AUR#725 Jul 6 Political Talks Suspended Indefinitely; Parliament Fails To Start Work; Tymoshenko 1 & 2; Storm Brewing Between Ukraine & Russia; Peace Corps

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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       

 
     TALKS ON ENDING UKRAINE’S POLITICAL STANDOFF

               SUSPENDED INDEFINITELY ON WEDNESDAY
 
                      PARLIAMENT FAILS TO START WORK
       PARTY OF REGIONS PHYSICALLY CONTROLS RADA
 

                        ONE-HUNDRED AND TWO DAYS
         SINCE THE UKRAINIAN PARLIAMENTARY ELECTION 
                      NO NEW SPEAKER OF THE PARLIAMENT,
  NO NEW PRIME MINISTER & NO NEW CABINET OF MINISTERS             
    The Action Ukraine Report (AUR) brings you the news from Ukraine.
      Send the AUR to your colleagues and friends..keep them informed!   
                                                         
ACTION UKRAINE REPORT – AUR – NUMBER 725
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN WASHINGTON, D.C., THURSDAY, JULY 6, 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
                   SUSPENDED INDEFINITELY ON WEDNESDAY
Associated Press, Kiev, Ukraine, Wed, July 5, 2006

2RADA FAILS TO START WORK DUE TO PRESIDIUM BLOCKING
                             BY PARTY OF REGIONS FACTION

Ukrainian News Agency, Kyiv, Ukraine, Wed, July 5, 2006
3.    COALITION, OPPOSITION, AND YUSHCHENKO POSTPONE
                                    MEETINGS INDEFINITELY
Ukrainian News Agency, Kyiv, Ukraine, Wed, July 5, 2006
4.   UKRAINIAN NOMINEE FOR SPEAKER, PETRO POROSHENKO,
                 UPBEAT ON PARLIAMENT CRISIS SITUATION
UT1 TV, Kiev, in Ukrainian 1830 gmt 5 Jul 06
BBC Monitoring Service, United Kingdom, Wed, July 5, 2006

5.         UKRAINE: PARTY OF REGIONS BLOCKS PARLIAMENT
                    Ukraine’s Orange coalition already beginning to fray

ANALYSIS & COMMENTARY: By Oleg Varfolomeyev
Eurasia Daily Monitor, Vol 3, Issue 129
Jamestown Foundation, Wash, D.C., Wed, July 5, 2006

6ON THE CURRENT SITUATION IN UKRAINE. WHAT IS AT STAKE?
OPINION & COMMENTARY:
By Stephen Velychenko

Resident Fellow, CERES Research Fellow, Chair of Ukrainian
Studies Munk Center at the University of Toronto, Canada
Action Ukraine Report (AUR) #725, Article 6
Washington, D.C., Thursday, July 6, 2006

7.                                  HOPE OVER EXPERIENCE
       Will the second “orange” coalition last any longer than the first one?
The Economist print edition, London, UK, Thu, June 29 2006

8.                                       TYMOSHENKO 1 & 2
OP-ED: By Taras Kuzio and Tammy Lynch
Kyiv Post, Kyiv, Ukraine, Thursday, July 6, 2006

9.                         THE LITTLE ENGINE THAT COULD?
          Yulia Tymoshenko at the helm of the Ukrainian Cabinet may be
                                   a blessing in disguise for Russia.
OP-ED:
By Georgeta Pourchot
Kyiv Post, Kyiv, Ukraine, Thursday, July 6, 2006

10.   STORM BREWING BETWEEN RUSSIA & UKRAINE DESPITE
                                  TEMPORARY GAS TRUCE
    Two events: Yulia Tymoshenko’s appointment as Ukrainian prime minister,
                  and Turkmenistan’s decision to hike gas prices to Russia.
Datamonitor-ExpertView, London, UK, Wed, July 5, 2006

11.                    GEOPOLITICAL MISUNDERSTANDING
     Estonian warns only terrorists ‘will win’ from Ukraine’s joining NATO
ANALYSIS & COMMENTARY:
By Sergei Karaganov
Tallinn Molodjozh Estonii (Internet Version-WWW) in Russian
Estonia, 26 Jun 2006 page No. pp 12-13
BBC Monitoring Service, United Kingdom, Wed, Jul 05, 2006

12.  UKRAINE NOT RULING OUT RESOLUTION OF INHERITANCE
           OF USSR’S ASSETS & LIABILITIES BETWEEN UKRAINE

                 AND RUSSIA BY UN’S INTERNATIONAL COURT
Ukrainian News Agency, Kyiv, Ukraine, Wed, July 5, 2006

13.                                AFTER THE REVOLUTION
    IN RUSSIA’S SHADOW, GEORGIA’S LEADER REMAKES NATION
Mikheil Saakashvili Overhauls Economy and Judiciary; Concerns About Rights
                                   ‘We’re in a Rush Against Time’
By Marc Champion in Tbilisi, The Wall Street Journal
New York, New York, Thursday, July 6, 2006; Page One

14.   ACTING MINISTER OF FOREIGN AFFAIRS BORYS TARASIUK

Ukrainian News Agency, Kyiv, Ukraine, Wed, July 5, 2006

15EDITOR OF UKRAINIAN WEBSITE BADLY BEATEN IN UZHHOROD
UNIAN news agency, Kiev, in Ukrainian 1711 gmt 27 Jun 06
BBC Monitoring Service, United Kingdom, Wed, Jul 05, 2006

16.         UKRAINE’S NEW US AMBASSADOR GETS AN EARFUL!
                          Meeting with the Ukraine-U.S. Business Council
THE EAR:
By Jim Davis, Editor-In-Chief
The Ukrainian Observer magazine, The Willard Group
Kyiv, Ukraine, July 2006 Edition

17. PEACE CORPS NUMBERS UP BUT QUALITY QUESTIONS REMAIN
      Peace Corps operates in Ukraine for 14 years, largest program in the world.
By Lua Pottier, Ukrainian Observer magazine
The Willard Group, Kiev, Ukraine, July 2006

18.   CARNEGIE ENDOWMENT ANNOUNCES NEW VP STRUCTURE 
                           Russia Expert, Mark Medish, Joins Carnegie                       

Carnegie Endowment for International Policy (CEIP)
Washington, D.C., Wednesday, July 5, 2006
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1
 TALKS ON ENDING UKRAINE’S POLITICAL STANDOFF
              SUSPENDED INDEFINITELY ON WEDNESDAY

Associated Press, Kiev, Ukraine, Wed, July 5, 2006

KIEV – Talks on ending a standoff between Ukraine’s top opposition party and
members of the parliamentary majority coalition have been suspended
indefinitely, a spokeswoman for President Viktor Yushchenko said Wednesday.

The standoff began last week when deputies of the opposition Party of
Regions began blocking the podium of parliament, preventing legislators from
voting on forming a new government. The new parliament was elected in late
March, but a series of disputes and negotiations have obstructed forming a
government.

Coalition and Party of Regions members held talks Tuesday on resolving the
standoff, but Yushchenko spokeswoman Larysa Mudrak said talks were

suspended indefinitely Wednesday. She didn’t give a reason.

Raisa Bohatyreva of the Party of Regions said the coalition “doesn’t know
the answer to the question” about how key parliamentary committee seats will
be divided. The party contends the coalition was trying to freeze it out of
key committee positions.

The Party of Regions won the largest share of votes in the March election,
but fell short of a majority. The majority coalition came together after
long negotiations between Yushchenko’s party and two others.

It is widely referred to as the Orange Coalition because the parties were
central to the 2004 “Orange Revolution,” the protests that broke out after a
fraudulent presidential election and that helped force a rerun that
Yushchenko won.

The Party of the Regions also objects to a coalition proposal to hold the
votes on the prime minister and the parliamentary speaker on a single
ballot, in violation of parliamentary rules.

The Party of Regions is led by Viktor Yanukovych, whom the official count
gave the most votes in the disputed presidential election that set off the
Orange Revolution protests.                             -30-
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2. RADA FAILS TO START WORK DUE TO PRESIDIUM BLOCKING
                             BY PARTY OF REGIONS FACTION
 
Ukrainian News Agency, Kyiv, Ukraine, Wed, July 5, 2006
KYIV – The Verkhovna Rada failed to start its operation because the
Party of Regions’ faction deputies blocked its work.
The Rada presidium had around 30 Party of Regions deputies. Around 30
deputies of the Party of Regions faction are blocking the Rada presidium.

In the evening of July 4 the parliamentary coalition, the Party of Regions
and the Communist Party failed to reach the agreement on unblocking the
Rada’s work.

Since June 27 the Party of Regions’ faction has been blocking the Rada’s
work, trying to prevent contravening the rules of procedure package election
of the prime minister and the parliament speaker, as well as election to
prevent a change of the head of the rules of procedure and division of the
Rada’s committees in the coalition’s favor.             -30-
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3. COALITION, OPPOSITION, AND YUSHCHENKO POSTPONE
                                    MEETINGS INDEFINITELY
 
Ukrainian News Agency, Kyiv, Ukraine, Wed, July 5, 2006
KYIV – The parliamentary coalition, the opposition, and President Viktor
Yuschenko have postponed their meeting indefinitely.
Parliamentary Deputy Raisa Bohatyriova of the Party of the Regions
announced this to journalists.

‘The coalition presently is not responding to the question that has been
under discussion since yesterday, the issue of committees,’ Bohatyriova
said. According to her, the parliamentary coalition is refusing to transfer
leadership of the parliamentary committees with the functions of providing
checks and balances to the parliamentary opposition.

Bohatyriova noted that the Party of the Regions is insisting on proportional
distribution of parliamentary committees, in accordance with the active
parliamentary regulations.

According to her, the Party of the Regions is seeking leadership of 10
parliamentary committees in accordance with the parliamentary regulations,
including committees with the functions of providing checks and balances.

As Ukrainian News earlier reported, a meeting of the parliamentary
coalition, the opposition, and Yuschenko was scheduled for 12:00 on
Wednesday. The Party of the Regions and the Communist Party were

unable to reach agreement on July 4 on unblocking the work of the
parliament.                                   -30-
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4. UKRAINIAN NOMINEE FOR SPEAKER, PETRO POROSHENKO,
                UPBEAT ON PARLIAMENT CRISIS SITUATION

UT1 TV, Kiev, in Ukrainian 1830 gmt 5 Jul 06
BBC Monitoring Service, United Kingdom, Wed, July 5, 2006

KIEV – Petro Poroshenko, the candidate for speaker nominated by the
propresidential Our Ukraine bloc on behalf of the Orange coalition in
parliament, has said in a TV interview that he thinks the opposition Party
of Regions is ready to unblock the parliament rostrum and to let parliament
resume its work.

Appearing in the “In Focus” evening talk show on the state-owned UT1
television on 5 July, Poroshenko said: “I won’t speak in a language of
ultimatums. The blocking will not carry on. I have no doubts whatsoever that
the [Party of] Regions is now ready to unblock [parliament]. I have no
doubts whatsoever that the coalition is ready to accept certain compromise
positions.”

Describing the concessions to be made to the opposition, he said the
coalition would strictly adhere to parliamentary procedures and would hold
separate votes on the speaker and prime minister. He added that the
coalition understood that the opposition had the right to be represented in
parliament’s leadership and to head a number of supervisory committees,

such as the committees on freedom of speech, human rights and so on.

Poroshenko said he had no reasons to doubt his coalition partners or fear
that they may not vote for him as speaker. “At the moment I have no concerns
and see no reason whatsoever for the vote to fail,” he said.

He warned, however, that if any of the three forces comprising the Orange
majority walked away from its coalition obligations, this would immediately
lead to talks on a new coalition format, this time with the opposition.

“The coalition has been formed. People’s deputies have put their signatures
under it. If this or that political force, by failing to vote, shoulders
responsibility for ruining the coalition – I am convinced that it would be
irresponsible to hold a new election – a coalition will then be formed in a
different format.

I am sure it must be formed immediately after the first failed vote because
no-one has to talk anyone into anything and the responsibility for the
failure will rest with the deputies who signed [the coalition accord], but
failed to honour it,” Poroshenko said.

Answering a question about his rivalry with the coalition’s candidate for
prime minister, Yuliya Tymoshenko, Poroshenko said they had entered into

an alliance to work effectively rather than be friends.

“We don’t form coalitions to be friends or to socialize. We form them to
work together. I am sure and we do hope that this joint work will be
effective – both mine and Yuliya Volodymyrivna’s [Tymoshenko’s],”

Poroshenko said.                                       -30-
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5. UKRAINE: PARTY OF REGIONS BLOCKS PARLIAMENT
                     Ukraine’s Orange coalition already beginning to fray
 
ANALYSIS & COMMENTARY: By Oleg Varfolomeyev
Eurasia Daily Monitor, Vol 3, Issue 129
Jamestown Foundation, Wash, D.C., Wed, July 5, 2006

Ukraine still has no new cabinet in place, and the parliament elected in
March still has not started work either. On July 4 President Viktor
Yushchenko described this situation as a “parliamentary crisis.” It took
months to form the majority in parliament required by the constitution (see
EDM, June 28), now attention has turned to forming the cabinet.

On June 27, the Party of Regions (PRU), which has the largest faction in
parliament, began to physically block the Orange Revolution coalition from
electing a speaker from the ranks of Yushchenko’s Our Ukraine party and to
prevent the approval of Yulia Tymoshenko as prime minister.

PRU representatives barricaded themselves in parliament, demanding that the
majority coalition of Our Ukraine, the Yulia Tymoshenko Bloc, and the
Socialist Party (SPU) meet a set of conditions. The PRU presented the first
two conditions on June 26. These included election of the speaker by secret
ballot followed by the election of prime minister and proportional
distribution of chairmanships of parliamentary committees.

The coalition wanted to elect both speaker and prime minister simultaneously
in an open ballot — to prevent dissenters in the three parties from
breaking the agreement to approve Tymoshenko for prime minister and Petro
Poroshenko for speaker — and to leave only a handful of committee chairs
for the opposition, including the PRU and the Communists.

The PRU has nothing to lose. There are no legal mechanisms for unblocking
parliament in Ukraine, and after a month of obstruction Yushchenko will be
entitled to call new elections, which the PRU, apparently being at the peak
of its popularity, would only welcome. There is still no full trust inside
the Orange Coalition, so any serious obstacle to government formation may
kill the coalition.

The PRU was formally right, protesting against a simultaneous vote on prime
minister and speaker, as current parliamentary regulations prohibit this.
The PRU does not conceal that it expects cracks to appear in the coalition
if speaker is voted on first — should the 242-strong coalition fail to
collect the 226 votes needed to approve Poroshenko for speaker, Poroshenko’s
party, Our Ukraine, would likely vote down Tymoshenko.

Cracks appeared almost immediately. The Socialists suggested that Our
Ukraine replace Poroshenko with a different candidate for speaker, a
suggestion immediately rejected by Our Ukraine. Korrespondent quoted
Socialist Oleksandr Baranivsky, now minister of agriculture, as saying that
Ukraine’s countryside will not survive another round with Tymoshenko as
prime minister.

The SPU may not be the weakest link, as it is no secret that many in Our
Ukraine, including outgoing Prime Minister Yuriy Yekhanurov, only grudgingly
agreed to back Tymoshenko.

Afraid for the coalition, Yushchenko backed down. On July 29, he urged talks
with the PRU and agreed that the chairmanship of several key committees,
including the one for press freedom, should go to the PRU. On June 30, the
head of Yushchenko’s secretariat, Oleg Rybachuk, made it clear that
Yushchenko had agreed to the PRU’s demand that votes for speaker and prime
minister should be held separately. They also decided to hold a round-table
meeting between the leaders of the coalition and the PRU on July 3 to
unblock parliament.

The PRU took this as a sign of weakness, and on July 3, PRU leader Viktor
Yanukovych did not turn up for the meeting. He said he would do so only if
Yushchenko also attended — a condition that Yushchenko immediately
accepted — yet later on the same day the PRU came up with a new set of
conditions. These included giving the post of first deputy speaker to the
PRU, voting for deputy speakers by secret ballot, and allowing the
opposition to nominate judges to the Constitutional Court.

Yesterday, July 4, Tymoshenko’s representative Oleksandr Turchynov said that
the coalition had agreed to the PRU’s main demands, including voting for
speaker and prime minister separately, giving the chairmanship of several
committees to the opposition, and using a secret ballot for deputy speakers.

At the same time, he accused the PRU of plotting “to destabilize Ukraine”
and made it clear that the coalition has sticks as well as carrots up its
sleeve. Asked whether he meant the use of force against parliament like
Russian President Boris Yeltsin did in 1993, Turchynov ruled out that
scenario, saying, “Our main tank is the support of our voters.” Yushchenko
met with Yanukovych and Communist leader Petro Symonenko twice on

July 4, but no solution was apparently found.

The coalition may resort to gathering its parliamentary factions for a
meeting outside of parliament in order to elect a speaker and prime
minister. This happened in 2000, when the leftist opposition was defeated
this way by then-President Leonid Kuchma.

Yushchenko, however, is reluctant to follow in Kuchma’s steps, as this may
make his government look illegitimate, especially in the eyes of the PRU’s
vast electorate in the east and south. But he may not make endless
concessions either, as this may cause dissent within the coalition’s ranks
to grow if more top posts go to the PRU to quench its appetite.
——————————————————————————————–
(UT1, June 26; Channel 5, June 27-30, July 3, 4; Korrespondent.net,

June 29; NTN TV, June 30; Ukrayinska pravda, July 4)
——————————————————————————————–
LINK: http://www.jamestown.org
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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6
. ON THE CURRENT SITUATION IN UKRAINE. WHAT IS AT STAKE?

OPINION & COMMENTARY: By Stephen Velychenko

Resident Fellow, CERES Research Fellow, Chair of Ukrainian
Studies Munk Center at the University of Toronto, Canada
Action Ukraine Report (AUR) #725, Article 6
Washington, D.C., Thursday, July 6, 2006

Although the Party of Regions is commonly called an “opposition” party this
is a misnomer that carries with it erroneous implications and assumptions
that will  lead to erroneous assessments and judgments. The Party is rather
a “restorationist” party that will destroy Ukrainian democracy and threaten
European security if its leaders come to power again and turn Ukraine into
another Belorus.

For all its faults,  there  is no alternative to the Orange Coalition who
are trying  to destroy Europe’s second-last last imperial era “old regime”
elite peacefully and therefore merit support.

Ukrainians reemerged on Europe’s political map in 1991 after more than 200
years of direct foreign political rule imposed by military might.  Between
1709 and 1711, then between 1918 and 1921, and again between 1944 and 1950
Russia invaded Ukraine three times in a series of bloody wars that tied
Ukraine to the tsarist and then Soviet empires.

Under Russian rule Ukrainians got Russian-style serfdom,  Siberian exile,
governmental prohibition of publishing and teaching in the native language,
terror, and famine-genocide. When in 1991 Ukraine emerged as an independent
state there was no “liberation war.” Consequently the  imperial or “old
regime” elites were not exiled or executed.

They remained in power until 2004 and since then have retained positions
influence to such a degree that they can keep their own out of jail.  Their
constituency, meanwhile, is the product of Soviet migration policies that
directed Russians into and Ukrainians out of Ukraine.

This immigration and “ethnic dilution”, combined with deportations and
millions of unnatural Ukrainian deaths between 1917 and 1947, created large
Russian-speaking urban enclaves in the country’s four easternmost provinces.

In addition, educational and media policies, channeled upwardly mobile
non-Russian rural migrants into Russian-speaking culture and allowed urban
Russians to live work and satisfy their cultural/spiritual needs without
having to use or learn Ukrainian.

Second and third generation urban Russian immigrants and assimilated
migrants spoke in Russian, lived in a Russian public-sphere  and were
Moscow- oriented culturally and intellectually.  After 1991 most of the
urban population accepted  Ukrainian independence, but few changed their
Russian language-use or intellectual/cultural orientation.

Since 1991 an increasing percentage of Russians and Russian-speakers see
Ukraine as their native country. However, in 2005, whereas only 6% of
Ukrainians still saw themselves as “soviet citizens,” the percentage for
Russians was 18%,  and  while 2% of Ukrainians still did not regard Ukraine
as their native country, 9% of Russians in Ukraine  did not.

This means that  a percentage of  the population in Ukraine today, of whom
most are Russian, support foreign rule over the territory in which they
live – much as did once  the French in Algeria, the Germans in Bohemia and
Poland, the Portuguese in Angola, and  the English in Ireland.

This anomie and nostalgia for empire of some Russian speakers would be
harmless if not for  Ukraine’s  neo- soviet political leaders who exploit it
to maintain their by-gone imperial -era power in a post-colonial state. Both
would be manageable if leaders in Russia, the former imperial power, were
able to resign themselves to the loss of their empire, and like the British,
help the new national government rather than its imperial era collaborators.
Putin is no DeGaulle –who realized in the end that French settlers had to
leave Algeria.

Ukraine’s neo-soviet leaders are organized in four major  groups with
varying degrees of support covert and overt from Russia and its government –
whose ambassador in Kyiv is not know ever to have made a speech in
Ukrainian. Ukraine’s communists and  Natalia Vitrenko’s “Bloc” openly
advocate the abrogation of Ukraine’s independence and its reincorporation
into a revamped imperial Russian dominated USSR.

The Russian Orthodox church, which claims an estimated 50% of Ukraine’s
Orthodox,  is not only led by a  Patriarch  in Moscow, a foreign country,
that sits in Putin’s government, but is dominated by its chauvinist,
anti-Semitic fringe. This church does not recognize Ukrainians as a distinct
nationality, it publicly supports Ukraine’s communists, and fielded priests
to run in elections.

In  June 2003 the Russian Patriarch gave the leader of Ukraine’s Communist
Party its “Order of Prince Vladimir.” No more than  8% of Ukraine’s voters
back these old communist party leaders.

The more serious threat to Ukraine is posed by its fourth major neo-soviet
group; the Party of Regions. Although 2004 and 2006 election results suggest
approximately one-third of all voters in 2006 supported the Party of
Regions,  these returns are dubious.

 
First they are a product of documented coercion, intimidation and covert
operations-albeit smaller in scope and scale than was the case in 2004.

Second, they are based on ‘machine politics’ in Ukraine’s eastern provinces
where, in control of the local administration and manufacturing , the party
can offer people fearing poverty and insecurity short-term material
incentives in return for votes.

Third they are based on a lingering soviet-style cradle to grave
enterprise-paternalism, still stronger in eastern than western Ukraine, that
allows managers and owners to politically blackmail  their  employees– much
as “company-town” owners did in  nineteenth- century western Europe and
America.

How strong the party  would be in Ukraine’s east,  without the dirty-tricks,
machine-politics and neo-feudal enterprise-paternalist based intimidation
is difficult to determine.  But it would  have less than one-third of the
seats in the country’s parliament.

The party ostensibly supports Ukrainian independence in as much as its
leaders regard Ukraine as a territory that they should control as  a
“black-mail state” — just as they controlled it up to 2004.  Yet, its
anti-constitutional advocacy of Russian as a “second language” shows it
wants to keep Ukraine within the Russian-language communications sphere

and out of the English-language communications sphere.

While the Canadian and Polish ambassadors  can learn Ukrainian before their
appointments  well enough to use it publicly, some Party of Region leaders
have the unmitigated gall to speak in Russian in parliament. Some, like
Azarov, have not yet managed to learn Ukrainian after fifteen years of
independence.

But then how many French in Algeria learned Arab? How many English in
Ireland learned Gaelic? How many whites in Africa  knew Swahili or Bantu?
How many Japanese learned Chinese or Korean? How  many Germans in

Breslau learned Polish? Its leaders, additionally, engage in symbolic
colonial-homage type acts that pander to imperial  Russian nostalgia and
compromise Ukraine’s status as independent country.

In November 2005 in  Krasnoiarsk, for example, Ianukovych  publicly  gave
the speaker of the Russian Duma  a bulava – the symbol of Ukrainian
statehood. While the party formally supports “eurointegration” – just like
Putin supports the eurointegration of Russia – it has not explicitly stated
that it is for  “EU membership for Ukraine.”

Given this omission there is every reason to believe that if they return to
power they will first incorporate Ukraine into the SES and only then, via
Russia, “integrate into Europe” just like Belorus.

Party  leaders learned their politics under Shcherbitsky,  ran  Kuchma’s
“black-mail state,” and employ criminal Bolshevik-style electioneering
practices. They publicly belittle Ukrainian independence, are in constant
contact with Russian extremists like Zhirinovsky, Zatulin, and Luchkov, and
they want the Communist Party included in coalition talks.

All of which show that for all  their  chatter about  laws, representation
and committees, Ukraine’s neo-soviet Party of Regions is no mere opposition
party. It is more a restorationist party whose purpose is to destabilize the
country.

If the Party of Regions’ tactics succeed they will  compromise Ukraine’s
post -2004 ruling coalition; they will strengthen those opposed to Ukraine’s
entry into EU  and who think that it should remain in Russia’s sphere of
influence.

Foreign observers must ask themselves how a renewed Party of Regions led
Kuchma-like “black-mail state” is supposed to fit into the EU? How is
Russia, a resource-based autocracy, supposed to be “stable” when
resource-based autocracy’s everywhere else in the world are notoriously
unstable?

Ukrainians, for their part, can be sure that Party of Regions leaders will
not trouble  Bill Gates about a Ukrainian version of Windows, or Hollywood
Studios about Ukrainian dubbing and subtitles, or fashion magazine chains
like Burda about Ukrainian translations.                 -30-
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NOTE:  Stephen Velychenko is a Resident Fellow, CERES Research

Fellow, Chair of Ukrainian Studies Munk Center at the University of
Toronto, Toronto, Canada. E-mail: velychen@chass.utoronto.ca
————————————————————————————————
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7.                              HOPE OVER EXPERIENCE
       Will the second “orange” coalition last any longer than the first one?

The Economist print edition, London, UK, Thu, June 29 2006

KIEV – “NO LOVE, no romance, no illusions.” It is like a second marriage,
says Oleg Rybachuk, head of Ukraine’s presidential administration, of the
politicians who led the “orange” revolution of 2004 and are now re-forming
the coalition that collapsed acrimoniously last year, only this time with
clear-eyed pragmatism.

The Socialists, President Viktor Yushchenko’s “Our Ukraine” and the block
led by Yulia Tymoshenko, the prime minister whom he sacked, have agreed to
form a new government, on the basis of their small majority in parliament.
(This week a sit-in by the Party of the Regions, or PRU, which won the most
seats in March’s parliamentary election, delayed the formalities.)

“History has given us a second chance,” proclaims Ms Tymoshenko, who is
getting her old job back. She had insisted on that throughout three months
of horse-trading since March.

Was there any other way? Mr Yushchenko’s lot had flirted with the PRU, led
by Viktor Yanukovich, the disgraced loser of the presidential election of
2004. The PRU, says Mr Rybachuk, was “like a lion waiting for one of [the
orange parties] to leave the camp”.

Although it would have annoyed the Americans, an alliance of the two Viktors
might have made for decent economic policy, and helped to pacify the eastern
and southern bits of the country that back Mr Yanukovich. But it would have
outraged those Ukrainians who thought the revolution meant the end of Mr
Yanukovich and his ilk.

An immediate question is whether the new orange government will last any
longer than the old one. There are grounds for modest optimism. As Mr
Rybachuk puts it, the electoral lull before the presidential vote in 2009
means that Ukraine’s politicians “don’t have to promise everybody paradise
immediately”.

Perhaps Ms Tymoshenko will learn from some of the populist errors she

made last time, such as the imposition of price caps on fuel and other
commodities. In any case, the post-revolutionary expectations of Ukraine’s
voters are gradually obliging its politicians to govern in the interests of
the country, rather than simply their own.

Unfortunately, the fissures that opened in the orange team soon after it
booted out the old regime remain. The Socialists, for example, have their
own ideas about privatisation, and are sceptical about the government’s
avowed keenness to join NATO. And then there is the question of gas.

Before the election, Ms Tymoshenko vowed to review the deal struck in
January, under which Ukraine buys Russian and Turkmen gas from

RosUkrEnergo, a shady intermediary, at double the former price-a price
now likely to rise yet again, especially since the Turkmens want more for
their gas too.

Ms Tymoshenko is opposed to the use of intermediaries (“we have reached the
link before the last”, she says of the RosUkrEnergo mystery). She says she
plans to end Ukraine’s energy dependence on Russia. Big protests were staged
in Kiev this week over proposed rises in domestic gas tariffs.

Ideology is not the dividing line in Ukrainian politics: personal ambition
and greed are more important. If a coalition of the Viktors looked unlikely,
so, after the vitriolic mud-slinging last year, when Mr Yushchenko accused
Ms Tymoshenko of corruption, did an orange revival. Has she forgiven the
president? “God forgives”, Ms Tymoshenko replies piously.

She complains too that business and politics in Ukraine are still too
intertwined. And she promises that she will not stand against Mr Yushchenko
for the presidency in 2009. He is evidently calculating that it is safer to
have her inside the government than in opposition. Do not be too surprised
if neither the coalition nor Ms Tymoshenko’s pledge endures.   -30-
————————————————————————————————

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========================================================
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========================================================
8.                                   TYMOSHENKO 1 & 2

OP-ED: By Taras Kuzio and Tammy Lynch
Kyiv Post, Kyiv, Ukraine, Thursday, Jul 06 2006

Despite the tug of war occurring between the parliamentary majority
coalition and the opposition, it seems likely that Yulia Tymoshenko will
return as premier. This has elicited both applause and groans from political
analysts.

Therefore, the (impending) confirmation of the Tymoshenko-2 government
is a good opportunity for us to investigate the successes and failures
during Tymoshenko-1: the eight months she served as premier in 2005.

The biggest complaint against Tymoshenko-1 was that growth plummeted from 12
percent in 2004. After dismissing Tymoshenko almost 10 months ago, President
Viktor Yushchenko suggested that during her tenure, there were “serious
problems” regarding management of the economy. “Economic stability,” he
said, could be restored “in two to three months.”

While “stability” may have occurred, economic growth did not. It is clear
now that Ukraine’s economic slowdown in 2004 cannot be blamed entirely on
Tymoshenko’s mismanagement. This can be seen from the lack of any noticeable
improvement in growth under her successor, Yuriy Yekhanurov, who generally
is widely praised for his management skills, and has served two months
longer than Tymoshenko did.

There were, indeed, some significant mistakes made by Tymoshenko’s
government in 2005 that should be avoided when Tymoshenko-2 returns in
2006. In particular, Tymoshenko and her cabinet sometimes spoke rashly
and without thought as to how they would be interpreted by foreign
investors.

The most important case in point is Tymoshenko’s statement in mid-February
2005 on her government’s re-privatization policy.

“We have coordinated the work of the government and the prosecutor-general,”
she said. “And for each enterprise in which the prosecutor has discovered
violations, we will put a specific program in place to put an end to all
illegal transactions surrounding state property.”

Further, she repeated an oft-stated Orange Revolution slogan, promising
“that which was illegally put into private hands” would be “returned to the
state.” Although Tymoshenko herself declined to provide the number of
enterprises involved, or explain specifically what the “program” for dealing
with these enterprises entailed, a spokesman for the Prosecutor-General’s
Office later said 3,000 enterprises were being evaluated (but interestingly,
did not say the enterprises would be re-privatized).

Tymoshenko’s statement, combined with the number provided by the PGO,
was interpreted by some as a government decision to re-privatize 3,000
companies.  Tymoshenko never made a concrete move to do so, and in fact,
stated that any questions would be solved “through the justice system,”
giving current owners the right to pay a legally determined price
differential and maintain their property.

She also denied that 3,000 companies were involved, but again declined to
name a number. Therefore, although Tymoshenko never specifically said
3,000 enterprises would be re-privatized, she left her comments widely
open to interpretation.

The then-prime minister’s vague statements, occurring at the same time as
similarly vague statements on the issue from the presidential
administration, frightened investors and provided fodder to Tymoshenko’s
enemies in big business. It was an inauspicious start to Tymoshenko-1.

Tymoshenko-1 also intervened in the gas, meat, and sugar sectors in an
attempt to control spiraling prices. These decisions concerned investors and
provoked severe international criticism. Tymoshenko-2 should avoid repeating
these pitfalls.

However, it is important to note that, in the meat and sugar sectors, the
Tymoshenko government first attempted to increase imports and decrease
custom duties in order to increase supply and decrease price. The Kuchma-

era holdover parliament blocked each such attempt.

In fact, in the sugar industry, the parliament actually decreased the level
of imports allowed into the country. Prices immediately skyrocketed, while
several parliamentary deputies with sugar interests benefited.

Nevertheless, the Tymoshenko-1 decision to ultimately intervene in the above
industries was a major error. Instead of solving the problem, it led to
further increases in price and decreases in supply. In these cases, the
Tymoshenko-1 government exhibited limited understanding of market forces.

Since then, however, Tymoshenko has admitted her mistake in attempting to
manually control prices, taking on more new liberal economic advisors, and
vowing not to do so again.

Despite these issues, there were other important factors that led to lower
GDP growth rates for both Tymoshenko-1 and the Yekhanurov governments.
These include a downturn in demand for Ukraine’s most important export,
steel, and a drop in world steel prices.

Metals, energy and chemicals account for two-thirds of Ukrainian exports.
These industries are energy intensive and therefore sensitive to increases
in energy and transportation costs.

In addition, it is still unclear to what degree the 12 percent growth in
2004 was real. It is noteworthy that reliable polls in 2004 did not show
Ukrainian voters felt they were living in a country experiencing a massive
economic growth boom. The Rand Corporation’s Keith Crane, an expert on
Ukraine’s economy, believes that if statistical discrepancies are taken into
account, the real decline in growth in 2005 was closer to 5 percent.

Some analysts also note that the economy in 2005 was nothing like the
economy in 2004, when important industrial sectors were “managed” and
assisted by “insider” government favors.

Foreign investor and consumer confidence was seemingly not affected by
Tymoshenko-1. Retail trade boomed by 23 percent in 2005. At $7.5 billion,
Foreign Direct Investment also was the highest in any year since Ukraine
achieved independence. Only $4.8 billion of this is accounted for by the
sale of Kryvorizhstal, a successful re-privatization that was prepared by
Tymoshenko-1.

Other advances made under Tymoshenko-1 include the removal of tax
exemptions for Special Economic Zones and improvement of customs
enforcement leading to improved revenue collection.

The year 2005 also saw the first attempts by Tymoshenko-1 to realistically
aim for WTO membership. Both Tymoshenko-1 and the Yekhanurov
government can take credit for Ukraine being granted market economy
status by the EU and U.S. in December 2005 and February 2006,
respectively.

Rand’s Keith Crane is critical of the lack of progress under Tymoshenko-1
on an economic code, a joint stock company law and land reform. Others
criticize a failure to truly decrease bureaucracy and improve the tax code.
But, the Yekhanurov government has also made limited progress on these
items.

Between Tymoshenko-1 and Tymoshenko-2, Tymoshenko has attempted to
improve her image by portraying a business-friendly face and respect for
property rights. Nevertheless, while investors have come to accept the idea
of another Tymoshenko government in the hopes that her well-known,

energetic, workaholic nature will jumpstart stalled reforms, they remain
cautious.

The mistakes made by Tymoshenko-1 should be criticized with a view to
avoiding them under Tymoshenko-2. Nevertheless, Tymoshenko-1 produced
important positive results and its record was far more varied than is often
suggested by analysts.

The lack of any economic upturn, coupled with increasing citizen
disillusionment under the Yekhanurov government demonstrates that certain
factors in the past two years were beyond the control of the government.

However, Tymoshenko-2, unlike Tymoshenko-1, will operate with a
parliamentary coalition and without hostility from a Kuchma-era parliament.
This factor alone should improve the working of the government.

Should the Tymoshenko-2 government remember the lessons learned from the
mistakes under Tymoshenko-1, and receive support from the parliamentary
majority coalition to pursue reforms, this caution will disappear. The
Orange coalition then will have an opportunity to make up for lost
opportunities by reinvigorating the economy.        -30-
————————————————————————————————-
NOTE: Taras Kuzio is a Visiting Professor at the Institute for European,

Russian and Eurasian Studies at George Washington University,
Washington. Tammy Lynch is a Senior Research Fellow at Boston
University’s Institute for the Study of Conflict, Ideology & Policy. 
————————————————————————————————-
LINK: http://www.kyivpost.com/opinion/oped/24755/
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
9.                   THE LITTLE ENGINE THAT COULD?
          Yulia Tymoshenko at the helm of the Ukrainian Cabinet may be
                                a blessing in disguise for Russia.

OP-ED: By Georgeta Pourchot
Kyiv Post, Kyiv, Ukraine, Thursday, July 6, 2006

Tymoshenko’s often-announced intention to renegotiate the 2006 gas deal with
Gazprom offers the Kremlin an opportunity to show its G-8 partners that
Russia is indeed the reliable energy provider it always claimed to be and
that Ukraine is an unreliable party as a transit country.

Tymoshenko may rattle the case hard enough before this month’s St.
Petersburg summit for the Kremlin to seek exoneration in the much-disputed
gas crisis of the past winter.

The gas crisis of 2005-2006 between Russia and Ukraine spilled over into
Europe, and propelled energy security to the top of the EU-Russia agenda.
Russia does not sell gas to Ukraine; it compensates it for the transit of
Russian gas through Ukrainian pipelines to European consumers.

Before January 2006, Russian compensation gas was valued at $50 per 1,000
cubic meters, far below European market rates; Ukraine’s transit fee was at
$1.09 per 1,000 cubic meters of Russian gas per 100 kilometers of Ukrainian
pipelines, also below European market rates. This arrangement was intended
to last through 2013.

Ukraine argued unsuccessfully that the contract should be revised only on
its expiration date; Russia argued that its production costs had gone up
with rising global demand and consumption patterns. It agreed to higher
transit fees but increased the gas price.

The increase in transit fees did not sufficiently offset the increase in gas
prices and Ukraine declined the Russian offer. As a result, Gazprom cut off
gas supplies to Ukraine on January 1, and Ukraine diminished the gas flow to
European markets.

Several European countries felt the diminished supplies within hours of the
gas cut. Austria, France, Germany, Hungary, Italy, Poland and Slovakia all
reported pressure drops of around 30 percent in their pipelines.

Since the European Union as a whole gets around 20 percent of its gas from
Russia, and about 80 percent of that comes via pipelines crossing Ukraine,
the 2006 gas crisis signaled a longer-term concern with Russia’s reliability
as a gas provider.

Yet Russian officials were effective in pointing out that for the past half
century, Russia had been a reliable supplier of energy to Europe, but that
transit countries such as Ukraine created problems in delaying Russian gas
from reaching its consumers.

In particular, they argued that Ukraine siphoned off some of the gas
intended for European markets last winter to offset the cut to its domestic
market. Ukraine argued that it did no such thing and the burden of proof
remained on Russia.

Eventually, an agreement was reached. Under the deal, Ukraine buys gas from
a Swiss-registered company half-owned by Gazprom called Rosukrenergo, which
buys gas from Gazprom at $230 per 1,000 cubic meters, and from Turkmenistan
for much less. It then supplies gas from both sources to Ukraine, for an
average price of $95 per 1,000 cubic meters.

To put things in perspective, 2006 Gazprom tariffs per 1,000 cubic meters to
other countries are $47 for Belarus (Gazprom is currently seeking a fourfold
price increase), $110 for Armenia, Georgia and the Baltic countries (the
latter already agreed to price increases beyond 2006) and $280 for Romania.
The average EU tariff is $240.

The agreement was hailed as a “success” by the Cabinet and as an
unacceptable compromise by Yulia Tymoshenko, then part of the parliamentary
opposition. Tymoshenko pledged to annul the gas deal during her election
campaign and said she would seek to renegotiate the price down even before
she was officially appointed prime minister.

Yet, take two of the Orange Coalition put in place checks and balances of
teamwork that may slow down Tymoshenko’s drive to renegotiate the gas deal.

The hard-fought coalition agreement stipulates that every coalition partner
has the power of veto over proposed legislation, and consensus is needed for
submitting a draft bill or resolution to the Verkhovna Rada. Partners are
also required to consult on issues of special importance with the three top
state officials – the president, the prime minister, and the parliamentary
speaker – and hold mandatory consultations with the president regarding the
determination of foreign and domestic policies.

If respected, such rules may make unilateral decisions impossible. As it is
well-known that President Yushchenko would rather not rock the gas-deal
boat, Tymoshenko’s rhetoric shifted only slightly after she was sure of
getting her job back. From emphatically advocating a return to the $50
tariff through 2013, she recently shifted attention to denounce the
“middleman” Rosukrenergo.

“I am sure the three countries should conclude contracts directly, without
the involvement of any interpreters or semi-legal intermediaries,” she
stated. Why and how the elimination of the middleman would influence the

gas price down was not clarified.

Irrespective of the rhetorical shift, the Kremlin reacted with irritation.

The most important thing is to honor agreements, Russia’s Minister for
Industry and Energy Viktor Khristenko said. Gazprom spokesman Sergei
Kupriyanov referred to Ukraine as “the weak link in the chain of Russia’s
gas supplies to Europe,” warning that Tymoshenko’s threats could lead to a
new crisis, similar to the one at the start of the year.

Should that happen, Tymoshenko may be what Russia needs to clarify for its
G-8 partners the distinction between unreliable energy suppliers and
unreliable energy transit partners.

For years, Russia has been pressured by its European partners to ratify the
Energy Charter Treaty, which sets out clear rules for cooperation in the oil
and gas business. One reason offered by Russia for not ratifying the charter
is the insufficiently addressed rules for energy transit countries. Should
Tymoshenko turn electoral rhetoric into policy, a new standoff would be
expected. In the meantime, the G-8 summit is only weeks away.

If Tymoshenko demands that the initial $50 deal be honored through 2013,
Gazprom is unlikely to back down; in fact, it announced that it intends to
up the price further. Cutting gas supplies will not occur before the summit
to avoid putting the spotlight on the Kremlin again, but the row will be
used by the Kremlin to exemplify its claim that Russia was and remains a
misunderstood partner whose reliability should not be questioned.

In light of Russia’s global leadership ambitions in the energy field, the
new Ukrainian premier may become the little engine that could exonerate
Russia in the West’s eyes.                  -30-
———————————————————————————————-
NOTE: Georgeta Pourchot is senior associate at the Center for Strategic

and International Studies (CSIS) in Washington DC and director of on-line
programs in political science for Virginia Polytechnic Institute and State
University.
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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10. STORM BREWING BETWEEN RUSSIA & UKRAINE DESPITE
                                   TEMPORARY GAS TRUCE
     Two events: Yulia Tymoshenko’s appointment as Ukrainian prime minister,
                  and Turkmenistan’s decision to hike gas prices to Russia.

Datamonitor-ExpertView, London, UK, Wed, July 5, 2006

The January 2006 Russia-Ukraine gas deal has been temporarily extended to
the autumn; a temporary truce largely driven by Russia’s position as chair
of the G8. There are two events on the horizon with potentially serious
implications for the reliability of gas supplies to Europe: Yulia
Tymoshenko’s appointment as Ukrainian prime minister, and Turkmenistan’s
decision to hike gas prices to Russia.

Last year, Russia sparked a crisis in European gas supply by seeking to
unilaterally end a long-term gas contract with Ukraine and raise prices to
international levels. In November 2005 Russia proposed a price rise from $50
per 1,000 cubic meters to $160, but the following month it suddenly raised
the price to international levels (around $230 per 1,000 cubic meters).

This was twice the amount paid by Armenia, Georgia and the Baltic states,
and much more than the existing $50 special rate effectively reserved for
pro-Russia former satellites such as Belarus.

Rather than phase-in price increases or go to international arbitration as
requested by Ukraine, state-controlled Gazprom said it would simply turn gas
supplies off on January 1, 2006, if Ukraine did not comply. Ukraine did not
comply and continued to take gas out of transit pipelines pursuant to its
original agreement, bringing accusations of theft from Gazprom.

Some 80% of Europe’s Russian gas is transported across Ukraine, and when
the taps did get turned off, seven European countries reported 30% drops in
gas pressure within hours.

                                  RUSSIA UNDER PRESSURE
These events were bizarrely timed by Russia to coincide with its
chairmanship of the G8, with a specific focus on energy security. The EU
ratcheted up diplomatic pressure for the dispute to be resolved and,
immediately after the US weighed in, a deal was reached on January 4, 2006.
This was accomplished by blending much cheaper Turkmen gas with Russian
gas, to produce an overall price to Ukraine of $95 per 1,000 cubic meters.

Gas prices under this new contract were scheduled to come up for review on
July 1. Up to the day before the deadline Russia had not decided whether it
would raise rates or not. At the same time Ukraine’s outspoken former prime
minister Yulia Tymoshenko has been waiting in the wings, making dramatic
declarations about the need to scrap the contract altogether.

The brewing storm has been averted at the last minute through an agreement
between the departing administration in Kiev and Moscow: the terms of the
January agreement are to be extended to the end of Q3 2006.

There can be little doubt that the ‘energy security’ G8 meeting in St.
Petersburg on July 15, at which Russia is the chair, is the driving factor
by this sudden capitulation by Russia and Gazprom.

This new agreement, however, is a truce and not a resolution of the dispute.
The task of setting in place a long term agreement remains unresolved. To
this end, two interwoven variables could yet combine to create potentially
serious disruptions in future gas supplies to Europe.

                              THE TYMOSHENKO FACTOR
[1] First, Ukraine’s former firebrand prime minister Yulia Tymoshenko is on
the cusp of re-forming a government, and she has already called for a
revision of the Russia-Ukraine gas contract. The January compromise gas deal
was only possible because Ms Tymoshenko had earlier been replaced as
Ukraine’s premier. During and after this spring’s national elections, she
repeatedly called for the January gas deal to be called off.

The returning Ms Tymoshenko is dedicated to forcing RosUkrEnergo out of the
Ukraine-Russia pact. In 2004, in the dying days of former president Leonid
Kuchma’s government, this murky company secured a sweetheart intermediary
role carrying Gazprom-secured gas from central Asia to Ukraine, through
Gazprom pipelines, to sell on to Ukraine’s NaftoGaz Ukrainy.

The commercial rationale for RosUkrEnergo’s role is unclear. But the
company’s original involvement as monopoly gas supplier to Ukraine was set
up under President Kuchma’s pro-Russia, pre-Orange Revolution government,
just before it orchestrated massive electoral fraud in a bid to hold on to
power through presidential candidate Victor Yanukovich.

The company is consequently seen by many, and most importantly Yulia
Tymoshenko, as a vestige of that regime. This has direct implications for
the security of gas supplies to western Europe.

                       TURKMENISTAN TURNS TABLES
[2] Ironically, Russia is now in the position that Ukraine was last year.
Turkmenistan, having learned from Russia’s hard ball strategy, has stated
that it wants to raise the price at which it sells its gas to RosUkrEnergo
(from $65 per 1,000 cubic meters to $100), otherwise it will cut off
supplies. It threatens to do this by September, at which point the current
30bcm supply contract with Gazprom is expected to be fulfilled.

Negotiations with Gazprom have recently broken down, and a Ukrainian
delegation immediately began talks to negotiate a new deal. Such a deal
would reduce Ukraine’s dependence on Russian gas and break Gazprom’s
monopoly on central Asian gas (though Ukraine will nevertheless have to use
Russian pipelines to transport the gas).

This unresolved dispute threatens to intensify in the near future, with
serious consequences to secure gas delivery through Russia and Ukraine to
Europe.

The saving grace in all this potential turmoil is Russia’s chairmanship of
the St Petersburg G8 summit on July 15. Russia’s desire to calm tensions and
prove itself a responsible energy leader is driving its current stance.

And so, notwithstanding the focus of the current G8 summit, the next few
months will see feuds over the structure and price of major gas contracts
escalate, with potentially serious ramifications on the security of gas
supply.                                              -30-
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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11.                GEOPOLITICAL MISUNDERSTANDING
        Estonian warns only terrorists ‘will win’ from Ukraine’s joining NATO

ANALYSIS & COMMENTARY: By Sergei Karaganov
Tallinn Molodjozh Estonii (Internet Version-WWW) in Russian
Estonia, 26 Jun 2006 page No. pp 12-13
BBC Monitoring Service, United Kingdom, Wed, Jul 05, 2006

The world changes fast in very different and unexpected directions and it
has become difficult to administer – especially for people and countries
used to direct governing. A number of horrible mistakes have been made by
the so-called developed countries in the last 10-12 years.

These mistakes have a price. Pakistan, India and North-Korea, who have
obtained weapons of mass destruction due to common oversight, have now
practically legitimized their new role. There are no serious arguments left,
except perhaps bomb attacks, and political and economic bribery, against the
further spread of nuclear power and even here the efficiency is quite
uncertain.

The dialogue of civilizations and its support for modern forces in order to
fill the security vacuum in Central Asia was propelled into downfall. The
attack on Iraq destroyed one of the very few secular regimes in this region,
but it seems that this regime was unacceptable for someone.

The mistake in Iraq launched a wave of hatred towards the western world, as
even those who dreamed of overthrowing Saddam became involved. The western
world in turn became divided.

The United States lost its moral and political advantages and its limited
success in Afghanistan was hardly comforting. Yes, the Taleban was defeated,
but there was not and is not going to be a viable regime to replace them.
Anti-terrorist and anti-radical coalitions will be heated up by the war in
Iraq with the accompanying stress and problems.

Anti-American coalitions started to appear not only in Central Asiabut also
in Latin America. Some western politicians decided to apply extreme methods
in return: to start conflicts with Russia and China in order to restore at
least some of Atlantic solidarity and weaken Europe at the same time.

Maybe they hope to force Moscow to give up its confident and independent
political tone with their hidden and not so hidden threats. Perhaps they are
trying to provoke Moscow to retaliate with foolish actions and increase
international tension, in order to divert attention from their own political
failures.

The new enlargement of NATO is being prepared. Rumour has it that even
Australia, South Korea, Japan and New Zealand are going to join. I do not
think they will accept this step as they do not need it. Pacts and
pseudo-pacts are spreading from PATO [Pacific Treaty Organization], CENTO
[Central Treaty Organization], SEATO [Southeast Asia Treaty Organization]
and other alliances.

There are rumours that anti-missile systems will be stationed in Poland,
near the Russian border – supposedly against terrorist rockets, but those
would never be able to reach Poland. At the same time it was semi-officially
announced in the NATO Parliamentary Assembly that countries like Croatia,
Macedonia and Albania will be joining NATO in the nearest future. These are
countries that do not meet any membership demands or conditions.

Washington and Kiev have been discussing Ukraine’s joining NATO in 2008.
There are also plans for more operative actions without any referendums.
Referendums would most likely sink the whole idea (provided the results are
not falsified) or cause even deeper splits in society.

Those in Ukraine who do not have confidence in their own power and the
viability of Ukraine, who are afraid of a strong Russia and are willing to
bind their country to United States with military-political handcuffs,
strive to see NATO expand.

Western motivations are not always clear, but in some cases possible to
figure out.

There is a strong wish to bind the fluctuating and unstable Ukraine to the
western system. Somebody in the United States definitely wants to win the
votes of Eastern European immigrants and their children. The goal is to
create another pro-American platform in Europe in addition to Poland, which
is not even working properly.

Poland is almost isolated in the greater Europe. Polish tradition
worshippers are dreaming about restoring the power over Ukraine, lost
centuries ago.

Ukraine is probably joining NATO on even stronger calculations, unless all
this is a misunderstanding. There is no Ukraine-Russia demarcation border
and assault ditches are being dug in some places. If a real border is
created (right now it only exists on paper and feeds corrupt customs
officers) huge problems are also inevitable.

Every mound will become strategically important, every ravine historical.
They will be fought over, and the results can easily be imagined – a lot of
blood. Millions of people presently living on one side of the border and
working on the other, will lose their standard of living. Hundreds of
thousands of families will be divided, dozens or hundreds of problems will
appear.

The syndrome of the divided nation, which has barely been avoided so far,
will appear on both sides. The scenario may be reminiscent of the one we had
in Yugoslavia, even if it is a softer version. However – who knows… Do
those who are trying to make Ukraine join NATO understand it? Some of them
do, but most of them, I am sure, do not even think twice about it, do not
remember the lessons of recent history.

Let us suppose that Russia is not like Serbia. Russia will weaken but can
survive. Russia will be pushed into anti-western alliances. Many people in
Moscow will lose their wish to support the status quo. Ukraine, however,
will lose much more. Ukraine will lose a vitally important (albeit not
always comfortable) partner who has never let them down.

Hopefully Russia will not choose confrontation. A strong, possibly
disproportionate offensive is still necessary.

The most important issue is, however, that this “Arc of Instability” along
the Ukrainian-Russian border will sink the idea of uniting the world’s
biggest countries against new threats. A new, different and almost grotesque
rivalry between blocs will be born. Almost everyone will lose, only those
who are willing to destabilize the world and get more weapons of mass
destruction, which means terrorists and radicals, will win.

These are the people against whom developed societies and civilized
countries are fighting.

If part of this society supports NATO’s dangerous and unwise enlargement to
Ukraine, it will not be worth being called developed and civilized. I would
gladly be wrong in my fears as I still have faith in rationalism and
self-preservation, that is, European civilization.              -30-
———————————————————————————————–
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12. UKRAINE NOT RULING OUT RESOLUTION OF INHERITANCE
           OF USSR’S ASSETS & LIABILITIES BETWEEN UKRAINE
                  AND RUSSIA BY UN’S INTERNATIONAL COURT

Ukrainian News Agency, Kyiv, Ukraine, Wed, July 5, 2006

KYIV – Ukraine is not ruling out the possibility of the United Nations
Organization’s international court resolving the dispute between Ukraine and
Russia over inheritance of the assets and liabilities of the former Soviet
Union.

Vasyl Filipchuk, the head of the Ukrainian Foreign Affairs Ministry’s press
service, stated this while commenting on the Russian finance minister’s
statement that Russia was seeking to assume responsibility for all the
assets and liabilities of the former Soviet Union.

Filipchuk noted that the process of resolution of the issue of inheritance
of the assets and external debts of the former Soviet Union between Ukraine
has not been completed and that Article 4 of the agreement of December 4,
1991, on inheritance of the assets and liabilities of the former Soviet
Union states that 16.37% of the assets and liabilities belong to Ukraine.

‘At the same time, the data about the structure of the debt and assets of
the former Soviet Union … are working data and preliminary,’ Filipchuk
said.

He also said that the currency and diamond reserves of the former Soviet
Union, its investments abroad, including the capital of foreign Soviet banks
and the money remaining deposit accounts with foreign banks, have not yet
been included in the assets of the former Soviet Union.

Filipchuk stressed that the payment of the former Soviet Union’s external
debt does not rule out the need to search for a mutually acceptable option
for resolving the inheritance issue.

‘The voluntary payment of the debt by Russia does not create a legal basis
for recognizing it as the country with the sole right to the foreign
facilities, real estate of the former Soviet Union. Instead, it only needs
to be taken into account within the framework of the bilateral negotiating
process,’ Filipchuk said.

He stressed that Ukraine has repeatedly proposed holding talks with Russia
on the entire range of issues involving inheritance of the assets and
liabilities of the former Soviet Union. However, according to him, such
proposals have not received the support of the Russian side.

According to Filipchuk, Russia is continuing to delay the start of work on
comparing and distributing the former Soviet Union’s diamond reserves
despite the existence of the relevant agreement and the need to sign a
separate agreement on the issue.

‘Regarding the possible intentions of the Russian side to resolve the issue
of inheritance of the assets and liabilities of the former Soviet Union
through the courts, it is necessary to note that in accordance with the
terms of the agreement of December 4, 1991, any of the sides, including
Russia, can file the relevant lawsuit with the international judicial
instances,’ Filipchuk said.

According to him, resolution of the dispute by the international court is a
civilized method of resolving disputes among countries, although Ukraine
continues to attach priority to resolution of the issue through
negotiations. Therefore, according to him, Ukraine will welcome
negotiations.

As Ukrainian News earlier reported, Ukraine believes that Russia’s decision
to proclaim itself as the successor-country of the former Soviet Union
amounts to legal nonsense.

Ukraine recently expressed surprise at Russia’s lack of desire to hold talks
on the issue of sharing the assets and liabilities of the former Soviet
Union.                                             -30-
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========================================================
13.                                AFTER THE REVOLUTION
IN RUSSIA’S SHADOW, GEORGIA’S LEADER REMAKES NATION
 Mikheil Saakashvili Overhauls Economy and Judiciary; Concerns About Rights
                                 ‘We’re in a Rush Against Time’

By Marc Champion in Tbilisi, The Wall Street Journal
New York, New York, Thursday, July 6, 2006; Page One

TBILISI, Georgia — Georgian President Mikheil Saakashvili stood 200 feet
above this capital city one recent afternoon, pointing out pet projects from
the rotating deck of an observation tower his nation had just purchased in
France.

Along the river, he said, ground was about to be broken for his “personal
favorite,” a ballet center. At the foot of the tower, a planned $250 million
shopping complex and park was the subject of a competition between
architects from Japan, Britain and Denmark. Hyatt and Hilton had just agreed
to build hotels. A new teaching hospital was to open this fall.

Below him, in all directions, lay the medieval churches and public buildings
he ordered lit to brighten the city, which until recently lacked regular
electricity and “was so depressing,” he said. “Maybe we’re overplaying it.
We’re putting lights everywhere.”

The so-called orange and yellow revolutions that brought Western-leaning
governments to Ukraine and Kyrgyzstan have bogged down in political feuding.
But Georgia’s three-year-old “rose revolution” has started to deliver
dramatic change, driven by its energetic 38-year-old president.

Mr. Saakashvili, who has strong backing from the U.S., is trying to
transform Georgia’s economy in a hurry. His aim is to end centuries of
Russian domination and to forge new ties with the West. Corruption is down,
and tax revenues have at least doubled since 2003, due in part to a new flat
tax and improved collection, helping to pay for the government’s many
projects.

The nation’s gross domestic product rose 8.5% during the first quarter. Mr.
Saakashvili recently hired Mart Laar, the former Estonian prime minister
responsible for Eastern Europe’s most radical free-market economic makeover,
to advise his government on how to follow Estonia’s path.

Mr. Saakashvili faces enormous challenges. Georgia sits at the center of an
unstable region and shares borders with both Russia and Iran. If he
succeeds, Western nations stand to benefit.

New pipelines that pass through Georgia are coming on line this year, giving
Western nations access to oil and gas from the Caspian Sea area, one of the
world’s few significant new sources of energy outside of the Middle East and
Russia. Georgia also is a key plank in the Bush administration’s efforts to
promote democratic governments in the former Soviet bloc.

But Mr. Saakashvili’s methods also are raising concerns among civil-rights
groups and some Western governments. Freedom House, a U.S.-based nonprofit
promoting democracy, said in an annual survey that judicial independence and
media freedoms in Georgia are declining. Former allies of Mr. Saakashvili
have joined the political opposition, claiming that Mr. Saakashvili doesn’t
consult with parliament and has accumulated too much power.

The president, a graduate of New York’s Columbia Law School, disputes the
findings on the courts and media, and notes that Georgia will have its first
free local elections in October. But he is unapologetic about his political
tactics. “If we consulted like normal countries, we wouldn’t be where we
are,” he said during a recent series of interviews.

His role models, he said, are Kemal Attaturk of Turkey and Josip Broz Tito
of Yugoslavia, both authoritarian nation-builders. Current Western leaders,
he noted, didn’t have to build their countries from scratch.

Georgia threatens to become a flash point in the West’s increasingly
delicate dealings with Moscow. The U.S. maintains a 650-person embassy here,
which dispenses one of America’s highest per capita assistance programs in
the world. The Russian government views U.S. efforts to promote energy
security and democracy in Georgia as muscling in on its backyard and
undermining its interests as the region’s dominant distributor of energy.

Russian troops protect two separatist enclaves in Georgia. Mr. Saakashvili
wants Western leaders to press Russia at the G8 summit in St. Petersburg
next week about what he says is Russia’s suppression of democracy in
Georgia. France and Germany have blocked North Atlantic Treaty Organization
membership talks for Georgia, largely due to concerns over relations with
Russia, according to people involved in the talks. During an appearance in
the White House yesterday with Mr. Saakashvili, President Bush said: “I
believe that NATO would benefit with Georgia being a member.”

Georgia’s role as an energy transit route is set to grow. An important new
oil pipeline from the Caspian Sea started to fill last month and will soon
transport one million barrels per day to the world market. It passes through
Georgia and Turkey, bypassing both Russia and the Middle East. A natural-gas
pipeline from Azerbaijan to Georgia and Turkey is due to start operating in
September, and a European consortium has plans to extend it to Western
Europe by 2011.

Mr. Saakashvili is also determined to see a gas pipeline built from Central
Asia to Poland that would cross Georgia, run under the Black Sea, then cross
Ukraine. That pipeline also would bypass Russia, breaking Moscow’s grip on
the supply of Central Asian gas to Ukraine and the West.

Mr. Saakashvili cites these energy projects, along with intense political
and economic pressure from Russia and Georgia’s recent history of civil war,
as justifications for rapid change. The nation needs to pursue change
quickly, he says, or it won’t happen at all. “We’re in a rush against time,”
he says.

Mr. Saakashvili, a tall, burly man with a loping gait, burst onto the
political stage in 2003, when he stormed Georgia’s parliament in a bloodless
revolt against stolen elections. He was carrying roses.

Mr. Saakashvili was elected president in a landslide in 2004. David
Usupashvili, a lawyer who had worked for six years with a U.S.-sponsored
program to support the rule of law in Georgia, says he was offered the job
of justice minister. Although he was from a different party, Mr. Usupashvili
had backed Mr. Saakashvili’s revolt.

He wanted to know what he’d be asked to do. “They said, ‘Prepare amendments
to the constitution to reduce parliamentary powers so it cannot block
reforms.’ I refused the job,” Mr. Usupashvili says. “They didn’t want checks
and balances.”

Georgia’s constitution was subsequently changed to strengthen the
presidency. Last year, Mr. Usupashvili’s Republican Party moved into the
opposition. “We lost hope that Saakashvili could change,” he says.

Mr. Saakashvili says he has studied closely the mistakes of leaders in
former communist bloc countries as they shifted to market economies
following the 1989 collapse of the Berlin Wall. One common problem, he

says, was a failure to move quickly enough, in part due to opposition from
parliaments that blocked change.

Another big mistake, he says, was to leave security services intact. Serbian
leader, Zoran Djindjic, did so after deposing Slobodan Milosevic in 2000.
Less than three years later, Mr. Djindjic was assassinated. “We are learning
from Djindjic’s mistakes,” said Mr. Saakashvili.

One of Mr. Saakashvili’s first steps in office was to overhaul the country’s
corrupt and hated traffic police. He sacked half of the force’s 30,000
officers, then gave the rest a tenfold pay raise and merged them into the
regular police force. Now, even opponents say it was a good move.

He next purged the ranks of customs officials. Then he downsized the

old KGB and put it under the interior ministry to create a department
styled more like the U.S. Federal Bureau of Investigation.

Within the army, 34 of the 35 generals were removed, according to Deputy
Defense Minister Mamuka Kudava. Now four generals run a military that bears
little resemblance to what it looked like a few years ago. A new military
base in Western Georgia, built to NATO standards, houses 3,000 troops.
Soldiers there watch flat-screen televisions in an air-conditioned
cafeteria. An indoor swimming pool is half-finished. “We didn’t used to have
boots,” notes one officer.

During a trip to Monaco, Mr. Saakashvili noticed that concrete apartment
buildings had been brightened with colored-glass balcony fronts. The
buildings, he recalls, “were just as ugly as ours, and if they can have
these colored glass balconies, why don’t we?” he says. Bright colors now

can be seen on Soviet-era apartment blocks across Georgia.

Police uniforms and patrol cars have been replaced and marked with English
lettering. Unpopular Soviet technical colleges were re-branded “American
schools” because Mr. Saakashvili believes Georgians associate the English
language with quality and honesty. The new teaching hospital in Tbilisi will
be run by a team of Georgian doctors returning from practices in the West
and Russia. The curriculum and exams, once in Russian, will now be in
English.

Since Mr. Saakashvili’s election, corruption has declined, according to the
European Bank of Reconstruction and Development. “This was a totally corrupt
country,” says Mark Rhodes, who runs the Georgian operations of Greenoak
Holdings Ltd., a United Kingdom-based group that ships Azerbaijani oil from
a terminal at Batumi on the Georgian coast. The company just bought the
city’s port in a competitive, $92 million privatization. That kind of move
once involved payoffs, says Mr. Rhodes.

Simplified taxes helped to double tax revenue between 2003 and 2005, and as
economic changes kick in, the government is budgeting for revenue to double
again by this year. The number of licenses needed to start and operate a
business has been cut by 80%. Tens of thousands of businesses have emerged
from the illegal economy to register. The World Bank and International
Finance Corporation this year said Georgia’s economy is reforming at the
second-fastest rate in the world.

But increasingly, Mr. Saakashvili’s just-do-it approach to government has
been making enemies of civil-rights leaders and pro-democracy activists who
were once supporters. In January, a banker named Sandro Girguliani was taken
to a cemetery with a friend and severely beaten by members of the government
security service. The two men had just left a café where Mr. Girguliani had
insulted the security service’s chief.

Mr. Girguliani was found dead in the morning in a ditch where he had fallen.
His friend survived. The four men responsible have confessed to the beating
and are now on trial. But their insistence that they acted on their own has
not quelled public suspicions that the country’s security chief was
involved.

During prison riots in March, seven inmates were shot dead, something Mr.
Saakashvili says was regrettable, but necessary to keep thousands of
prisoners from escaping. The government fired allegedly corrupt judges,
prompting accusations of political interference in the courts.

Mr. Saakashvili also introduced a plea-bargaining system, whereby officials
and businessmen accused of corruption now can return money to the

government instead of going to jail, a procedure that some businessmen
have criticized as arbitrary.

“They have supported selective justice, undermining the rule of law,” says
Anna Dolidze, chairwoman of the Georgian Young Lawyers’ Association. “If
someone had told me [at the time of the revolution] that this would happen,
I would have laughed at them.”

“We started firing judges, and then people accused us of political pressure.
That’s rubbish,” responds Mr. Saakashvili. The judges were fired for
corruption and incompetence, he says.

Georgia’s government has formed a committee to develop and propose

sweeping changes to its legal and penal systems. Mr. Saakashvili says he
asked the European Union to provide Georgia with 100 Scandinavian judges
to work alongside their Soviet-trained Georgian counterparts to help change
the legal culture. “They said they’d consider it, but as always, they’ll
consider it for a long time,” he says.

Mr. Saakashvili’s often blunt and emotional style has infuriated Moscow.
Earlier this year, Russia banned all imports of Georgian wines and mineral
water, claiming it had health concerns. Russia has given passports to
residents of Abkhazia and South Ossetia, two separatist enclaves within
Georgia. Russian officials all the way up to President Vladimir Putin have
hinted that they could support the territories’ calls for independence.

Mr. Saakashvili recently opened a Museum of the Soviet Occupation in
Tbilisi, which focuses on Moscow’s repression of Georgia after the Red Army
invaded in 1921. “It’s weird,” says Mr. Saakashvili. “We are perceived [by
Russia] as some kind of forefront in a world-wide plot of the CIA and the
Western world against [its] greatness.”                    -30-
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Write to Marc Champion at marc.champion@wsj.com, http://online.wsj.com
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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14. ACTING MINISTER OF FOREIGN AFFAIRS BORYS TARASIUK

                TO PAY OFFICIAL VISIT TO CANADA JULY 16-19
 
Ukrainian News Agency, Kyiv, Ukraine, Wed, July 5, 2006

KYIV – Acting Foreign Affairs Minister Borys Tarasiuk will pay an official
visit to Canada from July 16 to 19. Vasyl Filipchuk, the head of the
Ukrainian Foreign Affairs Ministry’s press service, announced this to
journalists. According to him, Tarasiuk plans to visit Canada’s capital
Ottawa as well as Toronto.

During the visit, Tarasiuk will meet with Canada’s Foreign Affairs Minister
Peter Mackay, the Canadian House of Commons Speaker Peter Milliken,

National Defense Minister Gordon O’Connor, International Cooperation
Minister Josee Verner, Opposition Leader William Graham, the Canadian-
Ukrainian parliamentary group’s leadership, the leadership of the
parliamentary committee for foreign affairs, the Ontario province’s Premier
Dalton McGuinty, and Toronto’s Mayor David Miller.

Tarasiuk and his hosts are expected to discuss cooperation in the bilateral
and multilateral formats as well as pressing issues in Ukrainian-Canadian
cooperation.

Significant attention will be paid to the issue of realization of Ukraine’s
bid to integrate into the Euro-Atlantic and European communities as well as
to development of political dialogue between the two countries at the
highest and high levels.

As Ukrainian News earlier reported, Tarasiuk and Canada’s Foreign

Affairs Minister Mackay discussed ways of developing Ukrainian-
Canadian cooperation in April.                     -30-
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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15. EDITOR OF UKRAINIAN WEBSITE BADLY BEATEN IN UZHHOROD
 
UNIAN news agency, Kiev, in Ukrainian 1711 gmt 27 Jun 06
BBC Monitoring Service, United Kingdom, Wed, Jul 05, 2006

UZHHOROD, Ukraine – On the evening of 26 June, Serhiy Romanenko,

the chief editor of the Reporter internet site was brought unconscious
to the Uzhhorod city hospital after he was found in the centre of Uzhhorod.

According to the casualty department at the hospital, the journalist was
found to have been hit on the back of the head, a broken lip and with some
teeth knocked out. The police believe that the beating of the journalist is
connected to his professional work.

Romanenko wrote several articles critical of the activities of high-ranking
politicians of Transcarpathia and Serhiy Ratushnyak, the mayor of Uzhhorod.

Articles critical of efforts and attempts by Serhiy Ratushnyak to tighten
his influence in several city organizations and political parties, in
particular, the city committees of the Socialist Party of Ukraine and the
Yuliya Tymoshenko Bloc, appeared a few days ago on his site.   -30-
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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16.  UKRAINE’S NEW US AMBASSADOR GETS AN EARFUL!
                   Meeting with the Ukraine-U.S. Business Council

THE EAR: By Jim Davis, Editor-In-Chief
The Ukrainian Observer magazine, The Willard Group
Kyiv, Ukraine, July 2006 Edition

Having lived in Ukraine full-time for almost 12 years and having been
involved with the country long before that, I’ve had a ringside seat to
much of the country’s independent history. And I am able to claim certain
distinctions, mostly by happenstance, not any particular brilliance of my
own.

One of those distinctions is having known all of the United States’
ambassadors to Ukraine since that position came into being, starting with
Roman Popadiuk and continuing up to the very recent incumbent, William
B. Taylor, Jr.

On Constitution Day, June 28, I had an opportunity to spend an hour with
Taylor in a meeting hosted by the Ukraine-U.S. Business Council that
included about 40 persons, most of whom were top business and NGO
leaders in Ukraine.

Just as in the past, I was very favorably impressed by Taylor for a number
of reasons, not the least of which was what appears to be a great
willingness and ability to listen to those people he is representing. The
ambassador asked for suggestions and he certainly got what he bargained
for from this group, some of whom have been active in Ukraine for 15
years or more.

Taylor is a man who is accustomed to controversy–some of it in
circumstances involving active, sustained and deadly gunfire. His most
recent posting, as the U.S. government’s representative to the Quartet’s
effort to facilitate the Israeli disengagement from Gaza and parts of the
West Bank, had elements that Ukraine cannot match – thank goodness!

However, having previously served in Baghdad as Director of the Iraq
Reconstruction Management Office, and in Kabul, as coordinator of U.S.
government and international assistance to Afghanistan, even dealing with
Israel-Palestine problems might have seemed tame — and Ukraine almost
like a vacation cruise.

However, the ambassador could not help having been less than pleased with
the consensus among the Americans and European business leaders in the
June 28 meeting.

There was almost universal agreement that in some areas Ukraine has
improved under the Yushchenko administration but even more universal
were the opinions that for every positive move there have been a myriad
of missed opportunities. Just as most of us have heard – in too many other
conversations to count – the single word most commonly used in regard to
the Yushchenko presidency was and is, “disappointment!”

However, what had to be the most disturbing thing the ambassador heard was
that under the Yushchenko administration corruption has increased rather
than decreased. No one suggested that this relates to Yushchenko himself,
but more to a general lack of central direction and leadership.

And perhaps the most disturbing theme coming from most of the business
people in the meeting was an agreement that no part of the Ukrainian state
structure has changed less than the judiciary. Companies doing business here
have always attempted to avoid going to court, knowing that in the past
court judgments were as often as not the result of outright bribery.

Many in this meeting clearly believe that the judicial situation is the
cancer at the heart of Ukraine’s economy and that major surgery is needed –
and soon – to make progress on this issue. However, no one evidenced any
belief that a clean-up of judicial problems is forthcoming under the current
leadership.

Ambassador Taylor said that he is not one to volunteer a lot of advice to
foreign governments and that is probably a good posture to assume. One
can only hope that the current administration and the new government –
when we get one – will be asking for help in solving some of these problems,
and that it will be freely given.

A few final words…

Although I’ve been in Ukraine for well-over a decade, I’ve been with the
Willard Group for only about three months and editor-in-chief of the
Ukrainian Observer for only one issue previous to this one.

Those of us with responsibility for this publication are dedicated to seeing
it improve and prosper. And, just as the new ambassador, we try to be
good listeners.

There is a trite – but still true – old bromide in business, which goes, “If
you’re happy with our service, tell your friends. If you have a complaint,
tell us.”

If you want to write with suggestions, complaints, praise, whatever, please
do so to jim@twg.com.ua. I am available at least five days on Kyiv 502-3005
and every day of the year on 8-050-352-06-44.

Whatever your opinion or your suggestion for content, we’d really like to
hear it. Some of our best story ideas come from our readers. What’s yours?
———————————————————————————————–
LINK: http://www.ukraine-observer.com/articles/221/884
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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17. PEACE CORPS NUMBERS UP BUT QUALITY QUESTIONS REMAIN
      Peace Corps operates in Ukraine for 14 years, largest program in the world.

By Lua Pottier, Ukrainian Observer magazine
The Willard Group, Kiev, Ukraine, July 2006

After 14 years of cooperation with the Ukrainian government, the term ‘Peace
Corps volunteer’ is almost a household name around Ukraine. In fact,
according to former Peace Corps director, Jerry Dutkewych, the term was well
known after a mere 5 years. In a 1998 press interview, Dutkewych said, “I
think one of our biggest successes is that Ukrainians know that Peace Corps
volunteers are in Ukraine”.

Though the term is well known, why volunteers are here is not. According to
official Peace Corps statistics, Ukraine has the highest number of
volunteers in the Peace Corps world. Additionally, compared to other
countries where Peace Corps operates, Ukraine has both a higher level of
overall industrialization and a relatively stable political environment. So
then, what exactly is the focus of the volunteers’ work here? What are they
hoping to achieve and why is Ukraine still so high on the Peace Corps’
priority list?

Peace Corps began as a response to John F. Kennedy’s challenge in 1961 that
young Americans serve their country in the cause of peace by living and
working in developing countries. Remarkably, David Anderson, a Peace Corps
volunteer from that era that also served as a consultant during the process
of setting up Peace Corps in Ukraine, is still residing here. According to
him, the main difference between the beginning years and now is one of
motivation.

“Back then there was a much stronger idealistic element than now, people
joined to get a taste of the overseas and do some good. These days
motivation is more career-driven. People join to change their career
direction or as a way to leave the States,” Anderson said. While it is true
that many do join as a way of making a career or life change, it seems that
some element of the original idealism still makes its way into the overall
experience.

Valerie Wright, a former Peace Corps volunteer and member of the original
Ukrainian group said that by the end of their term, her group’s philosophy
had become to “change one person at a time”. This contrasts with their
initial concentrating off fulfilling programmatic goals.

Nevertheless, the local Peace Corps office periodically monitors and
evaluates programmatic goals, adjusting them according to the changing needs
expressed by the Ukrainian government. This is a reflection of the high
level of cooperation that Peace Corps enjoys with the Ukrainian government.
When Peace Corps offered their services to Ukraine just following the fall
of the Soviet Union, the agreement was made on the presidential level.

Agreements with host countries generally are made on a ministerial level, so
having both former Ukrainian president Leonid Kravchuk and former American
president George Bush (senior) personally sign the final Peace Corps
agreement immediately set Ukraine apart and indicated the high level of
governmental support for the program.

Providing the assistance that Ukraine requested involved creating a brand
new Peace Corps program in economic development. Thus the first group of
Peace Corps volunteers to arrive in Ukraine was also the first volunteers to
pilot the new program area. Wright describes that first group as being very
competitive. “In our group we had a couple of MBAs (Masters degrees in
Business Administration), representatives of Fortune 500 companies,
successful business managers, and hot interns from major corporations.”

Due to the newness of this economic development program, a lot of
improvisation was required on the part of the volunteers. Wright describes
that time as being imbued with a sense of historical opportunity that
inspired mixed reactions from Ukrainian counterparts.

She explained the mixed reactions, saying, “For a number of Ukrainians,
especially those in local governing bodies, having Americans around was a
constant reminder of the failure of their system.” In practical terms, this
often meant that cooperation with officials was more theoretical than
actual.

Change is always difficult and even more so when emerging from a
totalitarian regime. According to Anderson, regime change of this sort
brings with it an ingrained sense of paranoia. Post-soviet bureaucrats were
quite wary of the Peace Corps volunteers and before the economic collapse

in 1993 did their best to “keep an eye” on their activities.

Typically, economic programs suggested by the volunteers – beyond the
simplest ones – were extremely difficult to implement. The most frequently
asked question for Peace Corps volunteers was (and still is), “Why are you
here? Why did you volunteer?”

Anderson goes on to remark that, at the time, Ukrainians found the concept
of volunteering out of free will, in a non-coerced and non-cynical context,
hard to accept and understand. As the years went by, this attitude began to
change. These days, due to the advent of local volunteerism in
non-governmental organizations and among Ukrainian society at-large,
whatever answer volunteers give to this question of “Why?” is generally
accepted without much surprise.

A Peace Corps English language teaching program and a smaller environmental
program followed the initial economic development program. As the years went
by, the programs evolved from being less structured with fewer programmatic
goals beyond those of cultural exchange, to more systematic with
goal-setting more in-line with Ukrainian government expectations and
desires. Simultaneously, volunteers’ activities have been moving towards
greater personal responsibility for projects and initiatives, and overall
the roles of volunteers have become increasingly complex.

In an interview conducted for the Ukrainian Weekly in 2003, then-director
Karl Beck revealed, “In addition to their primary job responsibilities as
English and management teachers, business advisors and environmental
activists, volunteers work as change agents in Ukrainian towns and villages,
carrying out community projects…”

Currently, approximately two-thirds of the Peace Corps projects in Ukraine
are English language related, and there is a new youth development program.
Other programmatic changes include geographical distribution. Previously,
volunteers were primarily placed in large cities and towns all over Ukraine;
these days they are placed in villages and smaller communities.

Beck notes in the interview that there are already a significant number of
tangible programmatic successes, including “the work of a grandmother
from Atlanta who wrote state-of-the-art textbooks for five years of
university-level English teacher training, the creation by a retired
architect from Princeton, N.J., of green parks throughout a western
Ukrainian town, the training by a young Cornell University business graduate
of dozens of dairy farmers in the Lviv Oblast on managing the business
aspects of farming, the refurbishment of a Kirovohrad orphanage by a young
man from Connecticut, the launching of a nationwide campaign against the
spread of HIV/AIDS by a young woman from New York City, and the
establishment of women’s business centers in Crimean Tatar villages by a
woman from Dallas who before retirement had been one of Kodak’s top
managers…”

According to Helen Petrozzola, current deputy director of Peace Corps
Ukraine and a former Peace Corps volunteer, individual successes led to new
programming. Petrozzola remarks, “Ukrainian society is so dynamic, the
relevance of Peace Corps to Ukraine lies in our program’s ability to remain
flexible and responsive to Ukraine’s development needs.”

As a result of this perspective, three program advisory committees have been
formed to guide the process of program development. The committees include
local NGO representatives, relevant government officials, Peace Corps
volunteers and staff. The Committees’ main goal is to review programmatic
processes and develop goals, examine feedback from the field, make
programmatic decisions and develop ways to improve the effectiveness of the
programs.

Headway has also been made in the area of choosing locations for Peace Corps
volunteers. Previously the selection process was not entirely systematic.
Now, however, there are a number of lead specialists whose main job is to
travel around Ukraine and identify smaller communities that would like to
request a Peace Corps volunteer.

After expressing interest, there is a thorough process of assessing and
revisiting the community to check and double check the suitability and
feasibility of hosting a volunteer there. Petrozzola notes that despite an
abundance of enthusiasm, there is often little understanding of what hosting
a volunteer fully entails. She also points out that, “When there is
sufficient good will on both sides, Ukrainians and Americans almost always
find a way to cooperate and learn from each other.

But usually the first six months are the most challenging because the
volunteer is working on integrating into the community and being productive
there, while simultaneously the local community is learning how to live and
work with an American, usually in sites where previously few or none have
ever been.”

While supportive of the new system of site selection, all former volunteers
expressed concerns about the initial volunteer recruitment/selection
process. The field office is not involved in the actual selection process;
they merely categorize their volunteer needs and submit the numbers
requested to the main headquarters in Washington D.C. As can be expected,
any interaction involving humans is bound to be tricky, especially when
attempting to match the best set of characteristics and qualifications with
specific needs.

The general feeling among the former volunteers seems to be that in order
to fill the field office goals, the recruiting offices in the States may
allow people into the program who are not best-suited for service because

of a variety of reasons. Petrozzola points out, “There is a specific volunteer
attitude involved in any volunteer work.

Volunteers have to be flexible and do their best to respond to local
needs-even if this involves the volunteers writing a business plan in the
mayor’s administration one day and then helping their host family with
potato harvesting the next.”

A former volunteer whose term of service ended just last year, expressed
unease at what he perceives as being a low bar set for recruitment in order
to fill quotas. However, he believes the bigger issue is in sending people
who are emotionally unprepared to represent the U.S. in Ukraine.

Former volunteer Anderson also noted that the motivations of recruits play
a big role in the outcome and success of their activities. In his
experience, the recruits who arrive in Ukraine mid-career come primarily for

career reasons, or because they are unhappy with their lives in the United
States.

Thus, when they arrive, they are often taken aback by the realities of
volunteer life and are unhappy with conditions and activities. Consequently,
they leave without fulfilling their duties or terms, or become overly
concerned with securing a good post-service job – to the detriment of their
Peace Corps responsibilities.

The office in Ukraine does have an intensive program designed to acclimatize
volunteers as quickly as possible: New volunteers live in groups of four to
five in small towns or villages, and each volunteer lives with a Ukrainian
host family. For three months, the volunteers receive language lessons and
cultural immersion.

They also work together to design and carry out practical work in schools
or organizations that are similar to the sites they will eventually go to
for their two years of service. Following this training, the volunteers go to
their assigned locations and again live with a host family for three months.

The Peace Corps’ intensive language training course is becoming world famous
for its rate of development and its overall effectiveness. The system used
in Ukraine today is a far cry from its rude beginnings in 1992. At the time
Ukraine’s politically complex language situation inspired the decision to
teach all volunteers Ukrainian only. For the volunteers that were posted in
the west and some central regions, this was fine. For those posted in the
predominantly Russian- speaking south and east, there were some pretty
serious language issues.

Compounding the overall complexity and political sensitivity was the fact
that no one had ever taught Ukrainian to a foreigner on a professional level
before, so there were no materials, no precedence, and most importantly, no
teachers. Things have clearly improved since then.

Andrea Keerbs, a former Peace Corps volunteer who has stayed beyond her
term here in Ukraine, describes the language materials as being “great, with
their best feature being how they are constantly improving.” She did express
that, though the materials are excellent, the actual abilities among team
members tends to differ, which can lead to a situation where the
linguistically adept are held back and those struggling are constantly
battling to keep up.

Fortunately, ongoing course improvements now focus on accommodating the
variety and range of volunteer learning needs. For example, there is now an
emphasis on people who have special needs or who are significantly older or
have a more self-study learning style. Language is really one of those
abilities that you take for granted until it is not there.

A former volunteer illustrated the effects of the language barrier quite
succinctly when he said “The most difficult part [of being a peace corps
volunteer] is not having a full voice: without native language ability, a
lot of things have to go unsaid and you have to accept bad manners or
behavior or service and quietly watch a lot of corruption.”

After delving into the Peace Corps operation in Ukraine, it has become
apparent that in terms of goals, the Peace Corps is working hard to bring
its programmatic goals in line with the vision of the Ukrainian government,
and to improve its services and support to its volunteers on an ongoing
basis. Evaluating projects that focus on human or community transformation
is hard to quantify by its very nature, thus developing evaluations systems
is currently a top priority in the Peace Corps office.

In this case, it seems that the Peace Corps volunteers themselves have a
clear idea of what they are achieving and what their focus is: cultural
exchange is high on the list, as are the joys of giving (and receiving) new
perspectives on life and the universe through newfound Ukrainian friends
and family.

To end using the words of a former peace corps volunteer who is not known
for his optimism or idealism: “The best part of being a Peace Corps
volunteer was learning you changed someone’s thinking or they changed yours.

The measure of our effect shouldn’t be on organizational or institutional
levels because then we’d probably have little to show. Our greatest effect
is really on the individual level.”                     -30-
————————————————————————————————–
LINK: http://www.ukraine-observer.com/articles/221/879

————————————————————————————————–
NOTE:  Lua Pottier is currently doing post graduate work in public
health at Kyiv-Mohyla University in Kyiv.
————————————————————————————————–
[return to index] Action Ukraine Report (AUR) Monitoring Service]
========================================================
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18. CARNEGIE ENDOWMENT ANNOUNCES NEW VP STRUCTURE 
                        Russia Expert, Mark Medish, Joins Carnegie
                       
Carnegie Endowment for International Policy (CEIP)
Washington, D.C., Wednesday, July 5, 2006

The Carnegie Endowment for International Peace today announced that the
respected foreign policy expert and lawyer, Mark Medish, would be joining
Carnegie as Vice President for Studies-Russia, China, and Eurasia.

At the same time, Carnegie President Jessica Tuchman Mathews announced that
the Director of the Democracy and Rule of Law Project, Thomas Carothers,
would be assuming the role of Vice President for Studies-International
Politics and Governance.

The new appointments come as the Carnegie Endowment expands its China
program in Beijing and prepares to open a new Middle East Center in Beirut,
Lebanon, building on the work of its existing center in Moscow to create an
international network of research and analysis.

Medish, formerly a senior director of the National Security Council and
deputy assistant secretary for international affairs at the U.S. Treasury,
was most recently a partner in the public law and policy practice group,
Akin, Gump, Strauss, Hauer & Feld. He and Carothers will join George
Perkovich, now to be the Vice President for Studies-Global Security and
Economic Development.

Welcoming the appointments, President Jessica T. Mathews said, “I am
delighted that an expert of Mark Medish’s distinction in international
affairs will join our expanding studies team at the Carnegie Endowment. His
wide-ranging and deep experience will add enormous value to our research
programs in Washington, Moscow, and Beijing.

Three vice presidents for studies greatly strengthens our senior management
team and allows each of the three-all of them leading experts in their
fields-to pursue his own research. Specifically, it will allow George
Perkovich to become the permanent director of our internationally renowned
nonproliferation program at such a crucial time in that arena.”

Medish said, “I am genuinely thrilled about the new post. This is a chance
for me to follow more closely developments across Eurasia, including the
ongoing transitions in Russia and China, which will have an enormous impact
on international security and global dynamics.

The expert team at the Carnegie Endowment is absolutely first rate. No
international affairs institution has a higher reputation for rigorous,
nonpartisan, policy-relevant analysis. Further, Carnegie is unique in having
an active field presence, including our Moscow Center and the new program

in Beijing.”                                 -30-
————————————————————————————————
                  ADDITIONAL BIOGRAPHICAL INFORMATION

1. Mark C. Medish was most recently a partner in the Washington public law
and policy practice group of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
Before joining Akin Gump, Medish served in the Clinton administration as
special assistant to the president and senior director of the National
Security Council (NSC), where he assisted the president and national
security advisor Samuel R. Berger in forming and implementing U.S. foreign
policy toward Russia and the New Independent States (NIS).

Prior to joining the NSC, Medish served as deputy assistant secretary for
international affairs at the U.S. Treasury; his regional portfolio covered
Central Europe, the NIS, the Middle East and South Asia. Previously, he was
senior advisor to the administrator of the United Nations Development
Program, and special assistant to the assistant administrator for Europe and
the NIS at the U.S. Agency for International Development. Before entering
public service,

Medish was an attorney at Covington & Burling. He was educated at Harvard
University and Law School, Merton College, Oxford University, and the
Georgetown University School of Foreign Service.

2. Thomas Carothers is a leading authority on democracy promotion and
democratization worldwide as well as an expert on U.S. foreign policy
generally. He is the founder and director of the Democracy and Rule of Law
Project which analyzes the state of democracy in the world and the efforts
by the United States and other countries to promote democracy.

In addition, he has broad experience in matters dealing with human rights,
international law, foreign aid, rule of law, and civil society development.
He is the author or editor of seven critically acclaimed books on democracy
promotion as well as many articles in prominent journals and newspapers.

He is a recurrent visiting professor at the Central European University in
Budapest and serves on the board of various organizations devoted to
democracy promotion. Prior to joining the Endowment, Carothers practiced
international and financial law at Arnold & Porter and served as an
attorney-advisor in the Office of the Legal Advisor of the U.S. Department
of State.

3. George Perkovich is an expert on nuclear strategy and nonproliferation.
He is the author of India’s Nuclear Bomb, which Foreign Affairs called “an
extraordinary and perhaps definitive account of 50 years of Indian nuclear
policymaking,” and the Washington Times has called an “important.
encyclopedic.antidote to many of the illusions of our age.”

The book received the Herbert Feis Award from the American Historical
Association, for outstanding work by an independent scholar, and the A.K.
Coomaraswamy Prize from the Association for Asian Studies, as an outstanding
book on South Asia. Perkovich recently coauthored a major Carnegie report,
Universal Compliance: A Strategy for Nuclear Security, a new blueprint for
rethinking the international nuclear nonproliferation regime.

The report offers a fresh approach to deal with states and terrorists,
nuclear weapons, and missile materials to ensure global safety and security.
Perkovich is also developing a project on fairness in the international
system, drawing on his interests in trade and globalization.

His article, “Giving Justice Its Due,” published in the July/August 2005
issue of Foreign Affairs, establishes the central theme of this project.
From 1990 through 2001, Perkovich was director of the Secure World Program
at the W. Alton Jones Foundation, a $400 million philanthropic institution
located in Charlottesville, Virginia.

At the time of the Foundation’s division in 2001 he also served as Deputy
Director for Programs. Perkovich served as a speechwriter and foreign policy
advisor to Senator Joe Biden from 1989 to 1990. His personal research has
focused on nuclear strategy and nonproliferation, with a focus on South
Asia.

For further information about the Carnegie Endowment, its Centers, and
Programs please visit our website at www.CarnegieEndowment.org.
Communications contacts: Jennifer Linker, jlinker@CarnegieEndowment.org,

or Emily Hancock, ehancock@CarnegieEndowment.org.      -30-
———————————————————————————————–
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