THE ACTION UKRAINE REPORT – AUR – Number 610

 
 “THE 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”

                            
“THE ACTION UKRAINE REPORT – AUR” – Number 609
Mr. E. Morgan Williams, Publisher and Editor
Kyiv, Ukraine, FRIDAY, DECEMBER 2, 2005
 
                        ——–INDEX OF ARTICLES——–
                “Major International News Headlines and Articles”

1.        EU GRANTS UKRAINE MARKET ECONOMY STATUS
By Tom Warner in Odessa and agencies
Financial Times, London, UK, Thu, December 1 2005

2EU AGREES TO GIVE UKRAINE MARKET ECONOMY STATUS
By Mara D. Bellaby, AP Worldstream
AP, Kiev, Ukraine, Thursday, Dec 01, 2005

3PRESIDENT VIKTOR YUSHCHENKO PRAISES UKRAINE-EU

                SUMMIT AS MOST SUCCESSFUL TO DATE
    Text of President Yushchenko’s statement after Ukraine-EU summit
UT1 State TV, Kiev, in Ukrainian 0900 gmt 1 Dec 05
BBC Monitoring Service, UK, in English, Thu, Dec 01, 2005

4.    UKRAINE HOSTS REGIONAL PRO-DEMOCRACY FORUM,
                           SEEN AS CHALLENGE TO MOSCOW
Natasha Lisova, AP Worldstream; Dec 02, 2005
Kiev, Ukraine, Friday, December 2, 2005

5.         UKRAINE TO RESELL NIKOPOL METALS PLANT
By Tom Warner in Kiev, Financial Times
London, UK, Wednesday, November 30 2005

6.              BNP TO BUY STAKE IN UKRAINIAN BANK
By Tom Warner in Kiev, Financial Times

London, United Kingdom, Friday, December 2 2005

7.                 CORRUPTION’S GRIP EASES IN UKRAINE
Fred Weir, Correspondent of The Christian Science Monitor
Christian Science Monitor, Boston, MA, Tue, November 29, 2005

8.                                 TROUBLED UKRAINE
Irish Times, Dublin, Ireland, Thu, Dec 01, 2005

9.   DISMISSED UKRAINE LEADER CHARTS HER COMEBACK
By Judy Dempsey, International Herald Tribune (IHT)
Europe, Wednesday, November 30, 2005

10GRADUATE UKRAINE FROM JACKSON-VANIK AMENDMENT
ACTION ITEM: Ukrainian National Information Service (UNIS)
Washington, D.C., Thursday, December 1, 2005

11UKRAINE’S EU ENVOY ROMAN SHPEK SAYS INTEGRATION
                           DEPENDS ON WTO ACCESSION
            “Roman Shpek: ‘I am a supporter of a revolution in minds
                                   and an evolution in actions'”
INTERVIEW: With Roman Shpek,
Ukraine’s Envoy to the European Union
Pavlo Bebl, Uryadovyy Kuryer, Kiev, in Ukrainian 29 Nov 05; p 6
BBC Monitoring Service, UK, in English, Thu, December 01, 2005

 
12. PRES BUSH SALUTES LEADERS OF DEMOCRACY IN KIEV
       Message to the Forum of the Community of Democratic Choice
Public Affairs Section, United States Embassy Kyiv
Kyiv, Ukraine, Friday, December 2, 2005

13.                REVISITING THE ORANGE REVOLUTION, 

                              CONSIDERABLE GAINS MADE
                      Yushchenko’s First Year in Office: Part One
ANALYSIS & COMMENTARY: By Taras Kuzio
Eurasia Daily Monitor, Volume 2, Issue 217
The Jamestown Foundation
Washington, D.C., Monday, November 21, 2005

  REVISITING THE ORANGE REVOLUTION: STILL FAR TO GO
                       Yushchenko’s First Year in Office: Part Two
ANALYSIS & COMMENTARY: By Taras Kuzio
Eurasia Daily Monitor, Volume 2, Issue 220
The Jamestown Foundation
Washington, D.C., Monday, November 28, 2005
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1
        EU GRANTS UKRAINE MARKET ECONOMY STATUS

By Tom Warner in Odessa and agencies
Financial Times, London, UK, Thu, December 1 2005

The European Union said on Thursday it would accord Ukraine market

economy status, in a move that recognises Ukraine’s reform programme
and will improve the country’s trade relations with the 25-nation bloc.

The agreement, which will help Ukraine’s steel producers gain access to
European markets without being subjected to anti-dumping measures, was
announced at a meeting in Kiev between Tony Blair, the British prime
minister, Jose Manuel Barroso the European commission president, Viktor
Yushchenko, president of Ukraine, and other EU and Ukrainian leaders.

The EU leaders were in Kiev for the launch of an ambitious EU border

control programme to curb smuggling across Ukraine’s border with the
separatist region of Transdniestria in Moldova.

The EU held a press conference in Odessa on Wednesday announcing its

border assistance mission for Bam which will place 50 border guards and
customs officials from EU countries.

The border is particularly unruly and sensitive because most of the Moldovan
side is controlled by Transdniestria, an unrecognised breakaway state backed
by Russia. One of the EU monitors’ five bases will be the last Ukrainian
stop on the railway leading to a Russian military base in Transdniestria.

With the EU set to take in Romania in its next planned expansion and

Moldova set to become an EU neighbour, Brussels is taking an increasing
interest in the region.

Some western European governments, particularly France, had reservations
about stepping into a region they consider Russia’s back yard but worries
about a possible hole in the EU’s eastern frontier overcame their
objections.

The monitors won’t be able to carry out the inspections themselves or enter
Transdniestrian territory. If they see problems their only recourse will be
to “discuss European ways of doing things,” as a EU official put it, with
the Ukrainian or Moldovian officials whose work they are monitoring.

But the EU believes the mission could help towards a settlement of the
Transdniestrian conflict by discouraging anyone who might want to

preserve the region as a smuggling haven.

The rise to power in Ukraine of Mr Yushchenko, who is striving to bring

his country into the EU, has also changed the region’s dynamics.

To drive that point home he is hosting a summit of “Baltic-Black
Sea-Caspian” region leaders Friday where presidents from Romania,

Georgia and Baltic states, but not Russia and its ally Belarus, will discuss
how to strengthen democracy.

Mr Yushchenko has tried to bring Moldova’s and Transdniestrian’s leaders
together to agree on a plan for elections in the breakaway region monitored
by European observers, so far without success.  -30-
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2. EU AGREES TO GIVE UKRAINE MARKET ECONOMY STATUS

By Mara D. Bellaby, AP Worldstream
AP, Kiev, Ukraine, Thursday, Dec 01, 2005

KIEV – The European Union agreed Thursday to declare Ukraine a free

market economy, handing President Viktor Yushchenko his first big victory
as he seeks a closer partnership – and eventual membership – for this
ex-Soviet republic in the 25-nation bloc.

The market economy status, which should open EU markets to Ukrainian
companies, was the top prize to emerge from the EU-Ukraine summit. But

EU officials also backed Ukraine’s ambitions to join the World Trade
Organization and called Ukraine’s progress “on track.”

“All of these are important in their own right, but the greatest importance
is the symbolism of a newer and deeper and stronger relationship between the
EU and Ukraine,” British Prime Minister Tony Blair said during the brief
summit in Kiev.

The gathering was the first EU-Ukraine summit since last year’s so-called
Orange Revolution, during which hundreds of thousands of Ukrainians

amassed in the capital to protest election fraud.

Yushchenko, a Western-leaning opposition leader who won a court-ordered
revote last year, hailed the protests as a sign of Ukraine’s European values
and pledged to secure a place for this poor nation of 47 million in the EU.

An enlargement-wary EU, however, has given only a lukewarm reception. Also,
Yushchenko’s efforts to join the World Trade Organization this year suffered
setbacks because of strong opposition in parliament, so receiving market
economy status was a prize he needed.

“Today, we got a clear political decision regarding the granting of market
economy status to Ukraine. The changing of status causes a chain of changes
in our relationship,” Yushchenko said after the talks.

The status, which will take about a month to formalize, will make it easier
for Ukrainian companies to export to EU nations by essentially giving
Ukraine a stamp-of-approval over how it regulates its economy, something
that should help exporters forge deals.

But the status also offers Ukraine the right to defend itself against
European accusations of illegally dumping products cheaply on the EU
markets. Already, Ukraine exports 32 percent of its products to EU countries
but analysts said that could grow significantly.

“It will also work from the other direction, driving foreign direct
investment by prompting the EU to take another look this way,” said Tomas
Fiala, managing director of the Kiev-based Dragon Capital investment house.

The EU-Ukraine summit – which lasted only a few hours – gave a major
personal boost to Yushchenko, who has suffered recently amid falling ratings
and internal upheaval within his team. “I hope people in Ukraine are in no
doubt … about how differently Ukraine is viewed in the world,” Blair said.

The summit was the ninth between the EU and Ukraine, and Yushchenko

called it the most successful. Blair, whose country holds the rotating EU
presidency, told Yushchenko that he could count on support.

European Commission President Jose Manuel Barroso also declared: “The

future of Ukraine is in Europe, and now we are building that future with
concrete steps.” Lawmakers in Ukraine’s fractious parliament, however,
were divided Thursday over what had been achieved.

“This recognition makes Ukraine a participant of the elite club of countries
with a market economy,” said Andriy Shkil, an ally of opposition leader and
former Orange Revolution heroine Yulia Tymoshenko.

Communist Party lawmaker Petro Tsybenko countered: “Ukraine is not a

country with a market economy and will not be able to be competitive.”

Ukraine is also pushing the EU to simplify some of the visa requirements for
Ukrainian citizens, and the EU, in turn, wants Ukraine to sign an agreement
to take back any refugee-seekers that enter the EU via Ukraine, a transit
country.   -30-
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3.   PRESIDENT VIKTOR YUSHCHENKO PRAISES UKRAINE-EU
                    SUMMIT AS MOST SUCCESSFUL TO DAY
      Text of President Yushchenko’s statement after Ukraine-EU summit

UT1 State TV, Kiev, in Ukrainian 0900 gmt 1 Dec 05
BBC Monitoring Service, UK, in English, Thu, Dec 01, 2005

KIEV – President Viktor Yushchenko has praised the 1 December Ukraine-EU
summit as the most successful to date. Speaking at a joint news conference,
Yushchenko said that Ukraine would soon be granted market economy status

and that the EU would support Ukraine’s bid at the coming WTO ministerial
conference in Hong Kong.

Yushchenko praised EU-Ukraine cooperation on energy and aerospace projects
and Ukraine’s contribution to the settlement of the Dniester conflict.
Yushchenko reiterated that EU membership remains Ukraine’s strategic
objective.

The following is the text of Yushchenko’s statement at a news conference
after the summit, which was broadcast live by Ukrainian TV on 1 December;
subheadings inserted editorially:

[Viktor Yushchenko] Dear colleagues and everyone who is present. We are at
an extremely important stage in relations between Ukraine and the European
Union. Our joint summit has just finished and, in my view, it has been the
most important one of the nine summits that have been between Ukraine and
the EU.

It has been successful because it has achieved specific results which were
concluded by the signing of the relevant agreements as well as the adoption
of significant political decisions for our bilateral relations.

                                EU MEMBERSHIP GOAL

First and foremost, I would like to state that our aim, the strategic aim of
the Ukrainian state, is integration into the European Union. We will do
everything possible so that, within the framework of this strategic policy
and this strategic aim, the European Community, first and foremost the
citizens of the European Union, view Ukraine’s membership of the EU as an
advantage and not as an additional problem.

We are convinced that Ukraine is an integral part of Europe, in the
political, economic and humanitarian sense. We have noted with satisfaction
today the effectiveness of the implementation of our main document, the
action plan, all of its six parts. Effectiveness in the implementation of
the action plan was especially highlighted in the trade and economics and
security areas, the judiciary and internal affairs.

                              MARKET ECONOMY STATUS

The important conclusion of today’s summit is that Ukraine has met the five
technical requirements to be granted market economy status and we hope that
the formalization of this political decision will not take long.

It was also important for Ukraine to receive a positive signal from the
leadership of the European Union on the beginning of talks on visa issues. I
feel that our positions on resolving this issue, which is important for
Ukrainian citizens, are close. We are hoping for productive talks.

We are also pleased to note that the European Union has welcomed the
strengthening role of Ukraine as an important contributor in safeguarding
peace and security in the world. We spoke in detail about the plan to
resolve the Dniester conflict, the logic behind the plan, the theoretical
aspect of applying joint efforts within the broader format of five plus two
[i.e. Moldova, Dniester region, Ukraine, Russian, the OSCE plus the EU and
the USA] and those new steps and initiatives to be taken to resolve this
extremely important political settlement, which is very important both for
Europe and Ukraine.

                                    WTO MEMBERSHIP

We were also pleased to note great progress made by Ukraine on its homework
in terms of joining the World Trade Organization. But we note that at the
legislative level, at the level of the national parliament, a set of
important documents to ensure the final and legal settlement of this issue
has not yet been adopted. At least we are talking today of the readiness to
make a positive statement on this matter on behalf of the EU in Hong Kong.

                    ENERGY AND SPACE COOPERATION

Finally, I would like to say that we have signed a range of bilateral
documents. It is especially important to note today that as these documents
have been signed it is possible to say today that Ukraine has joined the
family of Galileo projects and therefore we have come closer to the signing
of bilateral agreement between the space agencies of Ukraine and the EU,
which will shape the road map of cooperation between these two agencies.

It is also of special importance that it took us extremely little time, some
five or six months, to approach the signing of the energy memorandum. We

are extremely grateful to the EU for such an active reaction to the initiatives
on a range of energy projects.

I would say that the signing of the energy memorandum is a good example of
how the bureaucracy at both sides is being effectively tackled to ensure
these basic and fundamental bilateral ties.

By all means, it is a pleasure to note that we signed today a cooperation
agreement on airlines and on coordination on this issue.

In fact, this is but a small number of issues about which I wanted to inform
you and which, to my mind, summarize the work of the summit.

Thank you.   -30-
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4.     UKRAINE HOSTS REGIONAL PRO-DEMOCRACY FORUM,
                           SEEN AS CHALLENGE TO MOSCOW

Natasha Lisova, AP Worldstream; Dec 02, 2005
Kiev, Ukraine, Friday, December 2, 2005

KIEV – The presidents of nine countries are gathering Friday in a forum aimed

at promoting democracy in a region that spent decades under totalitarian
Soviet-era regimes, an initiative widely seen as a challenge to Moscow’s
dominant influence.

Ukrainian President Viktor Yushchenko, who took office after last year’s
Orange Revolution, is playing host to a forum that also includes the
region’s other revolutionary, Georgian President Mikhail Saakashvili, as
well as the presidents of the three ex-Soviet republics in the Baltics.

Notably missing from the participant list was Russian President Vladimir
Putin and Belarusian President Alexander Lukashenko, who is criticized by
the United States as Europe’s last dictator.

“This forum is part of Ukraine’s policy to promote development of democracy
in the region,” Deputy Foreign Minister Anton Buteyko said.

The Foreign Ministry said that Russia was invited, and a senior embassy
official will attend. Also scheduled to attend were the presidents of
Macedonia, Moldova, Slovenia and Romania as well as high officials from the
European Council, the Organization for Security and Cooperation in Europe,
Bulgaria, Poland and Azerbaijan.

The gathering, called the Community of Democratic Choice, was expected to
discuss regional stability, the development of democracy and economic
cooperation.

Many experts, however, called the forum a challenge to Russia and an attempt
to weaken its leadership in the post-Soviet region. Yushchenko and
Saakashvili, who took office after the 2003 Rose Revolution protests, were
the initiators of the gathering.

Both have pursued a pro-Western course, dragging their nations out of
Russia’s strong influence.

“From the very beginning this forum was planned with the aim of limiting
Russia’s leadership position in the region,” analyst Mykhaylo Pohrebinsky
said.

Ukraine’s parliamentarians are divided over the regional forum, but all
agreed that it is a challenge to the Kremlin.

Communist legislator Alla Aleksandrovskaya claimed that the forum was being
held “under pressure from the United States with the aim of isolating Russia
from Europe.”

But lawmaker Valeriy Shushkevych, an ally of pro-Western opposition leader
Yulia Tymoshenko, countered that it was a right step as “democracy is being
turned back in Russia and Ukraine does not want to repeat that.” “We are
just protecting our choice, the choice of the country in favor of
democracy,” Shushkevych said.  -30-
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5.           UKRAINE TO RESELL NIKOPOL METALS PLANT

By Tom Warner in Kiev, Financial Times
London, UK, Wednesday, November 30 2005

Encouraged by the highly successful reprivatisation of the Kryvorizhstal
steel mill, Ukraine will resell Nikopol Ferroalloy, another of the country’s
biggest metals plants, Viktor Yushchenko, the president, said yesterday.

Mr Yushchenko told an investors’ conference he remained committed to

ending legal challenges to privatisations that had taken place under the prior
pro-Russian government, a policy he admitted had hurt the investment
climate.

But he still planned to resell Nikopol Ferroalloy, which was taken over by
Viktor Pinchuk, a businessman and son-in-law of Ukraine’s former president,
Leonid Kuchma, in 2003.

Mr Pinchuk bought a stake of 50 per cent plus two shares in Nikopol for $80m
(Euro 68m, £47m) in 2003, but Kiev’s economic appeals court ruled in August
that the sale was illegal and the stake should be returned to the state.

Mr Pinchuk has appealed to the Supreme Court, which has not yet clarified
whether it will review the case.

Nikopol’s current market capitalisation is about $470m.

Mr Yushchenko’s government successfully resold Kryvorizhstal to Mittal Steel
for $4.8bn, six times as much as Mr Pinchuk and two partners paid for the
mill in a 2004 privatisation, which was cancelled by the courts after Mr
Yushchenko came to power in January.

The dispute over Nikopol was one of the main reasons that Mr Yushchenko
fired his former prime minister, Yulia Tymoshenko, and called an end to
“reprivatisations” in September.

Mr Yushchenko accused Ms Tymoshenko of favouring the plant’s minority
shareholders, who have urged the government to renationalise and resell Mr
Pinchuk’s stake.

Since then, Mr Yushchenko and Ms Tymoshenko have tried to patch up their

old alliance and are discussing a possible coalition after elections in March.
Mr Yushchenko said he also planned auctions of Ukrtelecom, the national
telecoms operator.
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6.                 BNP TO BUY STAKE IN UKRAINIAN BANK

By Tom Warner in Kiev, Financial Times
London, United Kingdom, Friday, December 2 2005

BNP Paribas has agreed to acquire a 51 per cent stake in Ukraine’s
fourth-largest bank, Ukrsibbank, after unexpectedly beating other leading
European banks which had shown interest.

The deal, worth $350m-$400m according to analysts, will bring to life BNP’s
long-cherished dream of entering the former Soviet Union’s fast-growing
retail banking sector after two years of frustrated efforts to acquire a
bank in Russia.

Ernest Galiyev, president of the bank and one of its owners, said the deal
would be completed as soon as regulators gave approval.

He said the current management would remain in place and that he and his
partner Olexander Yaroslavsky would stay on as part-owners with a

combined stake of 49 per cent.

BNP is the second big European bank to make a move into Ukrainian retail
banking after Austria’s Raiffeisen International paid just over $1bn in
October for a 93.5 per cent stake in Aval Bank, Ukraine’s second-biggest.

Ukrsibbank has a 5.3 per cent market share in Ukraine with assets of

$1.75bn and more than 700 branches. It had selected a shortlist of bidders
including France’s Société Générale, Austria’s Erste Bank, Italy’s Banca
Intesa, Germany’s Commerzbank and Hungary’s OTP.   -30-
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7.                  CORRUPTION’S GRIP EASES IN UKRAINE

Fred Weir, Correspondent of The Christian Science Monitor
Christian Science Monitor, Boston, MA, Tue, November 29, 2005

KIEV, UKRAINE – Viktor Kushner and about a dozen friends staged a rally

at Kiev’s city hall one day last week to protest what they call “corruption” in
the sale of some public parkland to a private business.

This sort of demonstration is a regular sight on the streets of Kiev these
days, though it was practically unheard of barely a year ago.

“The experience we had in the Orange Revolution last year showed that it’s
possible to change things by taking a stand,” says Mr. Kushner, a public
employee. “We’ve become freer, and we’re learning to act like free people.”

It’s difficult to judge the issues involved in Kushner’s specific complaint
against city hall. But growing evidence suggests that one of Ukraine’s worst
scourges, corruption, may be receding in the face of heightened public
awareness and postrevolutionary street activism.

Though the economic reforms promised by President Viktor Yushchenko have
been slow to arrive, experts say significant numbers of businesses are
leaving the shadow economy, more people are paying taxes, and fewer
officials are taking bribes.

“There are very strong anti-corruption moods in society right now,” director
of the independent Institute of Global Strategy in Kiev. “The revolution was
above all a moral event that changed public consciousness. Officials know
they must tread carefully in this atmosphere.”

The Berlin-based organization Transparency International, which annually
rates the perception of corruption in 150 countries, this year notched
Ukraine up to 113th place from last year’s 122nd, putting it roughly on a
par with Vietnam and Zambia.

Light shines into shadow economy Government tax receipts rose by 30 percent
in the first nine months of this year, despite a sharp economic slowdown,
thanks to individuals and companies emerging from the shadows to pay their
taxes.

In October, foreign investors received a heartening sign when one of
Ukraine’s biggest steel mills, Krivorizhstal, was “reprivatized” and bought
at open auction by India’s Mittal Steel Co. for $4.8 billion.

The same company had been previously sold to the son-in-law of then
President Leonid Kuchma for just $800 million. “This was a signal to the
whole society that times have changed,” says Oleksander Chekmishov,

deputy director of the Institute of Journalism in Kiev.

“It says that Ukraine is no longer a country of systemic corruption, in
which a small elite linked to political power divided up most of the
country’s assets among themselves,” he says. Ukraine’s improving
performance, however slight, contrasts with the worsening perception of
corruption in some of its post-Soviet neighbors.

Russia, which stands at No. 128 in Transparency International’s table of 150
countries, has seen corruption levels soar hand in hand with the deepening
authoritarianism of President Vladimir Putin’s rule over the past five
years.

For example, a recent survey by the independent InDem Foundation in Moscow,
which tracks corruption in Russia, found that the average business bribe has
grown by 13 times to $135,000 since Mr. Putin came to power.

In a TV address marking the first anniversary of the Orange Revolution last
week, Yushchenko pledged to wage war on corruption. “I am ordering the
Cabinet to produce urgent bills to be put to parliament,” including measures
to prevent tampering with the judiciary, offering people a chance to declare
past illegal incomes and new guarantees for property rights, he said.

Nevertheless, many Ukrainians, such as Kushner, appear to regard corruption
as a bigger problem than ever in their country. “The whole system is dirty,”
he says. “Everything needs to be taken under public control.”

One reason for the widespread distrust, experts say, is the acrimonious
bickering that has broken out among the leaders of the victorious Orange
coalition.

Last September, Yushchenko’s chief of staff, Oleksander Zinchenko, resigned
and accused several members of the president’s inner circle of graft. In the
political shock wave that followed, Yushchenko fired the entire government
and one of his closest advisers, industrialist Pyotr Poroshenko.

                           PUBLICIZING ALLEGATIONS 

Another reason, some suggest, is that a freer post- revolutionary media has
taken to airing allegations of official misconduct more thoroughly. “In the
past, the issue of high-level corruption was kept behind closed doors and
seldom raised in the press,” says Oleksander Shushko, director of the Center
for Peace, Conversion and Foreign Policy, a Kiev think tank. “Now we hear
about it every day on TV, so it seems like there’s more of it.”

The current feuding between the former leaders of the Orange Revolution,
which largely takes the form of corruption accusations, could be a good
thing for Ukraine’s political growth, says Volodymyr Gorbach, an adviser to
Pora, the radical student movement that intends to run candidates in
parliamentary elections slated for next March.

“They have ensured that corruption will be a key issue in the election
campaign, and that’s good,” he says. “It will help keep the momentum going
so Ukraine can move into the next stage of deep democratic change.”

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8.                                    TROUBLED UKRAINE

Irish Times, Dublin, Ireland, Thu, Dec 01, 2005

It caused barely a ripple outside Ukraine, but the case against the alleged
killers of journalist Georgiy Gongadze has just been sent to the country’s
Supreme Court.

It caused barely a ripple outside Ukraine, but the case against the alleged
killers of journalist Georgiy Gongadze has just been sent to the country’s
Supreme Court. The decapitation of the young reporter in 2000 is seen as a
slow-burning flame that grew with others into the conflagration of last
year’s Orange Revolution.

But the glacial progress of the murder inquiry encapsulates both the ills of
Ukraine’s ancien regime, and the disillusionment of many people who helped
topple it.

Not long after the orange-clad supporters left Kiev’s Independence Square,
cracks appeared in the team that led them to victory over a Moscow-backed
clan that used its power to rig elections.

For the faithful, the toughest “orange divorce” was that of Viktor
Yushchenko and Yulia Tymoshenko, whose high cheekbones and traditional
blonde plait became as emblematic of the new Ukraine as the poison-ravaged
features of her president.

As the economy slumped, in-fighting in the revolutionary ranks burst into
the open when the president’s chief-of-staff quit and accused his inner
circle of being more corrupt than the ousted cronies of former president
Leonid Kuchma.

Mr Yushchenko’s sacking of Ms Tymoshenko prompted old allies to brand him

a traitor to the revolution, and the heckling grew when he struck a deal with
Viktor Yanukovich – his arch enemy of last year – to ensure the appointment
of her replacement.

The president also agreed not to prosecute pro-Yanukovich officials who
helped rig the elections that triggered the revolution. Now, with the two
figureheads of the revolution likely to split the pro-reform vote in
parliamentary elections next spring, polls put Mr Yanukovich in the lead.

Optimists say all this is reminiscent of early 1990s Poland, where the
triumphant Solidarity team that ousted the communists splintered into a
dozen angry shards, but which is now a vibrant member of the EU and Nato.
Others see a stronger resemblance in another Ukrainian neighbour, Romania,
where it took 15 largely stagnant years to clear a corrupt clique from
power.

Two former policemen are expected to stand trial for the murder of Mr
Gongadze, one of the most tenacious critics of Mr Kuchma. He denies ordering
the killing, and many Ukrainians believe Mr Yushchenko has granted him
immunity from prosecution.

Mr Kuchma’s former interior minister and an ex-police general have been
accused of planning the murder: the minister was shot dead in March, hours
before he faced questioning about the case, while the police chief has
disappeared.

For Mr Gongadze’s relatives, as for many other Ukrainians, the Orange
Revolution has many questions left to answer.  -30-
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9.   DISMISSED UKRAINE LEADER CHARTS HER COMEBACK

By Judy Dempsey, International Herald Tribune
Europe, Wednesday, November 30, 2005

KIEV – In Ukraine, where resignation and economic paralysis have replaced
the hopes of the Orange Revolution of a year ago, the controversial and
flamboyant former prime minister, Yulia Timoshenko, is planning her
political comeback during parliamentary elections next March.

Only two months after President Viktor Yushchenko sacked her as prime
minister, a more subdued but still determined Timoshenko is hoping to
establish an alliance of convenience with the co-leader of the Orange
Revolution in order, she says, to prevent old rivals from regaining power
and to restart the reforms.

“I want to have a coalition with Yushchenko but not with these odious people
around him,” said Timoshenko, 45, who frequently clashed with Yushchenko
during her eight months in office, criticizing him for failing to curb the
powers of the oligarchs or stamp out corruption.

“This group of people who used the slogans of the Orange Revolution to come
to power but then used it to satisfy their appetite prevented the real unity
between me and Yushchenko,” said Timoshenko during an interview in the
offices of her Motherland Party. “I believe that the president is sincere in
his wish to do good for Ukraine.”

Yushchenko has not responded in public to Timoshenko’s offer. He is facing a
sharp diminution of his presidential powers under reforms that will make
Ukraine more of a parliamentary democracy as of January, ahead of the March
elections.

Essentially, he faces a choice among joining forces with Timoshenko and
accepting her again as prime minister; trying to find a strong enough ally
in his own camp for the post; or accepting that it go to his rival Viktor
Yanukovich, whose rigged victory in presidential elections last year
precipitated the Orange Revolution and Yushchenko’s eventual triumph in
rerun elections.

Yanukovich is currently waging a savvy campaign for the votes of those
disillusioned by the lack of great reform in the past year.

The United States and the European Union had placed great hopes in
Yushchenko and Timoshenko, believing the two could lead Ukraine toward
democracy and provide stability to a strategically important country
sandwiched between the EU and Russia.

After years of corruption under former President Leonid Kuchma and his prime
minister, Yanukovich, Westerners and many Ukrainians were hoping for a fresh
start.

But over the past few months, outsiders have looked on with frustration and
almost disbelief as the two heroes of the Orange Revolution clashed bitterly
over the pace of reforms.

The infighting has allowed the Russian-backed Yanukovich and his Ukrainian
Party of Regions to regroup. As Ukrainians marked the first anniversary of
the Orange Revolution last week, Timoshenko warned of a Yanukovich

comeback.

“Today,” Timoshenko said, “Yanukovich has just a chance. If we do nothing,
he has a 100 percent chance” of winning. To prevent this, she said she was
prepared to form a strategic alliance with Yushchenko’s Our Ukraine party
until the election.

Timoshenko acquired her political skills in the mid-1990s while running her
multibillion-dollar energy company, Unified Energy Systems of Ukraine, and
later as deputy prime minister in charge of the energy sector, when she
clashed openly with several oligarchs. She blamed some of these same
immensely rich and powerful businessmen for her dismissal, even though she
and Yushchenko had a written pact on sharing power.

Once the elections were over, Timoshenko recalled how Yushchenko had

invited her to “a frank talk. He told me he did not want to go along with the
agreement. He would feel more comfortable if I resigned. He would appoint
Petro Poroshenko as prime minister.”

Poroshenko, an oligarch with interests in confectionery, shipbuilding and
the media, supported Yushschenko’s presidential election campaign. The two
men are very close. They are godparents to each other’s children.

Timoshenko said Yushchenko changed his mind when he went to Independence
Square on the day of his inauguration, Jan. 23, 2005. “There, the crowds
shouted ‘Yulia! Yulia!’ The president saw it would not be wise to appoint
Poroshenko while society had other wishes,” Timoshenko said.

As prime minister, Timoshenko said, she did not have a free hand to tackle
corruption or reprivatize enterprises that had often been sold at below
market prices or to oligarchs who supported Kuchma.

Yushchenko had been more cautious, unwilling to seek revenge. Timoshenko

saw this as a sign that Yushchenko was not prepared to take on the oligarchs
or break their stranglehold over the state.

“Those who controlled metallurgy, energy and refineries joined forces,
sometimes with the most odious people in the Russian oligarchy from the
Russian Federation” and tried to block re-privatization, Timoshenko said.

Despite what she claims was intimidation and attempted bribes, Timoshenko
succeeded in reprivatizing the Kryvorizhstal metallurgical enterprise owned
by the oligarchs Rinat Akhmetov and Viktor Pinchuk, Kuchma’s son-in-law. It
was sold last month for $4.8 billion, six times higher than last year’s
original selling price.

Timoshenko said it was supposed to be just the beginning in her attempt to
break the power of the oligarchs. “We had been working on a model for future
ones,” she said. “Some people approached me with huge bribes, basically
trying to buy me. There was enormous pressure almost every day to prevent me
from playing a constructive role. It was basically a war.”

Economic advisers to Yushchenko who can be just as critical of the president
as they are of Timoshenko said Timoshenko did not do a good job on the
economy.

“As prime minister, Timoshenko pursued populist policies, increasing
pensions and social assistance payments,” said Igor Burakovsky, director

of the Institute for Economic Research and Policy Consulting in a recent
interview.

Buoyed by state handouts, during the first eight months of 2005 real
household incomes increased by 24.5 percent compared with the same

period last year. Inflation is running at 13.9 percent.

When asked if she was a populist and had increased social assistance
payments as part of her March election bid, Timoshenko denied it. “I think
for the first time in the history of Ukraine, I fulfilled my promises,” she
said.

“We managed to keep inflation under control despite our social policies.
These were the promises made by the president. But because there were
intentions to dismiss me from the very moment I was appointed, they used
this stereotype as a populist to justify their actions.”

If elected, Timoshenko says she will be prepared to take on the oligarchs
since she will have a freer hand in the strengthened prime minister’s seat.

“The less state in the market, the better,” Timoshenko said. “More state
encourages corruption. It leads to an unholy alliance of the bureaucrats and
the oligarchs.

“The more market we introduce into the economic sphere, the more difficult
for these corrupt interests to flourish,” she said. “We gave promises to the
Orange Revolution to introduce reforms. My campaign slogan is Move Ahead.”

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LINK: http://www.iht.com/articles/2005/11/30/news/ukraine.php
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[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
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10. GRADUATE UKRAINE FROM JACKSON-VANIK AMENDMENT

ACTION ITEM: Ukrainian National Information Service (UNIS)
Washington, D.C., Thursday, December 1, 2005

WASHINGTON – The recent “Orange Revolution” in Ukraine has

transformed the political landscape in that country.  Calls for a re-
examination of U.S.-Ukrainian bilateral relations is necessary, and
warranted.

One of the more immediate issues is the revocation of the Jackson-Vanik
amendment to the 1974 Trade Act, which limits trade with countries that do
not allow free emigration of its citizens.  Ukraine “inherited” the
amendment when it re-established its independence in 1991.

In early April 2005 in an address to a Joint Session of the United States
Congress, President Yushchenko reiterated the need to repeal the
Jackson-Vanik amendment and bring that chapter of Ukraine’s history to a
close.

Recent passage of a bill in the United States Senate (S632) has prompted
efforts in the House of Representatives by Rep. Jim Gerlach (R-PA) to
“graduate” Ukraine from the Jackson-Vanik amendment.

The Ukrainian National Information Service (UNIS) requests all Ukrainian
Americans and friends of Ukraine to contact their U.S. representatives and
urge them to support Rep. Gerlach’s bill HR1053.

Attached, please find a sample letter to send to your U.S. representative.
Sample letters may be e-mailed directly to your representative at
http://www.house.gov/writerep/.  Should you have any questions, please feel
free to contact the UNIS office by phone at (202) 547-0018 or via email at
unis@ucca.org.

SAMPLE LETTER

The Honorable (Name)
U.S. House of Representatives
Washington, D.C. 20515

Dear Representative (Name):

As a Ukrainian American residing in your district, I urge you to support
HR1053, a bill introduced by Rep. Jim Gerlach to “graduate” Ukraine from

the Jackson-Vanik amendment of the 1974 Trade Act.  This amendment is
a relic of Cold War-era politics.

Each Administration since 1992 has certified that Ukraine has met all
requirements stipulated in the law. Furthermore, as recent as November 18,
2005, the United States Senate passed by unanimous consent S632 to repeal
the Jackson-Vanik amendment for Ukraine.

In the last few months, the world has witnessed Ukraine make a firm
commitment to a democratic future and integration into the Euro-Atlantic
community.  It is essential that the U.S. Congress support the goodwill of
the Ukrainian people and attest in providing greater bilateral relations.

Repealing the Jackson-Vanik amendment, as was accomplished in the United
States Senate, is a critical step that will demonstrate to the Ukrainian
government that the United States welcomes the changes they implemented

and trusts in the future of Ukraine. I urge you to support HR1053 and thus to
facilitate the democratic and economic development of Ukraine.

Sincerely,
————————————————————————————————-
Ukrainian National Information Service, 311 Massachusetts Avenue, NE
Washington, DC 20002, tel:  (202) 547-0018, fax:  (202) 543-5502
e-mail:  unis@ucca.org, Web at:  http://www.ucca.org

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[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
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11. UKRAINE’S EU ENVOY ROMAN SHPEK SAYS INTEGRATION
                           DEPENDS ON WTO ACCESSION
            “Roman Shpek: ‘I am a supporter of a revolution in minds
                                   and an evolution in actions'”

INTERVIEW: With Roman Shpek,
Ukraine’s Envoy to the European Union
Pavlo Bebl, Uryadovyy Kuryer, Kiev, in Ukrainian 29 Nov 05; p 6
BBC Monitoring Service, UK, in English, Thu, December 01, 2005

Ukraine’s European integration depends a great deal on WTO accession and
starting talks with the EU on the creation of a free trade zone, Ukraine’s
envoy to the European Union, Roman Shpek, has said. Speaking in an

interview with the official cabinet paper, Shpek said the Orange Revolution
had brought Ukraine a lot of benefit.

He noted that the recent sale of the Kryvorizhstal steel plant gave the
business community a positive signal. Though Shpek quoted unnamed European
politicians as saying that Ukraine lacked a development strategy he did
stress that Ukraine’s future was in its own hands.

The following is the text of the interview with Roman Shpek conducted by
journalist Pavlo Bebl entitled “Roman Shpek: ‘I am a supporter of a
revolution in minds and an evolution in actions'” published in the Ukrainian
newspaper Uryadovyy Kuryer on 29 November; subheading have been inserted
editorially:

The Ukraine-EU summit will take place in Kiev on 1 December. It is assessed
by both sides as a kind of a phase in relations. Some Ukrainian analysts say
that the period of romanticism caused by the Orange Revolution has passed,
and Ukraine should, therefore, come to the summit with concrete deeds.

What concrete success in reforms did we manage to achieve during this period
and will the European Union be satisfied with Ukraine’s pace? This is the
first question to Ukraine’s envoy to the European Union, Roman Shpek, whose
interview is published by us on the eve of this important event.

             ORANGE REVOLUTION MADE POSITIVE IMPACT

[Shpek] There are no doubts that the general spirit of revolutionary changes
and transformation in Ukraine has made a substantial positive impact to the
development of relations with all countries in the world, and with the
European Union in particular.

Aspirations to defend the right to their own political choice demonstrated
by the Ukrainian people during the Orange Revolution has quickly, if not
suddenly, brought Ukraine closer to European countries. This is extremely
important. All these processes gave breath for developing bilateral and
multilateral political and economic relations.

Of course, the period after the revolution and formation of the relevant
teams in executive authorities was not simple. It is likely to be better for
journalists, political experts and historians to make conclusions about
this.

But despite all the difficulties of this process, Ukraine has managed to
achieve significant and important results. Democratic processes in social
development and activities of non-governmental organizations are taking
place. Extremely positive changes in provisions for freedom of speech can

be noted.

Economic reforms and liberalization of the business climate are taking
place. A favourable investment environment is being formed. The holding

of a new process to privatize the Kryvorizhstal steel plant has become an
important signal for the international business community.

However, I would like to make a remark that EU member states have certain
reservations and concerns within this context. They are related to whether
the Kryvorizhstal case was the first one and the last one.

                         FUTURE UKRAINE-EU RELATIONS

Generally speaking, we have managed to achieve much in bilateral relations
between Ukraine and EU. A statement is planned to be made at the summit
saying that the European Union, based on conclusions of the European
Commission, grants Ukrainian economy market status in anti-dumping
investigations.

We have substantial achievements in implementing the Ukraine-EU Partnership
and Cooperation Agreement and Action Plan. Two new agreements will be signed
during the summit: the agreement on Ukraine’s participation in the Galileo
programme and the Horizontal Aviation Agreement. In addition, a memorandum
on cooperation in the field of energy will be endorsed.

There is also a positive aspect that a meeting between the Energy Minister
Ivan Plachkov and the European Commissioner for Energy Andris Piebalgs will
take place a week after the summit, on 8 December, in Brussels, during which
ways for implementing the memorandum will be discussed, in particular, the
first steps in each of the priority areas for 2006.

I would like also to note accomplishments in cooperation between Ukraine and
EU in the field of justice and home affairs (JHA). The work of the joint
group on reviewing the action plan in the field of JHA and preparing a new
road map for the period from 2006 till 2008 will begin this year.

We see many elements of future cooperation in implementing common foreign
and security policies. Ukraine’s role as a regional
player is growing. Ukraine’s role and importance in settling the Dniester
region conflict are remarkable.

The initiative of Ukrainian President [Viktor] Yushchenko on this issue was
positively accepted by the EU leadership. All this indicates that Ukraine
does not just receive something from EU, but it is an adequate partner and
contributor to European policies.

The Europeans are interested in the coming parliamentary election being held
properly, which is one of the political criteria of the Action Plan. If the
country once again demonstrates its dedication to the democratic way of
development, new hopeful prospects will emerge for us, and they will promote
stepping up development of our relations.

I would like to answer “yes” to your question on whether the EU will be
satisfied. First of all, we, the Ukrainian people, should be satisfied.
Representatives of political parties and non-government organizations should
be satisfied with the political process taking place in the country.

Therefore, I call on all of us to collate our actions with our domestic
priorities, aware that this is the way for us to approach the so-called
Copenhagen criteria which give the formal right to speak about EU

membership in the future.

                                        UKRAINE’S PRIORITIES

[Bebl] Mr Shpek, British Ambassador to Ukraine (the United Kingdom currently
presides in EU) Robert Brinkley distinguished positive developments during
one of the “round tables” dedicated to European integration: customs reform,
stopping pressure on the news media and other steps in the direction of
supremacy of law.

Meanwhile, there are other tasks which we have to fulfil, among them
ensuring intellectual property rights, fighting corruption and others. Which
problems can you mention which concern Europeans?

[Shpek] The issue of fighting the shameful phenomenon of corruption, indeed,
influences estimation of the processes taking place in this country. Western
diplomats, politicians, political experts and journalists follow
developments in Ukraine.

They positively perceive the fact that Ukrainians themselves are speaking
more about corruption and fighting it in Ukrainian society. By the way, I
think that this issue will also be discussed during the summit.

The issue of ensuring intellectual property rights is undoubtedly very
important not only for Ukraine, but for all other countries as well. It also
has extraordinary importance for Ukraine’s integration into the
international economic system.

Ukrainians themselves suffer great losses due to the fact that property
rights in the country are not sufficiently protected. Meanwhile, the
European side notes substantial progress in resolving this issue.

                                      WTO ACCESSION

Our strategy and tactics with regard to Ukraine’s WTO accession are among
other questions to which the Europeans have not got positive answers for
themselves. The situation changes here the same way as during military
actions: sometimes we suffer losses, sometimes we regain the initiative and
achieve some positive developments, and sometimes it becomes calm.

The Europeans cannot always understand us on this issue. In particular, they
cannot understand the reasons why representatives of so-called
progovernmental and propresidential factions vote against Ukraine’s WTO
accession or do not vote at all.

Opposition forces have their clear position, but the position of
propresidential forces is not completely clear. Does a propresidential
majority exist in Ukraine in general and what is it formed around?

How can we have the objective of joining the EU if we reject the prospect of
WTO accession? In this case, we have to give more positive signals on actual
developments and our steps for the near future.

We should focus on our ultimate goal: Ukraine’s EU accession. There is a
standard scheme of achieving this goal: by way of concluding an agreement on
European association. This agreement is based on establishment of a free
trade zone (FTZ) between the country which then becomes a candidate for
joining EU and the EU itself.

In our case, we shall be able to start negotiations on this agreement on FTZ
formation as soon as Ukraine joins WTO. All sides are ready for this.

I remember my discussion with European politicians. They say that Ukraine
lacks a development strategy. The government has its programme for its term
of powers, but there is no strategy with regard to the direction in which
the nation plans to go. It will not be determined for us in Brussels. Our
future should be built with our hands and minds.

                               BILATERAL VISA REGIME

[Bebl] The EU Council of Ministers recently endorsed the mandate for
beginning negotiations on liberalization of the visa regime with Ukraine. Is
it a response to Ukraine’s “visa-free” steps, a kind of an advance before
the summit or confidence in civilized relations with us in the future?

[Shpek] If this question were asked in the game “Who Wants to Be a
Millionaire?”, I would have chosen the third option: confidence in civilized
relations with Ukraine in the future.

European institutions and EU member states welcomed Ukraine’s unilateral
actions in introducing a visa-free regime for citizens of EU countries, but
they did not take any obligations to do anything in response. This step from
Ukraine’s side has resulted in a positive reaction from both political
circles and public opinion in EU, in particular, in Brussels.

It was accepted as desire and readiness to become open, to show the real
living situation, to give an opportunity to visit the country and to take
part in its economic processes. Of course, this step is timely and right.

                                       NO EU ADVANCES

Unfortunately, EU is not the entity which gives certain advances. In this
context, one cannot compare EU with the former USSR or even with new
integration structures. Everyone was forcibly taken to the USSR in Soviet
times. Look at the way the Eurasian Union and SES [Single Economic Space]
are being formed.

Someone is very persistent in inviting someone else without showing the
rules of the game and without building unification step by step in order to
achieve a positive result. For example, there is an idea to form a customs
union in the SES, along with supranational bodies, and some even wish to
have a currency union.

But nobody wants to speak about formation of a free trade zone at the first
stage, or even to recognize the agreements which have been signed. At the
same time, countries are forced to joint it by way of different kinds of
political and economic pressure.

But the EU is the association for which others apply. There were cases in EU
history when countries submitted their applications for membership several
times. All of us witnessed the way our neighbouring countries from Eastern
Europe were working to be recognized as EU candidates, and then members.

This is why EU does not give advances, but requires countries’ readiness,
desire and capacity to acquire relevant criteria and rights to EU
membership.

                          NEW AGREEMENTS TO BE SIGNED

[Bebl] What, in your opinion, can be the next step from the EU side? You
have mentioned a long-awaited statement on granting market economy status to
Ukraine… [ellipsis as published] It is worth waiting for negotiations on a
free trade zone?

[Shpek] Justice will finally triumph in one more issue. Indeed, I have
mentioned that, on the basis of the European Commission’s conclusions, EU
member states recognized Ukraine as a market economy in anti-dumping
investigations.

The EU is ready for furthering cooperation in energy and to sign a
memorandum during the summit. The EU is ready for negotiations on forming
the FTZ, and I have already drawn special attention to the fact that in
order to achieve this, we have to do our share of the homework – to joint
WTO.

You know that, in addition to the Ukraine-EU Partnership and Cooperation
Agreement (PCA) in force, which will expire in 2008, the European
Neighbourhood Policy is being carried out in accordance with the action plan
approved earlier this year. There are also many serious accomplishments in
fulfilling these documents.

At the same time, the EU is ready to further relations with Ukraine. During
the meeting of the Council of Ministers in May 2006, the European Commission
will consider the possibility of concluding a new and more comprehensive
agreement between Ukraine and EU to replace the PCA which will enable them
to establish a new legal framework.

From our side, we expect it to be a European association agreement, and its
fulfilment will give Ukraine the right to become a candidate EU member and
to begin relevant negotiations on accession.

It is also extremely important for us to have a strong position at the
beginning of the negotiations on the new and more comprehensive agreement.
It will be strong when Ukraine joints WTO, begins negotiations on the FTZ
and conducts free democratic elections.

    UKRAINIAN POLITICIANS NEED MUTUAL UNDERSTANDING

[Bebl] I shall not exaggerate when I say that the coming parliamentary
election is shoulder to shoulder with Ukraine’s European and Euro-Atlantic
ambitions. What is the most important for the European Union in this case:
free and democratic process or mutual understanding of the forces which will
come to power after the election?

[Shpek] According to European politicians, they are ready for cooperation
with the authorities elected by the Ukrainian people. They do not show
special preferences for the names of future MPs who will form the majority
and those who will form the government.

Of course, it is important to have mutual political understanding between
the forces, as otherwise the election results will not make any positive
contribution. Meanwhile, much attention will be paid to the process of the
election campaign itself and the electoral process: the extent to which all
political forces will have equal rights and opportunities, the extent to
which we have left the impact of administrative resources in the past, the
way the political elite will achieve its proclaimed objectives and whether
we shall demonstrate consistent policy.

                           NEED FOR BETTER INFORMATION

[Bebl] Mr Shpek, any country has two components in its European integration
process. Ukraine is unlikely to have problems with the external, diplomatic
one. But the domestic one is related with a great bulk of, let us say,
homework.

As for the latter, I would like to single out informing people of the
advantages of EU accession, or in other words, propaganda work. Do you

have the impression that Ukraine makes a mess of it?

[Shpek] Your question contains an answer to it. Indeed, we make a mess of
the information work, but I would not like to say that it is propaganda.

There is very little information in the Ukrainian printed media, on TV and
in Internet publications about the way of life in EU, what it cares about
and what it is concerned with, what issues it considers, what concerns EU
citizens, what way the authorities should become closer to people, what way
the authorities should care not about their own interests, but reflect
social interests in their strategies, what way security levels can be
increased and conditions for free movement of people, goods, capitals and
services can be formed.

At the same time, efficiently fighting their illegal trafficking, along with
the extent to which EU is trying to be as close as possible to general human
values, and these values should become the basis of its policies. All this
is extremely necessary for understanding that the concerns of Europeans are
very close and similar to the concerns of Ukrainian citizens.

In addition to the information component which to great extent is a part of
our homework, the institutional capacity of the government and the Supreme
Council [parliament] to make provisions for fulfilling the task they
outlined and their ability to reflect social interests also play an
important role. Not the authorities for the sake of the authorities, but the
authorities for the sake of peace, stability and prosperity of the Ukrainian
people.

                               EVOLUTIONARY APPROACH

[Bebl] The last question is whether you are a supporter of a revolution or
an evolution in European integration?

[Shpek] I am a supporter of a revolution in minds and an evolution in
actions. We should change our psychology and mentality quicker and become
masters of our lives responsible for our future, our children’s and parents’
future and responsible for our prosperity, our life and our choice. The kind
of Supreme Council and policies we will have depends on us.

As for actions, we should stick to evolutionary way of development and
constructive dialogue between political factions and groups. Everyone has
the right to his own likings, both orange [President Yushchenko’s] and blue
[former Prime Minister and presidential candidate Viktor Yanukovych’s] or
red [Communist] colours. The only point is that all this should be related
to strengthening our state and its sovereignty.

The actions of some politicians should not lead to aggravation of
inter-ethnic, international or inter-religious intolerance. Respect for
general human values should be the basis of activities of the people who
have passed through revolutionary renewal and development of
self-consciousness.

One should learn to tolerate different points of view. In the event of
discussion, one should see not an enemy facing one, but a human being the
only controversy with whom lies in different vision of this or that problem.
They should search for ways of resolving them as two equal participants.

At this point, I would like to come back again to my answer to the first
question: we should not try to be liked by someone, but we should be proud
of our name – Ukrainian people – and be able to fulfil our aspirations.
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12.   PRES BUSH SALUTES LEADERS OF DEMOCRACY IN KIEV
          Message to the Forum of the Community of Democratic Choice

Public Affairs Section, United States Embassy Kyiv
Kyiv, Ukraine, Friday, December 2, 2005

KYIV – Undersecretary of State for Democracy and Global Affairs Paula
Dobriansky, the head of the U.S. delegation to the Forum of the Community

of Democratic Choice in Kiev, Ukraine, today shared greetings from U.S.
President Bush with her fellow delegates:

(Begin Message from President Bush)

I send greetings to those gathered for the Forum of the Community of
Democratic Choice in Kiev, Ukraine.

Across the world, hearts and minds are opening to the message of human
liberty.  The past four decades have seen the swiftest advance of freedom in
history, proving that the desire for justice, freedom, human rights, and
accountable, representative government is universal.

The anniversary of the Orange Revolution was a powerful example of

democracy for people around the world.  When hundreds of thousands of
Ukrainian citizens stood up to defend democracy in their homeland, they
showed that the love of liberty is stronger than the will of tyranny.

The work of democracy requires building and sustaining the institutions that
support freedom.  Democracies may look different from country to country,
but all democratic nations must uphold the rule of law, limit the power of
the state, and respect the rights of all citizens.  Nations grow in strength
not through conquest, but by allowing the talents and gifts of their people
to flourish.

I appreciate the participants in the inaugural conference and all those who
are working for the cause of freedom in the Baltic, Black Sea, and Caspian
regions, and around the world.  I also appreciated the strong leadership of
President Yushchenko and President Saakashvili.  Your efforts are an
inspiration to all who love liberty.

America will stand with you as you continue to advance democracy and
security and build a free future for your children and grandchildren.
Together, we will send a message of hope that freedom will be the future

for all nations and all people.

Laura and I send our best wishes for a successful meeting.

Signed: George W. Bush
(End Text)
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LINK: http://usembassy.kiev.ua/infocentral_eng.html
—————————————————————————————-
Public Affairs Section, United States Embassy Kyiv
4 Hlybochytska St., Kyiv  04050  Ukraine
(380 44) 490-4026, 490-4090, Fax (380 44) 490-4050
http://usembassy.kiev.ua, info@usembassy.kiev.ua
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[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
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========================================================
13.                     REVISITING THE ORANGE REVOLUTION, 

                              CONSIDERABLE GAINS MADE
                      Yushchenko’s First Year in Office: Part One
 
ANALYSIS & COMMENTARY: By Taras Kuzio
Eurasia Daily Monitor, Volume 2, Issue 217
The Jamestown Foundation
Washington, D.C., Monday, November 21, 2005

Ukraine held the second round of its contentious presidential election on
November 21, 2004. When the incumbent regime of President Leonid Kuchma
tried to steal the election from popular favorite Viktor Yushchenko,
thousands of Ukrainians took the streets in what came to be known as the
“Orange Revolution,” in honor of the Yushchenko campaign color.

One year later, the new administration has not fulfilled many of the
expectations that arose from the Orange Revolution. Nevertheless, it would
be wrong to paint the first year of Yushchenko’s administration as either
all positive or all negative, although the latter is currently more often
heard.

In its first year, the Orange team has registered 10 achievements, but has
come up short in seven other areas. The first part of this two-part article
looks at the areas of progress.

Human Rights and Democratization. As the EU has noted, Ukraine’s Orange
Revolution and Yushchenko’s election put the country back on the democratic
track that had stalled in Kuchma’s second term.

Since the late 1990s most members of the Commonwealth of Independent States
have evolved towards authoritarian regimes and “managed democracies.” But a
recent EU report noted that there are no systematic human rights violations
in Ukraine.

Civic Empowerment. The number of Ukrainians who took part in Orange protests
is huge. Throughout the country, one in five Ukrainians took part in
protests locally or in Kyiv. In Kyiv itself, 48% of its 2.5 million
population took part in the Orange Revolution. Participation in the Orange
Revolution changed Ukrainians from subjects into citizens.

Ukrainians, who were traditionally viewed as passive by Soviet and
post-Soviet rulers, are unlikely to continue to be submissive. A September
2005 poll by the Kyiv International Institute of Sociology asked Ukrainians
if they were ready to defend their civil rights; 51% said “Yes.” In western
and central Ukraine this answer was as high as 65%.

Democratic Political System. In early 2006, Ukraine will change to a
parliamentary-presidential system resembling those commonly found in central
Europe and the Baltic states. These parliamentary systems have helped these
countries to register democratic progress and move toward Euro-Atlantic
integration.

Media Freedom. Ukraine’s media environment has been transformed. The Social
Democratic Party-United (SDPUo) has lost influence at the three television
channels it once controlled (State Channel 1, 1+1, and Inter). Other
channels controlled by Viktor Pinchuk (ICTV, STB, Novyi Kanal) have become
more balanced in their coverage.

The Internet received a major boost from the 2004 elections. The Orange
Revolution has been described as the world’s first “Internet Revolution.”
Today, nearly 20% of Ukrainians use the Internet regularly.

International media watchdogs, such as Reporters Without Frontiers, have
also noted the considerable improvement in Ukraine’s press freedom.
Ukraine’s ranking (112) in the 2005 Annual Worldwide Press Freedom Index is
far higher than that of Russia (138) or Belarus (152) (rsf.org).

Ukrainian journalists now work in a freer environment, no longer fearing
arrest or violence. Gone are the censorship instructions (temnyky) issued by
Kuchma’s administration to television stations.

Political Parties. The Socialists, allied to President Yushchenko since the
Orange Revolution, are now the leading left-wing party, rather than the
Communists whose allegiance to the Ukrainian state was always suspect. The
Communist Party will likely win only about 30 seats in the 2006 parliament,
down from 120 in the 1998.

Formerly pro-Kuchma centrists are in disarray (see EDM, November 2). Only
one of the three large centrist parties from the Kuchma era (Regions of
Ukraine) is poised to enter the 2006 parliament. The SDPUo and Labor Ukraine
parties each have ratings of 1%.

Corruption. The first year of the Yushchenko administration has seen Ukraine
moving from a pretend struggle against corruption under Kuchma to a modest
attempt at battling this problem. Some 4,500 of the myriad regulations to
register businesses have been annulled, eliminating a major source of
corruption.

There is now a single channel to register businesses and a single channel to
clear customs. Previously a new business venture had to seek permits from 34
separate groups, giving many opportunities for bribes.

Some 52% of Ukrainians believe some progress has taken place, but more needs
to be done. Transparency International, a think tank researching corruption
around the world, has recorded gains in Ukraine this year
(transparency.org). Its 2005 Corruption Perceptions Index provides evidence
that policies introduced this year to battle corruption are producing
results. Ukraine’s improved ranking has “resulted in an increased sense of
optimism regarding governance and corruption in Ukraine.”

Oligarchs. The era when oligarchs could earn high rents from a close
relationship with a corrupt executive is over. The Yushchenko administration
has outlined a “deal” whereby in exchange for no further re-privatizations,
oligarchs now have to evolve into law-abiding businessmen.

This means an end to corrupt business practices; businessmen must move their
activities out of the shadow economy and increase their tax payments.

Revenues to Ukraine’s annual $20 billion budget soared by 30% this year,
despite an economic slowdown. VAT payments have grown from 16 billion hryvni
($3.2 billion) last year to 28 billion ($5.6 billion) this year. Taxes on
profits have also grown by nearly 50%.

The Kyiv Post (November 10) concluded that these healthier figures exist
because “More Ukrainian companies are willing to come out of the shadows in
order to boost their appeal to investors and drum up foreign money.”

Social Welfare. The minimum pension was increased to the same level as the
minimum wage. Wages for those employed by the state increased 57%. Social
welfare spending, including child support to encourage Ukraine to move out
of its demographic crisis, has grown by 73%.

Religious Freedom. The Ukrainian (Uniate) Catholic Church has moved its
headquarters to Kyiv, a move that would have been hampered under Kuchma.
Prospects for the unification of the pro-Russian and pro-Ukrainian Orthodox
Churches in Ukraine are now far greater.

Divergence from Russia. While Ukraine experienced a democratic breakthrough
in Ukraine, Russia simultaneously fell further into an autocratic abyss.  In
the aftermath of Russia’s fraudulent parliamentary and presidential
elections, the New York-based human rights think tank Freedom House
downgraded Russia from “partly free” to “unfree,” the first time Russia has
been given this rank since the collapse of the USSR.

The 2004 breakthrough “reinvigorated and jumpstarted the democratic
political development” of Ukraine, Freedom House concluded
(www.freedomhouse.org/research/nattransit.htm). Ukraine recorded significant
progress in four areas: electoral process, civil society, independent media,
and judicial framework. Russia registered the greatest decline of any
country in the in the same four areas in 2004.

Ukraine’s “Democracy Score” (4.5) is better than Russia’s at 5.61, out of a
range of 1-7 with 7 being the worst score. But Ukraine’s 4.5 score is also
moving closer to Croatia’s at 3.75, and Croatia is a possible candidate for
EU membership in 2007 alongside Romania (3.39) and Bulgaria (3.18). Of the
four “color revolutions,” Ukraine’s Democracy Score is the same as Serbia’s
(3.75) and improved on Georgia’s (4.96) and Kyrgyzstan’s (5.64).

Despite noticeable progress in these 10 areas, problems remain for the
Orange team. These will be discussed in Part Two of this series.
—————————————————————————————————–
   REVISITING THE ORANGE REVOLUTION: STILL FAR TO GO
                       Yushchenko’s First Year in Office: Part Two

ANALYSIS & COMMENTARY: By Taras Kuzio
Eurasia Daily Monitor, Volume 2, Issue 220
The Jamestown Foundation
Washington, D.C., Monday, November 28, 2005

Ukraine held the second round of its contentious 2004 presidential election
on November 21. When the incumbent regime of President Leonid Kuchma tried
to steal the election from popular favorite Viktor Yushchenko, thousands of
Ukrainians took the streets in what came to be known as the “Orange
Revolution,” in honor of the Yushchenko campaign color.

One year later, the new administration has not fulfilled many of the
expectations that arose from the Orange Revolution. Nevertheless, it would
be wrong to paint the first year of Yushchenko’s administration as either
all positive or all negative, although the latter is currently has the lead.

The November 21 issue of Eurasia Daily Monitor detailed the 10 notable
achievements of the Orange Revolution. This concluding article looks at
seven areas that still need to be addressed.

Market Economic Reform. Quarrels among senior Orange leaders, coupled with
expensive social policies and unclear plans for re-privatization, led to
policy incoherence and government malaise. Economic reform and privatization
failed to become a government priority. Economic growth slumped from 12%
last year to only 3% this year, with August seeing the first negative growth
since 1999.

RULE OF LAW. The National Security and Defense Council under former
secretary Petro Poroshenko applied pressure to the legal system and courts.
Poor personnel policy led to the continuation of questionably qualified
individuals such as Sviatoslav Piskun as prosecutor-general and Roman
Zvarych as minister of justice.

DIVISIONS AND “BETRAYAL.” The Ukrainian public finds it difficult to accept
an internal split in the Orange camp. As a Financial Times (October 17)
editorial wrote of President Yushchenko and former prime minister Yulia
Tymoshenko, “A Yushchenko-Yulia Tymoshenko coalition remains the best chance
for a reformist, Western-oriented government.”

By signing a Memorandum this fall with former presidential rival and Regions
of Ukraine leader Viktor Yanukovych, Yushchenko unleashed a sense of
“betrayal” of the Orange Revolution ideals. In Kyiv, a Razumkov Center poll
found that 25% of respondents believe that Yushchenko “betrayed” the Orange
Revolution, while only 6% thought Tymoshenko had abandoned the cause.

POOR LEADERSHIP. Yushchenko extensively traveled abroad in his first year,
and his absences created problems at home, a factor he himself recognized
only last month. His hands-off style of leadership is very different from
that of his micro-managing predecessor, Leonid Kuchma. As a result,
Yushchenko has only sporadically intervened when crises emerged. He was
unwilling to make tough decisions until the September political crisis.

Yushchenko’s perpetual lateness for meetings, often up to two hours or more,
has become legendary. He also has been inconsistent with his policies and
statements.

DUAL POWER. Poroshenko, as secretary of the National Security and Defense
Council, reigned over a de facto second government, obstructing and
interfering in areas beyond his remit while ignoring key national security
issues.

NO BREAK FROM THE FORMER REGIME. One year after the Orange

Revolution, no senior official from the Kuchma regime has been charged with
abuse of office, corruption, election fraud, or the murder of journalist Heorhiy
Gongadze. The investigation into Yushchenko’s September 2004 poisoning has
also made no progress.

Rather than being arrested, key Kuchma-era players are escaping Ukrainian
jurisdiction. Former interior minister Yuriy Kravchenko committed suicide,
while General Oleksiy Pukach fled abroad. Other senior Kuchma officials were
permitted to flee to Russia or the United States. U.S. law-enforcement
arrested one of these officials, Volodymyr Shcherban, while Russia continues
to provide protection for them.

BUSINESS ALLIES. The shady businessmen surrounding Yushchenko were only
removed after State Secretary Oleksandr Zinchenko accused them of corruption
in September 2005. These businessmen had provided vital resources for
Yushchenko’s presidential campaign. For example, Poroshenko and Andrei
Derkach provided resources to support the only two television outlets
available for the opposition (Channel 5 and Era TV, respectively).

Their continued presence in Yushchenko’s entourage became a problem as it
recalled the oligarchs that had surrounded Kuchma. When asked if the new
authorities were different from Kuchma, 52% of voters responded “Yes” in
March 2005, but that number dropped to 37% by September (uceps.com.ua).

A balance sheet covering the first year of the Orange Revolution would
reveal a mixture of positives and negatives. Yushchenko is committed to
democratization, economic reform, and Euro-Atlantic integration. But he may
not possess the necessary political will to deal with high-ranking officials
from the Kuchma era. Signing a Memorandum with Yanukovych, Kuchma’s last
prime minister, was a major strategic miscalculation.

Tymoshenko has greater political skills. She is also more credible in
possessing the political will to prosecute former Kuchma loyalists. The
organizers of the Gongadze murder are more likely to be brought to trial by
Tymoshenko than Yushchenko.

Western reports often wrongly blame the Tymoshenko government for the policy
incoherence that dominated the first nine months of the Orange Revolution.
Other factors are Poroshenko’s parallel government, Yushchenko’s lack of
leadership, and his inability to take decisive decisions, except in crises.
His extensive travels abroad also negatively affected domestic policies.

Both Yushchenko and Tymoshenko have positive and negative traits. If the
Orange coalition could reunite during, or after the 2006 parliamentary
elections, these traits could potentially balance one another to promote a
reform agenda and Euro-Atlantic integration (Ukrayinska pravda, November
19). The only alternative to an Orange coalition in the 2006 parliament
would be parliamentary coalitions composed of either “Kuchma-lite” or
“Kuchma-hard” political forces.  -30-
——————————————————————————————-
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