- The Washington Times - Sunday, March 10, 2002

Correspondent Natalia A. Feduschak of The Washington Times recently interviewed Ukraine's Prime Minister Anatoly Kinakh in Kiev. Their conversation came after Moody's Investors Services issued its annual report on Ukraine last month, saying the country's economic growth had picked up substantially.
Question: How would you characterize the current political and economic situation as Ukraine heads into the March 31 elections?
Answer:
In structural economic reforms, we were able in the last two, two-and-a-half years to achieve rather dynamic growth in our macroeconomic and macrofinancial indicators.
In the first 11 months of [2001], Ukraine's economy showed its best indicators. Gross domestic product grew by 9 percent, while industry grew by 15.4 percent, and inflation was 4.5 percent.
We've renewed our work with the International Monetary Fund and the World Bank. At fairly optimal conditions, we reached agreement about restructuring our external debt with the Paris Club of creditors. For this process to become irreversible, we need to deepen structural market reforms by bettering the social climate, creating a higher level of protection for investors and [business] owners, furthering work on questions associated with a transparent, modern taxation system and assisting in the development of small- and medium-size businesses which are the basis for the development of a middle class, which is the guarantor of democracy and the market development of a country.
All this will depend very seriously on how much the conditions are created for effective and professional cooperation between the levels of government the president, parliament and local government and how much we are able to increase the level of trust in reforms and government.
The discussion today is not only about structural market reforms, but about the formation of the main principles of a civil society in Ukraine.
Increasing the protection of human rights, freedom of speech and structural market reforms are also tied to the dictates of forming of a civil society with democratic ideals. This will also influence the pace of our integration into the European and world economic-political system.
Q: How do you overcome the skepticism people have in reforms and government?

A: I'm absolutely sure it is impossible to create a modern market economy a transparent competitive market without cementing democratic ideals. The formation of a civil society as a whole this is what we would like bring to people, now that we have practically begun elections to Ukraine's future parliament.
So that we cement and make irreversible the formation of a market economy and democracy in Ukraine, we need this parliament to have a majority that knows how to create democratic principles. That will create attractive conditions for the deepening of market-oriented structural reforms. That's why this period is very important for Ukraine.
We also need to seriously work on transparency of government and to create conditions where society can control the government's work. It is necessary to create conditions where there is a constant dialogue between society and government and to have effective contact between government and society.
It is also very necessary people understand how much of a responsibility they have, particularly with the elections. When they go to the election districts, they hold not only [candidate lists], but they hold their future, their children's future and the future of the government, in their hands. That, too, will determine how much Ukraine will move forward as a democratic nation and as a country which is forming a market economy.
Without question, you won't be able to increase the level of trust in government with only words and slogans. You need action. My assignment is to do that, not with populist methods, but with economic and market methods.
Q: What about problems some investors have faced in Ukraine?

A: The investment climate has been created by the questions surrounding the taxation system.
As a government we need to understand the investment level will be determined by how much the state defends the rights of investors.


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