Volodymyr Zelenskiy (La Presse)

Ukraine Appoints New Prime Minister as Focus Turns to Economy 

Ukraine has a new prime minister, the third to hold the position in a 6-month span. President Volodymyr Zelensky chose Denis Shmygal, businessman-turned-politician, and the Verkhovna Rada, Ukraine’s parliament, confirmed his appointment Wednesday.

An Economically-Minded Prime Minister

Shmygal takes over for Oleksiy Honcharuk who submitted his resignation last month following leaked audio in which he was critical of Zelensky’s economic policies. The president did not immediately accept the resignation, opting to give him a chance at accomplishing “some things that are very important today and are of concern to our society.” 

Honcharuk evidently failed to live up to Zelensky’s standard and an extraordinary session of parliament was called to install his successor. The president portrayed the move as advancing his agenda of reforming the state.

“Over the years, we had a lot of governments—the government of technocrats, the government of embezzlers, the government of salvation, the government of ‘strong business executives,’ the government of salvation, et cetera,” Zelensky said in parliament. “I believe that we finally have a government for people.”

Shmygal enters the position in the prime of his youth at age 44. He graduated with a degree in economic sciences in 1997 and worked in that field before entering public service for the Ministry of Revenues and Duties. Shmygal also served as head of a coal plant and governor of Ivnao-Frankovsk region before becoming a deputy prime minister for Communities and Territories Development in February.

Ukraine’s Focus Shifts from Corruption to Economic Growth

Zelensky praised Honcharuk’s service, but said it fell short of his expectations and that of his people.

“Yes, indeed, this is the first government where there is no high-level corruption. But not stealing is not enough. This is a government of new faces, but faces are not enough,” Zelensky said. “New brains and new hearts are needed.”

Shmygal’s appointment prompted a larger reshuffling of the cabinet. Former Foreign Minister Vadym Prystaiko became a vice prime minister and Dmytro Kuleba, deputy prime minister for European and Euro-Atlantic Integration, was elevated to a minister position.

Oleksiy Reznikov was appointed to the new position of vice prime minister for reintegration of the occupied territories. Serhiy Bessarab was removed as deputy chief of the General Staff and given control of the Ministry for Veterans Affairs, and Vadym Huttsait will serve as minister of youth and sports. 

Lt. Gen. Andriy Taran was also approved as the state’s new defense minister. Four other posts were also assigned new leadership and a further four remain open to appointments, which are expected to follow soon. 

Shmygal immediately announced plans to bring Zelensky’s vision to fruition. He announced an upcoming meeting with financial officers with the intention of amending the Constitution to decentralize power. Furthermore, he desires healthcare reform and aiding coal mining region with help from the World Bank. All of this is in addition to aspirations of reshaping medium and large businesses through by developing economic programs.

Zelensky asked the new prime minister to “do the impossible,” and Shmygal certainly has his heart set on fulfilling the ambitious task of revitalizing the Ukrainian economy.

“People’s patience is running out,” Shmygal said shortly after his appointment. “We need the reforms now.”

Zelensky Has a Lot to Prove

Markets however, did not react well to the government shakeup. Sovereign bonds bore the brunt of the damage with the 2032 bond sliding 3.76 cents on the dollar, according to Reuters. The 2027 and 2028 bonds also endured drops of more than 2 cents.

Zelensky recently hosted officials form the International Monetary Fund to hopefully secure a $5.5 billion loan. IMF funding is critical for helping the state rebound as it continues to fight Russian-backed separatists in the eastern provinces.

The cabinet reshuffling and installment of a premier with a background in economics could help instill confidence for IMF approval. Zelensky came to power with the intention of rooting out corruption, but now he has turned his focus to boosting the Ukrainian economy. The president, who entered office with no previous political experience, has a lot to prove and his poll numbers are slipping. With new leadership in Kiev, he hopes to reverse course and have something to show for his time in office when his term expires.