Poroshenko gives Ukraine '4 Ds' in annual address

By bne IntelliNews June 4, 2015

bne IntelliNews -


One year after taking office, Ukrainian President Petro Poroshenko pledged in his first annual address to parliament on June 4 to press on with an ambitious reform programme, root out corruption and maintain the blockade on the eastern Donbas region, where government forces are locked in a simmering conflict with Russian-backed rebels.

Reviewing the past 12 months, Poroshenko said Ukraine had avoided a default "which had seemed to be inevitable" thanks to heavy macroeconomic aid from the West and the International Monetary Fund (IMF). On the downside, the businessman-turned-president said the country remains plagued by corruption, and called on Ukrainians to keep their side of an anti-corruption bargain.

"A year ago in this hall I presented the anti-corruption treaty between society and the authorities: officials do not take and people do not give [bribes]. Today, I can say no party observes this treaty," Poroshenko said. To counteract bribery, he proposed a law that would encourage low-ranking officials caught taking bribes to inform on higher ranking officials doing the same, as well as encouraging bribe givers to inform on bribe takers.

Counting on the "Four D's"

Having previously served as minister of foreign affairs and also trade, Poroshenko, 49, was elected president on 25 May, 2014, three months after mass protests in Kyiv toppled his predecessor Viktor Yanukovych. His presidency hinges on a pro-Western course and defiance of Russia, but continuing corruption and economic collapse caused largely by the Donbas conflict have steadily eroded his public support.

In his address, Poroshenko nonetheless vowed to turn the economy around and fight corruption by continuing a reform drive consisting of what he called the "Four Ds": "[The tasks are] to keep up the course of de-oligarchisation, deregulation and decentralisation; to start de-monopolisation," Interfax news agency quoted Poroshenko as saying.

His administration and government had to "finish setting the infrastructure to combat corruption and to switch to a total offensive against it. [We also need] to start the lustration of judges and prosecution agencies," Poroshenko stressed. As part of a root and branch overhaul of the judiciairy, the president called for the dismissal of 300 judges "connected with proven accusations of corruption" by the High Council of Justice, the judiciary's self-regulatory authority.

Poroshenko also detailed plans for decentralisation, requiring amendments to the constitution to be adopted in the fall of 2015. At the same time, he underscored that Ukraine would steer clear of federalisation, as has been demanded by Russia, which seeks greater or even total autuonomy for the mainly ethnic Russian-populated, Russian-speaking eastern regions: "Ukraine has been and will be a unitary state," the president said.

Police clean-up and privatisation 

Regarding the reform of Ukraine's notoriously rotten law-enforcement structures, Poroshenko envisioned former Georgian chief of police Eka Zguladze, who is currently Ukraine's deputy interior minister, heading a reformed Ukrainian police force. A new traffic patrol service will also start work in the coming weeks, under the supervision of Zguladze, who oversaw Georgian police reform under the presidency of Mikheil Saakashvili. After awarding Saakashvili Ukrainian citizenship, Poroshenko appointed him governor of Ukraine's southern coastal Odesa region on May 30.

Drawing further from the Georgian model of recent years, the president also spoke in favour of a mass privatisation of state firms. "We have over 1,800 enterprises but no more than 200 are vitally important for the state," he said. Equipment and technology at most of these enterprises was still at the level of the 1930s, and the entities would not survive without investments and efficient management.

De-monopolisation will also proceed as planned, "We should make a political decision to impose a maximum share of 50% on concrete markets and 30% in the most important sectors," Poroshenko said, predicting that the new rules would break up the monopolists.

"We can give them the following choice: to obey tough regulation or sell their shares," he added, with the complaint that one concern controlls 80% of heating power generation, in apparent reference to oligarch Rinat Akhmetov and his DTEK concern - although Ukraine's anti-monopoly committee claims there is no monopoly and DTEK also refutes claims of its monopoly position. De-oligarchisation would see the introduction of legislation on state funding of political parties, to free them from oligarch influence, Poroshenko said.

Regarding the intractable questions of Nato membership and the insurgency in the Donbas region of East Ukraine, Poroshenko acknowledged that a number of Western countries were against Ukraine joining the military alliance and that it was necessary to hold a national referendum on the issue. 

Kyiv would continue an economic blocade of the parts of the Donbas region held by Russian-backed insurgents, the president said, noting that Ukrainians remaining in rebel-held territory had become "hostages" of the insurgents. As many as 9,000 regular Russian troops were now operating in rebel-held territories, he claimed, although Moscow strenuously denies it has fighting personnel in the country.

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 sales@intellinews.com

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 sales@intellinews.com

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.