An interview with Ukrainian Prime Minister Yulia Timoshenko

Yulia Timoshenko, prime minister of Ukraine and heroine of the Orange Revolution, speaks about natural gas negotiations with Moscow, and answers questions about re-privatization in Ukraine and the impending parliamentary elections.

Yulia Timoshenko, prime minister of Ukraine and heroine of the Orange Revolution, speaks about natural gas negotiations with Moscow, and answers questions about re-privatization in Ukraine and the impending parliamentary elections.

Question: How would you describe the current state of Ukrainian-Russian relations?

Yulia Timoshenko: I don’t think there has been any kind of chill or loss of priorities in our relations. Not at all. They’re just being streamlined. For many years, Ukrainian-Russian relations have been based not on the national interests of each country, but proceeding, in the case of Ukraine, from the personal plans and ambitious of leaders of our country. This is very bad, because such a foundation is unreliable for building a solid structure. A foundation is being created now on a very reliable, strong basis.

Question: I would like to touch on the natural gas topic. Formerly Kiev announced that it would answer to the proposal of Gazprom on increase of gas prices. When will this proposal formulated and how will this issue be settled?

Yulia Timoshenko: I am convinced that there will be no stresses, including price stresses. We have a perfect agreement effective until 2013 in which we have built a balance between services for Russian gas transit via the territory of Ukraine to Europe and the gas received by Ukraine.

Question: Russian and Western experts say that unregulated property rights are worsening the investment climate in Ukraine. What would you say to that?

Yulia Timoshenko: It is impossible to say that there is no problem with privatized enterprises. According to opinion polls, 75-80% of respondents believe that privatization was conducted in a dishonest manner, with violations of the law. When the new administration took power, there were great expectations in society that order would be enforced in this area.

It would be unjust to leave these expectations without satisfaction. Hence, there are three options of behavior.

First: the state does not touch anything, does not interfere in anything, and leaves the process as it is today. However, during privatization many private enterprises were illegally separated from this process. For example, they were artificially excluded from the lists of those who were admitted to the auctions. The auctions were also liquidated as a category and privatization was carried out on an uncompetitive basis. What is happening now? Justice has arrived, and thousands of arguments have started among companies, and they are going to court. They are dividing laundry services and stores, offices and marketplaces, everything that can be divided.

Question: And land?

Yulia Timoshenko: What is the most important, land too! Here is the situation: the state is watching all this and tens of thousands of legal actions on re-division of property are going on in the courts. It is interesting to see how this will influence investment climate in Ukraine when privatization of every enterprise is disputed for decades. Of course, we can follow this first path but there are at least two serious problems. First, this is lack of understanding on the part of the population why nobody enforces order in this area. Second, these are disputes between corporations that will block the way for investments to the country for ten years.

There is the second option in which the state will not take some enterprises selectively and will not bring them to the court where it is a party of a dispute. I have several questions. First, which enterprises should be grabbed if privatization of all enterprises without exception was illegal? The second question is who will influence the court and how will this process go on? Besides, this is an absolutely unpredictable situation for all the rest. Are there guarantees that if enterprise A is grabbed today, enterprise B will not be grabbed and taken to the court tomorrow?

There is the third option. We can pass a law that singles out, for example, a few dozen strategic facilities where it is possible to conduct additional evaluation according to a special method and to enable the owners to be the first to buy their enterprise at a real price. But all the other tens of thousands of enterprises should be fully exempt of any persecution. I can say the word “amnesty” but I will place it in quotation marks because we do not have such notion with regard to privatization.

Question: What is the probability today that a “big” electoral coalition of Our Ukraine of Viktor Yushchenko, People’s Party of Vladimir Litvinov and bloc of Yulia Timoshenko will be formed in 2006?

Yulia Timoshenko: I will start by saying that my wish is absolutely sincere. I wish people from Our Ukraine party that currently form opinion of the President understand that I am satisfied with what I have and I have no higher ambitions today. It is sufficient for me to be prime minister to enforce order in the country step by step, even despite a huge counteraction.

These slightly odd maneuvers around me are simply not interesting for me. They are outside my attention, outside of any influence on my psychic, on condition of my soul and my mood. To be honest, sometimes this even amuses me.

Question: A senior official from the Ukrainian Interior Ministry recently described well-known entrepreneur Rinat Akhmetov from Donetsk as “the leader of an organized crime group.” What do you think of this? Have you met Akhmetov lately?

Yulia Timoshenko: Leading entrepreneurs and high-class executives are an asset for any country. I am more keenly aware than anyone of the skills shortage being experienced by Ukraine now. Many business owners who worked in Kuchma’s time accepted the conditions that were dictated. If criminal conditions arose in the country when it was necessary to pay off everyone, to share the stakes, to maintain, well practically armed forces of some kind to prevent attacks from the right or from the left, these conditions were created by the authorities. That is why now it is necessary to try to create new rules first. If people are prepared to live according to the new rules, it is probably necessary to give them a chance. If people are not ready it is always possible to put them to prison.