• Українською
  • 10 minutes with the Prime Minister
    posted 14 February 2016 19:50

    Fellow Ukrainian families, good evening!

    In the whirl of political events and political struggles I'd like to talk now about the fight for the country and fight for our future. What we are capable of achieving in 2016 and what all of us should do. I will divide our 10 minutes into a few blocks.

    I start with an economic block. The world is facing new economic challenges. The drop in oil prices triggered the slowdown in industrial production in the world's largest economies, primarily China. And this, definitely, affects the economies of Europe and America. Ukraine is part of the global economy. Henceforth, we should seek our way out of this difficult situation.

    Above all, economic stability is price stability. This means the absence of a galloping rise in prices.   Last year we came up against this problem and the rate of inflation was almost 45%. This year we should settle an issue of galloping inflation. We have set a target showing, which is 12% inflation in 2016. Are we capable of achieving this? We are, if we further pursue economic reforms and if Ukraine prolongs participation in the program with the International Monetary Fund.

    To that end, we need understanding of all political forces, parties, the President of the country, the Government and we need unity to advance along this path of reforms.

    In the meantime, we should set afloat the Ukrainian economy, and this requires a resource. Where is the source for that? First of all, this is an internal source, internal source of the banking sector. We have had a discussion with representatives of Ukrainian banks and the National Bank. What are the needs of small and medium-sized businesses? Long and cheap loans. And in this matter stability of the banking system is the key.

    And again, I will mention our cooperation with the International Monetary Fund and the World Bank, as well as other international financial institutions. It provides us an additional cushion to ensure economic stability.

    Apart from domestic investment, the country needs foreign investment. To support foreign investment there is a rapid mechanism to leverage it through fair and transparent privatization of state property objects. This is also a way of curbing corruption in state-owned companies. So, this year we must launch comprehensive, transparent and honest privatization. And I believe that we have a full understanding with the Parliament regarding the need to attract the investor to the Ukrainian companies to make him place funds here, create new jobs and direct investment.

    The third is business climate and business environment. What are the problems faced by an entrepreneur? What does corruption mean for the entrepreneur? This includes the customs offices and the tax inspectorates. Task number one for the Ukrainian Government is to restore order in the Ukrainian State Fiscal Service and the Ukrainian Customs.

    At the last Government session the Ministry of Finance announced a wide reform of the State Fiscal Service and the Customs Service. Foreign companies will participate in reforming and management of four customs offices. To let us see how it works in Western countries, to apply best foreign practices and demonstrate all the other customs offices high standards and methods to provide service to the Ukrainian business and not to take bribes.
    We should complete the tax reform. And the first step has been taken. We reduced twofold one of the biggest taxes on business which is the tax on wages. However, the tax reform implies not just changing taxation rates, but primarily the change in the system of tax administration, simplification of taxes and abolishing a number of bureaucratic functions, those only provoking corruption towards the taxpayers.

    So here the Government and the Parliament should have one single platform of tax reform. And I believe that the Parliament would support the Tax Code submitted by the Cabinet of Ministers of Ukraine.

    Deregulation. Deregulation has been carried out throughout the past two years. A lot has been done, but not enough. Therefore, we should continue our work to gradually reduce the functions of the government and simplify registration, licensing and other services provided by the State, and in particular, those designed to directly ease life for each entrepreneur in the country.

    I would also like to dwell on an issue of the state-owned enterprises. Why is it crucial to introduce new approaches in the appointment of heads of public companies and how this affects the life of each Ukrainian citizen? The state-owned companies don’t supposedly affect the social standards or wage of each Ukrainian. But it is quite the opposite. If we continue with the appointment of independent chairmen to manage major public companies, and there are 50 of these, unaffiliated with the politicians, independent from the Government and independent from any business interests, it would enable to improve the financial performance of these companies. On the outcomes of the yearly activity, each company transfers dividends to the state budget of the country. These dividends fill the budget, so the budget can ensure an increase of social standards, salaries for teachers, doctors, better financing of infrastructure objects. That is, thereby the budget is capable to finance the needs of each citizen of the country.
    Therefore, large-scale changes in the leadership of public companies, de-politicization of state-owned companies and the introduction of a single principle of functioning of public companies - the principle of economic efficiency - which is based on independence of directors, are among the guidelines proclaimed and pursued by the Government, as, for example, it was done in a state-owned company the National Joint Stock Company "Naftogaz of Ukraine", which a year ago had losses worth USD 10 billion, while this year we are going to see it as a profitable company.

    The economy can be growing and the country can have the status of a democratic one just having one factor - fair and independent judiciary. At that, non-corrupt judiciary. We have had the first achievement - have voted for amendments to the Constitution of Ukraine, which is pending to be adopted in the second reading. What do these changes mean? These changes mean that Ukrainian judges, all the Ukrainian judges should undergo the process of fair re-attestation. Those judges, who are suspected of corruption, or those judges who pass illegal sentences, should quit judging. And, they should be replaced by honest, young professional lawyers, who wearing their judicial robes will render verdicts in the name of Ukraine and in the name of Ukrainian justice.

    For this purpose there should be submitted before the second reading by the Parliament a new law On the Judicial System and On the Status of Judges. And thus the new Ukrainian judicial system will ensure the protection of the rights and freedoms of man and citizen, will provide protection of business and entrepreneurship and will provide the basis for democracy – it is free and fair Judicial Branch.
    Social justice is also the foundation for the European democratic society. Yes, we pay wages and pensions timely. Yes, last year we increased them by 13 and 19% respectively. Yes, this year we plan to improve welfare standards by 12%. But the problems of Ukraine are poverty and covert unemployment.

    Hence, it is crucial to create jobs and carry out a pension reform. Poverty and corruption are interrelated. Rigid and uncompromising struggle against corruption at all levels of government should be a shared commitment of the President, the Government, the Parliament and all responsible political class of the country.

    Regarding the responsibility of the Ukrainian political class. I couldn’t care less about discord and quarrel about petty points among the Ukrainian politicians in their race for power. We must all fight for Ukraine and every Ukrainian citizen. The Ukrainian Government declared the principles of a new and fair Ukrainian policy which were supported by G7 states and our Western partners.
    I believe that the President of Ukraine and responsible politicians in the Ukrainian Parliament are committed to the same principles as we are. We need unity: unity on the way of reforms, unity in delivering social equity, unity in the judicial reform, unity in Ukraine’s advancement towards membership in the European Union and NATO, unity in our goals, principles and values.
    And, when we are united - we are invincible.