12 May 2014 Interview to Inter TV Channel

Dmitry Firtash: Ukraine Must Be Strong, Neutral And Independent

Dmitry Firtash, Head of the Board of Group DF Interviewed by Inter TV Channel

Q.: Mr. Firtash, this interview was primarily induced by the news reporting that two of the companies you own, Gorlovka Azot and Severodonetsk STIROL, have suspended operation due to the threat to safety of its employees and of all citizens residing in the area. Clearly, these are not political reasons but rather security considerations. I know that it was you personally who made this decision. What kind of threats to security are we talking about exactly? For how long has the operation been halted?

A.: We’ve had two situations. The first one took place in Gorlovka where our security personnel apprehended people who had been taking pictures of the plant producing ammonia, ammonia storage facilities. These people were turned in to law enforcers. For some reason, two hours later those people were released from custody.

Later, there was a theft of 1.5 tons of explosives at one of the enterprises in the East of Ukraine. You can imagine the scale of a disaster that may potentially break out. The third event was the fall of a shot down helicopter in the neighborhood of the Severodonetsk plant. That’s why I made the decision. It has nothing to do with politics, it’s a purely security-driven decision. Because we do understand what may happen if, God forbid, the plant is blown up or something like that takes place. You will appreciate the scale of the catastrophe.

I did make the decision personally. Obviously, looking at it from a commercial perspective, halting the production is bad for business.

Q.: Prices are booming!

A.: They are indeed. We were operative when prices were down while today, when prices are on the rise, we have to halt. However, we will be paying wages as we always do notwithstanding what’s going on. We aren’t going to lay anyone off, no shorter working hours or weeks are planned. Once again, it doesn’t make sense economically but looking at it from the national standpoint, I’m sure we do things right.

Q.: How does your situation in Austria affect your involvement in Ukraine’s social life? A New York Times correspondent asked you this question and you said: “Yes, I can influence politics. I am not a politician, but I do have certain influence.” What kind of influence is it, how are you connected with Ukraine, how aware are you about what’s going on there? To what extent are you able to interfere with all sorts of processes?

A.: In my situation, there are about 110 thousand people employed at enterprises predominantly based in corporate cities, i.e. the city fully dependent on such enterprises. I am responsible for the people employed by these companies and living in these municipalities. This is what I mean by my influence. I am responsible for these people’s being paid, being able to work so that I can earn as well, for having everything up and running. I am sitting here talking to you and by the same token I speak to others, I have phones, my subordinates, my friends come visit me, I have a lot of communication, my heart beats with Ukraine. This is not just words, it is about my lifetime investment. And

I do have to care about what’s going on in Ukraine.

Q.: The New York Times’ editorial argues that the evidence against you, the evidence underpinning the case was obtained under pressure. Reference is made to certain episodes and facts associated with it. Could you comment on it please?

A.: At this time, I clearly see that it was a perfect concoct criminal case which is 100 percent politically biased. I think, someone is doing it deliberately. I’ve incurred quite massive losses.

Q.: At least from what the New York Times reports to its readers it looks like a message that the charges are falling apart. How do you perceive it?

A.: I know for sure that I will win the case. I have no doubts whatsoever that it will be won. We will win the case, no question about it, because it’s a concoct case, concoct from a to z. But someone will pay dearly, it won’t go unnoticed.

Q.: OK, let’s change the subject. Are you going to vote at the elections and do you at all believe that these elections will take place?   

A.: Of course I believe they will. I can’t be 100 percent sure but I do believe they’ll take place and I do want them to take place. Here’s why: first, what will these elections bring about? They will completely legitimize the state power. Today, there are problems with it and quite a bit of speculations on whether or not the government is legitimate. Until
we address this issue, we will have questions to work on. Therefore, I am sure we have to run elections and secure the legitimate government. This is the first and foremost priority without which nothing can happen.

I think that Ukraine must be strong, second – neutral and third – independent. Politicians have built a country in which they have, for way too long, speculated on differences – East or West?

Q.: Russian language or Ukrainian language?

A.: Right, Russian language or Ukrainian language? But pardon me, in addition to Russian and Ukrainian, there are quite a few other languages as Ukraine is a multi-ethnic nation. But it’s not about it. The matter of the fact is that for 22 years politicians were speculating on these things ending up with what we have today. I think we should pursue a neutral position. There are 45 million people living in Ukraine, it’s not a dot [on a map], it’s quite a country. And we have to be vocal about what we know and what we want.

What are politicians talking about? Two things: it’s either let’s move towards Europe, we’ll be helped out or let’s move towards Russia, we’ll be helped out. Let’s cut it out, no one will help us out. The time has come to roll up our sleeves, grab a spade and start digging. We keep waiting for someone to come along and do something for us. It’s us who are there to make things happen, no one else. We must have our own strong military that will defend us and then we will be strong and reckoned with.

You may ask what arguments I could present for the neutral Ukraine. Lately, I had a discussion and I said that we have to be neutral like Switzerland. OK, Switzerland has a banking system that fuels the country. Let’s look from a different angle, though. What is Ukraine? Let’s look at its territorial capacity. Our territory is a major forte of ours. We have a huge infrastructure, we have railroads, seaports, you name it. We have ample natural resources, soil, agriculture, Ukrainians are highly educated and hardworking people.

In recent years, as the President of the Federation of Employers of Ukraine, I’ve traveled essentially all regions of Ukraine, except for three ones. I worked with business communities, I had meetings with staffs at enterprises, I met with universities, I talked to people. I listened to them and I’ll tell you what: provincial governments have no decision making power, nor does the governor, forget the mayors even though people elect them into offices.

Q.: Budgets are distributed from the top…

A.: The state power is so stiffly centralized that all the money is accumulated in the center. All the money wherever earned is then gone to the center to be then distributed by someone or someone’s team. I beg your pardon, this pattern doesn’t work. It is simply impossible today! You will recall what I would say back in 2012, 2013: the government and the state power have to be decentralized and more authority needs to be granted to regions. I think we should pursue federalization. You know why it’s easy for me to say this? Because I am not a politician and I couldn’t care less about my rating while politicians fear to tell the truth exactly because of the rating. Their toying with ratings has led us to complete misunderstanding of what is going on. My point is that truth needs to be spoken. Federalization is not an evil word. It is a key to answering all questions we are facing. More powers and more capacity should be given to municipalities. There has to be the central government that addresses external issues but it should not decide on local issues. However, I am unequivocally for the national integrity. That is when I’m talking about federalization I never mean region’s detachment from Ukraine. The country must be integral but regions should have more powers. Governors must be elected, mayors must be elected, i.e. regions have to have to their governments. Then people clearly understand who is accountable to them. They know better how to prioritize their budgets, what to build and what to do. Then tenders across regions and across the country make a better sense. After all, we, Ukrainians, are a very proud nation, we really are! We will do our best to prove that we are the best and competition will be real.

When I take care of my business I keep thinking about where I see my company in this or that year. I have a vision of how I want to grow it and what I need to make it happen…

Q.: That is, you have a strategy…

A.: A strategy, that’s right, and by the same token we have to realize one key thing. As Ukrainians we have to answer a question for ourselves: how do we visualize our country, in what format? The US has a federal system, so does Germany, Austria. If you take Austria, the budget is evenly distributed – 50 % in the regions and 50 % in the center. In
Germany this proportion is 70 % in regions and 30 in the center. With us it's all the other way around: 85 % in the center and just 15 % in regions.

The country must be one but its structure must be federal. The efficiency of this structure is manifested by at least three economies – not the weakest economies too: the US, Germany, Austria.

This is my point of view and I am sure we will arrive at this solution sooner or later. We don’t have to invent a wheel, it’s there already. There are different choices: confederation, federation, centralization, let’s put it this way.

Q.: Effectively, what we refer to as a unitary state.

A.: Exactly, that’s what I mean. Ukraine has been a unitary state for quite a while and today, after 22 years, we realized that this pattern doesn’t work here. It’s like a quilt torn apart and now the challenge is to bring all fragments together and stitch them up. But to achieve this, everyone’s got to be clear on what we’re doing. No coercion will work.

People need to be talked to and given what they want. They have to be heard. What I am good at is my being a good listener. I am no politician, I listen more than I talk. And when you travel places, you can hear what people say and you start understanding their problems. It is of special importance as long as you operate in real sectors of business because it gives you better understanding, it develops your insight. This being said, I am sure that federalization is the only answer. And the second thing: the language issue must be done away with. The language situation may not be raised as consensus here is hard to reach. Look at Switzerland: the country speaks 4 languages of which 3 are state ones. And this is a mighty state, a good state, is it not?

Q.: How long do you think it will take to achieve this? Suppose your plan is heard and taken aboard, there are so many ideological clichés and contradictions surrounding these notions: federalization, languages. How soon do you think Ukraine can get rid of them?

A.: Soon enough. I am a pretty pragmatic man and I think that this issue has reached the peak of its urgency and needs to be addressed now. The only question is whether we, Ukrainians, are ready to accept it. I think we are. I guess politicians, most likely, aren’t, and once we start discussing these things seriously enough quite a few political forces and political leaders will have to give a clear answer about whose side they are on. But that’s something not to their benefit. They are uncomfortable with it. Even when the house is on fire they tend to capitalize on it. You all see it, why should we be silent about it? Isn’t it true? Therefore, I think we should provide an impetus when politicians are incapable. You may argue that I am a businessman, not a politician. True, I am. I have to do business and as I do so I see that I live up to my function: I contribute to the state budget, I provide citizens with jobs, I do everything I am expected to. Politicians however don’t and because of them I can go broke and so can the whole country. Hence, we have to press on them and tell them: we are not happy with it, we don’t like it, let’s begin to talk, let’s answer the questions. Let’s make decisions!

Q.: Thank you for the interview.