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News Analysis: Ukraine's new cabinet faces major challenges

English.news.cn   2014-03-01 05:54:14

KIEV, Feb. 28 (Xinhua) -- The newly approved Ukraine's 21-seat cabinet is faced with tremendous challenges in order to save the crisis-ridden country from economic crackdown and threat of separation.

The new government, which has gathered well-known politicians and prominent figures of the recent protests, is set to make unpopular decisions, which would upset many Ukrainians in the short term.


The new Prime Minister Arseny Yatsenyuk, a 39-year-old former banker and diplomat, is expected to pay special attention to Ukraine's economy and foreign policy.

Although it is widely believed that Yatsenyuk, who was one of the prominent figures in Ukraine's pro-European protests, would concentrate government efforts towards the accession to the 28- member European Union, some analysts say the new PM would most likely develop balanced foreign policy.

While in service as the country's foreign minister in 2007, Yatsenyuk has maintained good diplomatic relations with both Eastern and Western partners.

Analysts believe that in a situation where the country is on the brink of economic disaster, Yatsenyuk, who has a reputation of being an intelligent manager, will focus on cooperation with countries that can financially help Ukraine.

Along with economic improvements, the preservation of Ukraine's territorial integrity amid a separatism threat is the main task for the cabinet, Yatsenyuk said.

To assist with that task, Vitaly Yarema, the 51-year-old retired lieutenant-general, was named as first deputy prime minister. From 2005 to 2010, Yarema has served as the chief of Kiev police. During his term, Kiev police solved about 60 percent of offenses, whereas now this figure is several times lower.

Yarema, who was formerly a deputy chairman of the Parliament's committee on combating corruption and organized crime, is viewed as experienced and skilled head of the country's power block.

Other key appointees include far-right politician Alexandr Such, businessman Vladimir Groysman and former Foreign Minister Borys Tarasyuk, who were named as deputy prime ministers.

Political analysts here interpreted the new government as a compromise variant, convenient in the current turmoil.

"Given the recent revolutionary situation, a controversial situation around the Crimea in particular and around Ukraine in general, the new government is more of less favorable," said Vadim Karasev, director of the Institute of Global Strategies.

Andrey Miselyuk, head of the Institute of Socio-political Design, said the new government was a "forced compromise" between a parliamentary coalition, protesters and Ukraine's expected financial donors, namely the European Union (EU) and the United States, who reportedly asked Kiev "not to include leaders of radical movements into the cabinet."

"The current members of the government have the potential to cope with the difficult challenges facing the country," said Miselyuk.


The financial situation in Ukraine appears to be an economic depression, which without quick and competent government actions, could deteriorate into a financial breakdown.

The former Soviet republic with a projected budget deficit of 4. 3 percent of the gross domestic product (GDP) for 2014 and the lowest level of foreign exchange reserves in eight years is in urgent need of funds to make its debt payments, which have amounted to 17.4 billion dollars this year.

Ukrainian economists assume that the new cabinet would first of all amend the country's 2014 budget, reducing public payments to raise fresh funds.

To avoid a bankruptcy, Kiev may also ask its lenders to partially write off the debts, some experts say.

"For external creditors this question should be posed in the form of a request, but it should be a requirement for all domestic creditors," said economic expert Andriy Novak.

Novak suggested that Ukraine should also review its tax policy to increase budget revenues.

Alexandr Zholud, economist at the International Center for Advanced Studies, believes that a more realistic option for Ukraine is to turn to foreign lenders such as the International Monetary Fund (IMF) for financial aid.

"If the government in the nearest future would prepare a new budget with smaller deficit and increase gas tariffs, Ukraine would have a chance to receive the first tranche of IMF aid within the next two months," he said.

On Thursday, Kiev submitted a request for financial support from the IMF, asking the global lender to send a mission, which would consider possible aid for Ukraine.

In response, the IMF agreed to send a fact-finding team next week to the country to make technical, independent assessment of the economic situation. The global lender made is clear that Ukraine, which seeks at least 15 billion U.S. dollars in aid, should be ready to fulfill the IMF requirements needed to get the bailout.

Thus, the new government is expected to adopt a package of unpopular measures, including higher utility prices, reduction of state subsidies and introduction of a permanent flexible exchange rate of the local currency.

According to some experts, such measures could lead to a new wave of anti-government protests in Ukraine, against the new cabinet.

"If previously we were dealing with the political protests, the new wave of demonstrations may be social. Workfolk may become the main actors in the rallies," analyst Konstantyn Bondarenko said.


Although the threat of economic turmoil is an urgent issue for the current government, it becomes secondary in the face of the sovereignty and territorial integrity of the state.

A separatist rebellion that could tear the country apart became a bolt from the blue for Ukraine this week.

On Thursday, armed groups seized local government and parliament buildings in the Autonomous Republic of Crimea in the country's south and raised Russian flags over them.

On Friday, some 50 armed men carrying Russian navy flags took control of the two airports in the Crimean capital of Simferopol and the second-largest city of Sevastopol.

Currently, the situation in Crimea is tense and unstable, said Interim Foreign Minister Andriy Deshchytsya, adding it was unclear "who these people are, what they want and plan to do."

But Interior Minister Arsen Avakov was not as restrained in his statements.

"I consider what has happened to be an armed invasion and occupation in violation of all international agreements and norms, " Avakov said on his Facebook page, describing it as a " provocation" from the Russian side and calling for talks.

Russia, however, denied any involvement in the military action in the Ukrainian peninsula.

Meanwhile, the parliament of Crimea announced a referendum over the future status of the territory. The vote is due to take place on May 25, the same day early presidential elections in Ukraine have been scheduled.

The parliament's move triggered fears of separatism threat in Ukraine. However, experts believe that this referendum is unlikely to take place.

"In Ukraine, there is no law on local referendums, so the referendum in the Autonomous Republic of Crimea is illegal," said Vasyl Onopenko, head of country's Council of Judges.

"Definitely, this referendum will not be recognized either by the Ukrainian government or international organizations," said Alexander Chernenko, chairman of the Committee of Ukrainian Voters.

The Ukrainian parliament has called on the United Nations Security Council to hold an emergency meeting to discuss the growing tensions in the East European country relating to separatist activities in the Crimea.

The lawmakers passed a resolution referring to the Budapest Memorandum of 1994, which guarantees Ukraine's sovereignty and territorial integrity. Some experts here welcome the parliament's resolution.

"Ukraine needs to consolidate international efforts to maintain its territorial integrity," said political analyst Olexandr Paliy.

However, other experts hold that the involvement of international mediators is not the only solution to the Crimean crisis.

Mykola Sungurovsky, director of military programs in the Kiev- based Razumkov Center, suggest that the new cabinet members should intensify their efforts to pull together the 2 million population of Crimea, where different ethnic groups live.

"There is a need to create an internal situation, making separatism unattractive, using economic, humanitarian and socio- political tools," Sungurovsky said.

The first internal steps towards the preservation of Ukraine's unity have already been made.

Many residents in Ukraine's western regions in solidarity with those living in Crimea have announced a civil action, in which they would speak Russian instead of Ukrainian, their native language and the official language of the state.

Politicians, sportsmen, celebrities and other public figures in many countries have urged, in their statements, all Ukrainians to unite.

Even far-right politician Oleg Tyagnybok, leader of nationalist "Svoboda" party who was widely seen as the "uncompromising defender of the Ukrainian language", expressed his solidarity with the of residents of Crimea.

"Each person can choose the language which he or she speaks. Nobody will humiliate the rights of national minorities in Ukraine. We believe that all of us need to come together, shoulder to shoulder, in the fight for our country," Tyagnybok said in his address to the residents of Crimea.

Editor: Mu Xuequan
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