News Analysis: New gov't inspires cautious hope for positive changes in Ukraine

Ukraine's new government will face its biggest test in July since assuming power in April, as it is set to deliver its first work report to the public.

Although the current cabinet led by Prime Minister Volodymyr Groysman took office amid low expectations, its initial achievements give rise to cautious hope that positive changes are not elusive.


In April, not many people expected the cabinet would be able to alter the situation in the country and push forward the stalled reforms.

Critics feared that Groysman, a close ally of President Petro Poroshenko, will be dependent on the president and unable to take responsibility for tough decisions due to a lack of political will.

Some analysts also linked Groysman to oligarchs, saying he may not be interested in really changing the country.

However, Groysman swiftly acted to increase government transparency by ordering all state officials to make public procurements on the Prozorro online platform, where every Ukrainian citizen can check how the government uses state funds.

Remembering that the recent political crisis was caused by a lack of understanding between the cabinet and the parliament and led to the resignation of his predecessor Arseny Yatsenyuk, Groysman took steps to improve relations with lawmakers.

His cabinet abolished taxation on pensions as long demanded by several opposition forces in parliament.

The cabinet also kicked off the reform process by amending the healthcare law, simplifying the procedure for registering imported medicines and adopting measures aimed at tackling corruption.

It also launched a major privatization program, putting the country's largest state-owned chemical producer Odessa Portside Plant up for auction.

Meanwhile, it has also begun a much-delayed energy sector reform, raising household gas prices to reduce huge budget subsidies for state-run energy company Naftogaz.

Analysts believe the energy reform, which is opposed by many, signals that Groysman is ready to make unpopular decisions if they are good for the overall economy.


Unlike his predecessor Yatsenyuk, who made a string of overseas visits when he took office, Groysman toured several Ukrainian regions, sending a message that he will focus his government's efforts primarily on regional development and domestic issues rather than on foreign policy.

"The current prime minister chose the right tactics -- first of all to deal with internal issues, thus providing a steppingstone for the government's work," said Volodymyr Fesenko, director of the Penta Center for Applied Political Studies.

It came as no surprise that after visiting the regions, Groysman, one of the founding fathers of Ukraine's decentralization reform, said developing the regions and transferring more powers to local authorities is a top government priority.

The foreign policies of Groysman's government are also quite predictable. He has vowed to boost the relationship between Ukraine and the West and has paid visits to the United States and Germany.

The U.S. trip reflected his cabinet's reliance on the financial assistance from Washington and the U.S.-based International Monetary Fund, which is considering releasing the third tranche of aid for Ukraine.


A roadmap for cabinet work within the next five years, unveiled in May, has been designed to deliver far-reaching changes to the country.

It contains five major goals: macroeconomic stabilization, creation of a favorable business environment, eradication of corruption, improvement of the quality of public services and restoration of people's safety.

The government's most ambitious commitments include pledges to move Ukraine from the current 83rd position to 20th place in the World Bank Doing Business ranking by 2018, to make the country's gas production self-sufficient by 2020 and to restore the country' s road infrastructure by 2021.

To achieve the targets, the government has unveiled a long "to-do-list" , which includes structural reforms in such sectors as agriculture, energy, social system, public services as well as tax and security areas.

However, analysts say the action plan has a major shortcoming as it has not proposed a clear strategy and concrete steps to implement the reforms.

Experts also say the government should work out deadlines for implementing each of the tasks and set macroeconomic targets to make the document functional.

"There should be the figures for the estimated GDP growth, figures for inflation, social standards etc., something, which would allow people to control the implementation of the plan," said Ruslan Bortnik, head of the Ukrainian Institute of Analysis and Management of Policy.