UKRAINE GETS NEW FINANCE MINISTER.

Publication: Monitor Volume: 8 Issue: 2

On December 27, Ukrainian President Leonid Kuchma replaced his finance minister. Outgoing is Ihor Mityukov, 49. Incoming is Ihor Yushko, 40. The official explanation for the change is that Mityukov did not measure up in his budget and tax planning. The draft tax code, which had been submitted to parliament (the Verkhovna Rada), was weak and did not pass in 2001. Unfortunately for Mityukov, a strong one adopted into law had been one of Kuchma’s priorities.

Mityukov’s real mistake was that he did not join the right party. In fact, he did not join any. His independence from political interests and regional groups was a strength between elections, because it was possible for him to reach compromises and strike deals to push financial legislation through a politically fragmented Rada. This independence, however, turned into a weakness as the March 31 Rada elections drew nearer. And while Yushko lacks independence, he does have strong political forces to back his decisions and moves. He is a key player in the Donetsk regional group and belongs to the Party of Regions (UPR)–the strongest among five parties comprising the pro-presidential electoral bloc For United Ukraine (FUU).

Mityukov has served in all governments under Leonid Kuchma–he was the deputy prime minister for finance in 1994-1995, Ukrainian Cabinet representative at the European Union in 1995-1997 and has been finance minister since February 1997. Under Mityukov, Ukraine achieved relative financial stability, restructured debts to the London and Paris Clubs of creditors and, for the past two years, was one of Eastern Europe’s most dynamically developing economies.

A professional in matters of finance, Mityukov shunned party politics. Yushko, however, while also a financier, did not. Director of the First Ukrainian International Bank–the financial pillar of the Donetsk “clan” and one of Ukraine’s top five banks–he was elected to the Rada in 1998. There he became deputy chairman of the Rada committee for finance and banking. Remaining a member of the Party of Regional Revival–a predecessor of the UPR–he joined then Prime Minister Valery Pustovoytenko’s People’s Democratic Party faction after his own party failed to form one of its own. This past autumn, he became chairman of the youth wing of the rapidly growing UPR–the political organization of the Donetsk group. On December 7, Kuchma appointed Yushko state secretary to the Finance Ministry.

In the Rada, attitudes to Yushko’s appointment differ. The opposition sees a threat of misappropriation of state finances during the campaign in favor of the FUU. At the same time, even his political rivals do not deny Yushko’s professionalism in finance and banking. His appointment clearly shows that Kuchma has indeed bet on the FUU in the upcoming elections and the Donetsk group in the government. Those from Donetsk are now in charge of both state revenues (with UPR founder Mykola Azarov remaining chief of the State Tax Administration) and expenditures (run by Yushko). Vitaly Hayduk heads the Fuel and Energy Ministry, and Volodymyr Semynozhenko–who formally chairs the UPR, though he is not exactly from Donetsk, but from Kharkiv–is the deputy prime minister for humanitarian issues (Forum, December 27; Kievskie Vedomosti, December 28; see the Monitor, December 10, 2001).

The Monitor is a publication of the Jamestown Foundation. It is researched and written under the direction of senior analysts Jonas Bernstein, Vladimir Socor, Stephen Foye, and analysts Ilya Malyakin, Oleg Varfolomeyev and Ilias Bogatyrev. If you have any questions regarding the content of the Monitor, please contact the foundation. If you would like information on subscribing to the Monitor, or have any comments, suggestions or questions, please contact us by e-mail at [email protected], by fax at 301-562-8021, or by postal mail at The Jamestown Foundation, 4516 43rd Street NW, Washington DC 20016. Unauthorized reproduction or redistribution of the Monitor is strictly prohibited by law. Copyright (c) 1983-2002 The Jamestown Foundation Site Maintenance by Johnny Flash Productions