Publication: Monitor Volume: 5 Issue: 236

Administrative reform, Ukrainian President Leonid Kuchma’s primary election promise and the contingency for international loans to Ukraine, seems to be at long last underway. On December 14, Kuchma launched the campaign by signing three decrees aimed at reducing and streamlining Ukraine’s cumbersome cabinet of ministers. The number of ministries, committees and other organs of the central executive branch have been cut by nearly half, from eighty-nine to forty-six; cabinet staff is to be reduced by nearly a quarter, which amounts to some 150-200 people.

There will be fifteen ministries in the new government, down from twenty in the outgoing one. The Ministries of Industrial Policy, Information, and Family and Youth are disbanded. The Ministry of Energy and the Ministry of the Coal Industry are merged into one Fuel and Energy Ministry, and those of Science and Technology and of Education into the new Science and Education Ministry. The Ministry of Foreign Economic Relations and Trade has been liquidated, with its responsibilities turned over to the Economics Ministry. The Ministries of Foreign Trade and especially Industrial Policy–atavisms of the Soviet system of central economic planning–will be redundant in the face of extensive privatization. Kuchma has also ordered that each minister will have no more than four deputies; under Pustovoytenko’s government a number of ministries had had as many as ten to fifteen.

The National Bureau of Investigation (NBI)–a still-born agency, created on paper in 1995 for fighting corruption and organized crime–has never been staffed and is now abolished. It is interesting to note that during Kuchma’s visit to the United States on December 8, the secretary of Ukraine’s National Security and Defense Council (NSDC), Yevhen Marchuk, was reportedly offered assistance in getting NBI off the ground. It had long been unclear, however, where NBI would fit in Ukraine’s oversized law enforcement system–which consists of the police, Security Service (SBU), NSDC and (crowning the lot) the Coordination Committee for Fighting Organized Crime, which is chaired by the president. Kuchma is also liquidating the National Guard, the elite troops established in 1991, which has duplicated police, SBU and army functions.

Ukraine’s oversized and unwieldy government structure has long been a decided hindrance to efficient governance and, as such, a major obstacle to the deregulation and liberalization of the economy. Government reform has been also one of the main International Monetary Fund (IMF) and World Bank conditions for extension of their loans to Ukraine. The IMF insisted on this again after Kuchma’s reelection last month: Specifically, the IMF mission which worked in Kyiv in the first half of this month made it quite clear that resuming disbursement of US$2.6 billion Extended Fund Facility, suspended in September, is contingent on the seriousness of Ukraine’s reform effort. Kuchma received similar signals from the United States and the European Union during his recent visits to Washington and Brussels earlier this month (Zerkalo nedeli, December 11; UNIAN, December 9, 15-16; Kievskie vedomosti, December 14, 18).

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