Q: Talking about the economy it should be mentioned that in the past twelve months Ukraine earned a high appraisal both from the West (Ukraine was given the status of a country with a market economy and the penal sanctions were lifted) and from the East (the President of Russia spoke in praising terms about the new principles of economic relations between our two counters). Now comes the turn of the Ukrainians themselves to give their high assessment. What is the essence of the course of the economic growth?
A: It requires a number of strategic tasks to be solved. And it is what my message to parliament, On the Internal and External Situation in Ukraine in 2005, is about.
Ahead of anything else, we must democratise our economic relations. In other words, we must ensure the formation of the fully-fledged institutional structure of the market economy, guarantee the rights of protection and realization of the rights of property, guarantee the equality of economic entities. The supremacy of law must be established both in the political and economic spheres.
Another necessary condition is the achievement of positive changes which we want to attain and reorientation of the economy towards modern innovation technologies. Their introduction should become the subject of a direct interest of the consumers, producers and investors.
In the current year we are planning to launch large-scale transformations in the energy sphere. They are aimed at cutting the energy consumption in the production, increasing the share of alternative energy, renovating the production and transmission capacities, and forming the state reserves of fuel and energy resources. We make every effort to diversify the sources of energy supply and of the routes of transmission of energy carriers.
No doubt, all of this must be done under the conditions of effective integration into the world economic system. We are impelled to do it by the changes in the conditions of the world markets and by the growing competitive pressure at the traditional markets of Ukrainian exports, by the future entry of Ukraine into the WTO, and by the expansion of the EU.
But the carrying out of these tasks forms a reliable basis for a stable economic growth.
Q: What place can Ukraine occupy in the world economy in the next decade? Which place is it worthy of? Should it be an agrarian, industrial-agrarian, or a developed country?
A: I want to immediately say that the deformed structure of the branches of the economy has still been preserved in Ukraine. This structure has come down to us from the former Soviet Union. As it is known, the fuel and raw resources branches dominate in this structure and it poses a danger for this country which can be given a role of the industrial-technological periphery under the conditions of globalization.
Naturally, we cannot accept it. This country has its own scientific schools, its own unique technologies. For example, as far as the number of certified software programmers is concerned, Ukraine is among the ten leading countries of the world in the sphere of information technologies. In the sphere of space exploration, Ukraine specializes in making rocket carriers, thus providing for ten percent of all the launches of space probes in the world. The Sea Start Launch project, initiated by Ukraine, is unique. This country is a world leader in the development of a number of space engines.
In the sphere of aircraft building in the past sixty years of its existence, the Ukrainian designers and engineers have created more than a hundred different types and modifications of aircraft which are known today in more than fifty countries of the world. The best known are the Ruslan aircraft with the load-carrying capacity of 150 tons and the Mriya (Dream) aircraft (250 tons). One of the features of Mriya is its capacity to carry reusable spacecrafts.
Ukraine occupies the fourth place in the world in the export of turbines for nuclear-power stations. Ukraine’s share at the world market is 13 percent, and these turbines are successfully used in 35 countries.
Our strategic task is to realize the Ukrainian scientific, technological and production potential, and to join the ranks of the developed countries of the world.
Q: What is the long-term state policy oriented towards — the establishment of the general well-being, or the support of big business?
A: I believe that these two guiding lines are not mutually exclusive. But the further growth of the population’s well-being will have an irreversible character only when it is based on a solid economic ground. And the role of big business in this is hard to overestimate. It plays a key role in the international competition struggle which becomes ever more acute under the conditions of globalization of economic ties. The presence of big Ukrainian capital allows Ukraine to be an active entity of the world economic community, rather than a passive field of foreign interests.
That is why an important condition of raising the well-being of the population, I believe, is the use of the social, economic and technological potential of big business, and in directing its efforts at raising the Ukrainian competitiveness, and forming the social market system in Ukraine.
At the same time, it is necessary to ensure the transparency and legitimateness of cooperation of big business with the state power bodies, to involve big business in developing and carrying out strategic national projects, particularly in the spheres of science, education, health care and technology.
The new government has a firm intention to openly and steadfastly ensure the unwavering adherence to the rules of conducting business which is a precondition for the greatest possible realization of the economic and social potential of big national capital.
Q: What is your assessment of today’s image of Ukraine in the world and the prospects of its international cooperation?
A: Today we are living in a state that has gained independence. We have opened the world’s eyes on Ukraine, and its international image has been changed for the better.
Ukraine has become a competent democratic player at the regional arena, and has established itself as an entity of international relations. The world sees in Ukraine a responsible and predictable partner. The proof of these words is our plan of a solution to the Transdnistrian conflict. This plan has found support in the EU, Russia and the USA.
At the bilateral and multilateral levels we shall use the potential of our strategic partnership with Russia, maintain good, mutually beneficial relations with other neighbouring countries. It is important for us to be where our political, economic, or humanitarian interests are.
We are prepared to maintain effective relations with the USA, Poland and Rumania. On the agenda are the recognition of Ukraine by the world market economy within the framework of anti-damping laws of the USA, signing of the corresponding protocol in the framework of the process of going through the formalities of Ukraine’s membership in the WTO.
Ukraine is actively promoting the introduction of the European values in our region. We continue working in the framework of the Community of Democratic Choice which was established at the summit held in Kyiv on December 2 2005. This Community is a regional form of ensuring democracy, security, stability and prosperity in the Baltic — Black Sea — Caspian region.
Our project for the future lies in the construction of a road to Europe. And our next steps in the sphere of European integration will be — creation of zones of free trade with the EU in 2007, and conclusion of a European agreement about the association in 2008.
Q: The government of Ukraine sets as one of its main tasks the raising of the quality of life of the Ukrainian citizens, guarantee of high European standards of social services — education, health care and social protection. Are there any special state programmes that are being developed in this connection?
A: The new government launches a state policy which is oriented towards the raising of economic, social and humanitarian standards of life for each citizen as it is done, by the way, in all the civilized world.
Our today’s priorities are, among other things, an active demographic policy, mother-and-child protection¸ struggle against HIV/AIDS, tuberculosis, oncological and cardio-vascular pathologies, improvement of medical care for the rural population.
Following my instructions, the government must work out and submit to parliament before June 1 2006 a comprehensive programme of the development of family medicine in Ukraine. A step in this direction has already been made — 250 million hryvnyas have been set apart in 2006 for the centralized financing of the rural medicine.
Thanks to the implementation of the programme Oncology in Ukraine, there is a tendency towards decrease in the death rate caused by malignant tumours. 137 million hryvnyas have been allocated from the state budget for 2006 to support this programme. The next steps in this direction are the development of a comprehensive programme of dealing with the oncological diseases in the years 2007-2016, and also the establishment of a national centre for cancer treatment following a French-Ukrainian government project.
Another priority is maternity-and-child protection. Following my instructions, a national centre of maternity-and-child protection is being created. Within the next few years, the children homelessness is planned to be fully eradicated.
I shall add that the Cabinet of Ministers is working out a comprehensive programme of prevention of tuberculosis, state programmes of the development of transplantation in Ukraine for the years 2006-2010, and creation of a unified system of urgent medical help, and informatization of the health care branch.
Q: Among the first laws that were signed by you in March 2005 was the Law of Ukraine On the Concept of the State Policy in the Sphere of Culture for the Years 2006-2007. This law says, among other things, that “the stable development of economy and the development of culture are mutually interconnected processes.” Is this recognition of the role of culture in the successful social and economic development supported by concrete measures?
A: A boost for the development of culture was the budget of Ukraine for 2005, in which the state financing of the sphere of culture has grown practically by one and half times compared to the year 2004 — from 360 million hryvnyas to 566.2 million hryvnyas. First and foremost, it became possible to raise the salaries of workers in the sphere of culture by 35 percent. For the year 2006, the expenditures of 659 million hryvnyas are envisaged for the sphere of culture.
The carrying out of a number of culture and art projects has been started (for example, the culture and art, and museum complex Mystetsky arsenal in Kyiv). The repair and restoration work at the national reserves Sofiya Kyivska in Kyiv and Shevchenkovski in Kaniv, the state history and culture reserve Hetmanska stolytsya has been stepped up. Measures have been taken to encourage charity donations for restoration and reconstruction of such reserves as Hetmanska stolytsya, Sofiya Kyivska, Khortytsya, Khersones Tavriysky, and Kamyana mohyla.
Q: Ukraine which has an advantageous geopolitical position and a culture, historical, tourist and recreation potential, has not yet become a fully-fledged participant at the international tourist arena.
A: Ukraine sets itself a task to create a competitive tourist product at the world market. And today we observe the growth of the international community’s interests in this country. No doubt, the introduction of a favourable visa policy has influenced the increase in the number of those who want to visit Ukraine. Last year, 17 million foreign tourists came to visit Ukraine, and it is 3.1 million people more than in 2004.
On October 2005, Ukraine became a member of the European Tourist Commission. As of October 1 2006, 40 inter-government and inter-branch agreements on cooperation in the sphere of tourism, including 9 with the EU countries, have been concluded. About 40 international agreements are being prepared for signing, in particular with such well-developed tourist countries as Spain, Italy, Cyprus, Malta, Portugal, Romania, Slovenia, France and the Czech Republic.
Q: In order to become a country of the world level attractive to tourists, it is necessary to have a corresponding well-developed infrastructure and high-quality services. Has such a task been put before the regional and local leaders, and how important is it?
A: First and foremost, tourism is a generator of additional revenues for the population, for the bodies of local government and for the regions, and also of a considerable number of new jobs which are connected with meeting tourists’ needs.
Today, a considerable interest is shown by foreign tourists in landmarks of defensive architecture — fortresses in Lutsk, Medzhybozh, Kamyanets-Podilsky, Khotyn, Bilhorod-Dnistrovsky, Uzhgorod, Mukachevo; palace complexes in the Crimea (Livadia, Bakhchysaray, Alupka, and other places), in the Land of Lvivshchyna (Zolochivsky, Pidhoretsky, Olesky), and in the Land of Chernihivshchyna (Baturyn, Kachanivka, Sokyryn); landmarks of wooden religious and civilian architecture in the Carpathian Mountains, etc. Having this in mind, I have given instructions to the Oblast State Administrations to work out regional programmes of preserving and using the landmarks of cultural heritage with the requirements of the tourist industry taken in consideration.
Representatives of the tourist regions also take part in working out new strategies in the development of tourism in Ukraine.
Q: The successful development of tourism depends to a large extent on investments, and consequently, on the stable conditions and climate that a country guarantees the investors. What does Ukraine guarantee?
A: We look upon the issue of protecting the rights of investors in Ukraine as a necessary condition of ensuring the stable development of Ukraine, social and economic transformations, including those in the sphere of tourism.
A legal basis has been formed in Ukraine which regulates foreign investments in all the spheres of the national economy and ensures the possibilities for their effective use and for earning profits. A foreign investor is guaranteed a free transfer of gained profits; guarantees are envisaged for the impossibility of nationalization of the investments, and for the right of getting compensation for the losses caused by the bodies of power. A national policy for entrepreneurial activity, foreign currency exchange regulation and taxation has been established. More than 60 international agreements on encouraging and mutual protection of investments have been signed.
As far as the improvement of the investment climate in the sphere of tourism is concerned, the government has approved the Concept of the Development of the Sea Coast of the Crimea for the years 2006-2007 which envisages foreign investments up to one million US dollars annually. It is a pilot project but if it proves to be effective, this experience will be introduced in other tourist regions of Ukraine. A bill dealing with tourist and recreational zones, aimed at solving a number of problems in this sphere, is already being publicly discussed.
To end this interview, I would like to wish the foreign readership of Welcome to Ukraine Magazine – discover Ukraine, its rich history and culture. Good luck!
