Interview – Volodymyr Groysman, Prime Minister of Ukraine
Motivated by his passion for those who slid through the cracks of the country’s old system, Ukraine’s youngest-ever prime minister does not want to be just any politician – he wants to be the leader who made his country stronger. And despite Ukraine’s recent challenges, he is confident that his country offers vast opportunities that will increase prosperity for all and act as a basis for a more democratic Europe. With an ambitious reform agenda touching on nearly every sector of the country, Volodymyr Groysman explains how Ukraine is on track to becoming one of Europe’s fastest-growing economies and a rising light in a world facing increasing threats from undemocratic forces
In 2014, following Ukraine’s revolution, you were elected chairman of parliament and in 2016 you became prime minister. What have been your most significant challenges and accomplishments during these transformative years?
After the Revolution of Dignity, we faced unprecedented challenges. We lost one-fifth of our economy, were facing a military invasion on our Eastern front and Crimea had been annexed. The Russian aggression halted the supply of energy resources to Ukraine and implemented other restrictions in order to destroy all of our economic ties. This was the beginning of the so-called ‘hybrid war’ against Ukraine. At that given point in time we hadn’t fully realized that this was not just a war against Ukraine, but a war against the democratic world as a whole.
The two following years were marked by challenges and a return to shaky stability. When my government arrived in 2016, we had to secure economic growth and continue to strengthen Ukraine. We had to impulse systematic changes in many spheres of Ukrainians’ lives, including the economy, energy, decentralization, local administration, healthcare, education, national police forces, the armed forces… just to name a few. More importantly, all of these had to occur at the same time – our agenda was to build up a new Ukrainian state. I’m proud to say that in these past two years we have managed to renew stability and macroeconomic growth, and we have seen results in each of these spheres.
This is a time for firsts – the first time in history we have had a roads fund; with our international partners we have created the first energy-efficiency fund; the first fund to support startups; the first agency to support exports; the first office of investment support; and the first council on industry development. We have also started the largest-scale reform of public service in the history of Ukraine.
What are your priorities going forward?
In 2019, Ukraine will have parliamentary elections and our number-one priority is to keep the pace of our efforts in order to secure accelerated economic growth. My government has also proposed a new system of education, healthcare and pensions, with the support of parliament. We’ve also suggested a new system of privatization.
For us, it is of utmost importance to maintain macroeconomic stability and secure sustainable development. Our continued collaboration with the IMF is key for us to be able to provide responses to the most urgent issues in the social and economic realms. In the years 2007 to 2014, Ukraine accumulated unprecedented foreign debt—over $40 billion in the period. That is a huge challenge for us today. The logic is that we must keep moving forward with our reforms, and this is also a prerequisite to continue to receive international support, which will get us out of this situation.
The task at hand for 2018 is full-scale privatization and I’ve created a separate group in the government to deal with this issue. The group is very inclusive, transparent and includes our international partners as well. A related privatization law came into force in March 2018. Prior to this, it was impossible to go about efficient privatization in Ukraine. We had seven laws, which combined made it extremely difficult, if not impossible to privatize. Today, we work with one privatization law, by which we’ve chosen to put the process of privatization under the jurisdiction of English law. The law’s being under English jurisdiction helps big companies attract experts and consultants to give them advice on how to get ready for privatization, and we are also conducting electronic e-options for bids. The process towards full privatization has started.
Which sectors are you targeting for privatization?
We have 3,500 state companies. It’s an unprecedented number. For a country like Ukraine it could be understandable for there to be 200 to 300, but not 3,500. We have state-owned companies in every sector of the economy – from agriculture to industry – and this year marks the 27th year of our independence. Although we have managed to make some state-owned companies cost efficient, this is still not enough.
What opportunities could this create for U.S. companies?
For the United States, our country has great potential and we can provide high-quality collaboration and huge opportunities in a wide array of sectors like energy, infrastructure and agriculture, as well as military, space and machinery. We are continuing on reforms, conducting de-regulation, we are in an attractive position when it comes to taxes and were creating new mechanisms for business protection. I also hope that in the near future we will have a new anti-corruption court, which will be a strong element ‘towards an efficient anti-corruption fight.
We have recently introduced a public e-procurement system called ProZorro, through which hundreds of billions of dollars’ worth of business flows. It also provides the opportunity for the American market to gain digital access to Ukraine’s market. Recently, we have launched strong projects with US companies in nuclear energy and a $1 billion contract with General Electric, which stipulates that we will not only buy locomotives from them, but we will produce components of them as well. We will provide up to 40 percent of the labor locally. This is an example of how we are stronger together.
We have profoundly deregulated the system of gas and oil production as well as having created attractive investment conditions and decreased royalties in their production. Ukraine is a gas country but we have been importing from foreign countries because of corruption and over-regulation destroying our production and increasing our dependence on Russia. This has all changed now. This sector is just one example of where we can strengthen and deepen our collaboration with the US.
We have created a Free Trade Zone with the EU and Canada, and we have finished talks for a Free Trade Zone with Israel. We are also finalizing talks with Turkey. These all create new opportunities for the development of industry and put Ukraine in a position to become a very important element in the value chain. We also have massive opportunities in the logistics sector. Today we see clear signals that aviation and ports are developing very rapidly. Roads are a huge challenge to the country which we are currently tackling. Many companies are coming to Ukraine to build their plants here – if I’m not wrong, 49 new plants are being constructed in Ukraine right now. The IT sector is growing, as well as agriculture and light industry. On top of this, we truly do have great potential in terms of human capital.
How would you evaluate current bilateral relations with the United States?
Today we feel very considerable support from the United States. The level of bilateral relations is quite high and I have a clear feeling that with each month that passes, those relations are becoming even stronger. Back in 2014, when we faced the aggression from Russia, the United States played a vital role in supporting our statehood and stopping the aggressor. I think that many further generations of Ukrainians will remember that. I would like Ukraine to be a reliable and strong partner for the United States and other democratic allies. We need to be an economically and democratically developed country that respects human rights and a country with a fair and just courts system, and this is exactly the direction we are moving in.
This is an extremely important geopolitical arena. How would you define the role of Ukraine in the region?
I’m absolutely confident that Ukraine’s role is growing today. Also from a security standpoint, since today we have one of the world’s strongest armies, on the eastern border of Europe. I believe that a developed Ukraine is a serious basis for the further development of a democratic Europe. Europe will not continue to be successful without Ukraine.
What strategic value does Ukraine offer the United States?
I think the importance here is that we share common values and that Ukraine is part of the democratic European family. And I am absolutely convinced that we are stronger together.
What would be a fair perception of Ukraine today?
Ukraine is a modern, 21st-century country with huge opportunities that haven’t been capitalized on to their full extent. We have our successes, we have our challenges and we have our failures just like anyone else. Despite that, I think that the opportunities in Ukraine are impressive compared to other countries on the continent. From a medium- and long-term perspective, Ukraine will become one of the strongest economies in Europe and those who come to invest here first will be the most successful. The risks we have today are much lower than the opportunities. Regarding perception, I think that a negative perception of Ukraine has been artificially created as part of the hybrid war. We understand that the aggressor has attacked us with one aim – not to allow Ukraine to join the club of democratic countries.
Yet, we have fought back against that aggression. We understand the enemy will continue to wage a war against us through their tanks, with energy issues, with blockades, hacking attacks and propaganda. They will do anything they can to stop Ukraine and prevent us from being successful. The good news is that Ukraine’s results no longer depend on them. In the first hours or days of the aggression, they were able to get closer to their goal, but with each month and with each year that pass, they are getting further and further away from it. We never thought that Russia would use their weapons against us or violate our borders, but this has become the new reality of this world. My task today is to boost our progress and our strengths and minimize our weaknesses.
You have an unusual story as a politician. Elected to a city council when you were 24, you became mayor at 28, vice prime minister, chairman of parliament and then prime minister at the age of 38. What has driven you so far?
To be completely frank, in 1995 when I graduated from college, I began my career in business. Politics wasn’t even on my mind and I became quite successful as an entrepreneur. In 2001, I was residing in a small area with a lot of people who came from Chernobyl after the accident. At that time, I had a business, was quite well off and didn’t have any problems, but quite often in the evenings, the townspeople would get together and ask me questions on my way back from work.
They told me that none of the city representatives cared about their housing or utility problems. I went to those representatives, to try and help find resolutions to the peoples’ problems, only it wasn’t that the government representatives couldn’t find solutions, but simply that they didn’t want to. I truly felt as if they did not care at all.
This is when I got into politics. I decided I wouldn’t fire the people who weren’t doing their work, I would oblige them to work. I realized my actions were making a change and like anyone, realizing you do something well makes you happy. The same principle applies to my role as prime minister – I don’t wish to simply be another prime minister in the history books of Ukraine; I would like to be known as the prime minister who made his country stronger. This is my motivation. We can make Ukraine great now.