Address by Leonid Kuchma, President of Ukraine, at the ceremonial meeting on the occasion of the 12th anniversary of Independence of Ukraine

August 23, 2003

Dear participants of the ceremonial meeting!
Distinguished guests of Ukraine!
Dear fellow citizens!

The historic calendar features the generous month of August. Once again everyone is saying at this blessed moment hallowed by the will and happiness: “Happy birthday, dear Ukraine”.

Another anniversary of Ukraine’s Independence is not necessarily the time to sum up the accomplishments of our country, but also the date when we should answer the most topical questions of the present. The most important of them is HOW the leadership of Ukraine assesses the road overpassed and WHAT it has planned for the future.

All of us again and again are recurring to the destiny-making summer of 1991. It has been so till this day, so it will be in hundreds and thousands of years to come. Since the event, which sheds light over our hearts, rises by its greatness over all of us, Ukrainians - dead, alive and yet unborn, rises to the very summit of our national identity, to the summit to which long ages full of sufferings and struggle for freedom lead. And from which the unbounded horizons of the new ages of happy free life are seen.

The great things are rightly said to be seen at the distance. Those who will come to this beautiful and free land after us might deeper and more comprehensively realize the magnitude of what happened on August 24, 1991.

However, we have one but tremendous advantage over next generations because no one but we, the present generation, gained the Independence of Ukraine.

Dear fellow citizens!

Today, the new time counting rises over us at the scene where the history is being made – Ukraine has turned twelve.

Exactly the same period of 12 months the Earth makes its one full turn around the Sun. This cycle is considered to be the optimal in all spheres, including the social and historical ones.

For Ukraine the 12th anniversary of independence is to some extent symbolic. It is symbolic because it has happened more than once in our thorny history that our country suffered fatal losses exactly after exhausting twelve years.

The tragic 1930 turned out to be such a year when after a twelve-year period after the adoption of the Fourth Universal declaring the State Independence of the Ukrainian People’s Republic, our country was on the brink of the biggest forced Famine in the history of mankind. That time millions of owners of the richest black earth on the planet paid their lives for the natural aspiration to freedom and the right to farm their own land by themselves. 1660 was such a year when Yuriy Khmelnytskyi who handed over Ukraine under the rule of Rzechpospolita betrayed a twelve-year work of his father Hetman Boghdan, the cause of the Great Ukrainian Rebellion.

I do not like to become like the cynics who say: history teaches anything but nothing. This day each of us returns in our thoughts back to dramatic and imbued with great expectations events that took place 12 years ago. Alongside with statesmen who that day voted in favor of the Act on Declaring the State Independence of Ukraine and thus stood at the roots of the current Ukrainian state I have the right for historical conclusions and generalizations.

Currently we are finding ourselves in that stage of our development when the first twelve years turn around the sun of our independence was completed. This milestone figure sets our minds to depart from the stage already covered to a genuinely new one.

How could we characterize the first circle in the open space of sovereign existence?

I would suggest our ascent to the orbit be conditionally outlined as surmounting 12 stages. Our high trajectory movement of asserting Ukraine, this new state planet in diverse galaxy of modern globalized civilization, passed through them. This cyclic ascent was marked by twelve challenges that studded our historic road.

The first one is the sweet word “freedom”. We all remember how in the first years of independence while celebrating this day we declared the state independence of Ukraine as the greatest achievement. By the God’s will brought into life by the present generation of Ukrainians this time happy for us historic scenario, we are witnessing and participating in, is being realized.

And if not long ago the very fact of emergence of a new European state might have arisen astonishment, today however, the truth should come into our bones and flesh that the independence of Ukraine is not only the most important event of our age, but also an inextricable condition for successful, safe and happy life of each of us.

Today there is no force either inside Ukraine or outside capable to pose a real threat to the independence of Ukraine. Friendly and good neighborly relations bind us with all our neighbors. Signing the Treaty on the Regime of State Boundary, Cooperation and Mutual Assistance in Boundary Matters between Ukraine and Romania became the final chord that formulated relations with them.

The second challenge is the state building itself. It immediately became clear that building Ukraine is not easier than fighting for it. Upon declaring independence a rule entered into play that could be paraphrased that only a state able to stand up for itself is worth something.

At its early stage the state could not but be strong with centralized responsive power able to adopt decisions swiftly and realize them effectively. The time demanded a presidential-parliamentary way of state governance.

To protect and strengthen itself the state adopted a necessary form of the power, but not the people coming to the power.

By the end of the present cycle Ukraine is full of strength and energy. The first stage of historic development has not exhausted our country but hardened it.

However, we have stepped upon the threshold of a new stage where clearing the hurdles requires higher executive skills. The time has come for a drastic rejuvenation of power.

Dear participants of the gathering!

After presidential elections of 1999 you remember me saying in the inaugural speech: “You will see a new President emerging”. Both now and then I have primarily referred to the actions of the authorities that would make them more efficient for the sake of citizens.

In 2000 an attempt was made to change the situation by means of referendum. But then as it seems too high standards were set and changes were blocked. But society as well as majority of political forces has gradually realized the necessity of such changes.

Thus carrying out political reform is becoming the key element of the realization of Ukraine’s national interests in the field of internal affairs.

As early as in 1999 I was considering a political reform. And the decisive argument in its favor has become a factor I would like to mention for the first time. Thoroughly analyzing our history since hetmans’ times one may conclude that parliamentarian-presidential form of governance suits the best way possible the political psychology and archetype of our people.

The Ukrainians do not like to delegate much power to hetman or President. Many of us are comfortable with a leader of the country being controlled by a strong people’s representation that is a parliament. Though I would like to emphasize that it should be a strong parliament accountable to people rather than a gathering of populists who in chase of “witticisms” may sacrifice the interests of people and state.

What were the further actions of the President? Right after presidential elections of 1999 for the first time in the modern history of Ukraine 11 factions created the parliamentarian majority that supported then existing government. And it is not my fault that it did not work with the majority in a proper way. After that Ukraine entered and actually has not left a permanent election campaign - the period which ended only in spring of last year.

The country seemed to have another chance to shape a responsible authority. For this chance we should be thankful only to you, dear fellow countrymen. To you, who overwhelmingly voted for those political forces that offered a democratic way of the development of Ukraine.

The outcome of the elections would have certainly been much more tangible if all those elected by you who share the stated values teamed up in the parliament. If such had happened for the first time in our history we would have had a parliament where cooperation but not mutual bickering, indeed responsible policy but not everlasting outbursts of ambitions would reign. Then the politics of the Ukrainian state could have been considered truly efficient.

I can only regret it did not happen.

Nevertheless despite both left-wing and right-wing opposition the first ever in the modern history of Ukraine coalition government was created which alongside with the parliamentarian majority signed the political agreement on cooperation and shared responsibility. Still it was only the starting point in cooperation between the mutually responsible parliamentarians and the government. But this fact proved that the projected political scheme can be functional.

The next step was a nation-wide discussion of the political reform which, despite what the authorities’ ill-wishers had prognosticated and had strived to thrust, in no way resulted a formal “agree-to-anything-leadership-comes-up-with”.

The discussion proved that the people were really interested in the proposed concept of the reform guaranteeing the high transparency namely: the people elect deputies, the deputies form the parliamentarian majority, the majority sets up the government and bears a complete accountability for its governing while the President remains a guarantor of the civil rights and represents the state abroad.

The unanimity over the majority of the principal standpoints within the society is reflected by the public polls. The reaction of the public opinion proved that the Ukrainians are an educated, European and modern nation that strives for democracy and political responsibility, a nation that is earnest about the destiny of its state, a nation that respects its rights and liberties.

When appealing to the wide strata of the society I stressed upon the necessity of accomplishing two goals.

The first one consists in laying down the genuine grounds for the political accountability that will allow sort out the sympathizers of the ruling government and the opposition. Every politician shall decide on whether he belongs to power or he is in opposition and as a result of such a decision the Verkhovna Rada will stop to look like a show-booth for the Fronde of the disgraced grandees who portray themselves as great dare-devils and oppositionists.

The second goal is to get the parameters of the political system of Ukraine closer to the EU standards. This “Europeanization” of the political system is badly needed to confirm by the real deeds and make more vivid our commitment to the course towards the integration into the European structures. The “European overhaul” of the Ukrainian politics I call for means assertion of Ukraine as a pushing force of the democratic changes among the Eastern Slavic countries as well as other CIS countries.

The constitutional reform was followed along 2003 by the harsh stand-off of the politicians and parties. Although during the elections to the Parliament as you well remember all of them campaigned for the political system change.

Meanwhile the President has made more concessions. I dropped the conception of bicameralism although I remain its hard advocate. I turned down the idea of decreasing the number of deputies that is massively supported by voters. Assuming the political compromise is in best national interests of Ukraine I agreed to recall my own bill to amend the Constitution.

As you are probably aware the consultations aimed at agreeing the new bill on amending the Constitution have been held this August. Almost all the political forces represented in the Parliament have participated in them. The work on a new bill is almost accomplished.

Despite some imperfections I believe that this bill should be adopted by the Verkhovna Rada because its endorsement by the constitutional majority is likely to be already guaranteed.

What is most important for me is that the agreement was reached regarding the core issue for the sake of which the reform had been launched namely the principle of forming the cabinet by the coalition of factions and parliamentarian groups. This principle safeguards the accountability of the cabinet to the society for its doings or inertia.

This compromise among political forces determines my attitude towards the bill agreed upon.

That is why on my part I as Head of State am ready to support it.

Thus one may stress that we are about to reach some kind of a historic compromise between those who for a long time have been on opposite sides of the political barricades. Following the bitter stand-off the politicians show maturity and consent on key issues on which solving the development of democracy in Ukraine depends.

On the final stage of the political reform - amending the Constitution of Ukraine - I call upon all the participants of the constitutional process to abandon their ambitions and to act exclusively for the sake of the people’s interests and democratic future of our state.

The changes of the political system are determined by the objective political needs. The maturity, competence and capacity of the public political forces in Ukraine have recently considerably strengthened. The present political situation now drastically differs from that we had in the mid-90s. The fact is obvious that those who were looking for slowing down the political transformations and turning them into the usual meaningless rhetoric have seriously miscalculated. Now it is clear that the reform is categorically opposed only by those who are not interested at all in an accountable authority, by those who do not comprehend the real needs of the country.

However the most important thing is that the essence of the political reform has gained a real endorsement by the people. The common wisdom is as always simple and clear-cut saying that all the branches of power shall bear responsibility for the people’s welfare by having their competences optimally shared among them while these branches should be a whole state body.

After getting the nationwide benediction the constitutional reform cannot be reversible. We, dear brothers-in-arms of friendly branches of power, cannot afford to have our state stalled on the same phase of development when it is a time to proceed to a new orbit.

Dear fellow-countrymen!

The third challenge to the new Ukrainian state became democracy, which all of us had to learn.

Everything, including democracy, is learnt by comparison. But, on one condition – when equal for all standards are observed.

There is little use of the work of those international observers and advisers, who, looking at the other countries’ political landscapes, grew into the habit of turning the binoculars the reverse side every time.

They tend only to look at our mistakes through the magnifying lens, and do not want to see our achievements.

Rabindranat Tagor once incisively remarked upon the similar situation: shut the door before all the mistakes, and you will never let in the truth.

The democracy, as it is known, is vividly manifested by elections, when the people, who, according to the Constitution, exercise the sovereignty and are the sole source of power in Ukraine, delegate their power to those temporarily authorised to use it.

And so this exciting democratic competition in our country became permanent, with the fighters of visible inter-party fronts simply not leaving the electoral barricades, and the electoral campaigns themselves turning into the kind of hobby for millions of people. By the number of supporters these electoral championships may have surpassed football, the national favourite.

By the way, we should not make a fetish of elections, substituting by them, in the mass consciousness, “the programme of building communism”: there will be no heavenly manna after the presidential campaign. What will be is the ordinary life, when, as it is typical for democracy, the well-being of everyone will depend first of all on themselves, not on a mythical “messiah”.

The fourth challenge is the political culture, as a separate dimension of our post-totalitarian transformation. Just think: only twelve years ago we had neither our own state, nor politically responsible, experienced forces, capable of assuming the responsibility for the state building and implementing reforms. And the society, in its turn, was ready to vote for any apparently attractive programme or any big slogan. As you are aware, we had to pay a heavy price for some of those big slogans or such readiness of society.

But the problem remains. If we do not succeed in making changes to our personal, internal constitution, if our politicians do not discard the fetters of repressive psychology, the democracy, so much shouted about by the opposition “Mensheviks”, will remain a fiction.

The constitutional reform is just a change of the form of governance. It will work only when it is adequately filled with substance. The substance is the political tolerance, the nation’s mentality, the historical tradition, and, most importantly, the professionalism of politicians, i.e. the personal composition of government in all its branches. When we talk about the productivity of the European parliamentary models, we should keep in mind that it is only effective when that form is filled with that content. I mean the skill to play a professional political game by the rules that are equal for all and well-established over the centuries.

No one can doubt that such a government is unthinkable without an opposition to the authority. Where the opposition ends, there the triumph of totalitarianism begins. But, in democracy the relations between the government and opposition represent a civilised competition of alternative programmes of social development. I stress: a competition of alternative programmes, not permanent fisticuffs of the Middle Ages.

The most effective criterion of political maturity is the attitude towards the public opinion. It must be taken into consideration by the government and the opposition alike.

The fifth challenge is the omnipresent word “party”, which in the old times used to be raised to the status of an ideology icon, but in reality has set the teeth of social consciousness on edge.

Here, too, we can not escape the extremes: from one-party totalitarianism we have leapt directly to the multi-party anarchy. By the number of parties we have probably surpassed the whole European Union. But the number is not the point.

The mature political parties must be the supporting structures of the democratic systems, bearing full political responsibility to the society. It is necessary to engage legal mechanisms for their rapid evolution from disposable electoral projects to permanent political institutions.

The sixth is the market, which has become the most significant “brand” of the new age.

We have restored on the pedestal the tested by ages “original mother” of the economic progress – the private property, which was the subject of repressions in totalitarian system, and managed to create the new class of modern society – the class of industrialists.

We are right to express dissatisfaction with the national bourgeoisie, but it is the bourgeoisie that should become the pragmatic engine that will push Ukraine into the circle of the world’s most successful countries. On the other hand, the state should do everything necessary to promote the interests of Ukrainian capital abroad, make sure that the Ukrainian businesses get profitable contracts from foreign contractors, because this capital creates the national wealth and sustains real jobs.

The Ukrainian businessman has gone through a difficult period of formation. He is getting rid of the original shortcomings of the primary accumulation of capital and tries to reach the horizons of systematic and transparent business conduct. The resolute legal and administrative measures towards the separation of power from property and politics from capital should assist that.

Dear friends!

I am not indifferent to how President Kuchma will go down in history; only concrete achievement can tell that.

Ukraine inherited from the Soviet Union a part of its national economy. It produced only 20% of the output, which was realised on the domestic market.

The society produced goods which it did not need. In the military-industrial complex, which kept running 40% of production capacities, the close production circle amounted to merely 3%.

In the USSR Ukraine used to have a destructive balance of payments. It consumed only two thirds of the GDP it produced.

It was from this hybrid that the national market economy had to be created, on the ruins of the command-administrative system.

It would not be an exaggeration if I say that this challenge turned out to be the most difficult test for us, which 10 years ago threatened Ukraine’s actual existence.

Nevertheless, we have travelled the road from the lowest point in 1994, with the GDP decrease of 23% and inflation over tens of thousands per cents, to the present one, with the GDP growth of 20% over the last three years and inflation at 5%.

I would like to mention that both these indicators are at the world record level.

The reason for that is the validity of the reformist course, steadily pursued by Ukraine practically over all the years of its existence. And, most importantly, the dedicated work of our people, because victory on the economy front was prepared not in the ministerial offices or session halls, but in the work places of millions and millions of Ukrainians, well known for their diligence, who had backed twice in presidential elections the strategic political course of the state leadership and implemented it by their everyday work.

Strong and efficient government is slowly, maybe much more slowly than desired, gaining momentum, and with it so does the country. We have all the reasons to congratulate ourselves on the improvement of socio-economic situation. I express my personal gratitude to all our compatriots who contributed their efforts to this end.

For the first time in 12 years the realisation of a conception of Ukraine as a transit country has begun. I am speaking of, first of all, the building of the European motorways, which means thousands of new jobs in the country. The new express train service has been launched that connected the capital with major cities in Ukraine. The domestic air communication has been resumed.

It is very important that the positive changes have affected the high technology sphere, particularly the acceleration of progressive structural changes. It is manifested by the rapid development of manufacturing industry and machine-building. We have to note that our economy is developing mostly without the raw-materials factor. This gives the reason to hope for overcoming the negative processes of the crisis period.

There are certain achievements in the social sphere. The average nominal salary in the first six month of 2003 has increased to 413 Hryvnyas, which is over 20% more than in the first six months of 2002. The people’s confidence in the state is growing, as is demonstrated by the increase in the population’s investment into the banking system by approximately 6,5 bn of Hryvnyas over the seven months of the current year. Notable is the progress in the institutional aspect: the pension reform is being implemented, which will allow to increase the level of pensions in the nearest future.

Citing all those facts, I am far from trying to exaggerate the successes and embellish the situation. Despite the improvement in the economic indices, the social situation in the country remains complicated.

The social feeling of the Ukrainian people is rather anxious. Although the number of people who assess the socio-economic situation as “bad” is twice smaller than in 1998, many of our fellow-citizens feel fear of losing their jobs, not receiving the necessary medical help or failing to sustain the subsistence minimum of their families.

But all the efforts of the government are directed towards acceleration of the pace of positive changes. They will be impossible, unless the government gets rid of those who discredit it. Those, who have become a burden, who have covered their names in shame by their part in dubious operations.

This explains a number of my personnel decisions.

There will be no breakthrough in economy until every manager on his level starts to take his official duties responsibly. The most important of those I consider the efforts to attract foreign investments. I would like to reiterate: we will never resign ourselves to the fact that the economic growth, recorded over the last four years, has been achieved mostly owing to extensive factors and the increase in the population’s purchasing power; that the investment and innovation components of this growth remain insignificant. That is why one of the main criteria in assessment of the work of heads of ministries, regional and district administrations and city mayors will be the real state of attraction of foreign investments.

There are in place all the political conditions for attracting investments – there is nothing more to wait for. The Government has the solid backing of the Parliament, its programme has been supported by the majority of deputies, including the large part of opposition; the state budget was adopted in time, it is even being overfulfilled, the Ukrainian legislation is being improved and becoming more stable.

The seventh challenge to the modern Ukraine is consolidation of the fundamentals of legal state, increasing the level of security of our fellow-citizens.

Although criminalisation of society is one of the most popular subjects in the public opinion, and has not been speculated upon only by the laziest, it is the law-abidingness of our citizens that was behind Ukraine’s overcoming the period of deep transformations without serious social upheavals.

Our country represents the territory of security and stability on the European continent. It is so obvious that the labels of trouble can not be attached to its peaceful and balanced image. Ukraine makes its history within the legal field. And that is the centuries-old wisdom of our people.

However, the imperfection of legislation resulted in social processes, particularly economic, that went beyond its bounds and were driven into the shadow. The long-standing people’s adaptation to the double-morality, originating in the times of the “telephone right”, contributes to that.

That is why the shadow sector, particularly in the sphere of economic, financial and production relations, has grown to the size of national epidemic.

It is in the shadow that almost a half of the GDP is created; the third of all monetary mass turns over outside the banking system.

Resale constitutes two thirds in the structure of trade turnover, which amounts to 200 bn Hryvnyas. 40% of the credit resources turn over in the trade.

As a consequence of such parasitic outgrowth, the yearly outflow of capital abroad is no less than 1 bn Hryvnyas.

There are many reasons for such state of things, and one of the principal is the lack of protective mechanism against industrial piracy, smuggling and falsification.

For example, just the introduction by the presidential Decree of 27 December 2002 of state monopoly in the sphere of control over production and turnover of spirits and tobacco products had an immediate concrete result, which is striking.

In a month after the introduction of a holographic excise-mark the budget revenues from production and import of spirits and tobacco products only have increased by 80 m Hryvnyas and by the end of the year are expected to reach 1 bn Hryvnyas; and this is just the beginning.

Taking into account the fact that due to the Decree the considerable part of spirits and tobacco market will re-emerge from the shadow sector, the potential increase in budget revenues will amount to several billion Hryvnyas a year.

Let me go back to the problem of the shadow sector in our economy. As everyone is well-aware, one of the main causes of this destructive phenomenon is corruption, particularly in law-enforcement organs. I have no intention to cast doubt on the dedicated service to Ukraine of thousands of honest and diligent officers; among them there are those who sacrificed their own lives, guarding the law and security of other citizens.

I will not deny the achievements of law-enforcement organs, nor will I nihilistically criticise the entire Ukrainian law-enforcement system, especially as the state owes it a lot in funding.

But I can not help sharing my concern about the extremely low level of public trust to the representatives of the law enforcement organs. This is the direct result of getting into their ranks of those who blatantly violate the law, their official duties and officer’s code of honour. Being stuck in corruption, those people mar the reputation of the whole law-enforcement system and the whole state. A criminal in shoulder-straps - this phenomenon has reached the scale of a social epidemic, which is demonstrated by operational data and the opinion polls results.

I will give you only one example. The adoption of a presidential Decree on regulation of the market of alcohol products, which substantially increased the budget revenues, provoked counteraction of not only the criminal structures, but of those whose duty is to protect the state interests.

The intertwining of criminal structures and state institutions that are designed to fight them is a new challenge for us. People speak harshly about the cases of human rights violations and corruption. The image of a corrupted law-enforcement officer has such an odious colouring that people nowadays are more scared of criminals in the uniform, than of criminal offenders themselves. The cases of illegal detention are particularly scandalous.

In the place of eliminated petty racketeering often come extortionists, who use official or, even worse, law-enforcement IDs as a cover.

People, who practically betrayed their oath of loyalty to their country, seek to become patrons to criminal groups: their criminal purpose being the privatisation of law-enforcement system, when “pocket” officers, for a relevant reward, help criminal pseudo-businessmen to deal with their competitors.

The leadership of departments, entrusted with the task of fighting the crime, have for a long time maintained their ability to eliminate corruption within their ranks without interference from outside. This did not happen, particularly due to the lack of effective co-ordination of activity of law-enforcement agencies on the adequate level.

Corruption, particularly in the law-enforcement sphere, has become a problem of national security, which demands reaction and conclusions on the highest official level. In particular, the revision of functions and designation of such a constitutional body as the Council for National Security and Defence.

On the whole, I believe we have underestimated the considerable power potential of this structure. It is an opportune moment to correct this mistake.

The eighth challenge - His Excellency Person, which has to become the greatest value in the Ukrainian State not only in the politicians' declarations, but in the real life.

I will speak frankly: while erecting the state's frame, maintaining our place in the world, from zero-point creating the up-to-date financial-industrial body of the economy, we had to postpone for tomorrow the interests of the average citizen.

He did not always agree with such a consecution, but it was impossible to reap the harvest without sowing the field.

Right now we commence on the program development and implementation of the national social policy, The start of the pension reform and the release of the circle of the tax press - these are good signs of time. The gross measures of the people's well-being reflect the sound tendencies. However we should not ignore the feet that the most crucial problem in Ukraine is the poverty of significant number of the population.

We have to admit: for today only a small part of the population has benefited from the results of the economic growth. The society has split up into the needy majority and the minority that managed to adapt itself to the new conditions.

Against the background of the noteworthy overall increase of the economic activities for the last years no significant improvements on the eradication of poverty have been achieved. Combined with the flashy division of the population according to the income level, it makes a potential threat to the country's social and political stability.

The authorities have to care of the fair distribution of the so-called "public dividends" from the production increase, a proper budget implementation. A complex of measures in the interests of the poor people and the population with the average income has to be fulfilled.

With the economy increase the principally new opportunities for the resolution of these challenges have been created. The time has come to adopt a number of socially-oriented laws: on the progressive taxation of the super-scale personal realty, luxury etc.

It is worthwhile to consider of the progressive taxation depending on the natural persons' bank deposits.

I consider it is necessary to put an end to the shameful practice, when the richest people pay miserable taxes. The strengthening of the attitude of social responsibility among the well-to-do and very prosperous people of the country is the important precondition for creation of the normal psychological climate within the society.

The setting up of the effective system of the direct social assistance should become the unconditional priority of the social policy. I am sure, if such system had existed, the developments at the food market we faced this year would not have aggravated to such extent.

The responsibility for these occurrences lays both on the previous as well as the current Government. From another side, the attitude of some politicians, who repeatedly neglected economic interests of the country for the sake of solving of their political problems, cannot be called otherwise than irresponsibility.

Acting according to the principle "the worst is the best", they had been disrupting voting on the law on money laundering, blocking the passing of the bills, necessary for stabilization of the food market. This all deserves decisive public condemnation whereas the decisive actions of the state authorities that made impossible the aggravation of food crisis and stabilized the situation at the food market are worthy supporting,

It causes anxiety that under the conditions of the maintenance of the high rates of economic growth the paying off the wages debts has practically been ceased. This issue should not be in any cases beyond attention of the Government.

The crucial resolving of health care problems is connected with the implementation of the insurance health care, which should be accelerated to full extent.

I would like to draw Government's attention to the measures to be taken immediately. I believe that it worthy to eliminate the VAT on the vitally important pharmaceutical products of day-to-day consumption domestically manufactured, and to impose the limited extra charge on them.

It is also expedient to introduce direct subsidies to purchase medicines for our compatriots who reached the senior age.

We are lagging behind in resolving the issue of social accommodation for the representatives of the least protected strata of population.

We are about to work out a State program on providing of this category of people with water and heat counters free of charge. The savings of energy supplies will recompense expenses on such program.

On the state level we have to learn the rule that the free society and the market economy are not contrary to but require redistribution and leveling of income as the foundation of state's social policy.

The Government and the Parliament should model their activities keeping in mind the main priority - the Person, its salary and pension, education, health, leisure environment and spiritual demands. After all, if GDP is growing and at the same time the living standards are not sufficiently improving it means that we haven't achieved the main goal — a quality of people's life.

The ninth challenge. The meaningful word - "choice" - that each of us is being faced with every day and at every step. Yet nations make their strategic choice once and for centuries. This choice is based on national interests of the country, I can state that Ukraine's foreign and internal policy, on the whole, has been in compliance with its national interests.

In the foreign policy we have proceeded from the understanding that it would be the lack of foresight to ignore the way the world and the situation in Ukraine are changing. Moreover, these changes presented our country with a chance, for the first time in many years. There was rather simple, I would even say straightforward choice, either to keep ourselves aloof from the changes and thus to remain a play-toy of the mighty of this world, or to make an effort to integrate into these changes and to be active.

The current position of Ukraine in the contemporary world is directly evolving from the crucial and undoubtedly tectonic changes in the world after September 11, 2001. Terrorist attack on New York City has proved that neither economic strength nor state-of-the-art weaponry can withstand medieval demons of religious fanaticism and interethnic intolerance.

The other day - October 23, 2002 made us realize that the terrorist misfortune is near by.

Among those who lost their lives saving people in the World Trade Centre on September 11, 2001 was New York fireman, US citizen of Ukrainian origin - Ivan Skala. Yet during the tragic events in the Moscow's Theatre on Dubrovka on October 23, 2002 substantially more Ukrainians were among the victims, those who have been suffering or have lost their lives.

And the most recent tragedy. When on August 1, 2003 truck loaded with an explosive and driven by a terrorist-kamikaze entered the territory of Mozdok Military Hospital in the Northern Caucasus, 19-teen year old private Valeriy Laba was the only one to block its way.

Later, the Minister of Defense of Russia said that this private was the only one who really tried to prevent the terrorist attack and put him forward for a decoration with "Order of Courage". Son of Ukrainian parents was buried in Veseliy Hutor, 5 kilometers away from the City of Snizhnyi in Donetsk oblast where he was born. We cannot but react on the current challenges and do make our contribution to the international stability. Recognizing certain social unpopularity of the decision but proceeding from Ukraine's national interests the state of Ukraine has decided to send our peacekeepers to Iraq. Such unpopularity, by the way, is not purely Ukrainian phenomena - there are also many reservations in the public opinion in Spain, Italy, Great Britain, Poland.

Along with the politicians of these countries we are confident that this decision has been made in the interests of the current and next generations of our fellow citizens. Our ability to effectively act in the changing world was appreciated by the leaders of other nations and by the international experts on Ukraine including those who traditionally are distrustful towards Ukrainian authorities. That is very important, since during the 12 years of independence we were not able to create an effective system to protect our national interests abroad whereas the ill-wishers towards the state authorities long ago have turned flinging of mud at their own country into quite a profitable business.

Peacekeeping mission is becoming increasingly determinative factor of the foreign policy of Ukraine, specific feature of our role and behavior style on the international arena.

Relying on the professionalism of Ukrainian soldiers we pray God for their safe return to Motherland. Our servicemen should know - Ukraine's heart belongs to them. The state provides and will provide Ukrainian peacekeepers with all necessary means.

Coordinated vote in the Parliament regarding the sending of our peacekeepers to Iraq has proved that we could make difficult and ambiguous but necessary for the country decisions. Let me emphasize - we all together - those who are in power and opposition. I want to thank all - pro-governmental and oppositional forces in the Parliament who voted with the perception of the national interests of Ukraine.

Unfortunately, such a unity in the realization of the national interests has been reached far more rarely that it was necessary.]

Other direction of the authorities' activity is the political assessment of the complex fragments of the political past. By this I mean the Poland-Ukraine relations - as difficult as in all the European neighboring countries. The relations that should be strengthened and developed due to Ukrainian national interest's point of view.

Strong and civilized authority which is confident in its rightfulness shouldn't be afraid of dotting the "i' s" and crossing the "t's" in historical issues - thus realizing the modem European practice of mutual understanding and reconciliation. The joint Ukraine-Poland actions to commemorate the victims of the Volyn' tragedy have become an example of the realization of this practice.

At that the authorities were under the pressure both from the left and right but we got used to it though. In our joint declaration with the President of Poland Alexander Kwasniewski we underlined its main goal: mutual forgiveness - is the first step towards the full reconciliation of young generations of Ukrainians and Polish that have to discard the prejudices of the tragic past.

Ukraine and Poland have demonstrated the wisdom of good neighborhood by taking the reconciliation in the past as a principle of future cooperation. This is a sense of the modern European philosophy of international relations, when the postwar understanding made it possible to direct the nations' energy not at their fighting with each other but at their common social flourishing.

We have not only made our European choice but inflated it with the real content. By this I mean our persistent dialogue with the EU, a real progress on the way towards NATO-integration, intensification of the relations with our Western neighbors both which are already members of the Alliance or are about to join it in the nearest future.

The European choice of Ukraine is the turn back to our national identity, the reminder of what is alpha and omega of more than a thousand year-long historic way from the Christening of Rus-Ukraine up to the post-communist era.

Speaking about European choice we have to put an end to the declarations regarding the time frames of our EU-accession. More attention is needed to the improvement of the living standards, social guaranties for our citizens and democratic development. After all this is the prime essence of European choice for the society.

The expansion of the European Union has become a new challenge for our national interests. The steps taken by the authorities in this regard are well-known. They were pre­emptive and aimed at the protection of the people of Ukraine.

On the highest level, with the participation of the President of Ukraine there are ongoing negotiations with Lithuania, the Slovak, Czech Republic and Hungary. They should be concluded with a formula reached by Ukraine and Poland - visa-free procedure for the citizens of those countries in exchange for free of charge visas for Ukrainians.

Another sphere that needs our concentrated efforts - is strengthening of the economic component of the foreign policy. And I am pleased with the developments in this particular field. The last year's GDP growth in Ukraine was 2.5 times higher than that of in the EU countries.

There is no other way for us to get closer to each other than achieving multiplied economic growth rate.

Commonality of this historic task unites us with all our partners - CIS member-states and first of all with Russia.

At the opening ceremony of the Year of Russia in Ukraine I uttered the principles of our relations under the current circumstances that finally could be summed up as that we need each other as never before.

We have been living in another world for quite a short period of time and it drastically differs from those landmarks of our common history that we are referring to so often.

For being centuries-old neighbors our experience of state-sovereign existence is just in its twenties. From this standpoint we are at the beginning of the way having made only the first steps and ahead of us lies centuries - old distance for the two independent neighboring countries.

Our relations with our strategic partner - the United States of America - reflect the fact that Ukraine cannot belong to the countries with a minor role in the world's politics.

By this I mean, first of all, cooperation in resolving the most critical problems of the world security, settlement of the crises of the global character.

Concerning bilateral cooperation with the USA the logics of mutual interest, our strategic common interests as well as adherence to the values of the democracy and humanity have, as it was expected, inevitably prevailed over sometimes too emotional perception of certain ambiguous and at times absolutely non-existing circumstances.

The tenth challenge – the spirit of the society, the moral fiber and psychological health of the Nation. Our cultural and artistic elite, clergy and talented youths tirelessly contributed to its advance and maturity. It grew stronger, nourished by the national tradition when Muses continued to create even as ideological guns thundered amidst historical cataclysms and political battles.

Re-phrasing the well-known ancient maxim, I would say that the state budgetary provisions were at times too short to meet the eternal needs of the Arts.

In 2003 Ukraine commemorates The Year of Culture. I have a dream that this campaign starts a whole new era when the moral strength of the society takes the uppermost place in the hierarchy of national priorities in Ukraine.

We have become accustomed to live under the trite spell of the importance of a ‘cult of knowledge’. However, it is often the spell of words not deeds. Moreover, our scientific and educational institutions have even begun to curtail their researches in fundamental sciences. This is a ruinous and unacceptable tendency. At the time when knowledge has become the prime value in the modern world, we would be able stand up to competition only if we rank in the frontline of scientific progress.

We do have every reason to set such a goal for ourselves because Ukraine is among the leaders in the global rating of educational standards, as one of determining indices of human development.

The funds invested in education are investments in the future. We should do everything possible to keep up on the adequate level every the advantage that we have inherited from the Soviet educational system, primarily, its top-level fundamental education. At one time, it enabled Ukraine to make a breakthrough in fundamental sciences.

As a former manager of a scientific-industrial complex, I personally believe that if we lose those standards and foothold we would turn into nothing but a brain or, even worse, resource appendage to economically stronger nations.

Ukraine has a lot to offer to the modern world. Not only because Ukraine jointly with the USA and Russia authors the most advanced aeronautic projects such as "Sea Launch" or a perspective space program "Cyclone" on satellite equatorial launches in Brazil.

In my opinion, even more indicative is the fact that Western countries readily welcome our specialists or invite our students to "finalize their studies" in the West.

Western companies do not seem to share the opinion of those who, out of obviously selfish reasons, try to prove that our education system is allegedly out-of-date, that it, supposedly, needs to be brought down to only pragmatic level, that the study of fundamental sciences should be replaced with emphasis on the marketing alone. Ukraine takes pride in its tradition of being a homeland not only to poets and artists but also to such giants of natural sciences as Mykhailo Ostrohradskiy, Volodymyr Vernadskiy. Russia has the right to be proud of her genius Mykhailo Lomonosov, but I would remind that Lomonosov graduated from Kyiv-Mohyla Academy in Ukraine.

I have no doubts that Ukraine today is rich in bright minds. Our goal is to identify them and give them "green light" for complete self-realization for the benefit of the country and the people.

As our society goes through the process of moral and political modernization, respectively will grow the worth of the Word – this fundamental value of civilization along with system of mass communications. In the age of information technology, which the mankind has entered, it should serve as an open channel of communication between the state and the public.

Underrated and, at times, distorted role of the mass media results in the rise of biases and partialities in public consciousness as to the content of processes, which develop in the society.

In the global information processes, any one who wishes attempts to speak for Ukraine. Only Ukraine herself fails to shape public opinion about her own self. The international community learns about Ukraine through the mouths of foreign spokesmen, thus, getting the image of the Ukrainian State in a distorted and biased way. We should immediately launch the necessary organizational effort so that the information vacuum around The State is filled up with the truth rather than fiction.

The eleventh challenge is unity of Ukraine in the contemporary multidimensional sense, from territorial integrity to civil consolidation.

We live on the soil of our ancestors, however not so long ago different parts of Ukraine were incorporated into different states. It stratified different historic experience, which have brought out its own consequences.

One should also remember that the seats of disintegration appeared not in a static, but within a highly dynamic society, which had permanently been under the pressure of total vibrations, caused by transforming conditions of its historic existence.

We have not to conceal these realities and have to acknowledge: Ukraine as a united entity, as a stable society, as a peaceful territory and a predictable State rose primarily thanks to a powerful consolidating force of the national idea of statehood, highly professional management, wisdom of the people and the sense of responsibility of mature strata of its elite. That is why those, who wish to shake the ship of our statehood and to get it loose, have always been and will always be a minority.

The world practice knows two ways to keep the helm of State – either by force or by consent. The Ukrainian State has chosen its fairway, which goes through unshakable national consensus and ongoing civil dialogue.

In the context of systematic work to shape a modern Ukrainian nation we have to elaborate and to implement a State Program of Interregional Integration.

Finally, I conclude by the twelfth challenge, thus stressing upon its particular importance and crucial significance. The challenge is called the national dignity.

The perception of being “less valuable” is the most grave burden, inherited by us after the centuries-long way through the deserts of stateless existence. This burden constrains the steps and leans on the shoulders, inclining to a humiliating posture of a permanent complainer, a whining weeper, a wretched paralytic, as Ivan Franko might have said, at a wayside of world progress.

Such image of Ukraine is made by some licensed patriots, who gain their political profits on exports of litter from their own home.

The more will they powder their heads with ashes on open European and overseas stages, the more they will move their country away from that very Europe, where it is not a custom to respect perpetual whiners.

If we do not come back to our senses, if we do not rise, we will always be treated if not like remote neighbours then like poor relatives and maybe will even find ourselves being pushed out of that very European family, which our remote ancestors were creating.

I call to stop this humiliating groveling before foreign courts of power. It is customary in this world to speak the language of healthy and strict pragmatism, of decisive protection of national interests without ideological sentiments or faked altruism.

We have to create in the Ukrainian society the atmosphere of civil dignity and national pride, because only in such a ground the strong sproutings of social optimism will shoot out. Without it, there is no historic success, which we so much wish to ourselves and to our descendants.

This very moral and psychological catalyst is capable of cementing the nation, in whose veins streams inexhaustible young energy.

My fellow compatriots,

This first spin on the orbit of our statehood we have completed successfully. It was unknown but exciting historic journey for us. I am confident, that all the most difficult we have now behind us.

As representatives of another our strategic partner – China, say: “Let God keep you from living in the time of change”. But no one can choose the time to live in. Thus, we must be up to our time, and up to our country.

We come out to the new horizons before us being confident in our will-power, and our flight on the wings of freedom is only climbing up. This sacred day, saying the cherished words of our national prayer before the altar of our Independence, we feel inexpressible pride for Ukraine, which took its merited place in the circle of free nations of the world, and which is awaited by its bright and happy future.

Let us remember the words of a great Ukrainian, writer Volodymyr Vynnychenko, who also lived in the time of change: “To read the Ukrainian history one has to take his bromide – it is one of helpless histories. It is painful to re-read, how the Ukrainian nation did the only thing during the whole time of its State, rather semi-State existence – snarled to all sides. The whole history is unbroken chain of rebellions, wars, plots and quarrels…”

Doesn’t it seem that the words of Vynnychenko refer not only to his times?

The main lesson we ought to learn from the intricate Ukrainian history: at the core of the most negative, even disastrous events there was always the lack of national unity. Let us consider: Poland and Lithuania were in the same bad state as Ukraine at the outset of the last century.

But the politicians of these countries had enough understanding, and, above all, the political will, to keep their countries safe. It was the lack of that will to the politicians of the then Ukraine. And the then Ukraine was destroyed by those who relied on social demagogy and, what Volodymyr Vynnychenko was compelled to acknowledge, on the support from outer anti-State forces.

The lessons of history should be kept in mind in order not to be doomed to their permanent repetition. It is also required by the national interests of Ukraine.

Once more, wish you a happy Independence Day, my dear Ukrainians.

Glory to Ukraine! Glory to the Ukrainian People!

Leonid Kuchma President of Ukraine