Ukraine yesterday got a new Prime Minister, a young politician with a vaguely reformist reputation named Volodomyr Groisman. But despite the surface promise, Hannah Thoburn argues elsewhere in our pages, it’s hard to see big new changes coming to Kyiv any time soon:
Though Groisman may indeed have good intentions, he is unlikely to have the political clout to force through any truly game-changing reforms; Groisman is Poroshenko’s man, beholden to the President for his position and career. Of course, there is a silver lining of sorts: As Anders Aslund has argued, Yatsenyuk’s departure also means that Poroshenko’s stalling corruption reforms can no longer be blamed on an unpopular Prime Minister. Groisman represents Poroshenko’s party, has long been a protégé of his, and will be seen by the public as an extension of Mr. Poroshenko.
Natalie Jaresko, Ukraine’s hard-charging technocratic Finance Minister just up until Groisman’s appointment, gave a talk in Washington yesterday, and Via Meadia was there. With the previous government of Prime Minister Arseniy Yatsenyuk in perpetual crisis after just barely deflecting a no-confidence vote in February, Jaresko had made the offer to head an apolitical, technocratic government, a government that “is able to work in the interest of the whole country, all its citizens, not some political or business groups.” Jaresko’s offer was ultimately rejected by President Poroshenko, who went instead with his young ward.
At yesterday’s talk, Jaresko was careful not to criticize the incoming government explicitly, but she didn’t try very hard to hide her skepticism either. She characterized the outgoing government she had served in as a hybrid technocratic-political animal, contrasting it with Groisman’s incoming “purely political” cabinet. While wishing Groisman well, she couldn’t resist listing the reforms achieved on her watch and mapping out a set of challenges for Ukraine going forward. Groisman must avoid the temptation of populism and work on keeping budget deficits under control, she said. He must continue to roll back onerous regulation regimes, he has to conduct transparent privatizations, and he should stick to the letter of the IMF bailout program. Though couched in detached, analytical language, these markers for evaluating the incoming government’s progress could just as easily be read as expectations of its future failure.
The path ahead for Ukraine is daunting. Despite some green shoots in the country’s west—the service economy is apparently showing signs of life in Odessa, and both Mitsubishi and Ericsson are planning to invest in Lviv—the simmering war in the country’s occupied east, its stubborn and pervasive corruption, and its persistently high debt levels are keeping the overall economic picture gloomy. Earlier this week, the IMF revised its projections for the country’s economy downwards, predicting 1.5 percent growth in 2016 and 2.5 percent growth in 2017. The IMF’s economists are not infallible soothsayers, and at least part of the drag on Ukraine’s economy can be attributed to a more difficult global economic situation. But an incoming government prone to dragging its feet on vital reforms is not likely to help.
Former Lithuanian Prime Minister Andrius Kubilius, appearing alongside Jaresko on yesterday’s panel, offered up some sharp insights. The next critical step for Ukraine, he said, is the further development of political parties from both the Right and the Left, parties that would offer voters a real and meaningful choice of policies. Technocratic caretaker governments were all fine and good, he seemed to imply, but at some point they had to be left behind. What had to be avoided, he warned, was confronting voters with a choice between Brussels and Moscow.
The West explicitly promised membership in the European Union and NATO to Lithuania as a reward for its reforms. Such concrete offers were never made to Ukraine, and with the EU struggling to maintain cohesion within its existing borders, it’s unlikely that they are forthcoming any time soon. Russia’s violent attempts to dismember Ukraine galvanized Ukrainian public opinion in a pro-European direction. The big question is: Will that orientation hold?