Editor’s Note: The Kyiv Post will be tracking the progress made by Ukraine’s new, post-EuroMaidan Revolution leaders in making deep structural changes in the national interest. The Reform Watch project is supported by the International Renaissance Foundation. Content is independent of the financial donor.
Security & Defense
NATO, the 28-nation military alliance, launched five trust funds with four million euros to help Ukraine’s security needs on Dec. 2. Great Britain, Denmark, Canada, Germany, Latvia, Lithuania, Turkey, Greece, Luxemburg, Norway, Poland, Czech Republic, Hungary, Romania, Estonia and Bulgaria are contributing and trying to raise money from other nations. The money will help Ukraine’s command and communications and fight cybercrime; some 700,000 euros are earmarked for retraining and care of Ukraine’s military, Ihor Dolhov, Ukrainian ambassador to NATO, said. Meanwhile, as new Cabinet was formed in Ukraine on Dec. 2, Stepan Poltorak remained as defense minister and Pavlo Klimkin as foreign minister, among four holdovers.
Energy
Ukraine got a new energy minister, Volodymyr Demchyshyn, who took office on Dec. 3. He is expected to tackle the issue of state-owned Naftogaz’s projected deficit of some $6.4 billion next year and a critical shortage of coal, with the loss of production from 60 coal mines because of Russia’s war against eastern Ukraine. Demchyshyn plans to import coal from Australia and restart negotiations on supplies from Russia. For Naftogaz, the government expects to announce solutions soon, Demchyshyn said. Some industry players are skeptical about his appointment as a minister, citing his lack of experience in the sector. He previously worked for a Ukrainian investment bank and British consultancy EY.
Rule of law
Ukraine got a partner in its struggle to clean up law enforcement and stop violations of human rights. On Dec.1, a group of some 50 experts from Hungary, Denmark, Germany, Great Britain and other countries of the European Union started working in Ukraine to consult and assist the government and representatives of civic society on the reforms of prosecution, police and judiciary. The mission has a two-year mandate and will be headquartered in Kyiv. The budget for its first year of work is 13 million euros. “Our joint understanding with the Ukrainian government has been that one of the major factors that impedes stability in Ukraine is the state of the civilian security sector,” Kalman Mizsei, head of the EU mission, said. “Civil society wants change. It wants professional police respecting human rights, a prosecution that is going after real crimes, not after somebody’s enemies, courts that make judgments based on the justice of the case, rather than who is paying more.”
Public Administration
Three foreigners joined the Ukrainian government on Dec. 2. Ukrainian-American Natalie Jaresko is finance minister, Lithuanian Aivaras Abromavicius is economy minister and Georgian Alexander Kvitashvili is health minister. They are expected to push through government’s efforts to reduce public sector spending of that amounts to more than half of Ukraine’s gross domestic product, estimated to sink to $150 billion this year. It will also face a budget deficit of more than $4 billion and shrinking foreign currency reserves of less than $12 billion. In short, Ukraine is broke and is expected to need another $12 billion in International Monetary Fund loans beyond the $17 billion already pledged. Kvitashvili plans to end the health ministry’s corrupt tender procedures and hold public, competitive tenders. Abromavicius wants to push for changes in transfer pricing to cut down on tax evasion and accelerate deregulation. Jaresko said she will increase tax revenues through simplification and uniformity in enforcement. “Our goal is to take care of things now, so we can ensure that in 2016 we will resume economic growth,” Jaresko said.
Land
Changes won’t start before the first quarter of 2015, according to the coalition agreement approved by the five political parties that hold a ruling majority in parliament.
