THE ACTION UKRAINE REPORT – AUR" – Number 620

 “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”

 
US SAYS UKRAINE & RUSSIA SHOULD JOIN WTO TOGETHER
 
U.S. Trade Rep. Rob Portman said Thursday in Hong Kong that 
Russia and Ukraine should join the World Trade Organization together.

“I hope Ukraine and Russia come into the WTO and they come in together,”
Portman said during a news briefing at the sixth WTO ministerial conference
in Hong Kong. “Their entrance may help us.” Portman said the accession
negotiations for the two countries would be completed “soon.” [articles 1-2]
                                      
“THE ACTION UKRAINE REPORT – AUR” – Number 620
Mr. E. Morgan Williams, Publisher and Editor

Washington, D.C., FRIDAY, DECEMBER 16, 2005
                        ——–INDEX OF ARTICLES——–
                “Major International News Headlines and Articles”

1.    RUSSIA AND UKRAINE SHOULD JOIN WTO TOGETHER SAYS
                  U.S. TRADE REPRESENTATIVE  ROB PORTMAN
By Randy Jensen, Interfax-China
Hong Kong, Thursday, December 15, 2005

2COMMENTS MADE BY US TRADE REP PORTMAN IN HONG KONG 

        RELATED TO RUSSIAN AND UKRAINIAN WTO ACCESSIONS
         Hope they both will be in WTO soon and hope they come in together
E. Morgan Williams, Publisher & Editor
The Action Ukraine Report (AUR)
Washington, D.C., Friday, December 16, 2005

3.    THERE ARE FAR LESS ECONOMIC FACTORS, HAMPERING
 UKRAINE’S JOINING WTO, THAN POLITICAL ONES, UKRAINIAN
        ECONOMICS MINISTER ARSENIY YATSENIUK BELIEVES
          Parliament’s failure to pass needed bills is the mail obstacle now
                       Only two issues left to resolve with the U.S.
Olha Tkrinform, Ukrinform, Kyiv, Ukraine, Thu, December 15, 2005

4. US AMBASSADOR TO RUSSIA BURNS INTERVIEWED ONLINE

              Questions about Jackson-Vanik amendment and Russia
ONLINE INTERVIEW: US Ambassador to the Russian
Federation William Burns, responding to readers’ questions
Gazeta.ru, Moscow, Russia, Wednesday, December 14, 2005
5.   RUSSIA ANGLES FOR CONTROL OF UKRAINE’S PIPELINES
By Judy Dempsey, International Herald Tribune (IHT)
Published by The New York Times
Europe, Thursday, December 15, 2005

6.  RUSSIAN-UKRAINIAN GAS SPAT BRINGS MORE ACRIMONY
   Barrage of threats & counter-threats, insults and allegations of blackmail
By Mara D. Bellaby, AP Worldstream, Kiev, Ukraine, Thu, Dec 15, 2005

7UKRAINE CANNOT RAISE TRANSIT FEES FOR RUSSAN GAS
          BECAUSE OF CONTRACTS SAYS PM YEKHANUROV
Ukrayinska Pravda website, Kiev, in Ukrainian 15 Dec 05
BBC Monitoring Service, UK, in English, Thu, Dec 15, 2005

8.        DISPUTE OVER NATURAL GAS PRICES IN UKRAINE
 Russia: pay European rates or hand over control of gas pipeline network
Andrew E. Kramer, The New York Times, NY, NY, Fri, Dec 16, 2005

9.           JOINT STATEMENT: V. YUSHCHENKO & V. PUTIN
                          Solution of the Trans-dniester problem
Press office of President Victor Yushchenko of Ukraine
Kyiv, Ukraine, Thursday, December 15, 2005

10UKRAINE PLANS TO BUILD EUROPE’S SECOND LARGEST

NUCLEAR DUMP ON GROUNDS OF CHERNOBYL POWER PLANT
Interfax-Ukraine news agency, Kiev, in Russian 1833 gmt 15 Dec 05
BBC Monitoring Service, UK, in English, Thursday, Dec 15, 2005

11    UKRAINIAN REFUSE TO GIVE UP BIRDS, FRUSTRATING

                    EFFORTS OF FIGHT BIRD FLU OUTBREAK 
Natasha Lisova, AP Worldstream, Kiev, Ukraine, Thu, Dec 16, 2005

12.                      UKRAINE: CAPTURING GROWTH
         Remarkable doubling in mobile phone penetration rates this year
                       One of the country’s fastest growing sectors
BRIEFING: in association with Dragon Capital
By Paulius Kuncinas, BA, MA (OXON), Oxford Business Group
London, United Kingdom, Thursday, 15 December 2005

13UKRAINE: MAHERISHI VEDICAL AGRICULTURAL LTD (UK)
     INTENDS TO LEASE 40 THOUSAND HECTARES OF LAND TO
GROW ECOLOGICALLY CLEAN CEREALS FOR EXPORT TO JAPAN
UNIAN, Kyiv, Ukraine, Wednesday, December 14, 2005

 
14.                 VIMPELCOM FEUD STALLS UKRAINE MOVE
By Andrew Langley & Anna Ivanova-Galitsina,
Wall Street Journal, Dow Jones Newswires
New York, Moscow, Thursday, December 15, 2005

15. UKRAINIAN CHEESE PRODUCER “CHEESE CLUB” TO RECEIVE
   10 MILLION USD INVESTMENT FROM INT FINANCE CORP (IFC)
Ukrinform, Kyiv, Ukraine, Wed, December 14, 2005

16EBRD GRANTS TWO CREDITS TO MAJOR UKRAINIAN FOOD

                     COMPANY CHUMAK TO TUNE OF 26 M. USD
Ukrinform, Kyiv, Ukraine, Wed, December 14, 2005

17.        UKRAINE FINANCE: BNP WINS UKRSIBBANK STAKE

The Economist Intelligence Unit Limited
London, UK, Wednesday, December 14, 2005

18 NATIONAL BANK PLANS TO SIMPLIFY PROCEDURE FOR
    INVESTMENT BY NON-RESIDENTS AND FUNDS WITHDRAWAL

Ukrainian News Agency, Kyiv, Ukraine, Tuesday, December 13, 2005

19.    NEW PERIODICAL FOR UKRAINE’S PRODUCE BUSINESS:
         “AGROOGLYAD: FRUITS AND VEGETABLES”! JOURNAL
Agricultural Marketing Project (AMP), Kyiv, Ukraine, Wed, Dec 14, 2005

20.  UKRAINE TO HOLD FIRST TENDER FOR BLACK SEA SHELF
                                  Shell and Hunt Oil interested

NIA Novosti, Moscow, Russia, Wed, Dec. 14, 2005
 
21 CARLOS PASCUAL NAMED VICE PRESIDENT & DIRECTOR
                OF FOREIGN POLICY STUDIES AT BROOKINGS
                           Former U.S. Ambassador to Ukraine
Brookings Institution, Washington, D.C., October 28, 2005
 
22.  CORRUPTION STEALS FUTURE FROM EVERY INDIVIDUAL
             Georgian president talks up new democracy forum in Ukraine
INTERVIEW: with Georgian President Mikheil Saakashvili
Volodymyr Skachko, Kiyevskiy Telegraf, Kiev, Russian, 9 Dec 05
BBC Monitoring Service, UK, in English, Monday, Dec 12, 2005
 
23.       THE HERALD CHRISTMAS APPEAL: MARY’S MEALS
              A project due to launch in Ukraine early next year, which
              will provide free meals and education to street children.
         Mary’s Meals now feeds 50,000 children worldwide every day
.
By Susan Swarbrickd, The Herald Online
Internet digest of Scotland’s leading quality newspaper
Glasgow, Scotland, UK, Thursday, December 15 2005
 
24      TARAS SHEVCHENKO: “THEN I’LL GO TO SEDNIV…..
                Ancient town in Chernihiv oblast, its place in the life
                       and creative work of our national prophet
By Ihor Siundiukov, The Day
The Day Weekly Digest in English,
Kyiv, Ukraine, Tuesday, December 6, 20005
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1
. RUSSIA AND UKRAINE SHOULD JOIN WTO TOGETHER SAYS
             U.S. TRADE REPRESENTATIVE  ROB PORTMAN

By Randy Jensen, Interfax-China
Hong Kong, Thursday, December 15, 2005

HONG KONG – U.S. Trade Rep. Rob Portman said Thursday that
Russia and the Ukraine should join the World Trade Organization together.

“I hope Ukraine and Russia come into the WTO and they come in together,”
Portman said during a news briefing at the sixth WTO ministerial conference
in Hong Kong. “Their entrance may help us.” Portman said the accession
negotiations for the two countries would be completed “soon.”

The head of the U.S. trade delegation said he would be meeting with his
Russian counterpart on Friday. He said the accession of the two large
economies would be welcome and could help negotiations, calling it “fresh
blood.”

Russia is attending this week’s WTO conference in Hong Kong only as an
observer, but will be giving a speech on Sunday.  -30-
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[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
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2. COMMENTS MADE BY US TRADE REP PORTMAN IN HONG KONG 
      RELATED TO RUSSIAN AND UKRAINIAN WTO ACCESSIONS
       Hope they both will be in WTO soon and hope they come in together
E. Morgan Williams, Publisher & Editor
The Action Ukraine Report (AUR)
Washington, D.C., Friday, December 16, 2005

WASHINGTON – The United States, in recent days, has clarified

where it stands regarding the aggressive drive by Ukraine and Russia
to both join the World Trade Organization (WTO) as soon as possible
and the potential serious issues and conflicts that would be raised by 
Ukraine if Russia joined first and the serious issues and conflicts that
would likely arise with Russia if Ukraine joined first. 
 
Ukraine has said it would never be able to become a member of WTO
if Russia became a members first because of the expected unacceptable
requirements Russia would impose on Ukraine in order to sign the 
bilateral agreement with Russia needed for Ukraine’s membership.
 
Comments made by U.S. Trade Representative, Rob Portman Thursday
at the World Trade Ministerial in Hong Kong on questions related to
Russian and Ukrainian WTO accessions were:

“QUESTION: Hello, I’m from Ukraine. At the beginning of this conference,
you made a statement that Ukraine and Russia need to enter the WTO
together. Can you clarify your position on this question?

And another question: Some countries who are trying to access the WTO

find themselves hostage of this conflict inside the WTO, and now they
think, “Oh, better we wait until you decide on this and better not to enter
the WTO before you decide all questions or problems inside.” What is
your message to these countries or the worries of these countries?

AMBASSADOR PORTMAN: Two messages. One, to repeat what I said
earlier, I hope that Ukraine and Russia will both be in the WTO soon, and
[two] I hope they come in together. I don’t know what will happen because
there are bilateral agreements they have to reach with every WTO member.
And then there is the multilateral agreement.

With regard to our progress, we feel as though we are in good shape to
complete the negotiations with Russia and Ukraine soon. We’re not quite
there yet, but we continue to talk. I think I’m meeting with Minister Gref,
if he’s available, tomorrow. I know we are in touch with the Ukrainian
Minister, and I think in fact have had some discussions this week.

So we think it’s a good idea to have these two major economies be part
of the WTO. Bringing them into the rules-based system makes sense, for
them, but also for the global economy.

Your question about whether they’re being held hostage, or whether what
we’re doing here is distracting from that, I don’t think so.

I think the truth may be that their entrance to the WTO may help us.
Maybe we need some fresh blood, fresh thinking, to try to break some
of these deadlocks.

But no, there is an accession process that goes on separate from the
negotiations on the core issues we’ve talked about, and that proceeds
regardless of what happens here in Hong Kong.”

 
Prior to departure for Hong Kong, in a press conference with U.S.
Secretary of Agriculture Mike Johanns, the U.S. Special Trade
Representative Portman said in terms of which country would join
WTO sooner, Russia or Ukraine, mentioned, “I would hope this
would be done in roughly the same timeframe.” 
 
There were many WTO specialists in Washington who have been
confident for some time, because of the position of the Bush
Administration, that the USA would not show strong support
for Ukraine joining WTO before Russia but would probably
support the ‘join together’ policy as now stated in Hong Hong. 
 
Many of these WTO specialists though, felt it was important, for
several key reasons, for the USA to show strong support for the
new government in Ukraine and thus to assist Ukraine in everyway
possible to join WTO before Russia. Ukraine badly needs to find
ways to have more leverage with Russia as Ukraine is getting
pressured by Russia in many ways such as regarding gas prices.
 
Many of Russia’s pressure tactics look as though they are in
direct response to Ukraine’s independent and European integration
stance supported by the Orange Revolution.  -30-
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http://www.ustr.gov/Document_Library/Transcripts/2005/December/Remarks_by_US_Trade_Representative_Rob_Portman,_World_Trade_Ministerial,_Hong_Kong_Convention_Exhibition_Center.html
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3.  THERE ARE FAR LESS ECONOMIC FACTORS, HAMPERING
UKRAINE’S JOINING WTO, THAN POLITICAL ONES, UKRAINIAN
     ECONOMICS MINISTER ARSENIY YATSENIUK BELIEVES
     Parliament’s failure to pass needed bills is the mail obstacle now
                 Only two issues left to resolve with the U.S.

Olha Tkrinform, Ukrinform, Kyiv, Ukraine, Thu, December 15, 2005

HONG KONG, CHINA – Within the framework of the 6th Ministerial
Conference of the World Trade Organization in Hong Kong chief of a
Ukrainian delegation, Economics Minister Arseniy Yatseniuk met with WTO
Director General Pascal Lamy on Thursday. The Ukrainian Economics
Minister commented on results of the meeting to Ukrinform correspondent.

During the meeting Pascal Lamy stressed on great progress by Ukraine on
the way to the WTO. This way, he said, is on its final stage. He,
particularly, emphasized the role of the Ukrainian Government in this
process over the st quarter.

At the same time, Pascal Lamy advised to exert every effort in urgent
adopting of the WTO bills. These bills’ failure to be passed the WTO
Director General said is the main obstacle for final completion of the
process.

The Ukrainian Minister briefed Mr Lamy about recent developments in the
Verkhovna Rada. (In particular, about results of the Wednesday voting for
bills, directly connected with Ukraine’s membership in the organization.)

As Arseniy Yatseniuk believes, there are far less economic factors hampering
Ukraine’s joining in the WTO, than political ones. As he stressed, Ukraine
doesn’t view its accession to the WTO through the prism of any
synchronization with other states and believes it is expedient to focus on
overcoming internal obstacles, rather than external ones.

A particular attention the two sides paid to Ukraine’s completion of
bipartite negotiations. As Arseniy Yatseniuk told Pascal Lamy, negotiations
with the USA are drawing to a close and two “sensible” issues have left to
sign the protocol.  -30-
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4. US AMBASSADOR TO RUSSIA BURNS INTERVIEWED ONLINE
              Questions about Jackson-Vanik amendment and Russia

ONLINE INTERVIEW: US Ambassador to the Russian
Federation William Burns, responding to readers’ questions
Gazeta.ru, Moscow, Russia, Wednesday, December 14, 2005
An online interview was conducted with the new US ambassador
to the Russian Federation, William Burns. 
 
Below is an except from the complete text related to several questions
about the Jackson-Vanik amendment and Russia and the U.S.
Ambassador’s reply. [EDITOR, The Action Ukraine Report]
SECTION ON JACKSON-VANIK———————-

(Question) Hello, Mr. Ambassador! What do you think, how rapidly
and at what level will American-Russian trade relations develop and
when will the Jackson-Vanik amendment be canceled?
Thank you. Dmitriy (St. Petersburg)

(Question) When will the United States finely cancel the Jackson-Vanik
amendment? For how many years can you keep the same reservations?
Are you not personally ashamed? Anna (Moscow)

(Question) When will the Jackson-Vanik amendment be canceled?

(Question) When will the Vanik-Jackson amendment be canceled? After
all, it is in the interests of the United States to have Russia join the
WTO. Aleksey Andreyev (St. Petersburg).

(Amb. Burns) I know that many Russians are bitter about the Jackson-Vanik
amendment. Ten years ago also, when I was working in Russia, in Moscow,
it evoked a great deal of dissatisfaction among Russians. And it is not easy
to explain why this amendment has not been canceled yet.

Every year since 1994 the American president has given assurances that
Russia meets all the requirements related to emigration that served as the
grounds for the introduction of the Jackson-Vanik amendment. And each
year the United States has canceled the amendment with respect to trade
relations between the United States and Russia.

And therefore for many years the US position has remained unchanged —
the Jackson-Vanik amendment must be canceled completely.

But Congress has had certain difficulties. I think it will be necessary to
do this again in the near future and again raise the question of finally
canceling the amendment.

And there is no doubt that Russia’s joining the WTO, which we support
in all ways, would accelerate this process.

The latest steps taken in the American Congress pertaining to the
cancellation of this amendment with respect to Ukraine reflect the interest
of our Congress in the matter of supporting Ukraine and its evolution into
a stable and prosperous state.

I hope very much that in the near future we will be able to begin to make
progress in the matter of canceling this amendment with respect to Russia
as well. [End of Q&A section about Jackson-Vanik]

——————————————————————————————
FOOTNOTE:  Now that the USA supports Russia and Ukraine joining
the WTO at the same time there is a strong possibility that there
will be action by some in the U.S. Congress to graduate both
countries from the Jackson-Vanik Amendment at approximately the
same time.  Several members of the Congress have supported this
approach in the past, especially those with strong Russian interests.
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[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
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5.    RUSSIA ANGLES FOR CONTROL OF UKRAINE’S PIPELINES

By Judy Dempsey, International Herald Tribune (IHT)
Published by The New York Times
Europe, Thursday, December 15, 2005

BERLIN – Russia and Ukraine raised the stakes Thursday in their long-
running dispute about natural gas prices and transportation fees, plunging
their relationship into the worst crisis since the Orange Revolution brought
Viktor Yushchenko’s pro-Western government to power in Ukraine a year
ago.

Gazprom, the giant energy company owned by the Russian government that
has demanded that Ukraine pay market prices for its natural gas imports,
said it wanted to establish an international consortium to jointly manage

Ukraine’s state-owned gas transportation system.

Such a consortium would give Gazprom a large measure of influence over the
setting of the fees it pays Ukraine for sending its gas through the country
and into Europe. It would fulfill Gazprom’s long-term strategy of gaining
control over one of the most important transit routes for its gas exports.

More than 80 percent of Russian natural gas exports to Western Europe go
through Ukraine, giving the country immense leverage in negotiating natural
gas prices and transit fees with Gazprom.

Claudia Kemfert, an energy expert at the German Institute for Economic
Research, said Gazprom’s strategy has always been to control the transit
routes.

“Gazprom resents that it has to negotiate transit fees with Ukraine or other
countries, which is why it was reviving this plan in order to weaken
Ukraine’s bargaining position with Russia,” Kemfert said. “The heart of the
dispute is Ukraine’s dependence on Russia for some of its gas supplies, and
Russia’s dependence on Ukraine for sending its gas to Western Europe.”

Russia and Germany raised the idea of the international consortium three
years after Russia had accused Ukraine of stealing natural gas destined for
Europe from the transit pipeline and hoarding it. Ukraine, which later
admitted to the theft, rejected the idea of the consortium after Russia said
it wanted a large measure of control over the pipeline.

Gerhard Schröder, the German chancellor at the time, and President Vladimir
Putin of Russia then started lobbying German companies to build the North
European Pipeline, which would run from Russia under the Baltic Sea into
Western Europe, bypassing Ukraine and Poland. The pipeline plan was signed
in September in Berlin.

Andriy Lopushanski, deputy chief executive of Naftogaz, Ukraine’s
state-owned natural gas transportation system, said Ukraine had no intention
of joining the consortium because it would mean giving up one of its most
important strategic assets. “This cannot be discussed since it is a
strategic interest of Ukraine and nobody may infringe upon it,” Lopushanski
said.

The question is what kind of compromise can be struck between Russia and
Ukraine before existing agreements expire Jan. 1. Gazprom has dropped its
threat of cutting energy supplies to Ukraine because Ukraine could make up
for the loss by taking natural gas destined for Western Europe.

This would jeopardize Europe’s supplies and damage Gazprom’s credibility as
a reliable energy supplier to the West. Russia meets more than a quarter of
the European Union’s natural gas needs.

One sticking point is Gazprom’s refusal to gradually phase in world market
gas prices for Ukraine, which has a gross domestic product of just $6,400
per capita, according to the European Bank for Reconstruction and
Development.

Ukraine said Thursday it was willing to pay higher prices and scrap its
barter system with Gazprom provided the price increases were phased in.

Under the barter system, Ukraine trades transit rights for natural gas. The
country, which gets half its natural gas imports from Gazprom, pays the
equivalent of $50 per 1,000 cubic meters, a third of the market price.
Gazprom said this week it wanted to charge at least $210.

The rest of Ukraine’s gas imports – around 29 billion cubic meters a year –
are bought from Turkmenistan, which transports the gas through Russia.

Vasily Astrov, an economist focusing on Russia at the Vienna Institute for
Comparative Economic Studies, said it was “very unlikely” that Ukraine could
afford such a steep and rapid rise in energy prices. As leverage, he added,
Ukraine could raise the transit fees for Russian gas sales to Western
Europe.

“Much depends on how much Ukraine increases those fees,” Astrov said.
“Russia could retaliate by raising the transit fees for the gas Ukraine
imports from Turkmenistan.” Ukraine had started to import gas from the
Central Asian republic to reduce its dependence on Russian gas, but that
strategy seems to be unraveling.

Last month, Gazprom signed a 25-year deal with Turkmenistan in which
Gazprom, starting in 2007, will receive all of Turkmenistan’s export
surplus, except its long-term commitments to Iran. -30-
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http://www.iht.com/articles/2005/12/15/business/gazprom.php
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6.  RUSSIAN-UKRAINIAN GAS SPAT BRINGS MORE ACRIMONY
    Barrage of threats & counter-threats, insults and allegations of blackmail

By Mara D. Bellaby, AP Worldstream, Kiev, Ukraine, Thu, Dec 15, 2005

KIEV – What began as a gas dispute between Ukraine and Russia has

ballooned into a diplomatic crisis as the neighbors launch a barrage of
threats and counter-threats, insults and allegations of blackmail at each
other.

Since the beginning of December, in addition to constant sparring over gas
prices, Kiev and Moscow have bickered over Ukraine’s ambitions to join

NATO and the Russian navy’s use of a Ukrainian port.

The acrimony – magnified by President Viktor Yushchenko’s victory last year
over a Kremlin-backed candidate – comes as Ukraine celebrates a string of
small successes in its hopes to forge closer ties with the West.

This month, Kiev won European Union recognition as a market economy,

played host to U.S. Secretary of State Condoleezza Rice and presided over a
pro-democracy forum involving heads of state that was widely perceived as a
challenge to Moscow’s regional domination.

Ukraine also declared that it would be ready to join NATO in three years –
an idea that clearly worries Moscow.

“What we are seeing is Russia playing the spoiler for Ukraine because this
administration is not very interested in any form of integration with
Russia,” said Ivan Lozowy, president of the Kiev-based Institute of
Statehood and Democracy. “It’s an emotional, knee-jerk reaction – Russia
feels obliged to show its strength and power when it is not getting its
way.”

Moscow has warned Kiev that it will no longer receive some of the cut-rate
deals on commodities from gas to enriched uranium that the Kremlin has

doled out in the past to friendly neighbors.

“Considering Ukraine’s unfriendly attitude, her strivings toward NATO …
delivering gas at those old prices no longer makes sense,” said Russian
analyst Sergei Markov.

Russian President Vladimir Putin said last week that high economic growth
and privatization revenue made Ukraine perfectly capable of paying world
market prices.

Kiev had been paying US$50 (A42) per 1,000 cubic meters and had balked

at Russian gas monopoly Gazprom’s proposal to triple that price. On
Wednesday, Gazprom warned Ukraine that because Kiev had dragged
its feet in negotiations, it now faced a sharply higher price of US$220-$230
(A185-A193).

Ukraine has countered that it has a contract through 2013 for the lower
price, and would consent to only a gradual increase. Ukrainian officials
have also accused Russia of applying pressure in a bid to force Ukraine to
hand over management control of its revenue-generating pipelines, a

proposal the Ukrainians have rejected.

The dispute is tricky for this gas-dependent country. Ukraine’s
energy-inefficient chemical factories will cease being profitable if the
price rises above US$95 (A79) per 1,000 cubic meters, and the country’s
giant metal works will struggle at prices above US$103 (A86), Security
Council chief Anatoliy Kinakh said. Those industries account for 30 percent
of Ukraine’s gross domestic product and 45 percent of its export earnings.

The gas dispute comes as Ukraine embarks on a parliamentary election
campaign in which Yushchenko is looking very vulnerable. Disappointment at
the slow pace of change could bring significant votes to those who opposed
last year’s Orange Revolution, giving them enough power to alter Ukraine’s
course.

“The energy factor will be used extensively both to illustrate the
performance of the government, which is not satisfactory in that sense, but
also to claim that if Ukraine were closer to Russia, there wouldn’t be such
hardships,” said Ukrainian political analyst Inna Pidluska.

Moscow has sought to use the gas dispute to blacken Ukraine’s name in
Europe, warning of possible supply cutoffs. The European Union gets almost
half of its gas imports from Russia, mostly piped through Ukraine. But the
EU has said it is confident Ukraine will honor its transit commitments.

“Russia has interfered, is interfering and will interfere,” said lawmaker
Borys Bespaliy, a Yushchenko ally. “The main problem is that Russia still
considers itself an older brother in relation to neighboring countries.”

Yushchenko’s government is giving as good as it gets. A senior
administration official suggested that if Moscow demands “world prices” for
oil, it might consider jacking up the US$93 million (A77 million) per year
that Russia pays to keep its Black Sea Fleet based in the Ukrainian port of
Sevastopol.

Russian media, meanwhile, have reported that Ukraine is threatening to open
up Soviet-era military installations to the United States and scuttle
military cooperation with the Kremlin. Ukrainian officials said they were
not aware of the reports.

Even the outbreak of bird flu in Ukraine became a point of disagreement when
a Russian veterinary official broke the news that Ukraine had the deadly
Asian strain; Ukraine refused to confirm it, countering that Kiev is putting
its trust in a British laboratory.

“Our government is just being provocative . … They intentionally drove our
relations into a dead end,” said opposition lawmaker Taras Chornovil.
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7.  UKRAINE CANNOT RAISE TRANSIT FEES FOR RUSSIAN GAS
          BECAUSE OF CONTRACTS SAYS PM YEKHANUROV

Ukrayinska Pravda website, Kiev, in Ukrainian 15 Dec 05
BBC Monitoring Service, UK, in English, Thu, Dec 15, 2005

Prime Minister Yuriy Yekhanurov has said that Ukraine’s contracts with
Russia prevent it from raising transit fees for Russian gas deliveries to
Europe to compensate for the proposed increase in the price of gas for
Ukraine. However, Yekhanurov insisted that Ukraine would fulfil its transit
obligations to Russia’s Gazprom.

Earlier today, Fuel and Energy Minister Ivan Plachkov said that Ukraine was
discussing an increase in transit fees with Russia and indicated that
Gazprom’s gas supplies to Europe would be jeopardized if the company

reduces the volume of gas supplies to Ukraine.

The following is the text of a report by Ukrainian Ukrayinska Pravda website
on 15 December:

Prime Minister Yuriy Yekhanurov has promised that Ukraine will carry out its
obligations to Russia’s Gazprom for pumping gas across its territory. “We
will provide the volume of transit that we are obliged to provide under the
contract between Ukraine and Gazprom,” Yekhanurov told journalists today.

Asked whether Europe would feel the consequences of the conflict between
Russia and Ukraine, Yekhanurov answered, “What are you talking about?”

Asked what might happen if Russia refuses to deliver gas, Yekhanurov said,
“What does it mean, Russia won’t deliver? What else can it do?”

However, Yekhanurov said that there is currently no news on the gas issue,
and the delegation that is in Moscow will report to the government on the
progress of negotiations on 16 December.

Yekhanurov also forecast that the price of gas for the population would not
increase despite Gazprom’s increase in price. “The public will not
experience any disturbances,” Yekhanurov said. He recalled that Ukraine
extracts 20bn cu.m. of its own gas.

Yekhanurov also said that the price will be different for different
categories of consumers.

Asked whether Ukraine could raise its transit fees to a level that would
compensate for the increase in price of fuel, Yekhanurov said: “We cannot
raise the fee, because this would be a violation of signed contracts.”

Yekhanurov also said that the change in price of Russian gas is not likely
to lead to a review of the budget. “But it is customary that the new
parliament looks critically at the budget,” he added.  -30-
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8.         DISPUTE OVER NATURAL GAS PRICES IN UKRAINE
   Russia: pay European rates or hand over control of gas pipeline network

Andrew E. Kramer, The New York Times, NY, NY, Fri, Dec 16, 2005

MOSCOW, Dec. 15 – The Russian natural gas company Gazprom is

demanding that Ukraine pay Western European rates for Russian gas –
more than four times what it pays now – or hand over control of its gas
pipeline network to a consortium to be run by Russia, Germany and
Ukraine.

Gazprom is threatening to cut supplies if talks break down, just as Ukraine
heads toward the coldest months of winter, and ahead of the country’s first
post-Orange Revolution parliamentary elections in March.

The new demands this week came during politically charged talks over gas
prices after the elections last winter removed Ukraine from Russia’s sphere
of influence in Eastern Europe.

Gazprom and Ukraine, whose economy depends heavily on Russian gas, are
negotiating prices for 2006. Gazprom’s deputy director for exports,
Aleksandr I. Medvedev, has raised the asking price for natural gas to the
amount paid in Western Europe: between $220 and $230 for 1,000 cubic meters.
The original 2006 asking price for Ukraine was $160, already a substantial
increase over this year’s price of $50.

“It’s clear today that Ukraine has passed the time when the price was $160,”
Mr. Medvedev said, speaking from Berlin on Wednesday while on a business
trip, in remarks that were carried on Russian television. The new rate is
based on rising prices for a basket of oil products on world markets, the
same formula used in Western Europe, he said.

“We are creating a completely understandable and transparent mechanism of
price formation,” he said.

Ukraine’s president, Viktor A. Yushchenko, responded in a statement on
Ukrainian television that he hoped that Russia’s “formula for creating a new
market should not become a formula for political pressure.”

A huge jump in utility bills or cities plunged into darkness and cold by a
gas shutoff could dent Mr. Yushchenko’s popularity. He won last December’s
contested presidential election over a Kremlin-backed candidate.

Moscow is also demanding that other former Soviet states that are tilting
toward the West politically, like Georgia and Moldova, pay market rates.
Gazprom is not renegotiating rates with Belarus, which is firmly in Moscow’s
orbit. The price of gas in Belarus’s 2006 contract is $46, according to
Gazprom.

On Tuesday, Gazprom’s director, Aleksei Miller, said in an interview with
Russia Today, a new Kremlin-financed English-language satellite news
channel, that Ukraine should compromise by surrendering its pipelines to a
consortium controlled by Russia, Ukraine and Germany, a major consumer

of Russian gas.

Ukraine’s pre-Orange Revolution leadership agreed to form such a consortium,
but the new government has ignored the agreement, he said.

As an alternative to surrendering control of its export pipelines, Ivan
Plachkov, Ukraine’s fuel and energy minister, proposed on Thursday a joint
venture with Gazprom to sell natural gas on Ukraine’s domestic market, if
Gazprom would agree to an incremental price increase leading to free market
rates in 2010.

Also, the Ukrainian Parliament passed a moratorium on privatizing the state
pipeline, Russia’s Interfax news agency reported Thursday. That would
obstruct any attempt by the government to fold it into a Gazprom-controlled
consortium.

Meanwhile, Kiev was abuzz with ideas on how Ukraine could strike back at
Russia. A presidential aide suggested raising the rent on Russia’s Black Sea
naval base, Moscow’s only warm-water port. Ukrainian news media reported
that the government had considered allowing United States experts a look at
Moscow’s advanced warning radar stations in Ukraine.

Gazprom threatened to sue if Ukraine siphons gas from export pipelines, an
option that Ukraine’s energy officials have discussed in speeches to their
Parliament. Ukraine uses only about 20 percent of the gas passing over its
territory from Russian fields.   -30-

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9. JOINT STATEMENT: VICTOR YUSHCHENKO & VLADIMIR PUTIN
                            Solution of the Trans-dniester problem

Press office of President Victor Yushchenko of Ukraine
Kyiv, Ukraine, Thursday, December 15, 2005

Being guarantors and negotiators in the process to settle the Trans-dniester
conflict and realizing our responsibility to ensure civil and interethnic
peace and stability in this European region and welfare of the Moldova
people as well as the Russians and Ukrainians residing on the shores of the
Dniester River, Ukraine and the Russian Federation welcome the resumption
of negotiations with the assistance of intermediaries from Ukraine, Russia
and the OSCE and the participation of observers from the United States of
America and the European Union.

We believe that the solution of the Trans-dniester problem will be found by
defining and legally assigning a special legal status to Trans-dniester,
guaranteeing sovereignty and territorial integrity of the Republic of
Moldova.

Ukraine and the Russian Federation are determined to actively coordinate
all practical measures they adopt to rapidly settle the conflict by
exceptionally peaceful means at negotiations between the Republic of
Moldova and Trans-dniester. The Russian Federation considers Ukrainian
initiatives as an important basis that helped to resume and accelerate these
negotiations, while Ukraine regards recent Russian propositions to be
significant for their development.

The guarantors confirm their commitment to all recently concluded agreements
and their readiness to maximally assist the multinational Republic of
Moldova to build its democratic, legal and neutral state on the principles
of integral territory, state power, economy, and defence. At the same time,
stability of the negotiated settlement model should be reliably supported
with a complex system of guarantees.

Ukraine and Russia welcome all measures to further democratise the region by
consolidating the fundamentals of civil society  and promoting human rights
on the basis of standards of the OSCE and the Council of Europe. We find it
important to create favourable conditions to conduct transparent and
democratic elections to the Supreme Council of Trans-dniester with the
participation of the international community. The OSCE might establish a
special mission to estimate the situation and to formulate relevant
recommendations in the context of Ukraine’s initiatives.

Recognizing the stabilizing role of current peacekeeping operations in the
region, the sides believe it would be expedient to transform them into
peace-guaranteeing operations under the aegis of the OSCE as a result of
the Trans-dniester settlement.

To achieve these goals, Ukraine and Russia intend to maximally help create
a climate of trust and reduce opposition between the parties of the conflict
and promote constructive dialogue in cooperation with the OSCE, the
European Union and the United States of America to achieve comprehensive
and lasting peace.   -30-
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LINK: http://www.president.gov.ua/en/news/data/1_4935.html
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10.   UKRAINE PLANS TO BUILD EUROPE’S SECOND LARGEST

NUCLEAR DUMP ON GROUNDS OF CHERNOBYL POWER PLANT

Interfax-Ukraine news agency, Kiev, in Russian 1833 gmt 15 Dec 05
BBC Monitoring Service, UK, in English, Thursday, Dec 15, 2005

KIEV  A new facility to store nuclear waste will be built on
the grounds of the Chernobyl nuclear power plant.

It will be Europe’s second largest after the storage facility at the
Leningradskaya nuclear power plant, the director-general of the state
specialized enterprise at the Chernobyl nuclear power plant, Ihor

Hramotkin, has said. Hramotkin was addressing a news conference in
the office of Interfax-Ukraine on Thursday [15 December].

Hramotkin said that one of the most important tasks at the Chernobyl plant
at present is unloading of nuclear waste, which is located at the plant’s No
1 and No 3 generating sets. Its volume exceeds 21,000 units.

The existing nuclear waste storage facility does not allow the entire volume
of spent fuel to be unloaded from the two generating sets. The nuclear

waste is currently stored in liquid form in special containers.

Hramotkin recalled that the contract to build the storage site was signed
with the [French] Framatome company in 1999. [Passage omitted:

background]

An independent international audit of the entire contract is being carried
out. Its findings are expected to be made available by January 2006.
[Passage omitted: more background]

[The director of the state department for the administration of the
Chernobyl exclusion zone, Serhiy Parashyn, has quoted Framatome as saying
that a further 85m dollars needs to be invested to complete the construction
of the nuclear waste storage facility, in addition to the same amount which
has already been spent; and that the completion is scheduled for 2010,
according to UNIAN news agency, Kiev, in Ukrainian 1720 gmt 15 Dec 05.]
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11.    UKRAINIAN REFUSE TO GIVE UP BIRDS, FRUSTRATING

                      EFFORTS OF FIGHT BIRD FLU OUTBREAK 

Natasha Lisova, AP Worldstream, Kiev, Ukraine, Thu, Dec 16, 2005

CRIMEA – Impoverished villagers in southern Ukraine are putting up strong
resistance to authorities who want to kill their domestic fowl in an attempt
to prevent the spread of bird flu.

Some residents of this village in Ukraine’s Crimean peninsula on Thursday
even chased off emergency workers with pitchforks. Others hid their birds in
sheds.

With the government destroying thousands of birds, some of Ukraine’s poor
are refusing to give up the chickens, ducks, turkeys and other fowl they
depend on for eggs and meat to make it through the former Soviet nation’s
long, cold winters.

Many say they are willing instead to take their chances in the fight against
a strain of bird flu that has killed humans in Asia and decimated flocks of
birds there.

On Wednesday, the Health Ministry confirmed the outbreak was the deadly
Asian strain H5N1, which has been recorded in at least 11 Crimean villages.
Birds are dying in another 14 on the peninsula.

In Urozhaynoe, Lena Sidorova refused to hand over her 20 ducks and hens.

She says she fears for her children’s health, but she’s also desperate to feed
her family. “All my family has are these 20 birds and my mother’s 330-hryvna
(US$65, A55) pension,” she said, crying.

An old, decrepit bus with the word “quarantine” written in red across it
stood on the outskirts of the Urozhaynoe region Thursday. Inside villages,
emergency workers _ some in special suits, others in military camouflage _
went door-to-door, asking residents if they had any birds.

But not all are cooperating.  “People are hiding birds, refusing to give
them to us,” said Andriy Tkachenko, an emergency official. “Some even

take pitchforks and chase us out.”

The Emergency Situations Ministry said it had culled 56,322 birds as of
Thursday, nearly two weeks after the country recorded its first case of bird
flu when about 2,500 birds died in marsh lands on this Black Sea peninsula.

Tkachenko said villagers have the right to not relinquish their fowl; all
they have to do is sign a form acknowledging that they have been warned.

The rules were not consistent, however; in the village of Nekrasovka, one of
the first hit by the outbreak, authorities were enforcing a mandatory cull,
residents said. On Thursday, about a week after the cull began, bird
feathers still covered a part of a village road.

Sergey Mirokhin, pushing a cart filled with firewood through Nekrasovka,
said the measures were excessive and worried that the 300 hryvnas (US$60,
A50) he received for his 15 hens and two geese will not be enough to buy new
birds in the spring. “My birds were not dying, but they took them without
asking me,” he said.

Some villagers complained that the government acted too slowly. They noticed
birds dying months ago. “My son came to me desperate as all his ducks died
in a day,” said Antonina Tonlikh, 78, her voice trembling. “Initially we
thought that they were poisoned.”

In Urozhaynoe, villagers insisted that their birds were healthy, and accused
the government of mixing up test results in the laboratory, something denied
by officials. Veterinary experts have said the virus was brought by
migratory birds, and they fear it will spread in the spring when birds fly
north.

International experts fear the H5N1 strain of bird flu could trigger a human
flu pandemic if it mutates into a form that is easily spread between people.
Since 2003, the virus has killed at least 71 people in Asia – most of them
farm workers who came into close contact with infected birds. No cases of
human infection have been recorded in Ukraine, health and emergency
officials said.  -30-
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12.                      UKRAINE: CAPTURING GROWTH
          Remarkable doubling in mobile phone penetration rates this year
                       One of the country’s fastest growing sectors

BRIEFING: in association with Dragon Capital
By Paulius Kuncinas, BA, MA (OXON), Oxford Business Group
London, United Kingdom, Thursday, 15 December 2005

The remarkable doubling in mobile phone penetration rates this year has not
just exceeded many a wild expectation, it has also set quite a challenge for
Ukraine’s mobile operators, as the five existing networks fight for market
share in one of the country’s fastest growing sectors.

By the end of October this year, the number of mobile phone subscribers
had reached an impressive 24.9m, more than double the number recorded
in October last year. Mobile penetration rates have thus risen from 30%
to 60% in just one year, with industry sector insiders already talking of
80% next year.

Adam Wojacki, CEO of the Ukrainian Mobile Company (UMC), one of the
two leading GSM operators in Ukraine, recently told OBG that although
Ukraine was initially one or two years behind its East European neighbours
in mobile phone development, it is now catching up very quickly.

New subscriber acquisition, analysts say, was driven primarily by improving
competition, better price offers for consumers and – fundamentally – a
significant increase in people’s real incomes.

Low per capita income used to be the main factor constraining the mobile
subscriber base. However, recent pension and wage hikes, it seems, have
released the genie from the bottle, freeing pent-up demand for mobile
telecommunication services.

The latest report published by the State Statistics Committee this week
reveals that personal incomes rose by 38% in nominal terms and 21.4%
in real terms during the first 10 months of this year.

Yet despite growth rates that are the envy of many Ukrainian economic
sectors, mobile operators admit that it is becoming increasingly tricky to
navigate in such fast-flowing waters.

Wojacki told OBG that, The pace of growth is quite challenging for operators
who face a tough balancing act in developing their network and deciding how
to allocate available capital to capture this growth.

Moreover, he added, mobile operators are having to operate in a low revenue
per customer environment, a result of a dramatic drop in average price per
minute in the last couple of years.

Subscriber acquisition, Wojacki explained, is driven by the
low-revenue-yielding pre-paid segment. This trend, he added, should
continue for another two years – until the market saturates.

Nonetheless, the two leading GSM operators, UMC and Kyivstar, enjoy
healthy EBITDA margins – currently between 50 and 60%.

Between themselves, the two GSM operators account for slightly over 90%
of mobile subscribers, with Kyivstar recently enjoying a slim lead over the
long-established frontrunner UMC.

The number of UMC subscribers has risen by 61.5% since the beginning of
this year, reaching 11.9m at the end of November. Meanwhile, on this score,
Kyivstar has shot past UMC, with 105% year-on-year subscriber base growth
at the end of November, or 13.53m customers.

However, UMC’s and Kyivstar duopolistic situation now faces a strong
challenge from Astelit, the owner of the life:) brand. Launched in Ukraine
almost 11 months ago, Astelit had managed to add 1.5m subscribers by the end
of October this year, claiming 6.1% of the vastly expanded mobile phone
market.

Ahmet Tanyu, CEO of Astelit, said in an interview with OBG last month that
the results have so far been in line with his company’s expectations.

Our proactive subscriber acquisition campaign is working and we should
reach 2m subscribers by the end of this year, he said.

However, Astelit, which is 54.2% owned by Turkey’s leading GSM operator,
Turkcell, and 45.8% by System Capital Management (SCM), had until August
been offering only pre-paid services. As it continues its network roll out,
it is poised to take on the more lucrative corporate segment, and increase
the number of post-paid customers.

According to Tanyu, the crucial factor in succeeding as a new challenger is
to have full shareholder commitment to investing in a nationwide network,
focused on all segments.

Our experience in other CIS countries such as Kazakhstan, Georgia and
Moldova, Tanyu said, has been a great advantage and we enjoy the benefits of
significantly lower telecoms equipment prices which lower our CAPEX costs.

Nonetheless, Tanyu added, a complete network roll out in a country the size
of Ukraine would add up to around $1bn.

Meanwhile, the market is expected to get even more crowded after it was
announced at the beginning of November that a fourth serious challenger,
Ukrainian Radio Systems (URS) – a company that operates under the WellCOM
brand – has been taken over by VimpelCom, another leading Russian mobile
operator.

Despite the dispute between VimpelCom’s share holders – the Russian Alpha
Group and Norway’s Telenor – both of whom have stakes in VimpelCom and
Kyivstar, VimpelCom says it has paid $231.3m for 100% of URS, paving the
way for a proper entry of VimpelCom into Ukraine in 2006.

Separately, the fifth player, Golden Telecom, which serves around 50,000
customers, is expected to continue its role as a niche player, focused on
the high-revenue corporate segment, positioning itself mainly as a one-stop
shop in telecommunications services, with an emphasis on wireline and data
services.

Andrii Droniuk, general director of Golden Telecom, told OBG recently that
Golden Telecom Inc shareholders did not announce plans to become a mass
market GSM service provider. The battle for mass market GSM is therefore
likely to become a four-horse race.

While Kyivstar and UMC are undoubtedly ahead of their two challengers –
Astelit and Vimpelcom – next year is likely to see an intensification of
competition, with all companies aggressively targeting new subscribers
through better price and quality packages.

With such intense competition, mobile operators are inevitably going to feel
some pressure on their profit margins. As the cost of subscriber acquisition
rises, market watchers say, this will lead to a price erosion. According to
many market watchers though, none of the old or new players are interested
in destroying the high value of the fast-expanding Ukrainian mobile
telecommunications market.

With cellular penetration rates expected to reach some 80% in 2006, the
Ukrainian mobile subscriber base is expected to exceed 36m. Even with
overlap between users estimated at 25-40%, mobile service revenues are set
to rise.

Improving purchasing power should also increase the average minutes per

user and help to raise revenue from value-added services. Next year, analysts
say, will perhaps be the most important year for Ukrainian telecoms since
the transition began in 1991.   -30-
——————————————————————————————
Paulius Kuncinas is Senior Country Editor, Emerging Ukraine 2006
Emerging Romania 2006; & Emerging Bulgaria 2005
Oxford Business Group, London, UK, m: +38 067 729 9322, in Kyiv)
pkuncinas@oxfordbusinessgroup.com; www.oxfordbusinessgroup.com
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13.  UKRAINE: MAHERISHI VEDICAL AGRICULTURAL LTD (UK)
    INTENDS TO LEASE 40 THOUSAND HECTARES OF LAND TO
GROW ECOLOGICALLY CLEAN CEREALS FOR EXPORT TO JAPAN

UNIAN, Kyiv, Ukraine, Wednesday, December 14, 2005

KYIV – Maherishi Vedical Agricultural Ltd (UK) has intent to lease 40
thousand hectares of agricultural lands in the Kherson Oblast for growing
grain-crops.

As UNIAN was told by Kherson Oblast governor Borys Sylenkov, the
company is about to lease lands in the Chaplynski, Boryslavski, and
Novotroitski districts of the Oblast.

He noted that the investors will grow ecologically clean cereals and will
export them to Japan. As of today, Maherishi Vedical Agricultural Ltd is
already leasing 25 thousand hectares in the Kalanchaksi district of the
Kherson Oblast.  -30-
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14.                VIMPELCOM FEUD STALLS UKRAINE MOVE

By Andrew Langley & Anna Ivanova-Galitsina,
Wall Street Journal, Dow Jones Newswires
New York, Moscow, Thursday, December 15, 2005

MOSCOW – The board of OAO Vimpel-Communications failed to approve

next year’s budget, potentially delaying the Russian wireless operator’s
long-planned expansion into the Ukrainian market.

Statements from Vimpelcom officials indicate that while the company’s core
operations in Russia and Kazakhstan won’t be affected by the move, the
expansion into the fast-growing Ukraine may suffer delays.

The failure is the latest escalation of a feud between Vimpelcom’s main
shareholders — Norwegian telecom operator Telenor ASA and Russian holding
company Alfa Group. They fell out over Vimpelcom’s acquisition last month of
Ukrainian RadioSystems, and the Norwegian company’s board representatives
have the power to block spending earmarked for the region.

Telenor, which is a majority owner in Kyivstar, Ukraine’s largest mobile
operator, opposed Vimpelcom’s acquisition of rival Ukrainian RadioSystems.

“Management will act as if the budget were approved, trying to be reasonable
and responsible,” Vimpelcom Chief Executive Alexander Izosimov said at a
news conference. That could be problematic with regard to Ukraine.

Mr. Izosimov declined to say whether Vimpelcom is prepared to scale down its
ambitions for Ukraine, although he added that “the first phase of
development in Ukraine wasn’t going to be very aggressive anyway.”

With about 60% of Ukrainians expected to own a mobile phone by the end of
this year, time is running out for Vimpelcom to make its move to capture
some of this lucrative market. Russia’s largest wireless operator, OAO
Mobile TeleSystems, or MTS, has a major presence in Ukraine.

“There are no disagreements on the board over plans for Kazakhstan and
Russia,” said Henrik Torgersen, senior vice president of Telenor and a
member of Vimpelcom’s board. Mr. Torgersen said he doesn’t see any problem
with management making decisions with regard to those countries.

A Telenor lawyer, said, however, the company’s charter will force management
to get board approval for most decisions. Management could be “in a tricky
situation if it doesn’t,” said the lawyer.

Mr. Torgersen said Telenor is still insisting on a completely different
approach by Vimpelcom to the Ukrainian market, with cheaper entry and less
ambitious plans.

Vimpelcom’s American depository receipts fell 0.74% to $43.11 each on the
New York Stock Exchange.
————————————————————————————————
Write to Andrew Langley at andrew.langley@wsj.com and Anna Ivanova-

Galitsina at anna.galitsina@dowjones.com
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15. UKRAINIAN CHEESE PRODUCER “CHEESE CLUB” TO RECEIVE
   10 MILLION USD INVESTMENT FROM INT FINANCE CORP (IFC)

Ukrinform, Kyiv, Ukraine, Wed, December 14, 2005

KYIV – The International Finance Corporation (IFC) intends to invest ten
million USD into developing of the Ukrainian leading cheese producer

“Cheese Club”.

The raised funds are supposed to be used for modernization of the Kaniv and
the Sviedlovodsk Butter And Cheese Factories. The funds are also envisaged
to be used for launching a technological line, which is supposed to produce
25 tons items per day.

Presently, works on certification of quality systems’ management in
accordance to the ISO 9001 international standards are carried out at the
Kaniv and the Sviedlovsk Cheese and Butter Factories. The IFC management is
also considering granting the Cheese Club loan of 20 M. USD, which will be
used for boosting circulating assets.  -30-
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          Power Corrupts and Absolute Power Corrupts Absolutely.
========================================================
16. EBRD GRANTS TWO CREDITS TO MAJOR UKRAINIAN FOOD

                     COMPANY CHUMAK TO TUNE OF 26 M. USD

Ukrinform, Kyiv, Ukraine, Wed, December 14, 2005

KYIV – The European Bank for Reconstruction and Development (EBRD)

will grant a 16 M. USD long-term credit and a 10 M. USD loan to the
Ukrainian company Chumak, with a view of replenishing the company’s
circulating assets, expanding its facilities and purchasing modern packaging
materials.

Besides, the credits will be used to finance the company’s promotional
activity with regard to popularizing its brand Chumak.

The Chumak buys sizeable part of raw materials from Kherson region formers,
so expanding its production facilities will allow the Chumak to recruit more
suppliers of vegetables and so help the farmers in marking their produce.

According to director of the EBRD’s Agricultural Business Department Hans
Christian Jacobsen, appearance on the Ukrainian market of new high quality
foods, based on tomatoes and other vegetables, expanding the assortment of
Chumak products will facilitate more intense competition in this sector.

The Chumak company is Ukraine’s leading manufacturer of ketchups, tomato
paste, mayonnaise, sauces, bottled sunflower seed oil. Its brand is among
Ukraine’s most known and recognizable. The company runs three factories in
Kherson region. In 2005 it made about 100,000 tons of products, worth 80 M.
USD.

As of late November 2005, the EBRD’s total investments in Ukraine reached 7
bn. euros in 74 projects. In 2006 the bank is expected to invest 500 M.
euros in the Ukrainian economy.  -30-
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17.       UKRAINE FINANCE: BNP WINS UKRSIBBANK STAKE
 
The Economist Intelligence Unit Limited
London, UK, Wednesday, December 14, 2005

BNP Paribas (France) has won the tender for a 51% stake in privately held
UkrSibbank, the country’s fifth-largest lender. The terms of the deal have
not been disclosed, but analysts have valued the stake at $500m-700m.

In addition to BNP Paribas, five other banks bid for UkrSibbank-OTP
(Hungary), Banca Intesa (Italy), Commerzbank (Austria), Erste Bank

(Austria) and Societe Generale (France).

Ernst Galiev, vice-president of UkrSibbank, stated that the selection of the
strategic investor was not based solely on price.

BNP Paribas expects to complete the acquisition before year-end. The
French bank will keep the UkrSibbank name and plans to increase the
bank’s branch network from the current 750 to 970 by mid-2006.
UkrSibbank reports net assets of $1.76bn, with a credit and investment
portfolio of $1.4bn.

The acquisition of the controlling stake in UkrSibbank marks the second
major foreign investment into the country’s banking sector this year. In
October, Raffeisenbank (Austria) finalised its takeover of a 93.5% stake in
Aval Bank, the country’s second-largest bank, for just over $1bn (BEE Oct
24th 2005).  -30-

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18.  NATIONAL BANK PLANS TO SIMPLIFY PROCEDURE FOR
   INVESTMENT BY NON-RESIDENTS AND FUNDS WITHDRAWAL
 
Ukrainian News Agency, Kyiv, Ukraine, Tuesday, December 13, 2005
KYIV – The National Bank plans to simplify the procedure of investment
by non-residents, as well as withdrawal of such investments from Ukraine.
NBU Deputy Governor Oleksandr Savchenko informed journalists about
this.
 
In Q1, 2006, the National Bank plans to reduce the number of licenses
and other documents, which should be received to perform investments.
First of all, the NBU plans to simplify crediting and leasing operations
by non-residents.
The volume of direct foreign investments to Ukraine in January-September
of this year grew by 10.8%, or USD 932.21 million and constituted USD
9,532.240 million as of October 1.
Small investments were observed in wholesale trade and trade intermediary
services (USD 1,662.1 million), food industry and processing of
agricultural products (USD 1,158.8 million) as of October 1.
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19.    NEW PERIODICAL FOR UKRAINE’S PRODUCE BUSINESS:
         “AGROOGLYAD: FRUITS AND VEGETABLES”! JOURNAL

Agricultural Marketing Project (AMP), Kyiv, Ukraine, Wed, Dec 14, 2005

KYIV – The first issue of “Agrooglyad: Fruits and Vegetables”, a new
periodical for produce business professionals, came out on December 5th,
2005. The full-color journal will equally provide everyone engaged in the
produce market, from farmers to supermarket produce department managers,
with quality, prompt and trustworthy information regarding the vegetable,
fruit and berry market.

The release of the debut issue coincided with the opening of the second
international conference and exhibition “Fruits and Vegetables of Ukraine
2005″, where leading players of the produce market gathered together.

“The produce business of Ukraine deserves to have it’s own periodical; it
provides one quarter of all money earned by Ukrainian agriculture (56%
more than grain production business!)”, said Rodion Rybchinskiy, Chief
Editor of the journal.

The motto of the weekly journal is “Checked – for quality!” because the
editors promise to publish only those materials being really useful and
interesting to those involved in the Ukrainian produce market.

Up-to-date market information will be a distinctive feature of the journal.
Wholesale and retail prices on the main fruits and vegetables will be
provided in each weekly issue, as well as weekly market overviews, price
trends, information about needs of processing facilities, contact
information of purchasing departments, and trustworthy bids and offers
of produce made by farms, wholesale companies, input suppliers, seed
companies, etc.

In the journal you will also find market forecasts, overviews of fruit and
vegetable export trade, and other useful statistical information.

A significant part of the journal is used by technological and marketing
sectors. The top specialists in Ukraine will prepare materials on new
production technologies, harvesting, post harvest handling, packing and
storage and a group of experts will review the provided information.

Cooperating with the Agricultural Marketing Project, “Agrooglyad: Fruits
and Vegetables” journal has the possibility to publish materials written by
world experts in the produce industry. The journal’s staff will endeavor on
what is new and interesting as they are trying to provide the up to date
economic evaluation and efficiency.

We’d like to point out that “Agrooglyad: Fruits and Vegetables” is not just
an ordinary full-color journal sent to the subscriber in the mail. By
subscribing to this periodical, one automatically gets access to a powerful
sales channel, i.e. weekly updated prices, which are looked at weekly by up
to 5,000 potential buyers and sellers of fruits and vegetables.

The subscriber can also access information online by visiting
www.lol.org.ua, where they will find daily updated information and be able
to submit information about their enterprise themselves. Subscribers can
also enjoy significant discounts for participation in the annual
international conference, which has been already recognized as a major event
in the CIS produce business and will also receive the annual reference book
“Produce business of Ukraine” and can place their advertisements in the
journal.

Another important feature is that each subscriber can communicate directly
with the analysts of the periodical free-of-charge!

The editors of “Agrooglyad: Fruits and Vegetables” weekly journal are

sure that this periodical will become a reliable decision-making tool in the
dynamically changing state of the produce market.

You can subscribe to this journal at all Ukrainian Poshta offices. The
subscription post code of “Agrooglyad: Fruits and Vegetables” weekly
journal is 23735. You can also subscribe on APK-Inform’s website, by
filling an easy form available at http://www.apk-inform.com/subscribe.php.
Monthly subscription costs 24.99 UAH ($ 5).

There is great news for the clients of the Agricultural Marketing Project
because the Project has decided to cover a part of subscription costs for
its clients in 2006. For the detailed information concerning the subscribing
terms for AMP clients, please inquire the Marketing Department of the
Informational Agency “APK-Inform” per tel: 8-0562-320795. -30-
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LINK: http://www.lol.org.ua/eng/fruits/showart.php?id=31717
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20. UKRAINE TO HOLD FIRST TENDER FOR BLACK SEA SHELF
                                Shell and Hunt Oil interested

NIA Novosti, Moscow, Russia, Wed, Dec. 14, 2005

KIEV – Ukraine will hold its first tender for the Kerch sector of the Black
Sea shelf for further development of hydrocarbon deposits, the Ukrainian
government said Wednesday.

The Kerch Strait divides Ukraine’s autonomous area of the Crimea and the
Russian Taman peninsula.

An intergovernmental commission will draft relevant documents and announce
the tender within two months. Bids will be received for three months from
the time of the announcement.

Ukrainian and foreign nationals and companies possessing the required
material, technological and economic potential may bid for the tender after
paying a fee of $10,000.

After the signing of a product sharing agreement, the winner of the tender
must pay Ukraine $500,000. Minimum investment in geological prospecting is
$15 million. If commercial hydrocarbon reserves are discovered, the winner
of the tender must pay Ukraine $2 million.

State-owned Chernomorneftegaz, a part of national gas company Naftogaz
Ukrainy, is the only hydrocarbon producer on the shelf of the Black and Azov
Seas that has obtained licenses without a tender.

Shell and U.S. company Hunt Oil said earlier they were interested in taking
part in the tender.   -30-

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21. CARLOS PASCUAL NAMED VICE PRESIDENT AND DIRECTOR
                OF FOREIGN POLICY STUDIES AT BROOKINGS
                              Former U.S. Ambassador to Ukraine

Brookings Institution, Washington, D.C., October 28, 2005

WASHINGTON, D.C. – Ambassador Carlos Pascual, currently director of
the State Department Office of Reconstruction and Stabilization, is joining
the Brookings Institution as vice president and director of Foreign Policy
Studies, Brookings President Strobe Talbott announced today.

Pascual will join Brookings February 1, replacing James Steinberg, who will
become dean of the Lyndon Baines Johnson School of Public Policy at the
University of Texas.

“Carlos is one of the most accomplished career diplomats of his generation,”
Talbott said. “For over two decades, he has been an innovator in addressing
some of the most important challenges facing the United States and the
international community. His career has included work in, and on, Africa,
Latin America, Europe, and the former Communist world.

He has had experience both in the field and at high levels of the executive
branch, advancing political and economic reform in developing and
transitional countries, combating terrorism and weapons proliferation, and
dealing with sources of instability. We are delighted that he will be
joining us at Brookings.”

Pascual, 46, has served in his current role at the State Department since
August 2004. He previously served as the U.S. ambassador to Ukraine from
2000 to 2003. In that capacity, Ambassador Pascual and his staff helped
strengthen grassroots democratic initiatives and helped build a strong
private sector. He also worked with the Ukrainian government on fighting
terrorism and on helping secure their participation in the Iraq war.

As ambassador, he maintained high morale, productivity, and professional
standards in a large and complex embassy, working under often difficult
conditions in a nation moving from authoritarianism to democracy.

“The world is at a critical juncture in the conduct of international
security policies,” Pascual noted. “The nature of power states and the
challenges they present have changed completely from the Cold War era.
We face threats from rogue states and non-state actors. The interlinkages
among foreign policy, economics, and security are greater than ever.

It is an honor to come to Brookings to work with such an outstanding team
on issues that will shape national and global security and prosperity for
the coming decades.”

From 1995 to 2000, Pascual worked in the White House National Security
Council, ultimately as senior director for Russian, Ukrainian and Eurasian
Affairs, where he helped guide U.S. policy during the most important
political transformation at the end of the 20th century-the dismantlement of
the former Soviet Union, the emergence of a democratizing Russia, and the
safeguarding of nuclear weapons and material.

He was well prepared for that task, having been a key member of the U.S.
government team that dealt with South Africa and Mozambique in the years
leading up to their own transitions.

Ambassador Pascual was born in Cuba, and immigrated to the United States
with his parents at age three. He now lives in Washington, D.C.  -30-
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http://www.brookings.edu/comm/news/20051028pascual.htm

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22. CORRUPTION STEALS THE FUTURE FROM EVERY INDIVIDUAL
             Georgian president talks up new democracy forum in Ukraine

INTERVIEW: with Georgian President Mikheil Saakashvili
Volodymyr Skachko, Kiyevskiy Telegraf, Kiev, Russian, 9 Dec 05
BBC Monitoring Service, UK, in English, Monday, Dec 12, 2005

Georgian President Mikheil Saakashvili has said that the creation of the
Community of Democratic Choice in Kiev on 2 December is important for
countries like Georgia and Ukraine. In an interview with a Ukrainian weekly,
Saakashvili said both countries are on the path of NATO and European
integration and need one another for support.

He does not regard the Community to be anti-Russian: Russia will feel calmer
with democratic, predictable neighbours. Saakashvili said he does not plan
to take Georgia out of the CIS.

The following is an excerpt from the interview Saakashvili gave to Volodymyr
Skachko entitled “Corruption steals the future from every individual” and
published in the Ukrainian newspaper Kievskiy Telegraf on 9 December;
subheadings have been inserted editorially:

The arrival in Kiev of Georgian President Mikheil Saakashvili coincided with
two events: the Ukraine-EU summit and the formation of Community of
Democratic Choice. The Georgian leader is pleased with both events, because
he considers them a continuation of the “rose revolution” in his country and
the Orange Revolution in Ukraine.

However, he started his meeting with Ukrainian journalists by saying what
Georgia is now proud of: annual growth rate of 7 per cent, road building, an
increase in the state budget, the high popularity rating of the authorities
and a successful struggle against corruption.

[Saakashvili] Georgia is a country where the level of corruption is one of
the lowest in Europe. I am absolutely sure of this, because the source of
the five-fold increase of our budget was not some special revenue: it was
money that was previously stolen, but is now coming into the budget.

Money that was previously being stolen is now going to the construction of
roads, hospitals and schools. To start with, we were accused of almost some
sort of authoritarian working methods. Now everyone understands that the
people who were answering for what was committed have answered according

to the law.

Not only our former opponents, but also some very significant officials whom
we took into the administration are now in not very distant places [jailed].
Because we are not standing on ceremony with corrupt people. We have only
one principle: if someone stole, he has to answer. Corruption is
unacceptable, because it steals the future from every individual.

[Skachko] Mr President, what practical result are you expecting from the
forum of the Community of Democratic Choice?
[Saakashvili] I believe that our countries are very similar to each other,
just as our problems are. Despite the fact that the Baltic countries are
already in NATO and the EU, Romania is already in NATO and is joining the
EU, while Georgia and Ukraine are still only on the path of integration. But
the challenges facing us are very similar.

We both emerged from the post-communist, post-Soviet system. This means
first of all that we should share experience with each other. Second, we
should help each other, because if we don’t, nobody else will. For example,
the Baltic countries came out with an initiative to help our states in
European integration.

This is very important, because most countries of Old Europe are still
somewhat sceptical about the accession of new states. And in a situation
like that, the voice of states that know us well and are confident that we
are just as European as they are is very important.

And the main thing is for that voice always to be heard where it is needed.
For this we have to meet each other and talk. The main thing that I am
expecting is that after the formation of the Community of Democratic Choice,
which is not an international organization, the frontier of Europe must no
longer be artificially set.

The frontier of Europe runs along the border of Ukraine and Georgia and
Moldova and all the other countries that have European ambitions. And the
creation of this community makes Europe complete. It makes the process of
European integration irreversible for everyone. After all, what is the idea
that everyone agrees on?

That the countries that are European by culture, history and ambitions
should definitely become part of all major European structures. This is the
theory. The practice is that everyone is scared of further enlargement.
                                  SITUATION IN AZERBIJAN 
[Skachko] There is an opinion that the new wave of democratization of Europe
at present stopped in Azerbaijan. It is said that you have good relations
with Ilham Aliyev. What’s going on in that country? Will Azerbaijan join
more actively in the Community of Democratic Choice?

[Saakashvili] Yes, Georgia is a great fan of the democratization of
Azerbaijan. We always help our Azerbaijani friends with advice. When it was
necessary, we even sent them ink for voting, because at that point there was
a big shortage of it there, while in Georgia there had been so many
elections in recent years that we had more than enough ink – enough for all
(laughs). And I hope that the process of democratic dialogue with Azerbaijan
will continue.

In general I’m perfectly confident that the process of democratization is
irreversible for all countries. I think that Azerbaijan is a country with a
very big future. But real prosperity will be provided by further democratic
dialogue, and I am absolutely sure that President Ilham Aliyev himself
understands this perfectly well. All my contacts with him convince me of
this.

Of course, we can see difficulties. And of course we worry every time these
difficulties are shown on television and the whole world watches them. But I
am sure that we are talking about a country with a very educated people that
has brilliant economic prospects. It’s a fine partner for Georgia, for
Ukraine and all the others. The country has an absolutely full-scale
democratic future.

 What is more, I tell you that everyone understood in their own way how they
should react to the revolutions in Ukraine and Georgia. I think that most
countries have realized that there is a need to reform and open up the
political system. And this is an irreversible process. The people in the
entire post-Soviet space have now become a far more important factor than
ever before.

Some people recognize it and some don’t, but people’s opinion, the mood of
the electorate, the mood of every individual person means far more since
Kiev’s Maydan [Independence Square, heart of the Orange Revolution] and
Tbilisi’s roses than they ever meant before.
                                         NOT ANTI-RUSSIAN 
[Skachko] The Community of Democratic Choice is considered a sort of
anti-Russian association. Do you agree with that view?

[Saakashvili] No. I believe that it is very important for Russia to have
democratic neighbours. Russia will feel easier because democratic neighbours
are more predictable; they are far more peaceable, pragmatic and realistic.
This means that one can expect far fewer nasty surprises from democratic
states than even from friendly dictators. Of course, there are complex
processes now taking place in Russia.

Let me say it right out – a decision is being taken to raise the price for
gas. I believe that it is a definitely political rather than economic
decision. In this sense there are, of course, difficulties and problems, but
in the sense of long-term development, I think that Russia will only gain
from the region becoming more European, more democratic, more civilized,
predictable and friendly towards it.

[Skachko] How do you assess the fact that now the government in Ukraine

that came after the revolution is increasingly losing its ratings?

[Saakashvili] You know, I’m not a judge of Ukrainian domestic politics.
Although I suffer very much because of the problems and rejoice at
everything good. But I know one thing: a year after the revolution, the
Georgian government had a lower rating than today. Why? Because after the
revolution big expectations arose, and people wanted everything immediately.
This is a normal phenomenon. [Passage omitted: expanding this]

[Skachko] After the return of Ajaria to Georgia, it is being said that
Abkhazia and Southern Ossetia will also be returned. Both Georgian and
Ukrainian experts agree that the replacement of Russian peacekeepers by
Ukrainians is also possible. How far do you think that such a replacement is
possible? That’s the first question.

The second is more creative. Very many Ukrainian artists are advocating the
opening in Kiev of a Ukrainian-Georgian village. Actually there already is a
site, but there are also some bureaucratic obstacles. What is your attitude
to this?

[Saakashvili] If someone opens a Ukrainian-Georgian village, I’ll move in
there with pleasure (laughs). But this is the first I’ve heard of this
splendid idea. [Passage omitted: lyrical musings]
                  UKRAINIAN PEACEKEEPERS FOR GEORGIA?
As for the territorial integrity of Georgia\ [ellipsis as published] When
the question of Ajaria was being decided, everyone thought: as usual,
militant nationalists are organizing a fight, and there’ll be a war – that’s
the sort of propaganda there was. There was nothing of the sort. Ajaria now
is the most successful part of Georgia. I welcome everyone to Batumi [Ajaria
capital], especially in summer. [Passage omitted: praising the beauty of
Batumi]

Abkhazia is one of the most beautiful places in the world, and it is simply
shameful that only one fifth of the pre-war population remains there. They
threw out almost all the Ukrainians, all the Estonians and Georgians, the
greater part of the Abkhaz, Russians and all the rest. And some generals and
a very small part of the population remained there.

 Naturally, the world needs to pay attention to this so that those generals
don’t decide everything. I think that Ukrainians by their nature are not
only the most peace-loving nation – any Ukrainian international
participation has all the qualities of professionalism, neutrality and
objectivity.

As well as humanity, which is very important, because it is a question of
protecting people. Ukrainian peacekeepers have given a very good account of
themselves wherever they have been. I want to remind you that in 1993 during
the war with Abkhazia, when Sukhumi was in flames, Ukrainian helicopter
crews under fierce artillery fire carried out hundreds of flights.

They evacuated the civilian population. There were also Ukrainians there who
sacrificed their lives. We have not forgotten the feat of those pilots. We
remember it 15 years later and will still remember it in 150 years and in a
thousand years’ time.

[Skachko] So will there be a replacement of peacekeepers?
[Saakashvili] It all depends on international organizations. UN Secretary
General Kofi Annan was in Tbilisi recently, and our position was explained
to him: Georgia is in no hurry for now. Nothing happens immediately. In
order to achieve good results, intensive work is needed. And we will work.

I’m sure that there is no alternative – it’s one country. And it is so
small, how can it be divided into parts again? It was united over many, many
centuries and will be united. [Passage omitted: prospects for economic
development in Georgia]
                              NO PLANS TO PULL OUT OF CIS 
[Skachko] Tell me, how do you see the future existence of the CIS? And
another question: what has happened to the Russian visas that have stopped
being issued?

[Saakashvili] Stopped being issued to whom?
[Skachko] To citizens of Georgia.

[Saakashvili] I haven’t yet requested a Russian visa (laughs). We have a
visa regime, a unilateral one – Georgia has abolished its visa regime with
Russia. In principle Russians can receive visas at the airport. And we, like
Ukraine, have abolished the visa regime with the EU and many other
countries. With Russia it has been going on for four years now and
everything is OK.

Yes, it got on some people’s nerves. Yes, it became harder for people to
meet. But at the end of the day everyone finds other roads. The Baltic
countries are a fine example. They were under constant pressure. And so?
Estonia, for example, is now the most successful country in the whole of
Europe, one of the most successful in the world.

It went through several years of economic pressure, bans on its exports to
traditional markets and a total visa blockade. But it survived and became
stronger. We don’t want, of course, to go through big trials. But if
obstacles are placed in our way, we will still overcome them and stand on
our feet.

[Skachko] Do plan to withdraw from the CIS?
[Saakashvili] I personally don’t have any such plans. It’s being discussed
in the Georgian parliament. I’m more inclined to take specific, pragmatic
rather than general decisions. [Passage omitted: the CIS does have
problems.]

[Skachko] But if parliament votes for withdrawal from the CIS, will you
support that decision?
[Saakashvili] As far as I can judge, this is not now expected. We will
discuss these questions, but I don’t predict any hasty decisions, because we
in Georgia have also become very pragmatic. [Passage omitted: expanding
this]
                     ENGAGEMENT WITH BELARUS NEEDED 
[Skachko] What do you think should be done about Belarus, which is not a
member of your Community of Democratic Choice?

[Saakashvili] I have already said that some countries correctly understood
the Ukrainian Maydan and the Georgian roses. I had, for example, very
interesting conversations with President [Nursultan] Nazarbayev [of
Kazakhstan] and other neighbours who understand that attention must be paid
to the political process that is happening in the world, open up the
political system and reform it. And many positive aspects have appeared in
Russia itself as well.

In Belarus it was understood in reverse – that you have to be even stricter,
even more resolute, and then nothing will happen. [Passage omitted: You
can’t intimidate people indefinitely.]

[Skachko] And what needs to be done with [Belarusian President Alyaksandr]
Lukashenka – pressure him or find a common language?

[Saakashvili] I believe that we need to continue contacts with the people of
Belarus at various levels and help spread ideas of freedom and democracy.
Isolation is not the way. And in this question I think that the birth in
Kiev of the Community of Democratic Choice is also sending a very strong
impulse and signal.

First and foremost to the people as a whole. Not to the president, the
government or other official representatives, but to the people of Belarus
as a whole. A signal that democracy is being consolidated and that there is
no alternative to it. That’s the main thing. [Passage omitted: Georgian
revolutionary team still united; free speech flourishing in Georgia.]

[Skachko] Whom do you support in the conflict that there is in the
revolutionary team in Ukraine between [President Viktor] Yushchenko and
[former Prime Minister Yuliya] Tymoshenko? And in general do you think that
Tymoshenko simply had her own viewpoint and that’s why she left? Have you
not tried to conciliate them?

[Saakashvili] You know, I have great respect for both leaders. I believe
that Viktor Yushchenko is truly a perfectly phenomenal hope for Ukraine on
the international level. And naturally I won’t hide the fact that it was
always painful for me to see such things happening. I have great respect for
that entire team, and the whole world has great respect.

Because they all deserve to be appreciated by people at least for what they
did in opening Ukraine to the world. Two years ago few people in the world
knew, to my great distress, what Ukraine was. Such a huge country, with such
potential, with such people, with bigger industrial potential than a
considerable part of Europe – and nobody knew about it. [Passage omitted:
importance of Orange Revolution]

[Skachko] Have you met with Yuliya Tymoshenko after the conflict? And

were there any attempts at conciliation?

[Saakashvili] You know, I don’t intend to interfere in this. It’s an
internal problem. True, it’s been hard for me to watch it. But I think that
Ukraine’s progress will not stop, and I will continue meeting with all
participants in this process with pleasure, because all Ukrainians are very
close and dear to us. Even those who during the revolution were on the

other side.

Ukrainians are a completely unique people in the centre of Europe. And

like a magnet it attracts all the others. In its potential, Ukraine has all the
hallmarks of a big state, but in its character this nation is completely
open and has not a single bad quality of big states – arrogance, imperial
ambitions and so on.

You have to understand what Ukraine means for all the other nations.

Ukraine is the hope for our development, for our Europeanization, for
our own success.  -30-
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23.        THE HERALD CHRISTMAS APPEAL: MARY’S MEALS
               A project due to launch in Ukraine early next year, which
               will provide free meals and education to street children.
           Mary’s Meals now feeds 50,000 children worldwide every day.

By Susan Swarbrickd, The Herald Online
Internet digest of Scotland’s leading quality newspaper
Glasgow, Scotland, UK, Thursday, December 15 2005

OUTSIDE the Universitet metro station in Kharkiv, the second largest
city in Ukraine, 12-year-old Igor is begging for money.

He’s small for his age, undernourished, and his face is dirty and scratched.
Mousy brown hair curls over the collar of his battered baseball jacket.

Igor is one of tens of thousands of children who live on the streets of
Ukraine. For him home is a small, cramped underground chamber which
serves as a maintenance access point for the city’s heating system. Here he
lives with six other children in claustrophobic, squalid conditions.

Originally from Belgorod, Russia, Igor came to Kharkiv when he was four
to live with his grandmother.

His grandmother stays nearby and although he sees her sometimes, she won’t
allow him to live with her. She has a new husband who, says Igor, is an
alcoholic who would beat him.  “Grandma says it is better that I live on the
streets,” he says. “That way I am safe.”

If he’s lucky Igor may be one of those who benefits from Mary’s Meals, a
project due to launch in Ukraine early next year, which will provide free
meals and education to street children.

The initiative, run by Scottish International Relief, now feeds 50,000
children worldwide every day. In Ukraine, each meal will cost just £1.

To make a donation, use the form alongside.

The project began three years ago when Scottish International Relief, an
Argyll-based non-denominational charity, began providing daily meals
for 200 orphans in Malawi.

It aimed to encourage children into the classroom, aiding not only their
nutrition, but their education, all for the cost of £1 a meal. The charity
decided to expand the initiative into Ukraine after witnessing the
award-winning pictures of the nation’s street children by photographer
David Gillanders in The Herald Magazine last year. Eleven months on,
the magazine today reveals how the situation has only worsened.

If you would like to make a donation to The Herald Christmas Appeal
to help Scottish International Relief, please download and print out the
special coupon here.  -30-
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LINK: http://www.theherald.co.uk/features/52590.html
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24.         TARAS SHEVCHENKO: “THEN I’LL GO TO SEDNIV…..
                   Ancient town in Chernihiv oblast, its place in the life
                          and creative work of our national prophet

By Ihor Siundiukov, The Day
The Day Weekly Digest in English,
Kyiv, Ukraine, Tuesday, December 6, 20005

Few such scenic spots are found even in Chernihiv oblast whose environs
have long attracted travelers. Sedniv is situated on the steep bank of the
beautiful river Snov (the “steep hill” immortalized by Leonid Hlibov in his
poem “Grief” is located here). It is mentioned in chronicles starting in
1072, when Prince Sviatoslav of Chernihiv first defeated the Polovtsians in
the vicinity.

This town thus has a remarkably eventful history. If we wanted to recount
Sedniv’s past step by step, we would recall how the populace twice repulsed
formidable Crimean Tatar raids in the 15th century (1482 and 1497) and how
Sedniv became a “company town of the Chernihiv Cossack Regiment” under
Khmelnytsky. But the subject of this article is the direct link between
Sedniv and the life and creative work of our national prophet, Taras
Shevchenko.

In this place the brilliant poet always felt special creative inspiration
(he wrote The Witch here and several dozen other colorful poems) and
enjoyed the harmony of the environs. Visiting Sedniv in the spring of 1847,
Shevchenko marveled at the sight of the river Snov and the boundless,
verdant plain; he may have subconsciously felt that these were his last days
of happiness and freedom.

He was immensely grateful to his friend Andriy Lyzohub, the owner of the
Sedniv estate, for his hospitality. On the morning of April 3, 1847, a happy
and merry Shevchenko left Sedniv for Kyiv, where Tsar Nicholas I’s
blue-coated gendarmes were waiting with an arrest warrant.

During the most tortured, lonely months and years of exile at the Orsk
fortress and Novopetrovsky Fort memories of Sedniv, where the brilliant poet
spent only a short while (April-May 1846; March-April 1847) were like a
breath of fresh air infusing Shevchenko’s soul with new life, helping him to
survive.
                             THEN I’LL GO TO SEDNIV…….
In a letter to his close friend Varvara Mykolayivna Repnina (March 7, 1850)
he wrote, “I’m praying to the Lord and cherishing the hope that my
misfortune will eventually end. Then I’ll go to Sedniv and paint ‘The Death
of the Savior’ in the church.”

During the time of his greatest ordeal Shevchenko remembered happy scenes
from Sedniv: working hard and with inspiration on the introduction for a new
edition of the Kobzar (it was in Sedniv that he wrote those beautiful lines
filled with national and general human dignity about the Russians having “a
people and the word” and that the Ukrainians, too, had “a people and the
word”); the poet’s workshop in the attic over the bank of the Snov River
(destroyed by fire in 1883); the charming old orchard in front of Lyzohub’s
mansion (part of it is still standing).
                              HISTORY OF THE LYZOHUBS
A few words should be devoted to the history of the Lyzohubs, a family that
may be called unique without any exaggeration. The following lines from
Varvara Repnina’s letter to the great poet (September 1844) were probably
harbingers of Shevchenko’s future meeting with Andriy Lyzohub: “I am so sad
to know that you haven’t met Andriy Lyzohub. He speaks of your poems with
such warm appreciation, and he is so sorry he has never met you in person.”

Naturally, quite a number of pseudo-fans of Shevchenko appeared among the
Ukrainian nobility in Chernihiv and Poltava gubernias in 1842-43; they
lavished false praise on him to prove that they too were “Ukrainian
 patriots” and also “for the people.” Shevchenko, however, singled out
Andriy and his relatives from among the Ukrainian noble Cossack families,
probably because he knew the Lyzohub family history, recognizing their
erudition, sincerity, and true democratic ways.
                           WERE AN OLD COSSACK FAMILY
The Lyzohubs were an old Cossack family that had acquired property in Sedniv
in the 17th century; the name is first mentioned in historical sources in
the mid-17th century. A Cossack by the name of Kindrat Lyzohub, born in the
vicinity of Zolotonosha, was a courageous and resourceful soldier whose two
sons were appointed colonels (Ivan in Uman, in 1661, and Yakiv in Kaniv the
following year).

Some time later the Lyzohubs sided with Hetman Ivan Samoilovych; Yakiv
Lyzohub settled in Konotop and proceeded to amass “free” and unclaimed plots
of land. Before long he became a great landowner. Andriy Lyzohub (b. June
1804) and his elder brother Illia (b. 1787, an amateur musician) were direct
descendants of Kindrat and Yakiv Lyzohub.
                FREQUENTED BY ARTISTS, ACTORS AND POETS
Ukrainian songs were often heard at Lyzohub’s manor in Sedniv, which was
frequented by artists, actors, and poets (Lev Zhemchuzhnykov left precious
recollections of the family. Unfortunately, the mansion caught fire on March
19, 1883, and a great many valuable old books, ancient deeds, memoirs, and
Shevchenko’s pictures perished. People who knew Lyzohub well described him
as a humane and kind-hearted landlord, who treated his peasants well and
tried not to overburden them with work.

He was also an amateur painter and this served to strengthen his friendship
with Shevchenko. There was much in Sedniv worthy of painting: not only the
excellent environs opening from the top of the steep hill over the Snov
River (standing by the summerhouse in which Hlibov is said to have composed
his Grief in 1859, one can see far and wide, including that “dense, verdant
grove, like paradise on earth”), but also the Lyzohubs’ stone church and
Shevchenko’s beloved linden (they say the tree is still there).

His friends recall that on April 3, 1847, Shevchenko was departing for Kyiv
in a cheerful frame of mind. His mood was not even dampened by the sinister
prophesying of Hryts, Sedniv’s well-known fortune-teller and saint (although
some regarded him as a yurodyvy, God’s fool). Hryts did his best to talk
Shevchenko out of his trip to Kyiv, repeating, “You’ll get in trouble! Bad
trouble!” Taras just laughed.
   FIRST TO CORRESPOND AFTER LEARNING PLACE OF EXILE
Lyzohub should be recognized in Ukraine for being perhaps the first to begin
corresponding with Shevchenko after learning the exact place of his exile.
In his letters he tried to encourage him morally and financially.
Shevchenko, in turn, was always grateful to his friend and shared with him
the excruciating pain in his heart.

In a letter dated Dec. 11, 1847, Shevchenko thanked Lyzohub for his kind and
sincere words: “I haven’t heard from Ukraine since the spring. I have
written to someone there. God must have prompted you to write to ease the
heavy burden of my loneliness in the desert…I wouldn’t want my worst
enemies to suffer the way I am! You ask if I have stopped painting.
                “I AM FORBIDDEN TO WRITE AND DRAW”
I wish I could, but I can’t and it makes me suffer even more, as I am
forbidden to write and draw. And the nights, the nights! Oh God! They are
terribly long, and in barracks at that! Dear Friend, please send me your box
of paints and a clean album, and at least one Charion brush; I will look at
them once in a while and maybe I will feel better.” Lyzohub instantly did as
the imprisoned poet requested.

Shevchenko and Lyzohub’s correspondence lasted until 1850. It was cut
short by very disturbing events that were generally characteristic of the
last years of Nicholas I’s reign. Count Orlov, the omnipotent chief of the
gendarmes corps, who was spending the summer in Chernihiv, summoned
Lyzohub.
STOP CONTACTS WITH “POLITICAL CRIMINAL” SHEVCHENKO
On behalf of the tsar he brutally forbade him to maintain any contacts with
the “political criminal” Shevchenko, adding that otherwise “there will be a
place found for him, Lyzohub, where Shevchenko is now.”

Andriy’s son Dmytro inherited his freethinking ways, with the most tragic
consequences. In August 1879 he was court-martialed in Odesa on charges
of involvement in an underground political society. His death sentence was
extremely cruel, considering that Dmytro had nothing to do with terrorist
acts, although he sympathized with the revolutionaries and actively helped
them. He was executed on Aug. 10, 1879.

One thing is beyond doubt. Shevchenko remembered Sedniv with the utmost
gratitude, as a place truly close and dear to his heart.
                 CULTURAL MONUMENTS TO THE POETS LIFE
                                     REMAIN NEGLECTED
However, there is no escaping the fact that the current condition of the
Shevchenko memorial site in Sedniv (Lyzohub’s mansion, the poet’s beloved
stone church in which he worked, and the gorgeous ancient garden) is, to put
it mildly, not the way the poet’s devotees would want it to be.

There is no modern infrastructure or roads, for which funds are required. Of
course, it is much easier for our ranking officials to place flowers at the
Shevchenko monument in downtown Kyiv once a year.

Meanwhile, cultural monuments to the poet’s life, such as Sedniv, remain
neglected. Isn’t this hypocritical of the state?  -30-
———————————————————————————————–
LINK: http://www.day.kiev.ua/153903/
——————————————————————————————–
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