11 September 2019

The new Ukrainian government: Four of a kind and an ace as president

Laurenţiu Sfinteş

The tools and advantages needed by the new Ukrainian president, Volodimir Zelensky, a parliament with a majority on his party’s side, a government full of loyalists and trustable people to run the key positions of other important institutions are, now, at his disposal. September has started with a new executive in Kiev, with a 39 years average age, the lowest in all Europe, led by a young prime-minister, Oleksiy Honcharuk, also the youngest in Europe. This is the format that the new Ukrainian government will have to raise the economy with, one to be bellow Azov Sea’s level, to manage an ineffective administration, to eliminate corruption and end a conflict with a neighbor, which is still acting like an older step brother.

Image source: Mediafax

A young team going to nationals. Poroshenko also makes two transfers

Choosing the new Ukrainian prime-minister was the first domestic political tactical test President Volodimir Zelensky had to pass through. The prime-minister position has a greater constitutional importance in domestic decisions, than the president one. The former president, Petro Poroshenko, has played this in the backstage, by over-interpreting the constitution, through the influence he had on some of country’s force structures people. The new president seems to think that that was not the best example to follow. Indeed, he wants to reach democracy, eliminate corruption, develop the economy etc. Hence, there are some conditions which have become extremely important for the prime-minister position:

- be young. Promoting brave and reformative youth is now president Zelensky’s team label;

- be a technocrat, unattached to any political doctrine or group. It would also be an advantage if the candidate would have some experience in economic, entrepreneurial or consultancy field;

- be a positive presence in the public space, though not too communicative, because that belongs to the president, still, to be able to have dialogue and a certain tenaciousness in reaching its objectives;

- have relations in the new Ukrainian elite, which is connected to West Europe through grants, businesses, consultancy, joint participation to programs. The connections with companies or people that are close to Moscow can reduce candidate’s chances.

The winner was Oleksiy Honcharuk, a 35 young men, whose most important previous positions was deputy chief of staff of the president, responsible with the economic issues. The youngest prime-minister in Ukraine’s history. The one to team with the youngest president.

However, Honcharuk is not new in this circle. He was previously counsellor for some ministries, and he even run for the previous parliamentary elections, for a party that did not pass the electoral line. This political sympathies were quite obvious when he became Aivaras Abromavicius’s pet, the economy and commerce reformative minister, a Lithuanian naturalized by marriage in Ukraine, promoted by Petro Poroshenko in the lateniuk government and recently reevaluated by Zelensky for the executive position of Ukroboronprom. Hence, the new young prime-minister was always in this power circle, full of experienced, ambitious and young people who are just waiting for a chance to match their direction.

This is also the case of some of the new government team members, who are, most of them, Zelensky’s former collaborators during the presidential electoral campaign and the 100 days since his mandate started.

Mikhail Fedorov is, at only 28 years, deputy prime-minister and minister of digital transformation. It is a huge step for the former chief of Zelensky’s online campaign team.  He is not leading any ministry, but the new created ministry in a government to have 10 minister positions, less than the previous one.

Dmitro Kuleba, young Ukrainian diplomat, Ukraine’s 2016 permanent representative to Europe’s Council, becomes deputy prime-minister at only 38 years and he is responsible with country’s European integration.

Vadim Pristaiko, foreign affairs minister, diplomat, not that young, 59 years old, Ukraine’s former representative to NATO, who led his country’s missions. This is one of the logic promotions, as he had, in 2017, the second position in the foreign affairs minister. He was, for a short period, president’s counsellor and deputy chief of the presidential administration.

Andrii Zahorodniuk, defence minister, he is executive’s senior at only 59 years. He was president Zelensky’s counsellor, but also member of the Ukroboronprom Administration Council, which makes him one of system’s men, who he tried to reform as director for defence’s reform in the defence ministry. Long ago, in 2015. His father is member of the monitoring team for Ukrnafta Oil Company, 40% controlled by someone close to the president, Ihor Komoloyskyi.

Denis Maliuska, justice minister, former lawyer and consultant for the World Bank. He teamed with the current prime-minister in the economy ministry, in the regulation service of economic activities, partnering with the private-public field.

Dmitro Dubilet, no portfolio minister, extremely young (34 years), banker and business man, founder of Monobank, the first online bank in Ukraine. Previously, between 2012 and 2016, he was chief of the IT department at Privatbank, a bank at that time managed by Igor Komoloyskyi, and then nationalized to be saved from bankruptcy. Coincidence or not, Oleksandr Dubilet, Dmitro’s father was, for two decades, 1997-2016, the president of this bank.

Vladislav Kriklii, 32 years old, minister of infrastructure, former chief of the intelligence technologies implementation office in the home affairs ministry, counsellor for the home affairs minister, deputy of circulation service chief, has also worked in the banking system. He has some obscurities around a fictitious company with grey zone activities that he, of course, denied.

Oleksi Orzhel, minister of energy and environment protection, 35 years old, energy and fuels specialist. He has worked with the prime-minister in the economy ministry. He is the chief of the Ukrainian Association for renewable energy. A young technocrat who became a politician.

Hanna Novosad, minister of education, 27 years old. She worked in the ministry of education and she was previously the European integration and planning direction chief, an “analytical think thank” by definition. The 2014 Euromaidan movement promoted her directly as counsellor of the minister at that time, immediately after he graduated the Maastricht University, from Holland. Hence, her experience in education is a laboratory one and her specialization is political sciences.

Volodimir Borodianski, minister of culture, above cabinet’s age level, whose past is composed of media, businesses and the banking system. He was also one of president Zelensky’s counsellors, even if just for one summer only.

This is the “young wolfs” team, which has imited experience, however, most likely an intense one, enthusiasts and strongly connected to president and prime-minister’s circles, having connections in the business, banking and mass media elites, people with power. They also have a pro-Western orientation, though, not clearly if it is an opportunist approach or just a sincere one. For now, the presumption is the latter.

But the government has other names as well, people belonging to other circles, who have other interests. Firstly, the two ministers taken from the previous executive, a transfer, in other words, from former president Poroshenko’s team.

Arsen Avakov, home affairs minister, is, by far, cabinet’s most controversial appointment. He is the vet of the executive political scene, running since 2014. Keeping him is probably president’s tribute- which personally granted this appointment-, for Avakov and ministry’s structures attitude during the electoral campaign and the recent elections. Avakov is also a good friend to someone close to the president, Ihor Kolomoyskyi. Not that it would matter. He is a minister who must be treated with precautious in a country like Ukraine. Corruption allegations, those related to blocking reforms, are just right there, in his files, and soon will be back.

Oksana Markarova, finance minister, also an appointment personally granted by the president, she is running the ministry since 2018. She is definitely a technocrat and, although finances can be distribute following options and political programs, this field was stabilized, being run by an independent.

Then there are the ministers coming from the field they will lead, who can also be called technocrats and who had connections with president’s team.

Timofii Milovanov, minister of economy (his official title “minister of economic, commerce and agriculture development”). Academic career, associated professor at the Pittsburgh University, but also vice-president of Ukraine’s National Bank administration council, since 2016. He will lead probably the most important ministry for this executive’s reform plans. He will be one of the “key” people in this new Ukrainian executive, with direct connection to the president.

Zoriana Skaletska (Cernenko), minister of health, health expert and lawyer, dean of the juridical sciences faculty. Her former husband was deputy in president Poroshenko’s previous parliament. Not that it would matter.

Oksana Koliada, minister for veterans’ problems, has worked in defence and home affairs ministers. Between 2015 and 2017, she was, concurrently, the press department and public communication chief of the defence ministry, but she has also led the work groups responsible with the strategic communication system development of the Ukrainian armed forces. She is a minister who remained in this position for her symbolism, rather than the contribution she brought to this executive’s reform plan.

Aliona Babak, minister of local communities’ development, experienced in international relations, charity, funds collection. She had, of course, studied in the West, Old Dominion University, Virginia. She was part of the former parliament, in behalf of a cooperative Christian political group, that she withdrew from in 2017.

Iulia Sokolovska, minister of social policies, was counsellor in the finance ministry, in the economy ministry and, the most important, chief of USAID department.

As DSM was foreseeing, Ukraine’s new political elite comes from president Zelensky’s close circles. Some of them will be in the executive, others are/will be appointed to lead some important institutions. Parliament’s leadership, the national agencies, a series of diplomatic positions, especially in Western capitals, will have loyalist people. This is the happy period of the presidential mandate and the governance, defined by projects and programs more or less spectacular, with responsibility to distribute the positions.

Ukraine has, however, other pressing issues, in Kiev and east of the country, but also in South, in Crimea, along Crimea, in the Black Sea and in each of the homes of the ten million Ukrainians for whom the post-independence economic miracle means, at this point, an average salary equal to Romania’s minimum one.

Without economy, there is nothing

Even if the governmental program is still in process, one month away from its final version, some of the objectives were publicly assumed. “The most important tasks for the new government is economy’s increase”, states the new prime-minister, adding that he is not talking about a 3% increase, like now, but doubling it, to at least 5-7%. Prime-minister Oleksiy Honcharuk also highlighted, in his first speech addressed to the parliament, some of the things left to solve:

- the reduced level of infrastructure development;

- the war in East of the country;


The solutions, to get to that “smart date”/ “intelligent state”, as to use the technologies allowed by communication and informatization (something he convince the president to choose him as prime-minister), Honcharuk makes a list with possible solutions:

- reducing banking credit’s price, by decreasing the interests from 17% to 12-13%;

- stopping the government funding for the dodgy industries, for the state hegemonies. “They are killing the competition and are preventing business’s normal development.”

- the integration, by 2023, in the European energy market, which would eliminate the Russian influence which is still dominating part of the national economy;

-the negotiation of a new agreement with the International Monetary Fund, in September;

- the reevaluation of the monetary strategy;

-fighting corruption, contraband, the modification of tax system.

He listed many things, not that convincing though, just as it fits a prime-minister who is perfect for the second plan.

 The new executive is marked by an assumed enthusiasm for change and effort (government’s first meeting was held at 23.00 pm, after they were appointed!), but the list of changes they proposed can be compared to an economic revolution manifest: from opening the market for transactions with farmlands for foreigners (by the end of 2019, they hope to increase GDP with at least 0.5 % only in this field), to starting the great privatization processes (Ukrposhta- public postal service, Ukrzaliznitsia- railways, public banks), the reform is already planned in a 20 legislative acts package, about to be approved.

The president brought, again, the executive and the parliament to fever pitch

… by asking them to directly go to the fifth speed (in East Europe, this is the maximum the economic engines work). He told the parliamentarians that it is not that difficult to dissolve a legislative, he reminded about a reform that is foreseeing reducing the number of deputies to 300 and offered them “a year probation”. The first law project discussed in September was the raise of parliamentary immunity. Just to be clearer. And he also reminded the executive about the parliamentary control, but, most likely, the next one will be a control directly from the presidential administration. After president Zelesnky’s only victory at the Mariinsi Palace (the presidential administration headquarter), in his first 1000 days. was the one in April,  a great one, yet connected to a hostile parliament and a government which was ready to block his reform initiatives, he has, now, all he needs to implement people’s will for people’s benefit.

On a foreign plan, Ukraine’s president got invited to important reunions, the prime-minister also got an invitation to Berlin, the Normandy group for the Donbass conflict reopens in September and the long-awaited prisoners exchange goes, also, really well.

In Kiev, 2019’s autumns looks really good. Therefore, let’s just not think about what we have read, not long ago, this spring actually, about the Ukraine-Moldova competition for the first place in Europe, in terms of the per capita income (2018’s winner: Kiev!), or the fact that 50% of the Ukrainian economy does not appear in statistics, hence does not produce any taxes, or the fact that 4% of the GDP leaves, every year, the country as outsourcing capital, or the annual foreign investments which go below 1% from GDP, when is should be 4-5 times bigger to allow the economic increase the prime-minister announced.

We should not also think about closing half of the Ukrainian commercial banks, in the post-2014 period only, due to bankruptcies caused by dodgy or discretionary credits, and the high inflation rate, double than maybe EU’s highest rate, and that, at that time, in 2019’s spring, 2/3 of parliament’s members were business men who were protecting their personal businesses through their parliamentary immunity.

This immunity we are referring to disappeared a few days ago, and a young parliament, a young government and a young president want to make Ukraine, a country which is also not that old, “East Europe’s economic tiger”.

Translated by Andreea Soare