Ukraine: Twelve Years of Independence
On August 24, 2003, Ukraine celebrates the twelfth anniversary of independence. A young member of the European family of nations,
Ukraine has been dealing with many challenges on the path towards becoming a country with deeply entrenched rules of democratic
governance, a globally competitive business sector and a vibrant civil society.
The past year was marked by formation of the first coalition government and continued economic growth at home as well as further steps
to strengthen Ukraine’s positions abroad and deepen its friendly relations with strategic partners, including the United States.
One of the most important accomplishments in domestic politics over the past 12 months is creation of the first coalition government in
Ukraine’s history. The new government was formed in November 2002 reflecting the current political majority in Verkhovna Rada, the
Ukrainian parliament. This has created conditions for much more effective cooperation between the legislative and the executive branches
of power. The recent approval of the Cabinet of Minister’s Work Program by an overwhelming majority of the parliamentary groups and
factions is an indicator of the new positive dynamics in Ukraine’s domestic politics. Another one is the fact that over 170 laws – of which
more than one-half were initiated by the government – have been passed by the parliament since the formation of the new cabinet. The
presence of a viable coalition government backed by the parliamentary majority has already resulted in the progress with the reform of
tax and pension systems, the adoption of the civil and economic codes and will facilitate a faster pace of socioeconomic development of
Ukraine.
Since the moment of obtaining its independence, Ukraine has been pursuing the policy of integration into European and Euro-Atlantic
structures while developing friendly relations with all neighbors. A founding member of the United Nations, Ukraine has always stood for
upholding the norms of international law and for strengthening the role of the UN in the issues of global security. Ukraine believes that the
role of the UN is crucial in establishing worldwide socioeconomic preconditions for peaceful and harmonious development.
As the global community facing many deadly threats, including international terrorism, Ukraine recognizes the need to commit even
stronger to the values of peace, liberty and free markets. The formal declaration of Ukraine’s intention to join NATO and the country’s
participation in shaping continental security structures are among important developments of the recent months. Ukraine has also made
progress towards membership in the European Union. The country has achieved stable rates of economic growth and is working to
harmonize the Ukrainian legislation with that of the EU in the key areas.
The participation of the Ukrainian troops in peacekeeping operations is tangible evidence of the country’s readiness to play a role in
ensuring peace and stability in the world’s troubled areas. Beginning this month a brigade of 1,800 Ukrainian servicemen will serve
shoulder-to-shoulder with the troops from the United States, the United Kingdom, Poland and other countries promoting peace, security
and stability in Iraq. This deployment culminates the ongoing process of establishing viable partnership ties between the Ukrainian military
and the counterparts from the US, NATO and Partner countries. Other examples of cooperation include decisions to open Ukrainian air
space for overflight by the coalition air forces during the campaign in Afghanistan and dispatching a Ukrainian radiochemical and
biological defense battalion to Kuwait during the campaign in Iraq as well as Ukraine’s participation in a series of multinational military
exercises.
Besides playing a role in the international peacekeeping missions, Ukraine has a lot to offer to the world. Every year, thousands of
specialists form different countries receive higher education diplomas in Ukraine. The country’s scientific prowess is successfully applied
in international projects like Sea Launch, a commercial satellite launch service. For several decades, Ukrainian companies have been
among major suppliers of equipment and technical assistance in infrastructure-enhancing projects in dozens of countries in Central and
South-Eastern Asia, Africa and the Middle East. In the past few years, the Ukrainian producers, especially the machine-building industry,
have managed to increase their presence in these markets. Today, no-one is surprised when Ukrainian companies win contracts in India,
Turkey, Turkmenistan or Brazil. Ukraine has expertise in construction of railroads, bridges, plants, oil- and gas-pipelines, refineries, as
well as water and electric power supply networks. Ukrainian Antonov cargo airplanes are known to be the best in the world. This
extensive potential is now receiving a boost from the domestic economic growth and Ukraine is looking to increase participation in
international business projects.
Over past three years, Ukraine has been reporting positive rates of real output growth. This is an unmistakable sign of the rebirth of the
national economy which suffered a protracted fallback in the early and mid 1990s. The GDP grew by 7.5% year-on-year by the results
of the first six months of 2003. Industrial output went up by 12%, exports by 27%, bank credits by 17%, and personal income by 11%
during the same period. Meanwhile, the rate of inflation – which amounted to 4.6% during the first six months of this year – remains
under prudent control of the National Bank of Ukraine. Ukraine is on the verge of becoming a member of the World Trade Organization
(WTO) – there are all reasons to expect this by the end of 2004. The Ukrainian government is actively working towards establishing
free-trade zones with the members of the Commonwealth of Independent States (CIS) and, in the longer run, with the EU. Reciprocal
opening of markets to trade will provide a further positive impulse to the growing Ukrainian economy. The sound economic policy of the
Ukrainian government and the growing dynamism of the economy have been noted by the world’s leading rating agencies which recently
upgraded Ukraine’s credit rating from “negative” to “stable” outlook.
The United States has been one of the most valuable economic partners of Ukraine. As of January 2003, there were over 1,000
companies with a share of US capital registered in Ukraine. Flagship names of the US business, including Cargill, Boeing, John Deere,
Procter & Gamble, Kraft Foods, AIG, and Coca-Cola, are among the most successful foreign companies that operate in Ukraine. The
US accounts for the largest share (17.5%) in the cumulative foreign direct investment (FDI) in Ukraine which stood at 5.6bn US dollars
as of April 2003. The US is also a leading source of the portfolio investment in Ukraine (24% of the total). As the capital flows from the
US to Ukraine tend to grow, the Ukrainian government intends to deepen bilateral economic cooperation through a number of initiatives
to improve the conditions for investment and entrepreneurship, including special investment regimes and product-sharing agreements.
Ukraine has been consistently working to strengthen cultural and humanitarian ties with other countries. In addition to the embassy in
Washington, DC, there are two other representative offices – in New York and Chicago – working to facilitate travel of persons
between Ukraine and the United States. Soon, the office in San Francisco will join in this work. Thanks to the reciprocal bilateral
agreement of December 2002, the citizens of the US and Ukraine are now eligible to obtain multiple-entry visas for the term of up to five
years. US citizens of Ukrainian descent are eligible for the waiver of the visa-processing fee. In 2002, over 45,000 US citizens were
issued Ukrainian visas while the results of the first six months of this year allow expecting an even greater total number of visitors in 2003.