A deadlock after Maidan: how Ukraine was on the brink of political crisis

On Tuesday the Prime Minister of Ukraine Arseniy Yatsenyuk will speak in Parliament with a brief report of the government for 2015, Ukrainian media and politicians do not exclude that by the end of the day can become the Prime Minister’s resignation.

The main claim to the Cabinet of Ministers — lack of reforms. This is indicated not only domestically, but also internationally. To ensure that the government of technocrats to undertake reforms, Kiev call USA, Canada, EU countries, and the managing Director of the IMF Christine Lagarde linked the execution of reforms with the loan.

Slow reform

Over the implementation of reforms following numerous expert organizations. Experts are economists VoxUkraine produces a special Index for monitoring reforms, which comprehensively evaluates the government’s efforts to implement economic reforms. For the period from 25 January to 7 February, the index was 0.6 points out of a possible 5. “Political developments overshadow economic reforms”, — explained in the document.

Ukrainian experts estimate that the reforms in different ways. President of the Center for economic development Alexander Paskhaver in an interview to Ukrainian portal Reed said that is positive about the incident for a year and a half, and when a critical mass of reforms will be achieved, changes start in key areas.

“We can’t say that any reform is not on paper and not on Facebook, obvious to the expert community, and for the people”, — disagrees Sergey Marchenko from the Center of a free economy name of Kakha Bendukidze.

Nevertheless, the country managed to improve its position in the world Bank’s Doing Business. In the ranking of doing business for 2016 Ukraine took 83rd place, a year earlier occupied 87-E. In terms of “registration of companies” the position has improved by 40 places.

The problems in the economy

“The annexation of the Autonomous Republic of Crimea and the military conflict in the East of the country since the beginning of 2014 has played a crucial role in strengthening the existing imbalances in the national economy,” explains the disappointing performance in the first paragraph of his report for 2015, the government. However, the government boasts, in the third quarter of 2015 for the first time in the last two years GDP growth in relation to the previous quarter (seasonally adjusted). If in the first quarter of 2015, the fall in GDP was 5.3% in the third quarter, GDP increased by 0.5%, according to the authors of the report.

Nevertheless, the national Bank of Ukraine has lowered its forecast of economic growth in Ukraine in 2016 from 2.4% to 1.1%.

Serious decline was recorded in industry, trade and transport, the government recognizes. By the end of the previous year the decline of production in industry slowed down from 21.3% to 13.4%. Rising prices for the year amounted to 43%.

To stabilize the situation helped the agreements of debt restructuring — a merit Finance Minister Natalia Jaresko (technocrat government) and assistance from the IMF.

However, since September, Ukraine may receive IMF tranche in the amount of $1.7 billion on 10 February, the managing Director of the IMF Christine Lagarde said firmly that it is difficult to imagine the continuation of cooperation with Kiev, “in the absence of visible efforts to give new impetus to the reforms in the state governance and combating corruption”.

Following negotiations, it was agreed that the parties will prepare an action plan, which Kiev will have to strictly adhere to.

European integration

The government recognises that the loss of the external market place — primarily Russian — dealt a severe blow to the economy. The Russian market was almost completely closed after the failed Brussels talks between Ukraine, the EU and Russia on issues of free trade between first and second. Russia, previously introduced embargo on the supply of certain types of goods, from 1 January this year overturned the regime of free trade with Ukraine. As a result, the export of Ukrainian goods to Russia in 2016 will be reduced by 30% or $1.3 billion, according to the presentation posted on the website of the national Bank of Ukraine on 8 February.

Direct losses of Ukraine from the embargo imposed by Moscow, will be about $98 million, and in total, including due to the lifting of tariffs and duties, loss of revenue for Ukrainian producers should be in the amount of $420 million to 600 million, evaluated the effects in the middle of January the Minister of economic development aivaras abromavicius.

The volume of trade with the EU in monetary terms is also reduced. According to the state statistics service, during January—June 2015 the trade volume was $13,452 billion, it has decreased in comparison with January-June 2014 $5,913 billion or 30.5%. The positive effect is not received from Ukraine and preferential terms on which from 1 January 2015, worked as a free trade area with the EU (EU import duties on Ukrainian goods was abolished, and Ukraine). In monetary terms exports of goods declined in the period by 35.6% (or $3,356 billion) and amounted to $6,062 billion, according to the publication “Apostrophe”. Thus, the share of imports of goods from EU countries has increased.

However, in Parliament and in official speeches of the President in the foreground now — the question of abolishing visas between the EU and Ukraine. At the summit in Riga last year the EU and Ukraine admitted that Kyiv has not done enough to enact all necessary laws and regulations to ensure that the visa cancellation was possible. Despite criticism in the media, the MPs have again delayed the adoption of necessary regulations. The seven laws necessary to implement the requirements of the EU to cancel visas, will be voted only on 16 February.

Territorial integrity

About necessity of restoration of territorial integrity Petro Poroshenko speaks at all possible stands. In January he proposed a special diplomatic format to discuss the return of the Crimea. Although since then no progress in this matter has not occurred. For the lack of attention and action in relation to the Crimea of the President was criticized by the representatives of the Crimean Tatars, who moved to Kiev. They conduct their own public blockade of the Peninsula, passing through the border goods.

Reintegration of Donbas has not occurred. At the Munich security conference, held at the weekend, Poroshenko again spoke about the intention to implement the Minsk agreements. However, the Parliament has yet to appoint date of consideration of the constitutional amendments in the second reading, which would give part of Donbas special status of local self-government. Instead, Rada has delayed the resolution of this issue. The law on the special status and Amnesty the question also postponed. Ukrainian experts and media attribute this to the fact that in the Parliament of 300 deputies, ready to support constitutional changes, with the resulting political consequences.

The government in its report indicates that Ukraine has managed to achieve not only international solidarity and condemnation of Russia, but also to strengthen the armed forces. In 2015 spending on defense and security in comparison with 2014 have been increased 1.5 times (by 32.1 billion UAH) to 95, 8 billion hryvnia.

The reform of public administration

One of the biggest transformations that the authorities managed to take in the final — will go live on may 1 — civil service reform. The law introduces competitions for all positions in the civil service, ensure the separation of political positions and civil service positions. Under the new rules, deputies, Ministers and their assistants, advisers, press secretaries and staff will not be civil servants. Civil servants of higher categories will not be allowed to be members of political parties.

Reformed the system of remuneration: will be increased salaries for officials (including through EU funds) and a smaller share of premiums and co-payments in the pay structure of civil servants. Instead of seven category of civil servants will be three. The highest body of the civil service will be to choose a special Commission, other civil servants will choose as a result of the competition, which will hold managers themselves, describes the essence of the reform, the newspaper “Today”.

The current practice of appointments in ministries and agencies is criticized by many, including members of the Cabinet of Ministers for the opacity. One of the reasons for his resignation the Minister of economic development and trade aivaras abromavicius called the attempt to impose him in the Vice of the man he is assigned wanted. It was about the Executive Director of “Naftogaz of Ukraine” Andrey Pasichnik, and imposed his presidential candidacy of the Deputy Chairman of the faction PPO and longtime friend of President Igor Kononenko.

“The Cabinet has evaluated its performance? They say the law about the civil service is victory.Yes, indeed, it is accepted, but it happened with a delay of a year and under very serious pressure from the EU and society,” assesses the reform Vadim Misky, coordinator of the expert group “Reanimation package of reforms” in an interview to Ukrainian portal Reed.

The process of lustration, although it is receiving much less public attention. Only under the law on cleansing of power for the year 860 were officials who reported Public lustration Committee at its page in Facebook. They were listed in the State registry of the Ministry of justice with a ban to hold positions for 10 years. The Ministry of justice also checks 48 thousand active civil servants, 37 thousand candidates to work in state structures and 4898 judges.

The fight against corruption

Published in in January the corruption perception Index of Transparency International Ukraine has improved its position: with the 142nd place, she climbed to 130. But these are still low figures experts TI explained the slowness of the government in carrying out new reforms (Russia occupies 119).

Summarizing the results of 2015, Poroshenko as achievements led the beginning of the work of anti-corruption authorities. For the year since the formation of the coalition government, in Ukraine there were created four special body to fight corruption: the National anti-corruption Bureau, Special anti-corruption Prosecutor’s office, National Agency for combating corruption and the National Agency for search and management of assets derived from corrupt activities. Was accepted and the policy document — anti-Corruption strategy for the years 2015-2017. However, the full force of all of these authorities have not earned.

The lack of reforms and poor, the fight against corruption were the main slogans of the Governor of the Odessa region Mikhail Saakashvili. The ex-President of Georgia held a series of economic forums on reform, and his supporters talk about the need to form a party.

The lack of trust

Assessment group international and Ukrainian experts, the signatories of Monday’s appeal on the platform of the international Renaissance Foundation, Ukraine is a real political crisis. “The current political crisis in Ukraine is, first and foremost, a crisis of confidence. People have lost confidence in the health of political institutions, capacity of government institutions and their leaders to carry out reforms in the direction outlined and proclaimed during the revolution of dignity” — said in a statement signed by the heads of the leading centres of expertise.

They recommend first and foremost remove from power people with an obvious conflict of interest. Since last year, Ukrainian media published a lot of material about the attempts of people in the ruling coalition, including the President’s inner circle to influence appointments to various state posts.

The media and deputies have accused a friend and business partner of President Igor Kononenko in trying to nominate people for positions administering state-owned companies. The leader of the party DILL Gennady Korban accused Kononenko that its people are leading company Centrenergo, Odesa port plant (OPZ), Ukrtransnafta, Ukrhydroenergo and Ukrgazvydobuvannia. A longtime friend of the President called it a lie. “According to the Odessa port, when we got to some specifics and called the name of Olga Tkachenko, according to them — member of the Supervisory Board, allegedly associated with me, it became clear that such a person does not exist in the Supervisory Board! For other objects, even names were named,” he fought Kononenko in an interview with “New time”.

Been simmering scandal over the Prosecutor General Viktor Shokina. Claims to how Affairs are being conducted in the Prosecutor’s office not only in public but also in international structures. So the Council of Europe criticized Ukraine for investigation of events in Odessa and on the Maidan. And on Monday the resignation of the Deputy Prosecutor General Vitaliy KASKO. He said that under the current leadership of the office “it is impossible to create in Ukraine a real European public Prosecutor’s office model”.

The activities of the government during the year also been repeatedly criticized by his staff during the reporting period, the announcement of the resignation of five Ministers: the Minister of health Alexander Kvitashvili, Minister of infrastructure Andriy Pivovarsky, Minister informality Yuriy stets, Minister of agrarian policy Alex Pavlenko, Minister of economic development aivaras abromavicius. All except the last one, however, withdrew them and expressed willingness to work.