Corrupt Ukraine Muddles On

Poroshenko's Man for PM in Ukraine, Total IMF Takeover Postponed

Western capital fails to get the government it wanted in Kiev

Mark Nicholas 

39 seconds ago | 19 

Groysman left, Jaresko right

In a typical Ukrainian fashion the formation of its new government which seemed like a done deal Sunday has been delayed over fighting for key ministries. Nonetheless, its Prime Minister and general composition are already known.

The post-Yatsenyuk government will be headed by one Volodymyr Groysman (38) who comes from the ranks of the Poroshenko Bloc. Yatsenyuk's People's Front Party, which is being battered in opinion polls but is with its 81 MPs still the second largest party in the parliament, will continue to support the new government and will be awarded important ministerial positions.

This means that the Poroshenko-Yatsenyuk 'grand coalition' remains in place but that leadership passes from one part to the other.

That is unlikely to have too many Ukrainians jumping for joy but it is better than the only realistic alternative, which was far worse.

The other candidate to replace Yatsenyuk was the Illinois-born former State Department official Natalie Jaresko (who still hasn't renounced her US citizenship) who was serving as post-Maidan's finance minister.

What made the prospect of Jaresko government so horrifying was that she proposed and demanded to run a radical, 'non-political' government beholden only to herself, and the IMF and EU.

The basic problem of Ukraine has always been the lack of identification of its political and economic elites with the state. (The same problem that plagued 1990s Russia.) Between the constant vulnerability of its oligarch or oligarch-connected leaders to challengers and high turnover Ukraine politicians have very rarely felt they had a long-term stake in Ukraine. 

Thus instead of reining in their short-term appetites to nurture and develop the country for the sake of long-term gain, they treated the country as a piñata. To be squeezed, battered and exploited to the maximum for the sake of attaining a gain before the next election, government crisis or scandal. 

We can see this today with Poroshenko who ran as a relative peace candidate in 2014 and surely knows the present compromise-free course in East Ukraine is to the detriment of the country, but who won't act on this lest he exposes himself to attacks from the right (including from Yatsenyuk who once praised Putin and championed Ukrainian-Russian ties).

Meanwhile President Poroshenko is not doing bad for Poroshenko at all. In 2015 as Ukraine's economy took further hits all Ukraine's top oligarchs took major hits losing billions of dollars in net worth. All except Poroshenko who somehow added $100 million to his previous fortune of $750 million.

A steward like that is a demoralizing proposition but the alternative is even worse.  

At least Poroshenko has some miniscule, economic and perhaps sentimental stake in the overall well-being of Ukraine that may impose some scruples on him. The west and the IMF have literally no stake in Ukraine whatsoever.

EU clearly demonstrated this when they declined to float Viktor Yanukovich a paltry $16 billion he wanted to sign the EU-Ukraine Association deal.

It again made this clear earlier this year when it signaled it is not actually interested in Ukraine's EU membership, after the country had literally torn itself in half and devolved into civil war to put itself onto that path, and had been encouraged by the west to do so all along the way.  

EU and western governments are only interested in Ukraine as an actor to turn towards the west to demonstrate its greater appeal and military, political, economic, moral and civilizational superiority over Russia, but do not actually care for the exotic, eastern country as such.

Ukraine is in a financial hole, but it would be far easier for the western creditors to write off the debt than it will be for Ukraine to repay it. Instead west wants every last penny back.

So much so that under the deal the IMF had Kiev leaders sign half of any GDP growth attained over 4% go directly into IMF's coffers. This is a virtual guarantee that Ukraine will remain impoverished for the foreseeable future. Even should decent growth ever be achieved the capital created will be siphoned off.

If anything the IMF is the least emphatic of any western actors and is even less fussed about the long-term consequences its squeeze has on Ukraine than its oligarchs. 

The silver lining to the new Poroshenko government is there won't be a government in Kiev named from IMF's own ranks. That would have been a disaster of entirely different proportions.

On the other hand the expiration date on Groysman's government is being put at between 6 to 12 months:

Assuredly Prime Minister Groisman and Cabinet will have a minimum of 6 months before they can face a vote of no confidence.  

His Cabinet may last 12 months – seeing Ukraine through to the other side of the Brexit referendum, US elections, and perhaps it may last long enough to get beyond ballots in Germany and France too. If so that would be a good result.  

However, it seems very unlikely that his time as PM or the new Cabinet will last until the end of this full parliamentary term.

It seems it won't be too long until IMF will have another shot at winning itself a colony of 45 million people in ex-USSR.

http://russia-insider.com/en/poroshenkos-crony-pm-ukraine-total-imf-takeover-postponed/ri13857