Viktor Lysytsky, a professional shipbuilder from a family with several generations of shipwrights who still sends cards to his former colleagues on Shipbuilders’ Day, is now referred to as Ukraine’s number one bureaucrat. He joined the civil service almost a decade ago and has climbed all the way up the ladder to Government Secretary of the Yushchenko Cabinet. He received from the previous government a burdensome heritage in the form of a bulky apparatus incapable of stepping up the decision- making process yet very skilled at slowing down and bringing to a halt any unwelcome initiative, often making good use of various types of lobbyists. Modern bureaucratic inefficiency was clear even to workers of that same apparatus; they were in for a trying period. As reform had actually set in, all tendered their resignations and spent the next couple of weeks in a “packing” mode. Finally, the apparatus resumed work with less 184 bureaucrats, but that was the end of staff reductions. So now is apparently the time to discuss the performance of the Cabinet’s reformed bureaucracy.
The Day: Mr. Lysytsky, you had to replace the obsolete government bureaucratic structure and develop a new skeleton.
V.L.: When replacing something you must have a clear idea about the consequences. I was not sure that I did. Of course, we could fire them all. Reform or not, the state is managed largely by the bureaucrats sitting on the fifth, sixth, and seventh floor (those occupied by the Cabinet apparatus — Author).
Formally, they were all dismissed and all felt in suspense for several weeks, as no one was sure what would happen. I spent the time talking to the former deputies to the Minister of the Cabinet of Ministers, people that were each an expert in a given field. Eventually I found those sharing my ideas, people I could rely on, and I used them to form an essentially new structure.
We proceeded from the notion of the Cabinet’s Secretariat as a body lending the government’s political decisions a legal form. The previous apparatus would often deal with micro-level problems.
The Day: You mean lobbying?
V.L.: Yes. Problems relating to certain enterprises. At present, the Secretariat is made up of people formalizing the rules of the game set by the Prime Minister and government. They lay down operation orders issued by the commanding officer. The first stage of reform is nearing completion.
The Day: Do you think today’s bureaucrats could turn into lobbyists?
V.L.: Yes, I do. One has to be naive or insincere to claim to the contrary. However, they can become lobbyists only where and when the existing procedures are imperfect, opaque, in the absence of decisions made jointly. A considerable part of the resolutions, directives, and draft enactments were signed or initialed in an on- line mode. In other words, people in different offices would sign a document and the required signatures would be thus collected. No one knew what the others thought and then the document would be placed on the Premier’s desk.
All this is different now. At the latest Cabinet sitting 39 different drafts were discussed in 51 minutes.
The Day: Stanislavsky would have said, “I don’t believe it.”
V.L.: You see, before discussing them the documents were handled by the government committee and there real battles were fought, to the last man. And we now have a standard procedure; any Cabinet member, even if not a member of a government committee, can take part in the discussion and cast a vote. I mean that no one can say now that this or that resolution was pushed through. In other words, there are fewer opportunities for lobbying and corruption.
The Day: But perhaps one ought to distinguish between lobbying and corruption?
V.L.: Lobbying is not a very pleasant thing, either, because the interests being lobbied and those of the state often do not coincide. For example, lobbying power machine-building is one thing and getting an interest-free loan for a collective farm is something altogether different.
Besides, lobbying is largely impractical, as the Premier has, fortunately, taken a very principled stand. He told everybody from the outset that he would not supply the interests of separate enterprises or regions. This has made the Secretariat’s work considerably easier. At the beginning a lot of documents were handled at the executor’s level and the orders given were clear: all documents requesting tax concessions for enterprises are to be rejected without much ado.
The Day: The way things are, powerful financial-political groups do not seem inclined to accept the rules of the games imposed by the Yushchenko Cabinet. Their response — as reflected in the media — to both the appointment and performance of the new government has passed through the stages of concealed and then undisguised rejection. Don’t you think that it’s primarily because the Cabinet has changed the rules of the lobbying game?
V.L.: Perhaps, but let me tell you again: they will have to get used to the fact that the rules will remain unchanged, precisely the way they are now. And this is good for them in the first place, because there is definite connection between the absence of lobbyism and real stability which is secured precisely by financial and budget discipline. This makes it possible for both the state and financial-political groups to work with a strategic perspective in view.
As for the media response, I would not overstate their influence. Today, people know precisely who is behind or owns this or that newspaper or television channel. Thus they can read between the lines better than ever before, realizing who does not like Yushchenko’s Cabinet. After all, such unmasking only serves to increase the Premier’s popularity.
Take one example. During his trip to Krasnodon the Premier met with a number of people and all those meetings were impromptu. How could one arrange such a meeting at a cemetery, in a hospital or in a dead miner’s home? And the way people treated the Premier, in an atmosphere saturated with grief and misery... You see, their faces were open. No one was happy, but they were open-hearted.
True, some of the media produce some sort of pessimism or skepticism, but they can’t change the attitude toward the Premier. As we were leaving the hospital someone said, “Mr. Yushchenko, you are too decent for this life...”
The Day: Suppose we discuss your exponents. Yushchenko’s Cabinet received an unprecedented credit of confidence at the time of its formation, but it can lose in an unprecedentedly short time without solving problems facing small business and the intelligentsia, both forming the social basis of your support.
V.L.: There are a lot of indicators reading that positive changes are underway. Take Luhansk oblast. It registers an output rise of 21% and I think this could not but have a favorable effect on wages and employment.
A balanced budget, a real budget income plan, a strict control over spending. Even solving these three budget problems are the best and most reliable guarantee of protection of the broadest social strata.
People have no cause to fear the future. This year won’t be worse [than the last], that’s for sure. It will be better, although not in every respect, not in every region, because the rates of development are different. A year ago, practically every region had back pensions; this year, several regions no longer do. This is certainly progress. Starting this March, arrears on pensions will be paid off at an accelerated rate. I know this doesn’t spell staggering amounts, but this is still progress.
Too little time has elapsed for assessing actual living standards and saying they are higher or lower. The statistics aren’t there. There are things, however, that are absolute axioms to me. A deficit-free budget gives an impetus to invigorating processes in the economy. In the end they produce a positive impact on people’s life. Another thing is where this impact is manifest, what regions or sectors, which enterprises can use them to the best advantage.
The Day: You said this with a trace of uncertainty. Do you feel that the process is being slowed down at the local level in some places?
V.L.: Practically every region you visit you meet with people saying look, I’ve got a plant idle. It’s an excellent enterprise. Just give us a state contract. To which I say great, you have an excellent enterprise. Then where’s your market? You are all out to resume production, yet you can’t arrange for sales, grab a market, locate consumers. And so, regrettably, the process of social differentiation will continue. Some of the enterprises will continue going down, reaching the point where revival will be out of the question. Others will forge ahead.
The Day: The series of articles about Ukraine’s misuse of IMF credits and now the Premier’s delayed trip to the USA are likely to damage Ukraine’s international image. Don’t you feel that the government is somewhat sluggish in refuting the accusations?
V.L.: I think that it takes a practical stand. We are waiting for the auditor’s report. How else can we prove that we are not guilty? We found ourselves in a situation where any tactic other than an independent expert examination would seem a plea of not guilty.
About the delayed visit. The decision was made in my presence. Right after the Premier got off the flight from Kazakhstan they began discussing the trip. It started at the airport and continued in his office. Quite honestly, in view of the [financial] accusations it was important to decide what was to be done next and the flight to the US was not the main point on the agenda. The discussion covered a broader range of issues. Then a ministerial officer on duty entered the office and in a shaky voice reported the tragedy at the coal mine. Viktor Yushchenko placed several calls and then said resolutely, “God forgive us, but we are not flying to Washington.” Everybody understood. How could the Premier leave his country at a time like that? But for the tragedy the question of the trip would have been — well, a matter for discussion. Now the issue was automatically closed.
The Day: Obviously you expect positive audit findings; are any steps being taken to restore Ukraine’s international image?
V.L.: In terms of PR technologies, it would be worth planning certain international level campaigns to break that wave of negative information sweeping over Ukraine. Western investors, however, are influenced much stronger when shown actual positive shifts in the financial system. When they are told that there is such and such an increment in budget returns and that there is no more barter or debt, they show an altogether different attitude. So our trump is what we actually achieve.
