Tymoshenko transparency initiative: overcoming barriers to the ukrainian investment climate

Thank you for being here.  I am beginning my foreign travel schedule next week to Brussels to further our European Integration efforts, but in reviewing my governmental planning efforts over the last 30 days, I felt it important to take the time to meet with you first, hear from you, and communicate to you what my government has accomplished and, more importantly, what we are going to accomplish in very short order. 

In sum, I wanted to give a push, if you will, to our “Contract with Investors,” which was launched during the election campaign. This represented a successful effort of collaboration and communication with members of the business community.  Many of you present here today had a hand in that and I thank you.  We now meet again to continue that effort, to lift this critical issue back to the top of the priority list of a government that is very much focused on reform.

Since taking office, we’ve accomplished quite a bit, especially in light of the timing between the election in September and our ability to convene the government in December.  What have we been doing?  I’ll mention several things here today that are quite material to this audience:  the budget for 2008, the Program for the Government that recently published and, of course, our historic agreement with the EU to permit WTO accession.  We will then speak to specific issues related to ways we intend to improve the investment climate.

By law, due to the timing of the elections, we had less than two weeks to pass a budget and less than 30 days to establish a Government Program.   We accomplished both, and while the budget is imperfect, all constituencies have agreed to make amendments to it at the end of the first quarter of this year, around the end of March, once we’ve had time to carefully review the situation and hear from all stakeholders.  While we plan to make significant changes to the budget, we believed it imperative to comply with existing mandates; our efforts to reform cannot overrun our commitment to the rule of law and transparency.

On WTO accession, my government acted swiftly to overcome the single most important obstacle to our membership in 2008.  As you by now know, Vice Prime Minister Nemyria traveled to London to meet with EU Trade Commissioner Mandelson and resolve, to both parties’ satisfaction, the dispute that prevented Ukraine from enjoying the unique trade opportunities presented by WTO membership.  That is swift and decisive action, action that is unique to this government. 

On all measures, we’ve followed the law and adopted our plans in the most transparent manner; too quickly for some, too slow for others, some say more, others say less; and as with any government effort, too few are completely happy with the outcome, and that is the nature of compromise, which is the core of any government implementing democratic rule. 

Transparency will be the theme of this meeting today and of my government going forward.  Whether you agree with any specific policy or not, the key point is the following – in less than 30 days my government identified, clarified and then executed on key issues:  absolute transparency, no disputes on process or legitimacy.  Our “Transparency Initiative”, referred to by some as the “Tymoshenko Transparency Initiative” ("TTI"), is going to be our approach on the major hurdles impacting our investment climate – great challenges indeed.  Some imply cynically that these challenges cannot be overcome; I disagree.  Everything we do is going to be in accordance with this philosophy, open dialogue with stakeholders, as we are having here today.  This is our message:  how something is done is critical to the legitimacy of its outcome.

In our effort to integrate more fully with the European political and business environment, we have been working closely with key advisors, including the EBA.  In consultation with them and others, we rolled out the “Contract with Investors” during the campaign, a significant success, we believe.  Feedback from you has been encouraging on this count, and we appreciate your communication with our new government.  

Today we are taking the next step in improving our investment climate, in this case increasing transparency in the business environment.

It must be said that you take a certain amount of risk to invest in Ukraine; you must also take a certain amount of risk to change the way Ukraine is governed.  We are in this together – if I am not successful in improving this investment climate, I cannot be successful as Prime Minister.  It is my responsibility to this country.

The theme of transparency is critical to how we will govern; it encompasses everything from combating corruption to the drafting of new investment laws to how we deal with our trading partners.  In addition to the theme, which you will hear repeatedly from me over the coming months, we have some specific steps to execute on today.  I would ask you to conduct some due diligence after this meeting; identify the numerous points we are addressing today in the “Contract with Investors.”  There are many.  First, as an example of “leading a change management program to develop the foundation of a modern government”, we are joining today with the investment community on a new approach, one based on communication and transparency. We are announcing the following:  

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• The adoption as a baseline of the EBA “Barriers to Investment” as a core set of principles against which my government shall work and by which we will agree to be measured – accountability is critical.
  
• The adoption as a baseline of the specific problems identified in the EBA in its “Action Plan” spreadsheet.  
  
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  • Both of these documents are available at www.eba.com.ua, and I have asked that they be published on the Cabinet of Ministers website as well.
    
  
  
• The creation of an electronic register by the government for commercial disputes that will be available to the public and media so that more light is shed on problems arising from the natural intersection of commerce and government.
  
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  • All corporations and individual entrepreneurs will have equal and direct access to the Prime Minister’s Office via this register. It will reduce the need for companies to believe they must hire lobbyists to get government action to improve the investment climate – those with money and privilege should not be the only ones who obtain governmental results.  If that were the case, where would that leave SME’s, which we believe are critical in growing this economy?
    
  • This register will be reviewed for problems with regulation, legislation or decrees, specific items for governmental action.  It is not for private party commercial disputes.  The government will not take actions on issues for the courts.
  
  

And who will be responsible for resolution of these problems?  Who will be accountable?  Today I announce the initiative to create a small body of foreign and domestic advisors who will work with me to improve our investment climate.  This will be called the Investment Advisory Council, part of the Tymoshenko Transparency Initiative.  Members will come from business abroad and entrepreneurial activity here at home.  This will not be a traditional investment advisory panel as we’ve had in the past, some of which existed in law but never actually convened.  This will be a group that agrees to come on board to work – not friends or vested business interests. 

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• This group will coordinate through Office of the Prime Minister. I will personally attend meetings to review progress.  
  
• It will be composed of business professionals, executives, experts in corporate governance, change management and public policy, for example.   Names are currently under consideration, and we will be engaging in a consultative process with many of you here today for your recommendations.  Integrity, character, experience, willingness and time are critical determining factors.
  
• The EBA will participate on the Council in a “watchdog” role.  Because the process is transparent, it can be held accountable – if the objectives are not accomplished, the EBA and others will be certain to speak up, early and often.  
  

My challenge to you, the entire investment community, is the following:  My government is here to speak with you about specific issues; we are taking on board your recommendations and offering our own proposals for your consideration.  Engage us, communicate with us and hold us accountable – that is the purpose of a democratic government in a civil society in which we are all stakeholders.

This is the type of transparency this government seeks in the Transparency Initiative – and this is just the beginning.  Pay close attention; this theme will permeate our policies and actions.

Do not say it is business as usual in Ukraine – it is not – and the discussion here today, which begins to fulfill our obligations in the Contract with Investors, is evidence of that.

I thank you for your time today.