Good morning to everyone!
This is my privilege to address this audience. It seems to me that this is quiet sunny today in our Yalta.
We as the country survived after a number of tremendous challenges my country is facing.
I was just yesterday thinking about this action plan. This is the action plan “Recovery for Ukraine”. This is what has to be done in a short-term prospective and the summary of what we already did.
In the last six months we’ve passed one revolution, we are still in the state of war, and we’ve got two elections – one presidential and another one – snap parliamentary elections. It’s not an easy time. And frankly speaking, the only source of energy for reforms, the energy for changes is this strong will of the Ukrainian people, strong desire to have new, another country. And it was up to the people to make these changes in Ukraine, but much depends on the political elite, much depends on the Government, on the House, on the President. Much depends on the institutional capacity of Ukraine to deliver real changes.
Just after we took over the Office of the Prime Minister, the key factor for us was to resume talks with the IMF. And we did it, we succeeded in getting the IMF’s and the World Bank’s support. But on the other hand this coin has two sides. On the other hand, we had to pass very complicated austerity package, what we did twice.
I won’t say people were very happy with this, but it was really important that the majority of Ukrainians accepted it. Accepted that the Government shot down a number of entitlement programs. Accepted that the Government had to increase the tariffs for households. Accepted that the Government had to increase tariffs, taxes and rents. Accepted that the living standards dropped substantially.
And for today we need to explain the reason why they accepted this and what should they get after this austerity package, after these tough and complicated reforms. We succeeded in a number of things: the IMF, partly deregulation, we introduced to the House a number of anticorruption legislation, partly deshadowed the economy, passed a new procurement law. We did a lot of good Government stuff. But where we failed? We failed really in tackling corruption, in overhauling the entire legislating system – eroded entirely, I would say, eroded judicial system, corrupted judges, ineffective prosecutors, and Soviet-style militia (or police).
This is the key agenda for the further reforms in Ukraine. It’s not an easy job to handle reforms having this kind of challenges and having snap parliamentary elections that are scheduled on the 26th of October. Because politicians are going crazy. Everyone is to promise everything, for all good and against everything bad. But it is another political cycle that we have to cross, and we’ll do this. I think about the composition of future Parliament and the future Government – whether this future will deliver the future.
In this action plan that I offered to the Ukrainian people, that the Government of Ukraine offered to the Ukrainian people we clearly unveiled and unfolded what needs to be done in the energy sector, in anticorruption, in the tax sphere, in the budgetary policy, in the fiscal policy. This is not the final one and we can present a very long, comprehensive with hundred pages of some kind of action plan. But what we need – we need a clear-cut strategy that is unfolded in this plan.
Few challenges still are not on the table, but still are looming. The first one and the key one is the war. This Government is the war-time Government. And let me put it bluntly – we are still in the state of war and the key aggressor is the Russian Federation. And until we get the peace – it would be really difficult to have real changes. Because to change the country – you need to get the support of the Ukrainian people. This is not normal, this is the key factor. Because the support of the people is the key driver of all reforms. But when ordinary Ukrainian citizens switch on the TV set and, for example, the first footage he takes is that Russian tanks invaded Donetsk and Lugansk, and another footage is that for example the Government proposes some kind of tax reform. It’s normal that people don’t care about the tax reform, they care about the security. And the normal reaction of every normal human being is to go urgently to the bank and to withdraw the deposit. Than to take UAH and to change it into dollar denominated asset. Fear.
The key priority, not only for Ukraine – but the key priority to the entire world – is to deter Russia and to stop the war. This is the key precondition for further reforms. It is crystal clear that we are not allowed to waste the time. No. But if we stop the war, if we contain Russia – we will get the chance to attract international investors, because it is not an easy job to attract an international investor when you have in your country already Russian tanks and Russian artillery. To regain the credibility of domestic investors and to be clearly focused on reforms those are needed in the country. So the first challenge that I’ve already mentioned is the war.
The second one, which is actually a part of the war – because Russia waged the war to Ukraine not only with the military tools and means, but with another one – with political, economical and even social. So, an energy sector. The energy sector is under the threat and you are well aware that Russia cut of the supply of natural gas to Ukraine few months ago. And they even went further. Few days ago Russia substantially decreases the supply of the natural gas to the EU member states – it dropped by 10%. And the idea was just to stop the reverse flow that we launched together with a number of EU member-states. And I praise and I command the efforts of the European Commission and our European partners to build up this reverse flow.
The third issue is that a number of Ukrainian coalmines were entirely demolished and dismantled by Russia-led guerillas. For today we are not out of coal, but we got the problems with the coal supply. Partly we resolve all this energy challenges. In our gas storage facilities we got up to 17 billion m3 of natural gas. That’s not enough to have a warm winter, but this is enough how to go through the winter. Not to be freezed. We started to import coal from different countries, incl. South-African Republic. This is the first time in the last two decades. And we believe that in case if we restore law and order in the territories that are still controlled by Russia-led terrorists, we will bring back the supply of coal from these areas to Ukrainian electricity system and to Ukrainian electricity plants.
So, my take on this is that tremendous challenges, huge problems, but huge opportunities. We are obliged. This is our responsibility – to deliver, to change the country and to make Ukraine better. And I strongly believe that in some time we will have European Union Conference in Yalta.