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Ukrainian parliament approves a progressive government (December 2, 2014)

The Ukrainian parliament just approved the new Cabinet of Ministers, most importantly the Ministry of Finance and the Ministry of Economic Development and Trade will be headed by Western-educated foreigners with strong investment backgrounds.  We believe that this is a strong signal that the current parliament is ready to go through with the necessary reforms and take the European path. We thus view this as extremely positive for the Ukrainian economy as a whole.

 

According to the recent decree #1008 initiated by the newly appointed Prime Minister Arseniy Yatsenyuk, the Ukrainian parliament appointed the following candidates to the Cabinet of Ministers:

• Vice Prime Minister of Ukraine: Valeriy Voschevsky;

• Minister of Culture of Ukraine: Vyacheslav Kyrylenko;

• Minister of Regional Development, Construction, Housing and Utilities of Ukraine: Gennadiy Zubko;

• Minister of the Cabinet of Ministers of Ukraine: Anna Onishchenko;

• Minister of Agriculture and Food of Ukraine: Oleksiy Pavlenko;

• Minister of Internal Affairs of Ukraine: Arsen Avakov;

• Minister of Ecology and Natural Resources of Ukraine: Igor Shevchenko;

• Minister of Economic Development and Trade of Ukraine: Aivaras Abromavicius ;

• Minister of Energy and Coal Industry of Ukraine: Vladimir Demchyshyn;

• Minister of Infrastructure of Ukraine: Andrei Pivovarskiy;

• Minister of Information Policy of Ukraine: Yuriy Stets;

• Minister of Youth and Sports of Ukraine: Igor Zhdanov;

• Minister of Education and Science of Ukraine: Sergiy Kvit;

• Minister of Health of Ukraine: Alexander Kvitashvili;

• Minister of Social Policy of Ukraine: Pavel Rozenko;

• Minister of Finance of Ukraine: Natalie Jaresko;

• Minister of Justice of Ukraine: Pavel Petrenko.

Pavel Petrenko (Minister of Justice), Sergiy Kvit (Minister of Education), Arsen Avakov (Minister of Internal Affairs) and Pavel Klimkin (Minister of Foreign Affairs) have already worked in the previous government headed by A. Yatsenyuk.

It should be noted that some of the key positions have been granted to foreign candidates with professional Western education and extensive experience in business. The Finance Ministry is to be headed by Natalie Jaresko, an American citizen with Ukrainian roots, who is co-founder and CEO of Horizon Capital, a US private equity fund manager operating in Ukraine. The Ministry of Economic Development and Trade will be headed by Ayvaras Abromavichus, a native of Vilnius (Lithuania), and a partner at the Swedish company East Capital, another well-known emerging and frontier market asset manager operating in Ukraine. The Ministry of Health is to be headed by Alexander Kvitashvili, an ex-minister of Health in Georgia (up to 2010). The President of Ukraine Petro Poroshenko has specifically issued a decree granting Ukrainian citizenship to Abromavichus, Kvitashvili and Jaresko so that they could be appointed as ministers in Ukraine.

Moreover, some of the incoming ministers have investment background: the soon-to-be Minister of Energy and Coal Industry, Vladimir Demchyshyn, headed the investment banking department of ICU, while Andriy Pivovarskiy, the Minister of Infrastructure, previously held a position of a managing director and head of investment banking at Dragon Capital before accepting a position of CEO at Continium Group (fuel retail company). We thus believe that it is extremely positive that some people with a profound business background and Western education have been appointed as ministers. Moreover, now that the government is formed, we expect that the IMF will deploy funds to Ukraine as promised.