Issues of Consultative Investment Council meeting

Victor Yushchenko presided over a Consultative Investment Council meeting to discuss a wide range of economic questions.

Addressing those present, he reassured them that Ukraine’s market course had not changed, and government was facing the challenge to draw more foreign investment and create new opportunities for investors.

The President said he believed his major task was to make Ukraine join the WTO this year and get a market economy status, considerably improving the business climate. He said that, having achieved these goals, we would be able to negotiate free trade zone regulations with the European Union.

Speaking about perspectives of Ukraine’s economic development, Yushchenko noted that mutual respect and civilized relations between government and business were necessary for economic growth.

“We agreed we would compromise to settle all conflicts between government and business,” he said.

Yushchenko reiterated that the President, the Prime Minister and the Rada Speaker had recently signed a memorandum to protect property rights.

The Head of State admitted that government had made several mistakes in the past nine months and told those present about specific measures they were taking to improve the economic state. They plan to employ young professionals to work for state agencies, simplify procedures to register businesses, and adapt our standardization system to European norms. The President also said it was important to “totally revise all paid services the state renders to business,” meaning various services that have their own budget funds.

“We aim to cancel these special funds, including them in our state budget,” he explained.

Yushchenko also stressed that it was vital to implement judicial reforms to create an “efficient judicial system and genuinely independent courts and judges.”

Speaking about the current investment rate ($ 197 per capita per year), he said this was “yesterday’s policy.” The Head of State added that Ukraine had great potential to increase this rate by ten times, using capabilities of our machine-building, chemical and light industries and high-tech sector.

“I have no doubts we will find the logical way in this direction,” he said.

Speaker Volodymyr Lytvyn said this meeting was a sign of investors’ trustin Ukraine. Commenting on stagnation in the economy, he said there were three reasons for that.

The most obvious one is the so-called left-wing disease of the Ukrainian economy whose major symptom is state interference and control. The second reason is absence of any clear concept of Ukraine’s development. Thirdly, there is political misbalance. Lytvyn said he hoped the situation might improve after next year’s elections.

Prime Minister Yuriy Yekhanurov assured all that he strived to create stable conditions and define clear rules for business to function. He said they had already restored Cabinet consultative commissions and decided that businessmen would be able to assess decisions of the Cabinet at a phase of their elaboration.

Then the participants made brief statements and exchanged comments.

The oldest participant of the meeting, Paul Ostling, Chief Operating Officer of Ernst & Young Global, said there were all reasons to believe that “Ukraine can now do more than in the past fourteen years.” He noted that the Council had not functioned properly and regularly since 2001.

“Now we are sure that we have been heard and we are ready to express our opinion,” said Mr. Ostling.

To make the council work efficiently, he suggested they should work in groups involving representatives of different industries. These groups should work publicly to elaborate a strategy to improve the investment climate in Ukraine. Ostling stressed that they should actively cooperate with the Cabinet.

Other members of the Council said the world should receive a clear signal that political events in Ukraine would never affect the economy and the chosen course of market reforms.

Speaking about a Kryvorizhstal auction, they said they hoped it would be transparent, public and legally impeccable to convince foreign businessmen that property rights are respected in Ukraine.

After the plenary meeting they signed a memorandum, elaborated a concept of working groups headed by government officials and accepted new Council members.