Ukraine’s government, splintering over issues from the war in the nation’s
east to faltering anti-corruption efforts, suffered a new setback as its
reform-minded economy minister stepped down.
Aivaras Abromavicius, 40, a Lithuanian-born former fund manager, said
Wednesday that he wouldn’t be a “puppet” for officials he accuses of blocking
overhauls of the ex-Soviet republic’s economy and institutions. He said
politicians, including one from President Petro Poroshenko’s party, had
pressured him to appoint “dubious people” at state-controlled companies.
Government bonds slumped after his comments.
The minister’s
departure underlines growing dysfunction in Ukraine, where memories of broken
reform promises from the 2004 Orange Revolution persist.
The administration
that took power in 2014 after a wave of pro-European protests has become bogged
down by infighting and criticism over failing to rein in the vested interests
that have controlled much of the economy for decades.
Poroshenko, who must
deliver reforms to maintain the flow of financial
aid from
allies such as the U.S. and the European Union, has promised personnel changes
in the cabinet this month.
“The
allegations by Abromavicius are highly damaging for Ukraine,” Lilit Gevorgyan,
senior economist at IHS Global Insight in London, said by e-mail. “To attract
investors back, Poroshenko and his team need to demonstrate that the second
revolution won’t be wasted on infighting and cosmetic changes, that they’ll
uproot entrenched corruption and clean up the business environment. So far, the news isn’t entirely
encouraging.”
Wednesday’s
news brought losses for government debt. The yield on dollar-denominated bonds
due 2019 jumped 45 basis points to 10.055 percent, the biggest daily increase
in more than seven weeks on a closing basis. The hryvnia gained 0.6 percent to
25.75 against dollar, recovering from an 11-month low Tuesday.
Abromavicius, whose
predecessor also left citing frustration over reforms, was one of several
foreign citizens drafted into Ukraine’s post-revolution government as
technocrats to add impetus to plans to steer the nation away from its Soviet
past. Announcing his exit, he accused officials of seeking to gain control over
cash flows at state energy producer NAK Naftogaz Ukrainy as well as
government-run enterprises in the defense industry. Pressure tactics on him
included pulling his family’s security detail, he said.
“My
resignation hopefully will serve as a cold shower for the leadership of the
country that something is going wrong,” Abromavicius said in an
interview. “Over the past couple of weeks, I started to be intimidated. I
started to be really pushed into a corner, forced to appoint some people who in
my view have nothing to do in my ministry.”
Poroshenko
said on Facebook that he told Abromavicius that he should stay, and that
the minister would consider the proposal. The anti-corruption bureau said it would
investigate the accusations.
‘Parochial
Differences’
Geoffrey
Pyatt, the U.S. ambassador in Kiev, described Abromavicius as “one of the
Ukrainian government’s great champions of reform.” A joint statement from Pyatt
and eight other ambassadors expressed disappointment at Abromavicius’s
resignation, saying he’d “delivered real reform results” and promoted “openness
and transparency.”
“It’s
important that Ukraine’s leaders set aside their parochial differences, put the
vested interests that have hindered the country’s progress for decades squarely
in the past, and press forward on vital reforms,” the ambassadors said.
Ukraine’s
efforts to stamp out corruption brought scant
progress last year, according to Transparency
International, which said in January that civil society, journalists and
whistle-blowers were more effective than government officials in combating
graft. The nation of 43 million people ranked 130th of 168 countries in
the Berlin-based watchdog’s Corruption Perceptions Index, level with Iran
and Cameroon.
Keep Fighting
The
results of Ukraine’s anti-graft endeavors will be assessed by lawmakers during
the week of Feb. 15, when Prime Minister Arseniy Yatsenyuk is scheduled to
report to parliament on his cabinet’s performance. The premier, whose party won
the biggest share of votes in elections in 2014, has seen his approval rating
plummet to 1 percent as Ukrainians vent their disappointment and growing
disillusionment following the revolution.
Yatsenyuk
told a government meeting Wednesday that his team must push on with their
program. The Finance Ministry struck a similar tone, with deputy minister Artem
Shevalyov pledging on Facebook to “fighting and reforming as long as we can.”
While
Abromavicius said his situation shows that technocrats can’t co-exist alongside
“people with an old mentality,” he expressed hope that Ukraine can still
complete the reforms he began.
“I
am still optimistic,” he said. “Things can still go in the right direction.”
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