The President of Ukraine Petro Poroshenko spoke at the opening of the fifth meeting of the regional development Council, which was held in International exhibition center in Kiev.
“Development. This word in the name of our organizational and discussion platform and is a key theme of today’s meeting. It is a logical grouping, it reduces to a common denominator all the items on the agenda of our meeting today. The issue of minimum wages, its impact on business and budget, the recovery of Bank lending, decentralization, road infrastructure, health reform and changes in General secondary education.
Another year and a half ago, the situation in the country was such that about prospects of development we could only dream of. Now there is reason to say that the beginning of real economic recovery, and have the opportunity to begin the transition from survival tactics to our state’s overall development strategy. Forced, however, I will be in this address to dwell on the risks that this strategy threatened. They are mostly, alas, are political in nature and very dangerous.
Friends, imagine, three years ago the default and complete collapse seemed almost inevitable. Then the economy is simultaneously hit by the war, the closure of the Russian market and the fall in world prices for basic goods of Ukrainian exports. Unreformed economy and unbalanced financial system, it would seem, leaves no chance to withstand such a shock.
All of the Ukrainian government — two Cabinet of Ministers Arseniy Yatsenyuk and the third Volodymyr Groysman had no other choice than to go on a very strict, principled and unpopular. The event was coordinated with international financial organizations, which supported my team has supported Ukraine in this difficult time. Although these steps, unfortunately, was extremely difficult for people, but without them, I can assure, it would be much harder. I have repeatedly apologized for the forced solution, although I realize that most, perhaps, to forgive and not ready — it was too painful.
But these difficult decisions helped to reverse the trend! Of GDP by the end of 2016 increased by 2.2%. In the fourth quarter, growth accelerated to nearly 5% per year. Maybe it’s not as much as I would like, but in 2015 when the effect of Russian aggression has impact in full measure, the economy fell by 10%.
Now comes alive industry shows a growth of 2.8% by the end of 2016. I am sure in 2017 we have the same positive Outlook. The industry most affected by the war, because a loss of up to 20% of the industrial potential of the country. However, industrial growth had stopped three years before the aggression in 2011, and I don’t know if we turned finally into a positive this multi-year negative trend. Moreover, the consequences of the so-called blockade of Donbass — this is a real blow to Ukraine — first impact in the industry, in the industry.
Inflation, the burden of high prices — what people care about most… this year it will be measured, hopefully already a single digit, less than 10%. Until 2019, this is our common task, we need to reach the level of about 5% annual inflation. It is terrible to remember that in the year before it was 43%. It managed to curb.
Foreign exchange reserves melt like snow in the spring, and the February 2015 “shrunk” to almost 5 billion. Today, they amount to 15.5 billion. It is there in the first place went the funds received from international financial organizations, and 100% of the funds from the International monetary Fund. All heard how irresponsible politicians argue that the IMF money is eaten, stolen, or misused. It is a continuous, total and irresponsible lie. Every penny, which Ukraine received from the IMF, is carefully preserved in the foreign exchange reserves of the state and works for the stability of the national currency, working on trust to the Ukrainian state, the Ukrainian economy, Ukrainian financial-banking system. They are whole and intact are in the reserves.
And the hryvnia exchange rate, where’s the wood to knock on?— the third year is kept flexible, but relatively unchanged. Remember all pseudo-projections: we have course — 35, then 40, then 50 can’t hold it. This are our pseudo-patriots. We do what we do, and I emphasize again that is the one anchor of stability for businesses, including through cooperation with international financial organizations, we must ensure that without sharp changes to business and population, although the “blockade” and has created additional risks.
Almost completed the extensive process of rehabilitation of the banking system, purification from diseased and dangerous to the entire system of banks, and there were more than 80. The money was stolen from the banking system for 23 years. Today we lay the responsibility on the immediate hard and decisive steps to improve the system. However, in the interests of tens of millions of customers we spent filigree and immaculate nationalization “PrivatBank” has provided and will continue to ensure its stable performance. Although it does not eliminate the need and responsibility for clearly informing the public about where the money is “PrivatBank”, where depositors ‘ money.
Hope for the best inspire and indicators such as the accelerating growth in wholesale trade and in construction. More than 17% over the past year means that the industry, the construction will entail semi-detached, and most importantly, that investors are already feeling the future demand for office and residential space. According to the results of the latest quarterly survey “Business expectations of the enterprises”, top managers in the next twelve months predicted increase in production of goods and services, the slowdown in prices, the weakening of devaluation processes and the increase in demand for loans. I want to remind, the NBU discount rate in March 2015 reached 30%, and now 14%. It is still too much for normal lending to the economy, but the trend is encouraging.
Recruitment agencies report that expands the number of vacancies, i.e. jobs at the same time increases the wages offered for these jobs. Positive expectations for themselves and they are a material force that stimulates economic growth.
If to draw an analogy with the medical field, the situation in the economy looks like, and believe me, a well-informed person, I do not exaggerate. We, being already on the verge of the other world, was in intensive care and survived. Spent some time in intensive care and got to his feet. We were discharged and we went. And we don’t just get better, and, full of strength and energy, we will live happily ever after.
So, the trends that I have described, no, they do not cause euphoria. They are not yet perceptible to the vast majority of Ukrainians. But, as someone said of the philosophers, sometimes it’s not what happened, and what happened, what was avoided.
The results achieved have not led to the improvement of people’s living standards. In this respect, we are just starting to use the first opportunity to take the first steps, such as raising the minimum wage to the level of 3200 UAH; increasing of salaries of doctors, teachers, etc.; to increase spending on road construction, and that everyone in Ukraine can already feel it; to provide financial opportunities for local community development and more.
So, importantly we have created the preconditions for economic development, for the beginning of the restoration, and subsequently the growth of people’s living standards. And, it seems, this trend does not suit everyone nor outside Ukraine, of course… or inside, which itself is abnormally and pathologically… But the fact that a considerable part of political elite continues to be guided by the principle “the worse, the better”.
I’ve been talking about things that are not a direct constitutional responsibility of the President to approach the subject big risks of a political nature that threaten the economy and human well-being. So we realized that something has been achieved, and therefore have something to lose.
Too much of a danger is to fall back. And then all the sacrifices, all the suffering that suffered and endured people will be in vain. I would like to Ukrainian reality was the Greek mythical hero Sisyphus. Only he price of a Herculean effort lifted the heavy stone up the mountain like he was slipping away. He again lifted it to the top, and it will of the gods every time was slipping away. And so on until the end of time.
The main is the Russian military threat. And it comes not only from the occupied areas of Donbass, it hangs on the border line with Russia. The correct answer to this challenge is only one: if at the beginning of 2014, defense spending accounted for 1% of GDP, in 2016 our joint efforts, we brought these costs to 3.2%, and it is possible that this share will have to increase. If we consider the total expenditure on defense and security, they already exceed 5% of the gross domestic product.
Re-birth and strengthening of our Armed forces has prompted the Kremlin to step up its efforts at internal destabilization in Ukraine. Information warfare, the proliferation of fake news, sowing panic and despondency… Stimulation and simulation of the protest movement and manipulation to their advantage with some right-wing groups… the Promotion of a mischievous idea of early parliamentary elections to increase the representation of Pro-Kremlin forces, travel to Ukraine subversive groups, preparation of terrorist acts — these are the tools of the Kremlin.
Political risks threaten economic growth, of course, are early elections. I truly respect the elections, including early, as an element of democracy, the key technology of democracy. By the way, I recall that he initiated them when it was a real need and when in the Ukrainian Parliament after the revolution of Dignity was dominated by the Communists and the regionals. I regularly examine the polls and see no prospects, to result in an extraordinary vote, to be elected by Parliament with a large reforming potential than the one that now works. The campaign was put on pause all the reforms at least a year. And then the composition of the new Parliament would be so diverse that it would be impossible to hope for the creation of any coalition.
That’s why I am categorically against re-election, which requires louder than all the so-called broad opposition. But the core of this broad opposition — two parties that eight years ago, only by some miracle did not create a broad coalition. From 2006 to 2014 were varied in steering the state, and for which we still have, by the way, remove.
They have slightly changed the names, made easy rebranding, but this does not become new. Democracy works when current in power replace tomorrow, not yesterday or the day before yesterday. As the President just happy because it is good for Ukraine if before 2019, the year of the planned elections, presidential and parliamentary, the Parliament against the current government formed a modern alternative. An alternative to the more liberal, more democratic, more Pro-European than the current coalition. And most importantly — not a populist, devoid of the propensity to demagogy, and in the Arsenal which is not easy, and therefore unfair decisions.
Progressive populism is one of the major policy threats to growth. This phenomenon is not a purely Ukrainian problem, it is a problem throughout Europe. Last week, European leaders, and I also had the honour and pleasure to congratulate Mark Rutte’s victory in the elections in the Netherlands, and we have each other — with the defeat of right-wing anti-European forces.
However, the Ukrainian populism basically not right and left. It blocks a number of important reforms, without which there can be a healthy and successful economy, as transparent privatization, or the introduction of market of agricultural land.
However, you need to return to the topic of risk. Clearer kristallizuetsya the threat of anarchy and ataman. The bright proof of that are real and potential consequences of the so-called blockade of Donbass. The organizers showed himself as an unsurpassed master of political PR. They correctly figured out the point of pain, caught the wave of public expectations, found an exposed nerve.
But they lied to the society, because actually it was not a blockade ORDO. Well what a blockade when there is a hole on the border with Russia hundreds of miles away? It was a special operation aimed to push the occupied territories of Ukrainian Donbas to the Russian Federation.
We had a national security Council decision to suspend transport links with the occupied territory, and it was forced. It stopped the chaos into which the blockade was trying to plunge the entire country. Fighting for the return of the territories, we may have even had to carry out the exchange of commodities of our factories, those who were able to stay in the legal field of Ukraine. They paid taxes to the Ukrainian state, they were registered with the Ukrainian registration authorities, they are paid salaries in UAH through the Bank accounts, making it impossible for any flow of funds to the separatist group. The blockade has achieved, has created the basis to enterprises were captured, confiscated, looted. And we have no right to take products from companies that are now captured by militants. And that’s about it — the decision of the NSDC. Limited exchange of goods may recover, as soon as Russia and its puppets will return to the Ukrainian owners and the Ukrainian state stolen plants.
Due to the blockade Ukraine has lost the last sphere of influence on these territories. For those who want to give the land of Putin is an absolutely acceptable strategy. For those who want to these businesses, and this strategy was the anchor that keeps the occupied territories, hoping to return to Ukraine is a matter of life and death.
Last but not least it is necessary to analyse the economic consequences. The blow was inflicted on domestic energy, metallurgy, the budget created additional risks for the national currency.
Of course, we will find a way, but you need to spend time and money. I am not going to look insufficiently optimistic, but the Ministry of Finance predicts not only low loss but also the slowdown in GDP growth due to rupture of process chains in the industry due to the blockade. Who will now answer?
Today, the IMF at the meeting of its Board had to allocate the next tranche of one billion dollars, which is necessary for the further replenishment of the reserves to keep the stability of the national currency, for a very powerful signal to investors. Because they are investors lending from the Fund is considered as a reputable and responsible recommendation to invest or already own, private money to Ukraine to develop production, to create jobs.
Us together was a great work: the reforms we have convinced the Foundation that our version of pension reform is one that does not include raising the retirement age, and we received a positive assessment of economic reforms. And on Saturday, the question on Ukraine disappeared from the agenda of today’s Board of Directors. This is the influence of political risks, the danger of which I speak now. And today, we will have intensive talks: Finance Minister, National Bank Chairman, Prime Minister and I will participate in it in order to fix the results that was caused by the absolutely irresponsible behavior of Ukrainian politicians. I emphasize again — the reason for the deferral was the consequences of the blockade!
Of course, I emphasize that we must unite together in order to soon to get the tranche.
Today my day began with a meeting on the issue, where he attended the heads of state, and one of its members, by the way, offered to send to Washington as special representative of Ukraine Andrei Ivanovich, along with Semenchenko, Yulia Vladimirovna, together with Parasiuk… If “Samopomich” organized and patronized the blockade, then let it be and corrected the consequences of this diversion. Of course, the offer was a joke, and its author had made the remark, that in this situation we are not joking. And I, as President, must answer not only for their mistakes but for the mistakes of others.
In the context of the blockade have a serious claim to you, dear chairmen of regional state administrations, the areas where local councils had exceeded its authority and made decisions that go far beyond their regional councils, accountability, and undermine the situation in the country. Now they will fill foreign exchange reserves, regional councils? They will compensate losses of the state budget, they will compensate for the loss of jobs? They will be responsible for the return of these territories under Ukrainian jurisdiction? No! They now hid. In the same way as hid then some of you instead of the attacker to take a public position. You have a lot of arguments in order to convince the deputies and the society. Again, this means that you either did not conduct explanatory work and then stayed in the trenches, or even behind the stove. Or explained so that you will not understand. Or you lack the political authority in their fields.
I hope that this story will be a lesson for all. The government must take a politically active position, as well as some heads of regional state administrations were able to convincingly demonstrate to the state the position of the regional councils.
In today’s Ukraine, a lot of people confuse democracy with the Makhnovshchina. Tell me, please, the French Republic is a democratic country? About the incident at Orly airport heard it all? The attacker grabbed the military for the machine and immediately, at that very minute was shot. The country is a high terrorist threat, and we were in the belligerent country. Here’s a French illustration of the fact that democracy is not anarchy and permissiveness.
Monopoly on the use of force is not only the state, even when it is democratic. Dear, we and Putin do not need to lose statehood, if we will not learn. If you do not understand that all protest should be exclusively peaceful in nature, and a passion for weapons need to show only on the front. Fortunately, the opportunity for those who wish, now have a volunteer army efficiently equipped. Therefore, understand the position of head of the National police of Sergey Knyazev, who insists to prosecute the MP, who used violence, threats and rudeness to the police. The police also needs to be protected! Political protection. Man in uniform needs protection and our support, and it is not only the task of the President, the government or the Minister of the interior — is the task of each of you.
Dear ladies and gentlemen!
A key reform for the current year remains anti-corruption reform. Corruption also there are all bases to consider as a threat to economic growth and national security.
Earned anti-corruption infrastructure: the National anti-corruption Bureau and the Specialized anticorruption Prosecutor’s office, the Agency for prevention of corruption. However, I fundamentally do not want to share law enforcement new and old, good and bad. They all make common cause, and the improvements now evident in the work of the SBU, and in a serious process of creation and formation of the National police and of the prosecution service, of NABOO.
Started the system, there are many who do not believe that is possible, the system of electronic Declaration. State politicians shocked the whole society, including me, as someone who all your money earned over the many years of hard and risky work in the field of business. But, on the other hand, let’s not forget that before we are all hiding from society. And today we are clearly and firmly demonstrated openness and transparency. And that in some neighbouring countries excessive interest in money of the higher officials, you can get a prison sentence. Of course, these States cannot be and are not an example to us to follow, for comparison purposes only. It is now may they learn from us, because we made an important strategic step in the direct fight against corruption and in the formation of a new anti-corruption political culture.
“The system of corruption already there are gaps, they need to be expanded” is not I said, and the head of the project “anti-corruption initiative of the EU in Ukraine”. As for me, a fairly objective assessment.
Fan arrest corrupt officials, who almost daily cause a strong resonance in the media, not the cause, however, the feeling in society that the systematic fight against corruption has begun. Why? Because on TV talk only about the crimes but can’t show the penalty because of the lack, so far, appropriate judicial decisions.
Every day I see in the media and on social networks, what people write about the situation in the courts. And unlike citizens, have no right to publicly Express their opinions on specific cases. But as the guarantor of rights and freedoms of citizens — initiated and provided the launch of the reform of the judicial system. I am very grateful to Parliament, which endorsed the constitutional changes in terms of justice and a number of laws. Emphasize that it continues an unprecedented competition with the involvement of the public, the results of which will create a new Supreme court on the principles of openness and competition. The participation of sitting judges, and candidates outside the court system, lawyers, scientists. At the start received more than thousand applications, now only a little more than five hundred candidates.
Check out the candidates on the criteria of professional ethics and integrity needs the High qualification Commission of judges, Public integrity Council, the High Council of justice. “With us, thank God, no one agreed and not agreed and not trying to do it” — these words your impressions of the work of the Public Council of integrity conveyed by one of its members, ex-warrior 92-brigade intelligence officer Leonid Maslov. Last night I saw his interview on one of the online resources. And that’s why this advice was created.
So, expect the new Supreme court work in may-June. Needs for these spring months to vote a new procedural law, which will ensure the transition of the judicial system chetyrehstennoy to trejdingovoj than complete implementation of the recommendations of the Council of Europe on this issue.
After the contest the Supreme court will finally start reorganizing the courts of appeal. New legislation allows you to take in the competitions part, again, not only judges, but also lawyers and scientists. Therefore, I appeal to all lawyers with appropriate qualifications and experience — join the construction of new vessels! The President did his job. And these courts are in dire need of Ukraine and Ukrainians.
But the attack pseudoactivity in Balaclava on the head of the High Council of justice last week — is not that other, as attempt to thwart judicial reform, to preserve the unacceptable status quo, to intimidate the judges and those involved in the reform of the court, and we try to present this situation to radically change. The state must and will provide judges and officials of the justice system adequate protection. And I demand from law enforcement authorities promptly and impartially investigate this outrageous incident and effective action by those bodies.
I am convinced that the most effective way of combating corruption is not only repression, and the removal of soil from which it grows: the decreasing role of the state in the economy, depriving officials of the impact on business processes; implementation of electronic forms management, management and communication of entrepreneur with state authorities. This is proven by the implementation of the system ProZorro, and the course on deregulation, which we implemented last year and continue this year.
For several decades, the ongoing debate about the fate of the tax police. I recall that a few years ago talked about the impact of station on business, the impact of fire on business, spoke about the influence of environmentalists, other. There were three sacred cows: the security service, the police and the tax police or the police, which no one even touch could not. I am sure that, unfortunately, attempts to find a compromise, yet at an impasse. I am sure that the time has come to make a decision and to put an end. My direct political will is that the structure of tax police should be liquidated. It is a job not muscular guys in masks, and “nerds” in white collar through analytical work. Therefore, there needs not power and analytical skills. Not brute force, mask-show, and efficient concrete work. Agreed that the meeting of the National Council of reforms with the active participation of the government, parliamentary committees, MPs, experts and the public will be further refined and developed the bill which I am ready to submit as urgent, short term has earned a new Service of financial investigations as a fundamentally new, intellectually-analyzing.
Dear ladies and gentlemen!
Being in a circle of representatives of local communities, of course, can not speak to the issue of decentralization. Local budgets increased from sixty-nine billion hryvnia in 2014 to one hundred and forty seven billion last year. This year should reach a figure of 170 billion. This will mean growth in the two and a half times.
The share of local budgets in the consolidated budget of the country has also increased and is very close to 50%, that never happened in the history of Ukraine. Consequently, revenues of local budgets grew at a faster pace relative to the growth of state budget revenues. And the last increase in the minimum wage doubled to 3200 hryvnia, has played an important role here, and the enormous benefit to local budgets.
The fact that you have received such a tremendous resource, does not mean that no one will be interested in and monitor the effective use of that money. No need to clear it with Kiev, that this was the meaning of the introduction of decentralization, but to keep them on Deposit accounts, having not repaired the road, not built schools, restored kindergartens, street lighting, having no real steps to ensure that each community felt real steps of 2.5 fold increase in local budgets is also unacceptable. Stress — what exactly, is up to you, but people need to see that you have somewhere the new road, where modern lighting, and somewhere, sorry, and dump… the Money for this.
We at each of our meetings with the European Bank for reconstruction and development, European investment Bank, with their unique expertise, to meet with international representatives, including in this dump, had specific talks, and I am sure that now already enter into the European investment Bank, their expertise, our French partners, I spoke with the French government… you will be assisted, but the people of Lviv alone with this problem will not leave. Communities should determine which projects in the first place they need Finance.
We, in turn, at the Central level did a great job on attracting resources of international financial assistance programmes for development of regions and local communities. What is not an invention. Some local councils have worked with this 5 or 10 years ago, attracting the resource. But today there is money, and this international assistance is an important additional resource that requires particularly effective use in the interests of the communities in the interests of every citizen of Ukraine.
“Over the past two years, Ukraine — under rather difficult circumstances, had made great strides. It is now crucial to move from enacting legislation and establishing institutions to fully implement these reforms to Ukrainian citizens can reap the fruits of this work” — these words, which EU high representative for the common foreign and security policy Federica Mogherini, a great friend of Ukraine, a few months ago, commented on the joint report of the European service of external influence and the European Commission. “Ukraine, — said in the report, is introducing an intense and unprecedented reforms in the economic and political systems; its democratic institutions and further restored”.
Change and transformation we began in 2014. In 2015 the first shift was only evident by the reformers. In 2016, they have already noticed and praised by our foreign partners. It is extremely important to 2017 went down in history as the year when change became tangible for a wide circle of our compatriots. This is the task that I set before you.”