Since regaining its independence in the aftermath of the Soviet Union’s collapse nearly 30 years ago, Ukraine has sought to build links with the West. This includes ties with institutions such as NATO, with which Ukraine has established a distinctive partnership. Kyiv has been keen on deepening those ties. Its interest in becoming a NATO member has continued to grow since 2014, as it views NATO as a means to protect Ukrainian sovereignty and territorial integrity from its aggressive neighbor, Russia.

Although NATO-Ukraine cooperation has intensified, and the Alliance maintains its “open door” policy, NATO members appear reluctant to put Ukraine on a membership track. Despite the fact that Russia continues a low-intensity conflict against Ukraine—and occupies Ukrainian territory—Kyiv can expand its practical cooperation with NATO. However, in the near term, Kyiv will have to keep its expectations about membership modest.

Read the rest at Turkish Policy Quarterly

Vital Interests: Steven, thanks for talking to us about Ukraine in the Vital Interests Forum . As a former Foreign Service officer you have expertise in this region and served as its Ambassador from 1998 to 2000 - a time when Ukraine was emerging as an independent nation. For our readers who aren't necessarily knowledgeable about Ukrainian history and geopolitics, can you provide some background?

Steven Pifer: Sure. I'd say the starting point actually goes back about 1,000 years. With Ukraine and Russia you have two countries whose history, culture, language, and religion are really intertwined. They both go back to the 10th Century, they both claim Kievan Rus’ as their founding state. Really,  from 1654 until 1991, with the exception of a couple of very chaotic years after the end of World War I, Ukraine was part of the Russian empire.

When the Soviet Union broke up in 1991, the part that the Russians missed most was Ukraine. Russians referred to Ukrainians as “little Russians,” which  was never very popular with Ukrainians, but many in Russia saw the two as a single country.

I remember a conversation I had with a Russian deputy foreign minister, probably in 1994 or 1995. This was a pretty modern guy. He understood things had changed, but said to me, "Up here in my head, I understand and I acknowledge that Ukraine is an independent country. Here in my heart, it's going to take a long time." I think that reflects the attitude of a lot of Russians, most importantly Vladimir Putin.

The last time Mr. Putin was in Kviv was in July 2013. That was four months before the Maiden Revolution began. He was there to mark the 1025th anniversary of Kievan Rus’ accepting Christianity, which of course, had a huge impact on the Orthodox Church, both in Ukraine and in Russia. He gave a speech in which he said, "We are one people, we Russians and Ukrainians." That was really tone deaf; many Ukrainians heard that as denying their culture, their history, their language. 

Part of this Russian approach is emotional for Mr. Putin and Russians - they didn't want to lose Ukraine. Part is a reflection of what we've seen particularly over the last 10 to 12 years: Russia actively trying to assert a sphere of influence in the post-Soviet space. I don't believe that Vladimir Putin wants to rebuild the Soviet Union, because Russia does not want to subsidize these other countries.

What Mr. Putin does want is a sphere of influence, or as Dmitry Medvedev, who was President back in 2008, called it, "A sphere of privileged interests in the post-Soviet space.” That means countries such as Ukraine, Belarus, Moldova and others in Central Asia should defer to Moscow on issues that Moscow considers key to Russian interests. That certainly means, how close you can get to institutions such as the European Union and NATO.

The tension that you now see between Russia and Ukraine is Russia trying to assert that sphere of influence and trying to pull Ukraine back into its orbit, whereas it's clear since the Maidan Revolution that the majority of Ukrainians see their future as a fully integrated European state.

Read the rest of the interview at Fordham's Vital Interests Forum

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A Note from the Ukrainian Emerging Leaders Program

To our supportive community,

On behalf of all of us at the Ukrainian Emerging Leaders Program, we hope that you and your loved ones are remaining safe and healthy. We would like to provide you with a short update on the program.

Due to the evolving situation with COVID-19, our selected fellows in consultation with the program team have made the difficult decision to postpone the next year of the Ukrainian Emerging Leaders Program until 2021-22. The health of our fellows is most important, and recent limitations about in-person instruction would have made it impossible for our fellows to enjoy a fruitful experience this year.

That being said, we would still like to introduce you to our incoming class. We expect to be able to invite them for the 2021-22 academic year and sincerely hope you will join us in welcoming our incoming fellows at that point.

Finally, although we are deferring our fellows for a year, the Program will continue, and we hope the virtual format will provide new opportunities. We will keep you updated as to any program events we conduct over the course of this modified year.

We are very excited to have these three fellows join us as soon as it is safe and healthy to do so, and wish the circumstances would have allowed us to have them with us on campus sooner.

Sincerely,
The Ukrainian Emerging Leaders Program Team

Yulia Bezvershenko
Ministry of Education and Science 

Yulia Bezvershenko is Director General of Directorate for Science and Innovation at the Ministry of Education and Science. The Directorate was created for policy development and implementation in the research, development and innovation sector.  

Since the Revolution of Dignity, Bezvershenko has been deeply involved in the reform of science development and implementation process. Her mission is to build knowledge-based Ukraine as economy and society based on knowledge, science and innovation. She has contributed to the Law on Science, which was adopted by Parliament in 2015. In cooperation with scientists and reformers she developed and actively participated in the creation of two new institutions, the National Council on Science and Technology and the National Science Fund. Bezvershenko currently works both on implementation of the aforementioned law and on its future iterations.

Bezvershenko holds a PhD in Theoretical Physics from the Bogolyubov Institute for Theoretical Physics (National Academy of Science of Ukraine) and a Master’s degree in Public Policy and Governance from the Kyiv School of Economics. She has diverse experience in the research and development sector, having worked as a researcher at the Bogolyubov Institute as well as a senior lecturer on quantum theory at Kyiv-Mohyla Academy. Until 2019, Yulia was a Deputy Head of Young Scientists Council of National Academy of Science of Ukraine and Vice-President of NGO "Unia Scientifica" aimed to promote science and to advocate reform of science in Ukraine.

Denis Gutenko
State Fiscal Service/Ministry of Economy

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Before joining the State Fiscal Service, Gutenko had worked in the Ministry of Economy since 2015. Gutenko promoted deregulation and improvement of business climate agenda. He initiated and successfully lobbied Parliament to adopt laws on the liberalization of international trade and currency, the transparency of scrap metal exports, and the reform of a corrupt ecological tax policy. Gutenko also led the removal of administrative barriers and outdated currency restrictions, resulting in the increased flow of services and payments for Ukrainian freelancers and small and medium enterprises.

Prior to this Gutenko began his career in the private sector as a banker, auditor and agribusiness manager, experiences that sparked his interest in improving the Ukrainian state bureaucracy and fighting widespread corruption.

Gutenko’s focus while at CDDRL will be on good governance and public administration reform, both of which remain significant opportunities and challenges for Ukraine. He looks forward to being an active member of Leadership Network for Change, and to continuing to challenge himself while at Stanford.

Nariman Ustaiev
Gasprinski Institute

Nariman Ustaiev is co-founder and Director at Gasprinski Institute for Geostrategy. He is also an external advisor for the Committee on Human Rights, Deoccupation and Reintegration of Temporarily Occupied Territories in Donetsk, Luhansk Regions and Autonomous Republic of Crimea, National Minorities and Interethnic Relations of the Verkhovna Rada of Ukraine. 

His work explores the multiple dimensions of Ukraine’s foreign and security policy and their intersection with good governance based on human rights. His areas of expertise are foreign policy; political and security challenges in the Black Sea Region; and human rights and Crimean Tatar issues. 

Prior to this Nariman had worked for governmental institutions responsible for Ukraine’s security policy, namely the National Security and Defense Council, the Secretariat of the Cabinet Ministers and the State Service for the Autonomous Republic of Crimea and Sevastopol for many years. 

Nariman graduated from the Diplomatic Academy at the Ministry of Foreign Affairs of Ukraine, the Ukrainian Academy for Foreign Trade and Kyiv-Mohyla Business School. 

Volodymyr Zelensky swept to victory in Ukraine’s spring 2019 presidential election because he promised renewed reform and a real fight against corruption.

Today, the reality looks quite different.

Zelensky has fired a reformist prime minister and cabinet, replaced a prosecutor general who had begun weeding out bad eggs among prosecutors, and triggered the resignation of a National Bank of Ukraine head who had won plaudits for steering an independent course. Speculation runs rampant in Kyiv that oligarchs are reasserting control.

Ukrainians can be forgiven for thinking they have seen this movie before. They have. Ukraine’s past 30 years are filled with episodes of rising hopes turning to disappointment.  Zelensky should ask himself whether Ukraine and he personally can afford another one.

After winning the presidential election in July 1994, Leonid Kuchma appointed an economic team with strong reform credentials.  That fall, he laid out a program to accelerate the transition to a market economy, liberalize prices, cut the tax rate, and slash the government’s budget deficit.  In 1995, however, he reversed course. Lacking the critical mass of reforms that energized growth in Ukraine’s western neighbors, Ukraine’s economy weakly hobbled along.

Following his reelection in November 1999, Kuchma turned to Victor Yushchenko, a recognized reformer, to serve as prime minister.  I recall hosting a Christmas holiday party in Kyiv the evening that the Verkhovna Rada (parliament), Ukraine’s parliament, confirmed Yushchenko; my Ukrainian guests were practically giddy with optimism.  Unfortunately, those hopes turned to naught. By June 2000, the presidential administration and Yushchenko’s cabinet of ministers were at war with one another instead of working together for change. Less than a year later, the Rada voted Yushchenko out.

Yushchenko later had another turn, becoming president in January 2005 following the Orange Revolution.  Many hoped he would finally get Ukraine on track to becoming a modern European state. He appointed as his prime minister Yuliya Tymoshenko, the most effective minister in his cabinet in 2000. Unfortunately, the two never got in sync on a reform program, and new infighting broke out between the presidential administration and cabinet of ministers.  Things did not improve with new prime ministers or with Tymoshenko’s return to the job. Ukrainians became so dissatisfied with Yushchenko’s presidency that, in the January 2010 presidential election, he placed fifth, drawing a mere 5.45 percent of the vote.

In May 2014, in the aftermath of the Maidan Revolution, Petro Poroshenko won the presidential election on the first ballot, something that had not happened since 1991. He and his first prime minister, Arseniy Yatsenyuk, adopted early reforms. They cleaned up the government’s finances, introduced critical price reform at Naftogaz, put the banking sector on a solid footing, and secured a large International Monetary Fund program.  But the pace of reform slowed in early 2016 after Poroshenko fired Yatsenyuk and other pro-reform ministers. By the summer, visitors to Kyiv could hear Ukrainians voice frustration over the failure—more than two years after the Maidan—to take real steps to reduce corruption and curb the outsized political and economic influence of the oligarchs.

Poroshenko and his political team apparently missed that rising disaffection. Campaigning on an anti-corruption message, Zelensky routed Poroshenko in the April 2019 presidential run-off, winning 73.2 percent of the vote.

This latest episode of hope-to-disappointment with Zelensky comes at a difficult time for Ukraine.  Mired in a war with Russia, the Ukrainian president cannot bring peace to Donbas without Vladimir Putin’s help, but the Kremlin appears intent on continuing the conflict.

Reform and the struggle against corruption, however, are fights that Zelensky can control.  If he turns away from them, he risks losing support in the West, particularly in Europe, where calls for a return to business as usual with Moscow are growing in EU member states. Zelensky should worry that, after 30 years of failure to rein in corruption and the oligarchs, Europeans may well begin to wonder whether Ukraine’s political elite is incapable of change.  Few things would damage Ukraine more than if its friends in the West begin to question whether the country is worth the trouble—and simply give up.

If Zelensky does not worry about his country’s future, perhaps he should worry about his political prospects.  Just thirteen months after assuming office, his approval rating plummeted to 38 percent in June, a far cry from the 71 percent he enjoyed last September.  His apparent reversal on corruption and long-needed economic reforms undoubtedly contributed to that.

Zelensky can still turn things around and become the pro-reform, anti-corruption champion that he promised Ukrainian voters.  Kyiv is full of reformers who can help him. However, if he does not change course, he most likely will follow in the footsteps of Yushchenko and Poroshenko — one-term presidents turned out by an electorate badly disillusioned with their failed promises.

Originally for Kyiv Post

President Volodymyr Zelensky and his government in Ukraine face two fundamental challenges: ending the conflict with Russia and implementing domestic reform. Overcoming these challenges appeared hard enough at the start of 2020. COVID-19 is only making that more difficult.

Ukraine finds itself in the seventh year of a war imposed on it by the Kremlin. Russian troops seized Crimea in March 2014, and Russian and Russian proxy forces have sustained a conflict in the eastern Ukrainian region of Donbas, which has claimed some 13,000 lives.

While Moscow has sought to draw Ukraine back into Russia’s orbit, there is little reason to believe that it will succeed. Nothing has done more than Kremlin policy over the past six years to push Ukraine toward the West and away from Russia. Moscow thus has used the Donbas conflict to destabilise Kyiv—to make it more difficult for Ukraine to succeed and pursue its goal of integrating with Europe.

As COVID-19 hit both Ukraine and Russia in March, some (this author included) hoped it might change some of the calculations in the Kremlin. Faced with a pandemic, falling prices for its energy exports, and an economy tumbling into recession, might Moscow rethink its policy in Donbas? A settlement would ease Russia’s political isolation and lead to a lifting of Western sanctions, which some economists estimate have cut Russian gross domestic product by 1.0-1.5% per year over the past six years.

As of June, however, Moscow’s policy appears unchanged. Russian and Russian proxy forces continue low-intensity fighting in Donbas. The appointment of a new Kremlin point-person on Ukraine did not visibly affect policy, which is determined by Vladimir Putin.

German Chancellor Angela Merkel and French President Emmanuel Macron, both grappling with COVID-19 and its economic consequences, have not followed up on the December ‘Normandy format’ summit with Zelensky and Putin. As the pandemic consumes the leaders’ attention, they and others – such as senior U.S. officials – show little bandwidth or readiness to press to change the cost-benefit calculation in the Kremlin and persuade Moscow to take up a different course that might bring peace in Donbas.

Therefore there is little reason to expect a diplomatic breakthrough, a fact that Zelensky and his team increasingly seem to recognise. The Ukrainian president has raised the idea of a “Plan B” if no progress is made by the end of the year. One suggested variant for a “Plan B” would entail virtually walling off the occupied part of Donbas and pushing the entire economic and social burden on to Russia.

The sad reality is the likely near-term scenario for Donbas is continuing simmering conflict. (As for Crimea, while not a hot conflict, it will burden Ukrainian-Russian and West-Russian relations for years if not decades to come.)

COVID-19 has made matters more complex, both for Zelensky politically on the domestic front as well as sinking the economy into recession. Kyiv recognised the need for an IMF stand-by program and access to low-interest credits. The Rada (parliament) enacted legislation to lift the moratorium on the sale of agricultural land and safeguard nationalised banks from efforts by former owners to regain control—both key conditions for an IMF stand-by agreement worth up to $5 bn. On June 9, the IMF executive board approved the agreement.

While the long-needed reforms on agricultural land and banking were most welcome, it was not clear whether their adoption reflected a genuine commitment to dramatic reform or, as with past Ukrainian leaders, the need to secure IMF credits. Both Ukrainians and the country’s friends in the West are looking for signs Zelensky will carry out the transformational agenda that carried him to an electoral landslide in April 2019, particularly with respect to curbing corruption.

Zelensky attaches priority to ending the conflict and restoring Ukrainian sovereignty in Donbas. But Kyiv cannot do that by itself. Moscow gets a vote, and the vote thus far favours keeping the conflict simmering. Whether Ukraine’s Western partners can mobilise additional pressure to change the Kremlin’s cost-benefit calculation at this point appears doubtful, at least in the near term.

If stalemated by Russia on Donbas, Zelensky can still take action on anti-corruption measures and other reforms to position the Ukrainian economy for strong growth as the pandemic eases. These are measures that he and his government control. To do so would deliver on the promises made to Ukrainian voters last year and solidify his reform credentials with his Western partners. Moreover, a more robust economy would bolster Zelensky’s position vis-à-vis the Kremlin, which hopes that domestic weakness will force him to compromise key Ukrainian principles and settle the Donbas conflict on Moscow’s terms.

Originally for Europe's World

There were high hopes for Ukraine’s prospects to develop into a successful, democratic and economically prosperous state when the Soviet Union collapsed in 1991. Unfortunately, the country has experienced a series of false starts and missed opportunities over the past three decades. Volodymyr Zelenskyy became independent Ukraine’s sixth president on May 20, 2019, bringing renewed hopes for dramatic change that would enable Ukraine to realize its full potential, despite the conflict with Russia.

One year later, however, it is not clear whether his presidency will prove transformational or just another false start.

Ukraine had many attributes for success when it regained independence in 1991, including an educated work force, some of the best agricultural land on the planet, key industries, and proximity to a reforming Central Europe. It has failed to realize that success.

To be sure, democracy in the form of free, fair and competitive elections has taken hold. But reform has lagged in other areas. In 1994, President Leonid Kuchma launched a burst of economic reform, but it faded within a year. In 2000, Kuchma’s appointment of Viktor Yushchenko as prime minister raised reform expectations, but the presidential administration began undercutting Yushchenko in the summer, and he was out in 2001.

Following the 2004 Orange Revolution, Yushchenko became president and twice appointed Yuliya Tymoshenko as prime minister. She had proven the most effective minister in Yushchenko’s cabinet in 2000. However, the two never got on the same track, and Ukraine missed another opportunity.

After the 2013-14 Revolution of Dignity, President Petro Poroshenko posted a good reform record for the first two years of his presidency, but the pace fell off dramatically in 2016. His failure to deal with corruption and get the economy going resulted in his electoral rout in 2019.

Zelenskyy, a political novice, won the April 2019 run-off election with 73 percent of the vote. He took office promising the real fight against corruption that so many Ukrainians wanted. In July 2019, his political party, Servant of the People, won a majority of seats in the Ukrainian parliament. This was the first time any Ukrainian president’s party had commanded a clear majority without the need for coalition partners.

Parliament approved Zelenskyy’s choice for prime minister, Oleksiy Honcharuk, and his cabinet. Most regarded the cabinet as honest and pro-reform, albeit young and relatively inexperienced. The new cabinet set ambitious reform goals. The choice of Ruslan Ryaboshapka as prosecutor general, a position abused by previous presidents to advance political agendas, won plaudits from civil society and anti-corruption activists. Ryaboshapka immediately began cleaning house in the prosecutor general’s office.

In what was termed a “turbo regime,” parliament began churning out legislation last fall, including an end to immunity for parliamentary deputies and a law laying out a mechanism for presidential impeachment. Not all was great. Critics asserted that some laws were ill-prepared in the rush. Meanwhile, factions began to develop within the Servant of the People party that would soon undercut its majority.

A full year after Zelenskyy became president, the picture is mixed. On the plus side, Zelenskyy personally appears honest and has not profited from his office, something that cannot be said about his predecessors. The nature of his relationship with oligarch Ihor Kolomoiskiy, who owns the television channel that broadcast Zelenskyy’s comedy show, posed a major question mark last summer. Zelenskyy now seems to have answered that by breaking dramatically with Kolomoiskiy over newly-passed banking legislation.

On May 13, the Ukrainian parliament approved banking legislation which will block nationalized banks from being returned to former owners. Referred to as the “Anti-Kolomoiskiy Law,” it should frustrate the oligarch’s bid to regain control over (or compensation for) Privatbank, nationalized in 2016 after an audit revealed some $5.5 billion in missing monies. This vote came weeks after MPs passed an agricultural land reform law that will allow Ukrainians to buy farmland, ending a two decades-long moratorium on such sales.

While both laws constitute victories for Ukraine’s reform agenda, getting them through the country’s parliament took longer and proved more difficult than initially anticipated. In the end, defections within Zelenskyy’s own party meant that the Servant of the People faction could not deliver a majority by itself. Instead, the legislation needed supporting votes from two other parties.

The International Monetary Fund had made these two pieces of legislation conditions for a new program of low interest credits for Ukraine. With COVID19 sweeping into the country and playing havoc with the Ukrainian economy, Kyiv’s need for IMF credits seemed a key motivating factor for their passage. (One would like to think that Zelenskyy and his MPs would have backed these laws in any case; too many of Ukraine’s reforms over the past 25 years have come about because of the need for an IMF program and credits.)

Other actions in spring 2020 have raised questions about Zelenskyy’s commitment to reform. He fired Honcharuk and reshuffled much of the cabinet in early March, just six months after the initial appointment of the government. Ryaboshapka stepped down after a parliamentary vote of no confidence and was replaced by a Zelenskyy friend with no prosecutorial experience, raising concerns about the politicization of the prosecutor general’s office.

The new cabinet lacks the reform credentials of its predecessor, and members of the old guard have returned to positions of power. The cabinet has yet to make clear whether and how hard it will press for change.

Other reform efforts have languished. Security sector reform, which has long been called for by both Ukrainian reformers and the country’s friends in the West, has gone nowhere. The leadership of the Security Service of Ukraine appointed by Zelenskyy sees no reason for change. Little has been done with the judicial branch, where corrupt judges have a reputation for selling decisions.

Recently, developments have taken a potentially more ominous turn. As reported by Melinda Haring and Victor Tregubov, dismissed reformers have found themselves under investigation. Ryaboshapka, who reportedly lost favor with Zelenskyy’s team for not prosecuting Poroshenko, now faces criminal proceedings on unspecified charges. Maksym Nefyodov, a reformer who was fired as head of the Customs Service in April, faces a pretrial investigation. Serhiy Verlanov, dismissed as head of the Tax Service, had his apartment searched by security officials. And Artem Sytnyk, head of the National Anti-Corruption Bureau, is under attack from other government law enforcement agencies.

After just one year in office, it is too early to deliver any definitive judgments on the Zelenskyy presidency. He can still become a transformational figure, but he will have to do better. Zelenskyy should now ask himself: how many chances can Ukraine afford to pass up?

If Zelenskyy, like many of his predecessors, adopts reforms merely to meet IMF conditions, he will miss the opportunity to unleash the country’s economic potential. Investors who could help boost growth will continue to sit on the sidelines waiting for real change, as they have largely done for the past 25 years.

Investigations targeting dismissed reformers will not go down well in the West (reference former Ukrainian president Victor Yanukovych’s bogus trial and jailing of his political rival Yulia Tymoshenko). This, along with any perception of a lack of reform commitment, could help feed a sense of Ukraine fatigue in Europe, just as countries such as Hungary and Italy seek a return to business as usual with Moscow.

Zelenskyy should consider how the approval ratings of his predecessors Yushchenko and Poroshenko plummeted when they failed to meet the reform expectations that brought them to the presidency. He still has time to justify the high hopes generated in spring 2019. If, however, his election turns out to be just another false start, he will most likely become another one-term Ukrainian president.

Steven Pifer is a William Perry Research Fellow at Stanford’s Center for International Security and Cooperation and a former US ambassador to Ukraine.

Originally for Ukraine Alert

In the midst of the damage to public health and the global economy, the COVID-19 crisis could present an unexpected opportunity both to resolve the only hot war in Europe and to address Russian President Vladimir Putin's assault on international norms of behavior.

As the spreading coronavirus and collapsing oil prices weigh increasingly on the Kremlin, the United States and its allies should offer to lift international sanctions against Russia if Putin will end his military incursions into Ukraine. President Trump and Congress can advance America's interests, and the world's, with a bold step to encourage an end to this war. The Trump administration and Congress should seize this opening.

Read the rest at NPR.org.

Ukrainians rode a wild roller coaster in March.  President Volodymyr Zelensky began the month by firing the prime minister and reshuffling the cabinet, prompting concern that oligarchs were reasserting their influence.  COVID-19 and its dire economic implications, however, refocused attention.  At the end of the month, the Rada (Ukraine’s parliament) passed on first reading legislation key to securing low-interest credits from the International Monetary Fund.

Meanwhile, controversy flared over the Donbas.  A March 11 agreement reached by Zelensky’s chief of staff broke a long-standing Ukrainian position by giving status to the so-called Donetsk and Luhansk “people’s republics”—the parts of Ukraine’s eastern region of Donbas occupied by Russian and Russian proxy forces.  It is unclear if Kyiv will go forward with the agreement.

Cabinet Reshuffle

On March 4, Prime Minister Oleksiy Honcharuk resigned at Zelensky’s request.  Honcharuk and his cabinet were widely viewed as inexperienced but honest and pro-reform.  Only in office for six months, Honcharuk’s team did not have time to achieve much of its ambitious agenda.

The new prime minister, Denys Shmyhal, brought little in the way of a national reputation, and the new cabinet lacks the reformist sheen of its predecessor.  Few took Zelensky’s reason for the reshuffle—the cabinet’s supposed ineffectiveness—at face value.  Some speculated that falling approval ratings provided the real motive.  Others wondered whether this signified Zelensky’s shedding the pro-reform, anti-corruption persona that won him the top job in 2019 and feared a return to the country’s unfortunate tradition of quiet government dealings with oligarchs.

Reformers became more depressed on March 5 when Prosecutor General Ruslan Riaboshapka was fired for refusing to investigate Petro Poroshenko, Zelensky’s predecessor.  Riaboshapka had a sterling reputation.  His replacement has never served as a prosecutor, is personally close to Zelensky, and ran on his party’s parliamentary ticket.  Her appointment raises doubts about the independence of the Prosecutor General’s Office.

The timing of the reshuffle—just as Kyiv sought to secure a new $5.5 billion agreement with the IMF—puzzled many.  Departing Finance Minister Oksana Makarova had made significant progress in negotiations with the IMF, but her immediate successor, Ihor Umanskiy, questioned the value of working with the Fund.

Back on Track, at least with IMF?

The newly appointed prime minister spent the month stressing the importance of securing the IMF program.  While he expressed his readiness to travel to Washington to meet the Fund’s leadership, the IMF told Kyiv to first complete two key preconditions.

One was Rada passage of a banking law that would prevent former owners whose banks had been nationalized from regaining ownership.  This targeted oligarch Ihor Kolomoisky, a former owner of PrivatBank.  After a 2016 audit revealed PrivatBank’s accounts were short $5 billion, the government nationalized it and made good the missing funds.  However, Kolomoisky recently suggested legal action to regain ownership or compensation, a deal-breaker for the IMF.

Kolomoisky has a link to the president, as he owns the television network that broadcast the comedy show in which Zelensky played a common man suddenly thrust into the presidency.  How the government handles the ownership of PrivatBank has become a litmus test for Zelensky.

The second issue was Rada passage of an agricultural reform bill that would lift a moratorium on the sale of agricultural land.  Ukraine has 30 percent of the world’s black earth, and the agricultural sector represents a bright spot in the economy.  But the prohibition on land sales denied private farmers the ability to use their land as collateral to secure loans to buy better seed, fertilizer and equipment.

While the Rada debated these measures in March, the rising number of COVID-19 cases and looming economic downturn focused attention on the need for the IMF program.  On March 30, the Rada sacked Umanskiy, replacing him with a new minister with established reform credentials, and replaced the minister of health as well.  It then approved, on first reading, the banking and agricultural land reform laws. 

The Rada has not satisfied the IMF completely, but March closed with Ukraine seemingly on track to secure its IMF program and suggestions that the Fund might make available more than $5.5 billion.  The vote on the banking law suggests a major break between the president and Kolomoisky, although doubts persist about Zelensky’s commitment to reform.  In any case, Kyiv will be swamped by the challenges of managing simultaneous health and economic crises.

Donbas Controversy

Domestic developments did not grab all of the March headlines.  A March 11 agreement regarding the Minsk Trilateral Contract Group (TCG) became a major point of contention in Kyiv.  The TGC consists of officials of Ukraine, Russia and the Organization for Security and Cooperation in Europe, with representatives of the so-called Donetsk and Luhansk “people’s republics” attending as unofficial “invitees.”  It has met for five years but has registered little progress toward implementing the objectives of the 2015 Minsk II agreement:  ending the fighting and restoring Ukrainian sovereignty over all of Donbas.

Andriy Yermak, the president’s chief of staff, sought to shake up the chessboard and tentatively agreed to a subgroup reporting to the TCG that would include equal numbers of representatives from Ukraine and of the occupied territory, with German, French, OSCE and Russian officials sitting in as observers.  The details leaked and provoked an immediate furor.

First, the subgroup was seen to give status to the two “people’s republics,” something Kyiv has carefully avoided over the course of the six-year-long conflict.  Second, by putting Russia on par with Germany, France and the OSCE, the agreement seemed to accept Moscow’s narrative that Russia is not a party to the conflict and that it is a civil war—despite the fact that Russian and Russian proxy forces occupy parts of Donetsk and Luhansk.

More broadly, critics saw no sign that the Kremlin, which still pulls the strings in occupied Donbas, had decided to end the conflict.

Officials close to the president asserted that the new subgroup would be consultative in nature.  They said the Ukrainian government would select ten members for the subgroup.  Of the ten to speak for the occupied territories, five would come from the ranks of internally-displaced persons who have left occupied Donbas—and Kyiv would influence who was chosen.  Ukrainian officials argued that this would be a favorable make-up (Kyiv picking fifteen of the twenty Ukrainian participants) and, in any case, the subgroup would only make recommendations to the TCG, not take decisions.

The new format poses risks, which officials acknowledge.  By the end of March, Kyiv seemed to have second thoughts, and the agreement was not signed on March 25, as had been planned. 

March was tough for Zelensky, and April may prove even more challenging.  The month began with the president and his government trying to come to grips with COVID-19 and an economy tipping toward recession, tempered by hope that Ukraine can manage the final steps necessary to secure an IMF program.  Battered over the TGC gambit, it is possible Kyiv will let the idea for a new subgroup die quietly.  As he nears the end of his first year as president, Zelensky, who came to the office a political neophyte, is finding just how difficult governing—for real, not in a television comedy show—can be.

* * * * *

In the most sweeping reshuffle of his government since he took office last May, Ukrainian President Volodymyr Zelensky fired his Cabinet and appointed a new prime minister earlier this month. The announcement comes at a tricky time, as the government is considering several reform measures that are seen as important to winning much-needed investor confidence. In an email interview with WPR, Steven Pifer, a nonresident senior fellow at the Brookings Institution and former U.S. ambassador to Ukraine, discusses the factors behind Zelensky’s move and why the new Cabinet will need to work hard to prove it can bring about real change in Ukraine.

World Politics Review: Why has Zelensky chosen to reshuffle his government at this time?

Steven Pifer: Some analysts suggest Zelensky made the personnel change due to concern over his declining popularity. Elected with 73 percent of the vote last April, his approval rating has fallen to just under 50 percent—still high by Ukrainian standards. Overall, the new Cabinet ministers lack the reformist credentials of their predecessors, and the new prime minister, Denys Shmyhal, is a relative unknown. The change has given rise to concern that the country’s oligarchs, who continue to exercise outsized political influence, are reasserting their position after Zelensky’s initial pledges to rein them in.

That, combined with the inexplicable timing of the reshuffle, has rattled Ukrainian reformers and Western investors. Zelensky took office last year amid high hopes that his presidency could make a dramatic breakthrough and put Ukraine on a path of economic growth and reduced corruption. When I visited Kyiv in late October, Ukrainians I spoke with were cautiously optimistic about what Zelensky and his government could achieve. The Cabinet reshuffle moves the needle sharply in the direction of caution. Indeed, some analysts fear the president is not committed to real change, and that he will simply muddle through as president without making the breakthrough that Ukraine needs. He will have to work hard now to quash those concerns and meet the expectations of Ukrainian voters.

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February 21 marks the sixth anniversary of the end of Ukraine’s Maidan Revolution. Three months of largely peaceful protests concluded in a spasm of deadly violence. President Victor Yanukovych fled Kyiv and later Ukraine, prompting the Rada (Ukraine’s parliament) to appoint acting leaders pending early elections. 

Today, Ukraine has made progress toward meeting the aspirations that caused Ukrainians to fill the streets of Kyiv: to become a normal European democracy with a growing economy and reduced corruption. Unfortunately, the country finds itself entangled in an ongoing low-intensity war with Russia, with uncertain prospects for settlement.

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