You're reading: Pivovarsky stays for now, but with conditions

After a long day at the Ukrainian Cabinet of Ministers on Feb. 4, Infrastructure Minister Andriy Pyvovarsky agreed to withdraw his resignation made in December. But he's not staying unconditionally and will not stay for long if his demands are not met.

His conditions include: the authority to hire temporary CEOs for state-owned enterprises under his control, without any interference and delay; the immediate start of the privatization process of state-owned enterprises; and better salaries for staff in all ministries.

In addition, he wants new leadership in the tax and customs services.

“If I don’t see the light in the tunnel in a couple of weeks – how the process can be changed – then it will not happen,” Pyvovarsky told during a Kyiv Post interview at the Infrastructure Ministry on Feb. 5. “It’s not about only (one) reform, it’s about the whole checklist. We are at the point when the checklist can be fulfilled tomorrow if there is the willingness of the parliament, of the president, the prime minister and the speaker. There is no reason to wait.”

The minister, who oversees the nation’s ports, railways, air travel, roads and postal service, said that he will soon assign a specific deadline date, but it will not be longer than two weeks from now.

He said that Finance Minister Natalie Jaresko, Agriculture Minister Oleksiy Pavlenko and other ministers are in agreement. “We agreed that we are ready to work in this government, we are ready to work for the state if certain conditions are met.”

Interfax-Ukraine quoted Jaresko as making similar demands, including “unconditional support of the reform program; the program of cooperation with the International Monetary Fund, including the need to urgently pass laws that will ensure transparent privatization; no political interference in the change of the management of the top 60 state-run enterprises on the basis of an independent nomination committee, and de-politicization of the State Fiscal Service.”

Pyvovarsky said that the Feb. 4 Cabinet meeting and his decision about whether to remain or resign was “one of the most difficult days of my life,” Pyvovarsky said. “The level of importance of the decision I had to make was just huge for me, for the country, for the Cabinet of Ministers, for a lot of people.”

The ministers had a long discussion with Yatsenyuk, and Pyvovarsky, Jaresko and Pavlenko also had a separate discussion.

“We came to the conclusion that this could be the turning point to provide an additional boost to the reform process,” Pyvovarsky said. “Within the cabinet, since the discussion was very frank and open, we discussed a lot of things that were extremely important for every single minister.”

He calls Economy Minister Aivaras Abromavicius’ decision to resign on Feb. 3 a “bold” move and “patriotic,” saying that it was the right decision.

Pyvovarsky said that history repeats itself again and again in Ukraine, where for years the “politically established reached a certain degree of calamity” and “would always make a decision that would, to a certain degree, jeopardize or destroy the statehood.”

But Abromavicius’ departure provided the opportunity, he said, for a long overdue discussion about serious problems.

“The boiling point was reached when it was time to have an open and framed discussion among all stakeholders,” Pivovarsky said. “Aivaras opened a unique opportunity that could help the country to accelerate reforms, make certain necessary changes right now that the political elite was not ready to discuss two days ago.”

He thinks that Abromavicius might return, but also with strict conditions.

“If he believes that the checklist is doable, he will come back,” Pyvovarsky said.

Abromavicius resigned on Feb. 3, citing obstruction of his ability to manage state-owned enterprises under the Economy Ministry’s control. In particular, he said that one of President Petro Poroshenko’s top allies in parliament, Ihor Kononenko, was blocking systemic reform and installing his cronies in the enterprises, which have been a source of graft for corrupt officials. Kononenko denied the charges.

While Pyvovarsky also encounters obstructionists, he didn’t want to name them on Feb. 5.

“Every time I name a name, I get a new court case,” Pyvovarsky said.

Pyvovarsky has two criminal cases against him registered in the National Anti-Corruption Bureau, and a number of court cases coming from officials he fired. He said corrupt officials “know how to use the system. They go to court, they file a claim and then I have to find more lawyers, volunteers who will protect me,” Pyvovarsky said.

But for the minister, the problems are not with just specific persons.

“The whole system is fighting back,” he said. “We started cracking the system and it worked and the whole system reacted.”

Pyvovarsky pointed his finger at parliament; Ukrposhta, the nation’s postal service; Boryspil and Lviv airports; and Ukraine’s Seaport Authority as places in need of new leadership.

Lawmakers put up obstacles, he said. ” Every time I want to change a certain CEO of a specific company I get a request from members of parliament saying: ‘Don’t do that, it’s a mistake,” Pyvovarsky said. “And then if I go for it, those members of parliament help whoever I fired get reinstalled. That’s how it worked for years.”

Privatization

The infrastructure minister wants to see swift and mass privatization since Ukraine’s more than 3,000 state-owned companies are massive cash-cows for corrupt officials.

Even though Ukrzaliznytsia, the state’s railway monopoly, has been corporatized, more needs to be done, Pyvovarsky said. First, there should be a new CEO and, second, there should be new independent members of the supervisory board.

In many cases, Pyvovarsky hasn’t been able to change specific CEOs during his whole time of 14 months of service.

“Ukrposhta – nothing. The Sea Ports Authority – nothing,” Pyvovarsky complained. “A number of appointments, even though they made it through the nomination committee, they get stuck in the secretariat of the Cabinet of Ministers. Some of the nominations have been locked by courts.”

Fair compensation

Since becoming minister on Dec. 2, 2014, Pyvovarsky has insisted on raising salaries for ministry staff members. They are now only nominally paid — with salaries of $300 a month or less.

“I was promised that a fair compensation mechanism would be found a year ago. It wasn’t. I will not wait for another year,” Pyvovarsky said. “I am not talking about my staff only. I am talking about all ministries. I cannot be successful with just successful people in my ministry. It doesn’t work like that.”

He says that every single draft law filed by his ministry came with the financial help of the European Union or technical assistance from foreign ministries.

But a ministry cannot function in the long-run based on volunteer work and foreign assistance, the minister said. The work needs to ultimately come from well-educated Ukrainians.

In Ukraine, there are “a lot of extremely smart people, but they are de-motivated by low wages,” Pyvovarsky said.