(Bloomberg) -- Ukrainian President Volodymyr Zelenskiy’s popularity has taken a hit, but it’s his prime minister who’s paid the price.
Premier Oleksiy Honcharuk was the chief casualty of a cabinet reshuffle that also envisages a new finance minister. The departure of Honcharuk -- who was replaced by his 44-year-old deputy, Denys Shmyhal -- was overwhelmingly approved Wednesday by parliament.
The shakeup marks a change of tack for Zelenskiy less than a year after he picked a government stacked with fresh faces to break free from the country’s notoriously corrupt post-Soviet politics. Honcharuk, 35, was installed as Ukraine’s youngest-ever prime minister to oversee an ambitious economic reboot.
Things haven’t gone according to plan, however. The pace of economic expansion has plunged and billions of dollars in international aid have been held up, with the government’s poor performance dragging down Zelenskiy’s own ratings.
That’s compounded a baptism by fire for the former TV comic, who months into his presidency found himself center stage in Donald Trump’s impeachment and negotiating face-to-face with Vladimir Putin over the Kremlin-backed war in Ukraine’s east.
The president is a “mirror of public opinion,” said Volodymyr Fesenko, head of the Penta research institute in Kyiv. “He feels the discontent. He understands that, unfortunately, his bet on rookie politicians unlike their predecessors hasn’t yielded results.”
Zelenskiy can’t blame everything on the government.
It’s his own ties to billionaire Igor Kolomoisky that have raised eyebrows among investors. Weighing a now long-delayed $5.5 billion loan, the International Monetary Fund frets about the tycoon’s efforts to undo the nationalization of Ukraine’s biggest bank, which he used to own.
Criminal charges for the alleged fraud that prompted the state’s takeover are yet to arrive.
And the fear is that in turning to old-guard politicians -- Ihor Umanskyi, the replacement for respected Finance Minister Oksana Markarova, served in governments in 2009 and 2014-2015 -- Zelenskiy is extinguishing voters’ hopes of a new start.
Oleksandr Kornienko, the president’s party chief, said before the changes were announced that incoming officials would need experience managing state-run or private businesses.
Shmyhal, for instance, was deputy head of an energy company owned by Ukraine’s richest man, Rinat Akhmetov, until last year, and also briefly managed the western region of Ivano-Frankivsk.
But the reshuffle doesn’t mark the end of the “new faces philosophy,” according to Kornienko.
“Trust in the president remains, and there’s trust in his economic and social program,” he said. “We have very nice goals for the government but in some spheres it’s been chaotic.”
In the end, Honcharuk’s missteps -- which also include an unpopular farmland reform and a failure to bring down household utility costs -- were too much. Economic growth is less than a third of Zelenskiy’s 5% target and risks abound, most recently from the first case of coronavirus.
Having rejected a previous request by Honcharuk to resign, Zelenskiy hasn’t been so forgiving this time round.
(Updates with parliament approving new PM in second paragraph.)
To contact the reporters on this story: Daryna Krasnolutska in Kyiv at dkrasnolutsk@bloomberg.net;Volodymyr Verbyany in Kiev at vverbyany1@bloomberg.net
To contact the editors responsible for this story: Andrea Dudik at adudik@bloomberg.net, Andrew Langley, Balazs Penz
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