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It’s All About the People

DsNews tried to find out where the Government can recruit “valuable employees” for managerial positions

In a couple of weeks, the Commission for the senior level of the government service should be set up that will be engaged in selection of VIP-level public servants. It is expected that the recruitment to positions of government secretaries for Ministries will be announced in July with the rest of the vacancies to be put to competitions as they become available. However, who will take part in those competitions? DsNews decided to find out whether talented executives from private sector would go to the government service, especially taking into consideration that their predecessors who came from business to the Government after the Revolution of Dignity have never been able to break the system.

The System proved to be stronger

It is clear that the machine of government is facing serious problems with personnel at the moment. Lustrated public servants, who showed up their worst under Yanukovych, return to managerial positions. Many vacancies remain unfilled due to competition of various groups that promote their own nominees. In the recent weeks, while there is still a chance to get employed at a managerial position in the executive branch of government without mandatory competition, many have been trying to make it there through good connections. “These include appointment through the back door or based on a quota principle, dealing in offices, and nepotism. As a result, public interests for a public servant are far from the most important,” Nikolay Vygovsky, expert for Reanimation Package of Reforms initiative, said to DsNews.

By no means all of many reformers who came to the government service after the Revolution of Dignity still remain at the Government. The long-time survivors include, for instance, Deputy Minister of Economic Development and Trade Maksim Nefyodov who previously served as a Managing Partner at Icon Private Equity, Director General at Microsoft Ukraine, and now serves as a Deputy to Dmitry Shimkiv, Chief Executive Officer of the President Administration, and others.

However, there are many more those who fell out of the race in the recent two years. Denis Brodsky worked as the Chief Executive Officer of the National Agency on Government Service for only one month. His employment history includes VAB Bank, Interpipe, and Platinum Bank; however, the specific features of working at a government executive office proved to be out of his depth. During four months, he has been engaged in matters of the customs service as Deputy to Chief Executive Officer of the State Fiscal Service Konstantin Likarchuk who before that served in such law firms as Avellumpernters, Melnichenko&Likarchuk, and others. Ruslan Korzh, previously a Managing Partner for countries of the Commonwealth of Independent States at international consulting company A. T. Kearney, held the position of Deputy Minister of Economic Development and Trade for slightly less than a year. Vladimir Schulmeister who before that managed a number of projects in The Netherlands, served at Fortis Bank (England), held the position of Financial Director and, later, Director General at Foxtrot Group of Companies managed to keep the position of First Deputy Minister of Infrastructure for one year. And this list can be continued.

The general public put high hopes on people that previously had nothing to do with the machine of government. It was assumed that because they have not form part of the bureaucratic machine that fully mired in corruption, they will manage to change something in this country. However, as it turned out that by no means all enthusiasts, when they faced the realities of the managerial system, are willing to continue trying to conduct the reforms. “Common failure of trust by people in the institution of the Government is still strong. This is our national illness. And it is difficult to blame this on business, because, for more than 20 years, the Government have been doing every conceivable thing so that to discourage dealing with them. Therefore, businessmen, who are professional in what they do, cannot see prospects they can pursue in the Government, and do not believe that they will be able to show their worth under the conditions that exist,” said Deputy Minister of Economic Development and Trade Maksim Nefyodov to DsNews. successful managers, businessmen, lawyers leave the Government for two reasons—opposition from members of “the old guard” and low salaries.

Sergey Boyko

Volia’s President on why it would be wrong to say that Ukraine has no good managers

DsNews: You would be interested to work for a government-owned company?

S.B. This is quite possible; however, I would set some conditions. By all means, this would be a decent compensation package, first and foremost. To what extent the level of operating expenditure can be different between the government and private sectors is debatable; however, not by an order of magnitude—that is clear. 20–30% difference is acceptable. And the second condition is efficient system of corporate governance. Objectives that a top manager is hired with, should be set once and for a long term.

DsNews: What would be an exact term are would talk about?

S.B. Previously I would talk about three years. However, under the conditions that exist at the moment, one year would be enough. This being the case, the rules of the game should be guaranteed to remain unchanged throughout that period. By way of example, all of a sudden, dividend need to be paid to the government budget once every three months, because the Government found a budget hole, all of a sudden. In addition, a company should be set an ambitious objective that is to say not all government-owned companies would be considered. Everything depends whether or not the objective is to prepare the company for privatization.

DsNews: How would you evaluate a trend towards engaging expatriates to fill vacant positions of Chief Executive Officer at government companies in Ukraine?

S.B. We have excellent and honest managers who work for owners and add value to businesses. That is to say, it would be wrong to say that this country just has no good managers. However, expatriates have an advantage that they are immediately trusted to be honest, by default. That is why, I think, they are engaged.

Still, the second aspect is that we have no experience. This is especially relevant in telecommunications sector. In telecom industry, some expatriate were engaged for a single reason that they have work experience that had yet to be implemented in Ukraine, by way of example, when mobile operators started working. There are not so many expatriates in the industry, where Volia works [cable television, the Internet — DsNews]. Everything started from small companies. And market consolidation did not take place to the extent that was expected to allow companies to invite expatriates.

Imported personnel

The new Cabinet of Ministers is different from the previous because no foreigner works there, while Yatsenyuk’s Government had three—Minister of Finance Nataliya Yaresko, Minister of Economic Development and Trade Aivaras Abromavičius and Minister of Health Alexander Kvitashvili. By the way, the team of Georgian reformers who arrived for assistance to Ukraine, became seriously smaller: First Deputy Minister of the Interior Eka Zguladze (who was appointed in December 2014 and was engaged in setting up of frontline police as she did before in Georgia) accepted the resignation, Deputy Prosecutor General of Ukraine David Sakvarelidze was fired (after his conflict with his then direct supervisor Viktor Shokin), Jaba Ebanoidze (in Georgia, he managed the customs service, the National Agency of Public Registers and served as Deputy Minister of Justice) has never made it to official appointment to fill the vacancy of Chief Executive Officer of the State Registration Service... As rumor has it, chances are that Chief Executive Officer of the National Police of Ukraine Khatia Dekanoidze can also be fired.

However, the Government does not refuse from foreign specialists altogether. The reforms are now dealt with by the second wave of outsiders, a team of European experts headed by former Vice Prime Minister of Slovakia Ivan Miklosh and Polish economist Leszek Balcerowicz who chose to be assisted by former Minister of the Interior of Poland Jerzy Miller and former Member of the Sejm Mirosław Czech. No doubt, all of them have experience in reforming. However, will they be able to use it in Ukraine? There is a significant aspect here that neither the Presidential Administration nor the Cabinet of Ministers take time to shed more light on who pays for the work of European experts in Ukraine? An answer to that question will help understand, whether foreigners can afford criticism of wrong actions take by Ukrainian Government or they can not because they are paid by the Government. Another important detail is that the expatriates, unlike their predecessors, who held managerial positions in Ukrainian Government, have no actual powers and ways to influence the processes in this country.

“It is not worth it to place huge hopes on foreigners. Firstly, they come to Ukraine to work for a definite term of a year or two. That is to say that they perceive work for government authorities as a stage of their international career. Secondly, for the time of the so-called ‘developing country reform’ process the world saw the emergence of a community of ‘expert reformers’ who earn by giving advice that is not always adequate,” said DsNews a member of Expert Advisory Council at the National Agency of Ukraine for Government Service, Director General of R&C Kyiv Group LLC Consulting Company Zhanna Balabanyuk.

Successfully implemented projects set the criterion

All in all, two years after the Revolution of Dignity, the matter of finding insightful managerial personnel is as topical as before. Managers who have the ability to generate ideas and embody them in life rather than to just imitate intense activities while misappropriating 70-80% of money allocated for the reform.

On the one hand, it is not worth it to assert unambiguously that new people who have no experience are better than old personnel. “We need to stop going to extreme as is the case in this country frequently: either praising incorruptibility of new people or glorifying the old personnel for the experience they possess. We should look at actual deeds, successes, implemented projects and professional achievements of a particular candidate for a position,” says Zhanna Balabanyuk.

On the other hand, the most easily available reserve personnel—actual businesspersons who proved to be able to level up their companies under extremely unfavorable conditions, providing high and medium-level salaries at their companies along with the high level of tax payments—frequently remains unengaged. Examples abound. There is, say, a successful project in transportation service sector—the national logistical operator Nova Poshta. This company was founded in 2001 to offer customers a crucially new format: delivery within Ukraine within 24 hours. At the moment, its network in this country covers nearly 1,000 cities and villages. In 2014, Nova Poshta launched Representative Offices in Moldova and Georgia and, in the last year, introduced a international delivery service in 200 countries of the world. According to the company, the number of addressed packages in 2015 amounted to approximately 11 million. Top managers at Nova Poshta could

quite successfully reform such government-owned company as Ukrposhta. For instance, experience of the current Director General Aleksandr Bulba who has been working at the company since 2008 and took the path from logistics manager to top manager, might be very useful under the conditions of modernization and reform in this country.

Another vivid example, this time from real estate sector: a large-scale innovative project of integrated development of nearly 20 hectare in Kyiv—Novopechersky Lipki residential property. This unique state-of-the-art city-in-city built to absolutely new standards of infrastructure decisions shows an example of how development needs to be done in a capital city. This project considerably raised the bar of standards in the construction industry and threw out a challenge to other developers. This being the case, Novopechersky Lipki is not a mimic a foreign prototype (as do many other elite projects in Kyiv), it is an originally authored design by a Ukrainian developer. Right from the start, its implementation has been the business of Valery Kodetsky who several times was ranked highest as Top Developer, Efficient Businessperson, Best Top Manager of Ukraine; Boulevard of Fountains, at least equally ambitious project, is nearing completion. Kodetsky’s experience would come in useful when determining the government policy in urban planning sector, implementation of projects for comprehensive development of territories, launch of leased residence market and the like.

An example of successful top manager in retail sector is Director General of ATB-market Dmitry Yevteev. It is quite possible that he might be take a managerial position, say, in the National Service of Ukraine on Food Safety and Consumer Protection. Founded in 1993, the retail network that was later named ATB-market was Ukraine’s first to reorganize classic grocery stores into self-service discount stores. The prototype was ALDI that is known and popular in Germany; however, it was adapted to Ukrainian realities. All in all, it turned out to be a Ukrainian economical supermarket rather than a classic German discount store. Today, ATB network consists of more than 700 shops in nearly 200 population centers of Ukraine. Over 2 million people purchase goods in shops of the network on a daily basis.

Yevgeny Ivanitsa has firsthand experience with problems of foreign investors that enter this country. Since 2006, Ivanitsa has been managing a franchise network of JYSK A/S in Ukraine. In 2012, after JYSK, international network of household product shops announced incorporation of a new company—JYSK Ukraine LLC—he became its Executive Director. Today, 28 JYSK shops operate in 14 cities in Ukraine. Having seen in practice all the obstacles that go in the way of a foreign business entering Ukrainian market, the top manager with such experience might work successfully in the State Regulatory Service or the Ministry of Economic Development and Trade.

Implementation of e-government in Ukraine at the National Agency on Electronic Governance would be simpler for a man who has experience of working in this sector. For instance, Dmitry Kalita who started his career in Intel corporation in 2000 with development of channel network and building of relations with distributors in Ukraine, Belarus, Moldova, Bulgaria and Baltic countries. Then he has been engaged in implementation of Intel’s marketing programs for end consumers in retail networks of Ukraine and, since April 2014, has been leading the office of the company in Ukraine, Belarus, Moldova. Intel not only produces chips; it also develops technologies for computing and communication devices, software and security systems for computer networks and systems, offers the full-scale solutions for protection in the range from personal computers to comprehensive protection of large corporations or government authorities.

A great many of such examples can be given. However, this analysis boils down to the fact that if such criterion of personnel selection as availability of successful implemented projects and actual portfolio is added to the today’s personnel policy of the Government, then a sufficiently efficient team of executives might be built that would be able to actually accomplish the modernization and reform of all sectors of public administration. People in business community have pragmatic mindset, they employ such notions as tasks, timing, and resources. If they are engaged on a contractual basis, are given a set of tasks or, to speak their language, projects, then quite considerable results might be obtained in a quite visible term. And the results are just what Ukrainian economy is lacking today so much.

DsNews: You were in charge of UDP for 10 years. Did you achieve the highest point in your career and what further strategic objectives can you see?

V.K. As an investment manager who have worked for many years on projects in real estate sector, I has been engaged in the matters of concept design, project approval, contractor selection, conduct of permit and authorization procedures, worked with investors and, most importantly, jointly with my team designed project development strategies providing their maintenance. We served as one-stop shop for our customers, but we also assumed the full responsibility to them. Only a few people believed that large-scale urban development projects which set the new standards of quality and comfort will be successful; however, we proved that even the most ambitious objectives can be accomplished under any conditions, if the ultimate objective (product) is defined properly, if a team of high-profile implementors is built and motivated and managerial control and the full responsibility are assumed. Practice proves that if such completely innovative projects as Boulevard of Fountains and Novopechersky Lipki could be built (and they are, to all practical purposes, of city-in-city format), then this country is ready to implement even larger scale projects.

Such project/target-based approach needs to be used also when conducting structural and institutional reforms. First, the objective of the reform should be defined in terms that are clear to the target group and then the implementation programs need to be selected on a competitive basis.

The direct implementor should be a specialist, whose competence is confirmed with practical success and causes no doubt in the general public that is the ultimate customer and beneficiary of reforms.

DsNews: In the recent years, Ukraine has been showing a trend towards engagement of competent top managers from large and successful private companies for management of government-owned companies. Did you consider an opportunity to work for the Government and, if yes, then in what sectors and under what conditions?

V.K. As far as engagement of top managers from private companies for public administration is concerned, I would discuss what, how, and why they are engaged. If you move a successful executive from a private business to a public servant position, then it is likely that the other day's businessman will not withstand a temptation to assume personal control of private businesses of his former partners and competitors. Unfortunately, there are many more examples of such negative consequences that are called corruption than there are positive.

However, if we talk about management of government-owned corporations, then experience and talent of a successful manager from private business might significantly increase economic efficiency, but only if such manager has powers, first and foremost, in relation to building the management team. It is not a secret that percentage of incompetent and unmotivated people reaches 40% in government-owned companies. They are not just dead wood, the serve as a mechanism of sabotage in relation to any reform and any programs of cost cutting and modernization.

In relation to foreign experts and executives that are engaged to implementation of Ukrainian reforms, I feel that that they offer us reforms of yesterday that even if they are successfully implemented will lead us to social and economic standards that were in place at the turn of the century. We have no time to take the path of reforms evolutionally, we need to make a breakthrough, so that in two or three year we cover the gap of 10–15 years, otherwise we will be doomed to become the eternal secondary both in terms of technology and social conditions.

Foreigners can be useful as advisers, rather than reform implementors because, among other things, that assume no responsibility to the Ukrainian general public for all that they “would like, but proved to be unable to do.”

National projects should become the centers of attraction of foreign investments, new technologies and training school for national managers. In addition to strategic value, such projects should accomplish practical tasks that are understood by the general public—construction of highways, transport hubs, industrial parks

and the like) and should be economically justified. Clear understanding of “the point of entry” and “the exit point” of a project will provides efficient management. Where this is the case, motivation of executives will be provided by clear relation with achieved results rather than fixed salaries.

DsNews: Can, in your opinion, government-owned companies in Ukraine operate as efficiently as private companies? What needs to be done to achieve this efficiency?

V.K. In my opinion, there is an internal contradiction here as not all private companies are efficient. Competition exists, the fittest, more adapted, and most innovative survive. Can the Government compete with a private business in the area of innovations? I am not an expert in the area of defense production; however, I think that this is the exclusive sector, where the Government should provide the highest level of technology and organization, engaging private businesses as customers for production and technology research. In all other sectors, there is no decent alternative to private business. This is proved by all advanced countries of the world. This being the case, they need to be engaged in sector, in which they achieved success, working in business, rather than engaging, for instance, in energy industry after several years of investment activities or reforming forestry after managing supermarkets. If a man is a subject expert, then he does not need to spend months to warm up and get in the know, he will not be able to trick “experienced” personnel by giving them for signing any document they need.

Unlike foreign specialists, top managers who work in Ukraine, are acquainted with Ukrainian realities and expect resistance from old bureaucratic system that come as a surprise to many expatriates. In addition, Ukrainian top managers have no complicated adaptation period that awaits their foreign counterparts, they already acquainted with Ukrainian mentality and will not be shocked by some specific features of our life. It is important to consider that engagement of foreigners in government service assumes that they will be given significant compensation package to cover costs and expenses of relocation, apartment or leased residence and the like. In addition, “outsiders” come to a foreign country for several years, and, however responsible a specialist would be, realization that they are here for some time only, cannot but affect the results of their work.

Ukrainian managers, who showed up in successful projects, are mostly politically unbiased, unlike “people of the Revolution” and, hence, will not adapt to a certain political force. Everybody know that they are successful, they are not intended to keep their public offices at any price, because they are confident that they will always will be able to go back to business.

In search of executives

No doubt, talented executives are available in Ukraine. Another matter is how to engage them in government authorities. As a matter of fact, the difference in income is enormous. On 1 May this year, the Law “On the Government Service” entered into force that brings plenty of new things in lives of Ukrainian bureaucrats. Now, competition to fill a vacancy in Category A (government secretaries, their deputies, chief executive officers of central government authorities and others) will be held by the commission on the senior level of the government service. “A special selection procedure for Category A public servants should set up conditions for high quality top managers to come to the key positions of the government service. Such broad representation of interests and oversight by the general public should provide transparent conduct of competitions and remove likelihood of corruption-based appointment,” says Nikolay Vygovsky.

However, it is not necessarily the case that a new wave of pilgrims from private sector to the Government should be expected. “People in business are oriented toward results that can actually be achieved. And if a man comes to government service and sees that he cannot change the system, and remaining there, cannot obtain the required result, then they just leave,” notes Maksim Nefyodov. However, not everything is so sad. “At the moment, when a transformation of the government service is underway, it is important that such people should be interested, so that they participate in competitions that will start in summer. And it is important here that conditions should be set up for their retention in the government service, rather than churn as is now the case,” considers Zhanna Balabanyuk.

In order to engage top managers in government service, we need to pay them decent salary. At the moment, it is the level of compensation package that prevents many business executives from moving to the government sector. “It is very difficult to explain people who work for a successful company, why they should move to working for a salary of USD 200 a month. Such compensation package only produces supplementary corruption risks and expands the community of who are willing to “do nothing for a modest compensation,” just wearing out the seat of their trousers at the government service in anticipation of pension,” says Nefyodov.

Concorde Capital’s Director General about poor management inevitably leading to corruption

DsNews: After change of the Government, many of your colleagues in investment business moved to manage government-owned companies and even whole departments. Do you consider such offerings?

I.M. I had such offerings; however, I did not consider them seriously.

DsNews: Under what conditions would you agree to manage a large government asset, by way of example, in banking sector?

I.M. There are no such conditions. I have a small experience of volunteer work in the Supervisory Board of one of government banks and I have had sufficient experience. In 2014, I was offered and agreed to become a member of the Supervisory Council of Ukreximbank; however, as early as at the beginning of this year, I wrote an application to be dismissed from my position. I prefer devoting all my time and ideas to development of Concorde Capital.

DsNews: What, in your opinion, is first and foremost needed to ensure that the management of a government company in Ukraine work efficiently?

I.M. Firstly, increase compensation of the management to normal market conditions. I saw many people, very strong and sane for whom market compensation and transparency of salary payments are important. Even in those rare cases, when a prospective employer honestly would like to hire a strong, competent, vivid chief executive officer, rather than install the latest in a series of public servants who will embezzle like crazy, this factor became a stumbling block. If a yearly sales turnover of a company amounts to $100 million or higher, then such compensation should be not less than USD 0.5 million a year. For instance, Chief Executive Officer of Ukrzaliznytsya should be paid not less than $3 million a year, Chief Executive Officer of Naftogaz of Ukraine needs to make $7–10 million a year. Poor management inevitably leads to corruption.

Secondly, principles and rules of corporate governance. This system should be transparent and clear. There should be the Management Board with clear powers in operating matters. Members of the Management Board should be appointed and dismissed by the Supervisory Board that shall be composed of representatives of shareholders and independent Directors with impeccable business reputation and market knowledge. There should be the auditing committee. Therefore, apart from the public prosecutor and fiscal service that, as we do understand, very frequently cover any corruption, audit will be also conducted based on market standards by independent members of the Supervisory Board, who care for their reputation and who consciously would not engage in a breach of business ethics, market principles and let alone engage in corruption.

DsNews: Do you consider it correct to invite foreign specialists to fill vacant positions of chief executive officers at government-owned companies?

I.M. In achieve the highest efficiency, the management should be balanced between local top managers recruited from business and foreign specialists. Of course, a man who was born and brought up here and understands how to do business in Ukraine, will be more competitive, than any foreign specialist. On the other hand, it is clear that such people not always have sufficient world outlook, range of vision, understanding of the best Western practices and the like. And, any possible insufficiencies of local chief executive officers should be compensated by the Supervisory Council and such institution as independent Directors. Why do they invite independent Directors? So that they bring in their competence, experience and access to knowledge, information that the management frequently does not have. It is a combination of both that should bring in the good results.

Again, all those matters are addressed when an efficient owner comes to the company. They become his problem then. When a company goes to private hands, there absolutely no corruption, at least not on such scale. All those matters of management are relevant in that transition period, until privatization takes place. Unfortunately, in this country, such transition period has been more than 20 years.

Higher salaries for public servants is specified in the law on the government service; however, in fairly insignificant size and gradually. For instance, in this month, position salaries will grow by only 10%. By 2018, the minimum position salary of a public servant will amount to two minimum salaries set by the Government by that time. That being said, for instance, the Minister will earn 10 times the minimum salary. 30% of position salary can be bonuses and employee benefits, but they do not save the day too. “In order to engage competent specialists from business to public administration sector, we need to offer them salaries that shall not be more than 10-20% lower than generally accepted for professionals of that category in the market. Then we will be able to recruit specialists for the key positions much simpler,” reckons Maksim Nefyodov.

The question is where to find money for all these. There are several alternatives. Firstly, if the law previously allowed financing salaries of public servants only at the expense of the government budget funds, now this objective can be accomplished by using the funds of international organizations. Simply put, now there is legal mechanism for compensation packages of Ukrainian public servants, the only thing left is to find the money to make it work. Another alternative is to increase salaries of public servants by reduction of personnel at government authorities while keeping the total amount of salaries. Then the rest efficient workers can be paid more at the expense of employee benefits, bonuses and the like.

The second important condition for top managers from business to go serving at the Government is clearly defined rules of the game. Executives should sign contracts that will specify the tasks set to them, ways of their accomplishment and the relevant remuneration that should depend on efficiency of their work and indicators that they need to achieve. In addition, control points shall be set to understand what and when should be done, who will evaluate and what criteria will be used. And it would be better if evaluation is provided by independent experts (international auditing companies, representatives of the non-government organizations and the like), rather than supervisors who not infrequently evaluate their subordinates with much subjectivity. In addition, guarantees need to be provided that the new executives will be allowed to implement what they devised and not just, as they say, take under advisement their reform plans, as this was the case several times.

It is very important that conflict of interests should be avoided. As a matter of fact, many managers that came from business, very frequently have close connections with owners of their companies. It is hard to imagine what headlines will be made by, say, appointment of President of Ukraine International Airlines Yuriy Miroshnikov, who has been working in that structure since 1992, as Chief Executive Officer of Boryspil Airport. However, many top managers do not have such close connections with the owner of business, they actually are just hired to provide management of the company and generate new ideas. Such specialists need to be intensively engaged when recruiting professional personnel for public administration system. But they also need to be controlled, by way of example, by setting a prohibition against any preferences for former employer and entities related to it.

Yet another important aspect: a set pattern that all public servants are corrupt officials and lazy buggers brakes the reform in public administration sector. “Firstly, this is not the whole truth and, secondly, this does not facilitate higher prestige of a public servant profession,” said Vladimir Kolomoets, partner at Pedersen&Partners, to DsNews. And only when the myth about uselessness and even toxicity of public servants is busted, many people would go to the executive branch of government and will have the ability to conduct reforms.

Aleksandr Kardakov

Datagroup’s Director General on what is needed to start appointing chief executive officers for government-owned companies

DsNews: Would you be interested in working for the Government and take charge, by way of example, of a large government company? Under what conditions would you agree to do so?

A.K. Yes, I would. Under what conditions? No obstacles to my work, such as a requirement that the new chief executive officer to all practical purposes do only one thing: move the government budget funds, which are allocated for government-owned companies, to the pockets of government public servants. In addition, a thing not less important for management is to have freedom of decision-making.

DsNews: What first priority measures, in your opinion, the Government should take to make the management of government sector of economy efficient?

A.K. I said at various times: our system of public administration is completely rotten and corrupt. We need to destroy that system and prepare most of government-owned companies for privatization. We removed some criminal powers, then some new criminal powers; however, no changes have been seen so far.

First and foremost, we need to start with appointment of chief executive officers at government-owned companies by holding actual competitions and remove godparents and relatives from schemes. Secondly, we need to offer new chief executive officers a salary of 1 Hryvnia and decent bonuses for accomplishment of tasks set to them. And the main task of a new top manager I would defined as energy efficiency and implementation of new technology. IT Implementation is a must for automation, accounting and control. And some already do this for the money of EBRD and other large donor organizations.

DsNews: Do you welcome appointment of foreign specialists as chief executive officers of government companies? Is it important in this case to understand the specific features of doing business in Ukraine?

A.K. I have dual attitude towards appointment of foreigners. On the one hand, I like methods of Saakashvili who calls to destroy of the system and start building everything from the ground up. We are also moving in the right direction in relation to the police reform. And, as far as appointment of foreigners to fill vacant positions at government-owned companies is concerned, I would not count only for foreign specialists. Let us hold open competitions and elect the best. We have decent specialists.

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