This winter’s election campaign for the presidency of Ukraine really came as a surprise to the entire international community. Who could have expected that the standoff between candidates Viktor Yushchenko and Viktor Yanukovich after the disputed first voting round would explode with massive social unrest? In what came to be called the Orange Revolution, the citizens barricaded government offices in Kiev and made it seem that the country was soon to break apart. Speculations that western and eastern Ukraine would separate were all around. It looked as though XXI century Europe was reliving events from the days of yore, when power was transferred through violence. The dioxin poisoning of Viktor Yushchenko, comparable to events usually depicted in medieval history texts or Homeric epics, also added to the sense of surrealism that surrounded Ukraine’s elections.

Finally, on December 26, 2004, it was announced that the elections were resolved peacefully. With a narrow margin of 7.8 %, Viktor Yushchenko was chosen Ukraine’s new head of state. Since then, Yushchenko’s new government had to realize its domestic agenda with great care – first, to change the policies of the previous administration and second, to keep the polarized country together.

On April 3, 2005, President Yushchenko and his Minister of Economics, Sergiy Teriokhin, arrived to the United States to meet with George W. Bush for the first time since the elections. In the U.S., President Yushchenko also addressed America’s business community, and spoke at a joint session of the U.S. Congress. During his visit, Viktor Yushchenko received a Courage Award from the John F. Kennedy Library Fund for his commitment to democratic principles.  

- Today, what is the social climate in Ukraine like?

- For many years Ukraine’s population has been deprived of its freedoms. Human rights were not protected. The law had no power. Corruption was out of control. We have inherited all this. It is, of course, not easy to resolve these problems. Our new administration will strive to improve the social conditions of Ukraine’s people. It is our goal for the year 2005 to launch sixteen new social welfare programs.   

- Mr. President, what type of economic reforms does your team intend to implement?

- Just as its social situation, Ukraine’s economy was in a difficult condition. Ukraine’s annual budget deficits in the past several years have made the country’s total debt to be about one third of its Gross Domestic Product. Economic growth was not high. Many laws that governed the economy have not been changed since the Soviet times. The tax system was in disarray. Previously, there were high taxes and a narrow taxation base. The so-called Free Economic Zones further limited economic development because they gave unwarranted privileges to some companies.

Under our administration, this year, we plan to make several adjustments to improve Ukraine’s economy. For one, the tax code will be changed so as to lower the tax rate to 13 %, but to have it apply to all companies indiscriminately. Secondly, private ownership of the land will be allowed. Ukraine, as it is known, has 40 % of world’s black soil. Ukraine will also begin the process of re-privatization. Companies that were unfairly privatized after the disintegration of the USSR will be placed for bidding. International investors will be able to participate in the bidding. The current owners, of course, will be offered to retain their control of the companies by paying the difference between the price they used to acquire the business and its actual value. Ukraine’s General Prosecutor’s Office plans to release a list of 27 enterprises that are to be re-privatized. This mechanism will allow for transparency and procedural fairness.    

Overall, for this year, we expect to have total economic growth of eight percent of the GDP.   

- In what fields will Ukraine be developing itself in the near future?

- First of all, the energy sector. Ukraine wants to establish a free trade policy for gas, oil, and electricity. Ukraine’s Gas Consortium is now becoming more effective. There are projects to construct an oil pipeline to Gdansk, as well as gas pipelines to Turkmenistan and Kazakhstan. Secondly, much emphasis will be placed on the high technology field. Quite likely, a special industrial complex will be built for such works. Ukraine will also engage in the development of rockets and rocket carriers.

- Free market economy is crucial to successful development of democracy. Will your government be helping private businesses?

- Our government will definitely assist private companies. The private sector in Ukraine still has major needs for growth. To make improvements, we will, first of all, reform the legal system so that it reflects today’s free market ideals. We, as I have already mentioned, will do away with unmerited corporate privileges. This move will insure true market competition. Second, the re-privatization plan will also help in strengthening the free market. We will also reform the procurement system to make it easier for companies to access financing opportunities. To make Ukraine attractive to investors, property protection for minority shareholders will be increased. The Agency for Investment will be set up in order to safeguard international investments in Ukraine. In addition, our government strongly believes that true business ethics need to be instituted in Ukraine. Fairness is imperative for successful development of private companies.     

- Corruption of the bureaucracy is one of the major deterrents to international economic cooperation. How will the new administration counter that problem? 

- For Ukraine, corruption is, indeed, a problem. Some of the old-era government officials have gotten used to bribes and extortions. Our administration will address the issue of corruption on several fronts. First, we will conduct systemic deregulation to limit the influence of the bureaucracy. If, for example, before, one needed to obtain four or five permits to run a business, now, that number will become smaller. On another side, corruption will be countered by the supervision of bureaucracy. Soon, the Ukrainian government intends to create an independent council to check corruption of the Police.    

- What is the current atmosphere of Ukraine’s relationship with the United States?

- I am grateful to my American colleague, President Bush, for his support to our efforts of improving Ukraine’s economy. The United States backs Ukraine’s efforts to secure accession to the WTO. Today, actually, we had spent one hour discussing this issue with Vice President Cheney. We also expect that by the end of 2005, the United States will grant the free-market economy status to Ukraine. Representatives from the American Chamber of Commerce have offices in Ukraine’s Ministry of Finance.

As for economic relations with the U.S., it is a policy of our new administration that tariffs on imported goods should be kept low to insure maximum progress and usefulness. It is not a good practice to promote home enterprises by setting import dues on similar products at 400 % – as was sometimes the case during the previous government.  

- How does Ukraine look at the importance of maintaining good relationships with former Soviet countries, Russia in particular?

- Russia has been, historically, a major partner of Ukraine. Good relationship with Russia is necessary. In the near future, Ukraine’s officials will go to Moscow for a conference. We will negotiate on the establishment of joint economic regions and on the beginning of free trade between our two countries. Good relationship between Russia and Ukraine will absolutely be of great benefit to us. Currently, Ukraine has about 3-4 significant articles of trade that it exports to Russia, while Russia has about 400 articles that it exports to Ukraine.    

- What are the goals of your administration in the international economic and political arenas?

- For the next three years, Ukraine will pursue the objective of Euro-integration. In order to become a member of the European Union, Ukraine will need to join the WTO. Ukraine’s government has already devised strategies to that end, as I have mentioned already. We will also need to reform the visa system and make it freer.

To Minister Teriokhin: - If you were an American investor with ten billion dollars, why would you consider working with Ukraine? In what industrial sector in Ukraine would you invest? 

- First of all, now, we have the most opportune circumstances for doing business in Ukraine. Fierce competition is absent, while the cost of operating in Ukraine remains moderate. As for the economic sectors that have high potential, I would have to name, first, the energy field. Mineral resources can also bring good yields. The transportation sector in Ukraine looks promising as well. Lastly, I will mention sun seed oil production. Ukraine’s agriculture is developing and restoring itself very quickly.