According to the expert Aleksej Ižak, of the Strategic Research Institute, the distribution to 50% of the royalties provided for in the agreement agreed after the meeting between Putin and Zelensky seems fair enough for the Ukrainian needs, although it is unlikely that the means that accumulate in the operations are sufficient to fully cover the needs related to the total reconstruction of the country.
kyiv (Asianews) – As the international press, Ukraine and the United States has widely commented, after the spectacular Trump and Zelenskyj meeting in the Basilica of San Pedro at the funeral of Pope Francis, signed a historical agreement on May 1, which provides for the formation of a joint investment fund for the reconstruction of the country devastated by the Russian war. This step opens a new page in the economic and political life of both countries, and Ukrainians hope it also will be a security guarantee against the claims of the aggressor.
The document of the agreement, of 12 articles, which lists the critical materials involved and presents the financial aspects, has the legal nature of an intergovernmental agreement, and will only enter into force after its ratification by the kyiv Rada Verjovnaja, as explained by the Ukrainian Minister of Economics, Julia Sviridenko, which is expected for a month and average of discussions. Next, the agency for support issues to state and private collaboration, according to the Ministry, will manage the application of the program. On the American part, the Fund will adopt the form of a limited liability company, in the hands of the US agency for international development financing.
50% of the canons and benefits derived from the use of the products of the Ukrainian subsoil will be allocated to the kyiv state budget, through the mechanism called «Ukrainian added Profit». American companies will not be granted the “right of primacy” on extraction, but participation in negotiations and auctions will be guaranteed in equal conditions, with the possibility of making maneuvers to acquire production in market conditions, without receiving a remuneration lower than that of other investors.
The management of the materials will be exempt from any imposition and, in case of conflict of interest, priority will be assigned according to Ukrainian legislation. Ukraine undertakes to defend the American investor from any loss in case of delays or limitations in currency transfers. According to the expert Aleksej Ižak, of the Strategic Research Institute, the 50/50 scheme seems quite fair for the needs of Ukraine, although it is unlikely that the funds that accumulate in the operations are sufficient to fully cover the needs associated with the total reconstruction of the country. Minister Sviridenko added that more specific initiatives will be launched precisely related to reconstruction.
In fact, a joint administration of the Fund is expected, with equal rights in decisions on investment projects, while maintaining control over resources, mineral extraction and all subsoil and infrastructure places. Reconstruction projects will be financed entirely by the Fund, without more Ukraine debt obligations with the United States. The negotiations on this matter were very long and laborious, and Ukraine was resolved in the defense of their interests, in the face of the first proposals that foresaw almost total US control over Ukrainian resources, while trying to maintain the criteria of equality and reciprocity that were adopted in relations with the administration of Joe Biden.
Thus, in the agreement there is no mention of restrictions in the entry procedures of Ukraine in the EU, which if carried out would be reviewed by the agreement with the US, as explicitly stipulated in the agreed text. Ižak also believes that “the agreement seems totally reasonable, not as it seemed at the beginning, when it caused very negative reactions in Ukraine, and also among its allies.” Ukraine now can also expand the market to other foreign investors, for the extraction and processing of rare and useful metals such as lithium, graphite, titanium and manganese, as well as gas and oil, which promises an important development of the country’s industrial potential and a significant growth of its role worldwide.
However, they continue to worry about security guarantees, one of the conditions under Ukraine most in their negotiations with Americans. In fact, no American commitment to military support or other crucial areas has been established, since Washington wanted to keep the military issues of economic ones separate. It is only mentioned that military support “can be part of economic support”, especially if the actions of the aggressor country affect US interests.
