AUR#678 Faded Orange, Old Guard Feared To Return, President Did Not Put Bandits In Jail; IRI Election Delegation Receives Briefings;

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                          FADED ORANGE

           Resentment, frustration, disappointment, anger and a feeling of
        betrayal at President Yushchenko for not putting bandits in jail, not 
     cleaning up corruption and living up to his promise during the Orange
             Revolution runs deep in Kyiv and is the first and foremost
                     complaint heard from the citizens on the streets.
          We did not expect economic miracles, one person said, but we
      did expect the President to put the bandits in jail. Now many of them 
              are going to be back in power and in the new Parliament.
"A glance at the list of election candidates shows a motley crowd of criminal
    suspects, chancers and businessmen scrambling to get into parliament."
Mr. E. Morgan Williams, Publisher and Editor  
              ——–INDEX OF ARTICLES——–
         Clicking on the title of any article takes you directly to the article.               
Return to the Index by clicking on Return to Index at the end of each article
Tom Parfitt in Kiev, The Guardian
London, United Kingdom, Friday March 24, 2006
COMMENT AND ANALYSIS: By Stefan Wagstyl and Tom Warner
Financial Times, London, Friday, March 24 2006


                                    COMEBACK IN UKRAINE
By Tom Warner in Kiev and Stefan Wagstyl in London
Financial Times, London, United Kingdom, Friday, March 24 2006 


By Mara D. Bellaby, AP Worldstream, Kiev, Ukraine, Fri, Mar 24, 2006

By Natasha Lisova, AP Worldstream, Wednesday, Mar 22, 2006


                                 LIKELY TO AVOID DRAMAS
By Tom Warner in Kiev, Financial Times
London, United Kingdom, Wednesday, March 22 2006

By Ron Popeski, Reuters, Kiev, Ukraine, Thursday, March 23, 2006

8.                               UKRAINE FACING A CHOICE
OPINION & ANALYSIS: By Alexander Oryol in Kyiv
RIA Novosti, Moscow, Russia, Thursday, March 23, 2006


                              BEFORE PARLIAMENTARY VOTE
By Steven Lee Myers, The New York Times
New York, New York, Friday, March 24, 2006

10.                   UKRAINE BETTER OFF THAN IT SEEMS
OP-ED: by Adrian Karatnycky, Kyiv Post
Kyiv, Ukraine, Thursday, March 23 2006

                        PARLIAMENTARY VOTE, POLL SHOWS
Bloomberg News, New York, New York, Friday, March 24, 2006


The Action Ukraine Report (AUR) #678, Article 12
Kyiv, Ukraine, Friday, March 17, 2006


                                   PARLIAMENTARY ELECTION 
AP Worldstream, Kiev, Ukraine, Thursday, Mar 23, 2006

AP Worldstream, Kiev, Ukraine, Thursday, Mar 23, 2006

15.                              UKRAINE: A NEW ELECTION
Kyiv, Ukraine, Wednesday, March 22, 2006

THE ISCIP ANALYST, Formerly The NIS Observed,
An Analytical Review. Volume XII, Number 3
Boston, Massachusetts, Monday, March 20, 2006

THE WHITE HOUSE: Office of the Press Secretary
Washington, D.C., Thursday, March 23, 2006

AP Worldstream, Washington, DC, Thursday, Mar 23, 2006

        Viktor Yushchenko on what will happen to Ukraine after the election
INTERVIEW: With President Viktor Yushchenko of Ukraine
BY: Mikhail Zygar, Mustafa Naijem, Sergei Sidorenko
Kommersant, Moscow, Russia, March 23, 2006

Tom Parfitt in Kiev, The Guardian
London, United Kingdom, Friday March 24, 2006

KIEV – Resplendent in a traditional embroidered shirt with tassels at the
neck, Andriy Shkil would strike anyone as a Ukrainian patriot. His office is
decorated with a ceremonial sword and a painting of a Cossack charging into
battle. The 40-year-old candidate in Ukraine’s parliamentary elections
speaks passionately about the future of his country, "on the crossroads of
Europe and Asia".

Yet there is a blot in Mr Shkil’s otherwise faultless copybook. When the
interior minister, Yuri Lutsenko, published a blacklist last month of almost
100 former convicts and criminal suspects among candidates to this Sunday’s
parliamentary elections, he was on it. "I know I’m innocent," he protested.
"It’s the rest of them I’m worried about."

Fifteen months after the orange revolution brought President Viktor
Yushchenko to power on a wave of street protests, the ideals of that
people-power uprising are under threat.

A glance at the list of election candidates shows a motley crowd of criminal
suspects, chancers and businessmen scrambling to get into parliament

Mr Yushchenko’s supporters fear that Ukraine is on the brink of slithering
back into the murky days of the 1990s when corruption was rife. In late 2004
and early 2005 they camped for weeks on Kiev’s main boulevard, fired up by
his promises to slough off the post-Soviet Ukraine of bent bureaucrats and
businessmen meddling in politics.

Yet the bad old ways were never shed and the party of their nemesis, Viktor
Yanukovich – Mr Yushchenko’s political enemy from the time of the
revolution – is poised to seize an increased share of parliament.

Mr Yanukovich, a former prime minister who represents the majority in the
pro-Russian east and south of the country, has promised to slow Ukraine’s
integration into Europe, and reject entry into Nato. His Party of the
Regions wants to improve ties with Moscow that were battered by a dispute
over gas prices earlier this year.
                                          HEAVY BLOW
Meanwhile, Yulia Timoshenko, Mr Yushchenko’s ally during the revolution,

has led her party into opposition, splitting the orange vote. For the hundreds
of thousands of protesters who poured into central Kiev to support Mr
Yushchenko in the disputed presidential election in 2004, it is a heavy

"Our heroes fell out and now the old guard is on the march," said Vova
Zakharov, 25, a veteran of the revolution, who camped for 75 days in central
Kiev during the orange protests.

Disappointed at Mr Yushchenko’s failure to fulfil his vow of a democratic
future, he and his friends have pitched six military tents in front of the
cabinet of ministers building, half a mile from Independence Square.

Their main complaint is the agreement signed in January on supplies of
Russian gas that benefited a shadowy intermediary company thought to be
part-owned by senior Ukrainian officials. "We soon saw that the corruption
went on just as before," said Mr Zakharov. "Nothing really changed."

Many Yushchenko supporters are incensed at hints that his Our Ukraine party
may enter into a marriage of convenience with the resurgent Party of the
Regions after the elections.

According to the latest polls the Party of the Regions has about 30%,
trailed by Our Ukraine with about 20%, and Ms Timoshenko’s bloc with 15%.

No team is likely to win the majority needed to form a government, raising
the spectre of intense bargaining between the bigger players.

Andrew Wilson of University College London, the author of Ukraine’s Orange
Revolution, said that "odious individuals" from all parties were likely to
get a toehold in parliament.

The colourful Mr Shkil is an exception: a victim of political persecution,
he spent 13 months in prison after leading a protest against the former
president, Leonid Kuchma, in 2000. But many suspect figures remain on the

Underworld bosses prize a spot on parliament’s benches because it gives them
immunity from prosecution, while shady businessmen hope to protect their
ill-won deals.

Mr Lutsenko called for candidates on his blacklist to abandon their scramble
for the 450 seats in parliament. The interior minister discovered that 11
candidates were wanted for questioning, 37 had criminal cases opened against
them, 41 were involved in cases that were being transferred to court and 10
were convicted criminals.

But although eight of the latter have been struck off and the other two will
soon go, no other person has heeded the call to quit.

One leading candidate – not on the blacklist – is the secretive billionaire
Rinat Akhmetov, a metals and mining magnate from the eastern Donetsk region
who is thought to be the real power behind its former governor, Mr
Yanukovich. He has been repeatedly accused by his critics of manipulating
politics in his favour.

"The Party of the Regions is not just a political force; it’s a structure
that provides cover to the business clan of Donetsk," said Mr Shkil, who is
running in Ms Timoshenko’s bloc.

Mr Yanukovich, his fortunes rising and his increasingly statesmanlike image
polished by US consultants, has let such accusations roll off him. Workers
at his Party of the Regions headquarters are quietly confident ahead of the
weekend vote. They know their party has huge support and has benefited from
the troubles of the orange clan.
Yevgeny Kushnaryov, head of the campaign, said that many of his candidates
were only investigated as revenge after the orange revolution. The
finger-pointing, he said, had got to stop. "There is something which can
unite us – the need to create a strong, respected state with a growing
economy," he said. "If we try, we can do that together."

It is a measured tone that has contrasted sharply with the squabbling of the
orange leaders.

"We must learn the lessons of why the orange coalition collapsed," the
president said during a recent talkshow. "It was the failure to recognise
the position of one’s partners, it was insincere behaviour, it was
behind-the-scenes intrigue."

Yet the taint of corruption is never far away. Senior figures who were
accused last year of nepotism by Mr Yushchenko’s chief of staff, Oleksandr
Zinchenko, have re-emerged as candidates for Our Ukraine.

"He tried to purge the bad guys from his party but he failed," said Dmytro
Sennychenko, a former aide to the president. "And now they’re at the top of
his list."

For Mr Zakharov, the protest veteran, it is another sign of the bitter
letdown that followed the heady days of the revolution. "We stood in the
street for weeks to change our country, not to keep it the same old way it
                                       THEN AND NOW
· Opposition leader and presidential candidate Viktor Yushchenko in 2004:
"The people of Ukraine have managed to determine their future without
resorting to violence. The will of the people has triumphed and the old
administration now understands that it has lost."

· Mr Yushchenko now: "We must learn the lessons of why the orange

coalition collapsed. It was the failure to recognise the position of one’s
partners, it was insincere behaviour, it was behind-the-scenes intrigue."

· Prime minister and presidential candidate Viktor Yanukovich in 2004, to Mr
Yushchenko: "If you win the vote you will only be the president of part of
Ukraine. I am not struggling for power. I am struggling against bloodshed."

· Party leader Mr Yanukovich now: "The orange revolution was a putsch,

plain and simple. And it caused the people real suffering."
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
2.                                    FADED ORANGE:

COMMENT AND ANALYSIS: By Stefan Wagstyl and Tom Warner
Financial Times, London, Friday, March 24 2006

Viktor Pynzenyk, Ukraine’s finance minister, is quietly explaining the finer
points of tax reform when suddenly the sound of pop music comes booming
through the windows of his office.

It is so loud that Mr Pynzenyk has to raise his voice to explain: "They go
on all day. In principle, they should not disrupt the work of the government
but they try. I’m used to it."

"They" are a crowd of about 100 demonstrators who are taking advantage of a
new-found freedom of expression to brave the cold and camp outside the main
government building in central Kiev. The protesters, in place since early
February, intend to stay until after Sunday’s parliamentary elections.

Yuri Baibula, a 32-year-old protester, says their complaints centre on an
unfavourable contract for gas supplies from Russia. But the underlying
sentiment is disappointment with the Orange Revolution that 15 months ago
brought president Viktor Yushchenko to power. Mr Baibula says: "We still
support Yushchenko but we do not support his government."

For Mr Yushchenko, the polls are a crucial test of his efforts to build a
stable democracy and open economy, to counter Russian influence by

promoting ties with the west, and to ease the country’s deep social and
political divisions. The results could shape Ukraine for years: under a
constitutional deal completed during the upheaval, much of the president’s
authority is being transferred to parliament, including the power to appoint
the government.

Unlike in neighbouring Belarus, where the dictatorial Alexander Lukashenko
was re-elected president by a landslide in a fraudulent election last
Sunday, Ukraine’s polls offer voters a free choice and the prospect of an
honest ballot, although some abuses are expected at local levels.

Yet democracy means Mr Yushchenko can take nothing for granted. A year

ago, the country was captivated by the Orange Revolution hero. Yulia
Tymoshenko, his formidable prime minister, was preparing a political assault
on associates of Leonid Kuchma, the authoritarian former president.

Viktor Yanukovich, Mr Yushchenko’s rival in the disputed 2004 presidential
election, and his aides faced investigation for electoral fraud. Mr
Yushchenko’s supporters seemed assured of a landslide win in the coming
parliamentary polls.

But things have turned out differently. Remarkably, Mr Yanukovich leads the
election race. According to opinion polls, his Party of the Regions, a
conservative group that wants to preserve post-Soviet traditions and return
to a close relationship with Russia, has about 30 per cent of the vote.
Meanwhile, Mr Yushchenko’s supporters are split into competing factions

with varying economic programmes.

Mr Yushchenko’s Our Ukraine bloc, which has about 20 per cent support,
favours careful budgets and cautious market-oriented reforms that take
account of big business interests. Ms Tymoshenko, whose bloc has about 15
per cent, courts voters with populist promises to rein in business oligarchs
and increase public spending.

These and smaller "Orange" parties are together almost certain to win a
majority in the new parliament. But it is unclear whether Mr Yushchenko and
Ms Tymoshenko, who split last year when he removed her as prime minister,
can form a new coalition.

If not, Mr Yushchenko may be forced to consider a deal with Mr Yanukovich.
From the outside, it seems unbelievable that a man whose campaign managers
orchestrated blatant electoral fraud only 16 months ago could be the main
beneficiary of what is likely to be Ukraine’s first-ever free democratic
election. Ukrainians themselves struggle to explain how this has happened.

One answer lies in Mr Yushchenko’s patchy record in power and the collapse
of the alliance that defeated Mr Kuchma. As prime minister, Ms Tymoshenko
wanted a far-reaching review of the Kuchma era, including the reversal of
numerous untransparent privatisations.

Mr Yushchenko was more circumspect. He announced judicial probes of serious
crimes including the election fraud, his own poisoning and the murder of
Georgy Gongadze, a campaigning journalist, but did not press prosecutors too
hard. He also limited the privatisation review to a few egregious cases,
chief of which was Kryvorizhstal, the steel mill, which Mr Kuchma sold for
$800m (£461m, ?667m) to Viktor Pinchuk, his son-in-law, and Rinat Akhmetov,
Mr Yanukovich’s financial backer and Ukraine’s richest man.

Mr Yushchenko won back control of the company and re-sold it for $4.8bn to
Mittal Steel, the global steel group. The authorities have also tried to
recover ownership from Mr Pinchuk of Nikopol Ferroalloy, another metals

But the president showed no sign of wishing to take the attack further.
After dismissing Ms Tymoshenko in September, he restored communications

with Mr Yanukovich and won his support for Yuri Yekhanurov, Ms Tymoshenko’s
moderate successor. Mr Yushchenko argued that it was more important to focus
on the future.

A second reason why Mr Yanukovich has leapt back to the political centre
stage is that he has held on to most of the 44 per cent of voters who
supported him in the presidential election. Mr Yanukovich has worked hard

on the campaign trail, promising stability and criticising the turmoil of Mr
Yushchenko’s rule in speeches that particularly appeal to older Ukrainians.
The east of the country – above all his home territory, the coal-and-steel
region of Donetsk – has remained loyal.

The failure of Mr Yushchenko and Ms Tymoshenko substantially to improve
their low support there leaves the country divided between supporters of the
Orange Revolution concentrated in Kiev and the Ukrainian-speaking west, and
opponents gathered in the Russian-speaking east. While inter-regional
conflict is not on the horizon, Ukrainians worry about the fragmentation of
their young nation. It is no surprise that moderate Orange politicians want
to bridge the divide, even if it means talking to Mr Yanukovich.

Meanwhile, there is a campaign to fight and politicians are investing huge
resources in the race, with spending going on television advertising,
billboards, speeches, rallies and the internet. For the first time, media
reporting is mostly free – a benefit of the Orange Revolution that is
appreciated even in the Yanukovich camp.

Voters face a bewildering range of choices, with simultaneous parliamentary,
regional, and local polls. Candidates include pop star Ruslana, boxing
champion Vitaly Klychko and scores of people involved in criminal
proceedings, notably Pavlo Lazarenko, a former prime minister convicted of
money-laundering in the US and currently under house arrest in his
California mansion, the former home of film star Eddie Murphy.

The new parliament’s most pressing task will be forming a coalition.
Attempts at a pre-election pact between Mr Yushchenko’s and Ms

Tymoshenko’s parties have failed, though the two blocs will almost certainly
try again after the poll.

But the divisions run deep. Ms Tymoshenko still wants to bring the Kuchma
regime and its oligarchs to account. Mr Yushchenko wants to win support from
established elites for reforms. She is a populist, given to lavish social
spending and improvised decisions that disorient investors. He is a former
central banker with a long-term view.

Members of Our Ukraine suggest that a non-party technocratic administration
might reduce clashes. But why would Ms Tymoshenko accept a solution that
would limit her influence, especially if her party does well at the polls
and she insists on the premiership?

Her supporters, including many of the demonstrators camping in central Kiev,
do not want her to compromise. As Mr Baibula says: "She is the one with the
trust of the Maidan" – referring to Kiev’s independence square, where crowds
gathered during the Orange Revolution.

A Yushchenko-Tymoshenko impasse would open the door for Mr Yanukovich

and his financial backer, Mr Akhmetov, who is also running for parliament.
Mykola Martynenko, an Our Ukraine leader, insists Mr Yanukovich himself
could not be a minister but says: "We can’t legitimise the system that
falsified the 2004 elections but there are enough professional politicians
in the Regions party with whom we could deal if the talks with Yulia are

Every effort will be made to secure a coalition because few politicians want
another election after spending huge sums on this poll – contributing up to
$500,000 to party funds for a place on a party election list high enough to
offer a good chance of landing a parliamentary seat. But political
uncertainty could hold up policymaking for weeks and the delays could affect
both foreign policy and the economy.

Efforts by Mr Yushchenko to improve ties with the west and integrate with
the European Union will continue. World Trade Organisation membership, which
Kiev hoped to acquire last year, is now on the agenda for 2006, following
decisions by the EU and, recently, the US to grant Ukraine market economy

Ukraine hopes to secure a hint of future EU accession but will concentrate
for now on practical measures including boosting investment and trade and
relaxing visa rules. Mr Martynenko says: "Ukraine’s European choice will not
be changed whatever the result of the election."

At the same time, Kiev faces deteriorating relations with Russia. The
Kremlin remains hostile to the Orange Revolution victors and their efforts
to promote ties with the west. Tensions came to a head this winter when
Moscow briefly turned off gas supplies in a contract dispute that eventually
ended with a six-month settlement under which average import prices rose
from $60 to $95 per thousand cubic metres. Mr Yushchenko has faced heavy
criticism both for the price and for his decision to accept Russia’s demand
that Ukraine channel imports through an opaque intermediary company called

Whatever the details of any future deals, gas prices are expected to rise
again when the contract is renegotiated and to keep rising until they match
world prices, currently around $230. Not for nothing have the Kiev
demonstrators singled out the contract for attack in their noisy protests –
accusing the government of betrayal.

Mr Yanukovich argues that he would be better placed to negotiate with Moscow
than the Orange politicians. He sees Ukraine as a bridge between Russia and
the EU, contributing to regional stability. But Mr Yushchenko’s supporters
say Mr Yanukovich would be politically unacceptable in the west.

Meanwhile, the government will face economic challenges. Gross domestic
product growth slowed from 12.1 per cent in 2004 to 2.6 per cent last year,
due to weakening world prices for steel, Ukraine’s main export, as well as
flat agricultural output and political uncertainty. Inflation has stayed
high, boosted by huge politically inspired increases in public pay, pensions
and welfare payments.

The Yushchenko administration financed spending by big increases in the tax
take, achieved by an assault on tax privileges and corruption. It also
encouraged foreign investment by creating a more open business atmosphere.

Last year’s foreign direct investment of $7.3bn was almost as much as the
$9bn the country attracted during the previous 14 years. The inflow includes
Mittal’s steel mill purchase and the $1bn takeover of Aval Bank by Austria’s
Raiffeisen International.

However, hopes of economic recovery have been hit by the gas price rise.
Forecasts for growth in 2006 have been cut to only about 2 per cent, leaving
the government with little room for manoeuvre. The International Monetary
Fund argues that structural reforms are urgent, including an overhaul of
public spending, privatisation and moves to boost energy efficiency.

But for the moment it is unclear when the new government might even be
formed. The longer the delay, the greater the prospect of further public
disenchantment. If the new ministers prove as disappointing as the current
government, they too could face demonstrators playing loud music outside
their offices. Genuine political stability is still some way off.  -30-

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

By Tom Warner in Kiev and Stefan Wagstyl in London
Financial Times, London, United Kingdom, Friday, March 24 2006 

When Viktor Yanukovich’s bid for Ukraine’s presidency was stopped by the
Orange Revolution, he was widely written off as a spent political force. But
the big man of eastern Ukraine is back with a vengeance and heading for
electoral success in this Sunday’s parliamentary polls.

Regional loyalties, money and political expediency all play a role in the
remarkable recovery of the 55-year-old former prime minister, who 12

months ago faced political ruin and an investigation into his role in alleged
electoral fraud in the disputed 2004 presidential election.

Mr Yanukovich grew up in poverty in the industrial Donetsk region of eastern
Ukraine, where he was imprisoned in his youth for robbery and assault. He
worked as a driver and transport manager before going into politics and
becoming regional governor.

In 2002, former President Leonid Kuchma appointed him prime minister and
two years later chose him to run in the presidential poll as his hand-picked

He gained broad support in the traditionally pro-Russian regions of eastern
and southern Ukraine by promising close ties to Russia, state support for
heavy industry, generous social benefits and strong personal leadership. But
Ukraine’s Supreme Court found that his campaign also relied on
ballot-stuffing and ordered a rerun, which was won by his pro-western rival,
Viktor Yushchenko.

Mr Yanukovich seemed finished, with even close colleagues deserting him. But
he retained the support of many of the 44 per cent of voters who backed him
in the rerun.

This time, Mr Yanukovich is campaigning on similar themes and is expected to
beat Mr Yushchenko fairly at the polls. Opinion surveys show Mr Yanukovich’s
Regions party with about 30 per cent support, while Mr Yushchenko’s Our
Ukraine bloc, hit by divisions, corruption claims and a faltering economy,
is struggling with about 20 per cent support.

If undecided voters and other factors go his way, Mr Yanukovich’s party
could end up with more than 40 per cent of parliament’s seats.

In a recent interview with the Financial Times, Mr Yanukovich credited his
political comeback to Mr Yushchenko’s "unprofessionalism" in government and
a weak economy, which expanded by only 2.6 per cent last year after growing
by 12.1 per cent in 2004, when Mr Yanukovich was prime minister.

Pointing to the dispute earlier this year with Russia over natural gas
prices, Mr Yanukovich said Mr Yushchenko relied on "very low- level" people
to handle the negotiations and ended up getting a bad deal. As prime
minister he would re-open talks with Moscow.

However, Mr Yanukovich conceded the Orange Revolution had brought some
improvements, including more freedom of speech.

"I won’t deny there have been positive changes, although in my view they are
still very small. That journalists are stating their point of view about
press freedom – that’s very good, that means we’re moving ahead," he said.

Analysts attribute Mr Yanukovich’s rise to continued support from the
Kremlin and from a softening of Mr Yushchenko’s attitude towards him. In the
first months after the Orange Revolution, several of Mr Yanukovich’s allies
were arrested or charged and others fled the country. But Mr Yushchenko
backed off last autumn after a split with his former prime minister, Yulia
Tymoshenko, which forced him to turn to Mr Yanukovich for support in

Mr Yushchenko is still hoping to foil Mr Yanukovich’s bid for power by
re-uniting with Ms Tymoshenko. There is also the possibility of Mr
Yushchenko forming a coalition with the Regions party, which may deprive

Mr Yanukovich of the prime minister’s job because of negative attitudes
towards him in central and western regions of Ukraine.  -30-
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]

By Mara D. Bellaby, AP Worldstream, Kiev, Ukraine, Fri, Mar 24, 2006

KIEV – The pro-Russian politician whose political future was written off
after being accused of trying to steal Ukraine’s 2004 presidential election
is poised to make an amazing comeback when Ukrainian voters go the polls

in Sunday’s parliamentary election.

While Ukraine’s Orange Revolution team looks set to fail its first major
electoral test, analysts say it will win another exam: proving that this
ex-Soviet republic can conduct a vote free of government meddling.

President Viktor Yushchenko’s job is not at stake, but those of his prime
minister and Cabinet are, as new constitutional reforms come into effect
that give parliament more powers in shaping the government. With Viktor
Yanukovych’s resurgence, the pro-Western path adopted by Yushchenko

could be slowed, with goals such as membership in NATO by 2008
dropping off the radar screen in favor of closer ties with Moscow.

"We might see an attempt made to roll back the public perception that the
Orange Revolution was a people-power uprising, and start hearing more that
it was a coup," said Ivan Lozowy, president of the Kiev-based Institute of
Statehood and Democracy.

Much will depend, though, on the final vote count and which parties combine
to form a coalition, since none are expected to win a majority in the
450-seat house on their own.

Yushchenko’s huge drop in popularity – from highs of around 70 percent just
over a year ago to around 20 percent today – has left him with little room
to maneuver. He needs a coalition partner, and has two choices: either reach
out to the man whom he called a criminal just 16 months ago, or make peace
with Yulia Tymoshenko, his feisty former Orange Revolution ally whose very
name makes him cringe after last year’s bitter falling-out. In either case,
Yushchenko risks letting in someone who could outmaneuver him in his own

"None of the options probably holds much appeal for Viktor Yushchenko at
this moment," said Mykhailo Pohrebinsky, head of the Center for Political
Research and Conflict Studies.

Ukraine’s 36 million registered voters will be choosing from 45 parties to
fill the single-chamber parliament, checking off their choice on a
78-centimeter (31-inch) ballot. Some 7,605 candidates are running, but only
about six parties are expected to make it over the 3 percent threshold.

Pollsters predicted that Yanukovych’s Party of the Regions, which dominates
in Ukraine’s Russian-speaking east and south, will win about 30 percent of
the vote, trailed by Yushchenko’s bloc and Tymoshenko’s. Tymoshenko wants
back her job as prime minister, which Yushchenko sacked her from last year,
if she scores more votes than his party.

Both Orange parties have been handicapped by the fierce competition between
them, and the widespread disappointment with the Orange Revolution’s failed
promises, particularly in the Orange team’s western Ukrainian base.

Yanukovych, who was stripped of his fraud-marred presidential run,
meanwhile, hired American election consultants and spent the past year
courting voters, promising to improve ties with Ukraine’s biggest trade
partner, Moscow, and return the country to the 12 percent GDP growth levels
it enjoyed under his stewardship. Last year, GDP growth fell to just 3

Yushchenko’s bid to earn Ukraine a place in the European Union and to raise
its international profile also kept him under pressure to ensure that his
political opponents enjoyed free rein. This campaign has been markedly
different from Ukraine’s past elections: Ukrainians can tune in nightly to
opposition politicians taking political shots at the president in live
debates and slick television advertisements. Colorful banners, flags and
ribbons – promoting everything from the fiercely anti-American People’s
Opposition to nationalistic parties – fill the country’s streets and trees.

"I will not comment on the people’s choice," Yushchenko told journalists
last week. "If they decide to support this or that political force I, as the
president, will ensure that their choice is fulfilled."

Analysts warn that the real test for Ukraine will come after the official
results are announced when the behind-the-scenes coalition talks speed up.
The newly elected lawmakers have one month from taking office in mid-May

to put together a majority, and then another month to name the government.
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
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By Natasha Lisova, AP Worldstream, Wednesday, Mar 22, 2006

DONETSK – Blue-and-white flags, ribbons and tents in Viktor Yanukovych’s
campaign colors engulf the main Lenin Square, squeezing out the competition
and leaving little doubt about where this eastern city’s sympathies lie
ahead of Sunday’s parliamentary election.

For 16 months, Donetsk has been biding its time under what residents here
call "the Orange Horde" – but now it has the look of a city decked out and
ready to party.

Yanukovych, its native son, appears headed for a comeback victory, ushering
his pro-Russian Party of the Regions to a first-place finish in the ballot.
A win for the former prime minister would be a humiliating blow to Orange
Revolution leader Viktor Yushchenko and the hundreds of thousands whose

2004 street protests helped keep Yanukovych from claiming the presidency
of this ex-Soviet republic.

But for this industrial city of a million, it would be a sweet turn of
fortune. "This time we will return our stolen victory," said Oleksandr
Domashchenko, a 23-year-old worker at the Zacyadko coal pit, one of the
Donbass region’s premier high-technology mines. "It will be our revenge."

Yushchenko’s job isn’t on the line, but new constitutional reforms are
transferring many presidential powers to the parliament, including the right
to name the prime minister and many Cabinet members. Yanukovych’s expected
strong showing would make his Party of Regions the biggest faction in the
450-member parliament but still short of a majority, which means he is not
guaranteed a role in forming the new government.

Analysts suggest that Yanukovych’s only shot at entering the government is
via an uneasy coalition with Yuschenko’s Our Ukraine party.

Here in Donetsk, where Yanukovych won 94 percent of the vote in 2004,
Yushchenko’s party seems to have already conceded defeat. While other
parties have sprinkled their campaign tents around the city’s big central
square, the sole Our Ukraine tent cuts a lonely figure.

Yushchenko’s party has concentrated its campaign in central and western
Ukraine, where it is also being squeezed by his Orange Revolution
ally-turned-rival, former prime minister and opposition leader Yulia

Tymoshenko, who is from the eastern Ukrainian city of Dnipropetrovsk,
ventured into Donetsk to campaign, but joked "it’s a little like
hand-to-hand combat" trying to win votes in Yanukovych’s stronghold.

Yanukovych isn’t universally loved here, but loyalties run deep. "All of
them are criminals, but Yanukovych is our criminal," said 69-year-old
retiree Olha Abdulova, who was begging for money in downtown Donetsk. She
said she was pinning her hopes on Yanukovych to "improve the life of his
Donbass compatriots."

Donetsk is the heart of Ukraine’s mining and industrial belt. Residents chat
to each other in Russian, not Ukrainian, and many prefer to look east to
Moscow rather than west toward the European Union. They want Russian to
become a second state language, the government to drop plans to join NATO
and to restore frayed ties with the Kremlin.

The region’s pro-Russian sentiment is so pervasive that when the usually
Ukrainian-speaking Prime Minister Yuriy Yekhanurov visited last week, he
switched to Russian.

Yanukovych is credited with raising living standards, protecting mines, and
getting salaries paid on time during his time as prime minister and also as
Donetsk governor. In contrast, residents now complain that under Yushchenko,
mines and factories have been closed and a backlog of unpaid salaries has
built up again.

"Yushchenko is not a president, he was a bad choice who messed up the
economy," said miner Oleksandr Shubin, 43.

Helping Yanukovych is also a party list packed with prominent Donetsk
figures. No. 7 is Rinat Akhmetov, a billionaire businessman who has poured
money into this once drab Soviet center, giving it a luxurious five-star
hotel and turning the Donetsk Shakhtar soccer team into one of Ukraine’s

Yanukovych "is our guy, he is a native .. To whom else we can appeal to
solve our problems?" said retiree Vasyl Shevchenko, 80, as he crossed Lenin
Square together with his wife Mariya, listening to a new Yanukovych election
march blaring from loudspeakers. "Why did the orange government put

pressure on us, lie about us?" the song repeated.

"We are ready to become your servants," Yanukovych said on Donetsk
television in appeal to voters in several eastern cities. "You are deciding
the country’s destiny: Will it remain on a path to catastrophe, chosen by
the orange government, or will we take a power into our hands?

Wearing a blue-and-white cap and scarf, Natalya Kaverina, a 21-year-old
student, had no doubt about the answer. "Our revenge is coming," she

warned.                                            -30-
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
                                 LIKELY TO AVOID DRAMAS

By Tom Warner in Kiev, Financial Times
London, United Kingdom, Wednesday, March 22 2006

As Ukrainians gear up for parliamentary elections on Sunday, the controversy
over last weekend’s election in their northern neighbour Belarus has given
rise to feelings of nostalgia.

Scenes of opposition demonstrators in Minsk have evoked memories of the
"Orange Revolution" of late 2004 when thousands of Ukrainians took to the
streets in protest against alleged vote-tampering by their own authoritarian
president and succeeded in overturning what many judged to be a rigged

While this Sunday’s election may not be as dramatic, the outcome is arguably
just as decisive in terms of the future direction of the biggest country in
eastern Europe after Russia. The contest could decide whether Ukraine
accelerates its efforts to integrate further with the rest of Europe or
moves back to a closer relationship with Russia.

Viktor Yushchenko, the pro-west president brought to power in the Orange
Revolution, faces the uncomfortable prospect of seeing his rival Viktor
Yanukovich, the pro-Russian leader who lost out in the re-run of the 2004
presidential race, emerging victorious in Sunday’s vote. Mr Yanukovich’s
Regions party leads in the opinion polls with about 30 per cent support,
ahead of the president’s Our Ukraine party.

The president has made clear he will respect Sunday’s result. With the
choice of the future prime minister to be decided by the new parliament,
speculation is now focused on the possible coalition. The two most
talked-about options are a new coalition between Mr Yushchenko and his
populist former prime minister, Yulia Tymoshenko, or a so-called "grand
coalition" between Mr Yushchenko and Mr Yanukovich.

The campaigning is lively, with more than a dozen parties spending heavily
on national advertising campaigns and many more focusing on local contests.
The opposition is campaigning hard on the theme of economic hardship, an
issue underscored earlier this year by Russia’s decision to cut gas supplies
to Ukraine, while the government is trying to keep alive the spirit of the
Orange Revolution.

And yet there is none of the intensity of 2004. As Ukrainians watch the much
smaller but still similar uprising in Belarus, many worry the spirit of the
Orange Revolution, which saw thousands of people occupy central Kiev in
protest at the first, contested vote won by Mr Yanukovich, has faded.

Olena Kornichenko, a student who spent yesterday manning a Yushchenko
campaign tent in central Kiev, said: "When we stood on the square [in
central Kiev] it was such a spiritual moment. I just hope when people watch
the news in Belarus they remember and, despite all the disappointment with
Yushchenko, they don’t betray the square."

Every evening Ukrainian television channels start with coverage of the local
campaign, replete with coloured balloons and other attention-grabbing
gimmicks. Then the tone turns somber as the correspondent from Minsk comes
on, reporting by telephone because live video is not permitted.

Despite Belarus’s hardline tactics, Mr Yanukovich’s Regions party and other
pro-Russian groups are strongly promoting closer ties to the country through
the Russia-led Common Economic Area, which also includes Kazakhstan.

The economic union was announced in 2004 but has not been implemented,
partly because Mr Yushchenko will not commit to the level of integration
sought by other members.

Mr Yanukovich’s support for the union has a strong economic logic: Belarus
and Russia are Ukraine’s fastest-growing export markets, mainly because of
Russia’s rising income from oil and gas and the preferential oil and gas
prices Belarus enjoys. By comparison, Ukraine’s economy is groaning under
the weight of increased prices for Russian gas and from repeated increases
in pensions, social benefits and public salaries. Gross domestic product
growth in January-February was just 1.5 per cent, one of the lowest rates in
eastern Europe.

Some western diplomats argue a Yushchenko-Yanukovich coalition would be

the best result for the economy, since it might allow Mr Yushchenko to improve
ties with Russia and avoid further gas price increases. But Mr Yushchenko
would be hard pressed to explain the move to his supporters.

Ms Kornichenko said she and her friends would take to the streets against
any Yushchenko-Yanukovich government. "If Yushchenko did that it would

ruin him politically," she said.
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]

By Ron Popeski, Reuters, Kiev, Ukraine, Thursday, March 23, 2006

KIEV – Ukraine holds a crucial election this weekend that could decide
whether a resurgence of those backing renewed links with Russia could
threaten the pro-Western ideals of President Viktor Yushchenko’s "Orange

With the party of Yushchenko’s old nemesis, Viktor Yanukovich, well ahead in
surveys for Sunday’s parliamentary vote, the "Orange" liberals in charge
since the heady street protests of late 2004 seem likely to lose much

Yushchenko’s Our Ukraine party lies second in surveys for the outcome of the
election to decide the make-up of an assembly endowed with new powers and
able to choose the prime minister.

Lying third is Yushchenko’s estranged ally Yulia Tymoshenko, sacked as

prime minister last year, and now running separately.
The only real certainty is that a coalition will be needed — with a
marriage of convenience between Yushchenko’s party and Yanukovich’s
Regions Party a strong possibility.

With 45 parties running in all, long talks on various permutations seem
inevitable. People are talking months rather than weeks before a new
government is formed.

Yushchenko, his dream of integrating quickly with the West battered by
months of government infighting, held out hope that the election would patch
together the liberal camp. "I believe the ideal option would be a renewed
‘Orange’ team," the president told Kommersant Ukraine daily.

"Amazing things could happen if we are talking about implementing aims and
ideals. The breath of fresh air people have had means no going back to
living like two years ago."

Yushchenko’s election turfed out a Moscow-backed establishment and ushered
in what liberals hoped would be a drive to membership of the
                               EUROPEAN UNION AND NATO.
Within months, his government split into factions accusing each other of
corruption. Tymoshenko’s dismissal left voters wondering out loud why they
had stood for days on end in the snow in Kiev’s Independence square.

Slow export markets and fright over Tymoshenko’s calls for of a mass review
of privatizations sent the economy into a slowdown, compounded by a deal
raising the price of Russian gas.
                               YANUKOVICH RIDING HIGH
Yanukovich, humiliated by his 2004 loss in the re-run election, is now
riding high as the pivotal figure in talks. He told Reuters one option was
getting back his job as prime minister, this time with more powers, to
rebuild ties with Russia and correct "errors made by those now in power."

The president has asked supporters to wait and see what coalition deal might
be struck but has not ruled out an "Orange-Blue" power-sharing combination
with Yanukovich.

For some, a deal with the man linked to the "criminal authorities" removed
by the revolution is too much to stomach. "I ask the president: Has he any
intention of forming a coalition with the Regions Party? I consider the
absence of a reply silent endorsement of this union," Tymoshenko, a key
figure who roused crowds in Independence Square, said this week.

Yushchenko’s retort to his former ally was unequivocal — and exposed the
reduced chances of healing the "Orange Team." "We must learn the lessons of
why the orange coalition collapsed," he told a television talk show. "It was
the failure to recognize the position of one’s partners, it was insincere
behavior, it was behind-the-scenes intrigue."

[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
         Send in a letter-to-the-editor today. Let us hear from you.
8 .                             UKRAINE FACING A CHOICE

OPINION & ANALYSIS: By Alexander Oryol in Kyiv
RIA Novosti, Moscow, Russia, Thursday, March 23, 2006

MOSCOW – The March 26 parliamentary elections in Ukraine will take place
in conditions of a deep political and economic crisis, which have replaced
the hopes and romanticism of the Orange revolution.

In my opinion, the main reason for this is that the new regime did not know
what to do with the country. It thought the revolutionary achievements were
enough for Europe to open its door for Ukraine and for Russia to start
paying its neighbor’s expenses of rapprochement with the West.

The Kiev authorities naively thought that Ukraine’s success in the West
depended on the speed of its movement away from Russia. Instead,
confrontation with Russia has provoked a deep political crisis in Ukraine,
which has not abated to this day.

To overcome this crisis and regain the trust of key foreign policy players,
Kiev should stop trying to use the Cold War rules in its foreign policy.
Ukraine needs a predictable and pragmatic policy based not on illusions but
on objective capabilities of Ukraine and its real national interests.

It should revise its European policy that rests on the illusion of Ukraine’s
accelerated admission to the European Union as an instrument of geopolitical
divorce from Russia.

This does not mean that Ukraine should abandon its European choice. But it
need not be based on an anti-Russian platform. Moreover, tensions and
mistrust in Russo-Ukrainian relations will considerably complicate Ukraine’s
rapprochement with Europe.

The models of such rapprochement may differ, from a gradual creation of a
common Ukraine-EU market (modeled on the agreements between the EU

and the European Free Trade Association, EFTA) to the implementation of
joint projects in various spheres, as the EU and Russia are doing.

Kiev should ponder possible involvement in EU-Russia cooperation formats.

It should not just participate in them but also scrutinize them creatively to
gear them to common interests. Despite the many years of Kiev’s European
integration rhetoric, Russia has advanced farther than Ukraine in the
majority of key fields of cooperation with the EU.

Moreover, Ukraine simply needs Russia to create effective forms of dialogue
with the EU in the spheres of energy security, migration, and readmission,
as well as a common market.

Whatever form Ukraine chooses for implementing its European choice, it must
consistently apply the fundamental rule, according to which Kiev should be
an equally reliable partner of Washington, Moscow, Rome, Berlin, Brussels,
and Beijing.

Kiev should do everything possible to normalize dialogue and cooperation
with Russia without neglecting the national interests of Ukraine. This is
truly a matter of life or death of the Ukrainian state.

One of the main tasks of the new Ukrainian government, which will be formed
on the results of the March 26 parliamentary elections, is to do its best to
stop Ukraine from becoming the frontline of a new Cold War. The country
should use the rare chance to strengthen security and build up trust in
eastern Europe.

Despite deep differences between them, the West and Russia are two
indivisible parts of one civilization based primarily on Christian values.
Ukraine cannot associate itself with only one of these parts of the common
civilization and turn its back on the other. This would tear the country in

The geopolitical location of Ukraine is a unique chance to become a link in
the European civilization by promoting dialogue and rapprochement and
smoothing over contradictions.                           -30-
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]

                          BEFORE PARLIAMENTARY VOTE

By Steven Lee Myers, The New York Times
New York, New York, Friday, March 24, 2006

SIMFEROPOL, Ukraine – There are few obstacles to speaking Russian

here in Crimea since, after all, practically everyone speaks it at home, at
school, at work.

Still there are those who complain that the language is under assault, that
the courts issue rulings in Ukrainian, that Russian classics are now taught
in schools as "foreign" literature, that a repressive government in the
capital, Kiev, is bent on imposing a nationalistic identity on a place that
was part of Russia until Nikita S. Khrushchev decreed otherwise in 1954
(and, to some here, should be again).

"Whatever we receive from Kiev is all in Ukrainian!" Yevgeny G. Bubnov, a
member of Crimea’s regional Parliament, complained in an interview as he
explained why he sponsored a proposal to hold a referendum on whether to
elevate Russian to official status in a country where, constitutionally,
Ukrainian is the language of the land.

The federal government fiercely opposed Mr. Bubnov’s proposal and

ultimately rejected it. But the constitutional clash it threatened to create
highlighted the stark ethnic and cultural divisions that continue to haunt
Ukraine with the approach of the March 26 parliamentary elections – the
first since the Orange Revolution a little more than a year ago.

The referendum even raised questions about the status of Crimea itself – a
lush peninsula of seaside resorts, vineyards and a largely Russian populace,
whose political, economic and cultural affiliations are closer to Moscow
than to Kiev. And that, its critics say, was exactly the point.

"It is playing with the sentiments of the population that is still nostalgic
for Soviet times, those who reacted painfully to the breakup of the Soviet
Union," said Vladimir B. Shklar, the Crimean leader of Our Ukraine, the
political party of the country’s president, Viktor A. Yushchenko.

The parliamentary elections are the first electoral test of Mr. Yushchenko’s
policies since he took office in January 2005, after mass protests against a
fraudulent presidential election. According to the polls, at least, he is
faring badly, with his bloc trailing the party led by the man he defeated,
Viktor F. Yanukovich.

As in the presidential race, the main issues revolve around Russia, namely
Ukraine’s relations to Russia, its larger neighbor. Nowhere are those issues
more charged than in Crimea, home not only to a majority of ethnic Russians
but also to Russia’s Black Sea Fleet, a source of tensions for nearly a

As the election campaign began in earnest in January, a group of young
people gathered with shovels on the isthmus that connects Crimea to the
mainland to dig a symbolic trench. Few openly call for separatism, which is
a federal crime, but several smaller parties and blocs are running on
platforms calling for closer cooperation with Russia and even reunification.

One party based in Crimea even calls itself the Party of Putin’s Politics.
Its billboards show President Vladimir V. Putin’s steely eyes fixed on the
rugged Crimean landscape, promising a united future.

Mikhail Y. Pushia stood on a square the other day in Sevastopol, the
deep-water port city on Crimea’s southern bulge, campaigning for Natalia M.
Vitrenko, the leader of a fiercely anti-American and anti-European bloc of
parties that advocate a new union among the Slavic nations of Russia,
Belarus and Ukraine. With a union, he said, "all the problems would be

The problems between Russia and Ukraine, of course, are considerable,
largely because the ties that once united them are now a source of tension.

A New Year’s dispute over the price of Russian natural gas, on which

Ukraine is heavily dependent, prompted Russia to shut down supplies briefly,
infuriating many Ukrainians.

Mr. Yushchenko’s deal with Mr. Putin to end the crisis – with a complicated
pricing system and a murky trading company – proved equally unpopular,
however. Mr. Yanukovich argues that he could have negotiated lower prices
because of his friendly relations with Russia.

In the wake of the gas dispute, Ukraine responded with threats to charge
higher rent for the base in Sevastopol that houses the Black Sea Fleet’s
dozens of ships and 14,000 sailors under a lease set to expire in 2017.
Russia now pays roughly $98 million a year; some Ukrainian officials have
suggested that billions would be more appropriate.

In January, Ukraine occupied one of the fleet’s lighthouses in Yalta, saying
Russia was using it illegally, provoking a war of words and a new round of
negotiations to defuse the confrontation. When student protesters began
demonstrating at eight other lighthouses, the fleet bolstered security
around them.

Russia’s defense minister, Sergei B. Ivanov, warned that revising the terms
of the lease would reopen a separate treaty that fixed the borders, which is
what many here say they would like to see happen.

"This is a Russian city," said Aleksandr N. Mironov, an ethnic Russian who
settled in Sevastopol after serving in the Soviet border troops.

Mr. Yanukovich’s Party of Regions does not openly endorse such sentiments,
but he has promised to make Russian a second official language and to
improve economic and political relations with Russia, which have been
strained since Mr. Yushchenko took office.

Mr. Yushchenko’s supporters say that the language issue and the tensions
over the naval base have been exaggerated with the intent to divide
Ukrainians and ethnic Russians, who account for roughly two-thirds of
Crimea’s nearly two million people, as well as large majorities in the
eastern Ukraine regions of Donetsk and Lugansk. Another predominately
Russian city, Kharkiv, voted on March 6 to adopt Russian as a second
official language in municipal affairs.

Khrushchev’s decision to cede Crimea to Ukraine mattered little during
Soviet times, but immensely after the Soviet Union collapsed in 1991 and
internal administrative borders became international boundaries. It was not
until 1997 that Russia and Ukraine reached agreement on how to divide the
fleet and to accept the current borders.

Despite impassioned oratory on each side, the prospects of an open conflict
appear slight. But Mr. Yushchenko’s supporters warn that Russia continues to
interfere in Ukrainian politics on the hope that a friendlier government led
by Mr. Yanukovich as a newly empowered prime minister could result in better
terms for the fleet and for the Russians living here.

"This is not going to be solved until after the election," a Russian naval
officer in Sevastopol said in an interview, speaking on condition of
anonymity because he was not authorized to comment on what has become a
diplomatic matter.

Petro O. Poroshenko, a tycoon closely allied with Mr. Yushchenko, complained
recently that proponents of the language referendum were trying to turn
Crimea into a client state of Russia.

"Look what happened in Abkhazia with Russian support," Mr. Poroshenko

said, referring to the Black Sea region in Georgia that became a separatist
enclave with Russian help after a bloody war in the early 1990’s. "The land
is almost as beautiful as the Crimea, and they have hundreds of thousands of
refugees. There is no development."

Although the language issue has been defused for now, it has resonated
deeply in Crimea, hardening support for Mr. Yanukovich, who won 81

percent of the vote here in the repeated second round of the disputed 2004
presidential race, and fanning resentments against Kiev.

The election, warned Vasily A. Kiselyov, the acting chairman of Crimea’s
Parliament and a Yanukovich stalwart, could lead to a new wave of large
street protests, even tent camps, only this time against Mr. Yushchenko’s
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]

OP-ED: by Adrian Karatnycky, Kyiv Post
Kyiv, Ukraine, Thursday, March 23 2006

Anyone who wants to understand Ukraine from afar is in big trouble. I came
to a very different country when I revisited Ukraine four months ago, having
visited many times in earlier years.

Politics and society are changing at a lightning pace. Keeping track is
harder than maintaining a scorecard at a basketball game.

After the first ruptures in the Orange camp, the dismissal of Prime Minister
Yulia Tymoshenko and the onset of the age of Orange acrimony, the
conventional wisdom from abroad has been that a great opportunity to advance
reform was squandered.

But nothing I had read or been told in recent months prepared me for what I
found. Certainly no reading of the Western press captures the essence of
current events or trends.

From the outside, the story is simple. Personal ambitions have undone the
Orange camp, slowed reforms and opened the door for the potential return

of the old order. But the reality is just a little bit different.

Myth One: The Orange camp is irreconcilably divided and incapable of

In point of fact, Our Ukraine, the bloc loyal to President Viktor
Yushchenko, and the Tymoshenko bloc may not be as divided as it seems.

Much of the harsh rhetoric between them is a fight for the hearts and minds of
the Yushchenko electorate.

Polls among the most reputable polling agencies have for months shown pretty
much the same thing: two irreconcilable camps; one pro-Orange, commanding
roughly 52 percent support, the other, scornful of the Orange Revolution and
attracting roughly 44 percent support.

This is a divide identical to the results of the December 2004 presidential
elections. Voters simply aren’t crossing over. And that means that the only
way the Orange parties can increase their share is by going after one
another. It does not mean that the Orange parties won’t be able to shape a
government after March 26.

Indeed, off the record, leading politicians in Tymoshenko’s Byut bloc and
Our Ukraine are confident of a modus vivendi, and some say that a formula
for power sharing is already in place.

Myth Two: While the Orange parties are hopelessly divided, the opposition
Regions of Ukraine bloc, led by Viktor Yanukovych, are unified and cohesive.

In point of fact, there are deep fissures in the Regions bloc. The Regions
are full of politicians who veer toward Russia and want the restoration of a
Donetsk-dominated authoritarian regime. But the party also has more
pragmatic politicians who understand that the Orange Revolution has led to
irrevocable changes in the consciousness of many Ukrainians. They know that
the constant political struggle of the last two years needs to be followed
by a period of stability, if not outright cooperation.

While the Regions have many political troglodytes who seek revenge and the
restoration of authoritarian rule, there is also a group influenced by
business lobbies, such as tycoon Rinat Akhmetov, that wants stability,
European integration, a prosperous economy and the diminishing of the
political and regional divide.

Myth Three: There is a danger of a so-called "revanche," or tilt toward

Wrong again. While it is regrettable that the Regions have so many
politicians who have questionable democratic credentials, and many are
alleged to be implicated in the efforts to falsify the presidential
elections of 2004, "revanche" is hardly possible.

First, in Viktor Yushchenko, Ukraine has an honest and democratic president
who retains considerable power in the areas of national security and foreign
policy, and who will influence government through the Our Ukraine bloc.
Second, power is now dispersed within the state and between the state and
society. No one can acquire unchecked powers.

Myth Four: The lack of consensus on economics inside the Orange camp

and the absence of a stable majority will result in policy zigzags that will
discourage Western investment and hold back economic growth.

Wrong again. Nearly all politicians make extravagant, budget-busting
promises in election campaigns. That is one of the unfortunate
characteristics of democratic contestation. But once in power, the need to
maintain budgetary discipline leads many populist promises to be toned down
or forgotten.

Because oligarchs and leading businessmen are dispersed across the spectrum
of political parties, they are likely to cooperate in pressing to reduce
taxes and control inflation, which threaten to erode profits. Ukraine’s
emerging business elite are likely to influence most parties and
parliamentarians to promote pro-business policies.

So, with a parliament in which no single group will dominate; power divided
between the president, parliament, government and Constitutional Court; a
differentiated business elite; and an active civil society and media that
showed their mettle in December 2004, Ukraine may be headed for a soft

Then there is the Russia factor. Russia’s energy pressures on Ukraine this
winter may well have been an effort to destabilize Ukraine, but it’s
important that such moves would primarily serve as a blow to the economic
interests of Ukraine’s industrial east.

Russia’s moves have helped focus the minds of Ukraine’s eastern magnates

on the fact that economic sovereignty requires diversification, cooperation
with a wide array of neighbors in the West and Central Asia, not necessarily
integration with Moscow.

Political analysts run a great risk in predicting. But unless the pollsters
are fabulously wrong, on March 27 Ukraine will have an Orange government led
by Our Ukraine, Tymoshenko’s Byut and the Socialists, with a prime minister
from Our Ukraine, and Yulia Tymoshenko as parliament speaker.

If Tymoshenko moves away from the sharp political intramural fight to a
coalition approach (not a sure thing), the new Orange alignment will be
stable and effective over the long haul.

Whatever path Tymoshenko takes on issues such as tax relief and energy
policy, there is likely to be a clear parliamentary majority made up of a
coalition of politicians who answer to pragmatic economic interests.

Readers and investors visiting Kyiv to try and make sense of the storm
shouldn’t worry: Ukraine will have a soft landing.

The post-Communist era is over. The authoritarian era is done. Divided
power, multiple interests, snarky media, powerful lobbies, intrusive civic
organizations and individual ambitions rule. And that means the Orange
Revolution has triumphed and that Ukraine is now much like the democratic
world that views and misunderstands it from afar.    -30-
Adrian Karatnycky is president and founder of the Orange Circle, a New
York-based international nongovernmental organization that promotes
Ukraine’s integration into Europe and the democratic community of nations

through conferences, briefings, research and the facilitation of investment
and business and contacts.
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]

Bloomberg News, New York, New York, Friday, March 24, 2006

KIEV – Ukraine’s President Viktor Yushchenko, swept to power in the Orange
Revolution of 2004, may be the loser in this weekend’s parliamentary
elections, thwarting plans to forge closer ties with the European Union and

Yushchenko’s Our Ukraine party ranked second in the last poll conducted
before the vote, 13 percentage points behind the Regions Party of Viktor
Yanukovych. Yanukovych, who lost to Yushchenko in a re-run of the
disputed presidential election that sparked the November 2004 street
protests, supports closer ties with Russia.

Optimism fostered by the revolution has dissipated amid slowing economic
growth, accelerating inflation and a split between Yushchenko and his first
prime minister, Yulia Timoshenko, after allegations of corruption. The
president and his erstwhile ally may be forced to overcome their
differences, said Ariel Cohen, senior fellow at the Heritage Foundation in

"The revolution-era allies will agree on a coalition in the new parliament
as any alliance between Yushchenko with Yanukovych isn’t possible,” Cohen
said on March 22. “If Yanukovych becomes prime minister, there is no way
Ukraine will enter NATO at all.”

The Regions Party was backed by 30.4 percent of voters in a Feb. 26-March 6
survey by the Kiev-based Democratic Initiative Fund of 2009 eligible voters.
Yushchenko’s party ranked second, with 17.1 percent. Timoshenko’s party had
17 percent support. The survey had a margin of error of 2.2 percentage
                                      RULING CLOWNS
Polls open at 7 a.m. on March 26 and close at 10 p.m. Local media will issue
exit polls, with the first official results expected to be released on March
27. The new parliament may hold its first session two weeks after the
results are published.

A cabinet must be formed within 30 days of the first session. If a
government isn’t formed on time, Yushchenko has the right to dissolve
parliament and call new elections.

Investors haven’t been impressed by the decline in support for Yushchenko.
Ukraine’s 10-year Eurobond maturing in 2013 declined to 106.11 as of March
22 from 109.16 on Nov. 28, when the election campaign started, according to
Bloomberg data. The yield rose to 6.569 on March 22, compared with 6.104
on Nov. 28, 2005.

Many voters have lost confidence in Yushchenko after he promised to boost
living standards and end corruption. "I thought that Yushchenko and his team
will put things in order in the country, will fight corruption,” said
Olesia Semenyuk, 26, an accountant in Kiev.

"Instead, there were scandals after scandals about corruption in
Yushchenko’s own team and it seems to me now that clowns instead of
professionals rule the country.”
Semenyuk, who backed Yushchenko’s bid for the presidency and took part
in the street protests in 2004, will vote for Yanukovych. Yushchenko and his
allies "haven’t done what they promised,” she said. "The Orange Revolution
made other countries respect my nation. Yushchenko’s team ruined that

Yanukovych will probably win 190 seats in the 450-seat parliament, short of
a majority, while Yushchenko is expected to get about 100 seats and
Timoshenko’s party may take 80 seats, Moscow-based Renaissance Capital
analyst Katya Malofeeva estimated in a March 21 report. As many as six
parties may enter parliament, she said.

Yanukovych, 55, who draws much of his support from the Russian-speaking
regions in the east of the country, seeks closer ties with Russia.
                                    YUSHCHENKO PROGRAM
Yushchenko, 52, has pledged to sell more of the country’s biggest companies,
such as national phone company VAT Ukrtelecom and win membership in the
World Trade Organization, the EU and the North Atlantic Treaty Organization.

U.S. President George W. Bush signed a measure yesterday giving Ukraine
permanent normal trade relations, a prerequisite for that country to join
the WTO.

The Bush administration and the Ukraine government worked out terms for
joining the WTO earlier this year. Yushchenko was cited by members of the
U.S. Congress as a key reason to support the measure. The measure passed
Congress earlier this month.

Yuriy Yekhanurov, Ukraine’s acting Prime Minister and leader of Yushchenko’s
party, said in a March 19 interview it may take as long as two months to
agree on a new prime minister and cabinet.

Ukraine attracted a record $7.86 billion in foreign direct investment 2005
after the sale of the country’s biggest steelmaker and the second-largest
bank. Still, the average monthly wage was about $150 in 2005, compared with
$300 in Russia, $770 in Poland and $4,500 in Germany, according to Bloomberg

Growth of the $80 billion Ukrainian economy slowed to 2.6 percent last year
from 12.3 percent the previous year after companies delayed expansion planes
following Timoshenko calls for revision of the property rights.
                                       SLOWING GROWTH
The economy may slow even further this year to 2.1 percent because of a
widening trade deficit, as imports rise faster than exports, after Russia
more than doubled price for gas supplies to Ukraine in January, the Economy
Ministry said on March 13.

Ukraine, which depends on Russia for 80 percent of its energy needs, battled
with the Russian government over pricing of natural gas imports earlier this
year. A new government must reach a new agreement with Russia on prices
for the second half of 2006 and the future, after the current agreement
expires at mid-year.

"The new government will have to deal with a whole range of issues, for
which there doesn’t appear to be any solutions that will satisfy everyone,”
Malofeeva at Renaissance Capital Group wrote in her report. "Those also
include maintaining acceptable budget spending on the back of a slowing
economy and finalizing WTO accession.”

The new government will enjoy expanded powers. Under a change in the
Constitution, the parliament will have the right to nominate and appoint the
prime minister, whose powers will also include for the first time some
responsibilities now held by the president, including the appointment of
most cabinet members.                            -30-
To contact the reporter on this story: Daryna Krasnolutska in Kiev, through
the Moscow newsroom at Halia Pavliva in
Moscow at
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]

    If you are receiving more than one copy of the AUR please contact us.

The Action Ukraine Report (AUR) #678, Article 12
Kyiv, Ukraine, Friday, March 17, 2006

KYIV – The International Republican Institute’s (IRI) international election

monitoring delegation has arrived in Kyiv and is preparing for Ukraine’s 
important parliamentary election on Sunday, March 26. The delegates will
monitor voting and ballot counting throughout the country.  Following the
voting, IRI will issue a statement on the findings of the delegation at 1 p.m.
on Monday, March 27 at the UNIAN press conference room.
On Thursday the IRI delegation received an intensive round of briefings.
U.S. Ambassador to Ukraine John Herbst made a presentation to the
delegation about, "Ukrainian Elections, Possible Outcomes, Ramifications
for Ukraine’s Future."

Representatives of major political parties in Ukraine, most of them members
of Parliament, briefed the election monitors on their view of how
the election process is going, and especially about problems and major
issues they feel are a concern, such as the preparation of voter lists. 
Those who made briefings included: (1) Representative of Political Bloc
PORA – Reforms & Order, Deputy Campaign Manager Ostap Semerak
and the Board Chairman of the Reforms & Order Party; (2) Representative
of Party of Regions, Member of Parliament (MP) Raisa Bohatyryova and
Head of the Party of Regions Faction in Parliament; (3) Representative of
the Socialist Party, MP Halina Harmash; (4) Representative of the Bloc of
Yuliya Tymoshenko, MP Mykhailo Volunyets, President of the Independent
Trade Unions of Ukraine; (5) Representative of the President of Ukraine in
the Parliament and Representative of the Our Ukraine People’s Union, MP
Yuriy Klyuchkovskiy and (7) Representative of Ukrainian Media, Andriy
Shevchenko, President of Public Media Center.

The delegation also receiving a briefing about Ukraine’s election law and

the rights and responsibilities of international observers. The election law
briefing was given by the Honorable Bohdan Futey, U.S. Federal Judge
and Ellie Seats, USAID Elections Specialist, USAID Mission in Kyiv.

Delegates are now being deployed throughout the country where they will

monitor polling stations and identify and evaluate strengths and weaknesses
in Ukraine’s election system, including campaign regulations, the balloting
process, vote tabulation and reporting.
The polls are open in Ukraine on Sunday from 7 a.m. to 10 p.m.  The
delegates will visit various polling stations throughout the day.  Each
delegate will then stay at one polling station in the area they are covering
to watch and monitor the ballot count. 
IRI’s delegation is led by The Honorable Michael Trend, former member
of Britain’s parliament.  Other delegates are Steven Berry, President,
Steven K. Berry, LLC; Thomas Carter, President, Commonwealth Consulting
Corp.; Marjorie Finkelnburg, Director of Government Relations, Pfizer; The
Honorable Bohdan Futey, U.S. Court of Federal Claims; Charles Greenleaf,
former Assistant Administrator, U.S. Agency for International Development;
Lilibet Hagel, Trustee, Meridian International Center; Reuben Jeffery III,
Chairman, Commodity Futures Trading Commission; Patricia Morgan, State
Chairman for Rhode Island, Republican National Committee; Gardner

Peckham, Managing Partner, BKSH & Associates; Roman Popadiuk,
former U.S. Ambassador to Ukraine; Bob Schaffer, former Congressman
representing Colorado’s 4th District; and Morgan Williams, Director of
Government Affairs, Washington Office, SigmaBleyzer.

IRI staff will also serve as observers and assist in the mission.  IRI staff
will be led by Georges Fauriol, Senior Vice President of IRI, Stephen B.
Nix, Regional Director for IRI’s Eurasia division and Chris Holzen, IRI’s
Country Director for Ukraine.

In addition, through a grant from IRI the Democracy Development Foundation
(DDF), a domestic Ukrainian nongovernmental organization, will monitor an
estimated 2,600 polling sites with more than 150 observers.  DDF is the only
Ukrainian elections monitoring organization conducting and coordinating both
domestic and international election observation for the parliamentary and
local election.

Since 1993, IRI has worked to help strengthen political parties and good
governance in Ukraine at both national and local levels.  IRI also works
with youth, women and civil society to increase their participation in the
political process.  In preparation for the March 2006 parliamentary
elections, IRI carried out trainings on campaign management, voter
education, youth mobilization, and political party poll watching.  -30-

FOOTNOTE:  Your AUR editor has been deployed by IRI to go
to Chernihiv for the parliamentary election observation mission. I will be
heading out to Chernihiv on Saturday morning.  On Saturday we will be
meeting with local election and party officials. Polls open at 7 a.m. on
Sunday and do not close until 10:00 p.m.  Everyone is then in for a
long night of counting the paper ballots.   AUR EDITOR.
[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
             Send in a letter-to-the-editor today. Let us hear from you.
                                   PARLIAMENTARY ELECTION 

AP Worldstream, Kiev, Ukraine, Thursday, Mar 23, 2006

KIEV – Forty-five parties and blocks are competing in the Sunday

parliamentary vote, but only about six are expected to make it over the
3-percent barrier. They are Our Ukraine, Bloc Yulia Tymoshenko, Party of
Regions, Communist Party, Socialist Party and People’s Bloc of Lytvyn.

PARTY OF REGIONS – Headed by Orange Revolution foe Viktor Yanukovych.

Has pledged to make Russian a second state language, drop plans to join NATO
and restore frayed ties with Moscow. Mostly supported in eastern Ukraine and
Crimea. Polls suggest 30-34 percent.

OUR UKRAINE – Headed by President Viktor Yushchenko. Initially enjoyed

huge popularity, but has suffered dwindling support since split with revolution
ally Yulia Tymoshenko and country’s economic slowdown. Put Ukraine on path
toward the European Union and NATO, taking it away form Moscow’s influence.
Mostly supported in western and central Ukraine. Polls suggest about 17-20

BLOC YULIA TYMOSHENKO – Headed by former Prime Minister Yulia

Tymoshenko. Trying to woo Orange voters disappointed by Yushchenko’s
government. Has accused government of betraying Orange Revolution aims
of justice and separation of business from power. Polls suggest 14-20 percent.

SOCIALIST PARTY – Headed by Oleksandr Moroz. Initiated constitutional

reform that handed presidential powers to parliament. Supported Orange
Revolution, and holds positions in Yushchenko’s government. Polls suggest
5-7 percent.

COMMUNIST PARTY – Headed by Petro Symonenko. Mostly composed

of elderly and those nostalgic for Soviet Union. Tried to attract young voters
with slogan "It is cool to be a Communist." Polls suggest 4-6 percent.

PEOPLE’S BLOC of LYTVYN – Headed by parliamentary Speaker

Volodymyr Lytvyn, who played a role as mediator during the Orange
Revolution. Could become kingmaker in coalition talks, and analysts suggest
he favors Yushchenko. Polls suggest 3-5 percent.

BLOC NE TAK – Headed by first Ukrainian President Leonid Kravchuk.

Main party of former President Leonid Kuchma’s allies. Pledged to change
direction of country’s foreign policy toward Moscow. Has warned of massive
vote fraud. Not expected to make it over 3-percent barrier.

BLOC PORA-PRP– Headed by former heavyweight champion Vitali Klitschko.
Believed to be pro-presidential. Partly composed of Pora members, youth
movement that played key role in 2004 Orange Revolution. Not expected to
make it over 3 percent.                                 -30-

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

AP Worldstream, Kiev, Ukraine, Thursday, Mar 23, 2006

KIEV – Major players in Ukraine’s parliamentary elections:

VIKTOR YANUKOVYCH: 55, Leader of the Party of the Regions; former

prime minister and chief nemesis of the Orange Revolution; With bedrock
support in Ukraine’s Russian-speaking east and south, Yanukovych’s party
is expected to be top vote-getter, but still to fall short of a majority.

VIKTOR YUSHCHENKO: 52, Ukraine’s president and leader of the Our

Ukraine Party; Yushchenko came to power in 2004 after hundreds of thousands
protested for weeks in the streets to dispute the results of presidential
elections that international observers deemed fraudulent; the longtime
leader of the opposition, he promised to speed up Ukraine’s integration with
the West, but has been criticized for failing to raise living standards. His
once huge popularity has dropped amid widespread disappointment.

YULIA TYMOSHENKO: 45, leads her own opposition bloc; former

Yushchenko ally; one of the driving forces behind Kiev’s street protests,
Tymoshenko was fired from her post as prime minister after Yushchenko
accused her of betraying the ideals of the Orange Revolution; Known for her
glamour and charisma, a strong showing would give Tymoshenko the upper
hand in talks aimed at restoring the Orange Team and in her bid to return to
her former job.                                          -30-
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]
15.                               UKRAINE: A NEW ELECTION

Kyiv, Ukraine, Wednesday, March 22, 2006

With the results pretty well known in advance (See The Ukraine Insider,
vol. 5, no. 2 from February 28), the important question in the upcoming
general elections on March 26 in Ukraine is what will be the coalition,
which will in turn form the new government.

According to new rules, not only are these elections purely proportional,
with voters voting for party lists compiled by party bosses, but the new
government will be formed by whoever wins or builds a parliamentary

Intrigue is added by the fact that three large election blocks are slated
to dominate the new Rada, or parliament.  President Viktor Yushchenko’s
Our Ukraine coalition will have to step aside for former presidential
hopeful Viktor Yanukovych’s Party of Regions, the clear leader in the polls.
Meantime, the erstwhile Yulia Tymoshenko and her block, BYT, are hoping
for a second-place finish.

Tymoshenko’s hopes of outdistancing Our Ukraine are bolstered by what
promises to be an election heavily influenced by the protest vote. Many
voters are disgruntled by the lack of progress after a year of Yushchenko’s
rule, whose campaign ads have a plaintive edge: "Don’t Betray the
Revolution," as if Ukrainians are about to stampede.

For her part, Tymoshenko is rightly known as a no-nonsense lady. Not only
does she individually super-micro-manage her own party and coalition, she
has made no bones about wanting to assume the Prime Minister post once
again. Tymoshenko even issued new billboards last week entitled: "Elections
of the Prime Minister."

Tymoshenko was late in making a strong run. After being fired from the post
of Prime Minister by Yushchenko on September 8, 2005, the President openly
criticized Tymoshenko. She, however, kept mum and, hoping for
reconciliation, insisted that her problems were not with Yushchenko, but
rather with his entourage, or "dear friends" as she calls them these days.

In early February, Tymoshenko’s aides, panicked at her lackadaisical
campaign and pandering to Yushchenko, called an emergency meeting and
moved to a more visible, and aggressive, campaign. But aggressive continued
to exclude direct criticism of Yushchenko, because Tymoshenko is well aware
that whether she becomes Prime Minister depends on her taking face-to-face
with Yushchenko. This, in turn, means that whether or not Yushchenko join
Tymoshenko in a coalition will turn on a dime. Since Yushchenko’s entourage
is deathly afraid of Tymoshenko’s rising popularity and is well aware of
their leader’s susceptibility to influence from the strong-willed
Tymoshenko, he will be kept well away.

Ironically, if Tymoshenko does edge out Our Ukraine to take second place
after Yanukovych, her chances of becoming Prime Minister will decrease.
Such a result will send additional danger signs to the Our Ukraine team of
"the Tymoshenko threat."

Herself aware of these goings-on, Tymoshenko has been screaming about
secret negotiations between Our Ukraine and the Party of Regions for
months. And with good reason.

You know, you just know, that when Roman Bessmertny looks the camera
straight in the eye and swears that Our Ukraine is not interested in a
coalition with Regions, that they are, well, interested.

Practically everyone in the political game has warned of an impending
coalition between Our Ukraine and Regions, including former President
Leonid Kravchuk, parliamentary speaker and former President Leonid

Kuchma’s honcho Wolodymyr Lytvyn and even the weasel-y Stepan Havrysh
from the "Ne Tak!" coalition, spearheaded by Kuchma’s former "Prince of
Darkness" Viktor Medvedchuk.

In the meantime, relations between Our Ukraine and BYT have gone from worse
to much worse. When a scuffle erupted in the Rada a week and a half ago, it
was between Yushchenko’s and Tymoshenko’s adherents, who take their cues
from their leaders.

Tetiana Mokridi, Bessmertny’s press secretary and on the Our Ukraine
election list, recently spoke of Tymoshenko in very disparaging terms,
doubtless echoing her boss’ real sentiments.

If Our Ukraine and the Party of Regions team up, the Donetsk clan will be
back in power in top form. As first place finishers, they will demand a lot
in terms of ministerial posts. After all, this is not a crowd accustomed to
being in opposition. Their main goal is to get back to the "trough," as the
state budget is commonly referred to.

For Yushchenko, teaming up with Yanukovych has several seeming advantages.
One is that he will keep his opponents close. A general misunderstanding of
the "grand coalitions" seen from time to time in Western Europe leads some
to view such a result as providing stability. In fact, of course, such a
coalition will sound the death knell of Yushchenko’s own, not so lengthy,
political career.

Riding into the Rada "on a horse," as they saying goes, will provide the
Donetsk clan, which stands behind Regions, a powerful stimulant. Their
leaders, such as former tax service head Mykola Azarov, bandied about as
a potential Prime Minister, are already talking big, insisting on rights
over the core of any future governing coalition. Others, such as their

campaign chief Yevheny Kushnariov, are threatening the orange crowd for
alleged abuses in shuttling him in and out of the prosecutor’s office during
a year over separatist speeches he made during the Orange Revolution in

Whether the "Donchany," as the Donetsk clan is known in its home fiefdom
of the Donbas region in eastern Ukraine, form a coalition or not with Our
Ukraine, is not really relevant. The point is, they’re back.        -30-
Correspondence should be addressed to:
THE UKRAINE INSIDER – is distributed via the Internet free of charge

to all interested parties as a source of in-depth information on political
events in Ukraine, including behind-the-scenes coverage of significant
current issues, the positions of policy-makers, tactics and strategy
information on Ukraine’s ongoing struggle toward a free and democratic
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]

THE ISCIP ANALYST, Formerly The NIS Observed,
An Analytical Review. Volume XII, Number 3
Boston, Massachusetts, Monday, March 20, 2006

In the Orange Revolution of 2004, Ukrainian citizens rose up to demand
justice and truth: They demanded that an overtly rigged presidential
election be overturned and their opinions counted. And they won. This  year,
as Ukrainians prepare to vote in the first parliamentary election  since
their revolution, they do so in a new atmosphere of freedom and  fairness.

While many voters may be disappointed that, following the  revolution,
change didn’t come as quickly as they anticipated in a  number of areas, the
parliamentary campaign of 2006 clearly  demonstrates the impressive level of
political freedom and debate that  has blossomed in Ukraine in just over one

In 2004, then-presidential candidate Viktor Yushchenko was refused time  to
advertise or appear on the primarily state-controlled Ukrainian  media. He
was routinely attacked by "journalists," as numerous dubious,  intensely
negative "documentaries" appeared all over Ukraine’s  television channels.
At the same time, Yushchenko was refused permits  to hold rallies, denied
airplane landing rights to campaign in certain  regions, followed by
security service personnel, threatened, and  finally, poisoned.

Those supporting Yushchenko were bullied, subjected to "investigations"
by tax and police officials, followed, and, along with Yushchenko,  placed
under a constant state of siege. Media found to be critical of  the
administration in power simply were shut down, journalists were  threatened
(threats which were taken seriously given the earlier murder  of journalist
Georgiy Gongadze and the disappearances of several  others), and an
atmosphere of oppression prevailed against those not  supportive of the
regime in power.

Alternatively, Yushchenko’s opponent, then-Prime Minister Viktor
Yanukovich – the chosen successor of President Leonid Kuchma – was 

praised at every turn on Ukrainian television and radio, and in state  controlled
newspapers. Certain journalists were rewarded for their  support of
Yanukovich, as most news distribution followed restrictive  orders issued
directly from the presidential administration (there  were, of course, brave
exceptions). Yanukovich received massive  assistance from the state
apparatus in holding rallies and "contacting"  voters, state workers were
threatened with the loss of jobs if they did  not vote for him, and students
were told they would lose their stipends  and housing. Moreover, this
assistance continued throughout the  now-discredited first round of voting.

My, how things have changed.

In 2006, advertisements for parties taking part in the parliamentary
elections – even those overtly opposing President Yushchenko – appear
regularly on all media outlets without restriction. Candidates travel,  hold
rallies and appear on media talk programs without problem or  constraint.
Although some candidates have complained of obstruction by  officials at the
local and regional level, complaints are aired loudly,  and generally,
problems are corrected. Even in Donetsk, the region of  the country with the
highest level of election fraud and violence in  2004, and the region where
officials still cling to many of the old  ways, candidates from all parties
are allowed – if not welcomed – to  campaign and speak to the press.

During one week on Ukrainian television, viewers could watch hour-long
press conferences with former revolution leader and prime minister  Yulia
Tymoshenko, who is running separately from Yushchenko’s Our  Ukraine party
in these elections, Socialist Party leader and former  Orange Revolution
partner Oleksandr Moroz, and Prime Minister Yuriy  Yekhanurov, the political
leader of Our Ukraine. Additionally, they  could see lengthy interviews with
the leaders of the smaller PORA and  Viche parties, a political debate on
possible parliamentary coalitions,  regular news reports on the activities
of all parties, and enough  political advertising to irritate even seasoned
Western political  analysts.

In fact, so many parties have bought advertising (47 are running) that
state-controlled Channel 1 is running at least five minute-long blocs  of
political advertising several times each hour. Cursory observation  suggests
that Yanukovich’s Party of Regions has purchased the largest  amount of
advertising time, and unlike what happened to candidate  Yushchenko in 2004,
all channels are running these advertisements.

On Independence Square, the site of the largest Orange Revolution  protests
in 2004, all parties can, and often do, maintain booths to  distribute
campaign material, and on weekends, set up small soundstages  to conduct
rallies. There is no greater sign of the new freedom in the  country than
the fact that on 11 March, Yanukovich’s Party of Regions  held a rally for
hundreds of voters almost on the same site where  hundreds of thousands
protested against him slightly more than one year  earlier. The rally was
not obstructed, not watched by security  personnel videotaping attendees,
and not barred from coverage by the  media.

This is particularly impressive given that Yanukovich seems poised to  win
the greatest number of seats in the next parliament (25-30%).  President
Yushchenko and those around him have not responded as most  leaders of
the former Soviet Republics have done when faced with  similar political
challenges, rather they simply have campaigned  harder, and challenged
Yanukovich to debates. They have accepted that –  as during the third round
of the 2004 presidential election when  Yanukovich received 44% of the
votes – there is a portion of the  citizenry that supports the former Prime
Minister’s pro-Russia,  anti-NATO program. In other words, they have
responded as any Western  political party would do.

There are, of course, individuals within Our Ukraine who have suggested
that Yanukovich should not be allowed to run in this election, because  past
crimes committed in his youth and his alleged involvement in  2004’s
election fraud should disqualify him. Yushchenko, however, has  shied away
from this idea, as he has shied away from pursuing Kuchma  for his past
alleged crimes (including alleged involvement in the  murder of Gongadze).
For better or for worse, Yushchenko has chosen to  allow his opponents to
rehabilitate themselves. Perhaps this is not the  justice demanded during
the orange revolution, but it is freedom – and  a level of freedom unknown
in that part of the world.

It is also worth highlighting that President Yushchenko and Our Ukraine
face challenges not only from Yanukovich but from his former revolution
partner, Yulia Tymoshenko. A poll released on 10 March by the respected
Democratic Initiatives Foundation found Yanukovich with 30.4%,  Yushchenko’s
Our Ukraine Bloc at 17.1% and the Yulia Tymoshenko Bloc  with 16.9% of
voter support. Yushchenko’s decision to break from Soviet  and post-Soviet
electioneering practices has allowed his party to face  the possibility of
placing third in the election, but should also prove  to his citizens – and
the West – that it is possible to hold a fair and  free election in the
former Soviet region.
                      PROBLEMS FACED ON ELECTION DAY
The poll itself will present additional problems for the government, as  the
country implements new laws and procedures designed to limit fraud  and
increase accountability. Most observers agree with the government’s  own
assessment that the sheer volume of choices faced by voters will  mean long
lines and an exceptionally long vote counting period. The  national
parliamentary ballot will have 47 party choices and be so long  that it will
not fit on the table provided to mark it. Moreover, voters  could receive up
to an additional four ballots, as they vote  simultaneously for the first
time in regional, municipal, district and  local elections. Parties on each
ballot may be different and in a  different order than on the national
parliamentary ballot. Needless to  say, voters will have more choice than
they thought possible in 2004,  and election workers who likely have never
participated in a free  election will face counting challenges.

There is little worry, however, of vote tampering or rigging.  Yushchenko’s
message of non-interference seems to have been clearly  delivered to
election workers. These workers complain that they are  afraid to make
mistakes for fear of being charged with fraud. This fear  has contributed to
difficulty filling election positions throughout the  country, but it speaks
volumes about the tone being set by the  presidential administration.
                                    COALITION BUILDING
Whether the pluralism of a campaign can be carried over into a  pluralistic,
diverse, and inclusive government also is a major test for  this new
Western-oriented government.

The incoming parliament will be tasked by new constitutional amendments
with creating a majority coalition and choosing a prime minister and
cabinet. Previously, the president named the prime minister, who was  then
confirmed by parliament. Now, the country has moved in the  direction of a
parliamentary republic (although the president will  maintain more power
than most presidents possess under this form of  government).

Numerous majority coalition scenarios exist, including agreements  between
Yanukovich and Yushchenko and between Yushchenko and  Tymoshenko.
Should the parliament fail to reach a majority coalition  agreement within
days after opening its session, the president has  the right to disband the
body and call new elections. It is unclear  whether this is a scenario being
considered by Yushchenko, but it is  hard to believe that the president
would embrace this idea over a  coalition with his former partners,
especially following a difficult  campaign, having made such progress on
political freedom and with such  unpredictable consequences.

It is also hard to believe that Yushchenko would choose to unite with
former Prime Minister Yanukovich, the man who was complicit in the
oppression of him and his associates in 2004. Even more, Yanukovich  leads

a party that voted in 2005 to oppose joining NATO, oppose reforms  needed
to join the WTO, oppose joining the EU without a special  agreement with
Russia, and oppose anti-monopoly free-market reforms  that might have
threatened the control some party members hold in  certain industries.
Clearly, Yushchenko has many decisions to make in  the next month or two.

Also clearly, Ukraine has come far in slightly over one year. The
atmosphere on the streets is cautious but hopeful, and the campaign
resembles some of the most hotly contested in the West. For over one  year,
Viktor Yushchenko has said that his country is part of Europe.  And there
can be no doubt that the president has given Ukrainians two  of their most
important demands during the revolution, and two of the  fundamental rights
of European nations – the freedom to choose their  own political leaders and
the freedom to learn about them from an  uncensored press.
Contact: Tammy Lynch in Kyiv – mobile 8-079-336-3837 or by
e-mail; link:

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

THE WHITE HOUSE: Office of the Press Secretary
Washington, D.C., Thursday, March 23, 2006



Room 350; Dwight D. Eisenhower Executive Office Building, 11:01 A.M. EST

THE PRESIDENT:  Thank you.  Pleased be seated.  (Applause.) Ambassador,

good to see you.  Please be seated.  Welcome.  Appreciate you all coming.  In
a few minutes I’m going to sign a bill that authorizes permanent normal trade
relations between the United States and Ukraine.  It’s a good bill, and it’s
going to strengthen our ties with our friend, Ukraine.  It’s going to create
new opportunities, economic opportunities, for both our countries.

I really want to thank the Chairman of the Senate Foreign Relations
Committee, a man who knows what he’s talking about when it comes to the
world, and that’s Chairman Lugar from Indiana.  Thank you for coming, sir.
(Applause.)  I thank the bill sponsor, Congressman Jim Gerlach, and his wife
Karen is here today.  Thank you for coming, Mr. Congressman.

Congressman Tom Lantos is with us.  He’s the Ranking Member of the House
International Relations Committee.  Congressman Curt Weldon, a cosponsor

of the bill, is with us.  Congresswoman Candice Miller from Michigan, a
cosponsor, is with us, as well as a cosponsor, Congressman Mike Fitzpatrick.
Thank you all for being here.  (Applause.)

I welcome you all here.  I especially welcome the Ambassador from Ukraine,
Ambassador Shamshur.  Welcome, Mr. Ambassador.  Appreciate you coming.
(Applause.)  This is the third time we’ve been together in the last 30 days.
(Laughter.)  I’m better for it.  (Laughter.)

 The bill I sign today marks the beginning of a new era in our history with
Ukraine.  During the Cold War, Congress passed the Jackson-Vanik Amendment
as a response to widespread communist deprivation of human rights.  The law
made American trade with communist nations contingent on those countries’
respect for the rights of their own people.

At the time, the law served an important purpose — it helped to encourage
freedom and the protection of fundamental rights, and penalized nations that
denied liberty to their citizens.  Times have changed.  The Cold War is
over, and a free Ukraine is a friend to America and an inspiration to those
who love liberty.

The Orange Revolution was a powerful example of democracy for people

around the world.  The brave citizens who gathered in Kiev’s Independence
Square demanded the chance to determine their nation’s future, and when
they got that chance, they chose freedom.

In the past two years, Ukraine has held free elections, and the people of
Ukraine and its President, Viktor Yushchenko, are deeply committed to
democratic reform.  On Sunday, the Ukrainian people will again have the
chance to cast a ballot in parliamentary elections, and they have a chance
to continue to shape their own future.

Ukraine is also working to expand its market economy and produce

measurable improvements in the lives of the Ukrainian people.  America
supports these efforts, and this bill is an important step.  By eliminating
barriers to trade between the United States and Ukraine, the bill will help
Ukraine grow in prosperity.

As we’ve seen over the past 50 years, trade has the power to create new
wealth for whole nations and new opportunities for people around the world.
By expanding trade with Ukraine, this bill will open new markets for
American products and help Ukrainians continue to build a free economy

that will raise the standard of living for families across their land.

 As Ukraine embraces democracy and more open trade, our nation’s friendship
will grow.  President Yushchenko has made reforms to increase transparency
and provide intellectual property protection and strengthen the enforcement
of the rule of law.

These reforms have taken great conviction.  And earlier this month, our two
nations signed a bilateral agreement that will establish the terms of trade
between our nations when Ukraine joins the World Trade Organization.  We
support Ukraine’s goal of joining the WTO, and we will help resolve the
remaining steps required for entry as quickly as possible.

As the Ukrainian government continues to build on a record of progress at
home, we will help Ukraine joins the institutions that unite free nations
and become a part of Europe that is whole, free, and at peace.

The growth of economic freedom and ownership in countries like Ukraine
reinforces the habits of liberty and democracy, and gives citizens a stake
in the success of their nation.  Ukrainian people have shown the world they
are committed to the ideals of economic freedom and democratic progress

and open trade, and that gives them a promising future.

The United States is proud to call Ukraine a friend, and I’m honored to sign
this important piece of legislation into law.  (Applause.)
(The bill is signed.)                       

[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]
     You are welcome to send us names for the AUR distribution list.

AP Worldstream, Washington, DC, Thursday, Mar 23, 2006

WASHINGTON – President George W. Bush was signing legislation Thursday

that would end Cold War-era trade restrictions on Ukraine, opening the way for
the former Soviet republic to join the World Trade Organization.

The measure frees Ukraine from a 1974 law called the Jackson-Vanik Amendment
that links trade benefits to the emigration and human rights policies of
former or current communist states. Both houses of Congress passed the
legislation earlier this month.

Ukraine hopes to join the 148-nation WTO this year and removal of U.S. trade
restrictions is necessary for that to happen. Since 1993, the United States has

granted Ukraine normal trade relations on a temporary annual basis.

Ukrainian President Viktor Yuschenko, whose pro-Western government was
elected in January, has welcomed the U.S. legislation, saying "consistent
U.S. steps in support of Ukraine on the way of reform are evidence of
strategic partnership between the countries."

U.S. exports to Ukraine, including poultry and agriculture machinery totaled
$531.7 million (A441 million) in 2005. Imports from Ukraine, including steel
and coke used in making steel, totaled $1.1 million (A910,000).

Sen. Richard Lugar, chairman of the Senate Foreign Relations Committee,

said Ukraine has demonstrated a commitment to greater freedom and free
market principles.                                     -30-
[ return to index] [The Action Ukraine Report (AUR) Monitoring Service]
      Viktor Yushchenko on what will happen to Ukraine after the election

INTERVIEW: With President Viktor Yushchenko of Ukraine
BY: Mikhail Zygar, Mustafa Naijem, Sergei Sidorenko
Kommersant, Moscow, Russia, March 23, 2006

[The parliamentary election in Ukraine will take place on March 26.
President Viktor Yushchenko discuses the campaign situation, the
chances of his party, his own plans for after the election, and
Russian-Ukrainian relations.]

      Question: One frequently hears speculations in Russia that the
"Yushchenko era" in Ukraine is drawing to its end. There is the
widespread opinion that the triumph of Viktor Yanukovich’s Party of
Regions is a foregone conclusion and that it will put an end to the
Orange Period in Ukrainian politics.

      Viktor Yushchenko: I’d say that this is an erroneous
assumption, or rather a deliberately cultivated myth. A legend if
you prefer that doesn’t have anything to do with the actual state of

      Yesterday is gone for good. Ukraine will never return to the
lawlessness of shadow economy, to the criminal regime, to the
decisions quietly made by oligarchs in the halls of power…

      The processes that are taking place in Ukraine are approved by

      Question: But democracy doesn’t necessarily mean democrats in
the halls of power. You will surely admit that Yanukovich may win
and become prime minister again.

      Viktor Yushchenko: I only know who won’t be the prime
minister… As for who will be in the Cabinet, the answer to this
question will be given on March 26. I’m convinced that a harmony

of interests will be found. Extremes will never promote the public

      Question: Results of opinion polls show the Party of Regions
ahead of all other political forces. Do you accept that this party
could form a coalition? Or will Our Ukraine provide the nucleus, no
matter what?

      Viktor Yushchenko: Let’s put it this way. The political
majority will probably be formed with the positions of three
political forces taken into consideration. These political forces
I’m talking about are Our Ukraine, Party of Regions, and Yulia
Timoshenko’s Bloc. That’s all by way of the nucleus. Some other
political forces may decide to join the coalition, the ones that
will have been elected into the parliament.

      The coalition should promote the policy of national interests,
both domestically and in international affairs.

      That a coalition will be formed is I think clear. What forces
may join it is immaterial at this point. In my view, there may be up
to six combinations. I’d prefer a renovated Orange Team of course. I
hope that the talks over establishment of the coalition in the wake
of the election will be successful.

      Question: What do you think Yanukovich’s party owes its high
rating to? Split in the Orange Camp?
      Viktor Yushchenko: Of course. And I would like the architects
of this split to understand it.
      Question: And who are they?

      Viktor Yushchenko: Those who were dismissed. Some people
dramatically changed as soon as they found themselves in the halls
of power, and that was the worst conceivable strike at the Orange
Revolution and the camp of Independence square supporters. I mean
the people who stood by my side on Independence Square. I considered
it my duty to elevate them to the positions of power. I hoped that
they would be as faithful to Ukraine and ideals of the team as they
had been before the election. I thought that national interests
would be their first priority in everything.

Unfortunately, devaluation of these values began practically at once.
Personal gains, personal aspirations, plans, and business ventures
moved into the foreground. Consider the Nikopol Ferrous Alloys Plant,
here the conflict was fomented by intrigues. Unfortunately, it was not
just an isolated episode. There were others as well. Dismissing them all
was the only means of preventing devaluation of the team and decline
of national economy left me.

      Question: You thought you might be at the top of Our Ukraine’s
list of candidates, until late summer. You changed you mind
afterwards. Why is that?

      Viktor Yushchenko: I didn’t rule out this possibility, but I
never said it was decided. We still had some time before the
election in the middle of 2005. We knew we would have to decide one
way or another closer to the election. As for me personally, there
is only one thing that concerns me. I want the upcoming election to
solidify the victory the forces of democracy scored in 2004.
Ukrainian democracy is still fragile… So, I gradually decided
against having my name at the top of Our Ukraine’s list.

      Question: But you are a party member!

      Viktor Yushchenko: I’m president and therefore put as much
distance between me and parties as possible. As for Our Ukraine, I
have trust in it. It already changed Ukraine and (I know) it will do
a lot for Ukraine yet. I decided nevertheless that having my name on
top of the list of candidates would be a collision with principles
of democracy.

      Question: Has anyone on your team ever proposed using
administrative resources?
      Viktor Yushchenko: The matter has never even been proposed.

      Question: Do you think someone might go ahead and use them
      Viktor Yushchenko: I can’t rule it out, of course. First and
foremost, the matter concerns local government bodies. Free and fair
elections are like a new culture. It is understood and accepted by
80% while 10% more need to think it over yet and the remaining 10%
do not want anything but what life was like two years ago. There is
only one way of winning elections. That is winning voters over to
your side. At the very least, it is necessary to invoke the hope
that the country is moving in the correct direction. The
administrative resource will only bring harm here. Tactically, it
may actuate victory. Strategically, however, it is always more
damaging than helpful.

      Question: What if some political force finds itself
disappointed with the outcome of election? What if it sets up tents
on Independence Square again, accuse you of tampering with the
election, and demands cancelling the election result. What will you
do then?

      Viktor Yushchenko: Protests on Independence Square require a
motive, and evidence that the election was rigged. You have my
solemn promise that there will be no such motive.

      Let us consider what was improved since a year ago. We revised
the work with voters lists. First and foremost, we completed their
inventory and run them by registries to update the lists. In short,
I believe that in the upcoming election we will have the most
precise lists of voters in the history of Ukraine. I’d say that this
is a guarantee of democratic nature of the election.

      Question: Many problems have arisen in Russian-Ukrainian
relations: gas supplies, the Black Sea Fleet, cheese, lighthouses.
What do you think all this means? Moscow’s vengeance for your
2004 triumph?

      Viktor Yushchenko: Relations between Ukraine and Russia have
never been simple. On the contrary, the legacy of the my team
included a host of unsolved problems. A number of bilateral treaties
and documents weren’t even functioning, but raising that issue was
taboo. In my view, the time has come to bring up all these matters
and – more importantly – finally resolve them.

Ukraine is being run by a team of pragmatists. Where foreign policy is
concerned, we are guided by quite simple and understandable principles.
They boil down to promotion of national interests of Ukraine, to honesty,
predictability, and responsibility to partners. Ukraine has proclaimed
Euro-Atlantic integration as its strategic objective.

This course remains unchanged. I always emphasize meanwhile that
Ukraine’s rapprochement with European structures doesn’t mean
friendship against someone else. On the contrary, Kiev has always
stood for advancement of mutually beneficial, equal, strategic
relations with all its neighbors and primarily with Moscow.

      I disagree with the assumption that 2005 was a bad year for
bilateral relations between Ukraine and Russia. On the contrary, the
Yushchenko-Putin panel was set up and its committees are already
working. The committee for the Black Sea Fleet has already met.

      As for economic matters, we abandoned the practice of barter
deals in the gas sector, and that’s fine by us and an important
achievement. The trade turnover between our countries rose 12% in
2005. Not bad, but not nearly as good as it could have been.

      Question: Has Moscow tried to exert any influence on the
parliamentary election in Ukraine?

      Viktor Yushchenko: I’d say this will be the first parliamentary
election in Ukraine whose outcome depends solely on Ukrainian
voters. It is here that the outcome of the election will be decided
– not in Washington, Brussels, or Moscow. If I my say so, our
neighbors understand it too.

      Question: Your opponents criticize the authorities for the gas
accord with Russia that makes RosUkrEnergo, a dubious structure at
least, a monopolist. What is the purpose of RosUkrEnergo?

      Viktor Yushchenko: You’d better ask someone else. Somebody has
been given a monopoly on gas transit across Russian territory. Why?
I don’t know why! I cabled the prime minister and requested another
appeal to Gazprom and Reifferizerbank for an official explanation.

These aren’t Ukrainian companies! We approached the third entity,
saying that we want to know what this company is and its history. We
want to know who its shareholders are, and so on. Had the matter
concerned a company registered in Ukraine or partly Ukrainian-owned,
I’d have perceived some logic in it, perhaps. And you are asking me
now why this company handles Russian gas. Is the gas Russian? It is.

So go ask Gazprom, or some other entity.   -30-

Translated by A. Ignatkin
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