Page 54 - BNE_magazine_05_2019

54 Opinion
bne May 2019
The exceptions are the banking sector clean up which has started, and both the National Bank of Ukraine (NBU) and the Ministry of Finance have been praised by donors for making real progress.
Indeed, observers have been encouraged by the high profile given to former finance minister Oleksandr Danylyuk in Zelenskiy’s new team. Danylyuk was one of the prime movers behind the nationalisation of PrivatBank in 2016 – a bank owned by Zelens- kiy’s oligarch backer Ihor Kolomoisky. Danylyuk showed himself to be a liberal reformer and competent pair of hands and his inclusion will be well met by the investment community at least.
The final team will be presented soon, according to the president-elect, but he has also made it clear that he doesn't intend to interfere with the leadership of the NBU, which will also encourage investors, especially as Ukraine has a heavy borrowing schedule ahead of it over the next five years.
Zelenskiy has said the widely hated domestic gas tariff hikes forced on Poroshenko as part of the IMF package are “not
in the presidents competence” which is to say Zelenskiy is suggesting he won’t undo any of the reforms already imposed at the IMF’s insistence.
He has also said that he will serve only one term and if this is true he could continue the reform program unfettered by the need to try and get re-elected.
One of the biggest reforms on the agenda that Poroshenko managed to shelve until after the elections is laws to set up a land market.
Ukraine’s parliament was supposed to pass a crucial land
law by the end of May 2017 that would have started the process of allowing the buying and selling of land. The
reform could earn Ukraine an extra $1.5bn to $2bn of badly needed revenues in just the first year, and billions of dollars of investment would be unlocked after that. Ukraine is a global agro-superpower and already one of the biggest exporters of grain in the world. A liberal law to create a land market was proposed by Aivaras Abromavicius, Ukraine’s Lithuania-born former minister of economy and trade, who quit in early 2016. Abromavicius was initially part of the Zelenskiy team but seems to have withdrawn as he was not to be seen at the election day celebrations.
No power base in the Rada
Zelenskiy’s election as president was an exciting conclusion to a hard fought fight, but the politics is not over. Zelenskiy will only be inaugurated in June, but his main weakness is that he has no representation in parliament and Poroshenko’s eponymous block is the largest fraction in the Verkhovna Rada.
There is a general election for seats in the nation’s parliament slated for October and if the vote were held now then Zelenskiy's recently-created party, The People’s Servant, would gain a domi-
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nant first-place victory with 25.9% of votes, followed by 15.7% for the Opposition Platform For Life party led by Russian-oriented Yuriy Boyko, 13.9% for the Petro Poroshenko Bloc, and 12.1% for the Fatherland party led by Yulia Tymoshenko, according to Kyiv International Institute of Sociology (KIIS).
But five months is a geological age in politics. Tymoshenko, who came third in the presidential race, has already proposed changing the constitution to strip the president of most of his power and turn Ukraine from a republic into a parliamentary democracy. Her erstwhile rival Poroshenko would probably support this move now.
Dissolving parliament and calling snap elections is an obvious answer but it is not clear if the president has the power to do this; briefly, Zelenskiy has to be made president by April 27 to be able to dissolve the Rada, but the date for his inauguration, chosen by the Rada deputies, has been set for June 3. Without a power base in the Rada, Zelenskiy will not be able to appoint his own people to many of the key cabinet positions, because as president he only has the power to appoint the defence and foreign ministers as well as the general prosecutor and a few other posts. He can also propose laws but he has no way to force them through. Zelenskiy could easily find himself a lame duck in a showdown with the Rada.
Whatever happens it certainly going to be an interesting and eventful six months until the elections, and if Zelenskiy can establish a parliamentary power base then he may even surprise his detractors and make some real changes.
His one big advantage in this, and ironically something
he shares with Putin, is the massive vote in support of his candidature as president. He has an undeniable mandate from the people to make a change and he will have control over the law enforcement agencies while everyone in the government is exposed to corruption charges. Zelenskiy could choose to play rough if he wanted to. But given his huge victory the current structure of the Rada is very likely to break up as the MPs scramble to keep their jobs in the new environment. Zelenskiy is the wind of change and really anything could happen now. Like he told the rest of the CIS: “Look at us. Anything is possible!”
Ukraine is an agricultural superpower, but the government has resisted creating a land market.