Change of government in Ukraine: assessment of the impact of personnel reshuffle on the country’s economy through the eyes of Serhiy Fursa

Ukraine is once again preparing for personnel changes in the government. Against the background of martial law, protracted economic instability and the gradual reduction of the political subjectivity of the executive power, new appointments in the Cabinet of Ministers are perceived mainly as technical rotations, and not as a prerequisite for course changes. In conditions where key decisions are made outside the government building, the change of personnel in ministerial positions causes a moderate reaction from business, experts and international partners. Expectations are restrained, forecasts are cautious. In this context, investment banker Serhii Fursa from Dragon Capital outlines his vision of what consequences the new appointments may have for the Ukrainian economy, how much the quality of management will change and whether we should expect shifts in the political center of gravity within the government.

Against the background of political rotations in the Ukrainian government, the question of their influence on the economy arises not for the first time, but with each such change the context changes significantly. Investment banker Serhiy Fursa from Dragon Capital in his considerations draws attention to a key aspect: today’s change of the Cabinet of Ministers, unlike previous years, does not cause expectations of significant economic changes. And this is not an accident, but a sign of a systemic transformation of the nature of the government as a political institution.

Fursa notes that a few years ago, when there were discussions about the candidates for the prime minister – whether, for example, Nataliya Yaresko or Volodymyr Groysman – it really didn’t matter. At that time, the figure of the head of government determined the direction of economic policy, particularly in the field of reforms, cooperation with international partners, the labor market, and the fiscal system. Now the situation is different. He believes that key road maps have long since been written in the government building, and such a change in roles is only partially explained by the conditions of martial law.

According to Fursa, the main structural flaw of the previous government is completely repeated in the current composition. It is about a low level of subjectivity. This creates a situation where the government is not an independent political unit in making strategic decisions. He suggests that there may be an exception when the new premiere will show more independence, but he emphasizes that it is useless to count on it without reason.

Fursa also draws attention to the fact that changes in the personnel of the government did not bring openly negative results. He admits that there were concerns about possible appointments, for example in the field of education, where there was a risk of a return to approaches similar to the times of Skarlet or Tabachnyk. But these scenarios, he believes, did not come true.

According to Fursa, the new premiere deserves special attention. He notes that it has a good reputation among business representatives. At the same time, she emphasizes that in her previous ministry, she managed to form an effective team, which demonstrated itself, in particular, during negotiations with the United States regarding the agreement on mineral resources. He cites an example when the option proposed by the Trump administration differed significantly from the final signed document, and this is due to the Ukrainian negotiating team.

The banker draws attention to the fact that two key members of this team, Oleksiy Sobolev and Taras Kachka, have now received ministerial positions. Fursa characterizes Sobolev as one of the most professional ministers of the economy in the entire history of Ukraine – especially in terms of understanding the functioning of the economy as such. He recalls the role of Sobolev in the reform of Prozorro.Sale and in the processes of small privatization, where, according to Fursa, he showed not only efficiency, but also a valuable position. It is from him that Fursa expects breakthroughs in the field of deregulation – but clarifies that it is not about reducing taxes, but rather about streamlining procedures and removing redundant barriers.

As for Taras Kachka, Fursa emphasizes his deep professional training in the field of foreign trade. Given the fact that the European integration of Ukraine in the coming years will be largely focused on negotiations in the field of agrarian policy, he considers the appointment of Kacha logical and timely.

Among the non-standard, but positive moments, Fursa names the appointment of Denys Shmyhal as Minister of Defense. He admits that it looks strange, given that Shmyhal is a former prime minister, and formally it looks like a “demotion.” But the main problem of the Ministry of Defense under the previous head was management chaos. Namely, Shmygal, according to Fursa, has strengths in systematic, consistent, bureaucratically accurate work.

At the same time, the banker critically evaluates the next changes in the structure of the government, meaning the unification and further separation of ministries. This has repeatedly shown its inefficiency and creates mostly technical problems. From his point of view, in such cases it is not about reforms, but about imitation of activity. Over time, individual ministries will have to be returned — in particular, the agrarian and environmental ministries.

Separately, the expert mentions the disappearance of the Ministry of Reintegration of the Temporarily Occupied Territories, hinting that the official reason for its disappearance could be not only structural changes, but also corruption grounds. In this context, Fursa mentions the court decision concerning 120 million hryvnias. The Ministry of Reintegration was not very functional, and it would be more logical to create a Ministry of Migration instead – however, he admits that such an idea is unlikely in the current political climate.

Regarding the appointment of Herman Galushchenko to the post of Minister of Justice, Fursa calls it strange, but not critical. The very fact of rotation does not create new risks, since Galushchenko already held a ministerial post. Fursa suggests that the changes may affect Energoatom, but advises to monitor the development of events, in particular, whether a supervisory board will be created – which is still not there.

He also draws attention to the fact that Chernyshov left the government, and considers this to be a manifestation of at least a partial feedback loop between society and the government. Despite the fact that this feedback is not systematic or deep, Furs assesses its presence as important, especially in the context of pressure on anti-corruption initiatives and abuses by some authorities. In this context, he mentions the case of Vitaly Shabunin and the actions of the SBI, which, according to him, demonstrate a dangerous tendency towards political pressure.

In conclusion, Fursa emphasizes that the Ministry of Finance has remained unchanged, and this, from his point of view, has become a positive signal for those involved in attracting external financing. Maintaining continuity in the financial bloc is a stabilizing factor important both for Western partners and for internal resource management.

In general, Fursa believes that the renewal of the government does not pose any threat to the economy and does not create illusions about breakthroughs. However, he urges not to expect from the government what depends on other decision-making centers. Expectations should be realistic.