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.

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