Interview with Boris Nemtsov, Adviser for foreign investment
One Plus One TV, Kiev, in Ukrainian 1630 gmt 5 Jun 05
BBC Monitoring Service, UK, in English, Sun, June 05, 2005

The Ukrainian presidential adviser for foreign investment, Russian politician Boris Nemtsov, has said that Ukraine will only benefit from joining the Single Economic Space, a proposed common market of Russia, Ukraine, Belarus and Kazakhstan. Ukraine will have cheaper oil and gas and free access to the Russian market, he said. The customs union will not hamper Ukraine's European integration, Nemtsov said.

The following is an excerpt from Nemtsov's live interview during a link-up with Moscow broadcast by Ukrainian One Plus One TV on 5 June:

[Presenter] Our guest today is the Ukrainian president's adviser Boris Nemtsov also was on Independence Square in Kiev [during the Orange Revolution] and completely supported Ukraine's European choice. Mr Nemtsov,  are you disappointed or inspired by the recent statement of your boss, President Yushchenko, regarding the Single Economic Space [SES]?

[Nemtsov] You know, I don't understand what the discussion is about. I completely support President Yushchenko's idea of Ukraine's European choice. This does not mean at all that Ukraine should emotionally argue with neighbouring countries, Russia for instance, or give up benefits, obvious benefits for Ukraine. So I think that Viktor Andriyovych [Yushchenko] is absolutely rightly and pragmatically, acting as a Ukrainian patriot, took a stance he described in Astana.

His position is as follows: a free-trade zone is beneficial for Ukraine because the big Russian market will be opened for Ukraine, because Ukraine will get energy resources from Russia, including oil and gas, at lower prices than now. This is beneficial for Ukraine. So, if this is beneficial and does not contradict Ukraine's movement towards Europe then why should any other stance be taken?

People are talking about a supranational body. This does not mean anything. What important for millions of Ukrainians is whether petrol is more expensive or cheaper if there is a common market and a free-trade zone. The answer is petrol will be cheaper. Will gas be more expensive or cheaper? It will be cheaper. Will public utility rates be higher or lower? They will be lower. Does it hamper our European integration? The answer is no, it doesn't. I don't understand what the discussion is about.

The SES is a complex organization. As far as I understand, the president has a fairly clear and pragmatic position. He talks about a free-trade zone. He says that there should be no barriers for trade, that prices should be the same in all countries and that there should be no quotas restricting trade.

This is beneficial for Ukrainian steel plant employees, Ukrainian miners and Ukrainian consumers of Russian oil and gas, in other words, for all the Ukrainians and others living on its territory. It is another matter that the movement towards a common trade and economic space is a complicated process. It will take time.

If you think that everybody in Russia is interested in a common market or a free-trade zone then you are completely wrong. Of course, the Russian leadership understands perfectly well that a free-trade zone means no duties on oil and gas exports, which we are collecting now and which amount to over 3bn dollars a year.

So, this is a fairly complicated process. The fact that the Ukrainian president has taken this - I think absolutely right - stance does not mean that the decision will be taken soon.

[Presenter] Will Russia agree to this version of the SES, which doesn't envisage a common market or supranational bodies.

[Nemtsov] You know, it is not the matter of supranational bodies. The question is whether our goods move freely, whether our customs collect duties on imports and exports or not. I think that if comprehensive agreements on this are signed then we don't really need these supranational bodies. Moreover, as far as I understood from the discussion, there will be legal collisions and the Ukrainian constitution will be violated. Who needs this?

By the way, this will violate the Russian constitution too. So I think we should come to a fundamental agreement whether we have a common market or not. The EU, by the way, became united after a common market was set up there. At first they had a large trading ground without any restrictions and only then supranational bodies appeared.

I think we should not begin with bureaucracy in the SES. We should begin with people's interests. If we cancel duties this will benefit everyone. Competition will increase and prices will go down. Ukrainian and Russian companies will have to work more efficiently. Labour productivity will increase and economic growth will go up.

It is also beneficial for Ukraine because the Russian market is bigger than the Ukrainian. Russia is three times as large as Ukraine in terms of population and it is a large country. So the opening of the Russian market is extremely profitable for Ukrainian producers. I will help Viktor Yushchenko in any way to have his concept implemented. As regards bureaucracy, of course it always defends its interests and it wants to set up supranational bodies. But this is not what we should begin with.

We should begin with cancelling quotas, licenses, import and export duties. If we begin from there people will support this rather than fear that Yushchenko has betrayed the ideas of the Orange Revolution. [Passage omitted: Nemtsov opposes large-scale reprivatization in Ukraine.]