First ministers fall in Ukraine's reform government

By bne IntelliNews July 3, 2015

bne IntelliNews -

Two key ministers in Ukraine's reform-oriented government vacated their desks on July 2, only six months after being appointed to the posts, pointing to entrenched resistance to reform and bitter in-fighting.

The US-trained health minister Oleksandr Kvitashvili became the first to go of a team of Georgian reformers, controversially appointed to top positions in Ukraine's government in December 2014. Kvitashvili said he resigned, while some reports said he was fired. His departure came after his original sponsors in the position, President Petro Poroshenko's eponymous party, accused him of paralysing the work of the ministry.

Kvitashvili was considered a successful reformer during his tenure as Georgian health minister from 2008-2010. However, he was seen as unable to run Ukraine's health ministry after dismissing all of his deputy health ministers in April but failing to appoint new ones.

Kvitashvili had pushed for state procurement of medicine to be implement via international organisations such as the World Health Organisation. But it proved to be impossible to square this simultaneously with Ukraine's legal system and international organisations. As a result, imports of key medicines such as for AIDS and diabetes have been disrupted, threatening patients' lives, according to media reports.

The ex-minister originally said he would leave Ukraine if fired, but later stated he would stay in the country to assist an as yet unappointed successor as health minister.

Kvitashvili's former boss, former Georgian president Mikheil Saakashvili, who was recently appointed governor of Ukraine's Odesa region, also called on Kvitashvili to resign on July 1. "It's high time we said honestly that the system is reform-resistant,"  Saakashvili said. "It’s not enough to be honest, you must also act aggressively."

The second cabinet member to leave his post on July 2 was US-trained Ihor Shevchenko, the minister of natural resources who also had oversight of licensing for oil and gas exploration in Ukraine's notoriously corrupt energy sector. Shevchenko was discovered to be on vacation in France when a huge fire destroyed fuel depots near Kyiv. He compounded his offence by flying back in a private charter jet owned by MP and millionaire gas businessman Olesandr Onyshchenko, whom critics accused of having lobbied Shevchenko's appointment as minister.

Shevchenko in turn accused Prime Minister Yatsenyuk of obstructing anti-corruption efforts at the ministry and of requiring that Shevchenko appoint Yatsenyuk loyalists to ministry positions. "Lawmakers have just voted for my dismissal quietly without discussion or giving me the floor," Shevchenko blogged after his dismissal. "This proves that the old corrupt Soviet system is afraid of the truth, of open dialogue and strong opponents."

Finally, the head of Ukraine's largest parliamentary group the Petro Poroshenko Bloc, Yury Lutsenko, a former interior minister regarded as a political heavyweight, also announced his resignation from his post on July 3. 

The move came after a large number of the party's MPs voted in favour of a bill that would convert forex loans and mortgages into hryvnia at a pre-crisis exchange rate of UAH5.5 to the dollar, compared to the current exchange rate of UAH21.5 to the dollar. The Petro Poroshenko Bloc was formally opposed to the bill, which is expected to be vetoed by the president, since it contravenes the term of a $17.5bn bailout agreement with the IMF.

Related Articles

Ukraine's largest PrivatBank faces down nationalisation fears

Graham Stack in Kyiv - Ukraine's largest lender PrivatBank has survived a stormy week of speculation over its future, but there are larger rocks ahead, with some market participants anticipating the ... more

bne:Chart - Russia begins to steady the ship according to latest Despair Index

Henry Kirby in London - Ukraine and Russia’s latest “Despair Index” scores suggest that the two struggling economies could finally be turning the corner, following nearly two years of steady ... more

Austria's Erste rides CEE recovery to swing to profit in Jan-Sep

bne IntelliNews - Erste Group Bank saw the continuing economic recovery across Central and Eastern Europe push its January-September financial results back into net profit of €764.2mn, the ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.