THE ACTION UKRAINE REPORT – AUR – Number 616

 
 “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”

 
                    UKRAINE: COMMENTARY AND ANALYSIS
                                            Eight Articles
       Economy vs. politics, a second Maydan, Rinat Akhmetov, Yulia
  Tymochenko, Moscow & Speaker Lytvyn, gas nerve and gas weapon,
   Borys Tarasyuk writes “The Spirit of the Orange Revolution Lives On”
                            
“THE ACTION UKRAINE REPORT – AUR” – Number 616
Mr. E. Morgan Williams, Publisher and Editor
Washington, D.C., & Kyiv, Ukraine, MONDAY, DECEMBER 12, 2005
                        ——–INDEX OF ARTICLES——–
                “Major International News Headlines and Articles”

1.                 “BETWEEN ECONOMY AND PRINCIPLES”
       Ukraine finding political priorities in conflict with economic priorities
ANALYSIS & COMMENTARY: Volodymry Kravchenko
Zerkalo Nedeli, Kiev, in Russian 3 Dec 05; p 1, 5
BBC Monitoring Service, UK, in English, Friday, Dec 09, 2005

 
2.                              “THE SECOND MAYDAN”
COMMENTARY & ANALYSIS: By Bohdan Chervak
Ukrayinska Pravda website, Kiev, in Ukrainian 30 Nov 05
BBC Monitoring Service, UK, in English, Saturday, Dec 10, 2005

3“THE REGIONALS ARE CHANGING FACES, OR AKHMETOV
                          IN THE ROLE OF PRIME MINISTER
ANALYSIS & COMMENTARY: By Serhiy Harmash
Ukrayinska Pravda website, Kiev, in Ukrainian 1 Dec 05
BBC Monitoring Service, UK, in English, Saturday, Dec 10, 2005

4TYMOSHENKO LAYING PLANS RUN FOR PRESIDENCY 2009
                           Yuliya Volodymyrivna Tymoshenko
              Former Ukrainian premier set sights on long-term goals
COMMENTARY & ANALYSIS: By Yuriy Butusov
Zerkalo Nedeli, Kiev, in Russian 5 Dec 05; p 3
BBC Monitoring Service, UK, in English, Saturday, Dec 10, 2005

5MOSCOW DOES NOT TRUST TEARS. WILL IT TRUST LYTVYN?
                Ukrainian speaker’s Moscow visit soothes Russian nerves

6.          GAS NERVE IN UKRAINIAN-RUSSIAN RELATIONS”
             Politics behind Russia’s hard line in gas talks with Ukraine
ANALYSIS AND COMMENTARY: By Dmytro Bondarenko
Ukrayinska Pravda website, Kiev, in Ukrainian 6 Dec 05
BBC Monitoring Service, UK, in English, Friday, Dec 09, 2005

7.                                    “GAS WEAPON”
               Chances of Ukrainian arms-for-gas deal with Russia
Defense-Express website, Kiev, in Russian 28 Nov 05
BBC Monitoring Service, UK, in English, Saturday, Dec 10, 2005

8.      “THE SPIRIT OF THE ORANGE REVOLUTION LIVES ON”
ANALYSIS AND COMMENTARY: Borys Tarasyuk
Minister for Foreign Affairs of Ukraine
Welcome to Ukraine magazine, Pages 14-16
Kyiv, Ukraine, Issue 4 (35), November, 2005
========================================================
1
                    “BETWEEN ECONOMY AND PRINCIPLES”
       Ukraine finding political priorities in conflict with economic priorities

ANALYSIS & COMMENTARY: Volodymry Kravchenko
Zerkalo Nedeli, Kiev, in Russian 3 Dec 05; p 1, 5
BBC Monitoring Service, UK, in English, Friday, Dec 09, 2005

As Ukraine seeks to forge a new foreign policy promoting democratic values,
it is finding its political priorities in conflict with economic priorities,
a Ukrainian weekly has said. Viewing changes to the way foreign policy is
conducted, the newspaper said the Community of Democratic Choice, set up
recently to promote the spread of democracy across Europe, had incurred the
displeasure of Russia, on which Ukraine depends for energy.

Other post-Soviet states which could bring Ukraine economic benefits,
including Azerbaijan and Kazakhstan, would not want to see Ukraine backing
EU statements on their countries, putting Ukraine in a difficult position as
it seeks EU membership. Ultimately a choice will have to be made between
principles and economic benefits, the paper concluded.

The following is the text of the report by Volodymyr Kravchenko entitled
“Between economy and principles” published in the Ukrainian Zerkalo Nedeli
newspaper on 3 December; subheadings have been inserted editorially:

The Ukrainian Foreign Ministry last Tuesday [29 November] celebrated a small
victory won during difficult battles in the corridors of power. The head of
state [Viktor Yushchenko] signed several decrees which should again boost
the coordinating role of the ministry in Ukraine’s foreign policy.

By a coincidence which lends this event a certain symbolism, on 29
November – precisely two years after [former President] Leonid Kuchma

signed a decree “On measures to boost the effectiveness of foreign policy
activity”, which lowered the ministry to the level of a department of the
presidential administration, Viktor Yushchenko reversed his predecessor’s
decision, signing decree No 1660 “On making changes to the regulations on
the Ukrainian Foreign Ministry”.

However, formally simplifying the position of the Foreign Ministry as
coordinator in pursuing Ukraine’s foreign policy cannot conceal the
contradictions in the government’s team when it comes to defining foreign
policy priorities and serious problems in coordinating work to meet them.

Let us take the example of recent statements by the Ukrainian prime
minister. Leaving tact aside, in a speech to a congress of the Union of
Small, Medium-sized and Privatized Businesses, Prime Minister Yuriy
Yekhanurov basically accused Ukrainian diplomacy of a lack of
professionalism. Diplomats were reproached for not working for business as
their colleagues in other countries do, when, Yekhanurov said, “they should
go all-out” in this sphere.

In this connection, Yekhanurov advised that the diplomatic corps should be
given refresher training. As an example of the Foreign Ministry’s blunders
having a negative effect on bilateral relations with partner states and on
business, Yekhanurov first recalled the granting of a visa to a senior
official from the Taiwanese presidential administration.

That was said to be fraught with problems linked to the signing by Ukraine
and China of a bilateral protocol on access to goods and services markets.
Secondly, he gave the example of Iran. Yekhanurov said that Ukraine’s
condemnation of human rights abuses in Iran had had a negative effect on
talks with that country in terms of getting the An-140 aircraft onto its
market.
                                        IRAN AND TAIWAN 
We are far from viewing the work of the Ukrainian Foreign Ministry through
rose-coloured spectacles. Ukrainian diplomacy has plenty of problems: in
terms of Russia, in terms of the EU and America, and in terms of the
countries of the third world. There is plenty to say about staffing, too.
However, criticism should be well-founded – which cannot be said about

the Taiwanese and Iranian incidents cited by Yekhanurov as examples.

The case of Iran is in no way linked to the fact that Ukraine supported the
UN General Assembly resolution on human rights in Iran. (The USA and the

EU actively lobbied for the resolution, adopted on 18 November, while Russia,
Belarus, Uzbekistan, Turkmenistan, Zimbabwe and another 60 or so countries
were against it.)

Although Tehran did react sensitively to the statements criticizing its
nuclear programme and the state of human rights, the problems which have
arisen with the An-140 are of an economic rather than political nature.

The fact is that the Kharkiv State Aviation Production Enterprise is for a
number of reasons encountering problems in organizing supplies of parts to
the Iranian factory in Isfahan where the aircraft is assembled. As a result,
in order to test the aircraft the Iranians have been forced to take the
parts which were lacking from ready planes and install them for the period
of the tests on planes which were being prepared for delivery.

The Iranians have several times raised this problem in talks with senior
Ukrainian officials, incidentally. This was done during the visit to Iran
this summer by the then secretary of the National Security and Defence
Council of Ukraine, Petro Poroshenko. This subject was discussed not long
ago in Dubai by the heads of the Ukrainian Ministry of Industrial Policy and
officials from the Iranian aircraft manufacturer HESA.

These problems have arisen for two reasons. First this is linked to the
Iranians delaying payments for aircraft parts supplied by the Kharkiv State
Aviation Production Enterprise. Secondly, the contract has already been in
effect for approximately 10 years. Prices for parts have risen, and the
contract did not set out an index-linked price increase. As a result the
profitability of the project for the Kharkiv State Aviation Production
Enterprise is, to put it mildly, not great…

The case of the granting of a business visa to an official from the
Taiwanese presidential administration invited to Ukraine by [MP and tycoon]
Viktor Pinchuk in October looks even more absurd. In this situation our
country is caught between a rock and a hard place, since Ukraine does not
have a bilateral protocol on access to goods and services markets either
with China or with Taiwan.

If the decision was taken to refuse the senior Taiwanese official a visa,
Kiev had every chance of complicating talks with Taipei on signing a
protocol, which is required to join the WTO.

Did the prime minister ask himself on what grounds the Ukrainian Foreign
Ministry should have refused the visa to the Taiwanese official? Only on the
grounds that he is a citizen of Taiwan and an official from the Taiwanese
presidential administration? This senior official was not wanted by
Interpol, and he had been invited to Ukraine by an MP… [ellipsis as
published]

Ukrainian diplomats say the incident has had little effect on our relations
with Beijing, since Kiev did everything to make sure that the Taiwanese
official did not meet Ukrainian officials. The fact that there have been
plenty of petty failures and significant errors in relations between
official Kiev and Beijing is another matter. At some point they will reach a
critical mass, with unpleasant consequences.

Did anyone in the government consider, for example, what consequences the
cancellation of the defence minister’s visit to China would have? Official
statements say that this was due to the need for Anatoliy Hrytsenko to
attend a meeting with the president about the 2006 budget.

However, there is another explanation: the president’s secretariat thought
the defence minister had been travelling abroad too frequently in recent
times, so the defence minister’s trip was vetoed by the president three days
before the visit. Those who took this decision did not consider at all how
Beijing, which is a specific sort of partner, would react to this. China is,
after all, a major importer of Ukrainian metallurgical output and an active
partner of Ukraine in the area of military-technical cooperation…
[ellipsis as published]

So if we are talking about “refresher training” it would be more apt to
broach the subject of giving it to the prime minister’s professional aides,
who drafted the unchecked information for their boss’s speech and thus put
him in an uncomfortable position.

There is something to say about coordinating foreign policy in the context
of Yekhanurov’s accusations. However, his speech is notable for something
else: it is obvious that not everyone in the upper echelons of Ukrainian
power shares the idea cherished by [Foreign Minister] Borys Tarasyuk about
official Kiev taking an active position on defending democracy, considering
it irrational and damaging to the country.

Opponents of this policy think that alongside the illusory image of a
consistent supporter of spreading democracy, Ukraine also gets a mass of
problems with the countries which are its main trade and economic partners.
New forum

It is notable that Yekhanurov voiced his displeasure a few days before the
opening of the first forum of the Community of Democratic Choice [CDC],
which was jointly initiated by Yushchenko and [Georgian President] Mikheil
Saakashvili: the initiative was announced during their meeting in Borjomi in
August. One of the aims of this project is to spread and boost European and
democratic values in the Caspian-Black Sea-Baltic region.

The CDC, which has emerged within the policy pursued by Kiev of supporting
democratic processes in the post-Soviet space, looks quite attractive. Its
supporters say the CDC will allow “the region to be freed from remaining
dividing lines, from human rights abuses, from any spirit of confrontation
and frozen conflicts, thus spreading the area of democracy, security,
stability and peace across Europe, from the Atlantic to the Caspian Sea”.

On the plus side, there is also the fact that in addition to the official
level, the CDC includes in the process NGOs, who can use the forums of the
CDC as a platform for dialogue. It is not intended that Ukraine should
receive any serious dividends other than in terms of its image. Kiev is,
however, counting on this informal community objectively assisting in
boosting Ukraine’s position as a regional leader and will not allow the
interests of the EU and USA to be pushed to the sidelines.

Like offering foreign policy support to democratic processes in the world,
the CDC project is aimed exclusively at the foreign consumer, since – as
past experience shows – boosting democratic institutions in the world does
not as a whole bother the Ukrainian electorate too much, more concerned as
it is with the social and economic pledges of parties and politicians.
(Unlike in the USA, where spreading democracy throughout the world is one of
the key elements of the candidates’ election campaigns.)

However, in existing conditions, the joint Ukrainian-Georgian initiative
will entail a lot of risks for Ukraine alongside the advantages in terms of
foreign policy and image. It is no chance matter that a Ukrainian expert has
described the CDC as a “front-line project”.
                                      RUSSIA’S DISPLEASURE 
As opponents of this foreign policy have said more than once, primarily this
will have a negative effect on relations with Russia, which views the
Ukrainian policy of supporting democratic processes on the one hand as a
manifestation of the policy of exporting the revolution and on the other
hand as an attempt to create an anti-Russian axis.

A few days ago [the president of the Russian Effective Policy Foundation]
Gleb Pavlovskiy rather eloquently put forward the unofficial view of the
Kremlin concerning Kiev’s undertaking. Pavlovskiy said that “an axis of
democratic countries who do not want to be in Russia’s sphere of influence
will basically be created” at the CDC forum.

However, Mr Pavlovskiy does not consider this bid a real threat to Russia.
Nevertheless, he said that Moscow should respond by boosting the Collective
Security Treaty Organization and putting relations with Georgia, Ukraine and
Moldova onto a cash basis [rather than barter trade].

In this situation, with Moscow taking an aggressive view of the idea of the
CDC, manically suspecting Kiev of planning to set up an anti-Russian axis,
the Ukrainian government should not only invite the Russian president to
take part in the forum. [In addition,] to see this project through we need
not only political will on the part of the Ukrainian leadership and the
necessary resources in the state to counteract Russia’s pressure from the
political, economic and energy points of view.

However, supporters of this foreign policy say that the Kremlin will always
be irritated when it watches such actions by Kiev and will always seek
levers of influence. The Russian Federation, unhappy with Ukraine’s
intention of joining NATO, is constantly threatening to reduce
military-technical cooperation between the two countries.

However, Russia pulling faces like this does not hinder the course of
Euro-Atlantic integration: in this policy the Ukrainian leadership does not
look round at its northeastern neighbour a great deal.

Russian politicians used to view the GUAM [Georgia, Ukraine, Azerbaijan,
Moldova] union just as belligerently. So the sooner the ruling political
elite in Moscow realizes that Ukraine is outside the Russian sphere of
influence the better. “We need to proceed on the basis that on some issues
our interests and Russia’s diverge,” supporters of the new foreign policy
say.

We can agree with many of these arguments. The idea is certainly good. On
the other hand, winter is upon us, and the current state of our resources –
especially energy resources – does not permit Ukraine to choose the path of
confrontation with Russia.

In a situation when Kiev and Moscow cannot agree on the conditions for
supplies of Russian natural gas to Ukraine and gas transit in 2006, when the
process of Ukraine joining NATO is gathering pace, this demonstration of
foreign policy is a further irritating factor.

Some experts predict it could lead to a situation in which – for the sake of
some illusory results in terms of spreading and supporting democracy –
Ukraine will be forced to make some serious concessions to the Russians in
specific areas of bilateral cooperation.
                                   THE EUROPEAN UNION  

The EU’s view of this project is, to put it mildly, ambiguous – unlike that
of the USA, which specially sent Undersecretary of State [for Democracy and
Global Affairs] Paula Dobriansky to the forum, and the Council of Europe,
the OSCE and NATO, represented by secretary-generals or their deputies.
Official EU fully welcomes Ukraine sharing the democratic values common to
Europe, defending them and even setting up the CDC.

However, Zerkalo Nedeli has been told that behind the scenes its officials
are bewildered: what do you need this for if you have got enough problems
even without it? A senior EU delegation behaved very tellingly on this
matter.

Kiev specially arranged for the Ukraine-EU summit and the CDC forum to take
place at the same time: the Ukrainians wanted the EU (represented by the
current chair of the EU, British Prime Minister Tony Blair, European
Commission President Jose Manuel Barroso, Secretary-General of the Council
of the EU Javier Solana and also European Commissioners Benita
Ferrero-Waldner and Peter Mandelson) to support the CDC forum.

But however hard Ukrainian diplomats tried to lure their European guests
along to yet another forum, the EU officials successfully avoided it. At the
EU’s insistence, the Ukraine-EU summit took place in the morning and when it
ended they quickly left Kiev, leaving a bitter taste in the mouths of the
Ukrainians.

Experts think that the reason for the EU officials’ inconsistent behaviour
lies in the fear of Brussels of permitting “the marginalization of Russia”.
In the eyes of EU officials, one of the things that could bring this about
is the CDC project, which, let us repeat, arouses an extreme degree of
antipathy among the Russians. It is no chance matter that Brussels is
constantly criticizing Minsk but very rarely Moscow.

At the same time, the EU officials are somewhat surprised by Kiev’s
selective support for EU statements. Ukraine does not share the position of
Brussels on such countries as Azerbaijan, Iran and Uzbekistan. (In the
future it will not back the position on Kazakhstan, either.)

Although Ukrainian diplomats say that “Ukraine is not obliged to back all EU
statements, since it is not a member” and it will decide this matter on the
basis of its national interests, our partners in the EU are wounded by this
position – although we must note that both Brussels and the member states of
this club themselves are not always consistent in supporting democracy (as
in the case of France with Saddam’s Iraq, for example).
                             CONTRADICTORY DEMANDS 
However selectively the Ukrainians back EU statements while voicing the
policy of supporting democracy in the post-Soviet space and in the world,
Kiev has a priori put itself in a losing position in relation to countries
Ukraine is to some extent dependent on.

These are the states of the South Caucasus and Central Asia, which have
problems with human rights.

This is another weak point of the policy currently pursued by official Kiev.
We should not forget that Turkmenistan is an alternative source of gas for
our country; Azerbaijan, which has seriously got down to re-arming its
military, is a promising partner for military-technical cooperation, and
Kazakhstan is currently ready not only to supply oil for the Odessa-Brody
pipeline but also to give the Ukrainians the opportunity to develop some
oilfields.

If these countries still accept criticism from the USA, EU and OSCE, Kiev
adopting the same position would be offensive to them. This would lead to a
cooling of bilateral relations.

This is what happened in the case of Azerbaijan. Although Kiev did not back
EU statements on Azerbaijan, Baku was disturbed by Ukraine backing the

OSCE assessment of the parliamentary election. Baku had thought that Ukraine –
which emerged from the same Soviet “maternity hospital” as Azerbaijan and
also has problems with democracy – could not adopt the same mentoring
position.

These problems, both current and forecast, have in the end meant that the
foreign policy of supporting democratic processes have aroused ambiguity in
the Ukrainian government. With the CDC project already launched, it is not
clear what the fate of this foreign policy defended by the Foreign Ministry
will be.

Yushchenko, who has received his share of honours at international
democratic forums, is still backing the Foreign Ministry’s position on this
issue. But will the Ukrainian president be as consistent in the future, when
a choice will have to be made between principles and economic benefits?
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[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
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2.                                  “THE SECOND MAYDAN”

COMMENTARY & ANALYSIS: By Bohdan Chervak
Ukrayinska Pravda website, Kiev, in Ukrainian 30 Nov 05
BBC Monitoring Service, UK, in English, Saturday, Dec 10, 2005

Bohdan Chervak has looked at Freedom Day, which was celebrated for the

very first time on 22 November, in the light of celebrations on Independence
Square to mark the first anniversary of the Orange Revolution. Writing for a
Ukrainian website, he said that with the parliamentary election just four
months away, campaigning techniques were clearly in evidence at the square.

He said that Yuliya Tymoshenko and President Viktor Yushchenko, the two

main figures during the revolution, cannot be forced to unite, which is what
the nation expects of them. The current post-revolutionary mood is one of
rational acceptance of objective reality and the desire to get as much
benefit as possible from the fruits of the revolution, he concluded.

The following is the text of the article by Bohdan Chervak entitled “The
second Maydan”, posted on the Ukrainian website Ukrayinska Pravda on

30 November 2005; subheadings have been inserted editorially:
                         FREEDOM DAY: START OF THE RACE
We should admit frankly that Freedom Day, celebrated for the first time in
Ukraine as a holiday, did not come off. Instead of that, the day marked the
start of election campaign by political forces referring to themselves as
the “orange team”.

The second Maydan [Independence Square in Kiev, the heart of the Orange
Revolution] will go down in the history of new Ukraine as an event related
to political techniques. On the one side, it was amazingly massive. On the
other hand, it was just a shadow of things associated in the nation’s
consciousness with the idea of Ukrainian revolution.

Viktor Yushchenko is still being rebuked for his “pro-American style” in
political practice, meaning that he emulates the conduct of US or European
leaders.

Yet the “second” Maydan saw Yuliya Tymoshenko tangibly surpassing the
president as regards resourcefulness in the use of western political
techniques. For instance, Yushchenko has never been carried on hands whereas
Tymoshenko mounted the rostrum riding in the limelight on the shoulders of
her bodyguards, which was supposed to epitomize public love.

Any election is the time for social demagogy. The second Maydan was no
exception. Former deputy prime minister and “field commander” Mykola

Tomenko beat everyone at this by putting to vote the issue that the proceeds
from the sale of Kryvorizhstal [steel plant in Kryvyy Rih sold for almost 5bn
dollars] should be “given over to the people”. Maydan voted unanimously.

Meanwhile a lot of people came to understand that Tomenko should be kept
away from public administration.

It has also become clear that the win-win subject of “uniting the orange
team” will become the main campaign slogan for the [propresidential] Our
Ukraine People’s Union [OUPU] and the Yuliya Tymoshenko Bloc. It has also
become obvious that the Maydan is no longer a strong enough to force the two
leaders to do what the nation expects of them.

Looking at the Ukrainian revolution as a permanent thing, it should be
stated that it has entered into a phase of rational acceptance of objective
reality and seeking as much benefit as possible from the fruits of the
revolution.
                       FIRST ORANGE FORCE: OUR UKRAINE
The OUPU was the first to enter into this phase. Quite recently, Roman
Bezsmertnyy as the Yushchenko party’s chief ideologist and strategist, was
cheerfully giving assurances that the OUPU would single-handedly surmount
any obstacles and be the most successful force at the March [2006] election.

Today Bezsmertnyy does not think so any more.

First, the bitter decline of its popularity ratings made him tender his
resignation from the post of deputy prime minister of Ukraine and get down
to the brass tacks of elections.

Second, the party understood that it was unlikely to get the result it
needs, and so it had to look for allies. Bezsmertnyy failed to find new
comrades-in-arms. His “old friends” lent him a hand.

[Anatoliy] Kinakh’s Party of Industrialists and Entrepreneurs, [Borys]
Tarasyuk’s People’s Movement of Ukraine [Rukh wing], [Oleksiy] Ivchenko’s
Congress of Ukrainian Nationalists, [Anatoliy] Matviyenko’s Ukrainian
Republican Party Sobor and [Volodymyr] Stretovych’s Christian People’s

Union joined Yushchenko’s Our Ukraine bloc.

This is evidence of their qualitative rethinking of the role and position of
the OUPU in the political life of the nation. It seems that its leaders have
come to understand that they have no grounds to claim the role of the only
ruling and guiding force, while a monopoly on Yushchenko does not

guarantee them a cloudless political future.
                     SECOND ORANGE FORCE: FATHERLAND
The “parallel force” of Yuliya Tymoshenko has also gone through an
evolution. It is obvious that she has been trying hard of late to reiterate
the Yushchenko phenomenon. Yet one may or may not enter one stream twice.
Tymoshenko’s clamorous step-down from the post of head of government
did not increase her popularity rating much as the case had been after
Yushchenko’s resignation from the post of prime minister.

Her flirtation with Moscow did not add to her popularity. (Who can say that
[Russian President Vladimir] Putin has not drawn due conclusions from the
Ukrainian revolution?) This is why Tymoshenko did not even dare hold a
congress of her Fatherland party in the open.

Otherwise the whole of Ukraine would have seen a lot of Kuchmists [people
who held posts or influence during the presidency of Leonid Kuchma] among
her comrades-in-arms, such as the United Ukraine party leader Bohdan
Hubskyy, whereas the revolutionary Levko Lukyanenko actually has no
significant influence there.

Incidentally, Fatherland, like the OUPU, did not venture running for
parliament alone, but unlike the OUPU, it has not yet finally decided on its
allies. Yushchenko’s party is seeking support among other political forces,
whereas the Tymoshenko party seems to have opted for the tactic of enlisting
individuals. At least Tomenko’s public walkout from the Reforms and Order
Party is proof of this.

Nor is Tymoshenko right in her statement that only two orange teams
supporting, respectively, Yushchenko and the former prime minister
[Tymoshenko] will be hammering victory at the forthcoming election.
              THIRD ORANGE FORCE: UKRAINIAN PEOPLE’S PARTY
For once, [Yuriy] Kostenko’s Ukrainian People’s Party [UPP] has decided go
its own way despite warnings from “friends” and to the delight of “foes”.
The latest UPP congress decided that the party would form a bloc.
Nonetheless, it does not take a great judge of politics to understand that
the UPP of all others will claim the role of the “third” orange force.

We can only say in this context that the orange electorate is not all that
elastic to satisfy the appetites of all those holding the orange banner of
Ukrainian revolution in their hands.

It is vain for enemies of the revolution to carp at the “second” Maydan:
they are also under its influence and have to reckon with it. The “blue”
[opposition forces] are lacking in originality this time though. All their
splinters, such as [former governor of Kharkiv Region, New Demoracy

leader Yevhen] Kushnaryov and [Soyuz party leader Oleksiy] Kostusev,
have decided to side with the strongest, the Party of Regions.

This move rounds off the debate on who is the true oppositionist in this
country. [Party of Regions leader] Viktor Yanukovych actually remains the
only influential mouthpiece of counter-revolution.

Today, it is difficult to predict the outcome of the coming election and the
balance of political power. Yet one can safely say that the era of the first
Maydan is over in Ukraine. The second Maydan will have a big impact on
Ukrainians. Yet nobody knows whether Ukraine is going to have a “third”
Maydan.  -30-
———————————————————————————————

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3.    “THE REGIONALS ARE CHANGING FACES, OR AKHMETOV
                            IN THE ROLE OF PRIME MINISTER”

ANALYSIS & COMMENTARY: By Serhiy Harmash
Ukrayinska Pravda website, Kiev, in Ukrainian 1 Dec 05
BBC Monitoring Service, UK, in English, Saturday, Dec 10, 2005

A looming split in Ukraine’s main opposition party was stopped when the
cabinet was dismissed in September, an influential Ukrainian site has said.
When President Viktor Yushchenko dismissed Prime Minister Yuliya

Tymoshenko, the Party of Regions was on the edge of a schism, the author
said.

He noted that Yushchenko’s move gave momentum to Party of Regions leader
Viktor Yanukovych and forced his opponents inside the party to compromise
and avoid a split.

As a result, influential tycoon Rinat Akhmetov, who allegedly wanted to get
rid of Yanukovych, is running on the party list and this means the face of
the party is likely to change once the results in the spring parliamentary
election are known.

The author said that with enough seats in parliament, Akhmetov could even
like with the idea of being prime minister.

The following is the text of the article by Serhiy Harmash, entitled “The
Regionals are changing faces, or Akhmetov in the role of prime minister”,
posted on the Ukrayinska Pravda website on 1 December; subheadings have

been inserted editorially:
                                    RELATIONS STRAINED
It is no secret in Donetsk that relations between [former Prime Minister
Viktor] Yanukovych on the one hand and [head of the Donetsk Region council
Borys] Kolesnykov-[local tycoon Rinat] Akhmetov on the other became far
worse in the period after the [2004 presidential] election [which Yanukovych
lost].

Yanukovych, as they said here, “screwed up” victory in the presidential
election, and those who placed their bets on him suffered for it.

And Viktor Yanukovych’s vacation abroad at a time when [the new authorities]
were taking Kryvorizhstal [steel plant] away from Akhmetov and when
Kolesnykov was in detention for four months did not add any warmth to those
relations.

In returning from detention, Borys Kolesnykov did not even really hide that
there were a few “nature lovers” in the party who apparently had nothing to
do. This relationship was made public in Donetsk media controlled by
Kolesnykov. Their editors and journalists even openly called Yanukovych a
traitor and a political corpse and so on at meetings with foreign diplomats.

This position was probably consciously or unconsciously provoked by them

via Rinat Leonidovych [Akhmetov] and Borys Viktorovych [Kolesnykov].

And it is no coincidence that within close circles, the leaders in the Party
of Regions are called a society of shareholders. This society formed out of
several people’s capital as well as by the merging of several parties.

It was and remains an instrument for achieving power for a specific regional
elite and part of this elite did not allow the other to get rid of the
Yanukovych brand which was hyped during the campaign.

Foremost because these people did not see themselves in a reformed Party of
Regions and Yanukovych is not only a figure everyone is used to, he is also
predictable. He is closer in spirit to those lilies and fish, than the tough
Kolesnykov or the pragmatic Akhmetov.

And besides, at one time or another almost all of them have come up against
attempts by Rinat Akhmetov or his people to swallow their businesses and
while they perhaps did not find protection with Yanukovych, it was with him
that they found support.

In turn, the Kolesnykov wing viewed the party as dynamic and pragmatic. Not
a populist opposition in the style of the Communist Party of Ukraine [CPU],
but a European-style party – not [protesting] on squares, but in parliament.
                          YUSHCHENKO ALTERS THE GAME
But the authorities introduced corrections into this fight. The dismissal of
[former Prime Minister Yuliya] Tymoshenko and her move to the opposition
forced President [Viktor] Yushchenko to choose what opposition was less
dangerous to him. And then President Yushchenko named Yanukovych the

main oppositionist.

In making this move, as they say in parliament, he caved into pressure from
the United States and brought Rinat Akhmetov back to the country. The page
of so-called “political repression” was closed.

In this way, Akhmetov and Kolesnykov turned out to be somewhat in debt to
Yanukovych, And this clearly did not make their relationship any better. The
opposite is more likely true, the ambitious Yanukovych felt his worth and
the stand-off only got stronger. One sign of this conflict was when
[regional television network] TRK-Ukrayina issued a bill to Yanukovych for
his time on air.

They let Yanukovych know that “his” media resource was not really his at all
and he could be cut off from it at any moment. Just as he could be cut off
from the region in which this media resource formed public
opinion…[ellipsis as published]

But in the end, both sides understood that they needed each other – at a
minimum for the parliamentary election. It turned out that after
Konovalyuk’s disaster in Working Ukraine, Akhmetov had nobody to place

his bets on in the race except on the Party of Regions. And Yanukovych
understood that he could not overcome the financial and political strength
of Akhmetov-Kolesnykov.

Both sides preferred a weak peace to a good war. But Viktor Yanukovych did
not let slip the chance to show Rinat Akhmetov his worth. He began to attend
nearly all of FC Shakhtar’s matches [Akhmetov owns the Shakhtar Donetsk
football club], where people always greeted him with standing ovations.
Akhmetov had to do that and he did it for the right outcome. And the outcome
was to propel Yanukovych’s ratings.

As a result it became clear that the initial plan of dissecting the Party of
Regions from Yanukovych and their separate participation in the
parliamentary election was not effective or advantageous to either side. The
Party of Regions without Yanukovych would lose votes, and the Bloc of
Yanukovych, made up of minion-parties, would not have financial or media
resources.

Besides, Yanukovych was the leader of the Party of Regions and who would

he be in a bloc named for him without this party? Just a flag to be
used…[ellipsis as published]
                                        A COMPROMISE
In the end the sides were pushed to a compromise with each other. On 5
November at the so-called “technical” congress of the Party of Regions,
Viktor Yanukovych announced that there would be no Yanukovych bloc – the
party would enter the election on its own.

One should point out that the congress was closed to the press, since people
were apparently afraid that Yanukovych, who had become suspiciously
obliging, would try to raise the issue of a bloc among delegates. But he did
as was agreed.

Appointing Vasyl Dzharta, who is close to Akhmetov, as chief of the party’s
headquarters, in place of Heorhiy Khara, who had headed HQ previously, was

a sign that emphasis had been set in place: he who pays, determines
management.

There was a sort of political reform within the party, when the chair was
relieved of some of his authority in return for a guarantee of his political
future. This guarantee apparently includes “political job offers” for
members of Yanukovych’s family. The sudden appearance of Yanukovych’s
youngest son in the management of the union of youth of the Party of Regions
gives him a spot on the Party of Regions parliamentary party list.

And Yanukovych’s eldest son will probably run for a seat on the Donetsk
Region council, so that should the opportunity arise, he can chair it. And
such a chance could well arise indeed, if Anatoliy Blyznyuk, who replaced
Kolesnykov as chair of the regional council, is recruited for example to the
government…[ellipsis as published]

A sign of this reform was Eduard Prutnyk’s return to the team. Prutnyk had
been a free agent since the election. Before, he headed work with public
relations and the press, practically cutting off the main ideologue of the
“Donetsk information umbrella” from this segment – Oleksandr Hurbych.
                        AKHMETOV RUNS FOR PARLIAMENT
But the height of internal party processes, was of course the announcement
that Rinat Akhmetov would run for parliament on the Party of Regions list.
Of course such a person getting into the top five on the list automatically
puts him in the light as a public politician. But Akhmetov and publicity are
things not that compatible. A man who publicly avoided politics in all his
interviews and football news conferences is now suddenly thrust into the
light of politics. Why?

There are most likely two reasons: an MP mandate provides immunity and
political status; or the laurels of Berlusconi – also the owner of a
football club and also with the reputation of a Mafioso and yet a person who
became the prime minister of Italy. That does not mean Akhmetov wants the
same post in Ukraine, but such an option cannot be excluded either.

Of course, it is possible that Rinat Akhmetov would prefer to remain in the
shadows of a prime minister he appoints. But that prime minister is not
likely to be Viktor Yanukovych.

Yanukovych is the face of the party’s return, the face of its past, one for
whom the nostalgic part of the population will vote. But, in coming into
parliament as an influential force and taking part in forming a government,
the Party of Regions will have to take responsibility for the actions of the
authorities, and in this case Yanukovych will strike a discordant note with
electoral expectations from him.

And Yanukovych remains a scarecrow for the West after the last election.

Nor is he accepted by the Ukrainian intelligentsia, let alone in western regions
of Ukraine. And that would create more instability in the country.
                                        STABILITY IS KEY
And both the Orange [pro-Yushchenko] and Blue-and-White [pro-Donetsk]
business elite are interested in stability. And so not even his own party
members will be likely to let Yanukovych become prime minister

In essence, Viktor Yanukovych has become hostage to the passions which
supercharged him and opposing political hacks during the presidential
campaign. Yanukovych as head of the Donbass political lobby would be a
direct challenge to the president and the Orange electorate. And the
pragmatic business wing of the Party of Regions does not need that.

And that means that logically, the face of the party will change after the
election. It will probably become more European. And Yanukovych with his
indictments and grammatical errors will either remain a mere flag or he will
go into the shadows.

By the way, it is quite possible that the variant of the Socialist Party of
Ukraine [SPU] will be repeated. The SPU is in power [for backing Yushchenko
during the election] but SPU leader Moroz is not in the government, and so
he can be opposed to it. It is possible that Viktor Yanukovych will be the
protest person in parliament and completely different people will be in
government.

The difference lies only in power being a means to win in the parliamentary
election for the SPU. While the opposite is true for the Party of Regions –
the parliamentary election is a means towards achieving power.

And so it will be the number of MP mandates getting into parliament on the
Party of Regions ticket that will determine the future model of the Donetsk
elite. It is quite possible that there will be a division: Akhmetov and his
people in government, and Yanukovych getting the people’s love.

In great part, the future development of events will be determined by how
comfortable Akhmetov feels in public politics. It appears he is not yet
ready for this. One indicator in this sense is a statement made available by
his press service on 29 November on the tycoon’s agreeing to run on the
Party of Regions ticket.

The statement was signed by Rinat Akhmetov’s press service (not by Systems
Capital Management [in which he owns 90 per cent] and not by FC Shakhtar),
and there was no contact information on it. That is, journalists had nobody
to call for comment.

It is also strange that such a serious step was not presented at a news
conference with Akhmetov, where he would have had to answer questions

posed by journalists, but in a one-way manner.

This shows that Rinat Akhmetov has still not decided on his role in politics
for himself: whether that role will be public, or official but in the
shadows. If he likes the first way, then a Prime Minister Berlusconi could
be very close to reality.  -30-
——————————————————————————————–
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4. TYMOSHENKO LAYING PLANS TO RUN FOR PRESIDENCY IN 2009
                                Yuliya Volodymyrivna Tymoshenko
                   Former Ukrainian premier set sights on long-term goals

COMMENTARY & ANALYSIS: By Yuriy Butusov
Zerkalo Nedeli, Kiev, in Russian 5 Dec 05; p 3
BBC Monitoring Service, UK, in English, Saturday, Dec 10, 2005

Former Ukrainian Prime Minister Yuliya Tymoshenko appears to be doing
everything she can to avoid scandals ahead of the coming parliamentary
election, an analytical weekly has said. The author noted that Tymoshenko is
building her team around her own image and personality and wants to keep any
bickering inside the team out of the public eye.

He also said that Tymoshenko does not mind having, at the same time, two
centres of influence in her team vying for favour. He concluded by saying
that this parliamentary election was a prelude to Tymoshenko’s running for
the presidency in 2009.

The following is the text of the article by Yuriy Butusov, entitled “Round
One”, published in the Ukrainian weekly Zerkalo Nedeli on 3 December;
subheadings have been inserted editorially:

The congress of the Yuliya Tymoshenko Bloc [BYT] was held in deep silence.
For a number of reasons, Yuliya Tymoshenko [the previous Ukrainian prime
minister] decided to scorn using the big event for PR hype.

This time journalists – conversations with whom are one of the her main
aces – were persona non grata. Naturally, this attracted attention – what
does the union, one of the parliamentary election favourites, want to hide
at its congress?

Two decisions were adopted at the forum which had real influence on the
strategy of the BYT campaign. These were a decision to create a bloc with
other political parties and confirm an election list of 450 people in which
all the names have been listed so far only in alphabetical order. If the
congress had been open, it could have turned into an open, public scandal.

There turned out to be too many groups of influence among BYT members

who would not have denied themselves the pleasure of creating a show out of
mutual accusations. Fights would have been of no help: the decision was made
by the leader. Public fuss would have hurt the single, indisputable merit in
the list – its leader.

Yuliya Volodymyrivna categorically does not want the scandalous flair and
enmity which has undermined the trust and rating of [President] Viktor
Yushchenko’s team to jump over to her own party. And problems within the
party are inescapable, and Stepan Khmara’s exit from the faction was merely
the first symptom. Tymoshenko’s old guard is dissolving among neophytes

who quite recently were in the [Viktor] Yanukovych team.

The closed congress allowed the framework of the Tymoshenko bloc to be
outlined for the first time. It became clear who could lay claim to being
included in the final list and whose had only a small chance and who would
probably not be in it at all. Besides, the process of forming a party list
made it possible to evaluate the structure of management and nature of the
BYT system.
                                THE PERSONALITY FACTOR
The structure of BYT in principle differs quite far from competing projects
and closely resembles the Our Ukraine image of 2002.

As far as can be made out, the Our Ukraine People’s Union [OUPU – the bloc
united behind President Viktor Yushchenko] is counting on administrative
resource and the autonomous technological vertical, the Socialist Party of
Ukraine [SPU] and the Communist Party of Ukraine [CPU] are leaning on
developing party apparatuses, while the Party of Regions finds support in
Rinat Akhmetov and friends’ business empires and [Speaker Volodymyr]

Lytvyn is gathering up the scraps of the old regime in the regions with the
help of a number of enterprising groups.

Tymoshenko’s bloc is being built on a qualitatively different base – on the
personal traits of Yuliya Volodymyrivna, who is ready to cross-pollinate the
most different centres of influence in order to achieve pragmatic results.
Yuliya Volodymyrivna Tymoshenko does not love dull party work and is

always striving to delegate it to one of her entrusted persons and that is one
reason that the regional units of BYT are mostly in an embryonic state.

The primitive construction of the party apparatus has forced her to come
running for the help of politicians capable of providing her with
ready-to-go political and organizational resources. And now she is engaged
not so much in developing the party structure as she is in coordinating
those political leaders who are unwrapping their owns teams in favour of
supporting her.

Tymoshenko does not have a strict vertical management or strict
subordination – she evens rewards competition and polemics among satellites
in their own orbits.

Currently Tymoshenko’s campaign headquarters includes [Oleksandr] Turchynov,
[Yaroslav] Fedorchuk, [Mykhaylo] Brodskyy, [Bohdan] Hubskyy and [Mykola]
Tomenko. Brodskyy is bringing his team to the HQ, foremost, Oleh Medvedev
and Dmytro Vydrin. Oleksandr Zadorozhniy is Hubskyy’s main political aide.

This team is fairly monolithic, although the presence of Hubskyy as one of
the HQ commanders and deputy chair of the campaign HQ and supervisor of

the legal side of the campaign, provokes surprise from overly naive citizens.

The greater part of the BYT leadership met Oleksandr Zinchenko’s exit with
enthusiasm. Oleksandr Oleksiyovych [Zinchenko] is still a man with a rating,
but it was hard to work with him in the HQ. Without his own team, he tried
to influence serious technological projects.

Zinchenko’s attempt to get a huge quota in the party list for his own party,
about which no-one knew, and also his demand to be supported in a bid to
become mayor of Kiev, provoked an explosion. Tymoshenko has still not parted
ways with the idea of having Zinchenko on the list, but they will only take
him, and not offer any quota. And Tymoshenko’s circle will not lose much
sleep even if there is a complete break in relations.

It is curious to note that it is a number of Tymoshenko’s personal aides,
and not HQ aides, who will have serious influence on the course of the
election.
                             TWO CENTERS OF INFLUENCE
Of course, from studying the BYT structure, one of the discoveries is the
current status of Mykhaylo Brodskyy. He is playing the role of head PR-man,
developer of strategies, public representative, manager of all the most
acute technological operations, supervisor of a number of regional and
municipal party structures, negotiator with other parties and even organizer
of resource support.

Brodskyy, as a gambling man, is not shy in his methods for fighting the
“Yushchenko regime”. As far as can be told, it was Mykhaylo Brodskyy who
first put his effort into seeing that people’s enthusiasm for and support of
“Lady Yu” was especially loud during celebrations on the anniversary of the
Orange Revolution. Brodskyy has serious influence on the placement of
personnel and in forming the final party list.

But the role of Oleksandr Volkov in the HQ is no less intriguing. He created
his own team of aides, people from the Democratic Union, a group headed by
Yuriy Levenets. Such a tough fight for influence over the “queen” has heated
up between Volkov and Brodskyy that it has already become known to the wide
public. Brodskyy thinks Volkov’s image negatively affects BYT’s reputation,
in contrast to Mykhaylo Yurevych [Brodskyy]’s own image.

But Tymoshenko rewards the apparatus concept and is calm in regard to two
competing centres accompanying the campaign. Of course Volkov is losing
influence in the central HQ, from which Brodskyy has ousted him, but he is
in charge of separate ticklish lines of work and is trying to get his man
into the central HQ – Oleksiy Lohvynenko.

Besides, Volkov cannot yet lay claim to any personnel appointments in the
party list. Oleksandr Volkov tried to get control of his native Chernihiv
Region, but Mykhaylo Yurevych sent him to run Crimea. Volkov is defending
views directly opposed to Brodskyy’s plan on campaign strategy. The
difference is not only in one believing the sociology of Iryna Bekeshkina
and the other in the methods of image-control.

Volkov is against a war with Yushchenko. Perhaps the desire to minimalize
his influence was one of the reasons for Brodskyy to raise the question of
resignation. Either me or him. Tymoshenko is applying immense effort to

ward off scandals in her own team.

Soon the party congress is to review the final variant of the party list.
And again Yuliya Tymoshenko will face the need to make the event as closed
as possible.

Vasyl Oponenko will symbolise the bloc status in the BYT leadership. He, in
contrast to Zinchenko, is not trying to reserve spots in the party list for
his own party, and is fully happy in the role of a satellite.

No stronger groups are being welcomed into BYT. And the leadership of the
Reform and Order party [RO] has learnt this well. RO people are trying to
hold negotiations at the level of equals and lay claim to quotas on the
national and regional and local party lists, but Tymoshenko does not intend
to create a fifth column in her team either during or after the election.

It is more likely there will not be a BYT-RO bloc. Tymoshenko expressed a
readiness to welcome individual members of the party, but it appears the
issue of uniting the two political forces has faded away.

But in reviewing the issue of the place and meaning of political partners
scandals are unavoidable.

Uniting with Hubskyy’s United Ukraine demands making the incompatible
compatible. Hubskyy wants his organizational and resource investment in the
campaign to be evaluated for what it is worth, and wants to include people
in the passing part of the party list whose political careers are even more
equivocal than his own – Zadorozhniy and Serhiy Osyka.

Their chances of getting onto the list are now seen as very high. The part
of the list likely to be elected could also include Vasyl Khmelnystskyy,
Tariel Vasadze, Oleksandr Abdullin and a whole slew of other politicians

who not long ago had the reputations of convinced Kuchma men.
                         TEST FOR FIGHT WITH YUSHCHENKO
Tymoshenko differs from other political leaders in her deep and all-around
professional work on her image. It is interesting that her current
parliamentary campaign will in many ways be a prelude to and test of her
readiness to contend against Yushchenko in the presidential election in
2009. And she is building this campaign with her sights set on more distant
targets.

And that is exactly why Tymoshenko will not try to make BYT into a single
team before the election. For her party apparatus is merely one of the
instruments for achieving more long-term political goals. The boiling pot of
BYT cannot be put out anyway, and there is no more time for building
internal ties.

But Yuliya Volodymyrivna is not regretting spending on organizing strategic
alliances for the post-election period. In contrast to Yushchenko, she has
been able to make certain progress with the Kremlin and also traits in her
image – for example distancing herself from radical-right parties.

Tymoshenko is heading into the parliamentary election as one seeking the
title of state leader. This year is her first round. It will show whether it
is worth taking part in the second.   -30-
——————————————————————————————–

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5. “MOSCOW DOES NOT TRUST TEARS. WILL IT TRUST LYTVYN?”
                Ukrainian speaker’s Moscow visit soothes Russian nerves

ANALYSIS & COMMENTARY: By Kostyantyn Kruhlov, Journalist
Kiyevskiye Vedomosti, Kiev, Ukraine, in Russian 9 Dec 05, p 4
BBC Monitoring Service – United Kingdom; Dec 10, 2005

Ukrainian speaker Volodymyr Lytvyn’s visit to Moscow this week may have had
the aim of acting as peacemaker in the ongoing gas dispute between the two
states, an opposition daily has said. As a balanced pragmatist, he is one of
the few senior Ukrainian politicians with whom the Kremlin feels
comfortable. He may also have gone to calm Moscow’s fears over Ukraine’s
ties with NATO.

The following is the text of the article by Kostyantyn Kruhlov entitled
“Moscow does not trust tears. Will it trust Lytvyn?” published in the
Ukrainian daily Kiyevskiye Vedomosti on 9 December; subheadings have been
inserted editorially:

The real aims of [parliamentary speaker] Volodymyr Lytvyn’s visit to Moscow,
it seems, remained outside the framework of official press releases.

Supreme Council [parliament] Chairman Volodymyr Lytvyn makes international
visits regularly – his duties oblige him to. But Lytvyn visits the Russian
capital especially frequently, at least twice a year. And this is
understandable: first it is a strategic neighbour, and second, the history
of parliamentary cooperation between the two countries has been going on for
several years.

Now a third factor may be added to those – Lytvyn may well be the only
remaining current Ukrainian politician who is understandable and familiar to
the Kremlin.

Volodymyr Lytvyn’s official visit to Moscow was marked by protocol meetings
with a gas subtext. However, Volodymyr Mykhaylovych Lytvyn himself made no
effort to hide the possibility of talks on the gas theme.

In an interview with the Russian newspaper Vremya Novostey published on the
eve of the visit, Lytvyn stressed that the gas problem was “a question for
the government, but we will touch on its political component”.

There should be no doubt that they did touch on it. Both during the meeting
with the Ukrainian speaker’s Russian counterpart, Sergey Mironov, and all
the more so during his conversation with the deputy head of the Russian
government, Dmitriy Medvedev.

Ukrainian officials – Fuel and Energy Minister Ivan Plachkov and [Ukrainian
gas monopolist] Naftohaz head Oleksiy Ivchenko – have been unable to resolve
the gas question for almost a month now. Against their background the
constructive and pragmatic Lytvyn, who, what is more, is well known to the
first people in the Kremlin, looks like a splendid parliamentarian.

He also has his own levers of influence on the position of the Russian
authorities. However, his role in these complex negotiations will remain
outside the frame: official press releases about Lytvyn’s meetings with
Russian politicians spoke basically only about “interest in developing
bilateral cooperation”.

On the other hand, our speaker needs no accustoming to the role of unnoticed
peacemaker – suffice it to recall his part in the Orange Revolution in
organizing round table meetings, to which Lytvyn invited not only [EU top
foreign and security policy official Javier] Solana and [Polish President
Aleksander] Kwasniewski, but also the speaker of the Russian State Duma
[parliament], Boris Gryzlov.

However, they did not only talk about that. In particular, during his
meeting with Mironov, Lytvyn emphasized the importance of creating the high
level [Ukrainian President Viktor] Yushchenko-[Russian President Vladimir]
Putin interstate commission for invigorating cooperation between the
countries. And he added: “We must take on responsibility at the level of
parliaments.

We are destined to consider the question, be it in the energy sphere, be it
in the framework of the SES [Single Economic Space – planned economic bloc
between Russia, Ukraine, Belarus and Kazakhstan].”
                                        PLACTORY MISSION 
However, there was yet another important component of Moscow visit. Lytvyn,
it seemed, decided to soothe the Kremlin’s nerves. Against a background of a
growing lack of understanding of the logic of the Ukrainian government’s
actions, the messages pronounced by the speaker were very important for
Moscow.

“Ukraine is interested in cooperation within the SES framework that does not
contradict the constitution”, “Ukraine does not intend to violate the
accords on the stationing of the Russian Black Sea Fleet”, “Questions
regarding joining NATO should be decided in a balanced and gradual way, but
for the time being we are interested only in cooperation”. It seemed that it
was just such a rational, logical and calm visit that Ukrainian-Russian
relations had been lacking for a long time.
                                        ELECTION FACTOR 
Lytvyn is a politician whose emotions are always hidden by the impenetrable
armour of political expediency. For the Russian side Lytvyn is still a
figure under a question mark. But for Russia, anyone who on the one hand
does not call for cold war with Moscow and on the other does not advocate
unification with Russia in a single interstate union are similar figures.

The Russian leadership, especially in recent years, has introduced a
practice of regarding certain Ukrainian politicians as enemies and, in
exactly the same way is not averse to listening to flattery from people who
come to pay obeisance. It is very difficult to suspect Lytvyn of either the
former or the latter.

On the one hand, Russian elites find it comfortable to work with him, since
he is a pragmatist, but it is equally hard to work with him, since his
pragmatism in relations with anyone (including the highest Russian
leadership) resemble a successfully chosen instrument for achieving the aims
and interests set out.

And today’s Kremlin has an extremely cautious attitude to such manoeuvres

by representatives of Ukraine. At the same time, is it not a matter of
indifference to Ukrainian citizens which compromises and accords have to
be thanked for the fact that there is gas in their homes and that the price of
petrol does not rise twice a month?

Many political experts agree today that compromises, pragmatism and
professional calculation are perhaps what is lacking today in the
relationship between Moscow and Kiev. It is also somehow not to the
Kremlin’s taste to have dealings with various sorts of provocateurs building
up their ratings in Ukraine on oaths of fealty to “Mother Moscow”.

Realty in words is one thing, real deeds and effective actions, in which
professions of eternal love are somehow out of place, are another. For this
reason it can confidently be said that Lytvyn was a welcome guest in Moscow.
Possibly the only one with whom the Kremlin and the highest Russian
leadership has recently conducted talks and bilateral work in a pragmatic
key, free of superfluous emotionalism.

However, neither should we forget the speaker’s interest in the approaching
parliamentary election, at which he is standing at the head of his eponymous
people’s bloc. In this connection it should be noted that Lytvyn’s visit to
Moscow was probably regarded at first by the Russians as not simply the
arrival of the Ukrainian speaker, but also as a meeting with a leader of a
serious political force that intends to influence the life of the state.

Naturally, there are no grounds for saying that Lytvyn was looking for
support in Moscow for his electoral ambitions. But it is indisputable that
he was examined there. And, judging from the reaction of the Russian press,
Lytvyn’s persona is extremely impressive to the political beau monde of
Moscow. He is a predictable, pragmatic and constructive leader, who does

not hide his rational sympathies for Russia to the same extent, on the other
hand, as his rational sympathies for the West as well.

In brief, “the inspection of the bride” went well. Lytvyn’s visit to Moscow
took place to the positive accompaniment of the press and in constructive
meetings with the Russian leadership. Now we have to await its results.

Kostyantyn Kruhlov, journalist (specially for Kiyevskiye Vedomosti)

————————————————————————————————
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6.          “GAS NERVE IN UKRAINIAN-RUSSIAN RELATIONS”
              Politics behind Russia’s hard line in gas talks with Ukraine

ANALYSIS AND COMMENTARY: By Dmytro Bondarenko
Ukrayinska Pravda website, Kiev, in Ukrainian 6 Dec 05
BBC Monitoring Service, UK, in English, Friday, Dec 09, 2005

Russia’s tough stance in ongoing negotiations over the price of next year’s
gas supplies to Ukraine is prompted by its desire to pressure the Ukrainian
authorities ahead of the spring parliamentary election, a Ukrainian website
has said. It also wants to gain control of Ukraine’s pipeline transit
system, it said.

Realizing that control of the transit of Russian gas to Europe is Ukraine’s
trump card, the Russians have tried to separate an agreement on transit
rates from prices for gas supply. However, the deadlock benefits neither
side, it concluded.

The following is the text of the article by Dmytro Bondarenko, entitled “Gas
nerve in Ukrainian-Russian relations”, posted on the Ukrainian website
Ukrayinska Pravda on 6 December; subheadings have been inserted editorially:

Fierce disputes over the price for Russian gas being supplied to Ukraine and
also the cost of transit of Russian gas via Ukrainian territory have placed
Ukraine and Russia on the brink of economic war.

Last week the fierceness of the discussion reached its culmination when the
leadership of [Russian gas monopoly] Gazprom presented the Ukrainian side
with a range of ultimatums.

The present gas disputes differ from all the previous ones in that both
sides – Russian and Ukraine – have fully played all their trump cards.

In the opinion of the Russian side, Ukraine should pay a price of 160
dollars for the Russian gas that it receives, which it considers equivalent
to world prices.

“Whereas at a price of 80 dollars on the German border the price in Ukraine
of 50 dollars was acceptable, when the price in Europe became 200 dollars,
then 50 dollars for Ukraine is impermissible,” the deputy head of Gazprom,
Aleksandr Ryazanov, says.

(True, when in the 1990s Ukraine was forced to buy Russian gas at prices
that considerably exceeded world prices – it was paying 80 dollars while the
European price was 67 dollars – Russia was not worried about it.)

At present the Ukrainian side is interested in maintaining the present
conditions of payments for Russian gas determined by agreements made in
2000.

The essence of these conditions is that volumes of gas supplied by Russia

to Ukraine are counted as payment for the transit of Russian gas to Western
Europe, based on a calculation of 50 dollars per 1000 cu.m.

The Ukrainian side’s arsenal has one, but extremely substantial trump card.
It is precisely via Ukraine that the gas transport system passes that pumps
80 per cent of all Russian gas exports to Western Europe and allows
super-profits to be made.

Making use of this dependence, in response to the raising of prices by
Russia, Ukraine is raising the question of transit tariffs and is refusing
to sign an agreement on the transit of Russian gas to Europe.

The Russian side recognizes the danger of Ukraine making use of its transit
advantages. However, until the ambitious gas pipeline on the bed of the
Baltic Sea is built, it will not be able to reduce its transit dependence on
Ukraine for several years yet.
  ATTEMPT TO SEPARATE TRANSIT AND GAS SUPPLY RATES
Russia tried to separate the question of tariffs from the pricing agreement.
Gazprom proposed that “the Ukrainian side consider signing a contract on
transit of Russian gas as a matter of extreme urgency” and only then reach
agreement on gas prices for Ukraine.

The deputy head of the board of Gazprom, Aleksandr Medvedev said, “The
contract for transit and the contract for supply are absolutely separate
contracts. We proposed that the Ukrainian side move to a European tariff
rate for transit of gas. And this is advantageous for the Ukrainian side.”

Of course the Ukrainian side did not consent to this. The possibility of
influencing Russia in the question of the transit of Russian gas to Western
Europe is the only possibility for Ukraine to affect the process of gas
price formation and prevent a terrible blow to the Ukrainian economy.

According to experts’ calculations, in the event of the adoption of the
Russian proposals, Ukraine will have to pay Russia 4bn dollars instead of
1.25bn for the same volume of gas (25bn cubic metres).

This means that starting from next year Ukraine will either start building
up debts or receive insufficient gas, which sooner or later will provoke an
energy and social crisis.

As one option for solving the gas problem, Naftohaz Ukrayiny [Ukrainian
state oil and gas monopolist] is proposing to increase transit tariffs to
3.5 dollars for pumping 1,000 cu.m. of gas through its territory per 100 km.

This is at a time when European prices for transit amount to about 2 dollars
and Russia is proposing to raise transit payments from the present 1.09 to
1.5-1.75 dollars.

As a response measure, Russia is threatening symmetrically to increase
tariffs for transporting gas being delivered to Ukraine from Turkmenistan.

The deadlock situation does not benefit either side. If an agreement on gas
is not reached by the new year, critically important deliveries of Russian
energy sources to Europe will be disrupted.

Here the reputation of both sides will suffer: Russia as a reliable supplier
and Ukraine as a reliable transit operator. And since Europe depends on
Russian gas only for one quarter of its needs, it will be able to find a way
out of the situation by increasing purchases from other suppliers.

“The dragging out of the negotiations by the Ukrainian side poses a danger
to uninterrupted supplies of Russian gas to Europe in 2006,” a written
statement by Russia’s Gazprom says.
                         RUSSIA FALLEN INTO ITS OWN TRAP
The president of the Russian institute of strategic development of the fuel
and energy complex, Vladimir Milov, has said that at present Gazprom was

in a hard trap that it had set for itself.

“Ukraine is not linked to Russia by any international legal obligations,
and, therefore, in response to price rises for gas is proposing to raise the
cost of transporting gas to 3.5 dollars.

These are excessive transit rates, but we have no instruments of influencing
Ukraine in these questions. If Gazprom specifies 200 dollars, then 3.5
dollars will change into 4 dollars. Ukraine is making full use of its
monopoly position as the main Russian transit export corridor.”

The president of the union of oil and gas industrialists of the Russian
Federation, Gennadiy Shmal, also spoke of the ineffectiveness of constantly
raising Russian gas prices. “Now we have no other way of supplying fuel to
Europe, and so at the present stage Russia and Ukraine are doomed to
collaborating in the gas sector.

What is more, Ukraine will simply be unable to pay too high a price, and
nobody will benefit from it building up debts.”

The need for mutual concessions is becoming increasingly obvious. The
Ukrainian side understands that it will not manage to avoid a rise in gas
prices. As the head of Naftohaz, [Oleksiy] Ivchenko, said, “The price for
gas in Ukraine must be raised, because it is economically unjustified…
[ellipsis as published] If the price of gas for the population is increased
by 25 per cent, the population will not suffer at all.”

The deputy head of the board of Gazprom, Aleksandr Ryazanov, said that
Russia would not supply gas to Ukraine without the signing of a contract.
His colleague Aleksandr Medvedev said last week that if Ukraine did not
accept the price proposed by Russia, the subsequent price proposal would

be even higher… [ellipsis as published]

And although the Russian side is stubbornly naming 160 dollars as world
prices, it is known that throughout the world prices are formed
individually. Gazprom’s pricing policy also varies depending on the region.

Gas prices for the Baltic will be increased to 120-125 dollars, for Turkey
to 115 dollars and for Georgia to 110 dollars. Price rises will also affect
Moldova, Azerbaijan and Poland and maybe Armenia.

It is characteristic that most of these countries are oriented towards the
West and are behaving increasingly independently with regard to Moscow. By
the way, the cost of Russian gas for Belarus in 2006 will remain over three
times cheaper than the world price.
           POLITICAL MOTIVES BEHIND RUSSIAN HARD LINE
So why is it that it is being proposed that “fraternal” Ukraine pays
considerably more for gas than other buyers of Russian gas? What is the
reason for the maximum hard line of the Russian position?

FIRST, Russia is interested in getting control of the Ukrainian gas
transport system. Thus Gazprom stated that it was prepared to abandon

price rises for gas in exchange for participation in running the Ukrainian gas
transport system.

If that plan were implemented, Ukraine would not be able independently to
determine the cost of transit, which would allow Russia complete freedom in
deciding gas prices. Apart from that, part of the payment for transit would
be returned to Russia. Of course, under the presidency of [President Viktor]
Yushchenko, Ukraine will not agree to that.

SECOND, uncertainty in the question of Russian gas supplies is hitting at
the authority of the present Ukrainian administration, which, ahead of the
parliamentary election, gives additional trumps to the opposition.

If the prices being proposed by Russia are accepted and lie as a heavy
burden on the budget, the government will lose its ability for economic
manoeuvre for a long time and will start accumulating debts.

If at the beginning of the new year supplies of Russian gas to Ukraine are
halted, in many regions, especially in the East, industrial production will
halt, threatening a social explosion before the election.

If Ukraine once again decides on unauthorized siphoning off of gas, it will
undermine its international prestige in the strongest way. By the way,
Ivchenko has denied the presumption that Ukraine would siphon off gas

from transit pipelines.

Be that as it may, the uncertainty in the gas issue is hitting at the orange
team. However, not signing gas agreements with Ukraine in the event of
halting transit to Europe will be extremely expensive for Russia itself as
well.

Is it ready again to pay the price for the longed-for influence on the
Ukrainian polity?

In view of the approach of the elections to the Ukrainian parliament, as
well as the formation of a band of states declaring their pro-European
orientation, it is not surprising that Russia has decided to play its “gas
trump card” right now.

But will this be enough to have a substantial influence on the political
positions of post-Soviet states? For the Ukrainian government the decision
of the gas problem means a test of its ability to control the situation in
the economy and assurance in foreign policy.

But it is already clear that genuine independence will come to Ukraine when
the stability of the Ukrainian economy does not depend on the current
pricing situation for energy sources.

P.S. Meanwhile, the visit by Ukraine’s Fuel and Energy Minister Ivan
Plachkov to Moscow intend for Tuesday [6 December] to meet with

Russian Industry and Energy Minister Viktor Khristenko did not take
place.

The official reason is that Khristenko was not in Moscow. According to
information from news agencies, Plachkov’s meetings in Moscow have been
postponed indefinitely in connection with the visit by a Russian delegation
including Khristenko to Brussels.

At present the sides are continuing to discuss conditions of transit and
deliveries of Russian natural gas to Ukraine at the level of Naftohaz
Ukrayiny and Gazprom.  -30-
——————————————————————————————–
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
========================================================
7.                                      “GAS WEAPON”
                   Chances of Ukrainian arms-for-gas deal with Russia

Defense-Express website, Kiev, in Russian 28 Nov 05
BBC Monitoring Service, UK, in English, Saturday, Dec 10, 2005

A Ukrainian website has examined the likelihood of Russia accepting
Ukrainian weapons in exchange for gas supplies. Following an announcement
that a deal was being discussed, the website viewed Russia’s likely needs
and asked analysts to gauge the chances of the deal coming off.

Former Russian armed forces commander Anatoliy Kornukov said that

although Ukraine was an important supplier of military equipment to Russia,
it could get by without it, while Ukrainian national security expert Anatoliy
Pavlenko suggested Ukraine’s arms market needs to be transparent if Ukraine
is looking to Europe.

The following is the text of the report entitled “Gas weapon” posted on the
Ukrainian website Defence-Express on 28 November; subheadings inserted
editorially:

In expert circles linked to the military-industrial complex, the statement
by the head of the Naftohaz Ukrayiny national joint-stock company, Oleksiy
Ivchenko, on 26 November this year has had a major impact. Ivchenko said
that Ukraine was ready to provide Russia with military supplies worth more
than 1bn dollars in exchange for extra supplies of Russian gas.

He said that the Ukrainian and Russian defence ministries, Naftohaz Ukrayiny
and Gazprom have already been holding talks for three months on

implementing a project which would entail paying for Ukrainian weapons
and military equipment with Russian gas supplies.

Ivchenko said this project was initiated at the level of the Ukrainian
Cabinet of Ministers and was in no way linked to the current gas balance.

He added that the list of Ukrainian military supplies was currently being
agreed.

In response to Ivchenko’s comments, Gazprom press secretary Sergey
Kupriyanov said on Saturday [26 November]: “We thought that the time for
barter payments had passed both in Russia and Ukraine. We deal in gas, not
weapons. We need money for gas supplies. If Ukraine has good weapons, it
needs to find a buyer and sell them and pay for gas with money, as is
accepted practice all over the world.”

Ukraine has already applied the practice of supplying weapons as a component
of payment for gas supplies purchased from Turkmenistan. Ukraine supplied
Turkmenistan via Ukrainian special exporters mainly with completed models of
arms and military equipment (in particular, the Kolchuga radar system), and
also repaired military aviation equipment. Ukraine has in its time decreased
its gas debt to Russia by paying for part of the debt with supplies of Tu-95
and Tu-160 strategic bombers.
                                          RUSSIA’S NEEDS 

The Centre for Army, Conversion and Disarmament Studies says that if such a
plan is carried out at this stage, Russia would primarily be interested in
resolving vital issues facing the Russian military and special exporters in
the medium-term rather than the long-term. Ukraine supplying Tu-22 aircraft
to Russia – which already has a contract to supply them to India – could be
viewed as quite likely.

Russia might also be interested in significantly reducing the costs of using
the Nitka training ground in Crimea, where Russian navy pilots are trained,
and also preserving conditions for using the early-warning radar facilities
in Sevastopol and Mukacheve. Information from these stations has been going
to the central command of the Russian Space Troops’ early-warning system.

Ukraine is now receiving compensation for this station to the tune of 4.24m
hryvnyas (0.84m dollars) [per year] from the Russian Federation, which is
approximately 19 per cent of requirements. It costs 4.4m dollars per year to
maintain and use the two facilities.

However, in the current situation, Kiev is unlikely to be able to put
pressure on Moscow – especially since all the details about handing these
stations over from the Ukrainian Defence Ministry to the National Space
Agency [of Ukraine] are being worked out. That means that if there are to be
barter payments, from the Ukrainian point of view this will not be done
through the Defence Ministry.

The goods and services that have traditionally interested Russia include:

– servicing Russian intercontinental ballistic missiles from the Russian
Federation’s strategic nuclear forces, prolonging the service life of
missile systems;
– developing and modernizing liquid-propellant rocket engines and systems
for them;
– supplying air-to-air guided missiles assembled in Ukraine under contracts
Russia is meeting with India and China;
– purchasing engines for aircraft (for helicopters: Mi-8MT, Mi-24, Mi-26,
Mi-28, Ka-27, Ka-50 Black Sharks, Ka-52 Alligators, Ka-60 Swallows)
– jointly developing and producing aircraft engines for the multi-purpose
Ansat helicopter and the Yak-130 training aircraft;
– purchasing and developing pumping stations for all types of aircraft in
use or being made – for Su aircraft and air-launched missiles;
– purchasing Ukrainian turbines to meet Russian contracts for maritime
equipment supplies;

The main complications in carrying out the project are the complex procedure
for barter payments, particularly if other departments and structures are
involved in the projects. A quick mechanism for carrying out the barter
payments has to be created.

It is not yet clear, either, who exactly would compensate the Ukrainian
manufacturers for the costs of producing parts that would be supplied to
Russia.

Officials from the Ukrainian and Russian defence ministries are not so far
commenting on this statement by Ivchenko that has had such an impact.
However, Russian and Ukrainian experts have been giving their views on the
prospects for carrying out the project proposed by Ivchenko.
                                DOES RUSSIA NEED UKRAINE? 
Maj-Gen Nikolay Bezborodov, a member of the State Duma Committee on

Defence, told the Interfax-AVN news agency that Russia did not need
Ukrainian military equipment or technology, but should not be in a hurry
to decline such proposals by Kiev.

“Russia is independent in terms of the absolute majority of its military
technologies. It can get by without assistance from other countries,”
Bezborodov said. However, he also noted that there are some military
technologies and there is some military equipment in Ukraine that could
interest the Russian military-industrial complex.

Bezborodov singled out aviation and missile construction. “As regards the
Ukrainian proposals directly, they should be examined from a political as
well as a purely economic point of view. I think that in the interests of
boosting political and economic cooperation – military-technical cooperation
specifically – Russia should not immediately reject the Ukrainian proposals.

There should be a detailed analysis of what is under discussion and what our
Ukrainian colleagues are proposing,” Bezborodov said.

Former Russian Federation C-in-C of the armed forces, Army Gen Anatoliy
Kornukov, said that if cooperation [in this sphere] with Ukraine to be
broken off, the Russian military-industrial complex would be able to supply
all the equipment for the needs of the Russian armed forces.

“I think we can get by without Ukraine in terms of aviation and our
air-defence system, that is for sure,” Kornukov said. He said that
complications could arise with the towers for radar stations for the S-300
anti-aircraft missile system. “However, I think that if there were an order,
our factories could put them out,” he said.

Kornukov stressed that even when it comes to the supplies of engines for
Antonov aircraft produced in Ukraine, which the Russian Federation’s
military transport aviation fleet is equipped with, Russia could get by
without Ukraine, by turning to aviation manufacturers in Voronezh and Omsk.

Kornukov also said that there would be problems with manufacturing engines
for Mi helicopters from the Russian armed forces army aviation fleet, which
are made in Zaporizhzhya, but the “Rybinsk engine manufacturers are capable
of mastering production of these engines, if they had the right
documentation – which would naturally have to be purchased”.

The Russian media reports that the former deputy C-in-C of the Strategic
Missile Troops [SMT] in charge of armaments, Col-Gen (Rtd) Aleksandr
Ryazhskiy thinks that the equipment and services from the Ukrainian missile
manufacturers required by the SMT could be worth a total of 350m dollars.
“We should not forget that our RS-20 heavy missiles, which are not called
Satan in the West for nothing, are developed and produced in Ukraine.

If the service life of these missiles is prolonged for 10-15 years, which
would be to Russia’s advantage, we would not get by without the
Dnipropetrovsk-based Yuzhnoye [Pivdenne] design bureau and the Yuzhmash
[Pivdenmash] factory,” Ryazhskiy said.

He added that the Yuzhnoye design bureau and the Yuzhmash factory were
currently carrying out the guaranteed designer’s supervision and analysis of
the technical state of the Russian RS-20 missiles, and taking part in work
to extend their service life. A special article in the Russian military
budget allocates funds to pay for this work.

Ryazhskiy also said that Ukraine still has enterprises which were
monopolists during the Soviet times in producing special equipment and
devices needed by the SMT. “All the Vega trajectory-measuring equipment was
put out in Kharkiv. This equipment is required to modernize Russian missile
testing grounds,” the expert said.

He added that most of the on-board and ground equipment required to target
strategic missiles was produced in Ukraine. “A number of Kharkiv
enterprises, Kiev’s Arsenal factory and others produce on-board devices for
missiles. In order to extend the missiles’ length of service, supplies of
this sort of equipment would probably be useful,” Ryazhskiy said.

He is of the view that to establish production in Russia of the devices and
parts currently produced in Ukraine would require not hundreds of millions
of dollars but billions of dollars. Ryazhskiy emphasized that Russia’s STM
currently has approximately 520 intercontinental ballistic missiles in its
arsenal. Only around 40 of them (Topol-M missiles) are built exclusively by
the Russian missile-construction system.
                                         EUROPEAN MODEL? 
Ukrainian national security expert Anatoliy Pavlenko told Defence Express
that he personally doubted the prospects for seeing this project through. He
said Ukraine had no interesting proposals for the Russian
military-industrial complex or the Defence Ministry.

It could be a matter of individual parts for weapons and equipment; however,
it is very doubtful that Russia would agree to such a complicated plan in
order to, in the long run, finance the Ukrainian military-industrial
complex. What would in effect happen as a result would be that the financing
of the Russian state defence order would be reduced, and this is
advantageous neither for Russian defence manufacturers nor for the Russian
government.

Pavlenko emphasized separately that the situation regarding Ivchenko’s
proposal was further evidence of the lack of transparency in the Ukrainian
system of military-technical cooperation. “Consultations are once more
taking place behind closed doors, and the public is forced to speculate
about what the government will agree to,” Pavlenko said, indicating that if
Ukraine really wants to “go towards Europe”, it would have to move to
European procedures and standards in organizing the trade in weapons and
military equipment.  -30-

——————————————————————————————–
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8.     “THE SPIRIT OF THE ORANGE REVOLUTION LIVES ON”

ANALYSIS AND COMMENTARY: Borys Tarasyuk
Minister for Foreign Affairs of Ukraine
Welcome to Ukraine magazine, Pages 14-16
Kyiv, Ukraine, Issue 4 (35), November, 2005

When President Victor Yushchenko was receiving the Chatham House Prize

from Her Majesty Queen Elisabeth II in London “as a token of great respect
for achievements of the Ukrainian nation”, the last preparations to auction the
huge Kryvorizhstal steel works were in full swing in Kyiv. These two
seemingly unrelated events delivered a clear and powerful message both to
the people of Ukraine and to its partners abroad.

Millions of Ukrainians were watching this grand sales show live on TV as if
it were a fashionable Sotheby gathering. The President kept his word given
in the Maydan one year ago to redress injustice following the theft of the
metallurgical plant by oligarchs at a meager price.

The budget was replenished by a handsome 4,8 billion US$ enabling the
government to fulfill its social obligations. Most importantly, the ideals
of the Orange Revolution have not been betrayed.

A special message was conveyed also by the Prime Minister to the diplomatic
corps in Kyiv right after the auction. There will be no mass
re-privatization. Another five to six big swindled deals might be reviewed
and managed in the same transparent and competitive manner, while hoards of
small and medium enterprises with foreign stakes can recline and prosper.

These are the clear rules of the game offered to all national business and
foreign investors.

I rendered the above examples by means of introducing Ukraine one year after
the Orange Revolution. The upheaval of widespread protest led to the
establishment of a new, democratic government followed by painful testing of
the best economic policies to political catharsis and finally to pragmatic
everyday toil. The revolution is over, but its spirit lives on.

I will never tire of re-iterating an explicit appeal to our international
partners that their enchantment by the Orange Revolution has to make room
for a long term strategic interest in Ukraine.

The international allure for my country draws its strength and
sustainability both from the internal and foreign policies of Ukraine.
The first glimpse of interest sparks whenever a British or US or Japanese
national calls the Ukrainian Embassy to learn that he or she no longer needs
a visa or any sort of invitation or hotel confirmation to enter Ukraine.

The second surprise comes upon arrival at the airport at a swift processing
of passengers or, for that matter, at the absence of barbed wire at a border
crossing point. The customs officers have become rather inconspicuous and
easy-going.

There is a remarkable lack of annoying police patrol down the fine roads,
while numerous big-boards underway advertise all sorts of national and
foreign makes. The roaming of cellular phones operates smoothly suggesting
that Ukraine’s telecommunications are also neatly integrated into the global
market.

Thousands of cranes scattered around the country indicate that the
construction boom is blossoming, and posh cars in Kyiv have long ago
outsmarted any other world capital, though it is sometimes considered as an
open affront to decency.

To be quite objective, the two detrimental elements to this overall positive
picture are still unsatisfactory hotels and undeveloped country-side. Big
private investments are needed to improve local services and infrastructure.

With the largely simplified procedure to be introduced for the allotment of
land plots and construction sites foreign capital will find it much easier
to come and stay for the amicable advantage of both sides.

Thus, establishment of “one window” services for the customs procedures,
registration of national and foreign business entities and allotment of land
parcels is meant to save precious time of entrepreneurs and to kill
corruption in the bud. Overall deregulation of economy is one of the corner
stones of the new authorities in their commitment to market economy.

Of course, the positive changes in economic policies could not have been
made without political stability, vibrant civil society and widespread
exercise of fundamental freedoms, all of which take root in the Orange
Revolution.

Freedom of the media stands out high among the virtues of the new
authorities. The current environment for journalist activity would have been
impossible under the Kuchma administration. Throughout the last twelve
months people were daily briefed on all the finesses of political life with
disregard to the “pulls” or posts. The entire political picture has been
lying flat and open on the bare palm of the reporter’s hand.

This unprecedented transparency and scrutiny had a double effect. First,
people knew well what was going on to form an educated opinion, which

will guide them during future elections. Second, their reaction to disclosed
notorious facts drove the president to take specific action.

For instance, with the turnabout of the men in power 18 thousand new
executive post-holders had to be appointed throughout the country.
Naturally, under the given circumstances and the pressure of time a few
mistakes had been made. Within a couple of months and following rising
protests of the people several governors and high ranking officials in the
customs service, interior and other central bodies were sacked.

This is how democracy works in a new Ukraine. This is how the people

learned to defend their rights. For a genuine democracy has to be defended
every day, not only during elections.

A remarkable thing about Ukrainians is that they remember about their recent
past, but think about their future. They are wise to have no illusion, nor
impatience about a quick miracle.

The Orange Revolution was obviously not the end but the beginning of a long
process inside the country. The people realized that they can make a real
difference, and they will want to feel it and to do it again and again –
until they sail safely into the harbour of the European and Trans-Atlantic
community. Then they will find out that the same job has to be done for
others and by others as well.

With the ultimate success story of Ukraine and sooner or later it will
inevitably be the case – the Orange Revolution will reverberate all around
the Eastern part of the continent and, in fact, all around the globe.
“Freedom cannot be stopped” is a universal formula that has nothing to do
with the export of revolutions, but comes out of people’s hearts regardless
of their race, ethnicity or religion.

This new philosophy of the primacy of fundamental rights and freedoms

has been laid down into the basis of Ukraine’s foreign policy, together with
such principles as democracy, stability and development.

With the change of the administration in Ukraine and especially recent
change of the government many had wondered about the difference in our
foreign policy priorities. Looking at the face of it, nothing has changed.
Membership in the European Union and NATO, developing friendly relations
with Russia and other neighbours and an active regional policy have been and
continue to stand out at the frontline.

That is the sign of stability and consistency of the foreign policy of
Ukraine.

On the other hand, a major difference is that we mean what we say. It is
called credibility in politics.

Today, we reaffirm in Moscow that our strategic goal is EU and NATO
membership and hear in reply that it is the sovereign right of Ukraine.

On the other hand, we re-iterate in Western capitals that we genuinely wish
to maintain friendly and mutually beneficial relations with the Russian
Federation, free of too much politicizing and filled with real economic
substance.

Today we do not choose between West and East, between European,
Euro-Atlantic integration and Russia. We are often proposed to make a
choice: either – or. My answer is – both membership in the European Union
and NATO and development of strategic partnership, good-neighbourly
relations with the Russian Federation.

The recent visits of the North Atlantic Council to Ukraine and of Prime
Minister Yury Yehanurov to Washington, the coming Ukraine – EU summit and
expected visits by Prime Minister Fradkov and President Putin to Ukraine are
all evidences of this integral policy.

The common interest of all parties in the triangle between the West, Ukraine
and the newly independent states is to establish an area of democracy,
stability and development, homogeneous with the acquis communautaires.

This is the backbone of Ukraine’s regional policy, whose next high level
benchmark will be the Forum of the Community of Democratic Choice, to be
held in Kyiv at the beginning of December.

Apart from democracy, which is a real new element in Ukraine’s foreign
policy, we have been for many years a net contributor to European and
international security and the biggest European contributor to international
peace keeping operations.

Ukraine’s primary goal in its close neighbourhood is to help resolve the
frozen conflicts. We wish these forgiven spots become safe and attractive
for businesses and tourists. Ukraine is a credible partner that can make a
real difference in the conflict settlement.

Our heavy-lift cargo aircraft Mriya and Ruslan are known all around the
globe delivering not only UN troops, but also humanitarian freights to the
countries and regions under the stress of natural calamities. Like it was
the case quite recently in the wake of the earthquake in Pakistan.

But most important is, of course, a human dimension. I was deeply moved

by a decision of a local Pakistani family to give a popular Ukrainian name
Taras to their newly born son, whose appearance in this world was assisted
by Ukrainian doctors.  -30-
———————————————————————————————–
LINK: http://www.wumag.kiev.ua/index2.php?param=pgs20054/14
———————————————————————————————–
Dear Readers of “Welcome to Ukraine”, This issue of the magazine marks
the first anniversary of the Orange Revolution, which has become a symbol
of universal strive for freedom. A new wind of democratic change is blowing
in many quarters of the globe.

The spirit of the Orange Revolution lives on in the minds and hearts of many
peoples being our common heritage and a solid basis of our common future.
———————————————————————————————–

NOTE:  The above article is from the latest issue of Welcome to Ukraine
magazine. For information about how to subscribe to the Welcome To
Ukraine magazine send an e-mail to ArtUkraine.com@starpower.net
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                     “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 COUNTY OF NEW OPPORTUNITIES”
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   UKRAINE INFORMATION WEBSITE: http://www.ArtUkraine.com
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    “WELCOME TO UKRAINE”- “NARODNE MYSTETSTVO”

            (Folk Art) and ContempoARTukraine MAGAZINES
UKRAINIAN MAGAZINES: For information on how to subscribe to the
“Welcome to Ukraine” magazine in English, published four times a year
and/or to the Ukrainian Folk Art magazine “Narodne Mystetstvo” in
Ukrainian, published two times a year, and ContempoARTukraine ‘
published in English four times a year please send an e-mail to
ArtUkraine.com@starpower.net. Complete information can be found
========================================================
 “THE ACTION UKRAINE REPORT- AUR” – SPONSORS
       “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 Report (AUR) 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 AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
11. 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
12. WJ EXPORT-IMPORT, Agricultural Companies, Kyiv, Ukraine,

David Holpert, Chief Financial Officer, Chicago, Illinois.
13. 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.
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 “THE ACTION UKRAINE REPORT – AUR” is an in-depth, private,
independent, not-for- profit news and analysis international newsletter,
produced as a free public service by the non-profit www.ArtUkraine.com
Information Service (ARTUIS) and The Action Ukraine Report Monitoring
Service  The report is distributed in the public’s interesting around the
world FREE of charge. Additional readers are always welcome.
             TO GET ON OR OFF THE DISTRIBUTION LIST
If you would like to read “THE ACTION UKRAINE REPORT- AUR”
please send your name, country of residence, and e-mail contact
information to morganw@patriot.net. Additional names are welcome. If
you do not wish to read “THE ACTION UKRAINE REPORT” around
five times per week, let us know by e-mail to morganw@patriot.net.  If
you are receiving more than one copy please contact us and again please
contact us immediately if you do not wish to receive this Report.
===================================================
                        PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer 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
——————————————————————————
Director, Ukrainian Federation of America (UFA)
Coordinator, Action Ukraine Coalition (AUC)
Senior Advisor, U.S.-Ukraine Foundation (USUF)
Chairman, Executive Committee, Ukraine-U.S. Business Council
Publisher, Ukraine Information Website, www.ArtUkraine.com
Member, International Ukrainian Holodomor Committee
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      Power Corrupts and Absolute Power Corrupts Absolutely.
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return to index [The Action Ukraine Report (AUR) Monitoring Service]
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