G7 ambassadors express concern with alleged Ukroboronprom plans

PM Denys Shmyhal submitted to President Zelensky a new
nomination for the head of Ukroboronprom, Ukraine’s state military industrial
holding, Interfax-Ukraine reported on Sept. 9, citing its sources in the
government. They said the new candidate is Serhiy Tykhonov, a current official
of the president’s office. The report has been also confirmed by MP Yaroslav
Zhelezniak of the Voice faction, who wrote in his blog that Shmyhal “pretended”
to conduct an interview with Tykhonov on Sept. 9.

Unlike the current head of Ukroboronprom, Aivaras
Abromavicius, a former manager of a Western investment fund committed to
reform, Tykhonov’s profile suggests he is pro-Russian politician who is
committed to post-Soviet corruption. In the late 1990s, he was elected to
parliament as a member of a pro-Soviet party called the Progressive Socialist
Party.

“Today, the country is under risk of losing one more
reform. For instance, the transparent work of the military-industrial sector,”
Zhelezniak commented on Sept. 10. His concerns were shared by G7 ambassadors to
Ukraine, who tweeted on Sept. 9 that “only leadership committed to transparency
and good governance can ensure Ukroboronprom’s success.” The ambassadors
recalled that Ukraine has committed itself to reforming the company based on
OECD principles.

Alexander Paraschiy: The very likely replacement of Abromavicius with Tykhonov looks indeed
as a step back from positive transformations in Ukraine’s military industrial
sector. Though, given that Ukroboronprom was never transparent, the risk posed
to its reforms won’t have any direct impact on Ukraine’s relationships with its
Western partners. At the same time, such an appointment will add some negatives
to Ukraine’s overall investment case.