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Minister of Finance Sergii Marchenko Gave an Interview to Turkish Anadolu Agency (03.02.2021)

Ministry of Finance: Ukraine is interested in using the Turkish experience

Minister of Finance of Ukraine Sergii Marchenko gave an interview to the Anadolu Agency, in which he analyzed the level and prospects of cooperation with Turkey, including in the economic, aerospace and defense spheres.

- As you know, relations between Turkey and Ukraine are actively developing. How do you assess them, including the economy?

- Ukraine and Turkey have covered the path from ordinary relations of neighboring countries to a strategic partnership. We develop political dialogue, working together in international organizations and on security issues. Our economic interests coincide in the spheres of transport, energy, aircraft construction, mutual tourist flows and cultural and humanitarian exchanges.

In general, I consider these relations very warm, friendly, with a huge potential for dynamic development.

The indicators of mutual trade confirm this.

Turkey is the world's fourth-largest market for Ukrainian exports and the sixth-largest partner in terms of trade turnover. In 2019, bilateral trade reached USD 5 billion. In the first nine months of 2020, it was USD 3.7 billion.

- You said our countries have reached a USD 5 billion trading level. Do you think that’s enough?

- Our Heads of State have repeatedly voiced the ambitious goal of raising the volume of bilateral trade to USD 10 billion. Therefore, there is a huge potential for the growth of the economic partnership. This is confirmed by statistics.

The volume of trade turnover in 2019 increased by 22.3% compared to 2018.

Unfortunately, 2020 was a difficult year for the whole world due to the COVID-19 pandemic. But already this year we expect to increase trade, including by expanding the range of goods and services that will be supplied by Ukraine to Turkey, and - in the opposite direction.

We are interested in expanding the range of export products of Ukrainian products at the expense of high value-added products and through joint innovation projects.

Ukraine actively attracts Turkish investments into the realization of infrastructure projects. I know that the Ministry of Infrastructure offers Turkish companies the opportunity to invest in Ukrainian ports, in particular under concession conditions.

I am confident that the integration of our countries` potentials in the sphere of the financial services market, the agricultural sector, the defense industry will allow us to achieve significant results. We are ready to deepen this relationship format.

- We know that President Zelenskyy and Erdoğan are preparing to sign the Free Trade Agreement between Ukraine and the Republic of Turkey. How do you assess the progress of negotiations?

- I note the productivity of the bilateral dialogue. On the Ukrainian side, my colleagues at the Minister of Economy are handling it.

It is too early to talk about completing the process, as there are unresolved issues. I know that recent negotiations have advanced significantly in terms of tariff and non-tariff restrictions, import duties on goods and services. We believe that the dialogue will become even more intense in the near future. In the last six months alone, several rounds of discussions and bilateral consultations have taken place. We continue negotiations and search for solutions that are acceptable and beneficial to both sides.

We expect from the Turkish side a position on the liberalization of trade in metallurgical goods and proposals for market access for goods and services.

The President of Ukraine Volodymyr Zelenskyy stated that the process is at the final stage and the Agreement should be signed as soon as possible. I agree with the opinion of the Head of the State.

- How do you assess the level of investment cooperation between Ukraine and Turkey?

- As of today, the volume of Turkish investments in Ukraine exceeds USD 500 million. According to expert estimates, their total volume, taking into account the resources raised through banking structures and joint ventures in other countries, reaches USD 3 billion. But we want to see our investment cooperation more active. I think the current level is insufficient considering the economic capabilities of the countries.

We are interested in the participation of Turkish capital in the development of Ukraine's technological potential, in investing in the new generation of industries for which Turkey is famous.

We are ready for joint projects in the aerospace field. Bilateral communication between representatives of high-tech industries, including in the field of defense and industrial complex of the two countries, gives reason to hope for the creation of successful strategic projects.

- To what extent is Ukraine able to create attractive conditions for investment by Turkish private enterprises? I mean tax benefits and other incentives.

- As Minister of Finance, I contribute to the improvement of the legal framework in the spheres that are under my responsibility. First of all, it is a fiscal service and a collection system for customs duties.

Ukraine has recently adopted a number of laws that protect investment, accompany the formation of new business, provide benefits to investors, including tax. There are benefits for the import of equipment.

Our goal is to give the investor the opportunity to ease the tax burden at the stage of business initiation. I think there are enough sufficient conditions in Ukraine, which allow businesses that are ready to come to our country to receive support from the Ukrainian government and incentives for active development. 

- What do you think about cooperation between Ukraine and Turkey in the security and defense industries?

- You know that Ukraine is confronting armed aggression from Russia. In order to win this hybrid war, it is important for us to develop our defense-industrial potential through the latest technological developments. We are interested in using the Turkish experience to strengthen Ukraine's defense capabilities.

Turkey is the undisputed world leader in the pace of development of its national defense industry. In 10 years, you have made an innovative breakthrough. As a result, seven Turkish defense industry companies are in the top 100 global companies according to Defense News.

The Turkish way of reforming the Military-Industrial Complex, which consists of a combination of public and private production, with the introduction of innovation is optimal for Ukraine. It is important for us to develop the latest technologies, combine the potentials of our countries, create joint ventures and joint production cycles.

We are ready for direct foreign policy agreements and localization of production. I’m sure we’ll achieve synergy in building joint innovative cases in the defense industry.

Based on this strategy, within the visit of President Zelenskyy to Ankara on 16 October 2020, Memorandum of Intent between the Ministry of Defense of Ukraine and the Presidency of Defense Industries of the Republic of Turkey on the projects in the defense-industrial sphere was signed.

Another step was the signing of an agreement in December 2020 by the Ukrainian Defense Minister with Turkish companies on technology transfer and production of "Bayraktar" corvettes and combat UAVs for the Ukrainian army. These projects will strengthen Ukraine's security and, in general, the security of the Black Sea and Azov Sea region.

- In which sectors of the defense industry can our countries achieve the greatest results?

- Ukrainian-Turkish cooperation in the field of military-industrial complex extends from earth to space. We are already implementing projects to reequip the Ukrainian army with communication equipment of the Turkish company "Aselsan". We contribute to the modernization of Turkish armored vehicles with Ukrainian systems of active protection and dynamic armor.

A promising direction is armored engine building where Ukraine is one of the world leaders.

We are ready for joint production of aircrafts on the technological basis of the world-famous Ukrainian enterprise "Antonov", as well as aircraft power units based on innovations of the company "Ivchenko-Progress".

In total, the partnership in aerospace and defense-industrial spheres includes more than 30 projects.

Ukraine is grateful to the President of the Republic of Turkey, as well as the top management of the "Baykar Makina" company, who strengthened us with Bayraktar UAVs at the critical time for our country. This contract has brought our partnership to a strategic level, significantly strengthening Ukraine's defense potential.

The next step will be the joint production of the "Akinci" strike UAV with the engine of the Ukrainian company "Ivchenko-Progress". Currently, the project of localization of production in Turkey and Ukraine is being developed within the framework of this project. I know that not all issues have been resolved there, but I am sure that the parties will find a solution acceptable to all.

- You have focused on regional security issues. How important is this aspect for Ukraine?

- In general, our countries have signed about 30 agreements on regional cooperation. Aspects of regional security certainly occupy an important place in relations between Ukraine and Turkey. We are grateful for Turkey’s unchanging position on supporting the sovereignty and territorial integrity of Ukraine, protecting the rights of the Crimean Tatar people.

Turkey takes a consistent and constructive position on these issues of principle for us. We highly appreciate the official decision of the Turkish side to join the "Crimean Platform". For us, this is an important signal from a partner in supporting the sovereignty and territorial integrity of Ukraine.

We are interested in such a partner as Turkey. We have a lot in common. We have an understanding of how to ensure the maximum result of this cooperation. Undoubtedly, the signing of the agreement on a free trade zone with Turkey will strengthen the dynamics of our relations and allow our economies to be more competitive.

Anadolu Agency (english)