On April 7 2011 the President of Ukraine delivered his Annual Address on the current situation in domestic and foreign policy of Ukraine to the Verkhovna Rada of Ukraine. The primary message of the Address is the modernization and innovation for improvement of the quality of life of Ukrainians. The modernization and innovative development of the country will ensure the influx of FDI, new jobs and economic stability. The development of the country is only possible through commitment to democratic values, protection of the rights and freedoms of citizens. European integration remains one of the top priorities of Ukraine.

In general, the Presidential Address includes an assessment of the Ukrainian state and society in 20 years of independence, analysis of the key issues of political, economic and social development of the country and its position in the world. The message also identifies the goals of the reform program Prosperous Society, Competitive Economy, Effective State proclaimed by the head of state, and measures aimed at its implementation.

The main idea of ​​the Address is political, economic, social, cultural and humanitarian development of Ukraine based on continuous modernization and innovation. Individual sections of the Address define the modernization strategy and specific targets for various government bodies, which should provide a way out of crisis and build a modern, developed, competitive, and attractive country.

Key priorities for the modernization of the state include the start of a new constitutional process, the implementation of the administrative and territorial reform, amendments to the electoral law, creating the anti-corruption system and building the institutional basis for active participation of civil society in public policy development.

In particular, the President proposes to support the initiative to convene the Constitutional Assembly to ensure the legitimacy of the process of reforming the Basic Law. The restoration of political accountability of MPs and political parties before citizens will be implemented through the introduction of the "mixed" (majority-proportional) electoral system. The improvement of the civil service is called to ensure the accountability of bureaucracy before the civil society and to limit the influence of political forces on mid- and high-level public officials. The reform of criminal justice, including the adoption of a new Criminal Procedure Code and the establishment of the national anti-corruption agency will be implemented to increase the protection of the rights and freedoms of citizens of Ukraine and to recover the capacity of the state.

The new humanitarian policy of Ukraine will be streamlined to maximize the potential of each individual creating optimal conditions for the realization of intellectual and creative abilities.

The consolidation, social and political unity of the nation will be achieved through the development and implementation of public policies to address social disparity and cultural, denominational, ethnic, linguistic, regional and regional diversity, strengthening the identity of the Ukrainian political nation, the development of society on the basis of internal dialogue, tolerance and humanistic values.

The new state strategy for overcoming poverty is based on sustainable economic growth, comprehensive development and full utilization of Ukraine’s labor potential. At the same time the state will reduce property inequality through the introduction of flexible taxation policy, rational social transfers, promotion of small and medium businesses.

The health care reform includes three key objectives: improving financial and logistical support of the sector, improving the organizational and functional structure of the health care system and improving the quality of healthcare.

The fundamental reform of the education system will ensure the availability and continuity of education, creation of clear and objective assessment of knowledge and expertise, promote research and innovation, strengthen the links between science, education and application needs of the national economy.

To ensure the ​​cultural rights of our citizens the state will protect the cultural identity of the nation shaping the competitive advantages of the national culture and promoting Ukraine’s participation in cross-cultural exchanges in the modern world.

To reach these goals we envisage a radical renewal of regulation in the humanitarian sphere, drafted or started the process of development of specific strategic state programs, national projects and concepts.

The implementation of the anti-crisis policy and improvement of external conditions allowed us to stabilize the macroeconomic situation in Ukraine in 2010. However the Ukrainian government sets the ambitious goal of long-term modernization of our economy. The process of realization of this goal gave start to a new wave of reforms in the economy. The modernization of our economy is the way to strengthen the competitive advantages of Ukraine in the world and ensure the positive growth of income of our citizens. The modernization of our economy is impossible without a substantial renewal of the public decision-making in the economy and the social welfare system.

To ensure the modernization of the economy the government plans to develop incentives for investment and innovation, reinforce the legal framework protecting the rights of investors, broaden the scope of credit available for production facility upgrades. In the framework of the modernization, the state will actively use the leading Western mechanisms to support investment, innovation and business activity - including the creation of clusters, providing insurance for export and credit risks. At the same time we will work to solve the old systemic problems that complicate the business activity in our country. For example, the automatic VAT refund system is already beginning to operate.

As part of the modernization policy, we will ensure the monetary and fiscal stability, combine the active privatization program with the increased efficiency of the public sector. The state will actively invest in augmenting the human capital, developing research, education and medicine. An important objective in terms of modernizing the economy and the social sector is the pension reform.

The country is facing the important tasks of brining our economy “out of shadow” The funds recovered to the official sector of economy can become a powerful resource for the modernization of the country.

Regional policy will play an important role in economic modernization and reform - regions will be provided with sufficient financial resources, their influence on government decision-making will be increased, the government will work to strengthen interregional cooperation, including the EuroRegions mechanism.

However the Address of the President sets not only the strategic objectives in the economy, but also identifies some tactical socio-economic objectives for 2011. Indeed, the current year has twofold economi objective: keeping the high rate of economic growth, while providing the tangible improvement of welfare for broad segments of the population. To this end, Ukraine will continue to liberalize the regulatory environment for business, creating a favorable fiscal space for enterprises, and ensuring macroeconomic stability, first of all - through a more balanced system of public finances. The government will initiate systemic reforms in the sector housing and utility services. Ukraine will start the formation of a transparent and efficient market for agricultural land.

The specifics of the international situation, where Ukraine found itself after the onset of the global financial crisis, urges us to implement the ideologically neutral non-aligned policy. Non-alignment is viewed as a consistent position to protect our national interests without participation in military alliances, which creates opportunities for partnerships and mutually beneficial relations with other countries and international organizations in all directions.

In doing so the state will focus its efforts to ensure the national security primarily based on our own capabilities and resources. In this regard, we initiated profound changes in the security sector, including the formation of a new model of the Armed Forces of Ukraine.

In 2011 Ukraine will continue to develop pragmatic partnership with Russia, the U.S.A., the EU, China, Turkey, Poland, as well as with the new centers of growth in Asia and Latin America. In particular, the important task is to complete negotiations on the Association Agreement with the EU, sign the FTA agreement and obtain clear terms of the introduction of the visa-free regime with the EU.

European integration is our number one priority. The first stage of this integration must be completed already in 2012. The immediate objectives of our European policy include: the DCFTA, visa-free travel, the Association Agreement with the EU, joint EU-Ukraine energy policy including the GTS modernization, FDI.

In relations with Russia we will develop integrative cooperation in aircraft construction, shipbuilding, nuclear power, rocket and space industry, and other high-tech knowledge-intensive industries within the framework of the Economic Cooperation Program through 2020, in strict observance of the national interests of the parties.

The objectives of the strategic partnership between Ukraine and the USA continues to be the promotion of European integration and security policy of Ukraine, broadening the possibilities for Ukraine to obtain strategically important resources needed to achieve the objectives of the modernization, development of Ukraine's energy sector, strengthening the democracy and socio-economic stability, attraction of US investment and expertise.

The foundation of the strategic development in Ukraine-China relations and relations with other growth centers is the intensification of economic, scientific, technical and military cooperation, effective mitigation of consequences of the global financial crisis, economic, credit and investment cooperation.