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Ukraine makes a Prime choice in its new PM
On March 11, 2011 The Ukrainian Parliament appointed Mykola Azarov as its new Prime Minister. This followed a hastily assembled coalition, and even more hastily law amendment pushed through this week by Yanukovych to allow a coalition to be formed by individual MPs, as opposed to bloc factions. The new coalition comprises the Party of Regions, Communist Party, the Lytvyn Block and several MP of BYuT and NU-NS factions; a total of 235 MPs representing a shade more than 50%. It is highly possible however, that the new law will be disputed in Ukraine’s Constitutional Court which could yet derail Yanukovych’s best laid plans.
Russian-born Azarov is considered one of the most influential figures in the Party of Regions and a close ally of Yanukovich; serving as finance minister and first deputy prime minister in his premierships from 2002-2005 and 2006-2007. During his time he undertook tax reforms, bringing the variable tax rate on personal income down to a uniform flat rate, and was credited with calming investors’ concerns of a financial meltdown following warnings of a crisis by then President Kuchma.
A trained geologist, Azarov previously held scientific and managerial positions at scientific and research institutions specializing in geology and mining both in Russia and in Ukraine.
He is a strong supporter of tight state control of the economy and is thought to be a safe (and conservative) pair of hands with the country’s purse strings. We can expect his operating style to be characterized by pragmatism and caution. In policy terms, we could expect to see potential increases in protectionist measures in favour of local Ukrainian industry and exports, stricter taxation discipline but with a focus on new technologies and modernization.
His experience of steering Ukraine through choppy economic waters must surely have a positive influence on a country which is still some way from clearing the recession. It is hoped that his pragmatic and conciliatory approach will encourage the IMF to resume the funding promise it suspended in 2009 following a number of breached promises.
At 62 years old and a trusted long-term ally of Yanukovych, Azarov is unlikely to pose any serious competitive challenge to the new President which should mark an end to the in-fighting which ultimately destroyed the previous administration.
This post was written by our Ukrainian colleague Dr. Oleksandr Sakharenko, Government Relations Manager at Grayling Ukraine
See our Ukrainian blog at http://insightukraine.mmdblogs.com or follow @grayling_ua on Twitter.

In terms of national and domestic policy in Russia, in contrast to foreign policy and the fresh start seen in this sphere, Russia is maintaining its long term position. The senior Russian leadership must still answer the age old question as to whether the human being lives for the state, or whether the state is established for the human being. This is of course the struggle between the competing Soviet ideology and that of modernization and the increasing struggle between the Russian political elite to push Russia along one of these divergent roads. Though as this clash of ideology continues, it is important to remember the threats and pitfalls posed by the continuation of a soviet mentality within the Russian state.
Maxim Kalashnikov
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