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Address by H.E. Volodymyr D. Khandogiy at the "KYIV KONNECTION BANQUET"

Edmonton, May 13, 1999

Your Excellency the Right Honourable Ramon Hnatyshyn, Distinguished Guests, Ladies and Gentlemen,

It is my special pleasure to address this distinguished audience. I'm particularly glad to be here at the annual "Kyiv Connection 99" banquet, which has become widely known for its great fundraising potential, and I am also very glad that the initiative to organize this event became a good tradition, thanks to Bill Pidruchney, President of the Ukrainian Foundation for College Education, and doctor Roman Petryshyn, Director of the Ukrainian Resource Development Centre.

I wish to thank all of you for finding time and coming here today. Your presence here is indeed a good sign of your genuine interest in the developments in my country, in the ongoing transformation of Ukraineís civil society, politics, economics and culture as well as perspectives for Ukraine-Canada relations.

Your participation in this event reveals once again how many friends we have on this side of the Atlantic, and it also demonstrates that there's a significant interest torwards my country - Ukraine.


Ladies and Gentlemen,

With the restoration of our independence more than seven years ago, Ukraine received the freedom she has long been dreaming of. Then started real revival of the national ideals, cultural and historical traditions inherited from our forefathers. The fact that over 90% of the population voted in favour of independence at the referendum in December 1991 demonstrated true consolidation of Ukrainian society, revealed the nationwide accord in choosing the direction for the future.

Of course, after the independence was proclaimed, a range of serious problems emerged. And they had to be deft with sometimes in very difficult circumstances.

Changes that were needed so badly included the following four major goals, which demanded simultaneous solution.

First - across the board transformation of the political system from the totalitarian regime towards a democratic state whose primary mission would be ensuring human rights and basic freedoms, and implementing the highest democratic values.

Second - deep economic reforms aimed at a transition from centrally planned system to a market model.

Third and the most difficult and challenging reform: changing social psychology from the slave mentality of complete subordination to the state to liberated psychology of a free citizen in a free democratic country.

And fourthly, securing for Ukraine its rightful place in the framework of modern international relations that would correspond to the nationís potential as one of the biggest countries in Europe. This goal also includes the urgent necessity to ensure massive international support for the efforts of the countryís leadership to implement the reforms.

Allow me to point out some of the aspects of the painstaking process of achieving these important goals.

Ukraine is one of the few countries of the former Soviet Union where the transition of power by way of elections did not provoke undesirable consequences. The elections themselves were of open, free and fair character. The approach to resolving the crucial issue of citizenship was civil rather than ethnocratic. The Constitution grants the human right to own property. And Ukraineís laws on religion and social organisation are prominently closer to the so-called Western standards.

With the population of over 50 million comprising 100 nationalities, Ukraine has always pursued the policy of maintaining stability and social accord in the society. For 7 years of its independent existence, our country, contrary to some pessimistic predictions, has succeeded in avoiding bloody conflicts ethnic tensions, regional division or fragmentation of the society. This has become possible thanks to persistent efforts aimed at comprehensive development of democratic institutions, legal protection of national minorities. This policy is enshrined in the Constitution of Ukraine.

The key sector of reforms is the national economy.

I would like to stress that todayís situation differs greatly from that of, say, mid-1994. For the first time since 1990, we have very good prospects to stop the fall in the gross domestic product. The industrial output is in some areas and scope of capital investments are growing, though the conditions for economic reforms still remain unfavorable. To prevent failure in stabilization processes in the field of production, a strict austerity measures were introduced aimed at reducing the budget deficit down to 2.5% of GDP.

Progress was made over the past year in privatising businesses, in improving market mechanisms and in ensuring the historic transfer of collective farmlands to private ownership. Privatization of small and medium-sized enterprises is in its final stage with over 80 percent of them being privatized and the share of large private companies continuously increases as well.

In spite of some decrease in GDP by 1.7% in 1998, it was less than in previous years and we expect that its growth will be achieved by the end of this year. The inflation rate in 1998 was 20% (compared to more than 10000% in 1993 at the peak of hyperinflation).

The shortcomings in reforming the Ukrainian economy can be generally explained by the fact that the models of development in Ukraine have been elaborated without proper consideration of the countryís distinctive features. But I would rather leave it to specialists to discuss.

Many critics tend to couple the problems in the way to successful reform with Ukraineís investment unfriendly image. In this respect I can say that the investment climate in Ukraine has become much more friendlier and illustrate this by the fact that the overall amount of direct foreign investments in Ukraine as of 1998 was US $2.1 billion. However, it would be unrealistic to say that Canadian and other investors have no problems in Ukraine, which is undergoing such critical transition. Ukraine recognizes the existence of disputes and is working to settle them in a constructive and civilized manner.

You know about recent economic problems connected with the negative impact of financial crisis in the neighboring country that Ukraine faces since August, 1998. The President of Ukraine, Government of Ukraine, National Bank have developed a set of anti-crisis actions that are in progress now. The support of international community is rather crucial at this time. The 2,5 billion US$ loan, that will be provided to Ukraine by the IMF according to its decision of September, 1998 will give the opportunity to use this financial resources for the most urgent needs. In this respect the Canadian support at the IMF Executive Directors meetings is highly important for Ukraine.

In order to achieve economic stabilization, real economic growth and the overall economic improvement the Government of Ukraine has elaborated the Ukraine-2010 Program which envisages three stages of social and economic development.

The first stage (that is, the years 1999-2000) includes economic stabilization and transfer to economic growth. The second stage (2001-2005) is dedicated to profound changes in economic structure and enhancement of economic efficiency, GDP growth up to 7% annually. The third stage (2006-2010) will see the continued structural transformation of the economy and higher pace of its growth, the achievement of the GDP per capita according to the real purchasing capability of US$4-4,5 thousand.

Ensuring political support for market reforms is one of the urgent priorities for the government. Cooperation with Western countries such as Canada and their support and assistance, particularly in Ukraine's aspiration to integrate into European and Euro-Atlantic structures, including WTO, as well as Ukraine's cooperation with international financial institutions, such as IMF and World Bank can hardly be underestimated.

As a country that experienced for itself the tragedy of nuclear disaster, Ukraine understands the concern of the world community for the continued exploitation of the Chornobyl Nuclear Power Plant. With this in mind, Ukraine made a difficult political decision to close down the Plant by the year 2000 on condition of receiving adequate and timely financial and technical assistance.

Regardless of Ukraineís difficult economic situation, this country continues to suffer enormous financial losses in connection with environmental rehabilitation and protection of the affected population, which in some years amount to more than 10% of state budget.

Ukraine hopes that the combined efforts of the international community will help to overcome the consequences of the Chornobyl tragedy, the worst ecological catastrophe in the history of mankind.

Ladies and gentlemen,

It is a well-known fact that as far as Ukraineís foreign policy is concerned, my country has achieved much notable progress. Let me mention one of the most significant achievements in this respect: the establishment of friendly relations with all Ukraineís neighbors. Such a thing as friendly relations with neighboring countries has been taken for granted by most established democracies of the West. Yet for Ukraine it was recently quite a challenge given the whole array of issues that emerged after collapse of the Soviet block ranging from regional interests to the peculiarities of bilateral relations with each and every neighbouring country.

This achievement did not only establish a secure environment of peace and stability in the region: it also enabled Ukraine, its neighbours, as well as other countries and international security structures, to concentrate on other relevant issues. To sum it up in a few words, this Ukraineís achievement indeed relieved a lot of tension in Europe and indeed in the world.

It is a recognized fact that peace and stability on the European continent is an inseparable part of the global security system. Ukraine views the future architecture of the European security as based on the principles of comprehensivnes, indivisibility, and partnership. This fundamental position determines my country's active cooperation with European and Euro-Atlantic security structures, such as NATO and the Western European Union.

Ukraine enjoys a special relationship - a distinct partnership - with NATO. It has developed this partnership through the NATO-Ukraine Commission and engagement in the Partnership for Peace. As you know first summit of this commission took place in Washington in April.

Who in this room, who in Ukraine and, indeed, who in NATO would have thought 10 years ago that this would be possible? Who would have imagined that a free Ukraine, sovereign and independent, would participate in the celebration of NATO 50th anniversary together with other democracies.

Today the Alliance is indeed facing a most controversial stage of its development as it is involved in the crisis in Yugoslavia.

Our approach to the conflict is balanced but Ukraine has always preferred peaceful means of resolution of any conflict situations and was against the use of military force without clear mandate of the UN Security Council. This position was developed into the peaceful initiative of the President of Ukraine regarding the settlement of the Kosovo crisis that was presented to the international community at the very beginning of the air strikes.

Ukraine has developed and presented an ambitious Program of Cooperation with NATO up to 2001 - the first and only state of the former Soviet Union to do so. This program will allow Ukraine to make a permanent contribution to Euro-Atlantic security. NATO members on their part are committed to helping Ukraine to implement this program and, more broadly, to pursue the economic and political reforms that will bring the prosperity and stability it needs to be a full and reliable partner.

Ukraine also actively advocates further strengthening of the role of the Organization for Security and Cooperation in Europe and WEU.

Ladies and gentlemen,

Let me emphasize that Ukraine's course towards integration into European and global economic systems remains unchanged.

I would like to put a special emphasis on the document entitled The Strategy of Ukraine's Integration into the European Union endorsed some time ago by the President of Ukraine. This strategy provides for the harmonization of national legislation, intensive development of trade and economic relations with the EU members based on the Partnership and Cooperation Agreement that entered into force last year.

I am vary glad to inform you that Ukraine jointed the Ottawa convention on the ban on land-mines and I am proud that I personally signed this document on behalf of my country two month ago in New York.

Though Ukraine is one of the oldest nations of Europe, it only celebrated its 7th anniversary, while Canada has already marked its 131st. Indeed, it is the dynamism and hard labor of many nations that brought Canada to its today's place on the globe. And I am glad to emphasise the important contribution Ukrainian Canadians have made over all those years into the making Canada the best country to live in.

We highly appreciate the significant role and contribution of Ukrainian Diaspora into the development of the friendly Ukrainian-Canadian relations. It was to a substantial extent due to the efforts of many Canadian Ukrainians that these relations were established and started to develop even before the official announcement of Ukraineís independence. And in December 1991 Canada became the first Western country to recognise the independent Ukraine.

Ukrainian-Canadian political relations of special partnership achieved a high level of understanding. The positions of Ukraine and Canada on major international issues often coincide or are very close. The agreement between Ukraine and Canada on mutual support at the elections to the UN Security Council for 1999-2001 achieved last year is an example to illustrate the level of mutual trust and understanding.

The first visit to Ukraine by Prime Minister Chretien last January has become a landmark in bilateral relations. The first visit of the Head of Canadian Government since the restoration of Ukraineís independence had a primary political importance and opened new opportunities to strengthen the special partnership between Ukraine and Canada.

During the negotiations between Jean Chretien and the President of Ukraine Leonid Kuchma a wide range of issues of bilateral cooperation was discussed as well as the problems of the two countries interaction at the international arena, the integration of Ukraine into European and Trans-Atlantic structures, and the issues of Chornobyl. The Canadian Prime Minister reconfirmed the course of the Canadian Government to support Ukraine within the IMF, G-7, NATO and other institutions where my country is not represented, as well as in the process of Ukraineís accession to the WTO. Both sides agreed that the main task of the current stage of our relations is the development of bilateral trade and investment cooperation. They also advocated the further intensification of regional cooperation between the two countries that would enable to realise to the fullest the interests and potentials of businesses of Ukrainian regions and Canadian provinces.

Ladies and Gentlemen,

Since the period of dissolution of the Soviet Union, a number of international scholars, analysts, diplomats, business leaders and journalists have agreed that the fate of stability in Europe, and indeed the whole world, will, to an important extent, depend on what happens in Ukraine.

Indeed, Ukraine has to solve many problems in all areas. However, the nationís determination and democratic choice remains unchanged. Having embarked on a massive program of reforms and building a democratic European state, Ukraine will carry on resolving all issues in a civilized manner and honouring all its commitments to its partners. By consolidating Ukraineís independence, the proper conditions for this are guaranteed.

Recently, Ukraine faced a major challenge in the Verkhovna Rada (parliament) as certain forces attempted to reverse Ukraineís commitment to democracy, and change the fundamentals of its domestic and foreign policy, most notably its adherence to market reforms and cooperation with the West. The rejection of these attempts is reaffirmation of our commitment to democracy and market economy.

The President and Government of Ukraine are doing everything possible to move ahead and implement reforms. Let me emphasize that Ukraine is doing this not to please the IMF or World Bank, but rather so because Ukrainian people made this conscious choice as the only way to future prosperity, and follow this path to the end. Most importantly, we had the opportunity to successfully begin the process of converting Ukraine into a flourishing democratic Central European nation. Our future, without a doubt, in Europe, although we realize that this path will be long and difficult. This choice leads not only to a more stable and prosperous Ukraine but also to a more stable and prosperous Europe. Ukraine's success is Europe's success.

Thank you for your attention.

For more information, please contact:
Taras Malyshevskyi, Press Secretary of the Embassy,
310 Somerset Street West, Ottawa, ON K2P 0J9
Tel. (613) 230-2961, fax (613) 230-2400, E-mail: