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At the 16th Yalta European Strategy (YES) Annual Meeting in Kyiv

13.09.2019

Dear Ukrainian friends and friends of Ukraine! 

I am very happy to be back at this conference with you and also happy to see free mister Sentsov here. I believe many of us here have called for his freedom and freedom for other prisoners. Many of us have used hashtags #freesentsov. And now it has happened.

On the other hand, let us not forget that this is only the first step, but the run is a marathon – 42 kilometres.

At the moment it is not yet easy to say that we have taken a really long step forward, but I know that somewhere around the 21 km mark, the political elite of this world might feel that we are closer to the finish line then we actually are.

At that point we must remember that Crimea is still occupied, this is something we need to solve and it takes strategic patience.

It may take 50 years — the Baltic states were occupied 50 years, but this was never recognised and this is what gave us back our freedom. So, I wish you all the happiness and I wish us all strategic patience in that question.

While preparing this speech, I realised that while political thinkers of the Baltic states are often invited to share their reform experience, our experience is, to a certain extent, rather irrelevant. It is true that its technicalities are still relevant, but their meaning to the outside world, if repeated, will be totally different.

When we started out, exiting the turbulence of the last days of the Soviet occupation, the world in general and Europe in particular were, in historic terms, a relatively safe haven.

Liberal democratic values, media freedom, personal freedoms, even global living standards, emerging markets—everything the statisticians measured—were picking up.

There was a safe haven, maybe a bit stagnant—missing the opportunities of new technologies, because the sectors where these technologies emerged – telecom, medicine – had long and protected investment cycles.

But in general, it was possible to claim that the reform experiments of emerging markets, including the Baltic states, generated a rapid societal change, which its people were able to tolerate easily because the developed, western stability was beckoning.

The case of Ukraine is different – technically you still have to do exactly the same thing – build the rule of law state, making sure that the legal space allows rapid generation of SMEs and quick uptake of new technologies – but the rationale for attractive international investors to participate is totally different.

The liberal democratic world is a turbulent place right now.
The deliverables for middle class have been relatively weak – and the wage stagnation has been made harder to tolerate by quickly rising executive pay in developed countries. Rising inequalities and the lack of social mobility, which makes bad luck hereditary, breed disappointment and create an active search for radical change. The search is loud and visible, uncomfortable, but the new consensus is nowhere to be seen.

Until capitalism adjusts itself to more win-win solutions, as it will undoubtedly do, because alternative solutions – more state intervention to provide more just redistribution – is less acceptable for free world, free market believers – Ukraine has to do its reforms in this context. So, you are striving to convince your citizens to continuously work for the reforms to deliver for them something that people in the free western world nowadays doubt has ever been delivered.

It is totally different if I compare it to 30 years ago when we set out with our reform program. On the other hand, this is something that is also your opportunity.

Akin to Estonia joining euro area in 2011. In „normal“ circumstances this would have been a technical move – just one more country in the euro area. But after the confidence crisis of the euro it was seen by the world as a heroic step – look, somebody still wants to join this euro area, when we are all in doubt about it.

This is the emerging Ukrainian story now – you are still striving to join this free world of free markets, where everybody is treated equally, where everybody`s rights are guaranteed, where there is media freedom. All this you are still striving to do.

This tells us that it is still worth to see how our societies can be made better and more equal, how to solve the current problems. If you want it, then it has to be worth it and I see here a story arising for the Ukraine for the future: it was the country that believed in human rights and democratic values. To show that while everybody else was doubting you succeeded. I wish you all the success in this and believe that one day there will be:

Ukraine free of politically motivated capital controls.
Ukraine certain to clamp down on corruption.
Ukraine guranateed to provide economic climate suitable to diversify economy.
Ukraine, which is strictly a rule of law state, protecting each and every one by its legal system independently of their social status.
Ukraine which treats all capital, big and small, foreign and local, equally.
Ukraine where SMEs can prosper, and grow without the fear of unlawful developments capping their future.
Ukraine the model of corporate responsibility instead of oligarchic economy.
Ukraine where legal space is welcoming to the society wide use of new technologies – narrow AI; driverless cars and the rest I cannot name, but what might be around the corner.
Ukraine the model of combating climate change instead of a country dependent on gas transit.

This is the Ukraine which we might see in 30 years time if you strive your effort to leapfrog.

There are all the reasons to try.

There is no lack of good ideas today – just read the common criticisms of western world today – concentrated wealth, ingrown public sector habits making states an obstacle to the development and unfit to provide society with necessary social market guarantees to keep capitalism in the position to deliver for wider society.

You can develop your society to be the better version of what has been before. I know this can happen, because my own country is the better version of public management than any other western countries has been able to do. Now all the rest are trying to do the same, but nobody else has yet achieved to.

Sometimes people ask me why should we stand up for Ukraine because they are not doing their own homework. I always say that 30 years ago when you were supporting our development, you didn`t do it because you thought that at some point we will be a digital wonderland and you can learn something useful from us. So, what tells you that Ukraine is not the next place globally where these developments will actually show us the way? I am quite sure this could be.

With new and emerging technologies, a lot of jobs are being taken from us, but there is one thing that computers will never be better than humans and this is being compassionate towards each other. This is our specialization for the future. Many of us already work in providing other people happiness – communication, videos, online content – and this is all making economic progress. In the future societies we do not waste our time in meaningless conversations, for example while booking a flight, leading us to develop careers where we make each other happy.

I see your country that has to fight corruption and current oligarchic economic system, all the problems you have in your financial systems, work with your social system and radically consolidate this sector to be able to support your people – I see why this country is talking about happiness.

You need your story to be inspiring for normal people. And it will be when you start to succeed. Inspiring the outside world. And the strive for happiness is something I value very much. I wish you all success in this and hope that you will not run out of energy at the 21 km mark, which very often actually happens with marathon runners. I know it is a long run and I wish you all the success. But I do believe. And I have been saying so for the three years I have been President of Estonia. Who knows, the next very progressive social environment might evolve here — in Ukraine.

One little last thing: I think what we have not figured out, but have to figure out, is how to become green economies. And you have the worst conditions to be talking about the green economy. You have a lot of losses in the energy system. If your people would have to pay market price for the gas, then surely my salary would not be enough to heat a two-room apartment. In a way you remind me of my country 30 years ago, when we simply did not have institutions, government offices, nothing. But we did not despair that we could not do it the way everyone else had done—putting many people sitting in offices across the country, we could not do it. So, we put the public services online. If we would have told that this is what we were going to do, others would have thought us crazy. If you say you want Ukraine to be 100% green economy, maybe even quicker than 2050, what Europe is striving for, they would say that you are crazy. Don’t believe them, do your own thing and all the success to Ukraine!

Thank you!