THE ELEVENTH GOVERNMENT OF UKRAINE:

Appointments and authority

The Government led by Prime Minister Victor Yushchenko was forced to resign when 26 April 2001, 263 Verkhovna Rada deputies voted in favor of no confidence to the Cabinet of Ministers of Ukraine. According to the Constitution of Ukraine a new government should be formed no later than two months from the resignation of the older one. However, only after a month, 29 May 2001, 239 deputies of the Verkhovna Rada had voted in favor of the first candidate proposed by the President, Anatoliy Kirilovych Kinakh. Thus, Kinakh led the eleventh government and became the tenth Prime Minister in the modern history of Ukraine.

The Kinakh government - peculiarities of its nomination

Nomination of the new government of Ukraine took place under very peculiar political circumstances. Unlike in the previous years, the former government was voted out of confidence by the deputies of the parliament and not thrown out of power by the head of the state. The initiators of this move argued that the reasons behind their action were two. First, the lack of desire and ability of the Cabinet to work together with all the factions of the parliamentary majority and second, the categorical refusal by Prime Minister Victor Yushchenko to form a new coalition government.

Going by this logic, prior agreement reached with the majority factions about their participation in the coalition government would have secured guarantee for approving any new candidates to the highest office of executive power in Ukraine by the parliament. However, reaching such an agreement was impossible, as the factions such as -Kongres>, na>, Ukrainskiy Narondniy Rukh and Narodniy Rukh Ukrainy did not participate in the consultations. Votes of the participating factions in these consultations were not sufficient to elect a new head of the government. So, among the four candidates named by the President
(M. Azarov, V. Medvedchuk, S. Tihipko and A. Kinakh) the only one remaining was that of Anatoliy Kinakh. The other three practically bowed out after they publicly announced their intentions of concentrating on party work before the 2002 elections (M. Azarov – Party of the Regions of Ukraine, V. Medvedchuk – Social Democratic Party of Ukraine (united), S. Tihipko – ). The overall impression created was as if the coming elections do not bother Anatoliy Kinakh at all. This is far from being true. The office of the head of the government gives much administrative and financial advantages during the pre-election campaign. It is with this aim in mind and with the need for having a loyal parliament in the coming year that President Kuchma chose the candidature of Kinakh. Quite surprisingly, in his speech before voting in the parliament, Kinakh said that even if his candidature gets rejected, he would still perform the duties of the head of the government. This shows that the real choice of Kinakh’s candidature was Kuchma’s and not of the Verkhovna Rada. In the conditions of the current political conflict there was a high probability that a new government would not be formed. In that case, the President would have had the choice of nominating an ad interim or acting Prime Minister, who, according to the Constitution of Ukraine is not empowered to act on behalf of the President in case the latter is removed from office by impeachment.

The nomination of the acting Prime Minister would have also proved the inability of the coalition to form a new government and that is why the factions were forced to vote for any candidate proposed by the President. The coalition, except for the faction , consistently pursued their policy of not voting for any candidate other than that of Yushchenko. At the last moment the Communists decided not to vote for the candidate proposed by the President as any new Prime Minister, in spite of his personal qualities, will continue the of the current regime.

Despite all this, the new Prime Minister could manage to draw the support of 239 deputies. The support of 16 Socialist party deputies and a few non-faction deputies was quite unexpected. It was quite clear that without these votes it would have been impossible to approve the head of the new government. Oleksandr Moroz explained this step of the Socialists before the voting and said that A. Kinakh would be a worse acting Prime Minister than a full-fledged Prime Minister.

O. Moroz was right from the political perspective of the issue. However, after voting in favor of Kinakh, the Socialist party, although in opposition to the current President, will be partly accountable for the Kinakh government and its performance.

Peculiarities of choice of personnel

The President of Ukraine Leonid Kuchma signed a decree appointing the new Prime Minister on the date of the voting, and immediately after that, other new appointments were announced. Oleg Dubina, Vice Prime Minister in charge of Industrial Policy, Fuel and Energy in the former Cabinet was appointed the First Vice Prime Minister. Minister of Internal Affairs Yuriy Smirnov, Minister of Defence Oleksandr Kuzmuk and the Minister of Emergency Situations Vasyl Durdinets remained in their previous posts. Volodymyr Lytvyn, Head of the Presidential Administration said that, all appointments were agreed with the Prime Minister. Lytvyn said the same about all other appointments that followed. Thus, new entrants to the Cabinet were Vice Prime Minister
V. Seminozhenko, Minister of Culture Y. Bohutskiy, Minister of Transport V. Pustovoitenko, Vice Prime Minister L. Kozachenko and Minister of Ecology and Natural Resources S. Kurykin. All the other ministers were reappointed in their previous posts and the Head of the State Committee for Industrial Policy Vasyl Gureev was reappointed as the Minister of Industrial Policy. Anatoliy Kinakh, formerly head of the Ukrainian Union of Industrialists and Entrepreneurs expressed his strong support for the re-establishment of this Ministry just before the voting in the parliament. Thus, even though majority of the deputies of the Verkhovna Rada qualified the performance of the earlier government to be unsatisfactory, 14 out of 21 or 66.6% of the ministers remained to work in the new government.

No significant changes in the party-based representations in the government were noticed. The new Prime Minister before his voting said that his government would be a coalition one, not based on party and political affiliations but on the bases of professional and moral qualities of those, who will work for the government. President Kuchma also was against the principle of coalition while forming the government, as there are no legal bases for it. The main supporters of the coalition principle were the and SDPU(u) factions and they fought till the end to preserve their political faces. First Deputy Speaker of the Verkhovna Rada and the leader of the Social Democrats Victor Medvedchuk, for example, tried to convince the public that Minister of Education and Science Vasyl Kremin in the Yushchenko government is different from the Vasyl Kremin in the Kinakh government. While Yushchenko personally approached him to be in the government in the past, this time it the SDPU(u) which delegated him. At the same time, Medvedchuk also credited the SDPU(u) for the appointments of Vasyl Rohoviy as the Minister of Economy and Ihor Mityukov as the Minister of Finance. In his effort to deny this fact, V. Rohoviy said that he was never a member of the SDPU(u) but welcomes the idea of social democracy. Formally speaking, representatives of parties in the government are from the Party of the Regions of Ukraine – Volodymyr Seminozhenko, Peoples Democratic Party of Ukraine – Minister of Transport and
ex-Prime Minister Valeriy Pustovoitenko, Agrarian Party – Minister of Agrarian Policy Ivan Kirilenko and to conclude, the Green Party – Minister of Ecology and Natural Resources Serhiy Kurykin. It is important to note that majority of the appointments to the new government including that of the Prime Minister consist of those, who were known for their earlier experience in Presidential administration of other state bodies, rather than in political parties. Serhiy Kurykin is however the only exception to this.

The composition of Anatoliy Kinakh’s government if compared with that of the Yushchenko government looks as follows:

Post in the Government	Yushchenko Government	Kinakh Government
Prime Minister	V. Yushchenko	A.Kinakh
First Vice Prime Minister	Y. Yehanurov	O. Dubyna
Vice Prime Minister	O. Dubyna	V. Rohoviy
Vice Prime Minister	M. Zhulynskiy	V. Seminozhenko
Vice Prime Minister	M. Hladiy	L. Kozachenko
Minister of Agrarian Policy	I. Kirilenko	I. Kirilenko
Minister of Internal Affairs	Y. Smirnov	Y. Smirnov
Minister of Defence	O. Kuzmuk	O. Kuzmuk
Minister of Finance	I. Mityukov	I. Mityukov
Minister of Health Care	V. Moskalenko	V. Moskalenko
Minister of Labour and Social Policy	I. Sakhan	I. Sakhan
Minister of Justice	S. Stanik	S. Stanik
Minister of Emergency Situations	V. Durdinets	V. Durdinets
Minister of Foreign Affairs	A. Zlenko	A. Zlenko
Minister of Economy	V. Rohoviy	O. Shlapak
Minister of Culture and Arts	B. Stupka	Y. Bohutskiy
Minister of Ecology and Natural Resources	I. Zayets	S. Kurykin
Minister of Transport	L. Kostiuchenko	V. Pustovoitenko
Minister of Fuel and Energy	S. Stashevskiy	S. Stashevskiy
Minister of Education and Science	V. Kremen	V. Kremen
Head of the State Committee for Industrial Policy/Minister of Industrial Policy	V. Gureev	V. Gureev
Government Secretary	V. Lysytskiy	V. Yatsuba

Thus, appointments made to the Kinakh government showed a clear sign of success for the President. It also showed that the main reason behind the resignation of the Yushchenko government was not absence of coalition, consensus or dissatisfaction with the composition of the Cabinet but the President’s personal dissatisfaction with the work of Prime Minister Victor Yushchenko and the realization by political competitors both in the parliament and the Presidential Administration of the need to remove Yushchenko from the political arena before the parliamentary elections.

Along with this, opponents of V. Yushchenko in the parliament, who wanted new financial and administrative leverage by getting ministerial portfolios in order to use them during the parliamentary elections failed to reach their aim. After the resignation of the Yushchenko government all political initiatives were transferred to the hands of the President. Appointments to the new Cabinet totally negated an independent role of the latter in Ukrainian politics and also demonstrated how the latter is fully controlled by the Presidential Administration. It also showed that those political forces, which are institutionalized in the Verkhovna Rada have almost lost all their influence on the government. Kinakh’s political equidistance from all major oligarchic groups is another testimony to this.

Government’s intentions and the real options

Speaking to the parliamentarians before the voting, Anatoliy Kinakh at the onset underscored the importance of constant, systematic, conscious and not situational and incidental cooperation of the Government with the Verkhovna Rada. Priorities in the area of socio-economic sphere for the government were structural economic reform, tax reform and poverty alleviation. A. Kinakh was known for his adherence to tough protectionism and soft monetary policy during his earlier activities. As the head of the Ukrainian Union of Industrialists and Entrepreneurs, he always called for supporting the domestic producer, even at the cost of devaluation of the national currency and credit subsidies. Unlike the Yushchenko government, the Kinakh government will pay attention not to macroeconomic stabilization but to microeconomic issues.

Already in his introductory speech Kinakh spoke of partial revival of the system of mutual payments, indicating that he is open to the various industrial lobbies. At the same time, the possibility of the center of decision making on operational economic issues and that of mutual payments being shifted from the Cabinet to the Presidential Administration became bigger.

Apart from initiatives in appointments and personnel management issues, President L. Kuchma took away the prerogatives of decisions related to the organization and formation of the work of the executive from the Verkhovna Rada and the Government. Several times he had vetoed various drafts of the Law on Cabinet of Ministers. The desire of President Kuchma to strengthen his control over the executive bodies led to the hasty decision of introducing cardinal changes in the system of executive power between the time of appointing the Prime Minister and the formation of the Cabinet. The scenario of reorganization of the executive and exercising more control over it would have been meaningful and perhaps was planned by the Administration in case acting Prime Minister was appointed. But when the President decided on the reorganization even after a full fledged Prime Minister was in place, and that too, without discussions and consultations, shows that Ukraine has been transformed into a presidential form of governance.

According to the Presidential decree , the State Secretary of the Cabinet of Ministers will head the Secretariat of the Cabinet of Ministers. He will support the office and functioning of the Prime Minister and all the Vice Prime Ministers of Ukraine, will approve, in consultation with the Prime Minister and the Minister of Finance the personnel list and the budget of the Secretariat. He will also have the right to appoint and dismiss the personnel of the Secretariat. The State Secretary of the Ministries by their status are members of the collegium, and will approve, in consultation with the Ministers, the structure of the Ministry, and in consultation with the Ministry of Finance will approve the personnel list and the budget of the particular Ministry. The State Secretary of the Ministry appoints and dismisses personnel of the central body of the Ministry and the leading management of its territorial sub-units, as well as of those enterprises and organizations, which are under the management of the Ministry.

The State Secretary of the Cabinet of Ministers and the State Secretaries of the Ministries will have their First Deputies. The President, upon presentation by the Prime Minister, appoints them, but they are dismissed by Presidential decrees alone. The State Secretary of the Cabinet and the State Secretaries of the Ministries are appointed for the term corresponding to that of the President. They and their First Deputies, unlike Ministers, are civil servants and are included in the senior management of the ministries. The status of the civil servant of the first grade does not only give the right to a (cottage) and car, but a lot of other benefits, including, additional payments above salary and significant shares of pension protection. Dismissal of the State Secretary of the Cabinet and those of the Ministries is possible only in cases of improper execution of duties, inability to work on health grounds, conviction by a judicial decision and in other cases, as envisaged by the law on civil service. Resignation of the Government or changes in its composition cannot be grounds for their dismissal. In relation to the creation of the institution of the State Secretaries, the posts of First Deputy Minister and Deputy Ministers have been abolished.

The Prime Minister of Ukraine, according to the decree, leads the work of the Cabinet, and directs it to the relaization of the domestic and foreign policies, implementation of the Constitution and other laws, acts of the President, Government programs and other tasks, bestowed upon the Cabinet. First Vice Prime Minister and the Vice Prime Ministers, according to the distribution of portfolio, support adherence to the Constitution, laws, acts of the President and the Cabinet of Ministers, coordinates the activities of particular issues with related ministries and other central executive bodies, without directly supervising their work.

As of now, the Prime Minister, all Vice Prime Ministers and Ministers, going by the nature of their portfolio, by the way of their appointment and dismissal, are political appointees and not civil servants.

Within a period of two months the head of the Presidential Administration with the State Secretary of the Cabinet should work out proposals on the creation of an effective system of interaction between the Presidential Administration, Secretariat of the Cabinet of Ministers and the State Secretaries of the Ministries. Within this same time frame a concrete proposal on appointing an authorized representative of the President on administrative reform issues will have to be placed for consideration.

In general, the institution of State Secretaries is widely practiced in the world. In the United States of America and the Great Britain the post of the Secretary of State is similar to that of the Minister. In majority of European countries the institution of State Secretaries is the post of the first deputy minister of foreign affairs. This deputy is the highest level after the minister and is subservient to the latter.

In various countries there are two types of state secretaries. One is that appointed in the same way as the minister and is a political figure. The second type consists of the highest official in the particular profession, and is an expert, who knows the system and on whom the whole system rests.

For example, there are two types of state secretaries in Germany – parliamentary and civil servants. Parliamentary state secretaries are at the same time members of the parliament and members of the Cabinet of Ministers. The parliamentary majority discusses candidacies to these as well as to ministerial posts after the parliamentary elections with the incumbent Chancellor during their consultation on forming a coalition government. In essence, these state secretaries are political deputies of the ministers while overall authority remains with the minister, who has the last word in their respective institutions on issues of personnel and finance. State secretaries also resign with the resignation of the Cabinet.

German State Secretaries-officials are civil servants, who have reached the level of state secretaries, as a rule, in that particular ministry. They are not members of the government, but are appointed by the government upon presentation of their candidature by the minister. These very state secretaries are in charge of administrative matters. After the government resigns, the state secretaries-officials may retain or lose their position, depending on the decision of the new minister. The same is true of the Head of the office of the Federal Chancellor, who leads the office of the head of the government and is a very important person. It is customary that each Chancellor appoints a new Head of Office.

In France the President appoints the state secretaries after the Prime Minister proposes their candidatures, and they become members of the government. In fact, French state secretaries are ministers of a lower level than usual ministers. They attend meetings of the Cabinet of Ministers only when issues concerning their sphere are discussed. Each state secretary is in charge of a particular area and is empowered to take both political and financial decisions in that sphere.

In Great Britain the state secretaries also are members of the Cabinet of Ministers and are also members of the parliament. They are appointed and dismissed by the monarch upon recommendation by the Prime Ministers. These appointments are political but those appointed are usually experienced in the areas they are given charge of. By their portfolio and authority, British state secretaries are deputy ministers.

In Greece the state secretaries are fourth by rank in the ministries after the minister, vice minister and deputy minister. In each ministry there may be a couple of state secretaries. The Prime Minister or the Minister appoints them, issuing a special law, where portfolio of the state secretary is indicated. Each new minister may change the state secretaries in his/her ministries, cancel or create new posts of the state secretary, depending on the minister’s vision of the work of the ministry.

In Canada the state secretaries, as the ministers, are members of the Cabinet and that of the parliament, and are accountable to the latter. The originality of the Canadian model consists in the fact that, each state secretary works not in one particular ministry but is the curator of a whole region or a sphere of life and coordinates the work of certain departments of various ministries. The Canadian state secretaries are accountable to the parliamentary commissions, which formulate the policies in each particular area. They resign together with the resignation of the Cabinet of Ministers.

The difference in the institution of state secretaries proposed by the Presidential decree as opposed to world practice is that in no country the state secretaries are accountable to the Head of the state – to the King, Queen or the President.

Apart from that, the introduction of the post of the state secretary with such powers and status as envisaged by the decree of the President, ruins the hierarchy of the administrative or management system. Going by the proposed option, the Minister becomes the titular head and the State Secretary will enjoy the real powers.

Thus, it is incorrect to say that refusal from the institution of the deputy ministers and transition to the institution of state secretaries is at par with the European models. The post of state secretaries is known all over Europe, but the essence of the concept in the Presidential decree is so misused and distorted, that it became a direct antonym of what it is in Europe. It is even worse than the institutions of deputy minister or first deputy minister existing in Ukraine today.

Prospects of the new Government

As world experience shows, socio-political and socio-economic strategies change with changes of the Government. It is quite clear, that the Kinakh Government came into being with this perspective in mind, as the main strategy of the current political regime is not economic or political reforms but preserving and strengthening their own dominant positions. Economic strategy of the Yushchenko government was an answer to the objective needs of the hour. It was impossible any more to lead the economy in the style of the Pustovoitenko government for objective reasons – such a model kept the President and the political elite in power and lost its effectiveness. Under conditions of political crisis survival and preserving the power was the main concern of the regime and not reforming the economy. Thus, from the point of political expediency, economic strategy and the management model of the Yushchenko government with its successes were sacrificed. A tough dilemma stands before the new Government, to continue reforms or to support the election campaign. It is highly probable that the new Government will neither have any strategy of activities, or any program of activities, or any logic of economic policy. This is a situational Government, appointed for the implementation of purely political plans.

Pressure on the Government on part of industrial-financial groups, intending to pursue their short-term interests will grow as the elections get closer. It means a renewal of the influence of the oligarchs in operations with state assets. But, unlike the Pustovoitenko Government, this influence will be more balanced as a result of the counterpoising of the Presidential Administration, oblast governors and political forces, orientated towards law enforcement and fiscal institutions. Objective interest of the bodies of power is in opposition to that of the oligarchs and consists in the fact that, during this period, reform strategy and development of the national economy led to the strengthening and not weakening of their authority.

In such a situation, at the best the Government will embark on the brink of imitation of reform and correction of the economic policy towards the benefit of the political forces, which supported its emergence. In the worst case – it will shift towards a total freezing of reforms in sectors of systemic importance to the economy such as, fuel and energy, finance and agriculture. In any case it is not worth hoping for movement of the Ukrainian economy towards economic growth. In reality, not large scale economic reform but remittance of social payments, keeping the GDP level, inflation and the exchange rates at the current level is what President will demand from the new Government. The Government has also been instructed to make the minimum salary closer to the subsistence level and raise average pension level by 12%. It will also raise the salaries in budget-financed institutions and stipends of students by 25%, and to transfer to the system of targeted privileges and subsidies as of January 1, 2002 payable exclusively in money. Evidently, it means the traditional pre-election package of political techniques of the regime.

As most of Anatoliy Kinakh’s government constitutes of people highly reliable to the President of Ukraine, introduction of the institution of the State Secretaries may be postponed. Attempts to seek compromise between the real powers of the members of the government and those much-declared powers of the state secretaries. Under any circumstances, the Kinakh government will be busy implementing socio-economic reforms for the sake of politics or to be more precise, for the parliamentary elections. This will be its main distinction from the Yushchenko government, which tried to implement social and economic reforms for the well being of its people.