Zelensky, 41, knows he needs help. He’s surrounded himself with reformist ex-ministers and other experts. But his campaign gave away little about his plans, which remain a work in progress. How quickly he cements his team and policy positions will determine his success on multiple fronts.
Without representation in parliament yet, Zelensky could struggle to enact meaningful change before October’s elections, where his new party tops polls. He could try to dissolve the assembly, though he must do so at least six months before that date. There are opportunities elsewhere. He’s signaled he’ll burnish his anti-graft credentials by replacing the prosecutor-general, long unpopular among Ukrainians and Western donors. He could also pick a new foreign minister as well as defense and security chiefs. But he must distance himself from exiled billionaire Ihor Kolomoisky, whose TV channel airs his shows.
Ties will remain frosty but a new leader could mean a new approach. Zelensky, whose Russian is better than his Ukrainian, won huge backing in the country’s east, where the war that erupted after Vladimir Putin swiped Crimea in 2014 rumbles on. He says he wants to bring about peace and get back prisoners of war. No fan of Poroshenko, Putin may be optimistic about his inexperienced successor. In an early test, Russia last week banned oil exports to its neighbor, risking higher gas prices.
Markets are giving Zelensky the benefit of the doubt. His rise has coincided with a rally that’s made the hryvnia the world’s fourth-best performing currency in the past three months. The hope is that Zelensky retain the likes of former Finance Minister Oleksandr Danylyuk and pushes on with reforms. “Just confirm the IMF and put a good team in place,” said Viktor Szabo, a fund manager who invests in Ukrainian bonds at Aberdeen Standard Investments in London. “We’re overweight.”
Growth, underpinned by the International Monetary Fund, is chugging along at more than three percent. But that doesn’t satisfy most people five years after the upheaval of another revolution. A glut of foreign debt payments mean cooperation with the IMF is likely to continue, with the current US$3.9 billion loan running through year-end. To keep the country afloat, Zelensky will probably have to agree to a new aid package, including more potentially controversial economic reforms.
Zelensky supports his predecessor’s push to join the European Union and NATO, though he may hand the public the final decision via referendums. Western leaders were quick to congratulate him, but stressed the need to tackle corruption. He must deliver if he’s to keep their backing.
Zelensky has already met French President Emmanuel Macron, whose rise has served as an inspiration, while German Chancellor Angela Merkel has invited him to Berlin.
by Daryna Krasnolutska and Volodymyr Verbyany (via Bloomberg)