Dear fellow countrymen! 

Dear members of the Parliament of Ukraine! 

In accordance with the Constitution of Ukraine, I would like to present today a regular Address of the President to the Verkhovna Rada “On the internal and external situation of Ukraine in 2011”, which outlines basic economic, social and political results of the year 2010. 

But the Address is more than only a report on the situation in the country. First of all, it is an opportunity of a serious conversation about the problems of the present and future of our development. 

A year ago, immediately after the presidential elections, I have addressed the Ukrainian nation, sketching a future program of action in the economy, humanitarian sphere, in domestic and foreign policy. 

I said openly that the changes our society needed, required us to concentrate our efforts, confidence and patience. I said that our choice to modernize Ukraine is irreversible. 

However, we must understand that the policy of profound changes will be conducted in the conditions of global instability, new crises and new threats that we must learn to prevent and take into account in time. 

Modern world is rapidly changing. It is becoming multipolar, more complex and dynamic, with new opportunities and challenges for development of each country and each community. 

Global economic situation is becoming more complex. 

At the same time, the uncertain economic recovery faces new ordeals. 

Since mid-2010, prices of basic raw materials have been growing rapidly. 

Global inflation can soon derail the process of economic stabilization and undermine social balance in many countries. 

Food crisis, including the threat of starvation in certain densely populated regions of the world, and aggravation of the problem of lack of potable water are becoming major challenges to mankind for the near future. 

Against this backdrop, struggle for development resources of the XXI century is worsening. 

More and more areas of conflict appear in the global space, tension in the international relations is growing significantly. 

The problem of environmental and technical safety is gaining particular importance. 

Climate change increasingly affects the development of civilization. 

The tragic events in Japan have become a real shock for all mankind. The earthquake claimed thousands of victims, caused a nuclear accident and suffering of millions. 

The disaster once again proved the obvious fact that only joint efforts and mutual respect will allow mankind to move on along the path of technological and social progress. 

Ukraine has a tragic experience of its own. And we hope that the international conference dedicated to the 25th anniversary of the Chernobyl disaster, will be a major milestone in the process of global consolidation and elaboration of cooperation mechanisms of overcoming environmental and man-made threats collectively. 

Recent events in North Africa, and the Middle East have once again shown that the period of political and economic transformations in these parts of the world will be complex and dramatic. 

But I am sure that there will be no return to the times of global confrontation. 

Generally balanced and responsible policy conducted by leading global powers and the entire democratic community prevents that. 

Dear fellow countrymen! 

Changes in the world harden the powerful. 

From this rostrum, I would like to call on every Ukrainian: enough complaining and groveling. 

Ukraine is a powerful and ambitious state. It is time to show the Ukrainian character and prove to ourselves and the world that Ukraine is a leading country. 

What should we found our plans of modernization upon? 

First of all, the industrial and scientific potential of our country remains unused. 

The Ukrainian state has a unique geographical location, which creates ideal conditions for placing production oriented at both EU and Euro-Asian region markets. 

Our country has deposits of rare natural resources, which creates great opportunities for the development of industries. 

Ukraine is a leader in black soil posession and has everything necessary to reach the position of an agricultural leader in the modern world. 

But the main thing is our powerful human capital. 

Despite the crisis in domestic education, we still have a developed system of professional staff training. 

There is significant potential in domestic academic and university science. 

There is a large pool of educated and skilled work force. 

This capital creates real preconditions for development of knowledge-intensive production and clusters of "knowledge economy". 

In these advantages and potential I see the foundation for development strategy until 2020 and beyond. 

Realization of this development potential will allow us to get out of the crisis period in the new quality, with high economic status, with a proper place in the new global division of labor. 

In order to change the situation fundamentally, we must build a democratic political system and a modern, competitive state government. 

They are founded on the rule of law, developed legal culture, balanced representative democracy, strong government, effective public management. 

Nowadays, Ukraine needs a qualitatively new economic model, based on high productivity and production efficiency, active investment in the implementation of technological innovation, favorable climate for citizens’ business activity. 

The priorities should be humanistic development, new quality of life of the people, creation of all necessary conditions for the maximum uncovering of their creative potential. 

I believe these are priority objectives of the policy of reforms, initiated by me in 2010. And first steps have already been made. 

We have jointly developed the program of economic reforms; the Committee on Economic Reforms has started working actively. 

A number of important laws have been approved, including the constitutional law on the foundations of domestic and foreign policy, the new budget and tax codes. 

Last year, we have also started reforms in various areas – judicial, regulatory, governance, education and healthcare. 

I have supported the community initiative to establish the Constitutional Assembly, whose aim is to develop proposals to update political system and make appropriate amendments to the Constitution. 

All these are only a part of our undertakings. 

However, giving an overall assessment to the work of the authorities during the period, can I be satisfied with the primary results? 

Anticipating critics and opponents I would like to say openly - no. 

Out of all the ideas and plans for 2010, we managed to realize only a third. 

What do I believe is the cause of poor performance? 

First of all, 2010 proved that the government and the society were ready to accept only a part of the proposed changes. 

The bureaucratized state machinery, which has been able to survive under any government, under its own inertia is trying to preserve its usual management mechanisms, its administrative capacity and corruption schemes of shady earnings. 

National businesses, both large and small, have chosen a wait-and-see attitude of either critics or observers. 

Even the so-called business protest squares were rather a critical reaction to the actions of the Government, than the productive proposals with concrete and feasible projects for the government. 

Finally, during 20 years of independence, millions of our people have grown tired of the expectations of quality changes. 

In some ways, the society has learned to survive by its own strengths and capabilities. 

And I understand the people fearing that any radical changes could worsen their already complicated life. 

The conclusion is one: we must crush the practice of procrastination and inertia, overcome the embarrassment of politicians and bureaucratic sabotage. 

The request for qualitative change has become a key requirement for the government, business and the public. 

But for reforms to become a common concern of the government, business, and civil society, clear, high quality, and socially significant landmarks for the future are needed. 

Our actions to modernize the country will be successful only if every step is governed by the goal of humanistic social development, strengthening and uncovering the potential of our human capital. 

This is precisely the content of the Millennium Development Goals, defined in the UN Millennium Declaration. 

And this humanistic content is incorporated in the package of reforms aimed at developing social capital. 

First of all, we need to eradicate corruption. 

Corruption in Ukraine is a systemic phenomenon. It erodes the state and humiliates every citizen, who is forced to defend his or her interests through shady relations with the officials. 

Corruption has now become a direct threat to constitutional rights and freedoms of citizens. 

Therefore, eradication of corruption schemes and urgent approval of anti-corruption laws is my absolute requirement. 

But even these steps are not enough. We can overcome shady and corrupt services, and corrupt rents only if the whole society rises to this struggle. 

I will support any initiatives connected to monitoring and exposure of the corrupt officials, wherever they work and whatever authority they possess. 

Combating corruption is also an important additional resource of economic development. 

I demand law enforcement sector and the judiciary to observe the law and fairness during the investigation of criminal cases and the passing of rulings. 

Only in that way can we put an end in the cases that have been of concern to the society for a long time. 

Investigations of abuse by senior government offices, crimes against journalists and well known public figures will be brought to their logical conclusion. 

The problem of drug abuse has been hushed up for years in Ukraine too. 

Currently, drug trafficking and the level of its organization have gained national threat level. 

Fighting drug abuse is a struggle for the future in both human and financial terms. 

Last year, we declared war on drug addiction and drug trafficking. I expect relevant proposals and a program of action from the Security Service and the Ministry of Internal Affairs. 

Separate subject of attention is healthcare. 

In this area, our primary concern is children, mothers and fathers. 

What is the main sense of healthcare reform? 

First of all, guaranteed basic medical services should be unconditionally backed up financially and technologically. 

This is a direct task for the Ministry of Healthcare. 

Family doctors, who will be responsible for and care about health of every child and its parents, should return to families again. 

Insurance healthcare should be available for those, who earn and use insurance services. 

Modernization of the economy, changes in the social protection system, healthcare, and other areas require new quality of education. 

For several years now, Ukraine has been in a fever of various experiments and innovations in this area. 

I understand the concerns of students, parents and teachers about the educational sector instability. 

But let's also talk openly about the real state of affairs. 

There are hundreds of universities, where formal approach to graduation prevails over quality.

Prevalence of humanities over technical education already leads to deficiency of such important occupations as engineers, technologists, designers, etc.. 

Even more acute is the situation in secondary schools and preschool institutions. 

Today, hundreds of thousands of Ukrainian schools and kindergartens barely make ends meet. 

The occupation of a teacher or a tutor remains undesirable. 

Gradual increase in teachers’ and tutors’ earnings, and implementation of the program "social housing" will allow to return confidence and hope of these wonderful people in the state. 

I am convinced that we all should be allies in the question of education reform. 

It is a national cause. I see education reform as one of the key tasks for 2011 and subsequent years. 

Overcoming corruption in this sphere, rational use of budgetary resources of the state and local government, training, introduction of modern technologies, opening widely available educational e-libraries are the key areas of the reform. 

I demand the Government to elaborate a balanced program of education reform, which enjoys broad social support. 

The reform of education must pass an extensive public examination. 

For my part, I will do my best to make these reforms backed up by the soonest introduction of modern technologies: computerization of schools, e-textbooks, databases of national and world literature. 

I am convinced that through the reform of education we will be able to approach radical changes in science, which too requires not only support, but also fundamental reforming. 

Universities, research institutions and research centers are our great hope; they combine fundamental scientific studies with practice, and innovative technological solutions. 

Rapid commercial implementation of scientific discoveries is the key to development of innovative economy. 

Therefore, the reform of science, in my opinion, should be closely linked to the development of national innovative infrastructure. 

Another priority of social change is the reform of pension system. 

I have lots of remarks about the ideology of recent developments. 

I am expressing them directly and openly. The main objective of the reform is to ensure decent living to our parents, while ensuring high level of protection of younger generations, our children. 

In order to achieve that, we need to improve the situation with the Pension Fund, prevent its depletion, and put an end to its dependency on the state budget. 

It is necessary to finally abolish unjustified privileges. 

Only the quality of work and personal achievement should be the criterion of the level of pension. 

New mechanisms of accumulating the contributions made by people during their working life are needed. 

Finally, we must ensure maximally effective use of insurance savings as a resource for economic development in the areas guaranteed and protected by the state. 

As a result, pension system of the future will stop being a burden for the state. 

It will become an effective and reliable source of social support and an additional source of economic development. 

More topical than ever becomes implementation of new cultural projects. 

I am convinced that public broadcasting development, "Culture channel” modernization, establishment of genuine cultural and educational center at the Mystetskyi Arsenal museum complex, development of contemporary Ukrainian cinema, opening of a library of Ukrainian and world literary heritage are the practical projects that will provide new quality of education and knowledge for everyone, regardless of age and place of residence. 

Dear fellow countrymen! 

Dear guests! 

Economic progress that has started last year is only gaining momentum. 

Already this year we have identified 21 directions of reforms. 

And each of these directions has an implementation plan and is clearly described in the National Plan of Action, whose draft is now ready for implementation. 

However, the ambitious goals we announced in 2010 require deeper understanding and new policy emphases for the long-term perspective - at least until 2020. 

The main long-term challenge we face today is increasing the pace and quality of economic competitiveness growth, and improving productivity. 

Let’s face it: national economy still remains largely ineffective, and dependent on the conditions at external financial and commodity markets. 

Old class of technology and products with low added value remain dominant in the structure of domestic industry. 

Basic industries are extremely costly. 

The level of GDP energy intensity in Ukraine is still above the average for CIS countries and almost threefold compared to that in economically developed countries. 

And this is one of the main causes of our dependence on energy imports in unreasonably large amounts. 

Therefore, top priority for Ukraine in the medium term is accelerating innovative development, technical and technological renewal of production lines, development of production of the 5th and 6th technological structure. 

Clearly, restructuring national industries in Ukraine, raising their efficiency and competitiveness will require significant investment. 

Therefore, the success of innovative strategies will directly depend on the ability of the state to ensure favorable investment climate, create appropriate conditions for using financial, technological, and organizational resources for innovative purposes. 

With that mind, 2011 should be the period of building a new legal framework of protection of the rights and interests of investors, introducing modern mechanisms of industrial policy and providing state support to high-tech enterprises and sectors of economy.

At the same time, there is considerable unrealized potential of domestic investment in Ukraine. 

In order to mobilize these resources, we need to arouse interest in a citizen to invest in the future. 

The Government has all the necessary mechanisms for that.

In the Committee on Economic Reforms, we have identified three important still unused development resources. 

The first is deregulation and promotion of entrepreneurial initiative. 

Under the condition of quality and systemic regulatory reform, we can expect significant effects next year – additional, compared to the last year’s, GDP growth by 2%, and revenue increase by at least 6 billion UAH. 

Special attention should be dedicated to the development of small and medium businesses. 

Middle business is the one oriented the most on innovation and breakthrough technologies. 

Effective use of public-private partnership mechanism will allow us to jointly form new industries. 

The second is speeding up privatization. 

If the process is organized rationally, the state budget can annually receive additional tens of billions of hryvnias. 

At the same time, effective owners will unblock the process of technical and technological modernization of production, allow the increase of productivity, and facilitate state budget revenues growth through additional tax earnings. 

The third is land. 

At present, the moratorium on sale and purchase of agricultural land hampers the development of domestic agriculture. 

The moratorium makes the development of effective agricultural enterprises based on the concentration of land ownership impossible. 

Therefore, measures to introduce a regulated market of agricultural land should be a priority and should start immediately. 

The main task is to launch in the coming years a proper land market and simultaneously create reliable legal guarantees of land use for its intended purpose. 

At the same time, I would like to emphasize that all the steps in this direction will be made in a broad dialogue with the public. 

No family working on land will be discriminated. 


Dear Colleagues, 

Ukraine's future as a prosperous European state depends primarily on us all. 

Therefore, security and defense sector reform becomes especially important. 

Admittedly, there has been no adequate attention dedicated to this constitutive component of the state during twenty years of independence. 

For a long time Ukraine has been "consuming" its security resources by using the heritage left after the collapse of the USSR. 

Today, these resources are almost exhausted. At present, Ukraine's security and defense sector is critically weakened. We are working now to improve the situation. 

Radical decisions were approved in 2010 on the development of national military-industrial complex. A new scheme of management was created. 

In 2010, we have prepared the updated National Security Strategy of Ukraine. 

Qualitatively new military doctrine has already been worked out, which takes into account the changes in military-political situation and proceeds from the non-aligned policy of our country. 

A new concept of reforming the Armed Forces of Ukraine is being prepared, which will define a new model of the Ukrainian Military. 

In this context I would like to repeat that non-aligned policy is the cornerstone of Ukraine’s foreign and security doctrine. 

Non-alignment is considered by Ukraine as a consistent position to protect national interests without participation in military alliances; it creates opportunities for development of partnership, mutually beneficial relations with other nations and international organizations in all directions. 

We proceed from the understanding that most of the modern challenges and threats are global. 

Overcoming them requires the world joining efforts and elaborating common approaches to regional and global security. And Ukraine is ready for such cooperation. 

Our main priority today is supporting the course towards global nuclear disarmament, active participation in creating all-European security system and finding ways of eventual demilitarization of the European continent. 

Ukraine will be consistent in supporting the idea of nuclear-free zone in the Central and Eastern European region. 

Our country is open to such a dialogue and cooperation with all partner countries and international security organizations. 

Specifically, Ukraine will continue its cooperation with NATO and the implementation of joint projects with the OSCE, CSTO, and other regional security structures. 

Ukraine has been and will remain a contributor to global scale peace and stability. 

Ukraine will continue to actively participate in the UN peacekeeping activities. 

For over a year now, Ukraine has been implementing a new foreign policy course, which is based on the concept of national pragmatism. 

Its basic elements are non-aligned choice, ideologically neutral policy of partnership in relations with Russia and CIS countries, the European Union, the United States, Turkey, China and ASEAN countries, other countries and regional groupings. 

Having set aside ideological cliches in its foreign policy, Ukraine was able to significantly expand the number of partners, develop new vectors of diplomatic activity. 

Contacts with Central and South-East Asia and Latin America have started improving. A breakthrough has happened in relations with the People's Republic of China. 

A fundamental component of the concept of national pragmatism is the strategy of European integration of Ukraine. 

Today, Ukraine is in an active process of negotiations on the Association Agreement. 

Signature of this agreement will create conditions for full integration of Ukraine into the European economic, social, cultural and legal space. 

Already this year, we aim to resolve differences in positions by compromise and finally approach the signing of the Association Agreement and the Agreement on Free Trade Area. 

In 2010, Ukraine and the EU have made a qualitative step forward in the field of visa-free dialogue. 

During the Ukraine-EU Summit, an Action Plan to liberalize visa regulation was announced for Ukraine. 

To further advance towards visa free travel with the EU, we must perform a number of technical tasks in 2011. 

Particularly those in the area of document security, migration, public order protection. 

I am sure that by the end of the year we will do it. 

I would like to underscore that European integration policy has never and will not harm our strategic partnership with Russia. 

For Ukraine, normalization of relations with Russia has become an integral part of its European choice. 

In 2010, we completed an important part of our bilateral agenda: we restored the full-fledged dialogue, economic cooperation and reached a new formula for strategic partnership between Ukraine and Russia. 

Another evidence of the seriousness of our intentions and a logical result of joint work in the near future will be the signing of the Declaration on the Contents of Ukrainian-Russian Strategic Partnership. 

However, our principled position is that bilateral relations should be based on mutual respect of national interests. 

Based on that, we are now considering the question of Ukraine's cooperation with the Customs Union. 

I believe that further development of relations with the Customs Union will be based on a new contractual framework of free trade agreements and possibly on a "3+1"packet cooperation agreement. 

This will allow us to provide for a real rapprochement of the European and the Euro-Asian economic spaces. 

We will continue developing strategic partnership with the United States based on the Charter of 2008. 

Here we attach priority importance to political dialogue in security area, cooperation in fighting international terrorism and conflict resolution. 

Ukraine will remain a reliable partner of the United States in maintaining strategic stability and security. It is our consistent position. 



Dear compatriots! 

Our task is to pull Ukraine out of the historical "den" of transitional period, where it had gotten due to ongoing crises, and struggle for power and property. 

Our task is to ensure implementation of the unwritten, but essential and inalienable rights of every citizen to free development and success, to honest life and ordinary human happiness of living in a just, free and open society. 

We must bring fairness and the rule of law into practice. 

A crime must be condemned and punished - morally, administratively and criminally. 

I am confident that this year we will change people's attitude towards the law and re-inspire in people faith in the fairness of law and irreversibility of punishment. 

Ukraine should become a contemporary XXI-century state, not a periphery and a source of resources for the development of others. 

It must become a strong, modern political nation, which makes history on par with the most ambitious and energetic societies. 

We will ensure the progressive development of democratic institutions together, and create together a new Ukraine. 

In these tasks is the philosophy of reforms, the meaning of the idea of modernization of Ukraine. 

Realization of these objectives, I am deeply convinced, is our common national purpose. 

Thank you.


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