AUR#700 May 25 US Ambassador’s Parting Words; First Lady In Philadelphia, GUAM; Gas Crisis A Grave Strategic Challenge; Russian Language Issue Heats Up

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ACTION UKRAINE REPORT – AUR           
                 An International Newsletter, The Latest, Up-To-Date
                     In-Depth Ukrainian News, Analysis and Commentary

                      Ukrainian History, Culture, Arts, Business, Religion,
         Sports, Government, and Politics, in Ukraine and Around the World       

                        
ACTION UKRAINE REPORT – AUR – Number 700
Mr. E. Morgan Williams, Publisher and Editor  
WASHINGTON, D.C., THURSDAY, MAY 25, 2006 
           –——-  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
1.                    U.S. AMBASSADOR’S PARTING WORDS
              John HERBST: “I do not agree that a fresh look at the gas
           agreements will increase tensions between Ukraine and Russia”
INTERVIEW:
With U.S. Ambassador John Herbst
By Serhiy Solodky, The Day Weekly Digest in English #15
Kyiv, Ukraine, Tuesday, 23 May 2006

2UKRAINE GAS CO OWES $413 MILLION TO ROSUKRENERGO 

United Pres International (UPI), Kyiv, Ukraine, Tuesday, May 23, 2006

3UKRGAZENERGO EYES $1.2 BILLION IN LOANS TO FINANCE
                  GAS STORAGE FOR UKRAINE’S WINTER GAS 
Alex MacDonald, Dow Jones Newswires, London, Wed, May 24, 2006 .

4.     RUSSIA-UKRAINE GAS AGENT ROSUKRENERGO BUYS

Reuters, Moscow, Russia, Wednesday, May 24, 2006

5.              POLITICS: SIEGE OF THE EXCLUSIVE CIRCLE
         Gas crisis remains one of Ukraine’s gravest strategic challenges

  Political and economic “soap opera” playing inside and outside Ukraine
ANALYSIS AND COMMENTARY
: By Yulia Mostovaya
Zerkalo Nedeli On the Web; Mirror-Weekly, No. 19 (598)
Kyiv, Ukraine, Saturday, 20 – 26 May 2006

6.                GUAM – UNITED STATES JOINT STATEMENT
        US delegation led by David J. Kramer of the US State Department
Public Affairs Section, U.S. Embassy, Kyiv, Ukraine, Tue, May 23, 2006

7.              G.U.A.M. FAREWELLS ITS POST-SOVIET PAST
                Four former Soviet republics set a course for the West

   The GUAM Organization for Democracy and Economic Development
COMMENTARY: By Sergei Sidorenko & Vladimir Soloviev
Kommersant, Moscow, Russia, Wed, May 24, 2006

8.   FOUR EX-SOVIET STATES SAYS NEW REGIONAL ALLIANCE
NOT DIRECTED AGAINST RUSSIA BUT IS A PRO-EUROPE CHOICE
          Georgia, Ukraine, Azerbaijan and Moldova sign a new charter
Associated Press (AP), Kiev, Ukraine, Tue, May 23, 2006

9.            KREMLIN LOSES ITS GRIP ON IT’S DYING EMPIRE
       Four former Soviet republics set to abandon eastern commonwealth
ANALYSIS: By Richard Beeston, The Times, London, UK, May 24, 2006

 

10.   EASTERN UKRAINIAN REGION GIVES RUSSIAN LANGUAGE
                              SPECIAL REGIONAL STATUS
Associated Press (AP), Kiev, Ukraine, Thursday, May 18, 2006 

11UKRAINE’S MAJOR OPPOSITION PARTY ISSUES STATEMENT

                             ON RUSSIAN LANGUAGE ISSUE
Interfax-Ukraine news agency, Kiev, in Russian 1309 gmt 17 May 06
BBC Monitoring Service, United Kingdom, Wed, May 17, 2006

12UKRAINIAN CELEBRITIES SAY GIVING RUSSIAN LANGUAGE
                 SPECIAL STATUS IS A WAR AGAINST UKRAINE
   “We have a direct threat to the Ukrainian nation & Ukrainian state system.”
Natasha Lisova, Associated Press (AP), Kiev, Ukraine, Fri, May 19, 2006

13.    INCONSISTENT LANGUAGE POLICY CREATES PROBLEMS 
    PRU-led Ukrainian regions continue to adopt Russian as official language
ANALYSIS & COMMENTARY: By Oleg Varfolomeyev
Eurasia Daily Monitor, Volume 3, Issue 101
Jamestown Foundation, Washington, DC, Wed, May 24, 2006

14.      RUSSIAN MP SAYS UKRAINE MUST NOT TRAMPLE ON
                    RIGHTS OF RUSSIAN-SPEAKING MINORITY
ITAR-TASS news agency, Moscow, in Russian, 22 May 06
BBC Monitoring Service, United Kingdom, Monday, May 22, 2006

15RUSSIAN LANGUAGE COMPLAINT: ATTENTION OLEH SOSKIN
—– Original Message —–
From: Nadia Kerecuk; nadia.kerecuk@ntlworld.com

Action Ukraine Report (AUR) #700, Article 15
Washington, D.C., Thursday, May 25, 2006

16. PROSPECT OF BUSH VISIT PUTS PRESSURE ON KIEV PARTIES
By Tom Warner in Kiev, Financial Times
London, United Kingdom, Friday, May 19 2006

17. KATERYNA YUSHCHENKO TO VISIT PHILADELPHIA NEXT WEEK
      Meet with top health care professionals, address the World Affairs Council
By Morgan Williams, Publisher and Editor
Action Ukraine Report (AUR) #700, Article 17
Washington, D.C., Thursday, May 25, 2006

18.   ART EXHIBITION: “MAZEPIANA” – SERHIY YAKUTOVYCH
WHAT: The Embassy of Ukraine is proud to present an art exhibition
“Mazepiana” – the works of Serhiy Yakutovych.

WHEN: Thursday May 25, 2006, 7:00 pm
WHERE: Embassy of Ukraine, 3550 M St. NW, Washington, DC 20007

19“EMBASSY SERIES” CONCERT: THE EMBASSY OF UKRAINE

WHAT: Another marvelous pair of evenings of wonderful music
WHEN: Friday, May 26 – 8:00 pm; Saturday, May 27 – 8:00 pm
WHERE: Embassy of Ukraine; 3350 “M” Street, N.W., Washington

20
.          WASHINGTON IGNORES DEMOCRATIC VALUES
                                 IN QUEST FOR CHEAP OIL
Sylvie Lanteaume, Agence France-Presse, Wash, D.C, Sun, May 21, 2006
21.             INVESTING: ADVENTURES AT THE FRONTIER
       One market that Chief Investment Officer Chisholm likes is Ukraine
By Conrad de Aenlle, International Herald Tribune
Paris, France, Friday, May 19, 2006
 
22UKRAINIANS GATHER AT MASS GRAVE TO COMMEMORATE
                               VICTIMS OF STALIN REGIME 
Associated Press (AP), Kiev, Ukraine, Monday, May 22 2006
 
23.                               A BOOK FOR SKEPTICS: 
                “THE UKRAINIAN QUESTION” 70 YEARS LATER
By Mykola SIRUK, The Day Weekly Digest #15
Kyiv, Ukraine, Tuesday, 23 May 2006
 
24UKRAINIAN NATIONAL ASSOCIATION 36TH CONVENTION
Action Ukraine Report (AUR) #700, Article 23
Washington, D.C., Thursday, May 25, 2006
 
25  HUMAN RIGHTS WATCHDOG UNHAPPY WITH UKRAINE
  Ukraine continues to treat prison inmates cruelly and violate human rights
TV 5 Kanal, Kiev, in Ukrainian 1600 gmt 23 May 06
BBC Monitoring Service – United Kingdom; May 23, 2006
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1
                 U.S. AMBASSADOR’S PARTING WORDS
            John HERBST: “I do not agree that a fresh look at the gas
         agreements will increase tensions between Ukraine and Russia”

INTERVIEW: With U.S. Ambassador John Herbst
By Serhiy Solodky, The Day Weekly Digest in English #15
Kyiv, Ukraine, Tuesday, 23 May 2006

This week John E. Herbst, Ambassador Extraordinary and Plenipotentiary
of the US, is leaving Ukraine. He is heading for Washington to take over as
Coordinator of the State Department’s Office for Reconstruction and
Stabilization.

Obviously, the diplomat is leaving Kyiv with the sense that he fulfilled his
duties. When he arrived in Ukraine three years ago, he stressed that his
main objective was to improve relations between Kyiv and Washington.

The Orange Revolution occurred during his ambassadorial tenure. This was
followed by a real thaw in the relations between our two countries, crowned
by the repeal of the Jackson-Vanik amendment and the granting of market
economy status to Ukraine.

Herbst had a chance to witness what he calls two democratic elections in
our country.

[The Day] The Day began the interview with Ambassador Herbst by asking
if he believes his ambassadorial mission has been accomplished, even though
Ukraine is still without a cabinet.

[Amb. Herbst] “Naturally, it would be better to leave Ukraine after it has
formed a coalition government. But I am going long before the official term
for its formation expires. Why do I have to go to Washington right now? The
reason is the position that I will occupy has remained vacant for almost
four months.

Besides, although the formation of a coalition is extremely important, it is
not of a fundamental nature. The essential fact is that Ukraine has had two
democratic elections in a row: the presidential election rerun in 2004 and
the parliamentary election last March.

The Verkhovna Rada election may be unhesitatingly called the freest and
fairest in Ukrainian history. Above all, President Viktor Yushchenko must be
given credit for this. I consider the democratic nature of these elections
the logical final touch to my stay in Ukraine.”

[The Day] If the formation of a cabinet is not a fundamental factor, do you
think the domestic political situation in Ukraine is predictable?

[Amb. Herbst] “The last elections were important not only because the
authorities allowed them to be free but also because all the participants in
this race tried to achieve victory by democratic means. It was very pleasant
to watch political leaders doing their political work according to the same
standards that exist in all democracies.

As you know, some participants of the last parliamentary elections did not
adhere to democratic principles. As for the current problems with the
coalition, they are not unusual in a democratic society. We also witnessed
very difficult coalition negotiations in Germany after the latest
 elections.”

[The Day] Some politicians say that a coalition that includes the Party of
Regions will be a departure from democracy.

[Amb. Herbst] “We would like to see a coalition devoted to the cause of
reforms. The formation of the cabinet depends on the politicians who were
elected to the Verkhovna Rada. We will cooperate with the government that
is formed as a result of negotiations between these politicians.”

[The Day] Your successor William Taylor said the US is interested in a
revision of the Ukraine-Russia gas deal.

[Amb. Herbst] “The same applies here: it is the government of Ukraine that
should address this problem. If the government of Ukraine concludes that the
gas deal should be revised, it will find support and understanding on the
part of the US. As you know, since January of this year the US has not
hesitated to point out certain problems in this connection.”

[The Day] There have been many changes in US-Ukraine relations in the past
year. What problems are still on the agenda?

[Amb. Herbst] “As of today, our relations are very good indeed. We can
certainly point to a number of steps that prove this convincingly: the
restoration of privileges under the Generalized System of Preferences (a
program that gives most products from less-developed and developing
countries duty-free access to the US market – Ed.), a bilateral agreement on
the WTO, granting Ukraine market economy status, and the repeal of the
Jackson-Vanik amendment. All these steps show the progress Ukraine has
achieved in its reform-related activities.”

[The Day] What opportunities have been lost in US-Ukraine relations over
the past few years?

[Amb. Herbst] “US-Ukrainian relations saw a cool period of three or four
years that lasted approximately from 1999-2000 until the presidential
election. I can say that this period was lost time. But we have regained
what we lost in the last 15 months.”

[The Day] What would you advise your successor and all foreigners who
want to know more about Ukraine? What three pieces of advice would
you offer?

[Amb. Herbst] “It is very important to listen attentively to the people you
are dealing with. It is equally important to understand the motivation of
the people with whom you are talking and contacting, the motivation of
political forces. And, of course, it is extremely important to understand
the national interests of your own country.

The positive side of being the US ambassador to Ukraine is that Ukraine
and the US generally have very similar interests. This interest is, above
all, that Ukraine should be a democracy and a market economy. This is

the road not only to freedom but prosperity.”                    -30-
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LINK: http://www.day.kiev.ua/162527/
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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2.  UKRAINE GAS CO OWES $413 MILLION TO ROSUKRENERGO 
 
United Press Internationional (UPI), Kyiv, Ukraine, Tue, May 23, 2006
KIEV, Ukraine — A Ukrainian gas company confirmed that it owed $413
million dollars to Swiss-based RosUkrEnergo.
 
State oil and gas company Naftohaz Ukrayiny confirmed it owes more than
$400 million for gas supplied by RosUkrEnergo in January and February of
this year, Yarolsav Dykovytskyy, acting director for financial and investment
issues and the head of Naftohaz’s department for economics and price policy,
said at a news conference in Kiev, UNIAN news agency reported.
Dykovytskyy was responding to allegations made in Ukraine over Naftohaz’s
debt to RosUkrEnergo. “It is not the case that we have not peen paying for
gas for four month. We have been paying for gas.
 
The debt was accumulated due to (the Russian state gas monopoly) Gazprom’s
failure to pay Naftohaz Ukrayiny for the transit of (Russian) gas (through
Ukraine),” Dykovystksyy said.                      -30-
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3. UKRGAZENERGO EYES $1.2 BILLION IN LOANS TO FINANCE
                   GAS STORAGE FOR UKRAINE’S WINTER GAS 

Alex MacDonald, Dow Jones Newswires, London, Wed, May 24, 2006 .

LONDON — The recently created Ukrainian natural gas supply company
UkrGazEnergo expects to raise $1.2 billion in loans to finance gas storage
for peak consumption during the winter months, Igor Voronin, Chairman of
UkrGazEnergo said Wednesday.

The new venture, called UkrGazEnergo, expects to raise $1.2 billion in loans
payable over a five-year period from “big banks” in order to buy and store
gas for this coming winter, Voronin told reporters at a press conference in
London. Voronin expects to secure the loan by August.

The company plans to store up to 12 billion cubic meters of gas in Ukraine
this year, about 38% of the 32 billion cubic meters of gas it plans to
import into Ukraine during 2006. Voronin also said the company plans to
increase its gas imports to 58bcm a year over the next five years.

He said that UkrGazEnergo has “the cheapest gas in Ukraine” and “as of today
… (it’s) much lower than the European average,” which should help the
company attract more customers in the future.

The company, which expects to generate about $4 billion in sales this year,
has already signed 17bcm of annual gas contracts with industrial customers
and expects to sign more contracts before the end of the year, Voronin said.

UkrGazEnergo was established at the beginning of the year as a joint venture
between Ukraine’s largest gas supplier, Naftogaz-Ukrainy (NGAZ.YY), and
RosUkrEnergo to supply gas to Ukraine’s industrial consumers with the help
of Naftogaz.

RosUkrEnergo, a joint venture between Russian gas major OAO Gazprom
(GSPBEX.RS) and a handful of private individuals, was also created at the
beginning of the year to solve a gas price dispute between Gazprom and
Ukraine that led to a temporary reduction in gas supplies to Western Europe.

Under the contract, RosUkrEnergo agreed to provide Ukraine with Russian and
Central Asian gas at a price of $95 per 1,000 cubic meters – a nearly
twofold increase for Ukraine but far less than the $230 it would pay if it
was getting only Russian gas.

Voronin said the contract with RosUkrEnergo is fixed until the end of the
year. When asked whether the price would re-negotiated for next year, he
said he wouldn’t comment.

Separately, Voronin said UkrGazEnergo plans to expand beyond gas supply to
industrial customers and move into “exploration, production of gas fields
(in Ukraine and) … beyond Ukraine.”

The company is also planning to set up a business which would help utilities
modernize their power plants in order to make them more energy efficient.
Lastly the company also plans to open a division dedicated to scientific
research in the gas industry.

Voronin said the loans “will cover all of UkrGazEnergo’s finance needs.” He,
however, didn’t rule out the possibility of raising more funds if the
company’s investment plans changed.

Voronin said the company had no plans to buy stakes in Ukraine’s pipeline
system. He also said that acquiring gas storage wasn’t feasible at the
moment although the company intends to play a role in modernizing Ukraine’s
storage infrastructure.

Separately, Voronin said that the financial problems at Naftogaz were due to
regulatory issues and government policies rather than bad management. He
said that Naftogaz plans to pay off its debt to RosUkrEnergo by June via
loan agreements. Naftogaz has incurred $400 million in debt owed to
RosUkrEnergo.                                -30-
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-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328;
alex.macdonald@dowjones.com

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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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4.       RUSSIA-UKRAINE GAS AGENT ROSUKRENERGO BUYS
CONTROL OF BIG GAS FIELD IN RUSSIA’S ASTRAKHAN REGION
Reuters, Moscow, Russia, Wednesday, May 24, 2006

MOSCOW – RosUkrEnergo, which was appointed at the start of this year to
manage Russian gas exports to Ukraine, has bought control of a big gas field
in Russia’s Astrakhan region, Interfax news agency reported on Wednesday.

The southern block of the Astrakhan gas condensate field contains 220
billion cubic metres of gas and around 20 million tonnes of oil. Citing a
source in the regional Astrakhan government, Interfax said the firm had
bought 74.87 percent of Astrakhan Oil and Gas Co., which owns the field,

and RosUkrEnergo co-owner Dmitry Firtash was now chairman of the
firm’s board.

The remainder of the shares, enough to block board decisions, is owned by
the regional government of Astrakhan, which is on the north coast of the
Caspian Sea.

Company documents from Astrakhan Oil and Gas show that it will need

over a billion dollars to develop the field and achieve target production
of 6 billion cubic metres a year. Firtash owns 45 percent of RosUkrEnergo,
while Russian gas monopoly Gazprom owns 50 percent. The remaining 5
percent is owned by Ivan Fursin.                    -30-
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5.           POLITICS: SIEGE OF THE EXCLUSIVE CIRCLE
          Gas crisis remains one of Ukraine’s gravest strategic challenges
   Political and economic “soap opera” playing inside and outside Ukraine

ANALYSIS AND COMMENTARY: By Yulia Mostovaya
Zerkalo Nedeli On the Web; Mirror-Weekly, No. 19 (598)
Kyiv, Ukraine, Saturday, 20 – 26 May 2006

By now, our readers have surely become sick and tired of discussions of

the gas issue. However, ZN feels committed to informing you quickly and
consistently about the most essential episodes in this political and
economic “soap opera” playing both inside and outside Ukraine.

The gas crisis (even in its current latent form) remains one of Ukraine’s
gravest strategic challenges, and thus requires ongoing media coverage.

Last week, ZN got hold of an amazing document, namely, the minutes from
negotiations between three working groups, representing the NJSC
NAFTOGAS UKRAINY, OJSC GASPROM and ROSUKRENERGO
AG Company, held on April 10th and 11th, 2006.

The minutes were signed by Riazanov, Vice Chair of the GASPROM Board;
Palchikov and Chuychenko, CEOs of ROSUKRENERGO; and Voronin,
Vice Chair of the NAFTOGAS Board.

The last fact is noteworthy since, on the one hand, Ihor Voronin has a
formal power of attorney from Ivchenko to sign official documents on behalf
of NJSC NAFTOGAS, which he did on January 4th, 2006 in Moscow.

On the other hand, Voronin chairs the Board of the UKRGASENERGO Joint
Venture, a NAFTOGAS competitor on the Ukrainian domestic market. So

there is a manifest conflict of interests, which, however, seems to be of no
concern whatsoever to our country’s government.

The minutes affirmed that, as of early April 2006, the NAFTOGAS debt to
GASPROM and ROSUKRENERGO was USD $400 million: “The NJSC
NAFTOGAS UKRAINY suggested signing a supplementary agreement to
Contract #14/935-1/04 dated 29.07.04 on the purchase of 5.7 billion cubic
meters of natural gas at USD 95 per 1000 cubic meters from

ROSUKRENERGO AG in March 2006″ (you will remember that the
negotiations were held in April, which is yet another, albeit circumstantial,
piece of evidence that the NJSC still has no gas balance).

“The ROSUKRENERGO AG Company confirmed that it would be ready to
supply 5.7 cubic meters of natural gas at USD 95 per 1000 cubic meters to
the NJSC NAFTOGAS UKRAINY in March 2006, provided the latter pays
off its current debt for the gas supplied in January-February 2006 under
Contracts #14/935-1/04 dated 29.07.04 (for USD $10,953,079.87 in January
and USD $354,215,180.41 in February) and #5-TPK dated 29.07.04 (for USD
$48,176,389.41)”.

According to our sources in the NJSC, of late Ukraine’s gas debt has
increased to USD $900 million (given the gas price of USD $95 per 1000 cubic
meters). One of the objective reasons is that in January-February, Ukrainian
enterprises buying gas from NAFTOGAS under contracts concluded earlier

paid only half the actual price and did not pay VAT. Why?

Because the NJSC NAFTOGAS UKRAINY was slow in preparing the
documentation enabling NERC to notify industrial gas consumers of the new
price for gas supplied to Ukraine: it rose from USD $50 to USD $95;
accordingly, he Ministry of Economy set the selling price for industrial
consumers at USD$110.

As for VAT, the zero rate applies only to gas supplied to Ukraine under the
intergovernmental protocol. Since no such protocol has been signed yet,
industrial gas consumers should pay the tax. This explains why NAFTOGAS
could not settle its debt to Moscow in January-February.

What it does not explain is why it did not start paying later, when all
concerned parties recognized their rights and financial obligations. Neither
the Ministry of Finance nor the Ministry of Economy knows the answer, and
the NJSC refuses to disclose information on the status of its debt
settlement with both Ashgabat and Moscow.

Interestingly, the NJSC NAFTOGAS UKRAINY is planning to launch a USD
$400-million project for gas field development and gas production in the
United Arab Emirates despite its growing debt to Russia, its unapproved
financial plan and the governmental resolution making the company’s
participation in investment projects conditional on the approval of its
financial plan, unless expressly authorized otherwise by the Cabinet.
Moreover, the company has never submitted the Emirate project feasibility
study to the government.

Yet let us return to the minutes. Its next paragraph describes the NAFTOGAS
proposal to ensure the gas balance in Ukraine in April 2006 “by purchasing
up to 2.5 billion cubic meters of natural gas from the OJSC GASPROM or
ROSUKRENERGO AG Company at USD $95 per 1000 cubic meters out
of the gas reserves to be supplied to Ukraine in April 2006.

Given the agreement signed on January 4, 2006, the OJSC GASPROM stated it
would not be able to supply the NJSC NAFTOGAS UKRAINY with natural gas
at the price of USD $95 per 1000 cubic meters, as starting in April 2006 the
ROSUKRENERGO AG COmnaby would be selling gas at USD $230 per
1000 cubic meters”.

So Moscow said its usual “no” to the company’s request of direct gas
supplies at USD $95 and insisted that it buy the gas required for the
country’s gas balance at USD $230.

The next paragraph is even more remarkable. It reads as follows: “The
ROSUKRENERGO AG Company advised that it had neither an obligation
nor the opportunity to continue supplying the NJSC NAFTOGAS UKRAINY
with natural gas in April 2006 and until the end of the year”.

Some experts describe this paragraph as the RUE Company’s attempt to
renounce the contract. They also mention their earlier warnings that
ROSUKRENERGO might peel off, leaving Ukraine without the gas due
to it under the contract.

Yet most probably, this paragraph is not about RUE’s intent to stop
supplying gas to Ukraine (although the deliberate ambiguity of the language
leaves ample room for bureaucratic arbitrariness). RUE will supply gas at
USD $95 per 1000 cubic meters to the UKRGASENERGO Joint Venture
that it founded together with the NJSC NAFTOGAS, but not to the latter.

This means that NAFTOGAS will have to fulfill its credit obligations and to
provide gas to households and heating systems, which yields no profit; but
it will have no gas for sale to industrial consumers, and neither
ROSUKRENERGO nor GASPROM are going to lend a helping hand by
selling more gas at USD $95 per 100 cubic meters.

They could offer additional volumes of gas at USD $230 per 100 cubic meters.
The situation is further aggravated by the Ukrainian government’s
requirement that NERC should limit UKRGASENERGO’s license, allowing it to
sell as little as five billion cubic meters of natural gas on Ukraine’s
domestic market.

The Cabinet was thus trying to curb the ROSUKRENERGO AG Company’s
monopoly as a gas supplier to Ukrainian industrial consumers. Mr Voronin
filed a claim to increase the volume of gas supplies, but the court case has
not been won yet. The UKRGASENERGO Joint Venture has been operating

since April 1st, 2006.

Once it supplies the 5 billion cubic meters it is allowed, the gas price can
rise to USD $230 per 1000 cubic meters. Alternatively, gas supplies can be
suspended, and NAFTOGAS will have no gas to sell to industrial consumers
anyway, unless it buys it at USD $230 per 1000 cubic meters.

Ministries and agencies engaged in gas-related businesses are paying
attention to three critical implications of the negotiations as recorded in
the minutes.

[1] First, the state-owned company GAS UKRAINY, subsidiary of NJSC
NAFTOGAS UKRAINY, responsible for supplying gas to Ukraine’s
industrial enterprises, will not be able to fulfill its obligations for want
of the necessary gas reserves.

[2] Second, ROSUKRENERGO and GASPROM are determined to supply
cheap gas to the UKRGASENERGO Joint Venture alone, compelling
NAFTOGAS to buy gas at USD $230 per 1000 cubic meters.

Since there is no mention of any objections from the Ukrainian negotiators
in the minutes, it should mean that Mr Voronin, incumbent Chair of the Board
of NJSC’s competitor and former a member of the RUE Coordination Committee,
is quite happy with the negotiation outcomes, whereby NAFTOGAS is being
ousted from the profitable gas market.

[3] Third, experts believe that ROSUKRENERGO and GASPROM are paving
the way for an inevitable price rise. As matters stand, neither the Ministry
of Finance nor the Ministry of Economy knows the exact price at which
Ukraine buys gas. The abovementioned 5 billion cubic meters do not meet the
industrial sector’s annual need.

It is up to the UKRGASENERGO Joint Venture to either break this amount into
monthly quotas, or exhaust its limit within the next couple of months, after
which it could sell gas at USD $230 per 1000 cubic meters. Some analysts
suggest, though, that Russia will hardly raise gas prices for Ukraine on the
eve of the G-8 Summit.

However, a perplexing question mark hangs over the price that Moscow will
use to calculate Ukraine’s debt for the gas already consumed. Of course, it
can afford to postpone drastic measures as the joint venture’s revenues are
being built up and so are the NJSC’s losses.

Meanwhile, a number of gas supply and distribution companies in the EU
countries, including Gas de France, E.ON.Ruhr-Gas, RWE AG (Germany),
Winters-Hall, OMW, ZMB (Austria) etc, were subject to search and seizure of
their documentation.

The ZMB Company, for example, is remarkable in that, for one thing, it sells
Russian gas re-exported by Ukraine (Yuriy Boiko, former NAFTOGAS CEO,
knows a lot about it) and, for another, it is registered to the same address
as a “Ukrainian” CENTROGAS Company holding 50 percent of the
ROSUKRENERGO stock.

Officially, the search and seizure of documentation was executed last
Tuesday and Wednesday in five EU countries by authorized representatives of
the EU investigation group in order to check the companies’ compliance with
the Gas Directive, regulating the European gas market development.

The Directive aims to restrain monopolies in the spheres of gas supplies and
transportation. For instance, gas companies in Germany and Italy violate the
European Gas Directive by preventing foreign competitors (state-owned and
private companies from several countries) from entering their domestic
markets.

Employees at the Gas de France Kyiv Office confirmed the seizure of
documents but argued it did not imply any criminal activities or
incompliance on the part of the company. According to them, the documents
would be scrutinized for compliance with the company’s rules and procedures
within the European Gas Directive requirements.

At the same time, ZN sources report that the investigators involved in the
massive search and seizure of documentation could have other objectives,
too.

Ukraine’s gas problems and Russia’s promotion of ROSUKRENERGO as a
monopolist supplier of Russian and Asian gas, the alleged association of the
gas intermediary with criminal structures, and Russia’s switching off the
gas during last winter’s coldest days made Europe think hard about its own
dependence on Russian natural gas.

So now, Europe is striving to ascertain whether this dependence is objective
and unavoidable, to look into the pricing of supplied gas and to find out if
the earlier concluded gas agreements allow of abuse or corrupt practices.

Some experts maintain that the search was inspired by the British Company
Global Witness’s report on corruption in the arrangements for Turkmen gas
supplies to Europe. A large section of the report is dedicated to Ukraine
and ROSUKRENERGO.

Supposedly, one of the objectives of the recent investigation activities in
Europe is to determine if the actual volume of Russian gas supplies to the
EU countries corresponds to those declared by GASPROM and to make
sure it is within the 30% quota allocated to Russia on the EU market.

The investigators will also check whether the gas for European consumers is
overpriced due to the involvement of multiple intermediaries at different
stages of the supply chain, and if these intermediaries are implicated in
shadow schemes or criminal activities.

In its publications earlier this year, ZN has quoted the US leaders’
censuring remarks vis-a-vis Russia’s energy sector strategy. Last week’s
developments, described above, testify that Europe is also taking practical
steps to explore whether Moscow’s policy poses a threat to the security of
the EU’s energy supplies.

Both Washington and Brussels seem to recognize Ukraine’s role as a key
transit country for Russian gas going to Europe. Kyiv has a chance to play
its own civilized and smart game. It could lose this chance unless it makes
a clear and resolute statement in the run up to the G-8 Summit in July. All
Ukrainian government members who are not involved in corrupt gas schemes,
and with whom we met last week understand that.

What our leaders need now is firm political will to make an unambiguous
policy statement, and to begin serious negotiations with Europe and the USA,
who have indicated, albeit unofficially, that they are prepared to support
Ukraine with investments and loans compensating them for the abrogation of
its agreement with ROSUKRENERGO signed in January 2006.

Yet we know the President’s stance on the matter; the Supreme Rada is busy
forming coalitions; the new government will not be formed before the G-8
Summit; and Yuriy Yekhanurov, acting Prime Minister, has “no grievances
against Olexiy Ivchenko”.

In the meantime, NAFTOGAS’s debt to Russia and Firtash is growing, a price
increase to USD $230 is in the pipeline, the intergovernmental protocol is
still absent, the gas price is an enigma to many in Ukraine, and very few
seem concerned about all of it.

These few are fully aware of the imminent threat to the country if they do
not raise these issues immediately, as well as of the threat to their
careers if they do.

No matter how hard the West may be trying to break the vicious gas circle
around Ukraine, the siege from within and the internal opposition to the
final settlement of this problem could spoil even the most favourable
prospects.
                                     -30-
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http://www.mirror-weekly.com/ie/show/598/53426/?429496729=722cd6ddb928c6ce8d8b7a09897a9531
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6.             GUAM – UNITED STATES JOINT STATEMENT
         US delegation led by David J. Kramer of the US State Department

Public Affairs Section, U.S. Embassy, Kyiv, Ukraine, Tue, May 23, 2006

KYIV – On May 22-23, 2006 in Kyiv, Ukraine, the GUAM Member-States

and the United States met at the Eleventh Meeting of the Council of Ministers
for Foreign Affairs of GUAM and the GUAM Summit to continue their dialogue
and cooperation.  The U.S. delegation was led by David J. Kramer, Deputy
Assistant Secretary for European and Eurasian Affairs.

The United States supported the creation of the “Organization for Democracy
and Economic Development – GUAM” with Secretariat in Kyiv and pledged to
provide appropriate assistance. GUAM Members-States reiterated their
commitment to cooperate on strengthening democracy, increasing security, and
deepening political, economic, scientific, and cultural cooperation in the
GUAM region.

The United States congratulated Ukraine on its assumption to the GUAM
chairmanship and reiterated its support for GUAM projects and for the
Organization’s goal of regional cooperation and development.

The Participants addressed the current state and prospects of the GUAM-U.S.
dialogue, and noted with appreciation progress achieved in advancing the
GUAM-U.S. Framework Program, which is the product of a four-year

cooperative effort to generate concrete, multilateral projects to facilitate
regional security and economic development.

Since September 2005, the GUAM countries have completed their country-

based inter-agency offices for the Virtual Center and Interstate Information
Management System and continued the development of the regional task force
structure intended for conducting law enforcement cooperation.

The GUAM Member States have also created a Secretariat of the Steering
Committee on Trade and Transportation Facilitation and intensified their
cooperation for this project.

The GUAM Ministers expressed their gratitude to the Government of the United
States for providing technical and advisory assistance to the organization.
The Euro-Atlantic Advisory Team, established after 2005 Chisinau Summit of
GUAM and sponsored by the United States, has proved to be efficient and
instrumental in assisting implementation of the GUAM-U.S. Framework Program.

The Participants reaffirmed their willingness to develop consolidated
efforts with a view to strengthening cooperation in fighting international
terrorism, preventing proliferation of weapons of mass destruction and
related technologies, combating organized crime, and confronting other
global challenges.

The joint exploration of ways to confront these common challenges to the
GUAM Member-States and the United States constitutes an important aspect

of GUAM-U.S. cooperation.

The United States commended GUAM for promoting inter-parliamentary
cooperation that is considered to become an effective instrument of
parliamentary diplomacy at the regional and European levels.

The GUAM States reiterated their interest in further deepening cooperation
with the European Union, other organizations and states in fields of mutual
interest, including diversification of energy supplies with particular focus
on the Caspian region, providing security for energy infrastructure, and
realization of the projects of the GUAM-U.S. Framework Program.

The United States reaffirmed its support for the territorial integrity of
GUAM States, within their internationally recognized borders.
GUAM Member-States reaffirmed their willingness to proceed further with

the dialogue within the format of the GUAM-European Union and GUAM-
European Union-United States context.

The Participants agreed to continue mutually beneficial cooperation, and
also to explore new areas of interaction. They agreed to conduct their next
meeting in New York during the general debates of the UN General Assembly
session of 2006.                                  -30-
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http://kiev.usembassy.gov/infocentral_eng.html
Public Affairs Section, United States Embassy Kyiv
4 Hlybochytska St., Kyiv  04050  Ukraine
(380 44) 490-4026, 490-4090, Fax (380 44) 490-4050
http://kiev.usembassy.gov/; nfo@usembassy.kiev.ua
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7.           G.U.A.M. FAREWELLS ITS POST-SOVIET PAST
               Four former Soviet republics set a course for the West

    The GUAM Organization for Democracy and Economic Development
 
COMMENTARY: By Sergei Sidorenko & Vladimir Soloviev
Kommersant, Moscow, Russia, Wed, May 24, 2006

A GUAM summit concluded in Kiev yesterday. The forum’s main
characters – the presidents of Georgia, Ukraine, Azerbaijan, and
Moldova – transformed their regional alliance into an international
organization, declaring it open for other countries to join. No one
named Russia among the potential candidates, but Romania and
Bulgaria have been invited to join GUAM. All this means that the
GUAM quartet has made a final decision on its foreign policy
orientation, shaping up as the “anti-CIS.”

On the second day of GUAM’s Kiev summit, the leaders of the
four post-Soviet republics approved the proposal made by their
foreign ministers the previous day: to change the organization’s
status from regional to international. They also decided to change
its name, in line with the goals it has set for itself. This
alliance is now called the GUAM Organization for Democracy and
Economic Development.

The presidents of the four GUAM participants – Mikhail
Saakashvili, Viktor Yushchenko, Ilkham Aliyev, and Vladimir Voronin
– described this as a historic event. They signed a declaration
about the new organization, its charter, and a summit communique. In
the declaration, Tbilisi, Kiev, Baku and Chisinau said they are
prepared to cooperate on ensuring democracy, and confirmed their
policy course in favor of deepening Euro-integration and
strengthening ties with NATO.

At the final press conference, summit host Viktor Yushchenko
said: “The name itself indicates that our key goals are Euro-
integration and North Atlantic integration. The next stage will be
cooperation on organizing the work of our border guards and customs
services.” President Yushchenko said that prospects for the
immediate future include unifying tariff policies for energy
resources transit and road and rail transport.

Yushchenko’s statement was supported by President Ilkham Aliyev
of Azerbaijan: “We are discussing new hydrocarbon sources and
transporting hydrocarbons from the Caspian basin to new markets.”

According to Aliyev, progress on democratic processes will be more
difficult if economic development lags behind. “Our countries are
the natural corridor between Central Asia and Europe. Creating a
transport corridor here will greatly influence Europe’s
development,” said Aliyev, president of the only GUAM country with
oil and gas fields. Aliyev said that Azerbaijan will increase oil
output to 60 million tons per year over the next few years, and
commence industrial production of gas. He promised that as soon as
this happens, oil from Azerbaijan would fill an Odessa-Brody
pipeline.

The four presidents also commented on their motives for seeking
their fortune outside the CIS. Aliyev was the only one who refrained
from making harsh judgements. He preferred a neutral tone, saying
that GUAM is not a confrontational organization and is not aimed
against anyone else. “We want to cooperate for our own benefit. And
our relations with Russia are constructive,” said Aliyev. Moreover,
he proposed that Azerbaijan, being less involved in conflicts with
Moscow than the others, should help its fellow GUAM participants to
normalize their relations with Moscow.
The other three presidents stated openly why they have switched
from the CIS to GUAM. “In GUAM, we’ll try to solve the problems that
we couldn’t solve in the CIS,” said Mikhail Saakashvili. “At a time
when economic sanctions are in effect against Georgia, Ukraine, and
Moldova, it’s very important that we are introducing a free trade
regime that will deliver real economic profits for all our
countries.”
“We still can’t shake the Soviet Empire syndrome,” said
Moldovan President Vladimir Voronin. “We Moldovans are a peace-
loving people, but even we can’t accept an ‘Elder Brother-Younger
Brother’ format for relations.”

The presidents of the two wine-producing countries followed
this up with some emotional comments about Russia’s ban on wine
imports from Moldova and Georgia.

Viktor Yushchenko joined in the CIS-criticizing: “The CIS is
short on useful action. We have submitted proposals concerning
logistics, and border demarcation and delimitation – but they
haven’t been accepted. There are dozens of such issues. How can
relations develop within the CIS if it can’t even resolve this kind
of question?”

At the end of the summit, Vladimir Voronin proposed renaming
the already-renamed organization as follows: the Community of
European Choice for Democracy and Economic Development. According

to Voronin, this would clarify the priorities of GUAM members. It was
decided to consider this proposal at the next summit, this autumn.

All members agreed that the organization should be expanded.
Romania and Bulgaria were named as the leading candidates for GUAM
membership. They are set to join the European Union next year, and
could increase GUAM’s political weight by joining this organization
as well. Nobody mentioned Russia as a potential GUAM member.
(Translated by Elena Leonova)                  -30-
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8.  FOUR EX-SOVIET STATES SAYS NEW REGIONAL ALLIANCE
NOT DIRECTED AGAINST RUSSIA BUT IS A PRO-EUROPE CHOICE
          Georgia, Ukraine, Azerbaijan and Moldova sign a new charter

Associated Press (AP), Kiev, Ukraine, Tue, May 23, 2006

KIEV – The leaders of four ex-Soviet republics broadly aligned with the West
insisted Tuesday their newly strengthened alliance was not aimed against
Moscow.

But tension with their giant neighbor, who was not invited to the gathering,
hung heavily over the two-day summit of the regional grouping, which has won
support from the U.S. and European Union.

Its members – Georgia, Ukraine, Azerbaijan and Moldova – signed a new
charter that pledges to uphold democratic values, foster economic
development and help each other on their pro-European path. The four
presidents noted that they had all made a “pro-Europe choice” that must be
encouraged.

“We are focusing on a new reality that has appeared in our countries, new
interests that have crystallized over the last few years,” said Georgian
President Mikhail Saakashvili, whose country along with Ukraine and Moldova
have set the goal of E.U. membership.

The alliance – which will be formally registered as an international group
under the name GUAM-Organization for Democracy and Economic Development

and have a headquarters in Kiev – comes amid growing frustration from three of
the ex-Soviet republics with the Russian-dominated Commonwealth of
Independent States, and fresh trade disputes with Moscow.

Georgia has raised the prospect of quitting the 12-nation CIS, and the
Moldovan President Vladimir Voronin also said upon his arrival Tuesday that
his country’s parliament would soon take up that question, Ukraine’s Unian
news agency reported.

Both nations are currently arguing with Russia over Moscow’s decision to ban
imports of Georgian and Moldovan wine, a blow to their economies. Russia has
cited quality concerns, but the ban is widely seen as retaliation for these
countries’ pro-Western policies. Voronin said Tuesday the matter should be
handled “in a civilized way.”

Ukraine was engaged in its own bitter dispute with Russia’s gas monopoly
earlier this year over gas supplies, which resulted in a nearly twofold
increase in price.

Azerbaijan’s President Ilham Aliev, who is being courted by both Russia and
the West, characterized his oil-rich Caspian Sea nation’s relations with
Russia as positive, but said there was tension in the years immediately
after the Soviet collapse.

Yushchenko said that while Ukraine sees Russia as a strong trade partner,
the CIS has “some deficiencies.”

Saakashvili, who is the most outspoken in his frustration toward Moscow,
insisted that he was personally offended during last year’s CIS summit when
Ukraine’s proposals weren’t even put on the floor for discussion. “Ukraine
is not some kind of village on the edge of the forest,” Saakashvili said.
“If Ukraine is treated that way, it’s hard to imagine what will happen to
smaller countries.”

Russian Deputy Foreign Minister Andrei Denisov, speaking on Russian state
television, said Tuesday that Moscow didn’t “see anything anti-Russian” in
the Kiev gathering. But he questioned the usefulness of the organization,
saying that it would be better to concentrate on strengthening existing
regional bodies.

The presidents touted the creation of a free trade zone, and called for
increased cooperation in the energy transport sector. “We are the natural
corridor between Asia and Europe and back,” Aliev said, referring to gas and
oil pipelines that go through the region. “It is impossible to go around our
countries. We should use this to speed up European integration.”   -30-

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9.           KREMLIN LOSES ITS GRIP ON IT’S DYING EMPIRE
      Four former Soviet republics set to abandon eastern commonwealth

ANALYSIS: By Richard Beeston, The Times, London, UK, May 24, 2006

ONE of the last vestiges of the Soviet Union appeared to be crumbling
yesterday, when four former republics signalled that they were pulling out
of the organisation established to keep the Kremlin connected with its lost
empire.

At a meeting in Kiev the leaders of the pro-Western states of Azerbaijan,
Georgia, Moldova and Ukraine pledged to form their own association to
promote democratic values. They also hinted that they would leave the
Commonwealth of Independent States (CIS), which was created 15 years

ago as a group representing most of the former Soviet republics.

While the CIS never fulfilled any great economic or political function, its
very existence was supposed to reflect Moscow’s continued influence from
Eastern Europe to the Caucasus and on to Central Asia. But ties between the
Kremlin and some of its former client states have deteriorated in a wave of
democratic movements that swept pro-Western leaders into power in Georgia
and Ukraine and encouraged anti-Russian sentiment in Azerbaijan and Moldova.

The new group will be called the Organisation for Democracy and Economic
Development and will be based in Kiev. It will rival the CIS, which is based
in Minsk, the capital of Belarus, where it is headed by Vladimir Rushailo, a
tough former Russian Interior Minister.

Viktor Yushchenko, the Ukrainian President, said: “Our citizens are giving
us a mandate to develop strong democratic and successful states.” The move
is seen as a huge snub to Moscow, which has not been invited to join. It
faces the prospect of being left in a CIS of eight states, including
Belarus, regarded as the last dictatorship in Europe, Armenia, and the
Central Asian republics of Kazakhstan, Kyrgyzstan, Tajikistan and
Uzbekistan. The splits within the CIS ranks have been growing in recent
months.

Moscow, which backed Mr Yushchenko’s opponent in the Ukrainian elections,
clashed with Ukraine this year when it suspended gas sales, causing an
energy crisis across Europe in the middle of winter.

The Kremlin has also rowed openly with Tbilisi over Russian support for two
breakaway regions in Georgia and its reluctant withdrawal of troops from the
country. Moscow’s recent decision to ban the import of Georgian and Moldovan
wine has strained ties further.

Azerbaijan has provoked the ire of Moscow by developing close ties with the
US, and building an oil pipeline to pump crude from the Caspian Sea to
Turkey, bypassing traditional Russian control over energy supply routes.

Moldova signalled yesterday that it may be the first country to quit the
CIS. President Voronin said that the issue would soon be debated in
parliament, where the move was likely to be approved.

Zurab Nogaideli, the Georgian Prime Minister, said that his country was

also debating the value of remaining in the CIS, and that the question of
withdrawal would come up before parliament this summer.

“Many in Georgia have been very critical of the CIS, of its performance, of
its efficiency, and we, as a government, are accountable to the people’s
concerns,” he told The Times during a visit to London.

He said that Georgia had attempted to make the CIS more efficient and
capable of dealing with important bilateral disputes, such as the Russian
wine ban, but that the CIS was incapable of addressing real issues.

“What is the sense in having an organisation that fails to discuss basic
issues that affect the countries concerned?”, Mr Nogaideli said. “It seems
to me that Russia itself is not interested in the CIS, in reality. They want
to keep it as an organisation, but they don’t want it to be an effective and
functional organisation. Russia only keeps it for prestige.”    -30-

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LINK: http://www.timesonline.co.uk/article/0,,3-2193775,00.html
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10.  EASTERN UKRAINIAN REGION GIVES RUSSIAN LANGUAGE
                              SPECIAL REGIONAL STATUS

Associated Press (AP), Kiev, Ukraine, Thursday, May 18, 2006 

KIEV, Ukraine – The eastern Ukrainian region of Donetsk granted special
status Thursday to the Russian language despite warnings from President
Viktor Yushchenko that such moves violated the constitution, which declares
Ukrainian the country’s only official language.

More than 120 of the regional legislature’s 133 members voted to make
Russian a regional language, allowing it to be used together with Ukrainian
in state and public institutions as well as at universities and cultural
institutions, said Irina Tarana, spokeswoman for the council.

The move was inspired by the fact that about 75% of the region’s population
believe Russian to be their native language, said Tarana.

The overwhelmingly Russian-speaking Donetsk region becomes the fourth area
to adopt such a measure, following similar moves in the eastern region of
Luhansk, the eastern city of Kharkiv and the Crimean city of Sevastopol.

“The decision was made in the interests of community…In the region, people
will communicate in such a way as it is better for them,” head of the
Donetsky council Antoliy Blyznyuk was quoted as saying by the Unian news
agency.

Yushchenko’s office has ordered prosecutors to consider a legal challenge
because the moves come in conflict with Ukraine’s post-Soviet constitution,
which declared Ukrainian the sole state language. Blyznyuk also expressed
concern that prosecutors would appeal the council decision, Unian reported.

The language issue is a sensitive topic in this ex-Soviet republic, where
Russian is predominantly spoken in the east and south and Ukrainian in the
west. During Soviet times, Russian predominated and now many nationalists
see protecting Ukrainian as critical to national identity.

Declaring Russian a regional language is a lesser move than trying to have
it declared a second state language, but it could open the door to those
efforts. Tarana said the council also adopted a recommendation to the new
national parliament, calling on it to recognize Russian as a state language
in Ukraine. Yushchenko has vowed to fight this.

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11. UKRAINE’S MAJOR OPPOSITION PARTY ISSUES STATEMENT
                             ON RUSSIAN LANGUAGE ISSUE

Interfax-Ukraine news agency, Kiev, in Russian 1309 gmt 17 May 06
BBC Monitoring Service, United Kingdom, Wed, May 17, 2006

KIEV – The Party of Regions will initiate discussion of “the language policy
of the state” at the first session of the Ukrainian Supreme Council
[parliament] of the 5th convocation, the party’s political council has said
in its statement on the protection of constitutional rights of Ukraine’s
Russian-speaking citizens, which has been made public on the party’s
website.

“The Party of Regions pledges to continue to defend the right of people to
think, speak and educate their children in their mother tongue, as well as
the right of local communities to freely use the Russian language,” the
statement said.

The document described as legally ungrounded the statement by the Ukrainian
Justice Ministry saying that the decisions by the city councils of Kharkiv
and Sevastopol and the Luhansk regional council to give Russian the status
of a regional language were unconstitutional.

“Article 147 of the Ukrainian constitution stipulates that the
Constitutional Court is the only body of constitutional jurisdiction in
Ukraine, and only that court is entitled to rule on matters of compliance of
laws and other legal acts of the Ukrainian constitution and come up with
official interpretation of the Ukrainian constitution and laws,” the
statement said.

The document said that the Justice Ministry’s explanation that the text of
the European Charter for Regional or Minority Languages had been incorrectly
translated “cannot be taken seriously, as it refers to a law which was
passed by the Supreme Council [parliament] and came into force”.

The Party of Regions urged the Council of Europe to pay attention to the
situation with the charter’s implementation in Ukraine and deliver an
appropriate assessment of the Ukrainian government’s actions.

The Party of Regions views the policy of the current government and
political forces “on which it leans for support” as an offensive on
citizens’ rights. “This campaign obviously has a political background to it.
It is a continuation of the short-sighted and unclever policies which the
Orange forces contributed to the presidential election and which resulted in
a deep split in society,” the document said.

The political council warned the law-enforcement agencies against “brutal
interference in such a sensitive sphere as language politics”. The council
also recalled that the president [Viktor Yushchenko] “is the president of
all citizens, including those for whom Ukrainian is the native language and
those for whom Russian or any other language is native” and urged
“respectful treatment of the right to defend the native language”.

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12.  UKRAINIAN CELEBRITIES SAY GIVING RUSSIAN LANGUAGE
                 SPECIAL STATUS IS A WAR AGAINST UKRAINE
   “We have a direct threat to the Ukrainian nation & Ukrainian state system.”
 
Natasha Lisova, Associated Press (AP), Kiev, Ukraine, Fri, May 19, 2006

KIEV – Ukrainian cultural figures and celebrities on Friday slammed efforts
to grant Russian language special status in this ex-Soviet republic, calling
it an act of war against the Ukrainian state and the Ukrainian language.

Artists, writers, politicians and scientists, meeting for a round-table
discussion in Kiev, condemned recent decisions by several regional councils
to have Russian declared a regional language, allowing its use in official
business.

The overwhelmingly Russian-speaking region of Donetsk on Thursday became the
fourth area to take such measures. “Today they announced a war, and we must
react accordingly,” movie director Yuriy Illenko said.

President Viktor Yushchenko’s administration has said granting Russian
special status contradicts the constitution, which declares Ukrainian the
only state language. His office has vowed to challenge the decisions in the
two eastern regions, an eastern city and the Crimean city of Sevastopol.

The language issue has become one of the most sensitive in Ukraine, where
Russian dominated during Soviet times and today many still consider it their
native language, particularly in the east and south. In western regions,
Ukrainian dominates and nationalists see protecting the language as a way to
prevent meddling from Moscow.

“Today we have a direct threat to the Ukrainian nation and Ukrainian state
system,” said lawmaker Ivan Zayeyts. Yushchenko’s legal adviser Mykola
Poludyony said the councils have are no legal authority to make such
decisions.

Council officials say their decision is based on a European charter, which
was ratified by the Ukrainian parliament in 2003, that protects regional and
minority languages. Critics, however, say Russian should not be considered a
minority language and does not need special protection. “Russian isn’t a
language that is disappearing,” Poludyony said.

The Party of the Regions, the pro-Moscow opposition party that won the most
votes in last month’s parliamentary election, campaigned on a promise to
make Russian a second state language.                  -30-
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13. INCONSISTENT LANGUAGE POLICY CREATES PROBLEMS 
    PRU-led Ukrainian regions continue to adopt Russian as official language

ANALYSIS & COMMENTARY: By Oleg Varfolomeyev
Eurasia Daily Monitor, Volume 3, Issue 101
Jamestown Foundation, Washington, DC, Wed, May 24, 2006

The Party of Regions (PRU), which strengthened its grip on Ukraine’s
Russophone east and south after the March 26 parliamentary election,
continues to probe the government’s weaknesses, challenging it on the
sensitive issue of language.

The PRU-dominated Donetsk regional council has followed the example of the
PRU-dominated Luhansk, Kharkiv, and Sevastopol councils, approving
regional-language status for Russian. The government, in response,
threatened to come up with tough measures against all those who violate the
constitution, according to which Ukrainian is the only language having
official status.

The government’s position is that the councils’ language decisions are a
threat to national security, part of a plan to exacerbate tension in society
and downgrade the status of Ukrainian. The government also argues that
language matters are the remit of the national — rather than regional — 
bodies of power.

The PRU, meanwhile, looks set to raise the issue at the national level. On
May 17, the party’s governing body — the political council — issued a
statement, “On the Protection of Constitutional Rights of the
Russian-speaking Citizens of Ukraine,” promising to raise the Russian
language issue soon after the new parliament convenes on May 25.

In the statement, the PRU pledged “to continue to defend the right of people
to think, speak, and educate their children in the mother tongue.” The PRU
brushed aside the Justice Ministry’s protests against the decisions of
Luhansk, Kharkiv, and Sevastopol on the status of Russian, saying that only
the Constitutional Court is entitled to rule on language matters.

Incidentally, the PRU has been among the parties blocking the election of
new judges to the Constitutional Court, fearing that the Court might take
President Viktor Yushchenko’s side and reverse the recent constitutional
reforms that diminished the president’s authority.

On May 18, the Donetsk region council voted by 122 votes to three (with one
abstention) to give Russian the status of regional language. As in the cases
of Luhansk, Kharkiv, and Sevastopol, Donetsk deputies said they were guided
by the European Charter for Regional or Minority Languages.

The council not only ruled that Russian may be used in business, official
documents, and educational establishments on a par with Ukrainian, but it
also called on parliament to give Russian state-language status along with
Ukrainian.

The council said that the current constitution ignores the fact that Russian
is the mother tongue for about one-third of Ukrainians, equating Russian to
the many minority languages spoken by small communities inside Ukraine.
Along with the PRU, the Communists and the radical left-wing Progressive
Socialists in the Donetsk council supported the language decision.

Official reaction followed immediately. Donetsk Region Prosecutor Oleksiy
Bahanets, who is subordinated to Kyiv, promised to appeal the council’s
decision in court as soon as he obtains official documents on the matter
from the council. On May 18, the cabinet gathered for a meeting to condemn
the eastern councils on language matters.

Deputy Prime Minister for Humanitarian Affairs Vyacheslav Kyrylenko blamed
“certain forces” for trying to “downgrade and practically fully exclude the
state language from usage, rather than protect minority languages.”
President Yushchenko’s legal adviser, Mykola Poludyonny, went even further,
warning of a separatist threat.

The Justice Ministry was instructed to come up with amendments to language
laws and regulations in order to toughen penalties for language-legislation
violators. It was also decided that the next meeting of the National
Security and Defense Council would be on the language issue. It may,
however, take some time for the council to convene, as its secretary,
Anatoly Kinakh, resigned last week.

Kyrylenko apparently found it difficult to explain, speaking on television
on May 22, why exactly the elevation of the Russian language status in the
eastern regions was a national security threat. “The state has certain
principles, and state language is an element of national security… very
important for state institutes,” he offered.

The language row reveals the lack of understanding regarding how deep the
language problem runs in Kyiv. It has been ignored for years, and President
Yushchenko continues to insist that there is no language problem at all,
despite the fact that pro-Communist and pro-Russian forces have been
regularly using the language issue against the government in all sorts of
elections. There has been no consistent policy of Ukrainianization, famous
Ukrainian philosopher Myroslav Popovych believes.

Commenting for the website Forum, he noted that it is sometimes difficult to
admit that the issue is actually about the “assimilation of the
Russian-speaking population,” which has to be “logical and unforced,” but so
far has been forcible.

Media expert Mykola Knyazhytsky told Forum that the main mistake of the
government has been imposing Ukrainian in those regions where it is
traditionally barely spoken, instead of financing Ukrainian culture in the
traditionally Ukrainian-speaking areas, such as Lviv.          -30-
——————————————————————————————————–
(Interfax-Ukraine, May 17, 18; Channel 5, May 18; NTN TV, For-ua.com,

May 19; 1+1 TV, May 22; see EDM, May 17)
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14.     RUSSIAN MP SAYS UKRAINE MUST NOT TRAMPLE ON
                   RIGHTS OF RUSSIAN-SPEAKING MINORITY

ITAR-TASS news agency, Moscow, in Russian, 22 May 06
BBC Monitoring Service, United Kingdom, Monday, May 22, 2006

MOSCOW – Russian State Duma deputies believe it to be “very important”

that the question “of language policy” will be placed on the agenda of the first
session of the Ukrainian Supreme Council [parliament] of the new
convocation. Andrey Kokoshin, the head of the [State] Duma committee
for CIS affairs and ties with compatriots, has said this to ITAR-TASS today.

In his words, “a general tendency can be observed in Ukraine to squeeze out
the Russian language from the information, legal and cultural space”.

One of the latest confirmations of this, the committee’s chairman noted, is
the decision of Ukraine’s Justice Ministry to deem illegal the decisions of
the Kharkiv and Sevastopol city councils and the Luhansk and Donetsk
regional councils to give the Russian language regional status.

“What we have here is a violation of the rights of the Russian-speaking
citizens of Ukraine that live in large numbers on certain territories,”
Kokoshin stressed.

He recalled that State Duma deputies have constantly drawn the attention of
their Ukrainian colleagues “to the need to ensure the rights of the
Russian-speaking population in accordance with Ukraine’s constitution and
international obligations”.

This problem “goes beyond the framework of bilateral relations since the
Russian language and Russian culture are a generally recognized part of
world culture”, Kokoshin noted.

“Behind the resolving of this problem lie the fates of tens of millions of
people, prospects for the formation of Ukraine as a democratic state and
ensuring genuine friendly and equal relations between Russia and Ukraine,”
the head of the committee said.                          -30-
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15. RUSSIAN LANGUAGE COMPLAINT: ATTENTION OLEH SOSKIN

—– Original Message —–
From: Nadia Kerecuk; nadia.kerecuk@ntlworld.com

To: citynews@osp.com.ua
Sent: Friday, May 19, 2006 10:11 AM
Subject: Re Russian language – complaint for the attention of Oleh Soskin
Action Ukraine Report (AUR) #700, Article 15
Washington, D.C., Thursday, May 25, 2006

Dear Mr Oleh Soskin,

I have decided to write in order to express my greatest disappointment that
your very good city bulletin is now being published mostly in Russian. I was
quite appalled to see the encroachment of Russian in your bulletin after so
many years of Ukraine being independent.

 
When it was published in Ukrainian I was very delighted to reach each edition.
However, it has become an annoyance.

Ukrainian citizens ought to know better especially those that head
organisations such as yours. Indeed, Citizens of Ukraine whatever their
ethnic background ought to respect the UKRAINIAN language. Honestly, I
cannot understand this approach.

UKRAINIAN IS THE ONLY official language in Ukraine – as English is in
England or Portuguese in Brazil, Russian in the Russia (are there any
bulletins of cities in Russia being published in Ukrainian????)  or French
in France and so on !!!

Particularly with the long history of prohibitions of the Ukrainian language
and the abuse of it by the Old Russian Empire, the Soviet Union and many

in power in Ukraine since the Independence in Ukraine.

Could you kindly explain why this is happening – of course, I welcome

your reply in Ukrainian or English.

With best wishes,

Nadia Kerecuk, Historian of Ideas in Language Sciences,
Expert in Linguistics including Ukrainian and Slavonic
Expert in Ukrainian Affairs & Studies
———————————————————————————————–

FOOTNOTE: Oleh Soskin: Tel: (044) 235-98-28, 235-80-23
E-mail: CityNews@osp.com.ua; Web: http://www.CityUkraine.osp-ua.info
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16. PROSPECT OF BUSH VISIT PUTS PRESSURE ON KIEV PARTIES

By Tom Warner in Kiev, Financial Times
London, United Kingdom, Friday, May 19, 2006

A possible visit to Kiev by President George W. Bush in June or July is
causing consternation in Moscow and putting pressure on Ukraine’s
quarrelling pro-western political parties to agree quickly on a coalition
government.

The White House is hoping the Kiev visit could be combined with a
US-European Union summit in late June or with the Group of Eight summit

in Moscow in mid-July.

A Kiev visit timed closely to the G8 summit would allow Mr Bush to stress

US support for the western-oriented democracies on Russia’s perimeter that
have come under economic pressure from Moscow.

Mr Bush would also use the visit to promote Ukraine’s accession to Nato,
which his administration is suggesting could be launched at the alliance’s
summit in Riga in November and completed by 2008.

The aggressive schedule was outlined by William Taylor, Mr Bush’s nominee

to take over as US ambassador in Kiev, in a Senate confirmation hearing last
week.

At a conference on Nato in Moscow yesterday, Jaap de Hoop Scheffer, the
alliance’s secretary-general, defended proposals for Nato to take in Ukraine
and Georgia, which he said were “not directed against Russia”. Russian
speakers warned that Nato-Russia relations would change for the worse if
Ukraine was invited to join.

However, Mr Bush’s mission in Kiev depends on there being a government

to greet him. A newly elected parliament is not due to convene until next
Thursday, two months after the March polls.

The three parties that led the 2004 Orange Revolution and together won the
largest share of parliamentary seats continue to argue over the sharing out
of key jobs, including the prime minister’s.

Viktor Yushchenko, president, added impetus to the talks last week when he
said that he did not object to the candidacy of Yulia Tymoshenko, a former
prime minister, with whom he has had a somewhat rocky relationship.

Ms Tymoshenko leads the largest of the three groups in the prospective
coalition and her bloc insists she be premier.

Mr Yushchenko’s spokeswoman said Mr Bush was likely to visit this year

but no date had yet been set. “Thank god that in Ukraine the government is
formed without outside influence,” she said. “But the president is
optimistic that we will see a government by the middle of June.”  -30-
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17. KATERYNA YUSHCHENKO TO VISIT PHILADELPHIA NEXT WEEK
      Meet with top health care professionals, address the World Affairs Council

By Morgan Williams, Publisher and Editor
Action Ukraine Report (AUR) #700, Article 17
Washington, D.C., Thursday, May 25, 2006

WASHINGTON – Kateryna Yushchenko, first lady of Ukraine, will visit
Philadelphia next week. The Ukrainian Federation of America, The
World Affairs Council of Philadelphia  and the Ukrainian Human Rights
Committee will host Kateryna Yuschenko for a series of meetings
regarding improving Ukraine’s health care services and world affairs.

The first meeting will be a program and dinner on Tuesday May 30, 2006
hosted by the World Affairs Council of Philadelphia and the Ukrainian
Human Rights Committee.  The World Affairs Council of Philadelphia is
the premier public policy platform in America’s birthplace and one of the
top speaking forums in the nation.

The event will beheld at the prestigious Union League at 100 S. Broad St. in
Philadelphia.  Registration and reception will begin at 5:30 pm followed by
the address of the First Lady of Ukraine and dinner.  The cost for the
event is $75.00. (For registration information see FOOTNOTE below.)

 UKRAINIAN FEDERATION OF AMERICA “PROJECT LIFELINE”

The Ukrainian Federation of America through it’s Ukrainian health care
initiative “Project Lifeline” has organized a private program for Wednesday
in support of Kateryna Yushchenko’s primary program, through the
Ukraine 3000 Foundation, to substantially improve the health care received
by the people of Ukraine, especially Ukraine’s children.

The Federation, under the leadership of Dr. Zenia Chernyk, Chair,
Healthcare Commission and Vera Andryczyk, President, has arranged a
private breakfast on Wednesday for the first lady to meet with top U.S.
health care professionals and representatives of the pharmaceutical
industries.

The first lady will then visit the Children’s Hospital of Philadelphia, the
birthplace of pediatric medicine in the United States. The First Lady will
tour Children’s Hospital facilities and meet with Hospital leadership to
encourage a sharing of knowledge and experience between doctors in
the United States and the Ukraine, with the hope to improve healthcare
for children worldwide.

At the hospital Mrs. Yushchenko will meet with Lawrence McAndrews,
president, National Association of Children’s Hospitals and Related
Institutions (NACHRI), James M. Steven, M.D., S.M., senior vice president
for medical affairs and chief medical officer, The Children’s Hospital of
Philadelphia, Children’s Hospital physicians, researchers and administrators

Following the tour of The Children’s Hospital of Philadelphia, Mrs.
Yushchenko will be the Guest of Honor at a private luncheon meeting,
set up by the Ukrainian Federation of America, with representatives of
the World Trade Center of Greater Philadelphia and charitable organizations.
The luncheon will be held at Neville Gallery at University of Pennsylvania
Museum of Archeology and Anthropology.

Philadelphia is the second stop on the First Lady’s national tour. She will

also earlier visit Washington, D.C., and then stops in California.  This is
Mrs. Yushchenko’s second visit to Philadelphia, after first coming to the
city in September 2005 when President Victor Yushchenko received the
Liberty Medal.

Since that time, Mrs. Yushchenko has met with many in the American
medical and pharmaceutical industries, through the “Project Lifeline”
program of the Ukrainian Federation of America, in order to further her
effort to elevate medical standards in Ukraine.            -30-
——————————————————————————————–
FOOTNOTE: For more information concerning the program set up

by the Ukrainian Federation of America on Wednesday please contact
Dr. Zenia Chernyk at 215 275 7902 or Vera Andryczyk at 610 539 8946.
 
For more information about the speech at the World Affairs Council in
Philadelphia go the following website:
http://www.wacphila.org/programs/speaker_eve.html#yushchenko
or call Adele Kauffman at 215 561 4700, extension 235. The Council
will be closed on Friday, May 26th and Monday, May 29th.  You can
also contact Ubulana Mazurkevich at 215-858-3006 or by e-mail:
ubulana@aol.com.
———————————————————————————————-
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18.  ART EXHIBITION: “MAZEPIANA” – SERHIY YAKUTOVYCH

WHAT: The Embassy of Ukraine is proud to present an art exhibition
“Mazepiana” – the works of Serhiy Yakutovych.
WHEN: Thursday May 25, 2006, 7:00 pm
WHERE: Embassy of Ukraine, 3550 M St. NW, Washington, DC 20007

Serhiy Yakutovych is an Honored Artist of Ukraine, Associate Member of
the Ukrainian Academy of Arts, The National Taras Shevchenko Prize
winner in 2004. Author of more than a hundred  illustrative cycles for
the books of Ukrainian and foreign classics such as “Three Musketeers”
by Dumas, “Song About Roland”, “Tristan and Isolde”, “Taras Bulba”

by Gogol, works of M.Gorky, O.Tolstoy, L.Tolstoy, P.Dostoevsky,
O.Gonchar, Golsuorsy, O.Walde, Nietzshe, and DeCoster.

Winner of numerous national and international graphic competitions, the
works of Sergiy Yakutovich are included in the museum collections of
Ukraine, Russia, Germany, France, Italy, Spain and in many private
collections.

FOR MORE INFORMATION:
RSVP by telephone at (202) 349-2961 or by e-mail at nholub@ukremb.com
LINK: http://yakutovich.com/ukr/sergiy/gallery_content.php?dir
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19. “EMBASSY SERIES” CONCERT AT THE EMBASSY OF UKRAINE

 
WHAT: Another marvelous pair of evenings of wonderful music by
Ukrainian artists in the elegant Ukrainian Embassy, a national treasure.
Violinist Solomiya Ivakhiv (with Roman Rabinovich on piano) is a winner
of the Prokofiev and Kocian International Competitions, recipient of
the Fritz Kreisler Gold Medal from the Curtis Institute of Music and
was awarded a scholarship from the President of Ukraine.  Ukrainian
buffet to follow.

WHEN: Friday, May 26 – 8:00 pm; Saturday, May 27 – 8:00 pm
WHERE: Embassy of Ukraine; 3350 “M” Street, N.W.
Washington, D.C. ; COST: $75.00

FOR MORE INFORMATION: See

http://www.embassyseries.com/events.htm
To order tickets, call Jerome Barry at (202) 625-2361 or order easily
online at http://www.embassyseries.org.
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20.       WASHINGTON IGNORES DEMOCRATIC VALUES
                               IN QUEST FOR CHEAP OIL
 
Sylvie Lanteaume, Agence France-Presse, Wash, D.C, Sun, May 21, 2006
WASHINGTON – The United States, eager to find new sources of oil
at the time when petroleum prices are skyrocketing, is increasingly giving
up its strategy of promoting democracy, analysts here say.

The US government of President George W. Bush has recently made
contradictory moves towards key foreign oil producers, sowing confusion
about its policy goals, according to Frank Verrastro, of the Center for
Strategic and International Studies, a Washington-based think tank.

If the democracy and support for humans right are the main engine of US
diplomacy, “then you have to wonder why we have not taken a tougher line
with Russia, why we have not taken a tougher line with Kazakhstan, why we
have not taken a tougher line with Libya?” he asked.

Yet US officials “use it when we talk about Venezuela, and we use it when we
talk about the Middle East,” said Verrastro, an expert in energy policy.
“Increasingly it is looking like a case by case application of what is more
important,” he said. “It is depending on what the perceived needs of the day
are.”

Washington announced on May 15 it was normalizing relations with Libya,
which has important crude oil reserves, despite the lack of political
reforms visible in a country led since 1969 by the same man, Moamer Kadhafi.

On the same day US officials imposed sanctions on Venezuela, a country that
supplies 15 percent of US oil imports. The stated reason: populist President
Hugo Chavez’s lack of cooperation in the US-led “war on terror”.

Washington also charged Chavez’s government with restricting the freedom of
the press and harassing his political opponents.
One day later US officials suspended free trade negotiations with Ecuador,
another important oil supplier, after Quito cancelled its contract with
US-based Occidental Petroleum and took over their assets.

On May 4 US Vice President Dick Cheney took a swipe at Russia over
democratic reform, accusing Moscow of “improperly restricting” human rights
and using oil and gas supplies as a weapon.

“No legitimate cause is served when oil and gas become tools of manipulation
or blackmail,” Cheney said, referring to the cut-off of gas supplies to
Ukraine last January which also affected parts of Europe.

Yet just hours later Cheney was praising the authoritarian government of
Kazakhstan for its “economic development and political development”.

Since 1993, the US has invested about 12 billion dollars (9.42 billion
euros) in Kazahkstan, which has oil reserves of 24 billion barrels, making
the US the biggest single investor in the country.

The Bush administration claims it is pursuing a coherent energy policy, but
recognizes that oil producing countries are politically profiting from the
high price of crude, a US State Department energy expert said, speaking on
condition of anonymity.

“You have the bulk of the world hydrocarbons resources owned by state owned
oil companies. And they are feeling very powerful now, as we saw in Ecuador
and Russia and Venezuela,” the official said.

However, Washington has not given up defending the democracy. “We have
principles,” the official said, pointing to Libya, which had to meet strict
guidelines to be withdrawn from the US list of state sponsors of terrorism.

“The evidence would suggest that America has put … our values above the
mercantilist energy issues,” the official said.

Richard Haass, president of Council on Foreign Relations, another
Washington-based think tank, disagreed.

“Today’s situation may lack drama in the sense that there has been no
successful terrorist attack on some tanker or refinery,” Haas wrote in the
most recent issue of Newsweek magazine.

“But current energy policy (or the lack of one) empowers some of the most
repressive and reckless regimes in the world, further impoverishes hundreds
of millions of the world’s poor and contributes to global climate change.”

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21.          INVESTING: ADVENTURES AT THE FRONTIER
        One market that Chief Investment Officer Chisholm likes is Ukraine

By Conrad de Aenlle, International Herald Tribune
Paris, France, Friday, May 19, 2006

In a world that keeps getting smaller, and where ever less remains unknown
and untried, emerging markets do not stay that way for very long before
joining the mainstream. So where can a globetrotting investor go in search
of a few thrills and more than a few bucks?

Some investment advisers are turning to so-called frontier markets. About
two dozen countries, in such places as Africa, the Balkans and the
Caribbean, have economies that are too raw and undeveloped even to be
classified as emerging, but they do have stock markets where investors can
experience opportunities and challenges reminiscent of a decade or more ago
in what are now emerging markets.

“Frontier markets tend to be relatively small and illiquid, even by
emerging-markets standards, and information is generally less available than
in other markets,” Charles Wang, co-director of research at Acadian Asset
Management, wrote in a recent report. “However, they represent a vast store
of untapped economic potential that may be very compelling as a long-term
investment opportunity.”

Just how untapped is made clear by their size. When Wang takes inventory, he
comes up with 285 publicly traded stocks in 22 countries and a total market
capitalization of $101 billion, or barely one-fourth the size of Exxon
Mobil.

What they lack in bulk – just 22 stocks have market valuations greater than
$1 billion each – they make up for in strength. Wang said that since
Standard & Poor’s started following these minnow markets in December
1995, they have comfortably outperformed larger and more familiar ones.

Frontier markets rose at an annualized rate of 11.6 percent in the 10 years
through last December, compared with 8.2 percent for conventional emerging
markets. Volatility has been lower in frontier markets.

Making the case for investing in the region, Max King, a strategist at
Investec Asset Management, which runs a pan-African mutual fund, pointed out
that African economic growth has exceeded that of the rest of the world in
each of the last five years, and he cited a Goldman Sachs study that
predicted that Africa’s share of the global equity market would more than
double over the next 20 years.

King tossed out several names to illustrate the region’s diverse investment
opportunities, including Orascom, an Egyptian company involved in such
activities as telecommunications, tourism and computing; Lafarge Maroc, a
Moroccan cement business controlled by the French company Lafarge;
Kenya Airways and Kenya Electricity Generating.

“If there is one stock to look at, I suggest the recently privatized KenGen,
which we were keen on and which was well-subscribed” when the government
sold shares to the public, King said.

So far, looking at frontier stocks is all that Acadian is doing. John
Chisholm, the firm’s chief investment officer, has not committed money to
any of them yet, but Acadian is drumming up business among institutional
investors, and he expects to start buying later this year.

One market that Chisholm likes is Ukraine, and one of his favorite stocks
there is the fertilizer producer Azot Cherkassy. “The company’s cheap, but
it’s expected to have good growth going forward,” he said. “That’s the
typical profile of what we’re looking for in these markets.”

Chisholm finds the same attractive mix in Tunisia, where his preferred
stocks include Banque Internationale Arabe de Tunisie and Frig Brass, a
maker of soft drinks and beer.

As appealing as these companies may be, frontier markets have their
drawbacks. Jerome Booth, research director at Ashmore Group, an
emerging-market investment house, maintains limited exposure to frontier
equities because trading is limited and “we put a premium on liquidity,” he
said.

Another shortcoming is in furnishing information. “Data availability and
quality ranges from quite good to extremely dubious,” Wang acknowledged.
A further limitation, he said, is that most stocks do not have analyst
coverage and therefore lack forward-looking factors, like earnings
estimates.         -30-

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http://www.iht.com/articles/2006/05/19/yourmoney/minvest20.php
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22. UKRAINIANS GATHER AT MASS GRAVE TO COMMEMORATE
                               VICTIMS OF STALIN REGIME 

Associated Press (AP), Kiev, Ukraine, Monday, May 22 2006

KIEV – Relatives and survivors gathered in a forest outside Kyiv Sunday at

the site of Ukraine’s largest mass grave for victims of Soviet dictator Josef
Stalin, commemorating up to 120,000 Ukrainians killed during his regime.
People laid flowers and tied linen towels with Ukrainian embroidery on trees
at the Bykovnya grave.

“It’s hard to imagine how it was possible to bury over 100,000 people in one
forest. The most awful is that it’s impossible to answer the question why
they were killed,” President Viktor Yushchenko said.

Historians say millions were killed throughout the Soviet Union during
Stalin’s reign, accused of state treason and other crimes.

Separately, up to 10 million Ukrainians died of the 1932-33 Great Famine,
which Stalin provoked as part of his campaign to force Ukrainian peasants
to give up their land and join collective farms.

On Thursday, thousands of Crimean Tatars marched in the capital of Crimea to
mark the 62nd anniversary of their deportation from the Black Sea peninsula
under Stalin, a forced exile that lasted almost half a century. Some 200,000
Tatars were deported in May 1944 after Stalin accused them of collaborating
with the Nazis and were not allowed to return until the Soviet collapse of
1991.              -30-

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23.                            A BOOK FOR SKEPTICS: 
         “THE UKRAINIAN QUESTION” 70 YEARS LATER

By Mykola SIRUK, The Day Weekly Digest #15
Kyiv, Ukraine, Tuesday, 23 May 2006

The British Embassy in Ukraine recently hosted the launch of a book of
articles by British journalist Lancelot Lawton, entitled “The Ukrainian
Question.” The publication of this book is an important event for the
Ukrainian public. Readers now have an opportunity to examine documents
that confirm the tragic events that occurred in Ukraine in the 1930s.

“The Ukrainian question is still one of the most important ones as far as
Europe is concerned. EU and NATO countries are paying a lot of attention
to developing good relations with Ukraine so that it will be stable,
prosperous, and independent,” British Ambassador Robert Brinkley told
The Day after presenting the “The Ukrainian Question.”

Lancelot Lawton was a British journalist and founding member of the
Anglo-Ukrainian Committee created in 1935, whose members were British
politicians, historians, and other individuals who were concerned about the
plight of Ukrainians.

The book contains the original speech “Ukrainian Question,” and its
Ukrainian translation, which was delivered in the British parliament in
1935, as well as the article “Ukraine, Europe’s Greatest Problem,” which
appeared in 1939.

The British ambassador said that it is very important that Lawton’s book has
appeared at this time. “This book shows that in the 1930s, when Britain and
the rest of Europe faced the rising menace of Hitler’s Nazi regime, there
were public figures in London who took an interest in the fate of Ukraine
and Ukrainians. Today this seems rather surprising. So, in my view, it is
important to reopen this fact of history and remember it,” Brinkley said.

The historian Serhiy Kot, a senior research associate at the Institute of
the History of Ukraine, who prepared the book for publication, told The Day
that the British journalist included an enormous amount of information in
his articles.

Written in a succinct style, these materials can be called a concise course
on the history and culture of Ukraine. Dr. Kot noted that the British
journalist had no links with Ukraine, i.e., he was not of Ukrainian descent.
Lawton freely joined the initiative of civic and political figures in Great
Britain, who wanted to encourage official London to establish closer
contacts with Ukraine.

“London took an interest in Ukraine: this is proved by the reports and
analytical notes concerning Ukraine, which were written by Moscow and
Warsaw consuls, and which dealt at length with the Holodomor.

In the 1930s the British wrote that the Holodomor had claimed five to seven
million human lives,” said Dr. Kot, noting that it took two years to trace
Lawton’s original articles, which were located at the Library of Congress in
the US. A total of 2,000 copies of the book have been printed.

Now the main thing is for the book to find its way to universities and
Eastern European research centers. “The book will also be useful to the
‘doubting Thomases’ in Ukraine, i.e., those who are skeptical about Ukraine.

They will read the British journalist’s articles and may adopt an entirely
different stance; they may rethink this page of Ukrainian history,” says Dr.
Kot.           -30-
———————————————————————————————–
LINK: http://www.day.kiev.ua/162552/
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24. UKRAINIAN NATIONAL ASSOCIATION 36TH CONVENTION

Action Ukraine Report (AUR) #700, Article 23
Washington, D.C., Thursday, May 25, 2006

WASHINGTON – The Ukrainian National Association (UNA) will hold its

36th Convention at Soyuzivka, the UNA resort in the Catskill Mountains
of New York State from the Friday the 26th through Monday the 29th of
May 2006.

Although much smaller than the 1970 Convention in Cleveland and the 1974
Convention in Philadelphia which hosted 431 and 426 delegates respectively,
the 2006 convention with its 100+ delegates still promises to be a major
event in the Ukrainian community.  The UNA has been a leader in the business
and social world of Ukraine’s Diaspora and hopes to continue this status in
the future.

Running for the Presidency of the UNA this time will be Walter Prochorenko,
a business executive with extensive international sales and marketing
background and experience. Dr. Prochorenko will be opposing the present
President of the UNA Mr. Stefan Kaczaraj who has held the post for the past
4 years.

The Convention promises to be a lively affair with honored guests such as
Ukrainian Ambassador to the US, Dr. Oleh Shamshur, His Excellency Bishop
Paul Patrick Chomnycky, and Ukraine’s Consul General in New York Mykola
Kyrychenko attending. Entertainment will be provided by the Dumka Choir of
NY, Baritone Oleh Chmyr. Violinist Marian Pidvirny, Singer Olya Fryz, and
the Syzokryli Dance Ensemble.              -30-
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25. HUMAN RIGHTS WATCHDOG UNHAPPY WITH UKRAINE
    Ukraine continues to treat prison inmates cruelly and violate human rights

TV 5 Kanal, Kiev, in Ukrainian 1600 gmt 23 May 06
BBC Monitoring Service – United Kingdom; May 23, 2006

KIEV – [Presenter] The international fight against terrorism looks
increasingly like a fight against human rights, representatives of Amnesty
International in Ukraine have said.

Ukraine continues to treat prison inmates cruelly and violate human rights,
the annual report of this respectful organization has said.
[Correspondent] Racist and anti-Semite attacks, human trafficking and cruel
treatment of detainees – Ukraine has failed to get rid of all that, the
Amnesty International in Ukraine Annual Report says.

Representatives of the organization blame the guarantor of the constitution
[president] for systematic violations of human rights. In particular, the
organization holds President [Viktor] Yushchenko personally responsible for
the deportation of 11 Uzbeks who asked for political asylum.

[Nataliya Dulneyeva captioned as head of Amnesty International in Ukraine]
Amnesty International in Ukraine, Ukrainian Helsinki Committee and other
organizations for protection of human rights in Ukraine have started an
unlimited action that will be ended only when the investigation is complete,
when the cases of the 11 asylum-seekers are handed over to the High
Commissioner for Refugees in Ukraine and when those who are guilty are
punished.

Torturing and sending people for torturing, are the most serious violations
of human rights from our viewpoint. [Passage omitted: Amnesty International
criticizes the governments of Western countries for violations of human
rights.]            -30-
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         “ACTION UKRAINE REPORT – AUR”
         A Free, Not-For-Profit, Independent, Public Service Newsletter
                With major support from The Bleyzer Foundation
 
      Articles are Distributed For Information, Research, Education
                Academic, Discussion and Personal Purposes Only
                                  Additional readers are welcome.
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      SigmaBleyzer/The Bleyzer Foundation Economic Reports
                “SigmaBleyzer – Where Opportunities Emerge”
 
The SigmaBleyzer Emerging Markets Private Equity Investment Group
and The Bleyzer Foundation offers a comprehensive collection of documents,
reports and presentations published by its business units and organizations.
 
All publications are grouped by categories: Marketing; Economic Country
Reports; Presentations; Ukrainian Equity Guide; Monthly Macroeconomic
Situation Reports (Romania, Bulgaria, Ukraine).
 
You can be on an e-mail distribution list to receive automatically, on a
monthly basis, any or all of the Macroeconomic Situation Reports (Romania,
Bulgaria, Ukraine) by sending an e-mail to mwilliams@SigmaBleyzer.com.
               “UKRAINE – A COUNTRY OF NEW OPPORTUNITIES”
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   UKRAINE INFORMATION WEBSITE: http://www.ArtUkraine.com
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    “WELCOME TO UKRAINE”- “NARODNE MYSTETSTVO”

              (Folk Art) and ContempoARTukraine MAGAZINES
For information on how to subscribe to the “Welcome to Ukraine” magazine
in English, Ukrainian Folk Art magazine “Narodne Mystetstvo” in Ukrainian, 
or ContempoARTukraine in English please send an e-mail to
ArtUkraine.com@starpower.net. Complete information can be found at
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              ACTION UKRAINE PROGRAM – SPONSORS
                              Action Ukraine Report (AUR)
               Holodomor Art and Graphics Collection & Exhibitions
          “Working to Secure & Enhance Ukraine’s Democratic Future”

1.  THE BLEYZER FOUNDATION, Dr. Edilberto Segura, Chairman;
Victor Gekker, Executive Director, Kyiv, Ukraine; Washington, D.C.,
http://www.bleyzerfoundation.com.
   Additional supporting sponsors for the Action Ukraine Program are:
2. UKRAINIAN FEDERATION OF AMERICA (UFA), Zenia Chernyk,
Chairperson; Vera M. Andryczyk, President; Huntingdon Valley,
Pennsylvania
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 298 7275 in Kyiv,
kau@ukrnet.net
4.  ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
5. Law firm UKRAINIAN LEGAL GROUP, Irina Paliashvili, President;
Kiev and Washington, general@rulg.com, www.rulg.com.
6. BAHRIANY FOUNDATION, INC., Dr. Anatol Lysyj, Chairman,
Minneapolis, Minnesota
7. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX  77024; bill.hunter@volia-software.com.
8. ODUM– Association of American Youth of Ukrainian Descent,
Minnesota Chapter, Natalia Yarr, Chairperson
9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C.,
Dr. Susanne Lotarski, President/CEO; E. Morgan Williams,
SigmaBleyzer, Chairman, Executive Committee, Board of Directors;
John Stephens, Cape Point Capital, Secretary/Treasurer
10. UKRAINIAN ORTHODOX CHURCH OF THE USA, South
Brown Brook, New Jersey, http://www.uocofusa.org
11. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
12. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO; Vera
Andruskiw, CPP Wash Project Director, Washington, D.C.; Markian
Bilynskyj, VP/Director of Field Operations; Marta Kolomayets, CPP
Kyiv Project Director, Kyiv, Ukraine. Web: http://www.USUkraine.org
13. WJ GROUP of Ag Companies, Kyiv, Ukraine, David Holpert, Chief
Financial Officer, Chicago, IL; http://www.wjgrain.com/en/links/index.html
14. EUGENIA SAKEVYCH DALLAS, Author, “One Woman, Five
Lives, Five Countries,” ‘Her life’s journey begins with the 1932-1933
genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
15. ALEX AND HELEN WOSKOB, College Station, Pennsylvania
16. SWIFT FOUNDATION, San Luis Obispo, California
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 TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR,
around five times a week, please send your name, country of residence,
and e-mail contact information to morganw@patriot.net. Information about
your occupation and your interest in Ukraine is also appreciated. If you do
not wish to read the ACTION UKRAINE REPORT please contact us
immediately by e-mail to morganw@patriot.net.  If you are receiving more
than one copy please let us know so this can be corrected. 
========================================================
                        PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer
Emerging Markets Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
Mobile in Kyiv: 8 050 689 2874
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
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    Power Corrupts and Absolute Power Corrupts Absolutely. 
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return to index [Action Ukraine Report (AUR) Monitoring Service]
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