OREANDA-NEWS. January 27, 2011. The first, traditionally the most difficult month of the year we are finishing quite easily and in an organized way. Entirely, in an automated way and according to the budgetary schedule the social payments of the state are being made. 

The State Treasury has opened allocations for the protected expenses since the 5th of January – to the amount of 11 billion UAH. 

Levelling subsidies to the amount of 1,5 billion UAH have been entirely transferred to the local budgets.

Subventions for the families with children to the amount of about 2 billion UAH.

State social assistance is now coming on schedule to the child orphans and children deprived of parental care, as well as to tutors and adoptive parents.

Housing subsidies are being transferred in full amount. This year about 1,5 million families have received the housing subsidies using the simplified order. 

I’d like to pay attention of the citizens to the fact that according to the new Tax code that have already taken effect people with two or more children aged under 18 are entitled to income tax abatement.

This tax abatement is being made use of by million of people. By the way, for some reason the Tax code opponents have forgotten about this important social privilege that has been granted to the citizens by the state.  

If the total income of a family where both parent are working does not exceed 3200 UAH they will have at their disposal 280 UAH of compensation according to the Tax code. You must admit, it is substantial for families with low income. 

It is not only a growth of family budget granted by the state, but also - along with the baby help – a motivation for increase of birth rate. 

Because you know the one-time assistance is being paid by the state during the first years after the birth of a child, but the income tax abatement, I mean the additional means in the family budget is valid until the full age of children.
 
At the same time we came close to financing the development expenses.

Yesterday I had a meeting with German businessmen that have united themselves into a delegation of German economy in Ukraine. That meeting allowed me to draw such a parallel: the scale and complicity of the task on modernizing the economy of Ukraine are comparable with the unprecedented transformations that were carried out by Germany in 1950th .

The whole world had been recovering then from the Second World war. Today the globalized world is withstanding the challenges of the slowing down economy, shortage of resources for development. These challenges have not been properly realized and examined yet.

That is why in the present situation development could be a much more complicated task than ia a traditional economy of the last century.

Nobody is waiting for us at the international markets with a welcome drink. On the contrary, we are facing  very tough conditions. Either we enter the markets with unique competitive propositions or yield to other countries in development tempo and the quality of life.

The Government is conscious its responsibility for realization of our competitive advantages.

What is our competitive proposal to the world today? Apparently it is our agricultural production, unique transit potential and high enough level of engineering and technical thinking in our country.

The world is starting to face the problem of food shortage.

Ukraine as a country with the richest black soils has a substantial potential for participation in solving this problem. 

We expect that already in the nearest time we would be able to fully satisfy the domestic demand for food, and in the perspective to play a significant role at the international food market.  

 To fulfill that task we have already instructed the authorities to work out and pass the appropriate national projects: “Grain of Ukraine”, “Contemporary animal husbandry”.

These projects are aimed at modernizing the agro-industrial sector, improvement of the export potential and competitiveness of this sector.

In the context of transit potential Ukraine is commonly meant only as a transit country for energy resources. But we all know that such position is vulnerable especially in connection with the new policy of Russia.

So I’d like emphasize – the spectrum of our transit chances is much wider. Our key goal should be integration of transport network of Ukraine into the European one.  Elimination of the numerous barriers and simplification of customs clearance procedures as well as the balanced tariff policy will uncover our competitive advantages in the sphere of freight transport. 

The next aspect. Contemporary economy is being increasingly determined by the quality of human potential. 

 The UN experts’ conclusions say that while some decades ago only countries with rich natural or financial resources held the potential advantages, the economic development of today is to large extent stipulated by the human potential.   

It is quite high in Ukraine. In particular, our country is still holding the competitive advantages of labour force training and qualification level. But we will have to stimulate training of young specialists in those professions that are asked for by the new economy of 6-7 technological structures based on innovative science intensive processes.

Special attention should be paid to the training of technical specialists.

Among the state priorities are also – support of science as the foundation for the new economy model based on knowledge and technology. 

Once again I would like to emphasize that from January the 1st of this year the new stimuli for innovative and investment development have taken effect. The Tax code provides for reducing the basic taxation rate, speeded amortization, directing part of the income to energy efficiency, modernizing and innovative processes.

At the same time we understand that modernizing of economy were impossible domestic resources and public funds only. So one the priority tasks of the Government is to stimulate private investment inflow for modernization.

One of the main problems that we came into collision with are perhaps bureaucratic resistance and corruption. 

It has not only created unfavorable conditions for the businessmen, but became an obstacle for systemic reforms.

Today the main standard acts have been adopted in Ukraine that correspond with the European principles of business activities regulation.

Since July last year changes to the Law on licensing system in the sphere of economical activity stipulate a declarative principle of business registration. The list of activities and works that are liable to licensing has been significantly shortened.  The Law on regulating of town planning alone has abolished a large number of permissions that were needed to start building and shortened the duration of all procedures that were left to two months.

We have already reduced by one third the number of economical activities and by 80 % the number of trades that require licensing.

It is quite a complicated process. But we are sure that the confused system of permissions, licenses, standards, certification demands that scared the potential investors away will be left in the past. Resolute stopping  of the officials’ arbitrariness that could accept or decline an application to their own wish is an enormous step towards improvement of investment attractiveness of Ukraine. We firmly declare that are building a free market economy with the rule of law, not the rule of officials.

In the ideal we plan to come to such a mechanism – a businessman is writes an application and hands it in to one authority.

And in some clearly defined time he receives all the permissions in a “single window”. In such a way we will firstly reduce the time losses for the business itself, and secondly minimize the contacts between the state officials and the businessmen in order to reduce corruption as much as possible.
 
Dear colleagues!
In the frame of the instruction of the President of Ukraine? On the basis of  the Programme of economic reforms till 2014 we have generated an investment projects data base at such directions:

125 strategically important branch and regional investment projects to the total amount of about 200 billion UAH;

714 investment projects at priority directions of economic and social development to the total amount of about 900 billion UAH;

Against part of these projects we will attract funds of European, Russian and world organizations and private foreign investors.

The Government will initiate and support investment projects in the regions and branches at the following directions in particular:

- development of sea oil and natural gas fields that gives an opportunity to reach an output of 10,3 billion of cubic meter of natural gas and additional budget inpayments of about 1 billion UAH per annum; - налагодження серійного виробництва літаків Аn – 140 та Аn – 148-100;

- working out and serial production of turbo reactive double circuit engine АІ-28 for the perspective modifications of aircrafts;

- agricultural machine building: technical refurbishment of tractor manufacturing at a Production association “Makarov Pivdenmash”;

- construction of the processing and storage complexes for agricultural products (gross markets) in the central, western and southern parts of Ukraine that will enable to regulate domestic food prices by means of market mechanisms and improve the export potential of domestic agricultural products especially under the conditions of significant rise of world demand;

- metallurgical complex: replacing of energy efficient production of steel and metal-roll with energy effective one at an open corporations “Zaporizhstal” and “Donetsk metallurgical plant” that will significantly reduce  the cost of metal-roll for domestic market. This - first of all - will encourage the development of the building sector and improve the competitiveness of metallurgical production;

- development of high technologies: implementation of the project “Production of satellite navigation equipment for the GLONAS and GPS users” at Kharkiv institute for radio technical measurements. 

As well as many other projects.
 
The agenda.
At today’s session we will discuss the action plan for fulfilling the obligations of Ukraine that come out of its membership in the Council of Europe.

In particular: fighting corruption, propositions on the improvement of election legislation; civil society development; implementation of judicial reform; improvement of human rights protection etc.

I attract your attention to the fact that among other things the action plan foresees accompaniment by the central executive authorities of a number of socially important law drafts the authors of which are opposition members of parliament.

This fact confirms once again the groundlessness of allegations that the Government ignores the position of its opponents. In the reality we are always eager to work together with all those who are not indifferent to the fate of our country and who represent a constructive position.

The Government is proceeding with its work on adjusting the normative legal documents in accordance with the tax code of Ukraine. 

Today we will examine the resolution drafts on: VAT exemption for the services granted by the geriatric and custody homes; land tax exemption of the producers of national films until the 1st of January 2016. 

We go on with the work on strengthening control on observance of budget law, effective and target use of public funds. At today’s session we will examine the changes to the Order of local budget funds use.

We will also consider the Typical description of a book-keeping service of a public institution. The adoption and realization of this document will ensure establishing of unified approaches and demands to book-keeping in the public institutions. Besides the role of this service in the administration of the public allocations, material and non-material recourses will be strengthened and the finance discipline in the public sector will be improved. 

We will also discuss the changes to the Decree of the cabinet of Ministers of Ukraine “On standardization and certification”.

At today’s session we will examine the list of components of the liquid missile fuel that should be utilized in 2011-2012. 

Adoption of this list will enable us to go on with utilization of melange in accordance with the Memorandum on mutual understanding between the Cabinet of Ministers and OSCE.

It is planned to eliminate over 12 thousand tons of liquid missile fuel components that will significantly reduce the potential ecological threat to the life and health of people. 
 
Dear present!
Today we will pass the decision of the Government on preparation and commemoration of the 90th anniversary of Georgiy Beregovoy – our renown compatriot, born in Poltava, that remained in the history as a hero of the Great Patriotic War, a test pilot, an outstanding cosmonaut, director of a Center for cosmonaut training and a public figure.

Georgiy Beregovoy was two times decorated with the award of the Hero of the Soviet Union, the only Soviet cosmonaut who received the Hero of the Soviet Union award for his courage in the air battles during the Great Patriotic War.

There is not much time left till the 15th of April, so I ask the Organizational committee and of members of the Government to pay special attention to commemoration of this anniversary at a high level. 

Thank you for your attention.