Three foreigners appointed to new Ukrainian cabinet

By bne IntelliNews December 2, 2014

bne IntelliNews -


Five weeks after parliamentary elections in Ukraine on October 26, the crisis-stricken country is one step away from getting a new government - including three foreign-born ministers, according to a list of the cabinet appointees drawn up by the governing coalition for approval by parliament.

The foreign-born ministers comprise a US citizen, a Lithuanian citizen and a Georgian citizen, who were named finance minister, economy minister and health minister respectively, after having been given Ukrainian citizenship earlier in the day by a decree of President Petro Poroshenko. All three have been nominated to the government by Poroshenko's eponymous party and, according to previous media reports, they will be paid internationally attractive salaries from a special fund raised by officials of the presidential administration.

Natalie Jaresko, the new finance minister who hails from the US Ukrainian diaspora, came to Ukraine in the early 1990s as a US embassy official, and stayed on to set up her own boutique private equity company Horizon Capital, becoming a respected voice in Kyiv's expat community.

Lithuanian Aivaras Abromavicius, the new economy minister,  is less well known in Kyiv. He is a partner in Swedish investment boutique East Capital, which specializes in emerging and frontier markets, and like Jaresko, is acquainted with conditions on the ground in Ukraine. Abromavicius is believed to have been a second choice for the position following the tragic death of late Georgian star reformer, Kakha Bedukidze, who died in November shortly after having been reportedly offered the post of Ukrainian economy minister.

The new health minister, Georgian Alexandr Kvitashvili, is the only one of the three foreigners to have experience in government, having run Georgia's health ministry and carried out reforms under the leadership of exiled former Georgian president Mikheil Saakashvili. Saakashvili is believed to have been offered the post of deputy prime minister in the government, but turned it down. It is unclear how well acquainted Kvitashvili is with Ukraine.

Another star Georgian reformer under the former Saakashvili government, currently exiled after losing power in 2013, Ekaterine Zghuladze may become deputy interior minister of Ukraine, and understudy - or chaperone - to the incumbent minister Arsen Avakov.

Avakov's remaining in the post was a bone of contention between Poroshenko's parliamentary group and prime minister Arseny Yatsenyuk's People's Front, of which Avakov is a leading figure. As talks moved on through the day on December 2, Poroshenko apparently accepted Avakov in the new government, but demanded that he fire his deputy minister Sergei Chebotar to make way for Zghuladze, which Avakov was reportedly refusing to do, according to political resource If Zghuladze does not make the government, she may head Ukraine's much-hyped but not yet existing anti-corruption bureau.

The government includes two more securities brokers: new energy minister Volodymyr Demchishin, a partner of National Bank of Ukraine head Valeria Gontareva in her Ukraine Investment Capital boutique brokerage, and nominated by Poroshenko;, and agriculture minister Oleksiy Pavlenko, a partner in investment company Pharus Assets Management, nominated by third place party Samopomich, headed by Lviv mayor Andriy Sadoviy.

Poroshenko ex officio names the defence and foreign ministers, who thus remain the same, with Yatsenyuk getting to keep two key allies in his People's Front party in their positions -  Avakov at the interior ministry, and Pavlo Petrenko as justice minister. The smaller pro-Europe parties, Batkyvschina, headed by former prime minister Yulia Tymoshenko, and Radical Party of populist Oleh Lyashko, have a deputy prime minister and one minister portfolio respectively.

The new cabinet controversially includes a Ministry of Information Policy, which is designed to counter anti-Ukrainian propaganda, such as that emanating from Kremlin-funded news outlets, and to promote Ukraine's image and arguments in the world. The ministry will be headed by a close associate of Poroshenko, Yury Stets.

"Let's face it, this is probably going to be the best government Ukraine has ever had, and the best chance of meaningful and revolutionary change,  - if Ukraine is going to reform and succeed, it is now or never, " writes Tim Ash of Standard Bank.


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