The Year of Poland must leave a mark of a modern country in the minds of Ukrainians, Marek ZIOLKOWSKI is convinced

WE MUST PROVE

“What is the overriding goal of the Year of Poland in Ukraine? What would you like to hear when the results of this year are summed up?”

“In the past twelve or thirteen years we have managed to quite significantly enhance Poland’s image in Ukraine. It is very important that in recent years Ukrainians’ trust in Poland has increased to such a high level, which no one could have dreamed of fifteen or twenty years ago. Now we would like to show Poland in one year and in a more integrated way as a modern European state. This is required for our strategic partnership and above all for our peoples, so that Ukrainians and Poles could look at each other not through the prism of history, which is also important, but above all through the prism of modernity. The Year of Poland will see dozens of various events, through which we would like to show the achievements of Polish composers and theaters. Nearly fifteen economic exhibitions will be held. We will also stage the Poland- 2004 national exhibition in Kharkiv. Moreover, we will work actively at the regional level in terms of cooperation among oblasts and wojewodstwos [a Polish administrative division corresponding to a province — Ed.]. We hope to attract Ukrainians’ attention to all these events. Geographically, they will span all of Ukraine, east to west and north to south. We hope that after all these events we will leave in Ukrainians’ mind a mark of today’s Poland.”

NATO: SEARCH FOR A COMMON APPROACH

“Ukraine and Poland are strategic partners that quite actively cooperate in various spheres. Considering Poland’s NATO membership, we would like to broach the issue of defense. Ukraine has done much in the way of Euro-Atlantic integration, which has been repeatedly stressed in Brussels. Kyiv wants to advance its cooperation with the alliance to the Membership Action Plan format at the upcoming Istanbul Summit. What should Ukraine do to fulfill its partners’ expectations?”

“You should look at the great experience of our cooperation with Ukraine as part of NATO efforts. Ukraine is one of the most active countries that cooperate with NATO. Yet a major discussion is underway in both NATO and Ukraine concerning the Istanbul Summit. I’ve talked to representatives of your country and NATO ambassadors. It appears there are as many concepts of future cooperation as there are discussions. I assure you that even Ukraine does not have a single concept. Ukraine and NATO are only beginning to look for a common approach. Undoubtedly, cooperation might reach the level of the Membership Action Plan or that of an intensified dialog. It should not be ruled out that the current format of the Action Plan or the annual target plans could be maintained. Incidentally, discussion is still underway on the level of the Ukraine-NATO Commission session at the Istanbul Summit. What should be taken into account? Above all, you must fulfill all the domestic tasks required under the documents signed with NATO. Ukraine is implementing its defense reform above all for itself and not someone else. We are pleased that this reform is progressing very successfully. Yet there are reservations concerning the fulfillment of the political preambles of the Action Plan. We must know what level of fulfillment of the political preambles we can expect from Ukraine. Thus far it is too early to speak of the future result of Ukraine’s meeting with NATO at the Istanbul Summit. I think it is important to discuss the events that will precede the Istanbul Summit. Above all, the visit by the new NATO secretary general to Ukraine this April will be decisive to some extent. Second, Poland has undertaken to invite defense ministers of NATO members and Ukraine to a conference in Warsaw this May, the same conference that was held in Washington last year and Berlin the year before. We would like to exchange views at an informal level. There are many possibilities but no single concept.”

“Judging from your words, the Warsaw conference will become a sort of decisive hour, when the decision on Ukraine will be prepared?”

“I would not call this conference a decisive hour. It just would be good to find out where Ukraine stands in its dialog with NATO a month before the Istanbul Summit. Recall the recent events when everything was decided in the final hours before the 2002 Prague Summit. Now the atmosphere is completely different, and there are no reasons to temporize.”

“Thus NATO members are now discussing a joint stance. Word has it that Germany and Holland are convinced that it is much too early for Ukraine to move to a Membership Action Plan and that the level of annual target plans is sufficiently high. Simultaneously, Poland, the US, and Great Britain seem to feel more positive about increasing the level of Ukraine’s cooperation with the alliance. Can you confirm or deny this? And why exactly such groups of countries?”

“There are no triangles or quadrangles. Discussion is underway both among NATO ambassadors in Brussels and in Kyiv. There are no new axes, neither old nor new Europe. There is no division, say, some countries treat Ukraine more favorably than others. The search for a concept continues. And there are more similar ideas than those you have mentioned, the first being the maximum that Ukraine can achieve, meaning Membership Action Plan status. Another concept is individual dialog. Yet another one, proceeding from the Distinctive Partnership Charter signed six years ago, could be termed as Special Partnership for Membership. This is a new format. Why not give it a try? Then comes the minimalist approach: everything might go no farther than the Action Plan, and cooperation will continue in the format of annual target plans. Thus, there are four or five concepts. And now absolutely anything is possible. Poland is inclined toward the maximum approach, that is, it wants to see the Ukraine-NATO relationship advance to the Membership Action Plan level. Some other countries also support our concept, but all this is under discussion. Everything will depend on the political realities of this dialog.”

“What is your assessment of the role of the Ukrainian peacekeeping force and the level of Ukraine’s cooperation with Poland in Iraq?”

“At all forums our embassy emphasizes the effectiveness and experience of the Ukrainian force in Iraq. This is a sign that Ukraine has learned a new philosophy: the peacekeeping philosophy is higher than a simple military philosophy. The Ukrainian peacekeepers are appraised highly.”

OIL

“Poland has helped Ukraine on the Odesa-Brody issue. Its policy has been friendly and encouraged Kyiv to implement this project in the direction of Europe one step at a time. Now Ukraine has approved the decision on the forward operation of the pipeline. Is Poland absolutely certain that this decision will be implemented in Ukraine? How deep is Poland’s involvement in this project? In what way will Poland participate in building the pipeline all the way to Plock?”

“As to the first part of your question, I can say for a certainty that negotiations are underway on the forward operation of the Odesa-Brody pipeline. There are several options for pumping oil, in particular through Slovakia, the Czech Republic, or Germany. We want to begin this project by means of delivering several thousand tons of oil by rail to Southern Poland this May. As for our means of participation, this is above all our political support for the project. For example, important talks are underway among the representatives of the Ukrainian and Polish governments and representatives of other countries that might join the project. That the dialog among all the interested parties — Kazakhstan, Azerbaijan, Ukraine, Slovakia, the Czech Republic, Poland, Germany, and Russia — is picking up momentum is a persuasive argument. Already this month a contract could be drafted to create a joint venture between Ukrtransnafta and Poland’s Pern Concern, which will be specifically involved in completing the stretch of the pipeline from Brody to the Polish border and from there to Plock. Another issue is attracting investors. Neither Ukraine nor Poland wants this project to be funded from the budget. A business plan must be developed not only for the Odesa-Brody pipeline, but for the entire project, beginning with deliveries from the Caspian deposits and ending with the companies at the receiving end. Work on this is underway. How much faster can it proceed? I can’t answer this question. I can only say that I’ve just returned from Brody. They are really waiting for this oil. All the technical equipment is ready.”

“Will Pern participate in the consortium to operate the oil pipeline if Ukraine decides to create one?”

“Most probably it will. And it would be only natural for Pern to join such a consortium. Perhaps there will be other companies and banks. The business plan is developed to secure loans and find money. Both American and Kazakh companies could be involved in the consortium. However, now it is much too early to discuss this, since the consortium will attract partners depending on the profitability of the project. Now that there is no definitive business plan it is difficult to say specifically how this work will proceed and who will join the consortium.”

“You have pointed out that time is needed to develop a business plan and attract investment. Has it occurred to you that supporters of back-pumping might use this delay and continue pressuring the Ukrainian government to reverse the oil flow? Incidentally, the lobbyists of back-pumping stated immediately after Ukraine’s decision on the forward operation of the pipeline that they were not going to give up.”

“There is nothing unusual about such statements. Our conclusions depend solely on the actions of the Ukrainian side. Thus, it is not up to us to evaluate the possibilily of back-pumping. Moreover, we are not interested in the reverse operation of the pipeline neither in theory nor practice. Undoubtedly, the issue of time is relevant, but your government and president support the decision on the forward operation. The time factor is a matter of months or half a year. Moreover, very soon it will be possible to pump technical oil and begin work that is feasible at the current stage. Oil can be transported by rail. Oil can be also pumped from Brody via the Druzhba pipeline. Currently, all this is being discussed, and the plans to implement this project by means of rail transport are feasible.”

COMPETITION AND MONEY

“What will be Poland’s specific steps in the way of contracts for the reconstruction of Iraq? What kind of cooperation with Ukraine is possible in this respect?”

“Last April our government appointed a former state property minister Poland’s special envoy in Washington. He is working to promote the interests of Polish companies and establish contacts with American companies that look for subcontractors to work on reconstruction projects in Iraq. Second, Poland’s former vice premier Prof. Marek Bielka is chief financial administrator in the Iraqi Provisional Administration. He forms the Iraqi budget based on the resources available. Whenever President Kwasniewski met with President Bush, in particular last January, Poland’s prospects in the reconstruction effort in Iraq were stressed repeatedly.

“However, the case of the Bumar Company shows that tenders are tenders. As you may know, the US government announced a tender to select a supplier of arms for the new Iraqi army under a contract worth half a billion dollars. Four companies made it to the final stage of the tender. Poland was certain that our company, Bumar, had a good chance of winning. Yet an American company, Noor, which does not manufacture weapons but instead buys them from various suppliers, has been named the successful bidder. This company bid a much lower price than Bumar. Bumar has filed a claim in the court of arbitration. As a result, the contract with Noor has been temporarily suspended. The court will decide whether to allow Noor to continue supplies under the contract or announce a new tender. Thus, Bumar still has a chance.”

“Does the Industrial Union of the Donbas still have a chance?”

“Our arbitration procedure is similar to that of the US and Europe. Without doubt, such procedures should be used.”

“Yet, what kind of cooperation aside from military cooperation is possible between Ukraine and Poland in Iraq?”

“Neither Poles not Ukrainians have any definitive prospects for participation in the reconstruction of Iraq. We can only be subcontractors of US companies. Meanwhile, other countries will compete for this right. Of course, it is not ruled out that our countries could compete in some tender.”

“There is an opinion that after Poland joins the EU, companies unable to compete in European markets will relocate to Ukraine.”

“It’s hard to say whether more Polish investment will come to Ukraine or whether it will remain at the current level. Presently Poland invests an annual $140 million in Ukraine. This is a very high index for Poland. Why do Polish investors come to Ukraine? Above all because of the cheap labor force. Moreover, there is a possibility to export goods manufactured in Ukraine to Russia, Poland, and world markets. Yet, as a rule, potential Polish investors in Ukraine’s economy already have factories in Russia, France, or even Mexico. They work on the world market and not only in Ukrainian or Polish markets. Thus, some investors have told me that the development of investments in Ukraine will depend more on Ukraine’s export possibilities than work force. Poland entered the EU market in the early 1990s but began investing in Ukraine only several years ago. We should ask economists as to what will be better for Polish companies — to remain on the European market or relocate to Ukraine. Judging from my discussions with businessmen who work in Ukraine, one cannot say for a certainty that Polish investment in Ukraine will grow.”

“What do Polish businessmen in Ukraine complain about most?”

“They complain about the uncertainty of the financial system. The unsolved problem of VAT rebates affects exporters. Meanwhile, as I have mentioned, Polish investors come to Ukraine to later export goods manufactured here. Moreover, they complain about bureaucratic complications. All economies struggle with red tape, but Ukraine is bogged down in it. It takes months or even years to obtain all permits to start a business. Polish investors are forced to open their affiliates here, since there is no other way to start their business here quickly. Complex customs and certification procedures also stand in the way. There are several arrangements on mutual recognition of certificates, but for 80-90% of goods one has to register certificates, which significantly complicates trade.”