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Speech by Prime Minister of Ukraine Viktor Yanukovych at a meeting in the House of Government of Ukraine "On the state of affairs in pricing and measures on ensuring price stability" on November 2, 2007
02.11.2007, 17:04
Dear Viktor Andriyovych, dear participants of the meeting!
Only the fact that we returned to the practice of drawing up together the ways of solving the most important problems testifies to understanding of the importance of consensus policy both by the presidential and executive branches of power.
Such policy is required in Ukraine today because polarization only stimulates populism. Starting with burning, urgent economic problems, I am sure, we will proceed to implementation of more prospective and broad plan on uniting society. We will seek together support for our initiatives in those social groups which seem to have little in common, which were always opposed but which can be and should be united, first of all, by issues of increasing standards of living in the country and tolerance to the opinions and stands of each other.
Our today's discussion is a good example of the Ukrainian politicians' ability to draw up a common vision, solve problems avoiding unnecessary aggression, overcoming of each other and populism. Such approach is a formula of success, a way of efficient public policy. In other words, I am confident that the unity of the country is not possible without consolidation, and only the unity of state and society is our main purpose today.
As regards the tasks of the executive power in the process of unification in the light of which we should look at our every step, it should be an efficient mechanism for increasing living standards of the people but not a distribution center.
Dear colleagues!
It is very important that we speak sincerely in such composition because controllability of executive vertical at all levels is a guarantee that our plans are not only conversations, it should not be continued like this that in some regions will be ours, theirs, yours etc leaders. We should bear responsibility together.
I see smiles here in the room, I have been observing this for hour and a half, and I am sure, Viktor Andriyovych, that as soon as we inspect implementation of the President's orders, implementation of the Government's decisions, decisions which are taken in the provinces concerning fulfillment of public policy, we will have an answer – who is worth something, and how earnest are they in their public obligations. Then we will have another discussion. I am confident that very soon we will introduce a system for controlling decisions of the executive power vertical.
I believe, dear colleagues, that we should conjointly sort those drawbacks and errors which we have in our common work and, as they say, it will be introduced into life and it will be justly. And to You, Viktor Andriyovych, I will constantly report about those directions in which we have serious errors today despite a region, or ministry, or department it will be.
State employees who jointly work for the state's interest, a long-term Ukrainian prospect should be in earnest about their duties only in this way. I broached this subject not accidentally. It is appropriate to ask here, why some regions fulfill the President's and Government's orders on pricing, and others simply ignore them. We are monitoring the implementation of this.
I want to say that soon we will consider issues such as, for example, how do the regions use their authorities on tax collection, why do the local budgets differ in regions – we will draw these conclusions together.
That is the reason why I would like us to look today at the price monitoring. And we will see that the difference in the growth rate between the regions only in October comprises 15-20 percent. Why? An answer to this question lies in disbalance of the executive power vertical. We also have questions to the agrarian bloc of the Government, business and public structures of the agroindustrial complex. In due time the oil-fat industry, for example, strengthened because of unprecedented public policy. We know it well.
And today the oil-fat business, so to say, "thanks" the state – by raising prices for products of prime necessity. And here, I was listening to the report of the Antimonopoly Committee Chairman, I would like to say that you should not only establish facts, why did it happen, you should act, Oleksiy Oleksiyovych, and envisage the situation, you are not statisticians – you are government authority. I still have no explanations from the economic and agrarian bloc of the Government, why do we have in Ukraine which exports oil, home prices higher than in the countries which on the contrary – import oil from Ukraine?
We are talking about organization of transparent agrarian market not for the first year. I remember, Viktor Andriyovych, when you at the beginning of 1995 organized the first exchange auctions on grain in the National Bank House of Ukraine and as You said today, I completely agree with You, it is lack of time which we have not used for organization of the exchange trade in the agrarian sector of economy and, first of all, on bread. Because the state which takes the 7th place in the world should, first of all, establish order inside the country. And as long as exchange trade on grain is absent it is impossible to realize it.
Who will organize transparent agrarian trade without agiotage demand and price spikes together with local authorities and business, public structures if not the agrarian bloc of the Government?
There are also negative consequences of the so-called "import liberalization" introduced in 2005.
We have high prices for grain, flour, oil, meat today. Why is there no transparent import of this production for stabilizing the market situation? Why is there still, even though to a lesser degree, meat smuggling with shady source and quality? Though I was reported that it has diminished significantly but it should not be. It is not an achievement, but a drawback.
The same concerns export. I believe that it was right to introduce restrictions on export but it can only be a temporal phenomena and not a system.
Retail prices for grain and, particularly, wheat have significantly increased. And today the most important thing is to provide the country with bread. How can we achieve it? We have done much together with you. And in the nearest future we should determine a scheme for work through such a program by the end of the year which could take into account all drawbacks we have and introduce a real system approach. We should not forget when in 2002 the grain was exported abroad for nothing at all and in the following year when bad harvest occurred we had to import wheat at world prices. Business received a profit from it but the state and people lost.
We cannot tolerate such games. We are speaking about inadequate activity at consumer market of the Antimonopoly Committee of Ukraine for a long time. The country needs proved forms and mechanisms of civilized market regulation of prices conditioned by the world market trends or other objective circumstances. Expectations that market will regulate itself will turn to decline in living standards of the citizens especially of not sufficiently provided strata of population. It cannot be allowed.
What I said about the food market concerns to a considerable degree oil and gas prices which are formed abroad. And the task of the Government is to do our best and facilitate influence of external factors. And we try to do it. Pay attention that this year average oil prices ration in Ukraine to the world oil price are lower as compared with the previous years. Undoubtedly, this is a result of restrictive measures.
The same way we follow in gas issue. We are negotiating with Gazprom of Russia a gas price for the following year that it will be reasonable for Ukraine, formed clearly and transparently. In this directions work both the Government and President. On Wednesday, in accordance with the President's order, I have commissioned Minister of Fuel and Energy Mr.Boyko to negotiate and find a way out of this problem.
At the same time I would like to note that in general dynamics and structure of the Russian gas prices Ukraine has an advantageous position and we will try together to hold it. But objective pattern is that the gas price for Ukraine will approach the world one. We should spare no effort and take measures aimed at facilitating adaptation of our economy and budgets to new prices. This problem is particularly burning for the housing and communal services, chemical and metallurgical industries.
Our serious problem is that we have no consistency in pricing export, consumer policy and economic policy on the whole. Every Cabinet tries to start all over again rejecting achievements of the predecessors. At that pricing policy is conditioned predominantly by the state of our economy which requires serious structural changes. But is it possible without adequate preparation, legislation, consolidation of all branches of power, regions' support?
Half a year our Government spent eliminating a system crisis. As soon as we began to work out program reforms we were absorbed in the political struggle. Legislative process stopped for more than half a year which was so needed for solving topical problems of the economy among which are price regulation, energy saving, investment and innovation activities. And this year inflation – is litmus paper which shows how important it is for the country to have stable economy, predictable politics and consolidated power.
I completely agree with the conclusions of Volodymyr Semenovych Stelmakh. And we also know how the political situation influences the economy of the state. I do not want to predict something bad but if there is no unity in power structures then we will always extinguish a fire and look for a guilty side.
I have already told and I would like to repeat again today. Implementation of Ukraine's course for high living standards of the people and human rights and freedoms should be regardless of the forces configuration in the Parliament. There is no ideological alternative for the ideas of economic prosperity and democracy. This course should be invariable.
Governments can be changed but general politics line of the state cannot be changed. With this purpose one of the first laws we propose to pass by a new Verkhovna Rada should be the Law "On foundations of foreign and home policy of Ukraine". At a Government sitting on Wednesday we called three basic reasons which have resulted in price increase and social tension. These are populism, incompleteness of reforms, high dependence on global situation and certain isolation of Ukraine from globalization processes, political instability. These damages, challenges we should dispose as of trash in the process of radical modernization of our state.
And thus, it is now very important to continue this modernization which we, Viktor Andriyovych, have started with You together. We should more actively integrate to the world market and not to waste energy for home conflicts. Our politics should be economically efficient; we should achieve understanding, compromise because especially the last months of this year have demonstrated: confrontation between the branches of power – is awful erosion which destroys the foundation of the state.
I will finish as I began. Implementation of a project of economically strong democratic Ukraine is impossible without consolidated power. I call again, dear colleagues, to combining efforts in solving the most significant problems today and count on understanding between us and our fellow citizens.
Thank you for attention. | |
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