Kuchma approves appointment of reformist Cabinet (01/09/00)

Kuchma approves appointment of reformist Cabinet

by Roman Woronowycz
Kyiv Press Bureau

KYIV - In the first serious effort to form a reform-minded government, President Leonid Kuchma has approved the appointment of three new vice-prime ministers and 11 ministers as proposed by his newly confirmed prime minister, Viktor Yuschenko.

President Kuchma, recently re-elected to a second term, had promised in his inauguration speech that Ukraine would begin to move aggressively on economic reforms, and that he would appoint a prime minister and a government ready to make the difficult decisions to bring the economy to life.

His appointment of Mr. Yuschenko on December 22 - considered internationally and domestically as perhaps the person most able and willing to make the needed changes - has brought with it a sense of optimism and a feeling that change is at hand. In turn, the prime minister's appointment of a Cabinet composed of an eclectic mix of veteran administrators, dedicated reformers and unexpected newcomers has continued that mood, even as political experts expressed surprise at some of the appointments.

On December 30, 1999, President Kuchma confirmed via presidential decree the appointment of Yuri Yekhanurov as the first vice prime minister; Yulia Tymoshenko as vice prime minister of energy affairs; Mykola Zhulynskyi as vice prime minister of humanitarian affairs; Serhii Tulub, minister of fuel and energy; Serhii Tyhypko, minister of the economy; Ivan Sakhan, minister of labor and social policy; Leonid Kostiuchenko, minister of transportation; Vasyl Kremen, minister of education; Bohdan Stupka, minister of culture.

The president also confirmed the re-appointment of Yurii Kravchenko as minister of internal affairs; Borys Tarasyuk, minister of foreign affairs; Suzanna Stanik, minister of justice; Ihor Mitiukov, minister of finance; and Oleksander Kuzmuk, minister of defense

Several of the new appointees, mostly those retained by the new prime minister, previously served in governments that waffled on reforms during President Kuchma's first term, but individually they are widely considered mainstream reformers.

Political experts are calling at least one appointment controversial, however.

Several days before the appointments Mr. Yuschenko gave strong evidence that he was serious about streamlining the bloated bureaucracy of the Cabinet of Ministers when he named two close aides to oversee the government's administrative arms. On December 26 he announced that Oleh Ryabchuk, formerly internal relations director at the National Bank of Ukraine, would run the prime minister's office and Viktor Lytvytskyi, the ex-chief advisor of the NBU, would head the Cabinet's secretariat.

In announcing the new Cabinet of Ministers, Volodymyr Lytvyn, head of the presidential administration said the president fully supports Mr. Yuschenko's picks. "The president has considered the proposals of the prime minister on the composition of the future government and expressed consent with them," said Mr. Lytvyn.

Earlier Mr. Yuschenko dispelled rumors that he had little input regarding the appointments to his Cabinet. After a meeting of the Collegium of the Ministry of Defense, the prime minister told reporters that he was in charge of forming the government. "It will be my government," said Mr. Yuschenko, according to Interfax-Ukraine.

The most unexpected appointment was that of Ms. Tymoshenko as vice prime minister of energy affairs. Ms. Tymoshenko, a national deputy who chairs the Parliament's Budget Committee, is also the owner of United Energy Systems, once a huge gas and oil distributor closely associated with Pavlo Lazarenko, the former prime minister who now sits in a U.S. immigration detention facility awaiting extradition proceedings and embezzlement and corruption charges in Switzerland and Ukraine.

Since the arrest of Mr. Lazarenko, Ms. Tymoshenko has seen her business shrink to a fraction of its former self. Today her company owes the Ukrainian government huge sums of money in unpaid electricity and energy bills.

Her appointment came as a surprise to many experts here because she has been an arch-critic of the Kuchma administration and, most recently, has led the fight against the 2000 budget bill submitted by the Cabinet of Valerii Pustovoitenko, who was recently replaced by Mr. Yuschenko.

The new prime minister said after the announcement of Ms. Tymoshenko that she was not appointed simply as a ploy to assure the smooth passage of the government's 2000 budget.

But many experts remain unconvinced. Mykhailo Pohrebynskyi, a noted political analyst and director of the Center of Political and Conflict Studies, told The Weekly that in making such an appointment it would have been difficult not to consider the benefits of having her on the side of the government in the budget battle and that bringing Ms. Tymoshenko into the Cabinet of Ministers obviously should silence one of the government's most vocal critics.

He said Ms. Tymoshenko's appointment offers other benefits also including her insider status as a pre-eminent player in Ukraine's energy markets. Mr. Pohrebynskyi explained that if she worked constructively she could do much to reorganize Ukraine's disheveled energy sector and help to develop better trade relations with the Russian energy barons, whom she knows personally.

The political analyst downplayed what many see as the liablity of Ms. Tymoshenko's ties to Mr. Lazarenko, noting that this could even be a plus, because many of the unfavorable energy deals cut with Russia were done by Mr. Lazarenko, and the new minister may have the ability to undo the damage done.

Mr. Pohrebynskyi said he also believes that Ms. Tymoshenko would play more of a managerial role than one of policy-making, and that the prime minister would keep her at arms length to avoid any political fall out should she become a loose cannon on government policy.

The political analyst questioned her reformist credentials, however, and said that her appointment is somewhat puzzling in the end because of her difficult relations with the president.

Yekhanurov seen as serious reformer

Mr. Pohrebynskyi was very upbeat about the appointment of Mr. Yekhanurov, the first prime minister, whom he called "a person with a reformer's outlook." Mr. Yekhanurov held the post of minister of the economy from February to July 1997 under governments headed by Yevhen Marchuk and Mr. Lazarenko. Prior to that he served as the head of the State Property Fund of Ukraine.

Currently Mr. Yekhanurov is a national deputy and a member of the National Democratic Party. He has not yet resigned his seat in the Parliament, which he must do according to the Ukrainian Constitution.

In his initial public declaration as first vice prime minister, Mr. Yekhanurov stressed that he would concentrate on "the economic bloc of questions," particularly budget and administrative reform. He explained that in administrative reforms he currently favors simulating the approach taken by Poland.

Poland led the former Warsaw Pact countries in pursuing reforms in a radical and swift manner, which allowed the economy to realign quickly into a free-market-type system. The Polish economy has breezed along in recent years with about 6 to 8 percent growth annually.

Questions about humanitarian affairs

Mr. Zhulynskyi, the other vice prime minister appointed by Mr. Yuschenko, also has reformist inclinations, but his managerial skills were questioned by Mr. Pohrebynskyi.

Mr. Zhulynskyi previously served as vice prime minister of humanitarian affairs in the administration of Ukraine's first president, Leonid Kravchuk. The tenure of his ministerial service is noteworthy as the beginning of the decline in a spurt in Ukrainian culture awareness that had begun in the late 1980s.

The humanitarian ministries with which Mr. Zhulynskyi will cooperate, which includes the Ministry of Culture and the Ministry of Education, are now headed by persons with unquestionable credentials with regards to Ukrainian culture, said Mr. Pohrebynskyi, but he doubted that they had sufficient bureaucratic skills to work effectively.

He called Mr. Stupka, Ukraine's best known actor and already a legend here, "the first person of Ukrainian culture, and probably the most intelligent person in the new government."

However, he had misgivings that the Ukrainian star of stage and screen would prove to be a good administrator because there is little precedent here for a person making the successful transition from entertainment to politics.

Mr. Pohrebynskyi had higher hopes for Mr. Kremen, the new minister of education who he said is a person with sufficient background and experience to finally get that ministry moving in the right direction.

Even as a new tide of optimism sweeps the country that true reforms may be around the corner, whether the humanitarian ministries and the Cabinet as a whole will work more effectively than previous ones is a question that neither Mr. Pohrebynskyi nor the new prime minister could answer without a doubt.

Speaking on the day of his confirmation by the Verkhovna Rada, Prime Minister Yuschenko said that, without the development of a centrist democratic parliamentary majority in the Verkhovna Rada, stagnation in every aspect of the reform effort could continue.

"This will be a problem of the government rather than the Parliament," said Mr. Yuschenko.

Fragmented efforts by various political parties are currently under way to form a majority coalition in the Parliament, but none has shown any evidence of success.

Mr. Pohrebynskyi questioned the manner in which Prime Minister Yuschenko and President Kuchma have gone about forming a Cabinet, if in fact their goal is a majority coalition in the Verkhovna Rada that will support government initiatives.

"You would think they would have made appointments more according to the faction mandates, but the Social Democratic Party (United) currently has the most mandates [from the centrist democratic parties], and they are not proportionally represented in the Cabinet," explained Mr. Pohrebynskyi. "I believe the government was formed in a process of compromises."

* * *

Four ministries and one vice prime minister portfolio remained vacant as of January 6: vice prime minister of agrarian policy; and the ministries of health, agriculture, ecology and natural resources and emergency situations. Mr. Yuschenko said he expects to fill those positions immediately after the Christmas holidays, which are celebrated here according to the Julian calendar.

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