After firing, Borovik flags sluggish pace of reforms
As two pro-Western, English-speaking lawyers who have Ukraine’s best interests at heart, Prime Minister Arseniy Yatsenyuk and former First Deputy Economy Minister Sasha Borovik would seem to be natural allies. But they weren’t. Borovik lasted less than three months on the job and traces his downfall – and eventual May 13 firing -- to his only personal meeting involving Yatsenyuk. It took place on March 21, in the company of his boss, Economy Minister Aivaras Abromavicius, Agriculture Minister Oleksiy Pavlenko and a dozen other officials.
Among other duties, Borovik had been put in charge of planning the April 28 international donors’ conference. It was not going well. The conference had been in the works for almost a year before Borovik joined the government. But as the date approached, it became clear that neither donors nor top European politicans would be coming. It was rebranded as the International Support for Ukraine Conference.
Yatsenyuk called Borovik in to report on the progress.
Borovik said that he told the prime minister that the European donors wanted to know how Ukraine had spent millions of euros in previous aid. He said Yatsenyuk exploded in anger. “The prime minister started yelling at this stage,” Borovik recalled. He said Yatsenyuk told him: “Young man, what are you talking about? The EU didn’t even give us much money. We have people dying here.”
Yatsenyuk’s press service referred calls for response to Danylo Lubkivsky, an adviser to the prime minister. Lubkivsky was still thinking about a response by the time this edition of the Kyiv Post went to the printer.
But Yatsenyuk on May 15 held out the possibility that Borovik could return to government. “If you want to work in Ukraine, our doors are open. Come. I have a lot of other work,” Yatsenyuk said, cited by Interfax news agency.
Abromavicius’ spokesman, Oleg Shumansky, referred to the ministry’s May 14 statement saying that Borovik didn’t work in a “constructive manner” and that the minister decided to replace him.
Borovik, 45, is a Harvard-educated lawyer and native of Ukraine who has, spent most of career living in the West and working in the private sector with Microsoft and Akamai Technologies. He talked with Abromavicius on Jan. 24, after coming to his attention through a member of parliament, Hanna Hopko, and other reformers.
After the “strange” meeting with Yatsenyuk, he began looking for explanations for such behavior. He read about the prime minister’s succession of high government posts in previous administrations and drew a couple of unfavorable conclusions.
“It’s not in the culture of that organization that someone would debate something with the prime minister,” Borovik said. “He was acting like a major player in a geopolitical game whereas, to me, he was the prime minister of a bankrupt country that was being supported by the West and needed to get out of the situation and is not in a position to dictate anything. The Western taxpayer woke up in me and I could not believe this is how the West is being perceived by the government.”
Within weeks of the March 21 meeting, Borovik also said that Abromavicius started freezing him out and becoming critical of his work. He was told not to talk to the press or meet with foreigners. Somewhere along the way, Borovik thinks Abromavicius stopped pushing for Yatsenyuk to officially approve Borovik’s appointment. The end came in a text message sent late on May 13 that he read the next day.
In danger of being lost in all the public noise of Borovik’s dismissal in the last week, however, is his larger assessment that Ukraine’s government is moving too slowly and haphazardly on reforms because it lacks a strategy.
“The country doesn’t have an economic strategy, at least one that has not been articulated to me. Will this be a welfare state. Will this be a German full-employment approach? Will this be a liberal economy? Will we take the U.S. approach?” Borovik said. “I maintain that we have to first reform government. We have to make it smaller and more professional.”
As an example of the slow pace, Borovik cited the process under way for selling more than 3,000 state-owned enterprises – more than half of them losing money. He said the state has no ability to manage the companies properly or hire good managers and should, therefore, sell them fast.
“The best we can do is pull out as soon as possible. Let’s not think about the price,” Borovik said. “We’re not going to get much money for this stuff.”
Borovik said that, on a worst-to-best scale of 1 to 5, Ukrainians and some in the West want full-scale reforms – a 5 – to create a “normal country.” The current covernment is starting at 1.7 and moving up to 2 and thinks it’s enough, he said. But too many in the government are tied to oligarchs and others interested in no reform.
“They cannot possibly cut their ties, they are so integrated. That’s why reforms are going slow,” Borovik said, citing the government’s failure to come up with new corporate goverance laws despite millions of dollars in assistance and indecision over the tax code.
He believes that Ukraine should stop arguing about the “bitter pills” that the International Monetary Fund is requiring in exchange for $17 billion in loans. Rather, it should undertake radical liberalization the way that Latvia, Slovakia and Georgia did.
“You build a system where it’s efficient for them (workers) to go to small and medium businesses,” he said. “You change the whole dynamic of the economy. There has to be a deputy prime minister responsible for reforms and economic law. That person should be a reformer-in-chief with administrative powers. You announce three major changes this year and three major ones next year and explain why we are doing it and what will change on the market.”
President Petro Poroshenko has announced a plan called the “4Ds” – de-oligarchization, decentralization, de-bureaucratization and de-monopolization. Borovik has a simpler concept: “Get rid of the 4Ds and replace it with 1L” – meaning liberalization, he said.
Despite his unhappy foray in government, Borovik – who said he never got paid for his government service – would be willing to go back into the public sector.
Since his firing, he’s stayed in regular contact with some people at the ministry, members of parliament and former Georgian President Mikheil Saakashvili, who advises Poroshenko on reforms.
“I lost my belief in the ability of the old system to change unless a critical mass of new blood comes in,” Borovik said. He’d like to be among the “new blood,” he said, because “the only way you can change the bureaucracy is from within.”
Former First Deputy Economic Minister Sasha Borovik speaks during a CEO breakfast hosted by the Kyiv Post and DHL Express Ukraine on April 24 in Kyiv. (Volodymyr Petrov)
Economy Minister Aivaras Abromavicius
Prime Minister Arseniy Yatsenyuk