THE INTERVIEW WITH LEONID M.KRAVCHUK, FIRST PRESIDENT OF UKRAINE

Leonid Makarovych
KRAVCHUK is a prominent
Ukrainian politician, first ever elected President of Ukraine,
Member of Verkhovna Rada from 1990,
entitled Hero of Ukraine

In 2001 Ukrainian Financial Group celebrated its 10-year anniversary. The Group was founded in 1991, the historical year when Ukraine came into being as a new independent state. On August 24, 1991 Verkhovna Rada (Parliament) of Ukraine adopted an Act of Independence. In a referendum held on December 1, 1991 over 90 per cent of the Ukrainians endorsed the independence. On the same day Leonid Kravchuk was voted as Ukraine's first President. Another historical date is December 8, 1991 when the CIS Foundation Treaty was concluded that sealed the disappearance of the Soviet Union from the political map of the world, legitimising the process of an official recognition of Ukraine as an independent state by the world community.

Since that time, these events have become history, though still reverberating after more than 10 years.

In our reminiscences of the pivotal period in Ukrainian history, we would like to address two questions to prominent Ukrainian politicians on their vision of the 1991 events from today’s standpoint and on the role of Ukrainian Financial Group in the formation of the independent Ukrainian state and development of the market reform and democracy. And the first in the line for these questions is Leonid KRAVCHUK, the first President of independent Ukraine.

Our choice was not random. Speaking about a historical figure, one usually refers to the past. And it is only in exceptional cases when a person is given such a distinction during his or her lifetime. However, one would agree that Leonid Makarovych KRAVCHUK is such an exceptional case. Although many of his ideas, decisions or actions might have caused opposite reactions from different political forces, this person is and will be in the future a tremendously remarkable historical figure for Ukraine as the man who stood at the cradle of the independent Ukrainian state and was Ukraine’s first President ever.

And, accordingly, Leonid KRAVCHUK’s vision of the processes that ran in Ukraine in 1990’s and, particularly, the role of different politicians and public figures in the creation and development of the new independent state in the center of Europe would be especially valuable. We appreciate Leonid KRAVCHUK’s consent to give an exclusive interview which is provided below.

Q.: Mr. Kravchuk, let me start from a personal question: if you could turn back time, would you take the same way that you have passed during the last decade? In particular, would you have courage to found and develop a sovereign Ukrainian state once again? It is obvious that even today Ukrainian independence has both its ardent supporters and implacable opponents, as a part of Ukrainians whose living standards have significantly deteriorated in the recent years put a blame for that on the change of Ukraine’s political line in 1990’s.

A.: First of all, I would like to get your message more precise with regard to principal matters, both in terms of its logics and my understanding. What I am trying to say is that the new line you have mentioned was endorsed on me by the Ukrainian people who elected me President of Ukraine in a legitimate and democratic way; therefore, I was fulfilling the voters’ rather than following my own voluntary decision. It was Ukrainian people’s will to elect me President, and it was Ukrainian people’s will that I fulfilled on August 24, 1991 by declaring the Act of Independence in the Parliament, which was subsequently approved by the Ukrainians in a referendum by the overwhelming majority. As a politician, I have been and will always be committed to carrying out the will of the Ukrainian people.

As to my vision of the first ten years of Ukrainian independence, whatever one might say, this is definitely more than simply a red-letter day. Today we have a perfect right to say that the past decade was equal to the whole epoch for Ukraine, as Ukraine has emerged as an independent state and was recognized as such by international community. So, it wouldn’t be an exaggeration to say that the past decade has brought about an epoch-making outcome to our country.

Q. It comes to the mind that Ukraine’s way to freedom and independence took a thousand years, and the freedom and independence were achieved through the great suffering …

A.: Absolutely. Today is always a bridge between the past and the future, and, therefore, epochal events should be viewed not only in the light of today’s needs, but also in the historical context, and assess its future impacts. However, we should also properly realize and appreciate the fact that with independence Ukrainians received a historical chance to decide on their own future, to keep, strengthen and develop their national traditions on an equal base with all sovereign nations. In other words, we are now able to run our home by ourselves. At the same time, we should do it reasonably, with a due respect to the thoughts and needs of Ukrainian people, including those who are disadvantaged under the new circumstances, and at least try to avoid obvious mistakes.

One can say things are going the different way from what we have expected, and the fledgling Ukraine state encounters numerous problems caused by wrong decisions. However, there is no surprise we have made mistakes. Even the established democracies have gone a long road often paved with blood and suffer. The course to freedom and establishment of democratic values has never been easy. However, these nations knowingly embarked on this course and successfully won the future they and their new generations deserved. I am convinced Ukraine also has a potential to overcome all barriers on its way to the integration in the free world. My conviction rests on an unbiased view at the country’s present economic situation, and I am definitely not alone in it.

Q: A friend of mine has compared restoration of Ukrainian independence (and he believes Ukraine has been restored as a successor of Kyivan Rus, the Cossack’s medieval state, and Ukrainian People’s Republic of 1917-1920) with the restoration of ancient Uspensky and Mikhailivsky Cathedrals in Kyiv. At the beginning, the restoration caused public debate as to whether it was too extravagant at the time when many of their compatriots had no access to basic food, medicines or clothes. However, with a flow of time, all blames went down, and the cathedrals have been completed, providing a constructive manifestation of today’s opportunities and will stay in the future as Ukraine’s great historical monuments and places of worship. Building Ukrainian sovereignty is a similar process: it develops day-by-day and year-by-year, gaining the maturity, sustainability and sensible content.

A.: I think this is a good analogy. However, the complaints about today’s difficulties faced by Ukrainian people should not be ignored. A state becomes mature only when it is really capable to take care of its people.

But let us take another analogy. Any reconstruction or repair is hardly a comfortable or amiable process. While the recent reconstruction of the Central Railway Terminal in Kyiv was underway, the terminal looked a real mess, with that terrible rattling, dust and huddles of construction materials and equipment. However, most people realized this should be endured, as they knew the repairs will be over soon, and Kyiv will have a new European class facility.

Similarly, we will be able to appraise the strengths of the Ukrainian state only by tangible results it provides in the future, when the building process is completed. There will always be people who do not see the wood behind the trees, but only those who are able to view the current processes comprehensively and pave way to the future, offering practical solutions of the problems, will achieve the success.

The passions and rapid developments of the recent past bring about a result you have already mentioned: the edifice of Ukrainian State is being erected out of a workday routine. It is not only true that many things are done for the FIRST time in history, - in fact, the HISTORY itself is made before our eyes and with our own hands, with all the load-carrying structures of the state, that is, government system, political framework, social sphere, army and police, education, culture, art, and other attributes of the state. Our time is supersaturated with events, sometimes the past decades or even centuries of development fit into days or months. I hope future historians or political analysts, even those who have opposite political views, would unanimously agree that we lived in a great era of the Ukrainian history.

Unfortunately, many people in Ukraine get a fragmented picture of the political and economic processes, as poverty prevents them from seeing the life in its full entirety. And we, politicians, should assume a significant blame for that.

As to me, building independent Ukraine is my life work in which I invested all my ideas, aspirations and will. Now I cannot imagine my life without it. The problems we faced on our way did not affect my confidence, but added composure and peace to my mind and soul. I am not afraid of any criticism or accusations, as the independent Ukrainian state has become reality and will stay in the future. This is the main outcome of the last decade.

Q: However, you have been heavily criticised, particularly for your readiness for compromise and ability to “squeeze between two raindrops”. However, many experts believe Ukraine should bless your flexibility and diplomatic talent that enabled gaining independence through peace without paying a single human life or a single inch of Ukraine’s land.

A.: Indeed, to me human life has always been a universal value. Even the most practicable political goals are not worth it. I was trying to be the President of all Ukrainians without bias to any political beliefs and independent of my own likings. You can remember the confrontation between national patriotic and pro-Communist forces in these days that reached flammable level. Each confronting side appealed to me., demanding to finish off the opponent, and threw mud on my name as a politician and human. However, my ultimate goal was to avoid political violence in Ukraine at any price. And now my conscience is clear, as Ukraine gained and strengthened its independence in a peaceful way.

I am happy nobody’s blood was shed at that time. And I regret it is being shed now.

Q: Many experts agree that even the developed states with their stable, well-structured political systems, powerful economies, an army of highly qualified professionals and robust legislation would find the challenges faced by Ukraine at the dawn of Ukrainian independence almost insuperable. Ukraine had to start the reform virtually from the scratch. What was your most useful asset in these days?

A.: People, of course. The most important task of those days was to identify the cadres capable of effectively solving the problems of the new independent state development. Our search was not limited to public servants only. We were also looking for economists, scientists other professionals who would be able to contribute into the reform, understanding the needs of the emerging state and adequately responding to the challenges of the transition period. But, generally, you might be right: it was really difficult to solve such a problem without a support from an organised pro-president political entity.

Among those who gave us a hand, Ukrainian Financial Group is always remembered with special warmth. In my view, this company is a perfect example of a business entity that has been knowingly and purposefully acting from an outset in the best interests of the nation by deploying the full scope of available tools – from business undertakings and financial solutions to political, sponsoring and charitable activities. In doing so, the Company manifested what I call practical, constructive patriotism – the most valuable and respected form of patriotism, in my belief.

Q: Could you give any specific examples?

A.: Yes, but let us first clarify the subject. To be honest, it had been shortly before the interview, when I found out the specifics of UFG’s business, as I scanned the Group’s 10th anniversary booklet while preparing for the interview. My only idea of UFG so far was that it was one of Ukraine’s first investment groups, a stock company founded with the aim to draw Western investment in Ukraine. I also knew that UFG’s predecessor company, Ukrainska Birzha, was organized by the Government as a kind of a pilot project of market-based transformation of the national economy.

Furthermore, I should probably apologise, but I do not know much more about UFG than an average Ukrainian, as the Group has always been quite unwilling as to publicising its know-how. However, it should be noted that within the past decade most Ukrainians, me included, heard a lot about Ukrainian Financial Group itself, as it was a sonorous name in Ukraine known as a source of a number of important reform-oriented ideas, initiatives and projects that contributed to raising Ukraine’s authority on the international market. I had many opportunities to make certain that UFG has been well-known throughout Ukraine and in many parts of the world due to various undertakings ultimately aimed at meeting the needs of Ukraine. At the same time, there were other businesses that initiated market relations in Ukraine, such as Slavutich or Bank Aval.

So, I do not have in-depth knowledge of UFG business specifics. However, I will try to assess the company’s various socially important activities from a political point of view. First of all, I would say that UFG and its management were among the pioneers and most vigorous advocates of market and democratic reform in independent Ukraine.

Q: Mr. Kravchuk, let me be frank: there is no altruism in business. The Ukrainian experience shows that people in this country come to politics out of self-interest or social ambitions, or for making their personal fortunes. At the time of your presidency the notorious grab-what-you-can privatisation and rampant corruption that marred Ukraine’s image in the world had not yet happened, and Ukraine was distinguished as one of the leaders among new independent states due to strong economic, political, scientific, and cultural potential rather than corruption and poverty. However, even at that time businessmen-turned-politicians would be driven by lucrative impulses rather than anything else…

I would not like to discuss this topic in detail, as it goes beyond the initially determined scope of our interview. However, I would like to notice that all people shouldn’t be tarred with the same brush. You wouldn’t argue that not everyone behaved like that.

It goes without saying that businessmen have their vested interests and protect them. However, this is not necessarily done in an illegal way or by “putting the hand into the cookie jar”. And, times were different. At the beginning of 1990’s market reform was a matter of life or death for businessmen. For instance, the Soviet Union’s central government owned 95 per cent of property in Ukraine; furthermore, state monopolies accounted for 80 per cent of the national product. Such environment was totally incompatible with market economy. So, businessmen were focused on developing a new model for the national economy and the new rules of the game allowing to satisfy their business and political ambitions and raise profits legitimately.

I quite often met UFG officials in my office while being President, but I cannot recollect a single case when they asked me to use my influence to solve their business issues. However, a number of UFG initiatives and proposals, that come to my mind, were designed to establish civilised market in Ukraine by creating market infrastructure, mechanisms, legal framework, etc. Furthermore, the company assumed the costs required for implementation of its market reform initiatives. For instance, UFG financed the activities on obtaining western legal publications and experience required for development of legal framework and regulations on market economic issues, as well as banking, insurance and other industries, conducted international legal conferences, seminars, etc.

It should be specifically noted that supporting sovereign Ukrainian state at the beginning of the 1990’s was quite risky. Today the sustainability of independent Ukrainian state has become an accomplished fact. However, ten years ago, despite the endorsement of independence by a majority of the Ukrainians in a referendum, the number of those doubting the successfulness of the new policy was quite significant. And the radical left would add fuel to the fire by aggressive propaganda (the tactics still used by them, though their political status has deteriorated since that time). Many Ukrainians were sure the independence would not last long, and the situation will fall back into place. The most aggressive opponents would offer quite bizarre scenarios, up to liquidation of Ukrainian independence by armed force, heralding prospects for the “traitors” closely resembling the reprisals of Stalin’s era. Not to mention the fact that even in the late 1990’s some members of the Parliament emphatically declined taking the oath when assuming the office, threatening their opponents at the noisy rallies, in written publications, and even in the Parliament.

Thus, people who decided to support democracy and market reform in Ukraine ten years ago definitely needed courage and strong nerve.

UFG made its choice to support the changes initiated by the new Ukrainian administration quite knowingly, deserving my full respect. Furthermore, in a few years after I left the office, I was awarded the Company’s prize as a sign of respect for our mutual work in the first years of independence. Notably, this happened in the middle of a broad campaign against me unleashed by my political opponents, some of which I literally saved from reprisals in their time.

Q: Do you remember your first contacts with Ukrainian Financial Group?

A.: I am sorry to disappoint you, but I am not quite sure when and where I first met UFG people. While being Chairman of the Supreme Soviet of Ukraine in the perestroika times, I quite often heard from the media about a new, energetic company that advocated market reform and operated quite a successful business. I might have met some UFG managers or specialists, but these meetings effaced from my memory due to a number of acute problems of that time (hope nobody will take offence). However, I remember quite clearly my later contacts with Valery BABICH as chief executive officer of Ukrainian Financial Group in the years of my presidency. As I already mentioned, there was a bad need in Ukraine for qualified, fresh thinking successful professionals who would be able to boost reform in different areas, but first and foremost in the economy. So, I started looking at Valery BABICH from a different, practical viewpoint, as he was characterised both by media and experts as a person who reorganised his company within a relatively short time in accordance with sound international management practices to achieve solid economic results. This made him a good potential candidate to a team of market reformers.

As far as I remember, the crucial test for Valery BABICH was preparation of my first visit to the United States in May 1992. Both my colleagues and me were willing to test him in a serious matter, as the trip was of vital importance for Ukraine.

Q: Why?

A.: Let me explain. I had visited the US many times. Particularly, I attended a UN session in 1991 as Chairman of the Supreme Soviet of Ukraine, which was the highest official position in Ukraine at that time. However, I was perceived, like other representatives of the former Soviet Union, as “Russian”. Later, in March 1994, I was cordially received in the White House during my official visit as President of Ukraine, a country, which by that time became a US strategic partner. However, the first official visit to the US in 1992 laid the foundation for Ukraine’s diplomatic breakthrough to the West.

However, it was not only for the importance of the visit for my newly born country and myself as a newly elected President that I was concerned. I should admit, that many Ukrainians still remember President George Bush Sr.’s hard stance and hard speech before the Ukrainian Parliament in August 1991 with regard to Ukrainian independence. Although we came to terms over the time, and the US President was the first to congratulate me with my election as head of the Ukrainian State by telephone, I was not sure that the friendly tone of our telephone conversation would transform in pleasant prospects for Ukraine’s relations with the leading Western state.

This was a typical working trip with little pomp and almost without grand press conferences and loud statements, with quite a few important documents signed. Instead, the agenda of this visit included intense contacts and negotiations with high government officials, politicians, businessmen, public figures, etc. In such meetings the parties form basic impressions, identifying common points for future development of the relations between the countries and establishing personal contacts that will determine the level of such relations. This is why we had to prepare for the trip very thoroughly.

Needless to say, the visit was critical not only for Presidential Administration, but for the Foreign Ministry of Ukraine as well. The US had recognised Ukraine and established diplomatic relations with us just a few months before the visit, so our co-operation was just in its formative stage. It should be emphasised that we were receiving great support from the Ukrainian diaspora in the US, but this was not enough to implement the project of such scale. Furthermore, we lacked experience of resolving such issues on our own without looking back at Moscow.

It is no secret that in 1992 the United States, as well as other Western nations, were seriously concerned about Ukraine’s nuclear arms status, as after the collapse of the Soviet Union Ukraine had the third biggest nuclear arms arsenal on its territory. This issue became one of the key items of our negotiations in the US. However, economic relations between the US and Ukraine were of equally principal importance. For Ukraine, establishing economic relations with the global economic leader was vitally important. Equally, it goes without saying the Americans would never give up an opportunity to set foot on a prospective market in the centre of Europe, providing a strategic link between West and East.

Therefore, involving UFG President Valery BABICH in the team within our delegation responsible for the business aspect of the visit was quite a natural step. We also considered in our choice his long past work experience with the Cabinet of Ministers and the State Planning Committee, which enabled him to assess Ukrainian market processes and prospects in the light of Ukraine’s state interests. However, I can admit that success of UFG headed by Valery BABICH was the most important factor that influenced our choice. In addition, he had significant authority in the business community as Chairman of the Congress of Commodities Exchanges of the Soviet Union, one of the first business associations in the former Soviet Union that was organised at the initial stage of market reform.

Q.: By the way, a few years later, a Wall Street Journal-sponsored Eastern Europe and NIS edition awarded Mr. BABICH the Man of the Quarter prize, qualifying him as one of the most influential people in post-Communist countries. This was taken as quite a logical decision both in Ukraine and abroad…

A.: Exactly. However, in spring 1992 Ukrainian independence took its first viability test without any hope for indulgence. Now in a lapse of years I should recognise we passed it successfully. Our first visit to the United States laid the foundation of special relationships between the two countries that developed into strategic partnership over the time. Furthermore, given a symbolic nature of relationships with the United States for a new independent state, the visit inaugurated the process of establishing relations with the West as a whole.

The business goals of the visit were also met. In the next few months Ukraine felt interest from major American banks and companies which began scrutinising the market for investment, modern technology export and other opportunities based on the agreements achieved during the visit.

Mr.BABICH participated directly in the negotiations on economic issue at all levels as a member of our delegation, and I should say his contribution to establishing tight co-operation between American and Ukrainian businesses was really significant. His understanding of economic and political situation, analytical skills and ability to find solutions to significant and complex issues, together with persuasiveness and consistency in asserting Ukrainian interests prompted me to invite him to join my team as an economic advisor and head of Entrepreneurs’ Council to be involved in the development and adoption of fundamental market reform principles in Ukraine.

In my view, Valery BABICH met all expectations in his new role. I remember a unique peculiarity in his style. In early 1990’s we were drowning in an idle talk on reform and hair-brained projects. However, few were able to serve as a role model by offering market-based solutions to economic problems. People would trust positive results rather than high-flown words. Mr. BABICH did not only develop economic reform concepts and programs in theory, but tried to draw expertise and best practices from abroad. Furthermore, UFG became a testing laboratory for strategic recommendations on market reform wherein advanced international experience was tailored to Ukrainian environment and practical solutions were developed through strict vitality and efficiency testing, as well as a showcase of advanced market experience offering infrastructure and methodological toolkits to achieve business goals. At the same time, the Group integrated businessmen, lawyers, economists and other specialists in a joint effort to develop and promote legal acts critically important for market reform in Ukraine.

What caught my eye when reading the above-mentioned UFG booklet was the company’s pioneering role in a wide variety of industries where it held leading positions. In fact, UFG acted as an icebreaker making a track for other Ukrainian businesses. Never before I have met people, who combined theory and practice so successfully.

Q: Do you remember any specific cases of successful combination of political and entrepreneurial activity you have mentioned before which had significant impact on Ukrainian economy? Say, in the investment area which is actually UFG’s main activity.

A.: I will try. I remember my visit to the United Kingdom in February 1993. Its agenda included meetings with Prime Minister John Major and visiting the EBRD Headquarters. Needless to say how important the relations between Ukraine and the United Kingdom were for establishing Ukraine in the international sphere. As to EBRD, market processes in Central and Eastern Europe and former Soviet Union were scrutinised by this major international financial institution.

Before the visit I discussed with Mr. BABICH some of its goals and objectives. I was interested in his opinion, as by that time he had already obtained significant experience in doing business in the UK and knowledge of the country’s business environment.

Both the UK and Ukraine were satisfied with the results of the visit, which particularly paved the way for enhancement of co-operation in the economic sphere, with the negotiations with John MAJOR and Jacques ATTALI, the president of EBRD making especially significant contribution to the success of the entire visit. In these meetings Mr. BABICH presented his initiative that we had discussed before the visit on establishing an international investment bank in Kyiv within a joint project of EBRD and UFG to provide a powerful vehicle for investment in the European countries of the CIS, first of all in Ukraine. The initiative was approved in London.

UFG played an active part in the project, carrying a significant part of project costs and the lion’s share of organisational issues.

Following these arrangements, Kyiv International Bank (KIB) was opened in April 1996 within the programme of celebrating the Groups’s 5th anniversary. Prime Minister John MAJOR as a part of his official visit to Ukraine attended the official opening ceremony. EBRD and UFG were founding partners and major shareholders in KIB. Through constructive co-operation of the parties, the CIS economies were provided an opportunity to draw solid investments from the West.

On the same day, Leonid KUCHMA, the second President of Ukraine, gave the case a further impulse. In his joint welcoming speech with John MAJOR to the guests of the grand reception at Kyiv Opera, he requested Prime Minister to mediate in negotiations with EBRD on organisation of EBRD Annual General Meeting in Kyiv. This would provide European investment community and the leading Ukrainian businessmen with an opportunity to meet directly for discussion on the ways for future co-operation and visiting some of Ukraine’s leading businesses. Furthermore, organisation of the Annual Meeting in Kyiv would be instrumental for EBRD in establishing its presence in the strategically important part of Eastern Europe.

Prime Minister John MAJOR agreed to support Ukraine’s initiative and discuss the issue with the President of EBRD. And he kept his promise: the Annual Meeting was convened in Kyiv. This was a great event for Ukraine from the viewpoint of both: establishing co-operation between Ukrainian businessmen and EBRD, and raising Ukraine’s positive image in the world, as both the negotiations with John MAJOR and the EBRD Annual Meeting in Kyiv were broadly discussed in international media and received positive and encouraging response for Ukraine.

As we see, efforts of Ukrainian statesmen and diplomats on intensification of market reform were effectively complemented by businessmen to the benefit of the entire Ukrainian society.

And yet another reminiscence. When looking through the UFG booklet, it came to my attention, that UFG drew to Ukraine the leading Western companies with a strong business and political influence. Along with EBRD, these included Merrill Lynch, LLOYD’s, PIERRE CARDIN, BMW, COMPAQ, SUN MICROSYSTEMS, WESTERN UNION, and other sonorous names.

Q: In other words, UFG proved with its own practice that business is the best peace envoy in the world, didn’t it?

A.: Exactly. As a politician, I can see a few positive impacts. Take one of the most well known UFG projects, co-operation with Western Union global fast money transfer network operating in 185 countries through its 90 thousand offices. The establishment of a UFG-operated nationwide Western Union service network in Ukraine integrated our country to the global Western Union family. And the success of Western Union business operated in Ukraine in full compliance with the company’s international practices raised international perception of Ukraine as a reliable partner.

This provides a good example of a company’s success, bringing benefits to the entire nation, which is specifically important in the first years of independence.

Q.: However, don’t you think that even in pure business terms the Group’s results are impressive? For instance, despite adverse investment climate in Ukraine, UFG drew 100 millions US dollars of direct investment in the Ukrainian economy, providing finance to Ukrainian companies and contributing to the creation of new jobs.

A.: I believe, UFG’s investment activities have important political impacts. I was really pleased to find out from UFG’s booklet that the company invested in strategic sectors of economy such as industry, agriculture, transportation, energy and utilities, finance and banking, and others. UFG projects are strategically focused on high technologies, as the company supports Ukrainian production companies in developing their products or draws advanced technologies from abroad to significantly improve the Ukrainian companies’ productivity and quality. UFG’s co-operation with National Space Agency, Defence Ministry, and heavy engineering industry provides a good example in this context.

In my belief, the above strategy is very patriotic in its essence, as it not only contributes to strengthening Ukraine’s technological potential, but also represents Ukraine in the world as a nation that is capable to effectively respond to technological challenges of the new millennium rather than a third world country. Furthermore, this approach not only raises the perception of Ukraine in the eyes of the world community, but also sets new standards and guiding lines for the future.

Q.: Mr. Kravchuk, if I am following your logics right, you put a stress on political aspects of business. If so, Valery Babich should not be considered a pure businessman, as politics and public initiatives comprise a significant part of his activities (although UFG has obviously supported them financially or otherwise). To the same end, there were several public organisations in which he was a founder, leader or member of their leading bodies. These, particularly, include Ukrainian Union of industrialist and Entrepreneurs, Ukrainian Congress of Business Circles, East European Union of Entrepreneurs, All-Ukrainian Union of Entrepreneurs, and others. Furthermore, he has recently been permanently involved in politics as Member of Verkhovna Rada for two consecutive terms and Chairman of Ukrainian Christian Association. What is your attitude to businessmen who turn politicians?

A.: My attitude is generally positive, although I believe, in this case, this was caused by the needs of the transition period. And, again, such people should be judged on a case-by-case basis depending on the results. As a rule, businessmen show constructive approach to reforming the society, as they are prompted by their own experience what should be done to make the economy work in accordance with market principles. Mr.BABICH, as I have already mentioned, has a strategic view of the processes on a national scale and is capable of providing solutions in the nation’s best interests. However, is he the only one? Take, for instance, the Ukrainian Union of Industrialists and Entrepreneurs (UUIE) in which UFG was a co-founder. This organisation has a tremendous influence on significant political processes. UUIE Congresses have had significant impacts on all branches of the state power in Ukraine, providing an important judgement on their performance and offering strategic alternatives within the process of the nation’s development. Furthermore, UUIP has become a real “breeding farm” of Ukraine’s political elite, as its people are now represented on all levels of the state power, making a direct and significant impact on the development and nature of Ukraine’s reform. It would be not out of place to remind that Leonid KUCHMA, the incumbent President of Ukraine, as well as two former Prime Ministers, and a number of Ministers and prominent members of influential political parties have all come to politics form UUIP. Furthermore, the position of UUIP considerably influenced adoption (or denial) of a wide number of legal acts and Presidential edicts.

However, other entrepreneurs’ associations in which Valery BABICH or UFG were involved have also been active and instrumental in politics. In particular, when in 1993 there was a series of problems and misunderstandings between Russia and Ukraine’s authorities, entrepreneurs’ associations from both countries drew the attention of Russian President Boris Yeltsin and myself, that freezing the relationships between the two countries would be unacceptable and concluded an agreement of co-operation. By the way, it was Valery BABICH who signed this document on behalf of Ukraine. The agreement was signed at Mariinsky Palace in the presence of all Ukrainian highest officials and prominent businessmen from Russia and Ukraine. As a result, the political and diplomatic deadlock was streamlined, and economic co-operation between Russia and Ukraine received a boost.

Q.: However, Mr. Babich did not always share your political views by far. Analysts were almost shocked when in 1994, being known as an instigator of the market reform launched by Presidential team and a CEO of a leading business company, he was elected to Verkhovna Rada in a historically “red” district in Western Donbas. Furthermore, in his campaign Mr.Babich was supported even by independent trade unions that were known as vigorous opponents to the market reform. In the next parliamentary elections in 1998, he won in a void district in Kyiv dominated by conservative right voters. And in the recent years he seems to have been totally preoccupied with Christian values known to be free of any divisions along political lines. What is this – elastic principles?

A.: Well, as to working in the Parliament, I would remind you that Valery BABICH and myself used to be members of the same parliamentary faction. As to “elastic principles”… As far as it concerns Valery BABICH, I know him as a man who never compromises or bargains on his principles. However, he is a master of proving his case, even to his opponents. I watched that with my own eyes more than once in the negotiations or discussions. With the elections, this seems to be the case, although his team in the campaign could probably provide a more precise explanation.

However, even if his views were different from mine, specifically the political views, I would never hold it against him even in my thoughts. I would always welcome independent thinking and encourage debate. By the way, debate often rose between me and Mr. BABICH when he was my economic advisor, as well as between him and members of the Government. A dispute between Mr. BABICH and former acting Prime Minister Zvyagilsky has come to my mind when Mr.BABICH, in the heat of polemics, claimed that he would rather place a bet on UFG and lose than agree with what he considered an unreasonable economic solution.

I am not ready to make general assessment of how successful UFG business is. I assume UFG might have had its own mistakes, failures and losses like any other business. This could happen throughout the world, so much the more on the complex Ukrainian market. I even remember an unrealised UFG project, Interport Free Economic Zone and Consignment Terminal on Ukraine’s western borders. This project had a potential to allow Ukraine capitalising on its unique location between East and West. I even signed an edict on this project, and major western and Ukrainian companies were invited for participating in it, but unfortunately it has remained on paper.

Sometimes Valery BABICH and UFG specialists stepped up with non-trivial and comprehensive, yet radical initiatives. This is specifically true for his idea to merge Ministry of economics and Ministry of finance into one entity that he has been offering for discussion to several Prime Ministers. In his opinion, the merger would turn the economic situation one hundred and eighty degrees, as the benefit of spending money from the state budget would turn into a need to earn money for the state budget. Interesting? Yes. Unusual? Yes, indeed. However, no Prime Minister could yet bring himself an inch closer to this idea. Though I wouldn’t even try to say who is right about it.

However, during the years of Vary BABICH worked in my team I saw more than once that he and his colleagues have always tried to solve problems with maximum prudence, taking into account the smallest details to obtain predictable outcome. Their ability to foresee the situation and start projects that run ahead of their time in the true sense of the word are incredible. It is really striking how often UFG began to develop business in the areas which would occur to other people’s minds years after.

The same is true about political initiatives supported by the UFG leader. Mr. BABICH made Christian values a cornerstone of his political programme in 1994 and has been standing up for them consistently since that time. Initially quite few people understood him, while many professional politicians even jeered at his “extravagance”. However, today the Church has the highest credibility rating among all institutions (over 80 per cent). A vast majority of Ukrainians realise that Ukrainian reforms should rest upon fundamental spiritual values and concern for people to make Ukraine a flourishing state. Only harmonically developed, steadfast people will be able to build the nation capable of responding to the challenges of the new century. And only those people, who feel concern for them from the state will associate themselves with it and defend it.

So, this was another case when Valery BABICH saw further than other people.

I dwelt so much upon UFG not only for the sake of giving an irrefragable answer to your questions. We still need to learn how to appreciate fairly the deeds of individuals and companies that use their best effort to build new Ukraine. This is to be gained with experience, and this will be the measure of our society’s civility. This is why I would emphasise the political importance of the topics, raised in this interview. Today it is as crucial as it has probably never been before to get Ukrainian business involved in a constructive reform based on the principles that would give the green light to fair competition, growth of a middle class, and achieving the living standards that enable people to feel socially protected.

Ukrainian Financial Group provides an illustrative example of importance of a business knowingly guiding by national interests and giving a hand to the developing nation in solving its tasks.

On the other hand, to be frank, I would like to cordially thank these people for what they are doing. A grim paradox is that although I have known them for so many years and eye-witnessed their great contribution in building independent Ukraine, until now I could not find the time to thank them for serving Ukraine and its people faithfully. Moreover, none of UFG people has yet been awarded by the state. By the way, this is a response to your remark as to businessmen’s lucrative motives.

I believe the fact that independent Ukraine and UFG are almost coevals is quite symbolical. This is more than just coincidence in time, this is a spiritual alliance. Please take my whole-hearted congratulations and thankfulness for many years of selfless work for Ukraine and best wishes to your business in the future. May all your kindness be repaid a hundredfold!

Q.: To conclude our conversation, let me ask you a personal question. The decade has approached its end, bringing Ukraine its first good round figure. During these years you seem to have experienced attitudes of all, yet even extreme shades, from highest glorification to incredible accusations. Your life in the last ten years could be represented graphically by a cardiogram zigzagging up and down. What are your feelings after all these ascents and falls?

A.: People are always people, and one should love them and forgive them in all their diversity. Although it may be difficult to forgive those who resort to blatant calumny against you.

You have noted it right: it might be by God’s will or at the fates decree, but I know I have to bear Ukrainian independence as my cross. Such was the will of the Ukrainian people, which has always been my highest law.

However, I am quite aware of my guilt before the people whom I involuntarily caused to suffer, as in the first years of Ukrainian independence millions of Ukrainians underwent many severe trials, especially the poorest and least protected groups. However, I have no right to say the words of consolation or justification. The choice have been made, and the only way to be honest to yourself is to clench your teeth and bear your cross to the very end, being held responsible to only the God and your conscience.

I see the only future for myself: using all my strength and will to finish my life-work and make Ukraine a prosperous country whose people will feel confident and protected on their own land.

I am not in the age to dream or draw impracticable projects, and I am acting and speaking in realistic terms. I have set the goals for myself and I know what should be done to meet these goals. Western democracies have achieved the same goals Ukraine is now striving for, and established the highest living standards and equal opportunities for all people. Furthermore, they had their own trials on their way and passed them with honour and dignity.

I am ready to stand any blows, reproaches and humiliations for the sake of the independent Ukraine, as I firmly believe in its happy future that will be achieved if we go down the road with love to God and Ukrainian people.

I know, that eventually I will find the rest in the Ukrainian ground. And I would be happy if the future generations of Ukrainian people know that I was one of many Ukrainians who knowingly built and developed the Ukrainian state for the sake of their better future.

Our great poet Vasyl Symonenko wrote frank and honest words, “Ukraine, I will die with your name on my lips. And live in your name”.

I am happy to live in the name of Ukraine that will bring happiness, welfare and love to its people. And I am saying it with the light heart, as I know Ukraine will certainly be such a country.