“This is a Cabinet of stagnation,” says Hlib Vyshlinsky, deputy head of GfK Ukraine, a market research company.
The Cabinet, which until now had 18 members, is changing in structure, and it’s not yet clear what it will look like by the time the president’s press service has finished posting his new appointments on the official website.
But that’s not the biggest news. The Cabinet is now heavily dominated by representatives of “The Family,” a loose grouping that is associated with Oleksandr Yanukovych, the president’s older son. Predominantly, its members are from eastern Ukraine.
While not much more was expected, the appointments suggest even more clannishness of the type that will keep “The Family” firmly in control of the budget. In this grouping however, there are no clear people seen as able successfully negotiate with the International Monetary Fund, European partners and even with Russia.
The new Cabinet also has very few public figures whose political and economic views would have been open for scrutiny. The two obvious exceptions are Leonid Kozhara, who replaced Kostiantyn Gryshchenko as foreign minister and Natalia Korolevska, who has replaced Sergiy Tigipko as social policy minister.
Kozhara was the chief foreign relations expert in the Party of Regions, while Korolevska ran a losing election campaign as leader of Ukraine Forward, a populist party that pretended to be opposition and even talked about impeachment to Yanukovych ahead of the Oct. 28 election. Her party program was an amazing amalgam of populist ideas and slogans, with no particular ideology attached.
Cosy places for ‘Family’
One of the most noticeable trends in the new Cabinet is the strengthening of the position of Yanukovych loyalists.
Prime Minister Mykola Azarov, who is often viewed as a relatively neutral figure in Ukraine’s Kremlinology, has now found himself surrounded by people who are viewed as the close circle of Oleksander Yanukovcyh in most key positions.
Serhiy Arbuzov, the highest placed representative of “The Family,” has moved from the Central Bank to the Cabinet as first deputy prime minister. He was considered by many as a potential candidate for prime minister after Azarov was dismissed in early December, but instead was appointed to a less prominent position.
It’s not yet clear who will replace him at the National Bank, a key position in the upcoming negotiations with the IMF, with which Ukraine needs to find common ground next year. Ukraine is due to pay off more than $10 billion in foreign debt, more than half it to the IMF itself.
The new Cabinet will also have a Ministry for Income and Duties, which will be headed by former chief tax collector Oleksandr Klymenko. It’s not clear what that ministry will be like, but it will mostly likely combine the tax service and the customs service, something that has been rumored for a long time. In other words, this is the ministry that will control most of the money coming to the state budget.
The other key ministry dealing with money remains in the same hands as Yuriy Kolobov keep his job as finance minister. He is actually considered competent, but too tied in with “The Family.”
Eduard Stavytskiy moved up from being ecology minister to industrial policy minister, a more powerful ministry. According to media investigations, Stavytskiy was a crucial figure in the scheme that allowed to privatize Mezhyhirya, the vast real estate north of Kyiv that now belongs to Yanukovych through a series of offshore companies.
Stavytskiy’s former adviser Oleg Proskuriakov has taken his place as ecology minister. He formerly headed the State Geology Committee. Both crucial agencies for the new gas extracting businesses set up by Oleksandr Yanukovych in the past few years.
Vitaliy Zakharchenko keeps his job as interior minister, which has received additional funding in the otherwise cash-strapped 2013 budget.
Akhmetov gets share
Rinat Akhmetov, the nation’s richest man and long-time president’s ally and financial backer of his Party of Regions, has improved his standing in the new Cabinet also.
Igor Prasolov, former head of Systems Capital Management, Akhmetov’s flagship company, and a former member of parliament, is now minister for economic development and trade.
Several officials from the eastern Ukrainian city of Dnipropetrovsk, who have also had close ties with Akhmetov, received jobs in the new Cabinet. Oleksandr Vilkul, former governor of the region, was appointed deputy prime minister. His appointment has received a mostly positive feedback from the expert community. Hennadiy Temnyk, the former deputy of Vilkul, is now minister for utilities.
Korolevska, the social policy minister who replaced Tigipko, is also considered close to Akhmetov. Her ministry controls the accounts of all social funds (including the infamous and ever-indebted Pension Fund), where every Ukrainian makes payments from their wages.
Other interests
Yuriy Boyko, a representative of a different clan, the so-called RosUkrEnegro group (which includes the chief of the presidential administration Serhiy Lyovochkin, gas and chemicals tycoon Dmytro Firtash and owner of Inter TV channel Valeriy Khoroshkovskiy), has strengthened his position in the new Cabinet. Boyko moved up to become deputy prime minister from his previous position as energy minister, despite featuring in international corruption scandals recently.
Pavlo Lebedev, a former deputy from Party of Regions, with a lot of business interests in Sevastopol, Crimea, was appointed defense minister. He seems to have no experience in defense of any sort, but some analysts said he was also close to Firtash.
Olena Lukash, former adviser to president and his representative in the Constitutional Court, is Minister of the Cabinet, a newly created (or, rather, restored) ministerial job. She is associated with the group of Borys Kolesnikov, a former deputy prime minister who has lost his job as deputy prime minister for infrastructure, possibly in part because of the recent failures of his pet project Hyundai trains, which have disrupted railway communication across the nation.
However, Volodymyr Kozak, former head of state railway monopoly Ukrzaliznytsia, has replaced Kolesnikov as infrastructure minister. He comes from Zaporizhya, and worked in Donetsk, and his appointment comes as a surprise, considering the recent railway failures.
Leonid Kozhara, a former Party of Regions deputy who was in charge of foreign relations, will now replace Kostyantyn Gryshchenko, whose daughter works for Boyko, as foreign minister. Gryshchenko will become a deputy prime minister, but his area of responsibility remains unclear. His appointment was also viewed as evidence of strengthening of the RosUkrEnergo group.
Dmytro Tabachnyk returns as education minister, Oleksandr Lavrynovych keeps his job as justice minister and Raisa Bogatyriova remains health minister. Mykola Prysiazhniuk also remains agriculture minister with expanded powers. Tabachnyk seems to be the only clearly pro-Russian figure in the new Cabinet, indicating that no breakthroughs are likely on that front, either.
Kyiv Post editor Katya Gorchinskaya can be reached at [email protected].
