This year had been quite dramatic for the Ukrainian-American relations. Suffice is to recall Ambassador Pifer’s pedantic letter and the Ukrainian leaders’ irritated reaction and suspicions America was blowing up the cassette scandal. There was a chance for all this to end with a complete mutual disillusionment. However, the September 11 events eliminated all the secondary issues and outlined new priorities. Today there is a chance for regaining the former optimism in our bilateral relationship on a new, more realistic basis.
It seems that the current condition of relations between the US and Ukraine does not correspond either to the declarations on strategic partnership nor the demands of the situation. The intensive character of high-level contacts and their effectiveness has declined compared to, for instance, 1999. There have not been any meetings between Presidents Kuchma and Bush as yet. What are the reasons for this?
The United States has maintained very consistent objectives in its relationship with Ukraine. We have consistently claimed that our long term goals are to support democratic and market oriented Ukraine that can be integrated with Europe. That is above all the case today.
In the past year there has been significant progress on economic issues in Ukraine. Ukraine continued to implement a sound budget, there has been a significant move away from barter transactions and toward the utilization of cash. This in turn has allowed the state to increasingly meet its obligations in terms of wages, salaries, and pensions. As a result, people have more cash on hand and this has stimulated consumer demand. This has been an important factor and generating over 9% growth through the first nine months of this year. Ukraine has assumed important pieces of legislation on the economy, including the Budget Code and Land Code. It has also passed the first three sections of the Civil Code and clarified some issues on the status of the judicial reform. This has contributed to improving in general the investment climate. As a result, Ukraine has been appropriately rewarded with the renewal of its IMF program, and its relations with the World Bank. There has also been a rescheduling of Ukraine’s debt to the Paris Club.
In the political sphere significant issues still remain in the bilateral relationship that Ukraine must continue to address internationally. There has been little progress on the Gongadze investigation, and that continues to remain a litmus test of Ukraine’s commitment to the rule of law. In the coming months Ukraine will face an important test concerning the structure of its commitment to democracy with the march of parliamentary elections. How Ukraine handles the elections, and even more important, the election campaign, will send an important signal of its commitment to international democratic standards. And, of course, we continue to work with Ukraine intensively on issues to combat terrorism.
In the context of all of these issues there have been many high level meetings. Secretary of Defense Rumsfeld and National Security Adviser Rice have visited Ukraine, the Prime Minister of Ukraine has visited the United States, and so has the Foreign Minister. In addition to this we have had active engagement through our bilateral Economic Policy Committee, Foreign Policy Committee, and Defense Committee.
Overall, I would assess that we have had a very active and constructive relationship. We have a clear understanding of the important issues on the agenda, and when there are differences over specific issues, we are able to talk about them quite frankly.
How many such differences do we have today? Could you specify them?
I think at this stage the principal issues in the Ukraine-US relationship are similar to the same issues Ukraine faces with other countries, specifically, the Gongadze case, the Oleksandrov murder, and other acts of violence against journalists, which raise questions about the freedom of speech, whether the legal system indeed operates effectively, and whether Ukraine has a system of justice, which reflects a strong commitment to the rule of law. These are issues that had been very openly discussed between the United States and Ukraine. We think that Ukraine does have an opportunity to act on these issues in a way that will increase confidence within the country and internationally that the rule of law does exist in Ukraine.
Don’t you think that Ukraine’s image, badly marred with both the Gongadze case and the tragic accident with the Russian plane, has its psychological influence no matter what steps Ukraine is currently taking?
These issues were discussed with Prime Minister Kinakh when he was in the United States, and he addressed them very clearly. He said that Ukraine has been an independent country for just ten years, and that sometimes there is a continuation of Soviet mentality in the ways difficult issues are treated. As a result of this, the issues are not always handled with the kind of transparency they deserve. He stressed that it was important for Ukraine to take responsibility for its actions, and when mistakes are made, to acknowledge those mistakes and take appropriate compensatory action.
I think that if Ukraine can in fact take strong and effective actions that demonstrate its responsibility as a state and responsibility to its people this will improve Ukraine’s image domestically and internationally.
The prime minister also stressed that a new generation is growing up in Ukraine with opportunities to live a free and more open life. With this new generation will come political changes. And this is also one of the reasons why we put such an emphasis in our bilateral exchanges on supporting exchange programs. They give young people an opportunity to develop new ideas about how they might be able to strengthen their country. Over the last ten years more than 25,000 Ukrainians have got to the US on exchange programs. This is an important and practical contribution we can make to Ukraine’s future.
You said that the way the elections are prepared and conducted will give a clear signal to the international community. Do you have any suspicions, or any basis for such suspicions, that they will be undemocratic and opaque? What exactly can change according to their results in the international attitude toward Ukraine?
First of all, in any country it’s a responsibility of public officials to take elections seriously, to do everything possible to ensure that those elections are conducted in a free and fair manner. In planning for the future one of the best guidelines is always to look at the lessons that can be learned from the past. In both the 1999 presidential elections and the April 2000 referendum the principal criticism that was made by international observers was not in the specific counting of the votes but in the prelude to the elections and particularly the role of media. Based on these lessons, we believe that it’s important for international organizations and donors as well as domestic authorities that are responsible for the elections to try to do everything possible to create a level playing field prior to the elections. The practical thing that the United States can do is to provide support to non-governmental organizations and independent media, who can help monitor developments prior to the elections and provide information to the elector on whether different political parties have equal access to the media and on whether a level playing field has been created in different regions of the country for the elections to take place.
What will be the consequences for Ukraine depending on the results, both negative and positive?
I don’t want to speculate on the negative; I think it is more constructive and more important to focus on what Ukraine can do for itself if it addresses these elections in a serious and constructive way. In particular, Ukraine wants to establish itself as a European state. I think there is a growing and widespread understanding that being European is defined by the kinds of policy actions the country takes internally. This includes whether or not the country conducts its elections in a way that gives its citizens confidence that they have an ability to influence the individuals that represent them in government and that their views can be heard in the political arena. An important issue also will be how Ukraine responds the problems during the election process that arise. Every country faces problems in its elections; we certainly experience that. And the key is to address those problems in a way that the state can still maintain the confidence of the electorate.
Is it appropriate to consider that the way the US received Viktor Yushchenko on such a high level indicates on certain sympathy by Washington concerning the results of Ukrainian elections?
I think that should be interpreted as respect for the first Ukrainian minister who was able to preside over the government that reversed the sharply economic contraction, which took place in Ukraine over a nine year period and produced the first positive growth rates in Ukraine’s short independent history.
You have already mentioned improvement of the investment climate in Ukraine. Has it really improved from the point of view of the American business?
I think at any point of time when you have growth at 9.3% and inflation under 4%, it’s indicative that positive economic steps have been taken. As a result of a number of positive economic decisions, many market businesses have found that they have been able to operate effectively in Ukrainian market. However, direct foreign investments over past year have still been relatively limited. One of the reasons have been that American businessmen have been looking for Ukraine to put in place a stronger legal foundation for the business economy. The passage of the Land Code has been a very important step in this direction. Passage of the Tax Code and legislation to protect intellectual property rights would also be very important additional steps that Ukraine could take. The biggest complaint that we currently hear from American businesses here concerns the court system. When problems arise they feel like they cannot always have a fair hearing in the courts. When the parties go to international arbitration, it has been almost impossible to get those judgments enforced internally within Ukraine. And this is continuing to be a real constraint on the level of foreign investment.
You mentioned protecting intellectual property rights. What would you answer to those viewing this problem as an example of not always fair competition from American companies?
First of all, I was asked to provide comments on Ukrainian legislation related to intellectual property rights by the deputy speaker of Verkhovna Rada. I was pleased to provide information from international experts on whether or not the legislation of Ukraine on intellectual property was consistent with international standards, particularly, the requirements for joining the WTO.
Since Ukraine has indicated that joining the WTO is one of its principal economic and foreign policy goals. We are pleased to be able to provide whatever technical advice that we can on how Ukraine might more effectively structure its legislation in order to meet the established international standards; in the end, adopting legislation that protects intellectual property in Ukraine will be a very important factor toward encouraging both domestic and international investment within Ukraine.
Does this also relate to CDs?
Ukraine has tremendous potential in high technology areas. But the only way that will secure investment in this field is if investors truly believe that the funds that they invest in the development of high technology will result and intellectual property will be protected. International recording companies have already been in touch with some of the legitimate Ukrainian recording companies. They have indicated that once good legislation is passed and there is a track record of enforcing it, they would be very interested in contracting with Ukrainian recording companies to produce CDs for the Ukrainian market. The CDs would be produced with Ukrainian covers specifically for this market. And they estimate that they could be sold for 15 to 20 hryvnias.
Returning to the most acute problem in international relations, the antiterrorist campaign, how does the US estimate Ukraine’s involvement in it? Could it suffer some changes in connection with the changing situation?
Ukraine has been a very strong and important partner in the antiterrorist campaign. It has played an important role in supporting diplomatic actions calling for justice against terrorists and holding accountable the countries and individuals that support the terrorists. This is including Ukrainian support for important resolutions in the UN under the auspices of GUUAM and in conjunction with NATO over the NATO-Ukraine commission. Ukraine has began to take important steps to combat money laundering, which is a critical step in order to cut off the access that terrorism might have to funds. Particularly, Ukraine has issued executive orders, which call on commercial banks throughout the country to seize the assets of any individuals or organizations associated with terrorist activities. Ukraine has granted overflight clearance for the military transport aircraft as well as emergency landing rights at three airfields. We are all bringing every day about additional steps that we can take to support on the international campaign against terrorism. Within Ukraine one important step will be to pass a money laundering law which would strengthen the legal and financial tools.
Another important step would be for Ukraine to continue strengthening control over its borders. Some steps have already been taken to increase the number of customs authorities and border guards on many of the key border points but still additional actions are necessary. The United States is working with Ukraine on ways that we could help strengthen the control over borders.
The US Congress and the parliaments of France and Germany have recently passed changes in their law giving their intelligence services wider authority for their fight against terrorism. This raises the question whether or not this can influence democracy. Are there any mechanisms to prevent turning the fight against terrorism and the striving for strengthening security into another witch hunt? How can this balance be kept?
This is a very important question, and in fact I focused the talk I have recently had in Washington on this issue. The campaign against terrorism should never be used to justify authoritarian actions, which are an illegitimate infringement on freedom and civil liberties. It’s very important for us to remember that our strength, America’s strength as a society is in freedom and respect for human dignity and rights. If we forget to protect this very basic principle, then the terrorists in fact win. As a result of this there has been a very extensive debate in the United States as we’ve been taking actions to strengthen our security about where the limits lie on the kinds of measures that can effectively and appropriately be implemented and put in place as the society was still protecting civil liberties. Throughout this debate one of the things President Bush has emphasized is that the reason that we are engaged in this war against terrorism is not to reduce freedom but to protect freedom.
This principle is also very relevant to the issues that Ukraine faces today. As Ukraine approaches the coming elections, one of the principles that is very important for Ukraine is how to give people the ability to express their political views through their votes. And to do that effectively it’s important to Ukraine to create the environment where people have the ability to share and exchange information freely. In this sense the fight against terrorism and actions to promote a democratic society are indeed consistent with one another.
Inevitably, in any society in which there is freedom there is also a risk that terrorists might be able to find ways in which to act. It is inevitable that we all seek ways to reduce the ability the terrorists have to be able to act freely. But as we move to strip away the fronts from the terrorists and eliminate their ability to travel freely, it’s important for us to keep in mind the principles we are trying to protect, the freer and more democratic state that will allow greater prosperity for all.
Will the intensification of security measures and ratifying the new immigration law influence the visa process for Ukrainian citizens?
At this point there have been no changes that have been implemented in the American visa system. However, the consular officials from the State Department have a meeting with their counterparts at the White House and other experts to review our immigration policies. They are looking at steps that could be taken to tighten controls against terrorists and criminals that none of us would like to allow into our countries, still allowing for individuals who have just and legitimate purposes to visit the United States.
The United States is largely a country of immigrants. I myself am an immigrant who came to the United States at three years old. It’s important for us to remember that out of this diversity we’ve been able to find strength.
