03 July 2015
Dmitry Firtash interview with ‘Segodnya’ edition
Dmitry Vasilievich, according to your estimates, will Ukraine be in default?
I do not estimate this, the government estimates so. Earlier they hinted at the default, but now they are talking about it quite openly and calmly. They are saying it will come soon. The government is preparing for the default.
Really, we hear about zeroing and life from scratch on TV – there is no default but they calm us down. What real threats for people and business do you see? Will people feel the default?
The impression is that our government does not watch TV or read newspapers. Because if you see what is going on in Greece, you notice that this concerns all, primarily ordinary people. There was no default in the world which didn’t harm the citizens. They suffer at first.
Is there any alternative to the default, if it is a recipe for overcoming the crisis? At the meeting of the Federation Employers of Ukraine it was suggested to decide what we build, what kind of Ukraine – an agrarian country, an IT-country, an offshore banking, or something else? Can we cut down taxes, attract foreign capital on special terms and take advantage of our geographic location?
I am definitely sure that we shouldn’t raise taxes, we should cut them down in order to be competitive with other countries. I understand that it is not so easy to do. But international investors are very important for us. May God grant us, they will come.
Unfortunately, now I do not see those who wish. Therefore, I think we should talk to our local business and large corporations today. The government should sit down together with business, talk and understand how we can help them, set specific goals for development of the industries.
Unfortunately, the government has not once met with entrepreneurship to talk during the year. They have not met neither with representatives of different industries, nor with the Federation, nor with trade unions. They shrank into themselves and followed their programme. This programme has driven them to the situation when they tell us about the default.
Today it is very important to talk to large companies and to ask them to back the country. It is important to think what the government should do so that the business will take on a big burden for nearest 5-7 years despite it is also hard time for them. This is the only way for us to revive the economy. We need to develop small and medium businesses, from 12% to at least 40-45% share of the economy.
But how to talk with big business – we have announced the deoligarchisation.... Who aspires to fight with Ukrainian big businessmen?
In my opinion, the fight against oligarchs is a diversion of forces today. We did not gain a victory in the war, we did not gain a victory in the economy. Probably, that is why new enemies are needed to show people why they live badly. I don’t agree. In fact, who are the oligarchs? They are people who have established the business, do business, create jobs and pay taxes. There are tens of thousands of such people in Ukraine. I think these are the people we should rely on. It depends on them whether people will receive pension or not, whether people will receive salaries or not, whether people will have jobs or not. In fact, the government fights with the business. Today we already have a reduction of a million of jobs in Ukraine. How much more have we to lose?
In my opinion, the fight against businessmen is a political and PR story. There is no need to create enemies within the country because businessmen are not enemies, they do what they can do. Give them the rules of the game, and tell them that these rules come into force from January 1, 2016. And if someone breaks the rules, then questions will arise.
I would say "thank you" to business for toiling and working. They care about people’s life: whether people receive salaries, what to do to avoid job cuts; they think about schools and kindergartens and operation of the town-forming enterprises. They work despite the fact they pay taxes and do not receive VAT return, they pay taxes for several months ahead. The state owes about UAH 100 billion to business! However, businessmen still support the infrastructure because they realize: if they lose the infrastructure in monotowns, they will lose it all. I think, big business and business in general should be on the first place. Someday people who create jobs, give jobs and do their best to put everything right will be respected.
Are you going to promote these ideas using a political project? Do you see yourself in the politics?
No, I do not see myself in politics. I am the chairman of the Federation of Employers. As a Federation, we are willing to support our members in local elections. The only question will arise: whether they support the programme we are creating today. It is more important for me to make the programme and to convince people that the programme is correct. And we will help the political force that will support our programme.
July 5 is the anniversary of the Donetsk’s capture. I cannot believe that a whole year has passed. In your opinion, how to remove gunmen from the Donbas and finally restore peace?
We should sit down and talk. Weapons and war will not solve the problem. I was opposed to this war. And when they called it the anti-terrorist operation, I said this was war. I said it would come to a bad end with no victory.
And now it is necessary to give certain authority locally. However, it is necessary to give authority to not only two regions but also throughout the country. Otherwise we will cause a new problem. Someone will think: “Aha, if they have got power in such a way, then we can do the same”. So, I think today decentralization is the best way to restore peace.
And we should clear up regarding the top – make a clear delineation of power between the President and the Prime minister. What country do we live in? We lived in the presidential country and it didn’t work for us. Then we lived in parliamentary-presidential country and we were not satisfied either. Then again, we lived in presidential-parliamentary country. And now we are living in parliamentary-presidential country again. And regardless of the surname – Yushchenko, Tymoshenko or Poroshenko and Yatsenyuk today, there is still a conflict, because there are restrictions of powers, where one starts and the other ends.
I would give maximum power and more freedom to regions. We must do everything to change current situation and start living for the future, for the sake of children. And we should not decide who is right. It is necessary to sit down for negotiations in Kyiv and find a solution.
Who will help people while the government is looking for the solutions? In particular, is the work of Rinat Akhmetov humanitarian headquarters the prominent businessman’s help for the countrymen or the way to keep the Donbass in Ukraine?
This is more than just a help, he is trying to solve the fundamental issue. He is trying to feed people, to show that Ukraine has some understanding and there is a faith they will be back home. Rinat Akhmetov makes absolutely correct things. He shows his human understanding, he was born there and everything that happens hurts him. I think he's absolutely right.
You are considered to be a sponsor of the Euromaidan. If you face a choice now whether to help the protesters, would you do it or not?
I cannot say that I was the sponsor of the Maidan, this is not true. But I will say in other words. Probably, it is right to support some initiatives, but not at that price. So, I think that the Maidan does not solve the problem. We can see what has happened. What do we see? We see that people were truly fighting for changes.
For example, take 2005. People also fought and lent credibility to those who came after 2004, and we know the end of the story. Now people took to the streets again for changes. What have they got? Just the same corruption, the same problems, all the same.
I have a friend who did his military service with me. He comes from Kolomyya, Ivano-Frankivsk region. We have not seen each other for 20 years. And he visited me recently. He said "You know, we have a problem. Whatever we do, we mean well but it gets worse. We were sincere when we went to the Maidan. I was there and I wanted the changes. What have I got? It has got much worse. Why did we do it? The second: there is a feeling that someone wants to send the best people from Western Ukraine to war in order to kill them and make us much easier”. I told him: "Don’t you think that there is the same story from the other side? They think the same. I suppose we have a trial as a nation. We shouldn’t fall under external influence, we have to say ‘Stop’!
In your opinion, how much time is needed for the country to back to the normal life? Is it five years, three years or a year? How much time should pass?
I think a year is not enough. We need a few years. It is important that government begins talking to the business. Now it is necessary to choose 5-7 strategic industries and develop them. A clear plan should be developed, it should be clear how much products is needed for the internal market and for export, how much currency we plan to receive, how much taxes we should collect for the budget, how many new jobs we should create. But today the government does not develop such programme. The government has cut off from everyone and lives in its own world. And business gets tax pressure instead of support. Tax agency has sucked out all the money from the business, funds are almost gone ... And today as the Federation of Employers we are elaborating the plan of the basic industries development. It is not our job, but if the business does not do it, Ukraine will remain in crisis for a long time.
Dmitry Vasilyevich, you live outside Ukraine for a long time. What do you think, when will you be able to return to the country?
Generally, I can go even today, I have a passport, I do not have problems with this.
I have a personal question. How do you live here? How do you spend your weekend?
Usually I don’t plan anything special. I visit church on Sundays. I was brought up like this, I grew up in Western Ukraine.
Is there Greek-Catholic church?
I am an Orthodox and visit the Orthodox church. When I was a child it was unconscious, now it is consciously. And now I go to church with my children (juniors – 10 years-old Anya and 8 years-old Dima – Segodnya) on Sundays. In that way my holiday begins. After that I rest, nothing unusual. My life is normally arranged... I live here for about a year. It is difficult, because I want to come back home. Ukraine is my home. If I wanted to live somewhere else, I would do it. But I want to go home. I like to rest wherever I want but to live only at home and work at home as well. All my actions, all my life is home. But it is a useful experience, I looked at things from the other side. Because when you think how to earn money all the time, how to do everything in time, you're like a squirrel in a cage. It just seems that you can do nothing if you have a big business. Conversely, 24 hours in a day is not enough! You are in process all the time. And you can’t say to people: “I will not pay” or “I will not do it”.
Note, we have been being in the state of war for a year, my two plants in Gorlovka and Severodonetsk are not operating. Ask me: did we delay salaries even for a day? Never! Because it’s not a fault of these people that they can’t work. I feel an enormous responsibility as an owner, I always have to think about the business.
So, in Ukraine you didn’t have weekends and here you have enough free time to spend with your family?
Yes, sometimes I have weekends here. But my family is in Kyiv. I have sent my children to Kyiv. Why? Rather big quarrel broke at my home last August, because kids were with me in summer and my wife wanted them go to school here in autumn. But it was not clear when my process would be over here. Of course, my wife wished children and she were along with me. But I had a different point of view.
You know, my management team started to ask me delicately last summer: “Maybe, we’ll get a residence permit here, and maybe we'll leave the country, because of the war, maybe we can take out our families?” And I answered: no. Why? Because, as soon as a person decides to move with the family to another place, even temporarily, he will not come back – children will settle, go to school, they will feel the language – and there will be no turning back.
And I began to speak: guys, don’t do that, everything will be fine. We can’t do that, who will be engaged in the economy, how will Ukraine develop? Otherwise, you know what people would say: you speak a lot, but your children are in Austria! And I came home and told: children will go to school in Kyiv – and no ifs or buts. My wife told me: You are crazy. Do you understand, what you are saying?” But I have sent them to Kyiv. They come for vacations, sometimes for weekends, but mostly they are in Kyiv, they study. To avoid dual understanding.
Yes. And these talks in the group stopped. It’s hard to believe but all talks have ended at once. If I brought my family to Kyiv, how can they tell me that they are going to leave? It would be awkward. Maybe they would like to do so, but they are afraid… Austria is a good and very interesting country. I had an opportunity to travel through it and look at it. And do you know what amazes me?
What amazes you in the Austrians?
They live within themselves. If there is an atomic war or the end of the world, the Austrians will be the last in the world to know what has happened. On the one hand, this is funny, on the other – it is very seriously. Why? Because they live in themselves. They think about their producers, they think they will buy their own products. Mostly they rest in their country. It would be very good for Ukraine to adopt this experience.
It is very curious, for example, in the mountains of Salzburg. More than dozens of farms are located about 5-6 km apart. What is a farm? This is the house where a family lives and their farm near the house. This family lives off it. And they don’t need anything else. I asked them: when did you visit Vienna for the last time? They answered: Four years ago. I said: Why didn’t you visit it? People answer: Why? We have a school here, a hospital, a theatre, we don’t need anything else”. I.e. they have all conditions for a comfortable life, and there are all conditions for normal life even in the deep countryside.
We should do the same in Ukraine. We need to understand that every region is strong in something and develop this area. Help once and this will be the solution. What do we have today? Almost 60% of Ukrainian regions are subsidized. And nobody did anything over these years, the subsidies continue increasing.
Now they say they will change something, they are going to unite territories with other ones. But money will not appear. We need to develop the programme for regions. We have to give regions an opportunity for development.
Take small and medium business for example. Just imagine: you receive 3 hectares of land with a house and a farm in the mountains in Western Ukraine. And they say: we will pay you, just take it. What do you think, will people come? Yes, they will. If they see the infrastructure, schools, places to rest – they will gladly agree. And this territory will develop. It will make money. And, as a result, budget funds will increase!