• Cabinet Composition/Roster: The cabinet is essentially completed although there is still no First Deputy Premier. In addition to including three foreigners in the cabinet (although they are now Ukrainian citizens), the Cabinet of Ministers has undergone a major overhaul. Counting Yatsenyuk and five ministers who kept their jobs (Avakov, Kvit, Petrenko, Poltorak, and Klimkin), only two other ministers have any previous cabinet experience (Kyrylenko was the Minister of Social and Labor Policy and Rozenko who was First Deputy in the same ministry from 2008-2010). It also appears that the SBU Chief Valentin Nalyvychenko will stay on the job although it is unclear who will be the new Chairman of the National Security and Defense Council (NSDC). Prosecutor General Vitaliy Yarema has run into difficulties lately and stays for the time being although he may be getting closer to the endangered list.
Prime Minister: Arseniy Yatsenyuk has proven more resilient than many expected last February in the Premier’s post. With parliament’s confirmation of his agenda, he has at least one more year on the job to get things done. One year in Ukrainian politics is a lifetime so we will see if he can make the tough choices that lie ahead.
Vice Prime Minister for Regional Development and Communal Services: Gennadiy Zubko is a Zhytomyr businessman who has won the confidence of President Poroshenko. Zubko was elected as an MP in 2012 with Motherland/Tymoshenko from a district in Zhytomyr city. With Volodymyr Hroisman leaving Bankova street to be Speaker of Parliament, Zubko will presumably continue Hroisman’s decentralization efforts in the Cabinet of Ministers.
Deputy Prime Minister for Culture: Vyacheslav Kyrylenko returns to the Cabinet of Ministers. Previously he served as the Minister of Social Policy and Labor under the original “Orange Revolution” government from February till September 2005. Kyrylenko has a solid record of supporting Ukrainian patriotic causes even though his record of achievements have been mixed. Kyrylenko has been elected to parliament multiple times.
Deputy Prime Minister: Valeriy Voschevskyi is the highest ranking Radical Party member to receive a post in the Cabinet of Ministers. Voschevskyi is a former Head of Ukraine’s State Road service (Ukravtodor) and owns a factory in Chernihiv (where Lyahsko’s hails from). Given that no Head of Ukraine’s State Road service can ever be considered as having done a “good job”, a leading indicator for how Lyashko’s team performs in government will be to watch Voschevskyi. If there is opposition to Yatsenyuk’s agenda within the Cabinet, expect to come from here first.
Finance Minister: Natalie Jaresko was the surprise appointee to Head the Ministry of Finance. Jaresko’s American background is well known and she is expected to be a “no nonsense” minister. Her “outside the box” appointment has already riled the Ron Paul conspiracy types and caused hand wringing about “perceptions” at the US Embassy, but ultimately it is a positive indication that the new Ukrainian government is committed to reform. Interestingly, the critics of this appointment were silent when Russian passport holders held Cabinet posts under the Yanukovych government.
Economic Minister: Aivaras Abramovychus was the second surprise “foreigner” appointment. Abramovychus, born in Lithuania, has a solid financial background and is expected to work closely with Jaresko at Finance. The fact that both the Ministries of Finance and Economy were awarded to foreigners, is both a positive sign that the new Ukrainian government wants radical changes as well as an acknowledgement of the huge corruption in the Ukrainian economy overall. Appointing foreigners to high posts is not a new practice. In the Bible, Pharaoh appointed a Jew named Joseph to be Vizier (Prime Minister) of Egypt to ensure adequate grain supplies for the nation. Joseph’s wisdom led to “seven fat years” for Egypt and helped the nation overcome and survive seven lean years of famine. Given that Ukraine has already experienced horrific famine (the Holodomor), war and economic decline, it is hoped that Jaresko and Abramovychus will be the “Joseph” that brings “seven fat years” to Ukraine’s economy.
Justice Minister: Petro Petrenko stays on the job and is a close Yatsenyuk ally.
Interior Minister: Arsen Avakov also keeps his job. Avakov is expected to appoint some of Georgia’s Ministry of Interior reformers as his deputy ministers to duplicate the success of professionalizing the police force in the Caucuses. Police reform will be a clear leading indicator of the success of this government in reforming the system.
Education Minister: Serhiy Kvit survived and remains and Education Minister. His work is viewed positively by the international community and will allow for full implementation of education testing and other reforms.
Health Minister: Aleksander Kvitashvili was the Georgian member of the “foreign triumvirate” tapped to lead a major ministry in the Ukrainian government. Kvitashvili, despite his work to reform Georgia’s healthcare system, remains a bit of a mystery. As former Shevardnadze parliamentarian said, “He is not a fish and not a meat” which translates to mean that no one really knows what to think about him. The optimistic scenario is that he will use his experience to improve the efficiency and services of Ukraine’s bureaucratic healthcare apparatus, even though most of the major reforms took place before his term as Minister of Health of Georgia. Most believe that he was appointed as a favor from Poroshenko to former Georgian President Mikhail Saakashvili. Given the pending criminal cases against Saakashvili (albeit primarily on political grounds) in Georgia, the appointment of the former Georgian president would cause a rift in Ukrainian-Georgian diplomatic relations at a time when both remain under heavy Russian pressure. It is known that Georgian Premier Irakli Garibashvili has personally argued with Poroshenko not to appoint Saakashvili to any post in the Ukrainian government. Thus, Poroshenko compromised by appeasing Garibashvili while pursuing his reform agenda via a Saakashvili apostle.
Agriculture Minister: Oleksiy Pavlenko has extensive business and financial and it is part of the “new Ukraine” team of young financial professionals in the Cabinet of Ministers. Agriculture harvests are one of the few things that have been positive economically for Ukraine this year and whatever work Pavlenko does with this ministry will likely be an improvement over Yanukovych’s Mykola Prysyazhnyuk, whose main accomplishment was providing “the family” with a virtual ATM of cash from the agricultural sphere.
Energy Minister: Volodymyr Demchyshyn takes over as the new Energy Minister. Demchyshyn worked in the private sector ING Bank and Ernst & Young before leading the National Commission for State Regulation of Energy and Utilities in August of this year. He replaces Tymoshenko ally Yuri Prodan. There had been speculation that Naftogaz Ukraina Chairman Andriy Kobolev who move over to lead the ministry but given the tenuous situation with winter fuel supplies, he will stay on in his current role. Ukraine is not out of the woods yet so to speak, with regard to keeping warm this winter and Kobolev has performed admirably under difficult circumstances.
Environment Minister: Ihor Shevchenko is another young face in the Cabinet of Ministers with private sector experience as a lawyer and financial manager. Shevchenko passed the bar exam in New York and founded the Ukrainian Bar Association.
Youth and Sports Ministry: Ihor Zhdanov received this post as part of the Tymoshenko quota in the Cabinet. Zhdanov, a seasoned political strategist, seems an odd selection for this relatively unimportant ministry. It is further evidence of the declining influence of Tymoshenko on Ukrainian politics. His appointment is the American equivalent of Karl Rove being appointed to the Presidential Commission on Physical Fitness, Sports and Nutrition. It’s not that he isn’t capable but it suggests the need to fill a post rather than find the most appropriate role for a political appointee.
Social Policy Minister: UDAR’s Pavlo Rozenko returns to the Ministry of Social Policy as the Head after a stint as First Deputy in the final years of the Yushchenko-Tymoshenko government (2008-2010). Rozenko is well regarded as a capable manager although not an exceptional politician.
Infrastructure Minister: Andriy Pyvovarsky is another “financial face” in the Cabinet of Ministers with extensive business and financial experience. Time will tell how well this team of businessmen, bankers, and finance wizards performs. Given the country’s economic woes, the extra emphasis on real world business experience appears to be a wise one.
Defense Minister: Stefan Poltorak remains (as expected) as Defense Minister.
Foreign Minister: Pavlo Klimkin also remains (as expected) as Foreign Minister. Klimkin deserves credit for maintaining a strong international coalition of support for Ukraine against Russian aggression.
SBU: Valentin Nalyvychenko remains as the boss of an agency of professional spies, amidst an environment of war and epic political intrigue. Every day he faces as many internal threats to his job as the country faces external threats to security – and yet he prevails. As long as Nalyvychenko continues to defy the odds with his near flawless performance, he will continue to lead the country’s Security Service.
Minister of Information: Yuri Stets received this controversial new post. Stets, a close Poroshenko ally, is tasked with fighting Russian propaganda. Nonetheless, the very concept of a Ministry of Information has startled the journalistic community in a country with a history of suppressed free speech. Stets’ every move in this ministry will be second guessed by suspicious journalists and the chance of ending his work on his own terms is small. While the idea for the ministry is understandable in war time, the creation of the post comes too quickly on the heels of overthrowing the tyrant Yanukovych to be socially acceptable. His best option is to quickly and effectively counter the Russian propaganda and then close the ministry as soon as possible to avoid being tarnished by his acceptance of this post. History rewards politicians who return power to the people (going back to the Roman Emperor Lucius Cinncinnatus) and severely punish those who usurp it.
Prosecutor General: Vitaly Yarema stays on the job for now but in the meantime Poroshenko is searching for a replacement – possibly even another Georgian candidate.
Minister of the Cabinet of Ministers: Hanna Onishchenko is a lawyer and former Deputy Justice Minister. She is tasked with coordinating the work of the entire Cabinet to ensure its efficiency. Onishchenko is the first woman to hold this position.
• Decentralization – the architect of Ukraine’s decentralization plans, Volodymyr Hroisman is now the Speaker of Parliament. This move can be interpreted two ways with regard to Poroshenko’s planned decentralization push: 1) after drafting the laws based on Poland’s experience in the 1990’s, Hroisman is moving to the legislative branch to ensure the bill is passed through parliament. Or 2) the problems in the Donbass will eliminate any chance at devolving powers to the regions and therefore Hroisman is trying to change jobs to avoid the fate of Roman Besmertniy in 2005 when he was tasked with “territorial and administrative reform” and met strong grassroots resistance (orchestrated by Tymoshenko). Decentralization is a key part of the “official” agenda and would essentially devolve powers to local communities and away from the national government. This would include budgetary powers and give local communities the right to consolidate into larger population groups to provide for healthcare, education, police and other functions. The direct election of governors, which polling consistently shows is supported by more than 75% of the population, will not be part of the decentralization package though. The Russian incursion in the Donbass combined with the annexation of Crimea has eliminated that option. As one Bankova advisor said, “after that, there is no way we are giving the Kremlin the convenience of being able to bribe just one guy (i.e. the governor) and take away an oblast.”
• Lobby Help in DC? On November 19, DC lobbyist Charlie Black visited Ukraine and met with top officials in the Poroshenko administration to discuss possible lobbying in DC. While Ukraine’s new government has long needed lobbying help in the US (had the new government hired lobbyists initially in February then the hard sanctions and military aid could have come months earlier), the meeting with Charlie Black is peculiar. Black is the former business partner of Paul Manafort when they operated Black, Manafort, Stone and Kelly till 1996. Manafort is a campaign consulting legend in Ukraine for transforming Yanukovych from the pariah of the Orange Revolution in autumn 2005 into Prime Minister less than a year later (August 2006). The financial size of his legendarily large consulting contracts are also noteworthy. Most recently Manafort pulled a rabbit out of his hat in the October parliamentary elections by helping the upstart Opposition Bloc surge to 9.4% out of nowhere. While Black and Manafort have not been business partners for several years, it does seem odd that the Poroshenko team would seek out his help as a lobbyist given the past association with Manafort/Yanukovych. Ukraine needs lobbying help in the US – even with the passage of Senate bill 2828. The goodwill from Congress won’t last indefinitely and every serious country has a professional, paid lobby in DC. Ukraine has run up huge debts this year both financially and in terms of US goodwill – and at some point, all debts come due. Thus, while it is good that Ukraine’s government is finally exploring lobbying help, greater discretion should be used in the candidates being interviewed.
Dates to Watch:• December 26, Last Voting Session of Parliament in 2014. Expect passage of the 2015 budget on this date.
• January 13, First Voting Session of Parliament in 2015
• October 2015, National Local Elections: Despite Poroshenko’s desire to push for early local elections, the local elections will likely remain next October. At stake will be the control of the mayor’s offices in every major city as well as the city councils. Presumably, the elections will take place after Poroshenko-Hroisman’s decentralization law has been passed by parliament which will give local communities far broader powers and budget controls than they currently enjoy. Importantly, the changes will not be only for the occupied Donbass but for the whole of the country. Expect heated races in Odesa, Kharkiv and Kherson among other major cities.