Ukraine’s New Government, Explained.
The Ukrainian parliament voted in a new reformist Cabinet of Ministers using the same old tactics of dirty Ukrainian politics.
by Devin Ackles, Hromadske International
produced by Maxim Eristavi, Randy R. Potts
What You Need to Know:
✓ The Verkhovna Rada voted in its new Cabinet of Ministers on December 2, 2014;
✓ Some MPs were very unsatisfied with the lack of transparency and old-school pressure to vote for ministers without their being subject to a public grilling;
✓ The opposition did not even bother to take part in the vote and left the session hall while it was taking place;
✓ The day of the vote, President Poroshenko signed a decree that granted 3 foreigners Ukrainian citizenship — they became ministers the same day;
✓ The controversy surrounding the selection of a minister to head a soon-to-be created “Ministry of Truth” eclipsed much of the day’s events;
Get up to speed on Ukraine. Follow Hromadske!
New Government Starts With Multiple Controversies
Who’s In Charge
After a long day of back-and-forth negotiations, and after the Prime Minister threatened to resign if a government was not formed, the new parliamentary coalition were able to finally settle on a list of ministerial candidates. As was expected, the two big winners were the coalition’s two largest parties — President Poroshenko’s Bloc and Prime-Minister Yatsenyuk’s People’s Front.
Most of the ministerial appointments were already known in advance, though there were a some huge surprises:
The ‘Ministry of Truth’ Controversy
For one, there was the speedy and secretive plan to create a new Ministry of Information Policy (nicknamed by the public “the Ministry of Truth”). The appointment of a close associate of President Poroshenko to head the new ministry caught journalists and civil society off guard.
Read more on the controversial Ministry of Information in our explainer:
Foreigners Among the New Ministers
There was also the unprecedented appointment of three foreigners as ministers who, the same day, were granted Ukrainian citizenship by presidential decree in order to be eligible to work in the Ukrainian government.
Dirty Politics Vote
There were signs that in spite of a reform-minded supermajority controlling parliament, little has changed in Ukrainian politics. Despite the best efforts of some members of the coalition, virtually all of the candidates were able to skip the typical tough questioning that senior level appointments are usually faced with when their candidacy is presented in western democracies.
Instead, each were provided with 3 minutes to present themselves and field a few brief questions from each political party and a representative from among the independent MPs. Except for the Minister of Interior, who came with a full-fledged video presentation on reforms he wants to carry out, no one else presented their own program for reforms. In place of a detailed description of a candidate’s work experience and qualifications, simple resumes were provided.
Other disturbing ‘traditions’ also reared their head during voting process. In addition to members from the opposition (most of whom are former Party of Regions members), MPs from both the Petro Poroshenko Bloc and the People’s Front were seen illegally voting for MPs who were not present for the vote.
Despite these developments, there is still a great sense of urgency and hope that the new government will be able to reform Ukraine and lead it away from the disastrous path that it has set itself on after 23 years of half-hearted reform.
Key Ministers
The ambitious coalition agreement signed by all five parties of the ruling coalition has a number of essential reforms as the basis of the new government’s existence.
Read more on Ukraine’s reformist supermajority here:
Promising to be the most reform minded government in the history of Ukraine, each ministry will have its own set of reforms to deal with. Here is a look at each of the newly-elected ministers and what is known about them.
Minister of Finance — Natalie Yaresko
Yaresko’s candidacy for the post of Minister of Finance was proposed by Samopomich (Self-Reliance) and was widely supported by all parties. A (former) U.S. citizen and graduate of Harvard University’s Kennedy School of Government, Yaresko has spent more than 20 years in Ukraine. Originally landing in Ukraine in 1992, she served as the first Chief of the Economic Section of the U.S. Embassy in Ukraine until 1995.
As her biography states, after her contract was up with the State Department, she decided to stay on in Ukraine. She has spent the next twenty years as the CEO of investment firm Horizon Capital, which has offices in both Kyiv and Chicago.
While she has spent a majority of her professional career in the private sector, she is no stranger to Ukrainian politics. Under President Yuschenko, Yaresko worked in two investment advisory bodies.
Her appointment is viewed as a serious attempt by the Ukrainian government to commit to reforms, given her outsider position and years of professional experience.
The Ministry of Finance is a relatively new ministry that was founded by presidential decree under Yanukovych in 2011. It is also one of the largest of all the ministries with far reaching powers. It oversees many of the most corrupt areas of the Ukrainian government, including state finances, tax regulatory bodies and customs. It is also responsible for helping to create the annual state budget — by far the greatest source of corruption in Ukraine. Reforming the ministry will require significant resources and a committed fight against deeply entrenched interests.
Minister of Health— Aleksandre Kvitashvili
The second of three foreigners granted citizenship by President Poroshenko, Kvitashvili is a western educated Georgian national. After completing his graduate education at New York University in the early 90s, Kvitashvili returned to his native Georgia where he worked for a series of international organizations, including the UNDP and the NYC-based EastWest Institute.
In 2008, Kvitashvili was appointed as Georgia’s Minister of Health, Labour and Social Affairs by then-president Mikheil Saakashvili, where he served until late 2010.
Kvitashivili’s experience in the region in various international NGO and government projects, but his record as Minister of Health in Georgia was a mixed bag at best. With his candidacy being proposed by the president’s party, and virtually no public discussion on him beforehand, both his qualifications and suitability for the ministry can only be assessed by his performance in the coming weeks and months ahead.
The Ministry of Health in Ukraine has been the subject of several government purchasing scandals in the past couple of years. With most of the healthcare system still controlled by the government and much of it unreformed since the Soviet era, it has witnessed a significant downturn in terms of the quality of its services and capacity. It is a constant drain on the state’s budget and in need of comprehensive reforms to bring it into the 21st century.
Minister of Economic Development and Trade—Aivaras Abromavicius
Another foreigner turned Ukrainian citizen, the Lithuanian native Abromavicius has a great deal of regional experience in the private sector, particularly investment. He has been a partner based in Kyiv with the Swedish investment fund East Capital since the early 2000s, before which he worked in the Baltic region for a Swedish Bank and the Brunswick group, another investment firm.
He has also had several investment projects in the Baltic region as well as Russia, where in a 2011 interview for website finparty.ru he stated that a majority of East Capital’s investments are in Russia — including in the energy sector. It is not clear if he personally has business connections in Russia still or the extent to which he was involved in the deals.
Little else is known about the Petro Poroshenko Bloc-supported minister, though it is clear that Abromavicius is an outsider when it comes to the Ukrainian political scene. His appointment has largely been viewed in a positive light at this early point, as not only does his experience in the private sector mean that he understands the specific economic issues that Ukraine faces, but he has been given a mandate to carry out reforms in the ministry and is not necessarily beholden to any long-standing political figure.
The Ministry of Economic Development and Trade is one of the most powerful regulatory bodies in the country. As one of its ministerial functions it oversees government purchasing — one of the key sources of corruption during (and before) Yanukovych’s administration. The harshly regulated environment in Ukraine has stifled business for decades and its successful reformation is key to rebuilding the nation’s economy and help it integrate with the European Union.
Minister of Internal Affairs—Arsen Avakov
Returning to his post as Minister of the Interior, Arsen Avakov will now need to make good on the proposed reforms to Ukraine’s deeply corrupt law enforcement agencies. An east Ukraine native, Avakov and his ministry have been subject to a great deal of criticism since taking office following his appointment in February 2014.
Outside of Avakov’s perceived inability to adequately combat corruption inside law enforcement agencies, he has also been subject to criticism for the ministry’s lack of arrests for grievous acts of corruption by former officials and the absence of progress on the dozens of individuals murdered on Maidan during the protests. The recent appointment of a known neo-nazi sympathizer and far right organization member, Vadym Troyan, to head the Kyiv oblast police force is also an issue of contention.
The Ministry of Internal Affairs will be facing the most significant reforms in its existence as it moves away from its soviet-era foundations and reforms into a western-style police force. Not only will the ministry be firing and hiring a new police force throughout the country, it will need to continue to deal with Russian-backed separatist threats and acts of terrorism.
Minister of Energy—Volodymyr Demchyschyn
Volodymyr Demchyschyn is another relative unknown the Ukrainian political scene. Holder of an MBA from the University of Kansas’ School of Business, he has spent his professional career working in management and senior administrative positions in Kyiv at ING, Ernst & Young and, more recently, at the Investment Capital Ukraine (ICU) group which specializes in securities traiding, investment banking and asset management.
His only other experience was as head of the National Commission of State Regulation of Energy and Utilities. This government agency is responsible for dealing with Ukraine’s natural monopolies and setting prices for gas and other natural resources. The president appoints and dismisses its members.
Demchyschyn’s emergence has been very quiet, though it is clear that he is a close ally that President Poroshenko trusts to deal with one of the nation’s most sensitive political and economic issue—energy.
The Ministry of Energy is in need of deep and comprehensive reforms, reforms that have been stalled on since Ukraine gained its independence. In addition to finding a way to diversify the nation’s energy supply, it will also need to begin to dismantle perhaps the single most corrupt state-owned company —Naftogaz.
The Time for Change is Now
The appointment of many outsiders to some of the most consequential ministries seems to indicate that the Ukrainian government is at long last ready to implement a series of far-reaching reforms. Should it fail to do so, the consequences will be severe.
There is a big difference, however, in passing reforms and implementing them. Placing professionals and technocrats at the most senior levels of government is a welcome step, but without support throughout their ministries from like-minded individuals, reforms will be difficult (if not impossible) in some areas.
More worrisome is a return to the politics of old. With the illegal voting carried out by some of the ‘pro-reform’ coalition’s MPs, coupled with the president’s hushed creation of the Ministry of Information Policy (that will be headed by a friend) shows that not everyone is on the same page.
The government has spent most of 2014 talking about reform. Now it must act on it.
