Businesses should stop paying bribes to Ukrainian officials, the country's new president Viktor Yushchenko has said.
Calling Ukraine a "deeply corrupt country", he promised to tackle this "complex... but not incurable" problem.
He said it was a disgrace that 50% of the country's economy was "in the shadow" - failing to "pay a penny" in taxes that could be spent on social programs and infrastructure.
Speaking at a dinner on the sidelines of the World Economic Forum in Davos, Mr Yushchenko also said he was sure the Ukraine would join the European Union, but acknowledged this would take a long time.
'Number one target'
Ukraine's new president was elected after protests at the outcome of elections the country's supreme court found to have been rigged.
Mr Yushchenko said tackling corruption would be his "number one political target".
"In 2005 business people have to make another entry on their balance sheets: 'saved expenses from not giving bribes to Ukrainians'," he joked.
On Friday, Mr Yushchenko had told business leaders that Ukraine needed them "to visit, to invest, to help us become a strong country".
Mr Yushchenko promised businesses lower taxes and "no prosecution", a pointed reference to the disputes between the Moscow government and a string of Russian firms like Yukos and Vimpelcom.
He also pledged wide-reaching reforms of the health and pensions systems, an independent judiciary, and press freedom - although he noted that Ukraine's media were currently controlled by just "two or three powerful families".
'I am European'
Key to Ukraine's success, he said, was the adoption of European values, regardless of whether the country joined the European Union.
Talk of "European accession" made him uncomfortable, though.
"I'm in Europe already, I am European, I do possess European values," he said.
But he also declared Russia a "strategic partner" and said he had set himself a goal of conducting an "honest and effective" policy towards his powerful neighbour.
However, Russia experts attending the World Economic Forum warned the Ukrainian president would find it difficult to move his country closer to the West without upsetting relations with Moscow.
Ukraine's economy relies heavily on gas imports from neighbouring Russia, whose government had supported Mr Yushchenko's rival in the disputed elections.
Drinking with friends
Mr Yushchenko, his face still heavily scarred as a result of dioxin poisoning that he says was an attempt on his life, made light of his condition.
Ending his speech with a toast to the health of his fellow diners, he insisted on clinking his glass with everybody on the table.
"Clinking glasses was invented in Kiev hundreds of years ago," he said. "It was to make sure that one shares the table with friends."
"By clinking glasses heavily, some drops would be exchanged between both glasses, then nobody would poison you," Mr Yushchenko said with a big grin on his face.
By: N. Peter Kramer
