Can Ukraine's technocrat-in-chief keep the country from falling apart?

Ukraine's acting prime minister, Arseniy Yatsenyuk, may lack star power but he could have the right stuff for a tough job.

In the annals of prime ministerial nicknames, “The Rabbit” is a dud. But this title, given by many Ukrainians to their interim Prime Minister Arseniy Yatsenyuk, is affectionate rather than dismissive, a reference to a cartoon rabbit — bespectacled and brainy — in the beloved Soviet rendition of “Winnie the Pooh.”

Mr. Yatsenyuk and his technocratic government inherited a country on the verge of default and inches away from an armed international conflict. Yet they’ve managed to inspire some measure of confidence, both in Ukraine and abroad. Yatsenyuk lacks charisma and political clout, but for now the lanky leader appears to be the right man for the job — and the best thing to happen to Ukraine in recent months.

The new prime minister and his cabinet “haven’t made any big mistakes yet,” says Yuriy Yakymenko, deputy director of the Razumkov Center, an independent Kiev think-tank. “If the situation gets worse, it will get worse because of external factors, not because of internal dynamics of the government.”

Overseeing Ukraine's fractured and fractious government is a herculean task. Yatsenyuk's government also faces a potential invasion from its powerful neighbor, growing separatism in the east, the loss of the hugely symbolic peninsula of Crimea, and a looming economic meltdown. 

“Yats”— an alternative nickname given to him by a top American diplomat — catapulted into his current position from the smoldering ruins of the street protests that gripped Kiev for nearly three months. The protests peaked in late February when clashes left scores dead and forced President Viktor Yanukovych to flee the country. 

Yatsenyuk was no stranger to the vast protest camp in Kiev’s central square; he made regular speeches alongside opposition leader Vitali Klitschko, now a presidential contender. But he has spent much of his career in government service and in a succession of appointed roles that included economics minister, foreign minister, central bank chairman, and a stint as speaker of the parliament.

Tentative progress

For some protesters, Yatsenyuk’s links to the old regime, and to the political camp of Yulia Tymoshenko, another would-be president of Ukraine, are a black mark. 

“He’s scum, like the rest of them,” says a weather-beaten protestor who gave his name as Mykola, as he sat next to a barrel fire outside an army green tent. A small contingent of dedicated protestors have vowed to remain on Kiev's square until at least the new presidential election in May. 

Another sticking point: Yatsenyuk’s cabinet lacks electoral legitimacy. That makes it particularly ineffectual, according to Mikhail Pogrebinsky, director of the Kiev Center for Political and Conflict Studies. 

“It’s a weak government; the leadership is moving in different, and contradictory directions. It’s made up of people who have absolutely no experience” in running the government, Mr. Pogrebinsky says. 

Still, Yatsenyuk has cobbled together a cabinet of technocrats who may lack charisma or stage presence but who’ve so far been able to stave off a meltdown. 

“It’s too early to draw negative conclusions” about the interim administration, says Yulia Tishchenko, political analyst at the Ukrainian Center for Independent Political Research. “The international community should evaluate the government not based on their overall actions, but through the prism of what’s happening from Russia.”

Even as the Kremlin moved to seize Crimea, and Russian troops surrounded Ukrainian bases and ships there, Yatsenyuk’s government has pushed forward with plans to overhaul taxes and tackle corruption, which has metastasized in the past decade to touch nearly all aspects of Ukrainian life.

Yatsenyuk’s recent visits to Washington and Brussels netted the government billions in loans, credits, and other economic aid, not to mention moral support. In a phone call between US Assistant Secretary of State Victoria Nuland and the American ambassador to Ukraine that was secretly recorded and leaked online last month, Ms. Nuland is heard saying, “Yats is the guy who’s got the economic experience, the governing experience." 

Further potholes down the road

Still, the reforms necessary to keep Ukraine solvent are likely to be painful and possibly destabilizing.

The International Monetary Fund and other international lenders are expected to demand changes to the judicial system and to the bidding process for lucrative state contracts, as well as a more flexible currency. Kiev will also have to reduce or eliminate subsidies on natural gas, a measure that would hit both average consumers and industrial users, including the steel sector.

The IMF estimated that Ukraine's gas subsidies comprised about 7.5 percent of its economic output in 2012. And with Ukraine needing to refinance $30 billion in sovereign debt bonds due this year and next, it would require up to $35 billion in financial aid in the next two years to avoid default. 

Even more acute for the current government, and the one that succeeds it after the May 25 presidential election, is managing the country’s oligarchs – a handful of billionaires who have build vast empires through insider deals and who, for many Ukrainians, are inextricably tied to political elites in Kiev. 

But for all its challenges, the tentative steps Yatsenyuk’s government has taken have raised hopes of some semblance of stability.  

Vadim Grechaninov, who directs the Atlantic Council of Ukraine, a think-tank, says the distrust Ukrainians have toward Kiev is the product of years of malfeasance and incompetence.

“The previous governments robbed politics of all integrity,” he says.

“Of course it’s a weak government,” he says. “Look at the situation, how it came to power.” But even so, “at least it’s not beholden to Putin like Yanukovych was.”