AUR#759 Sep 18 President Rebukes PM On NATO Stance; Telenor Communications Warns Of Threat; Baloha New Pres Chief-Of-Staff; FM Tarasiuk To NYC – UN

=========================================================
 ACTION UKRAINE REPORT – AUR           
                  An International Newsletter, The Latest, Up-To-Date
                       In-Depth Ukrainian News, Analysis and Commentary

                        Ukrainian History, Culture, Arts, Business, Religion,
           Sports, Government, and Politics, in Ukraine and Around the World       

 
                 Help Build the Worldwide Action Ukraine Network.
 Send the AUR to your colleagues and friends, urge them to sign up.
                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 759
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN WASHINGTON, D.C., MONDAY, SEPTEMBER 18, 2006
 
               -——-  INDEX OF ARTICLES  ——–
              Clicking on the title of any article takes you directly to the article.               
    Return to the Index by clicking on Return to Index at the end of each article
1.         PRESIDENT OF UKRAINE CRITICISED THE NEW CABINET
               Has five hour meeting with Prime Minister Viktor Yanukovych
                   President gave Prime Minister his first political warning.
ForUM, Kyiv, Ukraine, Saturday, 16 September 2006
 
2.         UKRAINE PRIME MINISTER REBUKED FOR NATO STAND
BBC News, United Kingdom, Friday, September 15, 2006

3.     PRO-RUSSIA PM BLOWS UKRAINE OFF WESTERN COURSE
Agence France Presse (AFP), Kiev, Ukraine, Sunday, Sep 17, 2006

4DEFENCE MINISTER SAYS UKRAINE TO CONTINUE NATO BID
NEWS CONFERENCE: By Ukrainian Defence Minister Hrytsenko
TV 5 Kanal, Kiev, in Ukrainian 0915 gmt 15 Sep 06
BBC Monitoring Service, United Kingdom, Friday, September 15, 2006

5.   FOREIGN MINISTER TARASIUK SAYS YANUKOVYCH HAS NO
           POWER TO FORMULATE UKRAINE’S FOREIGN POLICY
Ukrainian News Agency, Kyiv, Ukraine, Friday, September 15, 2006

6UKRAINIAN PEOPLE’S PARTY URGES YUSHCHENKO TO ENSURE

Ukrainian News Agency, Kyiv, Ukraine, Sat, September 16, 2006

7.                      WHITHER GOEST THOU, UKRAINIAN?
By Klara GUDZYK, The Day Weekly Digest in English, #24
Kyiv, Ukraine, Tuesday, July 24, 2006

8.       YANUKOVYCH: EASTERN AND WESTERN HEADACHES
OPINION & ANALYSIS: Andrei Yermolayev for RIA Novosti
RIA Novosti, Moscow, Russia, Friday, September 15, 2006

9.                                THE UKRAINIAN GAMBIT
                                      The price of the question
ANALYSIS & COMMENTARY: By Valery Panyushkin
Kommersant, Moscow, Russia, Friday, September 15, 2006

10.           PROSPECTS OF THE BROAD COALITION IN UKRAINE
ANALYSIS AND COMMENTARY: By IGOR BURAKOVSKY,
Director of Institute for Economic Studies and Political Consulting, Kyiv
Eurasian Home, Moscow, Russia, Friday, September 15, 2006

11.                  UKRAINE WITNESSING RECYCLING FRENZY
OP-ED: By Marusia Hnatkevych, Kyiv Post, Kyiv, Ukraine, Thu, Sep 14 2006

12TELENOR COMMUNICATIONS CO WARNS OF THREAT TO RIGHTS
                OF INVESTORS, INVESTMENT CLIMATE IN UKRAINE
        Telenor, largest communications company in Norway, major international
           mobile operator, operations in 13 different countries serving nearly 100

       million subscribers, largest foreign investor in the telecom sector of Ukraine.
Ukrainian Times newspaper, Kyiv, Ukraine, Monday, September 18, 2006

13UNITED STATES ADOBE SOFTWARE PRODUCER DECIDES TO
         LAUNCH FIGHT AGAINST PRODUCE PIRACY IN UKRAINE

Kostiantyn Druzheruchenko, Ukrainian News Agency
Kyiv, Ukraine, Wed, September 13, 2006

14UKRAINE’S METALLURGICAL IND FINDING GAS ALTERNATIVES
           Ukraine ranks first in the world in its use of open-hearth furnaces -
     a dinosaur technology that requires huge amounts of gas, in metal production.
Associated Press, Donetsk, Ukraine, Sunday, September 17, 2006

15.        UKRAINIAN PRIME MINISTER HOPES INVESTORS WILL
             DELIVER RUSSIAN GAS DIRECTLY TO THEIR PLANTS
Ukrayina TV, Donetsk, in Russian 1800 gmt 11 Sep 06
BBC Monitoring Service, United Kingdom, Monday, Sep 11, 2006

16MCDONALD’S UKRAINE OPENS 56TH RESTAURANT IN UKRAINE
                Opens seventh restaurant in Dnipropetrovsk, next one in Lviv
Viktoria Miroshnychenko, Ukrainian News Agency
Kyiv, Ukraine, Monday, September 11, 2006

17.     FBI DENIES RETURN OF FUNDS ILLEGALLY ACQUIRED BY
       FORMER PRIME MINISTER PAVLO LAZARENKO TO UKRAINE
Oksana Torop, Ukrainian News Agency, Kyiv, Ukraine, Sep 15, 2006

18US WELCOMES UKRAINE & POLAND’S INTENTION TO EXTEND
               ODESA-BRODY OIL PIPELINE TO POLAND’S PLOCK 

        PM Yanukovych meets with US Assn’t Secretary of State Daniel Fried
Daria Hluschenko, Ukrainian News Agency, Thu, September 7, 2006

19.     UKRAINIAN PRESIDENT’S NEW CHIEF-OF-STAFF, VIKTOR

                      BALOHA, PROMISES NO RESHUFFLE SOON
TV 5 Kanal, Kiev, in Ukrainian 1400 gmt 16 Sep 06
BBC Monitoring Service, United Kingdom, Sat, September 16, 2006

20.   MEDIA UNHAPPY ABOUT FREEDOM OF SPEECH IN UKRAINE 
UT1, Kiev, in Ukrainian 1800 gmt 15 Sep 06
BBC Monitoring Service, United Kingdom, Friday, September 15, 2006

21UKRAINE: OVER 1,000 COMMEMORATE KILLED JOURNALISTS

UNIAN news agency, Kiev, in Ukrainian 1931 gmt 16 Sep 06
BBC Monitoring Service, United Kingdom, Saturday, Sep 16, 2006
 
UNIAN news agency, Kiev, in Ukrainian 0937 gmt 16 Sep 06
BBC Monitoring Service, United Kingdom, Sat, September 16, 2006
 
     GENERAL ASSEMBLY IN NEW YORK FROM SEPTEMBER 18-25
Daria Hluschenko, Ukrainian News Agency
Kyiv, Ukraine, Tuesday, September 5, 2006
 
24UKRAINE TO AGAIN DECLARE NECESSITY TO ACKNOWLEDGE
        1932-1933 FAMINE AS GENOCIDE OF UKRAINIAN PEOPLE AT
                    THE 61ST SESSION OF UN GENERAL ASSEMBY
Ukrainian News Agency, Kyiv, Ukraine, Tue, September 12, 2006
 
25.   OUR UKRAINE & COMMUNISTY PARTY DISAGREE ON ON
  UKRAINIAN REBEL ARMY, 1932-1933 FAMINE AS GENOCIDE AND
                 INCREASING THRESHOLD INTO RADA TO 5%
Mykola Yeriomenko, Ukrainian News Agency
Kyiv, Ukraine, Tuesday, September 12, 2006
 
26. COMPETITION TO DESIGN MONUMENT TO AMERICAN HISTORIAN
         JAMES MACE ANNOUNCED, RESEARCHED 1932-1933 FAMINE
Natalia Ivanenchuk, Ukrainian News Agency
Kyiv, Ukraine, Thursday, August 31, 2006
 
27.              UKRAINE SHOULD ABANDON SOVIET-ERA MYTHS
                            A Conversation with Professor Roman Serbyn
CONVERSATION: With Canadian Professor Roman Serbyn
By Fran Ponomarenko, Vanier College, Montreal, Quebec, Canada
The Ukrainian Weekly, Parsippany, New Jersey
Sunday, July 9 and Sunday, July 16, 2006
The Day Weekly Digest, Kyiv, Ukraine, July 18 #25 & July 25, 2006, #26
========================================================
1
PRESIDENT OF UKRAINE CRITICISED THE NEW CABINET
           Has five hour meeting with Prime Minister Viktor Yanukovych
                President gave Prime Minister his first political warning.

ForUM, Kyiv, Ukraine, Saturday, 16 September 2006

KYIV – In a five-hour conversation with Prime Minister Viktor Yanukovych,
Victor Yushchenko has voiced his concern over several steps taken by the new
government and said the Cabinet must observe the National Unity Pact in its
work.

“I invited the prime minister to give him my first political warning about
some things certain government executives do, violating the [National Unity]
Pact and stabilization agreements. Our meeting resulted in a joint plan of
correcting such tendencies,” he told reporters at a mass media briefing on
Friday.

He is convinced the National Unity Pact “gave all the political forces keys
to implement these major political, economic and humanitarian tasks.”

As President of Ukraine, he will thereby spare no effort to make sure that
the key principles of this document – among them the unitary form of
government, language policy and Euro-Atlantic integration – are secured not
only as “common political agreements reached at the phase of finding
political compromises and resolving the parliamentary crisis but also used
as an action plan by the new Ukrainian government.”

President Yushchenko and PM Yanukovych spoke about some dangerous social
and economic tendencies, nontransparent and often inexpedient dismissals and
appointments, delays in the formation of a broad parliamentary coalition,
violations of the rights of the opposition and attempts to revise Ukraine’s
foreign policy, the president press office informed.

“Disregarding the law, the plan to raise the minimum wage on December 1,
2006, has been put off although the country has enough resources this year.

This is a dubious and unnecessary revision of budget policy,” he said,
adding that VAT reimbursement and tax pressure considerably complicated
the dialogue between the government and businessmen.

“The 2007 draft budget has no signs of tax reduction whatsoever,” he said,
claiming such a move could have helped legalize the economy.

The President also censured the Tax Administration for being apparently
unfair in VAT reimbursement and said he had authorized Prosecutor General
Medvedko to study the situation within ten days and “develop a mechanism of
monitoring which would make it impossible to carry out such policies in the
future.”

Victor Yushchenko also insisted that the formation of a parliamentary
coalition should be faster.

“The healthy part of Ukraine’s political forces must understand one thing:
given the constitutional changes, which were passed hastily, political
forces and government should take responsibility for many economic,
humanitarian, and social issues,” he said.

“I urge all those who take part in the formation of positions of this or
that parliamentary faction to accelerate this process.”

The President and the premier also spoke about the inexpedience of putting
pressure on deputies. Yushchenko said the revival of the practice of forcing
parliamentarians to join the majority perverted the March 26 poll results.

“I would like to wish the deputies to be responsible for their voters and
positions they defended during the campaign and to face all attacks bravely
[.],” he said. “I clearly demand that the rights of the opposition should be
protected and observed so that they can control the government.”

He characterized the prime minister’s attempt to revise Ukraine’s foreign
policy as unacceptable and reiterated that the country’s course to join the
European Union and NATO would not change.

Victor Yushchenko also said it was vital to pass bills based on the
principles of the National Unity Pact and his anti-corruption laws. The
President is soon going to convene the National Security and Defense
Council to discuss all these issues.                    -30-
———————————————————————————————
LINK: http://en.for-ua.com/news/2006/09/16/100117.html
————————————————————————————————-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2.  UKRAINE PRIME MINISTER REBUKED FOR NATO STAND

BBC News, United Kingdom, Friday, September 15, 2006

KIEV – Ukrainian President Viktor Yushchenko has criticised new Prime
Minister Viktor Yanukovych for suggesting Kiev was not ready to join Nato.

The president said Mr Yanukovych’s belief that public opinion opposed
the move was “wrong, does not meet national interests and must be
corrected”.

His prime minister called for “a pause” on Thursday after talks with
top Nato and EU officials in Brussels.

Mr Yushchenko has pushed for membership of Nato following his election
in 2005.

Mr Yanukovych was named PM in August by his arch-rival Mr Yushchenko,
on condition that he followed his pro-Western agenda. The move capped

a dramatic comeback for Mr Yanukovych, who was ousted in Mr
Yushchenko’s “Orange Revolution” in 2004.
                                            ‘PAUSE’
Mr Yushchenko told reporters his government had to abide by his stance
of integration with Western institutions as the “foundation, the credo
for foreign policy”.

The comments came a day after Mr Yanukovych said full Nato membership
had only limited support among Ukrainians, on his first visit to
Brussels as prime minister.

He said Kiev was taking a pause “because of the political situation in
Ukraine”.

“But the time will come when a decision will be made… For the time
being we are looking at enlargement of our co-operation with Nato,” he
said.

Opposition to Nato membership is particularly strong in eastern and
southern Ukraine – the electoral strongholds of Mr Yanukovych’s party.
Russia has also voiced strong opposition to Ukraine joining Nato.

Kiev had earlier expressed hopes of joining the world’s biggest
defence alliance in 2008.
                                         EU HOPES
At the same time, Mr Yanukovych said Ukraine would continue reforms
aimed at bringing the country closer to the EU.

EU External Relations Commissioner Benita Ferrero-Waldner said the
25-member bloc had no plans to offer Kiev membership “at this moment”.

Instead, she suggested the two sides negotiate what was described as
an enhanced agreement that would include a free trade pact.

Mr Yanukovych – who favours closer ties with Russia – was initially
declared the victor in the 2004 presidential polls, but the result was
then annulled by the Supreme Court, which ruled that the vote was
fraudulent.

Mr Yushchenko was elected president in the re-run of the second round
ordered by the court. In March, Mr Yanukovych’s Party of Regions

polled the most votes in parliamentary elections, but failed to secure a
majority.                                             -30-
——————————————————————————————
LINK: http://news.bbc.co.uk/go/pr/fr/-/2/hi/europe/5350756.stm
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3. PRO-RUSSIA PM BLOWS UKRAINE OFF WESTERN COURSE

Agence France Presse (AFP), Kiev, Ukraine, Sunday, Sep 17, 2006

KIEV – Ukraine’s prospects of integrating with the West have been dealt
a blow by Prime Minister Viktor Yanukovych in comments that cast
doubt on the country’s efforts to join NATO and highlighted a deep
rift at the centre of government.

An assertion by Yanukovych after he met the secretary general of the
North Atlantic Treaty Organisation (NATO), Jaap de Hoop Scheffer,
that a “pause” was needed in efforts to join the military alliance was
sharply rebutted by pro-Western President Viktor Yushchenko.

Yushchenko, who came to power in an “orange revolution” that saw
hundreds of thousands of his supporters take to the streets, has sought a
fundamental reorientation of this country of 47 million people away from
Moscow’s historical dominance and towards NATO and European Union
membership.

On Friday he huddled with his arch-rival Yanukovych for over four hours
of talks, emerging to slam the prime minister’s stance and his refusal to
endorse a NATO Membership Action Plan — a key stepping-stone to
membership.The prime minister’s comments in Brussels had been “mistaken”
and had not accorded “with the national interest,” Yushchenko said.

Yushchenko had hoped that NATO would agree on the action plan at a
summit of heads of the member states in November in Riga, Latvia.

“The Riga train has left,” commented Olexander Sushko, director of the
Centre for Peace, Conversion and Foreign Policy.”

After this scandal, the Western partners won’t take a decision on the
membership action plan for Ukraine this year,” Sushko said.

Such a decision would only be taken by the NATO members in six months
at the earliest “provided the West sees a consensus between the president
and the government,” Sushko said.

The influential pro-Western weekly Dzerkalo Tyjnia said there might be a
way around the set-back for Yushchenko.Instead of the Cabinet endorsing
the action plan, it could instead be put forward by the Security Council,
which is dominated by Yushchenko allies, the paper said.

“The decisions of the Council are validated by
presidential decrees” that the government must then fulfil, the paper said.

The dispute between Yushchenko and Yanukovych throws a harsh light
on a problem that has been brewing ever since Yanukovych was approved
as prime minister on August 4, following months of coalition wrangling.

Yanukovych made opposition to NATO a fundamental plank of his election
campaign earlier this year and has argued that the public does not back
membership — choosing to ignore the fact that public opinion was also far
from unanimous in the seven ex-Communist countries that joined NATO
in 2004.

Given the fragility of the current government and the possibility that early
elections could be called, Yanukovych is unlikely to abandon his anti-
NATO stance, said Sushko.

In a sign of this fragility, while Yanukovych and his ministers have been
appointed by parliament, a coalition agreement has still not been formally
approved.Yanukovych, who is backed by powerful business interests,
continues to advocate membership of the EU.

But how likely EU membership is without Ukraine also joining NATO
is open to question, as the two things have tended to go hand-in-hand
for other ex-Communist countries.

As the fall-out continued from Yanukovych’s comments on Friday, a
senior official from Yushchenko’s Our Ukraine party, Roman Bezsmertny,
raised the possibility of dissolving parliament, signalling the possibility
of further turmoil ahead.                                -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

========================================================
4. DEFENCE MINISTER SAYS UKRAINE TO CONTINUE NATO BID

NEWS CONFERENCE: By Ukrainian Defence Minister Hrytsenko
TV 5 Kanal, Kiev, in Ukrainian 0915 gmt 15 Sep 06
BBC Monitoring Service, United Kingdom, Friday, September 15, 2006

KIEV – Ukrainian Defence Minister Anatoliy Hrytsenko has said that Ukraine
will implement the NATO membership action plan despite Prime Minister
Viktor Yanukovych’s statements to the contrary.

Hrytsenko said that Ukraine’s NATO bid will continue and that the state
should boost a campaign to improve Ukraine’s public opinion of NATO.
Hrytsenko also said that he does not intend to resign.

The following is an excerpt Hrytsenko’s news conference broadcast live by
Ukrainian television TV 5 Kanal on 15 September:

[Hrytsenko] Why do I think that this move is unfounded, illogical and even,
to my mind, erroneous? Actually, what the [NATO] membership action plan is
about?

I can talk about this as an individual and a state servant who basically
initiated the development of this plan back in Vilnius in 2005, who was
directly involved and coordinated the development of this plan by the
Defence Ministry.

I want to remind you that in early March this plan was developed. Then this
work was extended to include other institutions, because all of us
understand that cooperation with NATO has not just a military component.

NATO is more of a community of states with high living standards and only
after that is it a military and political alliance which ensures the
security of these states and their high living standards. [Passage omitted:
more about NATO and the membership plan]

We are currently implementing this plan and I am very sorry that the prime
minister was not informed about that before his Brussels visit and that he
failed to find time to talk with the defence minister to understand what the
membership action programme actually is.

I want to stress that Ukraine and Ukrainians need the implementation of the
plan. NATO does not need it. They already have high living standards. We
need these standards.

Therefore to say that this is premature or that this should be postponed or
that we should consult people [changes tack] people want high living
standards. This plan is being implemented.

Therefore, I want to say that the Defence Ministry [1] was, is and will be
implementing the alliance membership action plan, regardless of any
statements made during any visits.

This is [2] what is required by the law, this is what is required by
resolutions of the president who under the constitution is in charge of this
area, sets guidelines and we will continue to do it.

Moreover, I want to say [3] that the membership action programme will be
implemented by the Yanukovych government, all ministers, all deputy prime
ministers and the prime minister personally for the sole reason that the
implementation of the plan means improving living standards.

When the prime minister says during a news conference in Brussels that
systemic economic reforms will be implemented, the judiciary will improve
and so on. This is what the membership action plan is about. It will be
implemented with immediate effect, otherwise we will be facing regress.

The [4] fourth and final point. As the defence minister and a member of the
National Security and Defence Council, I will raise with the president of
Ukraine the issue of Ukraine’s cooperation with NATO during a meeting of the
National Security and Defence Council to put an end to the dispute and to
make sure that all state servants are perfectly aware which directives they
should follow and how.

This will be a confirmation to our strategic course towards joining NATO and
to the tactics of joining NATO.

Unfortunately, after this visit it is 100 per cent clear to me that the NATO
Riga summit will not make a decision on Ukraine joining the membership
action programme. This is very unfortunate, because we had this chance and
we are actually prepared for this. This will actually benefit Ukraine and
Ukrainians.

[Question from the Interfax-Ukraine news agency] Mr Hrytsenko, does this
news conference mean that your vision of Ukraine’s defence security does not
match that of Prime Minister Viktor Yanukovych and that you intend to
resign?

[Hrytsenko] I can recall a well-known Odessa anecdote. When asked how he
was doing, Rabinovich said that you will not live to see it. This is my
answer.I will continue to work as the defence minister until the president

makes another decision.

I will continue to implement the membership action programme because the
strong army and servicemen with appropriate pay and social benefits is what
Ukraine needs. I will not give up this policy. Currently, there is no reason
to say that anything will change here. I will remain in my position and be
as efficient as I can.

[Question from the ICTV TV channel] Mr Hrytsenko, why do you say that
Yanukovych has defied presidential instructions? The declaration of national
unity does not mention joining NATO. It mentions only a NATO referendum.

[Hrytsenko] Again, I want to separate political assessments from what should
be done in the state according to the law. The declaration is not a law.
This is a political document. I was not involved in coalition talks, I was
not involved in drafting this document.

I think that political forces which signed a declaration will give a
political assessment to the prime minister’s actions. This is not my mission.

I am not a member of any political party.

However, the president as the head of state and as the official in charge of
national security, defence and foreign policy, has clearly stated that
Ukraine should say that it is prepared and wants to join the membership
action programme, both verbally and in writing. This has not been done.

The president has this right under the current laws, he defines tactics, he
has decided, and this is right, that we have completed the current stage of
intensified dialogue and are prepared for the next stage. He said this in
public, he said this to the prime minister personally at various occasions.
These directives should be implemented.

If I am given this directives I implement them as the defence minister. If I
disagree I try to persuade. If I can’t and if it is a critical issue I
submit my statement of resignation. There is no other option.

[Passage omitted: answers question about what the membership action plan is
about, says that the National Security and Defence Council should meet to
discuss the situation, answers a question about the procedure of
conscription in Ukraine.]

[Delo newspaper] Mr Hrytsenko, opinion polls show that our public does not
support accession to NATO. Perhaps, this is because the public hears about
NATO from [Progressive Socialist leader] Nataliya Vitrenko and Communist
leader Petro Symonenko.

Perhaps, the state should hold a campaign to explain what the alliance is
about. Also, don’t these actions by Mr Yanukovych show that he is acting on
some order from Moscow in exchange for gas concessions?

[Hrytsenko] I hope that our public hears about NATO not only from Vitrenko
but from the president, the defence minister and the foreign minister,
servicemen and other officials. It is clear that this is not enough.

It is my strong desire that an important remark the prime minister made in
the NATO HQ that we should shape the public opinion in terms of positive
attitude to NATO is reflected in practical actions.

Unfortunately, this is not happening now. I talked with experts from the
Foreign Ministry before coming here and they told me that next year’s draft
budget which was proposed by the cabinet unfortunately allocates no funds
for informing the public about NATO.

It was this year but money has not been allocated for the next year. So
there are discrepancies between declaration and what is being done. This
situation should be improved.

About NATO and gas. It is my personal opinion that the independence of our
state, I mean political independence, sovereignty and territorial integrity
can be guaranteed if we resolve the issue of diversification and
transparency of fuel supplies, especially gas, using clear and transparent
procedures without any political concessions and resolve the issue of
security through joining NATO.

To my mind, these are two essential conditions. Without that we can just
pretend to be a sovereign and independent state and expect more live
broadcasts from Russia about Gazprom training to pull the gas tap.

[Passage omitted: says that he is not in a position to comment on Crimean
lighthouses used by the Russian navy, says that the army should be financed
properly, says that the 2007 military budget should be discussed by the
National Security and Defence Council and that it is premature to talk about
a NATO referendum.]                               -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
    Send in names and e-mail addresses for the AUR distribution list.
========================================================
5. FOREIGN MINISTER TARASIUK SAYS YANUKOVYCH HAS NO
          POWER TO FORMULATE UKRAINE’S FOREIGN POLICY

Ukrainian News Agency, Kyiv, Ukraine, Friday, September 15, 2006

KYIV – Foreign Affairs Minister Borys Tarasiuk has said that Prime Minister
Viktor Yanukovych has no authority to formulate Ukraine’s foreign policy.
Tarasiuk was addressing journalists via a direct telephone link with the
Cabinet of Ministers.

Tarasiuk noted that the Constitution stipulates that the President of
Ukraine oversees implementation of Ukraine’s foreign policy and said that
the Prime Minister has no such powers.

Tarasiuk also said that the parliament has backed accession of Ukraine to
NATO and the European Union and that all the members of the Party of the
Regions’ parliamentary faction voted in favor of the relevant parliamentary
resolution.

“This means that [Yanukovych's statement in Brussels that Ukraine is not
ready to join the Action Plan on NATO Membership] can be considered as a
statement by the leader of a parliamentary faction.

As a representative of another faction and party, I can say that nobody has
cancelled the main priorities of the foreign policy of our country that the
president outlined,” Tarasiuk said. He stressed that Ukraine’s
foreign-policy course remains unchanged.

“It is a pity that the prime minister, as the head of the government,
expressed a position that differs from the foreign-policy course of our
country,” Tarasiuk said.

According to him, President Viktor Yuschenko can now exercise his power

and the relevant steps can be expected from him in the near future.

As Ukrainian News earlier reported, the Presidential Secretariat has said
that it expected Yanukovych to state Ukraine’s readiness to join the Action
Plan on NATO Membership during his visit to Brussels (Belgium) on September
14.

Defense Minister Anatolii Hrytsenko has expressed the view that Yanukovych’s
statement in Brussels that Ukraine is not ready to join the Action Plan on
NATO Membership was a mistake.

The parliamentary faction of the Our Ukraine bloc has said that it considers
Yanukovych’s statement that Ukraine is not ready to join the Action Plan on
NATO Membership a violation of the political agreements stipulated in the
Declaration of National Unity.                        -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================      
6. UKRAINIAN PEOPLE’S PARTY URGES YUSHCHENKO TO ENSURE
       INVARIABILITY OF UKRAINE’S NATO INTEGRATION POLICY
 
Ukrainian News Agency, Kyiv, Ukraine, Sat, September 16, 2006

KYIV – The Ukrainian People’s Party is calling on President Viktor Yuschenko
to ensure invariability of the country’s foreign policy aimed at integration
with NATO. This follows from a party’s statement, a copy of which was made
available to Ukrainian News.

As the message reads, during the Ukraine-NATO commission meeting, Premier
Viktor Yanukovych noted that Ukraine is not ready to join the NATO
Membership Action Plan.

‘UPP considers such statements by the Ukrainian premier as revision of
Ukraine’s foreign policies that were fixed in 1993 in the parliamentary
resolution on the main foreign policy directions and law on foundations of
Ukraine’s national security,’ the statement reads.

UPP also urges representatives of political forces in the parliament that
support Ukraine’s Euro-Atlantic aspirations to discuss changes in Ukraine’s
foreign policy set forth by Yanukovych.

As Ukrainian News earlier reported, during the Ukraine-NATO commission
meeting in Brussels (Belgium), Viktor Yanukovych called cooperation with
NATO important for Ukraine, but said that only 12-25% of Ukrainians support
such participation.                                          -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
7.                     WHITHER GOEST THOU, UKRAINIAN?

COMMENTARY: By Klara GUDZYK,

The Day Weekly Digest in English, #24, Kyiv, Ukraine, Tue, July 24, 2006

Every day in the media we hear about some Ukrainian citizens protesting
against our country joining NATO.

At the same time, very few Ukrainians are aware of the advantages and
disadvantages this membership entails. The blame for this lies with the
Ukrainian authorities and the media.

I would like to draw attention to the fact that it is always the same
Ukrainian citizens – ethnic Russians and totally Russified Ukrainians – who
protest against NATO and rapprochement with the Western world.

If you filter out the political demagogy of these anti-NATO protests, you
will get sediment that constitutes a well-known historical feature of a
considerable proportion of the Russian population – closeness based on
ethnic and religious xenophobia and the perception of permanent danger
from the West.

Thus, to a large extent today’s Russia remains a medieval imperial state
that has only learned to deal with the nations it has conquered or which
fully depend on it.

Therefore, the mentality of Ukrainian Russians can be defined by the old
saying, “They have forgotten nothing and learned nothing,” and hence, they
only want to make friends with the East, i.e., Russia, irrespective of any
practical benefit that may be derived from other interstate alliances.

Meanwhile, true Ukrainians have always been in contact with Western Europe,
unless they were prevented by force, since the earliest years of their
history.

Suffice it to recall (a sweet recollection indeed) that young people from
both western and eastern (Dnipro) Ukraine, from well-off and impoverished
poor families, began to travel-even walk-to famous Western European
universities as long ago as the 15th century, if not earlier.

There they obtained higher diplomas, learned foreign languages, and
sometimes stayed behind as instructors or even heads of those universities.

But more often than not, they would come home and teach students in
seminaries or academies. One such traveling student from Kyiv-Mohyla Academy
was Feofan Prokopovych, a well-known figure in the era of Peter I’s reforms.
In order to study in Western Europe he even briefly converted from Orthodoxy
to Greek Catholicism.

Yet no one ever went to the East, i.e., to Muscovite universities (with the
exception of the Stalin era, when Soviet institutions of higher education
began admitting students from Third World countries).

It would be worthwhile to recall an outstanding individual of the 17th
century, for whom the Western world became the continuation of his
fatherland. It is very difficult to imagine that such a personality could
have emerged in Russia.

Yuriy Kulchytsky was born approximately in 1640 in the village of Kulchytsi
Shliakhetski, near Sambir, in the Lviv region. At the age of 20, the youth
fled to the Zaporozhian Sich and became a Cossack.

It soon became apparent that the young Cossack had a special talent for
languages: he quickly mastered Turkish and Hungarian and then became a
brilliant translator, accompanying the Cossacks on their expeditions to
foreign lands and oxcart caravans to the Crimea.

During one of those expeditions the young man was captured, taken to the
Ottoman Empire, where he was imprisoned for several years. In captivity this
country boy improved his Turkish and, surprisingly, developed a liking for
coffee, then unknown in Europe. Some Serbian merchants, who needed the
young prisoner as an interpreter, purchased Yuriy’s freedom.

In Belgrade our hero, who was then fluent in Turkish, German, Hungarian,
Romanian, and Polish, was employed as a translator at a large Viennese
commercial company.

He was also well-versed in the customs of the peoples who populated that
part of Europe. In 1678 Kulchytsky moved to Vienna, where he launched his
own trading business.

In 1683, during the Austro-Turkish war, the vastly outnumbered Viennese
forces consisting of 16,000 Austrian soldiers and a militia of 6,000 men,
were besieged by 200,000 Turkish troops.

Among the Austrian troops was the former Zaporozhian Cossack Yuriy
Kulchytsky. Vienna was stricken with famine, a raging epidemic, and panic.

Messengers sent to deliver letters to the allied troops were unable to reach
their destination. The decision was made to dispatch another messenger to
the troops of Austrian Emperor Leopold I – a man who knew Turkish and could
penetrate the enemy defenses.

The choice fell on Kulchytsky, who was accompanied by his friend Mihajlovic,
a Serb. Dressed in Turkish clothing and bearing forged passports identifying
them as Turkish army merchants, they sneaked into the Ottoman camp during
the night and the next day walked bravely past the enemy tents.

The Turks took them for their own men. The messengers accomplished their
mission: they informed the Austrian government’s allies about Vienna’s
plight, organized light signals from the belfry of St. Stephen’s Cathedral,
and returned to Vienna a few days later.

After some time the Turkish army was routed, to a large degree thanks to
Cossack regiments led by Iskra, Hohol, Paliy, and others, who fought under
the colors of Grand Crown Hetman Jan III Sobieski.

Historians claim that among the many spoils captured from the Turks were

300 sacks of coffee beans, which Kulchytsky claimed as his reward.

He soon opened Europe’s first cafe called the Blue Cup, under a license
granted by Emperor Leopold I himself. Contemporaries recount that people
flocked in droves to Kulchytsky’s cafe, not so much to drink coffee, which
the Viennese were still unable to appreciate, as to hear the brave
Kulchytsky recount his “stroll” through the Turkish camp.

Some time later, in his free moments Kulchytsky wrote The Tale of an
Eyewitness Who, Disguised as a Turk, Went through the Enemy Camp

and Came Back.

In the 19th century when the grateful Viennese were celebrating the
anniversary of the victorious Battle of Vienna, they named a street and a
cafe after Kulchytsky. Eventually, a monument to our compatriot was
unveiled.

Still standing today, the monument depicts a sturdy fellow in an exotic
Turkish outfit holding a tray with cups in one hand and a coffeepot in the
other. At his feet are trampled Turkish gonfalons, dented scimitars, and a
sack of coffee.

This is the end of a story that has been recorded in numerous documents.

Looking back to the beginning of this article, I must note that many of our
ancestors would have been greatly surprised to see the anti-NATO slogans
that some so-called citizens of Ukraine are brandishing over the Ukrainian
lands. Why aren’t they defending the borders of Russia from the “corrupt
West?”                                               -30-
————————————————————————————————
LINK: http://www.day.kiev.ua/165584/
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
     NOTE: Send in a letter-to-the-editor today. Let us hear from you.
========================================================
8.   YANUKOVYCH: EASTERN AND WESTERN HEADACHES

OPINION & ANALYSIS: Andrei Yermolayev for RIA Novosti
RIA Novosti, Moscow, Russia, Friday, September 15, 2006

The agreement on national unity (the fifth universal in Ukrainian history
since 1917), signed by the leaders of parliamentary factions and President
Viktor Yushchenko on the eve of the formation of the government in August
2006, became a symbol of political reconciliation and recognition of the
results of the elections, which had been won by the Yanukovych-led Party of
Regions.

Although the party is generally perceived as “pro-Russian”, it used to be
consistently “post-Soviet” – a kind of restoration force in Ukrainian
style – with bronze miners, labor discipline in politics and idols with
janitor-to-general-secretary biographies.

Ukraine’s post-Soviet eastern project is good for elections (just like the
Orange one), but bad for practical policy. Having taken revenge on Our
Ukraine and the Tymoshenko bloc, and formed the coalition and government,
the Party of Regions is compelled to tackle the problems of Ukraine’s
integration. This is a formidable task.

The party has to prevent the parade of regions against the center,
consolidate the confidence of different parts of the country in its
position, formulate an effective foreign policy doctrine and refrain from
supporting corporate interests, which is typical for the eastern elites.

Meanwhile, there are more than 300 multimillionaires in the Ukrainian
parliament. They are members of different factions in accordance with the
purchased mandates.

The deputies representing big business, that is, export-oriented industries,
which are the backbone of the budget, have formed new centers of influence.
The industrial and financial groups, who prefer to stay away from public
politics, have their lobby in parliament as well.

Ukrainian capitalists – Akhmetov, Klyuyev, Taruta, Firtash, Kolomoisky,
Poroshenko, Martynenko, Boiko and Zhevago, to name but a few, have
become a real ruling force in the country.

Unlike the oligarchs in the last years of Kuchma’s term, they openly
advocate their business strategies, take an active part in government
policy, and make their own public initiatives. This part of the Ukrainian
establishment feels best in a positive economic atmosphere.

Therefore, the agreement on unity as a pact of the elites, based on the
ideology of stable development, is the most adequate response to the
requirements of oligopoly. This may explain the stubborn pushing of the
broad coalition idea, which has room for everyone, except, possibly, the
ambitious Tymoshenko bloc.

The dominant export-oriented groups also need a most favored status in
trade with Russia and access to international stock and credit markets.

As distinct from the contradictory middle class, these advocates of macro
integration have formed the political and economic basis for the policy of
the fifth agreement. It is more complicated to translate it into ideology
and practical steps.

Yanukovych’s first messages in Sochi during the EurAsEC summit and at the
international economic forum in Polish Krynica were predictable.

In Russia the Ukrainian prime minister spoke about strategic partnership and
a special relationship, and suggested returning to the project of single
economic space. In Poland he quietly omitted the eastern vector, laying
emphasis on pro-European choice and the need to promote EuroAtlantic
cooperation instead of straightforward membership.

Formally, Yanukovych does not seem to stray away from the Ukrainian
tradition with its eastern-western dualism and a balancing game. But there
are some nuances. Although the Sochi meeting was presented as the “first
success”, in reality it was a cold shower.

Old talk about single economic space did not produce the desired effect.
Russia made it clear that it is serious about its new Eurasian policy
(EurAsEC-CSTO+SCO, or Eurasian matryoshka doll), and is going to pursue
it in the long term.

Mikhail Fradkov’s invitation to join sounded ironical. Therefore Krynica and
the subsequent visit to Brussels were a good excuse for announcing
adjustments in foreign policy. It won’t be multi-vector anymore.

The idea of European pragmatism, even bordering on geopolitical egotism,
sounded as the new government’s credo. Ukraine will not be asking anyone for
anything.

It will work to get what it wants. European markets and the WTO, free trade
with the EU and protection of the spheres of influence in Europe and Asia
(including mutual investments in Russian and Asian economies) are the first
features of European pragmatism, Ukrainian style.

This line reflects on domestic policy. In the next three to five years (a
new period of transition) Ukraine is planning to carry out infrastructure
reforms and prepare its market for internationalization. There are several
directions to this policy – utilities, transport and communications, and
land reform.

The continuation of political reform is only viewed in the following
context: developed parliamentary structure, up to and including the election
of the president by parliament, and consolidation of local self-government,
which is closely integrated with regional business structures. Clearly,
centralized nomenclature capitalism is not a risk for Ukraine.

During the transition Ukraine will secure economic stability by reforming
its energy industry and searching for access to new pipelines, based on the
resources of domestic gas traders, long-term agreements with Moscow on the
joint use of gas transportation networks in exchange for guarantees of gas
supplies and balanced prices.

In relation to former CIS partners, Ukraine will lay special emphasis on the
bilateral format. As for European integration, paradoxically as it might
seem, the inherent conservative attitudes of the eastern elites from the
Party of Regions may hit the mark.

Growing pessimism, slowing European integration and revision of the federal
EU concept have come in very handy. Ukraine has got a chance to catch the
train.

Ukraine is passing through a kind of Rubicon in its development. Power
belongs to those who have to move from the Eurasian to European division
of labor in the next 15 years.

This task requires integration of its Orange and eastern projects. The
coalition led by the Party of Regions and the Yanukovych government opens
up the second 15 year long period.               -30-
————————————————————————————————
Andrei Yermolayev is the director of the Ukrainian Sofia Center for Social
Studies and a member of the RIA Novosti Expert Council.
————————————————————————————————
LINK: http://en.rian.ru/analysis/20060915/53939095.html

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
9.                               THE UKRAINIAN GAMBIT
                                        The price of the question

ANALYSIS & COMMENTARY: By Valery Panyushkin
Kommersant, Moscow, Russia, Friday, September 15, 2006

Any head of the Ukrainian state will invariably follow course known in
advance. When he is fighting for power and political points, the (future)
head of state will surely play on friendship with Russia.

He will promise the voter friendship with Russia and official status for the
Russian language. He will promise friendship to his Russian partners as well
and probably even obedience and, secretly, the gas pipeline, as soon as he
gets to power.

But everything changes as soon as he assumes power. The ruling Ukrainian
head of state will make it known in his first month in office, with either
sharp or harsh words, that it won’t work out with Russian’s status as second
official language.

A few months later, it will turn out that Ukraine is striving for
integration with Europe, and not integration with Russia at all. In a few
years, of course we see that Ukraine wants to accede to NATO.

Viktor Yanukovich just hasn’t been prime minister long enough yet to admit
it. Those who remember his last term as prime minister recall that he took
several serious steps toward NATO membership then.

That is simply geopolitical reality. Objectively, Ukraine is moving toward
Europe and away from Russia. To reverse that natural trend would require
exceptional political will.

It would take a brave person to announce his Western leanings openly on his
way to power. And it would take a great historic presence, once in power, to
try to go against the geopolitical nature of his country and marry Kiev to
Moscow.

Theoretically it is possible. We will not deny the role of personality in
history. Theoretically, we can imagine a strong person at the head of
Ukraine who could, like Bogdan Khmelnitsky, who could swing Ukraine

around into the embrace of Moscow, come what may.

But the role of personality in history is proportionate to the strength of
the personality, and that’s the problem.

The Ukrainian politicians who are supported by Moscow have, by definition,
to be not independent and politically weak-willed, because Moscow expects to
dictate its rules to them.

Otherwise, there would be no reason for Moscow to support them. And to
change Ukraine’s political course from West to East would require political
will. It’s a vicious circle.

Russia has no need to support a strong-willed Ukrainian politician. And
supporting a weak-willed politician is dumb. He won’t have the will to stop
or reverse Ukraine’s natural attraction to Europe and NATO natural spread to
Ukraine.

That is to say that there is no sense to a Russian policy in Ukraine at all,
other than to feed the Russian political advisers working in Kyiv. -30-
———————————————————————————————–
LINK: http://www.kommersant.com/page.asp?idr=520&id=705041
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
10.      PROSPECTS OF THE BROAD COALITION IN UKRAINE

ANALYSIS AND COMMENTARY: By IGOR BURAKOVSKY,
Director of Institute for Economic Studies and Political Consulting, Kyiv
Eurasian Home, Moscow, Russia, Friday, September 15, 2006

When we speak about the prospects of the broad coalition in Ukraine we
should bear in mind several essential points. In terms of economic policy,
the positions of the Party of Regions and Our Ukraine Party are similar in
many respects because the both political parties are big business-oriented.

Big and very big business is behind the Party of Regions. Our Ukraine Party,
while also representing the big business, is backed up by a group of
businessmen whose business is no longer medium, but not yet big.

All in all, we can speak about the coincidence of the economic interests
underpinning activities of the two political forces.

Businessmen that back up these parties are interested in forming the good
and stable regulatory environment for they need macroeconomic stability
since high inflation strikes at everybody.

Besides, Ukrainian businessmen are also interested in the positive
international Ukraine’s image, since many big companies declare that they
are going to hold IPO. I would also note that the businessmen behind Yuliya
Tymoshenko Bloc have the same priorities.

It is another thing that position of the business in Ukraine is complicated.
On the one hand, all the stakeholders come out for the stable environment
and equal conditions.

On the other hand, everybody wants to have more rights than the others do,
to enjoy all sorts of favored treatment.

For instance, different businesses are proposed unequal conditions when
conducting the tender purchases whose amount is quite large in Ukraine.

Different conditions in holding the privatization tenders are also possible.
In short, there are many indirect ways to create the noncompetitive
environment.

If to speak about the broad coalition in terms of politics, de facto it
already exists. Our Ukraine Party has its representatives in the Cabinet of
Ministers. Now it is time to form the coalition de jure that will imply
distribution of powers and spheres of influence.

I would not call the current government the government of the Party of
Regions. It is the government of Viktor Yanukovych.
Many strategic decisions are made by the Prime Minister personally with a
glance to the opinions of the Party of Regions’ major sponsors.

The bottom line for the Prime Minister now is to strengthen his grip over
the energy and economic policies. This will make it possible to influence
the processes in the other spheres.

It is clear that the influence of the Our Ukraine Party’s ministers, for
example, in the humanitarian bloc, is not great.

As an example, Minister for Family, Youth and Sport of Ukraine Yuriy
Pavlenko is in the marginal situation, essentially due to the status of his
Ministry, which has little impact on the political course formulation.

Minister of Labor and Social Policy of Ukraine Mykhaylo Papiyev is a
representative of Yanukovych in the Cabinet’s humanitarian bloc.

The main problem impeding formation of the coalition is that the political
parties see the agreement’s contents in different ways. The Party of Regions
and the Socialists are interested in more general definitions, while Our
Ukraine Party comes out for concretization of the agreement, specifying
concrete actions of the government.

And probably, it is right, since everyone supports fighting corruption, but
the ways to solve the real problem can be quite different. Such things
should be specified well in advance.

It comes natural that while determining the concrete solutions the coalition
splits into factions. In this situation Yanukovych is interested in
prescribing only the general principles of the government’s policy in the
agreement, since then he becomes more independent as Prime Minister. And
Our Ukraine Party is against that, since a detailed plan will make the Prime
Minister more dependent on the coalition.

It’s hard to predict what the final resolution will be, since Ukraine
doesn’t have such precedents in its political history. I think that Our

Ukraine Party’s way is more forward-looking.

As to the President’s position, the signing of the agreement will not
liquidate the political crisis. In my opinion, the government is only to
proceed with the most challenging work, and they will have to find new
approaches different from those of the late Kuchma’s or the early
Yushchenko’s rule.

Nowadays the President has a lot of leverages.

[1] Firstly, it is the President’s quota in the Cabinet of Ministers. Here
the Justice Minister is the most important figure, which signs all the
orders of the Ministries and the Cabinet.

[2] Secondly, Yushchenko has his representative in the Cabinet, who, at the
minimum, can inform the President about the situation in the government,
and, at the maximum, influence the government’s activity.

The other representative of the President is in the Parliament. He is able
to track the entire legislative process.

[3] Thirdly, Yushchenko remains Chairman of the Council of National Security
and Defense whose competence can be interpreted broadly.

The President to a considerable degree can control the Council’s governing
body which consists of the Minister of Defense, the Minister of the Interior
and the head of the National Bank. Together they form the Council that, in
principle, can make decisions obligatory for the Cabinet of Ministers.

[4] Fourthly, Yushchenko reserves the right of legislative initiative and he
showed that by introducing the package of bills on fighting corruption.
Thus, the President uncovers the MPs’ position on this problem and
determines the general attitude to the work with the President.

Apart from that, the President reserves the right of veto. This instrument
remains to be effective, until the government has the constitutional
majority in the Parliament. For the time being there is no such a majority.

On the whole there is no telling what kind of coalition will exist in the
long run. But shall I hazard a guess that a broad coalition, embracing
among the others the Communists, will be formed.           -30-
——————————————————————————————–
http://www.eurasianhome.org/xml/t/expert.xml?lang=en&nic=expert&pid=791

————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
11.               UKRAINE WITNESSING RECYCLING FRENZY

OP-ED: By Marusia Hnatkevych, Kyiv Post, Kyiv, Ukraine, Thu, Sep 14 2006

Ukraine’s new prime minister, Viktor Yanukovych, has, in less than three
weeks in office, appointed a new cabinet and fashioned a new government
plan. Let’s not mention right now how badly it clashes with the presidential
government plan and course for the future.

Yet, Yanukovych acted fast, not because he is probably one of the country’s
better-prepared politicians these days, but because he didn’t have far to
look. To quote the local press, the new cabinet is full of last year’s
styles. The PM has simply recycled the previous governments under Kuchma.

Apparently, it’s full of old hands – and no new ideas. To be fair, given the
dozen or so governments coming and going since 1991, any experienced Cabinet
minister was bound to have served under ex-president Kuchma. Let us not
forget that Orange revolution leaders President Yushchenko, himself, and
Yulia Tymoshenko, both served under Kuchma.

But the plum jobs on Yanukovych’s staff went to supporters and those who
will have no problem following the new PM’s directions faithfully. There are
good friends of the ex-president like Dmytro Tabachnyk. Hardliners are many,
like Azarov, best known as the country’s former tax chief.

The new PM is also hoping that local oil barons like Yuriy Boyko can
cultivate his oil and gas contacts to get Ukraine out of trouble with Russia
and its eastern neighbors. The cabinet seats doled out to presidential
supporters, meanwhile, are in forgettable posts, like culture and
healthcare.

However, the new health minister may have a golden opportunity to make
orange juice from fallen oranges. The population has demonstrated that it is
ripe for social reforms.

The minister could gain praise from the PM and public alike with savvy and
substantial changes to health policy and social policy. The PM would only
welcome such initiatives as enhancing his reputation with the public as well
as the West.

On the other hand, the social portfolios will likely remain underfunded and
take a back seat to energy issues. And some appointments are just plain good
choices.

Tarasyuk is perhaps the most capable foreign minister and will keep the
foreign policy of the country stable. Like Yekhanurov, he could be appointed
to any PM’s cabinet.

As for the new government’s program, it is a good gauge of what to expect
from the cabinet. Yanukovych is already breaking the rules. The proposal to
make Russian an official language contravenes the Constitution and the
Universal signed with the president less than one month ago.

Tabachnyk has tried to appease fears by painting a European Formula, which
tries to address national minority issues. If the government cares for
minorities, as Tabachnyk maintains, then this cabinet could be good for
Crimean Tatars, who have given up on getting housing but would at least like
to use their own language in the Crimean legislature.

The great Ukrainian versus Russian language debate might appear
insignificant to foreign observers, but it reveals more about politics than
linguistics. It appears that Yanukovych has fallen back on bad, heavy-handed
habits.

Already he seems willing to break rules – huge rules like Constitutions -
with the intention of “amending legislation later” to get his way.

This behavior, combined with the failure to fulfill another part of the
Universal agreement – cooperation with NATO and the EU, becomes one small
step towards setting up a recycled Soviet union with brethren-in-arms Putin
and Lukashenko.

What the West can expect from the new cabinet is that the Ukrainian
government will be cozying with the East and throwing out platitudes about
important ties with Western countries at intervals just enough to hang onto
foreign loans.

So far, Russia is only giving out friendship and higher fuel prices, not
cash. Banning Ukrainian wines from Russian markets, as Russia did last week,
is not a good way to kick off a friendship.

Yanukovych might want to look for better friends elsewhere. On the other
hand, certain pragmatics may be at work here. Is the new cabinet just trying
to revive the old days of cheap Soviet-like goods to meet the basic needs of
the masses, while the elite flies to Paris for the weekend?

Although some might naively think Yanukovych cares about what the president
or the public might think of him, the kinder, gentler PM, who has taken to
smiling and getting pictures taken with war veterans, babies and women in
traditional costumes, is merely the work of some good image-making.

Yet, he has his admirers following a simple apology for his previous
actions – which at least included condoning corruption of officials under
his regime. Admirers come in the form of a growing number of Western critics
of Yushchenko, who have become skeptical of the Orange Revolution.

And they come from former colleagues, like ex-premier and newly-sentenced
Pavlo Lazarenko, who knows the new PM well.

Lazarenko endorses Yanukovych as a capable leader who can get things done.
Ostensibly not a glowing recommendation, the public does not need Lazarenko
to tell them that Yanukovych can single-mindedly achieve goals – his goals,
his way.

He has been patient, planned well and his thick layer of skin, primed during
a troubled youth, has helped to endure a little negative press. Now, he is
in the driver’s seat as PM again.

With such determination, it is a pity that Yanukovych will likely be
repeating the cronyism and corruption of the 1990s, rather than meaningful
change for even his part of the country.

But Yanukovych has already shown that he cannot deliver on his platform
argument – lower fuel costs from his neighbors. Energy costs could prove to
be his undoing as many PM’s before him, most recently his arch-rival Yulia
Tymoshenko.

So far, Yanukovych has proven to be smart, wily and patient. He will likely
play the role of compromiser for a time – as his patron Kuchma did when he
became PM in the early 1990s. Yanukovych will butter both sides of his bread
and wait for the crumbs to fall.

At the same time, he will not be out to anger the supporters of the Orange
Revolution, but intends to woo them with actual reforms to demonstrate his
superiority over the Orange government.

Ukraine desperately needs its own plan for future development, be it devised
by Yanukovych or someone else. As 15 years of governments before them, the
new ministers appear to have chosen the well-worn paths of blindly following
either Russia, which is losing global friends fast, to make life cheap or
easy, or following the West, which also has its strategic interests in mind.

Where is Ukraine going? This question remains unanswered. Its own people are
grappling for an answer, most recently in 2004, while floundering between
the selfish interests of East and West.

Somehow in the last 1000 years, Ukraine fell far off the pedestal from being
the most progressive nation and economic powerhouse in Europe to sitting 10
centuries later on the street corner of East Road and West Avenue, begging
for small change.                                   -30-
————————————————————————————————-
Marusia Hnatkevych is an independent journalist and political analyst who
lived and worked in Ukraine for over a decade.

————————————————————————————————-
LINK: http://www.kyivpost.com/opinion/editorial/25055/
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
 If you are receiving more than one copy of the AUR please contact us.
========================================================
12. TELENOR COMMUNICATIONS CO WARNS OF THREAT TO RIGHTS
                OF INVESTORS, INVESTMENT CLIMATE IN UKRAINE
       Telenor, largest communications company in Norway, major international
            mobile operator, operations in 13 different countries serving nearly
        100 million subscribers, is Kyivstar GSM’s majority shareholder and the
                      largest foreign investor in the telecom sector of Ukraine.

 Ukrainian Times newspaper, Kyiv, Ukraine, Monday, September 18, 2006

KYIV – Jan Edward Thygesen, Telenor Executive Vice President, warned
against the possibility of a dangerous legal precedent being set in the
Supreme Court of Ukraine on October 3.

If this precedent is set, it may seriously undermine the legal rights of
foreign and domestic investors in Ukraine and damage the investment climate
and attractiveness of the country.

Mr. Thygesen has also sent a letter to the President, the Government, the
Parliament and businesses in Ukraine, informing them of a potential abuse of
Ukrainian legal system and asking them to support Telenor in defending the
investors’ rights in Ukraine.

Storm, a wholly owned subsidiary of Alfa Group and Kyivstar’s minority
shareholder, is asking the Supreme Court of Ukraine to make a decision which
would give equal representation to minority and majority shareholders on the
boards of directors of Ukrainian joint stock companies, regardless of the
size of their respective shareholdings.

This would set a dangerous legal precedent, legitimising a total disregard
for the property rights of numerous domestic and foreign investors in
Ukraine.

Despite the fact that Telenor owns 56.5% of the Ukrainian mobile
telecommunications company Kyivstar, to Storm’s 43.5%, Storm has filed nine
lawsuits to Ukrainian courts in an attempt to gain equal control in Kyivstar
and overturn legally binding agreements through abusing the Ukrainian legal
system.

In case Storm’s intentions were satisfied, these lawsuits could have serious
repercussions for investment in Ukraine. “Should the laws of Ukraine be
interpreted in such a manner, a precedent will be established that will pose
a serious threat to anyone investing in a Ukrainian company,” said Thygesen.

“In practice, this would mean, that a shareholder with 90% of the shares of
a company would have the same voting and ownership rights as someone owning
10%. This would obviously be a complete disregard of ownership rights seen
as a foundation of any market economy worldwide.”

Mr. Thygesen said that the Presidential Administration was well aware of the
potential impact, pointing to the remarks made by Oleg Rybachuk, former head
of the President’s Secretariat, during the recent business morning organised
by the European Business Association.

As reported, Mr. Rybachuk said, “In the whole world, this will be an
unprecedented occasion,” and that such a decision would make Ukraine
“exclusive in its interpretation of what is a minority and what is a
majority shareholder, and what are the rights when one possesses 10% of
shares and what are the rights when one possesses 90%.”

Telenor, the largest communications company in Norway and a major
international mobile operator with operations in 13 different countries in
Europe and Asia, serving nearly 100 million subscribers, is Kyivstar GSM’s
majority shareholder and the largest foreign investor in the telecom sector
of Ukraine.

“We are committed to Kyivstar and to helping its management continue to
build a world-class mobile communications company,” said Thygesen.

 
“We sincerely hope that the rule of law in Ukraine will prevail and that
companies like Alfa will not be allowed to use the national judiciary as an
avenue for appropriation of other companies’ property.

Legal precedents such as the one sought by Storm/Alfa will, if granted by
the Supreme Court of Ukraine, have a significant negative impact on the
attractiveness of investing in Ukraine.”                       -30-

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
             Send in a letter-to-the-editor today. Let us hear from you.
========================================================
13. UNITED STATES ADOBE SOFTWARE PRODUCER DECIDES TO
         LAUNCH FIGHT AGAINST PRODUCE PIRACY IN UKRAINE

Kostiantyn Druzheruchenko, Ukrainian News Agency
Kyiv, Ukraine, Wed, September 13, 2006

KYIV – Adobe, a large producer of software based in the United States, has
decided to start fighting against illegal spread of its products in Ukraine.
Najeeb Khan, Adobe’s anti-piracy manager, told this to journalists at a
press conference.

As he noted, according to optimistic forecasts, the company plans to triple
its sales in Ukraine in the next few years. The company intends to actively
develop educational programs aimed at increasing the culture of using
computer software.

Apart from this, Adobe plans to cooperate with law-enforcement organs in
boosting fighting against software piracy. Adobe has not held any talks with
the Internal Ministry so far.

According to Adobe’s representative for the CIS Pavlo Cherkashyn, in two
weeks, the company plans to open a representative office in Moscow (Russia),
which will supervise Russian, Ukrainian and Kazakh markets.

Adobe did not disclose the amount of losses from software piracy or
investments into its anti-piracy program. Founded in 1982, Adobe (the United
States) is a large producer of software in the field of multimedia and
printing.                                              -30-

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
14. UKRAINE’S METALLURGICAL IND FINDING GAS ALTERNATIVES
           Ukraine ranks first in the world in its use of open-hearth furnaces -
     a dinosaur technology that requires huge amounts of gas, in metal production.

Associated Press, Donetsk, Ukraine, Sunday, September 17, 2006

DONETSK, Ukraine – Twelve times a day, the tap at the Donetskstal factory’s
blast furnace No. 2 opens and out plunges a river of fiery, molten metal.

The cast iron is part of the lifeblood of Ukraine’s export-oriented economy
and the first sign of success in this former Soviet republic’s race to wean
itself of its costly dependence on Russian natural gas.

This metal is produced using no natural gas, a first not only for Ukraine
but also for much of the region.

The furnace uses pulverized coal as fuel, a technology that was long ago
adopted in the West and Asia but was largely ignored in a part of the world
where few saw the point of investing EUR20 million-EUR25 million to
transform gas-guzzling furnaces into more energy-efficient beasts.

But last year, in what many perceived as political punishment for Ukraine’s
election of a pro-Western president, Moscow cut Ukraine off from the heavily
subsidized gas supplies it had enjoyed since the Soviet collapse.

Ukraine suddenly saw the price it pays for natural gas nearly double, and
could be facing another 40% increase next year.

“I would say that we managed to do this right on time,” said Borys Krykunov,
technology director at Donetskstal-Metallurgical Factory, which had been
using the technology for years, to varying degrees, but only this year
managed to complete the full transition from natural gas in production.

The factory in Donetsk, about 730 kilometers southeast of Kiev, is one of
several in Ukraine’s industrial east, a region where smokestacks and coal
mines dot the skyline and a change of wind brings a pungent smell.

“Today, many factories are starting to go down this path,” Krykunov said.

Ukraine is one of the most inefficient energy users in the world, using
almost as much natural gas as more advanced economies such as Germany and
Britain. For every dollar’s worth of industrial production, Ukraine consumes
about 2 times as much energy as its neighbor Poland.

Gobbling up much of that natural gas is the metallurgical sector, which
drives Ukraine’s economy, accounting for almost 40% of all Ukrainian
exports. Ukraine ranks first in the world in its use of open-hearth
furnaces – a dinosaur technology that requires huge amounts of gas – in
metal production. Forty per cent of Ukraine’s steel is produced using that
method, compared to 3% in other steel-producing nations.

For decades, such waste didn’t seem to matter. The Soviet Union was awash

in natural gas. After the Soviet collapse, newly independent states such as
Ukraine lacked the funds to modernize their industries, and Russia kept the
cheap gas flowing, so there was no real incentive.

Then came last year’s gas price dispute. Ukraine saw its foreign trade
balance slide from a net positive to a deficit of 2.9 million hryvna
($580,000) in the first half of 2006, with the biggest imbalances with its
two main energy suppliers, Russia and Turkmenistan.

Officials began talking about the need to reduce gas consumption by as much
as 60%. Ukrainian industry, led by the metal sector, has been the first to
respond, reducing its use of natural gas by more than 1 billion cubic meters
compared to a year ago, said Volodymyr Saprykin, an analyst with the
Kiev-based Razumkov Center for Political and Economic Studies.

“We definitely saw long-term investment programs being altered,” said Ildar
Gazizullin, an expert at Kiev’s International Center for Policy Studies. “I
would expect that we will be seeing more modernization and an increase in
efficiency in the next few years.”

Donetskstal’s furnace No. 2, tucked inside a large, gated compound, is a
model. A mix of pulverized coal and hot air are blasted into the towering
furnace to produce about 2,300 tons of cast iron every day.

In 2005, the furnace required 61 cubic meters of natural gas for every ton
of cast iron produced; today, it requires none. The more environmentally
friendly technology has also allowed the factory to cut back on the use of
coke, which has also been growing more expensive.

Donetskstal plans to bring a second furnace online with the same technology
within the next month.

“Coal is cheaper and very efficient, so the cost of metal production is
less, of course,” said Ivan Volovnenko, a blast furnace expert at
Donetskstal. “For a time, every blast furnace was blowing natural gas. But
about 20 years ago, the Europeans and the Asians stopped using natural gas
for the same reason we are now.”

Donetskstal won’t say how much it spent on renovations to switch to the new
technology, but has been open about sharing the advantages. The company

held a seminar for other metallurgical factories to show off its furnace,
Krykunov said, and many were sold on it.

The government has floated the idea of offering special incentives to
encourage the switch to energy-saving technologies, but so far hasn’t
offered anything specific. Metal companies, which had enjoyed healthy profit
margins, have largely been doing it on their own.

First Deputy Prime Minister Mykola Azarov said one thing the government
wouldn’t do is put an artificial limit on energy usage.

“Estimates that we may reduce by two times the use of gas in the next five
years are absurd,” he said. “We can’t reduce the use of gas because our
economy is going to keep developing and we are laying the basis for high
economic growth. Gas-using sectors account for 30% of our economy.”

Industry just has to become more efficient, officials said. “The one big
stimulus is the increasing price of gas, it’s really the big thing -the one
and only incentive that business needs,” Gazizullin said.        -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
15.      UKRAINIAN PRIME MINISTER HOPES INVESTORS WILL
            DELIVER RUSSIAN GAS DIRECTLY TO THEIR PLANTS

Ukrayina TV, Donetsk, in Russian 1800 gmt 11 Sep 06
BBC Monitoring Service, United Kingdom, Monday, Sep 11, 2006

DONETSK – [Presenter] The government promises to create all the necessary
conditions for domestic investors who want to develop gas extraction abroad
in order to deliver gas to their plants, Prime Minister Viktor Yanukovych
has promised.

However, he pointed out that in Russia, for example, the transport system is
in state hands and it may be a problem to get permission to transport gas to
Ukraine. But if businesses can agree directly with Russian companies, the
Cabinet of Ministers won’t get in the way.

[Yanukovych, in Ukrainian] Whatever is good for manufacturers is good for
the state. This is a normal approach. We will follow this path and create
conditions for our investors who are able to take part in developing
deposits abroad, for them to invest money and produce gas for themselves,
and for them to deliver it to their plants.

Go ahead. This is excellent. This will benefit Ukraine, especially – because
if such agreements are concluded, this means that the price will be lower
than what they are paying today to Ukrhazenerho [joint venture set up by
state oil and gas company Naftohaz Ukrayiny and Swiss-registered gas
importer RosUkrEnergo to deliver gas to Ukrainian industrial consumers].

[The Korrespondent web-site reported on 8 September, quoting the Russian
newspaper Vedomosti, that the National Commission for Energy Regulation had
issued a license to Metinvest BV to deliver 2bn cu.m. of gas at an
unregulated tariff over three years. Metinvest belongs to Donetsk tycoon and
MP Rinat Akhmetov's System Capital Management.]

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
16. MCDONALD’S UKRAINE OPENS 56TH RESTAURANT IN UKRAINE
              Opens seventh restaurant in Dnipropetrovsk, next one in Lviv

Viktoria Miroshnychenko, Ukrainian News Agency
Kyiv, Ukraine, Monday, September 11, 2006

KYIV – On September 9, McDonald’s Ukraine opened a new restaurant in
Dnipropetrovsk located at 2A Hlynky Street.

Ukrainian News has learned this from the company’s press service. According
to the report, it is a seventh restaurant in Dnipropetrovsk and 56th in
Ukraine.

The company invested USD 500,000 into the construction. As the company

said, the new facility may service up to 2,500 people a day. According to the
company, in late September, it is planned to open another restaurant in
Lviv.

As Ukrainian News earlier reported, McDonald’s Ukraine plans to open four
restaurants this year. The total sum of investment in them will be USD 5
million.                                       -30-
———————————————————————————————–

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
17.  FBI DENIES RETURN OF FUNDS ILLEGALLY ACQUIRED BY
    FORMER PRIME MINISTER PAVLO LAZARENKO TO UKRAINE

Oksana Torop, Ukrainian News Agency, Kyiv, Ukraine, Sep 15, 2006

KYIV – The United States’ Federal Bureau of Investigation (FBI) has denied
reports that the funds illegally acquired by former Ukrainian prime minister
Pavlo Lazarenko are being returned to Ukraine. The head of the Ukrainian
bureau of Interpol, Kyrylo Kulykov, announced this to Ukrainian News.

According to him, the Ukrainian bureau of Interpol has received a response
to its relevant request from the FBI representative at the American embassy
in Ukraine. “That information does not conform to reality,” Kulykov said.

Earlier, the Ukrainian bureau of Interpol requested that the FBI confirm
reports in the mass media that funds illegally acquired by Lazarenko had
been returned to Ukraine. Kulykov also said that the United States earlier
promised to return USD 230 million.

According to the American embassy, several mass media organizations reported
that the FBI’s Director of International Operations Thomas Fuentes said on
September 14 that the United States had returned money embezzled by
Lazarenko to Ukraine. “That is untrue,” the embassy said.

At a press briefing in Washington, Fuentes provided information about the
US’ efforts to return illegally acquired money to the affected persons or
countries.

“During a general press briefing to the International Press Corps in
Washington, DC, outlining FBI international efforts and operations, Fuentes
discussed the U.S. effort to return criminally generated proceeds to persons
or nations that have been victimized.

This is done through highly formalized civil forfeiture procedures in U.S.
courts. Fuentes cited the Lazarenko case as an example of a matter that has
the potential for this type of restitution and stated that any money the
United States might recover as a result of civil forfeiture procedures would
be returned to Ukraine,” the embassy said.

Fuentes did not state that the United States has already sent forfeited
proceeds from the Lazarenko case to Ukraine, merely that the potential
exists to do so.

As Ukrainian News earlier reported, lawyers for Lazarenko appealed to a US
Appellate Court on September 11 against the decision of the San Francisco
District Court (California) to sentence Lazarenko to 108 months in jail and
fine him USD 10 million.

The San Francisco District Court sentenced Lazarenko to 108 months in jail
and fined him USD 10 million on August 25 for money laundering and sale of
illegally acquired property abroad when he was Ukraine’s prime minister.

A court found Lazarenko guilty on the 29 counts of the charges brought
against him, including extortion and money laundering, in June 2004, but
presiding Judge Martin Jenkins was to make the final decision on the
individual charges.

The US court dropped 15 of the 29 charges against Lazarenko on May 20,

2005. Lazarenko is accused of laundering USD 4.5-5 million. Lazarenko was
initially accused of laundering USD 114 million through American banks. The
court started hearing the case against Lazarenko in mid-March 2003.
Lazarenko was detained in the United States in March 1999. He was released
on bail on June 14, 2003.                              -30-
———————————————————————————————–
[return to index] Action Ukraine Report (AUR) Monitoring Service]
========================================================
     You are welcome to send us names for the AUR distribution list.
========================================================
18. US WELCOMES UKRAINE & POLAND’S INTENTION TO EXTEND
               ODESA-BRODY OIL PIPELINE TO POLAND’S PLOCK 
        PM Yanukovych meets with US Assn’t Secretary of State Daniel Fried

Daria Hluschenko, Ukrainian News Agency, Thu, September 7, 2006

KYIV – The United States supports Ukraine and Poland’s plans to extend the
Odesa-Brody oil pipeline to Plock, Poland and attract Central Asian states.

The Cabinet of Ministers’ press service disclosed this to Ukrainian News
with references to the meeting between Premier Viktor Yanukovych and US
Assistant Secretary of State for European and Eurasian Affairs Daniel Fried.

“The US government welcomes the intention of Ukraine and Poland to extend
the Odesa-Brody oil pipeline to Plock, attracting Central Asian states in
this process,” the statement reads.

Fried also praised Ukraine’s aspirations for creating a reliable system for
European security, which means diversification of energy supplies, creation
of transparent mechanisms for gas supplies and stability of such supplies to
Europe.

As Ukrainian News earlier reported, experts from Ukraine, Poland and the
European Commission agreed the draft of the Ukrainian-Polish
intergovernmental agreement on extending the Odesa-Brody oil pipeline to
Plock on March 15.

An international consortium of companies is recommending extension of the
Odesa-Brody oil pipeline to Ozegow, Poland.                  -30-

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
19.  UKRAINIAN PRESIDENT’S NEW CHIEF-OF-STAFF, VIKTOR
                   BALOHA, PROMISES NO RESHUFFLE SOON

TV 5 Kanal, Kiev, in Ukrainian 1400 gmt 16 Sep 06
BBC Monitoring Service, United Kingdom, Sat, September 16, 2006

KIEV – [Presenter] The presidential secretariat has a new head today. He is
Viktor Baloha. His predecessor Oleh Rybachuk introduced him at a news
conference in the secretariat.

He said that he has resigned because he is tired. He said that he has coped
with all the tasks which the secretariat faced in the transition period and
now wants to get some rest.

Viktor Baloha thanked his predecessor and said that the presidential
secretariat will step up its work and that no major reshuffle should be
expected soon.

[Rybachuk] The president recognizes people who have their own strong sides,
their own professional skills which make them authoritative for the
president. At the time, he set me some objectives. When we had a talk a few
days ago he agreed that these objectives had been achieved.

[Baloha] He prepared me and told me that structural changes should be made.
I believe that his achievements will be followed up.

I believe that the main thing is that there should be no sharp turns in this
work and that no-one should say that any team that comes to Bankova [the
presidential secretariat] begins a serious reshuffle. This will not happen.

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
20.   MEDIA UNHAPPY ABOUT FREEDOM OF SPEECH IN UKRAINE 

UT1, Kiev, in Ukrainian 1800 gmt 15 Sep 06
BBC Monitoring Service, United Kingdom, Friday, September 15, 2006

KIEV – [Presenter] It has been more difficult for journalists to work in
Ukraine at present. This is the conclusion by the Mass Media Institute and
the Independent Media Trade Union of Ukraine.

They launched a protest called “Hands off freedom!” today. Journalists’
organizations are saying that politicians have increasingly been violating
the professional rights of journalists.

They made public several demands to the authorities. They demand bringing to
book MP Oleh Kalashnykov [of the ruling Party of Regions over an incident
with STB TV cameramen] and Kiev mayor Leonid Chernovetskyy.

They also demand blocking a bill tabled by Party of Regions MP Vasyl
Kyselyov, who proposed introducing criminal punishment for libel in the
media. They believe that the bill will be a tool for persecuting
journalists, and promise to compile a list of foes of the press.

[Mykhaylyna Skoryk, captioned as head of the Kiev branch of the Independent
Media Trade Union] We are clearly aware what and who prevent us from working
professionally. We want those guilty not to hide behind their MP immunity or
posts but want them to be punished in line with Ukrainian laws.

[MP Andriy Shevchenko of the opposition Yuliya Tymoshenko Bloc faction]

The [murdered journalist Heorhiy] Gongadze case and the attitude of politicians
to the freedom of speech in general is a diagnosis to the whole political
system, and this political system is doomed, if key politicians fail to
treat journalists as they should. I think that they should make the
conscious choice in favour of freedom and rights.
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
      Please contact us if you no longer wish to receive the AUR    
========================================================
21. UKRAINE: OVER 1,000 COMMEMORATE KILLED JOURNALISTS
 
UNIAN news agency, Kiev, in Ukrainian 1931 gmt 16 Sep 06
BBC Monitoring Service, United Kingdom, Saturday, Sep 16, 2006
KIEV – More than 1,000 people took part in a rally called Commemoration
Day to commemorate killed journalists in Kiev today.
The rally participants carried candles. They formed a symbolic Commemoration
Circle and observed a minute’s silence to commemorate killed journalists.
 
They then moved in a column to the presidential secretariat. At the
entrance, they left candles and their slogans demanding the investigation of
[journalist] Heorhiy Gongadze’s murder and criminal punishment for the
killers and organizers of the crime.
Six years have passed since Gongadze’s disappearance on 16 September. It
has been a tradition to commemorate killed journalists on that day.   -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
22. UKRAINE’S INTERIOR MINISTER LUTSENKO SAYS GONGADZE
                 MURDER UNLIKELY TO BE COMPLETELY SOLVED
 
UNIAN news agency, Kiev, in Ukrainian 0937 gmt 16 Sep 06
BBC Monitoring Service, United Kingdom, Sat, September 16, 2006

KIEV – Ukrainian Interior Minister Yuriy Lutsenko doubts that the

Prosecutor-General’s Office will ever complete the investigation of the
journalist Heorhiy Gongadze murder.

Lutsenko was speaking to journalists before the mourning ceremony in
Gongadze’s memory near a memorial cross in Tarashcha District [not far

from Kiev where Gongadze's corpse was found in 2000] today.

Lutsenko said that the recordings of former major Melnychenko [allegedly
made in former President Leonid Kuchma's office in 2000-01], whose
authenticity has been proved by various international forensic tests,
contain voices of certain individuals who to this date “are alive, thank
God, and can give testimony provided the Prosecutor- General’s Office has
political will for this”.

“Will this Prosecutor-General’s Office have such will?” Lutsenko asked and
answered: “Not today.” He added: “I believe that sooner or later this will
happen because there are enough grounds to complete the investigation (of
the Gongadze murder – UNIAN).” [Passage omitted: Lutsenko speaks about
Heorhiy Gongadze's historic role.]                            -30-

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
23.   FOREIGN MINISTER BORYS TARASIUK TO ATTEND UN
GENERAL ASSEMBLY IN NEW YORK FROM SEPTEMBER 18-25

Daria Hluschenko, Ukrainian News Agency
Kyiv, Ukraine, Tuesday, September 5, 2006

KYIV – Foreign Minister Borys Tarasiuk will visit New York, the United
States, as the head of the Ukrainian delegation to the United Nations
General Assembly . Chief spokesman for the Ministry of Foreign Affairs
Andrii Deschytsia made this statement at a briefing.

Tarasiuk is expected to make a speech during the general debate and hold
around thirty meetings with foreign ministers of other countries.

The visit program provides for his participation in the meetings of the
Ukraine-Troika European Union, the GUAM Council of Foreign Ministers,
GUAM in the United States, and in the second meeting of the Clinton
Global Initiative [organized by former US President Bill Clinton].

The minister will also meet with Ukrainian diaspora and Jewish
organizations of America.

As Ukrainian News earlier reported, the next session of the UN General
Assembly will start on September 12. In September 2005, Tarasiuk took
part in the 60th session of the UN General Assembly in New York. -30-
————————————————————————————————-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
24. UKRAINE TO AGAIN DECLARE NECESSITY TO ACKNOWLEDGE
        1932-1933 FAMINE AS GENOCIDE OF UKRAINIAN PEOPLE AT
                    THE 61ST SESSION OF UN GENERAL ASSEMBLY

Ukrainian News Agency, Kyiv, Ukraine, Tue, September 12, 2006

KYIV – Ukraine intends to repeatedly declare the necessity to acknowledge
1932-1933 famine as genocide of Ukrainian people at the 61st session of the
United Nations General Assembly. Foreign Affairs Ministry press service head
Andrii Deschytsia has disclosed this to the press at a briefing.

‘We intend to make the report not only to explain that tragedy. The
acknowledgment of the famine as genocide of Ukrainian people would be
important for all countries, which provide democracy and respect to human
personality,’ Deschytsia said.

He said that Ukraine and its GUAM partners also intends to put new unit
entitled ‘armed conflicts in GUAM countries and their consequences for
international society, safety and development’ onto the agenda of the
session.

Deschytsia said that GUAM countries had prepared corresponding memo
grounding the issue putting onto the agenda and sent it to UN secretary.

Ukraine says that the implementation of the initiative will assist
attraction of international society interest to the necessity to unite
forces on regulation of conflicts on the territory of Azerbaijan, Georgia
and Moldova.

As Ukrainian News earlier reported, Ukraine hopes that Finland will support
Ukrainian striving for acknowledgment of 1932-1933 famine as genocide of
Ukrainian people.                                          -30-

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
25.    OUR UKRAINE & COMMUNIST PARTY DISAGREE ON ON
  UKRAINIAN REBEL ARMY, 1932-1933 FAMINE AS GENOCIDE AND
                  INCREASING THRESHOLD INTO RADA TO 5%

Mykola Yeriomenko, Ukrainian News Agency
Kyiv, Ukraine, Tuesday, September 12, 2006

KYIV – The Our Ukraine Bloc and the Communist Party disagree on the status
of the Ukrainian Rebel Army warriors, idea of increase of the threshold into
the Verkhovna Rada to 5% and acknowledgement of the 1932-1933 famine as
genocide.

Verkhovna Rada deputy and Our Ukraine Bloc faction member Volodymyr
Stretovych has disclosed this to the press. He forecasted that the talks of
the working group will be ineffective.

The talks are planned to take place at 5:00 pm on Tuesday, as Our Ukraine
had introduced a number of amendments into the draft coalition agreement. As
Ukrainian News earlier reported, the working group had failed to start its
work. Justice Minister Roman Zvarych had forecasted the signing of the
coalition agreement on September 11                         -30-

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
26. COMPETITION TO DESIGN MONUMENT TO AMERICAN HISTORIAN
         JAMES MACE ANNOUNCED, RESEARCHED 1932-1933 FAMINE

Natalia Ivanenchuk, Ukrainian News Agency
Kyiv, Ukraine, Thursday, August 31, 2006

KYIV – The Ministry of Culture and the Kyiv City Administration have
announced a competition to design a monument to American historian James
Mace, who made a research into the 1932-1933 Great Famine [induced
starvation, death for millions, genocide] in Ukraine. Ukrainian News learned
this from their joint decision.

The competition takes place from August 28 to October 28 and the winner will
be selected on November 2. The city administration will erect the monument
on the left side of the Kontraktova Square in front of the entrance to the
new academic building of Kyiv Mohyla Academy.

The design must include rational use of land and be in conformity with
architectural monuments in the area. A jury of 21 with First Deputy Minister
of Culture Vladyslav Kornienko at the head will select the winner, who will
be given the right to further implementation of the project.

There is a UAH 15,000 reward that will be divided among eight best

designers participating in the competition under the set terms. There is no
reward for the winner.

As Ukrainian News earlier reported, the Cabinet of Ministers ordered the
Culture Ministry and the Kyiv City Administration in June to conduct a
competition for the best monument to be built in Kyiv in memory of Mace.

The Cabinet ordered the city administration to find a good place for the
monument and said that the contest and design efforts will be financed by
the Culture Ministry while construction of the monument will be funded from
the Kyiv budget.

President Viktor Yuschenko conferred the Yaroslav the Wise Order II on
American researcher and public figure James Mace posthumously in November
2005.

The order was bestowed for his personal merits to the Ukrainian nation in
revealing to the world community the truth about the 1932-1933 Great Famine
in Ukraine, for fruitful research work and public activities.

In December 2005, Yuschenko directed the Cabinet of Ministers and the Kyiv
City Administration to ensure installation of a monument to Mace in Kyiv by
February 18, 2007, and name a street after him.

According to the presidential directive, the opinions of Mace’s relatives
will be taken into account during design and installation of the monument.
In addition to the monument, a memorial plaque is to be installed in Kyiv on
the house where Mace lived.

James Mace died in 2004, and February 18, 2007 will be his 55th birthday
anniversary. According to various estimates, between 3 million and 7 million
people died during the 1932-1933 famine in Ukraine.           -30-

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
27.  UKRAINE SHOULD ABANDON SOVIET-ERA MYTHS
                       A Conversation with Professor Roman Serbyn

CONVERSATION: With Canadian Professor Roman Serbyn
By Fran Ponomarenko, Vanier College, Montreal, Quebec, Canada
The Ukrainian Weekly, Parsippany, New Jersey
Sunday, July 9 and Sunday, July 16, 2006
The Day Weekly Digest, Kyiv, Ukraine, July 18 & July 25, 2006

Roman Serbyn was born in 1939 in Vyktoriv, Western Ukraine. In 1948 he
and his family settled in Montreal.  In 1960 he obtained a B.A. in political
science from McGill University.  He went to France, where he first studied
French and then history on the Sorbonne.

In 1967 he obtained a licence en letters in history from the Universite de
Montreal.  In 1975 he completed his Ph.D. in history from McGill University.
He began teaching at the Universite de Quebec – Montreal (UQAM) in 1969;
he retired from this institution in 2002.  Prof. Serbyn is the author of
many scholarly publications. I had the opportunity to speak with Prof.

Serbyn on June 2 [2006].

[Subheadings have been inserted editorially by the Action Ukraine Report]

[Fran Ponomarenko] As a historian you’re often associated with the work
that you’ve done on the Famines of 1921-23 and 1932-33, probably because
you organized the first international conference on the Famine-Genocide at
UQAM in 1983.

Since then you have been very outspoken in your position that genocide is
the appropriate term to describe these calamities. You have also researched
and published materials on other historical questions.
                                 THE MEDIEVAL PERIOD
[Roman Serbyn] Yes, My first love was the medieval period. There was
something romantic about this era. And that’s the area my research began in.

By the way, I never called the medieval Ukrainian state Kyivan Rus’ but just
Rus’ because that is the term that was used then, as well as in subsequent
periods.

We don’t, for instance, say Galician Rus’ for the XIII-XIV centuries. Rus’
is sufficient. My doctoral thesis covered the period from 1140-1200. I
investigated such concepts as the “common old Rus’ nationality” and the
“transfer of the center of Rus'” from Kyiv to Suzdal/Moscow.

And by using old chronicles, archeological and linguistic studies (mostly
Soviet publications), I showed that there was no transfer of the center of
the state from Kyiv to Suzdal, no massive movement of population from the
Dnipro basin to the Oka region.

Pogodin elaborated this myth of a population shift in the 19th century and
some Russian historians adopted this idea. In fact, an examination of the
archeological documentation does not corroborate this theory in any way
whatsoever.

[Fran Ponomarenko] Where did you do your research-in the USSR?

[Roman Serbyn] No, I used 19th century and Soviet material, which I could
access in North America and Europe. I never got around to publishing my
thesis, but I did publish a couple of articles on the topic, one (“Some
Theories on the Question of Rus’ Unity {1140-1200} Reexamined”) was
published in a volume edited by O.W.Gerus and A. Baran, Millennium of
Christianity in Ukraine: 988-1988. Winnipeg, 1989. pp. 105-25.

By the end of my work I realized that there just weren’t enough documents,
not enough written sources, on the Rus’ period for me to continue in that
field. And since I was primarily interested in the national question, my
attention turned to the 19th century, a crucial period for understanding all
of the 20th century.

Also, the 19th century was less sensitive for the Soviets than the 20 th
century. The Soviets published many interesting documents and some good
studies on the period, and I also hoped that I might even be able to go on
an academic exchange and work in the Soviet archives. I almost did.

My application to work in the Soviet archives was accepted by the Soviets,
but a couple of months before I was to leave for Moscow, the Soviet Army
went into Afghanistan, and Canada suspended our academic exchange program.
          MYTHS AROUND HISTORICAL EVENTS IN RUSSIA
[Fran Ponomarenko] At this time, in the late 1970s, you were teaching
Russian and East European History. What aspect of the 19th century
interested you: the national problem in Ukraine, yes, but what aspect

specifically?

[Roman Serbyn] Well, I became interested in how myths were created around
historical events in Russia. For instance, let’s take the War of 1812,
Napoleon’s invasion of Russia.

The expression “Patriotic War” first appeared in the Russian literature in
the first half of the 19th century, and then it was taken over by Russian
and later, Soviet historians.

The notion was applied not only to Russian history but also to Ukrainian:
the Franco-Russian conflict became a “Fatherland War” for the Ukrainian
people! This is nonsense. The fact of the matter is that even for Russians
it was far from very patriotic.

There is an interesting document written by a Russian merchant returning to
Moscow just as the French were approaching the city. He wrote that he saw
people running away from the city. They told him that the authorities had
decided to close the city gates so as not to allow people to desert Moscow!

Later, when Napoleon was fleeing, the “patriotic” peasants attacked the
remnants of the Grande Arm?e, but it does not take much patriotism to attack
a half-frozen and completely demoralized army in flight.

The myth of the Fatherland War had a political purpose in the 19th century:
to instill pride and loyalty to the Empire and promote Russian nationalism.
          LIBERALIZING YEARS OF ALEXANDER II’S REIGN
[Fran Ponomarenko] What other issues attracted you?

[Roman Serbyn] I became interested in the major transformations in Ukraine
during the liberalizing years of Alexander II’s reign. Did you know that on
the eve of the emancipation of the serfs in 1861, Kyiv gubernia had the
highest percentage of serfs in the whole Russian Empire?

Emancipation meant new opportunities for the peasants, including moving
into urban centers, where they joined the growing ranks of the working
population. This raised the issue of fighting illiteracy.

In the early 1860s, idealistic students in the universities and gymnazia
(high schools) began organizing Sunday schools for young workers and
children of the working class.

Since AS there were no Ukrainian textbooks, they had to be written. Some
were composed by university students, others by Ukrainian literati.
Shevchenko wrote one such book.

I began collecting textbooks used in the Sunday school movement. These
Sunday schools were quite different from our North American conception.
Their purpose was to teach the three Rs and not religion. Most of the
teaching was done by university students and in Ukrainian.

The texts these students prepared for the children revealed a great deal
about their authors and the spirit in which they imparted knowledge. What
was the message behind the teaching material? For example, what words were
used to illustrate particular letters of the alphabet?

The patriotic message behind these texts is often striking. For example, the
letter “k” can be inserted in the word “koza” (goat) or “kozak” (Cossack)
and illustrated appropriately with a drawing of a goat (a familiar animal
for the young pupil) or a Zaporozhian Cossack.

The latter word reinforces the young person’s national consciousness. When
these textbooks are compared with similar textbooks from the Soviet period,
one gets a good idea of how primary education can influence future
generations of citizens.
                         KHARKIV-KYIV SECRET SOCIETY
[Fran Ponomarenko] Did you do any other research on this period?

[Roman Serbyn] Yes, I did. At the same time as I was collecting textbooks, I
became interested in other student activities and came across the so-called
Kharkiv-Kyiv Secret Society, which appeared in the late 1850s and was broken
up by the police in the early 1860s.

The group was organized by some idealistic students as a study and
discussion circle; they read and generated subversive material and became
involved in student strikes at the University of Kharkiv.

The police eventually discovered it and its members were expelled from the
university. I was interested in their attitude to the Ukrainian question.

Published excerpts from police reports show that some of them were quite
nationally conscious and patriotic. After the disbanding of the Kharkiv
group, some of its members were allowed to transfer to the University of
Kyiv and eventually became active in the Sunday school movement; others
joined Russian radical movements.

Besides ethnic Ukrainians, the group had Russian and Jewish students. One
of the latter, Veniamin Portugalov later started the first public discussion
of Jewish-Ukrainian relations.
                                       JEWISH TOPICS
[Fran Ponomarenko] This brings us to the Jewish topics you have also
researched. You gave a paper about the Sion-Osnova controversy at the
1983 McMaster conference on Ukrainian-Jewish relations. What brought
you to this area?

[Roman Serbyn] As I said, the 19th century fascinated me. The more I
pondered the national problem in Ukraine, the more I realized that this
dilemma was among other aspects also intrinsically connected with three
national groups-Russians, Poles, and Jews. I had already written about how
the Russians had created their “Kyivan succession” and “Patriotic War”
myths.

I dealt with Polish-Ukrainian relations in my article on the students at
Kyiv University around that period, and the return of Volodymyr Antonovych
and a few other young intellectuals from their Polonized milieu to the
Ukrainian national movement.

Jewish-Ukrainian relations were even more challenging because for the most
part they were for taboo in the Soviet Union.

And the Sion-Osnova controversy fell into the same time framework as the
Kharkiv-Kyiv Society, the Sunday school movement, and the “return” of
Antonovych and his group.

The controversy between the Russian-language Jewish weekly journal in Odesa
and the bilingual (Ukrainian-Russian) Ukrainian monthly journal published in
St.-Petersburg was started by Portugalov, mentioned above, who objected to
Osnova’s use of the term “zhyd”, which he considered offensive to him as a
Jew.

Osnova published Portugalov’s accusation and entrusted the writer
Panteleimon Kulish to provide the rebuttal. In Osnova’s defence Kulish
explained that this was the only existing term in Ukrainian.

Sion rejected the Osnova’s position and wide public debate was inaugurated.
Eventually over a dozen Russian periodicals participated in the discussion.

From a confrontation on a linguistic issue, the controversy turned to the
question of Jewish integration: Osnova demanded that Jews living in Ukraine
integrate into the Ukrainian milieu, while Sion retorted that Jewish
interests were best served by integration into the Russian milieu. The
proceedings of the McMaster conference were published and my article is in
them.
            ACADEMIC WORK ON SERHII PODOLYNSKY
[Fran Ponomarenko] In the academic world your work on Serhii
Podolynsky is well known. Podolynsky is a remarkable thinker and
personality.

He finished medical school in Paris, he had Ukrainian aristocratic family
roots, and, in defiance of his father’s pro-Empire positions, he became a
socialist and nationalist. I believe your biobibliographic and biographic
work on Podolynsky is the most complete to date.

[Roman Serbyn] Podolynsky is one of the bright lights of 19th-century
Ukrainian intellectual history. Unfortunately, he became mentally ill at the
age of 32 and died in 1891 at age 41.

Currently, in the West he is linked with the ecological movement because of
his discussions on conservation and the use of solar energy. Ukrainians have
always treated him primarily as an economist.

In fact, by education, he was a medical doctor. For the Soviets he was an
enigmatic figure because of his connections with Marx and the socialist
movements in Europe and the Russian empire. We have Podolynsky’s letters
to Marx; unfortunately, we do not have Marx’s replies to Podolynsky.

Podolynsky liked Marxist socialist economic theories but did not like Marx
as a politician because Podolynsky was a democrat, and he was most
disappointed by Marx’s dictatorial behavior at the 1872 conference of the
International at the Hague, where Podolynsky went to meet the leaders of
European socialist movements. It was as a socialist that Podolynsky became a
“nationalist” of sorts.

Like Antonovych before him, who left the Polish camp to join the Ukrainian
people among whom he was living, Podolynsky left the Russian revolutionaries
to join Drahomanov and the Ukrainian hromada. As a young socialist, while
studying medicine in Paris and then Zurich, he helped the Russian socialist
P. Lavrov publish the emigre journal Vpered.

He was personally acquainted with Bakunin and the less familiar, but more
important, Tkachev. Podolynsky’s position was that socialism in Ukraine
would have to be built on Ukrainian roots and culture; this is why he found
the use of Russian traditions and Russian slogans irrelevant in Ukraine.

That is why he gradually moved away from the Russian socialists and joined
Drahomanov, Pavlyk, Shulhyn – the Ukrainian radicals of the day.

Podolynsky was an authentic democrat, and in the Russian dispute between
Lavrov and Tkachev (a Blanquist who believed in coming to power by putchist
methods) he took the side of Lavrov against this “Leninist before Lenin” -
Tkachev. It was the latter that most influenced Lenin.
                                    SPEAKING OF LENIN
Speaking of Lenin, do you know what Lenin’s training was in?

[Fran Ponomarenko] Law, I believe.

[Roman Serbyn] Exactly. His was a lawyer’s approach. He argued for a
position regardless of any kind of moral principle. The Ukrainian
socialists, I’m afraid, did not see through him at all. For instance, Lenin
gave a speech in Zurich during the Great War.

In Western and Ukrainian social democratic newspapers (which summarized
his talk) his speech seemed to support the nationalities striving for
independence. But when the speech was summarized in the party newspaper, it
came out that Lenin was a Russian centrist. The Ukrainians misunderstood
what Lenin was really like.
                           WORK ON FAMINE OF 1921-1923
[Fran Ponomarenko] When did you begin your work on the Famine of 1921
-23? In your book (Holod 1921-1923 i ukrainska presa v Kanadi. Materialy
uporiadkuvav i zredahuvav Roman Serbyn. Toronto, Ukr.-Kan. Doslidcho-
Dokumentatsiinyi Tsentr, 1995. (700 pp.) you published all the materials
about the famine that appeared in Ukrainian newspapers in Canada at that
time.

You published photographs as well, and you have written several articles on
various aspects of this catastrophe.

[Roman Serbyn] I started to research the Famine of 1921-23 for a paper to
present at the 1983 UQAM Montreal conference that I mentioned earlier.
Later, to expand my knowledge, I worked in archives in Europe, the US, and
the UK, as well as at the Red Cross in Geneva. There is a lot of material.

This famine was not a taboo subject for the Soviets but the way it was
presented was really a perversion of the facts, especially with regards to
Ukraine. In 1921 and 1922 there was drought in Russia: along the Volga, in
the Northern Caucasus region, and in the southern half of Ukraine.

But in the rest of Ukraine the harvest was good, and there were enough
reserves to feed the whole Ukrainian population during those two years. Yet
food was taken out of Ukraine and sent to Moscow, Leningrad, and the Volga
region.

Also, in the first year of the Famine, when Lenin, Gorky, Patriarch Tikhon,
and Chicherin made an appeal to the West for help, all of them specifically
left out any mention of Ukraine. Lenin denied, until the end of 1921, that
there was even a famine in Ukraine!

Until the end of 1921 Lenin denied that there was even a famine in Ukraine!
The US sent relief to Russia in August 1921.

Credit must be given to American Jews for opening up Ukraine to famine
relief. Jews in Ukraine were writing to their relatives abroad and outlining
the conditions of famine, and this mobilized the American Jewish community.

The Jewish Joint Distribution Commission, which was already involved with
the work of the American Relief Administration’s work in the Volga region,
insisted that a fact-finding mission be sent to Ukraine.

Eventually, Moscow agreed to allow Joint-sponsored ARA aid to be sent to
Ukraine. The ARA insisted that the food kitchens in Ukraine could not be
restricted to Jews.

A compromise was reached, and the kitchens were opened to everyone but
were set up in heavily Jewish areas. As a result, most of the aid did go to
Jewish citizens, but other people were also fed and this aid alleviated the
over-all situation.

After examining the circumstances of this famine, we cannot avoid the
conclusion that this tragedy could have been avoided. And I have argued
that just as with the Famine of 32-33, this was a man-made famine.

The difference was that while in the 1930s this was a direct genocidal
undertaking by the government, in the 1920s the Soviet government took
advantage of adverse natural conditions and used them to its advantage.
                       WWII: GREAT FATHERLAND WAR
[Fran Ponomarenko] When did you start researching the way in which
World War II was and is being presented in Ukraine? In commemorative
events this war is always called the “Great Fatherland War” in Ukraine
and in Russia?

[Roman Serbyn] I began my regular travels to Ukraine in 1990, and in 1994
I noted that that year Ukraine was celebrating the 50th anniversary of the
“liberation” of Ukraine.

Also May 9 is a statutory holiday commemorating the end of the war and is
always portrayed as a great victory of the Soviet and Ukrainian peoples.
And, of course, the war was referred to as the Great Patriotic War.

I found it outrageous that Ukraine should be celebrating the exchange of a
Nazi tyrant (Hitler) for a communist tyrant (Stalin), especially as the
second tyrant destroyed more innocent Ukrainians than the first.

I became interested in how the whole mythology got started and what it meant
for the Soviet Union and why it was taken over by independent Ukraine.

I asked historians in Ukraine when this expression the “Great Fatherland
War” first appeared. No one knew or cared! So I started doing some
research.

The term was, in fact, invented on the first day of the war, i.e., on June
22, 1941. The next day it appeared in Pravda in an article by Emilian
Yaroslavsky, entitled “The Great Fatherland War of the Soviet People.”

In this article you can see the coalescing of various aspects that were used
for propaganda purposes and for forging the myth that this was a “war for
the fatherland.”

The three components of the myth are: a) the patriotism and elan of the
Soviet people, b) the liberation of Ukraine, and c) of victory of the Soviet
people.

My research and reflections on the German-Soviet war have led me to
conclude that for the vast majority of Ukrainians it had little to do with
patriotism. It did not liberate Ukraine, and Soviet troops can hardly be
considered as the real victors.
                                     MAY 8 VS MAY 9
[Fran Ponomarenko] In Europe the commemoration of the end of the war
takes place on May 8. In Russia and Ukraine the date is May 9. Why the
discrepancy?

[Roman Serbyn] I examined this question also. On May 8, 1945, Stalin
decreed that there would be a holiday on May 9, and so Victory Day was
celebrated in 1945, 1946, and 1947. But by 1947 (on Dec. 27 to be precise)
a decree was issued that May 9, 1948, was going to be a regular workday.

At the same time in 1947 all the invalids started to disappear from the
streets of big cities. They ended up on Valam Island, north of St.
Petersburg, and in other places of deportation.

They were removed in order not to remind the people about the war. Why?
In order to start changing the collective memory, to issue a new memory.

The revolution was the founding myth, and the way the war was remembered
would become the consolidating myth. In this regard there were two very
revealing toasts proposed by Stalin at victory banquets.

In the first one, at the end of May 1945, Stalin singled out the Russian
nation as the guiding nation of the USSR. Nations would now bow to the
Russian nation.

In the second toast, Stalin raised his glass to the “cogs” of the great
state mechanism without which the people in command could not accomplish
anything. How true, but cogs are not liberators or victors, they are just
cogs, and that’s the way Stalin liked it.

After Stalin’s death the “party” replaced him as the main focus of
authority. In 1965 Brezhnev brought back the May 9 holiday and monuments
started going up.

In Kyiv we have the deservedly maligned metal monstrosity of a woman
warrior, spoiling the graceful silhouette of Kyiv’s right bank. May 9
replaced Revolution Day as the Soviet Union’s main holiday. Independent
Ukraine took the holiday and the myth that went with it.
         MYTH OF THE GREAT FATHERLAND WAR IS ALIVE
[Fran Ponomarenko] The struggle for the historical memory of the Ukrainian
nation is clearly still urgent. UPA does not have recognition. Divizia
Halychyna is not even on the horizon, whereas the myth of the Great
Fatherland War is alive. Who is promoting this at this moment?

[Roman Serbyn] The Communist Party, the Red Army Veterans, the Orthodox
Church of the Moscow Patriarchate, ethnic Russians and non-Russian Russian
speakers who may feel threatened are continuously bolstering this.

The myth of the Great Fatherland War is preventing reconciliation between
Ukrainians who fought in the three different military formations (even
though there were transfers between them): the Red Army, the Ukrainian
Insurgent Army (UPA) and those who fought in the Axis armies, especially
the Division Halychyna.

It is a disgrace to Ukraine and especially a shame on the Ukrainian
political elite that 60 years after the war Ukrainians are still divided on
this issue and a shame that must be shared by the president, the government,
and the parliament of Ukraine, that the only armed force that was
specifically formed to struggle for the independence of Ukraine is not
recognized by this independent state today.

There was no liberty for Ukraine after the war! There was liberty in Europe
when the Nazis were defeated but not in Ukraine.

Furthermore, victors get spoils and wouldn’t all the peasants who were in
the army get the spoils?

The commanders did – these spoils were shipped back to the USSR by the
trainloads. But not the cogs! Mostly of farmer stock, they would simply have
wanted their land back. They got nothing!
                                       FAMINE IN 1947!
[Fran Ponomarenko] They got another famine in 1947! When you first started
raising this issue and writing about it, how was your work received in
Ukraine? As far as I know, you are the only historian who is looking at this
aspect of the construction of historical myth in Ukraine.

[Roman Serbyn] Part of the answer would be in the fact that at first only
one paper in Ukraine agreed to take my articles on this topic. Now
publications on this subject abound and they are getting pretty close to my
perspective on the war. These interpretations are also spreading to academic
conferences and publications.
                     THE FAMINE OF 1932-33 AS GENOCIDE
[Fran Ponomarenko] Perhaps we could touch on the Famine of 1932-33 for a
moment. You have been over the years very outspoken on this tragedy.

You have published widely on this subject as well, including a recent entry
in the MacMillan Encyclopedia. Is there still resistance to the idea of the
Famine as Genocide?

[Roman Serbyn] Yes! No serious scholar would deny that the Famine took
place; most agree that it was man- made, and that the Soviet authorities
were responsible. Many Russian scholars accept this. They are primarily
interested in the famine in the RSFSR. Some in fact are suggesting that
Russians are also victims of genocide.

The question that is debated amongst scholars is: Can it be called Genocide?
If so, was it a national genocide, or was it against the peasantry. I
maintain that Ukrainians were targeted as a group.

The fact that Famine also occurred in Kazakhstan does not negate the
Ukrainian genocide. All it means is that there were two different groups
victimized in a genocidal attack by the Soviet regime!

A weakness in the Russian claim to national genocide is the fact that the
famine areas in Russia were inhabited by ethnically mixed populations, in
some of which the Russian population was in the minority.

In the Caucasus 1/3 were Ukrainians. In Kuban 2/3 were Ukrainians. Russian
sources call these people Russians.

What has not been done but needs to be done is to look at the census for
each region and break it down into a set of small units and see if in fact
there is a difference between the rates of death in Ukrainian and Russian
villages, as well as to look at the different policies or different ways of
implementing the same policies, and so on.

Russian historians don’t seem to be interested in this type of research, but
Ukrainian historians are not doing this either. This would give a more exact
picture of the ethnic composition of the famine victims died.

One problem with the Ukrainian presentation is that it often restricts
itself to Ukrainian state territories, but even there it does not give
national breakdown in the ethnically mixed area.

[Fran Ponomarenko] What were the conditions for Germans and Jews in the
Famine of 1932-33?

[Roman Serbyn] Apparently the Soviets allowed some German aid to get
through to the German settlements, so as not to antagonize Germany.

As for the Jewish agricuturalists, who were not very numerous, they also
received aid from Western Jewish organizations that continued to help Jewish
agricultural settlements after the 1921-1923 famine. But this topic needs
further exploration. For some reason, historians seem to be avoiding this
question.
      FITS REQUIREMENTS OF THE GENOCIDE CONVENTION
But to get back to the issue of resistance to the recognition of the
Ukrainian famine-genocide. No Western government except the Balts has, to my
knowledge, declared the Holodomor to be Genocide. That it’s man-made is a
given.

However, we have enought solid evidence that it was carried out in a way
that fits the requirements of the Genocide Convention to be qualified as
Genocide.

New evidence is provided by the correspondence between Stalin and
Kaganovich. We also have an official document dated 22 January 1933 signed
by Stalin and Molotov which was sent to Ukraine and Bielorussia and to
regional Russian centers around Ukraine decreeing the closing of Ukraine’s
borders.

The document says that for the second year in a row peasants are fleeing and
they must be stopped at the borders and punished or sent back to their
villages.

There was to be no escape from hunger; within six months over two hundred
thousand people were apprehended shot, sent to the gulag or back to the
starving villages. Death becomes inevitable. The Genocidal intent on the
part of Stalin is clear.

If we couple this closing of the borders with the decrees (naturalni
shtrafy) issued in the fall of 1932 whereby foodstuffs were removed from
the houses of the villagers, ostensibly as a penalty for not giving over the
grain which they did not have, large scale death had to be certain.
             HOLODOMOR AND COMMON CONSCIOUSNESS
[Fran Ponomarenko] But now I’d like to ask you, to what extent is Holodomor
becoming an important aspect of the educational process in Ukraine? Has it
become part of the common consciousness?

[Roman Serbyn] Not yet! The Italian historian Grasiozi made an interesting
comment. He said that great calamities are internalized by a society as they
happen and become part of the collective memory. But it is hard to
ressuscitate the memory of the Famine since it was so strongly denied for
several generations.

Most Ukrainians grew up without any personal experience of this atrocity and
with no outside information about it.

It is interesting to compare in this respect what is done by the Jewish
community to preserve and honor the memory of the Holocaust in Ukraine and
what the Ukrainian state and the Ukrainian nation is doing with regard to
the Holodomor. There are already several Holocaust museums and research
and study centres devoted to that topic.

The Ukrainian authorities so far have been spending all their energy on
discussion of various half-baked projects. At the same time they continue to
treat German occupation as the greatest evil and push the Famine-Genocide
into the background.

Nazi crimes are presented as being larger than Communist ones and the myth
of the Great Fatherland War is dominant.

In my opinion, this is bad for Ukrainians on all scores. Not enough
intellectual work is being done to bring the Famine into the consciousness
of the citizenry.
            UKRAINIAN INSTITUTE OF NATIONAL MEMORY
[Fran Ponomarenko] A resolution has been made to build and organize a
Ukrainian Institute of National Memory. What do you think of this project
and what do you think ought to be their priority task?

[Roman Serbyn] First of all, the combining under one roof of all the
atrocities committed against Ukrainians by various regimes, as it is
presented in the present project – Polish,Communist,Nazi – will have the
effect of diluting the central significance of the Holodomor, which was the
central assault on the Ukrainian nation. Yad Vashem deals only with the
Holocaust.

The Washington museum also deals with the Holocaust. Remember that
originally there was some discussion of building a Holodomor complex that
would house a museum and a research center. This project seems to have gone
by the way side. This is a serious mistake.

There should be two separate institutions: a Famine-Genocide Institute and
an Institute of National Memory, say dedicated to the 20th century, which
would include material on all the repressions, in the various decades, that
were initiated by Soviets and Nazis.

The Famine was the central assault, however, and it must have its own
research center.
              EXECUTION OF UKRAINIAN INTELLIGENTSIA
[Fran Ponomarenko] Should this Famine-Genocide center also include the
Rozstrilane Vidrodzhennia, the execution of the Ukrainian intelligentsia?
The terror?

[Roman Serbyn] The starvation of Ukrainian farmers was the part of the
genocide which was the most costly in human life, but it cannot be treated
in isolation from the rest of the genocide.

The assault on the Ukrainian nation included the decimation of the Ukrainian
cultural and political elites (Rozstrilane vidrodzhennia) and this must also
be included.

The Russification of Ukraine and Kuban is part of the genocide. Ukrainians
in the RSFSR must be included. Some mention should be made of the precursor
famine (1921-23) and the aftermath in the Great Terror.

                ARE THERE CURRENTLY GOOD HISTORIANS?
[Fran Ponomarenko] Do you feel that there are currently good historians
addressing Ukrainian issues?

[Roman Serbyn] The problem is that there is not enough solid work bing done
by Ukrainian historians. The best work on the Armenian genocide has been
done by Armenians. The best work on the Jewish Holocaust has been done by
Jews.

We are of course pleased if non-Ukrainians take up work on Ukrainian history
but there are not enough Ukrainians in this field doing the fundamental
work. That work urgently needs to be done.

[Fran Ponomarenko] You are one of the few diaspora intellectuals taken
seriously in Ukraine. One often gets the impression that there is some
negativity to the diaspora. What can be done to accelerate a more positive
attitude?

[Roman Serbyn] Serious scholars in Ukraine take serious scholars in the West
seriously. Hunczak, Sporliuk, Subtelny, Kohut, just to name a few, are well
respected by historians in Ukraine.
                        STATE OF UKRAINIAN LANGUAGE
[Fran Ponomarenko] Please comment on your view of the contemporary state
of the Ukrainian language. What in your view is a fair resolution of the
linguistic situation in Ukraine?

[Roman Serbyn] To begin with I think that the Diaspora capitulated too
quickly in the face of the onslaught of Sovietism. The Diaspora preserved
some of the basic elements of the Ukrainian language. There was no reason to
accept the Soviet pravopys.

In Ukraine, the Russian language is the language of the former colonial
power, which has managed to maintain its status of a dominant imperialist
language. The problem is that the Soviet propaganda machine made the
Ukrainian people accustomed to accept their subordinate colonial status as a
normal state of affairs, and they have difficulty in shaking this mentality.

It is not normal that a member of Parliament not know and publicly use the
country’s state language, to say nothing of the arrogance of Ministers who
are too arrogant or linguistically challenged to learn and use Ukrainian in
fulfilling their functions in Ukrainian. Ukrainians no longer need to accept
this domination of the language of the colonizer.

The recognition of Russian as Ukraine’s second official (state) language
would be the beginning of the end of Ukrainian as Ukraine’s national
language. But until Ukrainians have pride and respect for their own language
things will not advance.
                       NATIONAL ACADEMY OF SCIENCES
[Fran Ponomarenko] Is it necessary to reform the National Academy of
Sciences? How likely is this to happen?

[Roman Serbyn] The very name suggests a lack of self-respect! In France it’s
the Academie francaise! In Russia it’s Rossijskaja Akademia Nauk! In Poland
it’s Polska Akademia Nauk! Why not simply call it the Ukrainian Academy of
Sciences?

It definitely needs reforms, but it is hard to expect this devalued
institution to reform itself, it would first have to purge its own ranks -
hardly something we can expect these people to do.

What has always puzzled me is why good scholars from the diaspora have
accepted to be nominated to this institution? If they expected to bring
about changes, I think they have been mistaken.
                      THE ONGOING POLITICAL REFORM

[Fran Ponomarenko] I’d like to ask you a few political questions, if I may.
What are your views about the ongoing political reform?

[Roman Serbyn] I would hardly call it “reform” if by reform we mean change
for improvement. Two months after Parliamentary elections and there is still
no government. This is as primitive as a political system can get.

I am opposed to proportional representation in such a situation as we have
in Ukraine. In my view it reduces citizen participation in the political
life fo the country, makes deputies dependent on the party bosses and
completely independent of the electorate.

You cannot buy a high place on party list in a system that does not elect
its members of Parliament by proportional representation.

Secondly, the source of the political illness in my opinion is the country’s
system of Parliamentary immunity, which should rather be called
parliamentary impunity.

Instead of being a guarantee for the elected representatives to fulfill
their responsibilities as representatives of their electorate, the system
has become a protection for dishonest elements against legal prosecution for
crimes committed before or during their tenure.

Political parties are not interested in promoting a genuine political
culture. The spirit of otamanshchyna dominates Ukrainian political life.
This means politicians want privilege.
   YUSHCHENKO POISONING AND GONGADZE MURDER
[Fran Ponomarenko] There are still two major cases outstanding: the
poisoning of President Yushchenko and the Gongadze murder. Will there
ever be a just resolution to these?

[Roman Serbyn] I seriously doubt it. It seems to me that everyone at the
official level is tired of “solving problems”, including Yushchenko.
Yushchenko has become a Hamlet. The atmosphere in Ukraine is not one where
people feel support from the authorities in the resolution of such matters.

[Fran Ponomarenko] How would it be possible to interest Ukrainian financial
magnates and oligarchs to become cultural philanthropists?

[Roman Serbyn] This will only happen when they develop a sense of personal
dignity and a national consciousness! I suppose you need financial
incentives set up too, like tax deductions for pro-Ukrainian philanthropy.
But eventually, some Ukrainian robber barons will become Ukrainian
philanthropists.
        4TH WAVE OF UKRAINIANS COMING TO THE WEST
[Fran Ponomarenko] I wonder if you wouldn’t mind commenting on the 4th
wave of Ukrainians coming to the West.

[Roman Serbyn] I would say that the 3rd wave (which was strongly patriotic)
did not integrate well with the previous waves of immigration.

Because of this lack of fusion with the 1st and 2nd waves, many talented
people were lost to the community organizations. The same error is taking
place again. It is important to integrate this 4th wave.

This immigration has a much higher level of education but a much lower level
of national consciousness. In the Soviet Union, the state controlled
everything but it also paid for all the activities that it sponsored or
approved of.

This fourth wave had a lot of trouble accepting the fact that the Ukrainian
diasporan life was organized on voluntary basis and non-paid community
participation. We don’t have enough psychological studies addressing these
problems of assimilation and integration and adherence to ethnic origins.

[Fran Ponomarenko] What are you presently working on?

[Roman Serbyn] I am just finishing up an article using UN criterion to show
that the Famine of 32-33 was indeed Genocide. As you know, the UN
Convention recognizes only four groups as victims of genocide: these are
national. ethnic, religious, and racial.

Genocide exists where there is action with intent to destroy one of these
groups, in whole or in part. I’ll be presenting this paper at the Urbana
conference at the end of June.

I continue to write on the myth of the Great Fatherland War. I would like to
publish a French anthology of Podolynsky’s works, which is almost complete
but for which I have no sponsor for publication.

I am revising my article on the Sion-Osnova controversy for a publication in
Ukrainian and I also want to get back to the Famine of the 20s.     -30-
————————————————————————————————–
F. Ponomarenko teaches in the English Department of Vanier College,
Montreal, Quebec, Canada.
————————————————————————————————-
LINKS: http://www.day.kiev.ua/165572/http://www.day.kiev.ua/166003/
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================

    If you are receiving more than one copy of the AUR please contact us.
    Please contact us if you no longer wish to receive the AUR.    
       You are welcome to send us names for the AUR distribution list.
   If you are missing some issues of the AUR please let us know.
========================================================
         “ACTION UKRAINE REPORT – AUR”
         A Free, Not-For-Profit, Independent, Public Service Newsletter
                With major support from The Bleyzer Foundation
 
      Articles are Distributed For Information, Research, Education
                Academic, Discussion and Personal Purposes Only
                                  Additional readers are welcome.
========================================================
              ACTION UKRAINE PROGRAM – SPONSORS
                              Action Ukraine Report (AUR)
               Holodomor Art and Graphics Collection & Exhibitions
          “Working to Secure & Enhance Ukraine’s Democratic Future”
                 List of sponsors to be published again later this week.

========================================================
 TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR,
around five times a week, please send your name, country of residence,
and e-mail contact information to morganw@patriot.net. Information about
your occupation and your interest in Ukraine is also appreciated.
 
If you do not wish to read the ACTION UKRAINE REPORT please
contact us immediately by e-mail to morganw@patriot.net.  If you are
receiving more than one copy please let us know so this can be corrected
 
              SPAM BLOCKERS ARE A REAL PROBLEM                 
If you do not receive a copy of the AUR it is probably because of a
SPAM BLOCKER maintained by your server or by yourself on your
computer. Spam blockers are set in very arbitrary and impersonal ways
and block out e-mails because of words found in many news stories.
 
Spam blockers also sometimes reject the AUR for other arbitrary reasons
we have not been able to identify. If you do not receive some of the AUR
numbers please let us know and we will send you the missing issues. Please
make sure the spam blocker used by your server and also the one on your
personal computer, if you use a spam blocker, is set properly to receive
the Action Ukraine Report (AUR).

========================================================
                        PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer

Emerging Markets Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
Mobile in Kyiv: 8 050 689 2874
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
========================================================
    Power Corrupts and Absolute Power Corrupts Absolutely. 
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================

Leave a comment

Filed under Uncategorized

AUR#758 Sep 15 NATO Entry Talks Halted By Yanukovych; Pres Promises No Changes In Foreign Policy, Bunge Company Angry; PinchukArtCentre Opens In Kyiv

ACTION UKRAINE REPORT – AUR
An International Newsletter, The Latest, Up-To-Date
In-Depth Ukrainian News, Analysis and Commentary

Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World

WHO IS IN CHARGE OF FOREIGN POLICY IN UKRAINE?

ACTION UKRAINE REPORT – AUR – NUMBER 758

Mr. E. Morgan Williams, Publisher and Editor
PUBLISHED IN WASHINGTON, D.C., FRIDAY, SEPTEMBER 15, 2006

Help Build the Worldwide Action Ukraine Network
Send the AUR to your colleagues and friends, urge them to sign up

-——- INDEX OF ARTICLES ——–
Clicking on the title of any article takes you directly to the article.
Return to the Index by clicking on Return to Index at the end of each article

1. UKRAINE’S YANUKOVYCH HALTS NATO ENTRY TALKS
By Peter Finn in Moscow, Washington Post Foreign Service
The Washington Post, Washington, D.C., Friday, Sept 15, 2006; Page A15

2. PRESIDENT PROMISES NO CHANGES IN FOREIGN POLICY
Committed to striving for membership in the EU and NATO
Press office of President Victor Yushchenko,

Kyiv, Ukraine, Monday, September 11, 2006

3. YANUKOVICH PUTS KIEV’S NATO PLANS ON HOLD
By Daniel Dombey in Brussels and Roman Olearchyk in Kiev
Financial Times, London, United Kingdom, Friday, September 15 2006

4. UKRAINE STALLS NATO BID TO BUILD PUBLIC SUPPORT
By Alan Cullison in Moscow, The Wall Street Journal
New York, New York, Friday, September 15, 2006; Page A8

5. UKRAINE TO PURSUE EU ENTRY, NATO DRIVE ON HOLD
By Dan Bilefsky, International Herald Tribune
Paris, France, Thursday, September 14, 2006

6. UKRAINE: YANUKOVYCH BLOWS HOT AND COLD IN BRUSSELS
Relations with NATO are, in words of one NATO diplomat, now “on ice.”
By Ahto Lobjakas, Radio Free Europe/Radio Liberty (RFE/RL)
Prague, Czech Republic, Thursday, September 14, 2005

7. UKRAINIAN PRIME MINISTER, PRESIDENT AT ODDS OVER NATO
UT1, Kiev, in Ukrainian 1800 gmt 14 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

8. UKRAINIAN DEFENCE MINISTER HRYTSENKO UNHAPPY WITH

PRIME MINISTER’S STATEMENT ON NATO
TV 5 Kanal, Kiev, in Ukrainian 0915 gmt 15 Sep 06
BBC Monitoring Service,United Kingdom, Thursday, Sep 15, 2006

9. TWO LEADING UKRAINIAN CENTRE-RIGHT MPs OUTRAGED
THAT PRIME MINISTER PUTS NATO ENTRY ON HOLD
UNIAN news agency, Kiev, in Ukrainian Thursday, 14 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

10. KINAKH SAYS YANUKOVYCH’S STATEMENTS ON UKRAINE’S
UNPREPAREDNESS FOR JOINING NATO MEMBERSHIP

Ukrainian News Agency, Kyiv, Ukraine, Thursday, September 14, 2006

11. UKRAINIAN PRIME MINISTER REJECTS ACCUSATIONS OF
BREACHING DECLARATION OF NATIONAL UNITY ON NATO
Ukrayinska Pravda web site, Kiev, in Ukrainian 14 Sep 06
BBC Monitoring Service, United Kingdom, Friday, Sep 15, 2006

12. UKRAINIAN PROPRESIDENTIAL PARTY CRITICIZES
PRIME MINISTER’S NATO STATEMENTS
Interfax-Ukraine news agency, Kiev, in Russian 1256 gmt 14 Sep
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

13. UKRAINE WILL BECOME NATO MEMBER SOONER OR
LATER SAYS POLISH PRIME MINISTER JAROSLAW KACZYNSKI
PAP news agency, Warsaw, Poland, Friday, 14 Sep 06

14. POLAND’S LECH WALESA APPEALS FOR FASTER EUROPEAN
INTEGRATION TO AVOID LOSING UKRAINE
AP Worldstream, Warsaw, Poland, Thursday, Sep 14, 2006

15. NATO PROMISES TO SUPPORT REFORM IN UKRAINE
Ukrainian News Service, Kyiv, Ukraine, Friday, September 15, 2006

TO STOP CORPORATE RAIDS
Dow Jones Newswires, Brussels, Belgium, Thu, September 14, 2006 .

17. UKRAINE PM FACES BUNGE ANGER OVER GRAIN PLANT
Urging government help to thwart an attempt by “corporate raiders.”
Bunge: Ukraine’s tax authorities behind in refunding $40m in tax rebates.
By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, Friday, September 15 2006

18. UKRAINE PARLIAMENT COMMEMORATE JOURNALIST
GEORGY GONGADZE WITH MOMENT OF SILENCE

Ukrainian News Agency, Kyiv, Ukraine, Friday, September 15, 2006

19. LANGUAGE ISSUE THREATENS UKRAINE’S NATIONAL

SECURITY SAYS COMMUNIST LEADER PETRO SYMONENKO
RIA Novosti, Moscow, Russia, Thursday, September 14, 2006

20. EXHIBITION OF CONTEMPORARY ART “NEW SPACE”
PinchukArtCentre, Besarabska Square, Arena, Kiev, Ukraine
Public Opening – September 16th, 2006, 20:00

PinchukArtCentre, Kyiv, Ukraine
Action Ukraine Report (AUR) #758, Article 20
Kyiv, Ukraine, Friday, September 15, 2006

21. RUSSIA DESERVES MORE THAN STABILITY FROM PUTIN’S LAST
YEAR: THE CHAOTIC CAPITALISM OF THE YELTSIN ERA HAS
BEEN BANISHED, BUT OTHER DISTURBING TRENDS
ARE NOW GAINING MOMENTUM

By Jonathan Steele, Moscow, The Guardian
London, United Kingdom, Thursday, Sep 14, 2006


22. SO, UKRAINE ISN’T ORANGE AFTER ALL
OP-ED: By Adam Swain, Kyiv Post, Kyiv, Ukraine, Wed, Aug 30 2006
========================================================
1. UKRAINE’S YANUKOVYCH HALTS NATO ENTRY TALKS

By Peter Finn in Moscow, Washington Post Foreign Service
The Washington Post, Washington, D.C., Friday, Sept 15, 2006; Page A15

MOSCOW, Sept. 14 — Prime Minister Viktor Yanukovych of Ukraine said
Thursday that his government would suspend negotiations on membership
in the NATO alliance, his first major step toward reversing his country’s
drift away from Russia and toward the West.

“Because of the political situation in Ukraine, we will have to take a
pause,” Yanukovych told reporters in Brussels after talks with NATO
Secretary General Jaap de Hoop Scheffer and NATO ambassadors. “We
have to convince society.”

The prime minister, who has said he personally opposes NATO membership,
cited insufficient popular support for the step. A recent survey found that
60 percent of Ukrainians are against membership in the alliance,
significantly more than support the prime minister and his coalition
partners.

Making Ukraine, a former Soviet republic, part of the alliance is a
cherished goal of Yanukovych’s rival, President Viktor Yushchenko.

In late 2004, the two men competed in a presidential election. Yanukovych,
Russia’s favored candidate, was initially declared the winner, triggering a
street revolt and a new vote that swept Yushchenko into office.

Yushchenko set the country on a firmly pro-Western course, setting off alarm
bells in Moscow and the Russian-speaking parts of his own country with a
promise to quickly push for Ukraine’s membership in the Western military
alliance.

Yushchenko had expressed hope that the country could join as soon as 2008,
and the issue was scheduled to be discussed at a NATO summit in November.

But the coalition that backed him disintegrated last September, and after
parliamentary elections earlier this year, Yanukovych, whose party won a
plurality of votes, resurrected himself on the back of his rivals’
infighting. He became prime minister in July.

American officials have been enthusiastic about Ukraine’s potential
membership in NATO. But they have become increasingly worried about the
anemic support for the move within the country, Western diplomats said in
recent interviews.

The prospect of Ukraine joining the alliance is also anathema to the Kremlin
and the vast majority of Russians, who regard it as an attempt to encircle
and isolate their country.

Yanukovych stressed Thursday that he was not turning his back on the West.
“For the time being, we are looking at enlargement of our cooperation with
NATO,” rather than membership, he said. “We should be a reliable bridge
between the European Union and Russia.”

Yanukovych promised to continue supporting internal reforms that “will
bring us in the long term to accession of the European Union.”

E.U. officials, facing growing skepticism in the bloc’s 25 member nations
about any further expansion, were reserved, if not cold, to Ukrainian
membership but said a free-trade zone could be negotiated.

E.U. External Relations Commissioner Benita Ferrero-Waldner said the
union had no plans to offer Ukraine membership “at this moment.” -30-
———————————————————————————————————-
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/14/AR2006091401476.html
——————————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2. PRESIDENT PROMISES NO CHANGES IN FOREIGN POLICY
Committed to striving for membership in the EU and NATO

Press office of President Victor Yushchenko,
Kyiv, Ukraine, Monday, September 11, 2006

KYIV – In an interview for Milano Finanza (Italy), Victor Yushchenko has
said Ukraine would not change its foreign course, being committed to the
principles of democracy and economic development, and striving for
membership in the European Union and NATO.

“We have built a state with European state institutions and confirmed the
nation’s Euro-Atlantic course,” he said.

“We must continue developing Ukraine democratically, protect human rights
and ensure stability and unitary form of government in the country. We must
work to join WTO and integrate into the European Union and NATO,” he
added.

The Head of State said consolidation of the nation and economic prosperity
were among the major challenges facing Ukraine’s political elite. -30-
———————————————————————————————–
LINK: http://www.president.gov.ua/en/news/data/1_10275.html

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3. YANUKOVICH PUTS KIEV’S NATO PLANS ON HOLD

By Daniel Dombey in Brussels and Roman Olearchyk in Kiev
Financial Times, London, United Kingdom, Friday, September 15 2006

Ukraine’s path towards greater integration with the west was cast into doubt
yesterday when Viktor Yanukovich, the country’s prime minister, said he was
putting on hold Kiev’s plans to join Nato.

On his first trip to Brussels since taking office last month, Mr Yanukovich
dashed the hopes of pro-western Ukrainian politicians, and of officials in
Europe and the US, that he would use the visit to endorse joining Nato’s
membership action plan – a stepping stone to membership of the 26-nation
alliance.

Instead, standing next to Jaap de Hoop Scheffer, Nato secretary general, Mr
Yanukovich argued that the membership bid had to be put on ice because of
popular suspicions about Nato membership and doubts about its impact on
relations with Russia.

“Because of the political situation in Ukraine we will now have to take a
pause, but the time will come when the decision will be made,” he said.

“We will do everything possible to persuade the Ukrainian people that there
is no alternative,” he said, adding that the question of Nato membership
should be kept separate from his administration’s goal of good relations
with Moscow.

Until recently the US, the most powerful country in Nato, had hoped that the
alliance would mark its November summit in Riga, the Latvian capital, by
bringing Ukraine into the membership action plan and hence a step closer to
full membership.

“The door to deepening the relationship is open,” said a senior Nato
diplomat who emphasised that the alliance’s ambassadors had told Mr
Yanukovich yesterday they valued the relationship with Ukraine.

“But allies also understand that it is up to Ukraine to set the pace for
that relationship.”

Recent polls indicate that Ukrainian opposition to joining Nato is running
at about two-thirds of the electorate.

Ukraine is also heavily dependent for low-cost oil and gas on Russia, which
strongly opposes any suggestion that the country join Nato. Mr Yanukovich’s
declaration yesterday could be a setback for plans to expand his governing
coalition by bringing in members of Viktor Yushchenko’s Our Ukraine party,
which favours joining Nato.

While Mr Yushchenko’s ascent to power following the 2004 Orange Revolution
was seen in the US and Brussels as a sign that Kiev had moved decisively
towards the west, Mr Yanukovich’s election triumph this year has cast doubt
on prospects for further Euro-Atlantic integration.

Mr Yanukovich stressed the importance of ties with the European Union, and
negotiations on a wide-ranging agreement are set to begin next year.

But while Ukraine would like a trade deal with Brussels, EU officials warn
this will be impossible if Kiev joins a customs union with Russia. Moscow is
promoting such a customs union with several former Soviet neighbours.
————————————————————————————————-
http://www.ft.com/cms/s/f3e62df8-4456-11db-8965-0000779e2340.html
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
4. UKRAINE STALLS NATO BID TO BUILD PUBLIC SUPPORT

By Alan Cullison in Moscow, The Wall Street Journal
New York, New York, Friday, September 15, 2006; Page A8

MOSCOW — In another sign of the cooling of the Orange Revolution’s
pro-Western zeal, Ukraine’s new prime minister told NATO that his country
is putting efforts to join the alliance on hold because of lack of public
support for the move.

“We have to take a pause,” said Prime Minister Viktor Yanukovych, Thursday
after meeting with the North Atlantic Treaty Organization’s chief in
Brussels. He said Ukraine would formally launch its bid to join the
alliance, but only after a referendum on the issue. “We have to convince
society.”

Ukraine’s backtracking on its aspirations to join NATO is a defeat to the
administration of U.S. President George W. Bush, which had hoped a quick
entrance of Ukraine into the alliance would tug the former Soviet state
decisively closer to the West.

Ukraine’s own slow movement on NATO is likely to also spell problems for the
entrance of another former Soviet state, Georgia, into the alliance. Though
public opinion in Georgia is strongly in favor of joining the alliance, NATO
members in Europe are wary of admitting Georgia without Ukraine coming
first.

The Kremlin has lobbied hard against Ukraine’s entrance into the alliance.
The Kremlin said that Ukraine as a NATO member would be a threat to Russian
security and warned Kiev that any movements toward membership would worsen
relations.

Mr. Yanukovych was named prime minister last month, after a pro-Western
coalition of politicians came to pieces over how to divide positions in the
government.

Mr. Yanukovych has been advocating closer relations to Moscow, which
backed him in 2004 presidential elections that were tainted by vote fraud and
reversed by the mass public demonstrations of the Orange Revolution.

Thursday was Mr. Yanukovych’s first visit to Brussels since he was named
prime minister. After meeting with NATO Secretary-General Jaap de Hoop
Scheffer, Mr. Yanukovych said that few Ukrainians — maybe 12% to 25% —
supported the idea of joining NATO.

He said that Ukraine shouldn’t be forced to make a choice between steering
the country to either a pro-Russian or pro-Western course. “We should build
a reliable bridge between Russia and the European Union,” he said.

Mr. Yanukovych also met with EU External Relations Commissioner Benita
Ferrero-Waldner and repeated that Ukraine was interested in joining the
union. But Ms. Ferrero-Waldner said this wasn’t a prospect for the moment.

Besides numerous trade ties with Russia, Ukraine also must worry about its
heavy dependence on Russian natural-gas deliveries. Ukraine is in the midst
of negotiations with Russia for next year’s shipments, and officials have
said that a sharp increase in prices by Russia could be ruinous to the
Ukrainian economy.

While Mr. Yanukovych has advocated a public campaign to drum up support
for NATO within Ukraine, analysts are skeptical that he would ever do such a
thing.

Ivan Presniakov, an analyst with the International Centre for Policy Studies
in Kiev, said that Mr. Yanukovych’s government appears to want to delay any
serious moves toward NATO membership for at least two or three years, so
that it can buy enough time for Ukrainian industry to retool and cope with
higher energy prices.

“I don’t think that they really want to increase the support for NATO right
now,” he said. “They want to do is calm the fears of Russia.”

Mr. Yanukovych’s political party made a strong showing in parliamentary
elections earlier this year, after campaigning strongly against NATO
membership. This summer his party orchestrated anti-NATO protests that
hounded U.S. soldiers out of a southern Ukrainian province. -30-
————————————————————————————————-
Write to Alan Cullison at alan.cullison@wsj.com

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
Send in names and e-mail addresses for the AUR distribution list.
========================================================
5. UKRAINE TO PURSUE EU ENTRY, NATO DRIVE ON HOLD

By Dan Bilefsky, International Herald Tribune (IHT)
Paris, France, Thursday, September 14, 2006

BRUSSELS – Seeking to prove his European credentials, Prime Minister Viktor
Yanukovich of Ukraine said Thursday that he was determined to pursue
membership in the European Union. But he warned that he was putting the
drive to join NATO on hold.

“Because of the political situation in Ukraine, we will now have to take a
pause,” he said after a meeting at NATO headquarters.

The distancing of the former Soviet republic from NATO is a deviation from
President Viktor Yushchenko, his political rival, who has advocated joining
NATO since he came to power after defeating Yanukovich in a disputed
election in 2004.

Yushchenko agreed to Yanukovich’s return to power in hotly contested
parliamentary elections in March in exchange for a pledge by Yanukovich that
the country would continue on a pro-Western path.

But on his first visit to Brussels since becoming prime minister, Yanukovich
said Ukrainians remained cool to NATO and that membership would be submitted
to a referendum once the country had undergone political and economic
reforms.

“Over the last two years, I have detected more of a negative attitude of the
Ukrainian people with regard to the Atlantic Alliance and the possibility of
joining,” he said. “This is because of a lack of information.”

A majority of Ukrainians oppose membership in NATO, he said, due to a
lingering distrust of the alliance that has outlived the Cold War. Many fear
it could alienate Moscow.

In May, anti-NATO demonstrations erupted in Crimea, home to many ethnic
Russians as well as Russia’s Black Sea fleet, amid fears that the United
States planned to build a base in Ukraine. Wariness of NATO is particularly
strong in the eastern and southern regions, where Yanukovich has many
supporters, Ukraine experts said.

Analysts and NATO officials said Yanukovich’s statement should not be
interpreted as a sign that Ukraine was being pulled back into Moscow’s orbit
or distancing itself from the West.

“It is difficult to foresee how a country whose people are skeptical of NATO
can join the alliance for now,” said a senior NATO official, who asked for
anonymity to avoid breaching protocol. “The fact that the country wants to
strengthen its ties to the EU is a positive sign.”

Yanukovich’s distancing of Kiev from NATO may aggravate the power struggle
between him and Yushchenko. But Marius Vahl, a Ukraine expert at the Center
for European Policy Studies, said Yushchenko was unlikely to seize on the
issue because joining NATO remains deeply unpopular with Ukrainians.

He added that Russia’s often strained relations with NATO had improved
recently and that Ukraine’s decision would encourage this trend. “Ukraine
joining NATO would harden Russia’s attitude toward NATO at a time when
relations are good,” he said.

Yanukovich said he remained determined to steer Ukraine toward the European
Union. “We have the firm intention to have excellent relations with the EU
and a stable relationship, which will bring us in the long term to accession
of the European Union,” he said.

But the EU external relations commissioner, Benita Ferrero-Waldner, said the
bloc had no plans to offer membership for now and instead would propose
closer economic and political ties, including greater collaboration on
energy policy and a free-trade agreement once Kiev joins the World Trade
Organization.

Analysts said the lack of a firm membership offer from the EU risked slowing
reforms. “The unwillingness of the EU to invite Ukraine to join makes
Ukraine less likely to become a modern and prosperous country,” Vahl said.

Ukraine has grown increasingly frustrated with Brussels’ refusal to offer
membership. Yet many European countries fear that another big country like
Ukraine – its populations is about 47 million – would hamper the bloc’s
effectiveness. Such fears reflect expansion fatigue in a Union that already
includes 25 countries and 470 million people. -30-
————————————————————————————————
LINK: http://www.iht.com/articles/2006/09/14/news/ukraine.php
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
6. UKRAINE: YANUKOVYCH BLOWS HOT AND COLD IN BRUSSELS
Relations with NATO are, in words of one NATO diplomat, now “on ice.”

By Ahto Lobjakas, Radio Free Europe/Radio Liberty (RFE/RL)
Prague, Czech Republic, Thursday, September 14, 2005

BRUSSELS – Today’s visit to Brussels by Viktor Yanukovych was not
his first as Ukraine’s prime minister.

Given, however, that the last time Yanukovych was prime minister was
immediately before the Orange Revolution in 2004, the current visit was
eagerly awaited by EU and NATO officials as an opportunity to probe his
government’s intentions.

And true to most expectations, Yanukovych today confirmed Ukraine will
continue seeking EU membership.

His EU host, the Finnish foreign minister and current EU chair, Erkki
Tuomioja, gave Yanukovych’s renewed call for an accession perspective a
courteous, if clearly noncommittal welcome.

“I would say that the most important result of this meeting was that we were
able to confirm, to take first of all on our side to welcome and take note
of Ukrainian intentions to continue their European vocation, and from our
side our firm commitment to furthering this,” Tuomioja said.

When it comes to action, however, the EU remains cool. Only this week, the
European Commission floated plans to negotiate a new partnership treaty with
Kyiv — underscoring that the treaty would not address the issue of
membership.

One EU diplomat, who asked not to be named, told RFE/RL that the Ukrainian
side was told in the run-up to Yanukovych’s visit not to press the issue.
“Don’t ask, because you won’t like the answer,” was how the official summed
up the EU message delivered to Kyiv.

The official said the EU today met Yanukovych with a pre-prepared “defensive
point” to ward off demands for a membership perspective. The “defensive
point” boils down to the standard EU line — Ukraine’s EU membership is not
presently on the agenda.

This does not mean that the EU has formally ruled it out, but simply that it
wants to focus on concrete cooperation and reforms to bring the two sides
closer.

The EU is encouraging political and economic reforms in Ukraine to bring the
country closer to its own legislative standards. And the union is holding
out for the prospect of a free-trade zone with Ukraine, but on condition the
country first joins the World Trade Organization.

Ukraine is also hoping to sign an agreement by the end of this month easing
EU visa rules. Although Yanukovych today described the agreement as the
first step on the road towards the abolition of visas altogether, it will in
the foreseeable future be limited to cutting red tape, visa fees, and
waiting times.

Ukraine itself must sign up to a readmission treaty obliging it to take back
illegal immigrants who reach the EU via its territory.

The EU was also keen to win assurances from Yanukovych that Kyiv will
continue its strict enforcement of controls on the border with Moldova’s
breakaway region of Transdniester.

Yanukovych said today Ukraine will continue supporting the peace plan put
forth last year by the country’s president, Viktor Yushchenko.

Finnish Foreign Minister Tuomioja today took pains to acknowledge that the
fact that Yanukovych hails from the pro-Russian camp in Ukraine will not in
itself hamper cooperation with the EU.

“We [also] covered relations with Russia, because our common view and
understanding is that there is no contradiction between Ukraine’s good
relations with Russia and good relations with Europe — and neither with
[the] EU’s good relations with Russia,” Tuomioja said. “So, we do not see
any competition in this respect.”

However, Yanukovych revealed his pro-Russian colors while visiting NATO
headquarters today. The Ukrainian prime minister told NATO ambassadors that
his country wants to move step by step about plans to join the alliance
because of public opposition.

This means Kyiv has given the cold shoulder to those NATO member states –
led by the United States and Poland among others — who were preparing to
indicate at the alliance’s November summit in Riga that a membership
invitation is in the offing. Ukraine’s relations with NATO are, in the words
of one NATO diplomat, now “on ice.” -30-
—————————————————————————————————-
http://www.rferl.org/featuresarticle/2006/9/6e10e1e6-340e-4bf3-a830-f0d697bc83db.html

————————————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
7. UKRAINIAN PRIME MINISTER, PRESIDENT AT ODDS OVER NATO

UT1, Kiev, in Ukrainian 1800 gmt 14 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

KIEV – Ukrainian Prime Minister Viktor Yanukovych’s remarks that NATO
integration moves will be put on hold fly in the face of earlier statements
by President Viktor Yushchenko, Ukraine’s state-run TV said.

Yanukovych’s visit to Brussels on 14 September mainly focused on developing
stronger ties with the EU, but officials in Brussels said Ukraine stood no
chance of membership at the moment, the TV said.

The following is the text of the report by Ukrainian state-owned television
UT1 on 14 September:

[Presenter] Ukraine is not ready to join NATO because most of its citizens
are against this, [Ukrainian Prime Minister] Viktor Yanukovych has told the
NATO secretary-general [Jaap de Hoop Scheffer] at the start of his visit to
Brussels.

The step that comes last before joining NATO – joining the Membership Action
Plan – has thus been postponed.

This is despite the fact that President Viktor Yushchenko said as recently
as last month that Ukraine was not going to delay the signing of this
document. Here’s Iryna Herasymova with the details of the prime minister’s
tour of Brussels.

[Correspondent] Brussels still sees the Ukrainian prime minister as a
pro-Russian politician, the local press says. But the European Commission
has given assurances that it was waiting for Yanukovych to find out if
Ukraine’s course towards European integration indeed remained unchanged.

The EU found this out immediately after a welcome ceremony for the Ukrainian
delegation at Brussels National airport last night.

But Ukraine did not hear any guarantees of EU entry. On the contrary, EU
Foreign Policy Commissioner Benita Ferrero-Waldner – all smiles – explained
that this is not on the agenda right now.

[Ferrero-Waldner, overlaid with Ukrainian translation] The future is
uncertain, but I can say for certain that Ukraine currently has no prospect
of membership.

[Correspondent] The prime minister made a gesture in response, but in
relation to NATO. Ukrainians are not willing to join NATO, he said. People
need to be given an explanation of what NATO membership means first.

[Yanukovych] Society does not support this now, only a small part of it
does – 12-25 per cent.

[Correspondent] Yanukovych made it clear that the main task of the Brussels
visit is to forge closer ties with the EU. Therefore, a key topic for
discussions with EU commissioners is a new, expanded, bilateral accord on
partnership. Directions for talks on this have already been approved.

However, Ukrainian foreign relations experts say that this document will not
be signed any time soon.

[Oleksandr Sushko, captioned as scientific director of the Euro-Atlantic
cooperation institute] At this stage, Ukraine and the EU have somewhat
different approaches to the essence and goals of this accord.

This is the reason why talks are not going to be easy or end soon. I believe
that these difficult talks will take two years and result in a new framework
agreement defining the parameters, goals and essence of cooperation between
Ukraine and the EU.

[Correspondent] The European Commission said that the new accord will go far
beyond the current one. Ukrainian officials are upbeat about the results of
the current talks.

Economics Minister Volodymyr Makukha said that Ukraine’s accession to the
WTO had been agreed upon. Now the onus is on parliament to adopt a string of
necessary laws. -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
NOTE: Send in a letter-to-the-editor today. Let us hear from you.
========================================================
8. UKRAINIAN DEFENCE MINISTER HRYTSENKO UNHAPPY WITH
PRIME MINISTER’S STATEMENT ON NATO

TV 5 Kanal, Kiev, in Ukrainian 0915 gmt 15 Sep 06
BBC Monitoring Service,United Kingdom, Thursday, Sep 15, 2006

KIEV – Ukrainian Defence Minister Anatoliy Hrytsenko has said he disagrees
with Prime Minister Viktor Yanukovych’s statement in Brussels on 14
September to the effect that it is too early for Ukraine to start working on
a NATO membership action plan.

Hrytsenko was speaking at a news conference at the Interfax-Ukraine news
agency on 15 September, which was broadcast live by the private 5 TV Kanal.

Hrytsenko said Yanukovych should have consulted him before making such
statements. “Unfortunately, after this trip, it is 100 per cent clear for me
at least that no decision will be taken in Riga [at a NATO summit] on
Ukraine joining the NATO membership plan. Unfortunately. We really had this
chance. We are ready for this, and this would benefit Ukraine and
Ukrainians,” he said.

Hrytsenko said that living standards would improve in Ukraine if it joined
NATO. Hrytsenko said he is not going to resign over his disagreement with
Yanukovych. -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
9. TWO LEADING UKRAINIAN CENTRE-RIGHT MPs OUTRAGED
THAT PRIME MINISTER PUTS NATO ENTRY ON HOLD

UNIAN news agency, Kiev, in Ukrainian Thursday, 14 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

KIEV – Two leading centre-right MPs in Ukraine have bitterly criticized
Prime Minister Viktor Yanukovych’s remarks on 14 September that his
government is putting moves to join NATO on hold.

MP Anatoliy Matviyenko of the propresidential Our Ukraine faction called
Yanukovych’s remarks “immature, illogical and provocative”, the UNIAN
news agency reported at 1434 gmt on 14 September.

Yanukovych might have his own views on the issue, but he should understand
that Ukraine needs stability, Matviyenko said.

“He signs the declaration, then keeps mum and, in the end, blurts it out.
This just shows that he is not a statesman,” Matviyenko said.

Yanukovych’s remarks are likely to further complicate the stalling coalition
talks between Our Ukraine and the Party of Regions, he added.

“The upshot of the talks might be that we differ on one of the most crucial
issues,” UNIAN quoted Matviyenko as saying.

In a separate report at 1446 gmt, the agency quoted MP Andriy Shkil, a
prominent member of Orange Revolution figure Yuliya Tymoshenko’s bloc, as
saying Yanukovych’s remarks show that his Party of Regions is not going to
honour the declaration of national unity.

It was signed in early August by President Viktor Yushchenko and the leaders
of major parties, including Yanukovych, in an effort to end the political
crisis that erupted after the March parliamentary election produced
inconclusive results.

“They could promise something he was not going to do or reword the bits that
were unclear, but when asked why they are not willing to ask NATO for the
start of membership preparations – the so-called Membership Action Plan, -
he said that Ukraine was delaying its NATO entry,” Shkil said.

“The declaration is not worth the paper it’s written on,” Shkil said. It was
clear from the beginning that President Viktor Yushchenko’s backing for
Yanukovych’s nomination for prime minister amounted to rolling back
European integration, Shkil said. -30-

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
10. KINAKH SAYS YANUKOVYCH’S STATEMENTS ON UKRAINE’S
UNPREPAREDNESS FOR JOINING NATO MEMBERSHIP

ACTION PLAN VIOLATE NATIONAL UNITY DECLARATION

Ukrainian News Agency, Kyiv, Ukraine, Thursday, September 14, 2006

KYIV – Member of the Verkhovna Rada Anatolii Kinakh (Our Ukraine Bloc’s
faction) believes Premier Viktor Yanukovych’s statements that Ukraine is not
ready to join the Action Plan for NATO membership violate the Declaration of
National Unity.

This follows from a statement of the Our Ukraine Bloc’s press service, a
copy of which was made available to Ukrainian News.

He recalled that the Declaration provided a compromise definition of aims of
the Euro-Atlantic integration policy. According to the document, the
question on Ukraine’s membership in NATO will be solved through a
nationwide consultative referendum.

Kinakh believes that Ukraine had a chance to sign this document during the
Alliance’s summit in Riga (Latvia), and further delaying of the decision
will harm Ukraine.

‘Deviation from these terms will essentially change the dynamics of
Ukraine’s integration with the world community and will bring great harm to
strategic interests of our state,’ Kinakh said.

According to him, the membership action plan will continue economic and
political reforms and consolidate European standards and democracy. The
lawmaker says that it’s necessary to inform the public what advantages
Ukraine may receive from joining NATO.

As Ukrainian News earlier reported, during the Ukraine-NATO commission
meeting in Brussels (Belgium), Yanukovych said that broadening cooperation
with NATO was a pressing issue for Ukraine, noting that only 12-25% of
Ukrainian citizens support the country’s accession to NATO. -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
11. UKRAINIAN PRIME MINISTER REJECTS ACCUSATIONS OF
BREACHING DECLARATION OF NATIONAL UNITY ON NATO

Ukrayinska Pravda web site, Kiev, in Ukrainian 14 Sep 06
BBC Monitoring Service, United Kingdom, Friday, Sep 15, 2006

KIEV – Prime Minister Viktor Yanukovych has said that there is nothing in
the declaration of national unity [signed by President Viktor Yushchenko and
leaders of major political parties on 3 August as a tool to put end to the
four-month long political crisis] that compels him to support the NATO
membership action plan for Ukraine.

“The declaration does not say that we are supporting the action plan. It
does say, however, that the decision to join NATO should be taken based on
the outcome of a referendum,” Yanukovych responded to a question about the
outraged reaction of the [president's] Our Ukraine party to his refusal to
declare Ukraine’s wish to join the NATO membership action plan.

[Yanukovych said in Brussels on 14 September that Ukraine is not ready yet
for joining the action plan.]

“Certain politicians have their own views and this is their right,”
Yanukovych said. He added: “But these certain politicians have to take into
account the point of view of society of which only 12 to 25 per cent support
the idea of joining NATO.”

“I would like us to always pay attention to public opinion which has always
been and always will be a barometer for me,” Yanukovych said. -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
If you are receiving more than one copy of the AUR please contact us.
========================================================
12. UKRAINIAN PROPRESIDENTIAL PARTY CRITICIZES
PRIME MINISTER’S NATO STATEMENTS

Interfax-Ukraine news agency, Kiev, in Russian 1256 gmt 14 Sep
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

KIEV – [Propresidential bloc] Our Ukraine believes that Prime Minister
Viktor Yanukovych’s statement that Ukraine is not prepared to implement a
NATO accession plan is a breach of the national unity memorandum [which
Yanukovych signed on 3 August].

“The statement Viktor Yanukovych made in Brussels today to the effect that
Ukraine is not prepared to begin to implement an action plan to join NATO is
an example of how the clauses of the declaration of national unity are
violated.

This is a very provoking move,” Our Ukraine press service quoted Our Ukraine
MP Yuriy Klyuchkovskyy. He said that this statement can hamper the setting
up of a national unity coalition [involving Our Ukraine].

The deputy head of the parliamentary budget committee, Pavlo Zhebrivskyy,
said that Yanukovych’s statement “is one of the last bricks to the wall
separating Our Ukraine and the Party of Regions.

He said that the bloc intended to join the coalition but unless the foreign
political course of the state is preserved “we have nothing to discuss with
representatives of the Party of Regions”.

“Our Ukraine can go into hard-line opposition to the so-called anti-crisis
coalition [involving Yanukovych's Party of Regions] and to the course to
scrap the European choice, reforms and the liberalization of the economy,”
Zhebrivskyy said.

The head of the parliamentary committee for security and defence, Anatoliy
Kinakh, said that joining the NATO membership action plan would be a
continuation of political and democratic reforms in Ukraine, the
introduction of European and world standards, the protection of human rights
and the competitive economy.

“Therefore, if Ukraine wastes this opportunity, because the November Riga
NATO summit was expected to declare readiness to agree on Ukraine joining
the action plan, a failure to follow this schedule will significantly
decrease the dynamics of Ukraine’s integration into the world community and
deal a serious blow to the strategic interests of our state,” Kinakh said.

Yanukovych said in Brussels today that currently Ukraine is not prepared to
implement the NATO membership action plan. -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
Send in a letter-to-the-editor today. Let us hear from you.
========================================================
13. UKRAINE WILL BECOME NATO MEMBER SOONER OR
LATER SAYS POLISH PRIME MINISTER JAROSLAW KACZYNSKI

PAP news agency, Warsaw, Poland, Friday, 14 Sep 06

WASHINGTON – Despite present difficulties Ukraine will become a NATO
member sooner or later, Prime Minister Jaroslaw Kaczynski has said.

Commenting Thursday’s [14 September] remark of Ukrainian Prime Minister
Viktor Yanukovych that Ukraine would not seek NATO membership now,
Kaczynski said that it was not new news for him, as he heard it from
Yanukovych himself.

Kaczynski noted that the “effects from our point of view are obviously not
good as we would like to see Ukraine in the alliance as soon as possible”
and he expressed the hope that sooner or later Ukraine will become NATO
member.

On Thursday Poland’s prime minister met House of Representatives Speaker
Dennis Hastert. After the meeting Kaczynski said that the Polish government
would seek to legalize dual citizenship in Poland. -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
14. POLAND’S LECH WALESA APPEALS FOR FASTER EUROPEAN
INTEGRATION TO AVOID LOSING UKRAINE

AP Worldstream, Warsaw, Poland, Thursday, Sep 14, 2006

POLAND – Nobel Peace Prize laureate and Solidarity founder Lech Walesa
urge European leaders Thursday to speed up the integration process of poorer
eastern European countries and to avoid losing Ukraine.

Walesa, who won the 1983 Nobel Peace Prize for leading Poland’s
anti-communist Solidarity movement, said western Europe must change its
attitude toward helping poorer eastern nations improve their economic level.

“We have lost Belarus and now we risk losing Ukraine,” Walesa told private
TVN24 television.

“Europe must unite as soon as possible, bring economies to similar level,
increase its tempo and include the economically poorer nations,” he said.
“Ukraine will see that it pays off, that this is the right direction, and
then we will win Ukraine back in our orbit.”

Walesa’s statement came as Ukraine’s new prime minister, Viktor Yanukovych,
told NATO that he was putting moves toward membership in the alliance on
hold, but he said the former Soviet Republic still wanted to join the
European Union.

The previous, pro-Western government had hoped NATO would give Ukraine
a plan preparing the way for membership at a summit in November, and was
hopeful it could get an invitation to join as early as 2008. -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
15. NATO PROMISES TO SUPPORT REFORM IN UKRAINE

Ukrainian News Service, Kyiv, Ukraine, Friday, September 15, 2006

NATO has promised to support further military and security reforms in
Ukraine. The press service of the Cabinet of Ministers announced this,
citing a statement that NATO’s Secretary-General Jaap de Hoop Scheffer made
at a meeting of the Ukraine-NATO Commission attended by Prime Minister
Viktor Yanukovych.

‘The secretary-general of NATO gave a positive assessment of the current
level of cooperation between Ukraine and the alliance.
He assured that NATO will continue to support the implementation of reforms
in Ukraine,’ the press service said.

At the start of the meeting, Scheffer congratulated Yanukovych on his
appointment as Ukraine’s prime minister and wished him fruitful work in the
post.

Scheffer said that NATO approved the course that Ukraine has taken in the
past few years, particularly the holding of transparent and democratic
parliamentary elections and the formation of a coalition government.

Yanukovych said that the main direction of the activities of the new Cabinet
of Ministers is fighting corruption, implementing economic reforms, and
improving the investment climate in Ukraine.

Yanukovych also said that Ukraine favors a deepening of its relations with
NATO. He confirmed Ukraine’s desire to continue to participate in
peacekeeping operations under the auspices of NATO.

Yanukovych stressed that the Ukrainian authorities have a coordination
position on cooperation with NATO and that this position is stipulated in
the Universal Declaration of National Unity, which states that Ukraine’s
accession to NATO and its cooperation with NATO are to be considered
separately.

According to Yanukovych, what is necessary right now is broader information
of the Ukrainian public about the positive aspects of European integration
while the final decision on Ukraine’s accession to NATO will be made after
the holding of a national referendum on the issue.

The press service of the Cabinet of Ministers also said that the
participants in the committee’s meeting also discussed topical issues
involving cooperation between Ukraine and NATO in the political, defense,
and security areas.

Scheffer said that NATO was prepared to assist Ukraine in implementing
military and security reform and stressed the importance of the assistance
that Ukraine is providing via the cooperation on the international fight
against terrorism.

Yanukovych said that it was very important for Ukraine to participate in the
creation of a new European security system.

Regarding the date of a national referendum on Ukraine’s accession to NATO,
Yanukovych said that the referendum would take place only if systemic
economic and social reforms are implemented and if the living standard of
Ukrainians improved.

According to Scheffer, Yanukovych’s visit to Brussels is an important step
toward deepening the cooperation between Ukraine and NATO.

As Ukrainian News earlier reported, Yanukovych traveled to Brussels
(Belgium) on September 13 for meetings with the leaderships of the European
Union and NATO.

Yanukovych believes that broadening cooperation with NATO is presently a
pressing issue for Ukraine. The signatories to the Universal Declaration on
National Unity agreed to perform the procedures on Ukraine’s accession to
NATO but stated that the final decision on accession to NATO will be made
via a referendum. -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
16. UKRAINE MULTINATIONAL INVESTORS URGE NEW LAWS
TO STOP CORPORATE RAIDS

Dow Jones Newswires, Brussels, Belgium, Thu, September 14, 2006 .

BRUSSELS – Representatives of multinational companies active in the Ukraine
lambasted the Kiev government and European Union this week, saying both
need to work harder toward Ukrainian legal reforms to stop the expensive and
potentially damaging practice of corporate raiding.

Corporate raiding is the suit-and-tie equivalent of pirates seizing a ship
and plundering its booty. Representatives of Bunge Ltd (BG), a global
agribusiness empire worth $6.66 billion, and private Ukraine TV station One
Plus One – which is partly owned by NASDAQ-listed media firm Central
European Media Enterprises (CETV) – say this practice is costing them
millions in legal fees and may stifle future investment into the country.

The E.U. has the tools to pressure Ukraine into legal reforms, they say;
Brussels can hold out on granting Ukraine a coveted free trade agreement,
and it can delay its admission to the World Trade Organization.

“The time is right. The E.U. must do more to get things to change,”
Kiev-based lawyer Sergiy Koziakov told Dow Jones Newswires Thursday.
Koziakov leads a law firm that’s been appealing what he says is a corrupt
court ruling in favor of a corporate raider and against One Plus One.

“Western governments need to make the point that if Ukraine wants access to
the E.U., to the WTO, to a common free trade zone, they need to create the
adequate business climate,” said Dexter Frye, managing director of Bunge’s
operations in the Ukraine.

Corporate raiders largely operate from legal firms, exploiting corrupt
courts and judges. Their methods for entering and plundering a company
range from harassment through allegations of wrongdoing until a payoff is
extracted, to sophisticated timing of dud court orders that can lead to a
company being in the hands of the raiders long enough for them to auction
off the assets.

E.U. officials recognize the practise as a growing problem.

During a meeting between Ukraine Prime Minister Viktor Yanukovych and
E.U. officials to discuss closer commercial and diplomatic ties, the two
sides discussed “difficult issues, talking openly about corruption,” said
akari Tuomioja, foreign affairs minister for Finland, which currently holds
the rotating presidency of the European Union.

“Justice, liberty and security” are among the most important issues for
Ukraine to tackle before entering into formal agreements with Europe, E.U.
officials said.

Multinationals have been keen to enter Ukraine. Once hailed the bread
basket of the Soviet Union, investors say the country offers fertile land, a
qualified workforce and easy access to eastern markets.

Yet Ukraine has come under increasing pressure to fight corruption. “We
want to remain in Ukraine,” said Henri Rieux, corporate affairs director for
Bunge Europe. “But you cannot stay in such a climate with such a corporate
structure. It’s a place where they simply don’t respect the rule of law.”
===================================================
By Juliane von Reppert-Bismark, Dow Jones Newswires
juliane.vonreppert@dowjones.com

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
17. UKRAINE PM FACES BUNGE ANGER OVER GRAIN PLANT
Urging government help to thwart an attempt by “corporate raiders.”
Bunge: Ukraine’s tax authorities behind in refunding $40m in tax rebates.

By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, Friday, September 15 2006

KIEV – Bunge, the US-based agriculture group, is urging Ukraine’s government
to help thwart an attempt by “corporate raiders” seeking to strip away its
ownership rights over a prized sunflower seed processing plant.

The escalating conflict was raised by Bunge officials ahead of a visit to
Brussels yesterday by Viktor Yanukovich, the Ukrainian prime minister. It
is his first official trip to Europe since taking charge of the former
Soviet state’s government in August.

The troubles facing Bunge, a large foreign investor in Ukraine, could prove
embarrassing for Mr Yanukovich who will meet high-ranking EU and Nato
officials.

A Bunge official said that a Ukrainian business group last year acquired a
minority stake in the Dnipropetrovsk plant, which is 94 per cent owned by
Bunge.

It has since embarked on a well-orchestrated campaign, including litigation,
intended to squeeze Bunge out of its investment, the official said.

“Utilising the same tactics by which they have successfully secured the
assets of other companies operating in Ukraine – the raiders purchase a
small number of common shares, and then exploit a weak judicial system
to secure court rulings nullifying the rights of the company as the majority
shareholder.”

Dominant Ukrainian business groups are notorious for utilising aggressive
corporate takeover tactics in settling differences among themselves, but
have rarely targeted foreign corporations openly.

Bunge, which generates an annual turnover of $350m at its Ukrainian grain
trading and processing operations, has warned authorities in Kiev that it
could scale back investments if the dispute is not handled justly. Bunge has
invested in excess of $150m to date.

“The actions of these raiders have gone unchecked to the point where they
have started targeting international companies such as Bunge. If they are
allowed to continue their activities, this will send a devastating message
to all companies operating in or entering Ukraine,” the company said.

Ukraine is home to a prospering agriculture market and has benefited from
investments from many leading international firms including Cargill and
Archer Daniels Midland.

Investors have repeatedly complained of bureaucratic red tape, including the
government’s tardiness in refunding value added tax, set at a rate of 20 per
cent. Bunge said Ukraine’s tax authorities are behind in refunding it some
$40m in tax rebates. -30-
————————————————————————————————-
http://www.ft.com/cms/s/eea9bc4c-4456-11db-8965-0000779e2340.html

———————————————————————————————–
[return to index] Action Ukraine Report (AUR) Monitoring Service]
========================================================
You are welcome to send us names for the AUR distribution list.
========================================================
18. UKRAINE PARLIAMENT COMMEMORATE JOURNALIST
GEORGY GONGADZE WITH MOMENT OF SILENCE


Ukrainian News Agency, Kyiv, Ukraine, Friday, September 15, 2006

KYIV – The Verkhovna Rada commemorated journalist Georgy Gongadze
with silence. Verkhovna Rada Chairman Oleksandr Moroz said this at the
plenary session of the parliament.

Moroz stated, that journalist’s activity stimulated the development of
democracy in the country.

Speaker reminded, that Gongadze’s murder made thousands of people protest.
As Ukrainian News earlier reported, the trial of the men suspected of
murdering Gongadze opened at the Kyiv Appeal Court on January 9.

The suspects are three former employees of the Internal Affairs Ministry’s
department of external surveillance: Valerii Kostenko, Mykola Protasov and
Oleksandr Popovych.

An international arrest warrant was issued for another suspect, Oleksii
Pukach, who is the former head of the Internal Affairs Ministry’s department
of external surveillance.

The Prosecutor-General’s Office said that only the first part of the
Gongadze murder case – the one involving the people who murdered
Gongadze – was sent to court.

According to the Prosecutor-General’s Office, the second part involves the
people who ordered the murder and organized it. -30-
———————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
19. LANGUAGE ISSUE THREATENS UKRAINE’S NATIONAL
SECURITY SAYS COMMUNIST LEADER PETRO SYMONENKO

RIA Novosti, Moscow, Russia, Thursday, September 14, 2006

KIEV – The leader of Ukraine’s Communists said Thursday failure to resolve
the language problem jeopardizes Ukraine’s national security.

The status of the Russian language was one of the hotly debated issues that
delayed the signing of a national unity agreement on key policies by
President Viktor Yushchenko and parliamentary leaders before Viktor
Yanukovych’s appointment as prime minister last month. The sides eventually
agreed to keep Ukrainian as the main state language, without entrenching it
as the only official language.

“Our party stresses that foot-dragging on the language issue is a real
threat to Ukraine’s national security,” said Petro Symonenko, whose party is
part of a ruling coalition that also comprises the Party of Regions, the
Socialists and some members of pro-presidential Our Ukraine.

“In particular, delay in granting Russian the status as a second state
language is in conflict with Ukraine’s European choice.” He said the current
policy pursued by the authorities in the language realm antagonized certain
forces in Russia who speculated on this problem and created an unfavorable
political climate, impeding the normalization of Ukrainian-Russian
relations.

“We are planting a humanitarian time bomb in relations with Russia,” he
said. “This also affects economic matters.”

Yanukovych said last month that granting Russian the status of an official
language in the country was impossible under current conditions, but that
Ukraine needed a law to regulate the use of the Russian language, in line
with the European Charter for Regional or Minority Languages.

Symonenko said the Communist faction would advocate budget spending in full
on programs to enable the Charter to be applied in Ukraine.

The Communist Party, which has 21 seats in the 450-member Supreme Rada, will
also advocate a long-debated common economic space for Ukraine, Russia,
Belarus, and Kazakhstan, he said.

“The creation of the common economic space should be an important part
of the government’s anti-crisis program, along with the formation of a
gas-transportation venture, comprising Ukraine, Russia and interested
parties from Europe and Asia,” he said. -30-
—————————————————————————————————-
LINK: http://en.rian.ru/world/20060914/53868303.html
—————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
20. EXHIBITION OF CONTEMPORARY ART “NEW SPACE”
Pinchuk Art Centre, Besarabska Square, Arena, Kiev, Ukraine
Public Opening – September 16th, 2006, 20:00


PinchukArtCentre, Kyiv, Ukraine
Action Ukraine Report (AUR) #758, Article 20
Kyiv, Ukraine, Friday, September 15, 2006

KYIV – On Saturday, the 16th of September, Victor Pinchuk’s Foundation
“Contemporary Art in Ukraine” will open in Kyiv one of the largest Eastern
Europe centers for contemporary art – the PinchukArtCentre.

PinchukArtCentre is situated in downtown Kyiv, in an old building on
Bessarabska square. Its total surface is 2,500 square meters.

According to international and Ukrainian experts, this facility, designed by
the French architect Philippe Chiambaretta, is unique. Its creation is the
fulfillment of the promise given by the founder of the Centre, Victor
Pinchuk, to do his best to provide in Ukraine conditions not only for
exhibiting contemporary art but also for its creation.

The world of culture speaks a variety of languages. One of them is the
language of contemporary art. On the one hand, it does not require
translation.

On the other hand, this language implies getting used to it and speaking it.
Impressing, sometimes shocking and even unpleasant, this language is
capable of talking to a person in an unusual way about ordinary things.

At the same time, it is only the contemporary art that can accept absolutely
naturally the things that would seem surprising and fancy. It is always
talking about future, about what is still difficult today to understand and
notice.

It is right to the new space and at a new time that the PinchukArtCentre
opens its door. It is intended to become a cultural portal that will bring
the newest art trends to Ukraine and will integrate the Ukrainian
contemporary art into the worldwide cultural context.

PinchukArtCentre will be inaugurated with the exhibition entitled “New
Space” (curated by Nicolas Bourriaud, France, and Olexandre Soloviov,
Ukraine).

The visitors will have an opportunity to see the works of acknowledged
international masters and contemporary Ukrainian artists such as Serhiy
Bratkov, Olaxandre Gnylitsky, Olafur Eliasson, Oleg Kulik, Boris Mikhailov,
Sarah Morris, Philippe Parreno, Thomas Ruff, Arsen Savadov, Oleg Tistol,
Karsten Holler, Vasyl Tsagolov and others.

By opening its exhibition premises, PinchukArtCentre continues and
strengthens the support for the Ukrainian contemporary art and obtains the
possibility to present the most progressive and promising international art
to the Ukrainian and international audience.

For the invitees, the exhibition will be open to visit from 2.00 p.m. on the
16th of September, and at 8.00 p.m. on the same day, the opening ceremony
will start in the Arena complex featuring Oleg Lundstrem Jazz Orchestra
(Russia) and the German band Booka Shade.

A unique video show will also be presented to the visitors in which the
video and the reality are combined in an unforgettable performance. Starting
from the 17th of September, the exhibition “New Space” will be open for free
visiting in PinchukArtCentre.
INFORMATION
Created in 2003 on the initiative of the famous Ukrainian patron of arts
Viktor Pinchuk with the ambition to promote the development of the
contemporary artistic scene in Ukraine, the Foundation for Contemporary Art
organises exhibitions and creative workshops, provides grants to Ukrainian
artists.

The collection composed of about 300 artworks, was presented in Kyiv several
times, and introduced to the international audience in Venice in the Palazzo
Papadopoli, on the occasion of the 2005 Biennale.

Web address of PinchukArtCentre: www.c-artpinchuk.org. Olexandre Soloviov,
curator of PinchukArtCentre, info@c-artpinchuk.org, tel. +38 044 490 48 06,
fax +38 044 494 11 29

Contacts: Tatiana Overina, Advisor on communications for Victor Pinchuk’s
Foundation, overina@pinchukfund.org, tel. +38 044 494 11 45,
fax: + 38 044 494 11 49. -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
Please contact us if you no longer wish to receive the AUR
========================================================
21. RUSSIA DESERVES MORE THAN STABILITY FROM PUTIN’S LAST
YEAR: THE CHAOTIC CAPITALISM OF THE YELTSIN ERA HAS
BEEN BANISHED, BUT OTHER DISTURBING TRENDS

ARE NOW GAINING MOMENTUM

By Jonathan Steele, Moscow, The Guardian
London, United Kingdom, Thursday, Sep 14, 2006

On the seventh floor of a skyscraper that towers over southern Moscow an
entire wall is covered by screens of electronic data. At computer terminals,
operators monitor the flow of Russia’s most lucrative export product.

This is mission control for Gazprom, Russia’s state-owned energy
conglomerate – the place from which, if you are Dick Cheney or a Russophobe
of his ilk, the Kremlin intends to run Europe, if not the world.

Pressing a button here can bring a country to its knees, so the nightmare
has it, or at least cause its citizens to shiver by cutting off their gas.

About 40 experts on Russia – journalists, academics and policy analysts from
Europe and the US – were granted rare access to Gazprom’s inner sanctum last
week. It was the third year Russia has invited the so-called Valdai
Discussion Club for meetings that culminate in a three-hour
question-and-answer session with Vladimir Putin.

The message the Russians wanted to give us was that blackmail is not on the
agenda. Energy producers need customers willing to sign long-term purchasing
contracts just as much as energy consumers want guarantees of supply.

Putin even rejected the description of Russia as an “energy superpower”,
telling the group that the label was “deliberately fed to the media in order
to bring about an association with the terrible Soviet Union”.

Watching the screens in Gazprom’s control room, you certainly have an
impression of a Gulliver rather than a Goliath. The web of pipelines ties
Russia to Europe. Almost none go east. Fears that Russia could dump Europe
and switch gas sales to Asia are absurd. Although Putin said Russia plans to
increase energy exports to Asia by a factor of 10 by 2020, this would total
only 30%; 70% will still go to Europe.

The second message to our group was that Russia’s transition to western
capitalism is a long way from completion. The current hybrid of state
ownership and regulated prices for energy will not end soon, nor will the
government’s determination to keep control of strategic assets. Pipelines
will not be sold to foreigners, which would only give them windfall profits,
Putin says.

Appointing Kremlin managers to the boards of gas and oil companies is a step
towards good corporate governance, not away from it, since the oligarchs who
seized control of former Soviet assets in the 1990s evaded taxpaying on a
massive scale.

At the same time the Kremlin wants to move as quickly as politically
possible towards charging market prices for the energy it sells inside
Russia and to former Soviet republics. It finds it ironic that the west
calls on Moscow to charge more, only to complain of Russian intimidation
when Ukraine refused to sign a new contract last year and Russia stopped
sending gas after the old contract had run out.

Within Russia, Gazprom is not yet raising prices for fear of a social
explosion. Russian consumers have had to accept several shocks in the past
15 years, from the hyperinflation of the early 90s and the bank collapses of
1998 to sharp increases in housing costs and fares for domestic flights and
urban transport.

Putin’s restoration of a strong Russian state and his calm defence of
national interests after the often demeaning pro-westernism of the Yeltsin
years are the key to his high poll ratings. The concerns stem from other
trends.

He is continuing to re-exert central control over politics at all levels,
apparently so that he can suppress protest rather than respond to it. The
Russian parliament was emasculated in 2004 by “reforms” that created high
hurdles to small parties and independents trying to enter the Duma.

The largest opposition party, the Communists, lost much of its support after
Putin stole its “national-patriotic” agenda six years ago. Now, with
parliamentary elections due next year, the Kremlin is trying to manipulate
the three smaller parties that raise social-protection issues.

It engineered leadership purges to put Putin supporters in charge of the
Party of Life, the Pensioners’ party and the party known as Motherland, and
encouraged the three to merge. The new creation has yet to choose a name,
but the Moscow joke is that to call it “the life of pensioners in the
motherland” would be too stark since everyone knows there is no feel-good
factor there.

Equally worrying is the accelerating trend towards the marketisation of
Russia’s education and health systems. Universal provision, free at the
point of delivery, has collapsed. The health sector in particular is
severely affected. Imposing charges for consultations with doctors,
operations and private hospital rooms has split the system in two.

The Soviet practice of small “presents” to doctors has become one of
virtually mandatory payment at high rates. The World Health Organisation
ranks Russia at 127th out of its 192 member nations, and at 75th according
to the amount the government spends on healthcare.

Putin recognises a health crisis, particularly in the country’s declining
birth rate and the reduced life expectancy for adults. He has made education
and health two of his four “national projects”. The trouble is the
stinginess of his response and the way that government money is spent.

Flush with energy revenue, Putin has set up a stabilisation fund for the
economy, but his advisers insist it will not be used for short-term
injections of cash into social services.

A system of “childhood certificates” not only provides higher maternity
allowances once a baby is born but earmarks money for pregnant women to pay
delivery fees, thereby subsidising the new market system in health.

“Why do we need to break the old Soviet system instead of making it better?”
asks Leonid Roshal, who chairs the president’s newly formed commission on
public health.

As Putin moves nearer to his final year in office, he deserves credit for
restoring stability after the chaotic capitalism of the Yeltsin era. But he
has done little to reduce the greedy culture of rent-seeking that emerged in
the early 90s, in which the owners of every asset, whether natural
resources, property, skills or a job in the police or other government
sectors, look to extract an unfair profit.

“In 1990 only three or four of my fellow economic graduates at Moscow
University went into government. The rest wanted to make money in business,”
a banker told me last week. “Now 70% go into government. You can make more
money there.” Putin’s legacy needs to be better than that. -30-
(j.steele@guardian.co.uk)
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
22. SO, UKRAINE ISN’T ORANGE AFTER ALL

OP-ED: By Adam Swain, Kyiv Post, Kyiv, Ukraine, Wed, Aug 30 2006

The re-emergence of Viktor Yanukovych as prime minister of Ukraine must
rate as one of the most implausible developments even to the many seasoned
observers who have long become accustomed to ‘transition shocks’ in
post-Soviet Europe.

The so-called Orange Revolution, which followed the rigged presidential
election illegitimately ‘won’ by Mr. Yanukovych in late 2004 was supposed to
usher in a new democratic Ukraine firmly anchored to Euro-Atlantic
geopolitical and economic structures.

However, the new government is committed to encouraging the nascent
Ukrainian capitalism that has emerged out of the gangsterism of the 1990s
and to re-establishing a close and cooperative relationship with Russia,
whatever the West may say. Tellingly, the new government has an unambiguous
democratic mandate.

Compared to the temporary economic shocks of the 1990s that were anticipated
and analyzed by neoliberal economists, Mr. Yanukovych’s resurrection is all
the more shocking because it suggests that the future of Ukraine is not
Orange after all.

Combined with the re-election of President Lukashenko in Belarus earlier
this year and Mr. Putin’s willingness to assert Russia’s national interests
even at the expense of offending the West, it looks as if the future of the
post-Soviet world can not be understood purely in terms of a single Western
modernity.

Rather than being a source of cheap labor and a client of the West, it is at
least possible that Ukraine will take its place in a new emergent capitalism
centered on Russia with access to cheap and plentiful hydrocarbons and the
potential to rival the West.

Is it any wonder then that Western governments have been so keen to
destabilize and re-align Ukraine?

That Mr. Yanukovych becoming prime minister for a second time – with
enhanced powers that arguably make him more powerful than President
Yushchenko – has shocked so many onlookers, is because so much comment in
the West leading up to and following the Orange Revolution was based on
wishful thinking.

Whilst the Orange Revolution unquestionably mobilized millions of people
yearning for a new Ukraine, it was not, as widely claimed, solely a national
and democratic reawakening. It was also the occasion for the latest tactical
scramble for power amongst the cosy elite that has misruled Ukraine since
Independence.

Sober analysis of the protagonists revealed that the distinction between the
‘goodies’ and the ‘baddies’ was not so clearly drawn as was often supposed.

The mass mobilization and the political jousting would not have occurred
without the sophisticated political operation, predominately ‘made in the
USA’, which destabilized the finely balanced domestic political landscape.

The aim of U.S. foreign policy toward Ukraine has been clear and consistent
ever since Independence: to as far as possible detach Ukraine from Russian
influence.

To this end, members of the nationalist Ukrainian Diaspora in academia, the
media and elsewhere have often been willing accomplices.

Ukraine has been subject to Western meddling through the operation of
supposedly independent foundations, aid programs and technical assistance
projects, as well as through the more formal (but often less public)
instruments of Western diplomacy.

The failure to impose neoliberal economic policies in the 1990s led the U.S.
to switch its focus to so-called ‘political processes’ and ‘civil society’.
This entailed the mobilization of students, academics, NGOs, journalists and
politicians to provide evidence of the authoritarianism of former Ukrainian
President Kuchma’s incumbent regime.

Accordingly, Mr. Yushchenko’s presidential campaign focused largely on the
legitimacy of the election process itself. Hence the staged fracas between
Mr. Yushchenko and the guards protecting the Central Election Commission
building in Kyiv before the presidential election.

Hence, too, the agents provocateurs who organized Orange rallies in the
politically hostile east of the country in order to video the anticipated
response. Both Mr. Yushchenko’s campaign and the supposedly non-partisan
interventions by Western governments were justified by the reaction they
provoked.

Once demonstrators had flooded onto the streets of Kyiv, they were lauded as
the embodiment of the ‘Ukrainian people’ conveniently ignoring that ‘other’
Ukraine, which had supported Mr. Yanukovych and which was as suspicious of
the events at Maidan as the demonstrators were of the electoral process.

Equally damning is the way the Orange Revolution failed to deliver stable
government, failed to maintain rapid economic growth and made little
progress in cracking down on corruption. Far from strengthening the state
and promoting structural economic reform the Orange Revolution destabilized
the productivist ideology that had united the country.

Just as the state was showing signs of consolidation and alignment after
years of division between ministries and competing regional lobbies, the
Orange Revolution undermined an already weak state machine.

The renationalization of the Kryvorizhstal steel mill that had been
controversially sold to IMU, a holding company jointly owned by two of the
largest business empires in the country, and its subsequent resale to the
London-based Mittal Group, symbolized the severing of connections between
the state and the country’s national capitalists.

Government was largely paralyzed and many voters found Mr. Yushchenko’s
apparent fixation with NATO accession a bewildering distraction. Such
political instability merely served to discourage much-needed investment and
undermine economic growth.

The conditions that had enabled rapid economic growth were torn asunder by
the Orange Revolution and rendered the country almost ungovernable.

The appointment of Mr. Yekhanurov as prime minister last autumn was an
acknowledgment that Mr. Yushchenko and his allies couldn’t govern the
country without reaching an accommodation with their political foes based in
the financial and industrial heartland in the east of the country.

The finely balanced waxing and waning as the regional lobbies vied with one
another for influence in Kyiv was disrupted by the Orange Revolution.

During his first spell as prime minister, Mr. Yanukovych proved particularly
adept at brokering between the rival regional lobbies and is perhaps now
best placed to coax and cajole them to forge a functioning national state
machine united in common cause with a governable national economy.

It is paradoxical that the most fervent supporters of the Orange Revolution
now have the least confidence that it will have a lasting effect on the
country.

But since Mr. Yanukovych and his party have apologized for their role in the
rigged election and now unambiguously defend free elections and a free
media, it is at least possible that his premiership will show the Orange
Revolution marked the beginning of a new Ukraine after all. Only not the new
Ukraine envisioned by many Orange protagonists and their patrons in the
West. -30-
———————————————————————————————–
Adam Swain is a lecturer in Geography at the University of Nottingham,
UK.; LINK: http://www.kyivpost.com/opinion/oped/25002/
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
If you are receiving more than one copy of the AUR please contact us.
Please contact us if you no longer wish to receive the AUR.
You are welcome to send us names for the AUR distribution list.
If you are missing some issues of the AUR please let us know.
========================================================
“ACTION UKRAINE REPORT – AUR”
A Free, Not-For-Profit, Independent, Public Service Newsletter
With major support from The Bleyzer Foundation
Articles are Distributed For Information, Research, Education
Academic, Discussion and Personal Purposes Only

Additional readers are welcome.
========================================================
SigmaBleyzer/The Bleyzer Foundation Economic Reports
“SigmaBleyzer – Where Opportunities Emerge”

The SigmaBleyzer Emerging Markets Private Equity Investment Group and The Bleyzer Foundation offers a comprehensive collection of documents,
reports and presentations published by its business units and organizations.

All publications are grouped by categories: Marketing; Economic Country
Reports; Presentations; Ukrainian Equity Guide; Monthly Macroeconomic
Situation Reports (Romania, Bulgaria, Ukraine).
LINK: http://www.sigmableyzer.com/index.php?action=publications

You can be on an e-mail distribution list to receive automatically, on a
monthly basis, any or all of the Macroeconomic Situation Reports (Romania,
Bulgaria, Ukraine) by sending an e-mail to mwilliams@SigmaBleyzer.com.
“UKRAINE – A COUNTRY OF NEW OPPORTUNITIES”
========================================================

UKRAINE INFORMATION WEBSITE: http://www.ArtUkraine.com
========================================================

“WELCOME TO UKRAINE”- “NARODNE MYSTETSTVO”

(Folk Art) MAGAZINES
For information on how to subscribe to the “Welcome to Ukraine” magazine
in English, or the Ukrainian Folk Art magazine “Narodne Mystetstvo” in
Ukrainian, write to ArtUkraine.com@starpower.net. Complete information is
========================================================
ACTION UKRAINE PROGRAM – SPONSORS
Action Ukraine Report (AUR)
Holodomor Art and Graphics Collection & Exhibitions
“Working to Secure & Enhance Ukraine’s Democratic Future”

1. THE BLEYZER FOUNDATION, Dr. Edilberto Segura,
Chairman; Victor Gekker, Executive Director, Kyiv, Ukraine;
Washington, D.C., http://www.bleyzerfoundation.com.
Additional supporting sponsors for the Action Ukraine Program are:
2. UKRAINIAN FEDERATION OF AMERICA (UFA), Zenia Chernyk,
Chairperson; Vera M. Andryczyk, President; Huntingdon Valley,
Pennsylvania
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 298 7275 in Kyiv,
kau@ukrnet.net
4. ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
5. Law firm UKRAINIAN LEGAL GROUP, Irina Paliashvili, President;
Kiev and Washington, general@rulg.com, www.rulg.com.
6. BAHRIANY FOUNDATION, INC., Dr. Anatol Lysyj, Chairman,
Minneapolis, Minnesota
7. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX 77024; bill.hunter@volia-software.com.
8. ODUM- Association of American Youth of Ukrainian Descent,
Minnesota Chapter, Natalia Yarr, Chairperson
9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C.,
Dr. Susanne Lotarski, President/CEO; E. Morgan Williams,
SigmaBleyzer, Chairman, Executive Committee, Board of Directors;
John Stephens, Cape Point Capital, Secretary/Treasurer
10. UKRAINIAN ORTHODOX CHURCH OF THE USA, South
Brown Brook, New Jersey, http://www.uocofusa.org
11. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
12. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO; Vera
Andruskiw, CPP Wash Project Director, Washington, D.C.; Markian
Bilynskyj, VP/Director of Field Operations; Marta Kolomayets, CPP
Kyiv Project Director, Kyiv, Ukraine. Web: http://www.USUkraine.org
13. WJ GROUP of Ag Companies, Kyiv, Ukraine, David Holpert, Chief
Financial Officer, Chicago, IL; http://www.wjgrain.com/en/links/index.html
14. EUGENIA SAKEVYCH DALLAS, Author, “One Woman, Five
Lives, Five Countries,” ‘Her life’s journey begins with the 1932-1933
genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
15. ALEX AND HELEN WOSKOB, College Station, Pennsylvania
16. SWIFT FOUNDATION, San Luis Obispo, California
17. TRAVEL TO UKRAINE website, http://www.TravelToUkraine.org,
A program of the U.S-Ukraine Foundation, Washington, D.C.
========================================================
TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR,
around five times a week, please send your name, country of residence,

and e-mail contact information to morganw@patriot.net. Information about
your occupation and your interest in Ukraine is also appreciated.

If you do not wish to read the ACTION UKRAINE REPORT please
contact us immediately by e-mail to morganw@patriot.net. If you are
receiving more than one copy please let us know so this can be corrected.

SPAM BLOCKERS ARE A REAL PROBLEM

If you do not receive a copy of the AUR it is probably because of a
SPAM BLOCKER maintained by your server or by yourself on your
computer. Spam blockers are set in very arbitrary and impersonal ways
and block out e-mails because of words found in many news stories.
Spam blockers also sometimes reject the AUR for other arbitrary reasons
we have not been able to identify. If you do not receive some of the AUR
numbers please let us know and we will send you the missing issues. Please
make sure the spam blocker used by your server and also the one on your
personal computer, if you use a spam blocker, is set properly to receive
the Action Ukraine Report (AUR).

========================================================
PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer
Emerging Markets Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
Mobile in Kyiv: 8 050 689 2874
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
========================================================
Power Corrupts and Absolute Power Corrupts Absolutely.
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================

Leave a comment

Filed under Uncategorized

AUR#757 Sept 14 Euro-Pragmatist PM Heads To Brussels; WTO; Naftogaz Loses $368 M; Ukraine Risk Overview; Quest Roundtable VII, Oct 17-18, Wash DC

=========================================================
 ACTION UKRAINE REPORT – AUR           
                  An International Newsletter, The Latest, Up-To-Date
                       In-Depth Ukrainian News, Analysis and Commentary

                        Ukrainian History, Culture, Arts, Business, Religion,
           Sports, Government, and Politics, in Ukraine and Around the World       

                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 757
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN KYIV, UKRAINE, THURSDAY, SEPTEMBER 14, 2006
 
                Help Build the Worldwide Action Ukraine Network
 Send the AUR to your colleagues and friends, urge them to sign up
               -——-  INDEX OF ARTICLES  ——–
              Clicking on the title of any article takes you directly to the article.               
    Return to the Index by clicking on Return to Index at the end of each article
1.                UKRAINE PM AIMS TO BE A ‘EURO-PRAGMATIST’
By Roman Olearchyk and Stefan Wagstyl
Financial Times, London, UK, Thursday, September 14 2006

2.        UKRAINE’S NEW PRIME MINISTER HEADS TO BRUSSELS
                                  FOR TALKS WITH EU, NATO
Natasha Lisova, The Associated Press,

Kiev, Ukraine, Wed, September 13, 2006

3  UKRAINE HAS TO JOIN WTO BY END OF YEAR AND HOPES

TV 5 Kanal, Kiev, in Ukrainian 0800 gmt 14 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

4.    UKRAINIAN PRIME MINISTER REPORTEDLY HESITANT ON
                       NATO AHEAD OF VISIT TO BRUSSELS

              “Yanukovych refusing to have anything to do with NATO?”
ANALYSIS & COMMENTARY: By Alena Hetmanchuk
Glavred website, Kiev, in Russian 0946 gmt 12 Sep 06
BBC Monitoring Service, United Kingdom, Tuesday, September 12, 2006

5UKRAINE’S EASTERN DONETSK BASED CONGLOMERATE SCM

Business Digest, Sofia, Bulgaria, Monday, September 11, 2006

6. UKRAINE, TURKEY, ROMANIA INCLUDED BY MEINL EUROPEAN

         LAND COMPANY IN PLAN FOR NEW SHOPPING CENTERS
Nine O’Clock, Bucharest, Romania, Wednesday, September 13, 2006

7UKRAINE’S NAFTOGAZ POSTS $368 MILLION IN LOSSES IN 2005
RIA Novosti, Moscow, Russia, Wed, September 13, 2006

8UKRAINE PLANS TO SPEND $4.5 B TO UPGRADE GAS TRANSPORT
Associated Press, Kiev, Ukraine, Tuesday, September 12, 2006

9.        PIPELINE POLITICS IN THE CASPIAN BASIN MAKES FOR
                           STRANGE POLITICAL BEDFELLOWS
ANALYSIS & COMMENTARY: Khadija Ismayilova
EURASIANET.ORG, New York, Wednesday, September 13, 2006

10.    ROSUKRENERGO (RUE) TO ACQUIRE STAKES IN SEVEN
                UKRAINE GAS COMPANIES FOR $73.5 MILLION

Business Digest, Sofia, Bulgaria, Monday, September 11, 2006

11.                          UKRAINE RISK – RISK OVERVIEW
EIU Riskwire – Overview, The Economist Intelligence Unit Limited
New York, New York, Monday, September 11, 2006

12.       UKRAINE’S QUEST FOR MATURE NATION STATEHOOD
Roundtable VII: Ukraine and NATO Membership, Tue-Wed, Oct 17-18, 2006
Walter Zaryckyj, Program Coordinator
Ukraine’s Quest For Mature Nation Statehood Roundtable Series
Action Ukraine Report (AUR) #757, Article 12
Washington, D.C., Thursday, September 14, 2006

13.     UKRAINIAN SOBOR PARTY AGAINST APPOINTMENT OF

                    STATE ARCHIVE COMMITTEE CHAIRWOMAN
Ukrainian News Agency, Kyiv, Ukraine, Tuesday, September 12, 2006

14.                     ONLY THE U.S. TRIES AND CONVICTS
OP-ED: By Taras Kuzio, Kyiv Post, Kyiv, Ukraine, Thursday, Sep 07 2006

15.                                 “HE KNOWS TOO MUCH”
 Danger from non-diversification of Ukraine’s gas supply – security official
INTERVIEW: With SBU Deputy Chairman Ivan Herasymovych
BY: Roman Kulchynskyy and Vyacheslav Darpynyants
Kontrakty newspaper, Kiev, in Russian 28 Aug 06; pp 8 – 12
BBC Monitoring Service, United Kingdom, Tuesday, Aug 29, 2006

16UKRAINIAN INTERIOR MINISTER YURIY LUTSENKO ACCUSES

              PROSECUTORS OF STALLING IMPORTANT PROBES 
One Plus One TV, Kiev, in Ukrainian 1630 gmt 8 Sep 06
BBC Monitoring Service, United Kingdom, Friday, Sep 08, 2006

17.                       “THROUGH THE SMOKESCREEN”
   Wide inquiries planned in investigation of Ukrainian policeman’s killing
ANALYSIS & COMMENTARY: By Oleksandra Prymachenko
Zerkalo Nedeli, Kiev, Ukraine, in Russian 9 Sep 06; pp 1, 2
BBC Monitoring Service, United Kingdom, Monday, Sep 11, 2006

18. PROFILE: UKRAINIAN COAL INDUSTRY MINISTER SERHIY TULUB
BBC Monitoring research in English 30 Aug 06
BBC Monitoring Service, United Kingdom, Sunday, Sep 10, 2006

19YES, SHE’S BEAUTIFUL, AND SHE AIMS TO STAY THAT WAY
                       Nataliya Gotsii, a model from Borispol, Ukraine
By Natasha Singer, The New York Times
New York, New York, Thursday, September 14, 2006

20.   TASTE OF UKRAINE: CLASSIC SAUERKRAUT DISH BIGOS
                              IS SIMMERED IN CULTURE
By Mat Schaffer, Boston Herald, Boston, MA, Wed, Sept 13, 2006

 
21.              “GUELDER ROSE SUMMER ON THE DNIPRO”
                      Poltava oblast hosts international folklore festival
By Ksenia Zalutska, Komsomolske, Poltava Oblast
The Day Weekly Digest In English, #27
Kyiv, Ukraine, Tuesday, September 12, 2006
========================================================
1
      UKRAINE PM AIMS TO BE A ‘EURO-PRAGMATIST’

By Roman Olearchyk and Stefan Wagstyl
Financial Times, London, UK, Thursday, September 14 2006

Viktor Yanukovich, Ukraine’s new prime minister, will today seek to dispel
doubts about his commitment to deepening ties with the west and show that

he can co-operate with President Viktor Yushchenko, his former enemy.

On his first official visit to Brussels, Mr Yanukovich will tell senior
European Union and Nato officials that he wants to base Ukraine’s foreign
relations on pragmatism.

Speaking in Kiev ahead of his departure, Mr Yanukovich called for “a
balance” in relations with the west and Russia. But in an apparent swipe at
Mr Yushchenko’s pro-west views and at the EU’s reluctance to treat Ukraine
as a potential future member, Mr Yanukovich also said it was time to replace
“Euro-romanticism” with “Euro-pragmatism”.

Mr Yanukovich this summer won Mr Yushchenko’s personal backing for a
coalition government in a deal that followed months of deadlock after
elections in March.

Most voters had expected Mr Yushchenko to form a government with Yulia
Tymoshenko, his former ally in the pro-democracy Orange Revolution, but Mr
Yushchenko turned instead to Mr Yanukovich, his rival in the disputed 2004
presidential elections.

A pact signed by the two men includes Mr Yushchenko’s plans for integration
with the west, including early membership of the World Trade Organisation
and possible future accession to Nato and the EU.

But Mr Yanukovich’s commitment to these aims has yet to be tested and doubts
persist about his government’s stability – not least because Mr Yushchenko’s
Our Ukraine party has yet to join the coalition, despite the president’s
personal backing.

Mr Yanukovich, who earlier pledged to revive strong ties with Russia, said
this week his government would adhere to the western integration plans. But
he provided few details on how fast it would proceed.

The visit to Brussels is expected to do little to solve Ukraine’s
fundamental dilemmas. While many people in western and central Ukraine want
integration with the west, much of eastern Ukraine, where support for Mr
Yanukovich is high, favours ties with Russia.

Ukraine relies heavily on Russia for low-cost oil and gas. Prices are now
rising but remain well below central and west European levels.

Vladimir Putin, Russian president, backed Mr Yanukovich in the 2004
presidential poll and was furious at Mr Yushchenko’s victory. He has
moderated his criticism since the Yushchenko-Yanukovich deal and last week
praised the president for his statesman-like qualities.

But Ukraine remains vulnerable to Russian pressure. Moscow is promoting a
loosely defined economic union, including a customs union, designed to boost
co-operation between Russia, Ukraine, Belarus and Kazakhstan.
Western-oriented Ukrainians worry this could bring Kiev closer into Moscow’s
orbit.

While most Ukrainians support EU integration, about two-thirds oppose Nato
membership. But Mr Yushchenko wants to press ahead with Nato integration,
including securing a membership action plan (MAP) – a precursor to full
membership – later this year.

Mr Yushchenko wants entry into the WTO this year to score an early success
for his foreign policies. But Mr Yanukovich has questioned the proposed
entry terms.

As for EU integration, Kiev officials recognise that membership is a distant
prospect – and that Brussels will not even offer a vague promise of
accession in the light of public opposition in the EU to further
enlargement.

Kiev wants stronger trade relations, including better access to EU markets.
Brussels is ready to work on this but insists the onus is on Ukraine to
carry out necessary reforms, starting with completing preparations for

WTO membership.                                 -30-
——————————————————————————————–
http://www.ft.com/cms/s/32e969f4-438d-11db-9574-0000779e2340.html
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2.     UKRAINE’S NEW PRIME MINISTER HEADS TO BRUSSELS
                                 FOR TALKS WITH EU, NATO

Natasha Lisova, The Associated Press,
Kiev, Ukraine, Wed, September 13, 2006

KIEV – Ukrainian Prime Minister Viktor Yanukovych heads to Brussels on
Wednesday for talks with European Union and NATO officials, a trip under
close scrutiny to determine how much the West should expect from a man

who was openly backed by the Kremlin.

What Brussels is likely to find during Yanukovych’s visit on Thursday is an
increasingly self-confident politician who appears determined not to be
taken for granted – either by the West or by Russia.

“The new Ukrainian government sees its task to stop playing the role of
beggar, which it has played in negotiations with the EU up until now, and
become a strong, self-confident and therefore interesting partner for
Brussels,” Yanukovych said in setting out his government’s agenda this
month. He did not mention NATO.

Yanukovych has publicly promised to uphold Ukraine’s pro-Western course,

and his interest in joining the European Union, with all the financial and
political rewards that promises, is not in doubt.

But Yanukovych’s ambivalence about NATO, despite his written pledge to make
membership a priority, is so pronounced that even Ukraine’s defense minister
seemed uncertain about how convincing a case Yanukovych could make for
Ukraine this week.

“Much will depend on how Prime Minister Viktor Yanukovych is received by
NATO, how convincing he is and whether he keeps his word,” Anatoliy
Hrytsenko, one of the strongest advocates for Ukraine’s NATO membership,
said in televised remarks.

Yanukovych’s office has said that he is expected to meet with NATO Secretary
General Jaap de Hoop Scheffer and the European Union’s top foreign policy
official, Javier Solana, and participate in separate Ukraine-NATO and
Ukraine-EU committee meetings.

It’s a getting-to-know-you visit, a chance for EU and NATO officials to get
reacquainted with the man whose fraud-marred grab for the Ukrainian
presidency sparked the 2004 Orange Revolution mass protests.

Yanukovych’s bid was strongly supported by Russian President Vladimir Putin,
and his ultimate defeat by the pro-Western Viktor Yushchenko was seen as not
only a crushing loss for Yanukovych but also as a humiliation for the
Kremlin.

Yanukovych rebounded less than two years later to lead his center-right
party to victory in the 2006 parliamentary elections, and went on to form a
governing coalition that includes the Socialist Party and the Communists.

He has reached out to Yushchenko, and the president’s center-left party is
now in talks about joining the coalition; it already has a handful of
members serving in Yanukovych’s Cabinet.

The European Union is likely to sound out Yanukovych about his interest in
joining a Russian-dominated economic union; they’ve warned that if Ukraine
signs up to a customs union with Russia, Kiev could hurt its chances of
setting up a free trade zone with the European Union. Yanukovych wants that
free trade zone, and he has said he will make that clear.

NATO will be seeking more clarity about Ukraine’s position ahead of a major
alliance meeting in Latvia in November. Originally, Ukraine was expected to
take the first step toward membership at that meeting. Yanukovych has said
that will not happen, but Yushchenko has said it is still on the agenda.

Analysts predict that Yanukovych, who has said he doesn’t want to get stuck
in an “either-or” choice between Moscow and the West, will try to keep his
options open, particularly on this first visit.

“He is well-versed at saying the right things,” said Ivan Lozowy, president
of the Kiev-based Institute of Statehood and Democracy. “But no matter how
pleasing he tries to be, he understands that his words and deeds will be
closely watched in Moscow.”                                 -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3.   UKRAINE HAS TO JOIN WTO BY END OF YEAR AND HOPES
        TO FORM A FREE TRADE ZONE WITH THE EU SAYS PM
 
TV 5 Kanal, Kiev, in Ukrainian 0800 gmt 14 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

KYIV – [Presenter] Ukraine has to join the WTO by the end of this year

and hopes to form a free trade zone with the European Union, Prime
Minister Viktor Yanukovych said in Brussels today after a luncheon
with the EU commissioner for external relations, Benita Ferrero-Waldner.
[Passage omitted: Ferrero-Waldner is shown commenting.]

[Yanukovych] All this is happening ahead of the preparation and signing
of a future broad agreement between Ukraine and the European Union.
We hope that this broad agreement will create basis for forming a free
trade zone between Ukraine and the European Union in the near future.             
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
4.   UKRAINIAN PRIME MINISTER REPORTEDLY HESITANT ON
                        NATO AHEAD OF VISIT TO BRUSSELS
            “Yanukovych refusing to have anything to do with NATO?”
 
ANALYSIS & COMMENTARY: By Alena Hetmanchuk
Glavred website, Kiev, in Russian 0946 gmt 12 Sep 06
 BBC Monitoring Service, United Kingdom, Tuesday, September 12, 2006

Prime Minister Viktor Yanukovych is said to be hesitating whether to sign a
letter supporting Ukraine’s joining the NATO Membership Action Plan

before his visit to Brussels, a website has said. Yanukovych is reportedly
resisting President Viktor Yushchenko’s pressure, saying that the letter
contradicts the position of his Party of Regions.

The following is the text of the article by Alena Hetmanchuk entitled
“Yanukovych refusing to have anything to do with NATO?” posted on the
Ukrainian website Glavred on 12 September:

The issue of Ukraine’s integration into NATO seems likely to become a
stumbling block in the formation of a grand coalition again.

At least, it will happen if [Prime Minister] Viktor Yanukovych fails to
fulfil his previous obligations and does not sign a certain letter in which
the Ukrainian government reportedly states its readiness to begin the
implementation of the NATO Membership Action Plan (MAP) by the coming
Thursday [14 September] when he is due to have a meeting with NATO
leadership in Brussels.

The first person to reveal the existence of this kind of message two weeks
ago was the head of the parliamentary committee for national security and
defence, Anatoliy Kinakh.

However, he then reproached Mr Yanukovych for his reluctance to sign the
letter that would confirm the invariable course of Ukraine’s foreign policy.

Then a representative of the Party of Regions [headed by Yanukovych],

Hanna Herman, sharply reacted to Mr Kinakh’s statement.

She said that Prime Minister Viktor Yanukovych and his government were
focused on tackling economic instability in Ukraine, but not on writing
letters to Brussels to confirm the invariable course of foreign policy:
“Penetrating into the prime minister’s position of foreign policy issues,
Kinakh ardently monitors the prime minister’s correspondence addressed to
Brussels.

In his opinion, prime minister’s epistolary activity in correspondence with
the European Union might serve as a proof of the new Cabinet of Ministers’
dedication to European values and its aspirations to transform Ukraine into
a full member of the European community.”

Anyway, according to available information, Ukrainian Foreign Ministry has
already prepared this message for the prime minister.

But having Anatoliy Orel as the prime minister’s adviser on foreign policy
issues, the Foreign Ministry seems likely to be driven into the same kind of
reservation in which it was contained when Mr Orel headed the general
department for foreign policy in [former] President Kuchma’s administration.

Glavred tried to clarify the situation, having contacted Anatoliy Orel
directly. Mr Orel was obviously in bad temper: he flatly refused to make any
comments, motivating it by saying that he “does not give interviews”.

However, could anything else be expected from the person who, according to
an episode narrated in diplomatic circles, having been asked: “What time is
it?” once answered: “What do you need it for?”

Viktor Yanukovych’s press secretary Denys Ivanesku behaved no less
cautiously. He just shyly noted that he was not ready to answer this
question and requested to contact him “after Brussels”.

By saying this, the press secretary actually confirmed our diplomatic
interlocutor’s opinion that the issue can drag on until the prime minister
lands on Belgian soil.

Meanwhile, speculations on Our Ukraine’s [propresidential party] likely
intention to link signing of this letter with its joining the grand
coalition began actively circulating on the Pechersk hills [central part of
Kiev where major government agencies are located]… [ellipsis as published]

Meanwhile, Glavred has got a confirmation from a reliable source from the
Party of Regions that this letter really exists and that Mr Yanukovych
refuses to sign it, indeed.

Moreover, we have also got a confirmation of the information that serious
pressure “at the highest level” is being exerted on Viktor Yanukovych, but
the prime minister is reportedly trying to explain to the president that his
signature under the message does not comply with his party’s position.

At the same time, another source from the Party of Regions has informed us
about the other likely option: Yanukovych will at last sign this letter on
behalf of the government, but he will make a special statement that the
Party of Regions’ position has remained unchanged.

A notable point is that nothing is known about this message in the
[presidential] secretariat itself. At least, the head of the foreign policy
department, Kostyantyn Tymoshenko, immediately redirected this question to
the Foreign Ministry, having presumed that “certain preparatory work for the
visit is likely to be under way”. As for the message that interested us, he
just noted: “I know that there was an idea of this kind.”

Most likely, Yanukovych’s acquaintance with NATO Secretary-General

Jaap de Hoop Scheffer promises to be interesting… [ellipsis as published]
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
    Send in names and e-mail addresses for the AUR distribution list.
========================================================
5. UKRAINE’S EASTERN DONETSK BASED CONGLOMERATE SCM
          BUYS FOUR-STAR OPERA HOTEL IN DOWNTOWN KIEV
 
Business Digest, Sofia, Bulgaria, Monday, September 11, 2006
 
KYIV – Ukraine’s eastern Donetsk-based industrial conglomerate System
Capital Management (SCM), owned by local tycoon Rinat Akhmetov, is to buy
the half-constructed four-star Opera hotel in downtown Kiev, currently owned
by Ukrainian private company Intern, by the end of September 2006, it was
reported on September 6, 2006.

Further information will be released at the end of September, when the
purchase is to be finalised, SCM’s press secretary Evgenia Levchitskaya
said.

According to Vyacheslav Yutkin from the Russia-based National Reserve
Corporation (NRC), SCM’s major competitor for the hotel purchase, the
Ukrainian conglomerate has already bought the attractive hotel property.

NRC offered a price of $49 mln (38.3 mln euro), but Akhmetov’s bid

exceeded it by a million U.S. dollars, and Intern hurried to accept it, Yutkin
claimed.

The seven-story hotel, situated opposite the Taras Shevchenko National Opera
House, was to be completed in 2006. It is part of a larger project that
includes the construction of two more hotels for a total $14 mln (10.9 mln
euro). Yutkin believes the Opera hotel can bring an annual profit of over
$10 mln (7.8 mln euro).

NRC, controlled by Russia MP Aleksandr Lebedev, owns real estate properties
in the Crimea, Kiev and the Carpathians. At present, SCM runs hotel Donbass
Palace in Donetsk, as well as a number of health tourism complexes.

[Editor's note: Akhmetov's group owns a five-star hotel in the health resort
of Truskavets, Lviv region, western Ukraine. The hotel operates under the
Turkish brand Rixos. SCM plans to open another Rixos hotel in Kiev in 2006.]
(Alternative name: Kyiv, Lvov) www.zadonbass.org
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================      
6. UKRAINE, TURKEY, ROMANIA INCLUDED BY MEINL EUROPEAN
         LAND COMPANY IN PLAN FOR NEW SHOPPING CENTERS

Nine O’Clock, Bucharest, Romania, Wednesday, September 13, 2006

The Meinl European Land real estate company based in the United Kingdom
has entered into a co-operation agreement with the Acteeum Group company
for the purpose developing shopping centres in Ukraine and Turkey, as well
as in Romania and Bulgaria, the total estimate value of the project being
EUR 1 Bln.

The agreement foresees the development by Acteeum Group of shopping
centres and retail parks for Meinl European land, according to a press
statement by the realtor.

The total investment to be allocated for the development of real estate
projects within this partnership is going to reach EUR 1 Bln. The final
value of the investment is going to depend on the development of the
economies and retail markets in the four countries targeted.

Acteeum Group is a real estate developer that ahs developed retail projects
for Meinl European land in Central and Eastern Europe and in Turkey.

The group has offices in Amsterdam, Istanbul and Kiev, and is planning to
open representation offices in Bucharest, Sofia, Prague and Warsaw.
———————————————————————————————-
http://www.nineoclock.ro/index.php?page=detalii&categorie=business&id=20060913-508087

———————————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
7. UKRAINE’S NAFTOGAZ POSTS $368 MILLION IN LOSSES IN 2005

RIA Novosti, Moscow, Russia, Wed, September 13, 2006

KIEV – Ukraine’s national oil and gas company, Naftogaz, said Wednesday

its losses for 2005 stood at $368 million.

“Naftogaz Ukrainy finished 2005 with losses amounting to 1.842 billion
hryvnia,” the company said in a news release, citing audit results by the
Ernst &Young financial services company.

“As of December 31, 2005, the company’s current liabilities exceeded current
assets by 9.014 billion hryvnia ($1.8 billion), including tax arrears
totaling 5.168 billion hryvnia ($1 billion).”

Naftogaz said it had taken a total of about $1 billion in loans from foreign
banks to finance its activities and make investments, as well as to pay off
some of its short-term debt. The company said its long-term loans last year
nearly doubled, to 7.862 billion hryvnia ($1.37 billion).

Ex-President Oleksiy Ivchenko said in late April the losses of the company,
which accounts for 10% of the state budget’s revenues, hit $500 million in
the first quarter of 2006 alone, whereas the Fuel and Energy Ministry said
losses stood at $600 million.

Ivchenko clashed with the Finance Ministry, which rejected Naftogaz’s
proposal to raise gas prices for households by 60% starting in July. The
ministry demanded instead that Naftogaz scale back spending on a number of
foreign projects and cut investment in production in Ukraine.

Fitch Ratings said in late April the company expected losses could be as
high as $1.5 billion in fiscal year 2006.

It also cited press reports that Naftogaz has accumulated debts of around
$700 million for natural gas supplied by Rosukrenergo in February and March,
after Naftogaz was forced to sell gas on the domestic market at prices lower
than its acquisition price.

Rosukrenergo is a gas transportation company 50% owned by a subsidiary of
Russian energy giant Gazprom, with the other 50% being held by Austria’s
Raiffeisen Bank.  Naftogaz placed the blame for any potential disruptions to
gas imports on the government.                            -30-

—————————————————————————————————
LINK: http://en.rian.ru/world/20060913/53847203.html
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
     NOTE: Send in a letter-to-the-editor today. Let us hear from you.
========================================================
8. UKRAINE PLANS TO SPEND $4.5 B TO UPGRADE GAS TRANSPORT

Associated Press, Kiev, Ukraine, Tuesday, September 12, 2006

KIEV – Ukraine plans to spend $4.5 billion to modernize and reconstruct its
Soviet-era network of natural gas pipelines that supply Europe with much of
its gas, Ukraine’s state-owned gas company Naftogaz said Tuesday.

The four-year reconstruction project will help increase gas volumes and the
reliability of gas transit services, the company said. “We, as reliable
partners, will provide stability of gas transit to European countries,” said
Volodymyr Sheludchenko, head of Naftogaz’s board of directors.

The modernization project was expected to be funded through loans and
investments, including from abroad, Natogaz’s press office said, refusing to
provide any other details. Some 80% of Russian gas exports to Europe go
through Ukraine.

Ukraine’s Energy Minister, Yuriy Boyko, has said that Ukraine would ensure
that western European gas consumers don’t suffer supply disruptions as they
did in January during a price dispute between Ukraine and Russia, when
Russia briefly turned off the gas taps. Russia then accused Ukraine of
siphoning off gas meant for Europe.

Currently, Ukraine’s government is anticipating a gas price increase from
the current $95 per 1,000 cubic meters to $135 next year – a 42% hike – even
as Moscow and Kiev hold talks aiming at averting another pricing dispute and
supply disruptions.

Ukraine had hoped to retain the $95 price – already a two-fold increase over
last year – for five years, but that looked less likely after Prime Minister
Viktor Yanukovych, perceived as more pro-Russian than the Westward-leaning
officials who ran the previous government, called recent price talks with
Moscow “rather difficult.”                               -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

========================================================
9.  PIPELINE POLITICS IN THE CASPIAN BASIN MAKES FOR
                       STRANGE POLITICAL BEDFELLOWS

ANALYSIS & COMMENTARY:
Khadija Ismayilova
EURASIANET.ORG, New York, Wednesday, September 13, 2006

Yushchenko made his first official visit September 7-8 to Azerbaijan.
The trip produced seven bilateral cooperation agreements, including
a commitment to expand energy cooperation.

Yushchenko said his administration’s top priority was to forge deals
concerning “the extraction, refining and sale of oil,” the Trend news
agency reported.

In talks with Aliyev, he touted Ukraine’s Odessa-Brody pipeline as a
potentially new energy conduit linking Azerbaijan, and possibly Kazakhstan,
to Western European markets. The Yushchenko-proposed route would
bypass Russia, as does the already existing Baku-Tbilisi-Ceyhan pipeline.

Following his discussions with Azerbaijani leaders, the Ukrainian president
acknowledged that Kyiv and Baku were not a natural fit as partners. “Our
talks were easy-going, but there are problems in our relations that we are
ready to resolve,” he said.

For much of the past two years, Ukraine and Azerbaijan have been at
political odds. Yushchenko, who led the Orange Revolution in Kyiv in late
2004, became the embodiment of the democratization movement in the
former Soviet Union.

Aliyev, meanwhile, drew international criticism in connection with the
Azerbaijani government’s manipulation of the 2003 presidential and 2005
parliamentary election. In short, the two seemed to be polar opposites in
terms of political practices.

After Yushchenko’s triumph in Ukraine, Azerbaijan was among the
authoritarian-minded former Soviet states that took action to prevent the
spread of what became known as the Orange Revolution phenomenon.

In September 2005, for example, authorities at Baku airport barred an
activist of the Ukrainian youth organization Pora, which served as a
catalyst for the Orange Revolution, from entering Azerbaijan, prompting a
protest from Kyiv.

The “cold war” between Kyiv and Baku reached a peak in October of last
year in a dispute over the fate of Rasul Guliyev, an Azerbaijani opposition
leader who is wanted in Baku on embezzlement charges.

Guliyev, who denies the allegations against him, was attempting to return to
Azerbaijan to take part in the country’s parliamentary elections.

Azerbaijani authorities barred his plane from landing in Baku and he was
diverted to a Ukrainian airfield. With an international warrant against him,
he was briefly detained in Ukraine, but then released.

The decision against keeping Guliyev in custody caused displeasure in Baku,
and Aliyev reportedly personally called Yushchenko to complain.

Geopolitical circumstances in the Caspian Basin seem to have forced the
Azerbaijani and Ukrainian leaders to set aside their philosophical
differences. From Azerbaijan’s perspective, Ukrainian political support can
reinforce Baku’s stance toward a Nagorno-Karabakh settlement.

In a September 7 statement, Aliyev expressed thanks for “Ukrainian
understanding of Azerbaijan’s [Karabakh] position.”

Addressing students of Baku Slavic University on September 8, Yushchenko
placed Ukraine firmly on Azerbaijan’s side, saying that “recognition of
Azerbaijan’s territorial integrity is a necessary condition for settlement
of the [Karabakh] conflict.”

Yushchenko’s Karabakh statement appears linked to Ukraine’s desire for
Azerbaijani support in the energy sphere.

Kyiv’s efforts to reduce its energy dependence suffered a considerable blow
in early September, when Russia cut a deal with Turkmenistan on gas
supplies, thereby denying Ukraine significant access to Ashgabat’s abundant
energy reserves.

The Russian-Turkmen deal will likely require that Ukraine pay a
significantly higher price for gas imports.

Russia also wields considerable influence over Ukraine’s oil supplies. The
Odessa-Brody pipeline was supposed to reduce that dependence, but the oil
route, which is capable of transporting 40 million tons of oil per year,
remains underutilized.

Yushchenko sought an Azerbaijani commitment to ship a relatively modest
amount – about 4.5 million tons – via Odessa-Brody bound for Western
markets. Aliyev’s did not give a clear response, although he indicated that
diversification of Azerbaijan’s energy export routes is a basic element of
the country’s oil strategy.

“We have already established three pipelines to export our oil to world
markets. However, as oil exploration in Azerbaijan increases we consider
new facilities for export,” Aliyev said.               -30-
—————————————————————————————–
Editor’s Note: Khadija Ismayilova is an analyst based in Washington.
Rovshan Ismayilov is a freelance journalist based in Baku.
—————————————————————————————–
http://www.eurasianet.org/departments/insight/articles/eav091306a.shtml
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
10.   ROSUKRENERGO (RUE) TO ACQUIRE STAKES IN SEVEN
               UKRAINE GAS COMPANIES FOR $73.5 MILLION

 
Business Digest, Sofia, Bulgaria, Monday, September 11, 2006

Swiss-based gas trader RosUkrEnergo (RUE) plans to buy stakes in seven
Ukrainian regional gas companies and approved the $73.5 mln (58 mln euro)
asset appraisal made by Ukrainian Aval bank, part of Austrian Raiffeisen
International Bank-Holding, it was reported on September 11, 2006.

RUE plans to acquire stakes belonging to Ukrainian businessman Igor
Eremeev’s Continium group and to create a gas distributing network in
Ukraine. According to preliminary figures, RUE will pay $15.1 mln (11.9 mln
euro) for a 42.6 pct stake in Lvivgas, $16.6 mln (13.1 mln euro) for 40.75
pct in Ivano-Frankovskgaz and 52.4 pct in Chernigovgaz.

A 55.58 pct stake in Volyngaz and a 56.72 pct in Chernovtsygaz are evaluated
at $6.5 mln (5.1 mln euro) each. The 60.03 pct stake in Zakarpatgaz costs
$10.3 mln (8.1 mln), and 21.41 pct in Rovnogaz are estimated at $1.9 mln
(1.5 mln euro).

RUE plans to delegate the management of these stakes to joint
Ukrainian-Russian company UkrGazEnergo, equally owned by RUE and

Naftogaz Ukrainy.

[Editor's note: RosUkrEnergo is a joint gas trading company in which Russian
gas monopoly Gazprom owns 50 pct and the remainder is held by two

Ukrainian businessmen.] (Alternative names: Lvovgas, Naftohaz Ukrainy,
Naftogaz Ukrayiny, Naftohaz Ukrayiny, Ivano-Frankivskgaz)
—————————————————————————————————
LINK: http://proua.com/,http://www.aiidatapro.com
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
11.                     UKRAINE RISK – RISK OVERVIEW

EIU Riskwire – Overview, The Economist Intelligence Unit Limited
New York, New York, Monday, September 11, 2006

                                  OVERALL ASSESSMENT
Operating risk in Ukraine is fairly high. The presidential administration
that took power early in 2005 is more committed than the previous one to
attempting to increase political transparency and uphold the rule of law.

However, the old elites connected to the previous administration have
regained control of parliament and the government.

They are unlikely to push for greater political transparency or prioritise
rule-of-law considerations, and are closely tied to vested interests that
continue to distort the commercial and administrative system.

Red tape similarly remains pervasive, although some progress is being
achieved in easing the regulatory burden and simplify procedures.

Discrimination against foreign businesses was common in the past; the
situation is improving, but concrete results will only be noticed gradually.
The tax system is unclear and unpredictable. Infrastructure is inadequate.
                                          SECURITY RISK
Security risk in Ukraine is low. Armed conflict is not a concern. Although
ethnic tensions over Crimea persist, these are not expected to lead to
violent confrontations.

The political crisis that followed the flawed presidential election in 2004
fuelled inter-regional differences, but a resort to violence remains
extremely unlikely, and there is no indigenous armed activity of any kind.

There is some hostility to foreign capital, but little opposition to foreign
business people as such, and they face no special risks. Violent crime is a
concern for all businesses, as is the influence of organised crime in
Ukrainian politics and the economy.

Foreigners have not been targets of kidnapping but there have been attempts
at extortion. A rise in the number of physical attacks against foreigners
was reported in 2005, although these were still isolated incidents.
                                POLITICAL STABILITY RISK
The approval of a new government in August 2006 means that a pre-term
election or cabinet reshuffle are no longer sizeable short-term risks.

The risk of further political instability is nevertheless still high, given
that the president now shares power uncomfortably with a heterogeneous
coalition drawn primarily from groups that until recently opposed him.

The “Declaration of National Unity”, which both the president and the former
opposition signed in early April, improves only somewhat the prospects of
some degree of political stability.

Similarly, the fact that many pro-presidential politicians are backing the
coalition–despite it being led by their former opponents–is also helpful,
but does not eliminate the possibility of serious friction.

Moreover, constitutional changes have shifted powers from the presidency to
parliament, which adds to the risk of inter-institutional struggle and
periodic political paralysis.
                           GOVERNMENT EFFECTIVENESS RISK
Government effectiveness risk is high. The leadership and the bureaucracy
have traditionally performed poorly and erratically. Corruption is
widespread and red tape is pervasive.

The March 2006 parliamentary election has returned many seasoned political
leaders to government, which should help to increase the level of
professionalism.

However, the new government is unlikely to move quickly on administrative
reforms, increase transparency, or tackle the power of vested interests
still prominent in the public sector. The introduction of constitutional
changes at the start of 2006 has strengthened parliament and the cabinet.

Although it could eventually help lead to a more effective political system,
political manoeuvring surrounding the shift to a new distribution of power
is still likely to reduce government effectiveness over the short term at
least.
                                LEGAL & REGULATORY RISK
The legal process is not independent and the judiciary is easily cowed by
vested interests. Contracts are difficult to enforce and regulation is
neither impartial nor clear.

Although it is possible for foreign firms to win court cases, particularly
at the higher levels, the judicial process remains slow and inefficient.

Ukraine is dominated by powerful local players who have successfully
excluded foreign capital. The risk that foreign investors’ assets will be de
facto expropriated is low, but recent examples of this exist.

The outgoing government’s record on promoting competition and restraining
unfair competitive practices was poor.

Although the presidential administration is more committed to a level
playing field than the ones in place before 2005, reforming the old system
will take a while. Private property rights are still not well protected.
Local accounting standards are well below accepted levels in the EU and the
US.
                                  MACROECONOMIC RISK
Ukraine’s economic growth decelerated rapidly in 2005 and remained sluggish
in the first months of 2006, but has picked up recently and is expected to
reach 6% or more annually in 2006-07. Inflation has risen but remains
moderate, and the currency is stable.

Although relatively strong growth is expected over the forecast period, the
economy is still over-dependent on a few low value-added sectors. This
increases the economy’s susceptibility to price and demand swings, and its
vulnerability to protectionist measures abroad. Moreover, low levels of
investment raise further doubts over the sustainability of the economic
recovery.

Fiscal policy has loosened since mid-2004, which is partly to blame for
higher inflation since then. Further inflationary pressures are to be
expected, as the government boosted incomes prior to the 2006 parliamentary
election and as gas and electricity prices are rising sharply.
                      FOREIGN TRADE & PAYMENTS RISK
In the event of a financial crisis, foreign-exchange availability would
rapidly diminish–as was apparent during the election-related turmoil in
late 2004.

Discriminatory tariffs are a low risk but might be imposed in the event of a
grave economic crisis. There is a moderate risk of excessive trade
protection, and some capital controls are expected to remain in place.

The central bank has loosened currency controls in recent years. Not least,
it abolished the requirement that 50% of export earnings be converted into
the domestic currency.

The central bank has long been under pressure from exporters eager to see
swifter currency depreciation, but it has thus far resisted these demands.
                                         TAX POLICY RISK
The tax system poses some risks for business, since the tax regime lacks
predictability and transparency. Parliament made some progress in 2003 in
amending tax laws, including passage of a flat 13% income tax rate, which
entered into effect at the start of 2004.

Parliament attempted on occasion to reduce the VAT rate (from 20% to 17%)
under the previous president, but was blocked by presidential veto. The
level of corporate taxation is moderate, having been lowered as of 2004 as
part of a campaign to encourage tax compliance.

However, at 25% it is still higher than in many central European economies.
There is a persistent risk that taxes will be enforced in a manner
unfavourable to foreign firms even if, in theory, they are
non-discriminatory. An additional risk comes from sudden changes in the tax
environment that leave businesses little time to adjust.
                                   LABOUR MARKET RISK
Labour market risk is moderate. Strikes are only common in the state sector
and scarcely affect foreign firms. Labour laws are tilted towards the
employee and against the employer.

There is a shortage of managers and employees with exposure to doing
business in a market economy. Wage compensation is slowly moving towards a
system under which pay is related to productivity rather than age. Freedom
of association in Ukraine is respected.
                                         FINANCIAL RISK
Financial risk remains relatively high in Ukraine. The financial sector is
still underdeveloped, and there is little long-term finance available
domestically for the private sector. Few foreign firms would want to access
the small local financial markets.

There is an inadequate local bond market, while the illiquid stockmarket
plays little role in providing equity finance.

The international Financial Action Task Force (FATF) removed Ukraine from
its blacklist of countries deemed not to be sufficiently vigilant in
confronting money laundering in 2004, and in February 2006 ended its close
monitoring of the implementation of Ukraine’s money-laundering provisions.
                                   INFRASTRUCTURE RISK
Infrastructure risk is high. Port facilities are extensive and have improved
over the past three years, but are in need of further upgrading. Air
transport provision has deteriorated, requires investment and is expensive
compared with other locations in the region.

The distribution network is erratic and below standard. The
telecommunications system requires massive investment. The road network is
large but in poor repair, with the railways suffering from similar problems.

Power generation capacity is sufficient, but power cuts are possible at any
time and non-payment for energy is a concern. Information technology
infrastructure is inadequate for a country with Ukraine’s level of
education.                                            -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================

 If you are receiving more than one copy of the AUR please contact us.
========================================================
12. UKRAINE’S QUEST FOR MATURE NATION STATEHOOD
Roundtable VII: Ukraine and NATO Membership, Tue-Wed, Oct 17- 18, 2006

Walter Zaryckyj, Program Coordinator
Ukraine’s Quest For Mature Nation Statehood Roundtable Series
Action Ukraine Report (AUR) #757, Article 12
Washington, D.C., Thursday, September 14, 2006

WASHINGTON – The Ukraine’s Quest for Mature Nation Statehood
Roundtable Series began when a number of Ukrainian and American
organizations convened in April of 2000, to consider ways to encourage
a more engaged level of dialogue between the U.S. and Ukraine.

These deliberations gave rise to a commitment: to convene an annual
conference that would bring together prominent representatives from
academia, the private sector and the governments of Ukraine, the United
States and Europe, to monitor Ukraine’s progress towards fuller integration
into the Euro-Atlantic community and stronger bilateral relations with the
United States.

Six such events have been held:
Roundtable I:    Ukraine’s Quest for Mature Nation Statehood
Roundtable II:   Taking Measure of a U.S. – Ukraine Strategic Partnership
Roundtable III:  Ukraine and the Euro-Atlantic Community
Roundtable IV:  Ukraine’s Transition to a Developed Market Economy
Roundtable V:   Ukraine’s Transition to a Stable Democratic Polity
Roundtable VI:  Ukraine’s Transition to an Established National Identity

The conferences have resulted in improved cooperation between the
governments of Ukraine and the United States on matters of mutual benefit.

Further, the forums have proven to be a valuable venue for
business-to-business contacts resulting in increased trade and investments
between Ukraine and the country’s largest foreign investor, the United
States.

Finally, the series has provided an annual forum for think tanks and policy
advisors from both countries to discuss ‘topics of the moment’ that may be
of bilateral interest.

ROUNDTABLE VII – OCTOBER 17-18, 2006, WASHINGTON, DC
Continuing the tradition, Roundtable VII: Ukraine and NATO Membership,
will take place on Tuesday-Wednesday, Oct 17 and 18, 2006 in Washington,
D.C.

This year’s conference will bring together bring together government and key
non-government representatives of Ukraine, the United States and Ukraine’s
several neighbors as well as experts from the world of academia to examine
and evaluate Ukraine’s readiness to assume a place in the Euro-Atlantic
world in one of its two critical dimensions, or more precisely, to accede to
the historically singular security alliance known as NATO.

A veritable Who’s Who from the American, Ukrainian and European
governmental, NGO and private sectors, including the six individuals who
have served the post of United States Ambassador to Ukraine, are being
invited to provide their insights regarding the sine qua non of Ukraine’s
“Euro-Atlantic ambitions”.

The gathering will feature eight panels, run during the course of four
regular sessions, six highlight focus sessions, two working lunches and
two Conference receptions.

The following is a brief overview of the conferences:
[1] Roundtable I: ‘Ukraine’s Quest for Mature Nation Statehood’ was held in
Washington, DC on September 19-20, 2000 at the Library of Congress and
the Council on Foreign Relations.  The event took on the task of assessing
Ukraine’s progress in consolidating its national independence.

[2] Roundtable II: ‘Taking Measure of a U.S.-Ukraine Strategic Partnership’
was held in Washington, DC on October 31 and November 1, 2001, at the
Wyndham Crown.  The forum focused on assessing the capacity of the two
countries to make the requisite political, economic diplomatic and military
commitments to the realization of mutual strategic objectives.

[3] Roundtable III: ‘Ukraine and the Euro-Atlantic Community’ was held in
Washington, DC on October 8-9, 2002 at the JW Marriott on Pennsylvania
Avenue and The Ronald Reagan Building.

The gathering’s aim was to: a) objectively assess Ukraine’s internal and
external credentials for seeing a place in the Euro-Atlantic world and b)
extensively explore the Euro-Atlantic community’s attitude towards embracing
Ukraine as one of its own.

[4] Roundtable IV: ‘Ukraine’s Transition to a Developed Market Economy’ was
held in Washington, DC on October 7 and 8, 2003.  The gathering focused on
evaluating Ukraine’s market readiness, from both a macro and micro economic
perspective, to advantageously compete in the global economic arena and
attempted to address a key question: “Will the United States Support
Ukraine’s WTO Accession Process?”

[5] Roundtable V: Ukraine’s Transition to a Stable Democratic Polity, took
place on September 13 and 14, 2004 in Washington, D.C. The forum focused
on evaluating Ukraine’s movement, from both a domestic and an international
perspective, toward implementing the political reforms necessary to achieve
the country’s ultimate stated goal: membership in NATO and the EU.

The event was held at a crucial time for Ukraine: one month before the
beginning of the ‘now legendary’ UA presidential elections cycle of 2004.

[6] Roundtable VI: Ukraine’s Transition to an Established National Identity,
took place on September 27 and 28, 2005 in Washington, D.C. The conference
focused on evaluating Ukraine’s ability to develop a “firm center of gravity
as a nation/state” and to define a “distinct sense of place in world
 affairs”, particularly in the aftermath of its historically significant
performance during the “Orange Revolution”.
                       PARTIAL LIST OF PAST SPONSORS
The following is a partial list of institutions that have served as sponsors
of the Ukraine’s Quest for Mature Nation Statehood Roundtable Series:

Congressional Ukrainian Caucus; Ukrainian Congress Committee of
America; Embassy of Ukraine to the United States;
Ukrainian American Freedom Foundation; Embassy of the United States to
Ukraine; Organization for the Defense of Four Freedoms for Ukraine; The
Library of Congress; Ukrainian National Information Service; American
Foreign Policy Council; Ukrainian American Youth Association; Freedom
House; US-Ukraine Foundation; International Republican Institute; Center
for US Ukrainian Relations; National Democratic Institute; International
Renaissance Foundation; FYI/SAIS/Johns Hopkins University; Romyr
Consultants Corporation; BSSP/Harvard University; World Congress of
Ukrainians; LAP/New York University; Ukrainian Central Information Service;
ISE/Columbia University; Regional Initiatives UA; Ukraine-US Business
Council; Orange Circle.
                   PAST STEERING COMMITTEE MEMBERS
The following is a partial list of individuals that have served as Steering
Committee Members of the Ukraine’s Quest for Mature Nation Statehood
Roundtable Series.

William Miller, Bob Schaffer, Stephen Nix, Nelson Ledsky, John Van
Oudenaren, Richard Murphy, Herman Pirchner, Adrian Karatnycky,
John Micgiel, Tom Keaney, John Costello, Kyle Parker, Katie Fox
Nadia Diuk, Ilan Berman, Morgan Williams, George Nesterczuk
Julian Kulas, Olena Koslova-Pates, Barbara Broomell, Oleksandr
Poteikhin, Serhiy Konoplyov, Vitaly Shelest, Stephan Bandera,
Vera Andrushkiv, Nadia Komarnycky McConnell, Bohdan Fedorak,
Borys Potapenko, Mykhailo Sawkiw Jr., Tamara Gallo Olexy,
Mykola Hryckowian, Walter Zaryckyj.
                       PAST CONFERENCE PLATIUM PATRONS
The Heritage Foundation of First Security Federal Savings Bank,
Self Reliance (New York) Federal Credit Union
Phillip  Morris Companies Inc., Ukrainian International Airlines,

                   PAST GOLD, SILVER AND BRONZE PATRONS
Selfreliance (NJ) Federal Credit Union, SUMA Yonkers Federal Credit
Union; Polish-American-Ukrainian Cooperative Initiative (PAUCI);
Selfreliance Ukrainian American Federal Credit Union, Chicago, Illinois;
Coca-Cola Ukraine; Ukrainian National Credit Union; Ukrainian Future
Credit Union; International Renaissance Foundation; Providence
Association; Raytheon Corporation; Ternopilbud; DynCorp; Shell
International Gas; Khmil Ukraina; SigmaBleyzer; Ukreximnefteproduct;
Bechtel Corporation; Ukrtransnafta; Kyiv Atlantic Ukraine/Atlantic Farms;
Cleveland Selfreliance FCU; The PBN Corporation; Kraft Foods Ukraine;
Western NIS Enterprise Fund; Obolon; Motorola; Naftohazbud; Digital
Alliance; Cargill; FAKRO Enterprises; Desomark; AES Kyiv Oblenergo;
The Boeing Company; Geneza Press; Kvazar Micro; Aerosvit;
Romyr Consultants Corporation.
———————————————————————————————
CONTACT: Walter Zaryckyj, Executive Director/Center for US-Ukrainian
Relations, Adj. Associate Professor of Social Sciences/New York
University, UA Quest RT Series Program Coordinator, 1 917 476 1221,

———————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
             Send in a letter-to-the-editor today. Let us hear from you.
========================================================
13.    UKRAINIAN SOBOR PARTY AGAINST APPOINTMENT OF
              COMMUNIST PARTY MEMBER OLHA HINZBURH AS
                    STATE ARCHIVE COMMITTEE CHAIRWOMAN

Ukrainian News Agency, Kyiv, Ukraine, Tuesday, September 12, 2006

KYIV – Ukrainian Sobor Republican Party protests against appointment of
Communist Party member Olha Hinzburh as State Archive Committee

chairwoman to replace Hennadii Boriak. The party has disclosed this in a
statement, text of which Ukrainian News has.

The party says that despite old material and technical base, the former
leadership of the committee held great work to open the access to the
selections referring to fight for Ukrainian independence, which fixed crimes
of the communist regime.

The authors of the application say that appointment of the person having no
relevant education (engineer mechanic) and representing political force,
which considers itself the successor of those, who committed the crimes, as
the head of the State Archive committee threatens the continuation of the
work.

‘Ukrainian archives can turn into closed semisecret establishments, like it
was in the USSR,’ the party reported. According to the party, the archive

business has to be headed by a specialist and impersonal scientist with great
reputation.
As Ukrainian News earlier reported, on September 7, the Cabinet of Ministers
dismissed Boriak as State Archive chairman and appointed Hinzburh. Hinzburh
was the deputy of the Verkhovna Rada of the fourth convocation and
representative of the Communist Party of Ukraine.                -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
14.                ONLY THE U.S. TRIES AND CONVICTS

OP-ED: By Taras Kuzio, Kyiv Post, Kyiv, Ukraine, Thursday, Sep 07 2006

The sentencing two weeks ago of former Prime Minister Pavlo Lazarenko
to nine years imprisonment and a $10 million fine brings to an end an
investigation and trial that followed Lazarenko’s arrival in the U.S. seven
years ago seeking ‘political asylum’ from Ukraine.

The major irony of the sentencing of Lazarenko by a U.S. court is that it
would have never happened in Ukraine, where senior officials have always
remained above the law, and still do.

If Lazarenko had stayed in Ukraine, or had been extradited to Ukraine by the
U.S., he would have never been sentenced by the prosecutor’s office or tried
in a Ukrainian court. A transcript made illicitly by Major Mykola
Melnychenko in President Leonid Kuchma’s office has the latter to Prosecutor
Mykhaylo Potebenko in 2000 about Lazarenko.

Kuchma suggests asking the U.S. to extradite Lazarenko to Ukraine. Potebenko
replies that this would not be a good idea as Lazarenko’s testimony in court
would implicate Kuchma and other senior officials. During Lazarenko’s Prime
Ministership in 1996-1997, he was awarded two state medals by Kuchma.

No senior Kuchma era officials have been sentenced for abuse of office,
election fraud or violence against journalists and political opponents. Such
sentences are now highly unlikely as these same officials now have
parliamentary immunity or are in government.

Senior Kuchma era officials were not to know that Yushchenko, once in
power, would be so forgiving and tolerant of their misdemeanors.

Different proposals for constitutional reforms were introduced by President
Kuchma in his last two years in office to transform Ukraine into a
parliamentary republic out of fear of an elected President Yushchenko with
extensive executive powers stemming from the 1996 constitution.

With the failed parliamentary vote for constitutional reforms in April 2004,
the dirtiest election campaign in Ukrainian history was unleashed to block
Yushchenko’s election.

This culminated in an attempted poisoning of Yushchenko in September 2004,
followed by a failed bomb attempt two months later on Yushchenko’s election
headquarters.

Exaggerated fear of the threat following Yushchenko’s victory led some
senior officials, such as Transport Minister Heorhiy Kirpa, to commit
suicide.

A large number of Kuchma era officials were not prevented from fleeing to
Russia where they have been protected by the Russian authorities as
political allies. Senior Kuchma era officials who fled to authoritarian
Russia as well as those who remained in democratic Ukraine avoided criminal
charges.

Last year, Donetsk oligarch and Party of Regions MP Rinat Akhmetov hid in
Monaco out of fear of criminal charges being launched against him after
murder  accusations were levelled against him. Last month Akhmetov was
included by the presidential secretariat in the list of Ukrainian VIP’s who
received a state medal.

Former Sumy Governor Volodymyr Shcherban was the only senior official
who sought ‘political asylum’ in the U.S., rather than Russia. Following
Lazarenko’s conviction, only Shcherban can therefore, among Kuchma era
officials allegedly guilty of abuse of office, be charged and tried.

On Ukrainian Independence Day President Yushchenko said that society is
seeking equality of all Ukrainian citizens before the law. Yet, Yushchenko
admitted that ‘We have not achieved this’.

The Ukrainian authorities have an uphill struggle on transforming Ukraine
into a state based on the rule of law. In 2004, the last year of Kuchma’s
rule, 76 percent of Ukrainians believed there was no equality before the
law, according to a Democratic Initiatives poll. Two years into the
Yushchenko administration and this figure has only declined to 75.

Around 73 and 75 percent of Ukrainians, respectively, believe that if an
individual has money or they belong to the authorities they can then escape
justice. In other words, the current administration’s own inaction against
senior Kuchma era officials has made people continue to believe there is no
rule of law.

As the Ukrainian anecdote says, if you steal a cabbage you can go to jail.
But, if you steal billions you run for parliament and have a criminal record
better still, you are invited by the President to sign a Universal document
and form the government.

Ukraine’s progress towards a state based on rule of law is being de-railed
by five inherited legacies and contradictions within the Yushchenko
administration.

[1] First, the ‘new’ ruling elites did not arrive from abroad in 2004.
President Yushchenko faithfully served President Kuchma from 1994-2001 and
they both signed a denunciation of anti-Kuchma protestors in February 2001.

As events since the Orange Revolution have shown, Ukraine’s ruling elites
protect each other from criminal charges.

When President Yushchenko ordered the Prosecutor’s office to investigate
charges of corruption made by presidential secretariat head Oleksandr
Zinchenko against Yushchenko’s business allies, Yushchenko said he knew in
advance that no evidence would be found. Such a comment is a signal to the
Prosecutor’s office not to find any evidence.

In September 2005, President Yushchenko and opposition leader Viktor
Yanukovych signed a Memorandum that permitted the Party of Regions to
vote in favor of Yuriy Yekhanurov’s candidacy for Prime Minister.

In the Memorandum, President Yushchenko agreed to give an amnesty for
election fraud and reintroduced immunity for local deputies.

Lazarenko is the only Ukrainian politician to ever have his immunity
stripped by the Ukrainian parliament. Parliament refused to consider
Kuchma’s demand to strip Tymoshenko of immunity.

[2] Second, there is no political will to prosecute senior officials inside
Ukraine. Only the U.S. has ever prosecuted a senior Ukrainian official.

The 1996-2005 Ukrainian constitution permitted President Yushchenko to
remove the Prosecutor. Following 2006 constitutional reforms this can only
be undertaken with parliament’s approval.

Yushchenko did not replace Prosecutor Svyatoslav Piskun, whom he inherited
from the Kuchma era, till nine months into his presidency. Piskun protected
senior Kuchma era officials and eventually became an MP with the Party of
Regions.

Serhiy Kivalov, head of the Central Electoral Commission in 2004 when
election fraud occurred, is also a Party of Regions deputy. He was never
charged and continued to be Dean of Ukraine’s most prestigious Law Academy
in Odessa. He is also the current head of a parliamentary committee.

[3] Third, the Yushchenko administration has always been divided in its
attitudes towards the past. Yulia Tymoshenko believes she was upholding the
Orange Revolution by supporting the launching of criminal proceedings for
Kuchma era crimes, including calling for opening investigations into past
privatizations.

President Yushchenko and Our Ukraine disagreed with Tymoshenko’s approach
to the past. In his address to parliament on the day Viktor Yanukovych was
elected premier,  Yushchenko said, ‘We should not be looking for problems in
the past. This is the only way out’.

The head of the presidential secretariat, Oleh Rybachuk, described mutual
accusations between Yushchenko and Yanukovych in the 2004 elections as
merely ‘asymmetrical’, ‘impetuous’ and ‘nasty things’.

Ukraine certainly needed reconciliation between warring political groups and
inflamed regional tensions after the election. But one wonders whether
reconciliation should be at the cost of the fundamental principal of a rule
of a law-based state that everyone is equal before the law.

[4] Fourth, last month Yushchenko unveiled a monument to former Rukh leader
Vyacheslav Chornovil. An investigation has been re-opened into his death in
what many have always believed was a suspicious car accident in March 1999.

If the new investigation finds that Chornovil’s death was not due to an
‘accident’, will the Yushchenko administration seek to find the high level
organizers?

This is highly doubtful on the basis of their record in office when dealing
with the organizers of the murder of journalist Heorhiy Gongadze in 2000.

Only three lower ranking police officers have been put on trial. The
organizers of Gongadze’s murder have never been charged, have been allowed
to stay in politics, even though retired and out of office, to flee Ukraine
or may have even been murdered.

[5] Fifth, the Yushchenko administration, which has pledged to uphold the
constitution and rule of law, is itself often not in compliance with the
law. Presidential decrees in early 2005 to increase the power of the
National Security and Defence Council, in order that it become a
counter-weight to the Tymoshenko government, were unconstitutional.

A law adopted on Aug. 4, and signed into law that day by President
Yushchenko, which prevents the Constitutional Court from reviewing
constitutional reforms is illegal, according to U.S. Judge Bohdan Futey, a
long time adviser to the International Republican Institute on legal reform
in Ukraine. President Yushchenko cannot usurp the rights of the
Constitutional Court.

Members of Our Ukraine in 2005 and 2006 refused to relinquish their
parliamentary seats after entering government. Legislation requires this no
later than 20 days following joining the government.

Roman Zvarych, the current Minister of Justice and Our Ukraine member,
has ignored the Aug. 24 deadline to relinquish his parliamentary seat. He
should set an example by upholding the law.

Following the return of Yanukovych to government, which is dominated
by Kuchma era officials, Ukraine’s Orange Revolution is at a crossroads.
Ukraine can either continue to slowly move forward democratically or
stagnate towards the policies of the Kuchma era.

A state based on the rule of law is a central feature of a democracy and,
therefore, if Ukraine is to continue to muddle ahead then this area needs
radical institutional and cultural overhaul.      -30-
———————————————————————————————
Dr. Taras Kuzio is a Senior Fellow at the German Marshal Fund of the USA.
The views expressed in this article are those of the author and should not
be attributed to the German Marshal Fund of the USA. Taras Kuzio is also
an Adjunct Professor, Institute for European, Russian and Eurasian Studies,
George Washington University.
———————————————————————————————
LINK: http://www.kyivpost.com/opinion/oped/25038/
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
15.                             “HE KNOWS TOO MUCH”
 Danger from non-diversification of Ukraine’s gas supply – security official

INTERVIEW: With SBU Deputy Chairman Ivan Herasymovych
BY: Roman Kulchynskyy and Vyacheslav Darpynyants
Kontrakty newspaper, Kiev, in Russian 28 Aug 06; pp 8 – 12
BBC Monitoring Service, United Kingdom, Tuesday, Aug 29, 2006

KIEV – Ukrainian Security Service (SBU) deputy chairman Ivan Herasymovych,
who supervises economic counterintelligence, has said that insufficient
diversification of gas supplies is the main threat to national security.

He said that somebody in the SBU in 2005 destroyed important documents
relating to the activities of controversial Russian businessman Semen
Mogilevich, who is involved in gas dealings. There is no evidence of foreign
special service involvement in the case of murdered journalist Heorhiy
Gongadze, he also said.

The following is the text of the interview that Herasymovych gave to Roman
Kulchynskyy and Vyacheslav Darpynyants, entitled “He knows too much”
published in the Ukrainian business weekly Kontrakty on 28 August;
subheadings have been inserted editorially:

The deputy chairman of the Security Service of Ukraine [SBU], Ivan
Herasymovych, has established a connection between the destruction of the
“Mogilevich affair” and the course of gas negotiations with the Russian
Federation.

[Correspondent] You are in charge of the SBU economic counterintelligence
department. What threats to national security now exist in the energy
sphere, in particular gas?

[Herasymovych] First and foremost there are insufficient rates of
diversification of gas supply sources. The fact that [Russian gas company]
Gazprom, contracted virtually for all the Turkmen gas from January 2007, is
turning into a monopoly gas supplier to Ukraine, undoubtedly is a threat to
the country’s economic security. The problem of ensuring the trilateral gas
balance this year with our partners – the EU and Russia – is also topical.

[Correspondent] Tell us about these threats in more detail.
[Herasymovych] The latest round of negotiations to regulate the gas problem
is starting now. The SBU has already presented the government with its
proposals on this matter. I cannot comment in more detail on the current
situation, since it might damage the negotiation process.

[Correspondent] What can you say about the financial stability of Naftohaz
[Ukrayiny - Ukrainian state oil and gas company]?
[Herasymovych] The question of the economic and financial stability of
Naftohaz Ukrayiny as a state company also falls within the field of vision
of the SBU.

[Correspondent] How much time does the new government have to improve
Naftohaz’s financial health?
[Herasymovych] Let’s put it like this: the basic time for the game has
already run out and we need to win in extra time. Here you should note that
there are real professionals playing against Ukraine.

Let us recall, for example, the information campaign that accompanied the
inclusion in the Russo-Ukrainian gas schemes of RosUkrEnergo [RUE, monopoly
supplier of gas from Russia and Central Asia to Ukraine].

Certain forces tried to throw a shadow on the first persons in the Ukrainian
state. The calculation was simple – to create the impression that allegedly
the new authorities at the highest level were reincarnating corrupt schemes.
The aim was to influence the attitude of the EU regarding the
Russo-Ukrainian gas negotiations.

[Correspondent] Who designed that campaign – specialists from RUE, Gazprom,
the FSB [Russian Federal Security Service] or all together?
[Herasymovych] We came up against a developed technique for information
protection of the economic interests of certain structures and persons. You
can hire highest level consultants for the money you make from the gas
business. Almost all the transnational companies do that.

[Correspondent] How much money do businessmen make at the level of RUE
minority shareholders from gas schemes?
[Herasymovych] You’d better ask them.

[Correspondent] Does the economic counterintelligence department really not
have that information?
[Herasymovych] I’ll answer like this: big money is connected with large
expenditure and big obligations to other participants and with considerable
risks.

I would advise anyone wanting to discuss the alleged corrupt nature of the
scheme being used by RUE to consider that for Ukraine it is important to
guarantee receiving gas on the eastern border at a price of 95 dollars per
1,000 cu.m.
                  DESTRUCTION OF FILE ON MOGILEVICH
[Correspondent] What do you know about Semen Mogilevich?
[Herasymovych] A lot. Mogilevich has been in the SBU’s field of vision since
1993. The relevant case consisted of about 3,000 pages, including reports
from foreign special services. I personally had indirect dealings with him,
but I consider this case to be unique.

Mogilevich is not simply a person, but a system of contacts, by tracing
which it is possible to get a fair amount of
interesting information about this or that event both in Ukraine and beyond
its borders. What specifically are you interested in?

[Correspondent] Under what circumstances, why and which of the SBU officers
destroyed the Mogilevich file?
[Herasymovych] The Semen Mogilevich file was destroyed during the change of
SBU leadership in September 2005, despite the instructions of the new
chairman, Ihor Drizhchanyy, forbidding the scrapping of any documents.

I would very much like to find out who gave the order to destroy this file
and why. The Prosecutor-General’s Office [PGO] is now looking into it in the
framework of a criminal case.

[Correspondent] Who benefited from the destruction of the file, apart from
Mogilevich himself?
[Herasymovych] The investigation will provide the answer to that question as
well. But in any case, the destruction of the so-called Mogilevich file
damaged the interests of Ukraine. Back in August 2005 SBU staff engaged in
the case warned that in November-December serious problems connected with
the supply of gas awaited Ukraine.

The officers proposed to the then SBU leadership an algorithm of actions
that would have allowed the government more effectively to protect the
interests of the state in the process of the gas negotiations.

Instead of that, some very strange decisions were taken – to stop the work
of the group dealing with Mogilevich and destroy the relevant file.

[Correspondent] Are you hinting that Mogilevich’s structures are behind the
Swiss RUE company?
[Herasymovych] Whereas previously Mogilevich had been one of the most
influential businessmen in Russia, now, taking account of the latest
political trends in Russia, I would not exaggerate his influence.

[Correspondent] Did Mogilevich really control the Eural Trans Gas company
[fore-runner of RUE]?
[Herasymovych] There are certain facts that can be interpreted as evidence
of that company’s links with the structures of Mogilevich.

[Correspondent] What do you know about Mogilevich’s structures in Hungary,
and what is their role in schemes for capital outflow from Ukraine?
[Herasymovych] Mogilevich did indeed found a number of structures in
Hungary, but nobody has managed to obtain documentary confirmation of his
involvement in money laundering.
                              THE JOURNALIST MURDER CASE
[Correspondent] Were you part of the investigation team on the case of
[murdered journalist Heorhiy] Gongadze?
[Herasymovych] Yes.

[Correspondent] Explain how it was that Maj Mykola Melnychenko [former
bodyguard to ex-President Leonid Kuchma, who made recordings in Kuchma's
office apparently implicating him and other senior officials in serious
crimes] managed to go abroad before the start of the tape scandal?
[Herasymovych] The “iron curtain” of KGB times is already in the past.
Mykola Melnychenko received an external passport in breach of established
procedures, was given a Czech visa, travelled by car as far as Lviv, got
into a bus and crossed the Polish border, where he was met and transferred
into the Czech Republic.

Incidentally, the presidential guard service even before the scandal should
have paid attention to Melnychenko, who told the leadership of his wish to
go abroad, and after being refused permission, insisted on having his own
way.

[Correspondent] What is the cost of the apparatus that Melnychenko used to
record conversations in the office of the head of state?
[Herasymovych] Not expensive. He was using normal Dictaphones.

[Correspondent] Does it not seem to you that the disappearance of Gongadze,
the tape scandal and the Ukraine Without Kuchma movement were all links in a
single operation planned by foreign special services?
[Herasymovych] In the investigation process our team concluded that at the
initial stage the tape scandal was not controlled. In particular, there are
no grounds for saying that [Socialist Party leader] Oleksandr Moroz, who
made public the Melnychenko tapes, was being openly or secretly used by any
special services.

No signs of special service work in preparing the tape scandal were
discovered. Although an appropriate theory was developed almost immediately.

[Correspondent] Are all the Melnychenko tapes authentic?
[Herasymovych] No.

[Correspondent] Who, if not Western special services, organized the tape
scandal?
[Herasymovych] First of all, I’m not a court of law able to proclaim the
guilty party. And secondly, a frank comment on this might damage
investigation of the Gongadze case.

[Correspondent] How much did the tape scandal cost Ukraine?
[Herasymovych] It’s extremely complex to draw up the balance sheet. On the
one hand, the scandal proved to be a catalyst for democratic transformations
in the country. On the other hand, Ukraine was accused, not without the
recordings, of supplying Kolchugas [radar devices] to Iraq.

Apart from that, it is obvious that in the country’s premier office they
talked not so much about journalists and someone’s personal life as about
questions directly connected with the security of the state.

It is not by chance that Mykola is unwilling to give evidence to the
Prosecutor-General’s Office. He understands that if he starts speaking, he
will have to tell everything – from “A” to “Z”.

[Correspondent] How realistic is the chance of finding those who ordered the
murder of Gongadze after the death of former Interior Minister Yuriy
Kravchenko [found shot shortly before he was due to be questioned about the
case]?
[Herasymovych] The gradation of the perpetrators and those who ordered it is
fairly notional in this case. For example, Melnychenko is trying to convince
us that it was not Kuchma who placed the order, and is accusing another
politician.

It is possible that President Kuchma was displeased with articles by Heorhiy
Gongadze. But displeasure is not grounds for murder. If he said “sort it
out”, then it is quite likely that at some stage the situation could have
got out of control, i.e. the theory of an “excess by the perpetrators” may
well have the right to exist.

The accused who are now giving evidence in court still allege that they had
not received an order to kill Gongadze. Why [fugitive police Gen Oleksiy]
Pukach strangled Gongadze with his own hands, as they are saying, only Gen
Pukach himself can say.

[Correspondent] It’s difficult to believe somehow that an experienced police
general lost his self-control and strangled a well-known journalist.
[Herasymovych] It’s no less strange that a police general himself engaged in
surveillance, isn’t it? [Pukach had allegedly kept Gongadze under
surveillance prior to his disappearance.]

[Correspondent] Who ordered the murder of Gongadze?
[Herasymovych] The PGO [Prosecutor-General's Office] has to determine that.
I hope that Pukach will be found and that those who ordered the killing will
be put on trial.

[Correspondent] Do you believe that President Kuchma was simply set up, by
having spoken sharply against Gongadze?
[Herasymovych] I can’t say that it is precisely this theory that is the most
well-grounded.

[Correspondent] Gongadze’s relatives constantly stress that the authorities
were putting a brake on the investigation of Heorhiy’s murder. Who did this,
if Kuchma gave a direct instruction to pursue the case to the end?
[Herasymovych] You shouldn’t believe in the omnipotence of Kuchma. The
investigation was stalled by people in the know ho were able to make use of
connections in the law-enforcement agencies.

Pressure was put on the investigation team by illegal, hidden methods and it
is fairly hard to prove that a specific person was the initiator.

 But we know the part played by everyone in this story and we remember who
was really working to solve the crime and who was earning political
dividends.

I can only say that I am surprised when they try to present [Deputy
Prosecutor-General Viktor] Shokin as the person who created the conditions
for Pukach’s flight.

To put a police general in prison in 2003 (this was under the old regime!)
took a good deal of effort on the part of the deputy chief of the PGO’s
directorate for investigating especially important cases, Roman Shubin, and
Deputy Prosecutor-General Viktor Shokin. When Pukach was released, they
carried on working and finally proved that he was one of the key figures in
the case.

[Correspondent] Who, according to your information, helped Pukach to flee to
Israel?
[Herasymovych] According to my information, nobody has proved that Pukach
was hiding in Israel.
                        ATTEMPTS TO SUBORN SBU OFFICERS
[Correspondent] In what way do foreign special services recruit Ukrainian
high-ranking officials?

[Herasymovych] Methods of recruitment do not have national specific
features – they are universal and multiple. Foreign special services trace
bank accounts, collect compromising information during foreign visits and so
on. Then they propose collaboration.

It’s good when a politician or official comes home and tells us that they
wanted to recruit him. In such cases a complicated intellectual game starts.

[Correspondent] Did they try to recruit you?
[Herasymovych] Several times, but I’m not prepared to talk about it. A far
more acute problem for the SBU was the recruitment of service staff by
domestic business. Usually it was proposed to SBU officers to work as
advisers on some issues, in most cases the “advisers” provided cover for
some breaches of the law or other, frankly speaking – a “roof” [protection].

[Correspondent] What amounts are offered to SBU deputy chairmen for
consultations?
[Herasymovych] Once I was offered 300,000 dollars via middlemen to give an
order not to provide a guard during the transporting of a group of illegal
migrants to the airport to be deported. I refused, since that order would
have brought to nothing several years of work by a whole team of our staff.

If an official takes money, if only once, as a consequence it is highly
likely that he will be blackmailed and drawn in to other crimes.

[Correspondent] Offering bribes is a criminal offence. Why did you not
initiate the detention of the persons who offered you 300,000 dollars?
[Herasymovych] It’s not that easy to prove juridically the fact of the offer
of a bribe.

[Correspondent] Why is it that in the years of independence the SBU’s
Labyrinth information system was de-catalogued, and can you from one request
receive a full list of reports, say, about a businessman politician?
[Herasymovych] The SBU information system is not called Labyrinth. On
condition of observing a certain procedure, it is possibly rapidly to get
any operational information, but the unit of primary information may not be
complete. For example, an SBU officer or informant overheard some
conversation in a bar… [ellipsis as published]

[Correspondent] Or, for example, while monitoring the air waves.
[Herasymovych] We have definitively abandoned monitoring the air waves,
since in 50 per cent of cases that monitoring was unauthorized bugging of
conversations. So, to return to your previous question, operational reports
are filed into the relevant data bases.

As a result, a complete unit is built up of disparate fragments that form
the basis for further analysis. I can’t disclose the principles of
cataloguing SBU information units.

[Correspondent] Did one of the former SBU deputy chairmen, Volodymyr Satsyuk
[once suspected of poisoning President Viktor Yushchenko], really copy those
units for his own use?
[Herasymovych] I don’t know anything about that. The SBU databases are
protected in the proper way.

            HERASYMOVYCH SUING NEWSPAPER FOR LIBEL
[Correspondent] The newspaper Ukrayina Moloda, whose editor is a
presidential adviser, published an article in which you are named as
godfather to a child of [former presidential chief of staff under Kuchma]
Viktor Medvedchuk. Have you demanded a retraction of that information?
[Herasymovych] The information is an out and out lie. When Medvedchuk’s
first daughter was born, I was in the seventh form at school, and when the
second one was born my job was too low-level to be socializing with such
high-ranking officials of the time as Mr Medvedchuk.

The PGO has checked out all the allegations set out in the article, and they
were not confirmed. After that, the SBU and its staff took the paper to
court. As for the material itself, according to my information, it was
organized by real (or potential) figures in criminal cases connected with
corruption within the SBU.

[Correspondent] Can you name specific names?
[Herasymovych] Only one – Col Valentyn Kryzhanovskyy, who turned out to

be a citizen of the Russian Federation. He was set up in the SBU by extremely
respected gentlemen, including even a people’s deputy.

In essence, they managed to mislead the paper’s chief editor, Mykhaylo
Doroshenko, and convince him of the reliability of the information presented
for publication.

A group of specialists on the “advantageous” sale of the condemned material
tried to play out a combination attracting the press aimed at provoking
changes in the leadership of the service.

[Correspondent] How did you come to join the SBU?
[Herasymovych] I served in the Far East in a military unit of the first
airborne army. In 1993 I returned to Ukraine and moved to Transcarpathia,
where I worked in the regional directorate of the SBU.

[Correspondent] What were you doing in Transcarpathia?
[Herasymovych] I was investigating cases connected with false advice notes
(with whose help Chechens, and not only they, “stung” banks for considerable
amounts), smuggling of radioactive materials and so on.

[Correspondent] Who suggested your move to Kiev?
[Herasymovych] They started inviting me to the capital after I’d been
already working for three years, but I didn’t want to move my place of
residence once again. In 1998, when the department of counterintelligence
protection of the economy of the state was set up, I was made an offer that
I accepted.

[Correspondent] What is the reason for your rapid career growth?
[Herasymovych] I never avoided high-profile cases. To be sure, on the one
hand you can gain prestige, experience and knowledge from them, but on the
other – you can make yourself a pile of problems.

[Correspondent] How substantial is the political influence on the formation
of the composition of teams dealing with high-profile cases?
[Herasymovych] There is no political influence now. The composition of teams
is formed in accordance with the functional activity and professional
abilities of staff and the specific features of the crime that needs to be
solved.                                                     -30-
———————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
16. UKRAINIAN INTERIOR MINISTER YURIY LUTSENKO ACCUSES

               PROSECUTORS OF STALLING IMPORTANT PROBES 

One Plus One TV, Kiev, in Ukrainian 1630 gmt 8 Sep 06
BBC Monitoring Service, United Kingdom, Friday, Sep 08, 2006

KIEV – Ukrainian Interior Minister Yuriy Lutsenko has accused the
Prosecutor-General’s Office of delaying important investigations.
Interviewed live on private One Plus One TV on 8 September, Lutsenko said
prosecutors were either biased or incompetent.

Lutsenko was responding to criticism voiced by Prosecutor-General Oleksandr
Medvedko earlier on the day. He had called “unprofessional” Lutsenko’s
recent statement that nationalist leader Vyacheslav Chornovil’s death in
1999 was a murder, not an accident.

Lutsenko said the Prosecutor-General’s Office “took away” the Chornovil case
from his aide, who, the minister said, had been making good progress in the
investigation. Lutsenko also called for the results of forensic tests in the
case to be made public.

Asked by the presenter to respond to charges that he often makes rushed
accusations which do not lead to anyone being put on trial, Lutsenko said:
“How can they be put on trial if we hand cases to prosecutors?”

“The Interior Ministry has good reason to suspect this or that person of
involvement in this or that crime. The law says, unfortunately, that I
cannot investigate this case. I have to refer it to the Prosecutor-General’s
Office.”

“If it updated the public on the progress of investigations more often,
there would obviously be no people avoiding punishment for years,” Lutsenko
said. Instead, “it spends years investigating cases which interest society”,
he added.

Lutsenko did admit, however, that he often lacked legal knowledge in his
job: “I am perfectly aware that, not being a specialist, I make mistakes of
a purely legal character.” “But this does not mean it is possible to shut me
up so that I don’t make people do their jobs,” Lutsenko said.

He insisted he had grounds to suspect an MP of involvement in the murder of
senior police officer Roman Yerokhin. He accused the Prosecutor-General’s
Office of being slow to question witnesses in the case, which were detained
by the police, questioning policemen instead. “Investigators are either
biased or incompetent,” Lutsenko said.                      -30-

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
17.                    “THROUGH THE SMOKESCREEN”
       Wide inquiries planned in investigation of Ukrainian policeman’s killing

ANALYSIS & COMMENTARY: By Oleksandra Prymachenko
Zerkalo Nedeli, Kiev, Ukraine, in Russian 9 Sep 06; pp 1, 2
BBC Monitoring Service, United Kingdom, Monday, Sep 11, 2006

A serious analytical weekly has published a plan of investigation into the
murder of Col Roman Yerokhin. Prosecutors believe that finding out who
Yerokhin was, what he did and whom he knew is important for the
investigation. The plan envisages several checks into Yerokhin’s past
activities.

The conclusion of the investigation will depend on the positions of
political forces rather than evidence of the witnesses and suspects, the
weekly suspects.

The following is the text of the article by Oleksandra Prymachenko entitled
“Through the smokescreen” published in the Ukrainian weekly Zerkalo Nedeli
on 9 September; subheadings have been inserted editorially:

Interior Minister Yuriy Lutsenko doubts the involvement of a deputy from the
Party of Regions in the killing of police Col Roman Yerokhin. He said this
when commenting on the information disclosed last week that, apart from a
YTB [Yuliya Tymoshenko Bloc] deputy, a deputy from the Party of Regions
might be responsible for ordering the killing.

“On the Internet there are many emotions, theories, sometimes dirt and
distracting smoke… [ellipsis as published] A lot of information appears on
the Internet, but there are now operational investigative actions in
progress that will certainly lead to the killer.”

Lutsenko said that his main purpose as a minister was to discover the person
who ordered the crime: “All the other theories – about who he (Yerokhin)
was, how he worked, with whom he was acquainted – are secondary.”
(Ukrayinska Pravda website)

Of course, the person who ordered it (the instigator) is the main thing. But
who Yerokhin was, how he worked and who he was friendly with are not simply
secondary aspects.

These are not idle theories but questions that, if unanswered, will make it
impossible to solve the crime and establish what the instigator’s motive
was. That means answering the main question that is worrying far from just
the interior minister.

Zerkalo Nedeli was told by Lutsenko, whose interview was published in the
previous issue, that from the very first days of the disappearance of Col
Yerokhin, the Interior Ministry together with the prosecutor’s office and
the SBU [Security Service of Ukraine] undertook the investigation of the
case.

Zerkalo Nedeli has at its disposal a plan and draft outlines executed
undoubtedly by an authoritative hand. Our assumption is that the hand is
that of a prosecutor.

This plan testifies that the questions of “who Yerokhin was, how he worked
and with whom he was acquainted” are not only not secondary for the inquiry,
but completely equal to the first point – disclosure of the person who
ordered the crime. And one cannot disagree with that.
                 SALIENT POINTS OF INVESTIGATION PLAN 
The plan contains about a dozen points. We will quote some of them,
stressing that the document does not contain references to any political
force or specific politicians.

Thus, at the time of sketching out the note, it was planned to request
material of the in-house check by the internal security directorate of the
Ukrainian Interior Ministry in 2005 in the internal affairs directorate of
Donetsk Region on Yerokhin and Chornyy (Chornyy is deputy chief of the
Donetsk DCOC [Directorate for Combating Organized Crime], who worked

with Yerokhin and also moved to Kiev – Ed.)

It was also intended to request a document from the SBU Donetsk Region
directorate about the existence of operational information about corrupt
activity by Yerokhin during his time as deputy chief of the DCOC of the
Donetsk Region internal affairs directorate, which was presented in August
2006 at the request of Interior Minister Lutsenko.

The investigation was also interested in a request from Supreme Council
[parliament] deputy [Yuriy] Karmazin to the Interior Ministry, the SBU and
the Prosecutor-General’s Office [PGO] in January 2006 about corrupt activity
by Yerokhin and Chornyy and relevant material of how the departments
concerned reacted to it.

We do not know what the SBU document is about. And we realize that even if
it contains impartial information about Yerokhin it cannot serve as
unequivocal confirmation of his involvement in dirty deeds.

(Alas, one cannot discard the possibility that the information was handed
over not with the aim of cleansing the police ranks, but with the aim of
“re-roofing” [provision of new protection for] financial structures that
provide abundant revenues, considering the story of the law-enforcement
agencies and special services of our state.)

As far as the deputy’s request is concerned, amplification is required here.
In actual fact, there was no deputy’s request. There was a deputy’s appeal
“Regarding abuse of office by staff of the DCOC of the Interior Ministry
directorate in Donetsk Region, Yerokhin, Reznykov and Chornyy”.

The date of registration of the appeal to the PGO was 24 November 2005. All
the material is now in the archive. But there is also a document dated 13
December 2005, signed by Deputy Prosecutor-General [Viktor] Shokin, “On
consideration of the appeal regarding abuses…” [ellipsis as published],
true, without mentioning the three above-mentioned names.

We realize that an officer in the law-enforcement agencies engaged in
“unmasking” conversion [money laundering] centres will inevitably become a
target for the most crafty provocations and combinations of enemies. And the
whole arsenal of pressure and disparagement may be put into action against
him, in which “defamatory” information of a rival agency and even a deputy’s
request are not the strongest and far from the last means.

Apart from that, we understand that over every operative carrying out his
duty in today’s Ukrainian reality there is always hanging, like a sword of
Damocles, at least the article on exceeding powers.

Given all of this, nevertheless, if one gives special powers to an officer
specializing in combating money laundering, and also provides him with a
special Interior Ministry facility for residence (if only his own country
cottage), one needs to be as sure of him as of oneself.

When having Col Yerokhin subordinate to oneself personally and signing
operational detective files with one’s own hand, one should evaluate
everything, including, and perhaps primarily, operational information that
has to do with him.

But obviously, since the SBU response came in August, the minister’s request
timewise was connected with the disappearance of the subordinate rather than
with the time when Lutsenko was addressing the question of whether the DCOC
colonel merited such high trust.
    MINISTER’S SURPRISINGLY HIGH TRUST OF YEROKHIN 
The investigation is also interested in material in the criminal case of the
main directorate of the Ukrainian SBU for results of falsifying the election
of the president of Ukraine in 2004 (in the part of the involvement with the
charges against Yerokhin).

Is that involvement limited exclusively to handing out bonuses to
politically aware miners who had gone to Kiev to support their candidate
[current Prime Minister Viktor Yanukovych, who initially won the rigged
ballot]? Or is it a question of some other involvement?

Apart from that, the investigation is interested in information from Donetsk
banking institutions about the existence of deposit accounts of Yerokhin,
Chornyy and all members of their families in the period 2004-06. In itself
the question does not reveal anything, and the check may produce nothing.
But, we repeat, it should have been carried out before Yerokhin’s transfer
to Kiev rather than after it.

It is surprising, to put it mildly, how someone in relation to whom the
investigation has so many serious questions could have enjoyed such
confidence of the Interior Ministry leadership.

Apart from that, while paying our respects to the awareness of the compilers
of the plan quoted, we will make so bold as to add some points to it.

Is it true that material was found in Yerokhin’s office testifying to the
close interest displayed by Interior Ministry staff in particular in the
telephone conversations and movements of two political leaders – Tymoshenko
and Yanukovych?
               YEROKHIN VISITED USA SEVERAL TIMES?
Is it true that over the past few years Yerokhin visited the USA several
times on private invitations, obtaining the requisite permission from the
Interior Ministry leadership?

Is it true that the people detained in the case of Yerokhin’s murder
immediately named the person who ordered it – a people’s deputy of Ukraine -
and later denied their testimony? Is it true that their original evidence
was recorded on tape?

Is it true that when being transferred to Kiev in February 2006, Yerokhin
took with him the operational detection file on Ruslan Ts., who is
responsible for the activity of a bank whose effective owner is a citizen
known to many people by the nickname Kosa?

Why is a people’s deputy composing an alibi for a suspect in the case of
Yerokhin’s murder, giving obviously false evidence, when the “partner in
crime being given a helping hand” is in custody? Why has a criminal case not
been instigated in relation to that deputy?
    POLITICS WILL DETERMINE INVESTIGATION OUTCOME 

But however many questions are raised by the investigation and however
professionally and procedurally independent the behaviour of the
investigators is, be they Interior Ministry or the PGO, alas there is a
great risk that the established truth may be edited out of all recognition
before being released to the public, as has already happened on more than
one occasion.

And the fact that a deputy of some political force will be named as the
instigator will depend in the very last place on the real evidence of the
suspects, but primarily on the political disposition of forces.

Incidentally, regarding the plans of the head of the law-enforcement
department in this context, there are masses of them, as the classic used to
say. Not only operational, as we said earlier, but also potentially far more
global, in particular concerning party construction.

The role of the foundation of that construction, according to Zerkalo
Nedeli’s information, is given to an organization that has several times
passed from hand to hand, whose name in ringing-growling alliteration calls
Ukraine forward.

And, as evil tongues would have it, a deputy interior minister who is very
competent in the performance of his duty and an eminence grise who, when
Lutsenko came to the ministry, had every chance of heading the traffic
police are directly linked with the consolidation of that foundation. The
question of who dealt with the creation of the party’s financial foundation
remains open.

Fishing out the truth in fragments in the flows of official speeches, we are
left to observe precisely which party will be “converted” into “gold” by the
death of police Col Roman Yerokhin. And it may be that we will find the
truth about who ordered the killing and the real motives many years later -
in the memoirs of the investigators.

Ukrainian Prosecutor-General Oleksandr Medvedko says that the material in
the criminal case of the murder of the former officer of the Donetsk DCOC
[Yerokhin] contains no information about the involvement of people’s
deputies of Ukraine in committing the crime.

“We know about it from statements in the media. The material of the criminal
case contains no information regarding the involvement of any people’s
deputies in committing this crime,” he said at a news conference in Kiev on
8 September.

At the same time he stressed that there might be such information in
operational material. He also said that he had already issued an instruction
to study the operational detection file.

Medvedko also added that the PGO had taken on the case of Yerokhin’s

murder, since it takes over all high profile cases.          -30-
———————————————————————————————–
[return to index] Action Ukraine Report (AUR) Monitoring Service]
========================================================
     You are welcome to send us names for the AUR distribution list.
========================================================
18. PROFILE: UKRAINIAN COAL INDUSTRY MINISTER SERHIY TULUB

BBC Monitoring research in English 30 Aug 06
BBC Monitoring Service, United Kingdom, Sunday, Sep 10, 2006

Newly-appointed Coal Industry Minister Serhiy Tulub, an associate of Prime
Minister Viktor Yanukovych from his days as Donetsk governor, has the
reputation of a highly effective manager who follows instructions to the
letter and is not inclined to take personal initiatives.

In 2004-2005, Tulub served in Yanukovych’s previous government as fuel and
energy minister – a post he had earlier held in 1999-2000. He also headed
the state nuclear power company Enerhoatom from 2002 to 2005.

After the Orange Revolution, some media close to the new authorities accused
Tulub of financial and other improprieties at Enerhoatom, including
diverting funds from the company for Yanukovych’s presidential campaign and
pressurizing managers to ensure favourable results for Yanukovych in
districts around the country’s nuclear power plants.

In June 2005, the then head of the Main Auditing Directorate, Mykola
Syvulskyy, reported its finding that despite increasing output, Enerhoatom
made a loss of about 8m dollars in 2004, apparently because it was paying
inflated sums for supplies while bad debts were allowed to mount. However,
Tulub does not appear to have been investigated in connection with any
specific offences.

Tulub, who is married with two grown-up children, entered parliament in the
March 2006 parliamentary election as No 49 on the list of Yanukovych’s Party
of Regions. In line with the constitution, he will have to step down as an
MP if he is to continue to serve in the government.
                                            DONETSK ORIGINS
Born in Donetsk in 1953, Tulub started his career as a miner at a local
colliery in the 1970s. In 1976, he graduated from the Donetsk Polytechnic
Institute. Tulub joined the Communist Party committee of the Donetsk-Region
city of Khartsyzsk in 1981. Two years later, he was appointed director of a
local mine. In 1986, he became first secretary of the Khartsyzsk Communist
Party committee.

After holding a number of senior mining-industry positions in the early
1990s, Tulub was appointed head of the main directorate for coal-mining and
energy of the Donetsk regional administration in 1997. When Viktor
Yanukovych was appointed regional governor the same year, he made Tulub his
deputy in charge of energy, transport and communications.

In June 1998, Tulub was appointed coal minister in the government of Valeriy
Pustovoytenko. When the Coal Ministry was transformed into the Fuel and
Energy Ministry a year later, Tulub remained at its head.
                                  YUSHCHENKO GOVERNMENT
Tulub’s tenure in the cabinet of Viktor Yushchenko in 1999-2000 was marked
by open conflict with the prime minister and his deputy prime minister for
fuel and energy, Yuliya Tymoshenko. In a newspaper interview in January
2000, Tymoshenko went out of her way to praise Tulub’s professional
qualities.

But, in April, Tulub backed President Leonid Kuchma’s calls for Yushchenko
to dismiss Tymoshenko, reportedly saying that the existence of the post of
deputy prime minister for fuel and energy offended him because he considered
it an indication of distrust.

The following month, as Tulub and Tymoshenko drafted alternative programmes
for reforming the electricity market, Tulub sent a letter to Kuchma accusing
Yushchenko and Tymoshenko of blocking the ministry’s work. Tulub resigned in
June citing irreconcilable strategic differences with his government
colleagues.

Shortly afterwards, in August, Tulub was appointed deputy secretary of the
National Security and Defence Council – reportedly on the recommendation of
the leaders of the United Social Democratic Party, Viktor Medvedchuk and
Hryhoriy Surkis, who were also outspoken critics of Yushchenko’s and
Tymoshenko’s energy policies. Tulub used the position to continue criticism
of the cabinet’s handling of energy issues.

In November, a small explosive device went of at land plot where Tulub was
building a dacha. There were no injuries. Tulub viewed this as an attempt to
intimidate him due to his efforts “to end abuse by cabinet members in the
fuel and energy sector”.

                            FIRST YANUKOVYCH GOVERNMENT 
Tulub was appointed head of the national nuclear power company Enerhoatom in
June 2002. Although a court found that the previous Enerhoatom chief was
sacked unlawfully, Tulub kept the post.

In early 2003, the chairman of the Enerhoatom supervisory board, influential
businessman and MP Andriy Derkach, accused Tulub of corruption and failing
to ensure security at the country’s nuclear power stations. However, the
accusations were never officially confirmed, and in June 2003 the board was
dissolved.

Later, similar accusations against Tulub were voiced by the head of the
National Electricity Regulation Commission, Yuriy Prodan, but again they
were not confirmed.

In March 2004, Fuel and Energy Minister Serhiy Yermilov was dismissed -
reportedly due to his strong opposition to a Russian proposal to use the new
Odessa-Brody pipeline to pump oil to Odessa, rather than in the European
direction.

Tulub, who had earlier expressed doubts over the economic viability of the
pipeline, was reappointed as minister the following month. The Yanukovych
government eventually approved the reversal of the pipeline in July.

After his appointment, Tulub said completion of construction of new
generating sets at the Rivne and Khmelnytskyy nuclear power plants would be
his top priority. When the Khmelnytskyy reactor was connected to the
national grid in August 2004, Tulub received the title Hero of Ukraine. The
Rivne reactor was launched in October.

In a TV interview marking his 10th anniversary as president in July 2004,
Kuchma named Tulub, along with the late Transport Minister Heorhiy Kirpa and
state oil and gas company Naftohaz Ukrayiny chief Yuriy Boyko (now fuel and
energy minister), as a model state manager, praising his efforts to return
Enerhoatom to profitability from the verge of bankruptcy.          -30-

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
19. YES, SHE’S BEAUTIFUL, AND SHE AIMS TO STAY THAT WAY
                      Nataliya Gotsii, a model from Borispol, Ukraine

By Natasha Singer, The New York Times
New York, New York, Thursday, September 14, 2006

NEW YORK – BEFORE she lets a makeup artist begin painting her face for a
fashion show, Nataliya Gotsii, a model from Borispol, Ukraine, performs her
own backstage grooming routine.

At the Tuleh show last Sunday at Fashion Week in New York, while models with
newly manicured and pedicured nails lounged in chairs waiting for their pale
lacquer to dry, Ms. Gotsii, 22, was rummaging in her Carolina Herrera
satchel in search of her favorite skin-care items.

“I am crazy about my skin,” she said. With one hand still in her purse, she
added, “Come on, if the nail gets scratched, who is going to see?”

Out of the carpetbag came a canister of Evian water she used to liberally
spray her face and neck. Next, an eye gel from Innoxa, which she patted
lightly under her eyes. And, finally, clarifying eye drops, squeezed into
each eye. “It makes the white part of your eye turn more white, almost

blue,” she said.

Ms. Gotsii’s career took off three years ago when she won in a regional
modeling search in Kiev, Ukraine. Sent to New York to compete, she was named
the Ford Supermodel of the World in 2003. She recently shot an advertising
campaign for a Carolina Herrera fragrance and is appearing in magazine ads
for the Valentino Red line.

Ms. Gotsii struts runways with a predatory, leonine gait and an icy stare
cold enough to freeze Lake Michigan. She is equally fierce about taking care
of her skin.

During Fashion Week, she drinks two to three liters of water a day. She
prefers tea to coffee, doesn’t drink alcohol, avoids tanning booths and
wears sunscreen daily, she said.

At night, in her Battery Park apartment, she prepares her own face
treatments by boiling a concoction of herbs like mint and chamomile; then
she freezes the mixture into ice cube trays.

“If I wake up and I feel I need something, I wrap the ice in fabric – I do
not put ice directly on the face because it is bad for the capillaries – and
I put the cloth on my face,” she explained. “After 20 minutes, it takes off
puffiness.”

But Ms. Gotsii has one habit that is not so skin-friendly: smoking.
“Smoking, yeah, it’s bad, and not just for your skin,” she said. “But
everybody does it.”                                  -30-
———————————————————————————————-
http://www.nytimes.com/2006/09/14/fashion/14sside.html?_r=1&oref=slogin

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
20. TASTE OF UKRAINE: CLASSIC SAUERKRAUT DISH BIGOS
                              IS SIMMERED IN CULTURE

By Mat Schaffer, Boston Herald, Boston, MA, Wed, Sept 13, 2006

When Tania Vitvitsky is making bigos, you smell it as soon as you walk
through the front door. This classic sauerkraut and pork stew announces
itself with a distinctive pungent aroma that portends its bold, tart
flavors.

“I grew up eating Ukrainian food,” said Vitvitsky, executive director of
Sabre Foundation, a Cambridge-based organization that distributes donated
books to developing countries. “But I warn you, this is a cross-cultural
dish, and some people consider it Polish.

My parents are from a part of Ukraine that was under all kinds of
occupations – Austrian, Polish, Russian and German. A lot of the food
comes from many different cultures.”

Born in a displaced person’s camp in Austria after World War II, Vitvitsky,
along with her parents and grandmother, came to the United States when she
was 4 and settled in Philadelphia. Her bigos recipe is her grandmother’s.

“In the Ukrainian diaspora, we traditionally serve this during the midnight
break at weddings,” she said. “Ukrainian weddings are elaborate affairs.
After you have your main meal, you dance a lot, and at midnight, there’s a
whole other spread – all kinds of smaller dishes. Bigos is served there. I
made it for my daughter’s wedding.”

Vitvitsky recommends you begin your bigos the day before you intend
to eat it.

“It takes a couple of hours to simmer, and the taste develops overnight,”
she said. “Like borscht, I believe it’s much better the next day because the
flavors blend.”

 There are apparently as many bigos recipes as there are Eastern European
cooks.

“Some people use caraway; I don’t use caraway,” Vitvitsky said. “Some
people put ketchup in it; I don’t. I like the sauerkraut in a pouch – not
the can.
Some people use sauerkraut and not fresh cabbage. Some people put a whole
lot of meat in it; I just like it for flavoring. And I use salt pork, but
you can use kielbasa or any smoked meat. You can (also) make it meatless.”

 Vitvitsky’s daughter, Ksenia Olsen, a graduate of the French Culinary
Institute in New York City, continues the tradition.

 “Of course she makes bigos,” said her proud mom. “Yesterday she made
sauerkraut soup, which is another specialty of the family.”
                                    TANIA VITVITSKY’S BIGOS
1 lb. salt pork, rind removed and discarded, meat diced
1 T. oil
2-3 cloves garlic, peeled and diced
1 large onion, peeled and chopped
2 32-oz. pouches sauerkraut, drained and rinsed
1 14.5-oz. can diced plain tomatoes with their juices
1/2 small head cabbage, coarsely chopped
1 bay leaf
Salt and pepper to taste

 In a large, heavy kettle, brown the diced salt pork in the oil over medium
heat. Add the garlic and onion and saute, 2 to 3 minutes. Add the drained
and rinsed sauerkraut. Stir to combine.

Stir in the cabbage, tomatoes and bay leaf. Bring to a simmer, lower the
heat and simmer for 2 to 2 hours. Salt and pepper to taste. Before serving,
slowly reheat and correct the seasonings.

It is traditionally served with rye bread and kovbasa (Ukrainian) or
kielbasa (Polish) smoked sausage. Mezeria (cucumber-sour cream salad)

and mashed potatoes also are nice accompaniments.

Serves 4 to 6 as an entree, 8 to 10 as a side dish.
                    MEZERIA (CUCUMBER-SOUR CREAM SALAD)
3 large pickling cucumbers, thinly sliced
1/2 small onion, peeled and thinly sliced
3-4 T. sour cream
1 T. fresh dill, chopped
Salt and pepper to taste
Combine all ingredients. Refrigerate for an hour before serving.
Serves 4 to 6 as a side dish.
————————————————————————————————-
http://theedge.bostonherald.com/foodNews/view.bg?articleid=157239&format=&page=1

—————————————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
      Please contact us if you no longer wish to receive the AUR    
========================================================
21.        “GUELDER ROSE SUMMER ON THE DNIPRO”
                      Poltava oblast hosts international folklore festival

By Ksenia Zalutska, Komsomolske, Poltava Oblast
The Day Weekly Digest In English, #27
Kyiv, Ukraine, Tuesday, September 12, 2006

“Guelder Rose Summer on the Dnipro” has become the calling card of
the city of Komsomolske in Poltava oblast, pulling in thousands of visitors
from 40 countries in the past seven years.

The idea of holding this festival belongs to Leonid Kotovsky, ex-director of
the municipal Palace of Culture and Art, who has been the festival organizer
for four years in a row.

This year’s festivities began with a special liturgy at St. Nicholas
Cathedral. Afterwards the festival procession visited the Cossack Grave,
laid flowers and wreaths at the Eternal Flame, and marched through the city
streets. Various ensembles performed one number each from their repertory at
every intersection.
                                                   GUESTS
This year festival visitors were enchanted by the Portuguese ensemble As
Salineiras de Lavos from Figueira da Foz. The group, whose name means “the
women who extract salt in sea lagoons,” was founded in 1959. The members
make their own costumes based on 110-year-old patterns, and their shoes
(sabots) are made of cork.

The seven-kilogram baskets that the women hold on their heads during their
performance are filled with real sea salt. Before every appearance, the
dancers wet the salt to keep it from crumbling; that’s why it looks
artificial.

Throughout the 47 years of its existence, this Portuguese folklore group has
toured Spain, France, Germany, Italy, the Netherlands, Belgium, and Sweden.
This was their first visit to Ukraine.

Toradi, a traditional Korean dance group, also wowed audiences. The dancers
speak Korean, Russian, and Ukrainian (they were born and raised in Kyiv).
Toradi was founded six years ago under the aegis of a Kyivan-Korean
association to encourage Ukraine’s ethnic Korean women to study their
ancestral culture and traditions.

The ensemble’s repertory consists of 10 numbers, including dances performed
at Buddhist temples and imperial palaces, as well as shamanic and folk
dances.

This is the girls’ second appearance in Komsomolske. The audience especially
liked their “Dance of the Three Drums.” The history of this dance dates back
to the days when shamanism was widespread in Korea. It was thought that the
sound of drumbeats could drive evil spirits from people and their dwellings.

The Polish regional folklore group Nawojowyczi performed folk songs and
dances, many of which are well known to Komsomolske audiences.

The exotic group Kobama presented the cultural heritage of Central Africa’s
Republic of Togo. The ensemble is named after the old singer Kolani Baba
Mamadou, who used to sing for the king of the Mandingo Empire of Mali.

Since their repertoire consists of traditional ritual dances, the group is
often invited to perform at festive events, such as weddings and birthday
parties. The group’s members are French-speaking.

The folk song ensemble Vechorka from Chalna, in Russia’s Karelia region, was
founded in 1988. All the members, aged 15 to 20, studied singing. The
ensemble has a serious repertory. Toward the end of the festival, the group
performed a game involving some city residents, including Mayor Oleksandr
Popov.

After their performance the Vechorka singers said that Karelian folk songs
are the star feature of their repertory. Owing to the fact that previous
governments did not encourage the Karelian language and traditions, they
began to die out. A large number of Karelians moved to Finland.

Now Karelia is populated by Pomors, Vepses, Finns, Russians, and even
Ukrainians. Our Karelian guests were very glad that there was balmy weather
in Ukraine because it was already snowing in Chalna.

The folklore group Matitsa from Kaliningrad was founded in 1989. Its 15
young members perform songs, and dances, and enact games and ritual and
calendar feasts from Russia’s different regions.
                                                AWARDS
The program of “Guelder Rose Summer on the Dnipro” featured guests from

the near and far abroad and two Ukrainian groups: the folk dance ensemble
Besarabsky Souvenir (Bilhorod-Dnistrovsky) and the Slavutych Folk Choir
from Komsomolske, which added national coloration to the festival program.

Turing the final gala concert, the jury named winners in the nominations
“Oldest and Youngest Festival Participants,” “Miss and Mr. Festival,” and
“Audience Prize.”

The youngest participant was Sergei Fomin, 11, from Karelia (Russia), while
82-year-old Bronislaw Bukanski from Poland was the oldest.

Gbteglo Saso from the Republic of Togo (Africa) was chosen Mr. Festival,

and Hanna Nedialkova (Bilhorod-Dnistrovsky, Ukraine) was proclaimed Miss
Festival.

When the festival ended, the visiting performers left the city, but not all
of them left the country. The groups from Portugal, Karelia, and Togo are
going on a tour of Ukraine and will take part in the international folklore
festival “Polissian Summer and Folklore” to be held in Lutsk.    -30-

———————————————————————————————-
LINK: http://www.day.kiev.ua/168559/
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
    If you are receiving more than one copy of the AUR please contact us.
    Please contact us if you no longer wish to receive the AUR.    
       You are welcome to send us names for the AUR distribution list.
   If you are missing some issues of the AUR please let us know.
========================================================
         “ACTION UKRAINE REPORT – AUR”
         A Free, Not-For-Profit, Independent, Public Service Newsletter
                With major support from The Bleyzer Foundation
 
      Articles are Distributed For Information, Research, Education
                Academic, Discussion and Personal Purposes Only
                                  Additional readers are welcome.
========================================================
      SigmaBleyzer/The Bleyzer Foundation Economic Reports
                “SigmaBleyzer – Where Opportunities Emerge”
 
The SigmaBleyzer Emerging Markets Private Equity Investment Group
and The Bleyzer Foundation offers a comprehensive collection of documents,
reports and presentations published by its business units and organizations.
 
All publications are grouped by categories: Marketing; Economic Country
Reports; Presentations; Ukrainian Equity Guide; Monthly Macroeconomic
Situation Reports (Romania, Bulgaria, Ukraine).
 
You can be on an e-mail distribution list to receive automatically, on a
monthly basis, any or all of the Macroeconomic Situation Reports (Romania,
Bulgaria, Ukraine) by sending an e-mail to mwilliams@SigmaBleyzer.com.
               “UKRAINE – A COUNTRY OF NEW OPPORTUNITIES”
========================================================
   UKRAINE INFORMATION WEBSITE: http://www.ArtUkraine.com
========================================================
    “WELCOME TO UKRAINE”- “NARODNE MYSTETSTVO”
                                   (Folk Art) MAGAZINES
For information on how to subscribe to the “Welcome to Ukraine” magazine
in English, or the Ukrainian Folk Art magazine “Narodne Mystetstvo” in
Ukrainian, write to ArtUkraine.com@starpower.net. Complete information is
========================================================
              ACTION UKRAINE PROGRAM – SPONSORS
                              Action Ukraine Report (AUR)
               Holodomor Art and Graphics Collection & Exhibitions
          “Working to Secure & Enhance Ukraine’s Democratic Future”

1.  THE BLEYZER FOUNDATION, Dr. Edilberto Segura,
Chairman; Victor Gekker, Executive Director, Kyiv, Ukraine;
Washington, D.C., http://www.bleyzerfoundation.com.
   Additional supporting sponsors for the Action Ukraine Program are:
2. UKRAINIAN FEDERATION OF AMERICA (UFA), Zenia Chernyk,
Chairperson; Vera M. Andryczyk, President; Huntingdon Valley,
Pennsylvania
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 298 7275 in Kyiv,
kau@ukrnet.net
4.  ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
5. Law firm UKRAINIAN LEGAL GROUP, Irina Paliashvili, President;
Kiev and Washington, general@rulg.com, www.rulg.com.
6. BAHRIANY FOUNDATION, INC., Dr. Anatol Lysyj, Chairman,
Minneapolis, Minnesota
7. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX  77024; bill.hunter@volia-software.com.
8. ODUM- Association of American Youth of Ukrainian Descent,
Minnesota Chapter, Natalia Yarr, Chairperson
9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C.,
Dr. Susanne Lotarski, President/CEO; E. Morgan Williams,
SigmaBleyzer, Chairman, Executive Committee, Board of Directors;
John Stephens, Cape Point Capital, Secretary/Treasurer
10. UKRAINIAN ORTHODOX CHURCH OF THE USA, South
Brown Brook, New Jersey, http://www.uocofusa.org
11. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
12. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO; Vera
Andruskiw, CPP Wash Project Director, Washington, D.C.; Markian
Bilynskyj, VP/Director of Field Operations; Marta Kolomayets, CPP
Kyiv Project Director, Kyiv, Ukraine. Web: http://www.USUkraine.org
13. WJ GROUP of Ag Companies, Kyiv, Ukraine, David Holpert, Chief
Financial Officer, Chicago, IL; http://www.wjgrain.com/en/links/index.html
14. EUGENIA SAKEVYCH DALLAS, Author, “One Woman, Five
Lives, Five Countries,” ‘Her life’s journey begins with the 1932-1933
genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
15. ALEX AND HELEN WOSKOB, College Station, Pennsylvania
16. SWIFT FOUNDATION, San Luis Obispo, California
17. TRAVEL TO UKRAINE website, http://www.TravelToUkraine.org,
A program of the U.S-Ukraine Foundation, Washington, D.C.
========================================================
 TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR,
around five times a week, please send your name, country of residence,
and e-mail contact information to morganw@patriot.net. Information about
your occupation and your interest in Ukraine is also appreciated.
 
If you do not wish to read the ACTION UKRAINE REPORT please
contact us immediately by e-mail to morganw@patriot.net.  If you are
receiving more than one copy please let us know so this can be corrected
 
              SPAM BLOCKERS ARE A REAL PROBLEM                 
If you do not receive a copy of the AUR it is probably because of a
SPAM BLOCKER maintained by your server or by yourself on your
computer. Spam blockers are set in very arbitrary and impersonal ways
and block out e-mails because of words found in many news stories.
 
Spam blockers also sometimes reject the AUR for other arbitrary reasons
we have not been able to identify. If you do not receive some of the AUR
numbers please let us know and we will send you the missing issues. Please
make sure the spam blocker used by your server and also the one on your
personal computer, if you use a spam blocker, is set properly to receive
the Action Ukraine Report (AUR).

========================================================
                        PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer

Emerging Markets Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
Mobile in Kyiv: 8 050 689 2874
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
========================================================
    Power Corrupts and Absolute Power Corrupts Absolutely. 
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================

Leave a comment

Filed under Uncategorized

AUR#756 Sept 13 Legal Framework For Business; Fuel That Grows In The Field; Globalized Village; Vat Refunds Up Donetsk Region; Old-New Broom; Ugly Truth

=========================================================
 ACTION UKRAINE REPORT – AUR           
                  An International Newsletter, The Latest, Up-To-Date
                       In-Depth Ukrainian News, Analysis and Commentary

                        Ukrainian History, Culture, Arts, Business, Religion,
           Sports, Government, and Politics, in Ukraine and Around the World       

                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 756
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN WASHINGTON, DC, WEDNESDAY, SEPTEMBER 13, 2006
 
                Help Build the Worldwide Action Ukraine Network
 Send the AUR to your colleagues and friends, urge them to sign up
               -——-  INDEX OF ARTICLES  ——–
              Clicking on the title of any article takes you directly to the article.               
    Return to the Index by clicking on Return to Index at the end of each article
1.    UKRAINE: LEGAL FRAMEWORK FOR BUSINESS OPERATIONS
                 The current legal basis is not only inadequate, but to a large
         extent it sabotages the development of a market economy in Ukraine.

PRESENTATION: Dr. Irina Paliashvili, President and Senior Counsel
Russian-Ukrainian Legal Group, P.A., Kyiv and Washington, D.C.
Organisation for Economic Co-operation & Development EU/TACIS Program
Roundtable on Enterprise Development & Investment Climate in Ukraine
Kyiv, Ukraine, Tuesday, 13 June 2006

2AGRICULTURE ASSOCIATIONS ASKING UKRAINIAN CABINET
        TO RECONSIDER TAXES IMPOSED ON FARMERS IN 2007
              Confederation president Kozachenko calls for lower taxes.
Interfax-Ukraine, Kyiv, Ukraine, Tuesday, September 12, 2006

3.                            FUEL THAT GROWS IN THE FIELD
By Svitlana Chystiakova, Kherson
The Day Weekly Digest in English, #27
Kyiv, Ukraine, Tuesday, 12 September 2006

4.         WORLD BANK FORECASTS 2007 INFLATION BELOW

                              10% IN UKRAINE, GDP AT 6-7%
Interfax-Ukraine, Kyiv, Ukraine, Tuesday, September 12, 2006

5.     WORLD BANK $700M WORTH OF PROJECTS FOR UKRAINE
Interfax-Ukraine, Kyiv, Ukraine, Tuesday, September 12, 2006

6GLOBALIZED VILLAGE OF PLUZHNE: SUPPLYING EUROPE WITH
    MANPOWER, INTEGRATED INTO THE WORLD LABOR MARKET
By Mykhailo Vasylevsky, The Day, Iziaslav raion, Khmelnytsky oblast
The Day Weekly Digest in English, #27
Kyiv, Ukraine, Tuesday, September 12, 2006

7.     REPRESENTATIVES OF U.S. BUSINESSES MEET WITH US

Action Ukraine Report (AUR) #756, Article 7
Kyiv, Ukraine, Wednesday, September 13, 2006
8.    EBRD MAY LOAN UKRAINE’S LEADING PHARMACEUTICAL
                     MANUFACTURER OJSC FARMAK EUR32M
Interfax-Ukraine, Tuesday, September 12, 2006

9.   SWEDISH COMPANIES TO SPEND EUR 40M REHABILITATING
          UKRAINIAN OIL FIELDS IN IVANO-FRANKIVSK REGION
Interfax-Ukraine, Kyiv, Ukraine, Tuesday, September 12, 2006

10US INVESTMENT OPTIONS GROUP ACQUIRES ALMOST 96.6%

       OF STOCKS IN BERDIANSKY ZHATKI FARM MACHINERY CO
Interfax-Ukraine, Kyiv, Ukraine, Tuesday, September 12, 2006

11.          “DOES THE GOVERNMENT PACK ITS SUITCASES?”
                VAT refunds in Donetsk region twice as much as planned
Ukrayina Moloda newspaper, Kiev, in Ukrainian 6 Sep 06; p 1, 5
BBC Monitoring Service, United Kingdom, Thursday, Sep 07, 2006

12UKRAINIAN PRES SEND ANTI-CORRUPTION PACKAGE TO RADA

Interfax-Ukraine news agency, Kiev, in Russian 1400 gmt 11 Sep 06
BBC Monitoring Service, United Kingdom, Monday, Sep 11, 2006

13“LEARNING FROM VICTORIES: WHAT UKRAINE’S ECONOMY

         SHOULD BE LIKE IN CONDITIONS OF POLITICAL REFORM”
                  Ukrainian prime minister outlines cabinet programme
PARLIAMENT SPEECH: By Viktor Yanukovych, Prime Minister, Ukraine
Den, Kiev, Ukraine, in Ukrainian 6 Sep 06; p 5
BBC Monitoring Service, United Kingdom, Friday, Sep 08, 2006

14.           HOW CLEAN DOES THE OLD-NEW BROOM SWEEP?
        Yanukovych team expands efforts to gain control over all of Ukraine
ANALYSIS & COMMENTARY:
By Yulia Mostovaya

Zerkalo Nedeli On The Web, Mirror Weekly, No. 34 (613)
International Social Political Weekly
Kyiv, Ukraine, Saturday, 9 – 15 September 2006

15UGLY TRUTHS OF UKRAINE’S ELECTION RESULTS, 2004 & 2006
ANALYSIS & COMMENTARY: By Taras Kuzio
The Ukrainian Observer monthly magazine, #74/7
The Willard Group, Kyiv, Ukraine, September 2006

16.   WHY UKRAINE NEEDS A GOOD OPPOSITION AND NOT UNITY

                  Hocus-pocus: poof to democracy and back to the USSR
ANALYSIS & COMMENTARY: By Oksana Bashuk Hepburn, Canada
Maidan website, Kyiv, Ukraine, Thursday, August 31, 2006

17.               STATE GLORY: GULAG OF THE RUSSIAN MIND
COMMENTARY: By Nina Khrushcheva
Japan Times, Tokyo, Japan, Friday, Aug. 25, 2006

18MONUMENTS TO UNKNOWN WARRIORS, INSURGENTS’ STORIES
By Natalia Malimon, Lutsk Raion, Volyn oblast
The Day Weekly Digest in English, #27
Kyiv, Ukraine, Tuesday, September 12, 2006
========================================================
1
UKRAINE: LEGAL FRAMEWORK FOR BUSINESS OPERATIONS
                 The current legal basis is not only inadequate, but to a large
          extent it sabotages the development of a market economy in Ukraine.

PRESENTATION: Dr. Irina Paliashvili, President and Senior Counsel
Russian-Ukrainian Legal Group, P.A., Kyiv and Washington, D.C.
Organisation for Economic Co-operation & Development EU/TACIS Program
Roundtable on Enterprise Development & Investment Climate in Ukraine
Kyiv, Ukraine, Tuesday, 13 June 2006

SESSION 1: LEGAL FRAMEWORK FOR BUSINESS OPERATIONS

SUMMARY OF RECOMMENDATIONS AND ISSUES FOR DISCUSSION

In light of the fundamental and systematic economic reforms needed in
Ukraine and the pronounced “rule of law” (“verkhovenstvo prava”) policy,
as well as on-going dramatic increase in foreign and domestic investment,
it is imperative to ensure that Ukraine’s legal system is prepared to serve
as a modern and adequate legal basis for the economy.

The current legal basis is not only inadequate, but to a large extent it
sabotages the development of a market economy in Ukraine.

There has been for many years various efforts made by the Government,
international institutions, business organizations to conduct an inventory
and evaluation of everything that has gone wrong with the legal framework
for business in Ukraine.

This evaluation, to a large extent, already has been accomplished: the
problems and the proposed solutions were identified in great detail in
several major recent reports, including:

     (i) the OECD Report on Improving the Conditions for Enterprise
Development and the Investment Climate for Domestic and International
Investors in Ukraine: Legal Issues With Regard to Business Operations
and Investment;
     (ii) the UNDP Blue Ribbon Commission for Ukraine’s “Proposals for
the president: A New Wave of Reform”;
     (iii) the EBA Report on Barriers to Investment in Ukraine.

The main priority for the Government, therefore, should be to act, and to
act swiftly and decisively.

Ukraine’s legal system can be improved immediately and dramatically just by
cancelling the most archaic and damaging legislation, using the so called
“guillotine” principle, which worked successfully in other countries that
undertook modernization reforms.

What is also very important for this work is that the Government stays in
constant contact with the business and investment communities.

To this end, a number of practical measures is suggested, which basically
center on making Government available for on-going dialogue with the
business and investment communities, represented by various business groups
(such as the European Business Association, AmCham, reputable industrial
and trade associations, associations of small and medium-sized businesses,
the business press, etc.).

In particular:
     (i) the Cabinet should designate a Vice Prime Minister and one Deputy
Minister in each Ministry, and assign to them the responsibility to act as a
liaison with the business and investment communities;
     (ii) Government officials should actively participate in business
conferences in Ukraine and abroad (which very rarely happened in the past);
     (iii) Government officials should attend meetings of various business
groups and take immediate action on their concerns;
     (iv) the Government should create an analytical/monitoring body
(perhaps on the basis of the current Committee on Entrepreneurship and
Regulatory Policy) that will research, collect and summarize the problems
that businesses are facing and swiftly react to them and hold Government
bodies and individual officials accountable for violations.

OECD has been working for several years in close cooperation the Ukrainian
Government, international institutions, and private sector to improve
Ukraine’s legislative environment and make the country more attractive to
domestic and foreign investors alike.

FIVE KEY SUBSTANTIVE PROBLEMS IN CURRENT LEGAL SYSTEM
Based on this work, five key substantive problems in the current legal
system were identified and the solutions were developed and recommended,
as described below.

I. CIVIL AND COMMERCIAL CODES ———-
On 1 January 2004 two separate Codes, Civil Code and Commercial Code,
took effect, becoming the new legal basis for civil and business relations
in Ukraine.

Both Codes were developed over the course of several years by two
different drafting groups with very little or no coordination between them.

The Civil Code covers relations among both individuals and legal entities
and generally market-oriented, but contains many conflicted rules and flaws,
which act as an impediment to enterprise development and investment.

The Commercial Code covers relations among legal entities, and the State,
and is clearly anti-market.

For example, the Commercial Code severely restricts the freedom of contract
and replaces such basic types of contract as sale-purchase with the archaic
“supply” contract, which was used under the Soviet system.

Moreover, the Commercial Code specifies that “supply” contracts will be
further regulated by decrees from the Cabinet of Ministers.

With the two opposing Codes, Ukraine ended up with two fundamental laws,
regulating largely the same subject, but being conceptually opposite and
containing numerous specific conflicts.

Moreover, each of these two Codes has many internal conflicts, and both

of them conflict with other existing laws.

Today, drafting any simple contract in Ukraine is a frustrating and
impossible exercise in reconciling artificially created irreconcilable
differences.

numerous other unnecessary obstacles and hidden charges (some of them are
described below) were created by both Codes that make full compliance with
the law virtually impossible.

The consequences of this situation include not only serious impediments to
enterprise development and investment, but also overwhelming number of
court disputes, and create breeding ground for corruption in the regulatory
authorities and in the court system.

Based on a thorough study of both Codes and two years of practice, OECD
came to a recommendation, which is similar to the one made in the UNDP Blue
Ribbon Commission Report’s Key Recommendation #8 (out of 12): there is an
urgent need “to abolish the anachronistic Economic [Commercial] Code and
improve the market-oriented Civil Code”.

The “guillotine” principle should be applied in this case, and should bring
an immediate and unequivocal end to the long and fruitless academic debates
about which Code is better and how to reconcile them.

The Civil Code should be quickly and substantively improved, based on the
Dutch Civil Code, which in a slightly transformed format, has been
successfully applied in Russia and Kazakhstan for the last 10 years.

II. CORPORATE LEGISLATION ———-
Corporate legislation suffers from two major gaps: Ukraine urgently needs a
Law on Joint-Stock Companies and a Law on Limited Liability Companies,
which are the two most often used corporate structures in Ukraine.

However, the good quality corporate laws cannot be developed until the
problem of the irreconcilable Civil and Commercial Codes is resolved.

III. ANTIMONOPOLY LEGISLATION ———-
The unnecessarily broad and ambiguous antimonopoly legislation of Ukraine,
which regulates coordinated actions and economic concentrations, and the
formalistic and extremely low monetary thresholds for transactions requiring
prior approval from the Antimonopoly Committee of Ukraine (“AMC”), force
companies to seek AMC prior approval of actions that really have no bearing
on competition in the Ukrainian market at all.

In practice the AMC’s prior approval requirement is frequently ignored,
knowingly or unknowingly.  The AMC, however, has extensive instruments
for applying large and often unjustified sanctions for even minor
violations.

The solution would be:
     (i) to remove the prior approval requirement in many cases altogether,
or to replace it in some cases with notification requirement; and
     (ii) to considerably increase the monetary thresholds for transactions
requiring the AMC prior approval.

IV. UNNECESSARY OBSTACLES AND HIDDEN CHARGES ———-
Under the previous political regime, Ukraine was notorious for its
bureaucratic red tape, its unnecessary barriers and serious charges that
were disguised as various fees, fines, mandatory intermediary and
commission payments, etc.

Immediate and drastic measures are required to eliminate such
unnecessary obstacles and hidden charges.

Just a few examples:


     [1] ARTIFICIAL, UNNECESSARY, OVERLY EXPENSIVE AND
STEADILY INCREASING INVOLVEMENT OF NOTARIES IN
MANY ASPECTS OF BUSINESS RELATIONS.
For example, a mandatory notarisation requirement was imposed on many
routine transactions between legal entities for a notary fee of a hefty 1%
of the value of the transaction.

Thus, the new Civil Code introduced an unnecessary rule that all lease
agreements, including between companies, whose term is one year or longer,
are subject to notarisation, forcing all such lease agreements to carry a
burden of an extra 1% for no added value.

Another problem, partially created by the new Civil Code and partially by
subsequent regulations, is complications with issuing powers of attorney,
which businesses use in their operations all the time.

First, an underlying contract is now required for a power of attorney to be
issued  (a requirement that does not exist in most legal systems of the
world) and second, a power of attorney no longer can be broad, but must
be very specific.

Considering that the cost of notarising each power of attorney is around
UAH 50 ($10), this adds unnecessary complications and costs to doing
business.

The following measures are recommended for putting notarisation under
control:

     (i) immediate cancellation of all unnecessary notarisation
requirements;
     (ii) reducing notary fees for all remaining notarisations;
     (iii) returning to a simple power of attorney system with no underlying
contract requirement and reintroducing a possibility for giving broad
authorizations.

     [2] 90-DAYS RULE.
This is a rule that was designed some time ago, allegedly to prevent capital
flight, and which while failing this task, put a tremendous financial burden
on legitimate business operations.

Specifically, the tax authorities impose severe fines and sanctions when a
Ukrainian business fails to receive hard currency proceeds from sales (in
case of export contracts), or goods (in case of import contracts), under its
international contracts within 90 days of the due date.

Moreover, the fines are not limited to the amounts that the Ukrainian
company in question failed to receive within 90 days, meaning that the
imposition of fines continues indefinitely and can exceed the original
unreceived amount by many times, and could theoretically bankrupt a
company.

The best recommendation here would be to remove this outdated 90-days
rule altogether, because it has proved incapable of preventing capital
flight, and only serves as an absurdly heavy burden on doing legitimate
business.

     [3] OUTDATED REQUIREMENTS AS TO FORM OF CONTRACTS.
Modern business operations are often conducted electronically; the contracts
are signed via fax or electronic mail and corporate seals are not used in
most developed countries.

It is interesting to note that in Ukraine, until the new Civil Code came
into effect in 2004, the law only required that parties to a contract agree,
in appropriate form, on certain essential terms and conditions.

The lack of an imprint of a corporate seal on a signed agreement in most
cases did not constitute a violation of the form of the agreement.

The new Civil Code, however, demands that all contracts, domestic and
international (including addenda, amendments, and other contractual
documents) be signed with an original corporate seal affixed.  Lack of a
corporate seal can make the contract invalid.

This is a big step backwards and a major inconvenience, so businesses
continue making contracts ignoring the corporate seal requirements, which
obviously puts the validity of numerous contracts in doubt and provokes
unnecessary disputes.

The recommendation with regard to this problem is to modernize the
requirements as to the form of contracts, including accepting contracts made
by fax and other electronic means of communication and removing the
corporate seal requirement altogether.

     [4] UNNECESSARY OBSTACLES AND HIDDEN CHARGES IN
THE AREAS OF THE CURRENCY REGIME AND THE FINANCIAL
SECTOR, INCLUDING:
     (i) overregulation of ordinary financial activities (for example, in
order to issue a simple parent guarantee, a company needs to be registered
with the State Commission of Ukraine for Regulation of Financial Services
Markets of Ukraine);
     (ii) the requirement that any sale-purchase of Ukrainian securities
(even outside of Ukraine between non-residents) must be carried out only
with the participation of a Ukrainian securities trader;
     (iii) restrictions on inter-company loans;
     (iv) excessive licensing requirements by the NBU with regard to foreign
currency transactions and payments outside Ukraine; and many others.

     [5] ONGOING RESTRICTIONS ON LAND OWNERSHIP FOR
FOREIGN INVESTORS, WHEREBY UKRAINIAN SUBSIDIARIES OF
FOREIGN COMPANIES STILL CANNOT ACQUIRE OWNERSHIP OF
LAND PLOTS IN UKRAINE.

V. REGULATORY GOVERNANCE AND THE PERMITS SYSTEM ——-
Another tremendous problem, which affects all businesses operating in
Ukraine at all times, is the chaotic, arbitrary, excessive and incredibly
costly overregulation and interference by the authorities in all spheres of
business.

It is loosely referred to as the “permits system”, or by the broader,
internationally known term “regulatory governance”.

Several half-hearted attempts to “deregulate” were made by various Ukrainian
Governments, but in the absence of true political will, they generally
resulted in more overregulation and more chaos.

The latest effort to eliminate several thousands regulatory acts in 2005 did
not achieve considerable results because the cancelled acts turned out to be
archaic documents, which had little to do with business regulation and were
not applied in practice in any case.

The solution to the above problem has been proposed by the OECD which,
as a first step, suggested adopting a framework Law on Fundamentals of the
Permits System as soon as possible, which shall achieve two major goals:

     (i) stop the abuse of entrepreneurs; and
     (ii) give a head start to establishing a modern, transparent and
liberalized permits system, setting up its principles and its framework,
including for enforcement, monitoring, appeals procedure and liability (for
the abuse of the system by Government officials) mechanisms.   -30-

————————————————————————————————
E-mail: Dr. Irina Paliashvili, general@rulg.com; Chronicle of Recent
Developments in Ukrainian Legislation: http://www.rulg.com/chronicle.asp.
————————————————————————————————
NOTE:  The formatting of the article was edited by the Action
Ukraine Report (AUR), Washington, D.C.
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2. AGRICULTURE ASSOCIATIONS ASKING UKRAINIAN CABINET
        TO RECONSIDER TAXES IMPOSED ON FARMERS IN 2007
              Confederation president Kozachenko calls for lower taxes.

Interfax-Ukraine, Kyiv, Ukraine, Tuesday, September 12, 2006

KYIV – Ukraine’s agriculture associations have asked the cabinet to
reconsider taxes imposed on farmers in 2007. President of the Ukrainian
Agrarian Confederation Leonid Kozachenko said at a press conference on
Monday that the associations are planning to send a request to Premier
Viktor Yanukovych.

Kozachenko said that on January 1, 2007 the grace period of VAT payments

for farmers expires. Moreover, from January 1, payment of a fixed agriculture
tax on the remuneration of labour will grow by 20%. He forecasted that the
losses of farmers next year will be around UAH 4.6 billion.

Kozachenko said that the government and the associations should jointly work
out a strategy for the further taxation of the agriculture sector, and if
taxes are reduced, an effective scheme for supporting farmers should be set
up.

He said that the associations hope to meet with the Ukrainian premier to
discuss possible options for improving the situation in the sector and
drawing up schemes for taxation and support of the sector. “[The
associations] agreed that such a meeting should be held,” Kozachenko said.

Head of the Association of Farmers and Private Landowners of Ukraine Ivan
Tomich said at the press conference that the current taxation system for
farmers could be reformed if the state gives farmers UAH 6.5 billion in
support in 2007. He said that subsidy and fund distribution schemes

should be improved.

Deputy Agriculture Minister Yuriy Luzan told the press that the ministry is
elaborating amendments to the taxation system for the agriculture sector for
2007. The ministry, in particular, proposes to set VAT at 12%, and change
requirements on the enterprises under the grace system.

He said that the ministry proposes to give the right to use the special
taxation regime to enterprises that produce 75% of the country’s agriculture
products. Luzan said that the scheme for 2007 foresees a special regime for
enterprises that produce other types of products worth no more than UAH
300,000.                                          -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3.                        FUEL THAT GROWS IN THE FIELD

By Svitlana Chystiakova, Kherson
The Day Weekly Digest in English, #27
Kyiv, Ukraine, Tuesday, 12 September 2006

To some people the rape plant has an unusual name. Even so, this crop is
attracting increasing attention. What is rape? Even people with little
connection to agriculture often see this crop in the fields, particularly
its bright yellow color.

Rape not only gladdens the eye; it is also an inexhaustible source of useful
agents that are absolutely indispensable to people. On the one hand, it is a
popular source of vegetable oil used in many branches of industry; on the
other, it is good fodder.

Rapeseed oil contains 40-47 percent of fat, 20 percent protein, and 5
percent cellulose. It is also very beneficial to people who live a healthy
lifestyle. This plant is also a wonderful herald of winter crops.

Ukraine’s market demand for rape is between 500,000 and 800,000 tons a year,
but actual yields amount to some 150,000 tons. Winter rape is mostly grown
in Kherson oblast, where winter crops have twice the yields of spring crops.

In the last few years winter rape plantings have considerably expanded. The
agriculture and food department of the Kherson Oblast State Administration
reports that these crops occupy 9,000 hectares, the largest planting in all
the years of its cultivation.

Rape can be planted all over the region, although it is most popular in Hola
Prystan raion, where it occupies over one-third of all arable soil.

Large plots of winter rape are sown in Skadovske and Kakhivka raions.
Meanwhile, this precious crop is practically ignored in Velyka
Oleksandrivka, Vysokopillia, Verkhnii Rohachyk, and Ivanivka raions of
Kherson oblast.

The expansion of areas devoted to rape is facilitated by hybrids recently
developed by German breeders. These seeds can be sown 15- 20 days
later than the Ukrainian varieties.

It is thus possible to use damp soils in September and the first 10 days of
October. A farmer who plants rape once will plant it every year. There are
several advantages to growing winter rape.

[1] First, it means selling rape and receiving money in July, when it is
especially needed for harvesting early grain yields and preparing for winter
crop sowing.

[2] Scientists say that the world’s oil deposits will last only another
50-80 years. Even a country, like Iran, with its large deposits of black
gold, is growing rape to produce biofuel. Biofuel is methyl ether (90%
rapeseed oil plus 10% methyl alcohol).

In order to ease the ecological burden, 5-35 percent of biofuel is added to
petroleum-based diesel oil. Biodiesel can be obtained at production plants
(up to 200 tons of biodiesel a month, working only one shift). This is not
being done yet in Ukraine. In 2005, 201,400 hectares were devoted to rape
crops.

[3] There’s no denying the fact that these little yellow flowers generate
solid profits. In recent years the price of commercial winter rape has
sharply increased, and this crop has become competitive and profitable.

Statistics compiled by the agriculture and food department of the Kherson
Oblast State Administration indicate that last year the cost price of one
centner [=100 kg - Ed.] of winter rape was 54-60 hryvnias, 30 percent less
than for sunflower. Good rape yields bring 30-40 hryvnias’ worth of profit
from every hectare of rape compared to sunflower.

What are the prospects for growing winter rape? They are obvious. In
countries, like Germany, every farmer receives 300 euros from the government
for every hectare of rape sown. Every year two million tons of biodiesel are
produced from rapeseed in that country.

In Poland, farmers who grow rape receive social subsidies. A Polish farmer
is not too worried about whether he will sell his rape because the
government subsidies are large. In Ukraine, it is 60 hryvnias.

In world agricultural production, rape is in second or third place after
cotton and soybeans. One hectare of winter rape yields 1,100 kg of oil. By
way of comparison, one hectare of soybeans produces 310 kg, and one
hectare of sunflowers, 600 kg.

A scientific method is also used to fasten the upper section of rape with
elastic. This prevents the husks from cracking and increases crop yields by
25-30 percent.

Kherson oblast plans to sow 136,000 hectares of winter rape in 2010 and
produce at least 340,000 tons of rapeseed. In 2006, 30,000 hectares of rape
were sown, but the bad weather in the fall (lack of humidity and low winter
temperatures) prevented sprouting in the entire sown area.

Agricultural producers, however, are glad that 10,000 hectares survived
these harsh conditions, allowing them to harvest 13.3 centners per hectare.
The regional administration plans to sow some 80,000 hectares with winter
rape for next year’s crops.                                -30-
———————————————————————————————
LINK: http://www.day.kiev.ua/168550/
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

========================================================
4.    WORLD BANK FORECASTS 2007 INFLATION BELOW
                          10% IN UKRAINE, GDP AT 6-7%

Interfax-Ukraine, Kyiv, Ukraine, Tuesday, September 12, 2006

KYIV – The World Bank forecasts inflation in Ukraine in 2007 to be below
10%, GDP growth at least 6-7%, and the budget deficit about 2% of the GDP.

“I believe the inflation will be lower then 10%, and the GDP will grow at
least 6-7%,” the head of the World Bank’s mission to Ukraine, Dusan Vujovic,
said during a press conference in Kyiv on Tuesday given to mark his leaving
the post.

According to Vujovic, the budget deficit in 2007 will not exceed 2% of GDP.
He said a 2% budget deficit is not a problem if there is a reduction in
unreasonable social expenditure and if the resources are used efficiently.
Much can be done with a 2% budget deficit, he said.

According to him, over the next several years Ukraine will have to attract
assets via domestic and foreign loans in order to finance the budget
deficit, due to its costly social programs in it.

The World Bank is a major creditor of Ukraine. Since 1992, the World Bank
has approved $4.6 billion worth of credits for Ukraine, $3.2 billion of
which have already been received.                          -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
    Send in names and e-mail addresses for the AUR distribution list.
========================================================
5.    WORLD BANK $700M WORTH OF PROJECTS FOR UKRAINE

Interfax-Ukraine, Kyiv, Ukraine, Tuesday, September 12, 2006

KYIV – Some $700 million worth of projects are currently being drafted for
Ukraine by the World Bank, head of World Bank’s mission to Ukraine Dusan
Vujovic said in Kyiv on Tuesday.

Speaking during a press conference given to mark his leaving his post,
Vujovic said the projects are being drafted as part of the present strategy
of cooperation between the World Bank and Ukraine.

According to him, the new projects will be implemented in such spheres as
improving the water supply network in the regions, reforming the
electricity, ecological, and judicial systems, food safety and other areas.

The World Bank is a major creditor of Ukraine. Since 1992, the World Bank
has approved $4.6 billion worth of credits for Ukraine, $3.2 billion of
which have already been received.                            -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================      
6. GLOBALIZED VILLAGE OF PLUZHNE: SUPPLYING EUROPE WITH
    MANPOWER, INTEGRATED INTO THE WORLD LABOR MARKET

By Mykhailo Vasylevsky, The Day, Iziaslav raion, Khmelnytsky oblast
The Day Weekly Digest in English, #27
Kyiv, Ukraine, Tuesday, September 12, 2006

Someone had left a copy of the Italian Ukrainian Gazette on a table in the
tavern. It turns out that this newspaper has been in circulation since
February 2006. Although it was early in the morning, the tavern was crowded.

The assortment of ordered drinks was a reminder that Pluzhne has long been
living under the sun of the free market. Tipsy customers, mostly young
people, were not interested in discussing the Ukrainian Gazette.

The village council building is located nearby. Liudmyla Hrebeniuk, the
secretary of the local self- government, was in her office.
                              GEOGRAPHY OF PLUZHNE
“You can use our migrant workers to study world geography. They are
everywhere: Portugal, Italy, and the UK. Many of them are in Moscow. Yes,
they remember their native village and come back for a short rest, but then
they return to where they come from,” says Hrebeniuk, who has occupied her
post for 20 years.

Viktor Maksymchuk is the veteran council chairman of the village. “They
elected him for the third time, on an alternate basis. He took a leave of
absence and went for a vacation at the seaside,” says Hrebeniuk. “At one
time he also saw the world through a migrant worker’s eyes. He no longer
does; he says he can’t because of his status.”

Olha and Ihor, a young married couple, visited their native Pluzhne in July.
Olha’s mother Liudmyla was the first to travel to Italy about 10 years ago,
and it looks as though she will never come home.

She has remarried there. It is said that families are made and wrecked in an
international manner because of the migration process, when a husband
travels in one direction and a wife in the other.

“Our village is large, so I can’t be sure about everyone’s destiny,”
explains Hrebeniuk.

There are 3,341 residents on the official register of Pluzhne, which is
located 18 km from Iziaslav, a remote district center. It is a typical
backwater. “Our population is shrinking.

Since the beginning of the year, 23 birth and 37 death certificates have
been issued, and then you have the ones who are leaving for different parts
of the world,” says the village council secretary sadly, commenting on
natural and migration trends.

But, as she points out, the village did respond to one of President
Yushchenko’s “Ten Steps toward the People.” The state’s financial
childbirth incentives have yielded some results: in previous years the
local baby-transporting storks were lazier than in 2006.
                    MAGELLANS AND THEIR FOLLOWERS
For some reason or other, Pluzhne’s history is silent about all those
Magellans and Columbuses who blazed a trail from this village to foreign
countries, close or faraway.

The fact remains that globalization has not spared this village, one of the
largest in the region. Pluzhne has effectively integrated into the world
labor market – out of dire need, of course.

“What else could those people do? The district labor registry office has 702
of our residents on its lists,” says Hrebeniuk, who sympathizes with her
unemployed fellow villagers.

Apparently, the founders of the Ukrainian Gazette in Italy have the gift of
foresight, at least where the “bright” prospects of Pluzhne and other
villages are concerned.

The front page of the issue in question provides detailed explanations on
where the modern followers of Magellan can acquire legal status, and how and
where to obtain work permits. One of the authors of the article predicts:
“The migrant worker trend among our women will never cease.”

Here’s another topic: the glorification of the Ukrainian woman, “who gives
up her personal comforts and lives for the sake of her children” – in Italy,
while her children live in Pluzhne. The poor woman has to be in constant
telephone contact with her offspring just to keep track of their education.

The Ukrainian newspaper published in Italy offers an answer to the main
question of today: who is to blame for wives abandoning their husbands and
small children and going off as migrant workers? Its headlines and articles
are full of words, like “Octopus” and “Mafia” – of course, not the Italian
Mafia. This is the voice of the distant homeland.

“I’ve been away from home for a year. I brought 1,500 euros,” says a tipsy
voice. “And look what’s happening here,” a middle-aged man says to the man
with the euros. “Have another drink, my treat,” says the migrant worker,

encouraging him to set out on his search for the truth.

At another table you can hear the following dialogue:
“I told my old lady to go to England. People say the English are different
from the Italians. They are indifferent to women. But she went to Italy. Me?
I figured that after working so hard, I wouldn’t want anything; 13 hours at
an asphalt plant. No, sir! I went to a brothel.

Our women were there too, but I’ve met enough of them at home. One of their
women? In one hour you kiss goodbye to what you’ve earned in three days.
They’re all the same. Now then, tell me how you people have been keeping
here all this time.”

“Not much to tell. We milked our cows and sold the milk for one hryvnia a
liter. And then that war came out of the blue. Before, the suppliers wanted
our milk for their plants, but now they have reduced the price by two times.
Half a hryvnia!

They said we could either accept their prices or drink our milk. We
slaughtered our cattle to sell meat – what else could we do? That wasn’t our
war. And a thief stole my horse from the pasture.”

These are some of the conversations I heard. After all, summer is the same
in Portugal, Italy, Great Britain or Poland: vacation time.
Pluzhne has four hangouts like this. There used to be a children’s cafe, but
today it caters to local adult customers and village guests.
                                 OUR OWN “OCTOPUS”
An anonymous local chronicler, writing about the village’s “achievements
during 60 years of Soviet power,” left this for posterity: “Pluzhne is the
center of the village council. The population numbers 4,009.

The Druzhba [Friendship] Collective Farm, whose central office is in
Pluzhne, owns 2,600 hectares of arable soil. The collective farmers grow
grain crops and beets. Dairy animal husbandry, gardening, and bee-keeping
are well developed.

In 1969, a pharmaceutical plant for the production of biomycin was set up on
the premises of a distillery built in Pluzhne in the early 20th century; the
new plant has a staff of 170.

Among its other enterprises, the village has a Silhosptekhnika [agricultural
technology] branch with well-equipped workshops, motor pool, oil base,
warehouses, brickyard, and a communal enterprises combine.”

During the 15 years of the new era Pluzhne has experienced many changes.
Friendship Company, the successor to the collective farm of the same name,
no longer has orchards or bee-keeping; and dairy animal husbandry is in its
death throes. Well, we all know that dead bees don’t buzz.

“Druzhba bakes bread. The 120 workers receive their wages in the form of
bread-payment in kind. Then they brought in a shoe factory, and people were
getting shoes instead of a salary,” says Hrebeniuk, outlining the company’s
socioeconomic situation. But the founders of Druzhba are humane: “If
someone needs an operation, they will pay for it.”

For some reason the globalization of Pluzhne has had little impact on the
population’s vocabulary. They seldom use words, like octopus or mafia.
They prefer to call a spade a spade.

“The bandits cut up the bakery with its 170 workers. Where did they come
from? Kyiv, they say. They came here, loaded up all the equipment, and
scrapped it,” says the secretary of the village council.

Neither did the “bandits” spare the Silhosptekhnika branch with its
“well-equipped workshops and brickyard.” That wasn’t the end of it. The
trees that were planted in the forested areas around Pluzhne in honor of the
USSR’s 60th anniversary are being cut down. The villagers believe the timber
is being sold in Poland.

“Our village council chairman Maksymchuk has been writing to all the people
in power to make those bandits calm down a little and bring them to justice.
He has sent several letters to the president, but to no avail,” complains
Hrebeniuk.

Pluzhne does not expect the government to carry out the rest of the promised
“steps toward the people” after issuing childbirth incentives. Instead, it
continues to increase the readership of the Italian Ukrainian Gazette.

Why not? After all, there is a market supply to meet increasing demand.

Ukrainian migrant workers provide their fellow villagers with financial
support. They facilitate local business initiatives. But these initiatives
run up against the organization of trade and the food industry. Every Friday
vendors from all over the district gather in Pluzhne, serving customers any
way they please.

In market conditions, there is only one way out of the situation: personal
participation in globalization. This process is accompanied by irreparable
losses – and not just for Pluzhne. Statistics show that the demographic
situation is worsening.                                      -30-
————————————————————————————————
LINK: http://www.day.kiev.ua/168549/
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
7.     REPRESENTATIVES OF U.S. BUSINESSES MEET WITH US

    AMBASSADOR TAYLOR IN KYIV ABOUT NEEDED REFORMS
 
Action Ukraine Report (AUR) #756, Article 7
Kyiv, Ukraine, Wednesday, September 13, 2006
 
KYIV – Several representatives of U.S. companies doing business in Ukraine
met with U.S. Ambassador Williams Taylor in Kyiv last Friday.  The meeting
was arranged by Morgan Williams, Director, Government Affairs, Washington
Office, SigmaBleyzer Emerging Markets Private Equity Group.  Williams
serves as Chairman of the Executive Committee of the Board of Directors
of the Ukraine-U.S. Business Council in Washington.
 
Vadym Bodayev, Head of the Kyiv Representative office of SigmaBleyzer,
briefed Ambassador Taylor on the latest developments concerning the
ongoing issue regarding the U.S. Overseas Private Investment Corporation
(OPIC) and the work to resolve an outstanding insurance claim OPIC has
against the government of Ukraine.  The unresolved claim has the OPIC
program shut down for Ukraine at the present time.
 
Dr. Irina Paliashvili, President and Senior Counsel, Russian-Ukrainian
Legal Group, P.A., Kyiv and Washington, D.C., discussed with the
Ambassador the present status of the legal framework for doing business
in Ukraine and the highest priority legislative reforms that need to be
adopted by the Parliament. [see article one above by Irina Paliashvili,
AUR Editor]
 
Paliashvili said, “he current legal basis for doing business in Ukraine
is not only inadequate, but to a large extent it sabotages the development
of a market economy in Ukraine. The main priority for the Government,
therefore, should be to act, and to act swiftly and decisively.

Ukraine’s legal system can be improved immediately and dramatically just

by cancelling the most archaic and damaging legislation, using the so called
‘guillotine’ principle, which worked successfully in other countries that
undertook modernization reforms.”
 
David and Tamara Sweere, founders of the Kiev-Atlantic Agricultural
Group, provided information about the great agricultural potential that
still exists in Ukraine, especially in the production of crops for energy.
 
David Sweere told Ambassador Taylor, “Because of the shift in world-wide
food and energy economics, and based on its unique land mass and climate
to this important region of the world, Ukraine has a significant opportunity
to develop an entirely new, highly profitable industry based on the production
of efficient, clean and profitable bio-based energy. 

While there has been some talk and efforts made towards the support and

development of the bio-diesel industry from vegetable oil in Ukraine, the
fundamentals of ethanol production for energy from corn and other grains
are far more compelling.”
 
Sweere said the development of this opportunity for Ukraine is nearly 100%
related to the acceptance, understanding, support and will of the Government
of Ukraine to provide the required dependable assurances (such as opening
US OPIC for example) that would be required to warrant the open playing
field to allow the industry to develop and the products to be mandated for
use and distribution without threat or interference by the well established
traditional energy sources and interests. 
 
“Maybe this is too much to expect, but, the alternative for Ukraine is not
bright as it relates to its competitive posture in both the field of agriculture
production and/or energy without moving into the 21st Century with the
rest of the world,” Sweere told Ambassador Taylor.
 
Morgan Williams discussed the ongoing program of the Ukraine-U.S.
Business Council with the Ambassador.  Council members would like to
see many more legislative reforms adopted in Ukraine that would improve
the business environment, a clear-cut level-playing-field program of
VAT tax refunds, and a much improved legal system for the protection
of property and contract rights.
 
Ambassador Taylor said he has had several meetings with Ukrainian
government officials about moving critical economic and business related
reforms forward yet this year.  The Ambassador said he will be working
closely with U.S. businesses in Ukraine and asked the business leaders
to stay in contact with him regarding the business climate in Ukraine.  -30-
———————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
     NOTE: Send in a letter-to-the-editor today. Let us hear from you.
========================================================
8.   EBRD MAY LOAN UKRAINE’S LEADING PHARMACEUTICAL
                  MANUFACTURER OJSC FARMAK EUR32M

Interfax-Ukraine, Tuesday, September 12, 2006

KYIV – The European Bank for Construction and Development may issue

a EUR 32 million credit to Kyiv-based OJSC Farmak, one of Ukraine’s
leading pharmaceutical producers, the EBRD said on Tuesday.

The credit will be partially syndicated by other banks, the EBRD said. The
bank’s board plans to consider the project on October 17.

The general volume of the project, aimed at modernizing and creating new
production facilities according to GMP standards, is EUR 86 million.

Farmak is among Ukraine’s three major pharmaceutical producers. Its net
income from sales in 2005 grew by 20.8%, to UAH 243.72 million, while its
net profit grew by 45.6%, to UAH 32.48 million.

The EBRD’s credit portfolio in Ukraine by the end of May included 114
projects worth a combined EUR 2.27 billion.         -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

========================================================
9. SWEDISH COMPANIES TO SPEND EUR 40M REHABILITATING
        UKRAINIAN OIL FIELDS IN IVANO-FRANKIVSK REGION

Interfax-Ukraine, Kyiv, Ukraine, Tuesday, September 12, 2006

KYIV – Sweden’s Capital Oil and Sadkora Energy AB plan to invest 40

million euros in 2006-2008 rehabilitating the Maidan and Kubash oil fields in
Ukraine’s Ivano-Frankivsk region.

The Swedish companies have signed an agreement to rehabilitate the fields
with Bohorodchanynaftogas, a subsidiary of the Nadra Ukraine company.

They will spend EUR 20 million overhauling wells and buying drilling and
other equipment and 20 million euros on routine operations. The companies
plan to rehabilitate 40-50 wells with a combined average daily output of
300-400 tonnes of oil.

The Swedish company will receive 84% of the profit if that volume is
achieved and 83% if another 100 tonnes per day is achieved.

The wells were thought to be unviable and were mothballed in the 1960s.
Oil started to rise to the surface in the early 1990s.             -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
10. US INVESTMENT OPTIONS GROUP ACQUIRES ALMOST 96.6%
       OF STOCKS IN BERDIANSKY ZHATKI FARM MACHINERY CO

Interfax-Ukraine, Kyiv, Ukraine, Tuesday, September 12, 2006

KYIV – Investment Options Group LLC (the United States) bought a

95.556% stake in OJSC Berdiansky Zhatki (Berdiansk in Zaporizhia region)
on September 4, the OJSC has reported in the mass media.

The company said that international direct investment funds ukrn i new
capital growth co. ltd. (a 44.2672% stake) and ukrn ii future capital growth
co. ltd (a 41.831% stake) under the control of SigmaBleyzer Investment
Company, which owned over 10% voting stocks in the company, sold their
stakes on September 4.

As reported, as of early 2006, along with the above-mentioned investment
funds, UKRN III New World Growth Co. Ltd (under SigmaBleyzer’s control

as well) owned a 9.458% stake in the company.

In August, the Antimonopoly Committee of Ukraine allowed Investment

Options Group LLC to buy over 50% of the stocks in the company. The
U.S. company is planning to invest in Ukraine.

Berdiansky Zhatki produces beams, mounted and trailer reapers, pick-up
attachments and machines for sunflower harvesting.

In 2005, the company’s net revenues dropped by 12.2%, to UAH 15.6
million, its net losses grew by 4.3 times, to UAH 4.05 million.
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
11. “DOES THE GOVERNMENT PACK ITS SUITCASES?”
               VAT refunds in Donetsk region twice as much as planned

Ukrayina Moloda newspaper, Kiev, in Ukrainian 6 Sep 06; p 1, 5
BBC Monitoring Service, United Kingdom, Thursday, Sep 07, 2006

Companies from Donetsk Region received twice as much VAT refunds as
planned, and neighbouring Luhansk region received 50 per cent more, while
VAT refunds to other Ukrainian companies have been cut significantly, a
propresidential paper has said. The Yanukovych government is unsure of
its political future, the paper added.

The following is the text of the unattributed article entitled “Does the
government pack its suitcases?” published in the Ukrainian newspaper
Ukrayina Moloda on 6 September:

[Prime Minister Viktor] Yanukovych’s and [First Deputy Prime Minister
and Finance Minister Mykola] Azarov’s team obviously does not feel
self-confident, as it abruptly began “withdrawing cash”: Donbass has
received double VAT refund for August at the expense of robbing the rest
of the regions.

The closer the winter is, which means imminent adoption of the budget for
the next year, conclusion of new contracts for gas supplies with Russia and
consequently, fulfilment of the promises given to the Ukrainian people, the
fewer victorious reports are heard from the new “coalition” government.

Even the major herald of progressive accomplishments of the Cabinet of
Ministers, Mykola Azarov, who combines the posts of the first deputy prime
minister and the finance minister, keeps silent and seems to be sad.

Indeed, there are no grounds to be in high spirits when tariffs are growing,
people are furious, and in addition, economists seem to be jeering: in
response to the government’s statements about a certain crisis left by the
previous Cabinet of Ministers, they turn their fingers round their temples
[gesture implying that someone is crazy] and present figures which confirm
indices of brilliant inputs in the national economy made by [former Prime
Minister Yuriy] Yekhanurov’s cabinet.

Therefore, victorious statements remain statements, but a good military
commander cannot but think about preparations for a retreat.

The “regional” government [dominated by the Party of Regions], fully stuffed
with people from Donetsk, seems to be keeping a possibility of rapid retreat
“in reserve”.

At least, this is the first impression that comes to mind while studying an
analysis of budget implementation in August in VAT refunds to exporting
domestic producers.

Let us remind you that there were media reports three weeks ago saying that
the Finance Ministry had decided to suspend VAT refunds at all.

Then the minister in charge, Mykola Azarov, denied this information, having
explained that the government had just inspected the register of the
enterprises contending for VAT refunds, and it disclosed that one-half of
them were “puffery” and “bubble” ones. Therefore, value added tax was
reportedly compensated only to those enterprises which deserved this,
indeed.

But now try to guess in one attempt: in what Ukrainian region are these
“deserving” firms and companies located, the ones to which VAT had to
be not just compensated, but even the relevant plan had to be over-fulfilled
twofold? The answer is right.

A document obtained by Ukrayina Moloda from reliable sources confirms that
enterprises from Donetsk Region were the ones to have received VAT refunds
in the amount of as much as 696,235,000 hryvnyas [about 137.9m US dollars]
instead of 313,934,000 hryvnyas [about 62m US dollars] in August.

Moreover, 153,801,000 [about 30.5m US dollars] of them were received during
the last banking day! What was the need for this rush?

By the way, government officials from Donetsk did not treat badly the
neighbouring Luhansk Region: 87,395,000 hryvnyas [about 17.5m US dollars] of
compensation were allocated here in August instead of 66,818,000 hryvnyas
[about 13.2m US dollars] envisaged in the budget.

Meanwhile, let us take Kiev as an example: a number of exporting enterprises
are also located there, while the government has “donated” “as much as”
60,243,000 hryvnyas [about 12m dollars] out of the planned 376,020,000
hryvnyas [about 74.5m dollars]. Poltava Region received just 6,887,000
hryvnyas [about 1.36m dollars] out of 57,824,000 hryvnyas [about 11.5m US
dollars].

As for Volyn Region, it received only… [ellipsis as published] 459,000
hryvnyas [about 90,000 dollars] out of 16,836,000 hryvnyas [about 3.3m
dollars].

The experts questioned by Ukrayina Moloda admit, in particular, that these
astonishing proportions can be a proof that the government headed by
Yanukovych has little confidence in its near future.

Therefore, they are trying to “stock up” to be on the safe side: nobody
knows what one can expect in economic and budget spheres during the coming
turbulent autumn, and therefore one should fill his pockets well before it
is too late… [ellipsis as published]
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================

 If you are receiving more than one copy of the AUR please contact us.
========================================================
12. UKRAINIAN PRES SEND ANTI-CORRUPTION PACKAGE TO RADA
 

Interfax-Ukraine news agency, Kiev, in Russian 1400 gmt 11 Sep 06
BBC Monitoring Service, United Kingdom, Monday, Sep 11, 2006
KIEV – Ukrainian President Viktor Yushchenko has issued a decree
approving a concept for overcoming corruption, which is called “Moving
towards integrity”.
 
He also submitted for parliamentary consideration a package of draft laws
aimed at meeting Ukraine’s international commitments to combat corruption.
The presidential press service told Interfax-Ukraine today that he submitted
the following bills for parliamentary consideration: “On ratifying the UN
Convention against Corruption”, “On ratifying the Criminal Law Convention on
Corruption” and “On ratifying the Additional Protocol to the Criminal Law
Convention on Corruption”.
Ratifying these conventions will facilitate the confirmation of a positive
image of Ukraine as a state where a favourable political climate is being
created for large-scale and mutually beneficial cooperation with all
countries, including in terms of combating corruption, the press service
said.
The following two bills were also sent to parliament: “On the basics of
preventing and combating corruption” and “On amending legislative acts
dealing with responsibility for corruption crimes”. [Passage omitted:
details of the draft laws]
The president also sent to parliament a bill “On the responsibility of legal
entities for corruption crimes”, which envisages introducing responsibility
for legal entities which commit corruption crimes and a procedure for
bringing them to responsibility. [Passage omitted: details of the bill]
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
             Send in a letter-to-the-editor today. Let us hear from you.
========================================================
13. “LEARNING FROM VICTORIES: WHAT UKRAINE’S ECONOMY
         SHOULD BE LIKE IN CONDITIONS OF POLITICAL REFORM”
                     Ukrainian prime minister outlines cabinet programme

PARLIAMENT SPEECH: By Viktor Yanukovych, Prime Minister, Ukraine
Den, Kiev, Ukraine, in Ukrainian 6 Sep 06; p 5
BBC Monitoring Service, United Kingdom, Friday, Sep 08, 2006

KIEV – Ukraine’s new prime minister has addressed parliament outlining the
basic tenets of his government’s action plan. Viktor Yanukovych said his
government’s main task was to give Ukraine a strong, “transparent” economy
and become a “post-industrial state”.

He said the country should certainly join the WTO, but pay due regard to
giving certain sectors of the economy transition periods. He said Ukraine
should present itself to Brussels as “a strong, self-capable and hence
interesting partner”, while restoring good relations with Russia.

The following is the text of Viktor Yanukovych’s speech before parliament,
entitled “Learning from victories: what Ukraine’s economy should be like in
conditions of political reform”, as published in Den on 6 September,
subheadings have been inserted editorially:

With the transition to a parliamentary-presidential form of government, the
executive power in Ukraine has ceased to be an instrument in the fight
between various political forces in the government.

It has been transformed into an instrument for serving the people. The
current government is the first Ukrainian Cabinet of Ministers to act under
the conditions of political reform.

For the first time in the new history of our state, the executive power
plays the role of hired help, serving at the behest of the ruling
parliamentary coalition and consequently, the majority of voters.

At the same time, never before has responsibility for the results of running
the government been so personified.

The criticism of our opponents with regard to the colourful nature of the
coalition and the presence of differences in the programmes of its subjects
probably are of little concern to voters.

In reality of power, it is important to voters how successfully it provides
for their interests. And if changes for the better are not seen, then there
is someone to personally complain to for poor work.

In contrast to previous years, now there is a chance for synchronizing the
actions of the president, parliament, and the Cabinet of Ministers.

The incarnation of political reform in life is a very painful process and
the first steps of activity by the new government have once again convinced
us of this. For constitutional reform also envisions the division of
authority. And this demands very sure and thoughtful steps.

The process of transferring authority is a painful process and one must
relate to it with the understanding and patience which all branches of power
should show. We should tread this difficult path in tolerance and, I would
even say, delicately. In any case the government is prepared for a process
with exactly this, shall I say, tone.

Besides everything else, political reform is a unique chance to establish a
system of effective and responsible power, power capable of providing the
reforms the state really needs.

There are very important political, economic and social reforms among the
priorities which the government has put into its programme.
                                 A TRANSPARENT STATE
Foremost among them are steps to root out corruption which is the main
reason slowing economic reform.

We will create a transparent investment climate in the state. We will build
a realistic and transparent tax policy and create a realistic civil code and
make the court system independent.

Establishing a transparent economy is one of the most important tasks which
we will address.

We will also carry out key reforms, in particular, reforms in the pension
system and in health and education. And the essence of these reforms lies in
putting the person and not the system at the centre of the government’s
care.

We will change the accent and the principles of financing. And will provide
funds not to education overall, but for specific students; and not for
health in general, but for the patient, the person who needs recovery. This
will lower the level of corruption in the budget sphere and optimize
expenditures.

It is this very type of approach which we will apply in administrative
reform, in reforms of state management and state service.
In carrying out tax reform, we will do everything so that the tax system
stimulates manufacturers, so that conditions are created for transparent
relations between business and the authorities.

Reform of the financial system will give the government the conditions
needed to develop the financial market, new financial instruments for the
movement of securities.
                      PRIVATE PROPERTY INVIOLABLE
We must recognize that real estate in our country, beginning with large
enterprises and ending with regular dwellings, is undervalued.

By preaching the inviolability of private property, we will create the
conditions for capitalizing business and valuing property of various forms
of ownership. IPO’s [initial public offering of shares] will give us the
chance to increase not only the value, but the transparency of business.

Restructuring the local government and communal housing and management are
among the first reforms which are priority tasks for our government. The
problem of developing infrastructure demands special attention.

Coordinating the legislative activity of all branches of power will make it
possible to quickly carry out these reforms and help to overcome the crises
in all important spheres of life in Ukraine and put our state on track to
accelerated social and economic development.

For every branch of power in our state has one goal – to raise people’s
standard of living, to improve the life of every citizen. That is our common
task and that is our highest priority. For both the government, the
parliament and the president.
                      BECOMING A POST-INDUSTRIAL STATE
Being conscious of our responsibility before the Ukrainian people, the
cabinet of ministers has prepared a government action plan and draft
strategy of economic and social development for Ukraine for 2007-2011 which
it is ready to present to parliament for review.

These documents envision bringing the Ukrainian economy to stable speed in
economic growth in the first stage from 2006 to 2008.

In the second stage – the period from 2009 to 2011 – conditions will be
created for moving to a stage of post-industrial economy of general welfare.

The draft includes identifying issues which cannot be delayed and which
demand solutions in 2007 as well as basic goals which need to be achieved in
the course of the next 12 months and a list of priorities and tasks which
will allow us to reach these goals.

We must not repeat the mistakes of past years. And we must foremost rid
ourselves of populist methods. As is known, they lead to the share of demand
on the state budget being expanded without grounds.

Social payments increase, while the speed of economic development slows.
This leads to stagnation in the economy and as a result, domestic investment
begins to curtail and revenue to the budget slows.

Our government will return to the investment-innovation model of developing
the economy, which will give it increased growth and consequently, higher
social standards.

Under such a model, social payments will cease to be as people say, “paper”
which loses its value every month for a lack of goods to back it up. Social
payments will turn into real money, which can really provide for increases
in people’s standards of living.

It is very important that we find a common language with domestic goods
manufacturers. Removing stimuli for those who were ready to increase
production, renew technology bases and install state of the art technology
led to our feeling a lack of domestic goods on the market and replacing them
with imported goods, for which flung the doors were opened wide and customs
barriers removed.

Opening the domestic market led to a negative trade turnover and subsequent
erosion of state gold and currency reserves – the foundation of a stable
national currency.

Recognizing the complexity of the situation in which the domestic economy
finds itself, the government has adopted and is realizing a programme of
anti-crisis actions which lay the fundamental foundations for rebuilding and
modernizing leading sectors.

The mechanism for achieving this goal will be restoring the optimal balance
between consumption and accruement.

The industrial potential which gave us the ability to develop last century
has been practically used up. In three to five years, the safety life of the
entire thermal energy system will expire. Fixed assets in metallurgy are 80
per cent worn out.

Consequently, colossal amounts of funding are needed for modernization. For
just the first steps to replace the thermal energy system we need to
allocate over 15bn hryvnyas.

In this situation, we plan to increase the share of savings in the economy
which will be directed for renewing, modernizing and increasing production.
With this goal in mind, the 2007 budget envisions lowering the
redistribution of GDP by about 30 per cent.

In this way, about 36bn hryvnyas will remain in the economy. This resource
will give our manufacturing the push to increase growth and create a new
quality of domestic goods.

In addition to this, we will provide state budget support for priority
programmes, restore stimuli for investment projects and in this way achieve
the task of renewing the investment-innovation model of development.

As a result, the economy will begin to “pull itself out of the crisis” on
its own and provide non-inflationary manufacturing and social growth. This
will open the path to raising wages, payments to the Pension Fund and the
revival of purchasing power on the domestic market. By the end of 2007, we
plan to make the budget for the Pension Fund non-deficit.
                                      JOINING THE WTO
One extremely important issue is Ukraine’s joining the WTO. The government
has given itself a firm task – to consistently take our state into the WTO,
since this meets Ukraine’s own interests. And the sooner we accomplish this
process, the better for our country.

But we plan to go there without a rush, but surely, with transitional
periods good for our sectors of the economy and with a requisite level of
protection for the domestic market.

For the first time in the history of Ukraine, we will instill the principle:
privatization is a resource for creating new, modern capacities. Funds from
privatization will not be eaten away as was done before, but will be used
for realizing serious investment projects.

Solving immediate economic tasks will make it possible to resolve problems
we have in the humanitarian sphere.

The state’s foreign policy should serve the achievement of the state’s
strategic goals. We are deeply convinced that the main task of Ukrainian
diplomacy should lie in turning Ukraine into a state with a developed
economy in as short as time as possible, and that means being a stable and
predictable partner on the international arena.

Economic stability will be the key to the determined strengthening of
democratic institutions, providing basic human rights and freedoms in
accordance with the Copenhagen criteria.

The civilized world is not striving to draw new dividing lines, including on
the European continent. However, it is forced to do so in fear of the
threats which are contained in being economic behind.
                         RELATIONS WITH EU AND RUSSIA
In viewing European integration as a strategic goal of the Ukrainian state,
the new government sees its task lying in having the beggar in the European
negotiation process, which role Ukraine has played recently, being replaced
with a strong, self-capable and hence interesting partner for Brussels.

We should do everything we can to harmonize our legislation with that of the
European Union as soon as possible.

A special place in this should be reserved for restoring mutually,
good-neighbour relations with Russia. We are convinced that this is a
necessary condition for bringing the state onto the track of accelerated
economic development.

At the same time, I would like to emphasize our firm intent to provide
stable supplies of energy resources to Ukraine and through Ukraine to the
European Union.

We are a reliable partner for both Russia and Europe and will confirm this
in the further reputation of our state, building on this an energy policy
which will meet Ukraine’s interests.

The time when the European integration rhetoric on the Ukrainian side was
mostly declarations must go into the past.

We should not try to convince the world that we are an exception. It is hard
to convince the world of anything, especially in today’s era of
globalization and the exacerbation of contradictions between the basic
centres of world politics. We must simply do a lot of work, being directed
only by national interests.

When Bismarck united German lands, he acted exclusively in the interests of
Germany, and not, say, of Austria. We must do our work, not sparing effort
and with no right to rest until the first hopeful signs appear. A miner
toils with diligence and drive, digging into the earth with his untiring
hammer in order to get the coal that people need.

We have the strength to do this, because the Ukrainian national character is
not lined with empty words and chatter, with which certain of our
politicians suffer, but with a love of work.

The new government fully realizes that the key to our successful activity is
smooth cooperation with parliament and the president. It is with this goal
that we have prepared the concept for organizing the cooperation of the
Ukrainian Cabinet of Ministers and the Supreme Council [parliament] in the
system of state power.
                           LEGISLATIVE  INITIATIVES
The government’s activeness in realizing its legislative initiatives must
play a key role here. The constitutional definition of the status of the
Cabinet of Ministers gives it the right to provide for realizing its state
policies on the legislative level.

It is worth noting that in a state with a link between the parliament and
government, 75 to 80 per cent of bills are submitted by the latter.

With this in mind, we have prepared 42 bills which we submit for review to
parliament in the context of the tasks outlined in the declaration of
national unity, the agreement of establishing the anti-crisis coalition and
the plan of immediate steps for overcoming the crisis in the economic and
social spheres.

The government also intends to work together with the opposition, in which
it would hope to see a watchful controller of the state of affairs in
society and a constructive critic of its actions.

We view the opposition not as an opponent, but as a partner in strengthening
the economy of the state and the democratic foundations of life in Ukrainian
society.

From the moment the ruling parliamentary coalition was set up and the
coalition government was formed, the Ukrainian people finally got the chance
to turn the page of strength-sapping internal fighting.

The prospect of living in a state where stability and predictability rule
has appeared before them, a state where in the heat of the political battle
statesmen do not forget their main goal – serving the interests of those who
brought them to power. The government is ready to fulfil this mission.

We call upon the Supreme Council, the president and all leading political
forces to support out programme of action. We believe in success, because we
do not have the right to fail.

As the president has said, we must learn from victories. And so let us
conquer them by our common efforts.                      -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
14.     HOW CLEAN DOES THE OLD-NEW BROOM SWEEP?
      Yanukovych team expands efforts to gain control over all of Ukraine

ANALYSIS & COMMENTARY: By Yulia Mostovaya

Zerkalo Nedeli On The Web, Mirror Weekly, No. 34 (613)
International Social Political Weekly
Kyiv, Ukraine, Saturday, 9 – 15 September 2006

The first stage in expanding the clout of the Yanukovych team is practically
over. As a result, the Prime Minister’s associates have gained control over
the country’s main cash flows and key bureaucratic positions.

In the next stages, they are likely to focus on regional governments, mass
media, law enforcement and diplomatic missions.

The recent personnel reshufflings are bound to yield immediate results, and
that segment of the Ukrainian business elite that had to survive on
“starvation rations” over the last two years will have the feast of their
lives.

In the meantime, they are negotiating the menu: [MP] Rinat Akhmetov throws
regular dinner parties to chat informally with [the State property Fund
Chair] Valentyna Semeniuk and [Kyiv Mayor] Leonid Chernovetsky; [Minister
for Fuel and Energy] Yuriy Boiko frequents Moscow to discuss bright
prospects of UkrGasEnergo as a potential backbone of the “private National
Joint Stock Company” and a member of the gas transportation consortium;
[Vice prime Minister] Andriy Kliuyev takes care of Feodosiya-based
state-owned (at least, for the time being) enterprises and of converting
power-generating enterprises into joint-stock companies.

Pragmatists have taken advantage of the situation: land prices within 30 km
from Kyiv have risen by one third, managers and drivers are deserting the
old oligarchs for the new ones.

Law enforcement authorities at different levels are confused: some officers
admit, off the record, that in 2005 they submitted to the Prosecutor General’s
Office, Security Service, and Ministry of Interior complete sets of
documents proving a number of new appointees’ involvement in criminal
activities.

Of course, the professionalism and ethics of the newly appointed officials
in the Secretariat of the Cabinet of Ministers, UkrGasEnergo or NJSC
NAFTOGAS UKRAINY are questionable, to put it mildly, but President
Yushchenko’s administration had more than eighteen months to prosecute the
criminals and the quality of the orange team’s governance (which turned into
sabotage due to the team members’ incompetence) was no better.

Which of the previous functionaries could serve as a role-model? Gladkykh?
Vasiunyk? The new leaders of the fuel-and-energy sector should be closely
watched to insure that they are expediting national interests and the
country’s energy security; there should be no doubt of that.

However, the previous NAFTOGAS management, including CEO Olexiy

Ivchenko, should first account for the spending of UAH 13.2 billion from
the company’s budget.

This issue was raised in the Prime Minister’s recent talk with the SBU
Chief. Rinat Akhmetov should also be watched for compliance with the
principles of fair competition and free market in expanding his metallurgic
empire.

But again, was the license to develop strategic titanium deposits granted to
Mr. Firtash in full compliance with the principles of a market economy? And
who will have the courage to do the watching? As matters stand, there are no
people in Ukrainian politics that would be morally entitled or daring enough
to it.

The debate about whether or not “Our Ukraine” should join the ruling
coalition is still underway. Those in the OU who think it should be in the
opposition, hope for their better political future.

Those OU faction members who think of their better political present, with
positions in power and illusory access to resources, claim they are prepared
to join the coalition with the Party of Regions, Socialists, and Communists,
thus sacrificing themselves for the sake of the President and in exchange
for the leverage, albeit limited, in the shaping of the country’s political
and economic course.

As for the leverage, it will be limited, indeed, even within the OU quota of
ministries: the budget is in Azarov’s hands, governmental committees are
under control of the Party of Regions, a parliamentary majority already
exists without the OU faction, the faction whose support the Party of
Regions will use whenever it disagrees with the Socialists or Communists on
some minor matters.

Moreover, “Our Ukraine” has very little to do with the ministerial quota in
the Yanukovych Cabinet: Baloha, Poliachenko, Pavlenko, and Lykhovy

represent the President rather than the party.

Whether or not the OU faction joins the coalition, Viktor Yushchenko’s
ministers will stay in Viktor Yanukovych’s government, as agreed between the
President and Prime Minister.

Here is another example: Roman Bezsmertny, while still Vice Prime Minister,
tried to restrict the number of vice prime ministers and ministries. Viktor
Yushchenko was the first to foil those plans by getting the NSDC to pass a
resolution on creating two additional ministries: for coal mining and
construction.

The Party of Regions enlarged the number of vice prime ministers. Now the OU
representatives at the coalition talks suggest setting up three more vice
prime ministerial positions: for military-industrial complex (which, of
course, was not Anatoliy Kinakh’s idea); for legal issues (one should not
associate Roman Zvarych with this initiative); and for European integration
(Roman Bezsmertny never thought of Oleh Rybachuk as the best candidate for
the post).

Did anyone on “Our Ukraine” ever analyze what real powers some of the
coalition ministers have? Did anyone ever ask the head of one of the richest
ministries how he feels in a tight ring of vigilant regional deputies
obstructing his every order? I do not think so.

“Our Ukraine” is busy camouflaging its political failure from the electorate
and themselves.

Some OU members voice their concerns about the coalition. They insist they
should be told more about the contents and outcomes of the eight-hour-long
discussion between Yushchenko, Azarov, and Yanukovych that preceded the
nomination of the latter.

They believe they should first study the budget the coalition is going to
come up with. They argue they should look at the public response to the
expected sharp increase in the rent and utilities tariffs. Those concerns
seem well justified.

The incipient tendencies and processes are likely to have an adverse effect
for the Party of Regions in respect of both business relations and popular
sentiment.

I will explain what I mean. The Party of Regions is invading new territories
too aggressively. The more impudent they are, the more enemies they make.

So far, casualties have been minor because the party on the offensive has
had the grace to negotiate available options with their potential business
victims: “You should decide if you are in the opposition or in business.

If you are in the opposition, go to Parliament and hone your censuring
skills there. If you are in business, respect the authorities as
businesspeople do.

If you want to be both in the opposition and in business, let us first find
out how you got a controlling stock in Kyiv energy distributing company

and whether you deserve to hold it.”

The question is how the potential victims are going to react: will they
surrender one by one or will they unite to defend themselves?

The authorities could set the law enforcement on intractable businessmen,

it is true. Yet it is also true that the system for coercing the opponent
(known under the previous regime as the “administrative resource”) is so
corrupt that the opponent can bribe any of its integral parts.

The top brass may give an order but the rank-and-file (police,
investigation, tax or fire inspection, etc) officers can carry it out
poorly. The same applies to courts: wealthy people can always get a
favourable judgment, no matter what their political allegiance might be.

Or thugs can be hired to do away with opponents.

Of course, in this case, the entire world will know who did it and why, and
all hopes for capitalization, respectable partnerships, and high IPO prices
would have to be abandoned. Thus the large non-Donetsk business is in
suspense.

So is the population, apprehensive of the new rent, water, gas and
electricity bills, of “adjusted” prices for petrol and foodstuffs. Mykola
Azarov is not inclined to play populist games, bearing in mind either the
experience of his confrontation with Yuliya Tymoshenko or his own policy on
the eve of the presidential elections when pensions were raised, which made
a huge hole in the 2004 state budget.

The First Vice Prime Minister intends to cut back social programmes. He
could be right, after all, but neither he nor his political force will be
able to convince the overwhelming majority of the population that this is
the only viable solution for the national economy.

People will believe what they see and they will see startling bills. They
will also see that the Cabinet’s draft budget aims to redistribute funds in
favour of large business and state-owned companies.

The Ministry of Finance [headed by Mr. Azarov] plans to revive free economic
zones, most of which used to be financial “black holes”. It also proposes to
“keep the money in the economy”, i.e. to reduce the allocation of funds via
the state budget by 30%.

This will imply, inter alia, allowing state-owned enterprises to operate on
equal terms with the private ones.

This is a market-oriented initiative that should be welcome in any civilized
economy! In the Ukrainian context, however, it will mean that, due to the
traditional concealment of profits, the money “kept in the economy” will
never return to the budget as tax revenues.

And the assets of large state-owned enterprises and state monopolists will
be used for the benefit of those with the authority to sign or of their
“bosses”. The money will be washed out from the budget and lost for the
country.

Later it might return in the form of Austrian, British, Delaware, or other
investments to create new jobs.

Yet this is a long process, and the popular protests could break the chain
at some stage. The opposition will make the increased costs that Ukrainians
will inevitably have to bear starting next month look particularly dramatic
by promoting draft laws on reducing the tariffs of electricity and other
utilities, on raising doctors and teachers’ pensions to 90% of salaries, and
the like.

Under the circumstances, the role of the opposition is vital. By and large,
there are three modes of behaviour that the opposition could choose from:
Yuliya Tymoshenko as the opposition leader works to boost her popularity
with the voters, works for the country, or does both. She has not succeeded
in any yet.

The Party of Regions is making and will continue to make lots of mistakes,
and the opposition should learn to take advantage of them. It does not mean
that the opposition should become a substitute for the law enforcement, no
matter how inefficient the latter might be. Its task is not only to identify
mistakes, irregularities, and abuse, but also to prevent them.

Unless Yuliya Tymoshenko wants to become a second Natalia Vitrenko, she
should set clear priorities for her political force and the larger
opposition movement. Hopefully, the Ukrainian opposition will be wise enough
to recognize the government’s successes and propose solutions for rectifying
its errors.

The opposition (and the county) will gain if it stops parasitizing on the
authorities’ drawbacks and turning them into its own electoral advantages.
Instead, it should, for example, draft laws capable of “turning lemons into
lemonade” and raise public awareness of these laws.

Today, everyone wonders what stance Viktor Yushchenko will take. Some
politicians still hope he will be proactive enough to enhance the system of
checks and balances between branches of power. Others have their doubts.

The blitzkrieg-like personnel reorganization by the Party of Regions is not
just a result of the constitutional amendments. In its key issues, it was
coordinated with and approved by the President.

Examples are plenty: appointing Mykola Azarov as the First Vice Prime in
spite of the previous agreement to reserve this post for Petro Poroshenko;
assigning Kyreyev to head the State Tax Administration; replacing top
management in Ukrzaliznytsia [Ukrainian Railroad Company] and others.

Furthermore, in view of the President’s character and the little interest he
has shown so far in the ministries’ performance, and given the curtailing of
his powers under the latest constitutional amendments, there is only one
chance for Viktor Yushchenko to remain an active player in Ukrainian
politics, and that is if he manages to find an effective and proficient head
for his Secretariat and/or a potent NSDC Secretary.

Oleh Rybachuk is likely to preserve his post, at least for some time. Yet
the latter position is still vacant, since Volodymyr Horbulin is too old for
the official appointment, although he has everything it takes to promote the
national and presidential interests in the political game of today. None of
the presently cited candidates is his match.

The Party of Regions is prepared to give Viktor Yushchenko a “warm bath”
treatment.

This term, which I first heard from one of their MPs back in May, means they
offer him an outwardly respectful attitude, affluent life, generous
sponsorship for his humanitarian projects, efficient and hardworking
personnel trained in Donetsk to assist with the Secretariat’s operation, and
control over the uniformed ministries with no assets of their own and over
the foreign policy with no initiatives needling Russia. That is it.

Will the President accept these terms? Viktor Yushchenko is the only person
who knows the answer. He is not a man of the barricades. Yet should he prove
to be a political eremite, he will never make it for the full second term.

Those who count on neither the opposition nor the President and, at the same
time, are not at all enthusiastic about the new rulers and their methods,
look forward to the Party of Region’s eventual decline and fall. Joint
struggle in the opposition unites political forces, but power puts them to
the test.

Internal tensions are already felt within the economic segment of the
government, amongst the new fuel-and-energy sector leaders. A host of party
activists, particularly representatives of regional elites, have been
unhappy about the distribution of portfolios: they did not receive any posts
in the central government and there is no guarantee they will be offered a
complete license locally.

Relations between the Party of Regions’ leader and major shareholder are not
as serene as it might seem. Yanukovych and Akhmetov are close but they do
not always agree on priorities for using their newly acquired power.

The Prime Minister seems to believe he is more responsible for the entire
country than for the headway of one man’s business.

Viktor Yanukovych could continue to be torn between his duty and commercial
obligations. His internal conflict is essential at this stage in the country’s
life when, for the most part, tangible power is vested in effective
businessmen with dubious, if any at all, moral values. We will see very soon
what will come of the country with the old-new broom.      -30-

———————————————————————————————–
LINK: http://www.mirror-weekly.com/ie/show/613/54458/
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
15.  UGLY TRUTHS OF UKRAINE’S ELECTION RESULTS,
                                                 2004 & 2006

ANALYSIS & COMMENTARY: By Taras Kuzio
The Ukrainian Observer monthly magazine, #74/7
The Willard Group, Kyiv, Ukraine, September 2006

Orange voters in Ukraine and abroad did not have a good summer. After four
months of tortuous, non-transparent and back channel negotiations, neither
of the two coalitions that everyone had expected materialized; neither a
revived Orange nor a “grand” coalition of Our Ukraine and the Party of
Regions.

Instead, Orange supporters were stunned to see the return of Viktor
Yanukovych. It was bad enough, we had all thought, that the “bandits” had
slipped through the net of the prosecutor’s office during President Viktor
Yushchenko’s many foreign visits in 2005.

But, that they had even entered parliament and were now back in government!
Of Ukraine’s 13 Prime Minister’s since independence, Yanukovych is the only
Prime Minister to serve a second term.

Unlike his twelve predecessors, who served an average of only 12-15 months
each, Yanukovych could well stay prime minister until the next election
cycle in 2009-2011.

Following constitutional reforms, the president no longer has the option to
dismiss the prime minister if, for example, the incumbent’s popularity
becomes too high, a common cause for the government’s dismissal prior to
2005.

Ironically, Yushchenko used this power for the last occasion in September
2005 when he dismissed the Yulia Tymoshenko government after a record of
only seven months in government.

Even if the parliamentary National Unity coalition were to collapse, the
government would not automatically fall. Following a host of tactical
mistakes after Yushchenko came to power, Yanukovych could well be with us
for the medium term.
                              KRAVCHUK-YUSHCHENKO
Disillusionment among Orange voters first appeared in September 2005 when
the Tymoshenko government was removed and President Viktor Yushchenko
signed a memorandum with Viktor Yanukovych.

In other words, the Universal signed on August 3 between all of the
parliamentary forces, except Tymoshenko, is already the second of such
documents.

In both September 2005 and July-August 2006, President Yushchenko was
willing to sacrifice his principles by signing deals with Yanukovych when
his back was against the wall; the first when his candidate for prime
minister (Yuriy Yekhanurov) failed to win parliamentary approval and the
second when he had to choose between two unpalatable steps, early elections
or putting Yanukovych forward as prime minister.

In both cases, Yushchenko had been boxed into a corner by his own team’s
tactical mistakes and poor strategy.

This is also the second occasion in Ukraine’s history when the Communists
have entered government, the first being in 1994 with Prime Minister Vitaliy
Masol and the second in 2006. The dates are not coincidental, as President
Yushchenko increasingly resembles former President Leonid Kravchuk.

Kravchuk brought back Masol to replace Leonid Kuchma in a vain attempt to
attract Communist voters in the summer 1994 presidential elections.
Kravchuk’s betrayal of his post-1991 shift towards Ukrainian statehood by
bringing in a representative of a party that opposed Ukrainian statehood
failed to lead to his re-election for a second term.

Yushchenko and Our Ukraine insisted that the Communists be removed from
the Anti-Crisis coalition before they would consider joining it. The
coalition members refused, the Communists stayed in the coalition and

government, and Yushchenko nevertheless approved the entrance of Our
Ukraine into government.

The confusion that surrounds Ukrainian politics since this year’s elections
has therefore not disappeared; Our Ukraine is both in “opposition” and in
government, an untenable position.

Both Kravchuk and Yushchenko will be remembered for having brought about
independence (Kravchuk) and the Orange Revolution (Yushchenko). But,
Kravchuk failed to be re-elected in 1994 and Yushchenko is unlikely to be
re-elected in 2009 because they both proved to be weak, indecisive and
non-listening presidents.

Voters in 1994 did not think of independence achieved three years earlier,
but were instead preoccupied with the previous years’ hyperinflation and
incompetent economic policies of the Kuchma government.  They went on to
punish Kravchuk by not re-electing him for a second term.

Similarly, in the 2009 elections, Orange voters will not remember the Orange
Revolution but instead the fact that President Yushchenko permitted
Yanukovych (the “bandit” and twice former convict in Yushchenko’s 2004
election rhetoric) to return to government, thus permitting defeat to be
snatched from the jaws of victory.
          YUSHCHENKO NOT PLAYING BY HIS OWN RULES
Some Western academic experts have downplayed the significance of the return
of Yanukovych. After all, they argue, the Orange Revolution has changed the
rules by which Ukrainian politics is played.

To reach this conclusion one has to possess a very optimistic view of the
ability of human personalities to quickly change.

Of the 24 members of the government, only four are new people, while 20 are
representatives of the Kuchma era or were in the Tymoshenko government, such
as Minister of Justice Roman Zvarych, who proved to be very economical with
the truth about his U.S. education.

Five areas point to Yushchenko failing to play by the rules of the Orange
Revolution but instead by rules initiated by his opponents since 2000 when
he first entered politics.

As one commentator wrote in Ukrayinska Pravda (August 10), “there are
grounds to believe that in August 2006, Yushchenko lost the elections begun
in 2004. The triumphant inauguration in January 2005 was only the victorious
“end of the first phase.”

[1] First, Ukraine has a multi-party coalition that includes representatives
from four out of five of parliament’s political factions. All four -
Regions, Our Ukraine, Socialists and Communists – signed the Universal.

When Yushchenko was prime minister in 2000-2001 he refused to accept demands
from pro-Kuchma centrists to create a multi-party coalition government.
National democrats and centrists had removed the left-wing leadership of
parliament in a “velvet revolution” in January 2000 and created, for the
first time in Ukraine’s history, a non-left parliamentary coalition.

Yushchenko’s refusal to transform his government by including
representatives from the different political groups in the parliamentary
coalition, principally centrists, had two ramifications. Tymoshenko was
arrested in January 2000, spending 3 weeks in jail.

In April 2000, parliament voted no confidence in the Yushchenko government
and replaced it with one led by Anatoliy Kinakh. As is common with all
Ukrainian political groups, Kinakh first joined the pro-Kuchma “For a United
Ukraine” bloc in the 2002 elections and then defected to Yushchenko in round
two of the 2004 elections.

[2] Second, during the Orange Revolution, Yanukovych proposed as a solution
to the crisis that he continue as prime minister while Yushchenko become
president. But, Yushchenko refused to have any dealings with what he then
termed “bandits”.

Following the creation of the National Unity parliamentary coalition and
government, Yushchenko and Yanukovych are jointly running the country.

Government competencies are divided between Yushchenko (humanities, culture,
law enforcement, foreign and defense policy) and Yanukovych (economics,
energy).

[3] Third, regional divisions inflamed by Russian political technologists,
the shadow Yanukovych campaign (run by Deputy Prime Minister Andriy Kluyev)
and Viktor Medvedchuk’s presidential administration were successful in
creating a near 50:50 split in the vote.

Yet, even in the relatively free re-run of round two of the elections on
December 26, 2004, Yushchenko won by only 8 per cent.

Compare this to the 97 percent won by Mikheil Saakashvili in the January
2004 Georgian elections where his opponents received less than 2 per cent
each. In Georgia there is little chance of Saakashvili’s opponents returning
to power.

The Razumkov Ukrainian Center for Economic and Political Studies, which
provided many of the analysts for the 2004 Yushchenko campaign, points out
that President Yushchenko did nothing to resolve Ukraine’s regional divide
between coming to power in January 2005 and the March 2006 elections.

If he had undertaken steps during this fifteen-month period, it would have
been welcomed as the sincere efforts of a president with political will.

The Razumkov Center states, “In addition, Viktor Andriyovych did not wish to
recognize the problem, described it as contrived, and spoke in the name of
the nation himself,” (Zerkalo Tyzhnia, August 19-25).

Yushchenko only sought the mantle of President Lincoln as “unifier” after
his back was against the wall and he had to choose between two unpalatable
choices. The regional divisions inflamed by the 2004 elections, coupled with
the failure to heal them following those elections, were in the end
successful in bringing Yanukovych back to power.

[4] Fourth, only one reprivatization has taken place following the Orange
Revolution. After only a week in power, the Yanukovych government issued
instructions to the State Property Fund, Security Service and Prosecutors
Office to halt further investigations of past privatizations.

The Orange Revolution was about many factors, including blocking Yanukovych
from becoming president, anger at the treatment by the authorities of the
population in the 1990s and support for democratic rights and freedoms.

What it was also about was removing “bandits” from government and society.
It was never made clear who these “bandits” were, but Orange supporters
assumed they were Kuchma era senior officials and oligarchs.

The oligarchs can now rest easy as they are, in former Prime Minister Yuriy
Yekhanurov’s words, “national bourgeoisie”. Rinat Akhmetov and Hryhoriy
Surkis were both included by President Yushchenko in this year’s honor’s
lists for state medals.

Fifth, constitutional reforms to transform Ukraine from a presidential to a
parliamentary republic were first developed by Socialist leader Oleksandr
Moroz in 2000-2001 during the Kuchmagate crisis.

These were then developed by Kuchma and Medvedchuk in 2002-2003, failing
to find parliamentary approval in April 2004, but were then agreed to in a
“compromise package” in December 2004 and introduced in January 2006.

Yushchenko won a breathing space for himself by ensuring that constitutional
changes would not take place until 2006, rather than immediately following
the 2004 elections, as Kuchma, his centrist allies and the left pushed for.

Yushchenko therefore had a whole year, at his insistence, with Kuchma’s
extensive powers.

Yet, surprisingly, these powers were barely used; the one occasion when they
were was when he removed the Tymoshenko government. In reality,
Yushchenko’s detached personality is more comfortable as a president under
the new constitution, rather than as the micro manager Kuchma under the
1996-2005 constitution.
                  UNPACKING THE YUSHCHENKO MYTH
Why has Ukraine developed in this way since the Orange Revolution?  To
understand this we need to first and foremost unpack the myths about
Yushchenko.

Yushchenko has been unable to become a revolutionary president and we are
right to dismiss the comparison made by the presidential secretariat between
US President Abraham Lincoln and Yushchenko.

President Lincoln never compromised on his principles, such as abolishing
slavery, and never countenanced appointing the leader of the confederacy as
his vice president.

President Yushchenko, whose career developed during the thirteen years of
the Kravchuk and Kuchma eras, has been unable to institute a break with the
Kuchma era and introduce a new system of governance in Ukraine.

The Razumkov Center wrote, “Who then won? Leonid Danylovych won! We
saw a Ukraine without Kuchma, and it resembled something similar to Ukraine
with him (Kuchma),” (Zerkaklo Tyzhnia, August 19-25).

Yushchenko was unable to utilize the possibilities offered to him by the
Orange Revolution to become an Abraham Lincoln and John F. Kennedy in one,
having no truck with the personalities and policies of the Kuchma era while
proposing a new democratic and European vision for Ukraine.

Yushchenko may escape having to face early elections but Ukraine will still
have a new president in 2009. Only this time Ukrainian voters will be able
to choose for the first time between a man and a woman.     -30-
———————————————————————————————–
Taras Kuzio, PhD, Senior Transatlantic Fellow, German Marshal Fund of the
USA, Adjunct Professor, Elliott School of International Relations, George
Washington University and President of Kuzio Associates. See
www.taraskuzio.net. The views contained herein are those of the author and
do not reflect those of the German Marshal Fund of the USA.
————————————————————————————————
LINK: http://www.ukraine-observer.com/articles/223/915
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
16. WHY UKRAINE NEEDS A GOOD OPPOSITION AND NOT UNITY

               Hocus-pocus: poof to democracy and back to the USSR
 
ANALYSIS & COMMENTARY: By Oksana Bashuk Hepburn, Canada
Maidan website, Kyiv, Ukraine, Thursday, August 31, 2006

The incredible happened in Ukraine a few weeks ago. The former fraudulent
presidential candidate ousted by the Orange revolution, Victor Yanukhovych,
became the Prime Minister. Yesterday’s criminals are today’s political
leaders. The President, someone’s puppet. The people duped. Democracy
undermined.

This hocus pocus was accompanied by noble talk. Poof! Parliament united
under the Party of Regions is the right thing for Ukraine’s national unity.
Poof, poof!! It will avert a national crisis.

Don’t believe it. This is smoke and mirrors in the best of the former USSR
tradition. In democracies, unity in parliament is not a virtue. Parliament
requires at least two strong players from opposing camps to bring up
national differences and debate issues. Major democracies-the United States,
Britain, Germany, Canada– are not monolithic.

 
They are united despite major geographic, linguistic, religious and other
polarizations. They balance different, often conflicting interests, on a daily
basis. Their conflicts are no different from those in Ukraine. The difference
between the successful democracies and today’s Ukraine is the manner in
which political issues get resolved.

Successful democracies resolve their issues in parliament. The post March
election scenario in Ukraine was played outside its rules. Indeed, the
manner in which President Victor Yushchenko called upon the current
government to serve undermines parliament and is a dangerous step back
towards dictatorship.

Let’s recall what happened. The real winners of the March elections, Yulia
Tymoshenko’s Bloc and the Orange coalition which obtained a slight majority
of seats, were stalled for four months from sitting in parliament by the
President.

 
This was shocking and offensive to democrats around the world. To
temper the negative reaction, his inaction was given a seductive, but false
spin: the President is deliberating what is best for national unity.

Hocus-pocus nonsense. The stalling was taking place because the voters made
the “wrong ‘choice as far as the wealthy oligarchs were concerned. The
people wanted Yulia Tymoshenko as their prime minister. The Party of Regions
did not. Nor did it want to play according to democratic rules. It would not
take the rightful place of the minority and become the opposition in
parliament. It refused to recognize that it had received only 36% of the
votes. It worked hocus-pocus magic to have the people’s choice reversed.

 
The President went along as if the elections did not matter. He did not press
the rules of democratic behaviour: parliament must be constituted by
creating the government side from those who have the majority; and on the
opposition from those who received fewer votes. The democratic process
was by passed for months. Then it was too late. The powerful few, not the
people, got their way. It was a step backward in democracy.

The back-sliding continues. Ukraine’s political leaders, including the
President and his newly appointed Prime Minister, claim to want to resolve
its differences -east/west, pro Russia/pro West. This, to be done by
creating a unified political force in parliament. Some of the President’s
Nasha Ukrajina members have already agreed to serve in the Yanukhovych
cabinet. His last prime minister, Yurij Yanukhurov is now parliament’s deputy
head, the strange Roman Zwarych, the Justice Minister.

Political forces that aim to “unite” Ukraine politically do not stray far
from the Communist model. Today’s situation in Ukraine is so deja vu, so
Soviet in style and execution: undermine freedom and democracy and confuse
the situation by spinning pretty words and slogans. The reconstitution of
parliament along the one unified team is nothing less than a reversal to the
one party system of the former USSR. It is bad news for Ukraine.

 
Of course the USSR’s single Communist party kept the country united. It
was done by terror, brute force, control of the press, and total obedience to
the one-party system. This unity cost Ukrainians four famines, the biggest in
1933 taking a toll of some 10 million people. Plus, some seventy years of
tyrannical unity where opposition was suppressed by death or the Gulag.

What is going on in Ukraine that after 15 years of millions upon millions of
dollars heaped in training, re-educating, showing the Ukrainians how
democracy works in the West, government exchanges, money spent on

producing MA’s in public administration, that allows such political perversions
to happen? The situation in Ukraine is as much our shame as its own.

The events of the last four months underscore how meager the results are and
how shallow the changes. Shallow in understanding what democracy is and how
it works and shallow in the way its key players have evolved as democrats.

And shameful. It is scandalous that today’s Prime Minister is yesterday’s
cheating contender for the presidency. That his entourage comprises men like
Renat Akhmetov who at thirty-six has acquired enough billions to be in
Fortune magazine’s list of the world’s wealthiest men while an average
Ukrainian lives in dire poverty with about two hundred dollars a month to
sustain him.
 
It is scandalous that President Yushchenko denied his people their choice
for prime minister and succumbed to manipulations like the best
of the world’s puppet leaders. Even more so, now, he is mouthing that the
Orange revolution is but a myth and a legend. The Prime Minister, in the
meantime, boasts of having participated in it to build a just nation.
Hocus -pocus.

It is scandalous that the West won the war against Communism, saw the Soviet
empire crumble, supported Ukraine during its feisty Orange revolution, only
to allow this ally in global democracy building slip so perilously close to
the edge. Even more scandalous: the West may have orchestrated this in order
to have good business relations with the oligarchs.

Things might have been different. The best case scenario for democracy would
have been for the President to have stood with his people rather than betray
them. Seeing their will disregarded, the people might have returned to the
streets where they scored victory two years ago, to demand a re-elections or
his resignation.

 
The West might have become furious and called in its ambassadors to exert
pressure. And told its consulting firm that it is more in America’s interest to
have a democratic Ukraine, than to have it perverted in the name of doing
business for a fee. ( How is this any different from having Germany’s Gerhard
Schroder’s sellout to Russia’ Gasprom?)

It did not happen. Democracy has had a set back. The only bright spot on
Ukraine’s political horizon now is Yulia Tymoshenko. She has declared that
she will not join the Party of Regions et al to form a united front in
parliament. She will lead the opposition and will deal with the real
national crisis: the unbridled intention of the oligarchs to control all
aspects of Ukraine’s life.

When Ukraine got its independence in 1991, hope very quickly turned to the
realization that in fact little had changed. The Communist gang that had
ruled Ukraine was still at the helm. Hocus-pocus, it had wrapped itself in
Ukraine’s blue and yellow flag instead of the red one with the hammer and
sickle, this, to amass great state wealth. Yet some hard fought gains were
made– free elections and greater freedoms, especially in the media. Now, it
is feared, even that has been lost.

The fear is real. Restrictions have already begun. Freedom of speech and
press have been attacked. Last month some journalists were beaten and
several independent media outlets closed. In the Rada, there were moves last
week to undermine the political checks and balances system by further
restrictions of the President’s powers. This, perhaps, in anticipation that
the next one might be more difficult to control.

Today, more than ever, Ukraine needs a strong opposition. Yulia Tymoshenko
has a huge job in front of her. The West must wake up. It must rally behind
democracy and help her do a good job as the watch-dog of the people. All

aid focus should be directed towards resuscitating democracy there.
 
In turn, Ukraine’s citizens need to monitor how she fights for their well being
and help her. If she does well, they will reward her in the next election. And
punish the hocus-pocus tricksters.                           -30-
———————————————————————————————–
Oksana Bashuk Hepburn, President U-CAN a consulting firm, is writing
a book about the current situation in Ukraine. (Oksanabh@sympatico.ca)
———————————————————————————————–
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
17.      STATE GLORY: GULAG OF THE RUSSIAN MIND

COMMENTARY: By Nina Khrushcheva
Japan Times, Tokyo, Japan, Friday, Aug. 25, 2006

NEW YORK — It is now 15 years since the failed coup of August 1991 against
Mikhail Gorbachev. At the time, Gorbachev’s policies of perestroika and
glasnost were seen by Soviet hardliners as a sellout of communist Russia to
the capitalist West.

But it is now clear that the KGB and the military who launched the coup were
not defending the idea of communism.

They were protecting their idea of Russia’s imperial mission, a notion that
had given the Kremlin commissars greater control of the vast Russian empire,
and of Russia’s neighbors, than any of the czars had ever enjoyed.

Gorbachev’s reforms not only liberated ordinary Russians from the
straitjacket of Marxism-Leninism, but also released the national aspirations
of people who had been locked in the empire for centuries.

Having seen the peoples of Central Europe free themselves from Soviet
domination just two years before, the constituent nations of the Soviet
Union were beginning to seek the same freedom for themselves.

The Baltic republics of Estonia, Latvia and Lithuania were the first to
insist on traveling their own national path, and have since linked their
fate to Europe as members of the European Union and North Atlantic Treaty
Organization. Others soon followed. By December 1991, the Soviet empire was
no more.

But only the Baltics have secured the sort of independence dreamed of in
1991. Georgia, which is both European and Asiatic, teeters on the edge of
instability.

Traditionally Asian Uzbekistan and Turkmenistan have resumed the tribal
forms of autocracy they practiced throughout the centuries. Azerbaijan and
Kazakhstan have in essence become their presidents’ wholly owned family
fiefs.

Ukraine’s break with Russia was perhaps the most wrenching, both for those
in the Kremlin nostalgic for imperial control and for ordinary Russians who
see Ukraine as the wellspring of Russian civilization. The Orange Revolution
of 2004, which overturned a rigged presidential election, proved that
Ukraine was no longer a Malorossiya (a small Russia), an inferior and
subordinate Slavic brother.

That peaceful revolution, led by Viktor Yushchenko and Yuliya Tymoshenko,
was a reminder of how enlightened Kievan Rus had been before it was forced
to give way to the despotic princes of Moscow.

Two years after the Orange revolt, Yushchenko (a politician who seems out of
his depth) has now accepted the Kremlin placeman Viktor Yanukovich, the foe
he had vanquished in 2004, as his new prime minister.

Nonetheless, the Orange movement — now led by Yushchenko’s former partner
and prime minister, Tymoshenko — has not fully lost its way, and still aims
to preserve Ukraine as a truly independent and free country. Malorossiya,
for the majority of Ukrainians, remains a thing of the past.

Despite all these epochal changes, Russians cannot accept the loss of their
imperial role. The dream of empire is, indeed, the gulag that imprisons the
Russian mind.

Most Russians do not regard Europe’s approach to their country’s borders as
a sign that they have, at long last, fully united with the civilization of
which they are a part, but as a source of insecurity.

Something more is at work here than mere nostalgia. During the chaotic years
of Boris Yeltsin’s presidency, it was perhaps understandable that Russians
regretted their loss of great power status.

Something had to be blamed for their dire economic conditions. Yet under
President Vladimir Putin, with the economy growing robustly, these feelings
have hardened, not diminished.

Russians are reverting to the past — to the grand pronouncements of Russia
as a unique great nation, destined to rule the world.

As before the advent of Gorbachev — indeed, restoring a centuries-old
tendency — Russians yet again believe that the people should be willing to
forfeit their freedoms for the sake of the greatness of the state, which
wins wars and launches Sputniks. A free press, free speech and free
elections, it is feared, may diminish the brute power that is needed for
Russia to assert itself.

Russians have long boasted of their various unique forms of greatness: first
it was the holy Russian soul, so superior to Western practicality. In the
15th century, Moscow was declared a “Third Rome,” the savior of spiritual
Christianity.

The 17th century united this spiritual mission with imperial expansion,
which eventually encompassed a landmass spanning 11 time zones. In the early
20th century, the imperial and spiritual mission became one, as Russia
became the bastion of world communism.

All these forms of greatness, however, demanded that ordinary Russians
accept debasement and enslavement. Development is not seen as a means of
improving people’s lives, but as helping Russia prove itself to be superior
to everybody else.

So, ultimately, the material achievements of Russian development always come
with a body count. Josef Stalin’s industrialization killed millions — and
became obsolete in only 30 years.

Putin’s Russia doesn’t go in for mass killing, yet it has not lost the
country’s “superiority” complex.

For Russia’s elite, a restaurant bill cannot be too expensive, and one can
never have enough bodyguards waiting out front for you.

 On a grander scale, Putin’s Russia has become a great power in terms of
energy production, but that looks to be temporary, as scant investment is
being made to maintain and improve the oil and gas fields. What matters is
selling the reserves and being rich now, not finding more for later.

So, as always, the trouble with Russia is that the state develops, but
society doesn’t. The good of the people is sacrificed for the good of the
nation. The dream of great Russia remains the gulag of the Russian mind.
————————————————————————————————
Nina Khrushcheva teaches international affairs at The New School University.
————————————————————————————————
LINK: http://search.japantimes.co.jp/cgi-bin/eo20060825a1.html
———————————————————————————————–
[return to index] Action Ukraine Report (AUR) Monitoring Service]
========================================================
     You are welcome to send us names for the AUR distribution list.
========================================================
18. MONUMENTS TO UNKNOWN WARRIORS, INSURGENTS’ STORIES

By Natalia Malimon, Lutsk Raion, Volyn oblast
The Day Weekly Digest in English, #27
Kyiv, Ukraine, Tuesday, September 12, 2006

While their descendants are erecting obelisks to the insurgents, if only to
console themselves temporarily with the feeling of being “patriots of
Ukraine,” the remaining participants and eyewitnesses of those events are
quietly passing away without sharing their memories.
                       500 VILLAGE HOMES BURNED DOWN
On the feast day of the Transfiguration of our Lord memorial slabs
commemorating the events of 1943-1945 were unveiled in my native village
of Lavriv.

They were dedicated to two memorable battles fought by the Ukrainian
insurgents. Of course, the first one, which took place on Aug. 20, 1943,
could not have possibly reversed the course of history.

Nevertheless, it played a historic role in the destiny of this village and
its residents. I first heard about this when I was a little girl. Shortly
after that battle almost all of Lavriv was burned down – over 500 village
homes were consumed by fire in three days.

“The Germans walked from one house to the next, carrying torches, and the
cattle were roaring in the closed barns. It was like the end of the world.
People fled to the forest and neighboring villages,” recalled my late
mother, Liubov Pylypivna.

She almost never told me anything about the battle that preceded the fire.
She had probably never gotten over those experiences that had taught her to
hold her tongue. The Soviet government used fire and sword to eradicate all
memories of the Ukrainian insurgents.

My mother died this spring, three days before Easter, at the age of 84. She
almost died when she was a young woman; on two occasions bullets narrowly
missed her head. A month before the German troops burned down the village,
they set fire to the church.

The wooden church of St. Mary the Protectress stood on top of the same hill
as the current brick church. It had a precious ancient icon with gold
ornamentation, and gold and silver bowls. Some people even said that the
church was burned down by a local night watchman, because “he had given the
relics to the Germans.” In order to cover his tracks, he threw a red herring
across the path.

But there is a more plausible version of events: the church was razed to the
ground because it was a gathering place, where people discussed the struggle
against the Germans. Shortly before the fire, the Nazis opened fire on a
crowd of villagers, who had gathered in front of the church after the
service. One of the bullets barely missed my mother.

Today the participants of that memorable battle of 1943 are no longer among
the living, but some eyewitnesses who are still alive remember it. One of
them is Nadia, the wife of Mykhailo Korolchuk, a political prisoner, who was
repressed and exiled to Siberia in 1940.

She recalls that the insurgents ambushed a German convoy of three trucks and
one car in the vicinity of Mukhavets (the name of a street in Lavriv), in a
place known as Seredokhresnia. The convoy was traveling from the direction
of a railway substation called Pereparov.

There was an entire company of insurgents led by Vladik Herasymchuk. He was
nicknamed Vykhreshcheny, probably because one of his relatives was Jewish.
He had served in the tsarist army. He knew how to fight. The Germans were
stopped because they were supposedly going to burn the village down. The
insurgents killed them all.

Later the Germans lured them to Prince Lubomirski’s former estate and shot
nearly all of them. Vladik was killed in that battle, along with his son and
son-in-law. They all died for Ukraine.

In retaliation, the Germans, together with the Poles, burned down Lavriv a
few days later. Afterwards, when Mother and I tried to recall whether a
single old house in Lavriv had survived the fire – even just for show – we
could barely count a few dozen, and most of those were located in remote
hamlets.

The inhabitants of Lavriv built dugouts on the ash- heap of the burned
village. These dugouts survived – along with the bunkers of scattered
Banderite detachments in the neighboring forests – until the early 1950s. I
was born in 1955 in such a dugout, on the burned-out site of our house.

During a village party in 1945, a “Soviet” soldier named Mykola entered the
dugout home of our neighbor, Granny Yaryna. When he was playing with his
rifle, it went off, apparently by accident.

“He was sitting opposite us and Yaryna’s daughter Nastia was sitting beside
me. After the smoke dispersed, he asked: ‘Whom did I shoot? Did I shoot
Liuba?’ There was a tiny hole in Nastia’s forehead from the bullet, and a
drop of blood. Mother often talked about this.”

After that bloody village fete, our young people were often dragged off to
the NKVD station in Lutsk; they wanted a statement that Nastia was killed by
one of the “forest brothers.”

“We cried and said it wasn’t true, but the investigating officer laughed:
‘Moscow doesn’t believe in tears.'”
                    HELLO, SISTER! FAREWELL, BROTHER!
While the people of Lavriv have more or less accurate memories about the
battle of 1943 (perhaps due to the compelling association with the ensuing
fire), there is only one surviving insurgent, who in the winter of 1945 took
part in a three- hour battle outside the village with the members of an NKVD
extermination battalion, in which about 50 of them were killed.

His name is also Volodymyr Herasymchuk (no relation to Vladik Vykhreshcheny;
Herasymchuk is a common surname in Lavriv). This ailing survivor lives in
Lutsk. The chairperson of the Lavriv village council, Svitlana Herasymchuk,
says that his recollections are blurry.

“Natalka, why didn’t you ask your mother?” I heard this phrase many times
from my fellow countrymen.

My mother had a good memory and didn’t have to read any notes to recall
individual episodes from the village’s history (things she had witnessed) as
well as facts from the life stories of many families.

Her accounts were never tainted by opportunism; she related facts as they
really happened, and she never spared anyone for the sake of historical
truth.

“I saw Jews being shot in the place where the collective farm’s hencoop was
later built. Our mother told us to climb up to the attic, and we watched
through the window. They were surrounded on four sides; the large pit that
was quickly filled heaved for a long time, with blood oozing out. Do you
think only Germans did it? Our people were among them, wearing their
uniforms.”

I asked her a lot of questions, but I didn’t have time to ask many more. And
now I can’t. Shortly before my mother died, Halyna Tabakovska-Zakoshtui, the
niece of Ananiy Zakoshtui, our neighbor and Krai leader of the OUN, who led
the insurgents to their last battle with the NKVD in 1945, sent her several
old photographs from Lithuania, where she has been living since returning
from exile: “Let them remind you of Lavriv in those days,” she wrote.

The pictures were taken by her uncle. A small faded photo shows the boys
from the forest. Any older Lavriv resident takes one look at it and
identifies them as the men from that insurgents’ detachment. My mother told
me their names.

She would get mad at me for pestering her with such questions, saying “These
people died a long time ago.” But I never wrote down their names, and now no
one can identify them.

After Ukraine became independent, a memorial complex was built for these
insurgents in Lavriv, opposite the Church of St. Mary the Protectress,
including a gravestone for Ananiy Zakoshtui and stellae engraved with a long
list of names of victims of the purges, UPA soldiers, and people from Lavriv
who were shot in Lutsk Prison on June 23, 1941. Entire families lie buried
here.

Some victims have no graves – no traces or memories are left. They are alive
in other peoples’ memories, but these memories do not seem to interest the
independent Ukrainian government.

“Oh, my God, is that Sonia?” Nadia Korolchuk whispered to me when a woman
bent with age and wearing a simple embroidered blouse approached a
microphone during the unveiling ceremony.

“Who is she? Who is that woman?” Voices were heard in the crowd that had
been patiently but absentmindedly listening to excruciatingly correct
speeches of the powerful.

I escorted Sofia Ilchuk-Zubkovych, the only surviving participant of those
events, to Nadia Kovalchuk. In a moment both women were so immersed

in their reminiscences, they didn’t notice anything happening around them.

They had been friends in the mid-1940s, when the insurgents were still
strong. Kovalchuk’s brother also went to the forest.

“My father begged him not to go, but he went because ‘someone has to fight
for Ukraine.’ And he died for it when he was 17 years old. He was buried
near the village of Kalnatychi, now in Rivne oblast, past Sukhovolia, near
Stavriv. I visited my brother’s grave and met Sonia’s father.

He used to be a lumberjack in our forest, and for a time he lived in our
dugout. Their house was burned down because they had links with the
insurgents. So they installed a stove in the cellar and lived there.

“Natalka, did you hear Sonia’s story about the baby that she was looking
after? That girl was the daughter of Maksym Rudiak, a Lavriv resident. He
and his wife fled the village, running for their lives, and they left their
child to be looked after by fellow villagers, and she ended up with Sonia’s
father. I saw the child at that time.

Later I heard about her as she was growing up. The NKVD started looking for
her. All of the Rudiaks died fighting for Ukraine; some of them were shot or
they died in the camps of Kazakhstan.”

Sonia and her parents were also deported. She served her sentence in
Vorkuta. The girl, Svitlana Rudiak, escaped, and later in Bakivka she
married a Slovak named Josyp Tarchu, and the two of them later went to
Czechoslovakia.
ONE FORMER SOLDIER IDENTIFIED, BUT HE IS A STRANGER
Aunt Halka, one of my relatives, is eating a blessed apple. Opposite the
memorial dedicated to the heroes of the national-liberation struggle stands
the restored Church of St. Mary the Protectress. My aunt sighs sadly:

“Those widows whose husbands served in the Soviet army keep receiving
pension increases. My husband limped on his wounded leg until he died; they
all know that he had fought for Ukraine, but this state isn’t paying us
anything for them.”

The few former Banderites who live in Lavriv can be counted on the fingers
of one hand. Age is taking its toll. I remember when the village was sent
into a paroxysm of excitement a few years ago when an UPA veteran arrived
all the way from Great Britain.

Half the villagers “recognized” him as one of their old friends or a
relative believed to have perished long ago in a bunker. They say he kissed
the earth of Lavriv after being driven to the village boundary from Lutsk,
but he never gave his name and refused the invitation of the then village
council chairman Arsen Sydorchuk to pay homage at the ancestors’ graves.

“What do you mean, he’s unidentified?” exclaims Sydorchuk, now the deputy
head of the Lutsk oblast state administration. “I went to Lviv to pick him
up. His name is Hnat Yushko. But he was not born in Lavriv, that’s for sure.
He was not interested in anything there, not in the people or the history.

When our church burned down (St. George’s Church in the old graveyard) I
wrote so many letters asking for help! One letter was published in a journal
read by Ukrainian emigres all over the world. Hnat got in touch with the
editor, Pavlo Dorozhynsky, and asked how much he could trust those people
and whether his donation would be of any use.

“While he was visiting Lavriv, Yushko lived with the family of Stepan Dyl,
Mykhailo Korolchuk’s son-in-law. His Uncle Yosyp Dyl has lived in Great
Britain for a long time; he found his way there after World War II.

“This man Yushko was not active in the Ukrainian community. My uncle was the
head of the community in Nottingham, and we have lots of acquaintances
there, including people from Hnat’s village. My wife and I have visited
Great Britain 11 times, but no one seems to know him. He stayed at my place
for several days.

He said he was born in Vyshenky, a village in Ternopil oblast. I told him I
could take him to his native village, no problem. He said no. He visited it
only once after the war. His sister and nephews lived there.

He started sending money to them, but then there were some
misunderstandings, and he stopped sending money. He had a British wife and
two children, but then something went wrong and he moved to the Ukrainian
Club where he was given shelter. When we were in Britain, we called him and
hoped that he would invite us over. He didn’t and then all our contacts
broke off.”

The Banderite “stranger” donated 5,000 dollars to the church in Lavriv. The
roof was covered with tin and icons were purchased.
Quite a few Lavriv insurgents have died without ever talking about the past.

Recently we found a photograph of Leonid Romaniv, another participant in the
battle of 1945. He was not even 20 years old when he was wounded and died
for Ukraine.

This village, which found itself at the crossroads of the great highways of
history – invaded by Tatars, Turks, the French, Austrians, Cossacks,
Germans, and Poles – is immortalizing history on its own small scale. But
without state recognition, all these memorials will remain monuments without
memory.                                              -30-
———————————————————————————————–
LINK: http://www.day.kiev.ua/168545/
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================

    If you are receiving more than one copy of the AUR please contact us.
    Please contact us if you no longer wish to receive the AUR.    
       You are welcome to send us names for the AUR distribution list.
   If you are missing some issues of the AUR please let us know.
========================================================
         “ACTION UKRAINE REPORT – AUR”
         A Free, Not-For-Profit, Independent, Public Service Newsletter
                With major support from The Bleyzer Foundation
 
      Articles are Distributed For Information, Research, Education
                Academic, Discussion and Personal Purposes Only
                                  Additional readers are welcome.
========================================================
      SigmaBleyzer/The Bleyzer Foundation Economic Reports
                “SigmaBleyzer – Where Opportunities Emerge”
 
The SigmaBleyzer Emerging Markets Private Equity Investment Group
and The Bleyzer Foundation offers a comprehensive collection of documents,
reports and presentations published by its business units and organizations.
 
All publications are grouped by categories: Marketing; Economic Country
Reports; Presentations; Ukrainian Equity Guide; Monthly Macroeconomic
Situation Reports (Romania, Bulgaria, Ukraine).
 
You can be on an e-mail distribution list to receive automatically, on a
monthly basis, any or all of the Macroeconomic Situation Reports (Romania,
Bulgaria, Ukraine) by sending an e-mail to mwilliams@SigmaBleyzer.com.
               “UKRAINE – A COUNTRY OF NEW OPPORTUNITIES”
========================================================
   UKRAINE INFORMATION WEBSITE: http://www.ArtUkraine.com
========================================================
    “WELCOME TO UKRAINE”- “NARODNE MYSTETSTVO”
                                   (Folk Art) MAGAZINES
For information on how to subscribe to the “Welcome to Ukraine” magazine
in English, or the Ukrainian Folk Art magazine “Narodne Mystetstvo” in
Ukrainian, write to ArtUkraine.com@starpower.net. Complete information is
========================================================
              ACTION UKRAINE PROGRAM – SPONSORS
                              Action Ukraine Report (AUR)
               Holodomor Art and Graphics Collection & Exhibitions
          “Working to Secure & Enhance Ukraine’s Democratic Future”

1.  THE BLEYZER FOUNDATION, Dr. Edilberto Segura,
Chairman; Victor Gekker, Executive Director, Kyiv, Ukraine;
Washington, D.C., http://www.bleyzerfoundation.com.
   Additional supporting sponsors for the Action Ukraine Program are:
2. UKRAINIAN FEDERATION OF AMERICA (UFA), Zenia Chernyk,
Chairperson; Vera M. Andryczyk, President; Huntingdon Valley,
Pennsylvania
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 298 7275 in Kyiv,
kau@ukrnet.net
4.  ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
5. Law firm UKRAINIAN LEGAL GROUP, Irina Paliashvili, President;
Kiev and Washington, general@rulg.com, www.rulg.com.
6. BAHRIANY FOUNDATION, INC., Dr. Anatol Lysyj, Chairman,
Minneapolis, Minnesota
7. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX  77024; bill.hunter@volia-software.com.
8. ODUM- Association of American Youth of Ukrainian Descent,
Minnesota Chapter, Natalia Yarr, Chairperson
9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C.,
Dr. Susanne Lotarski, President/CEO; E. Morgan Williams,
SigmaBleyzer, Chairman, Executive Committee, Board of Directors;
John Stephens, Cape Point Capital, Secretary/Treasurer
10. UKRAINIAN ORTHODOX CHURCH OF THE USA, South
Brown Brook, New Jersey, http://www.uocofusa.org
11. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
12. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO; Vera
Andruskiw, CPP Wash Project Director, Washington, D.C.; Markian
Bilynskyj, VP/Director of Field Operations; Marta Kolomayets, CPP
Kyiv Project Director, Kyiv, Ukraine. Web: http://www.USUkraine.org
13. WJ GROUP of Ag Companies, Kyiv, Ukraine, David Holpert, Chief
Financial Officer, Chicago, IL; http://www.wjgrain.com/en/links/index.html
14. EUGENIA SAKEVYCH DALLAS, Author, “One Woman, Five
Lives, Five Countries,” ‘Her life’s journey begins with the 1932-1933
genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
15. ALEX AND HELEN WOSKOB, College Station, Pennsylvania
16. SWIFT FOUNDATION, San Luis Obispo, California
17. TRAVEL TO UKRAINE website, http://www.TravelToUkraine.org,
A program of the U.S-Ukraine Foundation, Washington, D.C.
========================================================
 TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR,
around five times a week, please send your name, country of residence,
and e-mail contact information to morganw@patriot.net. Information about
your occupation and your interest in Ukraine is also appreciated.
 
If you do not wish to read the ACTION UKRAINE REPORT please
contact us immediately by e-mail to morganw@patriot.net.  If you are
receiving more than one copy please let us know so this can be corrected
 
              SPAM BLOCKERS ARE A REAL PROBLEM                 
If you do not receive a copy of the AUR it is probably because of a
SPAM BLOCKER maintained by your server or by yourself on your
computer. Spam blockers are set in very arbitrary and impersonal ways
and block out e-mails because of words found in many news stories.
 
Spam blockers also sometimes reject the AUR for other arbitrary reasons
we have not been able to identify. If you do not receive some of the AUR
numbers please let us know and we will send you the missing issues. Please
make sure the spam blocker used by your server and also the one on your
personal computer, if you use a spam blocker, is set properly to receive
the Action Ukraine Report (AUR).

========================================================
                        PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer

Emerging Markets Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
Mobile in Kyiv: 8 050 689 2874
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
========================================================
    Power Corrupts and Absolute Power Corrupts Absolutely. 
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================

Leave a comment

Filed under Uncategorized

AUR#755 Sept 12 Caspian Oil Courted In Azerbaijan; No Resale Of Steelworks; 11 Laws Needed For WTO; 5 Tax Chiefs Replaced; Babyn Yar; Bronze Age Pyramid;

=========================================================
 ACTION UKRAINE REPORT – AUR           
                  An International Newsletter, The Latest, Up-To-Date
                       In-Depth Ukrainian News, Analysis and Commentary

                        Ukrainian History, Culture, Arts, Business, Religion,
           Sports, Government, and Politics, in Ukraine and Around the World       

                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 755
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN WASHINGTON, D.C., TUESDAY, SEPTEMBER 12, 2006
 
                Help Build the Worldwide Action Ukraine Network
 Send the AUR to your colleagues and friends, urge them to sign up
               -——-  INDEX OF ARTICLES  ——–
              Clicking on the title of any article takes you directly to the article.               
    Return to the Index by clicking on Return to Index at the end of each article
1.     UKRAINE PRESIDENT COURTS CASPIAN OIL IN AZERBAIJAN
Aida Sultanova, AP Worldstream, Baku, Azerbaijan, Thursday, Sep 07, 2006

2. UKRAINE’S CASPIAN CRUDE CONDUIT STILL IN TALKING STAGE
Turkish Daily News, Ankara, Turkey, Monday, Sep 11, 2006

3.      AZERBAIJANI OPPOSITION LEADER MUSAVAT SCEPTICAL

                  ABOUT AZERI-UKRAINE ENERGY COOPERATION
     Unfortunately Azerbaijani leadership is rather strongly influenced by Russia. 
TV 5 Kanal, Kiev, in Russian 1800 gmt 8 Sep 06
BBC Monitoring Service, United Kingdom, Saturday, Sep 09, 2006

4.             AZERBAIJAN, UKRAINE SIGN SEVEN AGREEMENTS
Turan news agency, Baku, Azerbaijan, in Russian 1604 gmt 7 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 07, 2006

5. UKRAINE CALLS ON AZERBAIJANI PARLIAMENT TO RECOGNIZE
        INDUCED STARVATION OF 1932-1933 AS A GENOCIDE ACT
Ukrainian News Agency, Kyiv, Ukraine, Friday, September 8, 2006

6.   UKRAINE HOPES FINLAND WILL SUPPORT RECOGNITION OF

       1932-1933 FAMINE AS GENOCIDE ACT AGAINST UKRAINIANS
Olha Volkovetska, Ukrainian News Agency
Kyiv, Ukraine, Wed, August 30, 2006

7                     STALIN AND THE UKRAINIAN MASSACRE
COMMENTARY: By Eric Margolis, LewRockwell.com

Burlingame, California, Monday, August 28, 2006

8. LIFTING OF EMBARGO ON POLISH FOOD EXPORTS TO UKRAINE
            One of main discussion points at the Krynica Economic Forum
Polish News Bulletin, Warsaw, Poland, Thursday, Sep 07, 2006

9.  POLAND: FSO CAR MANUFACTURER HOPING FOR EU FUNDING
             Loans guaranteed by the state for FSO’s new Ukrainian investor
Polish News Bulletin, Warsaw, Poland, Thursday, Sep 07, 2006

10JCDECAUX ENTERS UKRAINE/RUSSIAN OUTDOOR AD MARKETS
AFX Europe (Focus), Paris, France, Thursday, Sep 07, 2006

11. DANONE BUYS MAJOR UKRAINE DAIRY PRODUCTS COMPANY
AFX Europe (Focus), Paris, France, Thursday, Sep 07, 2006

12. UKRAINIAN OXFORD GRAD WINS BATTLE TO STAY IN BRITAIN
Ian Herbert, The Independent, London, United Kingdom, Sep 09, 2006

13.   WORLD BANK SAYS CONDITIONS FOR DOING BUSINESS IN
          UKRAINE IMPROVED IN 2006, REFORMS MUST CONTINUE
               Ukraine’s taxation system is the most burdensome in the world
Interfax-Ukraine news agency, Kiev, in Russian 1105 gmt 7 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 07, 2006

14.  UKRAINIAN PRIME MINISTER: NO RESALE OF STEELWORKS
Interfax-Ukraine news agency, Kiev, in Russian 1621 gmt 11 Sep 06
BBC Monitoring Service, United Kingdom, Monday, Sep 11, 2006

15.        FIVE REGIONAL TAX CHIEFS REPLACED IN UKRAINE
Interfax-Ukraine news agency, Kiev, in Russian 1439 gmt 8 Sep 06
BBC Monitoring Service, United Kingdom, Friday, Sep 08, 2006

16.       UKRAINE HAS TO PASS 11 LAWS TO JOIN WTO IN 2006
TV 5 Kanal, Kiev, in Ukrainian 1200 gmt 7 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sept 7, 2006

17UKRAINE: WTO LAWS WILL NOT BE PASSED IN SEPTEMBER
UNIAN news agency, Kiev, in Ukrainian 1509 gmt 7 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 07, 2006

18.   PARLIAMENT SEATS FOR CABINET MEMBERS CANCELLED
                 Ukrainian cabinet ministers relinquish parliament seats
Interfax-Ukraine news agency, Kiev, in Russian 0822 gmt 12 Sep 06
BBC Monitoring Service, United Kingdom, Tuesday, Sep 12, 2006

19UKRAINIAN PRES APPOINTS SECURITY COUNCIL MEMBERS
Interfax-Ukraine news agency, Kiev, in Russian 1826 gmt 11 Sep 06
BBC Monitoring Service, United Kingdom, Monday, Sep 11, 2006

20. COALITION FORMAT TO BE DETERMINED BY COMMUNISTS”
              Ukrainian president to reinforce security and defence council
ANALYSIS & COMMENTARY: By Serhiy Burlachenko
Newspaper 2000, Kiev, Ukraine, in Russian 8 Sep 06; p A7
BBC Monitoring Service, United Kingdom, Saturday, Sep 09, 2006

 
21.           15TH ANNIVERSARY OF UKRAINE’S INDEPENDENCE
Congressional Record statement by Rep. Christopher H. Smith
Co-Chairman, U.S. Helsinki Commission,
Vice-Chairman, House International Relations Committee
U.S. House of Representatives
Washington, D.C., Wednesday, September 6, 2006
 
22OLEH RYBACHUK MEETS WITH FORMER US AMB STEVEN PIFER
    Ukraine should intensify NATO membership dialogue, WTO by end of 2006
Interfax-Ukraine news agency, Kiev, in Russian 1554 gmt 11 Sep 06
BBC Monitoring Service, United Kingdom, Monday, Sep 11, 2006
 
23.     U.S. PRESIDENT GEORGE BUSH GOING TO VISIT UKRAINE
Ukrainian News Agency, Kyiv, Ukraine, September 11, 2006
 
Ukrainian News Agency, Kyiv, Ukraine, Monday, September 11, 2006
 
      DEMOCRATIC DEVELOPMENT FOR MIDDLE EAST COUNTRIES 
Ukrainian News Agency, Kyiv, Ukraine, Monday, September 11, 2006
 
26. EVERY 7TH FAMILY IS INCOMPLETE, NO BASIS FOR ALIMONY
Centre TV, Moscow, in Russian 1645 gmt 8 Sep 06
BBC Monitoring Service, United Kingdom, Monday Sep 11, 2006
 
27 BLACK SEA DOCUMENTARY: “FROM ODESSA TO ODESSA”
            Film aims to capture the way people live around the Black Sea
Turkish Daily News, Ankara, Turkey, Saturday, Sep 09, 2006
 
28.   FORUM FOR 65TH ANNIVERSARY OF BABYN YAR TRAGEDY
      President Of Israel, President Of Croatia, And President Of Montenegro
                 To Visit Ukraine On September 26 And September 27
Ukrainian News Agency, Kyiv, Ukraine, Tuesday, September 12, 2006

29.     REMAINS OF BRONZE AGE PYRAMID FOUND IN UKRAINE
Tom Parfitt, Moscow, The Guardian, London, UK, Fri, Sep 08, 2006

 
30OSTASH APPOINTED UKRAINIAN AMBASSADOR TO CANADA
Interfax-Ukraine news agency, Kiev, in Russian 1545 gmt 11 Sep 06
BBC Monitoring Service, United Kingdom, Wednesday, Sep 11, 2006
========================================================
1. UKRAINE PRESIDENT COURTS CASPIAN OIL IN AZERBAIJAN

Aida Sultanova, AP Worldstream, Baku, Azerbaijan, Thursday, Sep 07, 2006

BAKU – Ukrainian President Viktor Yushchenko on Thursday urged oil-rich
Azerbaijan to send Caspian Sea crude for delivery through a Ukrainian
pipeline that has been the subject of geopolitical jostling in the former
Soviet Union.

Following talks with Azerbaijani president Ilham Aliev, Yushchenko said
Ukraine’s state oil company has proposed that Azerbaijan commit to sending
4.5 million to 5 million tons of oil a year that would be pumped through the
pipeline leading from the Black Sea port of Odessa to Brody, near the Polish
border.

Azerbaijani oil could be refined and sold in Ukraine, Yushchenko suggested,
and could eventually be pumped further into Europe through an existing
pipeline into Slovakia and later through a proposed extension of the
Odessa-Brody pipeline into Poland.

Ukraine has been debating how to use the pipeline for years, amid Russia’s
strong lobbying for it to pump Russian oil in the
opposite direction – to Odessa for further transport to western markets
trough Turkey’s Bosporus.

The Western-leaning Yushchenko, and the United States, have favored using it
to pump Caspian oil. Aliev made no commitments but welcomed the proposal,
saying that by 2008 he expects a new U.S.-backed pipeline from the Caspian
to the Turkish Mediterranean shore to be filled to capacity.

“In the coming years the volume of production and export will rise, and so
it is very interesting for us to consider the question of alternative
routes,” he said.

The two leaders spoke after meeting for two hours and signing a joint
declaration that Aliev said “bears witness to the high level of political
relations and the desire to strengthen them.”

Yushchenko is seeking to lessen Russia’s influence on Ukraine, in part by
seeking other sources of energy. Russia cut off natural gas deliveries
briefly in January during a price dispute that ended with nearly twofold
hike in the rate Ukraine pays for the gas it relies upon.

Separately, Russia’s gas giant OAO Gazprom its chief, Alexei Miller, and
Ukrainian Fuel and Energy Minister Yuriy Boyko had met Thursday and

agreed on additional supplies for Ukraine in the fourth quarter of 2006.

Gazprom had warned earlier that Ukraine wasn’t injecting enough gas into
storage facilities to guarantee stable supplies of gas westward to the
European Union.

It had said this risked a repeat of supply shortages that Gazprom’s EU
customers suffered last winter, when Russia says Ukraine illegally siphoned
gas from transit pipelines to meet a temporary surge in its domestic demand.

The price for the additional gas will be determined “in a constructive
basis, taking into account the strategic perspectives for cooperation in the
gas sphere of Ukraine,” a Gazprom statement said.

————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2. UKRAINE’S CASPIAN CRUDE CONDUIT STILL IN TALKING STAGE

Turkish Daily News, Ankara, Turkey, Monday, Sep 11, 2006

A pipeline project that would create a new route for Caspian oil to reach
Western markets and loosen Ukraine’s dependence on Russian energy has

yet to find approval from former Soviet oil states, analysts said.

Ukraine’s president Viktor Yushchenko, who was promoting an ambitious
pipeline project, came away from a two-day visit to oil-rich Azerbaijan this
week with little more than promises to improve bilateral ties.

“Today Azerbaijan doesn’t have enough free oil and gas for it to make any
promises or deliveries,” Inglab Akhmedov, director of Baku’s Public Finance
Monitoring Center, told AFP.

Yushchenko was pushing the idea of using the existing Odessa-Brody oil
pipeline for deliveries of crude from the Caspian Sea to Ukraine and beyond
to international markets as it grapples with higher energy costs for Russian
supplies.

The Ukrainian pipeline was originally built in 2002 to loosen Russia’s grip
on Ukraine’s energy market, which imports 90 percent of its oil supplies
from its giant northern neighbor, but it was filled with Russian oil when
Ukraine was unable to find alternate suppliers in 2004.

The Odessa-Brody project would entail shipping Azerbaijani hydrocarbons

from the Caspian to the Black Sea, across Ukraine and eventually north to
Poland’s Baltic Sea coast for resale onto world markets.

But Ukraine’s leader warned that indecision from Azerbaijan’s leadership
could stall the project at a meeting with his Azerbaijani counterpart Ilham
Aliyev on Friday.

“The risks are in how effectively and quickly we will be able to engage the
mechanisms of power, structures of the state, to realize projects,”
Azerbaijan’s state news agency Azertaj quoted Yushchenko as saying.

“Azerbaijan in combination with Kazakhstan, are essential for the completion
of this project, but neither country has ever taken concrete steps to
forward its creation,” said Volodymyr Saprykin, an economist with the
Razumkov Center for Economic and Political Research in a telephone

interview from Kiev.

“This is not the first visit of a Ukrainian president to Azerbaijan,”
Saprykin added.

The project, which is essential for Yushchenko to fulfill his policy of
energy diversification, has been dogged by both geopolitics, with Russia
opposing the proposal, and economics, as Azerbaijan opened an alternate
route for its oil earlier this year.

Analysts said the launch of the Baku-Tbilisi-Ceyhan pipeline which ships
Azerbaijani oil to the Turkish Mediterranean coast meant Azerbaijan would
not have excess oil until the BTC reached full capacity in a few years time.

“If Azerbaijan starts servicing oil from Central Asia then we can start
talking about serious shipments to Odessa-Brody,” Akhmedov said, suggesting
Kazakhstan needed to agree to ship oil westwards through Azerbaijan for
Odessa-Brody to take off.

Kazakhstan, a growing oil exporter located on the east side of the Caspian
Sea, has also expressed interest in the Odessa-Brody idea.

Kazakh President Nursultan Nazarbayev said in May that Kazakh oil could be
routed into the pipeline, but the nation has yet to formalize shipments to
Azerbaijan.

Meanwhile opposition to the project has grown in Ukraine itself, where the
West-oriented Yushchenko has seen his pro-Russian arch rival Viktor
Yanukovich take economic decision-making power when he became prime

minister in August.

“There are both supporters and opponents of this project in Ukraine,”
Saprykin said, adding that a study funded by the European Commission would
show whether the project was economically feasible in the coming months.

The pipeline, which could eventually ship 40 million tonnes of oil per year,
would be a boon for both Ukraine and Western Europe, which have increasingly
grown wary of their dependence on Russia for both oil and gas.

It has the support of the United States, which has backed integration among
ex-Soviet states south of Russia’s borders through GUAM, a grouping of
nations that includes Georgia, Ukraine, Azerbaijan and Moldova.

Through a number of projects and programs, the United States and the
European Union have fought to link the Caucasus and Central Asia via
pipelines and transport corridors.

The effect is that ties with Moscow, cemented with infrastructure built up
over the Soviet period, are loosened, to the Kremlin’s chagrin.

Aliyev echoed the geopolitical changes in the region during his meetings
with Yushchenko and suggested that the Odessa-Brody proposal could interest
Azerbaijan in the next few years, as oil output increases.

“The regions of the Black Sea and the Caspian are integrating with each
other more and more. To some extent this region can already be viewed as a
unified whole considering relations in transport, energy, politics and other
relations,” Aliyev said. “Looking at new export routes interests us.”
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3.   AZERBAIJANI OPPOSITION LEADER MUSAVAT SCEPTICAL
              ABOUT AZERI-UKRAINE ENERGY COOPERATION
 Unfortunately Azerbaijani leadership is rather strongly influenced by Russia. 
TV 5 Kanal, Kiev, in Russian 1800 gmt 8 Sep 06
BBC Monitoring Service, United Kingdom, Saturday, Sep 09, 2006

KIEV – Azerbaijani opposition party leader Musavat has voiced his doubts
about “sincere and fruitful” energy cooperation between Azerbaijan and
Ukraine.

In an interview with Ukraine’s 5 Kanal TV, Isa Qambar said that the two
countries have difficulties in establishing partnership ties because
Azerbaijan takes into account Russia’s views which are not friendly towards
Ukraine.

The following is the text of the report by Ukrainian television TV 5 Kanal
on 8 September:

[Correspondent] Mr Qambar, why didn’t the Azerbaijani opposition believe in
official Baku’s sincerity in its negotiations with Ukraine?

[Qambar] In principle, we have a high opinion of Mr Yushchenko’s visit to
Azerbaijan because we do believe that relations between Ukraine and
Azerbaijan should develop irrespective of who is in power in the two
countries.

Unfortunately democratic Ukraine and authoritarian Azerbaijan have very
serious difficulties in establishing serious strategic partnership ties.

Unfortunately, the Azerbaijani leadership is rather strongly influenced by
Russia. We were able to lay the [Baku-Ceyhan] oil pipeline from Azerbaijan
through Georgia to Turkey only thanks to the principled position of the
Western countries, Turkey and Georgia.

I think that the authoritarian regime in Azerbaijan is unlikely to be able
to cooperate sincerely and fruitfully with the Ukrainian leadership. But we
would like to very much although we are basically opposed to the current
authorities in Azerbaijan.

[Correspondent] Do you think that there will be speedy cooperation in the
energy sphere? Will Azerbaijani oil be transported via the Odessa-Brody
pipeline?

[Qambar] It is difficult to say anything specific about this. I think that
Azerbaijan will agree to cooperate with Ukraine in the energy sphere as far
as the Kremlin will allow this cooperation to happen.

Unfortunately, Russia is putting pressure on democratic states in energy
matters and unfortunately the Azerbaijani leadership takes a serious view of
the Kremlin’s position.

And, unfortunately, at the current stage much will depend on to what degree
the Azerbaijani leadership listens to the Kremlin’s position, and for its
part the Kremlin is not very amicably disposed towards the energy security
of Ukraine and other democratic countries.

[Correspondent] As far as I know your party, the opposition party [Musavat],
was very much relying on Viktor Yushchenko’s visit and was expecting that he
would probably discuss with the Azerbaijani president the development of
freedom in the country. To what extent have your expectations been
justified? Did you have an opportunity to talk to Viktor Yushchenko?

[Qambar] The programme, formalities and sometimes the tone of a visit depend
not only on the visiting side but also on the host country. It is unlikely
that the Azerbaijani side would be ready to listen to Mr Yushchenko’s ideas
about democracy or even any wishes for democratization in Azerbaijan.

We understand the Ukrainian leadership and, to be honest, we do not expect
that they will speak openly about this subject and create extra problems in
relations with Azerbaijan.

[Correspondent] So, you did not manage to meet the Ukrainian president or
the Ukrainian delegation?

[Qambar] We did not try to. We have rather good relations with Ukrainian
politicians. We were not insisting on having any official contacts in Baku
because we are interested in good relations between Ukraine and Azerbaijan.

[Correspondent] Thank you.                        -30-

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
4.      AZERBAIJAN, UKRAINE SIGN SEVEN AGREEMENTS

Turan news agency, Baku, Azerbaijan, in Russian 1604 gmt 7 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 07, 2006

BAKU – Seven documents have been signed as a result of the high-level
Azerbaijani-Ukrainian talks. These documents are:

[1] A joint declaration between the presidents, Ilham Aliyev and Viktor
Yushchenko;
[2] An intergovernment agreement on cooperation in the environmental sphere;
[3] An intergovernment agreement on international combined cargo
transportation;
[4] An agreement between the Foreign Ministries on the training of
diplomatic staff;
[5] An agreement between the Azerbaijani Emergencies Ministry and the
Ukrainian Ministry of Ecology on scientific-technical cooperation in the
sphere of radiological monitoring;
[6] An agreement on cooperation between the State Oil Company of the
Azerbaijani Republic and the Naftohaz Ukrayiny national joint-stock company;
[7] An agreement on cooperation in the sphere of protecting sorts of plants.

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
    Send in names and e-mail addresses for the AUR distribution list.
========================================================
5. UKRAINE CALLS ON AZERBAIJANI PARLIAMENT TO RECOGNIZE
        INDUCED STARVATION OF 1932-1933 AS A GENOCIDE ACT

Ukrainian News Agency, Kyiv, Ukraine, Friday, September 8, 2006

KYIV – Ukraine is calling on the parliament of Azerbaijan to recognize the
famine [induced starvation] of 1932-1933 as a genocide act against the
Ukrainian people. This follows from a statement by the presidential press
service, a copy of which was made available to Ukrainian News.

President Viktor Yuschenko discussed the issue during a meeting with
Chairman of Azerbaijan’s parliament Oktai Asadov and members of the
Ukraine-Azerbaijan parliamentary group in Baku.

During the meeting, the Ukrainian side was represented by Foreign Affairs
Minister Borys Tarasiuk, Deputy Premier Andrii Kliuev, MPs Anatolii Kinakh,
Eduard Zeinalov and Petro Yuschenko. They also talked over
inter-parliamentary cooperation and interaction in the humanitarian field.

Yuschenko positively assessed opportunities for cultural development of
30,000 Ukrainians in Azerbaijan and 250,000 Azerbaijanis in Ukraine.

As Ukrainian News earlier reported, Yuschenko started his official visit to
Azerbaijan on September 7-8. According to various estimates, between 3 and

7 million people died in the 1932-1933 famine in Ukraine.           -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================      
6. UKRAINE HOPES FINLAND WILL SUPPORT RECOGNITION OF
     1932-1933 FAMINE AS GENOCIDE ACT AGAINST UKRAINIANS

Olha Volkovetska, Ukrainian News Agency

Kyiv, Ukraine, Wed, August 30, 2006

KYIV – Ukraine hopes that Finland will support Ukraine’s aspirations for
recognition of the famine [induced starvation] of 1932-1933 as an act of
genocide against the Ukrainian people.

Ukrainian News has learned this from spokesman of the Foreign Ministry
Andrii Deschytsia with references to a meeting between Ukraine’s Foreign

Minister Borys Tarasiuk and Head of the Foreign Affairs Committee of
Finland’s parliament Liisa Jaakonsaari.

According to the message, Tarasiuk briefed Jaakonsaari on measures being
held in Ukraine aimed at making the world community recognize the famine of
1932-1933 as an act of genocide against the Ukrainian people and expressed
hope that Finland will support Ukraine’s positions on the issue at the

international scene.

During the meeting, Tarasiuk also confirmed that Ukraine’s integration with
European structures and NATO, as well as constructive relations with Russia
together with regional security and stability, will remain key directions in
Ukraine’s foreign policy.

Tarasiuk and Jaakonsaari talked over the future of inter-parliamentary
cooperation and development of national minorities in Ukraine and Finland.
As Ukrainian News earlier reported, on August 29, Foreign Minister Borys
Tarasiuk left Poland for paying an official visit to Finland.

The Security Service of Ukraine declassified documents of the State
Political Department also known as GPU of the Ukrainian Soviet Socialist
Republic concerning the Great Famine of 1932-1933 that were deposited in the
state archive of the SBU.

In March, the Polish Senate (the upper house of parliament) called on the
international community to recognize the 1932-1933 famine in Ukraine as an
act of genocide against the Ukrainian people.

By 2007, Ukraine intends to draft a document on recognition of the 1932-1933
famine in Ukraine as an act of genocide so that the United Nations
Organization could pass it.

President Viktor Yuschenko recently called on the leaders of all countries
to recognize the 1932-1933 famine in Ukraine as an act of genocide against
Ukrainians. The parliaments of several countries have recognized the famine
as an act of genocide.

In November 2003, 25 member-countries of the United Nations Organization
drafted a joint statement that described the famine in Ukraine as the result
of the policies of a totalitarian regime. Other states later aligned
themselves with this statement.

In 2003, the Verkhovna Rada passed an address to the Ukrainian people
declaring the famine of 1932-1933 as an act of genocide.

According to various estimates, between 3 million and 7 million people died
in the 1932-1933 famine in Ukraine.                       -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
7.             STALIN AND THE UKRAINIAN MASSACRE

COMMENTARY: By Eric Margolis, LewRockwell.com

Burlingame, California, Monday, August 28, 2006

Five years ago, I wrote a column about the unknown Holocaust in Ukraine. I
was shocked to receive a flood of mail from young Americans and Canadians
of Ukrainian descent telling me that until they read my article, they knew
nothing of the 1932-33 genocide in which Stalin’s regime murdered 7 million
Ukrainians and sent 2 million to concentration camps.

How, I wondered, could such historical amnesia afflict so many young
North-American Ukrainians? For Jews and Armenians, the genocides their
people suffered are vivid, living memories that influence their daily lives.

Yet today, on the 70th anniversary of the destruction of a quarter of
Ukraine’s population, this titanic crime has almost vanished into history’s
black hole.

So has the extermination of the Don Cossacks by the Soviets in the 1920’s,
and Volga Germans, in 1941; and mass executions and deportations to
concentration camps of Lithuanians, Latvians, Estonians, and Poles. At the
end of World War II, Stalin’s gulag held 5.5 million prisoners, 23%
Ukrainians and 6% Baltic peoples.

Almost unknown is the genocide of 2 million of the USSR’s Muslim peoples:
Chechen, Ingush, Crimean Tatars, Tajiks, Bashkir, Kazaks. The Chechen
independence fighters today branded “terrorists” by the US and Russia are
the grandchildren of survivors of Soviet concentration camps.

Add to this list of forgotten atrocities the murder in Eastern Europe from
1945-47 of at least 2 million ethnic Germans, mostly women and children, and
the violent expulsion of 15 million more Germans, during which 2 million
German girls and women were raped.

Among these monstrous crimes, Ukraine stands out as the worst in terms of
numbers. Stalin declared war on his own people. In 1932 he sent Commissars
V. Molotov and Lazar Kaganovitch, and NKVD secret police chief G. Yagoda
to crush the resistance of Ukrainian farmers to forced collectivization

Ukraine was sealed off. All food supplies and livestock were confiscated.
NKVD death squads executed “anti-party elements.” Furious that insufficient
Ukrainians were being shot, Kaganovitch “the Soviet Adolf Eichmann” set a
quota of 10,000 executions a week. Eighty percent of Ukrainian intellectuals
were shot.

During the bitter winter of 1932-33, 25,000 Ukrainians per day were being
shot or dying of starvation and cold. Cannibalism became common. Ukraine,
writes historian Robert Conquest, looked like a giant version of the future
Bergan-Belsen death camp.

The mass murder of 7 million Ukrainians, 3 million of them children, and
deportation to the gulag of 2 million (where most died) was hidden by Soviet
propaganda.

Pro-communist westerners, like the New York Times’ Walter Duranty, Sidney
and Beatrice Webb, and French Prime Minister Edouard Herriot, toured
Ukraine, denied reports of genocide, and applauded what they called Soviet
“agrarian reform.” Those who spoke out against the genocide were branded
“fascist agents.”

The US, British, and Canadian governments, however, were well aware of the
genocide, but closed their eyes, even blocking aid groups from going to
Ukraine. The only European leaders to raise a cry over Soviet industrialized
murder were, ironically, Hitler and Mussolini.

Because Kaganovitch, Yagoda and many senior communist party and NKVD
officials were Jewish, Hitler’s absurd claim that communism was a Jewish
plot to destroy Christian civilization became widely believed across fearful
Europe.

When war came, Roosevelt and Churchill allied themselves closely to Stalin,
though they were well aware his regime had murdered at least 30 million
people long before Hitler’s extermination of Jews and gypsies began. Yet in
the strange moral calculus of mass murder, only Germans were guilty.

Though Stalin murdered 3 times more people than Hitler, to the doting
Roosevelt he remained “Uncle Joe.” At Yalta, Stalin even boasted to
Churchill he had killed over 10 million peasants. The British-US alliance
with Stalin made them his partners in crime. Roosevelt and Churchill helped
preserve history’s most murderous regime, to which they handed over half of
Europe.

After the war, the Left tried to cover up Soviet genocide. Jean-Paul Sartre
denied the gulag even existed. For the Allies, Nazism was the only evil;
they could not admit being allied to mass murders. For the Soviets,
promoting the Jewish Holocaust perpetuated anti-fascism and masked their
own crimes.

The Jewish people saw their Holocaust as a unique event. It was Israel’s
raison d’être. Raising other genocides would, they feared, diminish their
own.

While academia, media and Hollywood rightly keep attention on the Jewish
Holocaust, they ignore Ukraine. We still hunt Nazi killers but not communist
killers. There are few photos of the Ukraine genocide or Stalin’s gulag, and
fewer living survivors. Dead men tell no tales.

Russia never prosecuted any of its mass murderers, as Germany did.

We know all about crimes of Nazis Adolf Eichmann and Heinrich Himmler;
about Babi Yar and Auschwitz.

But who remembers Soviet mass murderers Dzerzhinsky, Kaganovitch, Yagoda,
Yezhov, and Beria? Were it not for Alexander Solzhenitsyn, we might never
know of Soviet death camps like Magadan, Kolyma, and Vorkuta. Movie after
movie appears about Nazi evil, while the evil of the Soviet era vanishes
from view or dissolves into nostalgia.

The souls of Stalin’s millions of victims still cry out for justice.      -30-
————————————————————————————————
NOTE: Eric Margolis, margolia@foreigncorrespondent.com, contributing
foreign editor for Sun National Media Canada, is the author of War at the
Top of the World.
————————————————————————————————
LINK: http://www.lewrockwell.com/margolis/margolis45.html
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
     NOTE: Send in a letter-to-the-editor today. Let us hear from you.
========================================================
8. LIFTING OF EMBARGO ON POLISH FOOD EXPORTS TO UKRAINE
             One of main discussion points at the Krynica Economic Forum

Polish News Bulletin, Warsaw, Poland, Thursday, Sep 07, 2006

WARSAW – The main discussion points at the International Economic Forum

in Krynica-Zdroj have been consolidation of the Polish and Lithuanian power
sectors, the lifting of the embargo on Polish food exports to Ukraine and
Polish-Georgian economic co-operation.

After meeting with Lithuanian government representatives, Economy Minister
Pawel Wozniak declared that the two countries were ready to return to the
project of launching a power link. The decision was prompted by changes to
the European power supply market.

As far as lifting the food the embargo is concerned, Ukrainian PM Viktor
Yanukovych said he was willing to “deal with it shortly.”

A separate panel discussion was devoted to business activity in Georgia.
Wozniak was trying to encourage Polish entrepreneurs to invest in Georgia,
which he said was experiencing dynamic economic growth. He added that

Poland had already started to support Georgia as a developing country.
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
9. POLAND: FSO CAR MANUFACTURER HOPING FOR EU FUNDING
            Loans guaranteed by the state for FSO’s new Ukrainian investor

Polish News Bulletin, Warsaw, Poland, Thursday, Sep 07, 2006

WARSAW – The FSO car manufacturer has an enormous opportunity. The

launch of production of a new car model would allow the company to pull
itself from the hole in which it found itself following the bankruptcy of its
previous owner – South Korea’s Daewoo Motors.

In order to commence production, the European Commission (EC) must

approve public aid for the company in the form of loans guaranteed by the
state for FSO’s new Ukrainian investor.

AwtoZAZ would like the state to guarantee 60 percent of an investment loan
worth $100m. The EC has put forward some demands. It wants to know the
stance of Poland’s authorities regarding public support and wants to receive
documentation on the whole FSO capital group.

It is still uncertain when the EC could make a decision on the issue. In
order to launch the production of one of Chevrolet’s models, AwtoZAZ still
needs to sign a licence agreement with General Motors.         -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
10. JCDECAUX ENTERS UKRAINE/RUSSIAN OUTDOOR AD MARKETS

AFX Europe (Focus), Paris, France, Thursday, Sep 07, 2006

PARIS – JCDecaux said it has entered the Ukraine and Russian outdoor
advertising markets by setting up a joint venture with Ukranian ad hoarding
group BigBoard Group SA.

Under the deal, JCDecxaux will contribute an unspecified cash injection and
Bigboard its existing outdoor advertising network in Ukraine and Russia to
create BigBoard BV.

The aim of the new group, 40-pct owned by JCDecaux and 60 pct by BigBoard
Group SA, is to participate in the consolidation of the outdoor advertising
market in both countries.

JCDecaux said BigBoard Group is the leading outdoor advertising company in
Ukraine, with a market share of about 20 pct and in Russia, is present in 8
out of 12 cities with more than 1 mln inhabitants.

In 2005, the company had sales of 30 mln usd. JCDecaux said in Russia and
Ukraine, 10 pct annual growth is currently possible. (mrg/ra)         -30-
——————————————————————————————-
AFX NEWS: paris@afxnews.com
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================

11. DANONE BUYS MAJOR UKRAINE DAIRY PRODUCTS COMPANY

AFX Europe (Focus), Paris, France, Thursday, Sep 07, 2006

PARIS – Groupe Danone said it has acquired a major Ukrainian dairy

products company, Molochnyi Zavod ‘Rodich’, for an undisclosed sum.

The move gives Danone, which already has other operations in Ukraine,
substantial new distribution capacity in a market that has had more than 15
pct annual growth in the last three years. (mjs/hjp)                 -30-
———————————————————————————————
AFX NEWS: paris@afxnews.com
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================

 If you are receiving more than one copy of the AUR please contact us.
========================================================
12. UKRAINIAN OXFORD GRAD WINS BATTLE TO STAY IN BRITAIN

Ian Herbert, The Independent, London, United Kingdom, Sep 09, 2006

An Oxford graduate who was threatened with deportation has won her fight to
stay in Britain.

When Eleonora Suhoviy arrived in Lincolnshire from Ukraine in 1994 at the
age of 13, she was unable to speak a word of English. But she went on to
become a talented scholar, concert pianist and dancer and worked for the

NHS after graduating from Oxford University.

Ms Suhoviy was in line for deportation from Britain until successfully
arguing five months ago at an asylum and immigration appeal tribunal appeal
panel that she should be allowed to stay.

The broadcaster Jeremy Pax-man, the former Conservative leader Michael
Howard and the former Tory foreign secretary Lord Carrington are among

those who have backed her campaign to remain in the UK.

The Home Office’s Immigration and Nationality Directorate was forced to
reconsider the case and has now granted the 25-year-old three years’ leave
to remain in the UK.

“I’m extremely happy, very elated,” Ms Suhoviy said yesterday. “It gives me
the freedom to pursue what I want to do.” If her leave to remain is renewed
for a subsequent period, Ms Suhoviy may be eligible for British citizenship
five years from now, when she could apply to join the Navy. It is her
ambition to serve as an intelligence officer.

Ms Suhoviy was brought to England by her mother, Svetlana, after her
parents’ divorce. She and her mother only had temporary leave to remain in
the UK and the Home Office decided in 1999 to remove them both.

Her mother appealed, but her remarriage was ruled to be one of convenience
and so the decision was upheld. Ms Suhoviy continued working although she
was not officially entitled to do so.

She taught herself English by reading Sherlock Holmes novels, which she
already knew by heart in Russian translation.

Her modern languages degree at Exeter College, Oxford, was funded by an
anonymous benefactor and an annual pounds 3,500 grant from Lincoln
Cathedral.

She became a leading light of the Conservative Association at Oxford and
graduated with a 2:1. Ms Suhoviy now runs the administration office at the
John Radcliffe Hospital in Oxford.

Her barrister, Jonathon Goldberg QC said yesterday: “This is magnificent
news. I am delighted the Home Office have seen the light and recognised
Eleonora’s special qualities.”                                -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
             Send in a letter-to-the-editor today. Let us hear from you.
========================================================
13. WORLD BANK SAYS CONDITIONS FOR DOING BUSINESS IN
        UKRAINE IMPROVED IN 2006, REFORMS MUST CONTINUE
             Ukraine’s taxation system is the most burdensome in the world

Interfax-Ukraine news agency, Kiev, in Russian 1105 gmt 7 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 07, 2006

KIEV – Conditions for doing business in Ukraine improved in 2006, World

Bankand International Finance Corporation experts believe.

“Ukraine’s general rating in terms of ease of doing business has improved.
In the 2005 study, it ranked 132nd out of 175 countries, but now it is
128th,” World Bank Country Director for Ukraine, Belarus and Moldova Paul
Bermingham has said.

He was speaking at a news conference today presenting a joint report by the
World Bank and the International Finance Corporation, “Doing Business 2007:
How to Reform”.

In particular, Ukraine has created a “one-stop-shop” system for registering
new businesses, which combines state registration and registration with the
Pension Fund, the Employment Fund, the Social Security Fund, the Workplace
Injury Fund and the tax authorities. The government has also simplified the
procedure for licensing business activities.

Bermingham said that the rather frequent change of government in Ukraine did
not affect economic growth in the country, because all governments pursued a
consistent policy.

“Governments changed in Ukraine in a fairly short period of time: a
Yanukovych government, a Tymoshenko government, a Yekhanurov

government and then a Yanukovych government again. These cabinets’
actions were consistently aimed at economic growth,” he said.

In this connection, Bermingham noted the stability of the securities and
financial markets. “Eurobonds and syndicated credits – no significant change
there. There has been a consistency (of actions – Interfax-Ukraine) by the
successive governments,” he said.

At the same time, he stressed that investors would like to see economic
reform stepped up in Ukraine.

In their report, the World Bank and the International Finance Corporation
note that reforms must continue in Ukraine so that its economy becomes
competitive in the region as well as in Europe, particularly in terms of
taxation and international trade.

“Ukraine’s taxation system is the most burdensome in the world. There are 98
kinds of taxes in Ukraine… [ellipsis as received] Ukrainian companies have
to pay 60 per cent of their incomes in taxes, while the world average is 40
per cent,” the experts say.                          -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
14. UKRAINIAN PRIME MINISTER: NO RESALE OF STEELWORKS

Interfax-Ukraine news agency, Kiev, in Russian 1621 gmt 11 Sep 06
BBC Monitoring Service, United Kingdom, Monday, Sep 11, 2006

KIEV – Ukrainian Prime Minister Viktor Yanukovych has said that the
Ukrainian authorities will not consider the resale of Kryvorizhstal
[steelworks], and that all controversial property issues should be settled
in court. Yanukovych said this in Kiev on Monday [11 September].

Asked by journalists to comment on Communist Party leader Petro

Symonenko’s statement about plans to resell Kryvorizhstal, Yanukovych
said: “An answer to this question can only be given in court. The
government will never intervene in such issues.”

Yanukovych said that the Ukrainian government would never administratively
intervene in privatization issues. He called for an end to talk about
administrative intervention in the economy.

Yanukovych said that, as far as he was aware, the Kryvorizhstal issue “is
being raised with the European Union, the process is not over yet”. “It
seems to me that parliament will in no circumstances discuss the issue,” he
added.

At the same time, he noted that the state actually deprived itself of a very
serious metallurgy plant, and that the sale proceeds were consumed.
Yanukovych also said that the new government favours the signing of the
amicable agreements with owners of plants that the previous government had
proposed.

“We want amicable agreements to be signed so that we close the issue once
and for ever. If additional payment for the plants is at issue, let them pay
into the budget, and that’s all,” Yanukovych said. [Passage omitted:
background to Kryvorizhstal's privatization]

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
15.  FIVE REGIONAL TAX CHIEFS REPLACED IN UKRAINE

Interfax-Ukraine news agency, Kiev, in Russian 1439 gmt 8 Sep 06
BBC Monitoring Service, United Kingdom, Friday, Sep 08, 2006

KIEV/ODESSA – The State Tax Administration has appointed

[1] Andriy Lavreshov as head of the State Tax Administration in Odessa
Region, replacing Anatoliy Kosolapov,
[2] in Dnipropetrovsk Region Serhiy Shynkarenko replaced Vasyl Andrukhiv,
[3] in Poltava Region Andriy Sokol replaced Vasyl Verteletskyy,
[4] in Rivne Region Viktor Bashuk replaced Bohdan Zoriy,
[5] in Chernihiv Region Valentyn Osypenko replaced Vitaliy Vedmid.
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
16.  UKRAINE HAS TO PASS 11 LAWS TO JOIN WTO IN 2006

TV 5 Kanal, Kiev, in Ukrainian 1200 gmt 7 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sept 7, 2006

KIEV – [Presenter] Ukraine will have to approve yet another 11 laws in order
to join the World Trade Organization, Deputy Economics Minister Valeriy
Pyatnytskyy has said.

He also said that the Economics Ministry has stepped up talks regarding the
adaptation of legislation with companies working in various industries.

Pyatnytskyy said that all draft laws would be sent to the Supreme Council
[parliament] shortly. He also expressed a hope that Ukraine will join the
WTO by the end of 2006.

[Pyatnytskyy] We expect close cooperation and detailed discussion of various
documents, rather than problems with the passage of bills. It often happens
that the documents we come up with present only part of the whole picture.
And very often the discussions that arise regard wider areas. Obviously, new
draft laws will appear during discussion.                  -30-
———————————————————————————————–

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
17. UKRAINE: WTO LAWS WILL NOT BE PASSED IN SEPTEMBER

UNIAN news agency, Kiev, in Ukrainian 1509 gmt 7 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 07, 2006

KIEV – The bills adapting Ukrainian legislation to WTO entry requirements
will not be passed in September, the chairman of the Supreme Council of
Ukraine [parliament], Oleksandr Moroz, has said during his meeting with
journalists of the Holos Ukrayiny newspaper.

Moroz said this will hardly happen [in September] because the bills in
question are still being re-drafted by the cabinet and have not been
submitted to parliament.

Moroz forecast that the bills on the export of scrap non-ferrous and ferrous
metals and on the import of old cars will be most controversial.

He said that he personally is in favour of a ban on the export of
non-ferrous scrap and in favour of restricting ferrous scrap exports. Moroz
also said that it would not be expedient to import cars more than five years
old. There is no need “to import trash”, he believes.         -30-
———————————————————————————————–
[return to index] Action Ukraine Report (AUR) Monitoring Service]
========================================================
     You are welcome to send us names for the AUR distribution list.
========================================================
18. PARLIAMENT SEATS FOR CABINET MEMBERS CANCELLED
                 Ukrainian cabinet ministers relinquish parliament seats

Interfax-Ukraine news agency, Kiev, in Russian 0822 gmt 12 Sep 06
BBC Monitoring Service, United Kingdom, Tuesday, Sep 12, 2006

KIEV – Ukraine’s parliament today cancelled ahead of schedule parliament
membership of Prime Minister Viktor Yanukovych, 10 members of the

Cabinet of Ministers and two representatives of the central executive.

These included First Deputy Prime Minister Mykola Azarov (385 votes in
favour), Deputy Prime Minister Andriy Klyuyev (385), Deputy Prime Minister
Volodymyr Rybak (406), Environment Minister Vasyl Dzharty (394), Education
and Science Minister Stanislav Nikolayenko (396), Family, Youth and Sports
Minister Yuriy Pavlenko (402), Transport and Communications Minister Mykola
Rudkovskyy (413), Foreign Minister Borys Tarasyuk (391) and Coal Industry
Minister Serhiy Tulub (394).

Parliament also cancelled parliament membership of the director-general of
the Ukrzaliznytsya state railways administration, Volodymyr Kozak (403),

and of the State Property Fund head, Valentyna Semenyuk (397).

[The Ukrainian constitution forbids combining work in parliament with
ministerial positions. The 13 individuals listed above asked parliament to
cancel their parliament membership in August.]

[Parliament speaker Oleksandr Moroz has said that he would turn to the Kiev
court of appeal in order to strip Justice Minister Roman Zvarych of his seat
in parliament, as Zvarych failed to apply for the cancellation of his deputy
mandate, Interfax-Ukraine, Kiev, reported in Russian at 0813 gmt on 12 Sep
06.]                                              -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
19. UKRAINIAN PRES APPOINTS SECURITY COUNCIL MEMBERS

Interfax-Ukraine news agency, Kiev, in Russian 1826 gmt 11 Sep 06
BBC Monitoring Service, United Kingdom, Monday, Sep 11, 2006

KIEV – Ukrainian President Viktor Yushchenko has signed a decree appointing
National Security and Defence Council [NSDC] members, the president’s press
service reported on Monday [11 September].

According to the decree, the NSDC consists of Prime Minister Viktor
Yanukovych, First Deputy Prime Minister Mykola Azarov, the head of the
presidential secretariat, Oleh Rybachuk, Economics Minister Volodymyr
Makukha, Emergencies Minister Viktor Baloha, Defence Minister Anatoliy
Hrytsenko, Security Service of Ukraine Chairman Ihor Drizhchanyy, Justice
Minister Roman Zvarych, Interior Minister Yuriy Lutsenko, Foreign Minister
Borys Tarasyuk, Health Minister Yuriy Polyachenko, and the head of the
Foreign Intelligence Service, Mykola Malomuzh.

Furthermore, in line with agreements, parliament speaker Oleksandr Moroz,
Prosecutor-General Oleksandr Medvedko and National Bank of Ukraine Chairman
Volodymyr Stelmakh were also included. Volodymyr Horbulin remains the acting
secretary of the NSDC. The NSDC is headed by Yushchenko.

[Horbulin was also appointed co-chairman of the working group analysing
compliance with the constitution and Ukrainian laws in Crimea, replacing
former NSDC secretary Anatoliy Kinakh in the post, according to
Interfax-Ukraine news agency, Kiev, in Russian 1910 gmt 11 Sep 06.]

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
20. COALITION FORMAT TO BE DETERMINED BY COMMUNISTS”
               Ukrainian president to reinforce security and defence council

ANALYSIS & COMMENTARY: By Serhiy Burlachenko
Newspaper 2000, Kiev, Ukraine, in Russian 8 Sep 06; p A7
BBC Monitoring Service, United Kingdom, Saturday, Sep 09, 2006

President Yushchenko will try to balance the Cabinet of Ministers, which is
formed mainly by the Party of Regions, with a strong National Security and
Defence Council, a pro-government weekly has said.

He reportedly plans to appoint former Prime Minister Yuriy Yekhanurov as
council secretary and former Finance Minister Viktor Pynzenyk as his deputy,
the paper wrote.

The transformation of parliament’s role will depend on interpretation of the
constitution, it added. The following is an excerpt from the article by
Serhiy Burlachenko entitled “Coalition format to be determined by
Communists” published in the Ukrainian newspaper 2000 on 8 September;
subheadings have been inserted editorially:

Having just commenced its work, the second session of the fifth convocation
of the Supreme Council [parliament] moved to the lobby for a week, till 12
September.

Despite official explanations on the necessity of work on drafting bills in
committees and factions, everyone clearly understands: the main reason is
determination of the ultimate coalition format, in particular, whether Our
Ukraine [propresidential faction] will join it, along with its role and
conditions for joining.

Negotiations are under way in full swing, first of all, the ones between the
[ruling] Party of Regions and Our Ukraine. [Passage omitted: statements on
new coalition made by Our Ukraine and Party of Regions representatives]

                 SOME PRESIDENTIAL POWERS RETAINED
As we earlier indicated on many occasions, under the reformed constitution
and with reduction of president’s powers, especially those related to his
influence on the formation and activity of the Cabinet of Ministers, the
role and significance of the body of the kind of the National Security and
Defence Council [NSDC] is growing for [President Viktor] Yushchenko and
company who are using all available means to stick to power and retain as
much influence as possible.

It should be noted that the authors of the political reform admitted some
imperfections in this respect: I mean that they have retained fairly
powerful levers of influence through the NSDC for the president (exactly for
the president!).

Therefore, they to some extent smoothed over the spirit of the political
reform having transition to the parliamentary-presidential model as the main
essence.

Taking into account the increased role of the Cabinet of Ministers and
parliament, it would have been more logical to increase the role of the
prime minister and the government (probably, the one of the Supreme Council
as well) in the NSDC. Something has been done (see below), but it was
obviously insufficient.

We have seen the way the NSDC can “hobble” the government and the prime
minister by the examples of relations between [former NSDC Secretary Yevhen]
Marchuk and Yushchenko’s cabinet, the same way as between [former NSDC
Secretary Petro] Poroshenko and [former Prime Minister Yuliya] Tymoshenko’s
cabinet… [ellipsis as published]

                            ADDITIONAL NSDC POWERS IN 2005
Of course, Yushchenko is unlikely to confer to the NSDC secretary the
excessive powers which Poroshenko had in 2005. Let us remind you that it was
the time when the president’s “dear friend” was granted the right not only
to be present at government meetings with the consultative voting right, but
also to influence the agenda, give instructions to ministries and government
agencies and to demand reports on their fulfilment.

Poroshenko could seriously influence law-enforcement authorities and even
courts (under the guise of “reforming judicial system”).

Moreover, in addition to the aforementioned powers which were far beyond the
constitutional framework, Yushchenko conferred to him the right to sign NSDC
decisions, and even (in violation of Article 106 of the constitution) passed
him presidential functions to preside at NSDC meetings during his
(Yushchenko’s) absence.

Let us reiterate: something of this kind is unlikely to be expected now, as
the president will not wish to be subject to the same portion of criticism
in relation to observance of the constitution as in 2005, and time is
different: politicians will revolt.

                               LAW ON CABINET OF MINISTERS
Nevertheless, Yushchenko is interested in stepping up NSDC role as a
counter-balance to the “alien’ government [headed by his former presidential
rival Viktor Yanukovych].

For example, presidential levers of influencing law-enforcers and foreign
policy have been retained, and they are weighty enough, while the NSDC is
his last hope in influencing the economic situation in Ukraine.

The head of state is particularly interested in increasing NSDC role in the
light of the recent developments. The rules of procedure of the Cabinet of
Ministers were amended on 30 August.

The provision according to which the president of Ukraine had powers to
cancel government’s regulatory acts has been excluded, and he is currently
authorized just to suspend the acts of the Cabinet of Ministers and to
appeal to the Constitutional Court at the same time.

It means that previously he had powers to cancel whatever he wanted, while
now he will have to substantiate his actions at the Constitutional Court,
and no-one can say for granted that the verdict will be in the president’s
favour. The provision saying that the Cabinet must fulfil president’s
directives has also disappeared from the rules of procedure: now it must not
do it.

                  VERBAL CONFRONTATION OVER BUDGET
The second alarming issue for Yushchenko is the draft law on the Cabinet of
Ministers of Ukraine. The presidential secretariat hastened to draft its own
wording. The Cabinet of Ministers objected to this.

The press service of the Party of Regions reported on 4 September that First
Deputy Prime Minister and Finance Minister Mykola Azarov sharply criticized
the work “initiated” by the presidential secretariat.

They allegedly interfered in someone else’s business. “Statements made by
the head of the presidential secretariat [Oleh Rybachuk] saying that they
are drafting a certain wording of the bill on the government of their own
rouse certain bewilderment.

In my opinion, taking into account the amendments to the constitutions which
have entered into force, it would have been more logical to authorize the
government itself to draft this bill.”

He has promised that the government will finalize its draft of the bill on
the Cabinet of Ministers within a week and will submit it to parliament: “I
think we shall finalize it in a week, and then submit it to the Supreme
Council… [ellipsis as published]” Let me add on my own behalf: parliament
is more likely to adopt namely the government’s wording (taking into account
disposition of forces).

At the same time, Azarov also gave the presidential secretariat a “flick on
the nose” on the budget issue: he rejected statements made by the
secretariat concerning the possibility that the president would not sign the
2007 budget, currently being drafted by the government, after its adoption.

“We are surprised with the tone of the statements that the secretariat is
reportedly preparing to examine the budget if it does not satisfy the
secretariat. There were a number of discourteous statements, and with regard
to this, certain questions have emerged; I think we shall discuss them with
the president after his return from leave.”

                 PRESIDENTIAL POWERS “FLOWING AWAY”
Obviously, Azarov is right. But surely, the presidential camp has made a
judgment that the government’s wording of the Law on the Cabinet of
Ministers will differ in principle from the one drafted by the presidential
secretariat (“for the president”) both in its letter and spirit.

It means that the president’s influence on the economic situation in the
country is “flowing away”. In addition, the Party of Regions have taken the
government’s economic bloc under its control, and therefore, neither joining
the coalition by Our Ukraine nor its failure to join it will change the
disposition of forces in this sphere in principle.

                SPECULATIONS OVER NSDC APPOINTMENTS
Therefore, this exactly is likely to be the reason why speculation began
circulating about [former Prime Minister] Yuriy Yekhanurov’s appointment as
the NSDC secretary and [former Finance Minister] Viktor Pynzenyk’s as his
deputy. It will mean the NSDC focused on the economy.

It will be an absolutely clear “economic juncture”: a kind of an alternative
Cabinet of Ministers; not the Cabinet of Ministers but a parallel
“government’s economic bloc”.

By the way, Yekhanurov said on 5 September that he knew nothing about his
appointment. He either might have been pretending, or it might have been a
proof that the president had not taken his final decision yet (or he might
appoint someone of the kind of [Interior Minister Yuriy] Lutsenko to this
post in the NSDC).

                                     NSDC LEGAL STATUS
According to Article 107 of the constitution, Ukrainian NSDC is a
coordinating body on national security and defence issues supervised by the
president of Ukraine. The Council “coordinates and controls activity of
executive authorities in national security and defence spheres”… [ellipsis
as published] As the notion of national security is very broad, the NSDC may
actually coordinate and control everything.

The president is the NSDC head, and he is the one who forms NSDC personal
composition: he may include there anyone at his own discretion.

However, the constitution stipulates that the prime minister, the defence
minister, the SBU [Security Service of Ukraine] head, the interior minister
and the foreign minister are NSDC members (according to their positions).
The Supreme Council speaker “may take part” in its meetings.

NSDC decisions are enforced by presidential decrees. Its competence and
functions are determined by law. Let us not enumerate them, but there is an
extremely broad scope of issues ascribed to NSDC functions and competence
(according to the Law on the National Security and Defence Council of
Ukraine): they comprise practically all spheres of life.

The president may interfere into anything he wants through this instrument.
His interference may be formalized in the form of decrees (propresidential
circles are currently making emphasis on this, following exclusion of the
provision on “instructions” from the rules of procedure of the Cabinet of
Ministers).

           SPECULATIONS ON RECENT DEVELOPMENTS
                        Staff grows from 400 to 800 people
The fact that, according to well-informed sources, the number of NSDC staff
members has grown from 400 to 800 people, and that the best analytical
forces have been gathered there, is likely not to be a mere coincidence.

Moreover, according to well-informed people from Bankova Street [where
presidential secretariat is located], Yuliya Tymoshenko, being fully aware
that she had “no prospects” of assuming prime minister’s office during the
present tenure of the Supreme Council, while persuading Viktor Yushchenko to
dissolve parliament, proposed him to appoint her NSDC chief as a way of
resolving the “problem”, and she promised him to “eliminate” people from
Donetsk within three months using Security Council’s mechanisms.

                   INTERPRETATION OF CONSTITUTION
There is another important point. Clause 18 of Article 106 of the
constitution stipulates that the president “is the head of the National
Security and Defence Council of Ukraine”.

However, the following text emerged in the same Article 106 after amending
the constitution (i.e. political reform): “Acts of the president of Ukraine
issued within limits of his powers envisaged by Clauses 5, 18, 21, 23 of
this Article, shall be signed by the prime minister of Ukraine and the
minister in charge of the act and its fulfilment.”

It means that a presidential decree issued for implementation of a NSDC
decision should also be signed by the prime minister and the minister in
charge! This constitutional provision obviously “undermines” the president’s
capacity to interfere into the work of the Cabinet of Ministers through the
NSDC.

However, it is a subject of much controversy. For example, in the opinion

of Roman Zvarych (not only “the president’s man”, but also the justice
minister), all decrees issued by the head of state and mandatory for
fulfilment in any case: “According to the constitutional amendments, the
Cabinet of Ministers is obliged to fulfil presidential decrees (acts), and
that’s it… [ellipsis as published]

Let me note that it is applicable to four clauses of Article 106 of the
constitution: 5, 18, 21 and 23.” (Zerkalo Nedeli [Ukrainian analytical
weekly], 2 September 2006)

Then it is impossible to understand: what is the sense of the aforementioned
remark in the constitution with regard to signing presidential decrees by
the prime minister and the minister in charge? We have quoted the passage
introduced into Article 106 during constitutional changes.

But the full wording of the final part of this article is as follows: “The
president of Ukraine, based on the constitution and laws of Ukraine, issues
decrees and directives which are mandatory for fulfilment in the territory
of Ukraine.”

“Acts of the president of Ukraine issued within the limits of his powers
envisaged by Clauses 5, 18, 21, 23 of this Article, shall be signed by the
prime minister of Ukraine and the minister in charge of the act and its
fulfilment.”

Logically, it means that presidential acts listed in all clauses (there are
31 of them altogether), except the mentioned ones (5, 18, 21 and 23) and
unconditionally mandatory for fulfilment. As for the latter, presidential
decrees should gain legal force only if they have been signed by the prime
minister and the minister in charge.

However, others (including aforementioned Zvarych) stick to the opinion that
signatures of the prime minister and the minister in charge are nothing more
than a formality and a kind of a proof that the prime minister and the
minister in charge are aware of the decree and began fulfilling it.

From this point of view, the situation is similar with the one which
happened at the moment when the president nominated the prime minister: is
it mandatory for him to make this nomination, or has he got the right to
refuse (as his signature was also necessary)?

It means that the fight of interpretations of this theme will continue;
probably, in the Constitutional Court, following the direction of the
problem raised by us back on 11 August (“Political reform: polishing
mechanisms and work on mistakes”): on the necessity of forming a clear and
comprehensible model of relationship within the triangle Cabinet of
Ministers – parliament – president… [ellipsis as published]

This body’s transformation into an alternative (to the government) centre of
decision-making and a lever of the president’s influence on economic
situation will depend on the ones in whose favour (the president or the
prime minister and the Cabinet of Ministers) the provisions of Article 106
related to presidential decrees on implementation of NSDC decisions will be
interpreted.                                         -30-

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
      Please contact us if you no longer wish to receive the AUR    
========================================================
21.     15TH ANNIVERSARY OF UKRAINE’S INDEPENDENCE
 
Congressional Record statement by Rep. Christopher H. Smith
Co-Chairman, U.S. Helsinki Commission,
Vice-Chairman, House International Relations Committee
U.S. House of Representatives
Washington, D.C., Wednesday, September 6, 2006

Mr. Speaker, August 24th marked the fifteenth anniversary of Ukraine’s
rebirth as an independent state, finally being freed from the shackles of
Soviet misrule that included a reign of terror, cultural suppression and a
genocidal famine.

The last fifteen years have witnessed peaks and valleys as the Ukrainian
people have struggled to overcome the legacy of communism and Moscow’s
imperialism.  While the process of Ukraine’s restoration is still a work in
progress, great strides have been made to consolidate that nation as an
independent, free and democratic state.

The December 1, 1991 referendum on independence, the 1996 Constitution and
especially the 2004 Orange Revolution stand as highlights, demonstrating
Ukrainian resolve for independence, rule of law, democracy and freedom, and
the continuing promise of a better life.

In contrast to the first 13 years of independence, Ukraine is now “free”,
and not merely “partly free.”  The March 26 parliamentary election was one
of the freest and fairest ever held among post-Soviet states.

The Ukrainian economy is on the road to recovery and development after the
initial post-Soviet decline of the 1990s.  Ukraine is a responsible neighbor
and has shown its mettle as a partner for peace and security in the world.

Of course, challenges remain despite the real progress that has been made.
There have been missed opportunities.  Many of the promises of the Orange
Revolution are only partially fulfilled.  The rule of law, including a truly
independent judiciary, remains to be consolidated.  Corruption, although not
as egregious as before the Orange Revolution, still rears its ugly head.

Many Ukrainians believe all too many among the political elites look first
toward their personal interests rather than to the good of the people and of
the nation they are supposed to serve.  As the last months have
demonstrated, political stability can be elusive, and it remains to be seen
what direction the new government will take.

Nevertheless, Ukraine continues to show tremendous potential, and I am
firmly convinced that this still relatively young 15-year-old independent
state will fulfill its potential.

Mr. Speaker, in looking over the last fifteen years, we must not forget the
sacrifices of millions who fought for Ukraine’s liberty over the course of
the last century, often against great odds and at great personal risk.

Whether in the struggle for Ukraine’s short-lived independence in 1918-21,
or the insurgent armies that fought against both Nazi and Soviet rule during
and after World War II, many Ukrainians made the ultimate sacrifice.

More recently, in the final decades of Soviet domination, Ukrainian Helsinki
Monitors and other human rights activists challenged the system, calling
upon the Kremlin to live up to commitments voluntarily undertaken when
Leonid Brezhnev signed the 1975 Helsinki Final Act.

One such renowned activist, Ukrainian Helsinki Monitor Nadia Svitlychna, who
served three years in a Soviet labor camp for her tireless defense of human
rights and freedom, died last month.

We honor the memory of Mrs. Svitlychna, recalling that it was courageous and
dedicated individuals like her who, as much as anyone, paved the way for an
independent, democratic Ukraine.

Mr. Speaker, I am proud of the role that the Helsinki Commission, which I
Co-Chair, has played throughout its 30-year existence in firmly supporting
human rights and freedom for Ukraine.

I am pleased that the Congress has stood firm in support of Ukraine and am
confident that the United States will continue to extend the hand of
friendship as Ukraine moves toward its rightful place as a fully integrated
member of the Euro-Atlantic community of nations.             -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
22. OLEH RYBACHUK MEETS WITH FORMER US AMB STEVEN PIFER
    Ukraine should intensify NATO membership dialogue, WTO by end of 2006

Interfax-Ukraine news agency, Kiev, in Russian 1554 gmt 11 Sep 06
BBC Monitoring Service, United Kingdom, Monday, Sep 11, 2006

KIEV – The head of the presidential secretariat, Oleh Rybachuk, believes
that the dialogue on issues of Ukraine’s NATO membership should be
intensified.

The president’s press service reported on Tuesday [11 September] that
Rybachuk said this during a meeting with the former US ambassador to
Ukraine, Steven Pifer.

The two discussed the development of the political situation in Ukraine and
devoted some attention to issues of international cooperation. Rybachuk said
that Ukraine’s strategic goal is also to join the WTO by the end of 2006.

“On this depend the prospects for forming a free-trade zone with the
European Union, and in broader terms – the speed of integration in the world
economic system, the country’s general investment attractiveness,” the
president’s press service quoted Rybachuk as saying.             -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
23. U.S. PRESIDENT GEORGE BUSH GOING TO VISIT UKRAINE

Ukrainian News Agency, Kyiv, Ukraine, September 11, 2006

KYIV – President Viktor Yuschenko’s press service informed the press

about a meeting between Yuschenko and U.S. Ambassador to Ukraine
William Taylor where this announcement was made.

‘George Bush has a huge desire to visit Ukraine,’ the report reads. The
diplomat said that the American authorities are trying to fix the date of
the visit.

During their meeting, Yuschenko and Taylor discussed bilateral cooperation
in energy and fight against corruption.

Taylor said that his country is ready to actively cooperate with the new
Cabinet of Ministers headed by Prime Minister Viktor Yanukovych.

During the meting Yuschenko expressed condolences in connection with the
fifth anniversary of the September 11 terrorist attacks and gave Taylor a
letter to the U.S. president. As Ukrainian News earlier reported, Yuschenko
invited Bush to visit Ukraine this year.                     -30-

————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
24. U.S. AMBASSADOR TAYLOR SPEAKS ABOUT UKRAINE & NATO 
 
Ukrainian News Agency, Kyiv, Ukraine, Monday, September 11, 2006

KYIV – United States Ambassador to Ukraine William Taylor wants Ukraine to
be united when adopting a decision on the country’s membership of NATO.

Taylor announced this to journalists while laying flowers at a monument
marking the fifth anniversary of the terrorist attack on New York that took
place on September 11, 2001.

Taylor stressed that the decision on Ukraine’s membership of NATO should

be made by Ukraine and its citizens and stressed that the United States would
like Ukrainians to be conscious of what NATO membership would bring them
when they are making such a decision.

‘Time is less important than the unity of the country during adoption of
this decision,’ Taylor said. He stressed that the best time will be the time
when Ukraine finally makes a determination on the need to join NATO.

As Ukrainian News earlier reported, Prime Minister Viktor Yanukovych said in
August that the Cabinet of Ministers was temporarily postponing approval of
a final decision on the Action Plan on NATO Membership until the Ukrainian
public is sufficiently informed about NATO.

Ukraine expects to be invited to join the Action Plan on NATO Membership at
the NATO summit scheduled for Riga (Latvia) in November.         -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
25.  U.S. AMBASSADOR TAYLOR SAYS UKRAINE IS EXAMPLE OF

     DEMOCRATIC DEVELOPMENT FOR MIDDLE EAST COUNTRIES 

Ukrainian News Agency, Kyiv, Ukraine, Monday, September 11, 2006

KYIV – U.S. Ambassador to Ukraine William Taylor has said that Ukraine

is an example of democratic development for Middle East countries.

He made this statement to the press when laying flowers at the Monument to
the Victims of Terrorism in Kyiv to commemorate the fifth year since the
September 11 terrorist attacks in New York. Taylor said that terrorist
attacks take place in many parts of the world.

‘You cannot say where a terrorist attack may happen next time, but it is
important to know how you should act then,’ he stated.

Taylor noted that joint efforts of the world community are needed to
overcome terrorist attacks and people should be let decide for themselves
what government they want to have in their country.

‘Ukraine is a good example where Ukrainians themselves took responsibility
to select those who will govern them. Ukraine could be a good example of the
way to use democratic development and democratic principles and it could be
a good model in other parts of the world, in Middle East for example,’
Taylor said.

As Ukrainian News earlier reported, a series of terrorist attacks occurred
in the United States on September 5, 2001.  International and U.S. experts
blame the attacks on Osama bin Laden, the Al Qaeda organization and the
Taliban movement.                                 -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
26. EVERY 7TH FAMILY IS INCOMPLETE, NO BASIS FOR ALIMONY

Centre TV, Moscow, in Russian 1645 gmt 8 Sep 06
BBC Monitoring Service, United Kingdom, Monday Sep 11, 2006

MOSCOW – [Presenter] The Ukrainian public is also concerned about the birth
rate, but the country of the victorious Orange Revolution has no money for
demographic revolution. Russian hydrocarbon export incomes are growing,
while the Ukrainian government has to spend more and more money on buying
fuel.

Rodion Tunetskiy reports on how Kiev is tightening the belts on pregnant
women and single mothers.

[Correspondent] Your daddy is a polar explorer. Your daddy works in a secret
laboratory. This is what more than one million Ukrainian kids who have never
seen their fathers hear in response to their questions.

Every seventh family in Ukraine is incomplete, and the number of divorces is
30 per cent bigger than the number of marriages. There is no legal base for
obtaining alimony. Until recently, single parents received state aid, but
the government has suspended the payments.

[Vitaliy Mushchinov, captioned as head of department of social protection of
the population, interviewed in his office] Some 400-410m hryvnyas of
additional budget money needs to be allocated. This is a rather significant
sum for Ukraine, so sources of financing must be found.

[Correspondent] Vita Savelyeva lives with her mother and two daughters.
Their family income is 1,000 hryvnyas, or about 200 dollars per month. Vita
earns about 100 dollars [a month], her mother’s pension is 80 dollars and
child benefits stand at 20 dollars. She hoped that the benefits would be
increased from 1 January [2006]. Instead of this, they were cut.

[Savelyeva, captioned, speaking to camera in her flat] It is impossible to
bring up a child on this money. Footwear, clothes, pencil-cases, pens and
other school equipment – nothing is free.

[Correspondent] The [Ukrainian] Ministry of Trade [and Social Policy]
insists that the number of single parents is falling, but the statistics
prove the opposite. The number of fatherless children has grown by 44,000

in 2006.

In general, the Trade Ministry officials sometimes do surprising things. For
example, the minister today proposed a bill on the status of former cabinet
members, providing them with lucrative pensions. There is apparently enough
money for this in the budget.

There are a lot of sculptures in Kiev parks. This one portrays a single
mother with a child. Ukraine, which presents itself as a Western nation and
aspires to EU membership, probably does not know how highly family values
are rated in Europe.                                     -30-

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
27. BLACK SEA DOCUMENTARY: “FROM ODESSA TO ODESSA”
               Film aims to capture the way people live around the Black Sea

Turkish Daily News, Ankara, Turkey, Saturday, Sep 09, 2006

ANKARA – German TV channel ARD is currently filming a Black Sea
documentary titled “From Odessa to Odessa” and has now reached Turkey

The documentary, directed by Jens Stubenrauch with cameramen Michael Oschl,
Fabian Werba and Segei Alekseyen, started filming in Odessa, Ukraine, and
moved eastwards from there. They are now at Turkey’s customs gate with
Georgia at Sarp.

Yasemin Oymen, who is responsible for pre-filming arrangements, said they
had a 26-day schedule. The documentary aims to capture the way people live
around the Black Sea rather than concentrating on history or nature. “We are
trying to concentrate on culture, tradition, handicraft and local arts,” she
explained

Filming has already taken place around the Hopa region for three days. “We
recorded a funeral at Baskoy in Hopa. We will film the influence of tea,
hazelnuts and fishing on the lives of people on the Black Sea coast. We will
continue on to Bulgaria and then complete our documentary where we started,”
said Oymen,                                            -30-       
———————————————————————————————-
LINK: http://www.turkishdailynews.com.tr/
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
28. FORUM FOR 65TH ANNIVERSARY OF BABYN YAR TRAGEDY
      President Of Israel, President Of Croatia, And President Of Montenegro
                 To Visit Ukraine On September 26 And September 27

Ukrainian News Agency, Kyiv, Ukraine, Tuesday, September 12, 2006

KYIV – The president of Israel, the president of Croatia, and the president
of Montenegro will be on visit to Ukraine on September 26 and September 27
to take part in the forum entitled “Life to My People” dedicated to the 65th
anniversary of the Babyn Yar tragedy.

Andrii Deschytsia, the head of the Ukrainian Foreign Ministry’s press
service, announced the visits to the press. He said ministers from
Kazakhstan, Bulgaria, Georgia, and Slovakia would come to the forum also. He
said the Foreign Ministry expects confirmations to come from other countries
also.

The sponsors of the forum are the Cabinet of Ministers and the international
foundation World Holocaust Forum, he said.

According to Deschytsia, the goal of the forum is to inform the world
community on the tragedy in the Babyn Yar and to attract the attention of
the humankind to the necessity to prevent from the spreading of xenophobia
and intolerance.

As Ukrainian News earlier reported, in July, President Viktor Yuschenko
invited world leaders (heads of over 50 states and international
organizations) to visit Ukraine in September to take part in the
international forum in Kyiv dedicated to the remembrance of the Babyn Yar
victims.

During the World War II, about 200,000 Kyivans were killed and 100,000 were
removed from the city. Over 100,000 Kyivans and prisoners of war of various
nationalities were shot in the Babyn Yar.                   -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
29. REMAINS OF BRONZE AGE PYRAMID FOUND IN UKRAINE

Tom Parfitt, Moscow, The Guardian, London, UK, Fri, Sep 08, 2006

MOSCOW – Archaeologists in Ukraine have unearthed the remains of an

ancient pyramidal structure that pre-dates those in Egypt by at least 300 years.

The stone foundations of the structure, which probably resembled Aztec and
Mayan ziggurats in South America, were discovered near the eastern city of
Lugansk.

It is thought they were laid about five millennia ago during the early
Bronze Age by animists who worshipped a sun god. The “pyramid” is in fact

a complex of temples and sacrificial altars topping a sculpted hillside with
steps on its sides.

Viktor Klochko, head of the excavation, said the discovery was of
international significance. “This is the first monument of its age and kind
found in eastern Europe,” he told the Guardian.

“It changes our whole conception of the social structure and the level of
development of the cattle breeders and farmers who were the direct ancestors
of most European peoples.”

There are about 100 pyramids in Egypt, and the remains of Mesopotamian
pyramids are preserved in Iraq and Iran. Ziggurats are also found in Mexico,
and the Nubians built pyramids as burial sites for monarchs in the Nile
valley.

But pyramid structures are rare in Europe. One of the few is a Roman-era
pyramid near Nice, France, that may have been built by legionnaires involved
in an Egyptian cult.

Although graves have been found at the Lugansk site, archaeologists think it
was used for sacrifice by burning, rather than as a burial ground. “People
lived in the surrounding valleys and climbed up it to carry out their
ceremonies,” said Mr Klochko. “They had a pagan cult that bowed down to

the sun, as did the ancestors of the Slavs.”

Remains of sacrifice victims, ashes and ceramics have been found at the
site, but no jewellery or treasure. The complex, which covered
three-quarters of a square mile and was around 60 metres (192ft) high, was
probably used for 2,000 years.

“What surprised me most is the scale of this enormous complex,” Stanislav
Mogilny, a student working on the excavation, told Russian television. It’s
just incredible – a titanic feat.”                             -30-

———————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
30. OSTASH APPOINTED UKRAINIAN AMBASSADOR TO CANADA

Interfax-Ukraine news agency, Kiev, in Russian 1545 gmt 11 Sep 06
BBC Monitoring Service, United Kingdom, Wednesday, Sep 11, 2006

KIEV – President Viktor Yushchenko has issued a decree appointing Ihor
Ostash ambassador to Canada, the president’s press service has announced.

Ostash was a member of the three previous parliaments. In the previous
parliament, Ostash was deputy head of the parliament’s foreign affairs
committee. [Ostash ran in the March 2006 parliamentary election on the list
of the Pora-Reforms and Order bloc, which failed to overcome the 3-percent
barrier.]

Ostash is 47 years old. He speaks English, Polish, Slovakian, Serbian,
Croatian and Bulgarian. Until now, Ukraine’s interests in Canada have been
represented by charge d’affaires ad interim Vadym Prystayko.

The ambassador’s post has been vacant since February 2006, when Mykola
Maymeskul was appointed deputy foreign minister. Maymeskul had headed
Ukraine’s diplomatic mission in Canada since March 2003. In the post,
Maymeskul also represented Ukraine in the International Civil Aviation
Organization.                                        -30-
———————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================

    If you are receiving more than one copy of the AUR please contact us.
    Please contact us if you no longer wish to receive the AUR.    
       You are welcome to send us names for the AUR distribution list.
   If you are missing some issues of the AUR please let us know.
========================================================
         “ACTION UKRAINE REPORT – AUR”
         A Free, Not-For-Profit, Independent, Public Service Newsletter
                With major support from The Bleyzer Foundation
 
      Articles are Distributed For Information, Research, Education
                Academic, Discussion and Personal Purposes Only
                                  Additional readers are welcome.
========================================================
      SigmaBleyzer/The Bleyzer Foundation Economic Reports
                “SigmaBleyzer – Where Opportunities Emerge”
 
The SigmaBleyzer Emerging Markets Private Equity Investment Group
and The Bleyzer Foundation offers a comprehensive collection of documents,
reports and presentations published by its business units and organizations.
 
All publications are grouped by categories: Marketing; Economic Country
Reports; Presentations; Ukrainian Equity Guide; Monthly Macroeconomic
Situation Reports (Romania, Bulgaria, Ukraine).
 
You can be on an e-mail distribution list to receive automatically, on a
monthly basis, any or all of the Macroeconomic Situation Reports (Romania,
Bulgaria, Ukraine) by sending an e-mail to mwilliams@SigmaBleyzer.com.
               “UKRAINE – A COUNTRY OF NEW OPPORTUNITIES”
========================================================
   UKRAINE INFORMATION WEBSITE: http://www.ArtUkraine.com
========================================================
    “WELCOME TO UKRAINE”- “NARODNE MYSTETSTVO”
                                   (Folk Art) MAGAZINES
For information on how to subscribe to the “Welcome to Ukraine” magazine
in English, or the Ukrainian Folk Art magazine “Narodne Mystetstvo” in
Ukrainian, write to ArtUkraine.com@starpower.net. Complete information is
========================================================
                ACTION UKRAINE PROGRAM – SPONSORS
                                 Action Ukraine Report (AUR)
            “Working to Secure & Enhance Ukraine’s Democratic Future”
                  Holodomor Education and Exhibition Collection
“Telling the World About the Holodomor Through the Eyes of Ukrainian Artists”
          

1.  THE BLEYZER FOUNDATION, Dr. Edilberto Segura,
Chairman; Victor Gekker, Executive Director, Kyiv, Ukraine;
Washington, D.C., http://www.bleyzerfoundation.com.
   Additional supporting sponsors for the Action Ukraine Program are:
2. UKRAINIAN FEDERATION OF AMERICA (UFA), Zenia Chernyk,
Vera M. Andryczyk, President; Huntingdon Valley, Pennsylvania
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 298 7275 in Kyiv,
kau@ukrnet.net
4.  ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
5. Law firm UKRAINIAN LEGAL GROUP, Irina Paliashvili, President;
Kiev and Washington, general@rulg.com, www.rulg.com.
6. BAHRIANY FOUNDATION, INC., Dr. Anatol Lysyj, Chairman,
Minneapolis, Minnesota
7. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX  77024; bill.hunter@volia-software.com.
8. ODUM- Association of American Youth of Ukrainian Descent,
Minnesota Chapter, Natalia Yarr, Chairperson
9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C.,
Dr. Susanne Lotarski, President/CEO; E. Morgan Williams,
SigmaBleyzer, Chairman, Executive Committee, Board of Directors;
John Stephens, Cape Point Capital, Secretary/Treasurer
10. UKRAINIAN ORTHODOX CHURCH OF THE USA, South
Brown Brook, New Jersey, http://www.uocofusa.org
11. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
12. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO; Vera
Andruskiw, CPP Wash Project Director, Washington, D.C.; Markian
Bilynskyj, VP/Director of Field Operations; Marta Kolomayets, CPP
Kyiv Project Director, Kyiv, Ukraine. Web: http://www.USUkraine.org
13. WJ GROUP of Ag Companies, Kyiv, Ukraine, David Holpert, Chief
Financial Officer, Chicago, IL; http://www.wjgrain.com/en/links/index.html
14. EUGENIA SAKEVYCH DALLAS, Author, “One Woman, Five
Lives, Five Countries,” ‘Her life’s journey begins with the 1932-1933
genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
15. ALEX AND HELEN WOSKOB, College Station, Pennsylvania
16. SWIFT FOUNDATION, San Luis Obispo, California
17. TRAVEL TO UKRAINE website, http://www.TravelToUkraine.org,
A program of the U.S-Ukraine Foundation, Washington, D.C.
========================================================
 TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR,
around five times a week, please send your name, country of residence,
and e-mail contact information to morganw@patriot.net. Information about
your occupation and your interest in Ukraine is also appreciated.
 
If you do not wish to read the ACTION UKRAINE REPORT please
contact us immediately by e-mail to morganw@patriot.net.  If you are
receiving more than one copy please let us know so this can be corrected
 
              SPAM BLOCKERS ARE A REAL PROBLEM                 
If you do not receive a copy of the AUR it is probably because of a
SPAM BLOCKER maintained by your server or by yourself on your
computer. Spam blockers are set in very arbitrary and impersonal ways
and block out e-mails because of words found in many news stories.
 
Spam blockers also sometimes reject the AUR for other arbitrary reasons
we have not been able to identify. If you do not receive some of the AUR
numbers please let us know and we will send you the missing issues. Please
make sure the spam blocker used by your server and also the one on your
personal computer, if you use a spam blocker, is set properly to receive
the Action Ukraine Report (AUR).

========================================================
                        PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer

Emerging Markets Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
========================================================
    Power Corrupts and Absolute Power Corrupts Absolutely. 
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================

Leave a comment

Filed under Uncategorized

AUR#754 Sept 7 Polish Investors Spur Development In Ukraine; Personal Incomes Up; Build The Holodomor Complex Now; Donetsk People To Many Key Posts

========================================================
 ACTION UKRAINE REPORT – AUR           
                  An International Newsletter, The Latest, Up-To-Date
                       In-Depth Ukrainian News, Analysis and Commentary

                        Ukrainian History, Culture, Arts, Business, Religion,
           Sports, Government, and Politics, in Ukraine and Around the World       

                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 754
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN KYIV, UKRAINE, THURSDAY, SEPTEMBER 7, 2006
 
                Help Build the Worldwide Action Ukraine Network
 Send the AUR to your colleagues and friends, urge them to sign up
               -——-  INDEX OF ARTICLES  ——–
              Clicking on the title of any article takes you directly to the article.               
    Return to the Index by clicking on Return to Index at the end of each article
1.               POLISH INVESTORS IN UKRAINE CAUSE BOOM IN
                              TRANS-BORDER SHIPPING MARKET
Polish News Bulletin, Warsaw, Poland, Wed Sep 06, 2006

2.     UKRAINIAN OIL CLOSER: ODESSA-BRODY-PLOCK PIPELINE
Polish News Bulletin, Warsaw, Poland, Wed, Sep 06, 2006

3.    UKRAINIAN PRIME MINISTER BELIEVES IN ALLIANCE WITH
                                   PROPRESIDENTIAL PARTY
Interfax-Ukraine news agency, Kiev, in Russian 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

4.            PERSONAL INCOMES 30 PER CENT UP IN UKRAINE 
Interfax-Ukraine news agency, Kiev, in Russian 0738 gmt 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

5.  GAZPROM GAS IMPORT DEAL HERALDS UKRAINE PRICE RISE 

By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, September 7 2006

6.     FITCH SAYS RISK IN ROMANIA AND UKRAINE INCREASED
Joanna Chung in London, Financial Times
London, United Kingdom, Thu, September 7 2006

7. UKRAINIAN, ROMANIAN TOP BRASS DISCUSS COOPERATION
Defense-Express website, Kiev, in Russian 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

8  UKRAINIAN MINISTER TALKS OF EVIDENCE OF MURDER OF
      PROMINENT POLITICIAN VYACHESLAV CHORNOVIL IN 1999
Ukrayina TV, Donetsk, in Russian 1800 gmt 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

9.                    BUILD THE HOLODOMOR COMPLEX NOW
Holodomor – induced starvation, death for millions, genocide of 1932-1933
OP-ED:
By Morgan Williams
Kyiv Post, Kyiv, Ukraine, Thursday, Sep 07 2006

10.            CELEBRATING THE UKRAINIAN AVANT-GARDE
       Chicago Cultural Center exhibits works by more than 70 modernists
By Timothy Inkebarger, Staff Writer, Chicago Journal
Chicago, Illinois, Wednesday, September 6, 2006

11. UKRAINE PRES AIDE: RUSSIAN TIES DON’T AFFECT GAS PRICES
Associated Press, Kiev, Ukraine, Wednesday September 6, 2006

12.                              “THE FRIAR’S GREED………”
  Prime Minister continues to appoint his people from Donetsk to key posts
Ostrov website, Donetsk, in Russian 0000 gmt 31 Aug 06
BBC Monitoring Service, United Kingdom, Tuesday, Sep 05, 2006

13YANUKOVYCH SETTLES INTO RETURN AS PRIME MINISTER
                           AS PRESIDENT WATCHES WARILY 

Mara D. Bellaby, AP Worldstream, Kiev, Ukraine, Wed, Aug 30, 2006

14.     UKRAINE APPEALS FOR ACTION TO STOP TRAFFICKING 
Associated Press, Kiev, Ukraine, Wed, September 6, 2006 

15.      PROFILE OF UKRAINIAN FUEL AND ENERGY MINISTER
                      YUIRY BOYKO FROM DONETSK REGION

BBC Research Service, UK, August 21, 2006 
BBC Monitoring Service, United Kingdom, Aug 21, 2006

16PROFILE OF UKRAINIAN TRANSPORT & COMMUNICATIONS
                           MINISTER MYKOLA RUDKOVSKYY
BBC Monitoring research in English 30 Aug 06
BBC Monitoring Service, United Kingdom, Wed, Aug 30, 2006
========================================================
1
       POLISH INVESTORS IN UKRAINE CAUSE BOOM IN
                        TRANS-BORDER SHIPPING MARKET

Polish News Bulletin, Warsaw, Poland, Wed Sep 06, 2006

WARSAW – In the first six months of 2006, the total value of Polish exports
to Ukraine reached $1.295bn, 55 percent more than in the same period of
2005.

From 2002 to 2005, it has increased from $1.180bn to $2.588bn. As a result,
as an importer of Polish goods Ukraine has overtaken Hungary and presently
holds the same position as Sweden.

Meanwhile, the value of Polish investments in the country exceeded $240m,
thus amounting to 2.5 percent of the total value of all foreign investments
carried out locally in H1 of 2006.

Polish investors are most willing to launch their projects in special
economic zones, which at present house investments of over 70 companies

from Poland. Alone the projects carried in the vicinity of Lvov are worth over
$150m.

The growing presence of domestic investors in Ukraine and consolidation of
the metallurgic industry resulted in a boom on the trans-border shipping
market. Since May, domestic company CTL Logistics has been shipping coke

to Ukraine and to Romania via Ukraine and Moldova for international giant
Mittal Steel.

It is the first case of the Ukrainian railways establishing co-operation
with a private shipping enterprise. “In the next few years, the volume of
raw material shipments from Ukraine to countries located further East, such
as Kazakhstan, may be expected to grow.

In order to facilitate shipments from EU member states to Central Asia, we
decided to spend ZL40m on the construction of two trans-shipment terminals
on the Polish-Ukrainian border,” says Trans Trade CEO Ireneusz Gojski.

Shipments from Ukraine usually carry mass loads of materials such as
minerals or steel, with machinery, home appliances and cars heading in the
opposite direction. Recently, shipping companies have included customs
services in their offer. In this way, they do not have to transport the
shipped goods to Kiev, where most of their clients have established their
local headquarters.

“Following the customs operations, which are performed at the border, the
goods are delivered directly to receivers. In this way, transport costs are
lowered by up to 20 percent,” estimates Andrzej Kozlowski from Ukrainian
branch of Raben.

Domestic companies are experiencing problems with distributors in Ukraine,
which is a country twice the size of Poland. In order to evade this
obstacle, Nowy Styl chair producer, which built a factory in the special
economic zone near Kharkov, decided to take shipping its products into its
own hands.

After investing in vehicles, it set up a network of warehouses in the entire
country. On the other hand, can manufacturer Can-Pack managed to establish
successful co-operation with local transport firms.

However, its representatives admit that warehouse space in Ukraine is
greatly insufficient. According to real-estate market research company DTZ,
the country is lacking as much as 400,000 square metres of warehouse space.

The existing warehouses are often located near railway tracks, which
encourages Polish shippers to use railways to deliver the goods to the
receiver.

Such is the case with Polfrost, whose Deputy CEO Marek Siwiec stresses that
so far the goods his company was responsible for were never stolen, whereas
in Poland he has seen entire loads disappear from warehouses.

However, investors operating in the country still have to deal with
omnipresent corruption. According to Transparency International, Ukraine
remains one of the most corrupted states in the world. On the other hand,
those willing to take the risk may hope for high profits.

So far, this incentive has tempted several shipping companies, including
Schenker, Kuehne + Nagel, Frank Maas and Raben. Over the last 12 months, the
latter firm has set up six trans-shipment terminals and increased employment
from 10 to 150 people.

So far, Polish logistics and shipping companies, such as Pekaes,
Trans-Poludnie, Link or Omega-Pilzno, are reluctant to enter the Ukrainian
market. “We might consider taking such steps in the future. At present,
however, the long queues at border crossings and the reigning corruption are
not in the least encouraging,” says Rafal Pijar from Trans-Poludnie.

————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2.   UKRAINIAN OIL CLOSER: ODESSA-BRODY-PLOCK PIPELINE

Polish News Bulletin, Warsaw, Poland, Wed, Sep 06, 2006

WARSAW – At the Economic Forum in Krynica-Zdroj, PM Jaroslaw

Kaczynski agreed with his Ukrainian counterpart Viktor Yanukovych on
the construction of the Odessa-Brody-Plock pipeline, an investment
Poland has coveted for several years.

What remains to be settled are the sources of financing for the undertaking
and finding contractors to transport the oil from exploration sites around
the Caspian Sea, as well as its collection from the pipeline.

Kaczynski declared that he would bring the question up during his visit to
the US, as it is US companies that will drill for oil in the Caspian region.

Also interested in oil transport contracts is Kazakhstan’s KazMunaiGaz.

The company constructing the pipeline is the Ukrainian-Polish Sarmatia.

As far as financing is concerned, PM Kaczynski said that the EU agreed to
assist the enterprise estimated at $0.5bn with EUR400m. It is uncertain,
however, whether the Polish authorities had already discussed the matter
with Brussels.                                        -30-

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3. UKRAINIAN PRIME MINISTER BELIEVES IN ALLIANCE WITH
                                PROPRESIDENTIAL PARTY

Interfax-Ukraine news agency, Kiev, in Russian 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

KRYNICA, Poland – Ukrainian Prime Minister Viktor Yanukovych is confident
that the [propresidential parliamentary] faction of Our Ukraine will join
the anti-crisis coalition. Yanukovych was speaking at the 16th international
economic forum Krynica-2006 in the Polish town of Krynica today.

“We began talks today regarding the creation of a coalition with Our
Ukraine,” Yanukovych said, adding that the process of unification between
the coalition and Our Ukraine will take place shortly.

“I am confident that it will be so, that the main political players in
Ukraine know people’s moods, that people want an alliance,” Yanukovych said.

He also added that “time has come to implement political reform and it has
become possible for the branches of power, the cabinet, parliament and the
president to closely cooperate; there is political will for this”.

The main thing achieved recently in Ukraine, Yanukovych stressed, is that
“Ukraine will never return to the totalitarian system”.
Yanukovych said that the system has changed and that a real opportunity has
presented itself to adopt in Ukraine the democratic values shared by the
European Union.

As is known, the anti-crisis coalition, which was set up in July, comprises
the Party of Regions, the Socialist Party and the Communist Party. Talks are
under way on the possibility of adding Our Ukraine to this coalition. -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

========================================================
4.     PERSONAL INCOMES 30 PER CENT UP IN UKRAINE 

Interfax-Ukraine news agency, Kiev, in Russian 0738 gmt 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

KIEV – Ukrainian population’s disposable incomes grew by 29.3 per cent year
on year and real incomes grew by 19.5 per cent year on year in January-July
2006, Interfax-Ukraine reported on 6 September, quoting the State Statistics
Committee. Nominal incomes grew by 30.3 per cent over the same period, the
committee added.

In July, disposable incomes grew by 21.3 per cent on June to 723.3 hryvnyas
per capita (about 143 dollars), real incomes grew by 20.2 per cent and
nominal incomes grew by 10.9 per cent.                  -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
    Send in names and e-mail addresses for the AUR distribution list.
========================================================
5. GAZPROM GAS IMPORT DEAL HERALDS UKRAINE PRICE RISE 
By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, September 7 2006

Ukraine faces the prospect of more stiff increases in the price of natural
gas imports next year, following an agreement earlier this week between
Gazprom, the Russian energy company, and Turkmenistan.

Under the terms of the deal, which avoided a potential stand-off and the
threat of a cut in supplies, the Russian state-controlled monopoly agreed to
an increase from $65 (Euro51, £34) per 1,000 cubic metres to $100 for
natural gas bought at the border with the central Asian republic.

The gas is then transported through pipelines to Ukraine by RosUkrEnergo, a
Swiss-registered trading company co-owned by Gazprom and two Ukrainian
businessmen. The price rise, which comes into effect on October 1, will be
passed on to Ukraine.

It remains uncertain whether the increase will take place this year or next.
Analysts in Kiev said the higher price for Turkmen gas would raise Ukraine’s
bill to at least $135 per 1,000 cu m.

European countries are unlikely to be immediately affected by the increase.
But there is concern prices could rise if other central Asian countries,
such as Kazakhstan and Uzbekistan, follow Turkmenistan.

Ukraine is still adjusting to a $95 rate set in January after an earlier
price dispute with Gazprom that saw gas prices nearly double. That fuelled
inflationary pressures and led to stiff gas tariff increases for households
and industry.

Political manoeuvring by Viktor Yanukovich, Ukraine’s new prime minister,
may have prevented a price rise from taking effect this year.

During a visit to Russia last month, Mr Yanukovich claimed to have reached
an agreement in talks with President Vladimir Putin and other top Russian
officials who, in his words, gave assurances that gas prices for Ukraine
would remain unchanged this year.

Ukrainian officials remained confident yesterday prices for gas imports,
which are handled by RosUkrEnergo, will not rise until next year. But Sergey
Kupriyanov of Gazprom said the issue was “subject to negotiations”. Yuriy
Boyko, energy minister, is scheduled to visit Moscow today for talks on the
price Kiev will pay for gas.                                 -30-

———————————————————————————————–
http://www.ft.com/cms/s/130bdfec-3e0e-11db-bd60-0000779e2340.html
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================      
6.    FITCH SAYS RISK IN ROMANIA AND UKRAINE INCREASED

Joanna Chung in London, Financial Times
London, United Kingdom, Thu, September 7 2006

Rapid credit growth and strengthening exchange rates have increased the
systemic risk in Romania and Ukraine, according to a new report yesterday
from Fitch Ratings.

This could tip Romania, which is poised to join the European Union on
January 1, and Ukraine, another long-term EU hopeful, into one of the
highest risk categories monitored by the credit ratings agency in the next
six months.

Investors are increasingly focused on potential triggers to systemic crises,
particularly given recent market volatility.

The conclusions of the report, which examines 81 economies, are based on two
indicators. The banking system indicator measures intrinsic banking system
quality or strength while the macro-prudential indicator looks at excessive
lending growth when accompanied by either strong asset price appreciation or
real exchange rate strength.

Azerbaijan is the most vulnerable to potential economic shocks, followed by
Russia, Iceland, South Africa and Ireland, according to the report.

Earlier this year, Iceland and South Africa, in spite of relatively strong
banking systems, suffered heavily when risk aversion led to a widespread
sell-off across world financial markets.

Their potential risk stems largely from dramatic credit growth and currency
appreciation and sharp asset price growth. Both countries have been raising
interest rates in recent months to cool down their economies.

Richard Fox, senior director in Fitch’s sovereign team and co-author of the
report, said that in Romania and Ukraine, real credit growth exceeded 30-40
per cent last year.

That, along with strong real exchange rates and, additionally in Ukraine,
strong equity prices, meant the risk outlook for both countries could
deteriorate.

However, he pointed out that the data, particularly for the macro-prudential
indicator, were “volatile and notoriously difficult to forecast”.

He added that systemic risk indicators did not necessarily portend future
ratings actions.

Overall macro-prudential risk has increased only slightly in the past six
months, while strengthening in a number of banking systems has helped

reduce overall bank systemic risk.

However, 40 countries, or just under half of the countries monitored, find
themselves in high categories for systemic risk. The majority of these are
concentrated in central and eastern Europe.                      -30-
————————————————————————————————–
http://www.ft.com/cms/s/28deaed6-3e0d-11db-bd60-0000779e2340.html

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
7. UKRAINIAN, ROMANIAN TOP BRASS DISCUSS COOPERATION

Defense-Express website, Kiev, in Russian 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

KIEV – A border meeting involving the Ukrainian Ground Forces Commander,
Lt-Gen Vitaliy Frolov, and the head of the Romanian armed forces General
Staff, Lt-Gen Sorin Ioan, took place in Odessa on 5 September, the press
service of the Ukrainian Defence Ministry has said.

The generals exchanged views and shared the experience of reforming and
developing the ground forces, discussed prospects for further cooperation,
particularly in training personnel for the armies of the two states.

The generals paid special attention to joint events and training Ukrainian
and Romanian servicemen for peacekeeping missions.

The parties noted that the command of the ground forces should pay special
attention to preparation for the Light Avalanche exercise involving Slovak,
Romanian, Hungarian and Ukrainian servicemen from the Tysa international
battalion, which is due to be held in Transcarpathian Region, Ukraine, on
18-27 September.

The command and staff exercise involving multinational battalion Tysa is
held annually in the states whose personnel is part of the battalion. The
exercise was held in Ukraine in 2002, in Hungary in 2003, in Romania in 2004
and in Slovakia in 2005. This year the exercise will be held in Ukraine. -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
     NOTE: Send in a letter-to-the-editor today. Let us hear from you.
========================================================
8.  UKRAINIAN MINISTER TALKS OF EVIDENCE OF MURDER OF
      PROMINENT POLITICIAN VYACHESLAV CHORNOVIL IN 1999

Ukrayina TV, Donetsk, in Russian 1800 gmt 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

KIEV – [Presenter] The death of the head of the People’s Movement of

Ukraine [Rukh], Vyacheslav Chornovil, was not accidental, Interior Minister
Yuriy Lutsenko said at a news conference in Dnipropetrovsk today.
[Chornovil died in a car crash near Boryspil in Kiev Region on 25 March
1999.]

According to him, the politician was assassinated rather than killed in a
road accident. Yuriy Lutsenko said he is ready to hand the materials of the
investigation to the son of the deceased, MP Taras Chornovil, on condition
he pledges not to disclose them.

[Lutsenko, in Ukrainian] A lot of new circumstances have emerged in the
case. I do hope the Prosecutor-General’s Office acts in line with the law in
this case.

If this happens, you and the whole of society will receive information that
Chornovil was not killed in a car crash, but was assassinated – if this
happens. Personally, I am deeply convinced of this, considering the
materials that I have.                                -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

========================================================
9.            BUILD THE HOLODOMOR COMPLEX NOW
 Holodomor – induced starvation, death for millions, genocide of 1932-1933

OP-ED: By Morgan Williams
Kyiv Post, Kyiv, Ukraine, Thursday, Sep 07 2006

Among the major crimes committed against the Ukrainian people, the
Holodomor of 1932-1933 (induced starvation-death for millions-genocide)
stands apart and forms a category of its own.

It fits the criteria for genocide according to the United Nations Convention
on the Prevention and Punishment of the Crime of Genocide. The 75th
commemoration of the Holodomor takes place in 2007-2008.

The deliberate starvation of millions of Ukrainian citizens and the horrible
suffering endured by millions more is seen as the most destructive and
costliest in terms of human lives in Ukraine’s history. Its main target was
the peasantry, the mainstay of the Ukrainian nation.

A large portion of Ukrainian peasants died and the Kremlin engineered
the execution of a large part of Ukrainian national elites (cultural,
educational, religious, political).

Millions of these victims died from starvation, others were executed
with a shot in the head, or sent to the gulag to die.

The genocide against the Ukrainian nation as a whole and included the
Ukrainian minority living in the RSFSR, especially the Kuban region of the
Northern Caucasus, where the Ukrainian peasantry was starved to death,
and a large part of the Ukrainian elites physically exterminated. This
Ukrainian ethnic minority should also be remembered.

                                 HOLODOMOR COMPLEX
Dr. James Mace, outstanding U.S. scholar on the Holodomor, called for the
establishment of a Holodomor Commemoration, Educational, Research and
Historical Complex in Kyiv. Sadly, Mace’s many calls fell on deaf ears.

Leaders in Ukraine and around the world have felt strongly it was important
for the Ukrainian genocide to find its proper place in the collective memory
of the Ukrainian nation and the world community after being covered up and
denied by the Soviet Government for 55 years.

In 2002 the Ukrainian World Congress called for the building of a complex.
I wrote an opinion piece in the Kyiv Post back on Nov. 28, 2002.

On Feb. 12, 2003, the humanitarian deputy prime minister at that time,
Dmytro Tabachnyk, representing the government, called the famine a
voluntary terrorist act that claimed the lives of up to 10 million people,
and turned Ukrainian villages into “a horrible social reservation the size
of which shocked the entire world,” in a hearing before Parliament.

Minister Tabachnyk announced the government was planning to build a
National Famine Memorial Complex to include a monument, museum and
a historical research center.

President Yushchenko told the IV World Forum of Ukrainians
recently that he would make sure a Holodomor complex is built by fall
2008. He said the complex would be appropriate to the level of the tragedy.

                       COMPLEX NEEDS TO BE BUILT NOW
The Holodomor Complex needs to be built now. It must be a separate,
stand-alone institution, not combined with another facility, or organization
that covers other repression events or periods in Ukrainian history. It must
be wholly devoted to the Ukrainian genocide.

The historical complex should be a world-class structure with a research
center, library, exhibition hall, museum, monument, chapel, archive center,
bookstore and memorial gallery, as in the leading historical centers of the
world.

There are precedents for this type of genocidal commemorative structures.
One is the Vad Yashem in Israel and the Holocaust Museum in Washington
are devoted exclusively to the Holocaust and not to other crimes the Jewish
people have suffered.

Thus, the Holodomor Complex must be focused on the Ukrainian genocide,
otherwise its role in the education of Ukrainian youth and its testimony to
the world will be greatly diminished.

                                 INSTITUTE OF MEMORY
The Institute of Memory, created recently by the Cabinet of Ministers, is
said to be devoted to the crimes against the Ukrainian nation committed by
various regimes in the 20th century. There are two main concerns about the
Complex being included under this Institute.

Firstly, the 20th century is full of tragic moments for the Ukrainian
nation. Crimes were committed by the Tsarist regime, the Polish regime in
Western Ukraine between the two wars, the Soviet regime (three famines, mass
deportations around WWII and at other times), and German atrocities during
1918 and WWII, including the Holocaust.

Secondly, an institute devoted to a whole century of Ukraine’s national
history must not delve exclusively into the tragic moments of the country’s
past.

This is certainly not a healthy or sound way to cultivate national
consciousness, especially among the younger generation.

The Institute of Memory should also include heroic moments of the Ukrainian
struggle for independence or such joyous moments as the proclamation of
Ukrainian independence in 1918 and 1991.

The Holodomor Complex, representing the most destructive event in Ukraine’s
history, under the Institute, could get lost and just become one more event
in the long list of destructive and  heroic moments in Ukraine’s history.

                            GROUND LEVEL MONUMENT
The Holodomor Complex design jury met last week in Kyiv to review the final
designs and it will meet Sept. 8 to make the final decision. It will be
built underground with a large monument on top.

It should make a major, dramatic and strong statement against communism and
the people who were in charge, on behalf of the people, families and nation
who suffered under this horrible tragedy and pay tribute to those who died.

The monument itself can become a world recognized symbol for the Holodomor.
One that moves the human mind and heart to remember the evil systems of the
past and also present governments that destroy millions of lives.

Most current Holodomor monument models focus mainly on the victims, look
like church structures, and do not make a strong enough statement about the
crime.

Since the final decision will be made this week, it is far too late to begin
the process once again. Officials should work with the winner to develop a
design that focuses on the crime and the victims.

The President should issue the appropriate orders now, negotiate the
necessary political deals and ensure the Complex is completed by the end
of 2008.

Its construction would provide the momentum to the Holodomor 75th
commemoration programs around the world and become a world center for
the most tragic event in Ukraine’s history. No more speeches or promises,
just actions that deliver results.                       -30-
———————————————————————————————–
Morgan Williams is Director, Government Affairs, Washington Office,
SigmaBleyzer Private Equity Investment Group. He is a member of the
Organizational Committee, 75th Anniversary of the Holodomor appointed
by the Cabinet of Ministers; Trustee, Holodomor Exhibition Collection;
Chairman, Mace Holodomor Memorial Fund of the Ukrainian Federation
of America. He is publisher and editor of the Action Ukraine Report (AUR)
————————————————————————————————-
LINK: http://www.kyivpost.com/opinion/oped/25037/
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
10.        CELEBRATING THE UKRAINIAN AVANT-GARDE
       Chicago Cultural Center exhibits works by more than 70 modernists

By Timothy Inkebarger, Staff Writer, Chicago Journal
Chicago, Illinois, Wednesday, September 6, 2006

Modern Ukrainian paintings and sculptures hidden away from Soviet police

in the early 20th century are finally seeing the light of day at an exhibition
running through the middle of October at the Chicago Cultural Center.

The exhibit, Crossroads: Modernism in Ukraine, 1910-1930, features more than
70 works by 21 artists of the Ukrainian avant-garde, many of whom were
persecuted, jailed, or killed.

“These were largely works that haven’t traveled even probably in Europe to
exhibition in Paris or anywhere else,” said Gregory Knight, deputy
commissioner of visual art for the Chicago Department of Cultural Affairs.

The exhibit is titled Crossroads in reference to the Western European
influences the artists drew from-Italian Futurism, French Cubism, and Art
Nouveau-when establishing their own styles. “One has to look hard to kind

of find what is indigenous in a crossroads situation,” Knight explained.

Besides paintings, the exhibit includes Cubist-influenced sculpture and the
abstract wooden assemblage of early Soviet-era Constructivism.

“Some of these artists are more celebrated and known as part of the Russian
avant-garde because that’s where their reputations were made after
immigrating from the Ukraine,” Knight said. “Others might have been Russian
by birth, I guess, and chose to live in Ukraine or Kyiv later in life
because the Soviet crackdown was slower to come there.”

In Sharpening Saws, a piece painted in 1927 by Cubo-Futurist Aleksandr
Bohomazov, workers are pictured using old techniques to prepare for the
future. The vibrant colors and themes in the painting celebrating work and
community are typical of the era.

“Ultimately it’s talking about traditional working methods of using handsaws
to split and create lumber, but then the suggestion in the background is
kind of a utopian modern architecture,” Knight said. “So its not like they
are just building log cabins; they’re actually kind of converting, if you
will, the past of falling trees and creating lumber with old hand methods
but with the suggestion of a modern world to come.”

The Kiss, a painting from 1913 by Vsevolod Maksymovych, is derivative of
1907 and 1908 Art Nouveau paintings of the same title by Austrian painter
Gustav Klimt, one of Maksymovych’s contemporaries.

Dairy-maid by Mykhailo Boi-chuk, uses a more primitive Eastern European
iconic style with hints of Cubism, depicting a woman carrying a canister of
milk through a forest. In the exhibition catalog, which is written in
Ukrainian with English translations, University of Southern California art
professor John Bowlt notes that Boichuk was accused of being a Ukrainian
nationalist for highlighting Ukrainian motifs in his paintings and was
“subsequently arrested and executed.”

The collection also features works by Alexandra Exter, David Burliuk, Vasily
Ermilov, and Kazimir Malevich. The works were compiled by Nikita
Lobanov-Rostovsky and Dmytro Horbachov from the National Art Museum

of Ukraine, the Museum of Folk Art of Ukraine, the Art Museum of
Dnipropetrovsk, the Theatre Museum and private collections.

In the exhibition catalog Lobanov-Rostovsky notes that the exhibit,
“provides contemporary artists with an opportunity to think about the past
and about the legacy, which a miracle has preserved.

Indeed, now is the time to contemplate the cultural future of a new Ukraine
and for art historians and archivists to uncover a treasure long buried
beneath the sands of time. I am fully convinced that, inevitably, a new and
vibrant art in Ukraine will be built upon the territory of this rich, but
neglected, legacy.”

Knight said the exhibit also will feature a forum at 6 p.m. Sept. 27, that
will draw parallels between Ukrainian art in the early 20th century and
during its recent liberation as a result of the breakup of the Soviet Union.
———————————————————————————————–
http://www.chicagojournal.com/main.asp?SectionID=1&SubSectionID=60&ArticleID=2158&TM=82842.7
————————————————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================

11. UKRAINE PRES AIDE: RUSSIAN TIES DON’T AFFECT GAS PRICES

Associated Press, Kiev, Ukraine, Wednesday September 6, 2006

KIEV – Ukraine was wrong to expect that Russia would lower natural gas
prices if it had a government that Moscow considered more friendly, a top
aide to President Viktor Yushchenko said Wednesday.

Chief-of-staff Oleh Rybachuk was responding to comments by a senior aide to
Russian President Vladimir Putin, who said Tuesday that Moscow’s aim was to
sell gas to Ukraine at the same price it sells to the European Union.

Putin adviser Igor Shuvalov told reporters in Moscow that meant “gradual
changes in the cost” for the ex-Soviet republic.
A New Year’s dispute between the two nations over gas prices resulted in a
brief shutdown of gas to Ukraine, and a drop in supplies via Ukrainian
pipelines into Western Europe. The dispute rattled European energy consumer
and marked one of the lower points in Ukrainian-Russian relations since the
1991 Soviet breakup.

Many Ukrainians had expected that the comeback of Viktor Yanukovych, named
prime minister after his pro-Russian party won the March parliamentary
elections, might help Ukraine win more concessions from Moscow than the
Western-leaning Yushchenko, who has sought to drive Ukraine into NATO and
the European Union.

“The election is over, and so is all the talk that if we had a different
government that Moscow liked more, it would mean cheaper gas,” Rybachuk told
European business leaders in Kiev. “As far as Moscow is concerned, we are
already a member of the European Union.”

Yanukovych was strongly supported by Russia during his fraud-marred bid to
win the presidency in 2004, and his eventual defeat to Yushchenko was seen
as an embarrassing blow to Putin. After returning as premier, Yanukovych
called for improved relations with Moscow, but has also publicly pledged to
continue Yushchenko’s pro-Western policies.

Yanukovych said after his first meeting with Putin that he won an agreement
from Moscow to keep the current natural gas price of $95 per 1,000 cubic
meters steady until the end of the year. But he has called talks on the
price for next year “rather difficult.” His cabinet is preparing for a 40%
increase in the price next year.

The situation for Ukraine grew more complicated this week after Russia’s
state gas monopoly, OAO Gazprom (GSPBEX.RS), agreed to a 50% hike in

natural gas received from Turkmenistan. Under the complicated gas deal reached
between Kiev and Moscow earlier this year, Ukraine receives its gas via a
middleman company, with the more expensive Russian gas offset by cheaper
Turkmen supplies.

The Gazprom-Turkmen deal is likely to trigger an immediate -and difficult –
increase in costs for Ukraine, despite the government’s insistence that it
would be able to hold the price steady until year’s end, said Volodymyr
Saprykin, an analyst with the Kiev-based Razumkov Center for Political and
Economic Studies.                                   -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================

 If you are receiving more than one copy of the AUR please contact us.
========================================================
12.                           “THE FRIAR’S GREED………”
  Prime Minister continues to appoint his people from Donetsk to key posts.

Ostrov website, Donetsk, in Russian 0000 gmt 31 Aug 06
BBC Monitoring Service, United Kingdom, Tuesday, Sep 05, 2006

The new Ukrainian prime minister continues to appoint his people from his
home region to the government, a Donetsk website has said. The author said
people from the industrial east region of Donetsk are taking over the
corridors of power.

He focused on the fuel and energy sector, finances, customs, transportation
and other smaller ministries, pointing out the advantages of control which
big business centered in Donetsk might enjoy.

The following is the text of an article signed by the Centre for Donbass
Social Trends Studies, entitled “The friar’s greed…”, published on the
Ostrov website in Russian on 31 August, subheadings appear as in the
original:

In principle, the cabinet of [Prime Minister Viktor] Yanukovych has not done
anything which would make it possible to judge its economic successes or
failures. But the very fact that there is a government, after long months of
instability, furthers the positive acceptance of Viktor Fedorovych
[Yanukovych]‘s arrival in power.

Against this background, the only real and alarming step taken by the
coalition in power is the massive rotation of key personnel at all levels.
Of course, this cannot be compared to the size of the Orange purge of winter
2005, but that was justified then by the declared change in the ideology of
the authorities in power.

Since it has turned out that [President Viktor] Yushchenko’s arrival only
changed the colour, but not the ideology, then the need to now change state
managers in such numbers cannot be explained by anything other than an
attempt to carry out another economic “dividing-up-the-spoils” in one’s own
favour with the help of one’s own people.

On 10 August, Ukrainian Prime Minister Viktor Yanukovych stated: “There will
not be any lustration of personnel. I have signed a separate instruction in
which I obliged all leaders in departments to have conversations with those
who are to be dismissed and to see that jobs are found for them”.

As we see, the prime minister has a rather strange understanding of
lustration. But that is not the point. The point is not the label, but the
process. And the essence of the matter is such that the personnel rotation
in the country smacks of an openly revanchist nature, since it looks merely
like Yanukovych compensating his people who suffered for supporting him
after the Orange Revolution.

There are appointments which did not have to be made. And while the main
mass of everyday Ukrainians did not take notice, the intellectual elite took
this step as an insult, as Yanukovych laughing not at Yushchenko and the
Orange ideals Yanukovych has loved of late, but at the principles of
democracy and common sense.

One show in this series is the “eeny-meeny-miny-moe” of dividing up
parliamentary committees [Yanukovych's Party of Regions did not live up to
its promise to divide committees evenly among the factions of parliament]
and inviting Mykola Plekhanov, who suffocated the student movement in Sumy,
to the cabinet.

The actions of these people, independent of the political regime, simply
discredit themselves and the power which embraces them.

Yanukovych’s team is forgetting that people do not judge the falsification
of the presidential election based on the Supreme Court ruling (which by the
way, no-one has overturned), but on their own personal voting experience and
in comparison to the previous parliamentary election.

And well, the strong-armed pressure on the peaceful student protest which Mr
Plekhanov built is assessed straightforwardly all the time and everywhere…
[ellipsis as published]

Holiday time and the general political apathy after the coalition soap opera
do not allow either politicians or simple folk to asses the magnitude and
meaning of the changes taking place in the country. Meanwhile, it is not
only the team which is changing, but the structure and base of power.

There is no system of counter-weights as there was under [former President
Leonid] Kuchma. Now there is a weak, though principled, president; and an
authoritative, though not completely independent prime minister and a
parliament still not tamed by either of them.

There are no evenly-significant political-economic clans, keeping their eyes
on each other. Now there is only one clan and one power. And if the Donetsk
people take power, it is not in order to willingly give it up. Judging from
the unceremonious personnel policy of the new cabinet, the next parliament
election will not be as democratic as this one [in March 2006] was.

For example, from a legal point of view, Donetsk Regional Tax Administration
Chief Oleksandr Zhurba and his first deputy, Mykhaylo Serbin, were dismissed
from the posts in a very suspect manner from a legal point of view. Less
than a week passed from the relevant decision by the State Tax
Administration [STA] until the unexpected presentation of the new directors
in Donetsk.

There was no information either in the press or on the STA website about the
change in the leadership of the Donetsk tax men until the presentation
itself. Serbin was on sick-leave at the time. Contrary to Yanukovych’s
words, he was not invited in for an interview and was not even given any
reason for the dismissal.

They found a replacement for ex-tax man in an indecently quick amount of
time. Giving the impression that there were check-marks next to Zhurba and
Serbin’s names even before Yanukovych came to the cabinet.

It is not surprising that the new STA leadership made its first personnel
changes in Donetsk. The people who came to power in Kiev and who make money
in Donetsk have taken care to see that the state did not control their
capital. And it is not likely that either of these dismissed gentlemen will
go to court, simply because they do not fit into [First Deputy Prime
Minister Mykola] Azarov’s team.

And maybe being dismissed is better for them, after all, this is the Serbin
who showed himself to be an active fighter against illegal conversion
centres. And if you believe [Internal Affairs] Minister Yuriy Lutsenko, the
Donetsk “businessmen” protect their “envelopes” in earnest. The murder of
police officer R. Yerokhin is testimony to that [Yerokhin investigated the
work of Donetsk conversion centres].

The Donetsk people are first rotating personnel in those sectors which have
a direct relationship to their business: energy, transport and
communications. Though they aren’t turning away from anything else. They are
trying to put their people everywhere.

One gets the impression that Yanukovych’s team does not plan to be in power
for long, and so they are stuffing their people in wherever they can so that
first, they can achieve some of their plans while they are in power and
second, to leave themselves a landing bridge into the executive after they
retreat – it is not that easy to fire a bureaucrat tenaciously holding onto
power in our time even for the president, he can just go to court to get
back.

                                        FUEL AND ENERGY 

The main conductor of the idea that all the smartest and most professional
people in this country are born and raised only in the Donbass was probably
Deputy Prime Minister Andriy Klyuyev, who divided up the entire fuel and
energy complex of the country with another Donetsk talent, Yuriy Boyko.

A deep and exact picture of the results of this select work was given by
journalist Orest Sokhar in today’s [31 August] article on Obozrevatel:

“Andriy Klyuyev (born in Donetsk) became the deputy prime minister of fuel
and energy and he entrusted Yuriy Boyko (Horlivka, Donetsk Region) with
running the fuel and energy ministry. Boyko’s deputies are Vadym Chuprun
(from Rovnopil, Volnovakhskyy district, Donetsk Region, and until recently,
governor of Donetsk Region) and Oleksiy Sheberstov (who for a long time
worked in DonbasEnergo).

Volodymyr Sheludchenko (Makiyivka, Donetsk Region, Donetskoblhaz) came to
head Naftohaz Ukrayiny and Serhiy Zubov (Kramatorsk, Donetsk Region) came to
head the state company Haz Ukrayiny.

Electric energy will also be run exclusively by people from Donetsk Region:
Ihor Hlushchenko (Belohirskyy town, Dobropolskyy district, Donetsk Region,
and director of Vostok-Enerho (SCM) [Systems Capital Management, controlled
by Party of Regions MP and Donetsk tycoon Rinat Akhmetov]) became president
of Enerhetychna Kompaniya Ukrayiny and Anatoliy Lutsyshyn (until recently,
the director of Servis-Invest, Donetsk, which is part of the SCM group)
became director of Enerhorynok.

The recently-appointed director of the National Electricity Regulating
Commission [NERC] is Oleksandr Rohozin (a long-time aide to Donetsk man,
Andriy Klyuyev). In addition to all of the above, one must add that Serhiy
Tulub (Donetsk) became coal industry minister”.

One may add Yuliy Yoffe, raised in neighbouring Luhansk Region in Kommunarsk
(now Alchevsk), to this list of professionals. Yoffe is now acting deputy
fuel and energy minister and, after sitting four convocations in parliament
suddenly seems to have for some reason decided he might like the executive
branch.

That is the reason for the total rotation of personnel in energy is far from
appointees’ professionalism, but rather the principle of being from the same
part of the country and personal loyalty, was unintentionally confirmed by
the former Donetsk governor Vadym Chuprun, who is now first deputy to Yuriy
Boyko.

In presenting Donetsk native Ihor Hlushchenko as president of the national
joint stock company Enerhetychna Kompaniya Ukrayiny, Vadym Prokofyovych
[Chuprun] told the now-former director of the company, Petro Omelyanivskyy
(who came to the company from Zakhidenerho): “Go back and put things in
order there”.

That means he was not such a bad director, if he is being sent somewhere as
an anti-crisis manager. They just had to put their own man in his
place…[ellipsis as published]

The exception to the policy of personnel rotations is Coal Industry Minister
Serhiy Tulub. Earlier, in coming to the new ministry, he completely rotated
personnel on the ground. People in Donetsk were waiting for a change in coal
generals – the directors of state coal enterprises.

But Serhiy Borysovych [Tulub] decided to make due without a revolution:
“People are working and I know them all; I brought many of them to their
posts and I know all of them. If anyone works poorly, doesn’t carry out his
tasks, then…[ellipsis as published] But there is no sense in that. No
revolutions, [just] calm work”. Of course, Tulub changed nearly all of his
deputies.

                                              FINANCES
Ukraine’s “great patriot” who came to Donetsk from Russia in 1984, Mykola
Yanovych Azarov, has also put his people in place on all the financial flows
of the state.

Wearing two hats, that of deputy prime minister and finance minister, Mr
Azarov not only changed all the deputy ministers and the entire leadership
of the STA, those structures which fill and allocate finances, but also of
those structures which directly or indirectly are supposed to control them –
the treasury and the State Auditing Directorate [SAD].

STA tax police chief Valeriy Koryachkin has been mobilized as first deputy
chair of the STA, he managed the tax police in Donetsk before the Orange
Revolution.

And Anatoliy Brezvin’s other first deputy is also a man from Donetsk – Vadym
Kaizerman, who was first deputy STA chair in Donetsk Region under Viktor
Yanukovych’s first tour as prime minister. One can say with certainty that
during their leadership Rinat Leonidovych [Akhmetov]‘s structures had no
problems with VAT reimbursements in Donetsk. Well of course, these
structures had no problems at all then!

We were unable to uncover Donetsk roots for the new SAD chief Petro
Andriyiv, but his work for Azarov as director of the Finance Ministry’s tax
and customs policy department shows he is not unknown to Azarov. The new
chief of the State Treasury Serhiy Kharchenko is from the same nest; he
worked as deputy finance minister from August 2004 to March 2005.

As well, one should not forget such an important resource allocator as the
Tender Chamber. On 14 August one of the Party of Regions’ leaders, MP Rayisa
Bohatyryova, was elected the chamber’s honorary president. The first vice
president of the chamber is MP Lyudmyla Kyrychenko (Party of Regions), and
the chair of the supervisory council is MP Oleksandr Tkachenko (Communist
Party of Ukraine).

At a chamber congress, Raisa Vasylivna [Bohatyryova] spoke of the need to
increase public control in the sphere of state purchases, providing for the
maximum effective use of funds and strengthening the fight against
corruption.

                                              CUSTOMS
Export is the basis of the Donbass economy. And the prospect of special
economic zones being reopened under Azarov is more than realistic.
Apparently, in order that the customs “give the ok”, Ruslan Cherkaskyy was
appointed first deputy of this institution; until recently, he chaired the
Donbass Regional Customs Service.

                       TRANSPORT AND COMMUNICATIONS 

It is not hard to suppose that Transport and Communications Minister Mykola
Rudkovskyy, who is a member of the Socialist Party of Ukraine [SPU], is not
a professional in the sphere which he heads. A year ago, the Tovarishch
[Comrade] party newspaper called him a “specialist in the fuel and energy
complex”.

And so he has given the ministry’s main direction of activity, Ukrzaliznytsa
[Ukrainian Railways] and communications to more experienced comrades. From
Donetsk, of course.

The railway has not only always been an important factor in the economy in
general and in the determining of prices in particular, but also a lever of
pressure on enterprises. And so right after the Party of Regions cabinet
came to Hrushevskyy street “our own” people appeared in the State Railway
Transport Administration.

“When he sent me to Ukrzaliznytsa, Viktor Fedorovych [Yanukovych] told me:
you have no right to make a mistake. Of course, the team will be made up of
people you know, who are reliable and who are professionals”,
newly-appointed Ukrzaliznytsa acting director Volodymyr Kozak said,
commenting on personnel policy in Ukrzaliznytsa.

Kozak earlier ran Lemtrans, one of Akhmetov’s companies. And we point out
that this conversation took place before the head of the institution, Vasyl
Hladkyy, had been dismissed.

We will not comment on Mr Kozak’s appointment from the point of view of
effectiveness. Maybe he really is a better professional than those who came
before him. We are interested here in the new cabinet’s approach to
personnel policy as the policy of putting your own people in place.

To illustrate this, one can take an 11 August decision by the cabinet, in
which Yanukovych relieved the president of the right to appoint the general
director of the railway administration. That will now be done by the cabinet
upon the recommendation of the transport minister.

Under the previous edition of the Provision on “state administration of the
Ukrzaliznytsa Ukrainian railway transport”, the general director of
Ukrzaliznytsa was appointed by the president.

As far as communications, the former director of Akhmetov’s DCC, Leonid
Netudykhata, has returned as deputy transport and communications
minister…[ellipsis as published]

                                ENVIRONMENTAL PROTECTION 

Ecologists immediately called the appointment of Vasyl Dzharta as
environmental protection minister, the main anti-ecology decision of the
Yanukovych government. This metamorphose rocked the ecology world
on the Internet. Commentary was simply murderous.

But on the other hand, Donetsk Region with its plants and factories which
don’t belong to strangers is the biggest polluter of the environment in
Ukraine. Who besides Donetsk’s own Dzharta to keep an eye on pollutants in
Donbass only being let out at night like they are now?

At the same time, Vasyl Heorhiyovych [Dzharta] insured himself by calling
Svyatoslav Kurulenko into his team as first deputy. Mr Kurulenko once headed
the Donetsk Region Department of Environmental Management. And from

December 2003 to April 2005, he worked as deputy environmental protection
minister. Apparently, Svyatoslav Kurulenko is the one who is going to
professionally direct the ministry.

                   CONSTRUCTION AND ARCHITECTURE 
Another experienced bureaucrat also declined to make a revolution – the
minister of construction, architecture and communal housing Volodymyr Rybak.
He only brought one person with him from Donetsk – first deputy minister
Anatoliy Orlov. Since 1998, Orlov worked as general director of
Ukrpromvodchermet, the state external water supplies manufacturing
enterprise.

                                     INDUSTRIAL POLICY 
There is an interesting story with the Industrial Policy Ministry. It is now
headed by a representative of Zaporizhzhya Anatoliy Holovko. Although Rinat
Akhmetov said the Party of Regions nominated its own candidate for the
post – former general director of Azovstal, Oleksiy Belyy.

No-one knows where Holovko’s hands are, if he is appointed despite the
opinion of the Party of Regions. However, the Donetsk people insured
themselves here, too, appointing Dmytro Kolesnykov first deputy minister.
Kolesnykov earlier worked as first deputy mayor of Kryvyy Rih, and also as
purchasing and logistics director at Sever ore-enriching plant, which
belongs to Rinat Leonidovych.

                            LABOUR AND SOCIAL POLICY 
The Yanukovych government dismissed Pavlo Rozenko as first deputy labour and
social policies minister, replacing him with Lidiya Drozdova who headed the
Donetsk Department of Social Protection in the regional administration there
under Governor Yanukovych.

                                       HEALTH MINISTRY 
It is even good to have your own people in place in the health ministry:
what if you suddenly have to make public or deny the diagnosis of some
leader of the opposition. For such cases, the Party of Regions has delegated
its representative as first deputy minister, Oleksandr Orda, who is
experienced in this issue.

Yanukovych brought him to Kiev from Donetsk during his first term as prime
minister. He gained notoriety for his comments on the dioxin scandal in the
autumn of 2004 [when then-presidential candidate Yushchenko was apparently
poisoned by dioxin].

                          THE CONSTITUTIONAL COURT 

Just in case, Viktor Fedorovych delegated his own representatives to the
Constitutional Court as well. One understands when a new head of government
brings his own team of ministers to the cabinet. But the change in
executives looks like a quiet government coup…[ellipsis as published]

Perhaps it is against any such accusations, that the prime minister’s fellow
countryman, Yenakiyevo [Donetsk Region] city judge Vyacheslav Ovcharenko,
became a member of the country’s main court, though it is not clear for what
services.

There it is. Like they say, it’s all under control…[ellipsis as published]
the third coming of the Donetsk people to power is even greater than it was
under Kuchma. One gets the impression that it is going on under the slogan:
“Put your people everywhere!”

We will not assess this process from the point of view of economic
effectiveness for the country. Time will tell. But from the point of view of
tact, such personnel policies look very dubious. Politically it is simply
dangerous. Who more than those from Donetsk should know the story about

the friar being undone by greed. Including greed for power.

The Donetsk people in Kiev should not forget that the twin towers of the
World Trade Center were the victims of the terrorist acts in 2001, exactly
because they were taller than any other building in New York…[ellipsis as
published]                                          -30-

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
             Send in a letter-to-the-editor today. Let us hear from you.
========================================================
13. YANUKOVYCH SETTLES INTO RETURN AS PRIME MINISTER
                           AS PRESIDENT WATCHES WARILY 
Mara D. Bellaby, AP Worldstream, Kiev, Ukraine, Wed, Aug 30, 2006

Ukraine’s President Viktor Yushchenko has been blunt: he’s keeping his eye
on the country’s new premier, Viktor Yanukovych.

The pro-Western president has rarely missed a chance to drill home this
point since he made the painful concession earlier this month to share power
with his archrival – the man he once accused of stealing votes in the 2004
presidential election that sparked the Orange Revolution.

But as Yanukovych settles back into the plush surroundings of Ukraine’s
Cabinet of Ministers – returning to the premiership he left just over a
year-and-a-half ago – he seems at ease with the changes the popular uprising
brought to Ukraine, eager to get off to a good start with his new boss and
determined to overcome his old gruff, stodgy image.

Many Ukrainians, the president included, appear wary of closing the door on
memories of Yanukovych’s fraud-marred bid for the presidency and the
corruption-fueled regime under which he served as prime minister to
then-President Leonid Kuchma. Both triggered the massive protests that
carried Yushchenko to power.

Yanukovych’s new ways were on display in a brief interview with foreign
journalists last week. He sank into an ornate armchair that his staff had
set aside for him, then frowned and switched to an ordinary chair like those
the reporters were in. “Let’s be entirely correct, we’ll sit as equals,” he
said, smiling.

Yanukovych also is fighting the perception that he’s pro-Russian, an image
bolstered by the strong backing he got from the Kremlin in the 2004 election
and by his being a native Russian-speaker who had to brush up on his
Ukrainian language skills.

Most of Yanukovych’s comments in the interview were in Russian, but when
asked about relations with Moscow, he pointedly answered first in Ukrainian:
“We need to work.”

He appeared perplexed when asked how Russia could help in Crimea, which is
populated largely by ethnic Russians, home to Russia’s Black Sea Fleet and
became part of Ukraine only in 1954 when ceded to the then-Soviet republic
by Nikita Khrushchev.

“Crimea is Ukrainian territory, just like any other Ukrainian region,”
Yanukovych said.

Yushchenko defeated Yanukovych in the 2004 presidential election on promises
to nudge this ex-Soviet republic into NATO and the European Union, and shake
off Russian influence. But Yanukovych’s party made a comeback in the 2006
parliamentary election, campaigning to make Russian a second state language
and improve ties with Moscow.

Since taking power, however, Yanukovych has championed what he calls a
pro-Ukrainian policy that bends neither to the West or the East. Relations
with Russia could prove his most difficult task. In the parliamentary
election, Yanukovych billed himself as just the person to improve ties with
Moscow and win Ukraine an advantageous gas deal.

He made Russia his first foreign trip and returned with what he said was a
promise to hold the gas price steady to the year’s end, but also spoke
vaguely about “a small increase” based on market prices for next year.

Talking about the thorny negotiations, Yanukovych admitted: “I have some
questions for our partners, which I would say, relate to the correctness of
our relations. That is to say, we want our joint activity to always be
predictable and transparent.”

Yushchenko, who endured strong criticism and suffered a vote of no
confidence in his former prime minister over this year’s gas price deal with
Russia, has appeared willing to hand this task off to Yanukovych _ even
declaring it the premier’s top assignment. But the president has bristled at
Yanukovych’s forays into foreign policy questions considered presidential
turf.

It was Yanukovych who declared that Ukraine would not launch its bid for
NATO membership at the alliance’s November summit. Yushchenko, a few days
later, suggested that Ukraine “won’t veer one iota” from its plan to join
NATO, and reminded Yanukovych of his pledge to uphold Ukraine’s national
security law, which stipulates NATO membership as a goal.

Asked if Ukraine needs NATO membership, Yanukovych chose his words
carefully.

“At this stage of time, this question is, from the point of view of the
population, still premature for Ukraine,” he said, adding that he supports
“continuing and deepening” cooperation with the alliance.

The unusual political partnership between Yushchenko and Yanukovych is still
finding its footing; experts say the real test likely won’t come until this
fall when the ex-Soviet republic’s politicians return from vacation.
Yushchenko has insisted that his government program take precedence, but
he’s largely dependent on Yanukovych and Yanukovych’s ministers to carry it
out.

“When I endorsed President Viktor Yushchenko’s program ’10 steps,’ I could
never have imagined that it would be fulfilled by his chief opponent in the
election,” Defense Minister Anatoliy Hrytsenko. “But it’s the political
reality.”                                           -30-

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
14. UKRAINE APPEALS FOR ACTION TO STOP TRAFFICKING 

Associated Press, Kiev, Ukraine, Wed, September 6, 2006 

KIEV -Ukrainian officials Wednesday warned that human trafficking
threatened to become a major problem for this ex-Soviet republic, and
appealed for more international efforts to stop it.

Activists attending a major conference by the International Council of Women
say official statistics on human trafficking in Ukraine – and elsewhere -
belie the true scope of the problem.

“Ukraine is one of world supplier of slaves. Official statistics do not show
real figures for us,” said Alina Komarova, deputy head of the National
Council Of Ukraine’s Women.

“The sale of young girls and women, sex and economic slavery are part of

an international criminal business that has taken root in Ukraine,” Yuriy
Pavlenko, head of a state council to combat human trafficking, told the 31st
session of the council’s General Assembly.

“It spreads fast…It demands joint efforts and active co-operation from all
governments and societies,” he said.

About 300 activists from 22 countries came to Ukraine for assembly of the
council, a group that works to prevent discrimination and violence against
women.

Ukraine remains a primary source for men, women and children trafficked to
Europe, the Middle East and Russia for sexual exploitation and forced labor,
officials say. Low salaries and unemployment force thousands of Ukrainians
to seek employment abroad, increasing their vulnerability to exploitation,
they say.

The International Organization for Migration says it has provided assistance
to more than 2,700 Ukrainians who were victims of trafficking since 2000,
but estimates that number is only a small portion of the victims.

Pavlenko praised Ukraine’s government for launching new initiatives to
combat trafficking, including forming a special law enforcement division.

“It is a problem for all countries, but especially for all former Soviet
republics. Often our women go to other countries not knowing what they will
face there,” said Elena Bashun, a member of the Union of Russian Women.
———————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
15. PROFILE OF UKRAINIAN FUEL AND ENERGY MINISTER
                YUIRY BOYKO FROM DONETSK REGION

 
BBC Research Service, UK, August 21, 2006 
BBC Monitoring Service, United Kingdom, Aug 21, 2006

Newly-appointed Fuel and Energy Minister Yuriy Boyko is an experienced
manager who headed state oil and gas company Naftohaz Ukrayiny for three
years under former President Leonid Kuchma.

Although a native of Donetsk Region, Boyko is seen as relatively independent
of the Donetsk-based Party of Regions led by Prime Minister Viktor
Yanukovych. Boyko is the leader of the minor Republican Party, which ran
unsuccessfully in the parliamentary election on a pro-Russian opposition
platform.

Since his appointment, Boyko has defended the controversial gas intermediary
RosUkrEnergo, which he says is essential for providing Ukraine with imported
gas at an acceptable price.

He has also said that the Odessa-Brody oil pipeline should continue to work
in the reverse direction, delivering Russian oil to Odessa rather than
Caspian oil to Europe, for at least another two years until the
Baku-Tbilisi-Ceyhan pipeline is operating at full capacity.

                                               CAREER
Born in the Donetsk Region town of Horlivka in 1957, Boyko graduated from
the Mendeleyev Institute of Chemical Technology in Moscow as a chemical
engineer. He also has an economics degree from the East-Ukrainian State
University (2001).

From 1981 to 1999, Boyko worked at the Zorya chemical plant in Rubizhne,
Luhansk Region, rising from technician to general director. From 1999 to
2001, he was board chairman of the Lysychansk oil refinery, Luhansk Region.
A controlling stake in the refinery was sold to Russia’s TNK oil company in
July 2000.

In August 2001, he became board chairman of the Ukrtatnafta refinery in
Kremenchuk. In February 2002, he was appointed head of Naftohaz Ukrayiny. He
also served as deputy state secretary at the Fuel and Energy Ministry until
July 2003, when he became deputy fuel and energy minister. Boyko is married
and has six children.

                                        NAFTOHAZ CHIEF 
Boyko was initially viewed as a protege of then First Deputy Prime Minister
Oleh Dubyna. When Viktor Yanukovych became prime minister in late 2002,
Boyko was seen as being primarily loyal to Kuchma. In a TV interview in July
2004 summing up his 10 years as president, Kuchma held up Boyko as a model
of a successful state manager.

In a newspaper interview in March 2003, Boyko said that under his management
Naftohaz Ukrayiny regained its leading role in the domestic gas market,
increasing the level of cash payments by industrial consumers. However,
Boyko’s effectiveness as a manager has been questioned.

An audit chamber report on the company for 2003, cited in the Global Witness
report “It’s a Gas: Funny Business in the Turkmen-Ukraine Gas Trade” (April
2006), pointed to a threefold decline in profits, while sales revenues
almost doubled.

While Boyko’s relations with Yanukovych appear to have been cool, those with
Fuel and Energy Minister Vitaliy Hayduk were antagonistic. Hayduk was
opposed to the reversal of the Odessa-Brody oil pipeline, which was being
lobbied by TNK-BP.

It has been suggested that Boyko influenced Kuchma’s decision to dismiss
Hayduk in December 2003. The Yanukovych government eventually approved the
reversal in July 2004.

Boyko is regarded as one of the main advocates of RosUkrEnergo, the
controversial intermediary company that delivers Central Asian gas to
Ukraine, and of its predecessor EuralTransGas. EuralTransGas replaced the
Itera corporation as supplier of Turkmen gas to Ukraine at the beginning of
2003.

In his March 2003 interview, Boyko said that the new arrangement allowed
Naftohaz Ukrayiny to take control of gas which previously went to Itera in
payment for transit services. When RosUkrEnergo was set up in July 2004,
Boyko was included on the company’s coordination committee – a position he
appears to have held until mid-2005.

 
                                            PARTY LEADER 
After the Orange Revolution, Boyko continued as head of Naftohaz Ukrayiny
until March 2005. In April, he became leader of the newly-founded Republican
Party. The party favoured holding referendums on Ukraine’s membership of the
EU, NATO and the Single Economic Space with Russia, Belarus and Kazakhstan.

Boyko warned that the adoption of the body of laws required to join the EU
would ruin the economy of Ukraine’s industrial regions. He also said that
the party “shares the position of the US Republican Party and other friendly
parties on the need to cut taxes”.

Boyko was highly critical of the activity of Yuliya Tymoshenko as prime
minister, particularly her handling of the petrol crisis in May 2005. In
August 2005, Boyko blamed the deterioration in Ukraine’s relations with
Gazprom on Tymoshenko’s lobbying of her business interests.

Meanwhile, Tymoshenko criticized the use of gas intermediaries such as
RosUkrEnergo, which she described as “a great criminal wart on the body of
Naftohaz Ukrayiny”. Boyko denied any wrongdoing and insisted that the
intermediaries ensured that Ukraine “received gas on time and at the lowest
price”.

In early September 2005, Boyko took part in protests against government
attempts to reverse the privatization of the Severodonetsk Azot chemical
plant by US investor Worldwide Chemical LLC.

At around the same time, Boyko said that he was under surveillance by the
Security Service of Ukraine, which was headed by Tymoshenko ally Oleksandr
Turchynov, and that he feared for his life.

After the dismissal of Tymoshenko, Turchynov complained that he had been
prevented from launching a criminal case against Boyko and others over
corruption in the gas sector by order of President Viktor Yushchenko.

The Republican Party ran in the March 2006 parliament election as part of
the Ne Tak (Not Right) opposition bloc alongside the United Social
Democratic Party of Ukraine, the Women for the Future Party and the
All-Ukrainian Centre Association.

Strongly opposed to NATO membership and sceptical about the European

Union, the bloc was strongly critical of what it described as the economic and
political incompetence of the authorities. It received 1.01 per cent of the
vote, and failed to enter parliament.                  -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
16. PROFILE OF UKRAINIAN TRANSPORT AND COMMUNICATIONS
                             MINISTER MYKOLA RUDKOVSKYY

BBC Monitoring research in English 30 Aug 06
BBC Monitoring Service, United Kingdom, Wed, Aug 30, 2006

Ukraine’s new transport and communications minister, Mykola Rudkovskyy, is a
wealthy former businessman with a taste for flashy cars and stylish suits. A
close associate of Socialist leader Oleksandr Moroz, he was elected to
parliament for a second time in March 2006 as No 14 on the Socialist Party
list.

He was simultaneously elected mayor of Chernihiv, but soon gave up the post
to serve in parliament.

Long an uneasy and sceptical ally of President Viktor Yushchenko and former
Prime Minister Yuliya Tymoshenko, Rudkovskyy appears to have advocated

from an early stage that the Socialists should join forces with the Party of
Regions after the parliamentary election.

His appointment as transport minister came after his vigorous participation
in scuffles with the Socialists’ former Orange allies in parliament after
Moroz’s election as speaker and the formation of the anti-crisis coalition
of Regions, Socialists and Communists in July.

It has been suggested that Rudkovskyy’s real influence over the transport
and communications sectors may be limited with the appointment of figures
said to be close to Donetsk tycoon and Regions MP Rinat Akhmetov to senior
positions.

Volodymyr Kozak, the former manager of the Akhmetov-linked transport

company Lemtrans, has been appointed to head the state railway administration
Ukrzaliznytsya. Meanwhile, Leonid Netudykhata, the former manager of
Akhmetov’s DCC mobile communications company, has been appointed as
Rudkovskyy’s deputy.

                        BUSINESSMAN AND CIVIL SERVANT
Born in a Chernihiv Region village in 1967, Rudkovskyy graduated from the
Chernihiv teacher training college as a teacher of history and sociology.

n the early 1990s, he studied economics for three years in Vienna, where he
says that he made his first money shovelling snow from the streets and
working as a porter in a bakery.

He later set up a firm with Austrian partners exporting food and clothing
for oil workers in Siberia. On his return to Ukraine ahead of the 1994
presidential election, Rudkovskyy worked on Leonid Kuchma’s campaign team.

After Kuchma’s election victory, Rudkovskyy served for several years as an
economic consultant in his presidential administration under Dmytro
Tabachnyk, the current deputy prime minister for humanitarian issues.

Rudkovskyy has said that he left Kuchma’s team after Pavlo Lazarenko was
appointed prime minister and the president “ceased to be a democrat”.

Rudkovskyy later served as president of the Derzhinvest state investment
company, and as deputy chairman of the board of the state gas company
Ukrhazprom. He says he left Ukrhazprom because he opposed the plans of Ihor
Bakay to form the state oil and gas company Naftohaz Ukrayiny, which he saw
as corrupt.

Rudkovskyy says that he had some business projects at this time, but their
work was paralysed by police and tax inspectors after he switched his
support to Oleksandr Moroz.

In a November 2003 interview, Rudkovskyy downplayed his wealth, rejecting
suggestions that he was a dollar millionaire, and insisted that he was no
longer involved in business.

                                          TAPE SCANDAL
Rudkovskyy ran for parliament as a Socialist in the 1998 election from a
Chernihiv Region constituency. However, his initial victory was overturned
after several courts found that he failed to meet residence requirements.
The seat was subsequently won by Kuchma’s close associate Oleksandr Volkov.

Rudkovskyy then worked as an aide to Socialist MP Valentyna Semenyuk. He
came to prominence at the height of the “tape scandal” in January 2001, when
police used an acetylene torch to open the door of his flat and seized
computer equipment that was being used to listen to recordings allegedly
made in Kuchma’s study by presidential guard Mykola Melnychenko.

Prosecutor-General Mykhaylo Potebenko subsequently suggested that an
“underground laboratory” for manipulating the recordings was operating in
Rudkovskyy’s flat.

In October 2002, Potebenko’s successor Svyatoslav Piskun repeated the
allegation that Rudkovskyy’s computer was used to doctor the recordings that
implicated Kuchma and other officials in the death of reporter Heorhiy
Gongadze. Rudkovskyy denied this and he was never charged with any offence.

Rudkovskyy was elected to parliament on the Socialist Party list in 2002. In
parliament, he was a member of the fuel and energy committee. He was
responsible for the Socialist Party’s Chernihiv branch.

                                           PARLIAMENTARIAN
Rudkovskyy has been credited as one of those who steered Moroz away from

the nostalgic Soviet-style left towards a more centrist social-democratic
position. He was one of the strongest backers of political reforms shifting
power from the presidency to parliament and the government.

Rudkovskyy advocated Moroz as the single opposition candidate in the 2004
presidential election and was dubious about Viktor Yushchenko’s chances of
victory.

In a November 2003 interview, he described current prime minister and former
presidential candidate Viktor Yanukovych as “the most favourable candidate
from the authorities you could think of for being beaten by the opposition”.

In April 2004, Rudkovskyy broke an opposition taboo on talking of Yuliya
Tymoshenko’s contacts with disgraced former Prime Minister Pavlo Lazarenko,
telling parliament that the Socialists would sign a coalition agreement with
Tymoshenko’s bloc only if she gave testimony at Lazarenko’s trial in the
United States and returned without handcuffs.

When Tymoshenko became prime minister in early 2005 after the Orange
Revolution, Rudkovskyy was one of those who expressed scepticism about her
programme which he described as “a set of good intentions”. However, he
subsequently voted in support of the programme.

In September 2005, Rudkovskyy was, with Republican Party leader and
newly-appointed Fuel and Energy Minister Yuriy Boyko, one of the leaders of
protests by workers at the Severodonetsk Azot chemical plant against
government attempts to reverse the plant’s privatization by US investor
Worldwide Chemical LLC.

In November 2005, Rudkovskyy was photographed driving around Kiev in an
Aston Martin sports car worth several hundred thousand dollars. Rudkovskyy
insisted that he did not own the car (“it’s too rough on my bad back” he
told Ukrayinska Pravda), saying that he usually drives a Lexus.   -30-
———————————————————————————————–

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
    If you are receiving more than one copy of the AUR please contact us.
    Please contact us if you no longer wish to receive the AUR.    
       You are welcome to send us names for the AUR distribution list.
   If you are missing some issues of the AUR please let us know.
========================================================
         “ACTION UKRAINE REPORT – AUR”
         A Free, Not-For-Profit, Independent, Public Service Newsletter
                With major support from The Bleyzer Foundation
 
      Articles are Distributed For Information, Research, Education
                Academic, Discussion and Personal Purposes Only
                                  Additional readers are welcome.
========================================================
      SigmaBleyzer/The Bleyzer Foundation Economic Reports
                “SigmaBleyzer – Where Opportunities Emerge”
 
The SigmaBleyzer Emerging Markets Private Equity Investment Group
and The Bleyzer Foundation offers a comprehensive collection of documents,
reports and presentations published by its business units and organizations.
 
All publications are grouped by categories: Marketing; Economic Country
Reports; Presentations; Ukrainian Equity Guide; Monthly Macroeconomic
Situation Reports (Romania, Bulgaria, Ukraine).
 
You can be on an e-mail distribution list to receive automatically, on a
monthly basis, any or all of the Macroeconomic Situation Reports (Romania,
Bulgaria, Ukraine) by sending an e-mail to mwilliams@SigmaBleyzer.com.
               “UKRAINE – A COUNTRY OF NEW OPPORTUNITIES”
========================================================
   UKRAINE INFORMATION WEBSITE: http://www.ArtUkraine.com
========================================================
    “WELCOME TO UKRAINE”- “NARODNE MYSTETSTVO”
                                   (Folk Art) MAGAZINES
For information on how to subscribe to the “Welcome to Ukraine” magazine
in English, or the Ukrainian Folk Art magazine “Narodne Mystetstvo” in
Ukrainian, write to ArtUkraine.com@starpower.net. Complete information is
========================================================
              ACTION UKRAINE PROGRAM – SPONSORS
                              Action Ukraine Report (AUR)
               Holodomor Art and Graphics Collection & Exhibitions
          “Working to Secure & Enhance Ukraine’s Democratic Future”

1.  THE BLEYZER FOUNDATION, Dr. Edilberto Segura,
Chairman; Victor Gekker, Executive Director, Kyiv, Ukraine;
Washington, D.C., http://www.bleyzerfoundation.com.
   Additional supporting sponsors for the Action Ukraine Program are:
2. UKRAINIAN FEDERATION OF AMERICA (UFA), Zenia Chernyk,
Chairperson; Vera M. Andryczyk, President; Huntingdon Valley,
Pennsylvania
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 298 7275 in Kyiv,
kau@ukrnet.net
4.  ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
5. Law firm UKRAINIAN LEGAL GROUP, Irina Paliashvili, President;
Kiev and Washington, general@rulg.com, www.rulg.com.
6. BAHRIANY FOUNDATION, INC., Dr. Anatol Lysyj, Chairman,
Minneapolis, Minnesota
7. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX  77024; bill.hunter@volia-software.com.
8. ODUM- Association of American Youth of Ukrainian Descent,
Minnesota Chapter, Natalia Yarr, Chairperson
9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C.,
Dr. Susanne Lotarski, President/CEO; E. Morgan Williams,
SigmaBleyzer, Chairman, Executive Committee, Board of Directors;
John Stephens, Cape Point Capital, Secretary/Treasurer
10. UKRAINIAN ORTHODOX CHURCH OF THE USA, South
Brown Brook, New Jersey, http://www.uocofusa.org
11. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
12. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO; Vera
Andruskiw, CPP Wash Project Director, Washington, D.C.; Markian
Bilynskyj, VP/Director of Field Operations; Marta Kolomayets, CPP
Kyiv Project Director, Kyiv, Ukraine. Web: http://www.USUkraine.org
13. WJ GROUP of Ag Companies, Kyiv, Ukraine, David Holpert, Chief
Financial Officer, Chicago, IL; http://www.wjgrain.com/en/links/index.html
14. EUGENIA SAKEVYCH DALLAS, Author, “One Woman, Five
Lives, Five Countries,” ‘Her life’s journey begins with the 1932-1933
genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
15. ALEX AND HELEN WOSKOB, College Station, Pennsylvania
16. SWIFT FOUNDATION, San Luis Obispo, California
17. TRAVEL TO UKRAINE website, http://www.TravelToUkraine.org,
A program of the U.S-Ukraine Foundation, Washington, D.C.
========================================================
 TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR,
around five times a week, please send your name, country of residence,
and e-mail contact information to morganw@patriot.net. Information about
your occupation and your interest in Ukraine is also appreciated.
 
If you do not wish to read the ACTION UKRAINE REPORT please
contact us immediately by e-mail to morganw@patriot.net.  If you are
receiving more than one copy please let us know so this can be corrected
 
              SPAM BLOCKERS ARE A REAL PROBLEM                 
If you do not receive a copy of the AUR it is probably because of a
SPAM BLOCKER maintained by your server or by yourself on your
computer. Spam blockers are set in very arbitrary and impersonal ways
and block out e-mails because of words found in many news stories.
 
Spam blockers also sometimes reject the AUR for other arbitrary reasons
we have not been able to identify. If you do not receive some of the AUR
numbers please let us know and we will send you the missing issues. Please
make sure the spam blocker used by your server and also the one on your
personal computer, if you use a spam blocker, is set properly to receive
the Action Ukraine Report (AUR).

========================================================
                        PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer

Emerging Markets Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
Mobile in Kyiv: 8 050 689 2874
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
========================================================
    Power Corrupts and Absolute Power Corrupts Absolutely. 
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================

Leave a comment

Filed under Uncategorized

AUR#753 Aug 24 Independence Day In Ukraine; Chornovil Monument Dedicated; Thousand And One Journalists’ Warnings; Siphon Russian Gas; Holodomor & Pres

=========================================================
 ACTION UKRAINE REPORT – AUR           
                  An International Newsletter, The Latest, Up-To-Date
                       In-Depth Ukrainian News, Analysis and Commentary

                        Ukrainian History, Culture, Arts, Business, Religion,
           Sports, Government, and Politics, in Ukraine and Around the World       

 
            INDEPENDENCE DAY
    THURSDAY, AUGUST 24, 2006
            Ukraine’s 15th Independence Day Since Fall of Soviet Union
                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 753
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN KYIV, UKRAINE, THURSDAY, AUGUST 24, 2006
 
                Help Build the Worldwide Action Ukraine Network
 Send the AUR to your colleagues and friends, urge them to sign up
               -——-  INDEX OF ARTICLES  ——–
              Clicking on the title of any article takes you directly to the article.               
    Return to the Index by clicking on Return to Index at the end of each article
1.       FIFTEENTH ANNIVERSARY OF UKRAINE’S INDEPENDENCE
                 Fifteen years ago bells of joy pealed in Ukraine: our homeland.
STATEMENT:
Orysia Sushko, President, Ukrainian Canadian Congress
Winnipeg, Manitoba, Canada, Wednesday, August 23, 2006

2.         ON THE OCCASION OF UKRAINE’S INDEPENDENCE DAY

GREETINGS FROM AMB OF UKRAINE TO THE U.S. OLEH SHAMSHUR
INDEPENDENCE DAY GREETINGS: By Oleh Shamshur
Ambassador of Ukraine to the United States
Embassy of Ukraine to the United States
Original in Ukrainian, translated by Heather Fernuik for the AUR
Washington, D.C., Wednesday, August 23, 2006

3.                             UKRAINE: GROWING PAINS
                 As Ukraine prepares to celebrate Independence Day
EDITORIAL: Kyiv Post, Kyiv, Ukraine, Thursday, August 24, 2006

4UKRAINE PUTS OFF SOME INDEPENDENCE DAY FESTIVITIES
       BECAUSE OF CRASH OF RUSSIAN AIRPLANE IN UKRAINE 
UNIAN news agency, Kiev, in Ukrainian 1347 gmt 23 Aug 06
BBC Monitoring Service, United Kingdom, Wednesday, Aug 23, 2006

5.      UKRAINIAN PRESIDENT UNVEILS MONUMENT TO LATE
OPPOSITION LEADER CHORNOVIL, ORDERS PROBE INTO DEATH
AP Worldstream, Kiev, Ukraine, Wednesday, Aug 23, 2006

 
6.       KYIV ERECTS MONUMENT TO VIACHESLAV CHORNOVIL
                          Leader of the Ukrainian people’s movement
Ukrainian News Agency, Kyiv, Ukraine, Wednesday, August 23, 2006

7.      YUSHCHENKO HANDS OUT STATE AWARDS ON OCCASION 
                       OF 15TH INDEPENDENCE ANNIVERSARY

Ukrainian News Agency, Kyiv, Ukraine, Wed, August 23, 2006
INTERVIEW: With H.E Mr. Yuriy Malko, Ambassador of Ukraine in Romania
On the Occasion of the Independence Day of Ukraine
Nine O’Clock, Bucharest, Romania, Thursday, August 24, 2006

9170 DIE IN UKRAINE AS RUSSIAN PLANE IS STRUCK BY LIGHTING
     45 children killed in third major accident this year: Crash raises questions

        over ‘flying cigar’ “The big question is: how the hell did the pilot get in
                                          the middle of a thunderstorm?”
Tom Parfitt, Moscow, The Guardian,
London, United Kingdom, Wednesday, Aug 23, 2006

10.              THOUSAND AND ONE JOURNALISTS’ WARNINGS
           The statement of journalists and mass-media employees on assaults
                                   of the freedom of speech in Ukraine.
STATEMENT:
By Journalists and Mass-media Employees on
Assaults of the Freedom of Speech in Ukraine
Original statement in Ukrainian, translated by Irena Yakovina
Ukrayinska Pravda online, Kyiv, Ukraine, Friday, August 11, 2006

11.                                      “‘TURNKEY’ CABINET”
People from Donbass dominate new Ukrainian deputy minister appointments
ANALYSIS: By Nataliya Romashova
Kiyevskiye Vedomosti, Kiev, in Russian 22 Aug 06; p 4
BBC Monitoring Service,United Kingdom, Wed, Aug 23, 2006

12UKRAINE LEADER PROMISES NOT TO SIPHON RUSSIAN GAS
By Andrew E. Kramer, The New York Times
New York, New York, Wednesday, August 23, 2006

13UKRAINE: “SOCHI TRIP. HE MADE HIMSELF RESPECTED AND
                       COULD NOT INVENT ANYTHING BETTER”
                       Ukrainian premier stands up to Russians in Sochi
ANALYSIS & COMMENTARY:  By Iryna Havrylova
Source: Kiyevskiy Telegraf, Kiev, in Russian 18 Aug 06; p 2
BBC Monitoring Service, United Kingdom, Wednesday, Aug 23, 2006

14 PRES & MRS YUSHCHENKO VISIT HOLODOMOR EXHIBITION
Press office of President Victor Yushchenko
Kyiv, Ukraine, Thursday, August 24, 2006

15. UKRAINE: PRESIDENT YUSHCHENKO EXPECTS PARLIAMENT
       TO DECLARE 1932-1933 GREAT FAMINE ACT OF GENOCIDE
Ukrainian News Agency, Kyiv, Ukraine, Thursday, August 24, 2006
========================================================
1
. FIFTEENTH ANNIVERSARY OF UKRAINE’S INDEPENDENCE
             Fifteen years ago bells of joy pealed in Ukraine: our homeland.

STATEMENT: Orysia Sushko, President, Ukrainian Canadian Congress
Winnipeg, Manitoba, Canada, Wednesday, August 23, 2006

Fifteen years ago bells of joy pealed in Ukraine: our homeland became a free
and independent state. Bells of joy pealed also three months later, on
December 1st during the referendum. And finally bells of joy pealed on
December 26th 2004, when the will of the people overcame the extraordinary
tribulations of the Orange Revolution.

These bells of joy rang in the hearts of millions of Ukrainians, living in
Ukraine and beyond its borders, and who fought for the independence of a
Ukrainian State over many long years.

They were a cry from our heroes, past and present, who throughout the
history of Ukraine stood together and will continue to stand in defense of
truth and freedom.

The sound of these bells reverberated across the entire globe wherever
Ukrainians are found and wherever beat Ukrainian hearts.

This sound is a sign of the victory of truth, which arose to forever stand
on guard for a free democratic Ukrainian State.  The people are listening
closely to this sound.

They are aware that only freedom will defend all that is dear and important
to the life of every human being, give an opportunity to express one’s views
freely, participate in truly democratic elections, and pray to God according
to one’s chosen confession.

Despite the latest troubles in Ukraine, which cause and continue to cause us
concern, I am deeply convinced that our nation is strong enough to rise to
the high responsibility for its state and its destiny.   It can never again
be led astray by internecine struggle.

We must believe that common reason, a sense of responsibility and deep
patriotism will prevail over all existing difficulties. It cannot be
otherwise.

We also want to believe that the bells, to which I alluded previously, will
not cease to ring and that the people will continue to listen to them in
order to improve the situation in Ukraine, understanding that these last
events will not deter the return to full democratic power.

All of us, Ukrainians in Canada, look forward impatiently toward the blessed
moment of our nation’s return to a full, stable democracy. And while we
remain afar physically, spiritually we are always with Ukraine, for we are
all children of one mother – Ukraine.

Throughout many years we have tried to give moral and financial support to
Ukraine. We constantly prayed: “O Great, One and Only God, save our
Ukraine. Protect her with the rays of freedom and light.”  We continue to
pray in communion with our brothers and sisters in Ukraine.

While bringing these greetings to you on the occasion of the 15th
anniversary of the independence of Ukraine, I want to bring to mind the
moving words of Vasyl Symonenko that should forever become our
guiding light.

                 My people are! My people shall forever be!
                         No one shall invalidate my people!
——————————————————————————————–
Contact: Ostap Skrypnyk, Executive Director
Ukrainian Canadian Congress, www.ucc.ca
————————————————————————————————-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2.         ON THE OCCASION OF UKRAINE’S INDEPENDENCE DAY
GREETINGS FROM AMB OF UKRAINE TO THE U.S. OLEH SHAMSHUR

INDEPENDENCE DAY GREETINGS: By Oleh Shamshur
Ambassador of Ukraine to the United States
Embassy of Ukraine to the United States
Original in Ukrainian, translated by Heather Fernuik for the AUR
Washington, D.C., Wednesday, August 23, 2006

Honoured Ukrainian community!
Dear fellow countrymen!

On behalf of the collective body of the Embassy of Ukraine in the United
States and myself personally I sincerely hail you with the Independence Day
of Ukraine!

Fifteen years ago the Ukrainian people won the independence dreamed of for
centuries. During this short-from a historical perspective-period Ukraine
came about as a state, and during the Orange Revolution, matured as a
political nation.

Undoubtedly the years of independence became a trial for all of us-a test of
maturity, of self-respect, of tolerance. And there cannot be any doubt in
that the industrious people of Ukraine are able to better life in their own
country and that the political elite are able to find ways to compromise,
national reconciliation and development.

The most recent political events in Ukraine demonstrated namely this: that
specifically dialogue, understanding and cooperation are the underpinnings
of true European politics.

We see Ukraine in a unified Europe; we are prepared to work towards our

goal gradually and steadfastly. The continuation of Ukraine’s foreign policy
course towards integration into European and Euro-Atlantic structures is
called to ensure the well-being and safety of its citizens.

We understand that the fundamental work is still ahead. However, we can
consolidate achievements and reach a new level of development in the modern
integrated world only together with our friends and partners.

A special role in this belongs to the Ukrainian-American collaboration that
proved its efficacy as a factor of facilitating the consolidation of the
independent Ukrainian State.

At the same time, the potential of our cooperation is far from exhausted,
and with optimism we are considering prospects for its further development.

The Ukrainian community of the United States plays a big role in the
cooperation of Ukraine and the USA and makes a colossal contribution so

that our Fatherland is known and respected throughout the entire world. For
Ukraine is that which unites all of us, regardless of where we live.

On this holiday we look to the future with confidence. The new Ukraine has

a chance to be at the heart of the prosperous, strong and influential
democracies. Therefore, let us together utilize the chance given us by God’s
will and our own efforts.

Dear friends! I wish you health, happiness, successes in all of your
endeavors, and may the love of the Fatherland inspire us all to new ends,
new good works in the name of our Ukraine and her future generations!

Glory to Ukraine!

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3.                            UKRAINE: GROWING PAINS
                 As Ukraine prepares to celebrate Independence Day

EDITORIAL: Kyiv Post, Kyiv, Ukraine, Thursday, August 24, 2006

As Ukraine prepares to celebrate Independence Day it finds itself no longer
at the infancy stage but firmly in its teens, though full adulthood is still
at least a few years away. That is probably an accurate assessment of the
last 15 years.

Ukraine had a rocky, unsure start as it began the 1990s with two Leonids -
Kravchuk followed by Kuchma – at the helm. It sees in the start of its 16th
with two Viktors – Yushchenko and Yanukovych – steering the country.

At the beginning of independence many ordinary folk were confident, buoyed
by the feeling that resources-rich Ukraine would do better as an independent
state as the Soviet Union imploded and the referendum on independence
received the unanimous support of people in December 1991.

Kravchuk experienced huge inflation and Kuchma, promising reforms, found
that, like many other politicians, it is easier to promise than deliver. He
brought Ukraine some stability but was too busy playing off the European
Union and Russia on the foreign front and magnates and businesses on the
home front.

Viktor Yushchenko fought Viktor Yanukovych for the presidency and won only
for the latter to complete a remarkable return by returning as prime
minister with more powers than the president.

Fifteen years on, and less than two years after the Orange Revolution,
people’s expectations have been tempered and, unfortunately, a level of
realism and sense of “stability”, a word used unsparingly during the Kuchma
era, have set in. However, there is no doubt that Ukraine has made progress
in many respects.

Economically, much needs to be done but the mass media is now freer and the
political system is moving, albeit slowly, towards greater responsibility.

There is a plethora of political forces out there, giving the voter a wide
choice of ideology, even if the majority of the main players hail from the
Communist era and these forces do not resemble apparent counterparts in the
West.

Perhaps more importantly a responsive civil society is being formed, thanks
in part to the Orange Revolution. People now feel more confident about
standing up for their rights. Many thrifty business people, working mainly
in small and medium-sized companies created from scratch, are thriving.

However, it has to be said that progress by entrepreneurs has largely been
despite and not due to the efforts of the authorities over 15 years. Many
people have been weaned off looking to the state to provide for them from
“the cradle to the grave”, as was the case in Soviet times.

A middle class is forming and as society becomes more stratified the danger
exists that unless an adequate social security system is put into place
society will be divided even more into “the haves and have nots”. Such
social protection is vital during the lengthy transition from a command
economy to one based on free market lines.

Though it can be said that Ukrainian society is now more meritocratic than
before much still needs to be done to give people in rural areas the
opportunity and means to at least compete on a level playing field. Cosy
relationships and arrangements need to be challenged.

A start could be made from the very top by ensuring MPs and their relatives
declare all their interests, business or otherwise. Business and politics
have still not been separated.

The countryside has been neglected by all governments and parties of every
political color, despite promises to invest in the infrastructure.

Many big problems still exist – ubiquitous corruption and business
monopolies are just two. Excessive, pointless bureaucracy is a third. It
could be argued that time and opportunities have been squandered by
politicians in moving the country ahead.

However, for all that Ukraine is now firmly on the world map. No longer is
it known just because of Dynamo Kyiv, Chornobyl or the latest scandal. Now
it is known in the world for successful people like Ruslana, the Klitshcko
brothers and Andriy Shevchenko. It is known for quality products like its
steel, the Ruslan plane and the Kolchuga radar system.

It is known for the Carpathian Mountains, Crimea and wildlife reserves like
the Aakania-Nova Biosphere Reserve. Perhaps what Ukraine needs more than
anything is a new and youthful generation of politicians to move it on over
the next 15 years.

Perhaps then Ukraine will be able to make a qualitative big step to fulfill
the hopes and dreams of those who voted for independence back in 1991.
———————————————————————————————–
http://www.kyivpost.com/opinion/editorial/24981/
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

========================================================
4. UKRAINE PUTS OFF SOME INDEPENDENCE DAY FESTIVITIES
       BECAUSE OF CRASH OF RUSSIAN AIRPLANE IN UKRAINE 

UNIAN news agency, Kiev, in Ukrainian 1347 gmt 23 Aug 06
BBC Monitoring Service, United Kingdom, Wednesday, Aug 23, 2006

KIEV – Only ceremonial events will take place in Kiev and other Ukrainian
cities on Independence Day on 24 August, Deputy Prime Minister Dmytro
Tabachnyk has told journalists.

“There will be no parade-ground concert by 35 military orchestras, it will
be held on Saturday (26 August – UNIAN). Also on Saturday, there will be a
big folk concert, which has been prepared by the organizing committee, and a
pop concert prepared by the Culture Ministry and the Family and Sport
Ministry. The fireworks will also be put off and will end the concert,”
Tabachnyk said.

Accordingly, fireworks, concerts and festive shows in other Ukrainian cities
will also be postponed from 24 to 26 August, Tabachnyk said. [Passage
omitted: more details of Independence Day celebrations]

Ukrainian President Viktor Yushchenko today signed a decree “The issue of
marking the 15th anniversary of Ukraine’s independence”, which moved some

of Independence Day festivities from 24 to 26 August.

The government appealed to central and local authorities to postpone
concerts and fireworks planned for 23-24 August due to the crash of a
Russian Tu-154 airliner in Donetsk Region [Ukraine]             -30-

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
    Send in names and e-mail addresses for the AUR distribution list.
========================================================
5.      UKRAINIAN PRESIDENT UNVEILS MONUMENT TO LATE
OPPOSITION LEADER CHORNOVIL, ORDERS PROBE INTO DEATH

AP Worldstream, Kiev, Ukraine, Wednesday, Aug 23, 2006

KIEV – President Viktor Yushchenko unveiled a new monument to late
opposition leader Vyacheslav Chornovil on Wednesday, and ordered a new
investigation into the 1999 automobile crash that killed the popular
nationalist.

Authorities said the March 25, 1999, incident – in which the car Chornovil
was riding in slammed into the side of a truck _ was an accident, but doubts
grew when the government refused to investigate other theories and quickly
granted amnesty to the truck driver.

The crash occurred as Chornovil, who was expected to enter the 1999
presidential race, was returning from a campaign trip. A video-recorded
confession of alleged police involvement surfaced, but then was mysteriously
misplaced.

Former President Leonid Kuchma’s government long dismissed allegations

that Chornovil’s death was a political killing aimed at removing a potential
presidential rival.

Yushchenko called for the new probe as he unveiled a life-sized bronze
monument to Chornovil in the center of Kiev. “For the people in power and
law enforcement bodies, solving the case is an issue of professional
conscience and civic dignity,” he said.

“I am sure that we must come to a totally different conclusion … which is
likely to lead us to the fact that this wasn’t just a mere accident,”
Yushchenko said.

Yushchenko came into office in 2004 and the investigation was reopened

after numerous requests from former party colleagues and Chornovil’s
son Taras, a member of parliament.

Last fall, police said they suspected Chornovil’s death was a political
killing, but the case again stalled. “It is obvious that it was not a usual
car accident,” Chornovil’s widow, Olena Pashko, said.

Chornovil was a dissident during the Soviet period who spent time in jail
for his political views, and he was instrumental in fostering Ukraine’s
independence amid the Soviet collapse.                   -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================      
6.     KYIV ERECTS MONUMENT TO VIACHESLAV CHORNOVIL
                          Leader of the Ukrainian people’s movement

Ukrainian News Agency, Kyiv, Ukraine, Wednesday, August 23, 2006

KYIV – The Kyiv city state administration has erected monument to Viacheslav
Chornovil, the leader of Ukrainian people’s movement, on the corner of
Hrushevskoho Street and Muzeinyi Lane. The monument was unveiled by
President Viktor Yuschenko and Chornovil wife Atena Pashko.

‘It is good that that we have another chance to remember this name…and
unveil the monument to this great person,’ Yuschenko said. He also said that
words ‘independence’ and ‘life of Viacheslav Chornovil’ are synonyms.

Viktor Yuschenko said that when people speak about the desire to make
Ukrainian policy really Ukrainian, people remember things Chornovil entered
the politics with: Ukrainian language, sovereignty, integrity and
collegiality of the country. ‘He (Chornovil) has to be among us today…,’
Viktor Yuschenko said.

He said that erection of the monument is symbolic on the eve of the
fifteenth Independence anniversary. In his turn, People’s Rukh (Movement) of
Ukraine leader Borys Tarasiuk called on law enforcement agencies to fulfill
their constitutional duty and find out reasons of Chornovil death.

The monument is made of bronze, its height is 5 meters and weight is 6.5
tons. It depicts Chornovil walking through a wall.

As Ukrainian News earlier reported, the municipal enterprise Department for
Reconstruction Works agreed with the creative and production enterprise
Hudozhnyk (Artist) on erection of monument to Viacheslav Chornovil the
leader of Ukrainian people’s movement on the corner of Hrushevskoho Street
and Muzeinyi Lane.                                  -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
7. YUSHCHENKO HANDS OUT STATE AWARDS ON OCCASION
                       OF 15TH INDEPENDENCE ANNIVERSARY

 
Ukrainian News Agency, Kyiv, Ukraine, Wed, August 23, 2006
KYIV – President Viktor Yuschenko has handed state awards on the occasion
of the 15th anniversary of Ukrainian Independence at Mariinskyi Palace. He
personally rewarded about 90 people.

Viktor Yuschenko awarded 10 people, who set Ukrainian national flag in Kyiv
in 1966 and in Chortkiv city (Ternopil region) in 1973, with first degree
order ‘For Courage'; nine people with the degree of Hero of Ukraine and
State Order.

The president also awarded fourth and fifth degree Yaroslav The Wise orders.

The award was given to Former Premier Yurii Yekhanurov; Former Finance
Minister Viktor Pynzenyk and Former State Tax Administration Chairman
Oleksandr Kireev. Viktor Yuschenko congratulated Yurii Yekhanurov with his
birthday on August 23 and thanked him for his work on the post of Ukrainian
premier.

‘I want to thank Yurii Ivanovych (Yekhanurov) for the work he did on the
post of Ukrainian premier…this is the person, who brought Ukraine
stability at the moment the country needed it the most,’ the president said.

He also awarded orders: ‘For Merits’ of the first, second and the third
degrees; “Bohdan Khmelnytskyi” of the third degree; “For Courage” of the
third degree; “Princess Olga” of the third degree. He also awarded medal
‘For Military Service to Ukraine'; and degree of ‘People’s Artist of
Ukraine’ to Oleksandr Ponomariov.

The president also gave degrees of “honoured art worker”, “honoured science
worker’, “honoured journalist”, “honoured folk art worker”, “honoured
metallurgist”, “honoured culture worker”, “honoured social worker”,
“honoured medical worker”, “honoured miner”, “honoured lawyer” and ‘hero
mother.’

Viktor Yuschenko said that it is a great pleasure for him to award people,
who had made their contribution into democracy, sovereignty and independence
of Ukraine. ‘It is a great pleasure for me to fulfill state mission and give
state awards,’ Viktor Yuschenko said.

He called on the participants of the awarding ceremony to be more active in
discussions on language, territorial structure and religion of Ukraine.
‘Your word will be powerful,’ Viktor Yuschenko said.

As Ukrainian News earlier reported, Viktor Yuschenko awarded 756 people

on the occasion of the 15th anniversary of Ukrainian Independence.

According to the presidential decree No.1177 of August 18, 2005, the
awarding ceremony is linked to five events: Ukrainian Independence Day;
Collegiality Day; Constitution Day; Victory Day on May 9 and Day of
Ukrainian Independence Endorsement via Referendum.         -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
     NOTE: Send in a letter-to-the-editor today. Let us hear from you.
========================================================
8. ROMANIA & UKRAINE: DEVELOPMENT OF BILATERAL RELATIONS,
            ONE OF THE PRIORITIES OF UKRAINE’S FOREIGN POLICY

INTERVIEW: With H.E Mr. Yuriy Malko, Ambassador of Ukraine in Romania
On the Occasion of the Independence Day of Ukraine
Nine O’Clock, Bucharest, Romania, Thursday, August 24, 2006

[Question] On August 24 Ukraine celebrates the 15th anniversary of
proclaiming its independence. How does the Ukrainian diplomacy celebrate
this important date for your state?

[Ambassador Malko] The Ukrainian diplomats are guided in their activity
by priority tasks defined by the Program of President of Ukraine Viktor
Yushchenko “Ten steps towards people”.

Ukraine cooperated almost with all countries on bilateral and multilateral
basis for the period after the presidential elections. The Ukrainian
diplomacy took active participation in solving important issues at global
stage.

Due to active and purposeful efforts of the Ukrainian diplomats we succeeded
in achieving specific outcomes on European and Euro-Atlantic directions.
Ukraine-EU closing has taken place. My country has consecutively followed
Ukraine-EU Action Plan.

In the beginning of 2006 the EU acknowledged Ukraine to be a market economy.
Abolition of discrimination obstacles provides the Ukrainian producers and
EU with new possibilities.

Currently Ukraine and the EU are considering the possibility of concluding a
new document which is to facilitate effective development of relations
between Ukraine and EU and to open the door to the EU.

Strategic character of Ukraine-NATO relations has become stronger and
stronger. The main political outcome is realization of the Intensified
Dialogue with NATO tasks on membership and proper reforms issues.

WTO membership is considered by MFA to be an important prerequisite of
successful realization of Ukraine’s integration to the EU and NATO.

I am pleased to establish the fact that we received official confirmation of
the Romanian party on acceptability of Ukrainian tariff obligations and
proposals on accession to goods and services market.

That removes necessity of signing appropriate bilateral protocol. After
obtaining the WTO membership we hope for establishing a free trade area
between Ukraine and the EU.

[Question] What is the meaning of the National Day of Ukraine?

[Ambassador Malko] The Day of proclaiming Ukraine’s independence -
August 24, 1991 – became an outstanding date in history of the Ukrainian
people.

The independence of Ukraine is the embodiment of the national ideal and
consecutive aspirations of many generations of our predecessors including
such famous historical figures as Volodymyr Velykyi, Yaroslav Mudriy, Bogdan
Hmelnitskiy, Pylyp Orlyk, Mihaylo Grushevskiy, Symon Petliura, Vasyl Stus
and many other brilliant representatives of the Ukrainian nation for free
development and independent determination of own nation’s destiny.

The independence of Ukraine – represents the creation of new conditions for
economic development of the country, cultural and intellectual prosperity of
the Ukrainian nation and representatives of 135 national minorities who live
today on the territory of our state.

At last the independence of Ukraine – gave the possibility of the
introduction of its proper foreign policy directed at the protection of the
national interests of the state, accession of our state to common European
values of democracy and security.

One of important features of this event this year is conducting of the IV
World Forum of Ukrainians on the eve of the 15th anniversary of Ukraine’s
independence.

That gave possibility to its participants to be present at many actions and
to feel the atmosphere of celebrating Independence Day on historical
Motherland.

[Question] Mr. Ambassador, how do you evaluate development of
Ukrainian-Romanian relations currently?

[Ambassador Malko] Answering your question I would like to note that
development of relations with neighbouring Romania on principles of good
neighborhood, mutual trust and constructive cooperation is one of priorities
of Ukraine’s foreign policy.

More active political dialogue after Presidential elections which took place
in the autumn of 2004 both in Ukraine and Romania is a clear evidence of
that. Thus, two official visits and several working meetings of our states’
heads have taken place for a period of only year and a half.

These top level contacts proved mutual disposition of new political leaders
of our states for creation of favourable political, economic, legal and
information climate which would allow building further Ukrainian-Romanian
bilateral relation in European spirit. Unidirectionality of our foreign
policy priorities is completely obvious.

It is necessary to underline that Romania completely supports Ukraine’s
course to European and Euro-Atlantic integration.

Thus, the atmosphere of relations between Ukraine and Romania has changed
fundamentally recently. Now we have more trust, mutual understanding and
stronger desire to see as much as possible positive in your partner. Hence
we have grounds to think that we are on new stage of development of the
Ukrainian-Romanian relations.

The previous problems gradually find solutions and efforts of new authority
are focused on development of our considerable bilateral potential in
positive dimension. All this may create basis for providing breakthrough in
solving existing controversial problems.

In conclusion I would like to wish your readers strong health and optimism.
———————————————————————————————–
http://www.nineoclock.ro/index.php?page=detalii&categorie=worldnews&id=20060824-17125
———————————————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

========================================================
9. 170 DIE IN UKRAINE AS RUSSIAN PLANE IS STRUCK BY LIGHTING
     45 children killed in third major accident this year: Crash raises questions
        over ‘flying cigar’ “The big question is: how the hell did the pilot get in
                                          the middle of a thunderstorm?”

Tom Parfitt, Moscow, The Guardian,
London, United Kingdom, Wednesday, Aug 23, 2006

A Russian airliner that crashed in eastern Ukraine yesterday killing all 170
passengers and crew on board was probably struck by lightning as it
encountered heavy turbulence, a preliminary investigation suggested last
night.

The Tu-154 was flying from the Black Sea resort of Anapa to St Petersburg
when it went down in open countryside about 30 miles north of the city of
Donetsk. More than a quarter of the aircraft’s passengers were children.

Russia’s transport ministry said bad weather had probably caused the crash
on flight 612. “A report about heavy turbulence came at 15.37 Moscow time
from the aircraft, which was at an altitude of 11,000 metres, and then the
plane disappeared from radar screens,” a spokesman told Interfax.

St Petersburg-based Pulkovo airlines told reporters that the crew issued a
second distress signal from a lower altitude but air traffic controllers
could not make out the sentence that followed.

Aviation experts said the aircraft could survive a lightning strike, but
flight instruments may have been knocked out, disorienting the pilot. The
crash was the third major aviation tragedy in Russia this year.

Witnesses said the plane plunged into the ground intact, suggesting there
had not been an explosion on board. A large bang was heard in the nearby
village of Sukha Balka followed by a series of smaller bangs.

At least 45 children were among the dead, according to the airline. Most
passengers were thought to be Russian holidaymakers from St Petersburg
returning home, although foreigners including at least one Dutch citizen
were reportedly among the dead.

Andrei Tyutyunikov, a reporter with local newspaper Donetskiye Novosti, who
arrived at the scene shortly after the crash, told the Guardian the aircraft
had been destroyed. He said: “It’s just in pieces. I can see one large chunk
with the letters on it. Emergency officials are dragging fragments of bodies
from the wreckage. There’s no one left alive.”

Television pictures showed firefighters dousing blackened hillside covered
in de bris. Thirty bodies were recovered by late afternoon. Rescuers
prepared to comb the wreckage through the night but they did not expect to
find any survivors.

Irina Andrianova, a spokeswoman for the Russian emergency situations
ministry, said a preliminary investigation indicated a lightning strike had
caused the disaster.

A team of medics and psychologists was dispatched to Pulkovo airport in St
Petersburg to help distraught relatives waiting for the flight. The
Ukrainian president, Viktor Yushchenko, cut short a holiday in Crimea to
monitor the situation.

A 60-strong Russian emergency ministry team also flew from Rostov to help
the rescue and clean-up effort. Relatives of the dead will be flown to the
site today to identify bodies.

In July, a Sibir airlines Airbus A-310 crashed and burst into flames after
veering off the runway in Irkutsk, killing 122 people. That accident was
blamed on a malfunction in a thrust reverser. Two months earlier 113 people
died when an Airbus A-320 belonging to Armenian airline Armavia crashed on
its way from Yerevan to Sochi. The disaster was attributed to the pilot
flying through bad weather.

The Tu-154 is known as the “flying cigar” because of its long fuselage and
cramped cabin space. It is still one of the most commonly used planes in
Russia.

“So far this crash is a mystery because the Tupolev is robust and every
aircraft has a weather radar,” said David Learmount of Flight International
magazine. “The big question is: how the hell did the pilot get in the middle
of a thunderstorm?”  (www.guardian.co.uk/russia)
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
10.    THOUSAND AND ONE JOURNALISTS’ WARNINGS
        The statement of journalists and mass-media employees on assaults
                                 of the freedom of speech in Ukraine.

STATEMENT: By Journalists and Mass-media Employees on
Assaults of the Freedom of Speech in Ukraine
Original statement in Ukrainian, translated by Irena Yakovina
Ukrayinska Pravda online, Kyiv, Ukraine, Friday, August 11, 2006

KYIV – On August 9, 10 and 11, 2006 Ukraine experienced a row of alarming
and annoying events which constituted a threat to the freedom of speech in
Ukraine.

[1] First, on August 9 in the centre of Kyiv correspondents of Nashe Radio
(Our Radio) station were kidnapped in broad daylight. They were taken out
to the forest, assaulted and intimidated. Ukrainian capital has gone through
such an overt banditry long ago.

[2] On August 10 Denis Ivanesko, the newly-appointed press-secretary of
Primer Viktor Yanukovych, forbade Channel 5 to telecast premier’s press-
conference, thus violating the Laws “On information” and “On television
and radio broadcasting.”  The Cabinet of Ministers’ press-service gave no
official explanations on the matter.

[3] At August 10 night the director of the Crimean broadcasting Foros
Company Fedor Saliy was assaulted too. A stranger attacked him without
any obvious reason, stroke him in the hand and run away as a TV company
employee appeared.

[4] On August 11 the press-secretary of Kyiv City State Administration
notified mass-media that its officials had limited journalists’ access to
receiving information.

Besides, MP Oleh Kalashnikov who assaulted the film crew of STB TV
channel remains unpunished. De facto he is a member of Party of Regions,
although the faction leaders urge that their party has expelled him.

The case on assault of Chief Editor of Stolychni Novyny (Capital’s news)
periodical Volodymyr Katsman is unprobed too. Investigation of Georgiy
Gongadze’s case stays inexplicit.

We, journalists and mass-media employees, are deeply concerned about all
these events happened for such a short interval.  Hoping that it is just a
coincidence, we still will do utmost to bar the return of censorship and
pressure on mass-media.

THEREFORE:

[1] We ask Interior Minister Yuri Lutsenko to take investigations of cases
on assaults of mass-media workers under his personal control.

[2] We offer to found a civil council for the Public Relations Center for
the Interior Ministry aimed at ensuring an operative response on the crimes
against journalists and mass-media employees, coordinating actions with
Interior Ministry and giving a competent and quick assistance to assaulted
colleagues.

[3] We address Prime-minister Viktor Yanukovych to take measures to bar
restriction for mass-media to receive an open official information.

[4] We demand from the premier to punish his press-secretary Denis Ivanesko,
to issue the government’s position on ban against live broadcasting of the
press-conference and to promise to prevent the similar situations further.

[5] We demand from the regional administrations and local authorities to
withdraw any limitations to mass-media access to an open information,
including accreditation in these regulatory bodies.

[6] We demand from the Prosecutor General’s Office to issue the
investigation
course of Oleh Kalashnikov’s assault of STB film crew and to give
information on other resonant crimes against journalists.

[7] We demand from the Party of Regions faction to give an official
information on MP Oleh Kalashnikov’s membership, as the official papers

of the Verkhovna Rada read that he was not expelled from the faction.

In our turn we confirm our intentions to stand up for the freedom of speech
and our colleagues’ safety by all possible means.

We warn that we are ready to trigger active protests in case the freedom of
speech is jeopardized.

You may support this statement by sending your signatures here:
info@telekritika.kiev.ua                                    -30-
————————————————————————————————
LINK: http://www2.pravda.com.ua/en/news/2006/8/16/6107.htm
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================

11.                                  “‘TURNKEY’ CABINET”
People from Donbass dominate new Ukrainian deputy minister appointments

ANALYSIS: By Nataliya Romashova
Kiyevskiye Vedomosti, Kiev, in Russian 22 Aug 06; p 4
BBC Monitoring Service,United Kingdom, Wed, Aug 23, 2006

Almost 40 of the 54 deputy minister portfolios have gone to people from the
Donbass in the new Ukrainian cabinet, a daily has reported.

The following is the text of the article by Nataliya Romashova entitled ”
‘Turnkey’ cabinet” published in the Ukrainian daily Kiyevskiye Vedomosti on
22 August:

The staffing formation of executive structures in the government is being
completed. The lion’s share of the newly appointed high-ranking cabinet
officials will represent the east of the country.

First Deputy Prime Minister Mykola Azarov paid particular attention to the
change of staff in the structure of the ministries and departments that form
the economic sector of the government.

The cabinet’s official website reports that the first deputy chairman of the
State Tax Administration [STA] in Donetsk Region, Vadym Kayzerman, who
became the first deputy chairman of the STAU [State Tax Administration of
Ukraine] and the deputy head of the tax police directorate of the STA in
Donetsk Region, Valeriy Koryachkin, who swapped this job for the seat of
first deputy chairman of the STAU and head of the tax police, came here from
the Donbass [Donetsk Basin].

The head of a directorate of the State Customs Service in Donetsk Region,
Ruslan Cherkasskyy, became the first deputy chairman of the State Customs
Service of Ukraine.

What is more, just as tried and tested staff were appointed to the other key
posts. All of Mykola Azarov’s deputies in his post of finance minister,
apart from Anatoliy Markovskyy, were either already working in post, or were
actively collaborating with Mr Azarov in other jobs in the Viktor Yanukovych
government of 2002.

They also include the new-old head of the STAU, Anatoliy Brezvin, who
occupied that post until March last year.

The deputy prime minister for regional policy and minister for housing
utilities, construction and architecture, Volodymyr Rybak, took for his
deputies the director-general of the Novohrodivka Machine-building Plant
(Donetsk Region), Hryhoriy Makhov.

The “heating” deputy prime minister, Andriy Klyuyev, got a job for his
adviser, member of the supervisory council of the Energy Company of Ukraine,
Oleksandr Rohozin.

The director of the Rovenkiantrasyt coal association (Luhansk Region), Yuriy
Zyukov, has become the first deputy to the coal industry minister, Serhiy
Tulub.

The first deputy mayor of Kryvyy Rih, Dmytro Kolesnykov, and the mayor of
Melitopol, Anatoliy Manhul, became respectively the first deputy and deputy
to the industrial policy minister, Anatoliy Holovko.

The latter, by the way, already under “orange power” managed to be the first
deputy chairman of the Zaporizhzhya Regional State Administration.

The former governor of Donetsk Region, Vadym Chuprun, also found himself a
place in the cabinet sun: now he will work as deputy fuel and energy
minister.

People’s deputy from the Party of Regions Volodymyr Kozak will henceforth be
in the leadership of one of the biggest state monopolies, Ukrainian
Railways. The former vice-president of Astelit company (Donetsk), Leonid
Netudykhata, has become deputy transport and communications minister.

The former head of the education and science directorate of the Donetsk
Regional State Administration, Valentyn Teslenko, will be helping the
Socialist [Education Minister] Stanislav Nikolayenko manage domestic
education.

Altogether, of the 54 vacant deputy minister portfolios people originally
from the Donbass got 39. True, changes have not yet affected a number of
departments. However, according to some forecasts, in the near future all
five deputy economics ministers will be replaced.

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
 If you are receiving more than one copy of the AUR please contact us.
========================================================
12.  UKRAINE LEADER PROMISES NOT TO SIPHON RUSSIAN GAS

By Andrew E. Kramer, The New York Times
New York, New York, Wednesday, August 23, 2006

MOSCOW – Ukraine’s new prime minister, Viktor F. Yanukovich, has
promised that his government will refrain from siphoning natural gas from
Russia’s export pipelines to meet his own country’s shortfall this winter, a
practice that incensed Russian officials who characterized it as stealing.

The assurance was the latest step by Mr. Yanukovich, a pro-Russian
politician, to unwind some of the conflicts between Ukraine and Russia in
the three weeks since Parliament elected him prime minister on Aug. 5.

The move was a concession, of sorts, to Russia – Ukrainian officials had
never publicly admitted to taking the gas without payment – but one also
likely to ease worries in Western Europe over the security of energy
supplies this winter. Some 80 percent of Russia’s gas exports to Western
Europe pass through Ukraine.

Mr. Yanukovich, who lost the election that came to be known as the Orange
Revolution in 2004 but staged an improbable political comeback this summer,
has brought a more conciliatory stance to the energy talks with Russia, as
expected. Talks are underway now for a contract for gas supplies in 2007.

Mr. Yanukovich said Ukraine’s national energy company, Naftogaz, was
preparing for the winter heating season by pumping gas into underground
storage.

“I am saying this so Europe can hear and they can feel at ease,” Mr.
Yanukovich said at a news conference in Ukraine on Tuesday, according to
a transcript provided by his office. “We won’t take European gas from the
pipes this winter.”

So far, Mr. Yanukovich has been feted by Russia more than the victor in the
Orange Revolution, President Viktor A. Yushchenko, ever was.

Just last week, in a break with protocol, President Vladimir V. Putin of
Russia invited him to join heads of state from the Eurasian Economic
Community for informal meetings in the resort town of Sochi though Mr.
Yanukovich is not Ukraine’s leader.

In turn, he has vowed a more pragmatic approach to the energy dispute that
last winter briefly reduced the flow of natural gas to Western Europe, and
striven to reassure European governments they will not be faced with
shivering citizens in northern Europe this winter.

At the Aug. 16 meeting he secured a promise by Russia’s natural gas
monopoly, Gazprom, not to revise the current gas price of $95 per 1,000
cubic meters until the end of the year.

Also, Mr. Yushchenko has signaled that Ukraine will likely continue next
year to import natural gas through a Swiss-registered intermediary,
RosUkrEnergo, that is controlled by Gazprom, though the United States
had opposed the arrangement as prone to corruption.

“God help us prolong it for several more years,” Mr. Yushchenko said of
the deal on Saturday, according to the Interfax news agency.

Still, in the tangled energy trade between the countries, Ukraine’s practice
of withdrawing gas intended for Western Europe from Russian pipelines has
long been a thorn in the side of Gazprom. It has also been a source of
leverage for Ukraine in the pricing talks, now apparently off the table for
Kiev.                                      -30-
———————————————————————————————–
http://www.nytimes.com/2006/08/23/world/europe/23cnd-ukraine.html?_r=1&ref=world&oref=slogin

——————————————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
             Send in a letter-to-the-editor today. Let us hear from you.
========================================================
13. UKRAINE: “SOCHI TRIP. HE MADE HIMSELF RESPECTED AND
                         COULD NOT INVENT ANYTHING BETTER”
                          Ukrainian premier stands up to Russians in Sochi

ANALYSIS & COMMENTARY:  By Iryna Havrylova
Source: Kiyevskiy Telegraf, Kiev, in Russian 18 Aug 06; p 2
BBC Monitoring Service, United Kingdom, Wednesday, Aug 23, 2006

Prime Minister Viktor Yanukovych will not be Russia’s puppet, a Ukrainian
weekly has said in summing up Yanukovych’s visit to Sochi on 15-16 August.
Yanukovych acted as an independent politician during the visit and gave no
firm guarantees to Russia on any sensitive issue in bilateral relations.

However, the price of Russian gas for Ukraine will depend on the Yanukovych
cabinet’s willingness to meet Russia’s demands, the weekly said.

The following is the text of the article by Iryna Havrylova entitled “Sochi
trip. He made himself respected and could not invent anything better”
published in the Ukrainian newspaper Kiyevskiy Telegraf on 18 August;
subheadings have been inserted editorially:

Viktor Yanukovych of course made his first visit as prime minister to
Russia. Frankly speaking, nobody doubted that this would be his first
geopolitical step.

To be sure, the friendly handshake between the Ukrainian prime minister and
the Russian president took place not in Moscow: Mr Yanukovych met with Mr
Putin in Sochi at the summit of the Eurasian Economic Union, where Ukraine
is an observer.

Only presidents take part in summits at such a level, and by inviting the
Ukrainian prime minister to attend, Russia clearly wanted to show that it
considered him to be really the leader of Ukraine.

But it was also obvious that Russia was counting on seeing a different
Yanukovych at the meeting: a politician depressed by a lengthy period in
opposition and ready for anything. Including for conditions that Russia
would raise.

Moscow had got used to working with [former President] Leonid Kuchma
according to that sort of scheme, and in the Kremlin they were probably
counting on finding in Yanukovych his “successor” in the foreign policy
area: you are a cheap energy source for us, and we’ll do anything you ask.

But Mr Yanukovych immediately “broke” this construct, making the
representatives of the authorities take him and his position into account.
As a result, the Russians had to reorganize the programme of the visit on
the hoof and change the schedule of meetings. It is hard to believe that the
Russian political elite had to make itself amenable to the Ukrainian prime
minister and not the reverse.

This is also confirmed by the absence of the planned “thank you” interview
of the Ukrainian prime minister to Russian TV, a number of informal meetings
between Mr Yanukovych and Mr Putin and the independent behaviour of
Yanukovych at protocol functions with [Russian Prime Minister] Mikhail
Fradkov.

In the final analysis, even if the reception of the Ukrainian prime minister
“by the back door” (Sochi) rather than at the front entrance (Moscow, the
Kremlin) was calculated to show Ukraine “its place”, it did not have the
desired effect.

It was also not possible to feed Ukraine with some sweet “carrots” with
which former leaders were treated: promises to reconsider the question of
the possibility of transit of Russian oil and oil products via Ukraine to
Europe and reviving the Antonov [joint plane development] project, which the
Russians virtually abandoned last year. Moscow wants once again “to tame”
Ukraine by forcing it to make a choice in its favour.

Russia today is worried by three aspects.

[1] The first is that Ukraine can no longer be a buffer between East and
West and has to make a choice, and right now is standing again at a
crossroads.
[2] The second is that the declaration [of national unity] signed by all
Ukraine’s political forces [on 3 August] only postpones the country’s
joining a NATO action plan, but does not remove the question from the
agenda.
[3] The third is the possibility for strengthening the power of the regions
(the east and the south) in Ukrainian domestic politics in order for the
pro-Russian part of Ukraine to have the decisive voice.
                                        THE PRICE OF GAS
Naturally, the gas question was key at the present talks in Sochi. The
agreed pricing parameters for gas up to the end of the present year – 95
dollars – were an advance on Russian friendship. Certainty appeared: the
price for gas will not rise for now, we will not freeze this winter and
Ukraine will not turn into a “country of a thousand Alchevsks”

[Alchevsk is a town in Luhansk Region where the central heating system broke
down for several weeks in January-February this year]. This is already good
and will probably bring additional points to the government team of Viktor
Yanukovych.

Well, what will happen later, in four months? Later Russia “will see”…
[ellipsis as published] It has become different with regard to its
neighbours: cautious, pragmatic and untrusting. Meanwhile, thanks to that
same Kuchma, who, while positioning himself as a pro-Russian leader,
conducted a policy that was not in the interests of the Kremlin.

Therefore, Moscow in a very hard-line way will put questions to Yanukovych
that are vital for it (coordination of WTO entry and a clear-cut position on
the SES [Single Economic Space - economic cooperation agreement between
Ukraine, Russia, Belarus and Kazakhstan]), or else Mr Yanukovych’s
occupation of the prime ministerial seat will have only an illusory success.
And Russia does not like illusions and tries to “punish with the rouble”
those who present it with them.

Therefore, the cost of gas for Ukraine next year will become known in
November-December and will depend officially on the state of world markets
and unofficially – on what position Ukraine adopts with regard to Russia.

Whether Viktor Yanukovych will manage to justify the trust of the Russian
political elite is the whole secret of the non-rise in gas prices. It seems
that Yanukovych was not prepared immediately to give up the multi-vector
policy and “surrender” to Moscow.

Hence the fall-back statements by the deputy prime minister for the fuel and
energy complex, Andriy Klyuyev: “At the talks in Sochi the Ukrainian prime
minister did not reach agreement regarding the definitive price for Russian
gas for Ukraine. Experts at the level of working groups are doing additional
work on technical aspects.”

So it cannot be said that the gas question has been definitively and
irreversibly solved with advantage to Ukraine: Russia is biding its time.
And if Ukraine’s foreign policy is not reviewed by the end of the year,
postponed, “mothballed”, fuel prices for Ukraine may become “European” –
from 120 to 250 dollars.
              YANUKOVYCH NO PUSHOVER FOR RUSSIA
But! However much Russia might have wanted to use the lever of gas pressure
on Ukraine, it had to behave fairly cautiously. The Yanukovych visit showed
that you have to take account of the neighbours. And not pressurize, but
help in the economic sphere in order to get political dividends later.

That is why Mr Yanukovych conducted himself with the Russian as an equal
partner and did not throw around promises for the sake of maintaining the
present gas agreements.

For example, in response to the proposal to Ukraine to take part in the
Eurasian Economic Union (an analogue of the SES controlled by Russia), he
said that first it was necessary to study whether the Eurasian Economic
Union corresponded to the national interests of Ukraine. Moscow did not
receive any firm guarantees on the “language” problem either.

Yanukovych merely promised to initiate a consideration of the question of
granting Russian the status of a state language as soon as it proved
possible to broaden the parliamentary coalition to a constitutional majority
(300 deputies), and for now to be satisfied with the charter of regional
languages that operates successfully in Ukraine.

It is understood why the prime minister will not be in a hurry to “oblige”
the Russian Federation:

[1] first, the coalition is expanding basically at the expense of
[propresidential] Our Ukraine members.
[2] Second, expansion at the expense of the Our Ukraine People’s Union [the
basic party in the Our Ukraine bloc] is fraught with danger for the prime
minister himself too, since under such a disposition the Communists and
possibly the Socialists will be eliminated from the coalition. (True, there
is always the Yuliya Tymoshenko Bloc in reserve.)

As a result, the Regionals [Party of Regions, headed by Yanukovych] will
find themselves “hostages” of the propresidential party and will be unable
to take decisions without its participation.

To sum up, the visit to Russia was not a victory for Yanukovych “in the
Russian direction”, but showed that his government would not be a puppet…
[ellipsis as published]                             -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
14. PRES & MRS YUSHCHENKO VISITS HOLODOMOR EXHIBITION

      Holodomor Commemoration Exhibition presented by Morgan Williams
                          
Press office of President Victor Yushchenko
Kyiv, Ukraine, Thursday, August 24, 2006

KYIV – Victor Yushchenko has visited an exhibition “Holodomor” on the
1932-33 genocide famine in Ukraine [held in the Ukrainian House in Kyiv.]

The exhibits – among them paintings by Ukrainian artists, photographs and
documents from the 1930s – were presented by Morgan Williams, a famine
researcher from the United States.                   -30-
———————————————————————————————–
LINK with photo: http://www.president.gov.ua/en/news/data/1_10020.html
LINK with photo: http://www.president.gov.ua/news/data/1_10018.html

———————————————————————————————–
NOTE:  The Holodomor exhibition was set up by Morgan Williams
for the IV World Forum of Ukrainians Holodomor Roundtable, at
the request of the Ministry of Foreign Affairs.
 
Morgan Williams is Director, Government Affairs, Washington
Office SigmaBleyzer Private Equity Investment Group and the publisher
and editor of the Action Ukraine Report (AUR), Washington, D.C..

He serves as a member of the Organizational Committee for the 75th
Anniversary of the Famine in Ukraine appointed by the Cabinet of
Ministers; Curator & Trustee, Holodomor Education and Exhibition
Collection; Chairman, Dr. James Mace Holodomor Memorial Fund
of the Ukrainian Federation of America, Philadelphia. morganw@patriot.net.
————————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
15. UKRAINE: PRESIDENT YUSHCHENKO EXPECTS PARLIAMENT
       TO DECLARE 1932-1933 GREAT FAMINE ACT OF GENOCIDE

Ukrainian News Agency, Kyiv, Ukraine, Thursday, August 24, 2006

KYIV – President Viktor Yuschenko expects the Verkhovna Rada to declare

the Great Famine of 1932-1933 an act of genocide against the Ukrainian
people. He made this statement in his Independence Day address.

“I believe that in the next few months the Verkhovna Rada will fulfill its
duty to the Ukrainian people and legislate to acknowledge that the Great
Famine in Ukraine was an act of genocide against our nation.

And hence, the government has a clear task to ensure the erection of a
Memorial to the Great Famine Victims in Kyiv toward the 75th anniversary

of the tragedy,” Yuschenko said. He said he is sure that the Cabinet of
Ministers will help build the memorial.

As Ukrainian News earlier reported, the Security Service of Ukraine has
declassified the documents of the State Political Department also known as
GPU of the Ukrainian Soviet Socialist Republic concerning the Great
Famine of 1932 and 1933 that were deposited in the state archives of the
SBU.

The Polish Senate (the upper house of parliament) called on the
international community in March to recognize the 1932-1933 famine in
Ukraine as an act of genocide against the Ukrainian people.

Ukraine is intending to draft a document on recognition of the 1932-1933
famine as an act of genocide by 2007 so that the United Nations

Organization could adopt it.

President Viktor Yuschenko recently called on the heads of state to
recognize the 1932-1933 famine in Ukraine as an act of genocide against
Ukrainians. The parliaments of several countries have recognized the

famine as an act of genocide.

In November 2003, 25 member-countries of the United Nations Organization
drafted a joint statement that described the famine in Ukraine as the result
of the policies of a totalitarian regime. Other states later aligned
themselves with this statement.

In 2003, the Verkhovna Rada passed an address to the Ukrainian people in
which it promised to declare the famine an act of genocide. According to
various estimates, between 3 million and 7 million people died in the
1932-1933 famine in Ukraine.                           -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================

    If you are receiving more than one copy of the AUR please contact us.
    Please contact us if you no longer wish to receive the AUR.    
       You are welcome to send us names for the AUR distribution list.
   If you are missing some issues of the AUR please let us know.
========================================================
         “ACTION UKRAINE REPORT – AUR”
         A Free, Not-For-Profit, Independent, Public Service Newsletter
                With major support from The Bleyzer Foundation
 
      Articles are Distributed For Information, Research, Education
                Academic, Discussion and Personal Purposes Only
                                  Additional readers are welcome.
========================================================
      SigmaBleyzer/The Bleyzer Foundation Economic Reports
                “SigmaBleyzer – Where Opportunities Emerge”
 
The SigmaBleyzer Emerging Markets Private Equity Investment Group
and The Bleyzer Foundation offers a comprehensive collection of documents,
reports and presentations published by its business units and organizations.
 
All publications are grouped by categories: Marketing; Economic Country
Reports; Presentations; Ukrainian Equity Guide; Monthly Macroeconomic
Situation Reports (Romania, Bulgaria, Ukraine).
 
You can be on an e-mail distribution list to receive automatically, on a
monthly basis, any or all of the Macroeconomic Situation Reports (Romania,
Bulgaria, Ukraine) by sending an e-mail to mwilliams@SigmaBleyzer.com.
               “UKRAINE – A COUNTRY OF NEW OPPORTUNITIES”
========================================================
   UKRAINE INFORMATION WEBSITE: http://www.ArtUkraine.com
========================================================
    “WELCOME TO UKRAINE”- “NARODNE MYSTETSTVO”
                                   (Folk Art) MAGAZINES
For information on how to subscribe to the “Welcome to Ukraine” magazine
in English, or the Ukrainian Folk Art magazine “Narodne Mystetstvo” in
Ukrainian, write to ArtUkraine.com@starpower.net. Complete information is
========================================================
              ACTION UKRAINE PROGRAM – SPONSORS
                              Action Ukraine Report (AUR)
               Holodomor Art and Graphics Collection & Exhibitions
          “Working to Secure & Enhance Ukraine’s Democratic Future”

1.  THE BLEYZER FOUNDATION, Dr. Edilberto Segura,
Chairman; Victor Gekker, Executive Director, Kyiv, Ukraine;
Washington, D.C., http://www.bleyzerfoundation.com.
   Additional supporting sponsors for the Action Ukraine Program are:
2. UKRAINIAN FEDERATION OF AMERICA (UFA), Zenia Chernyk,
Chairperson; Vera M. Andryczyk, President; Huntingdon Valley,
Pennsylvania
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 298 7275 in Kyiv,
kau@ukrnet.net
4.  ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
5. Law firm UKRAINIAN LEGAL GROUP, Irina Paliashvili, President;
Kiev and Washington, general@rulg.com, www.rulg.com.
6. BAHRIANY FOUNDATION, INC., Dr. Anatol Lysyj, Chairman,
Minneapolis, Minnesota
7. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX  77024; bill.hunter@volia-software.com.
8. ODUM- Association of American Youth of Ukrainian Descent,
Minnesota Chapter, Natalia Yarr, Chairperson
9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C.,
Dr. Susanne Lotarski, President/CEO; E. Morgan Williams,
SigmaBleyzer, Chairman, Executive Committee, Board of Directors;
John Stephens, Cape Point Capital, Secretary/Treasurer
10. UKRAINIAN ORTHODOX CHURCH OF THE USA, South
Brown Brook, New Jersey, http://www.uocofusa.org
11. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
12. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO; Vera
Andruskiw, CPP Wash Project Director, Washington, D.C.; Markian
Bilynskyj, VP/Director of Field Operations; Marta Kolomayets, CPP
Kyiv Project Director, Kyiv, Ukraine. Web: http://www.USUkraine.org
13. WJ GROUP of Ag Companies, Kyiv, Ukraine, David Holpert, Chief
Financial Officer, Chicago, IL; http://www.wjgrain.com/en/links/index.html
14. EUGENIA SAKEVYCH DALLAS, Author, “One Woman, Five
Lives, Five Countries,” ‘Her life’s journey begins with the 1932-1933
genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
15. ALEX AND HELEN WOSKOB, College Station, Pennsylvania
16. SWIFT FOUNDATION, San Luis Obispo, California
17. TRAVEL TO UKRAINE website, http://www.TravelToUkraine.org,
A program of the U.S-Ukraine Foundation, Washington, D.C.
========================================================
 TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR,
around five times a week, please send your name, country of residence,
and e-mail contact information to morganw@patriot.net. Information about
your occupation and your interest in Ukraine is also appreciated.
 
If you do not wish to read the ACTION UKRAINE REPORT please
contact us immediately by e-mail to morganw@patriot.net.  If you are
receiving more than one copy please let us know so this can be corrected
 
              SPAM BLOCKERS ARE A REAL PROBLEM                 
If you do not receive a copy of the AUR it is probably because of a
SPAM BLOCKER maintained by your server or by yourself on your
computer. Spam blockers are set in very arbitrary and impersonal ways
and block out e-mails because of words found in many news stories.
 
Spam blockers also sometimes reject the AUR for other arbitrary reasons
we have not been able to identify. If you do not receive some of the AUR
numbers please let us know and we will send you the missing issues. Please
make sure the spam blocker used by your server and also the one on your
personal computer, if you use a spam blocker, is set properly to receive
the Action Ukraine Report (AUR).

========================================================
                        PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer

Emerging Markets Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
Mobile in Kyiv: 8 050 689 2874
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
========================================================
    Power Corrupts and Absolute Power Corrupts Absolutely. 
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================

Leave a comment

Filed under Uncategorized