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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Know-how of new government’s portfolio allocation policy

Oligarchs, “revolutionaries,” obedient “soldiers”… Where will they lead the country to?
13 March, 2014 - 11:08
Sketch by Anatolii KAZANSKY from The Day’s archives, 1998

Oligarchs are in regional administrations, “revolutionaries” in the Cabinet and the National Security and Defense Council, and Yanukovych’s former officials in… the new government. The portfolio allocation policy of the former opposition is raising a lot of questions and contradictory comments from experts. Today, we can distinguish at least three signs of this policy, which make the new and the old governments resemble each other. Firstly, “friends” (even geographically) rather than “the best” continue to take offices. Secondly, power has in fact been divided between the two – Batkivshchyna and Svoboda, – as it has been before between the Regionnaires and the Communists. Thirdly, contrary to the promised “austerity,” the new Cabinet has not even been restructured and retained, in particular, the offices of “rented celebrities,” i.e., vice-premiers. What for?

We must admit, however, that the new government has know-how of its own. The first is a public quota known as “Maidan quota,” and the second is that big business representatives have taken the chairs of regional administration heads.


A couple of days ago, for the first time in Ukraine’s history, some of the most affluent Ukrainians were appointed to govern their native regions. Ihor Kolomoisky and Serhii Taruta – Nos. 3 and 16 on the Forbes list of Ukraine’s richest people – are now Dnipropetrovsk and Donetsk regional administration chairmen, respectively.

Some are in rapture over the new appointments, and some are taking a dim view of them – the revolution has allegedly removed one clan from and brought another to the “power pie.” The disgruntled are sure there is no place left for people’s representatives in this setup.

“We did not struggle against oligarchs,” Vira Nanivska, president of the National Public Administration Academy under the President of Ukraine in 2006-09, says to The Day. “We wanted the capitalists, who made their way up thanks to an anti-Soviet revolution [when state-run property was privatized. – Author], to drop monopoly and experienced and skilled people to take high offices. As you can see, this is not the same.”

The expert is convinced that such slogans as “All power to the Soviets!” and “Down with the oligarchs!” are no more than a reincarnation of Soviet myths which some politicians are airing in the media. “We must ponder over how to change the system instead of remaining hostages to bygone phobias,” Nanivska says. “If we are building capitalism, not socialism, there should be no question whether or not we need oligarchs.”

“We must not fight against all those who have money and property, for this may end up in a tragedy for the entire country,” the expert affirms. “We need healthy competition in the implementation of high-quality political, economic, social, and other innovations. This is what the country needs badly.”

The interviewed experts and politicians pointed out that, on the whole, allowing big business representatives to govern some regions was a forced but, at the same time, quite justifiable decision. “We ventured to take this step only after Russia had further unfolded its military intervention in Ukraine,” Batkivshchyna MP Andrii Pyshny told The Day, explaining the government’s motivation. “Politics and business should not mix, but it is necessary that regional administrations be headed by people who are highly valued as economists and politicians in the regions from which they come and where their assets have mostly been concentrated. We must do our best to avert a conflict and ward off separatist sentiments in the regions. If oligarchs are ready to make use of their name and reputation to rally society together, it is not a bad idea.”

These appointments are viewed as temporary – for three months – until the presidential elections, Pyshny says. Yet the politician cannot say for sure what the situation will be and when the time will come for the oligarchs to leave the offices they hold. “Nobody knows about the future,” Pyshny says vaguely.

“Big-time businesspeople are interested, like nobody else, in defending self-denyingly territorial integrity of the regions,” political scientist Mykhailo Basarab says to The Day. “Even if they are guided by personal material, not national, interests, it is now to the benefit of not only them, but also the country as a whole.”


Other experts also speak of a largely mercantile motivation of the oligarchs. “I can see no heroism here,” Market Reform Center President Volodymyr Lanovy says. “The oligarchs are just taking care of their capital. In this case, their interests have coincided with those of the country. Besides, they have received a nice opportunity to show their civic attitude and work for the country a little, taking money from their own pocket.”

“None of our big businessmen wants Putin to manage assets in Ukraine,” says Oleksandr Solontai, an expert at the Institute of Political Education, “Even though Pinchuk, Akhmetov, and Yaroslavsky have refused to head regional administrations, they will all the same be helping to tackle problems in the regions. It is in their interests.”

Some experts are pointing to another goal of the oligarchs’ political steps: they were guided by cold calculation aimed at tapping the administrative resource and further boosting their political potential – particularly when power decentralization reform is being carried out and the range of local communities’ powers is being broadened. Ukraine has long been talking about this reform, but officials have only now begun to seriously ponder on this.

“There should be no illusions at all about the oligarchs,” Lanovy stresses. He claims that some big capital owners are seeking revenge, for they suffered from the Yanukovych government and want to come to power again. Some are stepping out of the gray zone and whitewashing their image in the eyes of society which wants them to be “dispossessed.” Naturally, there is also the factor of civic stand here, but it is far from pivotal in this case, experts think.


Some politicians are betting on the oligarchs’ support in the problem regions during the upcoming presidential elections. “Turchynov has in fact recognized the right of Akhmetov to hold total sway in Donetsk and Luhansk oblasts, still a fief of the ‘updated’ Party of Regions,” says an ‘Akhmetov group’ MP, still a Party of Regions member. “The government has promised to lobby the Donetsk clan’s business abroad and allowed them to take over the Family’s assets. Akhmetov and Taruta were struck off the list of the oligarchs on whom the EU imposed sanctions. In response, the oligarchs must make sure that Tymoshenko gains the majority of votes in these regions during the elections.”

The Day’s sources in Batkivshchyna are saying that this party’s leader also hopes to “befriend” local elite leaders in other eastern and southern regions. The same applies to Ihor Kolomoisky who nominated himself as governor of Lady Yu’s homeland. “Let him try,” an UDAR member told The Day off-record. “The story of Tymoshenko-Kolomoisky relations is not simple at all. He could have been expected to help Ms. Tymoshenko before 2006 but now he will hardly do so.”

For inconspicuous (until recently) oligarchs to come out on the public arena is an anomalous phenomenon for Ukraine. This has never occurred in our history before. Society, too, has very mixed feelings about this step. We would hardly see billionaires as heads of regional administrations in peacetime. “This temporary union is needed to stabilize the situation in Ukraine,” Solontai say convincingly. “The current government is not making use of effective managers because it does not want them to make professional serious politicians in the future. This is why it is opting for a union with the oligarchs with whom it maintains good relations in any case.”

Will the government’s current portfolio allocation policy become a trend? What goal are the oligarchs pursuing in reality? Time will tell. With due account of a complicated situation in the country, there are a lot of questions to officials, but it is too early to draw final conclusions. The new government should be given at least a month to feel at home. Maybe, more i’s will be dotted and t’s crossed.

By Yulia LUCHYK, The Day