December 24, 2015

Ukraine’s foreign-born ministers at the forefront of reforms


Anastasia Sirotkina/UNIAN

Finance Minister Natalie Jaresko and Odesa Oblast State Administration Head Mikheil Saakashvili are the most recognized foreign-born Ukrainian state officials and have been mentioned as candidates for prime minister and vice prime minister, respectively.

KYIV – When Internal Affairs Arsen Avakov told Mikheil Saakashvili to “Get the hell out of my country!” to conclude their nasty shouting match at the December 14 meeting of the president’s National Reforms Council, he struck a nerve in the country.

Ukrainians have been critical of the unprecedented number of foreigners serving in key government posts. Some don’t like their dogged pursuit of reforms, while others don’t like their style. Some are accused of looking for a scapegoat.

“We have ministers and governors [oblast state administration heads] from abroad that we’re going to call prime minister and president. Then we should recognize that Ukrainians are inferior. I am categorically against this. No one besides us will restore order in our home,” Oleh Lyashko, the populist showboating politician who leads the Radical Party, said on December 21.

And while Mr. Lyashko’s comments reflect the view of many Ukrainians, leading publications such as Novoye Vremia have praised the foreign officials as among the most effective, partly because they’re new to the political system and aren’t indebted to anyone.

Indeed, Finance Minister Natalie Jaresko has been named by top media outlets as a possible candidate for prime minister to replace Arseniy Yatsenyuk, who is expected to be removed within months, after the next IMF loan tranche arrives.

Mr. Saakashvili, the head of the Odesa Oblast State Administration, has been named by political expert Viktor Nebozhenko as a possible vice prime minister, which he said was the aim of his December 14 presentation to the reforms council in which he accused Messrs. Yatsenyuk and Avakov of corruption.

“Saakashvili knows perfectly that he can never become prime minister. But his goal is to become vice prime minister of law enforcement ministries in the reformed Cabinet and oversee the work of the Internal Affairs Ministry, Procurator General’s Office, Security Service of Ukraine and the Anti-Corruption Bureau,” said Mr. Nebozhenko.

“His conflict with Avakov was the first step on that road. Even if Saakashvili doesn’t achieve his goals in the Cabinet, then he is trying to play the role – in public opinion and the mass media – of the overseer of law enforcement bodies in the fight against elite corruption in Ukraine,” he added.

And while Ukrainians might not like the idea of foreigners telling them what to do, the evidence indicates they’ve played critical roles in the government’s biggest accomplishments in reforms so far.

“These expert foreigners have some kind of ambition,” Oleksandr Palii, a Kyiv political expert and author, told Radio Free Europe/Radio Liberty in an interview published on December 22. “It’s this that they come for, to a country that’s in a war and in a difficult condition. Their motivation is tied to their self-fulfillment and their building their name in Ukraine.”

Finance Minister Natalie Jaresko – a native of Chicago, she graduated from Harvard University’s School of Public Policy before settling in Ukraine in 1992 and launching two top Ukrainian business investment funds, the Western NIS Enterprise Fund and later Horizon Capital.

The most lauded among Ukraine’s foreign-born ministers, Ms. Jaresko, 50, was hailed as the “hero minister” (Agence France-Presse) and “Putin’s American foe” (Bloomberg News) after spending six months working on a complicated $15 billion debt restructuring for Ukraine’s government and corporate debt, which was completed in September.

Ms. Jaresko has also pulled off what had been thought to be impossible, which was to balance the budget of the state natural gas production and transit monopoly Naftohaz Ukrainy by eliminating the multi-billion dollar deficits with which it was saddled for a decade in what was widely viewed as corruption.

Its budget was balanced in order to prepare for its split into three separate companies – for gas production, transit and storage – in what’s viewed as a major structural reform for the Ukrainian economy, particularly if some of the stakes are privatized.

Ms. Jaresko is now grappling with her next big challenge, which is the 2016 central budget. To her credit, her budget has the IMF’s endorsement as it met all the organization’s requirements. Yet she has drawn criticism from populist politicians for planning spending cuts that involve massive layoffs. Her defenders say she had little room for maneuvering in light of IMF requirements.

Odesa Oblast State Administration Head Mikheil Saakashvili – a native of Tbilisi, Georgia, he graduated in 1992 with a degree in international law from Taras Shevchenko National University in Kyiv, where he befriended President Petro Poroshenko as a student; he graduated from Columbia Law School in New York in 1994 with an L.L.M. degree. He served as Georgia’s president between 2004 and 2013, after which criminal charges were filed in 2014 and his Georgian citizenship revoked this year.

Since his appointment in May by Mr. Poroshenko, Mr. Saakashvili, 48, has been the most visible, and most controversial, foreign-born state official, as was expected given his notoriously hot temperament and intense approach to reforms, which his critics described as reckless during his presidency.

In his career in Ukraine, he launched a bold campaign to expose allegedly corrupt state officials, starting with the head of the State Aviation Service, Denys Antoniuk, accusing him of blocking low-cost competitors from entering the Ukrainian market.

The verbal attack in June, leaked onto the Internet, served as the media platform in his campaign to break up an alleged monopoly of International Airlines of Ukraine and its owner, Igor Kolomoisky. It resulted in Mr. Antoniuk’s dismissal and house arrest.

The campaign intensified at the December 6 meeting of the Odesa Anti-Corruption Initiative, at which he accused Mr. Kolomoisky, Prime Minister Yatsenyuk and his closest advisers of costing the government $5 billion as a result of their corrupt schemes. (All these politicians are rivals of Mr. Poroshenko; Mr. Saakashvili has yet to target anyone from Mr. Poroshenko’s team in his campaign.)

Needless to say, Mr. Saakashvili’s approach has earned him many enemies in a very short period of time. Messrs. Yatsenyuk and Avakov showered him with insults such as “traveling showman” during the December 14 debacle, while Mr. Kolomoisky vowed, in an interview published on December 21 on the news site, “to beat him like a dog” after he leaves government.

Economic and Trade Development Minister Aivaras Abromavicius – a native of Vilnius, Lithuania, he earned a bachelor’s degree in international business from Concordia International University Estonia before becoming fund manager in 2003 of East Capital asset management group, among Eastern Europe’s leading investment banks. He moved to Ukraine in 2008 to lead its Kyiv office.

Leading a ministry that doesn’t have many vital responsibilities, Mr. Abromavicius, 39, is most credited with cutting its staff by 30 percent in February and another 20 percent in the fall. He even left open the possibility that the ministry would be liquidated altogether.

Mr. Abromavicius has been a leading advocate of creating a state holding company for strategic enterprises and privatizing state enterprises that are plagued by corruption. Yet the Verkhovna Rada failed, 10 times already, to approve the legislation to enable the privatization process, as lamented by Mr. Abromavicius. “The illegal divvying up of assets continues!” he tweeted this month.

Health Minister Alexander Kvitashvili – a native of Tbilisi, Georgia, he earned a master’s degree in public administration from New York University in 2003. That year, he worked in the financial and administrative departments at Grady Memorial Hospital in Atlanta. He served as the Labor, Health and Social Security Minister in Georgia before becoming rector of Javakhishvili State University in Tbilisi.

Mr. Kvitashvili, 45, is widely characterized as one of the failures among the foreign-born ministers, yet he inherited one of Ukraine’s most corrupt government bodies. In a June address to Parliament, he estimated that two-thirds of the payments in Ukraine’s hospitals are in the form of bribes and proposed granting hospitals more financial autonomy to manage their affairs.

Attempts to dismiss him for alleged corruption began within months of his appointment in December 2014. He said these attempts were in response to his own efforts to combat corruption.

He was accused of incompetence in August for failing to arrange for medical transports abroad of terminally ill children and injured soldiers, costing six lives. In response, he said such commission findings were politically motivated.

Mr. Kvitashvili submitted his resignation in July and was considered for dismissal by Parliament four times, most recently in September, but to no avail. Among his accomplishments is organizing a 2016 program to introduce computerized medical cards and patient registers, to be financed by the World Bank.

Odesa Oblast Prosecutor David Sakvarelidze – a native of Tbilisi, Georgia, he completed his law degree in 2004 at Javakhishvili State University in Tbilisi. He studied at St. Bonaventure University near Buffalo, N.Y., in 2001-2002.

Appointed as deputy procurator general in February, his claim to fame was his investigations of the “diamond prosecutors” – two local prosecutors arrested for taking large bribes, including 65 diamonds found in one of the men’s possession. Attempts were allegedly made by two deputy procurators general to undermine their arrest and prosecution.

Those investigations, conducted with Vitaliy Kasko, earned the praise and support of U.S. Ambassador to Ukraine Geoffrey Pyatt. The scandal created a vicious conflict within the Procurator General’s Office, prompting Mr. Sakvarelidze, 34, to announce in mid-September that he had accepted a job as Odesa Oblast prosecutor general, working alongside Mr. Saakashvili.

Nonetheless, he retained the position of deputy procurator general and vowed that the criminal charges against the diamond prosecutors would be fully prosecuted, telling the news site on December 13 that the evidence has been collected and is ready to be presented.

In Odesa, Mr. Sakvarelidze led an investigation into the Odesa Portside Plant, a top producer of ammonium nitrate in Ukraine, and reportedly told news site that top Cabinet leaders, including Mr. Yatsenyuk, were involved in a $90 million per year corruption scheme.

Mr. Yatsenyuk denied the claims, while Mr. Sakvarelidze denied naming Mr. Yatsenyuk, though he acknowledged he had referred to “the country’s higher officials.”

In late November, Procurator General Viktor Shokin announced that Mr. Sakvarelidze would be responsible for monitoring the launch and activity of the Inspector General of Domestic Investigations and Security.

First Deputy Internal Affairs Minister Ekaterina Zguladze – a native of Tbilisi, Georgia, she studied at a high school in Oklahoma under a Freedom Support Act scholarship and completed a journalism degree from Javakhishvili State University in Tbilisi. She became Georgian deputy internal affairs minister in 2005 at the age of 27 and was promoted to first deputy, serving until 2012.

Appointed in December, Ms. Zguladze, 37, immediately outlined her goals of changing the methods of recruiting candidates to the newly created National Police of Ukraine and their training. The results were apparent a year later, when 80 percent of police commanders could not pass the new testing procedures.

In all, more than 37 percent of the Kyiv police force, or 3,386 officers, failed the first two of three tests to requalify for the police. The so called “militsiya,” as the police were referred to, was officially liquidated on November 7 and merged into the national police.

Once dispatched to monitor, or in many cases abuse, angry protesters, at least 400 police swarmed the Internal Affairs Ministry on December 13 to protest the requalification procedures, drawing Facebook comments from Mr. Avakov that “I’m even glad this happened” and “we will act more decisively and quickly,” asserting that the protesters were corrupt cops.

Ms. Zguladze also played a key role in leading the transformation of the notoriously corrupt State Traffic Inspection, whose Kyiv division was liquidated on July 10 and merged into the national police.

It was replaced the same week by the newly created police patrols, which made a positive impression on Ukrainians with their new cars and more citizen-friendly officers. Nationally, the traffic police was officially liquidated on November 18. The police patrols were among the few reforms visible to average Ukrainians following the Euro-Maidan.

Ms. Zguladze was named among the Top 100 Global Thinkers of 2015 by Foreign Policy magazine – one of only two Ukrainians selected. The police’s new norms and standards would be implemented this year, she said in April, but it will take another five to 10 years to reform it entirely.

National Police Chief Khatia Dekanoidze – a native of Tbilisi, Georgia, she earned a degree in international relations from Javakhishvili State University in Tbilisi. She studied in the U.S. before being appointed, at age 31, as head of Georgia’s newly created police academy, which she led between 2007 and 2012. She was appointed head of the National Police of Ukraine on November 4.

Prior to her appointment, Ms. Dekanoidze, 38, served as an advisor to Mr. Avakov and was involved with many of the reforms that were implemented. At her first press briefing on November 4, she said her priorities would be to launch the Emergency Action Corps (KORD), complete the testing process for police and launch police patrols in 29 more Ukrainian cities.

By December 11, she joined Mr. Pyatt in unveiling the National Police Recruitment Center. She assured the public that the recruitment and requalification is being conducted by independent commissions, who base their decisions on various objective tests that candidates have to perform. By March 1, she aims to have at least one recruitment center established in each oblast of Ukraine.