Leonid KUCHMA,
President of Ukraine answers
questions put to him by
Welcome to Ukraine magazine.
kuchma.jpg (145636 bytes)A Look into the Present Day of Ukraine and into its Future
WU: What are the main tasks in your opinion, sir, that must be tackled now, at the present stage of Ukraineís development as a state, and of its entry into the world community of nations?

Kuchma: Ukraine, as a young European state, had made its political choice which lies in an accelerated integration into the world community in general, and in the European community in particular. Ukraine takes an active part in the work of the Organization for Security and Cooperation in Europe, Ukraine is a member of the Council of Europe, Ukraine steps up regional cooperation within the framework of the Central European Initiative and of the Black Sea economic cooperation, Ukraine makes purposeful efforts to achieve membership of the European Union.

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During the state visit of Boris Yeltsin, President of Russian Federation, to Ukraine. May 1997.
Our participation in the work of authoritative international organizations helps us receive significant help in solving pressing problems, coordinate our actions with the member-countries of these organizations. At the same time, striving to maintain good relations with all the countries as we are, we do not regard our presence in some international organizations as an alternative to our presence in some others.

Such leading financial organizations as the international Monetary Fund, the World Bank and others, cooperate with Ukraine in several concrete fields. Unfortunately, the impact of the world financial crisis considerably limits Ukraineís possibilities and creates certain difficulties for Ukraine at the international arena. But it does not throw any doubt upon the fulfillment of our internal and external credit obligations, and fulfilling ones obligations is a necessary precondition for entering the world community. To do that we have to continue implementing reforms, speed up institutional changes, stimulate the development of Ukrainian business, get foreign investments, and introduce many other radical and large-scale measures.

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Mutual understanding reached at a warm meeting with Thomas Klestil, President of Austrian Republic.

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A friendly handshake.

All of these transformations have their own specific features, their own goals and paths of realization. But at the final count, everything that is being done in Ukraine at the moment organically unites the efforts to solve the internal problems with steps directed at entering the family circle of the economically developed countries.

WU: What are, in your opinion, sir, and the main directions of cooperation with other countries? What is being done to step it ups and heighten its activity?

Kuchma: The main external political priority of Ukraine, as has been already mentioned, is its integration into European and Euro-Atlantic structures, return to a new European unity of countries and peoples. In this context, I would single out our special relations with the European Union and with NATO. The level of these relations could be considered to be a sort of an indicator of Ukraineís participation in the processes of building up new Europe.

Ukraine is purposefully moving towards achieving its strategic goal, which is the entry into the European Union. And the first step is to get a status of an associated member.

We are reforming our economy and democratic institutions in order to get them closer to the standards of the European Union. Secondly, we attach a great importance to the implementation of the Agreement on Partnership and Cooperation, which creates a solid foundation for a further development of relations between Ukraine and the European Union.

They are deepened through involvement of Ukraine into the processes of European integration; our possible participation in the work of the Euroconference, talks dealing with working out an Agreement on Free Trade are examples of such involvement.

As a Central European state, Ukraine is striving to develop good-neighborly, partner-like relations with all the countries of the Central European region, to strengthen the regional stability and security. Ahead of anything else I would like to emphasize a special character of our relations with Poland which can be characterized as a strategic partnership

A multilateral political dialogue at the highest level, producing its results, is actively widening. Thus, following our initiative, a summit of the countries of the Black Sea economic cooperation took place in the town of Yalta, the Crimea, at which a new regional economic organization was created.

The framework of cooperation with the countries of the Baltic- Black Sea region, of the Central European Initiative, and also CEFTA, is expanding. An informal meeting of the presidents of the central European countries, planned to take place in the city of Lviv, Western Ukraine, in May next year and an international conference with the participation of the states of the Baltic-Black Sea region, planned to take place in the Crimea in September of 1999, will be noticeable events. I am convinced that all of the aforementioned will be in the interest not only of Ukraine but in the interests of the whole Europe as well.

Connecting its future with the united Europe of the 21st century, with the continent without divisive lines, Ukraine at the same time does not relinquish its interest in cooperation with the East. And it concerns, ahead of anything else, our strategic partner Russia. Russian Federation takes up 40 per cent of the external trade of Ukraine. To say nothing of a long period of the common historical development, age-long traditions of good neighbourly relations, established links and just relations between ordinary people.

An acute financial crisis in Russia has affected Ukraine as well. It could not be helped. The crisis has come to be a serious test for our trade and economic relations with Russia, from goods-exchange operations to the joint realization of large-scale projects and programmes.

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Talking to the well-known Ukrainian scientists Boris Paton and Mykola Amosov.

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Frank tolk with workers about their problems.
The present-day financial and economic realities require urgent and — I emphasize it — extraordinary steps to be taken. Some measures have already been taken. Thus, an agreement on carrying out payments for delivery of Ukrainian food products to Russia, and of Russian energy resources to Ukraine has been achieved. The mechanism of putting this agreement into practice is being worked out jointly by both sides.

In general, the financial crisis has shown very clearly that there is an urgent need to strengthen the economic component as one of the top priorities of the external strategy of Ukraine.

WU: Which spheres seem to you, sir, to be the most promising for getting foreign investments into?

Kuchma: The fuel-energy complex is one of the most important ones, followed by agriculture machine building, production of medicines and medical equipment, consumer industries, manufacture of air planes, ships, cars and rockets.

Today there is a definite lack of investments, both domestic and foreign, it is true, but I am convinced that the investment climate in Ukraine is going to improve soon and it will bear fruit. In fact, some changes to the better can be observed even now. In the past six months the volume of foreign investments grew two times, and in the machine building it increased ten times.

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Discussion cooperation with Geidar Aliev, President of Azerbaijan Republic.
I believe next year will bring an increase in the flow of foreign capital into Ukraine in general, in the form of direct investments in particular. But to have it, certain preconditions and stimulating factors must be created. I ascribe structural changes, including privatization and restructuring of big and medium-sized factories and companies to such preconditions and factors.

We shall be more actively putting our efforts into the aforementioned directions of work.

WU: Could you, sir, give your forecast of the further development of the economic situation in Ukraine?

Kuchma: We are forced to combine the market transformation of the economy with intensive work directed at overcoming the crisis and gradual coming over to economic growth.

Today the most difficult phase in market transformations is coming to an end in Ukraine. Thanks to the measures already taken, certain signs of stabilization in the economy have been observed, a growth of the volume of capital investments and construction work has been achieved. The budget deficit has dropped considerably from 6.8 per cent of the gross national product last year to 2.7 per cent this year. Inflation in the first six months of this year was the lowest in the past four years. Foreign investments have increased. Measures are being taken to stimulate the activity of small and medium-sized businesses.

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A family portrait in the interior: with dauther Olena.
Nevertheless, these positive trends have not yet been consolidated and have not yet been made irreversible, they have not yet acquired continuity because of the negative processes at the world financial markets in general, and at the financial markets of Russia in particular. At the same time several presidential decrees dealing with economic issues, decisive measures, taken by the National Bank of Ukraine, have allowed to considerably reduce the influence of negative factors and prevent a development of events similar to the one that has occurred in Russia.

Ukraine has managed to avoid an involved banking crisis, prevent a catastrophic devaluation of our national monetary unit, and avert a considerable price rise. The volume of the gross domestic product decreased in the past nine months of this year by only 0.5 per cent.

All of the measures taken have received a positive reaction on the part of international financial organizations which have continued to actively cooperate with us. The Board of Directors of the International Monetary Fund has taken a decision to open a credit line for Ukraine within the programme of Extended Fund Facility to the sum of 2.2 billion US dollars.

The first tranche has already been received. A positive decision as to the credits to Ukraine from the World Bank is about to be taken. In addition to everything else, these facts are an evidence of the fact that Ukraine is recognized by the international financial organizations as a reliable and stable partner.

We link further development of Ukrainian economy and its future to further structural changes. Privatization of the property of the state-run companies will continue, market mechanisms of influencing the factories and companies will be used more actively, including the procedures of bankruptcy. An administrative reform is proceeding; transformations in the agricultural complex are going deeper.

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With grandson Roman.
Provided we have a constructive cooperation and interaction of all the branches of government, efficient functioning of all the executive bodies, we can consolidate and develop further all those positive changes that have been achieved in the economy, and these changes should form a foundation from which the economy will be boosted to new heights in the future.

WU: Is tourism going to play a role in solving the domestic and international problems of Ukraine? Can we say that the tourist industry has found, as the saying goes, its feet already? Which measures, in your opinion, must be taken to promote its further development?

Kuchma: Let me begin with this: Ukraine has everything necessary to create a modern tourist industry and dynamically develop it. I have in mind, among other things, our rich historical and cultural heritage, natural conditions, human and material resources. But we must learn to use all of it cleverly, efficiently, so it would be useful both for the state and for the tourists, foreign and Ukrainian.

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Rare moments of rest.
From the point of view of solving our internal problems we can look upon tourism from two main angles. First of all, tourism occupies an important place in the spiritual renaissance of the nation. You should agree with a statement that knowledge of history and culture of your native land, of its places of interest and of its prominent figures, of its traditions and customs is a powerful factor in forming a personality, imbuing this personality with lofty feelings of social responsibility, of raising this personalities intellectual level.

No less important is the fact that tourism is one of those industries in which one can, if one establishes a proper way of doing things, achieve quick and important results which will contribute to a general economic revival. The experience of the countries, which have become the recognized world leaders in tourist business, is a convincing proof of that.

I believe it would not be necessary to explain in detail how important it could be for Ukraine, which is going through a period of economic difficulties. One should also bear in mind quite a pronounced social importance of tourism. Take, for example, creation of new jobs. In tourism, with relatively small expenses, many new jobs can be created, and providing services for tourists creates jobs in other tourist-related industries as well.

As far as the international problems are concerned, we attach a great importance to tourism in the context of Ukraineís entry into the European and world community, the thing Iíve already mentioned. Foreign guests, coming to see Ukraine with their own eyes, get ample chances of understanding our country better, on their visit they are provided with detailed information on various subjects, which helps do away with certain stereotypes and myths that have, unfortunately, gained currency.

It would be desirable to have foreign tourism which intensifies human exchange, widens and facilitates contacts in all the spheres and at all the levels, also working for boosting our economy. Sometimes one gets an impression that a great caution with which some potential foreign investors view a possibility of investing their capitals into Ukraine, is caused, to a great extent, by lack of information or by misinformation about Ukraine and the current situation in it, and about activities of foreign companies in Ukraine.

Now lets move to the second part of your question. It should be born in mind that after we gained independence we had to start building the tourist industry practically from scratch, and under very unfavourable conditions on top of that. We were forced to create our tourist industry anew. And at the same time we had to learn how to operate under the market-economy conditions and set it functioning.

Considering how difficult was the start, a lot has been done in the last few years. A legal foundation has been built which has all the generally accepted and time-tested norms. It provides for a dynamic development of business structures of different types of ownership and conducting business. I have in mind primarily such a principal document as the Law On Tourism, which was adopted by Parliament three years ago. The main goals, directions, and potentials of the tourist industry have been set in a special programme of development of tourism in Ukraine up to the year 2005.

At the meeting of Heads of Central Central and Eastern European States. Poland, June 1996.

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Hospitable Indonesia.

Today there are more than twenty five hundred agencies and companies working in tourist business. The state liberalized the conditions of their work and retained only one kind of controls — the one of the quality of services. The state guarantees safety of tourists, protects their life, health and possessions.

So, there are changes to the better and Ukrainian tourist business, one can safely say, is standing firmly on its feet. At the same time, considering the role tourism should play, its place in society, I regard everything that has already been done is only the beginning of great and complicated work. At the present stage the emphasis is put upon the widening the infrastructure of tourism, bringing it to the present-day standards. Improvement of hotel facilities must be a priority.

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With the young people of Ukraine.

The economic slump we are now experiencing has not allowed us to get the work of improving the tourist industry into full swing. But promising results have already been achieved. I am of the opinion that the service industry of the capital of Ukraine, including the tourist industry, got through a very serious test it was put to, with flying colours, I mean the annual Meeting of the Board of Directors of the European Bank for Reconstruction and Development that was held in Kyiv in May of 1998.

Individual cases when the guests of Ukraine are provided with services that meet high world standards must be made systematic. It is in this that I see an urgent task facing our tourist industry. A new additional incentive to hurry up with getting it done has become a recent acceptance of Ukraine into the World Tourist Organization.

WU: Mr. President, do you have anything to wish Welcome to Ukraine Magazine and its readers?

Kuchma: I wish both the magazine and its readers new successes in getting to know better our great and wonderful world. It is wonderful indeed that the world is getting to be more open before the inquisitive human nature and more accessible to many millions of people who love travelling.

Together with many others, I am of the opinion that tourism is an important social phenomenon of the 20th century. Let's join efforts to boost it to new heights, to make it possible for our children and our grandchildren, already in the twenty first century, to travel and see many exciting places and treasures of the planet Earth.

Photos by Anatoly Bovt and Valery Solovyov

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