Shock to the sistema: Ukraine’s youthful new government

Will Ukraine's young new leaders begin to reckon with their deep state?

Ukraine’s new comedian president, Volodymyr Zelensky, has wasted no time forming a new government since parliament assembled on 29 August. He ignored constitutional convention to attend the first day’s session, haranguing MPs and forcing them to sit after hours. This was all for public consumption, of course, but it has produced results.

The new prime minister, Oleksiy Honcharuk, is just 35 – four years younger than the average MP. Modern Ukraine itself is only 28, if one marks its birth with the fall of the Soviet Union. So the fundamental question is: how will the country’s new, youthful leadership team cope with an embedded sistema, or deep state, that is almost as old as they are?

The Ukrainian state is shrinking, with the number of ministries falling from 25 to 17. Honcharuk is a lawyer who, since 2015, has headed the Office of Effective Regulation – an organisation focused on deregulation that seeks to encourage a boom in small and medium-sized enterprises, as well as foreign direct investment. Honcharuk’s key deputy is the 28-year-old Mykhailo Fedorov, who once stood for the libertarian 5.10 party on a platform of abolishing all taxes aside from sales and social ones. Having also run Zelensky’s social media election campaign, Fedorov is now vice-prime minister for digital transformation, charged with implementing Zelensky’s slogan of a “state in a smartphone”.

Other appointments also point to a reform agenda. The leadership of the national bank is unchanged, even though oligarch Ihor Kolomoisky, Zelensky’s supposed patron, has been at loggerheads with the institution since the nationalisation of his PrivatBank in 2016. Oksana Markarova, who is respected by the International Monetary Fund (IMF), has kept her job as finance minister. The new minister of economic development, trade, and agriculture – Tymofiy Mylovanov – is honorary president of the Kyiv School of Economics, which has ambitions to become Zelensky’s ideas factory.

The fundamental question is: how will the country’s new, youthful leadership team cope with an embedded sistema, or deep state, that is almost as old as they are?

It is possible that the government will soon lower and simplify many taxes, and will restore Ukraine’s law on illicit enrichment – which the Constitutional Court struck down under Zelensky’s predecessor, Petro Poroshenko. The reform and privatisation of thousands of state-owned enterprises is a priority for the government. A move to allow the sale of land, which could revolutionise Ukraine’s agricultural sector, seems possible given that Zelensky has no post-Soviet hang-ups about the social ownership of land. An outsider, Lithuanian-Ukrainian politician Aivaras Abromavičius, is the new head of state-owned arms conglomerate Ukroboronprom – which has been a particularly shocking source of corruption since the war in eastern Ukraine began, in 2014.

An IMF mission is due to arrive in Kyiv as early as 10 September. The organisation could approve a new financial assistance package for Ukraine by October, thereby helping the country sustain its reforms – although the measure may become unnecessary if GDP growth, which reached 3.3 percent in 2018, continues to rise.

However, the economy will struggle without substantive legal reform. The good news in this is that the prosecutor general is no longer Yuri Lutsenko, who was a symbol of not just of resistance to reform but of the office’s role in protecting criminal groups and shaking down Ukrainian businesses. His successor, Ruslan Ryaboshapka, is well regarded by Ukrainian civil society organisations (even if he has made a poor start by repeating false rumours about the release of Ukrainian political prisoners). Many members of Zelensky’s team have had a difficult relationship with these organisations, which often regarded them as representatives of the Poroshenko era, or as rivals in their claims to represent ordinary Ukrainians.

Ryaboshapka has promised to work with the Agenda for Justice blueprint for reform drawn up by leading Ukrainian NGOs. Yet there are widespread fears that Zelensky’s chief of staff, Andriy Bohdan, and his supposed mentor, Andriy Portnov – a relic of the Yanukovych era – are already manipulating the judicial system behind the scenes. Bohdan may seek to run a parallel government that will bypass the inexperienced Honcharuk.

Reformers have also been disappointed with Zelensky’s retention of Arsen Avakov as head of the interior ministry. Avakov’s empire-building since 2014 seemingly made him powerful enough to prevent egregious election fraud by the Poroshenko regime – which may be part of the reason why Zelensky is grateful to him. But Avakov has allegedly functioned as a krisha (roof) for organised crime groups and maintained links with far-right militias. Zelensky has at least ensured that the National Guard now reports to him rather than Avakov – although this could, of course, simply create another source of unaccountable power.

The prospects of two notoriously corrupt ministries are unclear. Zoryana Skaletska, who appears to be a technocratic reformer, has replaced Ulana Suprun as head of the health ministry. The American-born Suprun was unpopular with the public, but only because her reforms threatened the interests of oligarchs, who sponsored a media campaign against her. The new head of the customs service, Maksym Nefyodov, helped develop the much-praised ProZorro online procurement system.

Zelensky has largely appointed well-respected professionals in defence and foreign policy roles. Andriy Zahorodnyuk is the new head of the defence ministry, having led a civil society effort to supply the army and overseen the ministry’s reform office in 2015-2017. Vadym Prystaiko, a former deputy foreign minister who once headed Ukraine’s mission to NATO, is the new foreign minister. Dmytro Kuleba, a familiar figure in the West for his work on information security, is vice-prime minister for European and Euro-Atlantic integration. The exception is Ivan Bakanov, whose sole qualification as the new head of the Ukrainian Security Service appears to be his childhood friendship with Zelensky.

As is becoming typical of organisations led by Zelensky, the new government is a mixed creature. But responses to it from the public and civil society groups tend towards the positive. The new government will attempt to prioritise domestic reform, especially in the economic and digital spheres – if Russia will allow it to do so. Although “Ze-government” is supposed to become “e-government”, there has been limited public participation in the process so far. For instance, Honcharuk was appointed from a list of four candidates – which was publicly available for comments but no more than this.

The ruling party’s majority in parliament is big enough to allow it to govern without opposition support. While the party controls 252 out of 418 parliamentary seats – with another 32 seats in Crimea and Donbas empty – Honcharuk was appointed with 290 votes. On 3 September, 373 MPs voted to abolish their own legal immunity, claiming they are not afraid of persecution by the authorities – but also indicating that the government should initially find them easy to control. The Ukrainian governments that formed after the Orange Revolution in 2004 and the Maidan protests in 2014 did not use their early popularity well. Zelensky – who, despite being in office for more than 100 days, had relatively little power before the new parliament met – has at least made a quicker start than his predecessors.

The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.


Senior Policy Fellow

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