Nigeria is very dangerous. The population is helpless, so Nigeria needs to be saved”.

Nigeria needs to be saved from who ? Nigerians or their leaders ?

Since most Nigerians are impoverished and without hope, they eagerly accept whatever crumbs they can pick, that falls from the tables of men and women, who by whatever means bulldoze their ways into power.

Without doubt, Nigeria as a country is operating on the reverse, most sectors are collapsing, national ethos has collapsed and morality has also collapsed.

Even though the Presidency insists that the situation is improving, what is happening is visible for all and sundry to see.

Anemic recovery in emerging markets to weigh heavily on global growth in 2016

PRESS RELEASE

Global economy to accelerate modestly to 2.9%

WASHINGTON, Jan 6, 2016— Weak growth among major emerging markets will weigh on global growth in 2016, but economic activity should still pick up modestly to a 2.9 percent pace, from 2.4 percent growth in 2015, as advanced economies gain speed, according to the World Bank’s January 2016 Global Economic Prospects.

Simultaneous weakness in most major emerging markets is a concern for achieving the goals of poverty reduction and shared prosperity because those countries have been powerful contributors to global growth for the past decade. Spillovers from major emerging markets will constrain growth in developing countries and pose a threat to hard-won gains in raising people out of poverty, the report warns.

“More than 40 percent of the world’s poor live in the developing countries where growth slowed in 2015,” said World Bank Group President Jim Yong Kim. “Developing countries should focus on building resilience to a weaker economic environment and shielding the most vulnerable. The benefits from reforms to governance and business conditions are potentially large and could help offset the effects of slow growth in larger economies.”

Global economic growth was less than expected in 2015, when falling commodity prices, flagging trade and capital flows, and episodes of financial volatility sapped economic activity. Firmer growth ahead will depend on continued momentum in high income countries, the stabilization of commodity prices, and China’s gradual transition towards a more consumption and services-based growth model.

Developing economies are forecast to expand by 4.8 percent in 2016, less than expected earlier but up from a post-crisis low of 4.3 percent in the year just ended. Growth is projected to slow further in China, while Russia and Brazil are expected to remain in recession in 2016. The South Asia region, led by India, is projected to be a bright spot. The recently negotiated Trans-Pacific Partnership could provide a welcome boost to trade.

“There is greater divergence in performance among emerging economies. Compared to six months ago, risks have increased, particularly those associated with the possibility of a disorderly slowdown in a major emerging economy,” said World Bank Group Vice President and Chief Economist Kaushik Basu. “A combination of fiscal and central bank policies can be helpful in mitigating these risks and supporting growth.”

Although unlikely, a faster-than-expected slowdown in large emerging economies could have global repercussions. Risks to the outlook also include financial stress around the U.S. Federal Reserve tightening cycle and heightened geopolitical tensions.

“Stronger growth in advanced markets will only partially offset the risks of continued weakness in major emerging markets,” said World Bank Development Economic Prospects Group Director Ayhan Kose. “In addition, the risk of financial turmoil in a new era of higher borrowing costs remains.”

Regional Outlooks

East Asia and Pacific: Growth in the region is projected to continue to slow to 6.3 percent in 2016 from a slightly less-than-expected 6.4 percent in 2015. Growth in China is forecast to ease further to 6.7 percent in 2016 from 6.9 percent in 2015.  Growth in the region excluding China was 4.6 percent in 2015, broadly unchanged from 2014, as weaker growth in commodity exporters, including Indonesia and Malaysia, was offset by growth acceleration in Vietnam and moderate recovery in Thailand. Risks include a faster-than-expected slowdown in China, the possibility of renewed financial market turbulence, and an abrupt tightening of financing conditions.

Europe and Central Asia: Growth is projected to rise to 3 percent in 2016 from 2.1 percent in the year just ended as oil prices fall more slowly or stabilize, the Russian Federation’s economy improves, and Ukraine recovers. Economic activity in Russia is projected to contract by 0.7 percent in 2016 after shrinking by 3.8 percent in the year just ended. Growth could resume modestly in the eastern part of the region, which includes Eastern Europe, South Caucasus, and Central Asia, if there is a stabilization of commodity prices. The western part of the region, which includes Bulgaria, Romania, Turkey and the Western Balkans, should grow moderately in 2016, buoyed by recovery in the Euro Area.

Latin America and the Caribbean: The region is projected to recover modestly from recession in 2016, with activity flat after shrinking by 0.9 percent in the year just ended, as the region grapples with the protracted decline of commodity prices and domestic challenges weighing on the region’s largest economies.  However, there are differences among the sub-regions with stronger growth in developing Central and North America and the Caribbean offsetting weakness in South America.  The current recession in Brazil is expected to extend into 2016 but a return to growth is expected in 2017.  Although weighed down by low oil prices and associated fiscal pressures, growth is expected to pick up in Mexico thanks to dividends from implementation of structural reforms and strengthening demand from the U.S. market.

Middle East and North Africa: Growth is forecast to accelerate to 5.1 percent in 2016 from 2.5 percent in the year just ended, as the expected suspension or removal of economic sanctions against the Islamic Republic of Iran will allow that country to play a larger role in global energy markets. Growth is expected to pick up in other oil exporters as well, predominantly on the assumption that oil prices will stabilize. The region is subject to serious risks from the possibility of an escalation of conflict, a further decline in oil prices, and failure to improve living conditions, which could spark social unrest.

South Asia: The region is projected to be a bright spot in the outlook for emerging and developing economies, with growth speeding up to 7.3 percent in 2016 from 7 percent in the year just ended. The region is a net importer of oil and will benefit from lower global energy prices. At the same time, because of relatively low global integration, the region is shielded from growth fluctuations in other economies. For FY 2016-17, India, the dominant economy in the region, is projected to grow at a faster 7.8 percent and growth in Pakistan (on a factor cost basis) is expected to accelerate to 4.5 percent.

Sub-Saharan Africa: The region is forecast to accelerate to 4.2 percent in 2016 from 3.4 percent in 2015 as commodity prices stabilize. Economic activity will vary across Sub-Saharan Africa, with consumption growth remaining weak in oil exporting countries as fuel costs rise, while lower inflation in oil importing countries helps boost consumer spending. Nigeria is forecast to expand 4.6 percent after growing by 3.3 percent last year while South Africa is expected to advance only modestly to 1.4 percent growth from 1.3 percent in the year just ended.

Source : World Bank

 

Every Sector of The Economy Is Bad-Eze Ndi Igbo

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First published on 8 August, 2015 on defunct http://www.federationews2day.com

Stakeholders in the education sector have continued to express worry over the declining standard of education in Nigeria. In this interview with Federationews2day, the Eze Ndi Igbo of Ibadan and Oyo state, Eze(Dr) Alex Anozie calls on government to salvage the sector. Excerpts :

Education standards are falling in Nigeria. What are your views ?

Many things have gone  bad, so bad in the country, that it is not only the education sector that is bad, almost every sector. Everything in this country has gone bad, it is not just education alone. So, anybody talking about the declaration of state of emergency in the education sector, I will suggest we declare a state of emergency in everything, that concerns everything in this country, because things have gone so bad, what about stomach infrastructure, don’t we see the need to declare a state of emergency on that again. People are hungry, and whatever you want to do today, you must feed first, you can’t go to school, when you are hungry, if you are in the classroom and you are hungry, you are not picking anything. So, quite alright  there is the need for government to put more efforts in improving the education sector in Nigeria, but other things are also important. Thank God the new government has started well, by fighting corruption, searching for our looted money, stolen money. Information reached us that one person stole $1 billion, not Naira, I am sure several others must have done things like that, which we have not known. But that $6 billion alone, if Nigeria can lay hands on it now  and it comes into this country, every segment of our lives in this country will be affected positively, education, stomach infrastructure, in fact the whole economy will bounce back to life. $ 6 billion by one person, people are wicked, human beings are wicked, if it is true, if that allegation is true, then we will have cause to rejoice, when that money is retrieved  concentration should be on education and infrastructure. There should be good roads rail-fast modern rail line from Lagos to Abuja, see what is happening to our highways, trucks don’t allow, it is everyday accident, here and there, trucks everywhere, but when we have something like that, all these trucks will disappear from our highways, our roads will last, lives would be saved, journey would be smoother and faster and a lot of things would happen. We have heard cases in past, we were told about money returned form so many places, we’ve not been informed how the money was invested. So, the education sector, quite alright, needs proper attention, but that is not the only sector, all the sector need attention, look at electricity. Honestly, speaking since this new government came in, electricity has been stable, a bit, there is a lot of improvement. And if it continues like that it would have a positive  impact in the economy.

Chamber of Commerce slams Buhari’s economic policies over losses

Muhammadu-Buhari-NigeriaPresident

 

The Lagos Chamber of Commerce and Industry has expressed reservations over the Federal Government’s economic policies.

The chamber lamented that the   private sector has lost about N1.46tn as a result of the foreign exchange constraints being experienced in the country over the last six months.

These revelations were made in a statement  by  the Chamber’s  Director-General,  Mr. Muda Yusuf.

“The private operators across several sectors (fast-moving consumer goods, steel, furniture, pharmaceuticals and manufacturing) lost about N1.46tn in stalled business activities resulting from paucity of forex over the last six months.”

Citing data from the National Bureau of Statistics, he noted that the country’s real Gross Domestic Product fell to 2.84 per cent in the third quarter of 2015, compared to 6.23 per cent in the same period in 2014.

Sectors such as manufacturing and the services slipped into recession after recording successive declines over the last three quarters in 2015, the LCCI said.

The group noted that the CBN had, in response to dwindling receipts from oil export, adopted several measures such as the closure of Retail Dutch Auction System window, restriction of cash payment into domiciliary accounts and prohibition of 41 items from accessing the interbank foreign exchange market.

It expressed concern about the state of the economy and the effects of the CBN’s policies on the operations of manufacturing firms and other private businesses.

It said, “The CBN’s administrative allocation of foreign exchange signposted much deeper challenges for investors and the economy. As of December 18, 2015, premium at the parallel market reached a record level of 35 per cent against the official exchange rate as the naira crashed further to 270/$ in the parallel market.

“The LCCI and the business community are very concerned about the current state of the economy and the consequences of the CBN’s approach to the management of foreign exchange market over the last few months. We have previously engaged the CBN and other authorities through several forums to draw attention to the implications of forex policies on businesses and the economy.”

This is coming just as the Federal Inland Revenue Service has hinted the citizens will pay higher taxes from next year as a means of shoring up the nation’s revenue.
The LCCI, in its 2015 economic review, said its third quarter 2015 business environment survey showed that a forex restriction by the Central Bank of Nigeria was one of the costliest policies in Nigeria in recent years.

Curiously, the Federal Inland Revenue Service has hinted that Nigerians will pay higher taxes from next year as a means of shoring up the nation’s revenue.

APC AND PDP Never Promised To Cut Salaries During Their Electioneering Campaigns-NASU

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As workers in the 36 state and the Federal Capital Territory wait patiently to see what lies ahead of the economic challenges in Nigeria, the Chairman of the Non Academic Staff Union, Oyo state chapter, Comrade Fatoki Olusola-Cole warns that any attempt by the Governors to cut salaries of workers or sack them would be stiffly resisted. Excerpts :
Reports making the rounds is that the 36 state Governors are toying with the idea of cutting salaries of workers or in the alternative sack them. How do you react to these reports ?

Well, I think it is a bad decision, if that is what they have arrived at in their meeting. And that is to tell you that these Governors have no interest of workers at heart. They used the workers to get elected, they used the workers to get to the office, now they are there, they now see what the office is, clearly, they are now turning back to put the blame on workers, to persecute, to destroy the workers. I think it is unfortunate. It is quite unfortunate that our Governors can arrive at this kind of selfish and sad decision. I don’t think that is the solution to this problem. And moreover workers cannot be held responsible for the state of the economy, the politicians are the people that should be held responsible, particularly, those in power. The Governors, the Ministers, the House of Representatives members and the senators, they should be held responsible, the executive, they are in charge of the money. When the money is flowing and the money is there, who are those managing it, are they not the people ? And now that the whole thing is packing up, they caused it, they vamoosed everything. They should not put the blame on workers. And workers should not be made to suffer as a result of their actions. So, I am totally against it. And let them be warned, that they are approaching problem, they are ascending to evil. Satan has sat down on his won, but they are now communicating to him to come. And we are going to tell them that workers are not fools. Many of them have embezzled this money and the current investigation that is going on now, I pray that it would reach the turn of these Governors and the former Governors. And you will see the alarming exposures that would be coming out. The billions that they must have siphoned. They should not make workers to suffer, because of what they have caused in this country. Enough is enough and if they try it, we are promising the Governors hell on earth. And we are not going to take it easy with them, it is our right and they cannot make us to suffer for what we have not committed. If they don’t know how to do it, they should leave the place. After all, when they were collecting billions of Naira from the Federal Government nobody knew, they never said anything, but now that the money is no more there, they are now crying. The one they collected, how did they manage it ? How did they spend it ? Do we see the infrastructure, which they are claiming that they put in place ? Where are the infrastructure ? What benefits have workers derived from the ones they collected ? And even, the N18,000 is not working. It is just as a result of the magnanimity of the workers to settle down for peace, if not, we would have rejected that N18,,000 and let them be cautioned that this is a statutory matter.
It is not what a Governor can stand up one day and say that No, I am doing this, to this. No, it cannot be done, if it would be done, then another negotiation would come up. And it would pass through the National Assembly to become law. It is a matter of law they cannot just say that. They are sitting down somewhere and saying that they cannot pay N18,000. No ! They are joking. And I am telling you, no worker can settle down for less in this country, except if the wages are reviewed upwards. So, we are warning them that they should be careful, if they don’t know how to do it, they better withdraw. They better resign and let somebody or those who are competent, who have the vision to take over. That is our stand. I think they are trying to get attention or sympathy from the Federal Government, maybe there would be another bail out for them. Yes, I think that is motive. Does it sound good for a Governor of a state. This man here started. I know that the idea was sold to the Governors forum, by our Governors forum, bu our Governor here, Governor Ajimobi, he called us for a meeting and that was where he opened up, that he would not be able to pay N18,000 any more, that we should go and tell workers that he is going to reduce their salaries. And we told him, that never on earth can that be accepted. He said, because he doesn’t want to downsize, either you want to downsize or you want to cut salaries, it is not acceptable. We are not going to accept it. And it is not going to be done or else you want to cause crisis in the state. And we will give you enough crisis, if that is what you want. So we have warned him. I know that he is the one that brought the idea through the Governors forum, so that they will get affection. Let them go back home and see how they can solve the problem in their states. Le them sit down and call their thin thanks together and ruminate on how the problem can be solved. Cutting salaries is not the solution and downsizing is not the solution, because APC did not promise us that they are going to retrench workers when they were campaigning for votes and the PDP people that are there as well, when they were campaigning, none of them said that when they become the Governor, they are going to downsize. They never made that promise. And if they are going to do it now, then workers will resist with their last drop of blood.

Action, Not Words, Needed to Improve Ukraine’s Investment Climate

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By:
William B. Taylor & Colin Cleary
Ukraine must not remain a country of great but unrealized potential. The International Monetary Fund package and other foreign assistance are helping stabilize Ukraine’s economy, but only an attractive business climate can result in the level of investment that will truly transform the country for the long term.

Ukraine has the makings of a prosperous and diversified economy. Even under the present difficult conditions, Ukraine’s agricultural exports are booming – and the potential for expansion is tremendous. With the right investment climate, Ukraine can become a major information technology hub. It can also become energy independent and perhaps an energy exporter. Favorable wage levels and a central geographic location make Ukraine a highly attractive location for manufactures of all types. The tourism, consumer products, transportation and financial sectors all have great promise.

But much work remains to be done. The World Bank put Ukraine at 83rd place among 189 countries surveyed in its Ease of Doing Business report for 2016. This is lower than Belarus (44) or even Kyrgyzstan (67).

Despite the EuroMaidan Revolution, Ukraine — fairly or not — is seen as about as corrupt as it was during the Viktor Yanukovych kleptocracy. Transparency International’s 2014 Corruption Perception Index put Ukraine at 142nd of 175 countries surveyed, compared with a 144 ranking in 2013.

Direct foreign investment has fallen since the Maidan events. Investors don’t like uncertainly and that is what the Russian annexation of Crimea and assault on Donbas have wrought. But investors also don’t like a business climate characterized by insider deals, bribes and selective justice. And much of that remains in place.

The U.S. State Department’s 2015 report on Ukraine’s investment climate observed that “in practice, the court system is viewed as ineffectual, corrupt and in dire need of reform.” The lack of a proper legal system in Ukraine is the major reason why the U.S. share of direct foreign investment in Ukraine was only 1.9 percent in 2014.

Judicial reform is thus essential — now. This must include the vetting, requalifying and, as needed, firing of existing judges and prosecutors — and the hiring of new people untainted by the corruption of the past. Salaries of those who remain must be significantly increased to ward off bribery.

A level playing field – founded on rule of law — will allow investors to compete based on who has the best product or service, not on who has the best political connections needed to obtain government contracts or concessions. Many of Ukraine’s tycoons are not businessmen at all. Rather, they obtained their fortunes from insider deals arranged with political actors and use their wealth to perpetuate privileged access to the state budget. Their influence corrupts the political and economic system and must end.

Investment is a vote of confidence; that vote remains elusive today for Ukraine. By focusing on reforms that foster an attractive investment climate, Ukraine’s leaders can set the stage for an era of sustained growth. Actions not words are needed for Ukraine to reach the tipping point — when investors let the funds flow.

William B. Taylor is executive vice president of the U.S. Institute of Peace and former U.S. Ambassador to Ukraine. Colin Cleary is a fellow at the United States Institute of Peace and former political counselor at the U.S. Embassy in Kyiv. The views expressed are those of the authors and not necessarily those of the U.S. government. The Russian version was published by Novoye Vremya. Reposted with permission from Kyiv Post. This article was first published on Nov. 18, 2015.

Source : USIP