Daily Archives: March 7, 2006

AUR#669 WTO Bilateral Agreement Signed by US & Ukraine; Two Down, One To Go; Jackson-Vanik Press Conference; Moment of Truth; Explosive Gas Deal


                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       

Mr. E. Morgan Williams, Publisher and Editor  
Washington, D.C., Kyiv, Ukraine, TUESDAY, MARCH 7, 2006
                           ——–INDEX OF ARTICLES——–
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Return to the Index by clicking on Return to Index at the end of each article
          Been working on the WTO bilateral agreement for twelve years
                       Two major milestones reached, one still to go.
By E. Morgan Williams, Publisher and Editor
The Action Ukraine Report (AUR) #669, Article 1.
Washington, D.C., Tuesday, March 7, 2006


                                    ON MARKET ACCESS
USINFO.STATE.GOV, Washington, D.C., Monday, 06 March 2006

                                      ON MARKET ACCESS
The Action Ukraine Report (AUR) #669, Article 3

Washington, D.C., Tuesday, March 7, 2006

                                 AGAINST RUSSIA, UKRAINE
Agence France Presse (AFP), Washington, D.C., Mon, Mar 6, 2006

UT1, Kiev, in Ukrainian 1920 gmt 6 Mar 06
BBC Monitoring Service, UK, in English, Mon, Mar 06, 2006


          Will hold press conference, Wednesday, March 8th at 2:30 p.m.
Amb Steven Pifer and Amb William Miller, Co-Chair
Jackson-Vanik Graduation Coalition, Washington, D.C., Mon, Mar 6, 2006

SPEECH: By H.E. Dr. Oleh Shamshur
Ambassador of Ukraine to the United States
Delivered at the: "UA Historical Encounters Series" – Conference I
Sponsor: NYU, Columbia University, Center for US-Ukrainian Relations
NYU Torch Club Forum, New York, NY, Wednesday, March 1st 2006
Published by The Action Ukraine Report (AUR) #669, Article 7
Washington, D.C., Tuesday, March 7, 2006

                               RISES AS ECONOMY FALTERS
By Stefan Wagstyl in London and Tom Warner in Kiev
Financial Times, London, United Kingdom, Tuesday, March 7 2006

9.                           ‘COLOR’ REVOLUTIONS WANE
 Russia asserts its influence ahead of Belarus, Ukraine elections this month.
By Fred Weir,  Correspondent, The Christian Science Monitor
Boston, Massachusetts, Tuesday, March 7, 2006


                                          NATO AMBITIONS
Ukrayinska Pravda in Ukrainian and Russian
Kyiv, Ukraine, Monday, March 6, 2006
The Action Ukraine Report (AUR) in English #669, Article 10
Washington, D.C., Tuesday, March 7, 2006

ANALYSIS & COMMENTARY: By Boris Kagarlitsky
Director of The Institute for Globalization Studies, Moscow
Eurasianhome.org, Moscow, Russia, Friday, March 3, 2006

12.                            A COMPLETELY NEW ELECTION

Analysis and Commentary: By Ivan Lozowy
The Ukraine Insider, Vol. 6, No. 1
Kyiv, Ukraine, Tuesday, February 28, 2006

      Leadership. And the people will suffer. There are no patriots in the land.
                       Not found among the present ‘leaders’ anyway.
By Glen Willard
The Ukrainian Observer #217, The Willard Group
Kyiv, Ukraine, March, 2006

14.                    "LOOP-THE-LOOP OVER SEVASTOPOL"
    Voting pattern of former Ukrainian prime minister Yuliya Tymoshenko’s
             faction in parliament suggests a strong pro-Russian position
: By Zoryana Krit
Ukrayina Moloda, Kiev, in Ukrainian 28 Feb 06, p 3
BBC Monitoring Service, UK, in English, Thursday, Mar 02, 2006

15.                               AN EXPLOSIVE GAS DEAL
          Putin’s Hard Bargain Could Undermine Democracy in Europe
By Jackson Diehl, Op-Ed Columnist
The Washington Post, Washington, D.C., Mon, Feb 27, 2006

By Roman Kupchinsky
Radio Free Europe/Radio Liberty (RFE/RL)
Prague, Czech Republic, Wednesday, March 1, 2006

17.                    NEW BOOK: "REVOLUTION IN ORANGE:
                Edited by Aslund and McFaul Exposes the Riveting Tale
Carnegie Endowment for International Peace
Washington, D.C., Monday, March 6, 2006

18.                       BOOK: " AN ORANGE REVOLUTION?
                       A Personal Journey Through Ukrainian History
           A captivating book about a defining moment in European history.
E. Morgan Williams, Publisher and Editor
The Action Ukraine Report (AUR) #669 Article 18
Washington, D.C., Tuesday, March  7, 2006
          Been working on the WTO bilateral agreement for twelve years
                       Two major milestones reached, one still to go.

By E. Morgan Williams, Publisher and Editor
The Action Ukraine Report (AUR) #669, Article 1.

Washington, D.C., Tuesday, March 7, 2006
WASHINGTON – The United States and Ukraine are to be congratulated
for finally completing and signing their WTO Bilateral Agreement on
Market Access. The agreement represents a major step forward in
the business relationship between the two countries and also moves
Ukraine forward on its path to joining the WTO before the end of 2006.

Ukraine and the United States can now move to a new dimension in
its economic and trading relationship. With Ukraine’s graduation to
market economy status recently by the U.S. Department of Commerce
a new, expanded trading potential is now possible between the two
friendly nations.

               WORKING ON AGREEMENT SINCE 1994
The two countries have been working on such an agreement since 1994
U.S. Trade Representative Rob Portman said at the signing ceremony
in Washington on Monday.  Portman said it has taken a long time but
completing the agreement in a timely manner has been one of the
priorities of the Bush Administration ever since Ukrainian President
Viktor Yushchenko made his official visit to Washington in the spring
of 2005.

"The two nations have  stood together, we have reached common
ground, we are good friends and trading partners," the U.S. Trade
Representative stated.  "I am proud of the negotiating teams on both
sides and congratulate them for their outstanding work. The U.S.
will be working with Ukraine to insure their bi-lateral and multi-
lateral success.  The U.S. supports Ukraine’s accession to the WTO
just as soon as possible, Portman stated in his remarks.

                    LONG, TOUGH NEGOTIATIONS
Ukraine’s Minister of Economy Arseniy Yatsenyuk said it has been
tough work, there have been serious negotiations, and it has taken a
long time.  "Ukraine needs this agreement with the U.S. as it will
permit us to deepen our trade relationship with the U.S. We needs
to be a member of the WTO for our own economic growth, for
the prosperity of our country."

"We need to be a member of a rules based trade organization. Our
economic growth needs to be based on the international rules
imposed on trade by the WTO," Yatsenyuk stated.

United States Secretary of Agriculture, Mike Johanns, made a
surprise visit to the signing ceremony.  Johanns, former governor
of Nebraska, said he was proud of the good work by the two
nations in completing the WTO accession agreement at this time.

USDA Secretary Johanns recalled listening to President Viktor
Yushchenko make his speech before a joint session of the Congress
and thinking there was so much work to do before the WTO
agreement could actually be signed. "This is a big step forward.

The USDA will be a partner with Ukraine, we will work with you to
increase trade between our two countries," Johanns said.

                             TWO DOWN, ONE TO GO
It is really exciting and gratifying to see two major milestones in U.S.-
Ukraine economic, business and political relations completed and signed
in the last two and one-half weeks. The United States granted market-
economy status to Ukraine on Friday, February 17. This was announced
by U.S. Deputy Commerce Secretary David Sampson while he was in
Kiev to discuss bilateral trade and investment relations and came after
several years of frustrating starts and stops.

There is one more major milestone that finally needs to be finished soon.
The U.S. Congress needs to complete the legislation necessary to graduate
Ukraine from the Jackson-Vanik amendment, a relic left over from the
Cold War.  The U.S. government, under President Bill Clinton, declared
that Ukraine met all the requirements for graduation but the U.S. Congress
has never passed the all the necessary enabling legislation.

U.S. Trade Representative Rob Portman said in his opening statement,

"In November, the U.S. Senate approved a bill terminating application
of the Jackson-Vanik amendment to Ukraine.  I look forward to working
with the U.S. Congress on such legislation that can be sent to President
George Bush for signature."
The Ukrainian-American community and friends of Ukraine started a
big push last fall to get the U.S. House to move on the legislation. The
drive has been led by the Jackson-Vanik Graduation Coalition co-chaired
by two former U.S. Ambassadors to Ukraine, William Miller and Steven
Pifer and by the Ukrainian Congress Committee of America, Michael
Sawkiw, President.

There are many positive indications the U.S. House may move on
Wednesday of this week to pass the necessary legislation since the
WTO bilateral agreement has been completed and signed. Thousands
of persons have been working on the Jackson-Vanik issue since Ukraine
became an independent nation, breaking away from the Soviet Union in
August of 1991.

Six more members of the U.S. House signed on a co-sponsors of H.R.
1053 introduced by Representative Gerlach of Pennsylvania. They were: 
1) Rep. Adam Smith; 2) Rep. Henry Hyde; 3) Rep. Dana Rohrabacher;
4) Rep. Chaka Fattah; 5) Rep. Louise M. Slaughter; and  6) Rep. Ellen

It will be time for a major celebration in Ukraine and in the United States
once the three major milestones have been completed and signed.  If
the Jackson-Vanik legislation is passed this week then three major
milestones, representing the culmination of many years of work, will
be a part of modern history, a chapter in history both countries can
be proud of.

To have the three significant agreements, Market-Economy Status for
Ukraine, U.S.-Ukraine WTO Bilateral Agreement on Market Access
and Ukraine’s graduation from the Jackson-Vanik Amendment all to
happen within a three-week time period would be just unheard of
in the development of modern economic-business-political
relationships between two independent, democratic, private-
market countries.

If you are a U.S. citizen and have not yet contacted your member of
the U.S. House of Representative to urge support for H.R. 1053
introduced by Representative Gerlach of Pennsylvania, please do
so first thing today. More co-signers are needed immediately on
H.R. 1053.  Help make history this week.

There were a large number of U.S. and Ukraine government officials
at the WTO bilateral agreement ceremony and representatives from the
private sector.

Representatives of the U.S. government included: Deputy U.S.
Trade Representative Ambassador Susan C. Schwab; Laurie Molnar
Ukraine Desk, Office of the U.S. Trade Representative; U.S. Deputy
Commerce Secretary David Sampson; Assistant Secretary for Import
Administration, David Spooner; and Christine Lucyk, Senior Policy
Advisor, Office of Russia, Ukraine and Eurasia for the International
Trade Administration (ITA).

Those representing Ukraine included the Ambassador to the U.S.,
Dr. Oleh Shamshur; Deputy Minister of Economy Valery Pyatnytskyi;
Chief Trade and Economic Mission, Embassy of Ukraine, Yevgen
Burket; the Deputy Chief Trade and Economic Mission, Embassy
of Ukraine, Yuriy Karpenko and Mykhailo Ratushniy, Member of
Parliament, Co-chief of the EU-Ukraine Parliamentary Cooperation

Those representing the private sector included: William Miller,
former U.S. Ambassador to Ukraine; Michael Sawkiw, President,
Ukrainian Congress Committee of America; Yaro Bihun, journalist,
The Ukrainian Weekly, Myroslava Gongadze, journalist, Voice of
America; Susanne Lotarski, President, Ukraine-U.S. Business
Council; Gary Litman, Vice President, Europe and Eurasia Affairs
Division, U.S. Chamber of Commerce and myself representing the
SigmaBleyzer Emerging Markets Private Equity Investment Group.

[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
                                         ON MARKET ACCESS
          USTR Portman, Ukrainian Minister Yatsenyuk sign pact March 6

USINFO.STATE.GOV, Washington, D.C., Monday, 06 March 2006

WASHINGTON – The United States and Ukraine formally signed a bilateral
agreement on market access issues March 6 as part of Ukraine’s World Trade
Organization (WTO) accession negotiations.

U.S. Trade Representative Rob Portman announced March 1 that the two
governments had reached agreement, and that as a result, Ukraine and the
United States should expect greater cooperation on economic issues "and a
strong boost to Ukraine’s efforts to complete the [WTO] accession

Portman, who participated in the March 6 signing ceremony with Ukrainian
Minister of Economy Arseniy Yatsenyuk, said "Ukraine’s commitment to
broad-based reform and economic liberalization will provide a welcoming
environment for investment, both foreign and domestic. The agreement also
demonstrates Ukraine’s commitment to the international trading system."

Portman noted that on November 18, 2005, the U.S. Senate voted to extend
permanent normal trade relations treatment to Ukraine by freeing it from the
provisions of the Jackson-Vanik amendment to the Trade Act of 1974.  "I
look forward to working with the U.S. Congress on such legislation that can
be sent to President George W. Bush for signature," Portman said during the
signing ceremony.

The Jackson-Vanik amendment links U.S. trade relations with many former
communist countries to the rights of their citizens to emigrate freely.  If
a country is found restricting emigration rights, the U.S. president must
issue an annual waiver for normal trade relations to continue.

The Senate bill passed in November 2005 says Ukraine fully complies with
international standards for freedom of emigration.  The Senate unanimously
approved the measure. The House of Representatives still must approve the
bill and the president must sign it.
Office of the United States Trade Representative
Executive Office of the President
Washington, D.C., Monday, March 6, 2006

                    AGREEMENT ON MARKET ACCESS

WASHINGTON – U.S. Trade Representative Rob Portman and Ukrainian
Minister of Economy Arseniy Yatsenyuk today formally signed a bilateral
agreement on market access issues as part of Ukraine’s World Trade
Organization (WTO) accession negotiations.

The bilateral agreement will create significant opportunities for U.S.
producers and exporters of industrial and agricultural goods and well as
U.S. services providers. This agreement is a major step towards Ukraine’s
completion of its accession negotiations.

"Ukraine’s commitment to broad-based reform and economic liberalization will
provide a welcoming environment for investment, both foreign and domestic.
The agreement also demonstrates Ukraine’s commitment to the international
trading system," said Ambassador Portman.

"U.S. support for Ukraine’s accession to the WTO goes back more than a
decade, and we are pleased to have reached this agreement. Trade Minister
Yatsenyuk and his team have worked tirelessly this last year. We will be
working with Ukraine and other WTO members in Geneva on the remaining
multilateral issues to finalize Ukraine’s terms of accession to the WTO,"
Portman said.

"In November, the U.S. Senate approved a bill terminating application of the
Jackson-Vanik amendment to Ukraine. I look forward to working with the U.S.
Congress on such legislation that can be sent to President George W. Bush
for signature," Portman added.

Ukraine’s tariff commitments in the agreement include eventual duty free
entry of information technology, e.g., computers and semiconductors, and
aircraft products and harmonization of tariffs on chemical imports at very
low or zero rates of duty.

U.S. service providers will benefit in particular from more open access in
the areas of energy services, branching in banking and insurance,
professional services, express delivery, and telecommunications, among

The bilateral agreement also addressed concerns related to specific sanitary
and phytosanitary measures of priority to U.S. exporters, shelf-life
standards, protection of undisclosed information for pharmaceuticals and
agricultural chemicals (as required by the WTO), imports of information
technology products with encryption, the operation of state owned firms
based on commercial considerations, and reduction of export duties on
non-ferrous and steel scrap.

Congressional action is necessary to terminate application of Jackson-Vanik
to Ukraine. This will clear the way for the two countries to apply the WTO
Agreement between them when Ukraine becomes a WTO member.
Distributed by the Bureau of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov.

[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
                                     ON MARKET ACCESS

The Action Ukraine Report (AUR) #669, Article 3

Washington, D.C., Tuesday, March 7, 2006
WASHINGTON – Ukraine and the United States formally signed a
bilateral agreement on market access issues as part of Ukraine’s World
Trade Organization (WTO) accession negotiation in Washington on
Monday, March 6.

According to an information document provided by the Office of the
United States Trade Representative to The Action Ukraine Report
(AUR) at the signing ceremony in Washington the following are TRADE
FACTS related to the U.S.-Ukraine WTO Bilateral Agreement on Market
  [1] Creates new market access opportunities for U.S. providers of goods
and services.
  [2] Ensures implementation of international standards and implementation
of sanitary and phytosanitary (SPS) requirements of WTO, issues of
priority to U.S. exporters.
  [3] Addresses long-standing concerns on shelf-life standards, protection
of undisclosed information for pharmaceuticals and agricultural chemicals
(as required by the WTO), imports of information technology products
with encryption, and export duties on nonferrous and steel scrap, which
will be part of Ukraine’s multilateral commitments in the accession.

                              AGRICULTURE RESULTS:
  [1] Ukraine’s average bound tariff will be 11.1 percent upon accession.
  [2] Ukraine will provide improved access on products of U.S. interest,
such as poultry and animal feeds.
  [3] Ukraine will participate in the zero-for-zero tariff agreement on
distilled spirits.
  [4] Ukraine will abide by international standards in its treatment of
imports of beef, pork, poultry, fish and biotech products.
  [5] Looking ahead, Ukraine commits to zero export subsidies; domestic
support commitments will be finalized as part of the multilateral package
to be negotiated with other WTO members, including the United States.

                          INDUSTRIAL TARIFF RESULTS:
  [1] Ukraine’s average duty will be 4.6 percent; many items of key U.S.
interest will face zero or reduced duties:
  [2] Information Technology Agreement (ITA) – Ukraine will eliminate
tariffs on computers, semiconductors, and other information technology
products, by January 1, 2010, with most tariffs eliminated upon accession.
  [3] Other duty-elimination initiatives: Ukraine will have zero duties in
key sectors:
Pharmaceuticals, furniture, non-ferrous metals, paper, and toys by the
date of accession, and eliminating at least 90 percent of tariffs for
products covered by the agricultural equipment, construction equipment,

scientific equipment, steel, and wood sectoral initiatives.
  [4] Trade in Civil Aircraft: All duties on parts and aircraft eliminated
by January 1, 2010.
  [5] Chemical Harmonization: low rates of duty at the harmonization rates
will be in effect for almost all of the 1,300-plus products covered by the
Agreement upon accession.

  [1] Elimination of restrictions, such as import licensing and approval
requirements, on the importation of ITA and other mass market technology
goods with cryptographic capability.
  [2] Reduction of export duties on ferrous (including steel) and nonferrous
scrap metals.
  [3] Protection of undisclosed information for pharmaceuticals (5 years)
agricultural chemicals (10 years) from the date of accession, as part of its
intellectual property rights commitments.
  [4] Ukraine’s state-owned and state controlled enterprises will make
purchases and sales in international trade of goods and services based on
commercial considerations and provide U.S. firms an adequate opportunity,
in accordance with customary international practice, to make sales to and
purchases from these firms.

  [1] Extensive commitments for services on sectors of interest to U.S.
firms, ensuring a high level of liberalization.
  [2] U.S. service suppliers will benefit from new market opportunities
across a wide range of sectors:
    a. financial services, including banking and securities (branching
permitted from accession), insurance (branching permitted within 5
years); and
    b.telecommunications , energy services, distribution, express delivery
services, engineering and construction services, and professional services.
LINK: www.ustr.gov
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]

                              AGAINST RUSSIA, UKRAINE

Agence France Presse (AFP), Washington, D.C., Mon, Mar 6, 2006

WASHINGTON – The US government called on Congress to repeal Cold

War legislation hindering trade relations with Russia and Ukraine after signing
a bilateral WTO accession deal with Kiev.

US Trade Representative Rob Portman and Ukraine’s Economy Minister

Arseniy Yatsenyuk signed the agreement here to take the ex-Soviet republic
a crucial step further towards joining the World Trade Organisation.

"Ukraine’s commitment to broad-based reform and economic liberalization will
provide a welcoming environment for investment, both foreign and domestic,"
Portman said at the signing ceremony.

"The agreement also demonstrates Ukraine’s commitment to the international
trading system," he said, after Kiev agreed to open up its markets more to
US imports and to pursue an aggressive clampdown on counterfeit goods.

Yatsenyuk noted that Ukraine had been battling to join the global trade club
and its forerunner since 1994. "It was very tough work and the wait was very
long. But we did it," he said.

Applicants must conclude bilateral agreements with any WTO member who

wishes one, and Kiev fears that Moscow would use this as a tool of political
influence if it were to join the club first. Russia has dismissed such

The United States is still in bilateral WTO talks with Russia. Portman said
he hoped those negotiations could be wrapped up before Russia hosts the
Group of Eight summit in St Petersburg in mid-July.

But for either bilateral accord to take effect, Congress must first repeal
the Jackson-Vanik amendment to the 1974 Trade Act, which was passed to
punish the Soviet Union for restricting the emigration of Jews and other

The Senate lifted the amendment’s terms against Ukraine in November. But the
House of Representatives has yet to pass its own legislation to that end for
Ukraine, and the law’s provisions also remain in effect against Russia.
Until Jackson-Vanik is repealed, the US administration cannot declare normal
trading relations with either country.

"We are working very hard to complete our bilateral agreement with Russia
and we are also working very hard frankly with the US Congress on both the
Ukraine agreement and the Russia agreement, to be sure we can take them

both through the political process here," Portman said.

"We hope that that process will move relatively quickly. We think it’s good
for the United States, and incidentally for Ukraine and for Russia, to be
members of the rules-based international system," he said.

Yatsenyuk said: "We strongly support (the) accession of the Russian
Federation to the WTO because we have (then) to act and exist in a similar
legal environment." The minister said Ukraine is still in bilateral WTO
talks with five other countries — Australia, Colombia, Kyrgyzstan, Panama
and Taiwan.

The Australian negotiations are seen as the toughest, but Yatsenyuk
expressed hope to wrap them up "in the nearest future".

Under its deal with Washington, Ukraine agreed to lower its duty on US
industrial imports to an average of 4.6 percent, while opening up its
markets to US computers, chemicals, pharmaceuticals and aircraft.

US companies in services such as banking, insurance and tele-

communications will enjoy greater access to Ukraine’s market.  -30-
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
    Send in names and e-mail addresses for the AUR distribution list.

UT1, Kiev, in Ukrainian 1920 gmt 6 Mar 06
BBC Monitoring Service, UK, in English, Mon, Mar 06, 2006

KIEV – Ukrainian President Viktor Yushchenko has said that the scheduled
signing of a bilateral protocol with the USA on access to markets of goods
and services is a "decisive victory".

Speaking in an interview with the state-owned UT1 television channel on 6
March, Yushchenko said: "An important protocol between Ukraine and the

USA will be signed today. I would say that this is a decisive victory achieved
at talks in the past several weeks."

Yushchenko said that Ukraine has signed bilateral protocols with 45
countries in the past year. The president said that Ukraine, as a non-WTO
member, has been suffering heavy losses as a result of antidumping
investigations launched against Ukraine by the EU, Russia, Mexico and other

Yushchenko predicted that Ukraine would see the effect of the signing of the
protocol with the USA and of WTO entry starting from the fourth quarter of
this year.  -30-

[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
      Will hold press conference, Wednesday, March 8th at 2:30 p.m.

Amb Steven Pifer and Amb William Miller, Co-Chair
Jackson-Vanik Graduation Coalition
Washington, D.C., Monday, March 6, 2006

WASHINGTON – The Jackson-Vanik Graduation Coalition will hold a press
conference on Wednesday, March 8th at 2:30 p.m. in room 1539 (fifth floor)
of the Longworth House Office Building to discuss the importance of the
House of Representatives passing legislation to graduate Ukraine from the
Jackson-Vanik Amendment prior to Ukraine’s March 26 parliamentary elections.

With the U.S. Senate having passed legislation by unanimous consent in
November 2005 to graduate Ukraine from the Jackson-Vanik Amendment, the
United States granting Ukraine market economy status in February, and the
United States and Ukraine concluding WTO bilateral negotiations this week,
now is the appropriate time for the House of Representatives to graduate
Ukraine from Jackson- Vanik.

In a short time, Ukrainians will return to the polls to express their
commitment to democracy and reform. The United States has been a faithful
ally throughout Ukraine’s work towards a more democratic and prosperous
nation. The Jackson-Vanik Amendment was enacted in 1974 in reaction to the
severe restrictions the Soviet Union had placed on emigration of its
citizens, most notably those of Jewish descent.

Since regaining its independence in 1991, Ukraine has built a strong record
of open emigration and has fully met Jackson-Vanik’s freedom of emigration
requirements, a fact recognized by both Presidents Clinton and Bush. Ukraine
thus merits graduation. The time to do so is now.

The Jackson-Vanik Graduation Coalition represents more than 250 businesses
and Ukrainian-American, Jewish-American and other non-governmental

WHO: Jackson-Vanik Graduation Coalition
WHAT: Jackson-Vanik Graduation Coalition Press Conference
WHERE: 1539 Longworth House Office Building, Fifth Floor, Independence and
New Jersey Avenues, S.E., Washington, D.C. (across from the U.S. Capitol)
WHEN: 2:30 p.m. on Wednesday, March 8, 2006
CONTACT: Marta Matselioukh at (202) 223-2228 or at martam@usukraine.org

[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]

SPEECH: By H.E. Dr. Oleh Shamshur
Ambassador of Ukraine to the United States
Delivered at the: "UA Historical Encounters Series" – Conference I
Sponsor: NYU, Columbia University, Center for US-Ukrainian Relations
NYU Torch Club Forum, New York, NY, Wednesday, March 1st 2006
Published by The Action Ukraine Report (AUR) #669, Article 7
Washington, D.C., Tuesday, March 7, 2006

Not so long ago we, in Ukraine, celebrated the first anniversary of the
Orange revolution. This would be an opportune occasion to take stock of
what has been achieved or not achieved during the period that was so
intense and rich in political developments.

It turned out that it takes not only courage, but hard everyday work to
transform a post-Soviet quasi-democracy into a modern and successful state.
Strengthening and developing democracy is a hard job which has to be done
in all directions – economic, political and diplomatic.

It should be remembered that the challenges were formidable and no home-
made or universal recipes were available. Only a year ago, some people
referred to the revolution as "UKRAINIAN EXPERIMENT", posing a
lot of questions:

Will the so-called Western model of democracy take roots in Ukrainian
ground? Will new Ukrainian leadership be able to ensure pursuit of
democratic reforms or the process will bog down in the post-Soviet
realities? Will Ukraine be able to sustain economic growth?

Will Ukraine set an example to its neighbors, including their ability to
define their way of development independently, in accordance with their

national interests and without external interference? The questionnaire
can be furthered.

I believe that we can already say that we can give a positive answer to the
greater part of the questions: democracy is on the rise, the process of
reform could suffer setbacks but it cannot be defeated.

 We still have a long list of things "to do", but the list of achievements
in establishing a new political system is already looking very respectable:

[1] We managed to destroy the foundations of the autocratic system
of corruption
[2] We ensured the freedom of expression and freedom of political choice
[3] The state powers have become open for control and responsive to
[4] The system of oligarchic control over economy has been shattered
and devoid of the state support
[5] Equally shattered has been the system of endemic corruption, including
the impact upon economy of the most dangerous shadow schemes
[6] The spread of poverty has noticeably diminished
[7] Economic development has been robust

 On the democracy side, one might say that the front line of the global
development of state management and modern democratic institutions
traverses Ukraine. We hope that Ukraine – together with our Georgian
friends – might play an important role in setting a course for the formation
and development of the new democracies.

Relevance of the success of Ukraine and Georgia in good governance by
far exceeds its domestic dimension having direct positive bearing upon the
processes unfolding in their close neighborhood. Conscious of that matter,
our two countries put forward the initiative of the COMMUNITY OF

It was based upon our common understanding of the necessity to strengthen
democracy, respect of human rights and rule of law in the region in order to
ensure its sustainable, stable and democratic development.

 We see CDC as a community of democratic countries in the huge region
between three seas – Baltic, Black and Caspian. We see it as a community of
nations, which consider human freedoms as the highest value and the ultimate
yardstick to measure success of the statehood.

The Borzhomi Statement of Presidents Yushchenko and Saakashvili reflects
their willingness and readiness to send a very clear political signal to all
countries of the region: we are your friends, we are ready to support you in
developing democracy and we will be glad if you, in turn, can support us on
this way.

This initiative is not about political ambitions or export of revolutions.
Our ambition is to make of the CDC a "powerful instrument of making our
region free of all remaining dividing lines, human rights violations and
frozen conflicts".

This initiative is about a political emphasis which has not been strong
enough within the post-Soviet environment: the emphasis on democracy as

an overreaching goal, as the tradition in this region was to focus on economy
and to tailor democracy in line with historic traditions and geopolitical
specificity of each particular country.

By launching CDC, Ukraine wants to indicate its disagreement with skeptics
saying: economic prosperity first and democracy second. We disagree with
those saying: without necessary historic experience democracy is doomed to
failure. It’s never too late and never too early to embark upon democratic
way. And there can no geopolitical causes that might justify rendering
fundamental freedoms unimportant or marginal, relegating them into the
category of a nuisances.

Practical implementation of the CDC envisages holding of the regular for a
of the leaders of the Baltic – Black – Caspian Sea area leaders who share
the vision of a new Europe and democratic objectives in order to transform
this region into the area of democracy, stability and security, fully
integrate it into Europe and democratic euro-Atlantic community.

To note: Ukraine doesn’t seek to invent its own, custom-made model of
democracy or economic development. We just want to cover the same

path that brought success and prosperity to the Central Eastern European
countries in the last decade. The key to success is determination in the
pursuit of democratic values and market economy.

CDC is to provide its participants with largely informal and regular
opportunity to discuss political developments in their countries and the
region from the viewpoint of human rights and genuine democracy. Here
every country of the region has its own record, own achievements and own
problems. CDC will give a possibility to share and discuss them promoting
inter alia the best practices.

The first CDC Forum took place in Kyiv on 30 November – 2 December
2004. It was of principal importance that it was organized at two levels.
The Official forum had been preceded by the Civic forum attended by the
representatives of over 150 NGOs.

As for the leadership forum, it included  leaders of leaders and
high-ranking representatives from 23 countries and 9 international organizations.

The Final Declaration has stated the readiness of the participating countries to
develop CDC upon the agreed principles and defined the sequence of the
follow-up events (Vilnius, May 2006 and Tbilisi, Autumn 2006).

 We are grateful to the United States for supporting CDC concept, and expect
that we can continue our interaction in promoting democracy and freedom
within this framework.

We also believe that EU whose member-states are among the founding members
of the CDC, and with whom we share same democratic values and common
social objectives will show keen interest and will take an active part in
the CDC activities. It might be that the CDC message will become for EU and

its partners a sort of the new idea, the new breath, the new message to bring
over, the new horizon to reach.

Having said that, I would like to stress that CDC is an absolutely open-
ended group of like-minded countries and NGO partners. CDC is not an
initiative directed against any third party (invitations to Kyiv were sent
to everyone, with one exception, and this exception was not Russia). We
do not intend to judge or criticize. By definition, CDC is a forum of
cooperation for dialogue.

We intend to discuss and help those who wish to be helped. To quote from
the Final Declaration: far-reaching mission of the CDC is to serve to unite
all of the countries of the region in their common efforts to strengthen our
regional cooperation, promote democracy and protect human rights.

 We do hope that CDC and Ukraine as one of its initiators can play an
important role by contributing to bringing different parts of Europe
together on the basis of the balance of freedoms and democratic ideals
rather than usual balance of powers. This is our humble ambition.

 In conclusion, let me reiterate that for Ukraine, its President and the
team of reformers last year has been extremely difficult and challenging.
However, it was not the year lost. Rather, it was the year when very
important and sometimes painful lessons were learned.

Now many eyes are focused on Victor Yushchenko. Trust me: he has come
from last years turbulences stronger than ever. He has stamina, he has
faith, and he has a vision for his country.

A part of this vision is that Ukraine must serve as a positive example for
others and be an active player in the region, active promoter of democracy.
He and Ukraine need your continued support and partnership.  -30-
NOTE: Conference II of the Series was held at Columbia University on

March 2, 2006, under the title: Visegrad-Ukraine/A Multi-relational
Perspective. Ambassador Shamshur presented at the Columbia U.
symposium as well. A Post-script: A video-transcript of the two forums
will be available soon on the website of Columbia University’s East Central
European Center. For further information, please contact: Walter Zaryckyj
at waz1@nyu.edu
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
         Send in a letter-to-the-editor today. Let us hear from you.
                              RISES AS ECONOMY FALTERS

By Stefan Wagstyl in London and Tom Warner in Kiev
Financial Times, London, United Kingdom, Tuesday, March 7 2006

Ukraine’s government faces mounting difficulties coping with the impact of
the recent rise in gas prices by Russia amid signs of growing inflation and
declining economic growth.

The disappointing economic news will put new pressure on the administration
of president Viktor Yushchenko as it prepares for parliamentary elections
later this month.

Official figures published on Friday showed consumer prices rose 3 per cent
in the first two months of 2006 – an annualised rate of 19 per cent and far
ahead of the government’s 10 per cent target.

Earlier data showed weak gross domestic product growth in January of 0.9 per
cent compared with the same month a year ago. With no formal government
forecast for GDP for 2006, ministers informally predict growth about level
with the 2.6 per cent recorded last year, down from 12.1 per cent in 2004.

However, with continuing uncertainty about the impact of the gas price rise
and the prospect of further increases in the second half of 2006, observers
say the country could face a recession. Igor Burakovsky, director of the
Institute for Economic Research and Policy Consulting, an independent Kiev
think-tank, said: "The risk of recession exists and the probability is
rather high."

Goldman Sachs, the US investment bank, warned in a report last week: "There
is a moderate chance that a second gas shock could push the country into

Last year’s decline in growth had been widely expected, as the 2004 GDP
figure was inflated by high steel prices, favourable weather for farming and
social spending. However, the government had forecast a recovery in 2006
with GDP growth of about 5 per cent.

However, the increase in the average price for imported gas from $60 per
thousand cubic metres to $95 has hit recovery hopes. Some of the increase
has been passed on to industry, which has seen prices increase by 67 per
cent. The government has refrained from increasing prices for residential
consumers and public heating companies and is forcing the state-owned energy
company Naftogaz to bear the costs. Prices for consumers and heating
companies are expected to rise after the election.

Jeffrey Franks, International Monetary Fund [IMF] representative in Kiev,
urged the government not to raise budgetary subsidies to protect gas users.
"The good outcome involves making adjustments to increase energy efficiency
which permit greater growth in the medium-term, make the country less
dependent economically on Russia and reduce the scope for corruption," he
said. "But if the Ukrainian government swallows increases, there will be
fewer adjustments and fewer benefits."

Lech Kaczynski, president of Poland, yesterday attacked plans for a
German-Russian gas pipeline as being "completely against the interests of
Poland", writes Hugh Williamson in Berlin.

On the eve of a visit tomorrow to Berlin for talks with Angela Merkel,
German chancellor, Mr Kaczynski told Der Spiegel magazine that there was "no
economic basis for the gas pipeline. We are a partner of Germany, so why
this pipeline, that skirts around Poland’s borders?" He said his discussions
to date with Ms Merkel on this issue were "not satisfying or constructive".

[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]
9.                          ‘COLOR’ REVOLUTIONS WANE
 Russia asserts its influence ahead of Belarus, Ukraine elections this month.

By Fred Weir, Correspondent, The Christian Science Monitor
Boston, Massachusetts, Tuesday, March 7, 2006

MOSCOW – Two key former Soviet states – Belarus and Ukraine – head

into elections this month amid dramatic accusations of planned coups,
state coercion, and vote-fixing.

But Moscow isn’t worried.

Instead, there is a sense of calm and fresh confidence here that contrasts
sharply with the Kremlin’s panicky reactions to the surge of "colored
revolts" that swept through the region in recent years. That revolutionary
wave – which began with Georgia’s 2003 Rose Revolution and continued with
Ukraine’s Orange Revolution – seemed unstoppable just a year ago, when
Krygyz President Askar Akayev was overthrown.

But the inability of new leaders to fulfill revolutionary pledges, together
with the failure of popular pressure to effect change in other Soviet
satellite states, has opened the way for Moscow to reassert its influence in
the region.

"Those upsurges were the response of people to bad governance and worsening
conditions, and the new leaders that came in have shown themselves unable to
offer improvements," says Gennady Chuffrin, deputy director of the official
Institute of World Economy and International Relations in Moscow.

"Ukraine could even see a reversal of what happened a year ago. Obviously
the Kremlin would like to see a weakening of [Ukrainian President Viktor]
Yushchenko, and I think that’s what’s going to happen."

Ukraine’s economic decline and disillusionment have propelled the pro-
Moscow opposition party into first place in opinion surveys for
parliamentary elections on March 26. In an ironic twist, the opposition leader

Mr. Yanukovych, who was forced out of power after being accused of rigging
Ukraine’s 2004 presidential election in his favor, claims the authorities
are preparing to steal the polls. "The orange team can only remain in power
through massive falsifications, and this is what they are doing," he said
last week.

According to a survey conducted last week by the Institute of Social and
Political Psychology in Kiev, Ukraine, Yanukovych’s Party of Regions leads
with 27 percent support, followed by former prime minister Yulia
Tymoshenko’s Bloc with 19 percent and Mr. Yushchenko’s Our Ukraine
movement with 17 percent.

If the elections bring in a deeply split parliament, it could lead to an
extended political crisis that would play into Moscow’s hands. A January gas
blockade by Russia appears to have deepened Ukraine’s economic slump
while strengthening the hand of the pro-Moscow Yanukovych.

"We can make Ukraine strong and rich, because democracy is impossible in a
poor country," Yanukovych told his campaign workers last week. "Unlike the
present leadership, we will not build our strategy to the detriment of
relations with Russia."

In Belarus, good relations with Russia are not an issue. The Kremlin will
try to put the best face on President Alexander Lukashenko’s almost certain
third-term victory in polls slated for March 19. But even Russian experts
who support the Belarussian leader refrain from calling the election process

Two candidates running against Lukashenko, Alexander Kozulin and Alexander
Milinkevich, have been all but barred from media and their rallies have been
broken up by force. Last Thursday, Mr. Kozulin was arrested and allegedly
beaten by police after he attempted to stage an impromptu press conference
at the Palace of the Republic, Belarus’ parliament, in Minsk. "I wanted to
tell the truth about the dictatorship that we live in," Kozulin told

Lukashenko, a former collective farm chairman who has maintained a strict,
state-controlled economy, can point to healthy growth rates, low
unemployment and stable, if meager, living standards.

"Lukashenko, for all his lack of democracy, has the support of his people
and is pursuing sensible policies," says Mikhail Delyagin, director of the
independent Globalization Institute in Moscow. "He may be the devil
incarnate to the West, but Belarussians regard him as their legitimate

But at least a few Belarussians apparently have other ideas. Last week, the
chief of Belarus’s KGB security service accused an allegedly foreign-funded
opposition group of planning to stage an election-day coup after publishing
faked voting results.

Opposition leaders deny the allegations. Mr. Milinkevich has called for
peaceful protests if vote-rigging occurs. But all election-day
demonstrations were banned by government decree last week. "These
elections are being held under conditions of total falsification and
persecution of the opposition," Milinkevich told journalists Friday.

The turmoil prompted US Deputy Secretary of State David Kramer to warn
Belarussian leaders that "there will be consequences" for incidents like
Kozulin’s arrest. "We are paying very close attention to those who are
involved in activities that promote either fraudulent elections or promote
violence," he said.

Many Russian experts worry that the perceived rivalry between Moscow and
Washington for influence in the post-Soviet arena, as played out through
these events, is accelerating a chill between the two countries.

A US Council on Foreign Relations report released over the weekend noted a
"downward trajectory" in US-Russian ties, in part due to Moscow’s alleged
meddling in the affairs of its neighbors, through energy squeezes and
political pressure. "Russia’s relations with other post-Soviet states have
become a source of significantly heightened US-Russian friction," the report

That view is mirrored in Moscow. "Unfortunately, the [wave of revolutions]
was perceived in Russia as a kind of conspiracy against Russian interests,"
mainly promoted by the US, says Irina Zvigelskaya, an analyst with the
independent Center for Strategic and International Studies in Moscow.

She says the problem results from poor communication over each other’s
policies in the region. "The US has been obsessed with the notion of
democracy, while we have been obsessed with the notion of stability," she
says. "It’s a deeply fraught misunderstanding"     -30-
LINK: http://www.csmonitor.com/2006/0307/p06s02-woeu.html
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]

Ukrayinska Pravda in Ukrainian and Russian
Kyiv, Ukraine, Monday, March 6, 2006
The Action Ukraine Report (AUR) in English #669, Article 10
Washington, D.C., Tuesday, March 7, 2006

Ukrainian ministers continue to publicly remain optimistic about their
country’s chances of NATO membership. Different dates are given for the
country’s entry, from 2008-2010.

Deputy Foreign Minister Volodymyr Khandohiy said Ukraine hoped to be
included in those countries invited to join at the 2008 NATO summit, which
is expected to be an enlargement summit. Three other countries could be
included in this enlargement wave, Croatia, Albania and Macedonia.

Included in the 2008 enlargement wave would likely see Ukraine, and the
other three countries, join NATO in 2010. This would be good timing for
Ukraine as it would follow the October 2009 presidential elections. But, it
would assume that the NATO friendly Viktor Yushchenko would be re-elected
for a second term or, failing that, his replacement was pro-NATO.

NATO General Secretary Jaap de Hoop Scheffer supports the view that the 2008
NATO summit  would be an enlargement summit that would invite in western
Balkan states and Ukraine. He refused to give a concrete follow up date when
these four countries would actually become NATO members.

Defense Minister Anatoliy Hrytsenko sees the likelihood of Ukraine obtaining
a Membership Action Plan (MAP) at the NATO summit in Riga in November,

the first to be held in a former Soviet country. This would give Ukraine the
opportunity to complete two annual cycles of MAP before being invited to
join NATO.

The unilateralist Bush administration is also committed to supporting
democratization abroad, including Ukraine and Georgia, which includes giving
these countries the protection of NATO. US Secretary of Defense Donald
Rumsfeld is on record as supporting Ukraine’s NATO membership.

An influential Ukrainian newspaper concluded that, ‘The US will support it
in every possible way and call on the other allies to help Ukraine integrate
into the alliance’.

Unilateralism could work in Ukraine’s favor as it reduces the need for the
US to take into account Russian objections to NATO membership for Ukraine.
This is especially, at a time when democratic regression is taking place in

The 2003 territorial conflict with Russia over the Tuzla island near the
Crimea, the 2005-2006 gas crisis and on-going dispute over Black Sea Fleet
illegal use of Crimean lighthouses have reinforced the need in the minds of
a large portion of Ukraine’s elites for the country to achieve NATO

President Yushchenko told a joint meeting of the National Security and
Defense Council and NATO’s  North Atlantic Council in Kyiv that NATO
membership would provide the necessary external guarantees for Ukraine’s
national security.

NATO membership, de Hoop Scheffer added, may be also seen as a stepping
stone to EU membership. The EU is inclined is currently only offering
"Enhanced Partnership" to Ukraine rather than full membership. As the
"carrot" of EU membership was crucial in encouraging post-communist states
to undertake painful and unpopular reforms, the absence of such a "carrot"
may negatively influence reforms inside Ukraine.
Although Ukraine has a high chance of being invited into the MAP process in
2006 the time frame for achieving full membership could be delayed beyond
the 2008 NATO summit because of the widely held view inside European

members of NATO that Ukraine is not ‘ready’. The three western Balkan states
are already in the MAP process.

President Yushchenko is correct to state that no country invited into NATO’s
Intensified Dialogue on Membership, which Ukraine was invited to join in May
2005, has never not ultimately joined NATO. But, the short timeframe of
2006-2008 for a MAP before being invited into NATO may mean Ukraine’s
invitation may be postponed after 2008.

The Ukrainian authorities is too optimistic about Ukraine’s chances of
entering NATO – even though there are the best international conditions for
this step. It is not just a question of free and fair elections, a Western
demand that is likely to be met by Ukraine.

A British Foreign office official working on Ukraine told me recently that
such a free election would be one of the first in the CIS since the early
1990s (and certainly in Ukraine since 1994). Another condition is that
Yushchenko attempt to have good relations with Russia. In the West,
Yushchenko is not seen as anti-Russian.

But, a third Western expectation is to wait and see whether reformers
dominate the Parliament coalition and government? It is in this expectation
that there are two contradictions facing the authorities that will be
decided by the 2006 election results.

FIRST, many Western members of NATO  will condition supporting Ukraine

being invited into a MAP at the Riga summit based on if there is a re-unified
Orange  Parliament coalition.

A re-unified Orange Parliament coalition will send a SIGNAL to NATO and the
EU that Ukraine’s democratic breakthrough begun by the Orange Revolution and
election of Yushchenko as Ukraine’s first reformist President  is now
consolidated and the reform process is sustainable. The paradox of this
expectation is that one of the three branches of the Orange coalition – the
Socialists – are hostile to NATO membership.

SECOND, as an alternative to a re-unified Orange coalition, Anders Aslund is
lobbying in Washington for an Our Ukraine-Regions coalition. After his
January visit to Ukraine he wrote that such a Parliament coalition is what
Prime Minister Yuriy Yekhanurov, State Secretary Oleh Rybachuk and  National
Security and Defense Council Anatoliy Kinakh also allegedly support.

If this is indeed true, do Aslund and these three members of the Orange
vlada realize what SIGNAL such a coalition would send to NATO and the EU.
And,  how support for such a coalition would undermine the goal of Ukraine’s
membership in NATO?

A Our Ukraine-Regions of Ukraine coalition would give a SIGNAL that Ukraine
is backtracking on reform and regressing away from the Orange Revolution.
NATO would postpone inviting Ukraine into a MAP and Ukraine would miss

being invited to join in the third round of NATO enlargement in 2008.

An additional consequence of supporting a Parliament coalition with Regions
of Ukraine would be to make Yushchenko a virtual President (which
constitutional changes would simply reinforce). Yushchenko’s support in
western-central Ukraine would collapse and his supporters would defect to

Eastern-southern Ukrainians would not give Yushchenko credit for doing a
deal with their Regions party. This would lead to Yushchenko not being
re-elected for a second term in 2009.

Does Our Ukraine not remember the drop in its support after it signed a
strategically futile memorandum with Regions of Ukraine in late September
2005, a memorandum that Yushchenko himself discarded in January?

Would an Orange coalition support Ukraine’s membership of NATO? Not

Throughout the CIS, the left are hostile to NATO membership. This makes the
post-Soviet left very different to the left in the Baltic states and Central
Europe. Remember post-communist Polish President Aleksandr Kwasniewski’s
ardent backing for Polish membership of NATO. We could not imagine any
Ukrainian left-wing leader, pro-Orange or anti-Orange, following in
Kwasniewski’s footsteps.

Ultimately, the major hurdle to be overcome in Ukraine will be the attitude
of the Party of Regions, which is set to have the largest faction in the
newly elected parliament. The Party of Regions is dominant in eastern
Ukraine where opposition to NATO membership is highest.

Without the conversion of the Party of Regions after March 2006 into a
pro-NATO force, or at least neutrally disposed towards membership, it is
difficult to see how Ukraine can move beyond a MAP into membership by
2008-2010 as President Yushchenko and Ukrainian officials constantly
NATO and the Bush administration expect three objectives to be met in
Ukraine for membership to become a potential future option.

FIRST, the holding of free and fair elections on 26 March as understood by
the OSCE and the Council of Europe. This objective is very likely to be met
as Ukraine holds its first free elections since 1994.

SECOND, continued political, economic and defense reforms. Although the pace
of reforms since Yushchenko’s elections have been slower than expected, and
often contradictory, that there is forward momentum is internationally

Freedom House upgraded Ukraine to ‘free’ this year, the country was granted
market economic status by the EU and USA and the FATF (Financial Action

Task Force) on money laundering has halted its monitoring of Ukraine

There is an on going cleaning up, and reform of, the Interior Ministry and
military under Interior Minister (MVS) Yuriy Lutsenko, on a high profile
visit to Washington DC last week, and Defense Minister Hrytsenko. Hrytsenko
has called for greater coordination among Ukraine’s security forces where
duties often overlap.

NATO is set to assist in this endeavor by expanding  its long standing
cooperation with the military to the Security Service, MVS, Border Troops
and Ministry for Emergency Situations.

THIRD, the most contentious issue is that of regional opposition to NATO
membership and low public support. Some other post-communist states, such

as Slovenia and Hungary, also had low public support for membership. The
populist Tymoshenko bloc have reiterated their opposition to joining NATO if
there is not public support within Ukraine.

Ukraine is different from earlier countries which have joined NATO in that
it would be the first truly post-Soviet state to be invited to join NATO, as
the three Baltic states were always treated differently and never joined the
CIS. Only 10% of Ukrainians understand what NATO is and why the country
should join, a legacy of Soviet anti-NATO propaganda.

There was also a lack of an information campaign on NATO during the Leonid
Kuchma era. This lack of a positive campaign on the merits of membership has
left a vacuum into which the former Kuchma camp has launched an anti-NATO
membership campaign.
                       LACK OF AN ALL-ROUND STRATEGY
The anti-NATO campaign is being led by the Ne Tak! (Not This Way!) election
bloc grouped around the Social Democratic united Party headed by Viktor
Medvedchuk, head of the presidential administration in Kuchma’s last years
in power. An important financial source for ‘Ne Tak!’ bloc and anti-NATO
campaign is the Republican Party led by former Naftohaz Ukrainy CEO Yuriy

Boyko was set to be arrested in summer 2005 but this was halted after
presidential adviser and energy tycoon Oleksandr Tretyakov intervened.

Boyko is thought to be a major recipient of income from the shady
Rosukrenergo created in July 2004 and included in the January new gas
contract with Russia.

This shows how the failure to launch criminal proceedings against past
corruption in the energy sector, and continuing to work with the shadowy
Rosukrenergo, undermines other policies. Namely, the strategic aim to seek
NATO membership. Not surprisingly, Defense Minister Anatoliy Hrytsenko

and Finance Minister Viktor Pynzenyk are against the gas agreement.

SECOND, support for a coalition with Regions of Ukraine (which Yekhanurov,
Rybachuk and Kinakh allegedly support) shows the degree to which the
Ukrainian government is itself not united over its NATO strategy. Is their
dislike of Tymoshenko more important than their support for Ukraine’s NATO
membership, which would be postponed if such a Rada coalition was formed?

THIRD, the largest faction in the new Rada will be Regions of Ukraine. It
will include numerous senior level Kuchma officials against whom no criminal
charges have been laid. Bandits to Prison have been replaced by Bandits to

How do Ukraine’s foreign policy strategists expect to deal with the question
that the largest faction in the new Rada is against NATO membership? How do
those government officials who prefer an Our Ukraine-Regions coalition not
understand that this would send a signal to NATO that Our Ukraine is
cooperating with an anti-NATO political force.

If President Yushchenko had fulfilled his campaign promise to send Bandits
to Prison, Regions of Ukraine would not have the largest faction in the new
Rada. Regions would not have been able to take revenge for what it sees as a
stolen victory in 2004. And, the largest faction in Ukraine’s parliament
would have been pro-NATO (Our Ukraine), not anti-NATO (Regions).
Holding a free election and not proposing anti-Russian policies are two
Western expectations of President Yushchenko that he will fulfill easily. He
is a democrat and is not anti-Russian. A third more difficult expectation is
that an Orange coalition be established in the Rada after the elections.

Ukraine has two coalition possibilities in the new Rada. In choosing which
coalition to go into, President Yushchenko and Our Ukraine will, in turn,
influence Ukraine’s successful drive to NATO or postpone it indefinitely.

1. A re-united Orange coalition leading to an invitation to join MAP at the
Riga NATO summit in October. This would be followed by an invitation to

join NATO (together with Albania, Croatia, Macedonia) at its 2008 summit.

2. An Our Ukraine-Regions coalition that will lead to a postponement of

NATO’s decision on inviting Ukraine into MAP. Such a postponement would
lead to Ukraine not being included in the third wave of NATO enlargement in
Taras Kuzio, Visiting Professor, Institute for European, Russian and
Eurasian Studies, Elliott School of International Affairs, George
Washington University. Former head of the NATO Information and
Documentation Centre, Kyiv. (tkuzio@gwu.edu)
LINK: http://pravda.com.ua/news/2006/3/6/39431.htm (Ukrainian)
LINK: http://pravda.com.ua/ru/news/2006/3/6/38441.htm (Russian)
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]

ANALYSIS & COMMENTARY: By Boris Kagarlitsky
Director of The Institute for Globalization Studies, Moscow
Eurasianhome.org, Moscow, Russia, Friday, March 3, 2006

Te electoral campaign in Ukraine has come to its homestretch. To predict
the results of the election in a foreign country is a mug’s game,
especially if this foreign country is Ukraine with its unstable political
situation, its struggles between numerous regional groups of influence and
clans, and finally with its political parties’ competition.

No matter how the seats in the future parliament are finally distributed,
the major camps are defined. Whichever party is going to get more

mandates, Ukraine will be in for another circle of political instability.

The confrontation still remains between two political lines, represented by
Viktor Yushchenko and Yuliya Tymoshenko, taking no notice of all of the
other political parties and groups. Russian observers, who are closely
watching Viktor Yanukovych’s activity, once again fail to notice the main

Yanukovych’s Party of Regions might represent interests of a certain
clan, but it doesn’t formulate any intelligible strategy of social and
economic development.

It’s clear enough: the main objective of such political forces is to maintain

business interests of the clan they represent (in this case it is the Donetsk
financial and business group), under whatever circumstances the country
is currently in.

In a situation when the major confrontation is going on between Yushchenko

and Tymoshenko, the only thing left for Yanukovych is to fluctuate
unsystematically around offering his services and clarifying who he should
adhere to this time.

The left parties – Socialists and Communists – turned out to absolutely
lack any political strategy. The Communists’ radicalism yields to that of
Tymoshenko, they are split up; the Socialists who cling to their seats in
the government, are little by little losing their prestige. Once powerful
and influential, these parties are now decaying.

The fact that Yushchenko and Tymoshenko will sooner or later clash in a
political confrontation, was obvious back when the "orange revolution" had
just begun. Usually any revolutionary process tends to drastically change
its political configuration, i.e. former allies become enemies. And it’s
not the impact of the winners’ ambitions.  It’s a social and political
logic. The political reform is only an outward goal of the game ­ whether
Ukraine is going to become a parliamentary republic or stay presidential.
In reality, the controversy is more deep-rooted.

There was no revolution in Ukraine ­ that is the main problem. The
movements which started out as revolutionary, from the very beginning were
planned by the opposition strategists as an "orange revolution" show, free
of any social content.

To make this show convincing enough, however, bizarre mass forces were

to be involved.  Yuliya Tymoshenko happened to become the leader of these
forces (maybe against her will). Exactly this, but not personal disagreements
determined the inevitable break-up.

People came in the streets not out of love for Yushchenko, but being tired
of the system. They got fed up with inequality, poverty, social injustice,
and corruption. They were against social and political course, pursued by
former president Leonid Kuchma.

All their hopes and insults were not however shaped into a clear political

program, in a system of demands. Vague expectations of the up-coming
changes came out as a vote for Yushchenko and sympathy towards

As it happens in the fairy tales about genie people finally got not what
they actually wanted, but what was suddenly articulated and said aloud. In
other words, they wanted social justice and got President Yushchenko

Under such circumstances Tymoshenko immediately became a symbol of

the initial pure hopes which failed to come true. She was like a magnet for
those preserving this hope. There is simply no other existing political
niche suitable for her. Those who intend to stop the revolutionary process
support Yushchenko, those who want to let it develop, concentrate around
Tymoshenko. Thus, we get Ukrainian Jacobins and Girondists.

Tymoshenko’s populism originally consisted in her effort to meet the social
expectations by raising benefits, stimulating salary growth, and
simultaneously tightening inflation. Very soon it became clear that a
policy of the kind firstly contradicts the liberal principles spread within
the ruling elite; secondly, it lacks funds.

These funds could have been accumulated through the re-privatization, but

it would inevitably include some elements of the re-nationalization, with the
economic course turning to the left (again, independently of the initial
intentions of Tymoshenko and her team).

The ruling elite could not put up with it, Tymoshenko’s career as a prime-

minister had disastrously come to an end, and she automatically became a
member of the opposition.

Yushchenko’s situation is no better. He tries to go on with his neoliberal
policy, which before had been pursued by Kuchma, Yanukovych, and

Yushchenko himself when he was prime-minister. However, the Ukrainians
don’t support this policy.  Their trust in such political course is exhausted.

It was exactly the protest against this social course that granted Yushchenko
presidency in 2004. By proceeding with his predecessors’ policy he is
little by little exhausting the people’s confidence. That is why he may not
allow realization of a political reform aimed at democratizing the
institute of the state power.

The problem with the political reform is not in its potential ability to
limit the president’s power.  It will make possible to put pressure from
below, which will chaotically correct the economic course. Whether
Tymoshenko will rise on this wave or someone more radical will rise

instead ­ it’s just a question of time.

Meanwhile, by suppressing this pressure from below and blocking the

already promised political reform, Yushchenko just keeps losing his supporters
among population, as he gets an image of a liar and an opponent to the
democracy, for which sake he was calling people out in the streets just a year

The two main participants of the political drama have not yet been
determined. Sooner or later Yushchenko will have to stand in front of his
people without his "democratic gown" and demonstrate the authoritarian
nature of the East European liberalism.

Tymoshenko will have to make the final ideological step and openly talk

as one of the left. If she proves unable to do that, she will either be beaten
by her "orange revolution" colleagues or will have to yield to someone
more radical.

Both parties are now hesitating. They were not striving for such a
confrontation, they were not planning this course of events. But the
logic of history is stronger than personal sympathy and plans.

The "orange revolution" becomes the asset of the past, but real
Ukrainian revolution maybe just around the corner.   -30-
LINK: http://www.Eurasianhome.org,
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]

    If you are receiving more than one copy of the AUR please contact us.
12.                         A COMPLETELY NEW ELECTION
COMMENTARY: By Ivan Lozowy
The Ukraine Insider, Vol. 6, No. 1
Kyiv, Ukraine, Tuesday, February 28, 2006


With general elections less than four weeks away, Ukraine is headed toward
wide-ranging changes in the political landscape.

First and foremost, the Verkhovna Rada, Ukraine’s parliament, will undergo
a radical transformation. Earlier Radas were composed largely of the
"boloto," or "mud" – People’s Deputies who drifted between factions, often
receiving large sums of money for switching sides. Previously, half of the
Rada’s MPs were elected in single-mandate districts and many from the

other half, elected on party lists, did not feel particularly tied to the
political party which got them elected.

Now, the March 26 elections are based on a pure proportional, or party
list, system. New rules preclude changing factions after the elections, so
the new parliament will be much more rigid.

The major polling services are pretty uniform in their forecasts, showing
six groups as definitely passing the 3 percent threshold:

Party of Regions: 25-30%
Our Ukraine: 19-22%
Yulia Tymoshenko Block: 15-17%
Socialist Party: 6-8%
Communist Party: 6-7%
Lytvyn Block: 5-6%
Pora-PRP: 2-3%

The pre-election campaign has produced few surprises. The Party of Regions
is conducting a hard-hitting campaign. Their list is heavily dominated by
people linked directly to Renat Akhmetov, the real force behind the party
and head of Ukraine’s most powerful industrial-financial group, or clan.
Akhmetov, who previously avoided the limelight, recently staged a prominent
appearance on his home turf in Donetsk, fueling rumors that he is preparing
to go public and oust Viktor Yanukovych, Yushchenko’s unsuccessful rival in
2004. Yanukovych had been the political face for the Donetsk clan for
years, but his failure in 2004 was reportedly very upsetting to his boss,

Yushchenko’s "Our Ukraine" coalition is headed by current Prime Minister
Yuriy Yekhanurov, who, besides his loyalty to Yushchenko has little to
recommend him. Yekhanurov is a political lightweight and has been damaged
by the recent gas spat with Russia. The person pulling Our Ukraine’s
strings is Roman Bessmertny, one of the people closest to Yushchenko. Yet
Our Ukraine’s TV ads have been muddled and backward-looking, attempting to
capitalize on the Orange Revolution at a time when disenchantment among
voters is high.

The firebrand Yulia Tymoshenko, Yushchenko’s former partner in the Orange
Revolution and Prime Minister until Yushchenko fired her on September 8,
2005, initially hesitated in confronting the Our Ukraine coalition
directly. These days, however, Tymoshenko sarcastically refers to her
former partners in Our Ukraine as "my dear friends" when she mentions
Bessmertny’s shenanigans in conducting "black PR" in the form of leaflets
accusing her of "betraying Ukraine" after her parliamentary faction voted
on January 10, 2006 to help oust Yekhanurov.

Tymoshenko’s political party, "Batkivshchyna" ("Fatherland"), is 100% a
one-woman show. According to MPs on her list, she maintained the list of
candidates to parliament in alphabetical order until all her "ducks" were
in a row. Specifically, Tymoshenko co-opted at least a dozen Kuchma-era and
medium level oligarchs by selling places for about 5 million USD. Unlike
other coalitions, which at least pretend to vote through party lists at
party congresses, Tymoshenko personally established the pecking order in
what is truly "her list." Since the Yulia Tymoshenko Block is not running
paid TV advertisements, she even stands to make some money during this
election campaign.

The once powerful Social Democratic Party headed by Viktor Medvedchuk is

at the core of a coalition named "Ne Tak" – an entitled denouncement of
Yushchenko’s principal slogan in the 2004 presidential campaign: "Tak!" or
"Yes." But the Ne Tak crowd is polling at only 1.5%. Their only hope is to
pull their usual trick of massively buying up electoral and election
committees’ support in one or several regions.

Another group set to go down in their rowboat is the Ukrainian People’s
Party headed by Yuriy Kostenko. Kostenko drifted away from Yushchenko
because of his inability to hit it off with practically anyone among the
Our Ukraine crowd.

Of all the major players, Our Ukraine has led the underperformer crowd.
Yushchenko’s rule has come across as weak and detached. During the recent
gas crisis with Russia, Yushchenko kept largely silent. The collapse last
year of the high-profile case against Borys Kolesnikov (See The Ukraine
Insider, Vol. 5, No. 1 from March 8, 2005), a key figure in Akhmetov’s
clan, dashed hopes among voters that Yushchenko’s slogan "Send the bandits
to prison!" would be realized.

Today many voters remain undecided, by some counts as many as 20 percent

of the electorate. Thus the big surprise of the March 2006 elections will be
delivered by the protest vote. Disenchantment with a series of crises badly
handled and squabbling within the former Orange coalition will boost
support for blocks seen as oppositionist, primarily Tymoshenko’s, the
Socialist Party, the radical pro-Russian politician and former Kuchma
protege Natalia Vitrenko and Pora-PRP (which includes Viktor Pynzenyk’s
Party of Reforms and Order).

Pora, largely composed of youth who spearheaded the Orange Revolution,

has put former heavyweight boxer Vitaly Klichko first in its party list, is
running a forceful TV ad campaign and has thousands of active volunteers
combing the larger cities.

Yet the undisputed leader is the Party of Regions. Their neck of the woods
in eastern Ukraine is a microcosm of the former Soviet Union, with
subservient media, a completely controlled local economy and regular
handouts buying up voter sympathy.

Many Westerners will view Region’s first place finish on March 26 as a
victory, although the combined votes for Our Ukraine and Tymoshenko

will be greater.

Thus the million dollar question is who will form the government after the
elections.   -30-
Correspondence should be addressed via the Internet to: lozowy@gmail.com

[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]
             Send in a letter-to-the-editor today. Let us hear from you.
      Leadership. And the people will suffer. There are no patriots in the land.
                       Not found among the present ‘leaders’ anyway.

The Ukrainian Observer #217, The Willard Group
Kyiv, Ukraine, March, 2006

Who will lead Ukraine in the future? Or, will Ukraine have leadership? That
is, effective leadership. What will the March 26, 2006 parliamentary
elections results produce for the near term and, even for the long term?

Will any one leader or combination of leaders or blocs of parliamentary
politicians step forward and make meaningful changes? Meaningful changes
that will ensure the promise of the recent Orange Revolution, the revolution
that seems in backward motion these days?

Thus, the headline on our Cartoon Cover this month, Ukraine Leadership? Yes,
with a question mark. We show caricatures of some who are at least likely to
be involved and have influence on the answers to our questions. Of course
there are others than those pictured who will certainly influence the
answers, but our pictured personages intrigue us most.

They are all interested in Ukraine’s football; they certainly are players in
the game. Pictured clockwise from Yulia Tymoshenko at 6:00 o’clock are:
Vitaliy Klitchko, Rinat Akhmetov (perhaps not the best caricature of the
young tycoon), Viktor Yushchenko, Viktor Yanukovich and Viktor Pinchuk.
Out to the side is Volodymyr Lytvyn.

New changes in law have made the coming contests for influence both more
important to the contestants and more critical for the country. Viktor
Yushchenko won a heatedly contested, bitterly fought 2004 election over
Viktor Yanukovych.

The people thought the seemed outcome of their demonstrations on the streets
of Kyiv in late 2004 and 2005 had produced a victory for freedom and
democracy. Almost immediately, however, it became clear that deals had
been made and there were promises for the victors to keep.

The Orange Revolution was compromised from the outset. This produced
conflict within the government. How much did promises and compromises
made during and after the ‘results’ of the Orange Revolution contribute to
the ineffective government of Yulia Tymoshenko?

What exactly was bought with the compromise that led to the grant of
immunity from the law for a greatly extended class of politicians? And is it
possible that the loser of the last presidential election could become a
powerful prime minister holding office during the remainder of the term of
the administration of the winner?

Regardless of the "who", the particular persons, the blocs they will
ultimately form amid the trade-offs, intrigues as benefiting the palaces of
Oriental potentates and medieval kings, who will lead in a manner as to
reflect the will of the people as expressed during their trials on
Kreshchatyk and throughout the land during the Orange Revolution?

The answer I think is possibly, no one. There may be chaos, at least for an
extended interim period. The game these ‘leaders’ will play is more than
rugby rough. And unlike rugby, there is unlikely to be any gentleman’s
sportsmanship, nor refined behavior. And who will suffer? As always the
people. Who will win?

At least on some level all the contestants will win. They can’t lose; it’s
to not any one of their advantage. Better to divide somehow the pie. If one
of these potential ‘leaders’ gambles too much, either for themselves or the
people they will run risks to their own personal desire for wealth an

What do the people want?

Well, I think it likely they don’t know. Exactly, that is. My limited
experience and study of history tells me they really don’t expect in
Ukraine to win as such.

Throughout history, certainly recent history, they’ve not felt a part of
government, or had any meaningful participation therein. That’s why the
Orange Revolution seemed so glorious. To them, finally participation
and hope…and a voice.

They were wrong. I think they now know it. There are no leaders for them.
They are back to protection by the State. Which to them now is a
particularly ineffective State.

And they hope for the things that all people want; a decent living, safety
and health for themselves and their children, a better life and education
for their children, comfort and camaraderie in their homes and workplaces,
laughter and joy on occasion, little suffering… those things, a little

What do the people need? Not need?

They need leadership.

They need for a few Ukrainian patriots to appear. A few good people. People
that understand that the right of all people is to have circumstances that
allow for themselves to protect themselves. That they can have rights to
property and live under a system of law that allows them to protect and keep
the fruits of their own labor.

Such patriots will understand that they need not seek ‘reforms’ that require
compliance with rules that chances potential, and in the future, to join the
EU, NATO, a particular Russian or others treaties or alliance. At least not

They need patriots that don’t harp on democracy and the need for elections
as of first import. They will understand that "election democracy" in of
itself has seldom in the world of the past century been a path to freedom
for the peoples of the world.

Freedom comes from the ability to have rights to property and in living
under a system of government that allows for the protection of those rights.

The Rule of Law does this and is a first, and basic requirement for freedom
and then prosperity for people. The Rule of Law is not: "have rules of law".
The concept is simple. All, repeat all, people are equal before the law and
are subject to it.

The king, the prince, the president, all officials of government must answer
to the law and be as equal under it as are all citizens and even the lowest

This is a concept presently alien to current leadership in Ukraine and as
best I understand…none of our present contestants for leadership of
Ukraine believes this principle. Nor or they remotely willing to adopt it.
They agree. They should be above the law that applies to others
                                   ECONOMIC MATTERS
The sine qua non of all Ukrainian politicians… leaders it seems, is to
promise ‘reform’ and from which will follow prosperity for all… and they
who are so blessedly free from economic conflicts of interest… say we
will have great benefit from foreign direct investment and such. Who,
they kidding? These ‘leaders’.

Shortly after the Orange Revolution I wrote of what I called the
"uncertainty principle" and of the risks investors from afar will accept:

"A few fools may look and participate without assurance. Smart investors
will wait for some signs of permanence. But the rules must be the rules.
There must be some certainty.

"Looking at the past fourteen years, there has been little certainty.
Rather, the only certainties seem to be that the businessman, the investor
has had to live with the certainty of corruption in government at all
levels, judicial malfeasance, arbitrary, burdensome, and ever changing

In short, all the circumstances existed that would cause any prudent
investor, businessman, and others who otherwise might be inclined favorably
towards Ukraine’s large potential market, its well educated and technically
talented population and other favorable attributes, to walk away. And they
in large measure did."

The parliamentary elections of March 26 will not produce certainty. More
likely a period of chaos, prior to the time our resultant contestant
‘leaders’ figure out how to carve up (maybe re-carve up) the Ukrainians
people pie.

And the people will suffer. There are no patriots in the land. Not found
among the present ‘leaders’ anyway.  -30-
LINK: http://www.ukraine-observer.com/articles/217/805
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]
14.                  "LOOP-THE-LOOP OVER SEVASTOPOL"
  Voting pattern of former Ukrainian prime minister Yuliya Tymoshenko’s
           faction in parliament suggests a strong pro-Russian position

Ukrayina Moloda, Kiev, in Ukrainian 28 Feb 06, p 3
BBC Monitoring Service, UK, in English, Thursday, Mar 02, 2006

The pattern of voting by former Ukrainian Prime Minister Yuliya

Tymoshenko’s faction in parliament suggests a strongly pro-Russian
position, a progovernment daily has said.

There may even be some sort of secret alliance between the Yuliya

Tymoshenko Bloc and other "pro-Russian" politicians like defeated
presidential candidate Viktor Yanukovych or parliament speaker
Volodymyr Lytvyn, the paper said.

It also ridiculed the bloc’s suggestions that her former Orange Revolution
ally, President Viktor Yushchenko’s Our Ukraine, was involved in alliance
talks with Yanukovych’s Party of Regions. The following is the text of
journalist Zoryana Krit’s article entitled "Loop-the-loop over Sevastopol",
published in the Ukrayina Moloda newspaper on 28 February, subheadings

have been inserted editorially:

The time when pest insects descend on Ukrainian land has not begun yet –
summer is a long way off. But the late February election campaign brought
the "insect" issue to the fore in the Ukrainian parliament.

The 23 February vote on overriding the presidential veto on the bill "On the
hero-city of Sevastopol", for the second time (since the vote on what was
supposed to be the dismissal of [Prime Minister Yuriy] Yekhanurov’s cabinet)
gave the authorities reasons to talk about the existence of a political
alliance of [former Prime Minister Yuliya] Tymoshenko- [parliamentary
speaker Volodymyr] Lytvyn -[opposition leader Viktor] Yanukovych , or

TLYa. ["Tlya" means greenbug or aphid in Ukrainian]

[Propresidential bloc] Our Ukraine’s statements about the existence of the
TLYa bloc after the farcical "sacking" of Our Ukraine’s No 1 Yuriy
Yekhanurov as prime minister can be attributed to electioneering interests,
but the situation with Sevastopol is much more serious.

Many political analysts agreed with Our Ukraine’s statement. In it, the
aforementioned vote on the bill on the status of Sevastopol was harshly
criticized as not only a dangerous factor in the process of rising
separatist sentiment in Crimea (which is something Russia has tried to
achieve for many years), but also an act of betrayal of Ukraine’s national

The most disputed chapters in the bill concern Sevastopol’s special status.
The president’s opponents proposed that this status is necessary because of,
among other things, the stationing "of the main base of the Russian Black
Sea Fleet, which is temporarily located in Sevastopol". This means that
pro-Russian MPs proposed to define the status of a Ukrainian administrative
unit based on the fact that another country’s troops are stationed there.

[President] Viktor Yushchenko, as head of state and guarantor of the
constitution, proposed the following: "Make the bill take account of the
fact that under Article 17 of the Constitution of Ukraine, the presence of
foreign military bases on the territory of Ukraine is unacceptable.

In accordance with Part 15, Article 14 of the temporary provisions of the
constitution, it is possible only for those bases existing at the time of
the constitution’s passage to be temporarily used by foreign military units,
only on the condition of lease in the manner prescribed by Ukraine’s
international agreements ratified by parliament, and not the laws of
The following parliamentary factions voted openly in favour of overriding
the presidential veto, not attempting to hide their pro-Russian stance:
Regions of Ukraine 56, the Communist Party 56, the People’s Party [of
Lytvyn] 39, the Yuliya Tymoshenko Bloc 33, the Socialist Party 26, the
People’s Bloc of Lytvyn 22, the United Social Democratic Party 18, Revival
10 and unaffiliated 17.

They failed to override the presidential veto, not enough votes. But their
unanimous vote will not only be remembered by many Ukrainians, but will also
become part of modern history similarly to the Russian parliament’s 1993
decision on the Russian status of Sevastopol, which was condemned by the

UN Security Council. Maybe this controversial decision by Russian MPs
became a model for some of their Ukrainian colleagues?

That is why from the point of view of defending national interests the
harshness of Our Ukraine’s statement seems to be fully justified: "The
factions of the TLYa political union have once again demonstrated that they
act as a political ‘enclave’ of a foreign country in Ukraine and attempt to
undermine Ukraine’s sovereignty and independence by any means possible.

Campaign populism and personal ambitions led these politicians beyond the
boundaries of interests of Ukrainian society and the state. The saddest part
is that our former Orange Revolution allies – the Yuliya Tymoshenko Bloc –
are taking an active part in this anti-Ukrainian sabbath.

The evolution of this political force from revolutionary radicalism to
following the Kremlin’s policy causes only disappointment, because with this
vote the Yuliya Tymoshenko Bloc in effect ‘surrenders’ Crimea to Russia and
endangers the plan to have Russian naval units withdraw from the Crimean
The reaction of the Yuliya Tymoshenko Bloc [BYT] to Our Ukraine’s statement
was fully predictable. BYT again accused Our Ukraine of attempts to hide the
fact of "conducting negotiations with the Party of Regions on forming an
alliance". With that, Tymoshenko’s people again failed to provide any

But BYT’s aggressive rhetoric is obvious – if we look at the statistics of
votes by Yanukovych’s and Tymoshenko’s factions, it becomes instantly clear
who has a secret alliance.

One thing is not clear: does Yuliya Tymoshenko really not understand that as
a result of these actions she may lose even her own "core" electorate, and
not gain a single pro-Russian vote? After all, there are many forces
"fishing" in these waters.

It is not surprising that the interests of the "big brother" in Ukraine are
lobbied by the "regionals" or Lytvyn’s bloc (the Ukrainian speaker has got
used to taking trips to Moscow lately, which seems almost like regular work
commute for him). Or Ne Tak [Not Right, opposition bloc] who openly

position themselves as the "outpost" of Russian interests in Ukraine (from
Medvedchuk’s speech at the United Social Democratic Party congress).

[Former President Leonid Kuchma’s chief of staff Viktor Medvedchuk leads

the party, which is part of the Ne Tak bloc.]
But what if this is done by political forces who won in the Orange
Revolution together?

We can understand [Socialist leader Oleksandr] Moroz to some extent.

Even though he is a "European leftist", he traditionally leans towards the
"brotherly ties" and even signed an agreement with the party of Russian
chauvinist [Dmitriy] Rogozin [Motherland] at some point. So the Socialist
Party’s vote can be seen as targeting the voters in southern and eastern

But it is much more difficult to justify BYT’s position – it is not
surprising that the bloc and its leaders are keeping silent on the matter.
In BYT’s nervous and loose-ended response to Our Ukraine’s statement,
nothing is said about the content of the bill and the possible tragic
consequences for Ukraine after its passing.

It is especially awkward for real patriots like Levko Lukyanenko, Andriy
Shkil and Volodymyr Yavorivskyy. It looks like they have become so

entangled in Tymoshenko’s business affairs (aimed mostly towards Russia),
that they began lobbying Russian interests with this very dubious crowd.

"In the nearest future Russia must present a plan for the Black Sea Fleet’s
withdrawal from Sevastopol," Ukrainian Defence Minister Anatoliy

Hrytsenko said. Russian navy must be stationed in Russia! Full stop!

Instead, the leaders of certain political forces are seeking political
support in Moscow or seeking to have criminal cases against them closed,

and so they pledge to the Kremlin at the expense of Ukraine’s national
interests. Maybe it is better to stay in Moscow after another secret trip
there?                                              -30-
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
15.                          AN EXPLOSIVE GAS DEAL
        Putin’s Hard Bargain Could Undermine Democracy in Europe

OP-ED: By Jackson Diehl, Op-Ed Columnist
The Washington Post, Washington, D.C., Mon, Feb 27, 2006

Sometimes the stumbling blocks in international affairs are glaringly
obvious — such as the victory of Islamic fundamentalists in Palestinian
elections, which has at least temporarily paralyzed the Bush
administration’s policy of promoting democracy in the Middle East.

Sometimes, though, they are complicated, confusing or simply opaque, and
thus barely reported on by the press or understood beyond a small circle of

That might explain why there has been so little discussion in Washington of
a gas deal between Russia and Ukraine this winter that, in its own way, may
be as significant as the Palestinian vote. Here is a terribly dense tangle
of a half-dozen contracts that involves hidden partners, disputed pricing
arrangements, and esoteric side agreements about transit fees and storage
facilities. It is mind-numbingly boring — and it may tip the balance
against democracy in much of the eastern half of Europe.

The story surfaced briefly at the beginning of January, when Russian
President Vladimir Putin made the mistake of partially halting gas
deliveries to Ukraine — and to much of Western Europe, which receives
Russian supplies through a Ukrainian pipeline. Chastised by big customers
such as Germany, Putin — who had been trying to force Ukraine to accept a
400 percent price increase — quickly turned the gas back on. A couple of
days later a deal was announced in Moscow and Kiev that appeared to
resolve the dispute more or less equitably: The nominal price of Ukraine’s
gas rose by a mere 90 percent.

It was not until more than a month later that the Bush administration and
other key allies of Ukraine’s pro-Western government — elected after the
popular Orange Revolution of 2004 — learned more about what was in the
Russian-Ukrainian contracts. When they did they were stunned.

Ukraine’s president, Viktor Yushchenko, and Prime Minister Yuriy
Yekhanurov had agreed to purchase Ukraine’s gas through a Swiss trading
company whose owners and beneficiaries are publicly unknown — but are
rumored to include senior officials and organized crime figures in both
Russia and Ukraine.

They granted this same shadowy company a 50 percent share in the business
of delivering gas to Ukrainian consumers. They accepted a price deal on gas
delivered to Ukraine lasting only a few months but guaranteed that
rock-bottom rates charged by Ukraine for the storage and transit of Russian
gas to the West would be frozen for 25 years.

What does this have to do with democracy in Europe? In effect, some U.S.
experts concluded, the Ukrainians may have sold to Putin that which he was
prevented from stealing: a Kremlin stranglehold on Ukraine’s government.

The Russian leader poured money and men into his huge neighbor in late 2004
in a blatant bid to install a pro-Moscow strongman as president and make
Ukraine’s political system a mirror of the new authoritarian Russian order.

His overreach triggered the Orange Revolution and the subsequent democratic
election of Yushchenko, whose goals include leading Ukraine to membership
in NATO and the European Union.

Putin sees the fragile new democracy in Ukraine, and an allied government
in the tiny Black Sea nation of Georgia, as dire threats. If Western-style
freedom consolidates and spreads in the former Soviet republics of Eastern
Europe, his own undemocratic regime will be isolated and undermined.
What’s more, Ukraine and its neighbors are likely to integrate with Europe
rather than remaining economic and political vassals of Russia.

After a turbulent year of free politics, Ukraine has another crucial
election, for a newly empowered parliament, scheduled for March 26.
This time Putin has avoided open intervention in the campaign. Instead he
triggered the gas crisis and presented his Ukrainian enemies with a choice:
Swallow a mammoth midwinter price increase for the fuel Ukrainians use
to heat their homes, just weeks before the election, or hand Russia a
commanding long-term stake in Ukrainian energy infrastructure — and the
ability to trigger a gas supply crisis at any time.

Yushchenko and Yekhanurov chose the second option, while also agreeing
to divert some of the huge profits to undisclosed beneficiaries. When
confronted by U.S. officials, they claimed that they had no choice; until
now they have denied knowing who owns the shell company through which
Ukraine will channel billions of dollars.

How to save democracy in Ukraine, and the chance it will someday spread
back to Russia? As in the Middle East, the Bush administration faces some
difficult choices. If pro-Western parties lead the next government —
something that is far from certain — President Bush could press them to
scrap the gas deal as a condition for taking the first step toward
membership in NATO, a "membership action plan." But that would probably
lead to a new face-off between Ukraine and Putin, in which Kiev would
require U.S. and European support — at a moment when those same allies
are pleading for the Kremlin’s help with the Palestinians and Iran.

Or the administration could decide to sidestep Putin’s gas-fired
imperialism, leaving a complicated issue to its present obscurity. The
Ukrainians might eventually find a way to free themselves from Russia’s
chokehold. But they also might allow one of the signal democratic
breakthroughs of the Bush years to suffer a crippling reverse.
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]

ANALYSIS: By Roman Kupchinsky
Radio Free Europe/Radio Liberty (RFE/RL)
Prague, Czech Republic, Wednesday, March 1, 2006

In mid-February, 40-year-old Rynat Akhmetov — one of Ukraine’s richest
men by virtue of his 90-percent stake in the Donetsk-based System Capital
Management Corporation (SCM) — was interviewed on his nationwide
television station, TRK Ukrayina.

The interview was conducted by Raissa Bohaturova, a leading member of
the Party of Regions led by Viktor Yanukovych, President Viktor
Yushchenko’s main rival in the 2004 presidential election. Bohaturova was
elected to parliament in 2002 after Akhmetov, who had been considered a
likely candidate, stepped aside, saying he did not wish to run for public

Things appear to have changed.

The TRK interview was, for many Ukrainians, the first opportunity to hear
the usually reclusive billionaire describe his stance on a variety of
subjects. The interview was widely watched throughout Ukraine, and
established Akhmetov as a man with his own vision regarding the country’s
                                ELECTORAL AMBITIONS
Akhmetov’s name is seventh on the Party of Regions’ electoral list for the
26 March legislative vote. But the fact that his interview was televised
nationally, rather than just in Ahmetov’s native Donbas region, led some
viewers to conclude Akhmetov sounded more like a candidate for prime
minister than a man merely seeking a parliamentary seat.

Akhmetov denies he is seeking the premiership. But some of his comments
during the interview could indicate otherwise.

"We need to form a government that cares about economic growth,"
Akhmetov told Bohaturova. "What does that mean? It means a government
of professionals, a government which will take not only power, but
responsibility, into its hands."

Akhmetov went on to define a strong Ukraine as one where the country is
dependent upon neither Russia, the United States, nor the European Union.
He was going into politics, he added, "in order to see Ukraine enrich
itself, in order that there be no poor people in Ukraine. I want Ukraine to
hold in its hands the trophy for being the best country in Europe."
                                   WHO IS AKHMETOV?
Akhmetov, an ethnic Tatar and practising Muslim, was born in Donetsk in
1966. His father was a coal miner, and the family often lived in poverty.
Akhmetov graduated from Donetsk State University with a degree in

In 1996, Akhmetov took over the presidency of the Shakhtar football club
in Donetsk after the murder of its owner, criminal boss Oleksandr Brahin.
Around that time, he founded Donetsk City Bank, DonGorBank, and
remains its majority shareholder.

In 2000 Akhmetov founded SCM, which rapidly became a very aggressive
player in acquiring companies in the Donetsk region. Over the next few
years, it took control of over 90 companies concentrated in the iron ore,
coal, steel, and energy generation sectors. SCM also has interests in
insurance and banking, food and beverage services, and hotels and hospitality.
                            THE ‘BUSINESS’ OF POLITICS
Akhmetov’s assets and personal fortune are sure to make him a major player
in Ukrainian politics for years to come — regardless of whether he becomes
prime minister.

But his repeated assertions that a future Ukrainian government must be run
by "professionals" and promote "economic growth" have only intensified
speculation that the head of SCM — one of Ukraine’s largest corporations —
might be persuaded to head up the country’s new government.

In the past year SCM has gone to extraordinary lengths to polish its image
as a responsible, European-style corporation and overcome past rumors about
reputed links to organized crime and unorthodox business methods.

In the summer of 2005, SCM launched a massive advertising campaign aimed at
promoting the stature in Europe of Ukrainian businesses. Ads were featured
in publications including the "Wall Street Journal Europe," "The Economist,"
the "Financial Times," and on television networks like CNN, EuroNews, and
BBC World.
Akhmetov will need to do several things to succeed in extending his
popularity beyond the Donetsk region. One is learn Ukrainian. Akhmetov
grew up speaking Russian and only recently has hired a Ukrainian teacher
to learn the language – an indication that, in spite of his protestations to
the contrary, his political plans are broader then he admits.

Many observers also believe he will ultimately need to break ties with Party
of Regions leader Yanukovych, his old friend and political ally.

This could be relatively simple. Yanukovych has no financial support base
of his own, and relies on SCM and the Industrial Union of the Donbas for
funding. Moreover, Yanukovych is seen by many Ukrainians as a former
convict — as a young man he was twice convicted of assault and battery —
and not fit to run for public office.

President Yushchenko’s Our Ukraine bloc has reportedly discussed a
possible coalition with the Party of Regions, but says it will not agree to
Yanukovych becoming prime minister. It has, however, avoided such a
categorical refusal regarding a similar deal with Akhmetov. -30-
NOTE: Roman Kupchinsky is the organized crime and terrorism analyst
for RFE/RL Online and the editor of "RFE/RL Organized Crime and
Terrorism Watch." He graduated from Long Island University in
Brooklyn with a degree in political science. He was the president of
Prolog Research and Publishing Corporation in New York prior to
joining RFE/RL where he was director of the Ukrainian Service for
10 years.   -30-

[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
17.                    NEW BOOK: "REVOLUTION IN ORANGE:
                   Edited by Aslund and McFaul Exposes the Riveting Tale

Carnegie Endowment for International Peace
Washington, D.C., Monday, March 6, 2006

NEW BOOK: Revolution in Orange:
The Origins of Ukraine’s Democratic Breakthrough
Edited by Anders Aslund and Michael McFaul
Carnegie Endowment for International Peace, March 2006
Washington, D.C., 225 pp., Paperback $16.95, Cloth $33.95

WASHINGTON – As Ukrainians prepare to go to the polls for parliamentary
elections at the end of March, a new book edited by Anders Åslund and
Michael McFaul identifies the driving factors and political implications of
the Ukrainian Orange Revolution.

"Revolution in Orange: The Origins of Ukraine’s Democratic Breakthrough,"

is a pioneering effort to describe and explain the events up to and through
December 2004.

Few predicted or anticipated such a dramatic breakthrough in Ukraine, the
effects of which have already been felt from Kyrgyzstan to Lebanon and are
likely to travel further.

This is a path breaking collection of essays by authors who had
on-the-ground experience interacting with the various Ukrainian, Western,
and Russian personalities of the Orange Revolution. Inside the book is a
colorful, detailed visual aid to follow "Who’s Who" and the revolution’s
intricate chronology.

This group of scholars, specialists, and journalists portray a riveting tale
of rigged elections, mass demonstrations and foreign interference, all from
a unique, insiders’ perspective.

Contributors include: Pavol Demes and Joerg Forbrig (German Marshall

Fund), Nadia Diuk (National Endowment for Democracy), Adrian Karatnycky
(Freedom House), Taras Kuzio (George Washington University), Nikolai
Petrov and Andrei Ryabov (Carnegie Moscow Center), Olena Prytula
(Ukrainskaya pravda), and Oleksandr Sushko and Olena Prystayko (Center
for Peace, Conversion, and Foreign Policy of Ukraine).

Anders Åslund is a senior fellow at the Institute for International
Economics, and the former director of the Russian & Eurasian Program at

the Carnegie Endowment. He is an internationally recognized specialist on
Ukraine and postcommunist economic transformation.

Michael McFaul is a senior associate at the Carnegie Endowment and an
associate professor of political science at Stanford University. He is a
leading specialist on democracy development in the former Soviet states.

He is coauthor of "Between Dictatorship and Democracy: Russian Post-
Communist Political Reform" (Carnegie Endowment, 2004).

Visit http://www.CarnegieEndowment.org/RevolutionInOrange  for free

excerpts and ordering information. CONTACT: Jennifer Linker, +1
202/939-2372, jlinker@CarnegieEndowment.org
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
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18 .                       BOOK: "N ORANGE REVOLUTION?
                         A Personal Journey Through Ukrainian History
           A captivating book about a defining moment in European history.

E. Morgan Williams, Publisher and Editor
The Action Ukraine Report (AUR) #669 Article 18
Washington, D.C., Tuesday, March  7, 2006

WASHINGTON – The new book by journalist Askold Krushelnycky
"An Orange Revolution" A Personal Journey Through Ukrainian History"
is being launched in London, UK, on Tuesday, March 14.  I have received
an advance copy of the book from Askold.  This is one book you do not
want to miss.  Askold says he will be in London for the launching and
would like to see many of his friends, Ukrainians and the friends of
Ukraine there.

The book is being published by Harvill Secker of The Random
House Group. A press release from Harvill Secker says the following:
"In November-December 04, the world’s eyes were fixed on Ukraine –
watching its people rise up and quietly overthrow the corrupt and
dishonest government.

In "An Orange Revolution," journalist Askold Krushelnycky returns
to the country of his parents’ birth and charts the history of the
enormous but little known European country to explain the
significance of this revolution.

The Ukraine’s industrial output, rich soil, precious fossil fuels and
engineering excellence, made it the jewel of the USSR’s empire.
Despite the break up of the superpower, the Kremlin still maintained
an extraordinary hold over the country, and was loath for that to

During the run up to the 2004 elections the Russian president, Vladimir
Putin, committed considerable funds to make sure his ally, Prime Minister
Viktor Yanukovych, remained in power, and casually assumed that
Ukrainians would be resigned as usual to the customary vote rigging.

This time, the blatant corruption and skullduggery forced hundreds
of thousands of ordinary people to take to the streets and demonstrate.
Decked in orange, the colour of the opposing party, the crowds called
for Viktor Yushchenko — their leader in waiting.

Krushelnycky tells this gripping story with a journalist’s detachment,
but with insider knowledge. Interviewing major players and anonymous
demonstrators alike, Krushelnycky also brings a very personal element
to the turbulent history of Ukraine, and outlines how events have directly
affected his family and friends.

In spite of threats of violence, the murder of high profile investigative
journalist and the poisoning of Viktor Yushchenko, the Ukrainian
people stood their ground and brought about lasting change.

Krushelnycky has added an epilogue to the end of the book, updating
the history further, and setting the scene for the [parliamentary] elections
in March 2006."

Journalist Krushelnycky wrote in his acknowledgment page: "During my
research for this project I have read books and articles which were
informative and thought-provoking.  Among the books I found most
helpful were Orest Subtelny’s outstanding "Ukraine – A History," Danylo
Yanevsky’s Ukrainian-language "Chronicle of the Orange Revolution,"
and Jaroslav Koshiw’s "Beheaded – The Killing of a Journalist." 

Of considerable use have been an English-language Internet publication
called "Action Ukraine Report," edited by E. Morgan Williams, and the
Ukrainian and Russian-language "Ukrayinska Pravda" Internet daily
newsletter.  Both provide comprehensive coverage and analysis of the
country’s news and the latter has been a brave champion of Ukrainian’s
fight for democracy."

Information about how to purchase the book can be found at the
following link: http://www.randomhouse.co.uk/catalog/results.htm .

[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]
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