Monthly Archives: August 2006

AUR#753 Aug 24 Independence Day In Ukraine; Chornovil Monument Dedicated; Thousand And One Journalists’ Warnings; Siphon Russian Gas; Holodomor & Pres

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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       

 
            INDEPENDENCE DAY

    THURSDAY, AUGUST 24, 2006
            Ukraine’s 15th Independence Day Since Fall of Soviet Union
                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 753
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN KYIV, UKRAINE, THURSDAY, AUGUST 24, 2006
 
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               –——-  INDEX OF ARTICLES  ——–
              Clicking on the title of any article takes you directly to the article.               
    Return to the Index by clicking on Return to Index at the end of each article
1.       FIFTEENTH ANNIVERSARY OF UKRAINE’S INDEPENDENCE
                 Fifteen years ago bells of joy pealed in Ukraine: our homeland.
STATEMENT:
Orysia Sushko, President, Ukrainian Canadian Congress
Winnipeg, Manitoba, Canada, Wednesday, August 23, 2006

2.         ON THE OCCASION OF UKRAINE’S INDEPENDENCE DAY

GREETINGS FROM AMB OF UKRAINE TO THE U.S. OLEH SHAMSHUR
INDEPENDENCE DAY GREETINGS: By Oleh Shamshur
Ambassador of Ukraine to the United States
Embassy of Ukraine to the United States
Original in Ukrainian, translated by Heather Fernuik for the AUR
Washington, D.C., Wednesday, August 23, 2006

3.                             UKRAINE: GROWING PAINS
                 As Ukraine prepares to celebrate Independence Day
EDITORIAL: Kyiv Post, Kyiv, Ukraine, Thursday, August 24, 2006

4UKRAINE PUTS OFF SOME INDEPENDENCE DAY FESTIVITIES
       BECAUSE OF CRASH OF RUSSIAN AIRPLANE IN UKRAINE 
UNIAN news agency, Kiev, in Ukrainian 1347 gmt 23 Aug 06
BBC Monitoring Service, United Kingdom, Wednesday, Aug 23, 2006

5.      UKRAINIAN PRESIDENT UNVEILS MONUMENT TO LATE
OPPOSITION LEADER CHORNOVIL, ORDERS PROBE INTO DEATH
AP Worldstream, Kiev, Ukraine, Wednesday, Aug 23, 2006

 
6.       KYIV ERECTS MONUMENT TO VIACHESLAV CHORNOVIL
                          Leader of the Ukrainian people’s movement
Ukrainian News Agency, Kyiv, Ukraine, Wednesday, August 23, 2006

7.      YUSHCHENKO HANDS OUT STATE AWARDS ON OCCASION 
                       OF 15TH INDEPENDENCE ANNIVERSARY

Ukrainian News Agency, Kyiv, Ukraine, Wed, August 23, 2006
INTERVIEW: With H.E Mr. Yuriy Malko, Ambassador of Ukraine in Romania
On the Occasion of the Independence Day of Ukraine
Nine O’Clock, Bucharest, Romania, Thursday, August 24, 2006

9170 DIE IN UKRAINE AS RUSSIAN PLANE IS STRUCK BY LIGHTING
     45 children killed in third major accident this year: Crash raises questions

        over ‘flying cigar’ “The big question is: how the hell did the pilot get in
                                          the middle of a thunderstorm?”
Tom Parfitt, Moscow, The Guardian,
London, United Kingdom, Wednesday, Aug 23, 2006

10.              THOUSAND AND ONE JOURNALISTS’ WARNINGS
           The statement of journalists and mass-media employees on assaults
                                   of the freedom of speech in Ukraine.
STATEMENT:
By Journalists and Mass-media Employees on
Assaults of the Freedom of Speech in Ukraine
Original statement in Ukrainian, translated by Irena Yakovina
Ukrayinska Pravda online, Kyiv, Ukraine, Friday, August 11, 2006

11.                                      “‘TURNKEY’ CABINET”
People from Donbass dominate new Ukrainian deputy minister appointments
ANALYSIS: By Nataliya Romashova
Kiyevskiye Vedomosti, Kiev, in Russian 22 Aug 06; p 4
BBC Monitoring Service,United Kingdom, Wed, Aug 23, 2006

12UKRAINE LEADER PROMISES NOT TO SIPHON RUSSIAN GAS
By Andrew E. Kramer, The New York Times
New York, New York, Wednesday, August 23, 2006

13UKRAINE: “SOCHI TRIP. HE MADE HIMSELF RESPECTED AND
                       COULD NOT INVENT ANYTHING BETTER”
                       Ukrainian premier stands up to Russians in Sochi
ANALYSIS & COMMENTARY:  By Iryna Havrylova
Source: Kiyevskiy Telegraf, Kiev, in Russian 18 Aug 06; p 2
BBC Monitoring Service, United Kingdom, Wednesday, Aug 23, 2006

14 PRES & MRS YUSHCHENKO VISIT HOLODOMOR EXHIBITION
Press office of President Victor Yushchenko
Kyiv, Ukraine, Thursday, August 24, 2006

15. UKRAINE: PRESIDENT YUSHCHENKO EXPECTS PARLIAMENT
       TO DECLARE 1932-1933 GREAT FAMINE ACT OF GENOCIDE
Ukrainian News Agency, Kyiv, Ukraine, Thursday, August 24, 2006
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1
. FIFTEENTH ANNIVERSARY OF UKRAINE’S INDEPENDENCE
             Fifteen years ago bells of joy pealed in Ukraine: our homeland.

STATEMENT: Orysia Sushko, President, Ukrainian Canadian Congress
Winnipeg, Manitoba, Canada, Wednesday, August 23, 2006

Fifteen years ago bells of joy pealed in Ukraine: our homeland became a free
and independent state. Bells of joy pealed also three months later, on
December 1st during the referendum. And finally bells of joy pealed on
December 26th 2004, when the will of the people overcame the extraordinary
tribulations of the Orange Revolution.

These bells of joy rang in the hearts of millions of Ukrainians, living in
Ukraine and beyond its borders, and who fought for the independence of a
Ukrainian State over many long years.

They were a cry from our heroes, past and present, who throughout the
history of Ukraine stood together and will continue to stand in defense of
truth and freedom.

The sound of these bells reverberated across the entire globe wherever
Ukrainians are found and wherever beat Ukrainian hearts.

This sound is a sign of the victory of truth, which arose to forever stand
on guard for a free democratic Ukrainian State.  The people are listening
closely to this sound.

They are aware that only freedom will defend all that is dear and important
to the life of every human being, give an opportunity to express one’s views
freely, participate in truly democratic elections, and pray to God according
to one’s chosen confession.

Despite the latest troubles in Ukraine, which cause and continue to cause us
concern, I am deeply convinced that our nation is strong enough to rise to
the high responsibility for its state and its destiny.   It can never again
be led astray by internecine struggle.

We must believe that common reason, a sense of responsibility and deep
patriotism will prevail over all existing difficulties. It cannot be
otherwise.

We also want to believe that the bells, to which I alluded previously, will
not cease to ring and that the people will continue to listen to them in
order to improve the situation in Ukraine, understanding that these last
events will not deter the return to full democratic power.

All of us, Ukrainians in Canada, look forward impatiently toward the blessed
moment of our nation’s return to a full, stable democracy. And while we
remain afar physically, spiritually we are always with Ukraine, for we are
all children of one mother – Ukraine.

Throughout many years we have tried to give moral and financial support to
Ukraine. We constantly prayed: “O Great, One and Only God, save our
Ukraine. Protect her with the rays of freedom and light.”  We continue to
pray in communion with our brothers and sisters in Ukraine.

While bringing these greetings to you on the occasion of the 15th
anniversary of the independence of Ukraine, I want to bring to mind the
moving words of Vasyl Symonenko that should forever become our
guiding light.

                 My people are! My people shall forever be!
                         No one shall invalidate my people!
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Contact: Ostap Skrypnyk, Executive Director
Ukrainian Canadian Congress, www.ucc.ca
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2.         ON THE OCCASION OF UKRAINE’S INDEPENDENCE DAY
GREETINGS FROM AMB OF UKRAINE TO THE U.S. OLEH SHAMSHUR

INDEPENDENCE DAY GREETINGS: By Oleh Shamshur
Ambassador of Ukraine to the United States
Embassy of Ukraine to the United States
Original in Ukrainian, translated by Heather Fernuik for the AUR
Washington, D.C., Wednesday, August 23, 2006

Honoured Ukrainian community!
Dear fellow countrymen!

On behalf of the collective body of the Embassy of Ukraine in the United
States and myself personally I sincerely hail you with the Independence Day
of Ukraine!

Fifteen years ago the Ukrainian people won the independence dreamed of for
centuries. During this short-from a historical perspective-period Ukraine
came about as a state, and during the Orange Revolution, matured as a
political nation.

Undoubtedly the years of independence became a trial for all of us-a test of
maturity, of self-respect, of tolerance. And there cannot be any doubt in
that the industrious people of Ukraine are able to better life in their own
country and that the political elite are able to find ways to compromise,
national reconciliation and development.

The most recent political events in Ukraine demonstrated namely this: that
specifically dialogue, understanding and cooperation are the underpinnings
of true European politics.

We see Ukraine in a unified Europe; we are prepared to work towards our

goal gradually and steadfastly. The continuation of Ukraine’s foreign policy
course towards integration into European and Euro-Atlantic structures is
called to ensure the well-being and safety of its citizens.

We understand that the fundamental work is still ahead. However, we can
consolidate achievements and reach a new level of development in the modern
integrated world only together with our friends and partners.

A special role in this belongs to the Ukrainian-American collaboration that
proved its efficacy as a factor of facilitating the consolidation of the
independent Ukrainian State.

At the same time, the potential of our cooperation is far from exhausted,
and with optimism we are considering prospects for its further development.

The Ukrainian community of the United States plays a big role in the
cooperation of Ukraine and the USA and makes a colossal contribution so

that our Fatherland is known and respected throughout the entire world. For
Ukraine is that which unites all of us, regardless of where we live.

On this holiday we look to the future with confidence. The new Ukraine has

a chance to be at the heart of the prosperous, strong and influential
democracies. Therefore, let us together utilize the chance given us by God’s
will and our own efforts.

Dear friends! I wish you health, happiness, successes in all of your
endeavors, and may the love of the Fatherland inspire us all to new ends,
new good works in the name of our Ukraine and her future generations!

Glory to Ukraine!

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3.                            UKRAINE: GROWING PAINS
                 As Ukraine prepares to celebrate Independence Day

EDITORIAL: Kyiv Post, Kyiv, Ukraine, Thursday, August 24, 2006

As Ukraine prepares to celebrate Independence Day it finds itself no longer
at the infancy stage but firmly in its teens, though full adulthood is still
at least a few years away. That is probably an accurate assessment of the
last 15 years.

Ukraine had a rocky, unsure start as it began the 1990s with two Leonids –
Kravchuk followed by Kuchma – at the helm. It sees in the start of its 16th
with two Viktors – Yushchenko and Yanukovych – steering the country.

At the beginning of independence many ordinary folk were confident, buoyed
by the feeling that resources-rich Ukraine would do better as an independent
state as the Soviet Union imploded and the referendum on independence
received the unanimous support of people in December 1991.

Kravchuk experienced huge inflation and Kuchma, promising reforms, found
that, like many other politicians, it is easier to promise than deliver. He
brought Ukraine some stability but was too busy playing off the European
Union and Russia on the foreign front and magnates and businesses on the
home front.

Viktor Yushchenko fought Viktor Yanukovych for the presidency and won only
for the latter to complete a remarkable return by returning as prime
minister with more powers than the president.

Fifteen years on, and less than two years after the Orange Revolution,
people’s expectations have been tempered and, unfortunately, a level of
realism and sense of “stability”, a word used unsparingly during the Kuchma
era, have set in. However, there is no doubt that Ukraine has made progress
in many respects.

Economically, much needs to be done but the mass media is now freer and the
political system is moving, albeit slowly, towards greater responsibility.

There is a plethora of political forces out there, giving the voter a wide
choice of ideology, even if the majority of the main players hail from the
Communist era and these forces do not resemble apparent counterparts in the
West.

Perhaps more importantly a responsive civil society is being formed, thanks
in part to the Orange Revolution. People now feel more confident about
standing up for their rights. Many thrifty business people, working mainly
in small and medium-sized companies created from scratch, are thriving.

However, it has to be said that progress by entrepreneurs has largely been
despite and not due to the efforts of the authorities over 15 years. Many
people have been weaned off looking to the state to provide for them from
“the cradle to the grave”, as was the case in Soviet times.

A middle class is forming and as society becomes more stratified the danger
exists that unless an adequate social security system is put into place
society will be divided even more into “the haves and have nots”. Such
social protection is vital during the lengthy transition from a command
economy to one based on free market lines.

Though it can be said that Ukrainian society is now more meritocratic than
before much still needs to be done to give people in rural areas the
opportunity and means to at least compete on a level playing field. Cosy
relationships and arrangements need to be challenged.

A start could be made from the very top by ensuring MPs and their relatives
declare all their interests, business or otherwise. Business and politics
have still not been separated.

The countryside has been neglected by all governments and parties of every
political color, despite promises to invest in the infrastructure.

Many big problems still exist – ubiquitous corruption and business
monopolies are just two. Excessive, pointless bureaucracy is a third. It
could be argued that time and opportunities have been squandered by
politicians in moving the country ahead.

However, for all that Ukraine is now firmly on the world map. No longer is
it known just because of Dynamo Kyiv, Chornobyl or the latest scandal. Now
it is known in the world for successful people like Ruslana, the Klitshcko
brothers and Andriy Shevchenko. It is known for quality products like its
steel, the Ruslan plane and the Kolchuga radar system.

It is known for the Carpathian Mountains, Crimea and wildlife reserves like
the Aakania-Nova Biosphere Reserve. Perhaps what Ukraine needs more than
anything is a new and youthful generation of politicians to move it on over
the next 15 years.

Perhaps then Ukraine will be able to make a qualitative big step to fulfill
the hopes and dreams of those who voted for independence back in 1991.
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http://www.kyivpost.com/opinion/editorial/24981/
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4. UKRAINE PUTS OFF SOME INDEPENDENCE DAY FESTIVITIES
       BECAUSE OF CRASH OF RUSSIAN AIRPLANE IN UKRAINE 

UNIAN news agency, Kiev, in Ukrainian 1347 gmt 23 Aug 06
BBC Monitoring Service, United Kingdom, Wednesday, Aug 23, 2006

KIEV – Only ceremonial events will take place in Kiev and other Ukrainian
cities on Independence Day on 24 August, Deputy Prime Minister Dmytro
Tabachnyk has told journalists.

“There will be no parade-ground concert by 35 military orchestras, it will
be held on Saturday (26 August – UNIAN). Also on Saturday, there will be a
big folk concert, which has been prepared by the organizing committee, and a
pop concert prepared by the Culture Ministry and the Family and Sport
Ministry. The fireworks will also be put off and will end the concert,”
Tabachnyk said.

Accordingly, fireworks, concerts and festive shows in other Ukrainian cities
will also be postponed from 24 to 26 August, Tabachnyk said. [Passage
omitted: more details of Independence Day celebrations]

Ukrainian President Viktor Yushchenko today signed a decree “The issue of
marking the 15th anniversary of Ukraine’s independence”, which moved some

of Independence Day festivities from 24 to 26 August.

The government appealed to central and local authorities to postpone
concerts and fireworks planned for 23-24 August due to the crash of a
Russian Tu-154 airliner in Donetsk Region [Ukraine]             -30-

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5.      UKRAINIAN PRESIDENT UNVEILS MONUMENT TO LATE
OPPOSITION LEADER CHORNOVIL, ORDERS PROBE INTO DEATH

AP Worldstream, Kiev, Ukraine, Wednesday, Aug 23, 2006

KIEV – President Viktor Yushchenko unveiled a new monument to late
opposition leader Vyacheslav Chornovil on Wednesday, and ordered a new
investigation into the 1999 automobile crash that killed the popular
nationalist.

Authorities said the March 25, 1999, incident – in which the car Chornovil
was riding in slammed into the side of a truck _ was an accident, but doubts
grew when the government refused to investigate other theories and quickly
granted amnesty to the truck driver.

The crash occurred as Chornovil, who was expected to enter the 1999
presidential race, was returning from a campaign trip. A video-recorded
confession of alleged police involvement surfaced, but then was mysteriously
misplaced.

Former President Leonid Kuchma’s government long dismissed allegations

that Chornovil’s death was a political killing aimed at removing a potential
presidential rival.

Yushchenko called for the new probe as he unveiled a life-sized bronze
monument to Chornovil in the center of Kiev. “For the people in power and
law enforcement bodies, solving the case is an issue of professional
conscience and civic dignity,” he said.

“I am sure that we must come to a totally different conclusion … which is
likely to lead us to the fact that this wasn’t just a mere accident,”
Yushchenko said.

Yushchenko came into office in 2004 and the investigation was reopened

after numerous requests from former party colleagues and Chornovil’s
son Taras, a member of parliament.

Last fall, police said they suspected Chornovil’s death was a political
killing, but the case again stalled. “It is obvious that it was not a usual
car accident,” Chornovil’s widow, Olena Pashko, said.

Chornovil was a dissident during the Soviet period who spent time in jail
for his political views, and he was instrumental in fostering Ukraine’s
independence amid the Soviet collapse.                   -30-
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6.     KYIV ERECTS MONUMENT TO VIACHESLAV CHORNOVIL
                          Leader of the Ukrainian people’s movement

Ukrainian News Agency, Kyiv, Ukraine, Wednesday, August 23, 2006

KYIV – The Kyiv city state administration has erected monument to Viacheslav
Chornovil, the leader of Ukrainian people’s movement, on the corner of
Hrushevskoho Street and Muzeinyi Lane. The monument was unveiled by
President Viktor Yuschenko and Chornovil wife Atena Pashko.

‘It is good that that we have another chance to remember this name…and
unveil the monument to this great person,’ Yuschenko said. He also said that
words ‘independence’ and ‘life of Viacheslav Chornovil’ are synonyms.

Viktor Yuschenko said that when people speak about the desire to make
Ukrainian policy really Ukrainian, people remember things Chornovil entered
the politics with: Ukrainian language, sovereignty, integrity and
collegiality of the country. ‘He (Chornovil) has to be among us today…,’
Viktor Yuschenko said.

He said that erection of the monument is symbolic on the eve of the
fifteenth Independence anniversary. In his turn, People’s Rukh (Movement) of
Ukraine leader Borys Tarasiuk called on law enforcement agencies to fulfill
their constitutional duty and find out reasons of Chornovil death.

The monument is made of bronze, its height is 5 meters and weight is 6.5
tons. It depicts Chornovil walking through a wall.

As Ukrainian News earlier reported, the municipal enterprise Department for
Reconstruction Works agreed with the creative and production enterprise
Hudozhnyk (Artist) on erection of monument to Viacheslav Chornovil the
leader of Ukrainian people’s movement on the corner of Hrushevskoho Street
and Muzeinyi Lane.                                  -30-
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7. YUSHCHENKO HANDS OUT STATE AWARDS ON OCCASION
                       OF 15TH INDEPENDENCE ANNIVERSARY

 
Ukrainian News Agency, Kyiv, Ukraine, Wed, August 23, 2006
KYIV – President Viktor Yuschenko has handed state awards on the occasion
of the 15th anniversary of Ukrainian Independence at Mariinskyi Palace. He
personally rewarded about 90 people.

Viktor Yuschenko awarded 10 people, who set Ukrainian national flag in Kyiv
in 1966 and in Chortkiv city (Ternopil region) in 1973, with first degree
order ‘For Courage’; nine people with the degree of Hero of Ukraine and
State Order.

The president also awarded fourth and fifth degree Yaroslav The Wise orders.

The award was given to Former Premier Yurii Yekhanurov; Former Finance
Minister Viktor Pynzenyk and Former State Tax Administration Chairman
Oleksandr Kireev. Viktor Yuschenko congratulated Yurii Yekhanurov with his
birthday on August 23 and thanked him for his work on the post of Ukrainian
premier.

‘I want to thank Yurii Ivanovych (Yekhanurov) for the work he did on the
post of Ukrainian premier…this is the person, who brought Ukraine
stability at the moment the country needed it the most,’ the president said.

He also awarded orders: ‘For Merits’ of the first, second and the third
degrees; “Bohdan Khmelnytskyi” of the third degree; “For Courage” of the
third degree; “Princess Olga” of the third degree. He also awarded medal
‘For Military Service to Ukraine’; and degree of ‘People’s Artist of
Ukraine’ to Oleksandr Ponomariov.

The president also gave degrees of “honoured art worker”, “honoured science
worker’, “honoured journalist”, “honoured folk art worker”, “honoured
metallurgist”, “honoured culture worker”, “honoured social worker”,
“honoured medical worker”, “honoured miner”, “honoured lawyer” and ‘hero
mother.’

Viktor Yuschenko said that it is a great pleasure for him to award people,
who had made their contribution into democracy, sovereignty and independence
of Ukraine. ‘It is a great pleasure for me to fulfill state mission and give
state awards,’ Viktor Yuschenko said.

He called on the participants of the awarding ceremony to be more active in
discussions on language, territorial structure and religion of Ukraine.
‘Your word will be powerful,’ Viktor Yuschenko said.

As Ukrainian News earlier reported, Viktor Yuschenko awarded 756 people

on the occasion of the 15th anniversary of Ukrainian Independence.

According to the presidential decree No.1177 of August 18, 2005, the
awarding ceremony is linked to five events: Ukrainian Independence Day;
Collegiality Day; Constitution Day; Victory Day on May 9 and Day of
Ukrainian Independence Endorsement via Referendum.         -30-
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8. ROMANIA & UKRAINE: DEVELOPMENT OF BILATERAL RELATIONS,
            ONE OF THE PRIORITIES OF UKRAINE’S FOREIGN POLICY

INTERVIEW: With H.E Mr. Yuriy Malko, Ambassador of Ukraine in Romania
On the Occasion of the Independence Day of Ukraine
Nine O’Clock, Bucharest, Romania, Thursday, August 24, 2006

[Question] On August 24 Ukraine celebrates the 15th anniversary of
proclaiming its independence. How does the Ukrainian diplomacy celebrate
this important date for your state?

[Ambassador Malko] The Ukrainian diplomats are guided in their activity
by priority tasks defined by the Program of President of Ukraine Viktor
Yushchenko “Ten steps towards people”.

Ukraine cooperated almost with all countries on bilateral and multilateral
basis for the period after the presidential elections. The Ukrainian
diplomacy took active participation in solving important issues at global
stage.

Due to active and purposeful efforts of the Ukrainian diplomats we succeeded
in achieving specific outcomes on European and Euro-Atlantic directions.
Ukraine-EU closing has taken place. My country has consecutively followed
Ukraine-EU Action Plan.

In the beginning of 2006 the EU acknowledged Ukraine to be a market economy.
Abolition of discrimination obstacles provides the Ukrainian producers and
EU with new possibilities.

Currently Ukraine and the EU are considering the possibility of concluding a
new document which is to facilitate effective development of relations
between Ukraine and EU and to open the door to the EU.

Strategic character of Ukraine-NATO relations has become stronger and
stronger. The main political outcome is realization of the Intensified
Dialogue with NATO tasks on membership and proper reforms issues.

WTO membership is considered by MFA to be an important prerequisite of
successful realization of Ukraine’s integration to the EU and NATO.

I am pleased to establish the fact that we received official confirmation of
the Romanian party on acceptability of Ukrainian tariff obligations and
proposals on accession to goods and services market.

That removes necessity of signing appropriate bilateral protocol. After
obtaining the WTO membership we hope for establishing a free trade area
between Ukraine and the EU.

[Question] What is the meaning of the National Day of Ukraine?

[Ambassador Malko] The Day of proclaiming Ukraine’s independence –
August 24, 1991 – became an outstanding date in history of the Ukrainian
people.

The independence of Ukraine is the embodiment of the national ideal and
consecutive aspirations of many generations of our predecessors including
such famous historical figures as Volodymyr Velykyi, Yaroslav Mudriy, Bogdan
Hmelnitskiy, Pylyp Orlyk, Mihaylo Grushevskiy, Symon Petliura, Vasyl Stus
and many other brilliant representatives of the Ukrainian nation for free
development and independent determination of own nation’s destiny.

The independence of Ukraine – represents the creation of new conditions for
economic development of the country, cultural and intellectual prosperity of
the Ukrainian nation and representatives of 135 national minorities who live
today on the territory of our state.

At last the independence of Ukraine – gave the possibility of the
introduction of its proper foreign policy directed at the protection of the
national interests of the state, accession of our state to common European
values of democracy and security.

One of important features of this event this year is conducting of the IV
World Forum of Ukrainians on the eve of the 15th anniversary of Ukraine’s
independence.

That gave possibility to its participants to be present at many actions and
to feel the atmosphere of celebrating Independence Day on historical
Motherland.

[Question] Mr. Ambassador, how do you evaluate development of
Ukrainian-Romanian relations currently?

[Ambassador Malko] Answering your question I would like to note that
development of relations with neighbouring Romania on principles of good
neighborhood, mutual trust and constructive cooperation is one of priorities
of Ukraine’s foreign policy.

More active political dialogue after Presidential elections which took place
in the autumn of 2004 both in Ukraine and Romania is a clear evidence of
that. Thus, two official visits and several working meetings of our states’
heads have taken place for a period of only year and a half.

These top level contacts proved mutual disposition of new political leaders
of our states for creation of favourable political, economic, legal and
information climate which would allow building further Ukrainian-Romanian
bilateral relation in European spirit. Unidirectionality of our foreign
policy priorities is completely obvious.

It is necessary to underline that Romania completely supports Ukraine’s
course to European and Euro-Atlantic integration.

Thus, the atmosphere of relations between Ukraine and Romania has changed
fundamentally recently. Now we have more trust, mutual understanding and
stronger desire to see as much as possible positive in your partner. Hence
we have grounds to think that we are on new stage of development of the
Ukrainian-Romanian relations.

The previous problems gradually find solutions and efforts of new authority
are focused on development of our considerable bilateral potential in
positive dimension. All this may create basis for providing breakthrough in
solving existing controversial problems.

In conclusion I would like to wish your readers strong health and optimism.
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http://www.nineoclock.ro/index.php?page=detalii&categorie=worldnews&id=20060824-17125
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9. 170 DIE IN UKRAINE AS RUSSIAN PLANE IS STRUCK BY LIGHTING
     45 children killed in third major accident this year: Crash raises questions

        over ‘flying cigar’ “The big question is: how the hell did the pilot get in
                                          the middle of a thunderstorm?”

Tom Parfitt, Moscow, The Guardian,
London, United Kingdom, Wednesday, Aug 23, 2006

A Russian airliner that crashed in eastern Ukraine yesterday killing all 170
passengers and crew on board was probably struck by lightning as it
encountered heavy turbulence, a preliminary investigation suggested last
night.

The Tu-154 was flying from the Black Sea resort of Anapa to St Petersburg
when it went down in open countryside about 30 miles north of the city of
Donetsk. More than a quarter of the aircraft’s passengers were children.

Russia’s transport ministry said bad weather had probably caused the crash
on flight 612. “A report about heavy turbulence came at 15.37 Moscow time
from the aircraft, which was at an altitude of 11,000 metres, and then the
plane disappeared from radar screens,” a spokesman told Interfax.

St Petersburg-based Pulkovo airlines told reporters that the crew issued a
second distress signal from a lower altitude but air traffic controllers
could not make out the sentence that followed.

Aviation experts said the aircraft could survive a lightning strike, but
flight instruments may have been knocked out, disorienting the pilot. The
crash was the third major aviation tragedy in Russia this year.

Witnesses said the plane plunged into the ground intact, suggesting there
had not been an explosion on board. A large bang was heard in the nearby
village of Sukha Balka followed by a series of smaller bangs.

At least 45 children were among the dead, according to the airline. Most
passengers were thought to be Russian holidaymakers from St Petersburg
returning home, although foreigners including at least one Dutch citizen
were reportedly among the dead.

Andrei Tyutyunikov, a reporter with local newspaper Donetskiye Novosti, who
arrived at the scene shortly after the crash, told the Guardian the aircraft
had been destroyed. He said: “It’s just in pieces. I can see one large chunk
with the letters on it. Emergency officials are dragging fragments of bodies
from the wreckage. There’s no one left alive.”

Television pictures showed firefighters dousing blackened hillside covered
in de bris. Thirty bodies were recovered by late afternoon. Rescuers
prepared to comb the wreckage through the night but they did not expect to
find any survivors.

Irina Andrianova, a spokeswoman for the Russian emergency situations
ministry, said a preliminary investigation indicated a lightning strike had
caused the disaster.

A team of medics and psychologists was dispatched to Pulkovo airport in St
Petersburg to help distraught relatives waiting for the flight. The
Ukrainian president, Viktor Yushchenko, cut short a holiday in Crimea to
monitor the situation.

A 60-strong Russian emergency ministry team also flew from Rostov to help
the rescue and clean-up effort. Relatives of the dead will be flown to the
site today to identify bodies.

In July, a Sibir airlines Airbus A-310 crashed and burst into flames after
veering off the runway in Irkutsk, killing 122 people. That accident was
blamed on a malfunction in a thrust reverser. Two months earlier 113 people
died when an Airbus A-320 belonging to Armenian airline Armavia crashed on
its way from Yerevan to Sochi. The disaster was attributed to the pilot
flying through bad weather.

The Tu-154 is known as the “flying cigar” because of its long fuselage and
cramped cabin space. It is still one of the most commonly used planes in
Russia.

“So far this crash is a mystery because the Tupolev is robust and every
aircraft has a weather radar,” said David Learmount of Flight International
magazine. “The big question is: how the hell did the pilot get in the middle
of a thunderstorm?”  (www.guardian.co.uk/russia)
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
10.    THOUSAND AND ONE JOURNALISTS’ WARNINGS
        The statement of journalists and mass-media employees on assaults
                                 of the freedom of speech in Ukraine.

STATEMENT: By Journalists and Mass-media Employees on
Assaults of the Freedom of Speech in Ukraine
Original statement in Ukrainian, translated by Irena Yakovina
Ukrayinska Pravda online, Kyiv, Ukraine, Friday, August 11, 2006

KYIV – On August 9, 10 and 11, 2006 Ukraine experienced a row of alarming
and annoying events which constituted a threat to the freedom of speech in
Ukraine.

[1] First, on August 9 in the centre of Kyiv correspondents of Nashe Radio
(Our Radio) station were kidnapped in broad daylight. They were taken out
to the forest, assaulted and intimidated. Ukrainian capital has gone through
such an overt banditry long ago.

[2] On August 10 Denis Ivanesko, the newly-appointed press-secretary of
Primer Viktor Yanukovych, forbade Channel 5 to telecast premier’s press-
conference, thus violating the Laws “On information” and “On television
and radio broadcasting.”  The Cabinet of Ministers’ press-service gave no
official explanations on the matter.

[3] At August 10 night the director of the Crimean broadcasting Foros
Company Fedor Saliy was assaulted too. A stranger attacked him without
any obvious reason, stroke him in the hand and run away as a TV company
employee appeared.

[4] On August 11 the press-secretary of Kyiv City State Administration
notified mass-media that its officials had limited journalists’ access to
receiving information.

Besides, MP Oleh Kalashnikov who assaulted the film crew of STB TV
channel remains unpunished. De facto he is a member of Party of Regions,
although the faction leaders urge that their party has expelled him.

The case on assault of Chief Editor of Stolychni Novyny (Capital’s news)
periodical Volodymyr Katsman is unprobed too. Investigation of Georgiy
Gongadze’s case stays inexplicit.

We, journalists and mass-media employees, are deeply concerned about all
these events happened for such a short interval.  Hoping that it is just a
coincidence, we still will do utmost to bar the return of censorship and
pressure on mass-media.

THEREFORE:

[1] We ask Interior Minister Yuri Lutsenko to take investigations of cases
on assaults of mass-media workers under his personal control.

[2] We offer to found a civil council for the Public Relations Center for
the Interior Ministry aimed at ensuring an operative response on the crimes
against journalists and mass-media employees, coordinating actions with
Interior Ministry and giving a competent and quick assistance to assaulted
colleagues.

[3] We address Prime-minister Viktor Yanukovych to take measures to bar
restriction for mass-media to receive an open official information.

[4] We demand from the premier to punish his press-secretary Denis Ivanesko,
to issue the government’s position on ban against live broadcasting of the
press-conference and to promise to prevent the similar situations further.

[5] We demand from the regional administrations and local authorities to
withdraw any limitations to mass-media access to an open information,
including accreditation in these regulatory bodies.

[6] We demand from the Prosecutor General’s Office to issue the
investigation
course of Oleh Kalashnikov’s assault of STB film crew and to give
information on other resonant crimes against journalists.

[7] We demand from the Party of Regions faction to give an official
information on MP Oleh Kalashnikov’s membership, as the official papers

of the Verkhovna Rada read that he was not expelled from the faction.

In our turn we confirm our intentions to stand up for the freedom of speech
and our colleagues’ safety by all possible means.

We warn that we are ready to trigger active protests in case the freedom of
speech is jeopardized.

You may support this statement by sending your signatures here:
info@telekritika.kiev.ua                                    -30-
————————————————————————————————
LINK: http://www2.pravda.com.ua/en/news/2006/8/16/6107.htm
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================

11.                                  “‘TURNKEY’ CABINET”
People from Donbass dominate new Ukrainian deputy minister appointments

ANALYSIS: By Nataliya Romashova
Kiyevskiye Vedomosti, Kiev, in Russian 22 Aug 06; p 4
BBC Monitoring Service,United Kingdom, Wed, Aug 23, 2006

Almost 40 of the 54 deputy minister portfolios have gone to people from the
Donbass in the new Ukrainian cabinet, a daily has reported.

The following is the text of the article by Nataliya Romashova entitled ”
‘Turnkey’ cabinet” published in the Ukrainian daily Kiyevskiye Vedomosti on
22 August:

The staffing formation of executive structures in the government is being
completed. The lion’s share of the newly appointed high-ranking cabinet
officials will represent the east of the country.

First Deputy Prime Minister Mykola Azarov paid particular attention to the
change of staff in the structure of the ministries and departments that form
the economic sector of the government.

The cabinet’s official website reports that the first deputy chairman of the
State Tax Administration [STA] in Donetsk Region, Vadym Kayzerman, who
became the first deputy chairman of the STAU [State Tax Administration of
Ukraine] and the deputy head of the tax police directorate of the STA in
Donetsk Region, Valeriy Koryachkin, who swapped this job for the seat of
first deputy chairman of the STAU and head of the tax police, came here from
the Donbass [Donetsk Basin].

The head of a directorate of the State Customs Service in Donetsk Region,
Ruslan Cherkasskyy, became the first deputy chairman of the State Customs
Service of Ukraine.

What is more, just as tried and tested staff were appointed to the other key
posts. All of Mykola Azarov’s deputies in his post of finance minister,
apart from Anatoliy Markovskyy, were either already working in post, or were
actively collaborating with Mr Azarov in other jobs in the Viktor Yanukovych
government of 2002.

They also include the new-old head of the STAU, Anatoliy Brezvin, who
occupied that post until March last year.

The deputy prime minister for regional policy and minister for housing
utilities, construction and architecture, Volodymyr Rybak, took for his
deputies the director-general of the Novohrodivka Machine-building Plant
(Donetsk Region), Hryhoriy Makhov.

The “heating” deputy prime minister, Andriy Klyuyev, got a job for his
adviser, member of the supervisory council of the Energy Company of Ukraine,
Oleksandr Rohozin.

The director of the Rovenkiantrasyt coal association (Luhansk Region), Yuriy
Zyukov, has become the first deputy to the coal industry minister, Serhiy
Tulub.

The first deputy mayor of Kryvyy Rih, Dmytro Kolesnykov, and the mayor of
Melitopol, Anatoliy Manhul, became respectively the first deputy and deputy
to the industrial policy minister, Anatoliy Holovko.

The latter, by the way, already under “orange power” managed to be the first
deputy chairman of the Zaporizhzhya Regional State Administration.

The former governor of Donetsk Region, Vadym Chuprun, also found himself a
place in the cabinet sun: now he will work as deputy fuel and energy
minister.

People’s deputy from the Party of Regions Volodymyr Kozak will henceforth be
in the leadership of one of the biggest state monopolies, Ukrainian
Railways. The former vice-president of Astelit company (Donetsk), Leonid
Netudykhata, has become deputy transport and communications minister.

The former head of the education and science directorate of the Donetsk
Regional State Administration, Valentyn Teslenko, will be helping the
Socialist [Education Minister] Stanislav Nikolayenko manage domestic
education.

Altogether, of the 54 vacant deputy minister portfolios people originally
from the Donbass got 39. True, changes have not yet affected a number of
departments. However, according to some forecasts, in the near future all
five deputy economics ministers will be replaced.

———————————————————————————————–
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12.  UKRAINE LEADER PROMISES NOT TO SIPHON RUSSIAN GAS

By Andrew E. Kramer, The New York Times
New York, New York, Wednesday, August 23, 2006

MOSCOW – Ukraine’s new prime minister, Viktor F. Yanukovich, has
promised that his government will refrain from siphoning natural gas from
Russia’s export pipelines to meet his own country’s shortfall this winter, a
practice that incensed Russian officials who characterized it as stealing.

The assurance was the latest step by Mr. Yanukovich, a pro-Russian
politician, to unwind some of the conflicts between Ukraine and Russia in
the three weeks since Parliament elected him prime minister on Aug. 5.

The move was a concession, of sorts, to Russia – Ukrainian officials had
never publicly admitted to taking the gas without payment – but one also
likely to ease worries in Western Europe over the security of energy
supplies this winter. Some 80 percent of Russia’s gas exports to Western
Europe pass through Ukraine.

Mr. Yanukovich, who lost the election that came to be known as the Orange
Revolution in 2004 but staged an improbable political comeback this summer,
has brought a more conciliatory stance to the energy talks with Russia, as
expected. Talks are underway now for a contract for gas supplies in 2007.

Mr. Yanukovich said Ukraine’s national energy company, Naftogaz, was
preparing for the winter heating season by pumping gas into underground
storage.

“I am saying this so Europe can hear and they can feel at ease,” Mr.
Yanukovich said at a news conference in Ukraine on Tuesday, according to
a transcript provided by his office. “We won’t take European gas from the
pipes this winter.”

So far, Mr. Yanukovich has been feted by Russia more than the victor in the
Orange Revolution, President Viktor A. Yushchenko, ever was.

Just last week, in a break with protocol, President Vladimir V. Putin of
Russia invited him to join heads of state from the Eurasian Economic
Community for informal meetings in the resort town of Sochi though Mr.
Yanukovich is not Ukraine’s leader.

In turn, he has vowed a more pragmatic approach to the energy dispute that
last winter briefly reduced the flow of natural gas to Western Europe, and
striven to reassure European governments they will not be faced with
shivering citizens in northern Europe this winter.

At the Aug. 16 meeting he secured a promise by Russia’s natural gas
monopoly, Gazprom, not to revise the current gas price of $95 per 1,000
cubic meters until the end of the year.

Also, Mr. Yushchenko has signaled that Ukraine will likely continue next
year to import natural gas through a Swiss-registered intermediary,
RosUkrEnergo, that is controlled by Gazprom, though the United States
had opposed the arrangement as prone to corruption.

“God help us prolong it for several more years,” Mr. Yushchenko said of
the deal on Saturday, according to the Interfax news agency.

Still, in the tangled energy trade between the countries, Ukraine’s practice
of withdrawing gas intended for Western Europe from Russian pipelines has
long been a thorn in the side of Gazprom. It has also been a source of
leverage for Ukraine in the pricing talks, now apparently off the table for
Kiev.                                      -30-
———————————————————————————————–
http://www.nytimes.com/2006/08/23/world/europe/23cnd-ukraine.html?_r=1&ref=world&oref=slogin

——————————————————————————————————————————-
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========================================================
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========================================================
13. UKRAINE: “SOCHI TRIP. HE MADE HIMSELF RESPECTED AND
                         COULD NOT INVENT ANYTHING BETTER”
                          Ukrainian premier stands up to Russians in Sochi

ANALYSIS & COMMENTARY:  By Iryna Havrylova
Source: Kiyevskiy Telegraf, Kiev, in Russian 18 Aug 06; p 2
BBC Monitoring Service, United Kingdom, Wednesday, Aug 23, 2006

Prime Minister Viktor Yanukovych will not be Russia’s puppet, a Ukrainian
weekly has said in summing up Yanukovych’s visit to Sochi on 15-16 August.
Yanukovych acted as an independent politician during the visit and gave no
firm guarantees to Russia on any sensitive issue in bilateral relations.

However, the price of Russian gas for Ukraine will depend on the Yanukovych
cabinet’s willingness to meet Russia’s demands, the weekly said.

The following is the text of the article by Iryna Havrylova entitled “Sochi
trip. He made himself respected and could not invent anything better”
published in the Ukrainian newspaper Kiyevskiy Telegraf on 18 August;
subheadings have been inserted editorially:

Viktor Yanukovych of course made his first visit as prime minister to
Russia. Frankly speaking, nobody doubted that this would be his first
geopolitical step.

To be sure, the friendly handshake between the Ukrainian prime minister and
the Russian president took place not in Moscow: Mr Yanukovych met with Mr
Putin in Sochi at the summit of the Eurasian Economic Union, where Ukraine
is an observer.

Only presidents take part in summits at such a level, and by inviting the
Ukrainian prime minister to attend, Russia clearly wanted to show that it
considered him to be really the leader of Ukraine.

But it was also obvious that Russia was counting on seeing a different
Yanukovych at the meeting: a politician depressed by a lengthy period in
opposition and ready for anything. Including for conditions that Russia
would raise.

Moscow had got used to working with [former President] Leonid Kuchma
according to that sort of scheme, and in the Kremlin they were probably
counting on finding in Yanukovych his “successor” in the foreign policy
area: you are a cheap energy source for us, and we’ll do anything you ask.

But Mr Yanukovych immediately “broke” this construct, making the
representatives of the authorities take him and his position into account.
As a result, the Russians had to reorganize the programme of the visit on
the hoof and change the schedule of meetings. It is hard to believe that the
Russian political elite had to make itself amenable to the Ukrainian prime
minister and not the reverse.

This is also confirmed by the absence of the planned “thank you” interview
of the Ukrainian prime minister to Russian TV, a number of informal meetings
between Mr Yanukovych and Mr Putin and the independent behaviour of
Yanukovych at protocol functions with [Russian Prime Minister] Mikhail
Fradkov.

In the final analysis, even if the reception of the Ukrainian prime minister
“by the back door” (Sochi) rather than at the front entrance (Moscow, the
Kremlin) was calculated to show Ukraine “its place”, it did not have the
desired effect.

It was also not possible to feed Ukraine with some sweet “carrots” with
which former leaders were treated: promises to reconsider the question of
the possibility of transit of Russian oil and oil products via Ukraine to
Europe and reviving the Antonov [joint plane development] project, which the
Russians virtually abandoned last year. Moscow wants once again “to tame”
Ukraine by forcing it to make a choice in its favour.

Russia today is worried by three aspects.

[1] The first is that Ukraine can no longer be a buffer between East and
West and has to make a choice, and right now is standing again at a
crossroads.
[2] The second is that the declaration [of national unity] signed by all
Ukraine’s political forces [on 3 August] only postpones the country’s
joining a NATO action plan, but does not remove the question from the
agenda.
[3] The third is the possibility for strengthening the power of the regions
(the east and the south) in Ukrainian domestic politics in order for the
pro-Russian part of Ukraine to have the decisive voice.
                                        THE PRICE OF GAS
Naturally, the gas question was key at the present talks in Sochi. The
agreed pricing parameters for gas up to the end of the present year – 95
dollars – were an advance on Russian friendship. Certainty appeared: the
price for gas will not rise for now, we will not freeze this winter and
Ukraine will not turn into a “country of a thousand Alchevsks”

[Alchevsk is a town in Luhansk Region where the central heating system broke
down for several weeks in January-February this year]. This is already good
and will probably bring additional points to the government team of Viktor
Yanukovych.

Well, what will happen later, in four months? Later Russia “will see”…
[ellipsis as published] It has become different with regard to its
neighbours: cautious, pragmatic and untrusting. Meanwhile, thanks to that
same Kuchma, who, while positioning himself as a pro-Russian leader,
conducted a policy that was not in the interests of the Kremlin.

Therefore, Moscow in a very hard-line way will put questions to Yanukovych
that are vital for it (coordination of WTO entry and a clear-cut position on
the SES [Single Economic Space – economic cooperation agreement between
Ukraine, Russia, Belarus and Kazakhstan]), or else Mr Yanukovych’s
occupation of the prime ministerial seat will have only an illusory success.
And Russia does not like illusions and tries to “punish with the rouble”
those who present it with them.

Therefore, the cost of gas for Ukraine next year will become known in
November-December and will depend officially on the state of world markets
and unofficially – on what position Ukraine adopts with regard to Russia.

Whether Viktor Yanukovych will manage to justify the trust of the Russian
political elite is the whole secret of the non-rise in gas prices. It seems
that Yanukovych was not prepared immediately to give up the multi-vector
policy and “surrender” to Moscow.

Hence the fall-back statements by the deputy prime minister for the fuel and
energy complex, Andriy Klyuyev: “At the talks in Sochi the Ukrainian prime
minister did not reach agreement regarding the definitive price for Russian
gas for Ukraine. Experts at the level of working groups are doing additional
work on technical aspects.”

So it cannot be said that the gas question has been definitively and
irreversibly solved with advantage to Ukraine: Russia is biding its time.
And if Ukraine’s foreign policy is not reviewed by the end of the year,
postponed, “mothballed”, fuel prices for Ukraine may become “European” –
from 120 to 250 dollars.
              YANUKOVYCH NO PUSHOVER FOR RUSSIA
But! However much Russia might have wanted to use the lever of gas pressure
on Ukraine, it had to behave fairly cautiously. The Yanukovych visit showed
that you have to take account of the neighbours. And not pressurize, but
help in the economic sphere in order to get political dividends later.

That is why Mr Yanukovych conducted himself with the Russian as an equal
partner and did not throw around promises for the sake of maintaining the
present gas agreements.

For example, in response to the proposal to Ukraine to take part in the
Eurasian Economic Union (an analogue of the SES controlled by Russia), he
said that first it was necessary to study whether the Eurasian Economic
Union corresponded to the national interests of Ukraine. Moscow did not
receive any firm guarantees on the “language” problem either.

Yanukovych merely promised to initiate a consideration of the question of
granting Russian the status of a state language as soon as it proved
possible to broaden the parliamentary coalition to a constitutional majority
(300 deputies), and for now to be satisfied with the charter of regional
languages that operates successfully in Ukraine.

It is understood why the prime minister will not be in a hurry to “oblige”
the Russian Federation:

[1] first, the coalition is expanding basically at the expense of
[propresidential] Our Ukraine members.
[2] Second, expansion at the expense of the Our Ukraine People’s Union [the
basic party in the Our Ukraine bloc] is fraught with danger for the prime
minister himself too, since under such a disposition the Communists and
possibly the Socialists will be eliminated from the coalition. (True, there
is always the Yuliya Tymoshenko Bloc in reserve.)

As a result, the Regionals [Party of Regions, headed by Yanukovych] will
find themselves “hostages” of the propresidential party and will be unable
to take decisions without its participation.

To sum up, the visit to Russia was not a victory for Yanukovych “in the
Russian direction”, but showed that his government would not be a puppet…
[ellipsis as published]                             -30-
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
14. PRES & MRS YUSHCHENKO VISITS HOLODOMOR EXHIBITION

      Holodomor Commemoration Exhibition presented by Morgan Williams
                          
Press office of President Victor Yushchenko
Kyiv, Ukraine, Thursday, August 24, 2006

KYIV – Victor Yushchenko has visited an exhibition “Holodomor” on the
1932-33 genocide famine in Ukraine [held in the Ukrainian House in Kyiv.]

The exhibits – among them paintings by Ukrainian artists, photographs and
documents from the 1930s – were presented by Morgan Williams, a famine
researcher from the United States.                   -30-
———————————————————————————————–
LINK with photo: http://www.president.gov.ua/en/news/data/1_10020.html
LINK with photo: http://www.president.gov.ua/news/data/1_10018.html

———————————————————————————————–
NOTE:  The Holodomor exhibition was set up by Morgan Williams
for the IV World Forum of Ukrainians Holodomor Roundtable, at
the request of the Ministry of Foreign Affairs.
 
Morgan Williams is Director, Government Affairs, Washington
Office SigmaBleyzer Private Equity Investment Group and the publisher
and editor of the Action Ukraine Report (AUR), Washington, D.C..

He serves as a member of the Organizational Committee for the 75th
Anniversary of the Famine in Ukraine appointed by the Cabinet of
Ministers; Curator & Trustee, Holodomor Education and Exhibition
Collection; Chairman, Dr. James Mace Holodomor Memorial Fund
of the Ukrainian Federation of America, Philadelphia. morganw@patriot.net.
————————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
15. UKRAINE: PRESIDENT YUSHCHENKO EXPECTS PARLIAMENT
       TO DECLARE 1932-1933 GREAT FAMINE ACT OF GENOCIDE

Ukrainian News Agency, Kyiv, Ukraine, Thursday, August 24, 2006

KYIV – President Viktor Yuschenko expects the Verkhovna Rada to declare

the Great Famine of 1932-1933 an act of genocide against the Ukrainian
people. He made this statement in his Independence Day address.

“I believe that in the next few months the Verkhovna Rada will fulfill its
duty to the Ukrainian people and legislate to acknowledge that the Great
Famine in Ukraine was an act of genocide against our nation.

And hence, the government has a clear task to ensure the erection of a
Memorial to the Great Famine Victims in Kyiv toward the 75th anniversary

of the tragedy,” Yuschenko said. He said he is sure that the Cabinet of
Ministers will help build the memorial.

As Ukrainian News earlier reported, the Security Service of Ukraine has
declassified the documents of the State Political Department also known as
GPU of the Ukrainian Soviet Socialist Republic concerning the Great
Famine of 1932 and 1933 that were deposited in the state archives of the
SBU.

The Polish Senate (the upper house of parliament) called on the
international community in March to recognize the 1932-1933 famine in
Ukraine as an act of genocide against the Ukrainian people.

Ukraine is intending to draft a document on recognition of the 1932-1933
famine as an act of genocide by 2007 so that the United Nations

Organization could adopt it.

President Viktor Yuschenko recently called on the heads of state to
recognize the 1932-1933 famine in Ukraine as an act of genocide against
Ukrainians. The parliaments of several countries have recognized the

famine as an act of genocide.

In November 2003, 25 member-countries of the United Nations Organization
drafted a joint statement that described the famine in Ukraine as the result
of the policies of a totalitarian regime. Other states later aligned
themselves with this statement.

In 2003, the Verkhovna Rada passed an address to the Ukrainian people in
which it promised to declare the famine an act of genocide. According to
various estimates, between 3 million and 7 million people died in the
1932-1933 famine in Ukraine.                           -30-
———————————————————————————————–
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SigmaBleyzer, Chairman, Executive Committee, Board of Directors;
John Stephens, Cape Point Capital, Secretary/Treasurer
10. UKRAINIAN ORTHODOX CHURCH OF THE USA, South
Brown Brook, New Jersey, http://www.uocofusa.org
11. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
12. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO; Vera
Andruskiw, CPP Wash Project Director, Washington, D.C.; Markian
Bilynskyj, VP/Director of Field Operations; Marta Kolomayets, CPP
Kyiv Project Director, Kyiv, Ukraine. Web: http://www.USUkraine.org
13. WJ GROUP of Ag Companies, Kyiv, Ukraine, David Holpert, Chief
Financial Officer, Chicago, IL; http://www.wjgrain.com/en/links/index.html
14. EUGENIA SAKEVYCH DALLAS, Author, “One Woman, Five
Lives, Five Countries,” ‘Her life’s journey begins with the 1932-1933
genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
15. ALEX AND HELEN WOSKOB, College Station, Pennsylvania
16. SWIFT FOUNDATION, San Luis Obispo, California
17. TRAVEL TO UKRAINE website, http://www.TravelToUkraine.org,
A program of the U.S-Ukraine Foundation, Washington, D.C.
========================================================
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AUR#753 Aug 24 Independence Day In Ukraine; Chornovil Monument Dedicated; Thousand And One Journalists’ Warnings; Siphon Russian Gas; Holodomor & Pres

=========================================================
 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       

 
            INDEPENDENCE DAY

    THURSDAY, AUGUST 24, 2006
            Ukraine’s 15th Independence Day Since Fall of Soviet Union
                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 753
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN KYIV, UKRAINE, THURSDAY, AUGUST 24, 2006
 
                Help Build the Worldwide Action Ukraine Network
 Send the AUR to your colleagues and friends, urge them to sign up
               –——-  INDEX OF ARTICLES  ——–
              Clicking on the title of any article takes you directly to the article.               
    Return to the Index by clicking on Return to Index at the end of each article
1.       FIFTEENTH ANNIVERSARY OF UKRAINE’S INDEPENDENCE
                 Fifteen years ago bells of joy pealed in Ukraine: our homeland.
STATEMENT:
Orysia Sushko, President, Ukrainian Canadian Congress
Winnipeg, Manitoba, Canada, Wednesday, August 23, 2006

2.         ON THE OCCASION OF UKRAINE’S INDEPENDENCE DAY

GREETINGS FROM AMB OF UKRAINE TO THE U.S. OLEH SHAMSHUR
INDEPENDENCE DAY GREETINGS: By Oleh Shamshur
Ambassador of Ukraine to the United States
Embassy of Ukraine to the United States
Original in Ukrainian, translated by Heather Fernuik for the AUR
Washington, D.C., Wednesday, August 23, 2006

3.                             UKRAINE: GROWING PAINS
                 As Ukraine prepares to celebrate Independence Day
EDITORIAL: Kyiv Post, Kyiv, Ukraine, Thursday, August 24, 2006

4UKRAINE PUTS OFF SOME INDEPENDENCE DAY FESTIVITIES
       BECAUSE OF CRASH OF RUSSIAN AIRPLANE IN UKRAINE 
UNIAN news agency, Kiev, in Ukrainian 1347 gmt 23 Aug 06
BBC Monitoring Service, United Kingdom, Wednesday, Aug 23, 2006

5.      UKRAINIAN PRESIDENT UNVEILS MONUMENT TO LATE
OPPOSITION LEADER CHORNOVIL, ORDERS PROBE INTO DEATH
AP Worldstream, Kiev, Ukraine, Wednesday, Aug 23, 2006

 
6.       KYIV ERECTS MONUMENT TO VIACHESLAV CHORNOVIL
                          Leader of the Ukrainian people’s movement
Ukrainian News Agency, Kyiv, Ukraine, Wednesday, August 23, 2006

7.      YUSHCHENKO HANDS OUT STATE AWARDS ON OCCASION 
                       OF 15TH INDEPENDENCE ANNIVERSARY

Ukrainian News Agency, Kyiv, Ukraine, Wed, August 23, 2006
INTERVIEW: With H.E Mr. Yuriy Malko, Ambassador of Ukraine in Romania
On the Occasion of the Independence Day of Ukraine
Nine O’Clock, Bucharest, Romania, Thursday, August 24, 2006

9170 DIE IN UKRAINE AS RUSSIAN PLANE IS STRUCK BY LIGHTING
     45 children killed in third major accident this year: Crash raises questions

        over ‘flying cigar’ “The big question is: how the hell did the pilot get in
                                          the middle of a thunderstorm?”
Tom Parfitt, Moscow, The Guardian,
London, United Kingdom, Wednesday, Aug 23, 2006

10.              THOUSAND AND ONE JOURNALISTS’ WARNINGS
           The statement of journalists and mass-media employees on assaults
                                   of the freedom of speech in Ukraine.
STATEMENT:
By Journalists and Mass-media Employees on
Assaults of the Freedom of Speech in Ukraine
Original statement in Ukrainian, translated by Irena Yakovina
Ukrayinska Pravda online, Kyiv, Ukraine, Friday, August 11, 2006

11.                                      “‘TURNKEY’ CABINET”
People from Donbass dominate new Ukrainian deputy minister appointments
ANALYSIS: By Nataliya Romashova
Kiyevskiye Vedomosti, Kiev, in Russian 22 Aug 06; p 4
BBC Monitoring Service,United Kingdom, Wed, Aug 23, 2006

12UKRAINE LEADER PROMISES NOT TO SIPHON RUSSIAN GAS
By Andrew E. Kramer, The New York Times
New York, New York, Wednesday, August 23, 2006

13UKRAINE: “SOCHI TRIP. HE MADE HIMSELF RESPECTED AND
                       COULD NOT INVENT ANYTHING BETTER”
                       Ukrainian premier stands up to Russians in Sochi
ANALYSIS & COMMENTARY:  By Iryna Havrylova
Source: Kiyevskiy Telegraf, Kiev, in Russian 18 Aug 06; p 2
BBC Monitoring Service, United Kingdom, Wednesday, Aug 23, 2006

14 PRES & MRS YUSHCHENKO VISIT HOLODOMOR EXHIBITION
Press office of President Victor Yushchenko
Kyiv, Ukraine, Thursday, August 24, 2006

15. UKRAINE: PRESIDENT YUSHCHENKO EXPECTS PARLIAMENT
       TO DECLARE 1932-1933 GREAT FAMINE ACT OF GENOCIDE
Ukrainian News Agency, Kyiv, Ukraine, Thursday, August 24, 2006
========================================================
1
. FIFTEENTH ANNIVERSARY OF UKRAINE’S INDEPENDENCE
             Fifteen years ago bells of joy pealed in Ukraine: our homeland.

STATEMENT: Orysia Sushko, President, Ukrainian Canadian Congress
Winnipeg, Manitoba, Canada, Wednesday, August 23, 2006

Fifteen years ago bells of joy pealed in Ukraine: our homeland became a free
and independent state. Bells of joy pealed also three months later, on
December 1st during the referendum. And finally bells of joy pealed on
December 26th 2004, when the will of the people overcame the extraordinary
tribulations of the Orange Revolution.

These bells of joy rang in the hearts of millions of Ukrainians, living in
Ukraine and beyond its borders, and who fought for the independence of a
Ukrainian State over many long years.

They were a cry from our heroes, past and present, who throughout the
history of Ukraine stood together and will continue to stand in defense of
truth and freedom.

The sound of these bells reverberated across the entire globe wherever
Ukrainians are found and wherever beat Ukrainian hearts.

This sound is a sign of the victory of truth, which arose to forever stand
on guard for a free democratic Ukrainian State.  The people are listening
closely to this sound.

They are aware that only freedom will defend all that is dear and important
to the life of every human being, give an opportunity to express one’s views
freely, participate in truly democratic elections, and pray to God according
to one’s chosen confession.

Despite the latest troubles in Ukraine, which cause and continue to cause us
concern, I am deeply convinced that our nation is strong enough to rise to
the high responsibility for its state and its destiny.   It can never again
be led astray by internecine struggle.

We must believe that common reason, a sense of responsibility and deep
patriotism will prevail over all existing difficulties. It cannot be
otherwise.

We also want to believe that the bells, to which I alluded previously, will
not cease to ring and that the people will continue to listen to them in
order to improve the situation in Ukraine, understanding that these last
events will not deter the return to full democratic power.

All of us, Ukrainians in Canada, look forward impatiently toward the blessed
moment of our nation’s return to a full, stable democracy. And while we
remain afar physically, spiritually we are always with Ukraine, for we are
all children of one mother – Ukraine.

Throughout many years we have tried to give moral and financial support to
Ukraine. We constantly prayed: “O Great, One and Only God, save our
Ukraine. Protect her with the rays of freedom and light.”  We continue to
pray in communion with our brothers and sisters in Ukraine.

While bringing these greetings to you on the occasion of the 15th
anniversary of the independence of Ukraine, I want to bring to mind the
moving words of Vasyl Symonenko that should forever become our
guiding light.

                 My people are! My people shall forever be!
                         No one shall invalidate my people!
——————————————————————————————–
Contact: Ostap Skrypnyk, Executive Director
Ukrainian Canadian Congress, www.ucc.ca
————————————————————————————————-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2.         ON THE OCCASION OF UKRAINE’S INDEPENDENCE DAY
GREETINGS FROM AMB OF UKRAINE TO THE U.S. OLEH SHAMSHUR

INDEPENDENCE DAY GREETINGS: By Oleh Shamshur
Ambassador of Ukraine to the United States
Embassy of Ukraine to the United States
Original in Ukrainian, translated by Heather Fernuik for the AUR
Washington, D.C., Wednesday, August 23, 2006

Honoured Ukrainian community!
Dear fellow countrymen!

On behalf of the collective body of the Embassy of Ukraine in the United
States and myself personally I sincerely hail you with the Independence Day
of Ukraine!

Fifteen years ago the Ukrainian people won the independence dreamed of for
centuries. During this short-from a historical perspective-period Ukraine
came about as a state, and during the Orange Revolution, matured as a
political nation.

Undoubtedly the years of independence became a trial for all of us-a test of
maturity, of self-respect, of tolerance. And there cannot be any doubt in
that the industrious people of Ukraine are able to better life in their own
country and that the political elite are able to find ways to compromise,
national reconciliation and development.

The most recent political events in Ukraine demonstrated namely this: that
specifically dialogue, understanding and cooperation are the underpinnings
of true European politics.

We see Ukraine in a unified Europe; we are prepared to work towards our

goal gradually and steadfastly. The continuation of Ukraine’s foreign policy
course towards integration into European and Euro-Atlantic structures is
called to ensure the well-being and safety of its citizens.

We understand that the fundamental work is still ahead. However, we can
consolidate achievements and reach a new level of development in the modern
integrated world only together with our friends and partners.

A special role in this belongs to the Ukrainian-American collaboration that
proved its efficacy as a factor of facilitating the consolidation of the
independent Ukrainian State.

At the same time, the potential of our cooperation is far from exhausted,
and with optimism we are considering prospects for its further development.

The Ukrainian community of the United States plays a big role in the
cooperation of Ukraine and the USA and makes a colossal contribution so

that our Fatherland is known and respected throughout the entire world. For
Ukraine is that which unites all of us, regardless of where we live.

On this holiday we look to the future with confidence. The new Ukraine has

a chance to be at the heart of the prosperous, strong and influential
democracies. Therefore, let us together utilize the chance given us by God’s
will and our own efforts.

Dear friends! I wish you health, happiness, successes in all of your
endeavors, and may the love of the Fatherland inspire us all to new ends,
new good works in the name of our Ukraine and her future generations!

Glory to Ukraine!

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3.                            UKRAINE: GROWING PAINS
                 As Ukraine prepares to celebrate Independence Day

EDITORIAL: Kyiv Post, Kyiv, Ukraine, Thursday, August 24, 2006

As Ukraine prepares to celebrate Independence Day it finds itself no longer
at the infancy stage but firmly in its teens, though full adulthood is still
at least a few years away. That is probably an accurate assessment of the
last 15 years.

Ukraine had a rocky, unsure start as it began the 1990s with two Leonids –
Kravchuk followed by Kuchma – at the helm. It sees in the start of its 16th
with two Viktors – Yushchenko and Yanukovych – steering the country.

At the beginning of independence many ordinary folk were confident, buoyed
by the feeling that resources-rich Ukraine would do better as an independent
state as the Soviet Union imploded and the referendum on independence
received the unanimous support of people in December 1991.

Kravchuk experienced huge inflation and Kuchma, promising reforms, found
that, like many other politicians, it is easier to promise than deliver. He
brought Ukraine some stability but was too busy playing off the European
Union and Russia on the foreign front and magnates and businesses on the
home front.

Viktor Yushchenko fought Viktor Yanukovych for the presidency and won only
for the latter to complete a remarkable return by returning as prime
minister with more powers than the president.

Fifteen years on, and less than two years after the Orange Revolution,
people’s expectations have been tempered and, unfortunately, a level of
realism and sense of “stability”, a word used unsparingly during the Kuchma
era, have set in. However, there is no doubt that Ukraine has made progress
in many respects.

Economically, much needs to be done but the mass media is now freer and the
political system is moving, albeit slowly, towards greater responsibility.

There is a plethora of political forces out there, giving the voter a wide
choice of ideology, even if the majority of the main players hail from the
Communist era and these forces do not resemble apparent counterparts in the
West.

Perhaps more importantly a responsive civil society is being formed, thanks
in part to the Orange Revolution. People now feel more confident about
standing up for their rights. Many thrifty business people, working mainly
in small and medium-sized companies created from scratch, are thriving.

However, it has to be said that progress by entrepreneurs has largely been
despite and not due to the efforts of the authorities over 15 years. Many
people have been weaned off looking to the state to provide for them from
“the cradle to the grave”, as was the case in Soviet times.

A middle class is forming and as society becomes more stratified the danger
exists that unless an adequate social security system is put into place
society will be divided even more into “the haves and have nots”. Such
social protection is vital during the lengthy transition from a command
economy to one based on free market lines.

Though it can be said that Ukrainian society is now more meritocratic than
before much still needs to be done to give people in rural areas the
opportunity and means to at least compete on a level playing field. Cosy
relationships and arrangements need to be challenged.

A start could be made from the very top by ensuring MPs and their relatives
declare all their interests, business or otherwise. Business and politics
have still not been separated.

The countryside has been neglected by all governments and parties of every
political color, despite promises to invest in the infrastructure.

Many big problems still exist – ubiquitous corruption and business
monopolies are just two. Excessive, pointless bureaucracy is a third. It
could be argued that time and opportunities have been squandered by
politicians in moving the country ahead.

However, for all that Ukraine is now firmly on the world map. No longer is
it known just because of Dynamo Kyiv, Chornobyl or the latest scandal. Now
it is known in the world for successful people like Ruslana, the Klitshcko
brothers and Andriy Shevchenko. It is known for quality products like its
steel, the Ruslan plane and the Kolchuga radar system.

It is known for the Carpathian Mountains, Crimea and wildlife reserves like
the Aakania-Nova Biosphere Reserve. Perhaps what Ukraine needs more than
anything is a new and youthful generation of politicians to move it on over
the next 15 years.

Perhaps then Ukraine will be able to make a qualitative big step to fulfill
the hopes and dreams of those who voted for independence back in 1991.
———————————————————————————————–
http://www.kyivpost.com/opinion/editorial/24981/
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

========================================================
4. UKRAINE PUTS OFF SOME INDEPENDENCE DAY FESTIVITIES
       BECAUSE OF CRASH OF RUSSIAN AIRPLANE IN UKRAINE 

UNIAN news agency, Kiev, in Ukrainian 1347 gmt 23 Aug 06
BBC Monitoring Service, United Kingdom, Wednesday, Aug 23, 2006

KIEV – Only ceremonial events will take place in Kiev and other Ukrainian
cities on Independence Day on 24 August, Deputy Prime Minister Dmytro
Tabachnyk has told journalists.

“There will be no parade-ground concert by 35 military orchestras, it will
be held on Saturday (26 August – UNIAN). Also on Saturday, there will be a
big folk concert, which has been prepared by the organizing committee, and a
pop concert prepared by the Culture Ministry and the Family and Sport
Ministry. The fireworks will also be put off and will end the concert,”
Tabachnyk said.

Accordingly, fireworks, concerts and festive shows in other Ukrainian cities
will also be postponed from 24 to 26 August, Tabachnyk said. [Passage
omitted: more details of Independence Day celebrations]

Ukrainian President Viktor Yushchenko today signed a decree “The issue of
marking the 15th anniversary of Ukraine’s independence”, which moved some

of Independence Day festivities from 24 to 26 August.

The government appealed to central and local authorities to postpone
concerts and fireworks planned for 23-24 August due to the crash of a
Russian Tu-154 airliner in Donetsk Region [Ukraine]             -30-

————————————————————————————————
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========================================================
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========================================================
5.      UKRAINIAN PRESIDENT UNVEILS MONUMENT TO LATE
OPPOSITION LEADER CHORNOVIL, ORDERS PROBE INTO DEATH

AP Worldstream, Kiev, Ukraine, Wednesday, Aug 23, 2006

KIEV – President Viktor Yushchenko unveiled a new monument to late
opposition leader Vyacheslav Chornovil on Wednesday, and ordered a new
investigation into the 1999 automobile crash that killed the popular
nationalist.

Authorities said the March 25, 1999, incident – in which the car Chornovil
was riding in slammed into the side of a truck _ was an accident, but doubts
grew when the government refused to investigate other theories and quickly
granted amnesty to the truck driver.

The crash occurred as Chornovil, who was expected to enter the 1999
presidential race, was returning from a campaign trip. A video-recorded
confession of alleged police involvement surfaced, but then was mysteriously
misplaced.

Former President Leonid Kuchma’s government long dismissed allegations

that Chornovil’s death was a political killing aimed at removing a potential
presidential rival.

Yushchenko called for the new probe as he unveiled a life-sized bronze
monument to Chornovil in the center of Kiev. “For the people in power and
law enforcement bodies, solving the case is an issue of professional
conscience and civic dignity,” he said.

“I am sure that we must come to a totally different conclusion … which is
likely to lead us to the fact that this wasn’t just a mere accident,”
Yushchenko said.

Yushchenko came into office in 2004 and the investigation was reopened

after numerous requests from former party colleagues and Chornovil’s
son Taras, a member of parliament.

Last fall, police said they suspected Chornovil’s death was a political
killing, but the case again stalled. “It is obvious that it was not a usual
car accident,” Chornovil’s widow, Olena Pashko, said.

Chornovil was a dissident during the Soviet period who spent time in jail
for his political views, and he was instrumental in fostering Ukraine’s
independence amid the Soviet collapse.                   -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================      
6.     KYIV ERECTS MONUMENT TO VIACHESLAV CHORNOVIL
                          Leader of the Ukrainian people’s movement

Ukrainian News Agency, Kyiv, Ukraine, Wednesday, August 23, 2006

KYIV – The Kyiv city state administration has erected monument to Viacheslav
Chornovil, the leader of Ukrainian people’s movement, on the corner of
Hrushevskoho Street and Muzeinyi Lane. The monument was unveiled by
President Viktor Yuschenko and Chornovil wife Atena Pashko.

‘It is good that that we have another chance to remember this name…and
unveil the monument to this great person,’ Yuschenko said. He also said that
words ‘independence’ and ‘life of Viacheslav Chornovil’ are synonyms.

Viktor Yuschenko said that when people speak about the desire to make
Ukrainian policy really Ukrainian, people remember things Chornovil entered
the politics with: Ukrainian language, sovereignty, integrity and
collegiality of the country. ‘He (Chornovil) has to be among us today…,’
Viktor Yuschenko said.

He said that erection of the monument is symbolic on the eve of the
fifteenth Independence anniversary. In his turn, People’s Rukh (Movement) of
Ukraine leader Borys Tarasiuk called on law enforcement agencies to fulfill
their constitutional duty and find out reasons of Chornovil death.

The monument is made of bronze, its height is 5 meters and weight is 6.5
tons. It depicts Chornovil walking through a wall.

As Ukrainian News earlier reported, the municipal enterprise Department for
Reconstruction Works agreed with the creative and production enterprise
Hudozhnyk (Artist) on erection of monument to Viacheslav Chornovil the
leader of Ukrainian people’s movement on the corner of Hrushevskoho Street
and Muzeinyi Lane.                                  -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
7. YUSHCHENKO HANDS OUT STATE AWARDS ON OCCASION
                       OF 15TH INDEPENDENCE ANNIVERSARY

 
Ukrainian News Agency, Kyiv, Ukraine, Wed, August 23, 2006
KYIV – President Viktor Yuschenko has handed state awards on the occasion
of the 15th anniversary of Ukrainian Independence at Mariinskyi Palace. He
personally rewarded about 90 people.

Viktor Yuschenko awarded 10 people, who set Ukrainian national flag in Kyiv
in 1966 and in Chortkiv city (Ternopil region) in 1973, with first degree
order ‘For Courage’; nine people with the degree of Hero of Ukraine and
State Order.

The president also awarded fourth and fifth degree Yaroslav The Wise orders.

The award was given to Former Premier Yurii Yekhanurov; Former Finance
Minister Viktor Pynzenyk and Former State Tax Administration Chairman
Oleksandr Kireev. Viktor Yuschenko congratulated Yurii Yekhanurov with his
birthday on August 23 and thanked him for his work on the post of Ukrainian
premier.

‘I want to thank Yurii Ivanovych (Yekhanurov) for the work he did on the
post of Ukrainian premier…this is the person, who brought Ukraine
stability at the moment the country needed it the most,’ the president said.

He also awarded orders: ‘For Merits’ of the first, second and the third
degrees; “Bohdan Khmelnytskyi” of the third degree; “For Courage” of the
third degree; “Princess Olga” of the third degree. He also awarded medal
‘For Military Service to Ukraine’; and degree of ‘People’s Artist of
Ukraine’ to Oleksandr Ponomariov.

The president also gave degrees of “honoured art worker”, “honoured science
worker’, “honoured journalist”, “honoured folk art worker”, “honoured
metallurgist”, “honoured culture worker”, “honoured social worker”,
“honoured medical worker”, “honoured miner”, “honoured lawyer” and ‘hero
mother.’

Viktor Yuschenko said that it is a great pleasure for him to award people,
who had made their contribution into democracy, sovereignty and independence
of Ukraine. ‘It is a great pleasure for me to fulfill state mission and give
state awards,’ Viktor Yuschenko said.

He called on the participants of the awarding ceremony to be more active in
discussions on language, territorial structure and religion of Ukraine.
‘Your word will be powerful,’ Viktor Yuschenko said.

As Ukrainian News earlier reported, Viktor Yuschenko awarded 756 people

on the occasion of the 15th anniversary of Ukrainian Independence.

According to the presidential decree No.1177 of August 18, 2005, the
awarding ceremony is linked to five events: Ukrainian Independence Day;
Collegiality Day; Constitution Day; Victory Day on May 9 and Day of
Ukrainian Independence Endorsement via Referendum.         -30-
————————————————————————————————

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========================================================
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========================================================
8. ROMANIA & UKRAINE: DEVELOPMENT OF BILATERAL RELATIONS,
            ONE OF THE PRIORITIES OF UKRAINE’S FOREIGN POLICY

INTERVIEW: With H.E Mr. Yuriy Malko, Ambassador of Ukraine in Romania
On the Occasion of the Independence Day of Ukraine
Nine O’Clock, Bucharest, Romania, Thursday, August 24, 2006

[Question] On August 24 Ukraine celebrates the 15th anniversary of
proclaiming its independence. How does the Ukrainian diplomacy celebrate
this important date for your state?

[Ambassador Malko] The Ukrainian diplomats are guided in their activity
by priority tasks defined by the Program of President of Ukraine Viktor
Yushchenko “Ten steps towards people”.

Ukraine cooperated almost with all countries on bilateral and multilateral
basis for the period after the presidential elections. The Ukrainian
diplomacy took active participation in solving important issues at global
stage.

Due to active and purposeful efforts of the Ukrainian diplomats we succeeded
in achieving specific outcomes on European and Euro-Atlantic directions.
Ukraine-EU closing has taken place. My country has consecutively followed
Ukraine-EU Action Plan.

In the beginning of 2006 the EU acknowledged Ukraine to be a market economy.
Abolition of discrimination obstacles provides the Ukrainian producers and
EU with new possibilities.

Currently Ukraine and the EU are considering the possibility of concluding a
new document which is to facilitate effective development of relations
between Ukraine and EU and to open the door to the EU.

Strategic character of Ukraine-NATO relations has become stronger and
stronger. The main political outcome is realization of the Intensified
Dialogue with NATO tasks on membership and proper reforms issues.

WTO membership is considered by MFA to be an important prerequisite of
successful realization of Ukraine’s integration to the EU and NATO.

I am pleased to establish the fact that we received official confirmation of
the Romanian party on acceptability of Ukrainian tariff obligations and
proposals on accession to goods and services market.

That removes necessity of signing appropriate bilateral protocol. After
obtaining the WTO membership we hope for establishing a free trade area
between Ukraine and the EU.

[Question] What is the meaning of the National Day of Ukraine?

[Ambassador Malko] The Day of proclaiming Ukraine’s independence –
August 24, 1991 – became an outstanding date in history of the Ukrainian
people.

The independence of Ukraine is the embodiment of the national ideal and
consecutive aspirations of many generations of our predecessors including
such famous historical figures as Volodymyr Velykyi, Yaroslav Mudriy, Bogdan
Hmelnitskiy, Pylyp Orlyk, Mihaylo Grushevskiy, Symon Petliura, Vasyl Stus
and many other brilliant representatives of the Ukrainian nation for free
development and independent determination of own nation’s destiny.

The independence of Ukraine – represents the creation of new conditions for
economic development of the country, cultural and intellectual prosperity of
the Ukrainian nation and representatives of 135 national minorities who live
today on the territory of our state.

At last the independence of Ukraine – gave the possibility of the
introduction of its proper foreign policy directed at the protection of the
national interests of the state, accession of our state to common European
values of democracy and security.

One of important features of this event this year is conducting of the IV
World Forum of Ukrainians on the eve of the 15th anniversary of Ukraine’s
independence.

That gave possibility to its participants to be present at many actions and
to feel the atmosphere of celebrating Independence Day on historical
Motherland.

[Question] Mr. Ambassador, how do you evaluate development of
Ukrainian-Romanian relations currently?

[Ambassador Malko] Answering your question I would like to note that
development of relations with neighbouring Romania on principles of good
neighborhood, mutual trust and constructive cooperation is one of priorities
of Ukraine’s foreign policy.

More active political dialogue after Presidential elections which took place
in the autumn of 2004 both in Ukraine and Romania is a clear evidence of
that. Thus, two official visits and several working meetings of our states’
heads have taken place for a period of only year and a half.

These top level contacts proved mutual disposition of new political leaders
of our states for creation of favourable political, economic, legal and
information climate which would allow building further Ukrainian-Romanian
bilateral relation in European spirit. Unidirectionality of our foreign
policy priorities is completely obvious.

It is necessary to underline that Romania completely supports Ukraine’s
course to European and Euro-Atlantic integration.

Thus, the atmosphere of relations between Ukraine and Romania has changed
fundamentally recently. Now we have more trust, mutual understanding and
stronger desire to see as much as possible positive in your partner. Hence
we have grounds to think that we are on new stage of development of the
Ukrainian-Romanian relations.

The previous problems gradually find solutions and efforts of new authority
are focused on development of our considerable bilateral potential in
positive dimension. All this may create basis for providing breakthrough in
solving existing controversial problems.

In conclusion I would like to wish your readers strong health and optimism.
———————————————————————————————–
http://www.nineoclock.ro/index.php?page=detalii&categorie=worldnews&id=20060824-17125
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]

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9. 170 DIE IN UKRAINE AS RUSSIAN PLANE IS STRUCK BY LIGHTING
     45 children killed in third major accident this year: Crash raises questions

        over ‘flying cigar’ “The big question is: how the hell did the pilot get in
                                          the middle of a thunderstorm?”

Tom Parfitt, Moscow, The Guardian,
London, United Kingdom, Wednesday, Aug 23, 2006

A Russian airliner that crashed in eastern Ukraine yesterday killing all 170
passengers and crew on board was probably struck by lightning as it
encountered heavy turbulence, a preliminary investigation suggested last
night.

The Tu-154 was flying from the Black Sea resort of Anapa to St Petersburg
when it went down in open countryside about 30 miles north of the city of
Donetsk. More than a quarter of the aircraft’s passengers were children.

Russia’s transport ministry said bad weather had probably caused the crash
on flight 612. “A report about heavy turbulence came at 15.37 Moscow time
from the aircraft, which was at an altitude of 11,000 metres, and then the
plane disappeared from radar screens,” a spokesman told Interfax.

St Petersburg-based Pulkovo airlines told reporters that the crew issued a
second distress signal from a lower altitude but air traffic controllers
could not make out the sentence that followed.

Aviation experts said the aircraft could survive a lightning strike, but
flight instruments may have been knocked out, disorienting the pilot. The
crash was the third major aviation tragedy in Russia this year.

Witnesses said the plane plunged into the ground intact, suggesting there
had not been an explosion on board. A large bang was heard in the nearby
village of Sukha Balka followed by a series of smaller bangs.

At least 45 children were among the dead, according to the airline. Most
passengers were thought to be Russian holidaymakers from St Petersburg
returning home, although foreigners including at least one Dutch citizen
were reportedly among the dead.

Andrei Tyutyunikov, a reporter with local newspaper Donetskiye Novosti, who
arrived at the scene shortly after the crash, told the Guardian the aircraft
had been destroyed. He said: “It’s just in pieces. I can see one large chunk
with the letters on it. Emergency officials are dragging fragments of bodies
from the wreckage. There’s no one left alive.”

Television pictures showed firefighters dousing blackened hillside covered
in de bris. Thirty bodies were recovered by late afternoon. Rescuers
prepared to comb the wreckage through the night but they did not expect to
find any survivors.

Irina Andrianova, a spokeswoman for the Russian emergency situations
ministry, said a preliminary investigation indicated a lightning strike had
caused the disaster.

A team of medics and psychologists was dispatched to Pulkovo airport in St
Petersburg to help distraught relatives waiting for the flight. The
Ukrainian president, Viktor Yushchenko, cut short a holiday in Crimea to
monitor the situation.

A 60-strong Russian emergency ministry team also flew from Rostov to help
the rescue and clean-up effort. Relatives of the dead will be flown to the
site today to identify bodies.

In July, a Sibir airlines Airbus A-310 crashed and burst into flames after
veering off the runway in Irkutsk, killing 122 people. That accident was
blamed on a malfunction in a thrust reverser. Two months earlier 113 people
died when an Airbus A-320 belonging to Armenian airline Armavia crashed on
its way from Yerevan to Sochi. The disaster was attributed to the pilot
flying through bad weather.

The Tu-154 is known as the “flying cigar” because of its long fuselage and
cramped cabin space. It is still one of the most commonly used planes in
Russia.

“So far this crash is a mystery because the Tupolev is robust and every
aircraft has a weather radar,” said David Learmount of Flight International
magazine. “The big question is: how the hell did the pilot get in the middle
of a thunderstorm?”  (www.guardian.co.uk/russia)
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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10.    THOUSAND AND ONE JOURNALISTS’ WARNINGS
        The statement of journalists and mass-media employees on assaults
                                 of the freedom of speech in Ukraine.

STATEMENT: By Journalists and Mass-media Employees on
Assaults of the Freedom of Speech in Ukraine
Original statement in Ukrainian, translated by Irena Yakovina
Ukrayinska Pravda online, Kyiv, Ukraine, Friday, August 11, 2006

KYIV – On August 9, 10 and 11, 2006 Ukraine experienced a row of alarming
and annoying events which constituted a threat to the freedom of speech in
Ukraine.

[1] First, on August 9 in the centre of Kyiv correspondents of Nashe Radio
(Our Radio) station were kidnapped in broad daylight. They were taken out
to the forest, assaulted and intimidated. Ukrainian capital has gone through
such an overt banditry long ago.

[2] On August 10 Denis Ivanesko, the newly-appointed press-secretary of
Primer Viktor Yanukovych, forbade Channel 5 to telecast premier’s press-
conference, thus violating the Laws “On information” and “On television
and radio broadcasting.”  The Cabinet of Ministers’ press-service gave no
official explanations on the matter.

[3] At August 10 night the director of the Crimean broadcasting Foros
Company Fedor Saliy was assaulted too. A stranger attacked him without
any obvious reason, stroke him in the hand and run away as a TV company
employee appeared.

[4] On August 11 the press-secretary of Kyiv City State Administration
notified mass-media that its officials had limited journalists’ access to
receiving information.

Besides, MP Oleh Kalashnikov who assaulted the film crew of STB TV
channel remains unpunished. De facto he is a member of Party of Regions,
although the faction leaders urge that their party has expelled him.

The case on assault of Chief Editor of Stolychni Novyny (Capital’s news)
periodical Volodymyr Katsman is unprobed too. Investigation of Georgiy
Gongadze’s case stays inexplicit.

We, journalists and mass-media employees, are deeply concerned about all
these events happened for such a short interval.  Hoping that it is just a
coincidence, we still will do utmost to bar the return of censorship and
pressure on mass-media.

THEREFORE:

[1] We ask Interior Minister Yuri Lutsenko to take investigations of cases
on assaults of mass-media workers under his personal control.

[2] We offer to found a civil council for the Public Relations Center for
the Interior Ministry aimed at ensuring an operative response on the crimes
against journalists and mass-media employees, coordinating actions with
Interior Ministry and giving a competent and quick assistance to assaulted
colleagues.

[3] We address Prime-minister Viktor Yanukovych to take measures to bar
restriction for mass-media to receive an open official information.

[4] We demand from the premier to punish his press-secretary Denis Ivanesko,
to issue the government’s position on ban against live broadcasting of the
press-conference and to promise to prevent the similar situations further.

[5] We demand from the regional administrations and local authorities to
withdraw any limitations to mass-media access to an open information,
including accreditation in these regulatory bodies.

[6] We demand from the Prosecutor General’s Office to issue the
investigation
course of Oleh Kalashnikov’s assault of STB film crew and to give
information on other resonant crimes against journalists.

[7] We demand from the Party of Regions faction to give an official
information on MP Oleh Kalashnikov’s membership, as the official papers

of the Verkhovna Rada read that he was not expelled from the faction.

In our turn we confirm our intentions to stand up for the freedom of speech
and our colleagues’ safety by all possible means.

We warn that we are ready to trigger active protests in case the freedom of
speech is jeopardized.

You may support this statement by sending your signatures here:
info@telekritika.kiev.ua                                    -30-
————————————————————————————————
LINK: http://www2.pravda.com.ua/en/news/2006/8/16/6107.htm
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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11.                                  “‘TURNKEY’ CABINET”
People from Donbass dominate new Ukrainian deputy minister appointments

ANALYSIS: By Nataliya Romashova
Kiyevskiye Vedomosti, Kiev, in Russian 22 Aug 06; p 4
BBC Monitoring Service,United Kingdom, Wed, Aug 23, 2006

Almost 40 of the 54 deputy minister portfolios have gone to people from the
Donbass in the new Ukrainian cabinet, a daily has reported.

The following is the text of the article by Nataliya Romashova entitled ”
‘Turnkey’ cabinet” published in the Ukrainian daily Kiyevskiye Vedomosti on
22 August:

The staffing formation of executive structures in the government is being
completed. The lion’s share of the newly appointed high-ranking cabinet
officials will represent the east of the country.

First Deputy Prime Minister Mykola Azarov paid particular attention to the
change of staff in the structure of the ministries and departments that form
the economic sector of the government.

The cabinet’s official website reports that the first deputy chairman of the
State Tax Administration [STA] in Donetsk Region, Vadym Kayzerman, who
became the first deputy chairman of the STAU [State Tax Administration of
Ukraine] and the deputy head of the tax police directorate of the STA in
Donetsk Region, Valeriy Koryachkin, who swapped this job for the seat of
first deputy chairman of the STAU and head of the tax police, came here from
the Donbass [Donetsk Basin].

The head of a directorate of the State Customs Service in Donetsk Region,
Ruslan Cherkasskyy, became the first deputy chairman of the State Customs
Service of Ukraine.

What is more, just as tried and tested staff were appointed to the other key
posts. All of Mykola Azarov’s deputies in his post of finance minister,
apart from Anatoliy Markovskyy, were either already working in post, or were
actively collaborating with Mr Azarov in other jobs in the Viktor Yanukovych
government of 2002.

They also include the new-old head of the STAU, Anatoliy Brezvin, who
occupied that post until March last year.

The deputy prime minister for regional policy and minister for housing
utilities, construction and architecture, Volodymyr Rybak, took for his
deputies the director-general of the Novohrodivka Machine-building Plant
(Donetsk Region), Hryhoriy Makhov.

The “heating” deputy prime minister, Andriy Klyuyev, got a job for his
adviser, member of the supervisory council of the Energy Company of Ukraine,
Oleksandr Rohozin.

The director of the Rovenkiantrasyt coal association (Luhansk Region), Yuriy
Zyukov, has become the first deputy to the coal industry minister, Serhiy
Tulub.

The first deputy mayor of Kryvyy Rih, Dmytro Kolesnykov, and the mayor of
Melitopol, Anatoliy Manhul, became respectively the first deputy and deputy
to the industrial policy minister, Anatoliy Holovko.

The latter, by the way, already under “orange power” managed to be the first
deputy chairman of the Zaporizhzhya Regional State Administration.

The former governor of Donetsk Region, Vadym Chuprun, also found himself a
place in the cabinet sun: now he will work as deputy fuel and energy
minister.

People’s deputy from the Party of Regions Volodymyr Kozak will henceforth be
in the leadership of one of the biggest state monopolies, Ukrainian
Railways. The former vice-president of Astelit company (Donetsk), Leonid
Netudykhata, has become deputy transport and communications minister.

The former head of the education and science directorate of the Donetsk
Regional State Administration, Valentyn Teslenko, will be helping the
Socialist [Education Minister] Stanislav Nikolayenko manage domestic
education.

Altogether, of the 54 vacant deputy minister portfolios people originally
from the Donbass got 39. True, changes have not yet affected a number of
departments. However, according to some forecasts, in the near future all
five deputy economics ministers will be replaced.

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12.  UKRAINE LEADER PROMISES NOT TO SIPHON RUSSIAN GAS

By Andrew E. Kramer, The New York Times
New York, New York, Wednesday, August 23, 2006

MOSCOW – Ukraine’s new prime minister, Viktor F. Yanukovich, has
promised that his government will refrain from siphoning natural gas from
Russia’s export pipelines to meet his own country’s shortfall this winter, a
practice that incensed Russian officials who characterized it as stealing.

The assurance was the latest step by Mr. Yanukovich, a pro-Russian
politician, to unwind some of the conflicts between Ukraine and Russia in
the three weeks since Parliament elected him prime minister on Aug. 5.

The move was a concession, of sorts, to Russia – Ukrainian officials had
never publicly admitted to taking the gas without payment – but one also
likely to ease worries in Western Europe over the security of energy
supplies this winter. Some 80 percent of Russia’s gas exports to Western
Europe pass through Ukraine.

Mr. Yanukovich, who lost the election that came to be known as the Orange
Revolution in 2004 but staged an improbable political comeback this summer,
has brought a more conciliatory stance to the energy talks with Russia, as
expected. Talks are underway now for a contract for gas supplies in 2007.

Mr. Yanukovich said Ukraine’s national energy company, Naftogaz, was
preparing for the winter heating season by pumping gas into underground
storage.

“I am saying this so Europe can hear and they can feel at ease,” Mr.
Yanukovich said at a news conference in Ukraine on Tuesday, according to
a transcript provided by his office. “We won’t take European gas from the
pipes this winter.”

So far, Mr. Yanukovich has been feted by Russia more than the victor in the
Orange Revolution, President Viktor A. Yushchenko, ever was.

Just last week, in a break with protocol, President Vladimir V. Putin of
Russia invited him to join heads of state from the Eurasian Economic
Community for informal meetings in the resort town of Sochi though Mr.
Yanukovich is not Ukraine’s leader.

In turn, he has vowed a more pragmatic approach to the energy dispute that
last winter briefly reduced the flow of natural gas to Western Europe, and
striven to reassure European governments they will not be faced with
shivering citizens in northern Europe this winter.

At the Aug. 16 meeting he secured a promise by Russia’s natural gas
monopoly, Gazprom, not to revise the current gas price of $95 per 1,000
cubic meters until the end of the year.

Also, Mr. Yushchenko has signaled that Ukraine will likely continue next
year to import natural gas through a Swiss-registered intermediary,
RosUkrEnergo, that is controlled by Gazprom, though the United States
had opposed the arrangement as prone to corruption.

“God help us prolong it for several more years,” Mr. Yushchenko said of
the deal on Saturday, according to the Interfax news agency.

Still, in the tangled energy trade between the countries, Ukraine’s practice
of withdrawing gas intended for Western Europe from Russian pipelines has
long been a thorn in the side of Gazprom. It has also been a source of
leverage for Ukraine in the pricing talks, now apparently off the table for
Kiev.                                      -30-
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http://www.nytimes.com/2006/08/23/world/europe/23cnd-ukraine.html?_r=1&ref=world&oref=slogin

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========================================================
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========================================================
13. UKRAINE: “SOCHI TRIP. HE MADE HIMSELF RESPECTED AND
                         COULD NOT INVENT ANYTHING BETTER”
                          Ukrainian premier stands up to Russians in Sochi

ANALYSIS & COMMENTARY:  By Iryna Havrylova
Source: Kiyevskiy Telegraf, Kiev, in Russian 18 Aug 06; p 2
BBC Monitoring Service, United Kingdom, Wednesday, Aug 23, 2006

Prime Minister Viktor Yanukovych will not be Russia’s puppet, a Ukrainian
weekly has said in summing up Yanukovych’s visit to Sochi on 15-16 August.
Yanukovych acted as an independent politician during the visit and gave no
firm guarantees to Russia on any sensitive issue in bilateral relations.

However, the price of Russian gas for Ukraine will depend on the Yanukovych
cabinet’s willingness to meet Russia’s demands, the weekly said.

The following is the text of the article by Iryna Havrylova entitled “Sochi
trip. He made himself respected and could not invent anything better”
published in the Ukrainian newspaper Kiyevskiy Telegraf on 18 August;
subheadings have been inserted editorially:

Viktor Yanukovych of course made his first visit as prime minister to
Russia. Frankly speaking, nobody doubted that this would be his first
geopolitical step.

To be sure, the friendly handshake between the Ukrainian prime minister and
the Russian president took place not in Moscow: Mr Yanukovych met with Mr
Putin in Sochi at the summit of the Eurasian Economic Union, where Ukraine
is an observer.

Only presidents take part in summits at such a level, and by inviting the
Ukrainian prime minister to attend, Russia clearly wanted to show that it
considered him to be really the leader of Ukraine.

But it was also obvious that Russia was counting on seeing a different
Yanukovych at the meeting: a politician depressed by a lengthy period in
opposition and ready for anything. Including for conditions that Russia
would raise.

Moscow had got used to working with [former President] Leonid Kuchma
according to that sort of scheme, and in the Kremlin they were probably
counting on finding in Yanukovych his “successor” in the foreign policy
area: you are a cheap energy source for us, and we’ll do anything you ask.

But Mr Yanukovych immediately “broke” this construct, making the
representatives of the authorities take him and his position into account.
As a result, the Russians had to reorganize the programme of the visit on
the hoof and change the schedule of meetings. It is hard to believe that the
Russian political elite had to make itself amenable to the Ukrainian prime
minister and not the reverse.

This is also confirmed by the absence of the planned “thank you” interview
of the Ukrainian prime minister to Russian TV, a number of informal meetings
between Mr Yanukovych and Mr Putin and the independent behaviour of
Yanukovych at protocol functions with [Russian Prime Minister] Mikhail
Fradkov.

In the final analysis, even if the reception of the Ukrainian prime minister
“by the back door” (Sochi) rather than at the front entrance (Moscow, the
Kremlin) was calculated to show Ukraine “its place”, it did not have the
desired effect.

It was also not possible to feed Ukraine with some sweet “carrots” with
which former leaders were treated: promises to reconsider the question of
the possibility of transit of Russian oil and oil products via Ukraine to
Europe and reviving the Antonov [joint plane development] project, which the
Russians virtually abandoned last year. Moscow wants once again “to tame”
Ukraine by forcing it to make a choice in its favour.

Russia today is worried by three aspects.

[1] The first is that Ukraine can no longer be a buffer between East and
West and has to make a choice, and right now is standing again at a
crossroads.
[2] The second is that the declaration [of national unity] signed by all
Ukraine’s political forces [on 3 August] only postpones the country’s
joining a NATO action plan, but does not remove the question from the
agenda.
[3] The third is the possibility for strengthening the power of the regions
(the east and the south) in Ukrainian domestic politics in order for the
pro-Russian part of Ukraine to have the decisive voice.
                                        THE PRICE OF GAS
Naturally, the gas question was key at the present talks in Sochi. The
agreed pricing parameters for gas up to the end of the present year – 95
dollars – were an advance on Russian friendship. Certainty appeared: the
price for gas will not rise for now, we will not freeze this winter and
Ukraine will not turn into a “country of a thousand Alchevsks”

[Alchevsk is a town in Luhansk Region where the central heating system broke
down for several weeks in January-February this year]. This is already good
and will probably bring additional points to the government team of Viktor
Yanukovych.

Well, what will happen later, in four months? Later Russia “will see”…
[ellipsis as published] It has become different with regard to its
neighbours: cautious, pragmatic and untrusting. Meanwhile, thanks to that
same Kuchma, who, while positioning himself as a pro-Russian leader,
conducted a policy that was not in the interests of the Kremlin.

Therefore, Moscow in a very hard-line way will put questions to Yanukovych
that are vital for it (coordination of WTO entry and a clear-cut position on
the SES [Single Economic Space – economic cooperation agreement between
Ukraine, Russia, Belarus and Kazakhstan]), or else Mr Yanukovych’s
occupation of the prime ministerial seat will have only an illusory success.
And Russia does not like illusions and tries to “punish with the rouble”
those who present it with them.

Therefore, the cost of gas for Ukraine next year will become known in
November-December and will depend officially on the state of world markets
and unofficially – on what position Ukraine adopts with regard to Russia.

Whether Viktor Yanukovych will manage to justify the trust of the Russian
political elite is the whole secret of the non-rise in gas prices. It seems
that Yanukovych was not prepared immediately to give up the multi-vector
policy and “surrender” to Moscow.

Hence the fall-back statements by the deputy prime minister for the fuel and
energy complex, Andriy Klyuyev: “At the talks in Sochi the Ukrainian prime
minister did not reach agreement regarding the definitive price for Russian
gas for Ukraine. Experts at the level of working groups are doing additional
work on technical aspects.”

So it cannot be said that the gas question has been definitively and
irreversibly solved with advantage to Ukraine: Russia is biding its time.
And if Ukraine’s foreign policy is not reviewed by the end of the year,
postponed, “mothballed”, fuel prices for Ukraine may become “European” –
from 120 to 250 dollars.
              YANUKOVYCH NO PUSHOVER FOR RUSSIA
But! However much Russia might have wanted to use the lever of gas pressure
on Ukraine, it had to behave fairly cautiously. The Yanukovych visit showed
that you have to take account of the neighbours. And not pressurize, but
help in the economic sphere in order to get political dividends later.

That is why Mr Yanukovych conducted himself with the Russian as an equal
partner and did not throw around promises for the sake of maintaining the
present gas agreements.

For example, in response to the proposal to Ukraine to take part in the
Eurasian Economic Union (an analogue of the SES controlled by Russia), he
said that first it was necessary to study whether the Eurasian Economic
Union corresponded to the national interests of Ukraine. Moscow did not
receive any firm guarantees on the “language” problem either.

Yanukovych merely promised to initiate a consideration of the question of
granting Russian the status of a state language as soon as it proved
possible to broaden the parliamentary coalition to a constitutional majority
(300 deputies), and for now to be satisfied with the charter of regional
languages that operates successfully in Ukraine.

It is understood why the prime minister will not be in a hurry to “oblige”
the Russian Federation:

[1] first, the coalition is expanding basically at the expense of
[propresidential] Our Ukraine members.
[2] Second, expansion at the expense of the Our Ukraine People’s Union [the
basic party in the Our Ukraine bloc] is fraught with danger for the prime
minister himself too, since under such a disposition the Communists and
possibly the Socialists will be eliminated from the coalition. (True, there
is always the Yuliya Tymoshenko Bloc in reserve.)

As a result, the Regionals [Party of Regions, headed by Yanukovych] will
find themselves “hostages” of the propresidential party and will be unable
to take decisions without its participation.

To sum up, the visit to Russia was not a victory for Yanukovych “in the
Russian direction”, but showed that his government would not be a puppet…
[ellipsis as published]                             -30-
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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14. PRES & MRS YUSHCHENKO VISITS HOLODOMOR EXHIBITION

      Holodomor Commemoration Exhibition presented by Morgan Williams
                          
Press office of President Victor Yushchenko
Kyiv, Ukraine, Thursday, August 24, 2006

KYIV – Victor Yushchenko has visited an exhibition “Holodomor” on the
1932-33 genocide famine in Ukraine [held in the Ukrainian House in Kyiv.]

The exhibits – among them paintings by Ukrainian artists, photographs and
documents from the 1930s – were presented by Morgan Williams, a famine
researcher from the United States.                   -30-
———————————————————————————————–
LINK with photo: http://www.president.gov.ua/en/news/data/1_10020.html
LINK with photo: http://www.president.gov.ua/news/data/1_10018.html

———————————————————————————————–
NOTE:  The Holodomor exhibition was set up by Morgan Williams
for the IV World Forum of Ukrainians Holodomor Roundtable, at
the request of the Ministry of Foreign Affairs.
 
Morgan Williams is Director, Government Affairs, Washington
Office SigmaBleyzer Private Equity Investment Group and the publisher
and editor of the Action Ukraine Report (AUR), Washington, D.C..

He serves as a member of the Organizational Committee for the 75th
Anniversary of the Famine in Ukraine appointed by the Cabinet of
Ministers; Curator & Trustee, Holodomor Education and Exhibition
Collection; Chairman, Dr. James Mace Holodomor Memorial Fund
of the Ukrainian Federation of America, Philadelphia. morganw@patriot.net.
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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15. UKRAINE: PRESIDENT YUSHCHENKO EXPECTS PARLIAMENT
       TO DECLARE 1932-1933 GREAT FAMINE ACT OF GENOCIDE

Ukrainian News Agency, Kyiv, Ukraine, Thursday, August 24, 2006

KYIV – President Viktor Yuschenko expects the Verkhovna Rada to declare

the Great Famine of 1932-1933 an act of genocide against the Ukrainian
people. He made this statement in his Independence Day address.

“I believe that in the next few months the Verkhovna Rada will fulfill its
duty to the Ukrainian people and legislate to acknowledge that the Great
Famine in Ukraine was an act of genocide against our nation.

And hence, the government has a clear task to ensure the erection of a
Memorial to the Great Famine Victims in Kyiv toward the 75th anniversary

of the tragedy,” Yuschenko said. He said he is sure that the Cabinet of
Ministers will help build the memorial.

As Ukrainian News earlier reported, the Security Service of Ukraine has
declassified the documents of the State Political Department also known as
GPU of the Ukrainian Soviet Socialist Republic concerning the Great
Famine of 1932 and 1933 that were deposited in the state archives of the
SBU.

The Polish Senate (the upper house of parliament) called on the
international community in March to recognize the 1932-1933 famine in
Ukraine as an act of genocide against the Ukrainian people.

Ukraine is intending to draft a document on recognition of the 1932-1933
famine as an act of genocide by 2007 so that the United Nations

Organization could adopt it.

President Viktor Yuschenko recently called on the heads of state to
recognize the 1932-1933 famine in Ukraine as an act of genocide against
Ukrainians. The parliaments of several countries have recognized the

famine as an act of genocide.

In November 2003, 25 member-countries of the United Nations Organization
drafted a joint statement that described the famine in Ukraine as the result
of the policies of a totalitarian regime. Other states later aligned
themselves with this statement.

In 2003, the Verkhovna Rada passed an address to the Ukrainian people in
which it promised to declare the famine an act of genocide. According to
various estimates, between 3 million and 7 million people died in the
1932-1933 famine in Ukraine.                           -30-
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AUR#752 Aug 23 Putin Proposes Economic Counterweight To EU, Customs Union; 15th Independence Day; Telling The World In 2007-2008 About The Holodomor

=========================================================
 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       

 
               INDEPENDENCE DAY
    THURSDAY, AUGUST 24, 2006
            Ukraine’s 15th Independence Day Since Fall of Soviet Union
                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 752
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN KYIV, UKRAINE, WEDNESDAY, AUGUST 23, 2006
 
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               –——-  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
New Europe, Athens, Greece, Tuesday, August 22, 2006
Ukrayinska Pravda On-line, Kyiv, Ukraine, Tuesday, August 22, 2006

4PUTIN SENDS INDEPENDENCE DAY GREETINGS TO UKRAINE

Ukrayinska Pravda On-line, Kyiv, Ukraine, Tuesday, August 23, 2006

5.         YUSHCHENKO MAKES ONE MORE GRANNY HEROINE 

Ukrayinska Pravda On-line, Kyiv, Ukraine, Tuesday, August 23, 2006
6UKRAINE CELEBRATES 15TH ANNIVERSARY OF INDEPENDENCE
STATEMENT: UCCA Executive Board
Washington, D.C., Wednesday, August 16, 2006

7.              OLEH RYBACHUK: HE DID NOT BETRAY MAIDAN
INTERVIEW: With Oleh Rybachuk, Head, Presidential Secretariat
Interview by: Serhiy Leshchenko, UP
Original in Ukrainian, translated by Anna Platonenko
Ukrayinska Pravda on line, Kyiv, Ukraine, Monday, August 14, 2006

8.                                     WHAT REVOLUTION?
EDITORIAL: Chicago Tribune, Chicago, Illinois, Monday, August 21, 2006

9 TELLING THE WORLD IN 2007-2008 ABOUT THE HOLODOMOR 
75th Commemoration of the 1932-33 Ukrainian Terror-Famine-Death-Genocide 
PRESENTATION:
By Morgan Williams
Holodomor Roundtable, IV World Forum of Ukrainians
Ukrainian House, Kyiv, Ukraine, Saturday, August 19, 2006
UNIAN news agency, Kyiv, Ukraine, Monday, August 21, 2006

10.      UKRAINE’S NEW GOVERNMENT: PERSONS, BIOGRAPHIES
ANALYSIS AND COMMENTARY: By Oleksandr Volf
Ukrainian newspaper 2000, Kiev, in Russian 11 Aug 06; pp e1, e3, e4
BBC Monitoring Service, United Kingdom, Wednesday, Aug 16, 2006
========================================================
1
PUTIN PROPOSES ECONOMIC COUNTERWEIGHT TO EU

New Europe, Athens, Greece, Tuesday, August 22, 2006

President Vladimir Putin has proposed a Russia-led customs alliance of
former Soviet republics, which would eliminate border duties between

member  countries.

The Kremlin leader is the organising motor behind a customs union seen by
Putin as an economic counterweight to the powerful European Union and a
means by which former Soviet republics can integrate their economies.

The customs union is planned as a first step towards the creation of a
common market. They key idea is to launch the project of economic
integration and to advance Russia as the core of this future economic
integration.

The Russian government understands that if it would like to be an equal
economic partner to the European Union in the future it had better
consolidate different resources around itself and the best way to do that is
to launch new integration projects in the post- Soviet space.

Today there are only two: Eurasian Economic Community (EurAsEC) and

Common Economic Space (CES). Until now, Ukraine has not officially
opposed the CES, but it has delayed joining the group.

The leaders of the post-Soviet region are also discussing a project of
reform of the CIS (Commonwealth of Independent States), proposed by

Kazakh President Nursultan Nazarbayev one month ago, and the customs
union of former Soviet republics.

A document instructing the Eurasian Economic Community (EurAsEC)

secretariat and Belarus, Russia and Kazakhstan to take steps to build a
legal basis for a customs union was agreed and signed during the informal
EurAsEC summit in Sochi, Russia.

“The ultimate goal of the efforts that are being made is the incorporation
of all EurAsEC members in the customs union,” Putin told journalists
following the meeting in Sochi last Wednesday.

The main problem hindering the establishment of the customs union is the
rate at which laws in each EurAsEC member-state are unified.

The countries would need to reform their economy in order to join this
union. Nazarbayev told journalists that Russia, Belarus and Kazakhstan had
agreed on 31 of the 38 documents outlining a common economic space of
post-Soviet countries.

“The other seven will be cleared in October, and these three countries will
set up a normal customs union,” the Kazakh leader said. Russia is eager to
form closer relations with Kazakhstan. The resource-rich country is a major
oil exporter in the region.

Kazakhstan can also influence other regional associations like GUAM
(Georgia, Ukraine, Azerbaijan and Moldova,) which is considered as a
potential threat for Russian domination in the post-Soviet region.

But GUAM cannot exist anymore without its engine being filled with Kazakh
and Azeri oil. Therefore, closer cooperation with Kazakhstan will help the
Russian government dominate the post-Soviet region.

However, it is unlikely that Russia will be able to recreate its former
Soviet might. Russian resources cannot be compared with the resources

of the old Soviet Union. There is a big difference.

But the creation of an economic integration of former Soviet republics is a
first step towards creating a key power in this region.

The idea is not to push out, but to instead weaken the position of other
global actors like the United States, China and the European Union,
minimising their role as global actors in the post-Soviet region.

The question is what is the European Union prepared to do to counter this
latest initiative spearheaded by Moscow?                    -30-
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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2.                     PUTIN’S COALITION OF THE WILLING
 
New Europe, Athens, Greece, Tuesday, August 22, 2006
Russia is set to step up work to form a customs union of former Soviet
republics. During an informal summit in Sochi in southern Russia last week,
leaders of the Eurasian Economic Community (EurAsEC) signed documents
on the establishment of a customs union, which envisions no duties or taxes for
imports or exports on the organisation’s territory.

Russian President Vladimir Putin is the organising motor behind the customs
union and the creation of a common market. They key idea is to launch the
project of economic integration and to advance Russia as the core of this
future economic integration.

With WTO membership delayed probably until the end of 2007, Russia is
striving to become a big regional economic player. The customs union is just
one way of doing this.

“The Russian government understands that if it would like to be an equal
economic partner to the European Union, not right know but in the future, it
had better consolidate different resources around Russia and the way to do
it is to launch new integration projects in the post-Soviet space,” Andrei
Ryabov, consultant of the Carnegie Centre in Moscow, told New Europe by
telephone.

Russian Prime Minister Mikhail Fradkov said in Sochi he had asked
pro-Russian Ukrainian Prime Minister Viktor Yanukovich “to reflect jointly”
on Ukraine’s possible membership of the EurAsEC and the customs union.

However, political observers say Ukraine wants some privileges in its trade
with Russia and the other former Soviet republics, but only insofar as they
don’t hinder its plans to become a member of the EU.

In the meantime, Ukraine would have to improve bilateral relations with
Russia, including solving the gas problem, and expand economic and

political relations in other spheres.

As for Russia, the creation of an economic integration of former Soviet
republics is a first step in becoming a key regional economic power.

Analysts note that the idea is not to push out, but to instead weaken the
position of other global actors like the United States, China and the
European Union, minimising their role as global actors in the post-Soviet
region.                                              -30-
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3.  MOROZ AND TYMOSHENKO MAKE PR MOVES BEFOREHAND
 
Ukrayinska Pravda On-line, Kyiv, Ukraine, Tuesday, August 22, 2006
The Verkhovna Rada Head Olexandr Moroz and Yuliya Tymoshenko Bloc
(BYuT) leader decided to congratulate Ukrainians on the Independence Day
two days prior its celebration.

“Following a difficult path of its new history, rich in rises and drops,
sprinkled with tears of either joy or sorrow, the Ukrainian state reached a
new stage of socio-political development having created the
parliamentary-presidential republic by its 15th anniversary,” reads Moroz’s
statement.

“We approached the European model of the state governing under the form but
embodiment of its content is a long and hard task. We should work a lot over
this challenge,” the Verkhovna Rada press-service cites the Speaker.

“The representatives of different political forces in the newly-elected
government comprehended this, and guided by the national interests signed
the National Unity Pact (Universal),” recalls Moroz.

In her turn Yuliya Tymoshenko “sincerely congratulating with 15th
anniversary of Ukrainian independence” reminded that “the forces alien to
the ideas of free and independent Ukraine had come to power.”

“None of us can lose courage. Each ought to find his place in fight for
Ukraine, his wealthy life and free future,” she says.

“This day has to strengthen our faith in Ukraine belonging to the Ukrainian
nation, in our right to back the Ukrainian independence for this generation,
our children and grandchildren can proudly say: “I am a citizen of Ukraine!”,
appeals BYuT leader.

“I believe in God, you and Ukraine,” adds Yuliya Tymoshenko.

Ukraine celebrates its Independence Day on August 24.
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

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4. PUTIN SENDS INDEPENDENCE DAY GREETINGS TO UKRAINE
 
Ukrayinska Pravda On-line, Kyiv, Ukraine, Tuesday, August 23, 2006
 
KYIV – Russian President Volodymyr Putin congratulated President
Viktor Yushchenko and all Ukrainians on the Independence Day.
“Our nations always were and stay the closest neighbors bound with
friendship and trust ties,” Putin marks.
 
“Ukraine and Russia has all means to enlarge bilateral and multilateral
cooperation in the frames of integration process within the Commonwealth
of Independent States,” he adds.
 
According to the Russian President, power industry, production cooperation,
transport and stimulation of mutual investments are the most attractive
fields for collaboration.

Yet Putin underlines that the two countries have much in common in
humanitarian and cultural spheres too.

He reckons that Ukraine and Russia can reach the real strategic partnership
relying on mutual understanding and compromise approach to the problem
issues.
 
“I wish you success in the government work and people of the amicable
Ukraine happiness and prosperity,” summarizes the Russian President.
————————————————————————————————
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5.     YUSHCHENKO MAKE ONE MORE GRANNY HEROINE 
 
Ukrayinska Pravda On-line, Kyiv, Ukraine, Tuesday, August 23, 2006
KYIV – On Monday at the presidential residence in Crimea Ukrainian President
Viktor Yushchenko awarded the craftsperson of art embroidery and Honoured
Art Worker of the Autonomous Republic of Crimea Vira Royik with Hero of
Ukraine title, the presidential press-service reports.

After the award presentation, 95-year-old Royik presented Yushchenko with

an embroidered towel and her book written in 2003.
Yushchenko wondered whether there was her permanent exhibition in Crimea.
The answer was negative.

Ukrainian President Viktor Yushchenko ordered his representative in the
Crimea Gennady Moskal to help Royik family to arrange such an exhibition.

As known, on the occasion of 15-year anniversary of Ukrainian Independence,
Viktor Yushchenko is going to award some 700 people.

In 2005 on the occasion of 14-year-anniversary of Ukrainian Independence
Yushchenko awarded 781 people with the various orders and titles.

In particular, in 2005 at Mariyinskiy Palace Viktor Yushchenko awarded
heroine of Orange Revolution Paraska Korolyuk with Order of Princess
Olga.                                             -30-

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================      
6. UKRAINE CELEBRATES 15TH ANNIVERSARY OF INDEPENDENCE

STATEMENT: UCCA Executive Board
Washington, D.C., Wednesday, August 16, 2006

The Ukrainian American community has actively worked to restore Ukraine’s
independence for decades. After this dream was realized in 1991, our focus
turned to building a stable system of democratic governance in the country.

During the last 15 years, Ukraine has achieved significant progress in this
respect: the Ukrainian people have internalized democratic ideals and upheld
their right to free and fair elections; Ukraine is at the threshold of
entering the Euro-Atlantic community.

Our community has made a significant contribution to these successes, in
particular, to the development of bilateral U.S.-Ukrainian relations.  It is
our goal to continue actively participating in the process of
democratization so that Ukraine can reclaim its rightful place in the
international democratic community.

During this time of celebration we look back on the progress Ukraine has
made and rejoice together with the people of Ukraine. However, we also
remember that there is much work ahead.

Ukrainians Americans continue to work for the benefit of the Ukrainian
people in Ukraine, as well as the U.S. especially during these trying times
when Ukraine faces the challenge of securing its democracy.

On the occasion of Ukraine’s 15th anniversary of independence, the Ukrainian
Congress Committee of America sends its sincere and heartfelt
congratulations to the Ukrainian American community and encourages it to
appropriately commemorate this event.

Although there is much to be done in the future, we are confident in the
fact that Ukraine will soon take its rightful place as an equal member of
the Euro-Atlantic community.

The UCCA also sends its warmest greetings to the people of Ukraine and asks
God to lend the nation strength in this time when Ukraine’s future is being
determined.

We urge our community to take an active part in the civic and political life
of the United States and Ukraine. With your help Ukraine will overcome any
obstacles and will build a democratic, prosperous state ruled by law!

GLORY TO UKRAINE!

On behalf of the UCCA Executive Board,
Michael Sawkiw, Jr., President
Marie Duplak, Executive Secretary
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
7.   OLEH RYBACHUK: HE DID NOT BETRAY MAIDAN

INTERVIEW: With Oleh Rybachuk, Head, Presidential Secretariat
Interview by: Serhiy Leshchenko, UP
Original in Ukrainian, translated by Anna Platonenko
Ukrayinska Pravda on line, Kyiv, Ukraine, Monday, August 14, 2006

Oleh Rybachuk is an incurable optimist whatever the situation. And today
this trait shows itself as well:  moreover, he is prone to think that such
an outcome is a great victory and nearly the second ‘Maidan’ of Viktor
Yushchenko. Rybachuk’s mission is not to give himself and others up to
despair.

Today Oleh Rybachuk represents an antipode to Granny Paraska psychotype:
he does not welcome any emotionality when dealing with realities, he acts
like a pragmatic, saying that nothing wrong or bad has happened.

However, he is not aware that he is starting to have an implicit faith in
fairy tales: about Yanukovych having an intention to stiffly embody
Yushchenko’s ideology or about Tymoshenko not being able to form
opposition to the president’s policy.

One would sometimes wish to supplement Rybachuk’s remarks with the

words of his predecessor and another antipode: “power is as strong as never
before”.

Rybachuk’s being so calm and optimistic can probably be explained this way:
Poroshenko, Gubsky and Klyuev are people of the same outlook to him. He
has long been at bitter enmity with the ‘dear friends’, and holding his new
office he became some sort of a filter to control their admission to
Yushchenko.

In the end, the negotiations between Yushchenko and Yanukovych, which
came to the end at 2 am on Thursday, did not proceed to designation of the
offices. Poroshenko is said to have been making an attempt to persuade
Yushchenko to allot his government quota “right here and right now”, but
Yushchenko refused.

Those who are in the habit of taking a walk down Gorodetskogo St. at 4
o’clock in the morning would have a good chance to see Poroshenko,

Tretyakov and Zhvaniya standing on the summer verandah in “Fellini”
restaurant, discussing their own and their country’s  future.  Back in 2004,
the day when Kyvalov proclaimed Yanukovych a President, their faces
radiated a greater deal of happiness.

Yushchenko is said to be blaming his fellow sponsors for the situation
taking a ‘Yanukovych turn’ for him. But Rybachuk himself is in no way a
strong President’s favourite now, their relationships tend to be getting
strained now and then.  The struggle for his dismissal is going on.

In order to find the key to Rybachuk’s being in such high spirits these
days, the “Ukrayinska Pravda” has made an attempt to question the head

of Presidential Secretariat in person.

                         INTERVIEW WITH OLEH RYBACHUK
[Serhiy Leshchenko, UP] The events which took place on the night of
Wednesday to Thursday have probably set the country’s course for many years
lying ahead. Why are you so pleased with these events? Many people took them
for the President’s defeat.

[Oleh Rybachuk] The thing which has just taken place in Ukraine was faced by
Poland fifteen years ago, when there were two tens of round tables. And they
gave the answer to the question where Poland was making its way to. No
matter who is holding the power, right- or left-wing, rose-coloured, green
or blue, Poland is following its own definite way.

Governments change once a year and once in two years elections take place.
And if the course is changed every time the new government is elected, the
country will be brought to a standstill.

Yushchenko’s key words are as follows: “the thing we need is constancy and
predictability of the country’s course”. It has been long discussed during
the latest negotiation process that because of the element of uncertainty
nobody will take the liberty of dealing with Ukraine.

Everybody has agreed upon the points of the National Unity Pact at some
certain stage of the negotiation process. But there was something holding
everybody back. Party of the Regions frankly feared that the National Unity
Pact would be signed, but the Parliament would then be dissolved. So, that
is why they cherished the editing of every single letter in the Pact.

[Serhiy Leshchenko, UP] Many people tend to regard the situation as if
Yushchenko betrayed Maidan not in word, but in deed!

[Oleh Rybachuk] I have to disagree with that. The strategic victory of
Yushchenko consists in his paving the country’s way for the years ahead.

He managed to bring together and seat down at the negotiating table those
political elites which in the course of previous years used to tear Ukraine
to shreds with their glaring contradictions. He did not betray Maidan!

[Serhiy Leshchenko, UP] But the fact of Yanukovych being nominated for the
office of a Prime Minister took place on the back of unwillingness of
Yushchenko’s electorate to accept such a step?!

[Oleh Rybachuk] The President’s wisdom consists in his arriving at unpopular
decisions. Was there any other way he could probably solve this political
situation?

[Serhiy Leshchenko, UP]  Tymoshenko made a suggestion to dissolve the
Parliament!

[Oleh Rybachuk] In terms of what? If there had not been any consensus
reached by the above-mentioned political elites, we would have then been
able to speak the following way: “You know, the country’s course cannot be
predicted. One coalition has been formed and we have not agreed on anything,
another one has been formed and again, nothing has been negotiated.”

Western reporters often ask: “How can that be true? Yanukovych is a
prorussian power, an absolutely different vector!”
This was a grave question for the President, who is the guarantor of the
country’s political course, for he designates it under the Constitution.

But the Ukrainian elections were true and fair, the whole world recognized
them as such. The Parliament and the coalition were formed then. They
nominated Yanukovych for the office of a Prime Minister. The President
issued a corresponding decree.

[Serhiy Leshchenko, UP] Tymoshenko suggested dissolution of the Parliament
since two months went by without forming the new government and that is why
there were solid grounds for the early elections to be conducted.

[Oleh Rybachuk] It is quite a different thing. I have been given so many
lectures on the interpretation of constitutional right, that I can
definitely say I have taken a short course in C.P.S.U.(B.) (Communist Party
of the Soviet Union [Bolsheviks])

It is indeed true that on Wednesday we were one step away from dissolution,
we stood within an inch from it! It was no bluff. We had all the documents
ready and all the consultations as to the dissolution had already been held.
The only thing we did not probably have was an appeal on videotape
recording.

Were the Parliament dissolved, I would be at ease and would comment as
follows: “The elites, which happened to get into the Parliament, have not
managed to come to an agreement”.

But we sat up until two o’clock in the morning and we had the same event
that the Poles once faced. Political elites joined hands around national
interest. In this respect, the only foreign-policy course is to become a
member of the European Union.

[Serhiy Leshchenko, UP] What about Ukraine’s integration into NATO?

[Oleh Rybachuk] It is a collective security system. And the National Unity
Pact states: “Entry into NATO after the referendum”. It is a great
compromise on the President’s part since the situation has developed into a
fit of hysteria, when the old women in Crimea see American submarines all
over their cellars. In order to slow down this paranoia one has to give some
quiet explanation: submarines are only to emerge after the referendum.

Ukraine is one of those few countries which submit the question of NATO
membership to a referendum. The alliance does demand this.

At the same time we took down the speculative subject, demanded by the
communists and other parties, which used to be very powerful in their past:
“Referendum is to take place right here and right now!”.

The National Unity Pact states: “Referendum after the completion of all
the procedures necessary for NATO membership”.

In other words, referendum will take place only when we have passed all the
schemes and programs, including the so-called Plan of actions for obtaining
NATO membership; when we receive a corresponding invitation and get our
feet in the door, like Turkey before entering the EU.

I would like to underline that after the revolution Ukraine faced a unique
moment. And Europe has already acknowledged its fault: we should have at
once set a clear perspective for the membership in the EU. And this way it
would have been much faster and easier to achieve our aim.

I tend to believe that after Europe gains an understanding of what has
happened today, it will again be at a loss. Today all the diplomatic world
stood still, being astonished by Ukraine.

For the problem has not been solved by means of tanks and force. The
thing which has been achieved is truly a unification of the country.

[Serhiy Leshchenko, UP] But the ambassadors, for instance, in their private
talks say: how are we to cooperate with Yanukovych if he is directly
responsible for the falsification of elections in the year of 2004? And now
he is the second person in Ukraine!

[Oleh Rybachuk] Indeed. But there is a worldwide thing, known as a probation
period. I believe they will readily cooperate since the first step of
Yanukovych is a great step on the road to eurointegration. What does the
National Unity Pact say?

Ukraine is to become a member of the World Trade Organization (WTO) by
the end of the year. In order to achieve this we are to pass resolutions for
twenty parliamentary laws. And who was the one ranting and raving so that
not to let Ukraine join the WTO? Communists and Party of the Regions.

[Serhiy Leshchenko, UP] Would you please tell us what happened yesterday
when being one step away from dissolution Yushchenko called Yanukovych
back and they started this successful process of negotiating?

[Oleh Rybachuk] In the course of consultations as to the dissolution the
President clearly stated his position and the politicians realized that it
is no bluff. In other words, all the dissolution gears were already
triggered off.

In his reply to a direct question whether the Parliament is to be dissolved,
Yushchenko said: “I have received information for my own, thank you. Wait
for the decision to be taken”.

After that Moroz made a speech in the Parliament while Yanukovych stayed at
the President’s office to talk over some important issues. Then Yanukovych
came out and said: “We have agreed that we shall meet again”.

He came back later as he promised. And then the negotiators Azarov and
Klyuev joined him; all the political board of Our Ukraine was there.

[Serhiy Leshchenko, UP] Do you think they were afraid that the Parliament
would be dissolved and therefore became more disposed to compromise?

[Oleh Rybachuk] It is complicated to substitute formal documents for
confidence: that is my life credo. There should always be someone to break
the ice.

There was no confidence, and the President’s logic was as follows: “Firstly,
I have all the formal grounds to dissolve the Parliament, I have no
intention to do this, but two years ago I was also elected with a majority
vote. I am responsible for setting the country’s course under the
Constitution. Where else in the world have you seen a country being so
unsteady?”

“If we do not combine our efforts now, if you cannot give an answer to
simple questions: how many official languages we have or whether Ukraine is
a federal or a unitary state, then you are unable to cooperate, to come to
an agreement as to the basic points in the country’s political course and in
this case I have no other alternative but to call the early elections,”
Yushchenko said.

Rybachuk on the balcony of presidential secretariat. Top view.

[Serhiy Leshchenko, UP] What was being discussed at those round tables
which lasted for 10 hours?
[Oleh Rybachuk] The basic things.

[Serhiy Leshchenko, UP] But how is it possible to discuss the basic things
for so long?
[Oleh Rybachuk] It is indeed possible, even if it is twenty hours!

[Serhiy Leshchenko, UP] They say, Yanukovych and Yushchenko held a
conversation about the formation of Ukrainian nation, Trypillian culture. In
other words, Yushchenko was trying to re-educate Yanukovych.

[Oleh Rybachuk] Trypillian culture was not discussed there. The thing they
were talking about was a close unification of the country, an avoidance of
religious split, the foreign policy.

And there was no re-education. Yanukovych understands that he represents the
power which seeks after the growth of capitalization. For example, Akhmetov
derives no benefit from the unstable situation in the country. Otherwise he
may lose billions of money.

[Serhiy Leshchenko, UP] But the National Unity Pact, signed by Yushchenko,
looks very much alike the one approved by Party of the Regions at the
political board.

[Oleh Rybachuk] You don’t say so! No way! To tell you the truth, there were
15-20 variants of the National Unity Pact. Let us read the item from the
last variant: “An overall development of Ukrainian language as the official
and spoken language in every sphere of social life throughout the whole
territory of Ukraine as the basis of nation’s and country’s
self-identification”.

Next, the matter concerns the free use of Russian language. The document is
well-balanced. There is no paragraph in the National Unity Pact that could
be recognized as an absolute version of somebody, either Yushchenko or Party
of the Regions. Any corresponding paragraph had 15 versions and both parties
were ready to compromise.

The principal moment of distrust was based upon the past. We understand that
during the presidential elections two years ago we all were impetuous and we
said so many nasty things to each other.

American technologists, for instance, suggested Party of the Regions to make
use of the language issue. It is an evident technology since one can
immediately keep the electorate in such a way. This technology is used in
many world countries.

Take for example the problem of racial relationships in the USA. The party
which is aimed at getting the majority of votes, picks out a segment and
starts exploiting this issue.

For example, the black population votes for the Democratic Party and the
democrats are doing their best in order to somehow separate their interests.
Obviously, this is typical of any other country.

[Serhiy Leshchenko, UP] In your opinion, will Yanukovych be a Prime Minister
for a long time? Or only for half a year as in case with Tymoshenko in 2004?

[Oleh Rybachuk] It is rather complicated to predict such things today. But
the thing which is truly important today is not Yanukovych, but the very
fact that a very strong system of balances has finally been created. The
next presidential elections are to be held in 2009. In other words, we
should be expecting four years without any elections.

[Serhiy Leshchenko, UP] And all these four years Yanukovych will be a
Prime Minister?
[Oleh Rybachuk] Four years of a stable government is a good ambition.

[Serhiy Leshchenko, UP] By the way, has Yanukovych guaranteed that he
will support Yushchenko’s candidature at the next presidential elections?

[Oleh Rybachuk] Yushchenko does not take any interest in guarantees for it
is complicated to believe in them. I remember the time when all the famous
politicians and participants of the ‘Orange Coalition’ gathered in this
office, and when the conversation turned to the guarantees at the
presidential elections, I said: “Do not even say that!”.

[Serhiy Leshchenko, UP] When signing the National Unity Pact with
Yanukovych, did Yushchenko realize that his main rival at the presidential
elections in 2009 will be Yulia Tymoshenko?

[Oleh Rybachuk] The 2009 elections is the last thing to interest him. And no
matter where Tymoshenko were: in the government or in the opposition, she
would anyway take part in the presidential elections in 2009. It is quite
normal, for it can probably be her lifetime ambition or an aim: to go
through the presidential elections.

And when she says that she will not take part in the elections under these
or those circumstances, I do not believe her! Though, to tell the truth, it
is less likely that Yanukovych will participate in the elections, for good
reasons.

Tymoshenko cannot be in the opposition to the President’s course.
Tymoshenko can only say that this course is not to be honestly taken.

In this case, let us and the President watch the non-presidential government
of Yanukovych meeting the engagements that he has taken upon himself: giving
votes as to the WTO membership, fulfilling the Plan of actions for obtaining
NATO membership and so on.

[Serhiy Leshchenko, UP] What future do you see under the conditions of
constant destabilization on the part of Tymoshenko-oppositionist?

[Oleh Rybachuk] Very comfortable, I should admit. For instance, I believe in
critics which was heard from Pynzenyk concerning the next year’s budget,
when he says that there have been several attempts to drill a hole in the
budget which is then to be legalized.

This is especially likely to happen owing to the fact that systemic benefits
and free economic zones are to be introduced. As a government
representative, who abolished such norms last year, I claim that there is
such a threat.

Thank God, there is Tymoshenko and such a political power that will not let
anybody sit and twindle their thumbs!  The standpoints of the President and
the opposition will very often be in close agreement.

The government of Yanukovych is not the government of Yushchenko. After
there have been several changes in the Constitution, there is no such term
as “presidential government” any more, this is a coalition government.

Therefore, it is not any longer relevant to appeal to Yushchenko and say:
“Your fellows are responsible for everything” or “The President and the
government  are one and the same”.

Opposition is efficient only when it is able to “X-ray” everything in every
place. Who is Tymoshenko in the past? The head of a budget committee. Who
is Turchynov in the past? The head of a budget committee. And who is
Yushchenko in the past? A Prime Minister who comes to know the particulars
of a budget.

During one of the consultations Yushchenko said to Azarov: “How come that
you have adopted the budget resolution without even having to consult with
the President? Do you really think I will sign it without reading?! That
won’t work!”.

Azarov was greatly astonished for Kuchma never took any interest in the
budget issues!

Indeed, we have another President and another opposition. And there is
always arousing a suspicion that the budget is going to be ‘shared’, as they
say. Under such combinations and experts, and considering such a balance, it
will not be possible to do that.

[Serhiy Leshchenko, UP] But Tymoshenko’s opposition is the opposition using
the slogans “Yushchenko betrayed me for the fifth time” and from now on she
will start a struggle which will last until the presidential elections take
place.

[Oleh Rybachuk] I took part in “Svoboda Slova” (“Freedom of Speech”) TV
programs, I go along both Maidans every single day and I want to say that it
is not possible to be in the opposition to the idea of the country’s
unification.

I suggested to Yulia Tymoshenko: “Take the National Unity Pact and tell what
exactly you do not agree with and why you do not wish  to put your signature
to it”. And she said: “Because this Pact is not to be carried into effect”.
But she is rather beforehand in her conclusions!

If the things stated in the National Unity Pact are not to be carried into
effect, such a government will not take a long time to collapse. A wave of
confrontations will develop into a number of resignations.

[Serhiy Leshchenko, UP] You have been referred to as the main team-mate
of Tymoshenko in her fight for the early elections!
[Oleh Rybachuk] So God be praised.

[Serhiy Leshchenko, UP] But she always held consultations concerning the
early elections with you!?
[Oleh Rybachuk] And I will keep on doing this with the only purpose: one
should always have a Plan B apart from a Plan A. Early elections were not a
bluff.

Plan B was discussed in great detail during all the most private meetings
held in this office: “What are we to do if we encounter an unconstitutional
activities on the part of the anticrisis coalition?”. We were prepared for
anything.

[Serhiy Leshchenko, UP] And you would even use tanks?
[Oleh Rybachuk] Of course not! Tanks with no air-conditioners is something
unreal under such circumstances. The weather is scorching and Ukrainians do
not like that.

[Serhiy Leshchenko, UP] What mechanism of appointing ministers is
established under this coalition?
[Oleh Rybachuk] All the designations are to take place during the
consultations of Yushchenko and Yanukovych.

[Serhiy Leshchenko, UP] And what are the guarantees of this?
[Oleh Rybachuk] No guarantees! There is a delicate moment here: a word
means much more than the guarantees altogether.

[Serhiy Leshchenko, UP] Does Yushchenko regret now that he used to
clamour out the words “cons will never administer state affairs”, “bandits
will never be ministers”?

[Oleh Rybachuk] But Yanukovych as well said that “Yushchenko is an
American agent and his wife is a CIA officer”.  Their accusations were
symmetrical. I wanted to share some thoughts with you.

I have recently arrived at an interesting conclusion, and even if my
relationships with Granny Paraska get spoilt, I will tell you this. We were
sitting at the negotiations with Klyuev, Yanukovych, Azarov, enjoying the
first minutes of surrealistic feelings.

The things happening at that moment reminded me of Spain, when the round
table was joined by the republicans and Franco’s Fascists, who not only
fought, but also shot each other!

Yushchenko was telling Yanukovych about the OUN UPA (Organization of
Ukrainian Nationalists and The Ukrainian Insurgent Army) and saw that
Yanukovych welcomed his words with a thorough grasp.

I remember Klyuev was once using almost obscene words about me in the
Parliament. And yesterday we told completely different things to each other.

I have my backgrounds in Donetsk too. I was recently at my mother-in-law’s
funerals, and those days the 9th of May (the Victory Day) was being
celebrated. I took part in the official events together with the regional
elite.

There were the heads of the regional administration and the regional
council. And I saw how people greeted them in the streets. Tens of thousands
of people! And this was not a show! Their leaders, the elite are the people
they had voted for.

When passers-by recognized me, they were asking me to tell the President
that they are not bandits, they are normal people. And this feeling has long
been repressed deep in their hearts. And then I visited the Theatre of
Ukrainian Drama and I was astonished!

A four-hour play in Ukrainian language, the auditorium was crowded and there
was a long queue. And you are talking about the absence of Ukrainian
language in Donetsk.

[Serhiy Leshchenko, UP] There is such an impression that back in 2004 you
were not the head of the President’s office, but an OSCE observer: as though
it was not you who was designing slogans about the Donetsk bandits!

[Oleh Rybachuk] I was not the head of the President’s office only. Unlike
the others, who came with Yushchenko, I had stayed the whole week in
Donetsk. We were attacked there and people hung fascist posters about
Yushchenko. I saw the programs aired on their TV channels. It was not
normal, but it was two years ago.

[Serhiy Leshchenko, UP] And now everything has passed into history?

[Oleh Rybachuk] I am telling you once again, this road of national
reconciliation was walked by the Poles, Spaniards and some other European
nations. But now everything has changed and the circumstances are different.

If somebody goes a criminal way today, he will be thrown into prison.
Because “Ukrayinska Pravda” will take a picture of somebody’s Mercedes,
this picture will be published and the edition will not be closed.

Journalists have become completely insolent! (Is laughing). They have nearly
tortured Kalashnykov to death, so he had to apologize to the whole nation.
And this is not the end. For there is democracy in Ukraine!

And if some minister gets so tempted to steal – let him only try!

[Serhiy Leshchenko, UP] How does the President see a designation of the
offices in a new coalition?
[Oleh Rybachuk] This is not of a fundamental importance.

[Serhiy Leshchenko, UP] How come? It is people who are responsible for
keeping their words. It is said that there have been negotiations held
according to the following  formula: Poroshenko – the first Vice Prime
Minister, Zvarych – the minister of justice. Is this variant valid?

[Oleh Rybachuk] There have been many negotiations and versions. The thing
which is important is that all the designations will in the end be approved
of after the consultation with the President.

[Serhiy Leshchenko, UP] What part did Rinat Akhmetov play in the course
of these negotiations?

[Oleh Rybachuk] His influence was considerable enough. Although he was
only a number seven in the list of Party of the Regions, he still is a very
powerful person in this fraction.

However, the point is not only about Akhmetov. For example, let us imagine
that the re-elections were to be held, would there be any interest on the
part of those people who run a systemic business in Ukraine?

Would it be a one-against-the-other battle? No way! They need an inflow of
investments, they need incorporation. And they need to be the greatest
integrators.

They do not need it when there is a Minister for Internal Affairs and then
there is another who would say: “Oh! We will tear you to tatters now!”.

I am convinced that being the Prime Minister, Yanukovych will not subject
the country to repressions. And were there re-elections, they would set the
scenario of sweet revenge.                           -30-
————————————————————————————————-
LINK: http://www2.pravda.com.ua/en/news/2006/8/15/6089.htm
————————————————————————————————-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
     NOTE: Send in a letter-to-the-editor today. Let us hear from you.
========================================================
8.                                  WHAT REVOLUTION?

EDITORIAL: Chicago Tribune, Chicago, Illinois, Monday, August 21, 2006

In late 2004 orange flooded the streets of Ukraine as hundreds of thousands
of people demonstrated for an honest election and a new government. It was
exhilarating to watch the many weeks of peaceful protests lead to an order
by Ukraine’s Supreme Court for a new round of balloting, which brought
opposition leader Viktor Yushchenko into power.

Despite powerful backing from Moscow for Prime Minister Viktor Yanukovych,
the reformers had won. Yushchenko was to be president. His ally Yulia
Tymoshenko would be prime minister. The Orange Revolution was complete.

Not so fast. The leaders of the Orange Revolution have gone through a bitter
split and the old regime won a big victory in a recent parliamentary
election. President Yushchenko recently did something that would have been
unthinkable two years ago: He nominated his old foe Yanukovych for prime
minister. The Ukrainian parliament approved the choice.

Some supporters of the Orange Revolution are seeing pure red. And the rest
of the world is left to ask: What revolution? Yulia Tymoshenko called the
new political alliance “an act of political capitulation by the Orange
camp.” Tymoshenko, once a charismatic ally of Yushchenko, is now the leader
of the political opposition.

Yushchenko discovered what many politicians learn: It can be easier to
demand reform than to carry it out. It requires political skill,
particularly in a nation as divided as Ukraine.

His supporters are impatient for the revolution to live up its rhetoric.
Ukraine has not joined the World Trade Organization. Official corruption is
still a serious problem. The promise of jobs through investment from Western
Europe has gone unfulfilled.

And Yanukovych, even in the midst of the protests that led to the new
election in 2004, always had strong support in Eastern Ukraine. He has
retained that political base of support.

So Yushchenko appears to have reluctantly taken the best of some very bad
options. He has cobbled together the only governing coalition he could at
this time. Will this work? They weren’t just hurling angry words in the 2004
campaign.

In September of that year Yushchenko was poisoned with a heavy dose of a
dioxin chemical that disfigured him–and was clearly intended to kill him.
He became ill after having dinner with the chief of Ukraine’s security
service.

Yushchenko and Yanukovych have far different views on cooperation with the
East and West–particularly with Russian President Vladimir Putin, who was
deeply unhappy about the 2004 results. The ambitious Tymoshenko is waiting
for her former ally to make a misstep.

Perhaps the new governing model will find broad support. But you can’t help
but think Ukrainians will feel a little dismayed and disarmed by the uneasy
alliance running the country. Think of a Bush-Kerry alliance running
Washington, with a little dioxin between friends.               -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

===========================================================
9. TELLING THE WORLD IN 2007-2008 ABOUT THE HOLODOMOR 
       75th Commemoration of the 1932-33 Ukrainian Terror-Famine-Death-Genocide 
           
PRESENTATION: By Morgan Williams
Holodomor Roundtable, IV World Forum of Ukrainians
Ukrainian House, Kyiv, Ukraine, Saturday, August 19, 2006
UNIAN news agency, Kyiv, Ukraine, Monday, August 21, 2006

Thank you very much for the opportunity to participate in this
Holodomor Roundtable.

First I wish to pay my respects and tribute to Dr. James Mace and his
work regarding the Holodomor (terror-famine-death-genocide) in Soviet
Ukraine.  It does not seem possible that we are having a meeting of this
type in Kyiv without Jim being here and contributing.

It is very important that Jim’s important and outstanding work be
remembered and continued by those around this table.  Corrupt politicians
and corrupt political systems that caused the human spirit to wither and
crushed the life out of millions of people must always be in the forefront
of our research and memory.

Our knowledge of such inhumane and destructive people and systems in
the past must always cause us to stand up and defend freedom and
democracy and fight against modern politicians and political systems that
crush the human spirit and destroy human lives.

I told Jim several years ago that I was not a researcher, scholar or writer.
He said Morgan then your job should be to “tell the world about the
Holodomor.”

After some study I decided my work would be to assist in telling Ukraine
and the world about the Holodomor ‘through the eyes of Ukrainian artists.’
I have now been working on this task for ten years and expect to be doing
this for many years to come.

       FAMINE IN SOVIET UKRAINE CAUSED BY PARDONABLE
 ERRORS? WAS IT INTENTIONAL OR HAPPENED BY ACCIDENT?

Just yesterday, Friday, August 18, a Deutsche Press Agence (DPA) news
story out of Kyiv stated:

     “Ukraine’s national intelligence agency the SBU on Friday opened up
     formerly-secret state archives on brutal Soviet era-famines causing the
     deaths of millions.

     SBU historians after four years of reviewing old KGB records made
     public more than 3,000 pages of 130 official state documents.

     It was the first time any former Soviet republic had released to the
     public archival information concerning the mass starvations, said
     Vasyl Danielenko, an SBU spokesman.

     The entire formerly-classified archive of the former Soviet republic
     Ukraine was now available for viewing in paper or digital format, or at
     the Internet web site www.ssu.gov.ua, he said.

    The Soviet government in its early years of existence presided over
     three deadly and wide-reaching famines – in 1921-22, 1932-33, and
     1946-47.

     Between six and ten million Ukrainians died of starvation in 1932-33,
     after Soviet leader Josef Stalin ordered the forced confiscation of
     food from the Ukrainian countryside.

     It was one of history’s worst instances of human-sponsored mass death.

     Many Ukrainians believe Stalin’s goal was the genocide of the Ukrainian
     nation. Known in Ukraine as the ‘Holodomor,’ the 1932-33 famine is
     reviled in Ukraine in a way similar to the Jewish Holocaust
     internationally.

     Some Ukrainians however say the famines were caused by pardonable
     errors by Soviet leaders of the day, rather than an conscious effort by
     Moscow to wipe out all Ukrainians.

     Besides Ukraine, the famines affected southern Russia, and portions of
     the modern states Moldova and Kazakhstan.

     The dispute over possible Soviet complicity in the famines has remained
     topical in Ukraine to the present, in part, because historians had been
     unable to gain access to Soviet-era archives concerning the events, to
     determine whether the Kremlin killed millions of Ukrainians
     intentionally or by accident.”

One can easily understand from the information in the news article that the
work of telling the world the truth about the genocidal famine in Soviet
Ukraine in 1932-1933 that caused the deliberate deaths of millions of
Ukrainians and severe pain, suffering and great personal and economic
loss for millions more still must be carried on and expanded.

                         PRESIDENT VIKTOR YUSHCHENKO

Ukrainian President Viktor Yushchenko long has had a deep personal
interest in Ukrainian history and has been one of the leading advocates
of telling Ukrainians the truth about what happened here in 1932-1933
and telling the world about the Holodomor.

On several occasions before and during his presidency Yushchenko has
called upon the people and government of Ukraine, and on Ukrainians
and Ukrainian organizations around the world to join together in new
ways to spread the word.

President Yushchenko has said the government of Ukraine should take
the lead to make this happen in Ukraine and also take the lead world-wide
through the Ministry of Foreign Affairs and the Ukrainian Embassies.

Most importantly, the President has said that he wants to see this happen
during the 75th Memorial Commemoration of the Holodomor in the
years 2007-2008 for the millions who died and the millions more who
suffered great losses and in someway survived this unbelievable tragedy.

                   NOW IS THE TIME FOR REAL ACTION

It is now August 2006, and the beginning of the 75th Memorial
Commemoration of the Holodomor is just months away. Now is the
time for the Government of Ukraine to finalize the development of
concrete programs and actions and see that those programs are
implemented in a timely and effective manner to produce concrete
results.

There have been far too many starts and stops, ups and downs,
backward and forward movements in the efforts of the Ukrainian
government over the years and also in the last eighteen months.

I will list some of the top priorities for action as my colleagues around
the world and I see them. This list is in no way exhaustive and will mainly
focus on the strong leadership needed at this time from the government
and people of Ukraine.

1. HOLODOMOR MEMORIAL/HISTORICAL COMPLEX IN KYIV —–

President Yushchenko has announced on several occasions he wants
the government to build a world-class Holodomor memorial, historical
research, and educational complex in Kyiv by the fall of 2008. The President
has indicated this is a top priority for him during his tenure as President.

The President in his speech to the IV World Forum of Ukrainians yesterday
at the Ukrainian Palace again stated he would make sure such a monument
(complex) is built.  Yushchenko said the monument would be appropriate
to the level of the tragedy.

The historical complex we recommend would include a research center for
scholars, library, large exhibition hall, museum, monument, chapel, archive
and document center, conference rooms, bookstore, family research center,
memorial gallery for victims, memorial gallery for survivors, and other
key facilities, such as those found in the leading historical centers around
the world.

All of the people I work with internationally strongly support this concept
and believe it is the number one priority in the new and expanded program
to tell the world about the Holodomor.

We urge the President, Cabinet of Ministers and the Parliament to move
forward rapidly with this project.  The design and implementation of the
complex should meet world-class standards and be the type of institution
that will support scholars, researchers, artists, students, historians,
political scientists, survivors and families of victims and draw millions of
visitors from around the globe.

The major concept most interested parties support is one where the
Holodomor Complex would be a separate, stand-alone entity, and not one
combined with another facility or organization that covers other historical,
or repression events or other periods in Ukrainian history.

I believe there have been at least four competitions in Ukraine during
the past six years for the design of such a complex, and I have been told
that another one is going on at the present time between the four finalists
of the last competition. There also have been many discussions and
debates about where to build such a complex.

Now there is also considerable confusion about the ‘Institute of Memory’
recently created by the Cabinet of Ministers and what exactly its agenda
will be.  There is confusion about exactly how the Holodomor historical
complex would interface with the ‘Institute of Memory.’

There is also no clear picture as to how such a complex would be
paid for.  Most people I visit with who understand the Ukraine government
say it is fine to make such plans but there are no funds to pay for such
a complex.

Does the President have an agreement with Prime Minister Yanukovych
and Speaker of the Parliament Moroz to support and pass the legislation
needed to provide the necessary funds for a world-class historical
complex? If not how soon can such an agreement be reached?

The President of Ukraine needs to follow-through  immediately on his
announced Holodomor program and use the full powers of his office
to make a Holodomor Historical Complex in Kyiv a reality in the near
future.

We feel that if such a complex is not built while Viktor Yushchenko is
president there is a strong possibility one will never be built.  At least a
real opportunity and many years will be lost, once again.

We call upon the President to make this project one of his top priorities
today, to issue the appropriate decrees and orders, to negotiate the
necessary agreements with the political leadership, and to move the
building of a Holodomor Memorial, Historical, Research and Educational
Complex in Kyiv forward immediately to completion.

The building of such a complex would provide important momentum
and drive to all of the Holodomor commemoration efforts around the
world.  We do not need more speeches, we do not need more promises,
only real action is needed.

2. NEW HOLODOMOR BRIEFING BOOK PUBLISHED ON THE
MINISTRY OF FOREIGN AFFAIRS (MFA) WEBSITE —–

There will be many opportunities for officials of the government of
Ukraine and others to give presentations about the Holodomor during
2007-2008.  Most of the research, writings and personal stories used
for such presentations now comes from books published 20 years
ago or more outside of Ukraine.

The personal and historical material in these books was obtained largely
from sources outside the Soviet Union and from Ukrainians who left
Soviet Ukraine. This work was badly needed, provided the world with real
information  about the major tragedy, and will always serve as a strong
basis for future scholarship.

An online briefing book needs to be developed during 2006 that outlines
the basic facts and story of the history of the Holodomor written mostly
by a group of researchers and scholars who have lived and worked in
Soviet Ukraine and Ukraine after independence in 1992, most of their
professional career.  This briefing book should be published on the
website of the Ministry of Foreign Affairs.

There has been considerable research and publications about the
Holodomor in Soviet Ukraine since 1988 and many personal stories have
been documented from witnesses who lived in Ukraine.  This information
needs to be added to the body of knowledge that was developed previously
outside Ukraine and made available to the world in multiple languages.

Many times officials of the government of Ukraine give out very different
and conflicting information about the Holodomor.  Officials need to be
able to access the key information quickly and easily. This tragic event
is also called by many different names and all of this only adds to the
difficulty of telling the world about the Holodomor.

3. MINISTRY OF FOREIGN AFFAIRS/UKRAINE EMBASSIES —–

President Yushchenko has stated many times that he wants the Ministry
of Foreign Affairs through their activities and their Embassies to
substantially increase their work during 2007-2008 to tell the real story
of the Holodomor.

The Ambassadors’ and staff of the Ukrainian Embassies need additional
resources and materials to assist them in their work to carry out the
directive of President Yushchenko.

One idea is to take seventy or more of the political-type posters from
Holodomor poster art (created mostly by Ukrainian artists living in
Ukraine) and a few other important artworks and reproduce them in
high quality images the size of a normal poster.

The reproduced images can be encased in very durable plastic sleeves
with rings in the top two corners for easy hanging.  Each complete set
can be rolled up together for easy handling and shipping.

Sets the Holodomor posters could be shipped to each Embassy with
copies of a small brochure about the Exhibition posters.

This will allow each Embassy to easily hold a Holodomor Exhibition
themselves and also to loan the materials to a wide variety of organizations
that would like to sponsor a Holodomor exhibition during 2007-2008.
This program will provide an effective tool so that many smaller
Holodomor educational exhibitions can be held around the world.

Such easily usable, durable, Holodomor exhibition sets could also be
made available to libraries, schools and other organizations in Ukraine
and around the world. We are presently cooperating with the Ministry
of Foreign Affairs on the development of such a program. The Ministry
has been supportive and encouraging regarding this approach.

A set of CD’s, power-point presentations could also be developed
using the visual materials.

4. HOLODOMOR EDUCATIONAL ACTIVITIES FOR CHILDREN —

It is very important that an extensive program of education and activities
be developed for Ukrainian school children to tell them and involve them in
understanding the historical background and what actually happened during
the Holodomor.  This program should be carried out during the 75th
Commemoration of the Holodomor in 2007-2008.

One of the most effective ways this has been done by other organizations
around the world who have been involved in teaching young people
about other tragic historical events has been through educational programs
that end with children producing their own works of art about the tragic
event.

All the art works are then presented in a major exhibition by the school.
This event then involves the extended families of the children and others in
the local community. Then the best local productions are entered into a
regional contest. The winners of the regional contest are entered into a
national contest. Many Holodomor exhibitions can then be held using this
art work and these will significantly broaden the visibility and
effectiveness of the program.

The art work related to other historical tragic events has many times been
published in books and made available to the general public.  Such books
are another very effective way to get the story and the message out to a
larger audience.  Children’s art works are in important and effective tool
for telling the story.

Some organizations have found effective ways to involve corporate
sponsors in such educational and art programs.

One Ukrainian graphics artist, Mykola Bondarenko, from the Sumy Region,
interviewed from 1988 to 1993 all of the people in his local district that
survived the Holodomor.  He then created as series of 75 linocuts that show
the various items children and their families were forced to eat in their
desperate struggle to stay alive.

This concept of teaching children about what children in 1932-1933 were
forced to eat to try to stay alive could be developed into an effective
tool for the education of children and for the creation of art works.

Some Ukrainian organizations around the world have created educational
programs for children and these could be used as a guide for a new
program in Ukraine.  It is also highly recommended that Ukrainian
organizations around the world expand their efforts to teach children
about the Holodomor.

5. HOLODOMOR EDUCATIONAL AND COMMEMORATIVE
EXHIBITIONS IN UKRAINE —–

The present 2006 program of twenty-one Holodomor Exhibitions sponsored
by Ministry of Culture in Oblast Centers should be continued into 2007 and
2008.  During 2007 and 2008 the Holodomor Exhibition could be presented
in around 50 of the largest cities in Ukraine that were not included in the
original 21, including those in Western Ukraine.

This program should be expanded to include more educational materials,
trained guides at the Exhibitions, and be held in closer cooperation with
the Ministry of Education to provide for the opportunity for more school
children to participate.

6. HOLODOMOR COMMEMORATION EVENTS IN NOVEMBER —–

The major Holodomor Memorial and Educational Program sponsored by
the government in 2005 should be should be continued in November
2006-2008. The program was entitled “The Swaying Bells of Memory”
and included an exhibition at the Ukrainian House in Kyiv. This program,
which was supported by the Presidential Administration, was a major
improvement over such government-sponsored programs held in previous
years.

All Ukrainian organizations around the world are encouraged to expand
their Holodomor commemoration programs in 2007-2008.

7. HOLODOMOR EDUCATIONAL AND COMMEMORATIVE
INTERNATIONAL EXHIBITIONS —–

Several Ukrainian groups around the world have asked the Government
of Ukraine to assist them in bringing a major, world-class Holodomor
Educational and Commemorative Exhibition to their city during 2007-2008.

Such requests have been received from Ukrainian leaders in Washington,
D.C., New York, Chicago, Cleveland, Philadelphia and Boston
(United States), Toronto, Ottawa, and Winnipeg (Canada); Paris (France);
and from the leader of the Ukrainian organizations in Australia.

Ukrainian and other organizations in these major cities are prepared to
assist with obtaining locations for exhibitions, local publicity and other
necessary arrangements and to assist in the costs of the exhibitions.

The Government of Ukraine through the Ministry of Foreign Affairs
should support such a program.  Since the lead time for such events
is quite long such a program would have to be approved by the
government this fall to be effective.

8.  “HOLODOMOR, THROUGH THE EYES OF UKRAINIAN
ARTISTS”… A New Historical Album —–

We have been working with the Ministry of Culture for several months
to create and publish a major new Holodomor historical album.

The album would tell the Holodomor story in text and through over
250 visual artworks created by Ukrainian artists. This would be the
first book of this kind published about the Holodomor.

The Ministry of Culture has been very cooperative and we hope that
this program will result in the new book being printed in late 2006.
The work with the Ministry has been very productive and the program
is moving forward.

One goal would be to distribute the books to thousands of Ukrainian
schools and libraries during 2007-2008.

The goal also includes finding the funds necessary to translate the book
into English and possibly other languages and have the book available
for distribution around the world by the Ministry of Foreign Affairs to
organizations, such as the United Nations. The album also would be
available to Ukrainian organizations for distribution.

9. “LIGHT A CANDLE” —–

The ‘Light A Candle” concept and activities should be continued and
expanded to other cities around the world.  The thousands of candles
placed on Mikhailivska Square in Kyiv in late November of 2003 under
the leadership of Viktor and Kateryna Yushchenko was most effective
and powerful.

10. TESTIMONY OF HOLODOMOR WITNESSES —–

The number of people alive today who actually experienced the Holodomor
in 1932-1933 is rapidly declining.  Programs to take testimony from these
survivors needs to better organized, funded and expanded quickly.

11. ENGAGING THE ARTISTIC COMMUNITY IN UKRAINE —–

The artistic and educational community in Ukraine was not allowed to
use their talents and skills to tell anyone about the Holodomor for 55
years.

The community since 1998 has been slow to tackle the Holodomor and
the other dark moments in Ukrainian history during the past 100 years.
The government should find ways to encourage the artistic and
educational community to become more engaged in Ukrainian history.

12. REAL PHOTOGRAPHS OF THE HOLODOMOR —–

Most all of the real photographs used to show the Holodomor in Ukraine
over the past 70 years were actually taken by international relief agencies
along the Volga River in Russia during the 1921-1922 famine.

The use of such photographs to depict the Ukrainian Holodomor were
first used by Nazi Germany in a major anti-Soviet campaign in 1934-1935

and then used by American media giant Randolph Hearst in stories on the
front page of several major US newspapers in 1935. The use of these
Soviet Russian photographs then became quite widespread in publications
of various types and are still being used widely today.
The Ukrainian government was even prepared to publish a new Holodomor
stamp in November of 2003 that featured a photograph taken in Soviet
Russia in 1921-1922.  Fortunately I was able to lead an effort to have the
production of this stamp stopped and a newly designed stamp was then
issued without the Soviet Russian photograph.

We recommend the President of Ukraine appoint a special international
committee to investigate the issue of why there are so few real photographs
of the Holodomor, to conduct research to see if there are some photographs
of the Holodomor in various governmental, educational, historical and private

archives worldwide that could be found and documented.

This committee should clearly and accurately identify the photographs that
were taken in Russia in 1921-1922 and thus should not be used anymore to
depict the Ukrainian Holodomor. The committee should also identify the
photographs that can historically be proven, beyond a doubt, to be from
the Ukrainian genocidal famine in 1932-1933.

13. PUBLICATION OF MATERIALS AND DOCUMENTS —–

 
According to Canadian scholar Roman Serbyn in 1990 the Party put
out a collection of documents in Kyiv on the famine in Party archives.
The collection was supposed to have been augmented with additional
material and republished for the 70th memorial commemoration in 2003.
 
Unfortunately the publication was held up. Serban said he understands
the Archives did their job and that it is now being held up the Institute
of History (NAN Ukrainy).
The collection’s bibliographica reference is: “Holod 1932-1933 rokiv na
Ukraini: ochyma istorykiv, movoiu dokumentiv. Kyiv, 1990.”
 
The National Academy of Sciences of Ukraine (NANU) should bring
together other documents as well (including the new SBU documents)
and publish them in a series of volumes (could probably put together 3
or more volumes) and have them out no later than late 2007 or early
2008. A summary volume featuring very key documents should be
published in English.
 
14.  INTERNATIONAL CONFERENCES IN KYIV —–

A serious of international conferences should be called for in Kyiv in the

summer or early fall of 2007 on the Holodomor (Terror-Famine-Death-
Genocide.) The conferences must be planned now and invitations sent
out not later than this fall.
 
15. UNITED NATIONS DECLARING 1932-1933 ACTS GENOCIDE —–

Finally, in preparing Ukraine’s brief for the UN, the Ministry of Foreign
Affairs should consult historians and legal experts, especially someone

well versed in the legal side of the Convention on Genocide (1948) and its
application in trials since then.
 
The Ukrainian case must be made in the name of the Ukrainian nation within
the whole USSR at that time, according to Canadian scholar Roman Serbyn.
 
Serbyn said, “In other words, the over 8 million Ukrainians living in Northern
Caucasus (especially Kuban), and the regions of RSFSR adjacent to Ukraine
and inhabited by great numbers of Ukrainians must also be included. The
Convention must be interpreted in relation to the whole Ukrainian population
of USSR of 1930s.

16. SPEAKING OUT AND TAKING ACTION AGAINST PRESENT
DAY GENOCIDES —–

The tragedy of the Holodomor against millions of Ukrainians should be
enough to cause the government of Ukraine and Ukrainian organizations
around the world to be one of the leaders in the global effort to identify
and support interventions to stop modern day genocides organized and
carried out by corrupt political leaders and corrupt political systems.

Unfortunately this is not the case at all.

In addition to being the right thing to do if Ukrainians were effective
today in the world arena about genocides this would give Ukrainians
considerable more leverage and real legitimacy to tell the world about
the Ukrainian genocide of 1932-1933.

We encourage the government of Ukraine and Ukrainians organizations
around the globe to take the lead in speaking out strongly and clearly
against modern day genocides and support strong actions by the
appropriate international organizations to intervene and stop genocidal
actions in a wherever they occur in a timely and effective way.

NO government or leading international political leader really listened to
the horrible cries of Ukrainians in 1932-1933. The international news
media was not allowed into Soviet Ukraine to report what really was
going on.

NO one was allowed by the Soviet communist government to come to the
assistance of the 33,000 Ukrainians who were being starved to a terrible
death every day in the spring of 1933. International relief agencies were
told their assistance was not needed as there was no famine, no problem.

NO government or international organization intervened to stop the murder
of millions of Ukrainians.

This total lack of action by the world community was not appropriate in
1932-1933 and it is not appropriate today when a genocide occurs. The

world must act quickly when genocide occurs.  Too many times action
is ready to be taken only after the major portion of the killings have occurred.

Thank you very much for this opportunity. All of us need to expand our
work. There is so much work to do.                          -30-
———————————————————————————————-
NOTE: Morgan Williams is Director, Government Affairs, Washington
Office SigmaBleyzer Private Equity Investment Group and the publisher
and editor of the Action Ukraine Report (AUR), Washington, D.C..

He serves as a member of the Organizational Committee for the 75th
Anniversary of the Famine in Ukraine appointed by the Cabinet of
Ministers; Curator & Trustee, Holodomor Education and Exhibition
Collection; Chairman, Dr. James Mace Holodomor Memorial Fund
of the Ukrainian Federation of America, Philadelphia. morganw@patriot.net.
———————————————————————————————-
LINK: http://www.unian.net/eng/news/news-164243.html

———————————————————————————————
NOTE:  The presentation above is the final draft of the presentation
that was edited by the author. It is a later draft than was published
by the UNIAN news agency.   
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
10. UKRAINE’S NEW GOVERNMENT: PERSONS, BIOGRAPHIES

ANALYSIS AND COMMENTARY: By Oleksandr Volf
Ukrainian newspaper 2000, Kiev, in Russian 11 Aug 06; pp e1, e3, e4
BBC Monitoring Service, United Kingdom, Wednesday, Aug 16, 2006

A weekly paper has carried profiles of all the members of the new Ukrainian
cabinet.

The profiles of President Viktor Yushchenko’s appointees, Interior Minister
Yuriy Lutsenko, Foreign Minister Borys Tarasyuk, Defence Minister Anatoliy
Hrytsenko and Justice Minister Roman Zvarych, are far from flattering.

The following is the text of the article by Oleksandr Volf entitled
“Ukraine’s new government: persons, biographies, informal links” published
in the Ukrainian newspaper 2000 on 11 August; subheadings are as published:

Viktor Yanukovych has become the first person in recent Ukrainian history to
have managed to get into the cabinet as prime minister twice (to be sure,
there was also Vitaliy Masol, but the first time he headed a cabinet that
was then called the Council of Ministers, back under Soviet power) and
become the head of the 13th government in the 15 years of independence.

And among the members of his present team there are almost no novices: of
the 24 deputy prime ministers and ministers only four – Volodymyr Rybak
(deputy prime minister and minister of construction, architecture and
housing utilities), Anatoliy Holovko (industrial policy minister), Mykola
Rudkovskyy (transport and communications minister) and Vasyl Dzharty
(environment minister) did not have previous experience of working in the
cabinet system.

Nevertheless, they all need introducing – if only for the sake of
“refreshing” the public memory regarding who both the new and the “old new”
government members were in the past and what sort of professionals and
personalities they are. We will make an exception only for the prime
minister himself – his biography is sufficiently well known to the citizens
of Ukraine.

[1] MYKOLA AZROV, first deputy prime minister and [2] finance minister
He is 59 years old, born in the town of Kaluga (Russia) and graduated from
Moscow State University (geologist-geophysicist).

He devoted 25 years of his life to working in his speciality in Russia’s
Tula and Ukraine’s Donetsk (in the latter case for over 10 years he headed
the Ukrainian state research and design institute of mining geology,
geo-mechanics and mine surveying).

After that there was an abrupt career somersault: in 1996 President Leonid
Kuchma appointed him chairman of the State Tax Administration of Ukraine
(STAU).

Such a choice by the head of state can be explained only as an attempt to
act in the framework of a Western model of personnel management, under which
the main demand on a top leader is not a knowledge of all the subtleties of
the subject being run, but the ability to organize the process
(incidentally, opponents of the first deputy prime minister constantly harp
on about his lack of relevant education, hinting thereby at incompetence –
the latter postulate is especially zealously defended by [opposition leader]
Yuliya Tymoshenko and [former Finance Minister] Viktor Pynzenyk.)

Azarov coped with the task, virtually becoming the founding father of the
STAU, which arose on the basis of the state tax inspectorate and was
transformed from an adjunct to the Finance Ministry into an independent
fiscal body.

And in the development of the structure a certain consistency was to be
traced (probably planned originally) in the formation and implementation of
the method of taxation: from harsh “processing” of the taxpayers in the
second half of the 1990s (in effect one can talk about “wringing out”
money – nobody wanted to pay it, but they had to be taught to somehow) to a
certain liberalization of the rules of the game towards the end of the first
premiership of Viktor Yanukovych.

True, by that time Mykola Azarov was no longer directly at the head of the
taxmen, but was coordinating the actions of the whole of the state’s
economic bloc in the same capacities as now: first deputy prime minister and
finance minister.

It can be assumed that now he will demand the appointment of his man as
chairman of the STAU (possibly it will be Fedir Yaroshenko, who already
headed the tax service in 2004 and is considered “a shadow” of Mr Azarov) in
place of Oleksandr Kireyev, who is a protege of Viktor Yushchenko, whose
deputy he was for seven years in the National Bank and to whom he is known
even longer – back from the times of joint work in the Ukrayina bank. In
connection with this, we have potential grounds for conflict between the
president and cabinet.

In the government and the STAU under Azarov’s leadership a whole galaxy of
domestic managers and financiers was formed, the most famous of whom is
probably the former prosecutor-general, Svyatoslav Piskun.

One can also recall the present STAU deputy chairmen Hryhoriy Operenko,
Borys Horbanskyy and Serhiy Lekar; the first deputy chairman of the National
Bank, Anatoliy Shapovalov; the deputy chairman of the accounts chamber,
Oleksandr Yaremenko; the chairman of the State Committee for Financial
Monitoring, Serhiy Hurzhyy).

In the logic of things, if these people were required both under the
previous and under the current president, it means that they have a
reasonably good training provided by Mykola Azarov, who is famous for his
utmost exactingness, meticulous assiduity (one can say pedantry) and ability
to achieve his set goals.

[3] ANDRIY KLYUYEV, deputy prime minister for the fuel and energy complex
He is 42 years old, born in Donetsk and graduated from the Donetsk
Polytechnic (mechanical engineer). He belongs to the notional group
“official rich men in state service”.

Back in the early 1990s he created a systematic business (before that he
worked in a number of mines of the Donbass and studied as a graduate at the
Donetsk Polytechnic University), which in time grew into the big corporation
Ukrpidshypnyk [Ukrainian Bearings], which until recently was headed by
Klyuyev’s younger brother Serhiy (now a people’s deputy for the Party of
Regions).

Another person to emerge from that structure is the first deputy to the
former fuel and energy minister, Ivan Plachkov – Serhiy Titenko (it is not
ruled out that thanks to this he will keep his job).

Andriy Klyuyev himself back in 1994 went to work in bodies of the local
executive: in Donetsk he was deputy to the chairman of the regional council,
Volodymyr Shcherban (now living in the USA) and of the regional state
administration (also Volodymyr Shcherban and Viktor Yanukovych), first
deputy to the chairman of the Donetsk City Executive Committee, Volodymyr
Rybak, who is now his colleague in the government, and also occupied a post
similar to the present one in the first Yanukovych government.

He is known as an experienced administrator, systematically thinking and
exacting; with his arrival in the cabinet in 2002 he introduced a fashion
there for expensive elegance through his adherence to the clothes of famous
“consistent” brands. There are reports that he has reasonably good relations
with [Interior Minister] Yuriy Lutsenko.

[4] DMYTRO TABACHNYK, deputy prime minister for social and

humanitarian issues.
He is 43 years old, born in Kiev and graduated from the history faculty
of the Shevchenko Kiev National University.

Being a historian not only by education, but also by calling, he also has
not bad talent as a publicist – in the second half of the 1980s, catching
the mood of the moment, he was one of the first to start printing material
in the sociopolitical media about Stalin’s repressions, thanks to which he
gained his first fame.

In bodies of state administration from the very start of Ukraine’s
independence he worked in the Secretariat of the Supreme Council
[parliament], headed the press service of the Cabinet of Ministers in the
government of Leonid Kuchma, for whom he became virtually the head of his
election campaign at the 2004 [as published, perhaps 1994 is meant]
presidential elections and the first head of the presidential administration
(at the age of 31), remaining at the same time an adviser to the head of
state. In 1998 and 2002 he was elected a people’s deputy.

On the latter occasion he gave up his powers ahead of schedule in connection
with his appointment as “humanitarian issues” deputy prime minister in
Viktor Yanukovych’s first government.

He deals with the sphere entrusted to him fairly competently, although he is
not a supporter of moving the vector of state culture policy towards
Ukraino-centrism, which we have been observing recently – rather he
advocates a cosmopolitan model of coexistence of ethnicities and their
cultural legacy.

In connection with this, his present appointment is perplexing to a certain
extent, since segments of history and culture, because of personal
sympathies, are under the personal supervision of Viktor Yushchenko, who,
during the formation of the government, demanded for himself the right to
decide on staff for the humanitarian sector: the ministers of health, family
issues, youth and sport, culture and tourism are 100 per cent his people
(the only exceptions are the ministers of labour and social policy and
education and science).

But facts are still facts – Dmytro Tabachnyk has returned to his previous
job and it is entirely probable that he can hold on there. For this he has
both the abilities of an administrator and personal qualities, first and
foremost a perfect grasp of the art of “corridor” politics.

[5] VOLODYMYR RYBAK, deputy prime minister and minister of

construction, architecture and housing
He is 60 years old, born in Donetsk and graduated from the Donetsk State
University (economist).

His “additional” ministerial duties testify most likely to the fact that he
will be responsible for regional policy, on which he is considered to be a
connoisseur, since the greater part of his working biography was connected
precisely with the areas of construction, housing utilities and local
government.

In these areas he trod the path from a foreman in the Donetsk trust
Santekhelektromontazh [plumbing and electrical installation] to mayor of
Donetsk (1993-2002), replacing in the latter job the former acting prime
minister Yukhym Zvyahilskyy (now a people’s deputy for the Party of
Regions), to whom, prior to that, he had been first deputy.

He is known as a strong economic manager. His age counts against him, and as
a result of his age he has a certain conservatism of thinking at a time when
the area subordinate to him is almost the most backward in the Ukrainian
economy (if we don’t count construction), and so requires contemporary
approaches and rapid action.

[6] YURIY MELNYK, minister of the agro-industrial complex
He is 44 years old, born in the village of Verkhnyachka, Khrystynivka
District, Cherkasy Region, which “gave” Ukraine’s executive a whole range of
notable and influential personalities.

For example former ones – the SBU [Security Service of Ukraine] chairman,
Ihor Smeshko, and the defence minister, Vitaliy Radetskyy (now the chief of
the National Defence Academy of Ukraine) – and current ones – the first
deputy minister of transport and communications, Petro Tsybenko; the deputy
chairman of the Supreme Justice Council, Lidiya Izovitova; and the
presidential adviser and head of the main service for issues of military
units and law-enforcement agencies, Ivan Kutsyk (who, incidentally, was seen
as one of the likeliest candidates for the post of interior minister).

He graduated from the Ukrainian Agricultural Academy (zoological technical
engineer). He is a government official with a big period of service. He was
in the system of the Agricultural Policy Ministry (agro-industrial complex)
from 1996, including in 1998-2005 as deputy minister (he “outlived” seven
ministers). From October 2005 he was deputy prime minister for agricultural
issues in the cabinet of Yuriy Yekhanurov.

Melnyk’s appointment is illogical from the political viewpoint, since the
post of “agrarian” minister is allocated to the quota of the CPU [Communist
Party of Ukraine], at a time when it was given to a person who is a member
of the clearly anti-communist UPP [Ukrainian People’s Party].

hat is more, the scrapping of the duty of the relevant deputy prime
minister, which for over 10 years now has unfailingly existed in the
government, may be evidence of the allocation to agriculture of a second or
third-ranking role in the formation of the economic policy of Yanukovych’s
cabinet.

A great dislike of publicity can be added to the features of Melnyk’s
character. Despite such solid government experience and high office that he
recently occupied, he is little known “by face”, not to mention his views on
the industry that he is in charge of, his politics and life as a whole.

[7] YURIY LUTSENKO, interior minister
He is 43 years old, born in Rivne and graduated from the Lviv Polytechnic
(electronic engineer). His father – Vitaliy Lutsenko (died in 1999 when he
was a people’s deputy from the CPU) – was for many years the first secretary
of the Rivne city [Communist Party] committee and, towards the end of Soviet
power, of the regional committee of the CPU.

For this reason, when Lutsenko relates how, when he was a student he almost
engaged in dissident behaviour, there is little credence in it – such
behaviour would have deliberately been the kiss of death to the career of
Lutsenko senior.

Yuriy Lutsenko is the same age as [fugitive former head of Directorate for
State Affairs] Ihor Bakay, also from Rivne, not a big city, and in the years
of their childhood even smaller, and so it is not ruled out that they may
have known each other, although they were on different steps of the social
ladder (Bakay is the son of a driver and a nurse).

It is probably precisely owing to his family’s position that one can explain
the fact that after the institute Lutsenko in some five years rose from
foreman to chief designer at the Rivne Hazotron plant, a defence enterprise
that, with the disintegration of the USSR, fell into collapse, which forced
Lutsenko to look for another application for his talents.

He quickly got the taste for power – at the age of 30 he managed to work as
deputy chairman of the Rivne Regional Council (nowadays people come to
ministerial duties almost straight out of school, but 10 years ago such
things were rather the exception), to head the running of the economy of the
local regional state administration, and in 1997 was appointed deputy to the
minister for science and technology, Volodymyr Semynozhenko, after whose
removal he lost his job

He was taken on by Prime Minister Valeriy Pustovoytenko as an adviser, but
stayed in that hypostasis for about six months – probably the head of
government did not value the abilities of Lutsenko to talk amusingly and
figuratively, and started demanding advice to the point, which turned out to
be thin on the ground in the latter’s intellectual baggage.

So, Lutsenko became an adviser to people’s deputy [Socialist Party leader]
Oleksandr Moroz, effectively thanks to patronage, and became well-known and
recognized in society.

To start with it was the tape scandal [recordings made in Kuchma’s office
apparently implicating him and other senior officials in crimes] during
which Lutsenko played the role of “the man with the tape recorder”, pressing
the relevant buttons of that sound reproduction device during the news
conference of the present speaker [Moroz].

Then the Ukraine Without Kuchma movement started, with the well-known March
clash between police and demonstrators that to a considerable extent
happened thanks to the activity of the current interior minister, although
at that time he strangely was not noticed in the ranks of the people who
appealed for people to go “into battle”.

There followed a seat in parliament and the orange events, used to the
utmost by Lutsenko for self-publicity, thanks to which he found himself in
the chair of head of the Ukrainian police.

Here, as is known, running through his rhetoric of the past two years have
been accusations against Yanukovych and his team regarding criminally
punishable acts (without any proof of such).

Therefore, Lutsenko’s assent to work under the leadership of someone, whose
name even yesterday he was happily throwing mud at, caused not simply
surprise in society, but shock (especially if one considers that Lutsenko
almost on the eve had sworn to the whole country that he would not join a
Yanukovych government for anything).

Regardless of what justifications for this step the three-times interior
minister thinks up (and he is a talented demagogue – his arguments will
deliberately be convincing), there can only be two real explanations: either
Lutsenko liked power so much that for the sake of it he is prepared to forgo
any principles, or he has been “hooked” by some very harsh compromising
material that has arisen recently, and now is simply obliged to listen to
the people whom he publicly humiliated yesterday.

So it is not a matter of someone (even the president of Ukraine) needing
Lutsenko as a minister (frankly speaking, as a minister he is really
extremely weak). It is not ruled out that it was precisely the Regionals
[i.e. the Party of Regions] that insisted on this candidacy (they certainly
backed it readily) with the aim of “re-education”.

In any case, one can only feel pity for Lutsenko in this situation.
Although, on the other hand, whom can he blame apart from himself?

[8] YURIY POLYACHENKO, health minister
He is 43 years old, born in Kiev and graduated from the Kiev Medical
Institute (orthopaedic traumatologist). He is the son of the Our Ukraine
people’s deputy and long-time president of the Kyyivmiskbud holding,
Volodymyr Polyachenko.

He is a professional doctor manager, working from 1986 to 1994 as a senior
member of staff at the Ukrainian Orthopaedic Research Institute and all the
rest of the time was in leading posts – chief doctor of the Medbud medical
association (part of Kyyivmiskbud), director of a curative treatment centre
in Cuba.

Then he was deputy and first deputy health minister (under three ministers,
including under one leader of the Party of Regions – Rayisa Bohatyryova) and
deputy to the secretary of the NSDC [National Security and Defence Council],
Volodymyr Radchenko.

He is one of the few ministers who originally built up the team both of the
president and the prime minister, a balanced, tolerant person who knows how
to find a common language with everyone (which, actually, is required of a
medical worker who, by definition, is outside politics).

As an administrator, unlike his predecessor, Mykola Polishchuk, he was not
subjected to special critical attacks from the media and the public when he
was working in the same job in the Yekhanurov cabinet.

Among the big negatives of that time one can cite only the problems with
international funding of programmes for combating HIV/AIDS, but they are
probably not the fault of Polyachenko, who simply was forced to eliminate
the consequences of the ill-considered and adventurist actions of the
previous leadership of the Health Ministry.

[9] BORYS TARASYUK, foreign minister
He is 57 years old, born in the Dzerzhynsk District centre in Zhytomyr
Region and graduated from the Shevchenko Kiev National University
(international affairs lawyer).

A career diplomat, he joined the structure of the Ukrainian SSR Foreign
Ministry immediately after graduating, moving from a ministry attache to
head of the department of political analysis and coordination and head of
the Foreign Ministry secretariat.

In 1987-1990 he worked as an instructor in the department of international
relations of the CPU Central Committee.

With the proclamation of Ukrainian independence he was successively deputy
to Minister Anatoliy Zlenko, first deputy to Minister Henadiy Udovenko,
ambassador to Belgium, head of the Ukrainian mission to NATO and minister of
foreign affairs in the governments of Valeriy Pustovoytenko and Viktor
Yushchenko.

In the latter case, after leaving office he became the director (with his
election in 2002 as a people’s deputy for Our Ukraine the honorary director)
of the Institute of Social Sciences and International Relations of the
Interregional Academy of Personnel Management (IAPM) [widely alleged to be
anti-Semitic], which gave cause for talk about his adherence to
anti-Semitism.

He can be considered to be “a five-time minister”, since he occupied the
post in the governments of Yuliya Tymoshenko and Yuriy Yekhanurov.

He is known for his zealous and consistent support for Ukraine’s
Euro-Atlantic line. This may not entirely suit the Party of Regions and
Yanukovych personally, but they have no weighty counter-arguments, since the
head of the Foreign Ministry is the president’s prerogative under the
constitution, which cannot be changed by any declaration [of national
unity].

Therefore it can be expected that the purely political Western aspirations
of Mr Yushchenko and Mr Tarasyuk will be balanced by an intensification of
the Eastern vector in the economy.

As a person, Tarasyuk is famous for his touchiness, as a consequence of
which he takes criticism hard, since he considers all his words and deeds to
be the only true ones, and if anyone tries to prove the contrary, he quickly
becomes his enemy.

[10] IHOR LIKHOVYY, culture and tourism minister
He is 49 years old, born in the village of Vrublivka, Romanivka District in
Zhytomyr Region, graduated from the Odessa Polytechnic (electro-mechanical
engineer).

He worked in his speciality for only six years (1979-1985) at the Kaniv
Mahnit electromechanical plant (Cherkasy Region), after which he was head of
department of the Kaniv town committee of the CPU (1985-1987) and first
deputy chairman of the Kaniv town executive committee (1987-1989).

He gained prestige in the area of culture and art in the job of head of the
Shevchenko national memorial centre in Kaniv, which he headed for 16 years
(1989-2005).

Thanks to this, he also became known in the political milieu, many of whose
representatives consider it mandatory for themselves to visit at least once
in their life the grave of the Kobzar [unofficial title of Ukraine’s
national poet, Taras Shevchenko].

Thus Likhovyy attracted the attention of Yushchenko, who considered him a
worthy replacement for Oksana Bilozir back during the formation of the
Yekhanurov cabinet.

One must give him his due – Likhovyy has not repeated the mistakes of his
predecessor, has not provoked conflicts in the delicate and easily wounded
milieu entrusted to him, demonstrating an intellectual attitude both to
people and to the relevant problems. In general and on the whole – the right
man for the job.

[11] ANATOLIY HRYTSENKO, defence minister
He is 49 years old, born in the village of Bohachivka, Zvenihorodka District
in Cherkasy Region (the well-known politician Yuriy Karmazin of the same age
also came from Zvenihorodka, and in the village of Vodyanyky in the same
district two years later there appeared the chairman of the Cherkasy
Regional State Administration, Oleksandr Cherevko).

He graduated from the Kiev Higher Military Aviation College.

He is married to the deputy chief editor of the newspaper Zerkalo Nedeli,
Yuliya Mostova. He has a son from his first marriage – Oleksiy – who works
for the Enran Telekom company and a daughter (also from his first
marriage) – Svitlana – in the PBN  company.

He actually served only two years in line units (1979-1981), after which he
took the “scientific military” line – he completed his advanced military
studentship (post-graduate course; 1981-1984) and for eight years
(1984-1992) taught in his home college.

With the start of Ukrainian independence he headed the problem analysis
directorate of the General Staff (1992-1994), at the same time completing
courses at the institute of foreign languages of the US Defense Department
and the US Air Force Academy, in connection with which, since that time, he
has the image of an “Americanophile” and a fierce supporter of cooperation
with NATO.

He also headed the directorate of military security problems and military
cooperation of the National Research Centre for Defence Technologies and
Military Security of Ukraine (1996-1997) and the analytical service of the
NSDC (1997-1999 under NSDC Secretary Volodymyr Horbulin, one of whose
deputies was Oleksandr Razumkov – q.v. below).

From December 1999 and up to the time of his first appointment as defence
minister (in the Tymoshenko government) he was the president of the Razumkov
Ukrainian Economic and Political Research Centre – formally a public
organization, but in fact maintained by money from Western grants, which
made one of the most considerable contributions to the victory of Yushchenko
at the 2004 presidential elections by means of deliberate systematic
manipulation of public opinion.

It is not unsurprising that the head of state who, according to Article 106,
Clause 10 of the Constitution of Ukraine, has the right to present the
candidacy of the defence minister, wants to see precisely Hrytsenko in that
job for the third time in a row.

What is more, frankly speaking, the Party of Regions as the dominant force
in the parliamentary coalition never had a great interest in the armed
forces and has no suitable ministerial candidates.

As a result, Col Hrytsenko got the opportunity to continue engaging in what
he calls “army reform”, and which entails its further reduction and transfer
to NATO standards.

He believes that this is strengthening the country’s security, but his
opponents allege that Ukraine will only lose from this, becoming dependent
on the other members of NATO. The army itself, as usual, is so far keeping
silent… [ellipsis as published]

[12] STANISLAV NIKOLAYENKO, education and science minister
He is 50 years old, born in the village of Bohdanivka, Znamyanka District in
Kirovohrad Region and graduated from the Ukrainian Agricultural Academy
(mechanical engineer).

He emerged from the vocational technical education system – he taught in the
Kirovohrad agricultural technical school and Krasnoperekopsk special
vocational technical college (Crimea).

He was secretary of the Komsomol [Young Communist League] committee of the
Kakhovka state farm training school (Kherson Region). In Soviet times he
also worked in bodies of the Komsomol and the CPU (in particular, as first
secretary of Nyzhni Sirohozy District Committee of the CPU in Kherson
Region).

In independent Ukraine, having worked for three years as deputy chief of the
education directorate of the Kherson Regional State Administration, in 1994
he was elected a people’s deputy, in which status he remained until February
last year, when he took up a ministerial post in Tymoshenko’s cabinet.

Proceeding from the principle of “first love”, he focuses his basic
attention on restoring the vocational technical education system, which has
been in crisis in recent years.

He also gained fame as a fighter against private higher educational
establishments, dozens of which are losing their licences (both for activity
as a whole and for training specialists in various specialities).

As equivocal aspects of his activity one can quote the constant scandals
surrounding school textbooks (there are accusations of bias in determining
the publishing houses that are instructed to prepare them, as well as of
opportunism, especially in the area of arts subjects) and an experiment with
the system of independent testing of graduates of comprehensive schools,
which causes more questions than answers.

[13] VAYYL DZHARTY, environment minister
He is 48 years old, born in the village of Rozdolne, Starobesheve District
in Donetsk Region and graduated from the Donetsk Polytechnic (mechanical
engineer; he graduated at the same time and in the same speciality as
Yanukovych, but the prime minister studied externally).

The greater part of his working biography was spent in the town of
Makiyivka, where he rose from a mechanic at a local motor transport
enterprise to town mayor. From that job he was appointed in 2002 as first
deputy chairman to the Donetsk Regional State Administration, Anatoliy
Blyznyuk (now chairman of the Donetsk Regional Council).

It is possible that he got his present job primarily for the good result of
the Party of Regions at the elections, during which he headed its election
headquarters.

At the same time, motor transport man Dzharty at the head of the Environment
Ministry (whose main attractiveness is issuing licences for developing
mineral deposits) looks no more illogical than his predecessor, the banker
[Pavlo] Ihnatenko.

In any case, both of them enjoy a reputation as quality managers, and the
new minister, what is more, is aware at first hand about natural resources,
the environment and ecological problems, if only because he has spent his
whole life in the Donbass.

[14] VIKTOR BALOHA, emergencies minister
He is 43 years old, born in the village of Zavydove, Mukacheve District in
Transcarpathian Region (his deputy at the ministry, Tiberiy Bolvari, is from
Mukacheve by birth, as is the deputy coal industry minister, Oleksandr
Frantsyshko, the chairman of the Transcarpathian Regional State
Administration, Oleh Havashy, whose first deputy at one time was Viktor
Baloha’s younger brother, Ivan). He graduated from the Lviv Commercial
Economics Institute (commercial expert).

He is a well-known Transcarpathian businessman (considered the richest
person in that region) and politician, who started his career in the system
of the regional consumer union.

After that he had his own commercial enterprise, thanks to which he gained
influence on processes first in his native Mukacheve, where in 1998 he was
elected town mayor, and then in the region as a whole, backing up his
financial strength with administrative resources in the form of his job as
chairman of the Transcarpathian Regional State Administration, which he
occupied both under Kuchma (with whom he eventually fell out) and under
Yushchenko (thanks to whom in 2002 he became a people’s deputy).

Baloha has recently been increasingly frequently called Yushchenko’s
favourite. For several months now he seems destined for the place of Oleh
Rybachuk, who is clearly losing influence, to head the presidential
secretariat.

Nevertheless, the head of state in negotiations with the parliamentary
coalition gained for his quota the head of the emergencies ministry, and he
decided to leave Baloha in place.

It is probable in this case that Yushchenko was guided by considerations of
state (and, it is not ruled out – personal) security – the ministry in
question is still related to armed formations at the head of which the
president tries to place people whom he trusts to the maximum (as is the
case with the defence and interior ministries) – to prevent anything
happening… [ellipsis as published]

[15] YURIY PAVLENKO, family, youth and sports minister
He is 31 years old, born in Kiev and graduated from the Shevchenko Kiev
National University (historian; studied together with a member of the
Central Electoral Commission, Zhanna Usenko-Chorna).

In 1995-2002 he worked at various posts in the Zinteko firm, the Teren arts
centre, at the TV-Tabachuk studio, in the IP Kiev joint enterprise,
Eurovision Plus, and the Slavutych beer and soft drinks plant. Then he was
elected a people’s deputy for Our Ukraine.

The youngest minister in the two previous governments, he is still that in
the present one. He can be calm about his career fate in the future as well.

First, because the president especially favours him (Pavlenko in general is
often called “a Yushchenko clone”), second, because with the distribution of
jobs, the “family-youth-sports” ministry, together with the Culture Ministry
are called “rubbish” in political officials’ slang, and of little interest
to anyone.

In the larger scheme of things, the young minister does not need to manage
anything – the areas that he is responsible for are self-regulating, and the
main thing here is not to interfere. And this is what he has been
successfully doing for the past year and a half and, it must be supposed,
will continue doing.

[16] IVAN TKALENKO, minister for liaison with parliament and other state
institutions
He is 51 years old, born in the village of Fursy, Bila Tserkva District in
Kiev Region and graduated from the Odessa Construction Engineering institute
(construction engineer).

His whole career up until 1998 was linked with construction organizations in
Bila Tserkva (his last job related to his speciality was chairman of the
board of Miskbud) and then he was elected a people’s deputy of the third
convocation.

The job of minister for liaison with parliament existed only once in the
Ukrainian government – during the first premiership of Yanukovych – and it
was occupied precisely by Tkalenko (moreover, every ministry at that time
saw the introduction of posts of deputy ministers for liaison with
parliament).

Although the need for it had been obvious almost from the first days of
independence, when the legislature and the executive were chronically
entering the latest clinch, not having yet managed to emerge from the
previous one, not least because of a lack of coordination of actions.

In the new conditions the existence of such a function is even more pressing
and needed; the level of quality of cooperation between the parliamentary
coalition and the Cabinet of Ministers will to a considerable extent depend
on the actions of this minister.

[17] ANATOLIY IVANOVYCH HOLOVKO, industrial policy minister
The most enigmatic figure in the new government -it is only known that he is
52 years old and graduated from the Kramatorsk Industrial Institute with the
speciality of mechanical engineer. He spent almost all his career at the
scandalously famed Nikopol Ferroalloys Plant (from worker to deputy chairman
of the board).

In 2003-05 he was an adviser on foreign economic relations for the
Energeticheskiy Standart Group office, which is controlled by the Russian
businessman Konstantin Grigorishin, and then worked as first deputy to the
chairmen of the Zaporizhzhya Regional State Administration, Yuriy Artemenko,
who also had the image of being Grigorishin’s man, and Yevhen Chervonenko.

[18] YURIY BOYKO, fuel and energy minister
He is 48 years old, born in the city of Horlivka in Donetsk Region and
graduated from the Moscow Chemistry Technology Institute (chemistry
technology engineer). He has six children – three daughters and three sons.

He worked at the Rubizhne-based Zarya Chemicals Plant (in Luhansk Region;
from foreman to general director. The basic specialization of the enterprise
is production of explosives), as general director of the Ukrvzryvprom
[Ukrainian explosives industry] state-owned corporation, as chairman of the
board of Lysychansknaftaorhsintez [Lysychansk petroleum organic synthesis]
and of Ukrtatnafta [Ukraine-Tatarstan oil].

During the premiership of Anatoliy Kinakh and the first premiership of
Viktor Yanukovych he headed Naftohaz Ukrayiny [state-owned oil and gas
monopoly], being at the same time first deputy to fuel and energy ministers
Serhiy Yermilov and Serhiy Tulub.

He is considered one of the most competent domestic specialists in the oil
and gas area. It had been assumed that he would return to Naftohaz, which
thanks to the activity of the former chairman of the board, Oleksiy
Ivchenko, from being almost the most profitable state company (which Boyko
left it in 2005) skidded down to the verge of bankruptcy (data about which
was revealed this week by Mykola Azarov).

The appointment of Boyko as head of the state’s entire fuel and energy
sphere may be evidence of its total crisis (especially in relation to
international deliveries of energy resources, first and foremost from the
East), or of signs of it and, as a result, of the need for the presence of
an experienced manager capable of rolling back the situation as a whole in a
very brief period on the eve of the winter heating season.

[19] MYKOLA RUDKOVSKYY, transport and communications minister
He is 39 years old, born in the village of Staryy Bykiv, Bobrovytsya
District in Chernihiv Region (it is interesting that a former transport
minister, Ivan Dankevych, was born in that district).

He graduated from the Chernihiv Teacher Training College (teacher of history
and sociology; Mr Rudkovskyy’s official biography asserts that for three
years he studied at the Vienna Economics University, however, following the
story of the “international diplomas” of Roman Zvarych [justice minister who
gave false information about his US degrees], one has to be cautious about
such information).

It is known that Rudkovskyy is an extremely wealthy person, but the question
is – from what.

In any event, in the 1990s he was a student (first in Chernihiv ands later
in Moscow and Vienna), after which he worked for two years in the
administration of President Leonid Kuchma (at the time that it was headed by
Tabachnyk).

He then served another two as president of the Ukrainian State Credit and
Investment Company, where one of his subordinates was one of Yushchenko’s
comrades-in-arms – the chairman of the board of the State Savings Bank of
Ukraine [Oshchadbank], Oleksandr Morozov, and a year as deputy chairman of
the board of Ukrhazprom.

Then came the tape scandal, thanks to which the whole country learned about
Mykola Rudkovskyy, as it did about Yuriy Lutsenko.

It was precisely his front door that was “cut with oxyacetylene” (an
allegation by the new transport minister) by people from the special
services with the aim of getting their hands on some of the originals of the
notorious tapes that were located at the time in his home.

As a result, he came into the orbit of Moroz, becoming, like Lutsenko, his
adviser, and later a people’s deputy for the SPU [Socialist Party of
Ukraine].

In March this year Rudkovskyy was elected city mayor of Chernihiv, but
renounced the job and, clearly guessed right. His present appointment can be
considered an act of gratitude on the part of the Party of Regions for
active participation in “the parliamentary battles” in July, during which he
lost several pieces of his upper clothing.

Seriously though, it is hard to say how competent historian Rudkovskyy is in
the area of transport and communications and how effective he is as a
manager – so far there has not been the opportunity to be convinced of
either. One thing is clear – Transport Ministry staff are not to be envied,
since their boss is known for his stern temper, his ready tongue and wealth
of expressions.

[20] MYKHAYLO PAPIYEV, labour and social policy minister
He is 46 years old, born in Zaporizhzhya and graduated from the Chernivtsi
State University (physicist). A considerable part of his life is connected
with Chernivtsi, where he worked for Elektronmash, Alyans and Polimermash
(in the latter two cases as CEO).

In 1997-2000 he was deputy chairman of the local regional state
administration, in 2000-02 – secretary of the regional committee of the
USDPU [United Social Democratic Party of Ukraine], from which he was elected
to the Supreme Council of the last convocation and thence joined the first
cabinet of Yanukovych, also as head of the Labour Ministry.

The return of a leader of the USDPU to the cabinet that he had left a year
and a half ago testifies not so much to the return of the United Social
Democrats to power as to simply the professional liking of Yanukovych for
Papiyev. So far as can be judged from his experience of 2002-05, he found
the work absolutely congenial, and the present prime minister has always
valued people with whom he has “working compatibility”.

What is more, Papiyev turned out to be not a bad minister; apart from
complaints regarding the mythical “spectacles for veterans” (mythical
because the story was not confirmed as a result of checks by law-enforcement
agencies) raised against him by [former Deputy Prime Minister] Mykola
Tomenko at the time of the Tymoshenko premiership, there were no particular
critical observations made about Papiyev even by his political opponents.

His forte is considered to be reform of the pension system that slowed down
with the coming of the orange authorities and now, it must be supposed, the
process will be resumed.

[21] SERHIY TULUB, coal industry minister
He is 53 years old, born in Donetsk and graduated from the Donetsk
Polytechnic (mining engineer-economist). He is an old-timer in the Cabinet
of Ministers, where he arrived back in 1998 to the same ministerial post.

Prior to that he worked as deputy to the chairman of the Donetsk Regional
State Administration, Yanukovych, and previously a large part of his working
life was connected almost exclusively with the coal industry, in which he
trod the path from mining foreman to general director of a number of
production associations.

In 1981-1983 and 1986-1990 he worked in the Khartsyzk town committee of the
CPU in Donetsk Region (in the latter case as first secretary), where the
newly appointed minister of the Cabinet of Ministers, Anatoliy Tolstoukhov,
was his colleague.

In 1999-2000 and 2004-05 he was minister of fuel and energy (here his
deputies were Yuriy Boyko; the general director of Enerhorynok, Yuriy Savka;
and the deputy chairman of Naftohaz Ukrayiny, Bohdan Klyuk). In 2000-02 he
was deputy to the secretary of the NSDC, Yevhen Marchuk.

In 2002-05 he was president of Enerhoatom (under the chairman of the
supervisory council, Andriy Derkach, who was elected to the current
parliament from the SPU and was one of the most active supporters of a
coalition between the Socialists and the Regionals).

He is known as an extremely efficient official, who does not sin by personal
initiatives, but strictly follows the spirit and letter of instructions from
higher authorities.

[22] ROMAN ZVARYCH, justice minister
He is 53 years old, born in New York (USA) and graduated either from the
Manhattan College or from Columbia University – various versions of his
biography interpret this page of his life variously, while Zvarych himself,
as is known, is also incapable of answering this question intelligibly.

His foreign biography (up to 1991) arouses certain doubts and questions. On
arrival in Ukraine he formally headed the Demos information and analysis
service, but actually engaged purely in politics (he joined the leading
bodies of Party of Reforms and Order and the People’s Movement of Ukraine
and was twice – not counting the current convocation of the Supreme
Council – elected a people’s deputy).

His only experience of administrative management comes from his leadership
of the same ministry in the Tymoshenko government (moreover, it is typical
that both then and now Zvarych started his activity by “outbidding” – with
hints of resignation).

This year and half have shown that Zvarych cannot be called a great
connoisseur of jurisprudence, and so those analysts are probably right who
consider that his present appointment was conditioned not so much by the
need to run the Justice Ministry (it is one of the few bodies of the central
executive that traditionally is distinguished by good organization of work
and selection of leading staff) as by the desire of Yushchenko to have his
own controller in the flow of statutory documentation, which, according to
legislation, has to be registered there.

Thus, the president is trying to safeguard himself against any government
resolution getting past him that runs counter to the policy and views of the
head of state.

[23] VOLODYMYR MAKUKHA, economics minister
He is 51 years old, born in the Russian town of Yaroslavl and graduated from
Moscow State University (mathematician).

He is a professional economist. He worked at the Consumer Cooperative
Research Institute and the Socioeconomic Problems Research Institute. Since
1997 he has been involved in the area of international economic relations.

In particular he occupied the post of deputy chief of the directorate of
investment projects of international financial organizations of the National
Agency of Ukraine for Reconstruction and Development and deputy chief of the
directorate of international investment programmes of the Economics
Ministry.

Since 2000 he has been in the system of the Ukrainian Foreign Ministry: an
adviser to the Ukrainian embassy in the USA and head of the ministry’s
Economic Cooperation Directorate.

Since July 2004 he was a deputy to Foreign Minister Kostyantyn Hryshchenko,
from whom he “passed as a legacy” to Borys Tarasyuk (according to some
reports, relations between Tarasyuk and Makukha cannot be described as
warm).

In May this year he was appointed ambassador of Ukraine to Japan (with which
our country has a very large amount of investment projects), but, as we see,
he did not have time to show his worth fully in that post.

He is one of the five [as published – see paragraph one] “novices” in the
government. He is considered to be an adherent of the course of forming the
Single Economic Space (SES) between Ukraine, Russia, Belarus and Kazakhstan.

It was originally assumed that Arseniy Yatsenyuk would remain at the head of
the Economics Ministry; he had managed to maintain even relations with (and
even gain the liking of) all the leading political forces in the country.
And so his absence in the new composition of the cabinet was somewhat
surprising, but not perplexing.

Evidently Yushchenko, who is favourably inclined towards the 32-year-old
manager, has decided to use him in another capacity.

It is not ruled out that he will become head of the National Bank (all the
more so in that Yatsenyuk spent almost the whole of 2004 as the country’s
chief banker in an acting capacity and performed rather well in that
capacity), since the present incumbent – Volodymyr Stelmakh – is already an
elderly man after all (in January he will be 67) and therefore should have a
worthy potential replacement.

[24] ANATOLIY TOLSTOUKHOV, minister of the Cabinet of Ministers
He is 50 years old, born in the town of Khartsyzk in Donetsk Region and
graduated from the Orel Teacher Training College [in Russia] (teacher of
history, sociology and English). His wife, Svitlana Tolstoukhova, works as
director of the state social service for the family, youth and sports.

He started his career as a teacher, teaching in a prison camp for minors and
in a vocational technical college. He spent two years as director of
boarding school in the town of Zuhres in Donetsk Region.

He also has experience of journalistic activity; he was head of department
at the Khartsyzk town newspaper Sotsialisticheskaya Rodina, was deputy
editor of the Volnovakha District newspaper Znamya Truda (both Donetsk
region papers), editor of the newspaper Zavtra (Kiev) and president of the
TV and radio company Svityaz (Kiev).

He was elected as a people’s deputy of the first and fourth convocations.

He is one of the most experienced professional bureaucrats (in the positive
sense of the word) in Ukraine. He is the main organizer of the government’s
work (this is actually what the minister of the Cabinet of Ministers does)
for the third time now (that was his job in the Valeriy Pustovoytenko
government and the first government of Viktor Yanukovych, as well as deputy
minister of the Cabinet of Ministers in the governments of Yevhen Marchuk
and Pavlo Lazarenko).

He is known as having a great capacity for work, assiduity, scrupulousness
and ability to work with people.                               -30-

———————————————————————————————–
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AUR#751 Aug 21 Declaration Of National Unity; Healthy Economy; Holodomor Exhibition; Secret Famine Archives Opened; Wounds That Time Cannot Heal

=========================================================
 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       

 
          INDEPENDENCE DAY, THURSDAY, AUGUST 24, 2006
                   15th Independence Day Since Fall of Soviet Union
                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 751
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN KYIV, UKRAINE, MONDAY, AUGUST 21, 2006
 
                Help Build the Worldwide Action Ukraine Network
 Send the AUR to your colleagues and friends, urge them to sign up
               –——-  INDEX OF ARTICLES  ——–
              Clicking on the title of any article takes you directly to the article.               
    Return to the Index by clicking on Return to Index at the end of each article
1.    UKRAINE: DECLARATION (UNIVERSAL) OF NATIONAL UNITY
Declaration [Universal] of National Unity.
Text Signed at the Round Table
Ukrains’ka pravda in Ukrainian, Kyiv, Ukraine, Wed, 3 August 2006
Translated into English by Heather Fernuik for the AUR
Published by the Action Ukraine Report (AUR) #751, Article One
Kyiv, Ukraine, Monday, August 21, 2006
 
2. UKRAINIAN PRESIDENT URGES PRIME MINISTER YANUKOVYCH
                          TO OBSERVE UNITY DECLARATION
Ukrayinska Pravda web site, Kiev, in Ukrainian 17 Aug 06
BBC Monitoring Service, United Kingdom, Thursday, Aug 17, 2006

3.       UKRAINE’S HEALTHY ECONOMY REFUSES TO SUCCUMB
                            TO YEARS OF POLITICAL TURMOIL 
By Roman Olearchyk, Financial Times
London, United Kingdom, Wed, August 16 2006

4UKRAINE POSTS NOTABLE GROWTH IN FOREIGN INVESTMENT
UNION news agency, Kiev, in Russian 1531 gmt 16 Aug 06
BBC Monitoring Service, United Kingdom, Wed, Aug 16, 2006

5.       GERMAN HEATING AND AIR CONDITIONING CO FORMS
                     SUBSIDIARIES IN RUSSIA AND UKRAINE 
Frankfurter Allgemeine Zeitung, Germany, Thursday, Aug 17, 2006

6. POLISH TOURISM INDUSTRY GROWS, TOP GROUP ARE GERMANS
     Number of tourists from Russia, Lithuania, Belarus and Ukraine is growing
Polish News Bulletin, Warsaw, Poland, Wed, Aug 16, 2006

7TURKISH BUSINESSMEN LOOKING TO INVEST IN DEVELOPMENT
           OF TOURISM, CONSTRUCTION OF HOTELS IN UKRAINE

Ukrainian Times newspaper, Kyiv, Ukraine, Monday, August 21, 2006

8.     UKRAINE’S PRIME MINISTER PLEDGES TO CHANGE RUSSIAN
                               LANGUAGE STATUS IN UKRAINE
Interfax-Ukraine news agency, Kiev, in Russian 0738 gmt 16 Aug 06
BBC Monitoring Service, United Kingdom, Wed, Aug 16, 2006

9COMMITTEE PREPARING CELEBRATIONS OF 15TH INDEPENDENCE
    ANNIVERSARY APPROVES PLANS FOR EVENTS FOR AUGUST 23-25

Ukrainian News Agency, Kyiv, Ukraine, Thursday, August 17, 2006

10.        UKRAINE’S PRESIDENT ASKS UKRAINIANS AROUND THE

                                     WORLD FOR SUPPORT  
Associated Press (AP), Kyiv, Ukraine, Friday, August 18, 2006 

11. HOLODOMOR 1932-1933 COMMEMORATION EXHIBITION IN KYIV
UNIAN news service, Kyiv, Ukraine, Thursday, August 17, 2006

12.     UKRAINE SPY AGENCY SECRET ARCHIVES ON SOVIET-ERA

                    FAMINES OPENED UP SBU ANNOUNCES IN KIEV
         It was one of history’s worst instances of human-sponsored mass death.
               Dispute continues: Was it caused by pardonable errors? Did the
                 Kremlin kill millions of Ukrainians intentionally or by accident.                                 
Deutsche Press Agence (DPA), Kiev, Friday, August 18, 2006

13.         SBU DECLASSIFIES DOCUMENTS OF STATE POLITICAL
           DEPARTMENT UKRAINIAN SOVIET SOCIALIST REPUBLIC

                RELATED TO THE GREAT FAMINE OF 1932 AND 1933
Ukrainian News, Mykola Savchuk, Kyiv, Ukraine, Friday, August 18, 2006

14.          UKRAINE WANTS UNITED NATIONS TO RECOGNISE

                            STALIN-ERA FAMINE AS ‘GENOCIDE’
Agence France Presse (AFP), Kiev, Ukraine, Saturday, August 19, 2006

15FOREIGN MINISTER TARASIUK ATTRIBUTES RUSSIA’S POSITION

            TO GIVE APPRAISAL TO CRIMES OF COMMUNIST REGIME 
Olha Volkovetska, Ukrainian News, Kyiv, Ukraine, April 21, 2006

16.                       WOUNDS THAT TIME CANNOT HEAL
                   The 1930s manmade famine in the Ukrainian countryside
By Oksana Shapova, The Day Weekly Digest in English

Kyiv, Ukraine, Tuesday, March 28, 2006

17.                           GULAG EXHIBITION: DARK COMEDY
                   FROM ISLANDS VERY FAR AWAY FROM ELLIS
By Andrew Stuttaford, National Review
New York, NY, Tuesday, August 01, 2006

18.         UKRAINE AND RUSSIA: DIVERGENT POLITICAL PATHS
          Ukraine is in post-orange political meltdown while Russia is reinventing
         itself as a successful energy superpower. Right? Wrong, says Alexander
              J Motyl, who looks beneath the surface of a changing relationship
.
ANALYSIS & COMMENTARY: By Alexander Motyl, 17 – 8 – 2006
Open Democracy Online, London, UK, Thursday, August 17, 2006
=======================================================
1
UKRAINE: DECLARATION (UNIVERSAL) OF NATIONAL UNITY

Declaration [Universal] of National Unity. Text Signed at the Round Table
Ukrains’ka Pravda in Ukrainian, Kyiv, Ukraine, Wed, 3 August 2006
English translation by Heather Fernuik for the AUR
Published by the Action Ukraine Report (AUR) #751, Article One
Kyiv, Ukraine, Monday, August 21, 2006

On the eve of the fifteenth anniversary of the independence of Ukraine, a
historic demand and opportunity to unite our own efforts, to achieve
national unity, has been placed before the Ukrainian government, the
political and civil elite of the country, [and] all forces that are not
indifferent to the fate of the Fatherland.

Realizing the responsibility before the Ukrainian people and the complexity
of the current political situation,

Respecting the desire of the people realized in a democratic fashion during
the elections of 26 March 2006,

Striving to resolve the political problems contemplatively and responsibly
and to get down to the resolution of the pressing tasks of economic, social
and humanitarian development,

Aiming for a general national reconciliation, which we believe is the key to
the future of Ukraine and an instrument for the resolution of the current
problems of our society,

Establishing a tradition of national political and public dialogue for
resolving inherited and acquired problems of our state life,

Attesting that  the heart of popular consolidation is the unconditional
abidance to principles of democracy and the respect for human rights
[and] adherence to the European choice of Ukraine,

Confirming the inalterability and irreversibility of Ukraine’s foreign
policy course, specifically aimed at integration into the European Union
and with the goal of strengthening its international authority,

In actions and in deeds, steadfastly governing ourselves by the national
interests of Ukraine, we proclaim a common desire for uniting efforts for
the realization of such priorities of national development as high quality
of citizen’s lives [that is] competitive and based on knowledge of the
economy and effective and just government [that is] integrated into global
processes and respected in the world as a state [and] we agree to the
immediate realization of the:

Plan of Actions to Ensure National Unity

1. The preservation of the sovereignty and integrity, the unitary and
collectivism of Ukraine as inviolable principles of the existence of the
state.

2. The continued guarantee and steadfast upholding of human rights. The
consistent development of such certain achievements of democratic Ukraine
as freedom of speech, free expression of views and convictions.

3. Relying on the organization of the state power established by the
efficacious Constitution of Ukraine, the continuation of the improvement
constitutional regulations of the social relations in Ukraine, the creation
of a balanced system of “checks and balances” among the President of
Ukraine, the Verkhovna Rada of Ukraine and the Cabinet of Ministers of
Ukraine, and the reestablishment of the activity of the Constitutional Court
of Ukraine.

4. The guarantee by political forces of the amenability of adopted and
future decisions of all bodies of the state government and bodies of local
administration are in accordance to the Constitution of Ukraine and the laws
of Ukraine.

5. The creation of the political and legal conditions for the unimpeded
activity of the opposition in the elected bodies of power at all levels. The
prohibition of corruption in politics.

6. The reformation of structures of the executive power and rendering
impossible of the politicization of state service through the immediate
ratification of the Laws of Ukraine “On the Cabinet of Ministers of Ukraine”
and “On State Service” (new edition) prepared for submission to the
Verkhovna Rada of Ukraine by the President of Ukraine.

7. The continuation of judicial reform according to the approved Conception
of the perfection of the judgeship for the strengthening of a fair court
system in Ukraine.

8. The guarantee of the non-interference of political forces and their
representatives in the activity of the law-enforcement bodies, the courts
and the National Bank of Ukraine.

9. The reform of law-enforcement bodies according to European standards, the
alignment of the Criminal Code and legal proceedings in accordance with the
standards and recommendations of the Committee of Ministers of the Council
of Europe, the European Union and the decisions of the European Court on
Human Rights.

10. The stimulation of the development of local administration, the raising
of its role and status by ensuring [its] financial-economic solvency and
reforming of the administrative-territorial structure.

11. The realization of anti-corruption policy at all the levels of the
government through, specifically, supporting the legislative initiatives of
the President of Ukraine in this sphere.

12. The all-around development and functioning of the Ukrainian  all-around
development and functioning of the Ukrainian language as the state
[language] and the language of official communication in all spheres of
public life on all of the territory of Ukraine as the basis for
self-identification of the people and the state. The guarantee to every
citizen of free use in all vital needs of Russian or other native language
freely according to the Constitution of Ukraine and the European Charter
for Regional Languages or the Languages of Minorities.

13. The development of the culture and rebirth of the spirituality of the
Ukrainian people, the guarantee of the integrity of the linguistic-cultural
sphere.

14. The upholding of freedom of religion. The respectful treatment towards
the unifying aspirations of believers from all Orthodox churches without
interference from the state or political forces in this process.

15. The raising of the standards of living of citizens of Ukraine, the fight
against poverty by means of effective and targeted welfare protection, the
guarantee of dignified wages and a fair retirement security.

16. The establishment of a middle class through the transformation of the
population’s earning policy, development of entrepreneurship and stimulation
of new jobs.

17. The increasing of the accessibility and quality of education, the
popularization of a healthy lifestyle, the reorientation of the health care
system towards human development  and the development of national centers of
combat against tuberculosis, and HIV/AIDS, a National Cardiology Center, a
National Institute of Cancer, and an all-Ukrainian health care center for
mother and child.

18. The introduction of principles of scientific-technological and
innovational development, the achievement of an annual rate of GDP growth
of not less than 5%, the stimulation of the creation of at least one million
jobs annually.

19. The carrying out of structural reforms in the economy. The
implementation of a tax reform that foresees the decrease of tax pressure on
the economy by widening the base of taxation, including by means of the
gradual introduction of a tax on property and a single social contribution
from the wages fund.

20. The guarantee of the energy security of Ukraine, the increase in the
effective use of natural resources, energy sources, the introduction of
energy-saving technologies.

21. The increase of effectiveness of agriculture and the government’s
attention to farmers. The introduction no later than 1 January 2008 of a
fully functional land market with a simultaneous financial-organizational
provision and the creation of an essential normative-legal base (laws of
Ukraine about cadastre, value of land and others).

22. The guarantee and protection of property rights by the State.

23. The increase of access and quality of communal services by means of
the development of competitive relations in the area of municipal services.

24. The organization effective economic cooperation with all interested
foreign partners, guided by interests of Ukraine. The immediate passage of
changes to the legislation necessary for entry to the World Trade
Organization and entry to this organization by the end of the 2006 year on
acceptable terms for Ukraine.

25. The continuation of Ukraine’s course of European integration with the
perspective of Ukraine’s entrance into the European Union. The steady
adherence to the Action Plan “Ukraine – EU,” the immediate beginning of
negotiations regarding the creation of a free trade zone between Ukraine and
the European Union.

26. The completion of work regarding Ukraine’s participation in the Single
Economic Space on the principles of a multi-level and multi-speed
integration with consideration of the norms and rules of the World Trade
Organization. The creation on an initial stage of a free trade zone in
without restrictions and exclusions within the framework of the Single
European Space.

27. Mutually beneficial cooperation with NATO in accordance with the Law of
Ukraine “On the Bases of National Security of Ukraine” (in the version that
in effect on the date of the signing of this Declaration). The resolution of
the question regarding entry to NATO as the result of a referendum, which is
taking place after the execution by Ukraine of all necessary procedures for
this.

We are convinced that the realization of the indicated priorities of social
development has to become the distinguishing criterion for the formation and
activity of the coalition, which in its work will rely on new
socio-political mechanisms of cooperation, in particular:

1. The development and implementation of regular public consultations
concerning important questions of social development and state building with
the inclusion in the dialogue, namely, non-parliamentary political forces,
citizens’ organizations and other participants in the socio-political
process.

2. The formulation of effective mechanisms of public control over the
actions of the government. The guarantee of transparency and accountability
of state governmental bodies and local administrative bodies.

3. The guarantee of accountability of the actions of bodies of power to the
national interests of Ukraine, strategic priorities of development,
interests of individual citizens by means of the involvement of political
parties and civic organizations to participation in the elevating of the
effectiveness of cadre politics in the State.

We are convinced that the realization of the clauses of this Universal,
which [articles] will be placed into the foundation of the activity of the
coalition of deputy fractions in the Verkhovna Rada of Ukraine and the
Cabinet of Ministers of Ukraine, is only possible on the condition of
national unity and the consolidation of political forces.

We believe that the cooperation between all the branches of power, political
parties and their fractions in the legislative body and bodies of local
administration, civic organizations, people that enjoy indisputable
authority in society during the implementation the indicated priorities will
unite society.

We are ready to overcome differences, unite efforts, and utilize all
opportunities for the improvement of the life of the Ukrainian people and
the guarantee of the prosperity of our Homeland.

President of Ukraine V. Yushchenko
Head of the Verkhovna Rada of Ukraine O. Moroz
Prime Minister of Ukraine Y. Yekhanurov
From the fraction “Party of Regions” V. Yanukovych
From the fraction “Our Ukraine” R. Bezsmertnyi
From the fraction of the “Socialist Party of Ukraine” V. Tsushko
From the fraction of the “Communist Party of Ukraine” P. Symonenko

Kyiv, 2 August 2006

(Original drafted on 2 August 2006 included a place for Y. Tymoshenko to
sign above from the fraction of the Bloc of Yuliya Tymoshenko and the
following tag:

“Done in the presence of public figures:

L. Kravchuk
I. Plyushch
I. Yukhnovskyy
Y. Sverstyuk
M. Popovych
B. Oliynyk
V. Bryukhovetskyy
M. Zhurovskyy
Y. Zakharov”)
————————————————————————————————-
LINK to Declaration of National Unity in Ukrainian:  

————————————————————————————————-
FOOTNOTE: The Action Ukraine Report (AUR) received a number
of requests for us to publish a highly accurate English translation of the
Declaration [Universal] of National Unity. The translation above is the
work of Heather Fernuik, Assistant Editor of the Action Ukraine Report
(AUR).
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2. UKRAINIAN PRESIDENT URGES PRIME MINISTER YANUKOVYCH
                            TO OBSERVE UNITY DECLARATION

Ukrayinska Pravda web site, Kiev, in Ukrainian 17 Aug 06
BBC Monitoring Service, United Kingdom, Thursday, Aug 17, 2006

KYIV – Prime Minister Viktor Yanukovych has assured President Viktor
Yushchenko that Ukraine’s integration with NATO and the WTO, the personnel
policy of the cabinet and the language issue are priorities in the work of
the cabinet and will be tackled in accordance with the declaration of
national unity [signed in early August prior to Yanukovych’s appointment as
the prime minister].

Yanukovych said this today during a meeting with Yushchenko in his residence
in Crimea, the presidential press service reported.

Among other things, the conversation focused on prospects for developing
Ukrainian-Russian gas relations in 2006 and 2007.

Yanukovych confirmed that his meetings with Russian President Vladimir Putin
and Prime Minister Mikhail Fradkov showed that Russia is prepared not to
raise the price of gas this year. Yushchenko noted that at the current stage
the prime minister has managed to defend the agreements that the Ukrainian
and Russian governments reached in January 2006.

The president stressed that the declaration of national unity is the basic
document to develop the programme of the new cabinet, in particular on
domestic and foreign policy, Euro-Atlantic integration and the language
issue.

Yushchenko said that when taking over as the prime minister Yanukovych
confirmed that all the points of the declaration would be included in the
cabinet’s action programme.

We recall that in Sochi Yanukovych said that he intends to deliver on his
election campaign vows to give Russian the status of an official language as
soon as the coalition has the constitutional majority [of 300 votes in
Ukraine’s 450-seat parliament].

[Ukrainian commercial TV channel ICTV aired the above presenter-read report
over the video of the Yushchenko-Yanukovych meeting. Video showed

Yushchenko talking to Yanukovych in his summer residence.]        -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3. UKRAINE’S HEALTHY ECONOMY REFUSES TO SUCCUMB
                          TO YEARS OF POLITICAL TURMOIL 

By Roman Olearchyk, Financial Times
London, United Kingdom, Wed, August 16 2006

Politically the last few years in Ukraine have been characterised by the
turmoil of a disputed presidential election, a popular revolt and – more
recently – months of gridlock following the indecisive outcome of a general
election. Economically, however, the country has experienced a more benign
time of healthy growth and rising foreign investment.

In the first seven months of this year gross domestic product increased by
5.5 per cent, up from 3.7 per cent in the same period in 2005, according to
official statistics released yesterday. The data underscores a revival in
the rate of growth, which touched a low of 2.6 per cent in 2005 after
peaking at 12 per cent in 2004.

Growth has been driven by a combination of rising world prices for exports,
such as steel, and increased domestic demand. Alongside steel, Ukraine –
once an agricultural and industrial power-house in the old Soviet Union – is
strong in chemicals, agriculture and machine building. Construction,
transportation, textiles and food manufacturing have also grown markedly in
recent years.

“The economy has surprisingly continued to perform quite well,” said
Hans-Joerg Rudloff, chairman of Barclays Capital, who also has personal
investments in Ukraine and serves on President Viktor Yushchenko’s foreign
investment council.

For Viktor Yanukovich, Ukraine’s newly appointed prime minister, the
positive economic data is both a blessing and a challenge. While he has
inherited a pretty bullish economy, his government also faces the difficult
task of pushing through unpopular structural reforms needed to secure
longer-term growth and stability.

Among the issues which need addressing are rampant corruption and an overly
complex tax system. Ukraine also needs to broaden its economic base and
reduce its over-reliance on sectors such as steel. The country’s dilapidated
infrastructure, is also in need of urgent improvement. Ukrainians, many of
whom live on less than $200 (Euro157, £106) a month, are also looking to the
government for the benefits of years of economic growth.

The compromise struck between the rivals Mr Yushchenko and Mr Yanukovich,
under which the president’s pro-western policies are largely preserved, has
given some investors cause for optimism that the prime minister will make
progress on the domestic front.

“The feeling that many investors have is that there is now a great
opportunity,” said Edilberto Segura, chief economist at SigmaBleyzer, a
private equity fund manager. The appointment of Mr Yanukovich, who has
strong links to the business community but is seen as close to Russia, was a
welcome resolution to months of political crisis, he said.

Foreign investors have stepped up their activities in Ukraine recently.
Foreign direct investment rose to $7bn last year, up from around $1bn in
previous years, with food manufacturing, banking and agriculture among the
favoured sectors.

Many early bird investors and multinationals, such as Nestlé, Coca-Cola, AES
Corporation, the US-based power company, and leading European cement
manufacturers, sneaked into Ukraine years ago. They have since been followed
by companies such Austria’s Raiffeisen banking group and Leoni, the German
automotive suppliers.

“There are very few markets left in the world where you can produce 30 per
cent growth year-on-year,” said Jorge Zukoski, president of the American
Chamber of Commerce.

But while the potential rewards are big, there could also be pitfalls ahead
for investors. There are fears that inflation could spiral if Russia insists
on raising prices for energy further. Natural gas prices were nearly doubled
earlier this year by Russia. Others worry that Mr Yanukovich will not be
able to enact reforms fast enough.

“The moment of truth has come for Ukraine. If positive results do not become
visible very fast, Ukraine and any government running the country will be in
deep trouble,” warned Mr Rudloff.                          -30-
————————————————————————————————-
http://www.ft.com/cms/s/0e960aac-2cc3-11db-9845-0000779e2340.html
————————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

========================================================
4. UKRAINE POSTS NOTABLE GROWTH IN FOREIGN INVESTMENT

UNION news agency, Kiev, in Russian 1531 gmt 16 Aug 06
BBC Monitoring Service, United Kingdom, Wed, Aug 16, 2006

KYIV – Ukraine’s growth in foreign direct investments reached 1,698,640,000
dollars in the first half of 2006, which is 250 per cent up year on year,
the UNIAN news agency reported on 16 August, quoting the State Statistics
Committee.

As of 1 July 2006, foreign direct investments in Ukraine amounted to
18,383,960,000 dollars which is 102.9 per cent up year on year. The State
Statistics Committee said that 1,810,200,000 dollars were invested in
Ukraine in the first half of 2006, however 214.7m dollars were taken away
from Ukraine by foreign investors over the same period.          -30-
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5.       GERMAN HEATING AND AIR CONDITIONING CO FORMS
                        SUBSIDIARIES IN RUSSIA AND UKRAINE 
 
Frankfurter Allgemeine Zeitung, Germany, Thursday, Aug 17, 2006

FRANKFORT: Vaillant, the German heating and air conditioning technology
company, is forming new subsidiaries in Ukraine and Russia. This comes in
response to rising demand for energy-efficient heating technology.

The company last year saw turnover in eastern Europe rise by 16 per cent to
230m euros, representing 13 per cent of total group turnover.
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6. POLISH TOURISM INDUSTRY GROWS, TOP GROUP ARE GERMANS
     Number of tourists from Russia, Lithuania, Belarus and Ukraine is growing

Polish News Bulletin, Warsaw, Poland, Wed, Aug 16, 2006

WARSAW – According to forecasts by the Tourism Institute, 19 million
tourists are to visit Poland in 2010 – 2.8 million more than in 2005. This
increase will be achieved mainly due to growing interest from German
tourists (5.5 million in 2005).

The number of tourists from Russia, Lithuania, Belarus and the Ukraine is
also growing. It is estimated that foreign tourists will bring $6.5 million
to the Polish economy in 2006. “I am happy that more tourists are visiting
Poland. This is mainly thanks to investment in tourist infrastructure and
interesting offers prepared by cities and regions.

Things could be even better, if more money was spent on advertising Poland
as a tourist destination,” says Polish Chamber of Tourism Chairman Jan
Korsak.

The Polish Tourism Organisation (POT), whose aim is to attract visitors to
Poland, received only ZL38 million from this year’s budget: “a lot less than
the Czech Republic or Hungary spend, for example,” adds Korsak.  -30-

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7. TURKISH BUSINESSMEN LOOKING TO INVEST IN DEVELOPMENT
            OF TOURISM, CONSTRUCTION OF HOTELS IN UKRAINE
 
Ukrainian Times newspaper, Kyiv, Ukraine, Monday, August 21, 2006

Ercan Eren, manager of the Turkish law firm Eren Ltd., and Dzhoshcun
Ardakhan, director of the five-star hotel Lyra, visited Ukraine to acquaint
themselves with development of tourism in the country and study problems
holding back an increase in the number of foreign tourists.

At the same time, in consideration of growing interest of Turkish tourists
in Ukraine they plan to map out a number of routes to Odessa and Kiev,
together with the firms YunayaTour and UkrFerryTour. To realize these plans,
the Turkish businessmen supported by the shipping company UkrFerry are
contemplating construction of several hotels near Odessa and in the Crimea.

“Turkish businessmen will invest about $15 billion in the Ukrainian economy
by 2012, particularly in the hotel complex and tourism,” Mr. Eren, who is
also the owner of the chain of Lyra hotels, told the press.

Aykhan Sarach, president of YunayaTour, said there are projects of buying
construction sites for hotels in Odessa and the Crimean town of Alushta.
“According to our estimates, today a room in Crimean four-star hotels is
worth between $150 and $160 a night with breakfast only, whereas Eren’s
hotels will offer a room for $100-120 with full board,” he noted.

P.S. Nestled between Greece and Syria, with the Black Sea to the north and
the Mediterranean to the south, Turkey straddles the fuzzy line between
Europe and Asia. Stitched together from the remains of the old defeated
Ottoman Empire, Turkey is about the size of Texas, with a population of 70
million people, compared with 48 million in Ukraine.

In recent years, the economic picture in Turkey was a bright one. Its $350
billion economy grew by a third between 2002 and 2005. Price inflation,
which was once running around 70% per year, was cut down to under 10%.

It also became a hot spot for global tourism, especially for winter-weary
Germans and Russians.

Tourism brought more than $16 billion in the country last year; several
million tourists visited Turkey as against 200,000 Turkish tourists, who
came to Ukraine. Global capital flows poured steadily into Turkish markets.
Things looked pretty good.

Vainly so far, Turkey has tried to gain access to the European Union. That’s
because Turkey also has problems, the kind of problems the E.U. is not sure
it wants to inherit. And the recent slide in emerging markets has exposed
some of those problems in stark contours. Price inflation is threatening
once again. The lira is selling off, down 21% against the dollar since
April. Unemployment is still high, around 11%.              -30-
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8. UKRAINE’S PRIME MINISTER PLEDGES TO CHANGE RUSSIAN
                               LANGUAGE STATUS IN UKRAINE

Interfax-Ukraine news agency, Kiev, in Russian 0738 gmt 16 Aug 06
BBC Monitoring Service, United Kingdom, Wed, Aug 16, 2006

SOCHI, RUSSIA, Ukrainian Prime Minister Viktor Yanukovych has said

that his Party of Regions will continue insisting on changing the Russian
language status in Ukraine.

“I never said we would change our electoral programme which we promised

to Ukrainian people,” he told a news conference in Sochi [Russia] today.

He told journalists that it is impossible to settle down the issue today as
the parliamentary coalition lacks votes to form a 300-member constitutional
majority to amend the constitution with regard to this problem.

“This does not mean that there will be no constitutional majority this year
or in 2007. Once we have a practical chance, we will raise this issue,” he
said.

Meanwhile, he added that at this stage it is “a better idea” to be guided by
the European Charter for [Regional or Minority] Languages which will
“dramatically improve a situation with the usage of Russian language in
Ukraine”, as he believes.

He said that parliament will consider a prepared bill on languages at its
next session. He said it “will clearly set out all the directions in the
usage of Russian and other languages”.                   -30-
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9. COMMITTEE PREPARING CELEBRATIONS OF 15TH INDEPENDENCE
   ANNIVERSARY APPROVES PLANS FOR EVENTS FOR AUGUST 23-25
 
Ukrainian News Agency, Kyiv, Ukraine, Thursday, August 17, 2006

KYIV – The organizational committee responsible for preparing and holding

the 15th anniversary of Ukraine’s Independence has approved a plan of festive
events for August 23-25.

Presidential advisor and head of presidential secretariat’s main humanitarian

policy service Markian Lubkivskyi told this at a committee meeting on Tuesday.

Lubkivskyi noted that official events will start on the Day of Ukrainian
Flag on August 23: at 10:00, President Viktor Yuschenko, Premier Viktor
Yanukovych and Chairman of the Verkhovna Rada Oleksandr Moroz will lay
flowers at monuments to Prince Volodymyr, Taras Shevchenko, Mykhailo
Hrushevskyi, Ivan Kotliarevskyi and at the memorial sign to victims of the
famine of 1932-1933.

From 14:00 to 15:00, Yuschenko will be presenting state awards at the
Mariinskyi Palace.
“On the Flag Day, a maximum amount of Ukrainian flags will hang on buildings
of state establishments, organizations and enterprises,” Lubkivskyi said.
He said that the monument to Viacheslav Chornovil in Kyiv will be opened at
the corner of Hrushevskoho Street and Museinyi Lane on August 23.
From 9:00 to 9:45 on August 24, priests will be praying for Ukraine at the
Sofia Cathedral, with Yuschenko, Yanukovych and Moroz participating.
At 10:00, Yuschenko, Yanukovych and Moroz are to take part in events on the
Sofiiska Square, where the president will address the Ukrainian people.
From noon to 13:00, Yuschenko, Yanukovych and Moroz will attend festivities
on Maidan Nezalezhnosti in Kyiv, including the ceremony of raising the state
flag, an artillery salute, motorcycle escort ride and launch of a festive
garland to the sky.
From 13:00 to 16:00, a festive concert will take place on Maidan
Nezalezhnosti with the participation of national bands of Ukraine. At 19:00,
a concert for youth will start, which will end with a salute at 22:00.
On August 25, Yuschenko, Yanukovych and Moroz are to attend the opening
of a memorial to the Heroes of Kruty in Chernihiv region.
As Ukrainian News earlier reported, on August 8, Yuschenko renewed the
membership of the organizational committee on preparations for the fifteenth
anniversary of Ukraine’s independence.
Yuschenko withdrew former Ukrainian Premier Yurii Yekhanurov from the
membership of the committee and at the same time, dismissed him as the
committee’s co-chairman.
Besides, Family, Youth and Sport Minister Yurii Pavlenko and former
ministers have also been withdrawn from the committee’s membership:
Transport and Communications Minister Viktor Bondar, Justice Minister
Serhii Holovatyi, Construction Minister Pavlo Kachur, and Ex-Vice Premier
Viacheslav Kyrylenko.
Vice Premier and committee’s co-chairman Dmytro Tabachnyk, Justice Minister
Roman Zvarych and Transport and Communications Minister Mykola
Rudkovskyi were included into the committee’s membership.
Ukraine was declared an independent state on August 24, 1991.      -30-
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10.    UKRAINE’S PRESIDENT ASKS UKRAINIANS AROUND THE
                                     WORLD FOR SUPPORT  
 
Associated Press (AP), Kyiv, Ukraine, Friday, August 18, 2006 

KIEV – President Viktor Yushchenko Friday urged a gathering of ethnic
Ukrainians living abroad to work together to support the country’s efforts
to solidify democracy and revive the economy.

Yushchenko told the crowd of some 3,500 people from 45 countries he was
aware of widespread disappointment among many Ukrainians after he allowed
the nomination of his Orange Revolution rival Viktor Yanukovych as prime
minister.

But he appealed to them to work together to “see Ukraine free, its citizens
well-to-do, and the power -democratic.”

Yushchenko spoke at a three-day conference ahead of the nation’s 15th
anniversary of independence next week.

Many Ukrainians abroad watched with concern as parliament earlier this month
confirmed as premier Yanukovych, whose fraud-tainted run for the 2004
presidency sparked the Orange Revolution mass protests. Yanukovych

received strong Kremlin backing during his campaign.

Ethnic Ukrainians living abroad tend to have strong nationalistic
tendencies, and Yushchenko has been greeted with standing ovations and
hero’s welcomes in visiting Ukrainian communities abroad – such as in
Chicago or Philadelphia, which have sizable Ukrainian concentrations.

Yushchenko defended the decision to join with Yanukovych, saying he had

set aside emotions and chosen “democracy to the very end.” If he hadn’t, he
said, the political paralysis that ensued after the March parliamentary
elections would have triggered an economic crisis.

The choice, he said, is either “conflicts, uncertainty, economic decline and
collapse…or the table of negotiation and understanding.”

Iryna Dzyubynska, who has lived in Miami for 14 years, lamented the state of
affairs in Ukraine and said she had high hopes after the Orange Revolution
protests. Hanna Popovych, from the western Ukrainian region of
Ivano-Frankivsk, said people should expect this new government to fail and
should prepare to elect a new, better leader.

“We should give Yanukovych time to fail, then demand the resignation of his
government, Yushchenko’s impeachment, and revote,” she said.      -30-
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11. HOLODOMOR 1932-1933 COMMEMORATION EXHIBITION IN KYIV

UNIAN, Kyiv, Ukraine, Thursday, August 17, 2006

KYIV – The Holodomor 1932-1933 Commemoration Exhibition at the IV

World Forum of Ukrainians, in the Exhibition Hall on the 5th floor of the
Ukrainian House, Kyiv, Ukraine, August 18-24, 2006 is part of a Holodomor
education and memorial exhibition program organized by Morgan Williams.

Williams serves as Director, Government Relations, Washington Office for
SigmaBleyzer, an emerging markets private equity investment group.

SigmaBleyzer has been operating in Ukraine for 13 years and has over $150
million invested in Ukrainian businesses.

Williams began collecting Holodomor works by Ukrainian artists ten years ago
when he lived in Kyiv and was working on the economic development of the
Ukrainian food system, from producer to consumer.

From 1933 to 1988 the Soviet government did not admit that millions and
millions of Ukrainians were forcefully starved to death during 1932-1933 in
what is now called the `Holodomor`, the forced terror, famine, death in
Ukraine.

 For over 55 years artists of all types in Ukraine were not allowed to
express themselves through their artistic works about the horrible tragedy
imposed on Ukraine. The repression for everyone in the Soviet Union
regarding real information about the Holodomor was very severe.

Only a very small handful of real photographs exits about the Holodomor.
Most of the photographs, said to be taken during the Holodomor in Ukraine,
were actually taken along the Volga River in Russia during the famine of
1921- 1923.

 
These photographs were first used by the Germans in 1935 for a large anti-
Soviet campaign and then by American media-mogul Randolph Hearst
in front-page stories for his many newspapers.

The Holodomor Education and Commemoration Collection in Kyiv has grown

over the years and now represents around 400 items including paintings, poster
art, graphics, linocuts, folk art, photos and other items.
 
Williams first exhibited the collection in Kyiv at the Ukrainian in November of
2000. Additional memorial exhibitions were held in the Ukrainian House in Kyiv
in November of 2003 and 2005.

The exhibition in 2005 was opened in Kyiv November 24th on the eve of the
Holodomor Memorial day. President Viktor Yushchenko launched a large program
to tell the world about the Holodomor during the 75th memorial commutation
in 2007-2008.

The Holodomor exhibition at the IV World Forum of Ukrainians represents only
one-half of the collection. The other half is now held in a traveling
exhibition sponsored by the Ukrainian Ministry of Culture. Holodomor
Memorial Exhibitions are being held in 21 major cities throughout Ukraine
during 2006.

Williams is working on a special historical album entitled “The Holodomor
1932-1933 Through The Eyes of Ukrainian Artists” is being created in
cooperation with the Ukrainian Ministry of Culture and Lidia Lykhach of
Rodovid.

Sets of posters about the tragedy are also under consideration that would be
distributed to Ukrainian embassies around the world by the Ministry of
Foreign Affairs. Several international exhibitions are also under consideration.

In May of 2004 Williams in cooperation with the Ukrainian Federation of
America in Philadelphia created the Dr. James Mace Memorial Holodomor Fund.
The Fund now supports the ongoing program and is the trustee of the artworks
purchased from donor funds. Williams now serves as archivist of the
collection.

A Gulag Education and Commemoration program has also been launched in

memory of those Ukrainians who suffered under Stalin’s Gulag repression
schemes.

Additional support for the Holodomor Education and Exhibition Program has
been provided by the Kiev-Atlantic Group, David and Tamara Sweere; Estron
Corporation; Bahriany Foundation; SigmaBleyzer; Odum, Association of American
Youth of Ukrainian Descent, Minnesota Chapter; The Bleyzer Foundation;
Ukrainian Orthodox Church of the USA; WJ Group of Ag Companies, Eugenia
Sakevych Dallas, Alex and Helen Woskob, the Swift Foundation, and the
Ukrainian Federation of America, Dr. Zenia Chernyk.

The Collection is always seeking historical information about the Holodomor
and about artists around the world who have used their talents to express
this tragedy. For further information contact Morgan Williams, P.O. Box
2067, Washington, D.C., 202 473 4707, morganw@patriot.net.  -30-

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LINK: http://www.unian.net/eng/news/news-163938.html
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NOTE: Morgan Williams is a member of the Organizational Committee for
the 75th Anniversary of the Famine in Ukraine 2007-2008 appointed by the
Cabinet of Ministers.
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12. UKRAINE SPY AGENCY SECRET ARCHIVES ON SOVIET-ERA
                FAMINES OPENED UP SBU ANNOUNCES IN KIEV
       It was one of history’s worst instances of human-sponsored mass death.
     Dispute continues: Was it caused by pardonable errors? Did the Kremlin kill
                    millions of Ukrainians intentionally or by accident.                                 

Deutsche Press Agence (DPA), Kiev, Friday, August 18, 2006

KIEV – Ukraine’s national intelligence agency the SBU on Friday opened up
formerly-secret state archives on brutal Soviet era-famines causing the
deaths of millions.

SBU historians after four years of reviewing old KGB records made public
more than 3,000 pages of 130 official state documents.

It was the first time any former Soviet republic had released to the public
archival information concerning the mass starvations, said Vasyl Danielenko,
an SBU spokesman.

The entire formerly-classified archive of the former Soviet republic Ukraine
was now available for viewing in paper or digital format, or at the Internet
web site www.ssu.gov.ua, he said.

The Soviet government in its early years of existence presided over three
deadly and wide-reaching famines – in 1921-22, 1932-33, and 1946-47.

Between six and ten million Ukrainians died of starvation in 1932-33, after
Soviet leader Josef Stalin ordered the forced confiscation of food from the
Ukrainian countryside.

It was one of history’s worst instances of human-sponsored mass death.

Many Ukrainians believe Stalin’s goal was the genocide of the Ukrainian
nation. Known in Ukraine as the ‘Holodomor,’ the 1932-33 famine is reviled
in Ukraine in a way similar to the Jewish Holocaust internationally.

Some Ukrainians however say the famines were caused by pardonable errors by
Soviet leaders of the day, rather than an conscious effort by Moscow to wipe
out all Ukrainians.

Besides Ukraine, the famines affected southern Russia, and portions of the
modern states Moldova and Kazakhstan.

The dispute over possible Soviet complicity in the famines has remained
topical in Ukraine to the present, in part, because historians had been
unable to gain access to Soviet-era archives concerning the events, to
determine whether the Kremlin killed millions of Ukrainians intentionally or

by accident.                                  -30-
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http://news.monstersandcritics.com/europe/article_1191722.php/Ukraine_spy_agency_opens_secret_archives_on_Soviet-era_famines

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13.       SBU DECLASSIFIES DECUMENTS OF STATE POLITICAL
          DEPARTMENT UKRAINIAN SOVIET SOCIALIST REPUBLIC
               RELATED TO THE GREAT FAMINE OF 1932 AND 1933

Ukrainian News, Mykola Savchuk, Kyiv, Ukraine, Friday, August 18, 2006

KYIV – The Security Service of Ukraine has declassified the documents of the
State Political Department also known as GPU of the Ukrainian Soviet
Socialist Republic concerning the Great Famine of 1932 and 1933 that were
deposited in the state archive of the SBU.

Serhii Bohunov, the head of the state archive of the SBU, announced this at
a presentation of the electronic collection of the documents. He said the
SBU had collected the documents in the archive and the archives of regional
bodies for three or four years.

The SBU has collected and declassified 130 documents, including resolutions
of the GPU of the USSR, directives, instructions, statements by witnesses,
and files of criminal cases. The SBU has declassified 5,000 pages of
documents.

Bohunov said the documents allows to see the general picture of the role of
the bodies of the GPU in the organization of the Great Famine, though this
is the task for historians to release findings.

Maryna Ostapenko, press secretary for SBU, said the SBU has declassified all
documents deposited in its archives. he documents are available at the state
archive of the SBU and most of them have been posted on the official Web
site of the Ukrainian special service. [www.ssu.gov.ua]          -30-
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14.      UKRAINE WANTS UNITED NATIONS TO RECOGNISE

                         STALIN-ERA FAMINE AS ‘GENOCIDE’

Agence France Presse (AFP), Kiev, Ukraine, Saturday, August 19, 2006

KIEV – Ukraine hopes to persuade the United Nations to recognise that the
great famine of 1932-33, which killed up to 10 million Ukrainians, was
genocide, a senior foreign ministry official said Saturday.

“We now have much more witness testimony and facts proving that this was

a terrible page in the life of the Ukrainian people… that claimed up to 10
million victims,” said Deputy Foreign Minister Mykola Maimeskul at a forum
on the famine in Kiev.

Ukrainian experts charge that under Josef Stalin Soviet authorities
intentionally brought about the famine in order to weaken Ukraine’s nascent
independence movement.

The famine has been blamed on the programme of forced collectivisation

of land begun in 1932 and the seizure by authorities of seed, wheat, flour,
vegetables and livestock. Estimates of the death toll range from four
million to 10 million people.

Jacob Sundeberg, president of an international commission set up to
investigate the famine, declared on Saturday that the facts supported the
use of the label genocide. “No doubt, the Ukrainian famine of 1932-1933

does fit the UN definition of genocide,” he said.

In a separate statement, he said: “I find that lethal intent was directed at
the Ukrainian nation as such”.

Less severe famines occurred in Ukraine in the years 1921, 1923, 1946 and
1947.                                             -30-
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NOTE:  Your AUR Editor attended the Holodomor Forum and was one
of the four persons asked to make a formal presentation. 
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15. FOREIGN MINISTER TARASIUK ATTRIBUTES RUSSIA’S POSITION
  ON SEVERE FAMINE IN UKRAINE IN 1932-1933 TO ITS RELUCTANCE
         TO GIVE APPRAISAL TO CRIMES OF COMMUNIST REGIME 

Olha Volkovetska, Ukrainian News, Kyiv, Ukraine, April 21, 2006

KYIV – The acting Minister of Foreign Affairs, Borys Tarasiuk has attributed
Russia’s position on the devastating famine in Ukraine during 1932-1933
(also known as Holodomor) to its being unwilling to give appraisal to the
crimes by the communist regime.

Tarasiuk made a statement to this effect at a news briefing following the
most recent Foreign Ministers’ meeting of the Commonwealth of Independent
States (CIS).

He reported to journalists the voting results on Ukraine’s proposal that the
Holodomor should be declared an act of genocide, saying that only four
countries voted in support of this proposal.

Commenting on Russia’s position, Tarasiuk said that Russia is making
attempts to confirm itself as a successor state to the Soviet Union on the
one hand, but, on the other hand, refuses to assume the responsibility for
the crimes committed by the country to which it is the successor.

This is apparently the unwillingness to give appraisals to what had happened
and what the communist regime had done,” Tarasiuk said. The [Holodomor]
issue was only a procedural question that was not even put up for
discussion, he emphasized.

“Basically, in normal international organizations procedural questions are
[always] approved,” Tarasiuk said.

As Ukrainian News reported before, Russia, in a statement issued on April
21, opposed the situation with declaring the severe famine in Ukraine in
1932-1933 an act of genocide against the Ukrainian nation to be politicized.

During the vote on April 21 on including the issue of declaring the Famine
1932-1933 an act of genocide against the Ukrainian people on the agenda for
the Foreign Ministers’ meeting of the CIS nations, the proposal was only by
supported four nations: Georgia, Moldova, Azerbaijan and Ukraine, while
Russia, Belarus, Kyrgyzstan, Tajikistan and Uzbekistan voted against, and
Armenia, Turkmenistan and Kazakhstan abstained from voting.

Ukraine intends to prepare a document before 2007 on declaring the 1932-1933
Famine in Ukraine to be an act of genocide against the Ukrainian people, in
the hope that this would be adopted by the United Nations Organization.

President Viktor Yuschenko recently called on the leaders of all countries
to recognize the 1932-1933 Famine in Ukraine as an act of genocide against
Ukrainians.

The parliaments of several countries have recognized the famine as an act of
genocide. In November 2003, 25 member-countries of the United Nations
Organization drafted a joint statement that described the famine in Ukraine
as a result of the policies of a totalitarian regime. Other states later
aligned themselves with this statement.

The Ukrainian parliament declared the famine to be an act of genocide in
2003. According to various estimates, between 3 million and 7 million people
died in the 1932-1933 famine in Ukraine.                    -30-
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16.     WOUNDS THAT TIME CANNOT HEAL
                  The 1930s manmade famine in the Ukrainian countryside

By Oksana Shapova, The Day Weekly Digest in English

Kyiv, Ukraine, Tuesday, March 28, 2006

The following story recounted by an 85-year-old woman reflects the history
of an entire generation. Let us call her Vira (“Faith”).

It is not her real name, but it reflects the essence of many people who
lived through the Holodomor, World War II, and the repressions but still

had faith in the justice of a system that promised them a “radiant future,” a
dream that enabled them to tolerate their darkest days.

Vira was born in 1920 in a village in the Odesa region. She became a
semi-orphan on the first day of her life, when her mother died in
childbirth. The father raised his daughter on his own until he remarried,
and Vira got an elder stepsister and later a stepbrother.

Vira clearly remembers the events of the 1930s to this very day.

Collectivization was completed in the countryside by 1932. No wages were
paid on the collective farm. Every villager had to complete 120 workdays in
one working season. If someone failed to meet the target, s/he had to
provide an explanation.

At year’s end, after the harvest was gathered, the greater part of it was
consigned to the state, and a certain percentage of the remainder was
divided into the number of days worked and then distributed among the
peasants in the form of grain, peas, etc.

In 1932, when it came time to distribute the earnings, it turned out that
absolutely everything had been requisitioned. As people gradually found out,
they began to contemplate using the previous year’s reserves for the next
year. At this very time the government decreed that all “surplus” grain and
other foodstuffs be consigned to the state because “the country’s working
class was starving.”

The collective farmers refused to obey, in response to which the government
launched the so-called “kulak dispossession campaign.” The first villager
whom this fate befell was a neighbor of Vira’s. He and his family lived in a
low-set thatched house resembling the one where Taras Shevchenko had been
born and raised.

There were a lot of children in the family, and all of them worked on their
land. No hired workmen had ever set foot on their plot. Vira had never seen
the mother of these children and thought they were orphans.

Those who carried out the kulak dispossession requisitioned everything down
to the last grain. They did not harm the master of the house, although many
so-called kulaks were arrested and sent “up the river.” This farmer was
famous in the village because he had golden hands: he was especially good at
making knee-high boots.

After his dispossession, in order to be able to keep body and soul together,
he began visiting other villages to mend footwear. He would bring home the
food that he was given as payment: he would never eat it himself and was
steadily becoming emaciated.

One day, on his way home from work, he fell and died of starvation. He was
the first casualty of the Holodomor in this village. All the villagers paid
him their last respects. Nothing is known about the destiny of his children
because nobody ever saw them again.

As the dispossession campaign was in full swing, searches were conducted
every other day, if not every day. They usually came at night, pounding on
the door and shouting, “Open up, it’s a search!” The people would open their
doors and then stopped locking them altogether.

Activists of the village “Committee of Poor Peasants” conducted these
searches. Vira recalls that they would pry into every corner of the house
and the backyard. They would take everything away, no matter how many
children there were in the family, or what age they were.

Vira’s peers, as well as younger and older children, stayed out of school.
Instead, they would go to the harvested fields early in the morning to look
for something edible. It was a great joy to find a mouse hole with a handful
of grain inside.

Whoever found such a hole would be overjoyed, while the other children
looked on with envy. A wonderful find was an ear of corn or a frozen carrot.
The children would put this into their bag and carry it home.

This lasted until the heavy snowfalls arrived. When the ground was covered
with snow, the famine intensified. People ate everything they could get
their hands on. There was not a single fowl, pig, or cow left in the
village – even dogs and cats began to be eaten. People were bloating up and
starving to death. Word spread that a mother had eaten her own child in a
neighboring village and that human corpses were also eaten.

Vira’s father looked for a job elsewhere. Since he was good at repairing
sewing machines and other mechanical appliances, he would walk to
neighboring villages. He would set out at dawn and come back late at night.

More often than not people had nothing to give him, so he would return home
empty-handed. Although his feet ached and became swollen, he left home every
day in the hopes of finding something to feed his family.

Once he was given some millet. This was a real treat for the entire family.
Chary of bringing the millet inside, he hid it in the yard. A search party
came that same night. When they had finished, the father went outside to get
the millet, only to see that it had disappeared.

Vira can still see her father going inside the house, tormented and swollen,
sitting down on the floor, and weeping for a long time. The rest of the
family cried with him.

People died every day. They would fall dead right on the street, in the
fields and houses; they were no longer buried or mourned. Pits were dug and
several corpses were thrown inside one of them.

Soon after, Vira’s 14-year-old sister went to Odesa to apply to a vocational
school attached to the Lenin Cannery. She was admitted and assigned a place
in the dormitory. Each student was given 400 grams of earthen-black bread a
day. The sister did not eat even a tiny morsel of these 400 grams: she would
dry the bread on a primitive metal stove and put it into a basket.

When the basket was full, the girl told her school teachers that her family
was starving, and they allowed her go home for two days in order to bring
the dried bread.

Vira’s sister took the Odesa-Kharkiv train, clutching the basket containing
the treasure for her famine-stricken family. But when the skinny 14-year-old
girl reached her destination and stepped onto the railway station platform,
a policeman came up to her, took her by the scruff of the neck, and dragged
her to the police station. There, he spread out a mat, emptied out the whole
basket, spanked the girl, and threw her out.

After walking 12 kilometers to her village, she came into the house and,
unable to say a word, squatted down and wept long and hard over the empty
basket. The basket was empty and so was the child’s soul.

There is pain that cannot be described with words; there is profound despair
that can only be compared to hell. Tears cannot take this pain away, time
cannot dull it, and medicines cannot kill it – the memory of this is a
lifelong open wound.

After crying her heart out, Vira’s sister, hungry and desolate, went back
the same day.

During this period so-called torgsins (shops for foreigners), began to crop
up. In these stores people could exchange their belongings for food. Vira’s
father once visited a shop like this.

His wife had left a beautiful wedding dress, a reminder of a dear person who
was no longer alive. Ignoring the lump in his throat, father took the dress
to the torgsin. In exchange, he was given a small loaf of bread blacker than
earth.

At home, Vira’s father cut the bread into pieces for each child to eat. It
seemed to Vira that she had never eaten anything tastier in her whole life.
Yet she managed to swallow only one morsel: the next swallow sent her

throat into a spasm. She began to choke and everyone rushed to help her.

 What an indescribable treat a tiny piece of earthen-black bread can be for
a person robbed of the right to be a human and for whom the words
“protection” and “care” can only be associated with her own father, not the
state!

With the appearance of vegetation in the spring of 1933, people began eating
grass, especially thick nettles. There had been no animals in the village
for a long time. Peasants gradually began to sow vegetables, mainly beets,
some potatoes, parsley, and dill. Little by little, bread began to appear,
as did the hope of survival.

Vira recalls renting a room in a neighboring village, where she attended
school. When she would leave her home after a weekend, she usually took some
beets. Once in her room, she would divide them up for the entire week. It
was a real feast when her father could give her some beans.

In 1935 Vira was admitted to a “working people’s faculty.” She was paid a
scholarship that barely sufficed for corn flour. This flour had to be
thinned in boiling water and then drunk. The girl used to take a glass of
this “beverage” and go to classes. She had to content herself with the same
drink for supper, so she always suffered from a hunger-induced headache.

Sometimes Vira would just sit and cry. This only intensified the headache
but perhaps dulled her spiritual pain. This lasted until October 1937, when
Vira, a first-year student at a medical institute, received her first
“excellent scholastic achievement grant.” For the first time in years she
bought some halvah and bread and appeased her hunger.

She clearly remembers the time when she ran out of corn flour and money

and had nothing to eat for three days. Then her stepmother’s sister suddenly
came to visit Vira and gave her three rubles.

It was evening, but Vira, forgetting even to say thank you, rushed to where
some old women were selling corn flour. Although it was late, she managed

to buy a few glassfuls of this flour. In her heart Vira still carries that
unsaid “thank you.”

Vira can recount many more things: about the war that claimed the lives of
all her relatives, the post-war devastation, etc. There are millions of
destinies like this, not dozens, hundreds, or thousands.

Those who lived through all these events are the bearers of history that has
been etched on the heart, a history that is impossible not only to forget
but which cannot be converted into a mere succession of historical facts,
happenings, and dates.

These people are re-living it every day of their lives. They wake up and
fall asleep, looking back on the past with a fear that this might reoccur
some day. In the past this fear would compel them to put away for a rainy
day most of their earnings. But those savings became the same emptied
baskets as the one Vira told us about.

Only God knows how much love and care it takes to ease their tormented
hearts. Whoever considers himself human cannot help bowing to the memory

of these people and do his best to alleviate their sufferings today and ensure
that tomorrow will not create a hell on earth.                  -30-
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LINK: http://www.day.kiev.ua/159910/
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17.                  GULAG EXHIBITION: DARK COMEDY
            FROM ISLANDS VERY FAR AWAY FROM ELLIS

By Andrew Stuttaford, National Review
New York, NY, Tuesday, August 01, 2006

Sometimes there can be nothing more telling than contrast. The boat sailing
in the sunshine of a July 4th weekend was filled with anticipation,
exhilaration, tourists, New Yorkers, the yellow t-shirts of the Jones family
reunion, and the pointing and squinting of countless digital Kodak moments.

Ahead lay Ellis Island, its museum of immigration, and, tucked away in a
corner of that museum’s third floor, an exhibition (Gulag: Soviet Forced
Labor Camps and the Struggle for Freedom) dedicated to a monstrosity that
had its origins on some very different islands, islands scattered in the
White Sea, islands that became (in Alexander Solzhenitsyn’s words) the
“mother tumor” of a cancer that eventually metastasized into an archipelago
of terror, slavery and murder all across the Soviets’ gargoyle “union.”

It stretched so far, in fact, that to reach some of its most dismal,
desolate, and destructive outposts, the camps at Kolyma, took a boat trip
too. There was no exhilaration on these ferries to an underworld darker than
Hades, just death, hunger, squalor, rape and disease. The only anticipation
was of worse to come.

Annotated illustrations by one former prisoner, Evfrosiniia Kersnovskaia,
displayed in this exhibition showed what awaited the guests of her
particular corner of the Gulag.

They were glimpses of a drained, pitiless world, populated by predators and
their hopeless, helpless victims, illuminated only by the surviving shreds
of Kersnovskaia’s humanity and the bleak poetry of her furious prose. Here
she recalls her own arrival at a “corrective labor camp”:

“First we were made to strip naked and were shoved into some roofless
enclosures made out of planks. Above our heads the stars twinkled; below our
bare feet lay frozen excrement. An enclosure measured 3 square feet. Each
held three to four naked, shivering, and frightened men and women.

Then these ‘kennel cages’ were opened one after the other and the naked
people were led across a courtyard .into a special building where our
documents were ‘formulated’ and our things were ‘searched.’

The goal of the search was to leave us with rags, and to take the good
things, sweaters, mittens, socks, scarves, vests, and good shoes, for
themselves. Ten thieves shamelessly fleeced these destitute and barely alive
people. ‘Corrective’ is something that should make you better, and ‘labor’
ennobles you. But ‘camp’? A camp wasn’t a jail. So then what on earth was
going on? “

This exhibition never quite told us. What it did do was give a sense of what
life, death, and the condition somewhere in between (they even had a word
for that) in the Gulag was like.

Sometimes this was achieved by the display of a few simple objects, such as
a crude handmade spoon; a luxury in the camps (prisoners were expected to
eat with their hands). Sometimes it was just the stories of the victims
themselves.

  HER ‘CRIME’ WAS TO STEAL THREE POUNDS OF RYE FROM
              THE FIELD THE STATE HAD STOLEN FROM HER

Take Maria Tchebotareva, for example. The regime did. Her photograph was on
display. She was sad-eyed, broad-faced, head-scarfed, an icon of the Slavic
heartlands. In happier times she might have been imagined as backdrop to
some Tolstoyan pastoral idyll, but she found herself trapped instead inside
a real, far darker script.

Her ‘crime’ was to steal three pounds of rye from the field the state had
stolen from her. She had four hungry children to feed, and in the famine
years of 1932-33 (oddly no mention was made of the fact that that famine,
known to Ukrainians as the holodomor, was man-made, and left millions of
deaths in its wake) and nothing to feed them with.

She served twelve years in the Gulag for those three pounds, followed by
another eleven in Arctic exile. She never saw her children again. For the
Tchebotarevs there was to be no family reunion.

In 1949 they took Ivan Burylov too, a middle-aged beekeeper stung beyond
endurance by the hypocrisy of it all. His offense? To write the word
 “comedy” on his supposedly secret ballot paper (there was, naturally, only
one candidate).

They tracked him down. Of course they did. They gave him eight years. Of
course they did. We’re never told whether he survived, but his ballot
endured (it was included in the display), and in its acerbic, laconic way,
it was as effective a monument to the USSR as any I’ve seen.

Another such monument, but this time specifically to the cruelty and
futility of Soviet rule is the “Belomor” canal. Carved through the roughly
140 miles of granite that divide the White and Baltic seas, it was a
typically pharaonic scheme of the early Stalin era involving well over
100,000 prisoners with primitive tools (pickaxes, shovels and makeshift
wheelbarrows) and a lack of precision that would have shocked the ancient
Egyptians: it proved too shallow and too narrow to ever be of much use.

As a killing machine, however, the Belomor project worked very well. In her
history of the Gulag, Anne Applebaum cites an estimate of 25,000 dead (there
are others, far higher), but no number was given in this exhibition, just
the bland adjective “many.”

That was fairly typical of an exhibition that too often shied away from
specifics. That was a mistake: the statistics and the details count, if only
as a warning for the future, a warning that, judging by one statistic that
was included, has yet to be properly heeded. Polls in Russia show that
“approval” (whatever that might mean) of Stalin’s leadership has risen from
7 percent to 53 percent over the last ten years.

That’s not to say an attempt was made to minimize the horror that was the
Belomor. Far from it. Most striking was a continuous loop of old propaganda
newsreel purporting to show the enthusiasm of the prisoners, drones of the
anthill state, as they clawed, dug, and hacked their way to reform,
rehabilitation, and socialist reconstruction through the rock, swamp, and
snow; and, yes, just like in Hitler’s camps, there was an orchestra.

A few feet further down the corridor (somehow the immigration museum’s still
visibly institutional character added to the force of an exhibit dedicated
to a state run amok) was yet more footage: those familiar parades of the
weapons of Armageddon, syncopated gymnasts and marching ranks of regimented
enthusiasm, but also, more revealingly, film of a young factory worker
shouting her praises of great Comrade Stalin, the edge to her voice
betraying the collective hysteria that always lurks somewhere within the
order, discipline and control of a totalitarian system.

Much of the rest of the exhibition was dedicated to Perm 36, a logging camp
set up in the wake of World War Two, that, after the end of Khrushchev’s
brief “thaw,” was used to imprison, torment and sometimes kill the Kremlin’s
most determined opponents, the bravest of the brave, who persisted in their
political work even after serving earlier sentences, men like the Lithuanian
Balis Gayauskas.

Undaunted by two years in Nazi custody, 35 years in the Gulag, and a further
three years in exile, this extraordinary individual had the last laugh – he
was elected to the parliament of a Lithuania that had itself won back its
freedom.

That happy ending is a satisfying reminder of the USSR’s ignominious
collapse, but before reaching the inevitable pictures of a tumbling Berlin
Wall, the exhibit took time to pay tribute to the tiny band of dissidents,
who for long, lonely years did what they could to preserve the idea of
freedom in lands that had known too little of liberty.

Naturally, the giants were featured, Solzhenitsyn, the great chronicler, Old
Testament in his wrath and grandeur, the gentle-souled, iron-willed Sakharov
and, of course, Sakharov’s wife, the spiky, indomitable Bonner, but so were
others too, lesser-known, but no less courageous: Sergei Kovalev, Ivan
Kovalev (father and son), Tatiana Khodorovich, Tatiana Veilikanova, Grigorii
Pod’iapolskii, Anatolii Krasnov-Levitin, Valerij Senderov, Tatiana Osipova
(Ivan Kovalev’s wife), Levko Lukjanenko, Leonid Borodin, and Vasyl Stus.
Remember their names. Remember their sacrifices.

It would have been unreasonable to think that this relatively small
exhibition could ever have illustrated the full scope of decades of Soviet
tyranny, but it was disappointing that it never really managed to answer
Evfrosiniia Kersnovskaia’s haunting question: “What on earth was going on?”

It wasn’t just a question of the exhibition’s missing statistics. The bigger
problem was the failure to put the Gulag into its wider context. The
impression was somehow left that the camps were primarily a means (albeit
brutal) of providing the manpower for “Stalin’s campaign to turn the Soviet
Union into a modern industrial power,” something that sounds if not exactly
benign then at least more reasonable than the description that this
murderous system actually deserved.

Certainly, forced industrialization was part of the story, but it’s an
explanation that obscures the camps’ significance within a far more
ambitious plan.

Why Soviet Communism, a poisonous blend of millennial fantasy, imperial
dream, paranoia, and psychosis, to name but a few of its sources and
symptoms, evolved in the way it did is the subject of potentially endless
debate, but in understanding the way that the dictatorship managed to
maintain its grip for so long, it’s necessary to realize that the Gulag was
just one part of a network of terror, mass murder, and oppression intended,
by eliminating all inconvenient traces of the past, to remake man into a cog
in the new, perfect and all-encompassing Soviet machine. That is what was
going on, something that this exhibition never truly managed to convey.

Despite this, its joint organizers, Perm’s Gulag Museum and the National
Park Service, should be congratulated for doing something to bring the often
overlooked horrors (and lessons) of the Gulag to wider attention over here
(after closing at Ellis Island on July 4th, the exhibition travels to
Boston, Atlanta, Washington, D.C., and Independence, California).

The fact, controversial to some, that space was found to note that many
other countries (including the United States) have, like today’s Russia,
found it difficult to come to terms with brutal systems that have defaced
their histories, should be seen as a statement of the obvious, not some
underhand attempt to play down the extraordinary evils of the Soviet past.

But if you want to consider how much more remains to be done in this respect
in Russia itself, remember the disturbing poll I mentioned earlier, and,
while you are at it, reflect on the fact that according to Memorial (an
organization dedicated to keeping alive the history of Soviet repression)
between 2002 and 2005 30 monuments to Stalin were erected in the territories
of the former USSR, There are, reportedly, plans for another 20 more.

Now ask yourself what the reaction would be if Germans began putting up new
statues to Adolf Hitler.                          -30-
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18.   UKRAINE AND RUSSIA: DIVERGENT POLITICAL PATHS
       Ukraine is in post-orange political meltdown while Russia is reinventing
      itself as a successful energy superpower. Right? Wrong, says Alexander
            J Motyl, who looks beneath the surface of a changing relationship.

ANALYSIS & COMMENTARY: By Alexander Motyl

Open Democracy Online, London, UK, Thursday, August 17, 2006

Here’s a puzzle. Throughout the 1990s, Ukraine and Russia were
quasi-democracies with authoritarian features. By 2001, they began moving in
the direction of greater despotism.

But then their paths diverged. Ukraine’s trajectory shifted toward democracy
during and after the “orange revolution” of late 2004. In contrast,
President Vladimir Putin’s Russia has become a full-fledged authoritarian
state.

Why was Putin able to succeed in establishing a dictatorship while Ukraine’s
president Leonid Kuchma failed? Although differences in personality and
leadership style matter, the answer lies in both countries’ institutional
legacies and the difference in their approaches to change.

The Soviet Union was an empire, but Ukraine and Russia occupied different
places in the imperial structure. Ukraine was the object of imperial rule –
a periphery – and emerged from the Soviet empire without a functioning state
apparatus and skilled elite.

Russia was the subject of that empire – the metropole – and inherited an
imperial state apparatus and highly skilled elite. Ukraine lacked state
institutions and was hard-pressed to pursue reform in their absence.

Russia possessed state institutions, but of a bloated and reactionary kind
that served as an obstacle to democracy, the rule of law, and the market.
Ukraine’s first two presidents, Leonid Kravchuk (December 1991-July 1994)
and Leonid Kuchma (July 1994 to January 2005), avoided radical change,
thereby enabling political institutions and a strong democratic opposition
to emerge.

Russia’s President Boris Yeltsin (December 1991-December 1999) pursued
radical change and, tragically, thereby polarised Russia’s political
parties, weakened the state, and created an under-institutionalized
political environment that facilitated the emergence of a strong
anti-democratic ruler.
                                   NEIGHBOURS APART
Although the prevailing mood in Ukraine almost two years after the orange
revolution is one of profound disappointment, Ukraine is a far different,
and better, country today. It has opened itself to the world. It is
democratic and free, even if chaotically so.

Civil society and the media are robust, open debate is the norm, foreign
direct investment has boomed, and the rule of law has improved. Ukraine
remains poor and corrupt, but, unlike Belarus and Russia, it is anything but
an authoritarian state with a dictatorial leader and a passive population.

How could a democratic breakthrough take place in a country known for
systemic stasis and government deadlock? Paradoxically, the “stagnation” of
the 1990s made the orange revolution possible. It takes time for
institutions – or valued rules of the game – to take hold. They “stick” only
after people use them repeatedly and come to view them as effective,
valuable, and “natural”.

Since such rule-based behaviour evolves slowly, almost invisibly, many
observers failed to see that Ukraine had become transformed since
independence in 1991, when it was a post-totalitarian and post-imperial
“space” without the institutions of a state, the rule of law, democracy, a
market, and civil society.

That changed in the last fifteen years. A state apparatus and skilled
administrative elites emerged, parties were established, regular elections
were held, popular activism grew, and market relations took hold (today
two-thirds of GDP is produced privately).

Because all political players practiced “formal democracy”, Ukraine’s
fractious parliament never submitted to the increasingly authoritarian
president, Leonid Kuchma.

That made him vulnerable to pressure from civil society and encouraged him
to forge alliances with economic clans that benefited from crooked
privatisation schemes. The result was a rough balance of power between
parliament, president, civil society, and business.

Kuchma’s illegitimate regime crumbled during the orange revolution, when
civil society rose in protest, and parliament and the oligarchs stood on the
sidelines. Constrained by a constitution invoked by everyone, the
revolution’s protagonists and antagonists resolved the crisis by negotiating
(not by shooting, as in Russia in 1993), thereby enabling the people to
elect Viktor Yushchenko president.

In stark contrast to his Ukrainian counterparts, Russia’s Boris Yeltsin
attempted to introduce radical change by means of “shock therapy” in the
early 1990s. Although supported by many in the west, the policy was doomed
to failure.

A strategy of “revolution from above” could not work without the active
intervention of the state, but the post-imperial Russian state bureaucracy
was anything but revolutionary or even reformist.

The inevitable failure of Yeltsin’s attempted revolution fatally weakened
the radical reformers as a political force. His policies also polarised the
political spectrum, thereby leading to the consolidation of both the extreme
left and the extreme right, undermining Russia’s nascent democratic
institutions, and enabling the president to emerge as Russia’s supreme
political figure.

Faced with chaotic economic change, polarised politics, and increasingly
uncertain rules of the game, state ministries and provinces tried to grab as
much authority as possible, both because it was there to be grabbed and
because grabbing it protected them from the assaults of an imperious central
government.

The resulting fragmentation of the state enabled forces associated with one
of the Soviet and Russian state’s most efficient agencies – the secret
police – to emerge in the late-Yeltsin era and take control of the
government and, increasingly, the state. Small wonder that a former KGB
officer – Putin – succeeded Yeltsin as president and that state
consolidation became his overriding programmatic goal.

Since the revolutionary democrats appeared to have been responsible for the
state’s fragmentation, state consolidation assumed anti-democratic and
anti-reformist dimensions. Under conditions such as these, the free press
and civil society could easily be viewed as obstacles to state
consolidation, especially when pursued under the auspices of the siloviki
from the security services.

Since coming to power, Putin has methodically dismantled Yeltsin’s
quasi-democracy and replaced it with authoritarianism. He has muzzled the
press, emasculated the parties and parliament, staffed the government with
his cronies from the security services, co-opted the oligarchs, extended
state control over the economy, and terrified civil society.

Hoping to appeal to Russians angry at the loss of empire and superpower
status, Putin has also played on great-power and imperial nostalgia,
nationalism, and patriotism, vowing to crush all of Russia’s enemies, the
Chechens in particular.

In 2005, Putin even declared the collapse of the Soviet Union the “greatest
tragedy of the 20th century.” Were such changes taking place in the 1930s,
they would be called fascist.
                            THE LASTING ORANGE LEGACY
The rough power balance between parliament, president, civil society, and
business in Ukraine ensures its continued democratic development. It also
means that systemic change will remain incremental and frustrating.

Unconsolidated democracies move slowly, Ukraine’s constitution is a recipe
for government volatility, and its corrupt political and business clans will
resist reforms that undercut their interests.

The March 2006 parliamentary elections and their aftermath are a case in
point. Ukrainians expected the elections to be fair and free, as indeed they
were. The results – with 32% of the vote going to the Party of Regions (PR),
22% to the Yulia Tymoshenko Bloc, 14% to the pro-presidential Our Ukraine
bloc, 6% to the socialists, and 4% to the communists – were also accepted as
legitimate.

The “blue” PR, which represents the oligarchic interests of Ukraine’s
Russian-speaking and anti-orange eastern rust belt, behaved democratically
before, during, and after the ballot. Its leaders are demagogues and
oligarchs, but they appear to know that the constitution is the only game in
town.

With the communists, whose candidate for president won 38% of the vote in
1999, having been demolished, the PR could now become Ukraine’s equivalent
of “post-communists”.

Attempts by the orange forces – the Tymoshenko Bloc, Our Ukraine, and the
socialists – to form a governing coalition produced months of horse-trading
and paralysed government. After they finally signed a coalition agreement in
late June, some socialists bolted and joined the PR and communists,
provoking further rounds of mud-slinging before the decision of Viktor
Yushchenko to nominate Viktor Yanukovich as prime minister on 3 August
brought the messy standoff to an end and inaugurated a new political phase.

Ukrainians were disgusted by their leaders’ infantile shenanigans, but the
seemingly endless post-electoral negotiations did show that Ukraine’s
politicians, like their counterparts in other democratic countries, were,
despite deep personal animosities, resolving their differences according to
the rules of the game.

Our Ukraine’s parallel negotiations with the PR about a blue-orange
coalition, like the socialists’ decision to back the blue forces, also
testified to an emerging consensus on centrist principles. Blue and orange
agree that Ukraine should be an independent, democratic, multinational, and
law-governed state with a market economy.

They insist on the inviolability of the constitution; want a vibrant
parliament; support a free press, a market economy, and cultural tolerance;
and oppose Ukraine’s fragmentation.

They believe further that Ukraine should enter the European Union and the
World Trade Organisation and maintain good relations with Russia and the
United States. Unsurprisingly, they also disagree violently on many
policies, such as Ukraine’s joining Nato, relations between Kyiv (Kiev) and
the provinces, the pace of privatisation, and the status of the Russian
language.

Notwithstanding the fireworks, Ukraine’s squabbling elites are searching
for, and finding, a modus vivendi in an institutionally democratic country
that is as suited today as Poland, Hungary, and Czechoslovakia were in 1989
to consolidate democracy and the market. Moreover, in contrast to the Kuchma
years, Ukraine’s politicians must also answer to an empowered population.

Some five million, primarily young, people took part in the orange
revolution. For Ukrainians in general – and especially for those in the
formerly quiescent blue eastern provinces – the revolution was a defining
moment that forced them to abandon their apathy, take a stand, and become
citizens.

The PR faces an especially difficult task. It must adapt to democratic rules
and answer to a mobilised populace that detests corrupt – even if
Russian-speaking – oligarchs.
                                 THE RUSSIAN PROBLEM
Thanks to its enormous geographic, military, demographic, and economic size,
Russia will always be a challenge for its non-Russian neighbours, Ukraine
included. Sadly, Russia currently is, and is all too easily perceived as,
also a threat to them because it has become – thanks in large part to
Vladimir Putin’s predilection for strong states, grandiose mythmaking, and
zero-sum thinking – neo-imperial, xenophobic, authoritarian, and unstable.

The Kremlin hopes to resurrect a sphere of influence in the “near abroad”.
Too many Russians openly dislike non-Russians. Putin has constructed an
unapologetically authoritarian state whose elites view democracy as a
threat. And Russia is a “petro-state” beset with weak political
institutions, inefficient government control of a resource-based economy,
pervasive corruption, and high instability.

Whatever such a post-Weimar Russia does – from waging a “gas war” against
Ukraine to banning Georgian wine to promoting its legitimate economic and
security interests – it evokes deep suspicion among non-Russians. That most
Russians support Putin is even more cause for alarm.

Ukrainians have ambivalent feelings about Russia in general and Putin’s
Russia in particular. All speak Russian and know Russian culture intimately,
and most have close ties with family and friends in Russia. But many also
resent the general Russian disdain for Ukrainian language and culture and
the widespread Russian view of Ukraine as a wayward province that will, in
time, come to its senses and return to Mother Russia’s fold.

Over half of Ukrainians prefer the west to Russia, about one-fifth are
unconditionally pro-Russian, and about one-third want to find a balance
between Russia and the west. Thanks to Putin’s neo-imperialism and
authoritarianism, that third group has been placed into an untenable
position and is tilting increasingly toward the west.

Kyiv’s response to geopolitical reality and divided domestic loyalties has
been, is, and will remain to try to maintain good relations with Europe, the
United States, and Russia. The brute fact of an enormous Russia right next
door means that Ukraine can never be too close to or too distant from it.

No Ukrainian elite with even a minimal commitment to the independence of
their own state can wilfully pursue the loss of sovereignty that an
unconditionally pro-Russian policy would imply. Even the bombastically
pro-Russian foreign policy of Alexander Lukashenko is premised on Belarus’s
continued existence. By the same token, neither can Ukraine’s elites just
snub their noses at Russia.

As a result, Ukraine has little choice but to pursue a foreign policy that
is neither pro-Russian nor anti-Russian, but anti-anti-Russian. In turn,
anti-anti-Russianness constrains the degree to which Ukrainian foreign
policy can be pro-western. The foreign-policy behaviour of Ukraine’s three
presidents – Kravchuk, Kuchma, and Yushchenko – reinforces this point.

Once elected, and regardless of whether their campaign slogans were more or
less anti-Russian or more or less pro-western, all settled into the
geopolitically determined space defined by the two poles of
anti-anti-Russianism and moderate pro-westernism.

However hard it may be to satisfy the competing interests of all three, Kyiv
has no alternative to a reactive “multi-vector” policy – unless Russia
forces its hand. The more neo-imperial, xenophobic, authoritarian, and
unstable Russia becomes, the more will Kyiv have to move toward the west,
regardless of whether Ukraine has an orange, blue, or orange-blue
government.
                                   RUSSIA’S WEAKNESS
Although Ukraine looks weak, its political institutions are actually in
pretty good shape. Russia looks strong, but its political institutions are
weak and unstable. Just as revolution from above was not a viable option for
Yeltsin, so authoritarianism is not a viable option for Putin.

Although Putin may be in control of the Russian state, the state itself is
brittle. Elites are at loggerheads, ministries promote their own interests
and fight over budgetary outlays, and coordination and cooperation in the
pursuit of policy ends is minimal.

The formal subordination of the regions and governors to the
“super-governors” and the centre, for instance, by no means signifies that
they really are beholden to Moscow’s wishes. Quite the contrary, the regions
are as avidly pursuing their interests today as they did in the past, but
they are doing so less visibly and less vocally.

Because the state remains weak and the rule of law has not been
consolidated, economic growth will continue to benefit at most a small
segment of the population. The example of third-world states shows that
authoritarian state-building can all too easily acquire pathological
characteristics, especially when institutions are non-existent or weak.
State building then becomes a source of patronage, and the state apparatus
becomes an obstacle to modernisation.

Russia’s ongoing transformation into a petro-state will only make things
worse. Energy-based states with weak political institutions are always
deeply corrupt states. They accumulate vast and easy wealth, which corrupt
elites invariably misappropriate. And oil states are rarely stable.

Russia’s turn toward neo-imperialism may be Putin’s biggest mistake. Many
Russians are angry at the loss of empire and feel humiliated by their
demotion to the status of a “third-world country with the bomb.” Putin has
purposefully and effectively played the nationalist card and revived a
variety of symbols associated with Russia’s or the Soviet Union’s glorious
past.

He has also appropriated a “tough guy” rhetoric, both at home and abroad,
that bespeaks self-confidence and promises greatness. And he has acted
vigorously in defence of the nation and the state, especially in Chechnya,
where the war has become an uncompromising fight to the finish. It is not
surprising that his popularity ratings remain extremely high.

Unfortunately, the combination of continuing state weakness and growing
foreign-policy boldness is a recipe for “imperial overreach” and disaster.
The tougher Russia gets, the tougher it sounds, the more it gets involved in
playing the great power that it cannot be, the greater the gap between its
aspirations and capabilities and the greater the likelihood of a systemic
breakdown.

There is little reason to expect Putin to change course any time soon. The
Russian people support him, and the Russian democrats are too weak to
challenge him. The European Union has been quiet. And the United States has,
thanks to the Bush administration’s moral bankruptcy, lost the right to
lecture the Russians.

Russia’s rush toward systemic breakdown is thus likely to continue. The
crash will be messy, but when it comes, Russia will finally have no choice
but to be a democratic state that pursues amicable relations with its
neighbours.                                         -30-
———————————————————————————————–
Alexander Motyl is professor of political science and deputy director of the
Center for Global Change and Governance at Rutgers University, New Jersey.
Among his books are Dilemmas of Independence: Ukraine after Totalitarianism
(1993) and Imperial Ends: the decline, collapse, and revival of empires
(Colombia 2001).
———————————————————————————————-

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AUR#750 Aug 13 View From Moscow: Commentary, Analysis; Constructing An Opposition; Human Rights Activist Nadiya Svitlychna, Political Prisoner

=========================================================
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

NADIYA OLEKSIVNA SVITLYCHNA (1939 – 2006)
Ukrainian Human Rights Activist, True Hero, Former Political Prisoner

(Article Seventeen)

ACTION UKRAINE REPORT – AUR – NUMBER 750

Mr. E. Morgan Williams, Publisher and Editor
PUBLISHED IN WASHINGTON, D.C., SUNDAY, AUGUST 13, 2006

Help Build the Worldwide Action Ukraine Network
Send the AUR to your colleagues and friends, urge them to sign up.

——- INDEX OF ARTICLES ——–
Clicking on the title of any article takes you directly to the article.
Return to the Index by clicking on Return to Index at the end of each article

1. ‘UKRAINE HIGHLIGHTS PRIORITIES AHEAD OF PRIME
MINISTERS VISIT TO RUSSIA
Ukrainian Ambassador Oleh Demin sets scene for Prime Minister
Viktor Yanukovych’s Visit to Russia
COMMENTARY: By Nadezhda Sorokina
Rossiyskaya Gazeta, Moscow, Russia, Thursday, August 10, 2006

2. “IT IS TIME”
Russia Urged To Be Pragmatic About Ukraine Despite PM Yanukovych
COMMENTARY:
By Leonid Radzikhovskiy
Rossiyskaya Gazeta, Moscow, Russia, Wednesday, August 9, 2006

3. UKRAINE’S NEW GOVERNMENT FINDS IT FOOTING
Russia Profile Weekly Experts Panel:
Contributors: Yury Fedorov, Andrei Seregin, Sergei Shishkarev
Introduced by Vladimir Frolov
Russia Profile, Moscow, Russia, Friday, August 11, 2006

4. A VICTORY FOR DEMOCRACY IN UKRAINE?
It may not seem it, but the return of Ukraine’s once autocratic, Russian-leaning
prime minister is actually the triumph, not the defeat, of the Orange Revolution
ANALYSIS:
By Yuri Zarakhovich in Moscow
TIME magazine, New York, NY, Friday, Aug. 04, 2006

5. UKRAINE POLITICS IN FLUX
OUTSIDE VIEW: By Vyacheslav Igrunov, Director
International Institute of Humanitarian and Political Studies, Moscow
UPI Outside View Commentator, Moscow, Russia, Tue, August 8, 2006

6. THE DEFENDER OF THE PEOPLE
ANALYSIS & COMMENTARY: By Boris Kagarlitsky
The Moscow Times, Moscow, Russia, Thursday, August 10, 2006

7. UKRAINE: A GOVERNMENT WITHOUT A COALITION
COMMENTARY & ANALYSIS: By Tatyana Stanovaya
RIA Novosti, Moscow, Russia, Thursday, August 10, 2006

8. “CAUGHT IN OUR OWN WEB”
Yanukovych seen as abandoning his promises to electorate, Russia
COMMENTARY: By Vitaliy Dymarskiy
Rossiyskaya Gazeta, Moscow, Russia, Thursday, August 10, 2006

9. BUT HE SAID IT WOULD NEVER HAPPEN
Viktor Yanukovych is leading Ukraine into NATO. Ukraine’s new prime
minister isn’t as pro-Russian as he used to be. Meanwhile, those who were
Yanukovych’s allies until recently are accusing him of betrayal.
COMMENTARY:
By Valeria Ovsyanik in Kiev
Novye Izvestia, Moscow, Russia, Wed, August 9, 2006

10. UKRAINE IS FINE. FOR NOW.
COMMENTARY: By Andrei P. Tsygankov, Program Chair,
International Studies Association 2006-07, Associate Professor,
International Relations/Political Science, San Francisco State University
Johnson’s Russia List (JRL) #180, Article 30
Washington, D.C., Wednesday, August 9, 2006

11. UKRAINE’S SHADOW ACROSS EURASIA
ANALYSIS AND COMMENTARY: By M K Bhadrakumar
Asia Times Online, Hong Kong, Thursday, August 10, 2006

12. DEMOCRACY IN UKRAINE
COMMENTARY: By Dan-Daniel Tomozeiu
EuObserver, Brussels, Belgium, Thursday, August 10, 2006

13. ‘EVERYTHING DEPENDS ON THE DETERMINATION OF
THE WEST NOT TO ABANDON UKRAINE’
Moscow will continue to use its back channels to penetrate, compromise
and sow division, and they will cultivate Moroz as an independent factor.
INTERVIEW
: With James Sherr, CSRC, UK Defence Academy
Den in Ukrainian, Kyiv, Ukraine, Tuesday, 8 August 2006

14. UKRAINE IS NOT EUROPE – YET
Formation of new government causes a number of concerns
OP-ED:
By Tammy Lynch, Kyiv Post, Kyiv, Ukraine, Thu, Aug 10, 2006

15. UKRAINE: A NEW ROME?
COMMENTARY: By TOL Magazine, Transitions Online
Prague, Czech Republic, Tuesday, August 8, 2006

16. YUSHCHENKO: CONSTRUCTING AN OPPOSITION
ANALYSES:
By Taras Kuzio, Transitions Online (TOL)
Prague, Czech Republic, Friday, 11 August, 2006

17. NADIYA OLEKSIVNA SVITLYCHNA (1939 – 2006)
Ukrainian Human Rights Activist, True Hero, Former Political Prisoner
Human Rights In Ukraine
Kharkiv Group For Human Rights Protection
Kharkiv, Ukraine, Thursday, August 10, 2006
========================================================
1
. ‘UKRAINE HIGHLIGHTS PRIORITIES AHEAD OF PRIME
MINISTERS VISIT TO RUSSIA’
Ukrainian Ambassador Oleh Demin sets scene for
Prime Minister Viktor Yanukovych’s Visit to Russia

COMMENTARY: By Nadezhda Sorokina
Rossiyskaya Gazeta, Moscow, Russia, Thursday, August 10, 2006

Ukrainian premier Viktor Yanukovych’s visit to Russia will take place next
week. This was stated at a press conference by Ukrainian Ambassador to
the Russian Federation Oleh Demin.

The diplomat’s manner was extremely restrained throughout the meeting
with journalists. He gave the impression of being afraid to sully the
backdrop to the head of government’s upcoming Moscow visit by speaking
a word out of place. Unsurprisingly, since Kiev is pinning great hopes on
the upcoming talks.

“Primarily economic cooperation problems will be discussed. We also want
to raise the issue of energy security as a whole. The main thing that the
Ukrainian side will be seeking to achieve is to put the contractual
(dogovornyy) relationship between our countries in order: Everything must
be as transparent as possible,” Demin explained.

He said that the existing contractual base for gas transshipments and gas
supplies to Ukraine is incomplete. The diplomat reminded his audience
that protocols to the 2001 agreement on gas transshipments across Ukraine
and gas supplies to Kiev are adopted annually. But no such protocol has yet
been signed for 2006.

Demin believes that the Europeans are following Russia’s and Ukraine’s
actions in the gas sphere very closely and that they also have an interest
in the relationship’s transparency.

The ambassador is confident that the situation surrounding the Antonov
project will also be a priority for discussion at the Moscow meeting.
This refers to Ukraine’s plans to build the An-70 military transport plane
jointly with the Russian side.

The only time the ambassador smiled was when he was asked to comment
on rumors that leading Ukrainian oppositionist Yuliya Tymoshenko and
Fuel and Energy Minister Boyko are currently in Russia on a visit.

“The fact that Yuliya Volodymyrovna is in Moscow is something I learned
from the Russian media. We are personally acquainted, but she has not
been in contact and has not approached the embassy.

Our diplomatic mission knows nothing about a Boyko visit to Moscow
either. It is possible that the visit is private, and I cannot confirm or
deny anything,” the ambassador stated.

Demin was much more willing to talk about Ukraine’s future foreign policy
priorities. In answer to the correspondent’s question about how the change
of political elite in Ukraine will reflect on Kiev’s relations with the
European Union and NATO, the ambassador again declared Ukraine’s
choice of the European route.

“When we talk about Kiev’s relations with the European Union, we mean a
European vector for the country’s development. If we are talking about
relations with NATO, we are perfectly well aware that Russia’s dialogue with
NATO has progressed much further than NATO’s analogous contacts with
Ukraine,” Demin asserted.

The Ukrainian ambassador named the Black Sea Fleet agreement as one
of the founding Russian-Ukrainian agreements. He is convinced that the issue
will not prove to be an “irritant” in relations between Moscow and Kiev. “We
have a treaty, and we have an agreed timeframe for the Black Sea Fleet’s
presence in Crimea,” Demin stated.

The Ukrainian ambassador thinks that it is hard to forecast as of right now
when Ukraine will join the WTO. It will all depend on bills that the
parliament still has to adopt to that end. In Demin’s words, in discussing
these documentsit is very important to analyze the extent to which they
accord with Ukraine’s national interests.

The head of the Ukrainian diplomatic mission also made it clear that Kiev is
not going to alter the customs regulations introduced for the Dniester
region.

“Ukraine’s policy with respect to the Dniester region in no way breaks
international rules or international agreements. From the Ukrainian side’s
viewpoint, what is being called a blockade is actually in line with
international relations in the sphere of foreign trade and customs regulations,”
Demin concluded. -30-
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2. “IT IS TIME”
Russia Urged To Be Pragmatic About Ukraine Despite PM Yanukovych

COMMENTARY: By Leonid Radzikhovskiy
Rossiyskaya Gazeta, Moscow, Russia, Wednesday, August 9, 2006

The 15th prime minister within the 15 years of Ukraine’s existence is
“Yanukovych again.” “Few birds can fly as far as the middle of the
Dnieper,” but Yanukovych has managed to do so twice.

Yes! (“orange revolution” slogan)

I am not going to retell you the endless saga of quarrels and
reconciliations between Viktor Andriyovych (Yushchenko) and Viktor
Fedorovych (Yanukovych), for we all know these rumors.

However, people rapidly forget rumors, which are merely “dust in the
wind.” Meanwhile, there are strategic points which remain unchanged:
The foundations of Ukraine’s “political economy.”

I am not a great fan of quoting President Putin, especially as the ultimate
and highest argument. This time, however, I will gladly do this. Putin said
during his meeting with foreign correspondents that there are no “pro-
Russian” or “pro-Western” politicians in Ukraine; there are “pro-Ukrainian”
politicians only.

Exactly! On the other hand, Ukraine itself is not homogeneous. As we know,
relations between Donetsk, Dnipropetrovsk, Kiev, and west Ukrainian clans
are not easy at all, and these clans willingly use both Russian and
anti-Russian sentiments in their games.

There are a lot of partners for these games in Russia, and they are ready to
shout either about Ukraine’s imminent split and “reunification of Donbass
and Crimea with Russia” or about “Ukraine’s final departure from Russia.”
It is two-way PR…. However, believe me that Russian society should not
treat this seriously.

In any case, “Ukraine is not Russia” (title of Leonid Kuchma’s book). It is
a country with its own exclusive interests that do not coincide with
Russia’s, the EU’s, or US interests, although it does not have antagonistic
conflicts with any of them.

It is not going to “enter” anywhere or “yield” to anybody, which is an
unconditional interest, a reflex of the entire elite no matter how its
members quarrel with one another.

Incidentally, the list of 30 Ukrainian oligarchs, including nine dollar
billionaires (incidentally, there are more than 50 of them in Russia), was
recently published.

There are different people among them: Steel makers, bankers, food
manufacturers, gasmen and oilmen, and even a TV producer (incidentally, he
is the producer of STS, which is probably our fastest-growing TV channel).

The list includes people living in Donetsk and Dnipropetrovsk, Kiev and
Kharkiv, London, Hungary, or on the plane. It includes Tatars (the great
Rinat Akhmetov with his fortune of around $12-billion who is at the top of
the list), Jews, Russians, Georgians, and, naturally, mostly Ukrainians.

There are eight Supreme Council deputies among them with Akhmetov,
again, at the top of the list (generally speaking, the Ukrainian Supreme
Council is the richest parliament in the world in terms of per capita
income of its deputies), seven former deputies, including two former
ministers of the economy and former general prosecutor (!).

We should also mention Kuchma’s son-in-law Pinchuk and Poroshenko,
the godfather of one of Yushchenko’s children and former chairman of
Ukraine’s National Security and Defense Council.

While reading the list, one becomes aware what kind of serious and
concentrated force the Ukrainian business-political elite is. To make it
finally clear: These powerful, crafty, rich, and stubborn “Cossacks,” just
as any elite in any normal country, are not going to share their power and
independence with any “sultan.”

Particularly since (we should compliment Ukraine again on this) not only
the elite, but also the people, society play an active political role there.
This always happens when the revolutionary brew is still warm.

We had the same situation in the early 1990s. What will happen in Ukraine
when the “revolutionary dust” settles down and people get alienated from
the authorities? We do not know whether this alienation will ever take
place, for each country has its own way.

Russia,in view of our “ability to reach agreement” (the 1993 events were an
example), was fated to face a “vertical structure of power” and the
bureaucratic “chill.”

Meanwhile, Ukraine demonstrated two other peculiarities: [1] First, its
ability to boil but, instead of exploding, reach agreement and stop on the
verge of an abyss and, [2] second, its ability to develop quite successfully
amid political chaos!

In 2004, for instance, when the entire country was in political turmoil and
the slogan “Down with Kuchma” was seen on every corner, the GDP
growth rate was 12 percent — a record level in the CIS!

Even in the first half of this year when the government was virtually
paralyzed, Ukraine’s GDP increased more than 5 percent (for comparison,
our GDP increased 6.4 percent amid perfect political stability).

Again, it is clear that “Ukraine is not Russia” and what is murderous for us
(a parliamentary republic and political instability) can be quite good for
Ukraine, just as for Italy, for instance.

Therefore, the fundamental problem for the Russian political elite is the
need to finally become aware of the “dialectical truth”: [1] First, Ukraine
will never be “Russian” or follow Russia’s lead; [2] second, Ukraine has
not “departed” from Russia, for we are fated by “history and geography”
to be partners.

What did Yanukovych’s appointment change? The appointment itself is
another example of “dialectical irony.” When Russia put every kind of
pressure to help Yanukovych, he lost (perhaps, excessive pressure was
not the least important factor!).

When Russia “left the situation unattended” Yanukovych did become
premier as a result of internal balance of forces in Ukraine. However,
when he became premier, he did not become a “pro-Russian” premier.
He simply became prime minister of the Republic of Ukraine.

Another moment of truth for the Russian Federation has come.

It is clear that Viktor Fedorovych will pay his first visit to Moscow. It is
very likely that he will say “absolutely pleasant things” (in political
terms) in impeccable Russian. And will ask — for the sake of support
for his government — to return to “fraternal” gas prices. And will promise:
“We will not enter into NATO in exchange for this!”

Will Russia agree to play this “Kuchma-2 game?”

If it does, this will primarily mean that we did not learn a lesson from
history. That our new pragmatic foreign trade policy is not a
well-considered course, but merely a “gesture of annoyance.” That,
just as before, there is “no business, only personal relations.”

That, just as before, ambitions and “false fears” (for instance, fear of
“Ukraine’s entry into NATO”) are of primary importance, whereas the
economy is of secondary one.

All our CIS neighbors will receive the old-new message: Russia is rich;
as always, it has money to burn and is ready to pay all those who smile
and bow to it. There is no need to do anything else.

If it does not, this will mean that our foreign policy has matured. We do
not owe anybody and nobody owes us anything. We (the Russian
Federation) maintain friendly relations with our friends, but we trade with
all countries based on general rules.

We pay for political gestures with political dividends, not with
petrodollars at all. Russia knows how to be a friend, but in addition to
this it has learned to count its money.

It is very interesting which policy will prevail.

It is time to make up our minds. It is time, as they say in Ukraine! -30-
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3. UKRAINE’S NEW GOVERNMENT FINDS IT FOOTING

Russia Profile Weekly Experts Panel:
Contributors: Yury Fedorov, Andrei Seregin, Sergei Shishkarev
Introduced by Vladimir Frolov
Russia Profile, Moscow, Russia, Friday, August 11, 2006

Viktor Yanukovich, who lost the presidency to Viktor Yushchenko in
the Orange Revolution, engineered a remarkable political comeback
following a convincing victory by his Party of Regions during the
March parliamentary elections, eventually leading to his appointment
to the powerful position of Ukrainian prime minister

It was not easy for Yushchenko to take Yanukovich’s victory, especially
considering that in 2004, Yushchenko campaigned against Yanukovich
under the slogan “Don’t let criminals into power,” hinting at Yanukovich’s
juvenile criminal record in the 1970s. But Yushchenko hardly had a
choice.

The so-called Orange coalition, made up of the Bloc of Yulia Tymoshenko,
Our Ukraine and the Socialist Party, collapsed in early July after the
Socialists abandoned the group when their leader, Alexander Moroz, was
not appointed speaker of the Rada. Joining forces with the Party of Regions
and the Communists allowed Moroz to get the position he wanted.

Yushchenko and his entourage did not mourn Yulia Tymoshenko’s failure
to secure the prime minister’s job, but the collapse of the Orange
coalition left the president with two options – to disband the Rada and
call new elections (a course favored by Tymoshenko whose party stood
to gain in new elections) or to accept Yanukovich as prime minister along
with the consequent personal humiliation.

On the surface, Yushchenko decided to be a statesman and put the
country ahead of his own political ambitions and personal feelings.
The reality is not quite so noble, however.

Yushchenko accepted Yanukovich’s nomination on the condition that
he sign a politically binding declaration, diluting some of his party’s
electoral promises on opposition to NATO and the EU and the official
status of the Russian language.

He also forced Yanukovich to accept Our Ukraine’s Pyotr Poroshenko
as First Deputy Prime Minister and pro-western politicians in the
Foreign and Defense Ministries. In return, Yanukovich received a much
broader and more stable parliamentary coalition.

[1] What does the new Ukrainian government mean for the country’s
relations with Russia and the West?

[2] Will Yanukovich be able to persuade the Kremlin to lift the tight
economic squeeze that Russia imposed on Ukraine after the Orange
Revolution, including the bans on imports of Ukrainian agricultural
and dairy products, as well as some industrial goods?

[3] Will Yushchenko be able to continue his push for Ukraine’s
membership in NATO and the EU with Yanukovich as prime minister?

[4] How will Washington’s approach to Ukraine change with the
new government in place?

[5] How stable is the new political coalition in Kiev likely to be?

[6] Are we witnessing the birth of a new broad political force that
can transcend Ukraine’s regional and cultural divisions?

[1] YURY FEDOROV, SENIOR RESEARCHER, CHATHAM HOUSE
LONDON

Whatever one thinks about Yanukovich’s personal and political
background, his nomination as prime minister has ended the protracted
governmental crisis in Ukraine and normalized political circumstances in
the country. More importantly, the crisis has been settled by political
means and according to the nation’s legal norms and procedures.

It means that Ukraine is really moving from its recent semi-totalitarian
past to a normal democratic political process. It gives reason to believe that
the next government, most probably headed by Tymoshenko, will come
to office also as a result of political developments and decisions.

Today it is impossible to predict how long Yanukovich’s government will
stay in power; to a large extent it will depend on its policies. If
Yanukovich focuses on redistributing national wealth and influence to his
lieutenants and a few East Ukrainian tycoons, his government is doomed
to fail in a few months.

Almost immediately, such a policy would result in the rise of a potent
coalition of Ukrainian elites threatened by the prospect of one particular
clique dominating the nation’s economy and polity.

Yet if he is responsible and sophisticated enough to maintain a balance
between Ukraine’s principal political, economic, and regional lobbies and
to concentrate not only on accumulating power in the hands of his Party
of Regions but also on promoting the national economy, his stay in office
will be much longer, up to a year or even a year and a half.

But it seems that political development in Ukraine will follow a pendulum
model. Governing coalitions headed by the Party of Regions and
Tymoshenko’s Bloc will rotate while Yushchenko’s Our Ukraine Party will
play the balancing role.

This is a so-called two-and-a half party system, well known in political
science and typical of a number of European democracies.

Of course, Yanukovich’s nomination as Prime Minister will be welcomed
by the Russian ruling elites. It will be interpreted as a long-awaited
victory for the pro-Russian forces, as well as a defeat of Tymoshenko,
the Ukrainian politician most hated by Moscow.

Yet the new situation in Ukraine is not as favorable to Moscow as it
seems.

[1] First, Russia will have to make serious economic concessions
to its would-be client in Kiev. Otherwise it will set Yanukovich up for
criticism by Tymoshenko.

[2] Secondly, Ukrainian foreign and defense policies are controlled not
by the prime minister but by the president and his nominees, who are
even more pro-Western than the president himself.

[3] And finally, Yanukovich, as well as most of the East Ukrainian
tycoons, is a supporter of Ukraine’s movement towards Europe. None
of Ukraine’s major political figures wants to see the transformation of
Ukraine into a Russian protectorate.

What makes Yanukovich distinct from Tymoshenko and the like is that
he prefers not to irritate Moscow and a part of his own electorate by
anti-Russian rhetoric and gestures.

In other words, Ukraine will continue its movement to the West. Crucially,
because of Yanukovich’s role, Moscow will have to at least nominally
support the things it does not like at all.

[2] ANDREI SEREGIN, SENIOR POLITICAL ANALYST,
NATIONAL LABORATORY FOR FOREIGN POLICY

The new broad coalition in Ukraine is a tactical loss for Russia and the
West, but a gain for Ukrainian sovereignty and democracy.

With the Orange Revolution finally over, Russia and the West still have
much time to understand and fix their political losses. Both Moscow and
Washington were surprised to see the rebirth of Ukrainian political
identity, which is rapidly maturing and exorcizing foreign influence.

Many Ukrainian observers hurried to call the new coalition fraudulent
deal, stressing the details of the compromise. The Orangists sensed the
bitter taste of betrayal, and branded it a “non-democratic elite collusion,”
which is true.

In negotiating the broad coalition compromise, both Yushchenko and
Yanukovich had to make some sensible concessions, discouraging many
among their electorate. But the harder the political compromise – the
better it is for Ukrainian democracy.

It has just successfully come through its greatest challenge thus far.
The two main political forces in Ukraine followed Lincoln’s
legacy in refusing to let their country become a “house divided.”

There are numerous political, economic and even moral problems
surrounding the new coalition. They include legalizing the alleged
“electoral fraud” by Yanukovich and closing the door to integration
in the EU and NATO, accepting whatever bitter disillusionment that
goes with it.

The opposition is already preparing many handy arguments for blaming
Yanukovich’s government for the current state of Ukraine’s economy, its
growing social problems and the tough gas talks with Russia that lie ahead.

Putting aside all media talk about stability, it is now clear that Russia
and the United States have lost some of their influence on the
Ukrainian political establishment. Russia will be surprised to see the
Yanukovich who emerges as prime minister. Although generally still
Russia-friendly, the new head of the Ukrainian government will not
allow Moscow to treat him like a puppet.

However, Yanukovich’s premiership is an evident blow to the U.S.-
sponsored “pro-democracy” drive in Ukraine. Some senior officials in
the White House, the State Department and other U.S. agencies have
surely taken the news as a bitter pill. But the most logical policy change
for Washington will be to try to fix its relations with Yanukovich and
work closely with the new government.

So, the new Ukrainian government clearly suggests the need for at least
tactical changes in both Russian and American policy towards Ukraine.

[3] SERGEI SHISHKAREV, DEPUTY CHAIRMAN, STATE DUMA
COMMITTEE ON ENERGY, TRANSPORT AND COMMUNICATION

It is true that the Yanukovich government will not be a Russian puppet.
For one thing, this is a coalition government with heavy participation
from Yushchenko’s Our Ukraine party, which controls key ministerial
positions – Defense, Foreign Affairs, Justice, and the Ministry of
Interior headed by Yury Lutsenko (who is a Socialist but more in
Yushchenko’s camp).

Yanukovich’s closest associates from Donetsk fill the rest of the top
government positions. These are hard-nosed people who know how to
defend Ukraine’s interests. Dealing with the new government in Ukraine
will not be a cakewalk for Moscow.

Although Yanukovich’s Party of Regions won the election on a platform
that advocated opposition to NATO membership and a broader role for
the Russian language, it is quite likely to shift gears pretty soon and
adopt more centrist positions that will not challenge Yushchenko’s drive
to move Ukraine toward the West.

Already, Yanukovich is starting to bring nuances to his stance on the
prospect of holding a national referendum on Ukraine’s NATO membership,
a key electoral promise. On Tuesday, he stated that the issue of Ukraine
joining NATO will be decided jointly by the cabinet, the president and the
Rada. Conspicuously missing from this formula was any mention of a
nationwide referendum.

The same assessment will probably apply to Ukraine’s position in the
negotiations with Russia on energy imports and transit. Yanukovich
needs at least to avoid another hike in Russian gas prices, which now
looks almost inevitable. This is what his most important constituency –
the big business from eastern Ukraine – demands the most.

But Russia is not likely to agree to a return to subsidized pricing for gas
deliveries to Russia’s competitors in eastern Ukraine, unless the new
government in Kiev does the unthinkable, agreeing to sell off its grid of
transit gas pipelines. No Ukrainian government could make such a deal
without being immediately brought down.

So we are going to see Ukraine muddling though in fits and starts and
probably enjoying healthy growth rates in the process, but it will not be
a pro-Russian or a pro-Western Ukraine. It will be a stubbornly
independent and more self-assured nation. -30-
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4. A VICTORY FOR DEMOCRACY IN UKRAINE?
It may not seem it, but the return of Ukraine’s once autocratic, Russian-leaning
prime minister is actually the triumph, not the defeat, of the Orange Revolution

ANALYSIS: By Yuri Zarakhovich in Moscow
TIME magazine, New York, NY, Friday, Aug. 04, 2006

To most Western eyes, the political comeback of former Ukrainian Prime
Minister Viktor Yanukovych would seem to be a major setback for the
celebrated Orange Revolution that brought President Viktor Yuschchenko to
power in late 2004.

It was the Russian-backed Yanukovych, leader of the eastern-leaning Party of
the Regions (PR), who helped trigger the peaceful democratic uprising after
initially winning a rigged Presidential election.

But thanks to his own political makeover and the internal squabbles of
Yushchenko’s once triumphant coalition, Yanukovych came Friday afternoon to
the Supreme Rada, Ukraine’s National Legislature, to be confirmed as
Ukraine’s new Premier – and, as a result of recent reforms, actually take
over many of the Presidential powers of his onetime nemesis, Yushchenko.

The flamboyant Yuliya Tymoshenko, Yuschchenko’s own onetime revolutionary
partner and prime minister and now leader of the parliament’s Byut faction,
decried “the sellout of the Orange Revolution” and pledged “stiff opposition
to the hatching coalition government of Yanukovych’s PR faction and
Yushchenko’s Our Ukraine (OU) bloc.

Her sentiment may be shared by many shocked at the turn of events in
Ukraine. But keen observers of government in the entire former Soviet Union
argue it could also be seen as evidence of an unprecedented political
maturity in the fledgling democracy.

“The Orange Revolution was all about fair elections rather than
individuals,” reminds Viktor Nebozhenko, an authoritative Kiev-based
political analyst. For the first time ever in the region, Ukraine has both a
President and a Premier elected in fair elections, with the first
opportunity to learn what separation of powers really means.

And contrary to what some people might claim, the political intrigue that
led to Yanukovych’s reemergence is as much a part of democracy as fair
elections, or for that matter, separation of powers. In the March
parliamentary elections, Yanukovych’s PR won 32% of the vote fair and
square.

The Orange forces, badly split since Tymoshenko lost her Premiership last
September in a feud with the OU, tried to re-build their winning coalition,
along with the Socialist party, but Tymoshenko’s categorical condition was
the Premiership.

Instead, in a sudden about-face, the Socialists formed a Coalition with the
PR and the Communists. That left Yushchenko with the legal option of
nominating the Coalition Leader Yanukovych, however distasteful to him, for
Premier, or disbanding the Rada, which risked aggravating the nation’s
already yawning split.

With suspense growing – and with two pre-taped TV addresses to the nation,
one proclaiming the Rada disbanded, the other one announcing the
‘Two-Viktors-One-Country’ conciliatory formula – Yushchenko chose the
last-minute compromise.

The terms of the National Unity pact he has forged with Yanukovych’s
coalition are discernable, however vague the wording: Yanukovych signed on
to Ukraine’s moving closer politically to Europe, while Yushchenko agreed to
improve cooperation with Russia – albeit only up to the point that would
facilitate Ukraine’s trade with Russia, but won’t hurt Ukraine’s prospects
for eventual WTO and EU membership.

Both yielded on the divisive issue of Ukraine joining NATO: Yanukovych
withdrew his avowed opposition to the move, while Yushchenko agreed to put
the issue to a referendum. Yanukovych has evolved since December 2004, while
Tymoshenko mentally got stuck at the barricades,” comments Nebozhenko.

In tactical terms, Yushchenko smartly used Yanukovych to neutralize
Tymoshenko, her blend of populism, radicalism and charisma perceived as a
bigger threat. Now, however, he may be able to just as effectively use
Tymoshenko’s opposition status to keep Yanukovych in check, should the
latter’s evolution fail to prove sufficiently deep.

The backstabbing and strange alliances might not be pretty, but they sure
beat street fights, or storming Parliaments by tanks. For that reason, it
can be argued, the compromise that brought the two Viktors together in power
is actually the triumph, not the defeat, of the Orange Revolution.

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5. UKRAINE POLITICS IN FLUX

OUTSIDE VIEW: By Vyacheslav Igrunov, Director
International Institute of Humanitarian and Political Studies, Moscow
UPI Outside View Commentator, Moscow, Russia, Tue, August 8, 2006

MOSCOW – The political crisis in Ukraine has been resolved, but uncertainty
persists. The new government is still suffering from the painful compromise
that brought about its establishment.

On the one hand, most key posts in the government have been given to people
free of ideological intoxication and capable of constructive, pragmatic
actions. They know why gas should be stored in underground depots in summer,
why international commitments should be honored, and why their country
should not clash with those on whom its development depends.

They are First Deputy Prime Minister Mykola Azarov and Naftogaz head Yury
Boiko. They will be easy to work with, and may be the most suitable partners
for Russia.

The duo of Foreign Minister Borys Tarasyuk and Defense Minister Anatoliy
Hrytsenko, who had laid out the plan for an accelerated integration of
Ukraine into NATO, which determined the policy underlying other decisions,
has remained in place, just like the position of President Viktor
Yushchenko, who pursued the line they had suggested and who remains the key
politician in Ukraine.

Yushchenko’s miraculous victory in the battle against the parliamentary
majority showed that he still has something within him — a fighting spirit.
Any other head of state would have acted in accordance with the law and
nominated the majority’s candidate.

But Yushchenko said that the majority must accept his conditions or he would
dissolve parliament because the creation of “a wrong coalition” distorted
the will of the people.

Surprisingly for observers, parliament did not reject the ultimatum, which
would have buried any other democratically elected president in a democratic
country, but spent weeks discussing it and eventually signed it, although
with compromise conditions.

The catastrophic inability of “orange” politicians to govern the country has
reduced the president’s approval rating to almost zero. (In his first and
best 100 days, Yushchenko had the support of barely 50 percent of the
people, which is logical in view of the illegitimate way he had come to
power.)

The parliamentary victory of the “orange trio” — the Yulia Tymoshenko Bloc,
pro-presidential Our Ukraine and the Socialist Party — seemingly
rehabilitated the revolutionary ideals. But subsequent developments showed
that the winners were kept together by their striving for power, so that the
“orange” government was deadlocked by their fear that one of the partners
would gain the upper hand.

However, the ideological foundation of Our Ukraine proved to be sufficiently
strong to prevent a seemingly unavoidable union with the pro-Russian Party
of Regions, led by Viktor Yanukovych, the new prime minister of Ukraine.

Its ideology prevented Yushchenko from implementing his agreements with the
crisis coalition: only 30 of the 80 members of Our Ukraine in parliament
voted for the new prime minister, leaving the party short of full
participation in the new coalition.

This result will benefit Yanukovych, who did nothing to bring it about.

The talks on the formation of the government showed that Yanukovych is a
weak politician, just like Yushchenko. The compromise was mostly reached
through the surrender of his party’s positions. Yanukovych’s stance on the
issue of the Russian language is a relevant example.

During the election campaign, the Party of Regions demanded that Russian
should be granted the status of a second official language.

But shortly before signing the agreement, Yanukovych said that Ukrainian
should remain the only official language and that the Ukrainian
Constitution, which protected all other languages, should be used to ensure
this.

His statement sounded like a capitulation in view of President Yushchenko’s
stubborn refusal to implement the European Charter for Regional or Minority
Languages.

Lawyers can talk all they want about how this refusal does not preclude
support for decisions to grant Russian the status of a regional language,
but the voters will not believe them.

Another example is Yanukovych’s stance on joining NATO. A possible
compromise might involve making a commitment to do everything necessary to
become a member, with only the formal accession to be approved by
referendum.

That Tarasyuk and Hrytsenko have kept their posts in the government means
that preparations for accession to NATO will continue alongside energetic
brainwashing of the people.

But then, a brainwashing campaign might not be necessary, since the
compromise agreement is not a binding document, and agreements survive in
Ukraine only until one of the sides decides to change his/her stand.

Moreover, the new government will be unable to speed up the country’s
movement towards NATO because of the growing civic awareness of the people.
But the Euro-Atlantic factor will complicate economic talks with Russia.

Russia sympathized with the Party of Regions, above all because it hoped to
stop Ukraine’s slide towards NATO. Since Ukraine’s stance on this issue
remains vague, Moscow will most likely establish coldly pragmatic relations
with Ukraine, and none of the new ministers, even though they suit the
Kremlin, will be able to dampen its resolve.

Russia will operate according to the “every man for himself” formula,
although this may cost it some of Ukrainians’ sympathy. But the Ukrainian
government will also lose out unless it develops friendly relations with its
main economic partner.

By succeeding in the coalition talks, Yushchenko has kept his post until the
next elections but lost broad electoral support. By resisting the temptation
to support the government and get seats in it, Our Ukraine may remain an
opposition force alongside Tymoshenko’s Bloc.

However, the “orange” time is over. The voters that may desert Yanukovych
and his Party of Regions will not support the “orange” forces, but rather
those who more consistently uphold the interests of the southern and eastern
regions of the country. Unrestrained nationalism survived for as long as the
eastern regions slept and maintained their paternalist Soviet mentality.

They are becoming increasingly active today, as proved by the passing of
laws on the status of the Russian language by regional assemblies.
This means that we may soon see the emergence of political parties that will
fight for the interests of the majority of Ukrainians, who live in the
southern and eastern regions. If the Party of Regions fails to get part of
that vote, it will anyway not go to the “orange” forces.

Ukraine has started down the path of slow recovery after years of
instability and civil discord. The formation of the new government was the
first faltering step towards this goal. Ukraine’s parliament has won the
battle against the president, and its role will keep growing, together with
that of the majority of voters.
————————————————————————————————
(Vyacheslav Igrunov is the director of the International Institute of
Humanitarian and Political Studies. This article was reprinted with
permission from RIA Novosti.)
———————————————————————————————–
(United Press International’s “Outside View” commentaries are written
by outside contributors who specialize in a variety of important issues.
The views expressed do not necessarily reflect those of United Press
International. In the interests of creating an open forum, original
submissions are invited.)
———————————————————————————————–
http://www.upi.com/InternationalIntelligence/view.php?StoryID=20060808-112232-9601r
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6. THE DEFENDER OF THE PEOPLE

ANALYSIS & COMMENTARY: By Boris Kagarlitsky
The Moscow Times, Moscow, Russia, Thursday, August 10, 2006

Ukraine finally has a government. As expected, it’s a coalition government.
In fact, Viktor Yanukovych, head of the Party of the Regions, got votes
during his confirmation as prime minister from his recent opponents in
Viktor Yushchenko’s Our Ukraine party. The day before the vote, Ukrainian
politicians ceremoniously signed their names to the Declaration of National
Unity.

In honor of the occasion, Yanukovych even spoke Ukrainian, and Yushchenko’s
voice cracked with emotion when he told journalists that the signed document
“would unite the two sides of the Dnepr River.” Henceforth, the
Russian-speaking East will be a friend of the Ukrainian-speaking west.

In actual fact, the two sides were never at war. The cultural animosity was
artificially fanned by politicians and business clans with power bases in
different regions. Yushchenko’s victory was not based in the nationalistic
Ukrainian West but, rather, Russian-speaking Kiev.

The Declaration of National Unity contains grandiose language and phrases
that gloss over the details. The Russian language will be respected, but it
won’t have the status of a state language. Ukraine will cooperate with NATO,
but not join the organization. In other words: Nothing will change.

The average citizen is far more interested in the economic situation than in
the status of the Russian language or even NATO. Naturally, the Declaration
of National Unity doesn’t mention the expected utility price hikes and
partial privatization of public transport, which will result in higher fares
and the discontinuation of unprofitable routes.

But the new coalition government will not be concerned with ideology. It
will be dealing with the economy. As Yulia Tymoshenko noted, the declaration
“is only a screen to hide the backroom deals to divide up ministerial
positions and spheres of business.”

Tymoshenko refused to sign the declaration. She appeared at the ceremony and
announced that her bloc was going into opposition, which would be outside
the parliament.

At Tymoshenko’s bidding, her faction left the chamber. At one time,
Tymoshenko threatened to return 3,000 companies to state control, so it’s no
surprise that the local elite were united in their desire to keep her out of
the government.

Tymoshenko stood out at the signing ceremony, dressed all in white against
the background of dour men in black suits. The message her image was meant
to convey was clear and certainly understood by millions of television
viewers.

Over the next few months, the government will have to start taking action.
The Ukrainian drama will continue, since a compromise among the political
elite does not guarantee social stability. In fact, it’s as if the
politicians took each other warmly by the hand and headed off in search of
the nearest cliff.

The division of rival camps allowed for the manipulation of public opinion,
which kept the situation under control. Now the situation is changing. Who
will lead people into the streets when there is another price hike? Who will
protest against the flagrant — even by Eastern European standards — social
injustice? Who will expose corruption?

Communists and Socialists are settling down comfortably into cabinet
ministers’ chairs. It seems the leaders of the main parties have accepted
their imminent disappearance from the political arena and dream of grabbing
something as they leave. Our Ukraine and the Party of the Regions will join
forces to carry out price increases and privatization.

Only Tymoshenko’s bloc will fight against official policies. I’ll bet
anything that if this continues, Tymoshenko will be the only person raising
the issues of pensioners and the poor and defending Russian schools and
ethnic minorities. After the Ukrainian statesmen united under the flag of
the declaration, no one is going to rock the ship of state.

The political bankruptcy of the Communists and Socialists has left a vacuum
on the left that will be filled by Tymoshenko. She is not very left-leaning
and her ideology is more than a little shaky. But there isn’t any other
opposition in Ukraine.

The new organizations that have appeared on the left in the last two or
three years will grow and increase in influence but in the coming months it
will be hard for anyone to match up to Tymoshenko. So the left will be
confronted by a tough choice: either join forces with an ideologically
doubtful populist opposition, or stay in the background of political life.

In the meantime, for millions of television viewers, Tymoshenko will be the
only defender of the people, fighting for social justice and the
nationalization of industry. -30-
————————————————————————————————-
Boris Kagarlitsky is director of the Institute for Globalization Studies.
————————————————————————————————-
http://www.themoscowtimes.com/stories/2006/08/10/007.html
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7. UKRAINE: A GOVERNMENT WITHOUT A COALITION

COMMENTARY & ANALYSIS: By Tatyana Stanovaya
RIA Novosti, Moscow, Russia, Thursday, August 10, 2006

MOSCOW – A new government has been formed in Ukraine, with Viktor

Yanukovych, leader of the allegedly pro-Russian Party of Regions, as
prime minister. Observers have hurried to say that the crisis is over and
the new body is sufficiently stable.

But this is not so. Although the union of President Viktor Yushchenko and
Prime Minister Viktor Yanukovych is the most viable of all the possible
scenarios, it is fraught with big risks of a chronic political crisis.

The new government does not yet have a ruling coalition, which should
take shape in September in a far-from-formal ceremony. Moreover, the
would-be coalition may be either a ruling or an opposition one.

Officially, there is a crisis coalition consisting of the Party of Regions,
the Socialist Party and the Communist Party, which nominated Yanukovych

as prime minister. But there is also a memorandum on the establishment of a
“broader coalition,” signed by the leaders of the Party of Regions and
pro-presidential Our Ukraine. It is not a coalition agreement but rather a
declaration of intentions.

Our Ukraine does not want to join a coalition that nominated the main
adversary of the “orange revolution” as prime minister and includes the
Communist Party. The pro-presidential party is ready for compromise provided
the Communist Party leaves the coalition and Our Ukraine has more say in
government and personnel policy.

It appears that Our Ukraine will have to accept Yanukovych, but will
continue fighting for the above condition. Meanwhile, it has split into two
factions: pragmatists, who may come to terms with the adversary, and
idealists, who may decide to join the opposition.

Only 30 of the 80 deputies from Our Ukraine voted for Yanukovych. Besides,
the Christian Democratic Union, which is part of the pro-presidential bloc,
announced on August 8 that its deputies would not join the broader coalition
with Communists and Socialists (the latter are said to be traitors who have
destroyed the “orange coalition”).

People’s Party leader Yury Kostenko said his party would join the opposition
and promised a new revolt by September as a protest against having
representatives of the “former regime” in the new government.

The pragmatists say the current developments have shifted the balance in
favor of the Party of Regions, referring to Our Ukraine’s representation in
the cabinet, where the posts of the deputy prime ministers and ministers of
the economic block have been given to members of the Party of Regions.

The pro-presidential party has been left with cultural and social posts.
This is the price Yushchenko has paid for keeping his “hawks,” Foreign
Minister Borys Tarasyuk and Defense Minister Anatoliy Hrytsenko.

According to the Party of Regions, the above two posts should have been
given to deputies from Our Ukraine anyway, but the pro-presidential party
claims that they are in the competence of the president and should not have
been distributed within the coalition.

Yushchenko also missed a chance to ensure the appointment of Petro
Poroshenko as deputy prime minister. Poroshenko was viewed as a
counterbalance to the Party of Regions in the upper echelons of the
government.

Our Ukraine will attempt to push back the Party of Regions in the cabinet
before the establishment of a new coalition. Yushchenko will try to regain
the loyalty of his allies, which means that he will have to pressure
Yanukovych. This is important, because the president as head of state is
losing the support of parliament by becoming a hostage to Yanukovych.

The disappointment of the “orange” part of parliament will soon become a
source of political instability in Ukraine, increasing the risk of tensions
in the divided government. Justice Minister Roman Zvarych has said that a
cell of Our Ukraine would be established in the government. This amounts to
an attempt to institutionalize the influence of the pro-presidential party
in the Yanukovych-led government, which contradicts the interests of the
prime minister.

On the one hand, the cabinet may split into an “orange” and a “regional”
block. On the other hand, it will have to rely on the “volatile”
parliamentary coalition. The difficulty is that there may be two forms of
parliamentary majority, one with Our Ukraine (the broader coalition), and
the other without it (the crisis coalition of the Party of Regions, the
Socialist Party and the Communist Party). The broader coalition will become
the ruling one, while the other will form an opposition, but the line
between them is very fine.

Yanukovych, who was nominated by the opposition (crisis) coalition but
approved by the broader coalition, might blackmail Yushchenko with the
existence of an opposition (crisis) majority in parliament.

This situation will persist for as long as the Communists, who ensure a
majority for the Party of Regions without Our Ukraine, support Yanukovych.
This will strengthen Yanukovych’s stance in subsequent political bargaining
with the president.

Our Ukraine will do its best to squeeze the Communists from the coalition.
But the Communists may be willing to leave of their own free will, in
protest against the anti-popular policies of the government (a relevant
example is a clause prohibiting the sale of land, which has been removed
from the coalition agreement). In this case, the search for a balance
between Our Ukraine and the Party of Regions will begin anew.

So the crisis in Ukraine has not been resolved, but has acquired new
characteristics and become quiet and chronic, and its core has shifted

from parliament to the executive branch. -30-
————————————————————————————————–
Tatyana Stanovaya is chief analyst at the Center for Political Technologies.
The opinions expressed in this article are those of the author and may not
necessarily represent the opinions of the editorial board.
————————————————————————————————–

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8. “CAUGHT IN OUR OWN WEB”
Yanukovych seen as abandoning his promises to electorate, Russia

COMMENTARY: By Vitaliy Dymarskiy
Rossiyskaya Gazeta, Moscow, Russia, Thursday, August 10, 2006

Let us talk about recent events in Ukraine. When viewed from the perspective
of one-dimensional Russian politics, where everything is black-and-white,
something strange is happening in the neighboring country.

After all, the parliamentary crisis caused by the breakup of the “orange”
coalition was supposed to prove the viewpoint of Russian political analysts
recruited to help “our man” Yanukovych in his fight against Yushchenko,
who is not “our man.”

Or take “our man’s” return to the post of prime minister: Does it not attest
to the weakness of the Maydan’s ideas and of the Ukrainian president’s
pro-Western policy?

In essence, speculations about the “orangists'” defeat started immediately
after the Supreme Council elections where the Party of Regions won first
place, but nonetheless lost to the three “revolutionary” parties — those
led by Yushchenko, Tymoshenko, and Moroz.

This suggests that the Ukrainians have not changed their preferences since
the Maydan days. Only politicians and politics have changed.

I cannot deny myself the pleasure of reminding you that I predicted in an
article published in the same Rossiyskaya Gazeta column the other day
that the “orange mixture” would fall apart into three components:
[1] Yushchenko’s democracy, [2] Tymoshenko’s populism, and [3]
Moroz’s pragmatism. And this really happened.

The “lady in white” who dreamed of premiership to secure her political
and economic interests was unsuitable both for the president himself and
his entourage in this post, whereas Socialist Party leader Moroz
demonstrated pragmatism (or political cynicism — you choose the name
for it), which presumes readiness for any alliances and coalitions for
the sake of one’s own career ambitions.

Briefly then: There was discord and hesitation, as a result of which
Yanukovych won and, just as during Kuchma’s presidency, took charge
of the Cabinet of Ministers where members of his Party of Regions
received 15 out of 24 ministerial posts.

However, did Yushchenko and his policy, so hated by Moscow, turn
out to be the loser?

Strange things then started to happen.

Yanukovych suddenly forgot his election promises and about his geopolitical
curtseys in Russia’s direction. Naturally, he will pay a ritual visit to
Moscow, but in the capacity of an exclusively pro-Ukrainian rather than
pro-Russian politician.

Just as during his premiership under Kuchma’s presidency, when the Russian
language was being squeezed out even of Yanukovych’s native Donetsk,
he has already removed the issue of the status of the Russian language from
the agenda.

At any rate, he placed his signature under the Universal (Declaration of
National Unity) speaking about comprehensive development of “the
Ukrainian language as the state language and the language of official
communication, the basis for the self-identity of the people and the state.”

Nor does Yanukovych’s premiership program mention his former concept
for Ukraine’s federalization, which, undoubtedly, could have led to the
breakup of the country, as was predicted by the spin doctors serving him
during the presidential elections, who felt offended by subsequent events.
The Universal emphasized Ukraine’s “territorial integrity, unity, and
wholeness.”

Finally, the main point: Yanukovych has fundamentally changed his stance
on Ukraine’s entry into NATO. Not only does the Universal point at the
need for mutually advantageous collaboration with the North Atlantic
alliance.

The new premier, without batting an eyelid, immediately gave up the idea
of a referendum on the issue and stated that the decision should rest with
the president, the premier, and the Supreme Council rather than the people.

If anybody still has illusions regarding the legislative majority’s
position, suffice it to look at the results of the vote on the resolution
authorizing foreign servicemen’s stationing in Ukraine: 273 votes “in favor”
and 23 “against.”

There is no doubt that the deputies passed the resolution with an eye to
future military exercises with NATO. Incidentally, Ukraine’s entry into
NATO was defined as a strategic goal back during Kuchma’s presidency
and Yanukovych’s premiership.

Admittedly, we have to say that the North Atlantic alliance (as well as the
EU, which has not yet recovered from its latest expansion) is not eagerly
waiting for Ukraine, and many Ukrainian experts share this opinion.

I would add for the sake of better understanding of the new premier’s
political position that the economic interests of the so-called Donetsk clan
do not coincide in any way with the economic interests of Russia, which
should not expect any major preferences from Yanukovych’s premiership,
although he will probably have to pay Russia in some form for Moscow’s
active (and occasionally even swashbuckling support) and for renunciation
of his own electoral promises due to which, in essence, Russia had chosen
him as its favorite.

One paragraph in the Universal hints at the form of this compensation: “To
complete work on Ukraine’s participation in the activities of the single
economic area based on the principles of multilevel and multispeed
integration taking into account WTO norms and regulations.” However, this
is merely guesswork. One way or another, the new Ukrainian premier will
have to explain his behavior to Moscow.

I am not saying all this to condemn Yanukovych or expose his
“treacherousness.” He behaves as a genuinely Ukrainian and pro-Ukrainian
politician.

It would be naive to believe that any politician in the post-Soviet area —
be it Yushchenko, Aliyev, Voronin, or anybody else — would behave
differently. It is time to get rid of the illusions we had about Ukraine in
the fall of 2004 when we thought that political technologies and PR
techniques could secure Russian interests in the neighboring state.

Let us recall the events that took place 15 years ago when our obviously
belated realization of new realities in the USSR resulted in its breakup.
The CIS and our bilateral relations with its members may meet the same fate if
we continue to regard Moscow (just as back in those days when it was
the notorious union center) as Mecca where everybody goes to bow and
pray.

One more point. Russian TV channels showed sensational footage of
fights in the Ukrainian Supreme Council with satisfaction and, it seemed,
malicious joy, as if saying: Look at the fruits of the “orange revolution.”

I agree, it was an unpleasant sight. Equally unpleasant as similar reports
from many parliaments in the world where political passions fly high. In
my opinion, however, complete unanimity and conformity of opinion,
which we also happen to see in TV reports, do not look any better.

Democracy (naturally, if it is not controlled from above) presumes political
struggle rather than marching in columns. It presumes harsh struggle (like
the one being waged in Ukraine) keeping awake both the authorities (no
matter how long the eclectic Yanukovych cabinet will last) and the
opposition, which, represented by Tymoshenko, currently comprises a
real force, which has something to fight for and somebody to fight against.

In this respect the Maydan definitely did not suffer a defeat. -30-

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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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9. BUT HE SAID IT WOULD NEVER HAPPEN
Viktor Yanukovych is leading Ukraine into NATO. Ukraine’s new prime
minister isn’t as pro-Russian as he used to be. Meanwhile, those who were
Yanukovych’s allies until recently are accusing him of betrayal.

COMMENTARY: By Valeria Ovsyanik in Kiev
Novye Izvestia, Moscow, Russia, Wed, August 9, 2006

Ukraine’s newly-appointed prime minister, Viktor Yanukovych,
is continuing the previous government’s policy of integration into
the European Union and NATO.

What’s more, at the end of last week the Supreme Rada, controlled
by Yanukovych, passed a resolution legalizing the presence of foreign
troops in Ukraine. NATO soldiers will soon take part in three military
exercises, and NATO vessels will visit Sevastopol in September.

Passing the legislation that permits the presence of NATO
troops on Ukrainian soil didn’t even require the votes of the
Yulia Timoshenko Bloc, considered pro-Western; 273 members of
the Supreme Rada voted in favor, with only 20 Communists and three
sympathizers voting against. The parliament’s decision can hardly
be considered uninformed.

Defense Minister Anatoliy Hrytsenko addressed lawmakers before the
vote, clearly explaining that this legislation was required for three
military exercises that will include NATO forces from Poland, Britain,
and Slovakia, as well as the pro-NATO Moldova.

What’s more, the upcoming Black Sea Force 2006 exercise will involve
NATO warships entering the military port of Sevastopol. The previous
Ukrainian parliament, which was considered pro-Western, rejected similar
legislation on two occasions.

It’s worth noting that the Economic Court of Crimea made a
significant decision yesterday: it ruled in favor of Gennadi
Moskal, President Yushchenko’s envoy in the region, in his case
against the Municipal Council of Feodosiya. The court found that
the Municipal Council’s decision to declare Feodosiya a “NATO-free
territory” was unlawful.

It was reported the same day that other municipal councils on the
Crimean Peninsula, which adopted similar resolutions in June, have
revoked them voluntarily, deciding not to go to court. Moskal’s argument
was a quote from the National Unity Universal, signed by Ukrainian
politicians, which directly refers to “the need for mutually beneficial
cooperation with NATO.”

Yanukovych has also changed his stance on the question of
Ukraine joining NATO. Previously, he was strongly in favor of
holding a national referendum on that issue – but as soon as he
become prime minister, he announced that the matter should be
decided by the president, the prime minister, and the parliament,
rather than by the people via a referendum.

Yanukovych added that “we should be guided by economic
expediency, not emotions.” But the best description of the
situation was provided by Defense Minister Anatoliy Hrytsenko, a
member of the Orange team, who told a news conference: “When I
wrote the Ten-Step Program [describing the NATO integration
process – editor’s note] for President Viktor Yushchenko, I never
imagined it would be implemented by the person who was his chief
opponent in the presidential election.”

Meanwhile, those who were Yanukovych’s allies until recently
are accusing him of betrayal. Natalia Vitrenko, leader of the
People’s Opposition Bloc (which didn’t make it into parliament),
maintains that Yanukovych has deceived voters for the sake of
securing the post of prime minister: “He said that his party would
oppose NATO membership and support the Russian language – but
now he’s talking of continuity between successive governments and
saying there won’t be any substantial changes in Ukraine’s
development strategy.”

To all appearances, the apprehensions of those analysts who
doubted Yanukovych’s pro-Russian orientation have turned out to be
well-founded. If current trends continue, there’s every chance
that Yanukovych will overtake his Orange predecessors on the path
towards the European Union and NATO. -30-
———————————————————————————————
NOTE: Translated by Elena Leonova
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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10. UKRAINE IS FINE. FOR NOW.

COMMENTARY: By Andrei P. Tsygankov, Program Chair,
International Studies Association 2006-07, Associate Professor,
International Relations/Political Science, San Francisco State University
Johnson’s Russia List (JRL) #180, Article 30

Washington, D.C., Wednesday, August 9, 2006

Good news is that Ukrainian government is formed, and it is a coalitional
one. Not everyone is happy, yet many observers from some cheerleaders
of the Orange revolution to Victor Yanukovich sympathizers have rejoiced
at the result of the four month’s stalemate. Inside Ukraine, influential
members of political class favor the outcome.

Both Western leaders and Russian President Vladimir Putin telephoned
Ukraine’s President Victor Yushchenko to congratulate him on the
settlement of the political crisis with the formation of Prime Minister
Yanukovich’s cabinet.

It is great news indeed, and the combination of the two Victors is the best
available at the moment. Ukraine now has a chance to rebuild its political
identity and address issues that have generated the crisis.

These issues are far from trivial, and working out a national unity
agreement is only beginning of solving them. Time is not on the side of the
new government, and Yushchenko/Yanukovich leadership must act quickly
and effectively.

The four most pressing issues are [1] energy, [2] Ukraine’s participation in
the Eurasian Economic Union, [3] status of Russian language, and [4]
NATO membership.

On energy there is no escape from the fact that prices are high, and Russia
is not going to be able to change that. Neither is America or Europe. As a
former President Leonid Kravchuk recently put, “the price of gas will not
depend on who is prime minister.” Something’s got to give, and, by now,
Ukrainian leaders must understand that. Other issues are no easier.

Polls show that more than 60% of Ukrainians are in favor of raising the
status of Russian language; more than 50% prefer Ukraine’s union with
Russia and countries of the Eurasian Economic Union; and about 55%
are fully or partially convinced that “pro-Russian choice” is the best for
their nation. Ukraine and Russia, while politically independent, remain
closely interdependent economically and culturally.

Alternatively, however, around 30% are strongly or partially in favor of
integration with the EU and NATO, and oppose rapprochement with
Russia.

Ukraine’s lacks of a viable political structure further complicates the
situation. Now that a coalitional government representative of both
eastern and western regions is formed, the key question is weather it will
be functional.

Divisions within the political class run deep, and the absence of a strong
executive authority may exacerbate the problem. The two Victors are
going to need every help they can get not just from within, but from
outside the country.

Internally, they would have to appreciate the depth of Ukraine’s cultural
and political divisions and act in the spirit of the national unity
agreement.

In reality, this means the already tested multi-vector policy practiced
before the Orange revolution.

Any attempts to forge some hard-core alignments­ either with Russia or
the West­ may only come at the expense of the nation’s unity.

Instead, one has to look for compromises, which might include giving
Russia greater share in domestic markets in exchange for acceptable
energy prices; developing ties with the Eurasian Economic Union, along
with those with the European Union; working out an arrangement on
status of Russian language, while encouraging younger generation to
speak Ukrainian; and not pushing membership in NATO, while gradually
forging stronger security ties with members of the alliance.

Externally, the new coalition will benefit greatly from big players, such
as Russia, the United States, and the European Union, providing
a concerted assistance or, better yet, a concerted decision not to
interfere.

To quote from the same interview with Kuchma, the Ukraine’s problem is
that there are three bosses for every two Ukrainians, and the key challenge
is to keep those bosses from pulling each other’s hair out. That includes
external bosses. It would be crucial to work out an agreement among great
powers in the region to stop treating Ukraine as its own turf and stay out
of the nation’s politics and policies.

Sending the new coalitional government congratulations is not going to do
it. Instead, it is necessary to address great powers’ gap in interests and
values, and to learn how to treat Ukraine with respect it deserves. Given
the increasingly antagonistic nature of Russia-Western interactions in the
region, this will not be easy.

At this point, there is simply too much negative baggage in Russia-Western
relations. NATO expansion, war in Iraq, colored revolutions, competition
for energy resources, and Russia’s domestic changes have already produced
radically different interpretations of the situation in the former Soviet
region. A new political will and a fresh approach are necessary.

Ukraine deserves nothing less. It is important that all external sides agree
that not only the Orange revolution, but many confrontational developments that
preceded it would have not been possible without great powers’ attempts to
treat Ukraine as a geopolitical prize in the region.

As known geopolitical warrior Charles Krauthammer put it during the Orange
revolution, “this is about Russia first, democracy only second . the West
wants to finish the job begun with the fall of the Berlin Wall and continue
Europe’s march to the east . the great prize is Ukraine.”

One must recognize the formidable challenge Ukraine is facing in its nation-
building. The nation has only been united in the 1930s, as a result of
Molotov-Ribbentrop Pact, which, ironically, makes Josef Stalin one of its

founding father.

The young nation therefore needs all the time and peace it can get to work
out for itself what it wants to be. If the world finally understands that it
needs a stable and predictable Ukraine, and not a Ukraine of warring clans

or quasi-separatist states, the new coalitional government has a chance.

If not, a strong center of gravity in Ukrainian politics may disappear
within a year, and extremists from east or west of Dnipro River will have

the day.
————————————————————————————————–
Andrei Tsygankov, andrei@sfsu.edu; http://bss.sfsu.edu/tsygankov/
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11. UKRAINE’S SHADOW ACROSS EURASIA

ANALYSIS AND COMMENTARY: By M K Bhadrakumar
Asia Times Online, Hong Kong, Thursday, August 10, 2006

Modern Ukraine’s most famous son, Soviet leader Nikita Khrushchev, once
said, “He who cannot eat horse meat need not do so. Let him eat pork. But
he who cannot eat pork, let him eat horse meat. It’s simply a question of
taste.”

The predicament facing the United States over the death of the “Orange
Revolution” in Ukraine is somewhat similar. The choice is whether to do
business with the incoming pro-Russian Prime Minister Viktor Yanukovich or
to destabilize him in the coming months by consorting with the mercurial
opposition leader Yulia Tymoshenko.

The dilemma is acute insofar as Washington doesn’t have a genuine “taste”
for either of the two Ukrainian leaders.

The choice would have been easy if Moscow had placed its cards on the table.
But Moscow is not helping matters. It is eschewing polemics and is not
stating preferences. Instead it is putting on a poker face – an exasperating
correct median line.

No sooner had Yanukovich assumed office in Kiev on Friday than Russian Prime
Minister Mikhail Fradkov extended customary greetings and expressed hope for
the development of bilateral ties.

President Vladimir Putin took another three full days to add his
felicitations. On Monday, significantly, he first telephoned Ukrainian
President Viktor Yushchenko to congratulate him for putting an end to the
political crisis emanating out of the latter’s rift with his “orange
partner” Tymoshenko. And only then did Putin congratulate Yanukovich.

With characteristic understatement, Moscow drew attention to the great
strategic defeat that the US has suffered in Ukraine. It is common knowledge
that the US actively worked behind the scenes after the March elections to
put together an orange coalition of Yushchenko and Tymoshenko.

Washington was eager to see an orange coalition in power in Kiev so that at
the summit of the North Atlantic Treaty Organization in November in Riga,
Ukraine could be formally invited to a membership action plan, which in turn
would qualify Ukraine potentially for full membership at the 2008 NATO
enlargement summit. But in the event, Yushchenko simply would have no truck
with Tymoshenko.

Fearing that his popularity, which is already below 10%, might plummet even
further if fresh elections were held because of a hung parliament,
Yushchenko opted for a grand coalition with Yanukovich despite the US
administration’s deep suspicion of the latter as a menace to the United
States’ geopolitical interests.

Worse still, as a former American diplomat put it, “pretty much everybody
… was surprised” by the undercurrents that swept Yanukovich to power.

Washington has put a brave face on the geopolitical shift in Kiev. The US
State Department spokesman claimed satisfaction that Yanukovich’s return to
power was “in the old-fashioned, democratic way” and, therefore, Washington
would seek a “good relationship” with his government, “just as we would with
any other democratically elected government”.

Yet such grandstanding couldn’t hide that in three broad directions at
least, Yanukovich’s ascendancy signifies a shift in Ukraine’s policies that
profoundly hurt the US position.

First, developments in Ukraine conclusively debunk Washington’s claims that
a wave of US-sponsored freedom and democracy was on the march. President
George W Bush himself had listed in his 2005 State of the Union address the
“Orange Revolution” in Ukraine as one of the “landmark events in the history
of liberty”.

As Russia scholar Anatol Lieven wrote, these assumptions on which the US
strategies have been based stand contradicted today; Ukraine “demonstrated
that the processes which the West has encouraged in Central Europe and the
Baltic states cannot be extended seamlessly to the former Soviet Union.

Societies, economies and national identities and affinities are very
different, links to Russia are closer, and both the US and the EU are weaker
than appeared to be the case a few years ago.”

Indeed, the reverberations of the collapse of the “orange project” will be
felt far and wide in the post-Soviet space. Belarussian President Alyaksandr
Lukashenka will feel vindicated in his assertion that there will be no rose,
orange or banana revolutions in his country. Mikheil Saakashvili in Georgia,
on the other hand, will worry that “color revolutions” are not irreversible.

Kurmanbek Bakiyev of Kyrgyzstan would be gratified that his early burial of
the “Tulip Revolution”, and his choice of indigenous and regional moorings
as the mainstay of power, were after all the correct choice.

Across the length and breadth of the post-Soviet space a realization will
have dawned that the era of the “color revolutions” has ended and that with
all its awesome power as the sole superpower, there are serious limits to
the US influence in bringing about regime changes.

Certainly, in Afghanistan, Iraq, Lebanon and Palestine – or, wherever
Washington has let the genie of “democracy” out of the bottle – pandemonium
prevails.

The Bush administration faces a serious credibility problem in the
post-Soviet republics of Central Asia and the Caucasus, which will pose a
difficult legacy for the next administration.

The less said the better for Washington’s “Greater Central Asia” strategy or
any mediation in settling the “frozen conflicts” in Moldova or
Transcaucasus. (Moldovan President Vladimir Voronin visited Moscow on
Tuesday to discuss with Putin key issues of finding a settlement to the
Transdnistria problem.)

Equally Ukraine, with its 50 million people, its advanced
military-industrial complex, its strong agricultural base, its highly
strategic geography, and not least of all its near-mystic appeal to Mother
Russia, should have been the fulcrum around which an entire geopolitics was
conceived by the US. With Ukraine cut adrift once again in the midriff of
Eurasia, issues are wide open.

Democracy may or may not have changed Yanukovich. But one thing is certain:
Moscow is back in serious business in Ukraine – that is, if it ever was out
of it in real terms. In his first remarks within hours of assuming office,
Yanukovich told the Russian government daily Rossiiskaya Gazeta that
Ukraine-Russia ties will run on an altogether different track than under the
orange regime.

He said: “We need to stop quarrelling with our neighbors and learn to have
respectful discussions … The new government is not going to foster
anti-Russia sentiments in Ukraine.”

Influential Russian politicians promptly reciprocated. But the chairman of
the Russian duma’s International Affairs Committee, Konstantin Kosachyov,
underlined Moscow’s cautious approach not to raise hackles in the West. He
commented: “Yanukovich stands for a balanced foreign policy of Ukraine.

Russian-Ukrainian relations now have a chance to overcome the crisis and
start gradual development.” The emphasis of Russian politicians was on the
“de-ideologization” of Russian-Ukrainian relations and their pragmatic
development.

All indications are that Russia will offer Yanukovich’s government a new
concept of strategic partnership focusing on the economic-reform objectives
of Ukraine but aimed at closer integration with Russia in terms of projects
and programs.

Russia has an inherent advantage over all of Ukraine’s Western partners in
pursuing such a course. More important, it is a “win-win” situation, since
Russia will also attend to the top priorities of Ukraine’s political
economy.

But US cold warriors seem to be stopping at nothing to raise the dust in
Russia-Ukraine relations. They see fresh hope in the “checks and balances”
implicit in the Yushchenko-Yanukovich grand coalition. (They made more or
less the same misplaced assumption in the case of the Bakiyev-Felix Kulov
team in Kyrgyzstan.)

They count on Tymoshenko providing an “effective critique” of the grand
coalition in Kiev. They insist democracy has changed Yanukovich’s outlook.

They calculate that the US still has its own clientele in the Ukrainian
leadership. They visualize Yushchenko, though an isolated politician, as
still capable of (and interested in) fighting for the “orange” spirit.

Without doubt, Yanukovich will create a change in atmosphere in Ukraine’s
relations with Russia, especially at the political and diplomatic level.

He will not be enthusiastic about the anti-Russia regional groupings
sponsored by Washington such as the GUAM group (Georgia, Ukraine,
Azerbaijan and Moldova) or the Community of Democratic Choice. These
regional groupings are bound to wither away if Kiev doesn’t put its heart
in them.

The million-dollar question has always been about the prospects of Ukraine’s
NATO membership. In his first comments, Yanukovich reiterated his opposition
to Ukraine joining the NATO.

He recalled that the orange regime’s stance on the issue “made Russia
unhappy” and that his government must abide by the wishes of the majority
of Ukrainian people who were opposed to NATO membership.

Yanukovich later amplified that “NATO is a very sensitive issue for our
society” and, therefore, “balanced and collective decisions” became
necessary involving the government, president and the parliament. What all
this adds up to is that the NATO enlargement summit in 2008, which Bush very
much hoped to have as a legacy of his presidency, will have to be postponed
indefinitely.

But NATO expansion is not merely an issue of Bush’s political legacy. If
Ukraine holds back, NATO’s eastward expansion virtually stalls. Ukraine is
too big to be bypassed. And no encirclement of Russia is realistic without
Kiev coming on board.

Furthermore, NATO expansion into Ukraine was intended to give verve to
Poland’s claims of a leadership role in Eurasia, which the US was counting
on, challenging Russia. Eastward expansion is NATO’s strategy; it isn’t
Ukraine’s strategy. It is a strategy that, essentially speaking, has nothing
to do with the actual security of member countries.

It is political and has been championed by the caucus involving the US,
Poland and the Baltic states. It is a venture about which other NATO
countries harbor ambivalent feelings.

Washington hoped that NATO expansion would give impetus to the United
States’ trans-Atlantic leadership and keep burning the fire of
Euro-Atlanticism even in the post-Cold War setting. Now, if NATO begins to
meander for want of motivation or a clear-cut action plan, lingering doubts
about its raison d’etre would resurface.

It is not even two years since then German chancellor Gerhard Schroeder
questioned NATO’s pivotal role or France reactivated its NATO links. The
challenge is thus political and, as Khrushchev put it, politics are the same
all over – “They promise to build a bridge even where there is no river.”
————————————————————————————————–
M K Bhadrakumar served as a career diplomat in the Indian Foreign Service
for more than 29 years, with postings including ambassador to Uzbekistan
(1995-98) and to Turkey (1998-2001).
————————————————————————————————–
LINK: http://www.atimes.com/atimes/Central_Asia/HH10Ag01.html
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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12. DEMOCRACY IN UKRAINE

COMMENTARY: By Dan-Daniel Tomozeiu
EuObserver, Brussels, Belgium, Thursday, August 10, 2006

Ever since the end of the Cold War, Ukraine represented for many observers
just a large former soviet republic too close to Russia to be properly
distinguished.

The policies of the two countries seemed so similar that many commentators
almost lost hope of ever seeing a truly independent Ukraine in charge of its
borders, army and energy security. And yet in November 2004, not more that
six months after Europe’s historical enlargement, the Ukrainian nation
awoke.

The people had enough of corruption, fraud and ignorance of their choices.
They took to the streets to manifest their anger and desire for freedom. And
it was there in the streets where the wish for a better life of the orange
camp proved stronger than the conservatism and inertia of the blue side.

Names like Viktor Yushchenko and Yulia Tymoshenko immediately became
associated with Ukraine’s new independent course, while Viktor Yanukovych,
the former premier, was seen as the big loser.

This picture was altered a few days ago, on the 3 August, when president
Yushchenko nominated his archrival Yanukovych to be prime minister.

The news hit hard at the heart of Orange Revolution supporters. Judging from
their comments, their hopes are shattered, the values they fought for seem
all lost. But are they really?
PUTTING A DEMOCRATIC SYSTEM IN PLACE
In 1947 the British Prime Minister Winston Churchill made one of his most
memorable quotes: “No one pretends that democracy is perfect [.] democracy
is the worst form of government, except for all the others that have been
tried.”

It is this democracy that, fifty-seven years later, was promoted by the
supporters of the Orange Revolution. And it is exactly democracy that has
triumphed in Ukraine. The values of democratic choice, proved in the end
stronger than any individual or coalition.

The Orange Revolution was not about giving the state power to Mr Yushchenko
or anybody else but about putting in place a democratic system that insured
Ukraine’s sovereignty and a better life for its people.

On 26 March, during the last election, the people showed their preference.
The two factions came close, the difference being around 3% in favour of the
now split Orange side. It showed the people were not happy with the slow
changes of the past two years but they haven’t lost their trust in democracy
and they were willing to wait.

It was now down to president Yushchenko, the political symbol of the Orange
Revolution, to make his choice for prime minister.

His options were limited Mrs Tymoshenko or Mr Yanukovych After a long
delay he opted for the later with all the sacrifices such a decision
implied. From a purely theoretical perspective, Mr Yanukovych being the
leader of the party that got most votes, is entitled to the position.

But there is more to the president’s choice; it shows his trust in the
durability of the democratic changes he was able to bring to the country.
His option carries a risk, a high one, and now he has to be able to defend
and oversee it.

But more importantly he has to keep his country on track. It won’t be easy
but if he manages, Ukrainian democracy will come out stronger and more
of a unifying force than ever before.
THE ROLE OF THE OPPOSITION
The decision of the president was interpreted by many as leaving Mrs
Tymoshenko, the real symbol of the Orange Revolution, out in the cold.
Instead, she is in for four years of real heat!

If any of that revolutionary spirit that energised the masses two years ago
is still there then the Yanukovych government will have to face a real
opposition both in Parliament and in the media.

In a real democratic system the role of the opposition is as important as
the one of the government. Mrs Tymoshenko proved to be a strong and
charismatic leader, now she has to show herself as an informed and fierce
critic. Heading a strong and unmerciful shadow government can be as
challenging as the real job itself.

For young democracies, having an alternation of power and leaders that are
capable of great things both in government and opposition is crucial.

Moreover if the alternation to power in other Eastern European countries is
any indication, Mrs Tymoshenko has a great chance of getting the top
position in four years or even earlier. And what a rich political experience
will she have by then!

It is clear that the controversial character of the story is the new prime
minister, Mr Yanukovych. His past is no indication of how he will perform in
his new job.

He was for long seen just as the right hand man of a Soviet-style leader.
Later, at the height of the Orange Revolution there were rumours he wanted
to bring the army out in the streets against his co-nationals.
THE RIGHT GAMBLE?
As a leader of the opposition he didn’t bring much and now he is portraying
himself as a reformed politician. Only time will tell what his real nature
is. For the moment he has to prove he is worthy of a second chance to the
highest office.

He has to show he understood the democratic game and he is willing to play
by the rules. Until then the responsibility for his actions lies with
president Yushchenko who took the gamble. Hopefully it was the right one.

Yet, there is one part of the world where the news about Mr Yanukovych’s new
job was received with less reservation. The Russian newspapers and opinion
leaders congratulated him and some even said they feel vindicated by the
nomination. But outside lessons have always slowly entered Russian space.

It must be hard to see a neighbouring country with a similarly difficult
history having a strong and blossoming democracy in which political rivals
are not jailed but asked to play their rightful role and where the press is
free to speak its mind.

And for the ones that are less jubilant about the Ukrainian changes, Mr
Yanukovych’s nomination at least proves that the Orange Revolution was
genuine.

There was no outside force trying to put its people into place. The
revolution was simply the option of the local population that had enough of
tyranny.
COMPLEX AND DELICATE CONCEPT
Democracy is a complex and delicate concept, that takes time to grow and
flourish both in the political system and in people’s hearts. And at no
phase is democracy more fragile than in its infancy.

The past two years showed the Ukrainian people the benefits and sacrifices
it requires, but it also showed its fragility.

It should not be forgotten that the people of Ukraine were energised by the
democratic models of Europe and the US when they took the streets asking
for change and for EU and NATO membership.

It is the EU and the US that became the guarantors of the newly born
democracy. The EU through its proximity and historical ties with the country
has not only the possibility but also the capacity and duty to keep a very
exigent eye on the developments in Ukraine.

Inside the EU, there are certain countries, such as Poland, which have a
vested interest in keeping the country on course and should therefore spare
no effort in making sure that democracy has solid roots across its eastern
border.

But who can talk about democracy in Eastern Europe without mentioning the
role of the United States?
WASHINGTON’S ROLE
The US is the single most important democratic model for the countries in
the region and its committed involvement in the area played a crucial role
in the post- Cold War transformations.

Washington’s role in Ukraine’s recent history has for sure been
overestimated by most commentators. It is true that the US engagement with
the Ukrainian democratic forces has always been there, but it has to be
stepped up in the near future.

If indeed president Bush wants to see Ukraine in NATO before he leaves
office then he has fully understood a large part of his responsibilities
towards this young democracy. With European integration having no secure
date, NATO membership is the only real external guarantee for the Ukraine’s
democratic future.

The Americans and the majority of the other NATO members are willing to
stretch out a hand. President Yushchenko and prime minister Yanukovych
should be ready to grab it if they want to prove they are worthy of leading
Ukraine in these historic times. -30-
————————————————————————————————–
The author is currently undertaking a PhD research at the Diplomatic Academy
of London (DAL) investigating the democratization of Central and Eastern
Europe. LINK: http://euobserver.com/7/22219
—————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
Send in a letter-to-the-editor today. Let us hear from you.
========================================================
13. ‘EVERYTHING DEPENDS ON THE DETERMINATION OF
THE WEST NOT TO ABANDON UKRAINE’
Moscow will continue to use its back channels to penetrate, compromise
and sow division, and they will cultivate Moroz as an independent factor.

INTERVIEW: With James Sherr, CSRC, UK Defence Academy
Den in Ukrainian, Kyiv, Ukraine, Tuesday, 8 August 2006

QUESTION 1. Do you think that the Universal can indeed unite Ukraine?

SHEER: There are three problems with this premise.

[1] First, documents do not create unity. To see how little unity exists
here, all you need to do is read the provisions. Eighty per cent of them
are so noble and vapid [ploskie, pustie] that they would unite eighty per
cent of humanity. The twenty per cent that matter are carefully crafted to
conceal disunity.

[2] The second problem is that Ukraine’s long-standing divisions have not
been healed since January 2005. In fact they have been aggravated, because
the lives of most ordinary people have become worse.

If a government, Blue or Orange, were demonstrably to change people’s lives
for the better and do so across the country, then today’s
divisions-regional, geopolitical, linguistic-would matter less than they do
now.

[3] Third, there is a just a touch of totalitarian nostalgia in this quest
for unity. The quality of a liberal democracy is measured by the quality
of its government and opposition-and by the rules and institutions that
keep the conflict of interests civilised, open and lawful.

QUESTION 2. Who won from signing this document, and who lost?

SHEER: Regions won before the document was signed. They won when
Moroz defected. The question now is how to shape this victory and prevent
it from becoming a danger to the rest of the country.

The scale of the potential danger will be seen when ministers are appointed.
But it will be influenced by several other factors:

[1] first whether the formerly Orange members of this coalition care as much
about their democratic and European values as they do about their
business interests;
[2] second, whether the opposition can oppose in a way that does credit to
them-and articulate a vision for the country that is attractive,
realistic and responsible.
[3] Third, I think it will depend on the resolve of the West not to give up
on Ukraine, but look for new opportunities and play a principled,
supportive role.

QUESTION 3. How might these events influence Ukraine’s relations with
NATO, the EU and Russia?

SHEER: It’s too early to say how they will, so let’s consider how they
might. NATO’s aim has never been Ukraine’s membership of NATO. It
has always been effective cooperation and security.

The latter depends on transforming Ukraine’s military and security
structures, so that they are well-trained, well-financed, democratically
minded and democratically controlled.

NATO and Ukraine have been addressing this jointly and, since January 2005,
in a very dedicated and serious way. That joint work now forms the core of
the NATO-Ukraine relationship.

So NATO’s key concern is, ‘what happens to this relationship?’. Soon, the
answer will be clear enough. It won’t be possible to fool anyone. There
are just too many experts involved.

As to membership, the door is open to countries that share NATO’s values
and meet its standards (which, by the way, include public understanding and
support). NATO won’t close this door, and it will insist on the right of
Ukraine and Ukrainians to make an informed choice on the matter.

Membership of the EU would not be on the table even if the Orange coalition
were restored. What is on the table is integration in specific, functional
areas of immense importance to Ukraine: trade, investment and friendlier
visa arrangements. But integration works according to certain principles.
The EU has one set of principles, the SES another.

Integration with one bloc and cooperation with the other is possible.
Integration with both is not possible, and it is a disservice to pretend
otherwise.

The question is not what declarations are issued, but what the practical
focus of the new government will be: implementation of the EU-Ukraine
Action Plan or integration into the Eurasian economic space?

Is the Kremlin happy about the latest events in Ukraine? Undoubtedly, yes.
But they are not dizzy with success. They do not trust Yanukovych, and
they know that the business interests behind him are tough.

The new government will be vastly more predictable for Moscow than the
Orange government, but stronger than Kuchma’s and less easy to manipulate
than Yushchenko’s.

So Moscow will continue to use its back channels to penetrate, compromise
and sow division, and they will cultivate Moroz as an independent factor.

As to Yanukovych and Akhmetov, they will try to establish a firmly pragmatic
multi-vector policy. I hope the West treats that a challenge rather than an
insult. -30-
———————————————————————————————-
The views expressed are those of the author and not necessarily those of
the British government
———————————————————————————————
Contact: James Sherr, james.sherr@lincoln.oxford.ac.uk
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
14. UKRAINE IS NOT EUROPE – YET
Formation of new government causes a number of concerns

OP-ED: By Tammy Lynch, Kyiv Post, Kyiv, Ukraine, Thu, Aug 10, 2006

Many analysts have reacted positively to the confirmation of the new
Yanukovich government, welcoming the end of over four months of
political turmoil.

But, when looking past the short-term goal of so-called “political
stability” to Ukraine’s long-term development, the formation of the
government causes a number of concerns.

On August 3, US State Department Spokesman Scott McCormack suggested,
“”Mr. Yanukovych has come to the prime ministership in the old-fashioned,
democratic way. He worked hard for votes, he campaigned, he politicked.”
Yes – and no.

It is true that Yanukovich’s Party of Regions ran a superb Western-style
political campaign, based on the advice of several US Republican Party
strategists. The party placed first in the parliamentary election, with 32
percent of the vote. And, in the end, Yanukovich negotiated well with the
president to secure his job.

But the formation of the coalition that allowed Yanukovich to be in that
position had as much to do with the physical blockading of the parliamentary
rostrum, and the reported providing of “incentives” to MPs, as with
“politicking.”

Almost immediately after the former “Orange” parties announced their own
majority coalition, which would have nominated former Prime Minister Yulia
Tymoshenko, the Party of Regions began blocking parliament. They blocked
work for 10 days, assisted by at least one non-MP “hired gun.” The unknown
man was filmed physically defending the rostrum from those attempting to
unblock it.

During that time, the Party of Regions was able to “convince” the Socialist
Party, the smallest member of the “orange coalition,” to switch allegiances.

The Socialists did so spectacularly during the election of the parliamentary
speaker. The party provided no notice to its previous coalition partners,
thus violating Ukraine’s parliamentary procedures.

Given the long history of bribery in Ukrainian politics, it was not
surprising when a television camera captured Party of Regions deputy Andriy
Kliuyev on the parliamentary floor making what appeared to be a gesture of
counting money while speaking to the head of the Socialists (although the
Socialists deny receiving money).

It also was not surprising for journalists to overhear a deputy from the
Yulia Tymoshenko Bloc ask Kliuyev sarcastically whether they could “get”
a committee membership for three million dollars since they missed the
chairmanships “for 10.”

There may be a reason why Kliuyev has been called the “money man” in
Ukraine’s domestic press. But one thing is certain – those watching the
parliamentary majority’s creation saw very little that resembled Western-
style parliamentary politics.

The inclusion of certain individuals in the new cabinet does little to
assuage concerns. Andriy Kliuyev was named Deputy Prime Minister
for the Energy Sector. This is the same post Kliuyev held in the 2004
pre-revolution Yanukovich government.

In fact, the new Yanukovich cabinet includes several individuals from that
time, which is the period when the questionable gas intermediary
RosUkrEnergo was formed.

RosUkrEnergo, which controls Ukraine’s gas contracts, has been severely
criticized by Western officials for its lack of transparency.

Charles Tannock, a British European Member of Parliament suggested that
the use of RosUkrEnergo in gas agreements with Russia suggests “there is
a possibility of political corruption.” He and other Western officials have
urged Ukraine to remove RosUkrEnergo from all gas transactions.

Yulia Tymoshenko had vowed to do this. During her tenure as premier, the
company was investigated by the Secret Service for money laundering. “It
is a front company,” she charged, designed to enrich certain Ukrainian
officials. After her dismissal, the probe was shelved. Now, the new cabinet
can be seen as a sign of support for the intermediary.

Ukraine’s new Minister for Coal and Mining, Serhiy Tulub, served as
Yanukovich’s Minister for Fuel and Energy in 2004, when RosUkrEnergo was
formed. Even more, Yuriy Boyko, the former head of Ukraine’s state gas
company Naftohaz in 2004, will now serve as Fuel and Energy Minister.

Boyko sat on the original “coordinating council” of RosUkrEnergo. The
international watchdog Global Witness questioned the “curious relationship”
between RosUkrEnergo, Naftohaz and Boyko and asked who profited from it.
Meanwhile, Ukraine’s new First Deputy Prime Minister will be Mykola Azarov,
a man known during the Kuchma administration for his use of the tax police
against the political opposition.

As head of the Tax Administration, Azarov is heard on the “Gongadze Tapes” –
secret recordings of President Kuchma’s conversations in 2000. These tapes
were authenticated by the United States FBI. Most individuals heard on the
tapes, including then-Prime Minister Viktor Yushchenko, have said the
conversations in question did take place. Kuchma and Azarov have not, but
they seem to correspond with real events.

In one conversation, a man identified as Azarov discusses his attempt to
pressure Boris Feldman, a wealthy banker and supporter of Yulia Tymoshenko.
On the tapes, Kuchma is heard to tell Azarov, “Put him in a cell with
convicts. Let them pound him.”

Three months later, Azarov explains that Feldman will go to prison.

“We agreed with the Luhansk court .,” he says on the tape. “I have talked
about adding a charge. We have discussed this with the judges there, whom we
can manipulate.” Feldman spent three years in jail before another court
threw out the charges.

Under Azarov’s direction, the tax administration also opened investigations
into the work of the US-based organization Freedom House and the US-owned
newspaper Eastern Economist. Many Ukrainian organizations critical of
Kuchma also endured excruciating tax investigations during Azarov’s tenure.

Now, Azarov is the second most important man in the cabinet. Though it
includes reformers, its overall make-up and the tactics used to form the
coalition, should give pause to those worried about corruption or possible
oppression. Any resurgence of RosUkrEnergo may concern Europeans
focused on energy.

As usual, the country appears to be heading in two directions at once.
Despite concerns for the future, Ukraine conducted a free and fair election.

All politicians expressed their opinions throughout the coalition formation.
Perhaps most important, this government, unlike Yanukovich’s first, will be
actively monitored by a real opposition.

The Yulia Tymoshenko Bloc refused to participate in the government,
suggesting that it could better serve Ukraine as a watchdog. Tymoshenko’s
new inter-party opposition may include disaffected members of President
Yushchenko’s Our Ukraine party, which officially joined Yanukovich’s
government. The President has welcomed the creation of the opposition and
pledged to protect it.

In fact, protecting the opposition should be one of the president’s most
important goals, given possible questions about the new cabinet.

Will this government truly be able to meet Western standards of democracy
and transparency? Ukraine will need its opposition to ensure that they do.
————————————————————————————————
The author, Tammy Lynch, is a Senior Fellow at Boston University’s
Institute for the Study of Conflict, Ideology & Policy.
———————————————————————————————–
LINK: http://www.kyivpost.com/opinion/oped/24912/
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
15. UKRAINE: A NEW ROME?

COMMENTARY: By TOL Magazine, Transitions Online
Prague, Czech Republic, Tuesday, August 8, 2006

OUR TAKE
Ukraine’s new government is a squandered opportunity, an unavoidable
decision, a compromise that – with luck – might help lead the way into a
more clearly defined party system.

In the end, President Viktor Yushchenko had little real choice. The
elections were free and fair, the Party of Regions topped the vote, it
managed to stitch together a majority, and the majority nominated Viktor
Yanukovych to be prime minister.

To deny Yanukovych the post would have been to deny the results of a
standard political process. To call new elections would have been a blow to
Ukrainian democracy, a loss of national face.

But, of course, the re-emergence of Yanukovych is a major blow, an
embarrassment for the democratic revolution that in 2004 swept aside,
strictly through the law book and without violence, a regime that had sought
in craven fashion to steal elections.

It is a loss of face for Ukraine – and, in that, it continues the motif of
the past two years, because face, and the loss of it, has been the
overarching theme of Ukrainian politics. Yushchenko lost his literally two
years ago, sacrificing his strikingly handsome looks in his bid to fight
opponents willing to use poison.

Two years on, he has lost his face politically, comprehensively defeated on
the political chessboard. The man who should have disappeared from public
view after the elections in 2004 – Viktor Yanukovych – will now, somehow, be
the face of Ukraine, occupying a constitutionally strengthened premiership.

With the return of Yanukovych, a former small-time criminal jailed by the
Soviets but never sentenced for the big-time crimes of the Donetsk clan that
he leads, Ukraine will be presenting to the world some of the ugly mug it
showed the world in the 1990s.

What was the new inspiring image of Ukraine – the hundreds of thousands on
the Maidan, the scarred, sacrificed face of Yushchenko, and the artfully
iconic image of Yulia Tymoshenko – has, at the very least, lost its sheen.

No one comes out this looking good. Victory seemed within the grasp of the
“orange” coalition, with the announcement of a government coalition between
Yushchenko’s Our Ukraine, Tymoshenko’s bloc, and the Socialists. Then, at
the last, Yanukovych’s blues seized the Socialists, and suddenly Yushchenko
was checkmate.

It was a game that should never have been lost: an orange coalition – albeit
smudged, stained, and faded after 15 troubled months in power – was viable,
and formed in outline within days of the elections. But it took nearly four
months to flesh out the outline with details.

That protracted process , and the coalition’s last-minute collapse, is
unconscionable, and those responsible should have that on their conscience.

That means the Socialists – for going over to Yanukovych – but, ultimately
and primarily, Yushchenko’s Our Ukraine: Tymoshenko’s position as leader of
clearly the most successful “orange” party in the elections should have
delivered her the premiership, but it seems that was the rock on which
the endlessly drifting, unguided talks foundered repeatedly.

There was always the knowledge that the united orange front would at some
point split. After all, a once-divided opposition unites to deal with an
otherwise insurmountable challenge – in Ukraine’s case, elections
grotesquely manipulated by a shamelessly venal administration – and, once
the challenge is surmounted, old divisions are bound to emerge when they
face the many, discrete challenges of government.

Nonetheless, an opportunity has been needlessly wasted – a chance of an
extended period in power in which to put clear blue water between Ukraine
and its murky past and to embark on a much-needed period of comprehensive
reform that would lead the country westward.
A HELPFUL NEUTRALITY?
An opportunity has been squandered. Still, despite the presence of
Yanukovych, the new government offers a solution that might be reasonable,
even appropriate for Ukraine at the moment.

Or, looked at from a less optimistic angle, there are at least some features
that militate against a worst-case scenario.

[1] First, the “declaration of national unity” that the parties signed up to
tries to safeguard some key parts of the “orange” agenda.

Among the critical ones are the commitment “To continue on the course of
European integration with the goal of Ukraine’s entrance into the European
Union,” to seek “mutually beneficial cooperation with NATO,” and to reform
the laws, judiciary, and law-enforcement institutions based on European
standards.

[2] Second, Our Ukraine is in a position to prevent a lurch back to
Ukraine’s past. The party has, in effect, acted as a cuckoo in the nest:
faced with the prospect of a blue government, it joined the government – and
in the process the Socialists and Communists have been pushed to the
margins, each with just two of the 23 government posts.

[3] Third, an impasse has some benefits for Ukraine. Symbolically, the
country is a highly charged geopolitical asset, wanted by Russia and,
theoretically, prized by Europe as a potentially “normalized,” democratic,
reliable, comprehensible neighbor.

This highly emotive geopolitics, and the controversial nature of the 2004
elections, has exacerbated internal tensions, and Yanukovych and his allies
used this as the launch pad for their political comeback.

Now, with Yushchenko’s and Yanukovych’s parties both in government, that
charge could slowly be neutralized. That would bring the country closer to
reality.

And that reality is that, [a] firstly, the West was doing little to win
Ukraine over – NATO membership was only on a very distant horizon; courtesy
of the EU’s sloth, EU membership was not even on the horizon – and, [b]
secondly, that, thanks to the deep divisions within Ukraine and its elites (and,
hopefully, because of the lingering spirit of the Orange Revolution), Russia’s
chances of transforming Ukraine into a system similar to its and Belarus’ –
namely, a consolidated authoritarian system – are also off the horizon.

A government that represents the two poles of Ukraine – a western, former
Austro-Hungarian half of small businesses, nationalist sentiment, and more
liberal inclinations and an eastern half onto which the Russian and Soviet
empires grafted on urbanization, industrialization, Russification, and a
more collectivized identity – will now have to work, day in, day out, on the
tortuous process of resolving these contradictions.

[4] And, fourth, if the process is too tortuous, the government will
crumble. Bets on this government lasting a long time should not be high.
CONSOLIDATION OR THE ITALIAN OPTION
That probability – that there will be a new government and possibly new
elections soon – suggests that, with the exception of Yanukovych’s party, we
may soon realize that the winners and losers from this debacle are not only
the current political formations. The elections and the protracted birth
pains of the new government suggest two basic scenarios.

The Party of Regions can use its time in government to advance its policies,
to reinforce its base of popular support, and to retrench itself in
Ukraine’s institutions.

Tymoshenko can capitalize on what is being presented as the capitulation of
Our Ukraine and the treachery of the Socialists to reinforce one message
that was clear from the elections: that Ukrainians see her as the principal
defender of the revolution.

The Party of Regions and Tymoshenko are, in other words, now in a position
to marginalize the other parties. Yanukovych can effectively consume what
remains of the Communist vote (just 3.7 percent in the elections) and slice
off chunks of the Socialists’ small support. Tymoshenko should be able to
feed on both Our Ukraine and the Socialists.

The Party of Regions and Tymoshenko’s party can work towards creating a
system dominated by two big parties. The strategic challenge for Tymoshenko
is to become a more standard political organization. Her election campaign
was populist and vacuous and the party images – herself and pink hearts on
white flags – hardly seem the symbols of an enduring party.

Still, behind the image-making are the outlines of a recognizable political
idea: social democracy. The challenge for Our Ukraine is to recover some
ground to become the third strong party that a polarized country like
Ukraine needs. For the other two – the Communists and the Socialists – mere
survival and maintaining significant influence may be a tough task.

But that vision of the political scene’s logical development may prove
wildly wrong: as these elections show, logical solutions can take a long
time to crystallize – and then dissolve. Previous parliaments have been
typified by constantly shifting alliances and deputies moving from one
faction to another, and business interests have been critically important.

Alliances may well shift again, deputies may migrate, and the billionaire
oligarchs of the Party of Regions, some of the millionaires who back Our
Ukraine, and the “red directors” – the communist-era apparatchiks – that
back the Socialists may battle for their own interests in a way that
distorts standard party-political calculations.

Quite possibly, we may see a continuation of the post-revolution pattern of
short-lived governments.

So, rather than a consolidating political system, we may see a country whose
politics looks rather like Italy’s, with governments changing frequently,
politics and business cohabiting unhealthily, and deputies operating more in
alliances and factions rather than clearly defined parties. There is even a
regional similarity, with Italy’s north-south divide matched with Ukraine’s
historic east-west split.

Where would that leave the revolution? Hopefully, after some years of
watching the political dance we would realize that the country is traveling
in generally the right direction.

Certainly, it would be clear that this is a highly political country – and
that alone would be a reminder of and a guarantee that Ukraine is different
from Russia.

But the key may lie outside the circus of parliament. Ukrainians need to
push for change in other ways – and they could look for an example to Italy.
There, politicians and the judiciary, politicization and independence are in
constant battle.

As the battles in Ukraine’s parliament grind on, dimming the spirit of the
revolution, Ukrainians can take their battle to the courts. -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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16. YUSHCHENKO: CONSTRUCTING AN OPPOSITION

ANALYSES: By Taras Kuzio, Transitions Online (TOL)

Prague, Czech Republic, Friday, 11 August, 2006

As fickle as the recent moves of Yushchenko and his party may look,
they highlight Our Ukraine’s deep-seated motivations.

The Ukrainian parliamentary elections in March were the freest in the
country’s history and one of the most free and fair polls yet held in
the Commonwealth of Independent States.

But this milestone in Ukrainian history was overshadowed by a four-
month parliamentary and political crisis that was overcome only at the
beginning of August with the signing of a deal that saw President Viktor
Yushchenko’s Our Ukraine party enter a “National Unity” coalition with
the top vote-getter, the Party of Regions, headed by defeated presidential
candidate Viktor Yanukovych.

The Socialist Party is also part of the new coalition, and the political
bloc of Yulia Tymoshenko, Our Ukraine’s Orange Revolution partner,

goes into opposition.

Our Ukraine’s maneuvers saw Yushchenko approving the candidacy for
prime minister of the man conventionally dubbed his arch-rival. The real
rivalry, however, is not Yushchenko against Yanukovych; it is the
personal and ideological divide between Yushchenko’s party and the
person and political movement of the woman who stood at his side during
the Orange Revolution.

Yushchenko and Our Ukraine did not expect to win the elections. Surveys
clearly put Yanukovych’s Party of Regions in the lead. But they never
expected to finish a distant third behind both Regions and the electoral
bloc headed by Tymoshenko, Yushchenko’s Orange Revolution comrade,
first prime minister, and now rival to both him and Yanukovych.

After the voting, a leading figure in Our Ukraine, Roman Bessmertny, told
the Stolychnyi Novosti newspaper, “The elections have taken place and we
should respect their results.”

Instead, the president and his stunned supporters refused to adhere to the
informal agreement among the “orange” forces that whichever political
grouping in their camp won the most votes – Yushchenko’s or
Tymoshenko’s – would have the right to nominate the next prime minister.

Our Ukraine’s unwillingness to accept the election outcome led directly
to four months of political and constitutional deadlock. And the party’s
solution to the dilemma was to go into “opposition” while placing some
of its leading figures into the National Unity coalition government: a
“semi-pregnant” position, as the leading weekly Zerkalo Tyzhnia
described it.

Such a move will not fool orange voters. Yet the party’s decision to
adopt an awkward straddle between the opposition and government did
not arise from short-term political considerations alone, for the party
has never been a true opposition force.
OUR UKRAINE’S TWO-FRONT STRATEGY
When they realized how badly the elections had turned out for them,
Yushchenko and Our Ukraine made a decision that set the course for
stalemate.

Instead of living with the outcome of the voting and putting forward
Tymoshenko for the premiership, they began simultaneous talks with
the Tymoshenko bloc and the Party of Regions.

In its talks with Tymoshenko’s people, Our Ukraine sought to prevent
her from returning to the premiership, or failing that, to win the post of
parliamentary speaker for Our Ukraine’s candidate, Petro Poroshenko,
a major figure in or near the party since its founding in 2001.

Personal animosity between Poroshenko and Tymoshenko plagued the
first year of the Yushchenko administration, and many observers felt
that the placing of the two rivals in high office would up the odds of a
quick government collapse.

Our Ukraine switched roles when talking with Yanukovych’s side, agreeing
to a deal to retain Prime Minister Yuriy Yekhanurov in office while
Regions would be allowed to control the speakership.

This would not have been too bitter a pill for Regions to swallow, as they
saw Yekhanurov as someone they could work with, above all, someone
opposed to further “reprivatizations” of one-time state assets that had
fallen into the hands of the wealthy businessmen who are Regions’ major
patrons.

Though Our Ukraine had come in third in the voting, the party believed
that having the president’s backing would compensate for its election
failure and allow it to hang on as the dominant political force.

The Socialists’ defection from the orange camp in July and the formation
of the “anti-crisis coalition” comprising the Party of Regions,
Socialists, and Communists, without Our Ukraine, undermined this
strategy and moved the crisis into a new phase that resolved itself only
with the formation of the “National Unity” coalition.

The creation of this coalition in early August marks a return to the
political landscape of the early 1990s after Ukraine became an
independent state.

The country’s first president, Leonid Kravchuk, sought to align himself
with the so-called national democrats – center-right parties, such as
Rukh, who favored building a strong state ahead of reform – to support
his statist policies in the face of internal and external threats. National
democrats divided over their attitudes toward cooperating with Kravchuk.

Rukh underwent a split, one wing going into opposition while hewing to
the president’s overall policies – a stance known in Ukrainian political
jargon as “constructive” or “loyal” opposition – while another wing fully
aligned itself with the president.

Our Ukraine’s split this summer came about in a similar manner, with one
“constructive opposition” wing against cooperation with Yanukovych and
another faction willing to join a Yanukovych-led government. The party’s
deep division showed clearly in the parliamentary vote on Yanukovych’s
candidacy for the premiership on 4 August, when only 30 of Our Ukraine’s
80 deputies voted for him.

Today, as in the early 1990s, those in Our Ukraine, such as Yushchenko,
who countenance cooperation with Yanukovych do so believing that
national democrats and “centrists” need to work together to unite
Ukraine, bringing together the western and central areas where the
national democrat power base lies with the eastern and southern
strongholds of the business-oriented, typically Russophone “centrists.”
LOYALTY TEST
Our Ukraine was established after parliament removed Prime Minister
Yushchenko from office in 2001. The aim was to unite national-democratic
and liberal parties against the growing authoritarianism of President
Leonid Kuchma’s administration.

Yet Kuchma did not see Our Ukraine as a threat, because its leaders –
including Poroshenko, who brought another “loyal opposition” party,
Solidarity, and enticed business interests into Our Ukraine’s fold;
Yushchenko; and former parliamentary speaker Ivan Pliushch – made
clear they were not like the true opposition represented by Tymoshenko’s
party and the Socialists. Our Ukraine sought out a niche between
pro-regime and anti-regime parties.

National democratic forces in Ukraine have never been comfortable
oppositionists. Their qualms in the early days over taking overly
critical stances against the presidential administration can be
partially understood by looking at the political tensions of the day.

Under Kravchuk and during Kuchma’s first term, the new state was
threatened by internal and external threats from the Communist Party and
Russia respectively, which refused to accept Ukraine’s sovereignty or
borders.

The strategic priority for national democrats was state and nation
building; that is, they were first and foremost statists rather than
reformers, as the 1992 split of Rukh into “constructive oppositionists”
and strong supporters of Kravchuk’s state-building policies shows.

These two poles of the national-democrat camp have always ruled out
a position of real opposition. Not until the “Kuchmagate” affair of
2000-2001 would Ukraine see its first true opposition movement,
embodied in Tymoshenko’s supporters and the Socialists.
RELUCTANT REBEL
The emergence of Tymoshenko as a leader of the protests against
Kuchma over his alleged involvement in the murder of journalist Georgy
Gongadze deepened the split in the national-democrat camp between
mild oppositionists and those willing to cooperate with the authorities.

Her bloc, which entered the 2002 elections as the National Salvation Front,
attracted some radical national democrats and liberals who opposed any
cooperation with pro-Kuchma centrists, but most national democrats
joined Our Ukraine and backed away from Tymoshenko’s and the
Socialists’ calls for Kuchma’s impeachment.

Our Ukraine and dismissed premier Yushchenko did not condemn Kuchma
or call for his removal from power. Instead, they merely called for the
removal of the heads of law enforcement bodies involved in the Gongadze
investigation, a sacrifice that Kuchma accepted.

When Yushchenko took over Kuchma’s office, although free from any
allegations of personal involvement in the journalist’s murder, he, too,
shied away from a thorough investigation of the affair, even after the 2005
shooting death (officially by suicide) of former Interior Minister Yuri
Kravchenko, one of the officials reportedly mixed up in Gongadze’s death.

During the 2004 presidential campaign, the violence committed against
Yushchenko and his supporters, coupled with the level of fraud
undertaken by the authorities, temporarily changed Our Ukraine’s
constructive opposition to open protest against Kuchma.

He was no street activist, unlike Tymoshenko, but Yushchenko had little
choice than to prepare for a revolution after his poisoning and the mass
fraud in the runoff vote against Yanukovych, which convinced him that
the authorities would never allow him to win.

Yushchenko’s transformation into temporary revolutionary did not convert
him into a true oppositionist, and the division between Our Ukraine and
the forces led by Tymoshenko and the Socialists was only set aside
during the Orange Revolution.

The division has dominated the Yushchenko administration, leading to the
dismissal of the Tymoshenko government in September 2005 and bitter
recriminations ever since. This spilled over following the 2006 elections
in Yushchenko and Our Ukraine seeking not to permit the return of
Tymoshenko as prime minister.

Our Ukraine’s inability to become an opposition force showed through
again in its reaction to the formation of the National Unity coalition.

The Socialists’ abandonment of the orange coalition for the Party of
Regions sent Our Ukraine reeling, and the party’s tactics have continued
to remain confused.

One part of Our Ukraine has stated its readiness to go into “constructive
opposition” to the new Yanukovych government while another is eager
to join forces with him. Meanwhile, neither of these wings of Our Ukraine
is willing to go into true opposition alongside Tymoshenko’s party.
OUR UKRAINE REDUX
The Our Ukraine bloc that won the 2002 elections under Kuchma is very
different from the Our Ukraine that lost the 2006 elections under
Yushchenko.

Our Ukraine-2002 was a far broader coalition of liberal and national
democratic parties. Our Ukraine-2006 is more centrist and pro-business,
comprising parties such as the Party of Industrialists and
Entrepreneurs, which supported Kuchma in the 2002 elections, defected to
Yushchenko’s camp only in the second round of the 2004 presidential
election, and joined Our Ukraine-2006.

Other democratic groups that had joined up with Our Ukraine in 2002,
such as the Reforms and Order Party and the civil-society organization
Pora, backed away from Yushchenko in 2006 and failed to win any seats
in parliament.

The more centrist and pro-business Our Ukraine became the more it grew
estranged from the Tymoshenko bloc and the closer it moved toward the
Party of Regions. Yushchenko has always been more threatened by
Tymoshenko, personally and ideologically, than by Yanukovych.

One of the paradoxes of the Yushchenko administration has been his
dispensing with allies who assisted his rise to power.

The presence of Pora and Reforms and Order in the Our Ukraine camp
for this spring’s elections would undoubtedly have helped the party attract
more than a measly 14 percent of the vote and would have helped
Yushchenko build a stronger support base in parliament from which to
challenge more effectively the rebounding Party of Regions during the
spring and summer negotiations.

True to form, Yushchenko has seemingly preferred to team up with the
former authorities than with the opposition. -30-
———————————————————————————————–
Taras Kuzio is a senior fellow at the German Marshall Fund of the United
States and an adjunct professor at the Institute for European, Russian,
and Eurasian Studies, George Washington University. The views expressed
in this article are those of the author alone.
————————————————————————————————
http://www.tol.cz/look/TOL/article.tpl?IdLanguage=1&IdPublication=4&NrIssue=179&NrSection=4&NrArticle=17432
———————————————————————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
17. NADIYA OLEKSIVNA SVITLYCHNA (1939 – 2006)
Ukrainian Human Rights Activist, True Hero, Former Political Prisoner

Human Rights In Ukraine

Kharkiv Group For Human Rights Protection
Kharkiv, Ukraine, Thursday, August 10, 2006

Nadiya Oleksivna Svitlychna was born August 11, 1939 in the village of
Polovynkyno, Starobilsk district, Luhansk region, Ukraine and died August

8, 2006 in the United States of America after a long illness.

Human rights activist, active member of the External Representation of the
Ukrainian Helsinki Group, editor and compiler of the “Visnyk represiy v
Ukraini” [“Bulletin of repression in Ukraine”] (USA); former political
prisoner

In 1958 Svitlychna graduated from the Department of Ukrainian Language and
Literature of Kharkiv University. She worked in the city of Krasnodon in a
school for working young people (as a teacher, then as the head teacher, and
the Head of the school), and after leaving the school found a job as a
librarian.

While working in Donbass, Svitlychna had been outraged at the fact that any
student in Ukraine could refuse to study Ukrainian and that even a “dvoika”
(the usual “fail” grade) in Ukrainian language was a sufficient grade to
move up to the next class. In 1964 Svitlychna settled in Kyiv.

She worked in the editorial team of an external agricultural technical
college, as the editor of the publishing house “Radyanska shkola”, as a
research assistant in the institute of pedagogical studies and at the same
time as a teacher in an evening school in Darnytsa.

The “Klub tvorchoyi molodi” [“Club for Creative Young People” (CCY)]

which Nadiya visited together with her brother, Ivan SVITLYCHNY, played
an enormous role in the life not only of the “Shestydesyatnyky [Sixties
activists]”. It was there that she became friendly with many future
dissidents, and with the artist A. HORSKA.

0n 1 April 1966 Svitlychna sent a telegram to the Presidium of the XXIII
Congress of the Soviet Communist Party in defence of her brother who

had been arrested in August 1965.

She also sent a statement to judicial consultancy body of the Shevchenkivsky
district in Kyiv and the Prosecutor General of the Ukrainian SSR turning
down the services of the lawyer appointed to defend her brother, since
analogous cases had made it clear that the defence lawyer in political
trials was forced to fulfil the role of assistant to the prosecutor.

After the notorious clash on 22 May 1967 near the monument to Taras
Shevchenko, the KGB began to closely follow Svitlychna’s movements.

On 8 November 1967 Svitlychna, together with her brother, Ivan DZIUBA and
Lina KOSTENKO sent a letter of protest to First Secretary of the Central
Committee of the CPU, Shelest, in which they qualified the trial of
Viacheslav CHORNOVIL as a violation of basic procedural norms, and as
“special revenge, reprisals by those people with power of a person who
thinks differently and who has the courage to criticize the actions of
specific Soviet institutions, that is, who exercises his constitutional
rights”.

In 1968 she was forced under pressure from the KGB to leave the Institute

of Pedagogical Studies.
FOUND BODY OF MURDERED FRIEND ARTIST ALLA HORSKA
In December 1970 in the city of Vasylkovi, Kyiv region, she and Y.
SVERSTYUK found the body of their murdered friend, the artist A.
HORSKA, organized the funeral and arranged for a monument to be
placed on her grave.

After the “January cull” of 1972 (the second wave of arrests), Svitlychna
was summoned to the KGB for questioning virtually on a daily basis in
connection with the case against her brother. Each time she parted with her
two-year old son Yarema as though for good. Her son was also used by the

KGB as an “argument” in the investigation.

A month before her actual arrest, during one of the questions, they
announced her arrest and demanded that she sign a form stating whom she
authorized to bring up her child.

“There were tears. Fear, doubts, bargaining with my soul: should I agree to
compromise for the sake of my child”, – these were the thoughts that ran
through her head when the head of the investigation unit, the notorious
Parkhomenko said: “We are giving you 24 hours – think long and hard”. She
did not believe a single word.

It then transpired that on that day I. DZIUBA had been arrested, and a large
number of searches carried out, including of Svitlychna’s home. They removed
the books of V. STUS “Fenomen doby” [“A Penomenon of our time”], A.
Avtorkhanov “Technology of power”, Mykhailo OSADCHY “Bilmo”

[“Cataract”], a manuscript by Danylo SHUMUK, poems, articles, extracts,
letters – 1800 items in all.
SVITLYCHNA WAS ARRESTED IN 1972, HER SON TAKEN
Svitlychna was arrested on 18 May 1972. Her son was taken from the crèche
by KGB agents and put in a children’s home in the city of Vorzel near Kyiv. It
was only through the efforts of Nadiya’s sister-in-law, L. SVITLYCHNA, that
the family was able to collect him from there and take him to his
grandmother in the Luhansk region.

Svitlychna spent almost a year in the isolation cell of the KGB on
Volodymyrska St. She was accused of having held and distributed samizdat.

PERSECUTION AGAINST THEM I PERCEIVE AS
PERSECUTION AGAINST ME
Her response to the provocative questions of the investigator was as
follows: “I am simply a person whom life gave the good fortune of meeting
with a wide range of creative people. Persecution against them I perceive as
persecution against me”.

The investigation protocols also read: “I admit guilt in that, having a
higher education and a certain amount of life experience, I still believed
laws which contradict each other, I considered that the Constitution of the
USSR is the highest Law and this is not the case since it is constantly
violated. I promise that when I am released with my small child, I will not
read anti-Soviet literature.

However I cannot swear that I will not read anything at all, since I am a
literate person, while the criteria are not clear, what one can read and
what is not allowed”.

MAY 1973 SENTENCED TO 4 YEARS LABOUR CAMP
On 23-24 May 1973 Nadiya Svitlychna was sentenced by the Kyiv Regional
Court under Article 62 Part 1 of the Criminal Code of the UkrSSR (“Anti-
Soviet agitation and propaganda”) to 4 years labour camp.

She served her sentence in the Mordovian political labour camp, No.
ZhKh-385/3 in the settlement of Barashevo, the Tengushevsk district. .

Together with other prisoners she actively participated in protests, hunger
strikes. A month before the end of her sentence, Svitlychna was taken to
Luhansk to choose a place to live, effectively in “exile”, although she had
firmly decided to return to Kyiv.

She returned in May 1976. She was refused registration, not able to get a
job, and threatened with arrest for “parasitism”. She and her son lived
with her sister-in-law, L. SVITLYCHNA, who was regularly fined for
“infringements of passport regulations”.
IN 1976 SHE REJECTED HER CITIZENSHIP
In autumn 1976 she had the courage to send a declaration to the Central
Committee of the Communist Party of Ukraine and the government rejecting her
citizenship, basing this move on the savage punishment meted out to Levko
LUKYANENKO, Petro GRIGORENKO, Viacheslav CHORNOVIL,Vasyl
STUS, Stefaniya SHABATURA and other decent people.

She explained her decision with the following words: “It would be below my
dignity to remain the citizen of the world’s biggest, most powerful and most
developed concentration camp”. She sent copies of this declaration to the
Ukrainian Helsinki Group (UHG) and the Presidium of the Supreme Soviet of
the USSR.

In 1977 Svitlychna was invited to join the UHG. She refused, explaining: “I
do everything I can for you and will continue to do all in my power. I will
do it not in order to make myself noticed somewhere as I see no particular
sense in this”.

In 1977 she married P. Sktotelny, obtained registration and found work as a
janitor in a kindergarten however after the next round of questioning she
was dismissed. On 30 December she was presented with a formal warning in
accordance with the Decree of the Presidium of the Supreme Soviet from
25.12.1977.

She was called as a witness at the “open” court trial of M. MATUSEVYCH

and M. MARYNOVYCH in March 1978 in Vasylkiv, Kyiv region. With
regard to her testimony, the Central Committee of the Ukrainian Communist
Party was sent the following information from the court: “She attempted to
use the court as a platform for anti-Soviet agitation and propaganda”.

In May 1978 her son Ivan was born. On 12 October 1978 she left the country
first for Rome where she given an audience by Pope Paul VI, and on 8
November that year she arrived in the USA. 8 years later she was stripped
of her Soviet citizenship. She worked as a translator at Harvard University.

From 1980 Svitlychna was actively involved in the work of the External
Representation of the UHG, and was the editor and person in charge of the
periodic publications of the Representative Office. All information about
repression in Ukraine came to her.

Up till 1988 Svitlychna regularly published the “Visnyk represiy v Ukraini”
[“Bulletin of repression in Ukraine”] (financed by the Ukrainian Diaspora).

From 1983 – 1994 she worked for the Ukrainian editorial office of Radio
“Svoboda” [Radio “Liberty”]. At first she only made public broadcasts
occasionally, as a rule, in connection with tragic events in Ukraine. She
turned down offers of regular work at first, fearing that this could hurt
her brother.

Then she understood that her brother could not be hurt anymore than he had
been. Out of a dazzling literary critic and poet the regime had turned her
brother into a sick man with first group disability status.

She deciphered and sorted out material smuggled out of the camps and
transformed it into brochures and books. She prepared for publishing V.

STUS’s “Palympsesty”.

In 1990 Svitlychna came to Ukraine. During the student hunger strike in Kyiv
she came without revealing her identity each day to the square.

She lived in Irvington (New Jersey, USA) and worked in the Ukrainian

Museum in New York, as well as editing the women’s magazine “Vera”.
Together with L. SVITLYCHNA she put together a book of recollections
of I. SVITLYCHNY.
Nadiya Svitlychna died after a long illness on 8 August 2006. -30-
—————————————————————————————————
BIBLIOGRAPHY:
G. Kasyanov. Dissenting voices: the Ukrainian intelligentsia in
the resistance movement of the 1960s to 1980s – Kyiv: Lybid, 1995.- pp.
11, 73, 74, 126, 127, 163, 164, 171, 172.
A. Rusnachenko. The National Liberation Movement in Ukraine. – Kyiv:
The O. Teliha Publishing house, 1998, pp.146, 153, 223, 262.
‘Khronika tekushchykh sobytiy’ [‘Chronicle of Current Events’] (CCE) –
Amsterdam: The Herzen Foundation, 1979, No.1-15.- pp. 28, 151.
CCE. – New York: Khronika, 1976, No. 41.- p. 44, , No. 43.- p. 107.
CCE. – New York: Khronika, 1977, No. 44.- pp. 63, 120; p. 45.- p. 22.
CCE. – New York: Khronika, 1978, No. 48.- pp. 22, 94, 126, 128.; No. 49.-
pp. 9-11.
Vesti iz SSSR [News from the USSR]. Munich : Prava cheloveka, 1988,
5/6-45.
O. Klymchyk. Yak ne zihneshsya, te ne zihnut [Try as you like, you won’t
break them].- Ukraina, 1992, ? 12.- p. 4-7.
The KHPG archives; S. Karasik
. THE HISTORY OF DISSENT IN UKRAINE
————————————————————————————————
———————————————————————————————–
NOTE: Subheadings have been inserted editorially by the Action
Ukraine Report (AUR). http://www.artukraine.com/historical/horska_vict.htm
———————————————————————————————–
FOOTNOTE: A few years ago Chrystia Sonevytsky took me to New
Jersey to see Nadiya Svitlychna, a truly amazing lady. We spoke
with her about her friend Alla Horska and looked at a series of documents
and photographs. Information about Nadiya was then posted on my
were developed about Alla Horska using information and copies of
photographs obtained from Nadiya Svitlychna:
———————————————————————————————–
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AUR#749 Aug 11 Democracy & The Rule Of Law In Ukraine; Energy Minister In Moscow, Yanukovych Going To Moscow; No To NATO For Now; No To WTO For Now;

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

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

                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 749
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN WASHINGTON, D.C., FRIDAY, AUGUST 11, 2006
 
                Help Build the Worldwide Action Ukraine Network
 Send the AUR to your colleagues and friends, urge them to sign up
               –——-  INDEX OF ARTICLES  ——–
              Clicking on the title of any article takes you directly to the article.               
    Return to the Index by clicking on Return to Index at the end of each article

1.          DEMOCRACY AND THE RULE OF LAW IN UKRAINE
                               New Rada, New Government, Old Style?
ANALYSIS & COMMENTARY
: By Judge Bohdan A. Futey
Published by the Action Ukraine Report (AUR) #749, Article 1
Washington, D.C., Friday, August 11, 2006

2.                UKRAINE: GAS TEST AWAITS NEW GOVERNMENT
By Roman Kupchinsky, Radio Free Europe/Radio Liberty (RFE/RL)

Prague, Czech Republic, Wednesday, August 9, 2006

3. RUSSIA’S GAZPROM HEAD, UKRAINE’S NEW ENERGY MINISTER

RIA Novosti, Moscow, Russia, Wednesday, August 9, 2006
UNIAN news agency, Kiev, in Ukrainian 1435 gmt 10 Aug 06
BBC Monitoring Service, United Kingdom, Thursday, Aug 10, 2006

6.    UKRAINIAN PRIME MINISTER PROMISES “OPTIMAL” GAS
          PRICES, HOLDING TALKS IN MOSCOW AUGUST 15-16

TV 5 Kanal, Kiev, in Ukrainian 1630 gmt 10 Aug 06
BBC Monitoring Service, United Kingdom, Thursday, Aug 10, 2006

7.         UKRAINE NEEDS TRANSPARENT GAS AGREEMENT
                      WITH RUSSIA SAYS PM YANUKOVYCH 

Associated Press, Kiev, Ukraine, Thursday, August 10, 2006 

8.     MOODY’S MAY DOWNGRADE NOFTOGAZ OF UKRAINE
Interfax, New York, New York, Thursday, August 10, 2006

9UKRAINE TURNS NAFTOGAZ TO RUSSIA, PM YANUKOVYCH
             MEETS WITH US AMBASSADOR WILLIAM TAYLOR

Ukrainian News-on-line, Kiev, Ukraine, Thursday, August 10, 2006

11.   UKRAINE WON’T SEEK NATO MEMBERSHIP ACTION PLAN
        AT NOVEMBER SUMMIT SAYS PM VIKTOR YANUKOVYCH
Mara D. Bellaby, Associated Press, Kiev, Ukraine, Thu, August 10, 2006 

12.  PRES YUSHCHENKO CANCELS FOREIGN MINISTRY STATUS

                                      EU AND NATO STATUS
Ukrainian News on-line, Kyiv, Ukraine, Monday, August 7, 2006

13. “UKRAINE-NATO: YOU REMEMBER HOW IT ALL BEGAN…ON
                  SOMETHING IMPORTANT WITHOUT EMOTION”
         Ukrainian analyst warns NATO membership brings additional threats
ANALYSIS AND COMMENTARY:
By Andriy Fialko
Zerkalo Nedeli, Kiev, in Russian 5 Aug 06, p 6
BBC Monitoring Service, United Kingdom, Saturday, August 5, 2006

14     CRIMEA CAUTIOUSLY WELCOMES NEW UKRAINE GOV
                   Strong No to NATO in Feodosia, Crimea, Ukraine

By Lisa McAdams, Voice of America (VOA) in Feodosia, Crimea
Washington, D.C., Wednesday, 09 August 2006
 
ICTV television, Kiev, in Ukrainian 1545 gmt 8 Aug 06
BBC Monitoring Service, Kyiv, Ukraine, Tuesday, August 8, 2006

17WARSAW LEADERS SCRAMBLE TO RETAIN INFLUENCE IN KIEV
By Jan Cienski in Warsaw, Financial Times
London, United Kingdom, Wednesday, August 9 2006

18.    EBRD CALLS ON NEW UKRAINIAN CABINET TO PROTECT
                                 RIGHTS OF PRIVATE OWNERS 

      Bunge Corp calls on government to protect legal owners from attacks 
Ukrainian News-on-line, Kyiv, Ukraine, Monday, August 7, 2006

19. FORTIS BUYS UKRAINIAN INSURER ETALON LIFE FOR EUR7.6M
Nicolas Parasie, Dow Jones Newswires, Amsterdam, Netherlands, Aug 9, 2006

20.   UKRAINE-UNITED STATES BUSINESS COUNCIL PRESIDENT
                 BRIEFS UKRAINIAN AGRIBUSINESS EXECUTIVES
Action Ukraine Report (AUR) #749, Article 20
Washington, D.C., Friday, August 11, 2006

 
                               IMPORTANT IRON ORE PROJECT 
By: John Helmer, Mineweb.com, Johannesburg, South Africa, Aug 10, 2006
Business Digest, Sofia, Bulgaria, Wed, August 9, 2006
 
         Kyiv Region factory produces more than 300 million bottles per year.
Ukrainian News-on-line, Kyiv, Ukraine, Tuesday, August 8, 2006
Business Digest, Sofia, Bulgaria, Tuesday, August 8, 2006
========================================================
1
      DEMOCRACY AND THE RULE OF LAW IN UKRAINE
                         New Rada, New Government, Old Style?

ANALYSIS & COMMENTARY: By Judge Bohdan A. Futey
Published by the Action Ukraine Report (AUR) #749, Article 1
Washington, D.C., Friday, August 11, 2006

Ukraine declared independence from the Soviet Union on August 24, 1991.
Since then, it has continuously used elections and compromise to build
itself as a nation instead of resorting to violence.

A series of laws as well as the Ukrainian Constitution have been passed and
revised in order to ensure that elections are free, fair, and democratic.
The Orange Revolution of November 2004 saw Ukrainian citizens peacefully
demanding that their votes count and succeeding.

Most recently, the March 2006 national parliamentary elections were declared
to be transparent and fair. (1)  Although more work needs to be done to
bring the rule of law and true democracy to Ukraine, particularly on the
local level, the country has taken many steps towards creating a democratic
system.

Despite Ukraine’s steady progress towards democracy, the leadership recently
took a significant step backwards, specifically in the legal area.

Following the fraudulent presidential run-off election in 2004, which
sparked the Orange Revolution, the Verkhovna Rada passed several
amendments to the Constitution known as the political reform that became
effective January 1, 2006.

Although the political reform resolved the 2004 presidential election
crisis, it was hastily adopted and not thoroughly thought out as evidenced
by the considerable confusion surrounding the formation of the majority
coalition and new government following the March 2006 parliamentary
election.  The status of the political reform still remains in question.

In a decision handed down by the Constitutional Court on October 5, 2005,
just prior to the expiration of the nine year term for most of the Judges,
the majority of the court stated that any change in the political system of
Ukraine must be submitted to and approved by a national referendum. (2)

Many critics of the reform, including myself, (3) believe that the political
reform is a change in the political system because it converts Ukraine from
a Presidential-Parliamentary system to a Parliamentary-Presidential system
and is, therefore, unconstitutional unless submitted to a national
referendum, regardless of any other irregularities.

The Ukrainian Constitution allows Parliament to amend the Constitution in
some aspects, but the political reform steps beyond the confines of
Parliament’s powers as described in the Constitution.

For nearly ten months, however, there was no quorum in the Constitutional
Court to consider the constitutionality of the political reform because
parliament refused to swear in Constitutional Court appointees and avoided
electing its share of justices.

On August 4, Parliament passed and  President Yushchenko signed a bill
prohibiting the Constitutional Court from deciding on the amendments to

the Constitution passed as part of the political reform.  This is clearly an
attempt to prohibit the Constitutional Court from considering the
constitutionality of the political reform now that a quorum exists.

This law is obviously unconstitutional itself.  Specifically, it violates
Article 8 of the Constitution, which guarantees individuals the right to
appeal issues of constitutional rights and freedoms, and Article 147, which
gives the Constitutional Court jurisdiction over all “issues of conformity
of laws” (4) with the Constitution.

This law is also unconstitutional because it abridges the Rada deputies’
right to bring an appeal challenging the political reform in violation of
Article 150.

Even if the Rada would have attempted to pass the law as a constitutional
amendment, such an amendment would not have passed muster under Article

157, which prohibits the constitution from being amended in such a way that it
takes away rights of the people.  As I said over a year ago “it is
inconceivable that reforms of such magnitude would be “immune” from
constitutional scrutiny.” (5)

I am surprised that in order to solve the political crisis, the leadership
chose to take a step backwards from implementing a rule of law system by
passing this legislation.  Hopefully, there will be at least forty five
deputies to challenge the law as well as the political reform.

The political reform changed the process by which most cabinet ministers are
appointed.  Now, the majority in the Verkhovna Rada has the power to select
a candidate for Prime Minister for nomination by the President and most
other ministers, and also maintains the right to terminate any minister. (6)

The President, in his capacity as commander-in-chief and head of foreign
affairs, will now appoint the ministers of Defense and Foreign Affairs.  The
President also appoints the Prosecutor General and the Head of the SBU
(Security Service), but must obtain the consent of the Verkhovna Rada to
dismiss them.  The cabinet of ministers will be able to create new
ministries and executive agencies instead of the President. (7)

The greatest hurdle in Ukraine’s continued progress towards democracy after
the March 2006 parliamentary election was implementing the political reform.
There was a great deal of confusion and disagreement particularly as to what
the President’s powers were in nominating the Prime Minister.

For example, the President now has fifteen days to decide on the nomination
of the majority coalition’s candidate for Prime Minister.  There is no
indication in the amended constitution, however, as to what would happen if
the President does not make a decision within those fifteen days.
Furthermore, the purpose of the fifteen days is unclear.

Is it meant to give the President time to consider the Prime Minister’s
qualification?  Or is it time to allow the President to negotiate agreements
with factions in Parliament that will be contingent on the nomination of the
Prime Minister?

This would seem to be the spirit of the law even if it is not the letter of
the law.  Therefore, it is essential that the Constitutional Court use its
powers under Article 150 of the Constitution to interpret the provisions of
the political reform.

Although the Parliament finally resolved the Constitutional Court crisis by
swearing in the appointed judges, it still failed to address the issue of
the oath of office.  Pursuant to a questionable provision in the Law on the
Constitutional Court, each candidate, regardless of whether he or she was
appointed by the President, or elected by the Verkhovna Rada or the

Council of Judges, must take an oath of office before the Parliament. (8)

Although the Constitution provides for the oath of office of the President
and Rada deputies, the Constitution does not have such requirements for
judges of the Constitutional Court. 

 
The swearing-in requirement, in my view, therefore, is likely unconstitutional
itself because it allows the vitality of the Constitutional Court to rest in the
hands of the Verkhovna Rada – a clear violation of the separation of powers
(Article 6).

The Law on the Constitutional Court can not give Parliament any oversight
authority that the Constitution does not already provide (9) and Article 153
(10) of the Constitution can not be interpreted as providing authority to
require an oath.  Naturally, such a law could be applicable only to judges
elected by the Rada, but not by the President or the Council of Judges.

Parliament once again neglected its duties with regard to the Constitutional
Court by not abolishing this oath of office and thereby removing a clear
impediment to the separation of powers.

It is quite apparent that the greatest challenge facing the rule of law in
Ukraine is the question of an independent judiciary.  In a January 23, 2006
speech commemorating that first anniversary of his inauguration, President
Yushchenko announced to the nation that 2006 would be a year of reform

and that the judicial system would be a key element of change. (11)

As a result of this address, President Yushchenko formed the National
Committee to strengthen democracy and the rule of law in Ukraine.  On March
22, 2006, the Committee adopted a new Concept Paper for the judiciary in
Ukraine.

Therefore, the aim is clear, to strengthen judicial independence and the
rule of law in accordance with Ukraine’s Constitution, as well as standards
approved by the European community and the rest of the free world.

In my opinion, this Concept is a valiant effort to strengthen some aspects
of court proceedings and guarantee citizens access to the courts, but as a
whole it seems to me that it fails to address the problem of reforming the
judiciary in-depth, and provides for additional ways to exercise control
over the judiciary.

Furthermore, it may be in conflict with the Constitution as enacted on June
28, 1996, it violates the principal of separation of powers (Article 6), and
the rule of law commitment (Article 8).  The idea of having government
inspectors for the judiciary is not an encouraging practice (guarantee) for
judicial independence.

Also, it fails to address many aspects of the present law on the judiciary
and it undertakes to provide solutions that are not very democratic.  It
barely touches on aspects of education at law schools and the role of
legal/professional organizations (like the American Bare Association (ABA)
in the United States).

Judicial independence does not mean the judges do as they choose, but do

as they must in accordance with the Constitution and laws of the country.
Judicial independence in the final analysis will depend largely on the
conscience and courage of the judges themselves.  Judges will not be
respected until they respect themselves.

As there cannot be a market economy without private ownership of property,
there cannot be a system based on the rule of law without judicial
independence.

In addition, the judiciary needs to have its own constituency, primarily the
legal profession and strong bar associations.  These will be responsible to
expose unethical practices of the judges, and/or coercive tactics upon
judges and enlist the press on their side.

In the United States the major defenders or critics of the judiciary are
members of the legal profession themselves (ABA), law school professors,

as well as the media.

It would be refreshing and welcome news if professors of law schools in
Ukraine would start to speak out, as well as the association of lawyers,
jurists, the Ukrainian Bar Association, and hopefully the World Congress of
Ukrainian Jurists.

There is no questions that the judiciary in Ukraine needs to be reformed.
What is needed is to strengthen the checks and balances – not control over
the judiciary by the executive.

Provide adequate salaries for judges, insuring appropriate funding and
assistance for the courts, prompt publication and availability for judicial
decisions, transparency in decision making, enforcement of judicial
decisions are ways to eliminate corruption among the judiciary.

Nevertheless, greater access of citizens to judges should not mean or
indicate ex parte communications behind closed doors.  This practice

should be eliminated completely.

It is hoped that a debate on judicial reforms will continue and that the
parliament of Ukraine, after it begins functioning, will seriously take all
views, including the judges of Ukraine, before it adopts a reform that will
affect judicial independence for many years to come.

Hopefully, President Yushchenko will be able to add judicial reform to his
list of accomplishments.  Although he has not yet been successful in many of
his goals, the increased freedom of the press during Yushchenko’s term is a
significant accomplishment.

Since Yushchenko has taken office, the press has not suffered repercussions
from the government for criticism of the administration.  In fact, the press
has freely commented on members of the President’s family’s and cabinet
ministers’ lavish living.

Many reports have been made on events that would not have come to light in
the previous administration.  For example, a Rada deputy recently assaulted
a cameraman, an incident that was well reported and 948 journalists signed a
petition calling for an investigation and possible prosecution.  At least in
this aspect, Yushchenko has stewarded the Ukrainian people’s progress
towards democracy.

The most recent examples of the growth of democracy and the rule of law in
Ukraine are the March 2006 parliamentary elections and the formation of the
new government.  The winners and losers of the March 2006 parliamentary
elections are clear.

The Party of Regions obviously won the popular vote, Yulia Tymoshenko’s

bloc performed better than expected, Our Ukraine bloc underperformed,
and Lytvyn’s People’s Bloc was undeniably a loser.

The biggest winner of all, however, were the Ukrainian people because by
general consensus the parliamentary elections of March 2006 were truly
democratic. (12)  Although the success of the Party of Regions, and its
leader Viktor Yanukovych, has been denounced as a step backwards, or

even a failure of democracy, this is not so.

The March elections were free and fair, there was virtually no evidence of
vote tampering, and the government’s assets were not used to support any
candidate over another.

Despite Mr. Yanukovych’s unsavory past, particularly with regard to the
allegations of vote rigging in the 2004 presidential election that sparked
the Orange Revolution, the Ukrainian people have spoken. (13)  Thankfully,
their voices were not silenced by illegal voting practices or official
pressure.

Ukraine’s post-Soviet history has, at the very least, provided hope and
confidence in the ability of new democracies to succeed without the use of
force and bloodshed.  During perestroika, Ukraine held an election
pre-independence in March 1990.

Since then Ukraine has held numerous elections after independence, including
four presidential elections (in 1991, 1994, 1999, and 2004), four
parliamentary elections (in 1994, 1998, 2002, and 2006), and numerous local
elections, each of which occurred without major violence.

The trend in Ukraine has been to resolve conflicts by the ballot box or
negotiations and compromise.  Thus, the concepts of “one man, one vote”

and equal protection have taken root in Ukraine and continue to grow.

In 1995, despite an acrimonious dispute between then-President Kuchma and
the Verkhovna Rada, an agreement delineating the executive and legislative
branches’ powers and principles for self-government was reached.  Unlike
many other former Soviet countries, a dispute was resolved diplomatically
instead of by violence.

As a result of this compromise, Ukraine was able to adopt a constitution a
year later, taking yet another step toward joining the community of
democratic nations that place the rule of law and a free market economic
system among its highest values.

The process that culminated in the adoption of a Constitution was, by no
means, solely one of agreement and harmony; rather, as one might expect,
this Constitution was born of compromise.  The Venice Commission on
Constitutional Development praised the constitution “as a document capable
of bringing true democracy to Ukraine.”14

Ukraine faced an enormous challenge to democracy in the 2004 Presidential
elections.  In the months leading up to the 2004 Ukrainian Presidential
election, grave concerns were expressed regarding whether Ukraine would

move forward as a democratic nation supporting a civil society which protects
individuals rights under the Rule of Law, or would take a “step backwards”
as the Venice Commission had noted. (15)

On October 31, 2004 held  its fourth Presidential election since
independence, followed by a November 21 run-off.  Both rounds, however,

were marred with allegations of massive fraud.  In particular, international
monitoring organizations noted serious deficiencies in the election process
and many countries, including the United States, likewise questioned the
election results.16

Following the November 21, 2004 run-off in the presidential election and the
ensuing litigation, with the Orange Revolution gaining momentum, tensions
between the Parliament, the Prime Minister, the outgoing President, and the
opposition were running high.  The use of force appeared almost inevitable.

As was the case so many times before, however, the Ukrainian politicians,
with the help of a number of foreign leaders, sat together at the
negotiating table instead of taking up arms.

The parties agreed to a simultaneous vote in the Verkhovna Rada on a
constitutional amendment (17) that transferred some of the powers of the
President to the Parliament (18) and a bill amending the law on presidential
elections. (19)  The Verkhovna Rada passed both on December 8, 2004.

The opposition, led by Yushchenko, demanded amendments to the law on
Presidential elections to prevent vote rigging and the resignation of
Yanukovych, the Prime Minister at the time. 

 
In particular, the opposition sought guarantees that elections would be fair
and not fraudulent.  Under the new law, the opposition was able to replace
members of the Central Election Commission and put in measures to
minimize election fraud. (20)

In addition, the use of administrative resources for elections was banned.
Finally, the law allowed for a rerun of the November 21 run-off election.
(21)  These changes ultimately enabled Yushchenko to win the election.

For his part, Yushchenko has once again solved the most recent political
crisis of four months by using compromise and discussion.

In negotiations that went down to the wire, the President attempted to
guarantee a commitment to the ideals upon which he was elected by holding
roundtable talks with all of the parties regarding his “Universal for
National Unity” which includes his pro-West provisions, including seeking
NATO and EU membership, as well as the unitary system of government and
Ukrainian as the only state language (this is in the Constitution). (22)

If the party leaders did not sign the declaration, and no government was in
place, the President considered dissolving Parliament under Article 90 of
the Constitution (the last day for forming the coalition government was July
25, 2006) as a last resort, and held roundtable discussions with Moroz,
Tymoshenko, Yanukovych, and other party leaders to that effect. (23)

On August 3rd, at 2:00 a.m., President Yushchenko announced that

Yanukovych, as well as other party leaders, including Moroz, had signed the
“Universal for National Unity” and that additional parties would ratify it in the
coming days. (24) 
 
In addition, Yushchenko announced that he was nominating Yanukovych as
Prime Minister.  To date, Yulia Tymoshenko has not signed the agreement,
and the Communist Party signed with reservations.

Although Ukraine has made significant strides towards democracy,  the
rhetoric of pre- and post- independence rule of law movements have not fully
blossomed into reality. 

 
The progress in areas such as elections has been steady, but in the legal realm,
progress has been slower than one would hope.  The resolution of the political
crisis following the March 2006 elections is another step towards creating a
stable democratic government.

Although the pairing of  Yushchenko as President and Yanukovych as Prime
Minister seems to be a marriage of opposites, in many ways it could also be
viewed as a positive.  Working in collaboration, these two men may be able
to bring Ukrainians from east and west together and help resolve the issues
of national identity.

On the other hand, new legislation that prohibits the Constitutional Court
from reviewing the political reform is a blow to the principles of
separation of powers and the rule of law. 

 
As the success of the Orange Revolution and the March 2006 elections have
shown, however, the people of Ukraine have passed the critical test of
\democracy, time will only tell if the leaders can continue on this path.   -30
—————————————————————————————————-
NOTE: Bohdan A. Futey is a Judge on the U.S. Court of Federal Claims in
Washington, DC, appointed by President Ronald Reagan in May 1987. Judge
Futey has been active in various Rule of Law and Democratization Programs
in Ukraine since 1991.  He served as an advisor to the Working Group on
Ukraine’s Constitution, adopted June 28, 1996.
—————————————————————————————————-
FOOTNOTES:
1           Press Release, The International Republican Institute, Ukrainian
Elections Meet International Standards (March 27, 2006); Press Release,
Committee of Voters of Ukraine, Voting Was Conducted Under Free and
Transparent Conditions (March 27, 2006); Press Release, OSCE, Ukrainian
Elections Free and Fair, Consolidating Democratic Breakthrough (March 27,
2006); Former Prime Minister Lauds Ukraine’s ‘First Honest Elections in 15
Years,’ Voice of America, March 29, 2006.
2  People’s Authority to Amend Constitution, decision by the Constitutional
Court, October 5, 2005.
3  Bohdan A. Futey, “Crisis in the Constitutional Court of Ukraine:  A Court
Without Judges?” August 18, 2005.
4  Ukr. Const. Art. 147
5  Futey, “Crisis in the Constitutional Court”
6  Id.
7  Oleg Varfolomeyev, Yushchenko Challenges Constitutional Reform, Eurasia
Daily Monitor, Volume 3, Issue 1, Jan. 3, 2006.
8  Law on the Constitutional Court, art. 17.
9  Ukr. Const., art. 6
10 “The procedure for the organization and operation of the Constitutional
Court of Ukraine, and the procedure for its review of cases, are determined
by law.”  Ukr. Const., art. 153.
11 Ukrainian President Proposes Political Stabilization Plan in Speech
Marking First Anniversary of His Inauguration, BBC Monitoring Service
(United Kingdom), Jan. 23, 2006 at 3.
12 Press Release, The International Republican Institute, Ukrainian
Elections Meet International Standards (March 27, 2006); Press Release,
Committee of Voters of Ukraine, Voting Was Conducted Under Free and
Transparent Conditions (March 27, 2006); Press Release, OSCE, Ukrainian
Elections Free and Fair, Consolidating Democratic Breakthrough (March 27,
2006); Former Prime Minister Lauds Ukraine’s ‘First Honest Elections in 15
Years,’ Voice of America, March 29, 2006.    In addition, the President
signed a decree before the elections guaranteeing elections free from
pressure by the authorities, a credo that was carried out through the
election.
13 Editorial, The People’s Choice, Washington Post, July 17, 2006, at A14.
14 Bohdan A. Futey, Judicial Independence or Constitutional Crisis?: A New
Challenge for Ukraine, Ukr. Weekly, June 10, 2001, at 6.
15 Venice Commission Report (Dec. 2003).
16 International Republican Institute Preliminary Statement (Nov. 22, 2004).
17 Id.  A number of legal experts and President Yushchenko have questioned
the constitutionality of the amendments.  See, e.g., Serhiy Holovaty: I
Believe the Political Reform Can be Abolished After the New Year,
http://www.pravda.com.ua/en/news/2005/12/29/4954.htm; Ukrainian President
Proposes Political Stabilization Plan in Speech Marking First Anniversary of
his Inauguration, BBC Monitoring Service (UK), January 23, 2006.  However,
until recently there was no quorum in the Constitutional Court and,
therefore, the issue has yet to be considered.  See also, Bohdan A. Futey,
Rule of Law in Ukraine: A Step Forward or Backward? 60 The Ukrainian
Quarterly 57 (2004).
18 Presidential-Parliamentary Ukraine Becomes Parliamentary-Presidential
Republic, Radio Free Europe/Radio Liberty, Jan. 1, 2006.
19 Id.
20 Q & A – Ukrainian Constitutional Reform, BBC Monitoring Research
Service (United Kingdom), December 29, 2005 at 1.  The Ukrainian Minister
of Internal Affairs, Yuriy Lutsenko, acknowledged that over 5,000 individuals
were charged with election fraud stemming from the 2004 Presidential
election.  Speech by Yuriy Lutsenko on February 9, 2006.
21 Id.
22 BBC News, Ukraine Leader’s Dilemma Over PM, August 2, 2006
23 Reuters, Ukraine Leader Mulling Parliament Dissolution, August 1, 2006
24 Associated Press, President Yushchenko Agrees to Nominate Arch-Rival
Viktor Yanukovych to be Prime Minister, August 3, 2006.
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2.     UKRAINE: GAS TEST AWAITS NEW GOVERNMENT

By Roman Kupchinsky, Radio Free Europe/Radio Liberty (RFE/RL)
Prague, Czech Republic, Wednesday, August 9, 2006

PRAGUE – One of the first items on the agenda of Ukraine’s newly formed

cabinet will be to address the unresolved question of future gas supplies
from Russia.

The rise of Party of Regions head Viktor Yanukovych to the post of prime
minister has led to speculation that the new Ukrainian political climate
could result in Russian concessions when gas negotiations resume.

The Party of Regions is widely considered to be pro-Russia, which in turn
was seen as a Yanukovych supporter during his 2004 presidential run.

In late May, Aleksandr Medvedev, a member of Gazprom’s management
committee, was asked about possible increases in the price of gas Russia
would charge Ukraine in the second half of 2006.

Medvedev replied that, “according to our signed contract, the price was
agreed upon for the first half year. This deadline is not far off and both
sides will soon discuss the future price,” RIA Novosti reported on May 26.

Yet the July 1 deadline came and went without any negotiations and without a
change in the price.

Ukraine’s months-long political crisis may be one reason Russia opted to put
the negotiations on hold.

As the Party of the Regions gradually improved its position as the crisis
dragged on, Moscow may have felt that it would not be prudent to demand
higher gas prices, lest it stymie its reputed ally’s chances of taking over
the government.
                                 NEW NEGOTIATING TEAM
The composition of the new government in Kyiv will be a major factor in the
upcoming gas negotiations with Moscow.

Of Yanukovych’s four deputies in his new cabinet, Andriy Kluyev will be the
one overseeing Ukraine’s fuel and energy sector. Kluyev is widely regarded
as a competent specialist with vast experience in industry and government.

He will be assisted in his work by Fuel and Energy Minister Yuriy Boyko, who
headed Naftohaz Ukrayina during Leonid Kuchma’s presidency, and by Coal
Industry Minister Serhiy Tulub.

Boyko was questioned in 2005 over his alleged role in creating RosUkrEnergo,
the murky middleman company involved in delivering Turkmen gas to Ukraine.
He is known as a professional in the gas industry and an experienced
negotiator with Ukraine’s Russian and Turkmen suppliers.

Tulub previously held the post of coal-industry minister in the government
headed by then-Prime Minister Yushchenko during the second Kuchma
administration. Tulub is not expected to play a role in the upcoming gas
negotiations.
                                          NEW REALITIES
The question of how much Ukraine will pay for future deliveries of Russian
and Turkmen gas will hinge on a number of different factors:

     [1] Russia’s ability to export gas without harming domestic consumers.
Russia is faced with rapidly rising domestic gas consumption and Gazprom
has been considering the possibility of decreasing gas exports to European
markets in the future;

     [2] Gazprom is reportedly strapped for cash needed to increase
production and for geological exploration, a situation that does not bode

well for Ukrainian consumers;

     [3] The amount of gas Turkmenistan can export to Ukraine. Any decrease
in volume That cannot be replaced by other sources could have a disastrous
impact on the new government and on Yanukovych’s pledge to raise the
country’s GDP;

     [4] Ukraine’s ability to implement energy-conservation projects,
especially in the gas sector. The former head of Naftohaz Ukrayina during the

Yuliya Tymoshenko government, Oleksandr Ivchenko, promised to diversify
suppliers and called for the construction of a Liquid Natural Gas terminal on
the Black Sea. It remains to be seen if the new energy team is willing to spend
billions of dollars on such projects.

                                COMMON MISCONCEPTION
Yanukovych’s record in managing energy policies during his term as prime
minister during the Kuchma administration is neither terrible nor brilliant.

The reason being that energy policy was decided by Naftohaz head Boyko and
Kuchma, with Yanukovych apparently playing a peripheral role.

Coming from Donetsk, Yanukovych was more involved in domestic coking coal
policy than in gas. The Donbas region of Ukraine has been far more dependent
on its native coal for its wealth than on imported gas.

Moreover, during his former stint as prime minister Yanukovych was seen to
be obedient to Kuchma, and never agreed to the gas-pipeline consortium the
Russians so desperately sought.

For years Gazprom strove to get the Ukrainian government to agree to an
“international” consortium (in which Russia would play a very significant
role) to manage the main gas trunk line traveling to Europe via Ukraine. And
for years the Ukrainians, even those thought to have “pro-Russian” leanings,
managed to delay and obfuscate the issue.

Will the Yanukovych government continue the energy policies of the Kuchma
government? This is not as absurd as it might seem, considering that neither
the governments of Tymoshenko nor her successor Yuriy  Yekhanurov remained
in office long enough to formulate a gas policy. Thus, the only precedent is
the old Kuchma-Boyko one.

The question thus remains: Will Moscow continue to tolerate the Kuchma
strategy of Kyiv paying lip service to Moscow while doing what it deems in
its own interests, or will Moscow demand a higher degree of subservience
from Yanukovych in return for its past support and a possible discount on
gas prices?                                      -30-

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http://www.rferl.org/featuresarticle/2006/8/4fd09ecb-df11-4c38-b1dc-d969580b2653.html
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3. RUSSIA’S GAZPROM HEAD, UKRAINE’S NEW ENERGY MINISTER
              MEET IN MOSCOW TO DISCUSS GAS COOPERATION
 
RIA Novosti, Moscow, Russia, Wed, August 9, 2006

MOSCOW, – Ukraine’s fuel and energy minister and the chief executive of
Russia’s natural gas giant Gazprom met in Moscow Wednesday to discuss
gas cooperation, a company spokesman said.

Natural gas, an important factor for Ukraine’s economy, has been a
contentious issue between the ex-Soviet neighbors during Western-leaning
president Viktor Yushchenko’s time in office.

Gazprom spokesman Sergei Kupriyanov said that at the talks in Moscow, Yuriy
Boiko and Alexei Miller “considered the current issues of cooperation in the
gas sector.”

Boiko, a former head of Ukraine’s state oil and gas firm Naftogaz, is a
member of the country’s new Cabinet led by pro-Russian politician Viktor
Yanukovych, who has close links with Ukraine’s industrial leaders and is
widely expected to pursue closer economic ties with Moscow.

At the moment, Ukraine is receiving a mixture of Russian and cheaper Turkmen
gas for a price of $95 per 1,000 cu m under an agreement that ended a gas
price spat with Russia in late 2005-early 2006. The price formula was based
on a rate of $230 for Russian gas and $60 for the Central Asian republic’s
gas. But the agreement was only valid for the first half of 2006.

Russia’s Gazprom is seeking to raise prices for Ukraine and other former
Soviet republics to European levels, which was the reason behind the New
Year dispute, when the gas monopoly suspended its supplies. Ukraine called
the move blackmail, and Russia accused Ukraine of tapping gas intended for
European markets.

In late June, Turkmenistan said it would cut off supplies of natural gas to
Russia if a new gas deal with a new price of $100 per 1,000 cu m was not
signed by September.

During talks with Ukraine in early July, Turkmenistan proposed that a
contract be signed on its gas exports at $100 per 1,000 cu m from October,
but Ukraine insisted on direct contracts for the second half of 2006 at $60
per 1,000 cu m.

Gazprom said early last month that its gas price for Ukraine would remain
unchanged unless Turkmenistan increased its price.
Earlier on Wednesday, Ukrainian Ambassador to Russia Oleg Diomin denied
knowledge of the Ukrainian minister’s visit to Moscow.

“Unfortunately, I have no information about Boiko visiting Russia,” Diomin
said. “Perhaps, he is making a private trip.” Ukraine’s new premier, Yanukovych,

is expected in Moscow next week.                      -30-
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LINK: http://en.rian.ru/russia/20060809/52450749.html
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4. ITALIAN ENERGY WATCHDOG SELECTED BY EU TO WORK
            ON ENERGY INTEGRATION PROJECT IN UKRAINE

AGI Online, Rome, Italy, Thursday, August 10, 2006

ROME – The Italian energy watchdog has been selected by the EU
Commission, among a number of supervisory bodies operating in the field
of energy, to take part in a twining project with the Ukrainian regulator.

Indeed, as part of the liberalization process of the Ukrainian energy
industry, a supervisory body was recently set up in that country in order to
promote a gradual integration of its market with that of the European Union.

The Italian watchdog will lead the project and will rely on the support of
two more partners: the Austrian energy regulator (E-Control) and that from
the Czech republic (ERO).

According to an official statement, the main objective of the project is
implementing the energy regulation model defined by the Ukrainian
(NERC) in line with the European best practices.

The assistance that the Italian watchdog is supposed to provide to its
Ukrainian counterpart includes: creation of joint working groups;
organization of initiatives aimed at involving Ukrainian institutions;
adjusting Ukraine’s legislation in the field of energy to that of the
European Union (acquis communautaire); organization of study visits to other
EU countries for Ukrainian officials with a view to studying the European
regulating system; adjustment of the Ukrainian rate system to the European
one and development of service quality.                 -30-
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http://www.agi.it/english/news.pl?doc=200608101417-1110-RT1-CRO-0-NF51&page=0&id=agionline-eng.arab

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5.   DEPUTY PRIME MINISTER KLYUYEV MEETS WITH US AMB
   TAYLOR, DISCUSSED GAS SUPPLIES AND ECONOMIC POLICY  
 
UNIAN news agency, Kiev, in Ukrainian 1435 gmt 10 Aug 06
BBC Monitoring Service, United Kingdom, Thu, Aug 10, 2006
KIEV – The Ukrainian cabinet is getting ready for bilateral consultations with
Russia and Turkmenistan regarding gas supplies, Deputy Prime Minister
Andriy Klyuyev said today at the meeting with US ambassador to Ukraine
William Taylor.
“The Ukrainian government is watching the situation in the gas sector
closely. We have a vision of a way to go and we know that we can get
enough gas for Ukraine and ensure gas transit to Europe. We are getting
ready for bilateral consultations with the Russian and Turkmen sides,”
Klyuyev said.

At the meeting, Klyuyev said that the Ukrainian cabinet believes that the
situation in the gas sector should be based on transparent relations.
“This is one of the main conditions because it is a component of Ukraine’s
image,” the deputy prime minister said.

The issues of the economic policy, which Klyuyev oversees, were also raised
at the meeting. The parties, in particular, discussed the situation
involving the construction of the Confinement facility at the Chernobyl
nuclear power plant. Klyuyev said that a decision on a company which will
build it is going be taken in the near future. He added that Ukraine is
seeking to complete the construction as soon as possible and in the most
effective way.                                      -30-
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6.      UKRAINIAN PRIME MINISTER PROMISES “OPTIMAL” GAS
            PRICES, HOLDING TALKS IN MOSCOW AUGUST 15-16
 
TV 5 Kanal, Kiev, in Ukrainian 1630 gmt 10 Aug 06
BBC Monitoring Service, United Kingdom, Thu, Aug 10, 2006

Ukrainian Prime Minister Viktor Yanukovych has said that Ukraine will pay an
“optimal” price for Russian gas. He promised to give the details after his
visit to Russia scheduled for 15-16 August.

 
Yanukovych said that his cabinet does not intend to review the existing gas
agreements with Russia. Yanukovych also ruled out the federalization of
Ukraine and said that local government should be developed instead.

The following are Yanukovych’s remarks made at a news conference as shown

by Ukrainian private TV channel 5 Kanal on 10 August; subheadings have been
inserted editorially:

[Yanukovych] We invite professionals and specialists, and, as you know,
professionalism has no colour. When working in the cabinet in 2004-03 I
could see us setting up a coalition de facto and de jure and nine factions
were involved in this process. When I started working it was very difficult
for me to understand how it would be possible to unite nine factions and
reach understanding with them.

Indeed, it was a very difficult path, but we completed it. We reached
understanding because we had the single goal and we have always sought
understanding and rejected even discussions on what separates us. The
president has put it very well in his night speech. I remember it. To some
degree he read my mind. I believe that we are the single team.

Today I had interviews with managers of different levels who have already
taken over their posts. I addressed them and said that I would like to see
them in the core of the team rather than on the bench of substitutes. If you
show the result and each of you cope with your duties effectively, you will
be the players. If it is not the case, then excuse me, there are substitutes
and the queue will be moving all the time. So the selecting of personnel
should be adequate.

We should train our personnel so that they step by step pass tests and this
process should be not just coordinated, but there should be competition. If
there is competition, and I experienced this many times, when you are pushed
from all sides, you always show some result. We believe that the government
team should always show the best possible Olympic result.

So I wish my colleagues to be like Olympic champions and learn to run and to
beat if need be. But you know this competition should be healthy. Everyone
should know that we work for the public, for the state, for the result and
for our country posts economic growth, so that we learn to respect each
other in our state, and because we want to be respected. And we should work
on this. But this happen only if we have some achievements which unite our
society.
                                                GAS
[Question from journalists] Will your cabinet cancel gas agreements with
Russia?
[Yanukovych] I have never said that we will cancel or review anything. I
want to repeat that we will seek to reach understanding with the suppliers
of fuel to make sure that the supplies of fuel are transparent and that we
sign interstate agreements involving the governments of our neighbour
states.

As for gas, it is a separate important issue and I think that after my trip
to Russia, which is scheduled for 15-16 August this year, I will be able to
give you a specific answer to this question. We are working now to make sure
that our state has enough gas, to ensure an optimal price of gas and I am
not prepared to say right now what it will be.

However, I would like to assure you that it will be optimal and we will
insist on this price and report to the public how we achieve this. We will
work on this.
                                           FEDERALIZATION
[Yanukovych] The issue of federalization of our state emerged, I would say,
on the emotional wave during the [presidential] election in 2004. This was a
response of the part of population which, to some extent, considered
themselves to be either cheated or put in the conditions that made them feel
discriminated. This was a natural reaction.

Under these circumstances, we, the politicians, reacted to our voters’
wishes and proposals. Our approach to this issue was not tough. Instead,

we offered society a discussion on the territorial organization of our state.
The proposed a federative organization was discussed during the election
campaign and the entire year of 2005.

What conclusion have we arrived at? We have arrived at the following
conclusion – that today it is more urgent to reform the system of local
government. This is in line with constitutional reform. And our task is to
continue with constitutional reform because without the reform of local
government it will remain one-sided and incomplete.

Step by step, we have to take measures on the decentralization of power and
reach the level when all of us are confident that the government is strong
enough to perform state functions and local government bodies are strong
enough to perform their functions.                         -30-
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7.   UKRAINE NEEDS TRANSPARENT GAS AGREEMENT
                 WITH RUSSIA SAYS PM YANUKOVYCH 


Associated Press, Kiev, Ukraine, Thursday, August 10, 2006 

KIEV,Ukraine – Ukraine’s new premier said Thursday that his country
needs a transparent agreement with Russia over natural gas supplies, but
emphasized that it didn’t necessarily mean cutting a controversial middleman
company out of the deal.

Ukraine, which receives much of its gas supplies from Russia, agreed to a
twofold price increase after a bitter dispute with Russian state-run gas
company Gazprom (GSPBEX.RS). Gazprom briefly turned off the taps to

Ukraine at the height of winter, which also triggered a brief shutdown of
supplies to Western Europe through Ukrainian pipelines.

As part of the deal that resolved the dispute, Ukraine agreed to receive its
imported natural gas at a price of $95 per 1,000 cubic meters from an
intermediary company, RosUkrEnergo – a joint venture between Gazprom

and a company owned by two little-known Ukrainians.

Asked by reporters Thursday if Ukraine plans on reconsidering the deal,
Viktor Yanukovych responded: “I never said we would change or reconsider
something.”

“We will try to find a common language with suppliers … so that the supply
of energy sources is transparent, so that the agreement that our country
will have, will be between governments,” he said.

Yanukovych heads to Moscow Tuesday in his first foreign visit since
parliament confirmed him last week, and talks on the gas deal are expected
to top the agenda.

During Thursday’s news conference, Yanukovych also pledged that no one in
government would be fired because of their political views, and pledged to
help those who choose to resign to find new jobs.

“I signed a special order that everybody who resigns …. will get new
jobs,” said Yanukovych, who showed no sign of the stiffness that used to
characterize his media appearances. Yanukovych served as premier before the
2004 Orange Revolution, mass protests against election fraud aimed at
helping Yanukovych’s failed presidential bid. This time, Yanukovych smiled,
joked and asked journalists to forgive him “for small mistakes.”   -30-

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8. MOODY’S MAY DOWNGRADE NOFTOGAZ OF UKRAINE

Interfax, New York, New York, Thursday, August 10, 2006

NEW  YORK – Moody’s Investors Service today placed the  Ba3  foreign 

currency  corporate  family rating and the Ba2 senior unsecured  foreign
currency rating of NJSC Naftogaz of Ukraine on review for  possible 
downgrade  following recent statements made by the Ukrainian Government
about the financial future of the company, Moody’s said in a press release.

In  accordance  with  Moody’s  GRI  rating  methodology the current
ratings  reflect  a combination of the following inputs: baseline credit
assessment  of 14-16 (on scale of 1-21, where 1 represents lowest credit
risk); B1  local  currency  rating  of  the  Ukrainian  government;  low
dependence; and high support.

Several  factors  could  influence the possible outcome. The review
will center  upon factors affecting the baseline credit assessment, such
as a possible  material  deterioration  of  its  financial  profile  and
weakening credit metrics; and a review of assumptions regarding possible
government support.                             -30- 

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LINK: http://www.interfax.com/3/182882/news.aspx
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9. UKRAINE TURNS NAFTOGAZ TO RUSSIA, PM YANUKOVYCH
             MEETS WITH US AMBASSADOR WILLIAM TAYLOR
 
Kommersant, Moscow, Russia, Tuesday, Aug. 08, 2006

Ukrainian PM Viktor Yanukovich will pay the first foreign visits to Moscow
and Washington, focusing on the energy security in time of the tours. Former
top managers of Naftogaz Ukrainy, who are loyal to Russia and know
personally Gazprom CEO Alexey Miller will become key negotiators in talks
with Gazprom.

The tricky point is that before launching gas negotiations with Russia,
Yanukovich talked to the U.S. Ambassador to Ukraine William Taylor.

The gas foreign strategy of Ukraine will be in line with “the spirit of
strategic partnership and pragmatic agreements with Gazprom,” Fuel and
Energy Minister Yury Boiko announced August 7, 2006, promising the
negotiations will be held professionally instead of being just politically
declarative.

Of interest is that Boiko personally knows Gazprom CEO Alexey Miller.
When heading Naftogaz Ukrainy, he visited Moscow from time to time and
agreed on the gas prices and transit amount with Gazprom.

Also on yesterday, Viktor Yanukovich announced the forthcoming upheaval in
Naftogaz Ukrainy. From 2005 to 2006, Naftogaz was taken over by Orange
leaders, Alexey Ivchenko and Alexander Bolkisev, with no great experience in
the gas business.

According to a source with Ukrainian cabinet, three candidates are being
considered now to replace Naftogaz CEO Alexander Bolkisev. Their political
past isn’t bright, but they have amassed great experience in the gas field.
They are Vladimir Kopylov, former chief of Naftogaz, Anatoly Rudnik, former
chief of Ukrtransgaz, and Vladimir Sheludchenko, deputy board chairman at
Naftogaz.

The first two officials took part in negotiations with Gazprom.
Sheludchenko, who never participated in such talks but is Boiko’s favorite,
will follow the consolidated policy of Ukraine.

The change in Ukrainian gas policy couldn’t escape the United States.
Yanukovich met U.S. Ambassador to Ukraine William Taylor Monday to
canvass deliveries of gas of Russia and Turkmenistan and the guaranteed
transit of energy to Europe, press service of the PM reported. Yanukovich

promised Taylor to focus on energy security in time of his visits to Moscow
and Washington.                                  -30-
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LINK: http://www.kommersant.com/page.asp?id=695860
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10. UKRAINE POSTPONES ENDORSEMENT OF NATO MEMBERSHIP
      ACTION PLAN TO INCREASE PUBLIC AWARENESS OF NATO
 
Ukrainian News-on-line, Kiev, Ukraine, Thursday, August 10, 2006

KYIV – Ukraine has postponed endorsing the NATO Membership Action Plan

to the time when public is well aware of the organization and is ready to sign
annual Ukraine-NATO target plans. Ukrainian News learned this from the press
service of the Cabinet of Ministers.

“The government of Ukraine doesn’t reject the NATO Membership Action Plan,
but it temporarily postpones endorsing the final decision on the issue to
the time when a higher level of awareness of the population about NATO is
achieved,” the press service quoted Premier Viktor Yanukovych as saying.

He said a relevant agreement was reached at the talks with the political
parties participating in the parliamentary coalition.
As he said, the submission of an application for joining the NATO Membership
Action Plan in several days after the end of the political crisis in the
country might cause new public and political confrontation.

It would be more fruitful, he said, to focus efforts on the realization of
the National Unity Agreement, including on the paragraph concerning the
cooperation with NATO.

While abstaining from the immediate submission of the application, Ukraine
will use the time for actual work with NATO, realization of required
reforms, and execution of the recommendations provided by NATO.

“We are sure that the final answer to the dialogue on Ukraine’s joining
NATO, which will last for the coming several years in the Ukrainian society,
will be given by the nation-wide referendum on the issue,” Yanukovych said.

As Ukrainian News earlier reported, Foreign Minister Borys Tarasiuk
forecasts that a nationwide referendum on Ukraine’s joining NATO will be
held not earlier than in 2008.

Signatories to the Declaration of National Unity assumed a commitment to
conduct procedures toward NATO entry, but adopt a final decision on
membership in the Alliance at a nationwide referendum. Members of the Yurii
Yekhanurov’s Cabinet of Ministers had stated the intent to secure membership
of NATO in 2008.                                   -30-
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11.  UKRAINE WON’T SEEK NATO MEMBERSHIP ACTION PLAN
       AT NOVEMBER SUMMIT SAYS PM VIKTOR YANUKOVYCH

Mara D. Bellaby, Associated Press, Kiev, Ukraine, August 10, 2006 

KIEV- Ukraine will not make a bid for NATO membership at the alliance’s
November summit, but will continue to develop relations with the alliance,
Prime Minister Viktor Yanukovych said Thursday.

The decision, which Yanukovych said was made jointly with his new
parliamentary coalition, was not a surprise since both NATO and Washington
had hinted strongly that the ex-Soviet republic was not yet ready to receive
a membership “action plan” during the upcoming summit in Latvia.

NATO membership action plans are meant to assist countries wishing to join
the alliance in their preparations by providing support and other help.

Yanukovych, who was confirmed as premier last week after months of political
paralysis, said pushing for membership was unwise since “several days after
solving the political crisis in the country (it) could cause new social and
political divisions.”

“We aim to use this extra time to work toward closer relations with NATO, to
conduct necessary reforms and to fulfill the recommendations that have
already been made by the alliance,” he said in a statement.

President Viktor Yushchenko has been a strong advocate of NATO membership,
and initially had expressed hope that Ukraine might receive an invitation
this fall.

That hope began to fade, however, after March’s inconclusive parliamentary
elections and the ensuing political turmoil. Anti-NATO protests later
erupted in Ukraine’s Crimean Peninsula, where Russia’s Black Sea Fleet is
based, forcing the cancellation of multinational training exercises.

Yanukovych’s Party of Regions strongly opposed NATO membership in the March
campaign, and some members participated in the Crimean NATO protests. But
Yanukovych last week signed a pledge to promote cooperation with the
alliance; he added the caveat that a public referendum must be held before
Ukraine sought membership.

Yushchenko’s office had no comment on Yanukovych’s announcement, which was
made in a press release issued after Yanukovych briefed journalists ahead of
a trip next week to Moscow. During the news conference, Yanukovych made no
mention of NATO.

Opinion polls show that most Ukrainians oppose alliance membership; many are
distrustful of their former Cold War foe, while others fear membership would
irretrievably harm relations with Russia without bringing any significant
benefit.                                                -30-
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12.  PRES YUSHCHENKO CANCELS FOREIGN MINISTRY STATUS
       ON COORDINATION OF ALL FOREIGN POLICY AND JOINING
                                      EU AND NATO STATUS
 
Ukrainian News on-line, Kyiv, Ukraine, Monday, August 7, 2006
 
KYIV – President Viktor Yuschenko has cancelled the Resolution on the
Foreign Affairs Ministry, which authorized it to provide coordination of
all foreign policy and joining EU and NATO.

This is disclosed in presidential decree No.678/2006 of August 3, text of
which Ukrainian News has. Viktor Yuschenko cancelled the resolution

and all decrees amending it.

According to the last wording of the resolution on the Foreign Affairs
Ministry of November 2005, Viktor Yuschenko set the ministry as leading
executive agency for provision foreign policy.

The resolution also foresaw that the ministry was the main agency to
coordinate all foreign policy including joining EU and NATO.

‘The Foreign Affairs Ministry, as the central executive agency, is the
leading agency in the system of central executive agencies on implementation
of the state foreign policy and coordination of measures on particularly
directed to strategic issues of joining the European Union and NATO,’ the
resolution reads.

As Ukrainian News earlier reported, Viktor Yuschenko strengthened Foreign
Affairs Ministry status in November 2005 canceling its coordination by the
Main Foreign Policy Department to the Presidential Administration,
introduced by the former President Leonid Kuchma in 2003.
Viktor Yuschenko has again become a coordinator of all foreign policy.
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13.  “UKRAINE-NATO: YOU REMEMBER HOW IT ALL BEGAN…ON
                  SOMETHING IMPORTANT WITHOUT EMOTION”
         Ukrainian analyst warns NATO membership brings additional threats

ANALYSIS AND COMMENTARY: By Andriy Fialko
Zerkalo Nedeli, Kiev, in Russian 5 Aug 06, p 6
BBC Monitoring Service, United Kingdom, Saturday, August 5, 2006

The question of whether or not Ukraine should join NATO is tainted by
opinions formed under the pressure of Soviet propaganda and without regard
for the bloc’s role, a weekly has reported. The author said opinions both
for and against membership are not based on rational, sober thought.

He said NATO has changed substantially in the past 15 years and the NATO
which the countries of Central and Eastern Europe joined and the NATO

which Ukraine is planning to join are “two very different things”.

Membership could even pose new threats to Ukraine stemming from
international terrorism directed against NATO, he said noting such threats
were “hypothetical” for Ukraine in its present, unaligned state. He said
Ukraine could still join the EU, even if it did not join NATO.

The following is an excerpt of the article by Andriy Fialko, entitled
“Ukraine-NATO: You remember how it all began…on something important
without emotion”, published in Zerkalo Nedeli on 5 August, subheadings

have been inserted editorially:

And so the entire world argues about 1,000 things, when all the pros and
cons are equally false. He who backs up his talk with provocative behaviour
and a high tone merely proves the weakness of his arguments.
                         STANCE ON NATO STILL NOT CLEAR 
For those citizens of our country who are exhausted by the sun and tired of
the interminable and ever more depressing political serial, many questions
which just yesterday seemed topical and provoked harsh discussion have been
pushed into second place. And the establishment of the anti-crisis coalition
could push them back even farther.

Ukraine’s prospects for joining NATO undoubtedly belongs to the number of
such questions.

Quite unexpectedly for everyone, this issue took one of the central places
during negotiations on signing the declaration of national unity and setting
up the new coalition. However, nothing became more clear.

In place of the clear and unambiguous signal which we intended to send to
the world, we again got sounds characteristic of the Ukrainian political
establishment “which sometimes sound like ‘a’ and sometimes like ‘e'”.

And in light of the extreme positions on the NATO issues which are held by
[pro-presidential bloc] Our Ukraine and the Communist Party of Ukraine, it
seems the joint efforts of a swan, lobster and pike would be the pinnacle of
results-oriented work compared to the work of the new coalition in this
direction.

“We have again lost such a big chance”, some say with worry. “We won”,
others will shout no less sincerely. And the majority will remain perfectly
indifferent.

We shall point out right away: there is no reason for either despair or any
special joy, since the issue of Ukraine’s membership in the North Atlantic
alliance has still not been presented. Although it could possibly be seen on
the horizon, among all things unsaid (the expediency of joining is another
topic). And so the maximum which we could count on is getting a meaningful
wink at the next summit. And they’ll wink anyway, though maybe not so
expressively.

Now there is time to think, in a more calm situation, exactly how justified
are the mutually-exclusive feelings our citizens have? On what base do
politicians stand when reciting such pathos-imbued speeches on the topic of
Ukrainian-NATO relations? Finally where does Ukraine’s national interest
lie, when cleaned of party intrigues and dirt and of external influences and
their own [psychological] complexes?

We shall try to find variants of answers to some of the issues, but do not
pretend to have the final word on truth. In order to understand the essence
of many complicated moments, one must not judge them based on positions
today, but rather recall the conditions under which they formed.

[Passage omitted: Commentary on the history and legacy of Soviet propaganda
regarding NATO.]
                    PRO-NATO CAMP IS FAR FROM TRUTH 
As paradoxical as it may seem, the arguments of those favouring Ukraine’s
membership in NATO are often essentially no closer to the truth than those
of their opponents, though they are presented in a more civilized and less
aggressive form. But this does not stop a pretty tale from being a tale, or
a fantasy from being a fantasy.

Though at the beginning of the 1990s the majority of our fellow countrymen
continued by inertia to look at NATO from foxholes dug during the cold war,
the idea of drawing closer (and for the more brave – Ukraine’s membership in
NATO) appeared in the domestic political elite at practically the same time
as independence was gained. It then seemed: just a little bit more and
Ukraine would take its rightful place in the family of civilized peoples.

The North Atlantic Treaty Organization agreement, which successfully
withstood the totalitarian system of the Soviet Union, was one of the faces
of the democratic system. NATO-member countries were the edge of dreams –
high standards of living, social protection, real responsibility of
authorities before society and not just a show of such, as well as freedom
of speech, congregation and mass media.

Besides, nearly all new democracies which had broken free of the suffocating
communist system and the pettiness of Soviet stewardship, were striving to
join NATO. In these conditions, a direct rejection over membership in the
alliance was taken as an expression of poor tone or at least insufficient
progress (progressiveness, democracy, and so on).

Besides, a feeling of slight offence appeared in the subconscious of the
Ukrainian establishment: if they are negotiating with everyone except you,
it means you don’t deserve it, you have not matured yet, or you are still on
the other side of the curtain.

As we see, understandings began to chance even in this early stage:
democracy and a level of civilization were seen as the same as the
important, but far from key, element in the system of western values, one
which was foremost responsible for the defence aspect.
                               NATO’S ROLE CHANGING 

In these 15 years which have sped by so quickly, threats to security have
changed at the core, and with them, the essence of NATO. The terrorist
attacks on 11 September 2001 which changes the world drew a thick, fat line
under an entire historical era. Of course the alliance which had shown
itself to be effective as a defence union was impotent in the face of a more
treacherous and sudden danger. As a result of adapting to new realities, its
nature and principles of action and its strategy changed fundamentally.

While NATO defended the Western world for its first 50 years of existence,
mainly due to the strength of its leading state, the United States, on the
threshold of the 21st century one can see the opposite picture as the
members countries in the alliance are themselves helping America in the
fight against the threat of terrorism.

NATO which had not gone beyond the bounds of the Euro-Atlantic region and
which acted in strict accordance with the statute of the United Nations,
turned into an organization whose strategic goal is preventative actions in
case of need – and without the agreement of other members of world society
and in practically any place on the globe.

In particular, the alliance’s Military Defence Concept against terrorism
adopted at the summit in Paris on 21-22 November 2002 unambiguously reads:
“NATO must be ready to carry out military operations against terrorist
groups and there resources when and where necessary in accordance with the
decision of the NATO council”.

Today the vulnerability of NATO member countries has significantly increased
in regard to new threats, such as a sudden missile attack by terrorists or
states which support terrorism or international terrorist organizations
(like Al-Qa’idah), and also the use of bacterial, chemical and – not to be
ruled out – nuclear weapons on the territory of countries in the alliance.

In this context, it is interesting to note a comparison by American
international relations expert Zbigniew Brzezinski on the problem of the
security of the United States in the 21st century with the challenges which
the criminal world is presenting to modern megalopolises.

Meaning the difficult and nearly impossible search in a city with a
population of millions for small, but well-organized groups of criminals
(terrorists) who are hard to identify before they commit large crimes
(terrorist attacks).

Brzezinski draws the logical conclusions: NATO’s main efforts should be
directed not towards integrating 26 national armies, since defence in terms
of the principle of territory has lost its original meaning, but towards
creating rapid-response forces which would carry out missions beyond the
borders of the alliance’s member countries.

Correspondingly, NATO’s priority tasks (both for the organization as a whole
and for its individual members) are operations in Afghanistan, Iraq and, in
the case of regulating the Arab-Israeli conflict, in the Middle East.

A number of influential American politicians have insistently put the issue
of activating the NATO agreement on the table in the case of an exacerbation
of the situation with Iran’s nuclear programme. It is a big question whether
the alliance can act as successfully under conditions of growing
geographical scope and such radically changing tasks.

But one thing is perfectly clear: the NATO which the countries of Central
and Eastern Europe joined and the NATO which Ukraine is planning to join are
“two very different things”.
                                    RISKS COULD INCREASE 
It is also perfectly clear that should Ukraine successfully complete the
process of Euro-Atlantic integration, the number of risks to its national
security could significantly grow. This is no reason to panic, but the issue
needs additional, serious analysis and thought.

Statements that the mechanism of decisions made in NATO are so democratic
that Ukraine can choose for itself which crisis situations it will
participate in and which not, are at best too naive.

Especially if one takes into account that the famous Article number five of
the Washington agreement of 1949 was used for the first time in the history
of NATO in response to the terrorist acts in the United States on 11
September 2001. This article qualifies an armed attack on one or more
members of the alliance as an attack on them all.

It is also hard to imagine that in case of a serious crisis in Washington,
London or Paris, they will follow a “fate-defining” meeting of our National
Security and Defence Council with trepidation, especially if the main
decisions have already been made by that time by the Grande dames of the
alliance.

Also unclear is the logic according to which we can discuss whether or not
we will take part in defending our potential allies should a threat against
them arise or whether they would unanimously and unwaveringly come to our
aid should such a threat arise against Ukraine itself. And so it is worth
asking oneself whether one needs such an unpredictable ally, on which one
cannot rely.
                       IN THE EU WITHOUT JOINING NATO 
I also think attempts to present the process of joining the European Union
and NATO as nearly one and the same thing are incorrect. Some saying that
without joining the alliance, we will get nothing in terms of the EU, so
what is there to talk about.

Under the identical common system of values and the public-political and
economic systems of participating countries, there are serious differences
between these integrating associations, not to mention contradictions.

NATO is foremost a military (and then political) union with the leading
participation of a super-power – the United States – which determines its
nearly unlimited sphere of responsibility in the face of global threats.

And one need not expect the only super-power in the world to behave itself
more loyally than a spouse – thinking only about how to make you happy
without thinking of its own interests. It is more likely to be like a
mother-in-law, who knows exactly what you should do for your own happiness
(and her peace of mind).

At the same time, in contrast to NATO, the EU is foremost an economic union
with an ever more noticeably strengthening political component which spends
a lot of time mulling the topic of “what is good and what is bad” while
acting quite slowly. These two organizations have as much in common as a
tank and a combine.

Here is one eloquent example. The most successful, unproblematic and fast
round of widening the EU took place in 1995 when non-NATO member

countries Austria, Finland and Sweden joined.

And the citizens of one country participating in the negotiations, NATO
member Norway, blocked the process of their country joining the EU in a
referendum, believing that [EU] membership would overly regulate their
habitual way of life and would not aid in preserving and developing their
own culture.

By the way, I personally asked Javier Solana at a conference in Kiev whether
it was possible for Ukraine to join the EU without joining NATO. His answer
was clear: “Of course it can, why not?” Clearly our Euro-integrators know
their way around the system much deeper than their colleagues in Brussels.

But Mr Solana’s opinion is still of interest since at that time he was
appointed “EU minister of foreign affairs” after having worked as NATO
secretary-general and knew the system from the inside.
                              IS THEIR LIFE WITHOUT NATO? 
The question of membership in NATO, taking into account the consequences
both for Ukraine and its relations with third countries, certainly occupies
an important, and today perhaps key, place. It is good that serious
discussion has begun on this issue. It is bad that it is being held mostly
on the basis of ideas, convictions and feelings, in a word, emotions, and
not on concrete facts and sober analysis.

In the heat of passions and mutual accusations, the answer to the main
question is somewhat lost: “What will Ukraine get from joining NATO and what
will it lose?” And will it not turn out that once becoming a member of the
alliance, Ukraine, besides moral satisfaction from being in a prestigious
club, will get first class protection from threats which are already not as
topical, while opening itself up to new, more dangerous risks which are now
more hypothetical in nature.

This article intentionally not does touch the Russian factor. One can
discuss that without end. Having not said the main thing – one of the
driving motives for Ukraine’s Euro-Atlantic aspirations is the desire for
insurance against the case of unforeseeable turns in Russia’s foreign
policy. Too much was said by [Moscow Mayor Yuriy] Luzhkov, [Duma

MP Konstantin] Zatulin and others in the mid 1990s.

One must stress: we are not at all talking about anti-Russian motivations
for Ukraine’s foreign policy and surely not about taking part in any kind of
acts against Russia. One can suppose that on the Russian side, unacceptance
of the idea of our membership in NATO includes recognizing the fact that it
will once and for all cut Ukraine off from the Russian “umbilical cord”.

In deciding the issue of membership, time is important. It is hard to
imagine a more unfavourable time for finally realizing the Euro-Atlantic
choice. The country is in serious need of taking a breath which would allow
it to overcome the noticeable divide in society and renew healthy processes
in the economy.

I personally do not understand how one can talk seriously about Ukraine’s
membership in NATO, having held up the country on 230 dollars per 1,000
cubic meters of gas. And that as a base price.

As far as the political aspect, a painless solution to the problem of our
joining the alliance today is impossible without the Party of Regions. And
unrealistic with it.

And one should not forget that society’s predominant unacceptance of the
idea of Ukraine’s joining NATO does not reveal itself in grotesque
theatrical processes, but will come in a referendum on the issue and in the
presidential election in 2009, a year when the issue could take on practical
meaning should a corresponding invitation be made then. And no-one needs
that mess.

For now events should not be forced. We have a strong position today like
never before. As far as the alliance, Ukraine’s input in its missions in the
former Yugoslavia and Iraq are qualitatively and quantifiably equal to the
efforts of a good half of the members of NATO. That is, not only are we
interested now, but the leading world players are interested in us.

This is something that should not only give us joy, but reason for a bit of
caution, too. Especially when voices of warning are ever more clearly
sounding in warning of a possible renewal of the cold war. You don’t have to
be a genius to understand exactly where its main battles will be fought.

At the same time, one must clearly imagine that the most commonly proposed
alternative to NATO membership, Ukraine’s neutrality, has no real guarantees
of being realized despite the idea appearing attractive on the outside.

Does anyone in fact seriously think that, not being tied by any alliance
obligations, states which look very much like the United States and Russia
will destroy each other and the entire world in our nuclear age and over
Ukraine, too? And what we have in the 1994 Budapest memorandum are not
guarantees, but statements (in a true translation of the original).

And of all statements, the most reliable is that of the beloved pop-singer
Vera Serdyuchka: “Everything will be OK, everything will be OK, I just know
it”. But that is a topic for another conversation. Or another song.  -30-
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14.    CRIMEA CAUTIOUSLY WELCOMES NEW UKRAINE GOV
                    Strong No to NATO in Feodosia, Crimea, Ukraine

 
By Lisa McAdams, Voice of America (VOA) in Feodosia, Crimea
Washington, D.C., Wednesday, 09 August 2006

FEODOSIA, Crimea – Many in Ukraine, particularly in the Russian-speaking
south and east, remain hostile to the United States – their former Cold War
foe. Russia has warned that relations between the neighbors would suffer if
Ukraine joined NATO. In one such territory, Feodosia, protests broke out in

June on the arrival of a U.S. cargo vessel ahead of scheduled NATO training
exercises.

The anti-NATO demonstrations across Ukraine’s southern autonomous region of
Crimea in May and June were the first such protests of any kind in this
sleepy port city on the Black Sea. Still, they lasted nearly one month and
brought well over 2,000 people into the streets. There, they burned American
flags and chanted “USA go home.”

Opponents of President Viktor Yushchenko have been energized by his party’s
humiliating, third-place finish in March parliamentary elections, and the
difficulty of the country’s various parties to put together a governing
coalition. Mr. Yushchenko has made NATO membership a top priority and has
been pushing for potential partners to commit to that goal.

One opponent, Anatoly Sitkov, first secretary of Feodosia’s Communist party,
says Ukraine’s recent pro-Western moves under President Yushchenko are not
to be taken lightly, especially when it comes to the question of Ukraine
joining NATO.

Sitkov says Crimea has no ill will toward the West, America in particular,
but he says, all the same, Crimea does not want to host all these foreign
troops.

He says there are only two real powers in the world today, the United States
and Russia and, in his view, these exercises risk breaking that delicate
balance as Russia remains firmly opposed to NATO. He says he also opposed
the NATO bombing campaign in former Yugoslavia years back and would
not like to see Crimea drawn into similar situations in the future.

At the same time, Sitkov says, he takes some comfort in the fact that the
recent unity agreement, signed by President Yushchenko and returning Prime
Minister Viktor Yanukovych, establishes that a national referendum must be
held before any decision is made on Ukraine’s bid for membership in NATO.

Sitkov says his party will participate in a referendum, if and when it is
held. But he says the West should still expect more protests in Crimea.

Viktor Buleyko, a war veteran, tells VOA that there is no practical reason
for NATO troops to come to Crimea.

“The only reason they would need to do so,” he says, “is as a first step to
‘occupy’ the Black Sea. After that it will then be possible for NATO to
attack Russia.”

“What help can we expect to get from these troops,” Buleyko cries, visibly
disturbed. “Crimea is not Iraq, not Iran, not Israel. It is Ukraine,” he
says, “and standing with us is Russia.”

Alexander Evanovsky, a soldier with Crimea’s border guard service, too,
expresses support for the recent protests. “Wherever NATO goes, there is

war,” the soldier says. “But our people are for peace. We do not need
foreign troops here.”

Evanovsky also rejects the notion that NATO might be a good thing for Crimea
if, for example, it shared updated training and equipment. “I have all that
I need,” he replies tersely.

Pensioner Valentina Leontyevna remembers the night the U.S. ship came into
Feodosia’s port. She says people protested in the streets for nearly 30
days, sleeping in tents they pitched in a park adjacent to the port. The
protests forced the cancellation of at least six scheduled exercises.

Valentina says the people of her town cautiously welcome the confirmation
of pro-Russia Prime Minister Viktor Yanukovych.

“We need to wait and see what he does,” she says, and then wishes aloud that
he had not signed the national unity pact with Ukraine’s president. It calls
for allowing foreign troops to hold training exercises in Ukraine, such as
those the people of Feodosia managed to halt through protests.

After twice rejecting such legislation, Ukraine’s parliament, or Rada, this
week approved the exercises, the first of which started on Monday in
Ukraine’s region of Nikolayev. At least three other international
anti-terrorism training sessions will be staged in September.

Asked how they will react if foreign troops again come to their shores, the
people of Feodosia are clear. They say if Ukraine ultimately opens its
windows to the West (i.e. NATO) as appears, it must be sure not to close
the door to Russia.                                 -30-
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http://www.voanews.com/english/2006-08-09-voa51.cfm
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15.   UKRAINE’S CABINET TO REVIEW DRAFT LAWS ON WTO

          ACCESSION PREPARED BY PREVIOUS GOVERNMENT
 
Ukrainian News-on-line, Kyiv, Ukraine, Tuesday, August 8, 2006

KYIV – The Cabinet of Ministers intends to review the draft laws required

for Ukraine’s admission into the World Trade Organization that the previous
Cabinet of Ministers prepared and submitted to the parliament for approval.

Prime Minister Viktor Yanukovych announced this while presenting newly
re-appointed Foreign Affairs Minister Borys Tarasiuk to employees of the
Foreign Affairs Ministry.

In particular, Yanukovych said that he had already ordered a study of the
draft laws to determine the extent to which they serve the interests of
Ukraine and determine whether it is necessary to hold public hearings on
them.

Moreover, according to Yanukovych, these draft laws should be agreed with
Ukrainian manufacturers in order to ensure that Ukraine’s accession to the
WTO does not have a negative effect on them.

According to Yanukovych, there are several sensitive issues for Ukrainian
manufacturers regarding Ukraine’s accession to the WTO.

At the same time, Yanukovych expressed the belief that the government will
be able to reach agreement with Ukraine’s partners in the WTO on deferment
of reduction of import duties for several years to enable Ukraine to create
better conditions if Ukrainian manufacturers.

Yanukovych also said that he needed to hold consultations with experts at
the Economy Ministry to enable him to forecast the period of Ukraine’s
accession to the WTO. He said this would enable him to assess the
probability of Ukraine’s accession to the WTO this year or postponement

of its accession until next year.

As Ukrainian News earlier reported, Ukraine previously set itself the goal
of joining the WTO in 2006. This goal is stipulated in the Universal
Agreement on National Unity that the political forces represented in the
parliament signed on August 3.                     -30-

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16.    UKRAINIAN PRIME MINISTER YANUKOVYCH, FOREIGN 
 MINISTER TARASYUK AT ODDS OVER WTO ENTRY DEADLINES

 
ICTV television, Kiev, in Ukrainian 1545 gmt 8 Aug 06
BBC Monitoring Service, Kyiv, Ukraine, Tuesday, August 8, 2006

KYIV – Ukraine’s Prime Minister Viktor Yanukovych and Foreign Minister

Borys Tarasyuk, who was re-appointed to the post under the quota of
President Viktor Yushchenko, have disagreed over the deadlines for Ukraine’s
WTO entry, a Ukrainian TV channel has said. Yanukovych came to the
Foreign Ministry on 8 August to present Tarasyuk to the ministry staff.

Yanukovych said his cabinet may postpone Ukraine’s WTO entry date to see
whether the interests of Ukrainian producers are observed in the WTO bills

submitted to parliament by the previous government.

Tarasyuk told journalists later that Ukraine’s WTO entry by the end of 2006
is stated in the national unity declaration signed by Yanukovych on 3
August. The following is an excerpt from a report by the Ukrainian ICTV
television on 8 August:

[Presenter] Ukraine may see the comeback of multidirectional foreign policy.
Slightly different priority slants could be heard today when re-appointed
Foreign Minister Borys Tarasyuk was being presented [to ministry staff] by
Prime Minister Viktor Yanukovych.

Yanukovych said that WTO entry may be postponed until next year, while
Tarasyuk refuted the statement at a news conference later today, recalling
the signing of the national unity declaration, which backs President Viktor
Yushchenko’s current course. [Passage omitted: repetition]

[Correspondent] After sweet promises to finance the ministry in a worthy way
and to deal with diplomats’ housing problems, Yanukovych said that the WTO
entry may be delayed.

The prime minister had already issued an instruction to revise the [WTO
related] bills submitted by the previous government, and proposed holding
public hearings. But Tarasyuk is certain that Ukraine will join the WTO by
the end of 2006.

[Yanukovych, addressing ministry staff] It is necessary to organize public
hearings of these [WTO] bills to see whether they have been agreed with
producer associations, as this is needed for us to take this step
consciously and not to receive any negative response from our public, or
from our industrialists and entrepreneurs.

[Tarasyuk, addressing journalists] I want to remind you that participants in
the national unity forum noted in their declaration that the completion of
the WTO entry process is a priority, and that it should be completed by the
end of 2006.

[Correspondent] Ukraine’s membership of the WTO and EU will not get in

the way of Ukraine’s creating a free trade zone within the framework of the
Single Economic Space [accord between Russia, Ukraine, Belarus and
Kazakhstan], Tarasyuk said.

But a U-turn in foreign policy and the abandoning of EU and NATO

integration are the only reason that will force the minister to resign.

[Tarasyuk, addressing journalists] If one is to speak about a hypothetical
question, this will obviously be a U-turn in foreign policy. Unequivocally,
I have no other interests than the interests of our state. If this happens
this will of course be the reason for me to tender my resignation.

[Passage omitted: Correspondent says Tarasyuk forecasts a national
referendum on NATO entry in 2008.]                      -30-

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17. WARSAW LEADERS SCRAMBLE TO RETAIN INFLUENCE IN KIEV

By Jan Cienski in Warsaw, Financial Times
London, United Kingdom, Wednesday, August 9 2006

WARSAW – The appointment of Viktor Yanukovich as Ukraine’s prime minister
last week has created a diplomatic challenge for Poland as Warsaw seeks to
maintain the influence in Kiev it built during the 2004 Orange Revolution.

Polish politicians were prominent in forging the compromise that gave
victory to Viktor Yushchenko in the battle against Mr Yanukovich for the
Ukrainian presidency. Since the success of the popular pro-democracy
movement in Kiev, Poland has sought to be an ambassador for its eastern
neighbour in the European Union and Nato.

But now the Polish government is scrambling to retain that influence with a
man who saw Warsaw as closely allied with his political enemies. In a bid to
ensure continued good relations, Jaroslaw Kaczynski, the prime minister,
yesterday called Mr Yanukovich to congratulate him and invited him to visit
Poland as soon as possible.

Lech Kaczynski, Poland’s president and the prime minister’s identical twin
brother, has also made improved relations with Ukraine a priority. He
recently met Alexander Kwasniewski, his ex-communist predecessor, to

discuss Ukraine, and formed a Polish-Ukrainian presidential committee.

“What Poland can do now is convince the Ukrainian elites, and particularly
the ‘blue’ camp [of Mr Yanukovich and his Regions party], to take the
pro-European path – to show them the advantages of eventual EU and Nato
membership,” said Pawel Zalewski, head of the parliamentary foreign
relations committee and a member of the ruling Law and Justice party .

“We can also promote the future membership of Ukraine in the EU,” he said.
This would mean Warsaw having to improve its tarnished image in Brussels in
order to lobby effectively on behalf of Ukraine.

The moves represent a recognition by Warsaw that it is in Poland’s interest
to retain influence in Kiev to continue explaining the advantages of a
western option for Ukraine. Poland also wants stability on its eastern
borders.

“We want a belt of democratic countries around the external frontiers of the
EU, and a democratic Ukraine is an element of that,” said Anna Fotyga,
Poland’s foreign minister.

The Polish government had been strongly criticised by the opposition at home
for inaction during the political gridlock in Ukraine that followed the
indecisive March general elections.

But some observers say Warsaw was left with little option. “There was a deep
crisis and chaos in Ukrainian politics and we lost any possible partner for
serious talks,” said Bartlomiej Sienkiewicz, an analyst.

However, critics see the apparent drift over Ukraine as part of a larger
problem with the government’s foreign policy. Since Mr Kaczynski became
president last October, relations with Russia, Germany and the European
Union have been troubled and the leader has been dogged by foreign policy
gaffes.

Improving relations with Ukraine would allow Warsaw to regain the role of
Kiev’s voice in the EU and Nato, which Mr Sienkiewicz said was “slowly but
inevitably being taken over by Germany”.

Mr Yanukovich has said his first foreign visits will be to Moscow, Brussels
and Washington. It is not clear when he will visit Warsaw.       -30-
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18. EBRD CALLS ON NEW UKRAINIAN CABINET TO PROTECT
                                RIGHTS OF PRIVATE OWNERS 

         Bunge Corp calls on government to protect legal owners from attacks 
Ukrainian News-on-line, Kyiv, Ukraine, Monday, August 7, 2006

KYIV – The European Bank for Reconstruction and Development calls on

the new Cabinet of Ministers to protect the rights of private owners. EBRD
Country Director for Ukraine Kamen Zahariev made this statement at a press
conference.

He said the EBRD is concerned about the raid attacks on enterprises in
Ukraine, which have become more and more frequent over the past two years.

They take place because of imperfect cooperative law, extremely broad
jurisdiction of courts (in geographic aspect as well), the possibility of
applying inadequate security for claim (when the holder of one share can
bloc accounts and operations of enterprise), and the possibility of
emergence of ‘dual registrars.’ 

 
BUNGE’S DNIPROPETROVSK OIL EXTRACTING PLANT ATTACKED
As another example of raid attacks, Zahariev named the Dnipropetrovsk oil
extracting plant; some of its minority shareholders lodged a claim to
declare the capital increase in 1994 invalid. If the court satisfies their
claim, Bunge Ltd, an international corporation that owns 94% in the plant,
will lose control of its asset, acquired in 2002.

Dexter Frye, the general manger of Bunge Ukraine, called on the government
to protect legal owners from raid attacks. ‘Once again I am addressing the
government with the request to stop illegal actions of the raiders so that
such a law obeying company as Bunge could continue to invest in Ukraine,’

he said.

Frye added that his company has invested USD 150 million in the Ukrainian
enterprise and is going to invest USD 300-500 million in development of old
and creation of new production capacities in Ukraine in the next three to
five years. However, it may reconsider its plans if the rights of owners
remain poorly protected.

Zahariev said that introduction of a system of single registrar of shares
and adoption of the law on joint-stock companies could be a proper response
of the government in this area.

As Ukrainian News earlier reported, the Dnipropetrovsk oil extracting
plant’s minority shareholders filed lawsuits in May asking the Kirovskyi
district court of Dnipropetrovsk and the Holosiivskyi district court of Kyiv
to return the controlling stake in the plant to the plant’s employees.

In late 2002, the Bunge corporation acquired the Cereol group, which
includes the Dnipropetrovsk oil extracting plant (one of the three largest
producers of vegetable oil in Ukraine).

Bunge is a major company on the world market of production of fertilizers
and food products. It has 450 enterprises in 28 countries and employs 25,000
people.

The Verkhovna Rada appointed Party of Regions leader Viktor Yanukovych

as prime minister and other Cabinet members on August 4.

Former prime minister Yurii Yekhanurov said that protection of private
property should be the priority of the new Cabinet of Ministers.    -30-

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19. FORTIS BUYS UKRAINIAN INSURER ETALON LIFE FOR EUR7.6M

Nicolas Parasie, Dow Jones Newswires, Amsterdam, Netherlands, Aug 9, 2006

AMSTERDAM – Belgian-Dutch bank and insurer Fortis NV (30086.AE)

Wednesday said it will buy Ukrainian insurer Etalon Life for EUR7.6 million,
in an effort to expand its insurance activities in developing markets.

The Kiev-based life insurer has a network of 26 branches and 100 agents. The
company ranks seventh in terms of gross written premiums and has a market
share of 5.2%, Fortis said.

“With over 47 million inhabitants, Ukraine has a fast-growing economy
supported by a well-developed industrial base, a highly trained workforce
and a good educational system,” said Peer van Harten, chief executive of
Fortis’ international insurance division.

“Over the last few years, the Ukrainian government has actively promoted
market reforms and we believe Ukraine has the potential of becoming a growth
engine in Europe,” van Harten said.

Fortis expects the cash deal to be completed in the fourth quarter of this
year and that it won’t have any impact on the company’s net profit per
share.

Fortis is aiming to lessen its dependence on the Benelux market by striking
insurance joint ventures in developing markets such as India or China. The
Belgian-Dutch company will report second-quarter results on Thursday.
Company Web site: http://www.fortis.com
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By Nicolas Parasie, Dow Jones, nicolas.parasie@dowjones.com  
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20.  UKRAINE-UNITED STATES BUSINESS COUNCIL PRESIDENT
               BRIEFS UKRAINIAN AGRIBUSINESS EXECUTIVES

Action Ukraine Report (AUR) #749, Article 20
Washington, D.C., Friday, August 11, 2006

WASHINGTON, D.C., Dr. Susanne S. Lotarski, President of the Ukraine-

United States Business Council welcomed seventeen Ukrainian agribusiness
executives to the United States and briefed them about the work of the
Council in promoting commerce between the United States and Ukraine.

Dr. Lotarski’s presentation was part of the opening day’s orientation for
their one-month executive training program in “Agribusiness Association
Development for Ukraine,” organized by the U.S. Commerce Department’s
Special American Business Internship Training Program, known as SABIT.
Funding for the program is provided under the Freedom Support Act of 1992.

Dr. Lotarski cited the Ukraine-United States Business Council’s efforts on
behalf of Ukraine in winning market economy designation by the Commerce
Department and Congressional passage of legislation graduating Ukraine from
the Jackson-Vanik Amendment and extending permanent normal trading relations
as examples of what business associations can do to influence government
policy and create a better business environment.

President Lotarski also pointed out that meetings organized by the Council,
such as those with Ambassadors Shamshur and Taylor, U.S. Assistant Secretary
of State Daniel Fried, Ukrainian Economy Minister Yatsenyuk and Presidential
Secretariat Deputy Chief Vasiunyk facilitate exchange of information and
views between business and government.

The Ukrainian association executives and entrepreneurs were interested in
learning about the Business Council’s organization and operation, especially
that it is entirely funded and governed by American companies interested in
promoting better conditions for expansion of trade and investment with
Ukraine.

In welcoming the delegation, Dr. Lotarski noted her great pleasure that the
SABIT training program, which she was instrumental in creating in 1990 while
serving as Director of the Commerce Department’s Office of Eastern Europe,
Russia and Independent States, has trained over 1,000 Ukrainian business
people since her initial interviews in 1991 of over a hundred candidates,
including Ukrainians, from across what was still the Soviet Union.

During their August 5 to September 2 stay in the United States, the
Ukrainian executives will visit Sioux Falls, South Dakota, Fargo, North
Dakota, Peoria and Chicago, Illinois, as well as Washington, DC.
Ukraine-United States Business Council members Cargill and Case New

Holland will host meetings and site visits for the group.

Participating in the training in “Agribusiness Association Development for
Ukraine” are nine association executives, four private farmers, four
directors of agricultural cooperatives, and a representative of the Ministry
of Agricultural Policy.  They represent the grain, fruit and vegetable,
dairy, poultry, and baking sectors, as well as services, marketing and
training for agriculture.

The associations represented include the Ukrainian Grain Association, the
National Association of Advisory Services for agriculture, the Association
of Rural Development of Poltava Region, the Kharkovsakhar Economic
Association, the Association of Framers and Private Landowners of Poltava
Region, the Federation of Auditors, Accountants and Financiers of
Agroindustrial Complex, the National Association Ukrkonservmoloko

(condensed and dry milk products), and Kharkovptitseprom (Poultry
Association).                                   -30-
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Information about SABIT, the Special American Business Internship Training
program for the New Independent States, can be found at
www.mac.doc.gov/sabit or by calling (202) 482-7300.

For information about the Ukraine-United States Business Council contact

Dr. Susanne S. Lotarski, President, at slotarski@boo.net or by calling (301)
654-9359, or by mail to P.O. Box 42067, Washington, DC 20015.
 
Morgan Williams, of SigmaBleyzer, serves as Chairman of the Executive
Committee of the Board of Directors and John Stephens, Cape Point
Capital serves as Secretary/Treasurer of the Ukraine-U.S. Business Council.
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21.  UKRAINIAN GOVERNMENT DECIDES AGAINST MITTAL FOR
                               IMPORTANT IRON ORE PROJECT 
 
By: John Helmer, Mineweb.com, Johannesburg, South Africa, Aug 10, 2006
MOSCOW – Victor Yanukovych has been the new Prime Minister of Ukraine
for less than a week, and has promised to make his first foreign visit to
Moscow later this month.

However, under the terms of a power-sharing agreement negotiated with the
pro-American President, Victor Yushchenko, Yanukovych, who is pro-Russian,
has been obliged to appoint Boris Tarasyuk, a pro-American foreign minister,
who will hold his hand in Moscow.

As the great American novelist Raymond Chandler once observed of the
difference between the appearance and power of a character, “except for her
face, she would have looked all right.”  

 
WHO WILL TAKE CONTROL OF IRON-ORE MINE, KRIVOI ROG?
Flag-waving is usually a foreign minister’s prerogative, but Russia is
counting on commercial Ukrainian interests, especially in energy and mining,
to follow the Russian lead. An early test of which way Yanukovych, and his
protege, Economy Minister Volodymir Makukha, will turn is the decision that
must be made shortly on who should take control of one of the country’s
major iron-ore mines, Krivoi Rog.

For the moment, Metalloinvest, a Russian iron-ore holding controlled by
Alisher Usmanov, appears to be winning support of the government in Kiev for
a plan to partner Ukrainian steelmaker Vadim Novinsky’s Smart Group in a
joint venture to operate and expand the iron-ore supplier that was once part
of the Krivorozshtal (Krivoi Rog) steelmaking complex.

The loser, also for the time being, is Mittal Steel, which last year won the
state privatization award of the Krivorozshtal steel plant, eastern Europe’s
largest producer of long steel products.

Mittal’s bid was $4.8 billion, surpassing rival offers from the Smart Group,
which controls Ukrainian long products maker Makeyevka as well as the
Inguletsky iron-ore processing combine; and from the Industrial Group, a
joint venture bidder representing Luxembourg-headquartered Arcelor and the
Industrial Union of Donbass (IUD) of Ukraine.

Both Smart and IUD are based in the eastern, Russian-speaking region of
Ukraine, where Yanukovych’s political strength is drawn. Gas to fire
Krivorozhstal’s furnaces is supplied by Russia.

Nina Burlyuk, spokesman of the State Property Fund of Ukraine, told Mineweb
the fund had drafted a proposal for a joint venture to operate the Krivoi
Rog iron-ore processing combine (GOK) , with the state to hold 50% plus one
share, and for an open competition to decide which commercial group should
hold the balance of the shareholding, and operate the mine and mill.

On August 2, just before Yanukovych was sworn into office, the government
issued a decree. This orders an inventory of the complex within a month; an
asset valuation; and preservation of the Property Fund’s control over the
mine. But Burlyuk acknowledges there is “a major problem”.

“We do not yet understand,” she told Mineweb, “how to implement this decree,
because our proposal to the Cabinet including competitive bidding for the
selection of [the commercial] investor.

However, the response, according to the decree, says that the JV should be
created, according to the conclusions that have been reached by a
commission, which worked several months ago, and reviewed proposals from
Mittal and the partnership of Metalloinvest/SmartGroup. That commission made
its choice in favor of the Metalloinvest/Smart Group.”

Usmanov has boasted of his Ukrainian interests in the past. But
Metalloinvest spokesman, Igor Tikhomirov, told Mineweb he would not confirm
the partnership with Novinsky, nor did he know, he said, what decision the
Yanukovych government will make on the proposed new bidding contest.

Last October, Usmanov claimed to be Novinsky’s silent partner in the bidding
for Krivorozhstal. That followed a failed attempt by Usmanov to attract
another Ukrainian steelmaker, Igor Kolomoisky, owner of the Privat group and
the Yuzhny iron-ore mine, to create what Usmanov called, at the time, his
“Euroasian iron-ore alliance”.

Kolomoisky publicly rebuffed Usmanov, saying “I see only minuses in
monopolization.” Industry sources told Mineweb that Mittal had vigorously
opposed Usmanov’s iron-ore consolidation plan at the time, also. An attempt
by Usmanov to choke off iron-ore supplies to Magnitogorosk Metallurgical
Combine (MMK), Russia’s largest steelmill, had to abandoned as a result.

Burlyuk concedes that the new Ukrainian government will take time to resolve
the uncertainty over the future of Krivoi Rog GOK. “We can’t say yet if
there will be a contest or not, and how to run it.”

Differences between the Usmanov-Novinsky offer and Mittal’s, which surfaced
during the earlier Ukrainian review, include the size of the planned
investment, the pellet production capacity to be achieved, and the sourcing

of raw materials.                                      -30-
——————————————————————————————————
LINK: http://www.mineweb.net/ferro_alloys/919375.htm
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
22. GERMAN LUFTHANSA SUSPECTED OF UNFAIR PRACTICES
                    UKRAINIAN PNSCU OFFICIAL STATES
 
Business Digest, Sofia, Bulgaria, Wed, August 9, 2006
KYIV – Ukrrudprom German air carrier Lufthansa is using unfair competition
practices in its expansion in Ukraine and threatens the national interests,
the head of the Public National Security Committee of Ukraine (PNSCU),
Oleksiy Tolkachev, told a press conference on August 4, 2006.
 
Tolkachev gave the press conference to talk about the conflict between
Lufthansa and Ukrainian carrier Dnepravia over flights to and from Germany.

[Editor’s note: Dnepravia, which owns the Dnipropetrovsk airport, filed a
claim against the German carrier in November 2005, stating Lufthansa had
launched regular flights on the Dnipropetrovsk-Frankfurt route without the
necessary permits from the Dnipropetrovsk airport, Novecon news agency
reported on November 9, 2005.

At that time Dnepravia also serviced regular flights on the
Dnipropetrovsk-Frankfurt route. The Ukrainian carrier claimed 18 mln
Ukrainian hryvnias ($3.6 mln/2.8 mln euro) in losses caused by the conflict
with Lufthansa.]

Tolkachev explained that the conflict arouse because Lufthansa had not
coordinated its flight schedule in Ukraine with the airport. In line with
the international standards, the carrier was obligated to negotiate the
terms of departures and arrivals with the Dnipropetrovsk airport, prior to
submitting its flight schedule to the Ukrainian aviation authorities.

Instead, Lufthansa only notified other carriers it would start servicing the
Frankfurt-Dnipropetrovsk route with six flights a week, Tolkachev said.

He added that in response to the complaint of unfair competition filed by
Dnepravia, Germany’s civil aviation authority stepped in and banned
Dnepravia’s flights to Germany, while taking measures to deprive the
Dnipropetrovsk airport of its international status.

The issue concerns not only corporate interests, but also undermines the
nation’s security and strategic interests, Tolkachev said. He called for the
Ukrainian aviation authorities, the ministries of transport and foreign
affairs, as well as the president, to step in and ensure the conflict’s
positive outcome.

[Editor’s note: The German civil aviation authority banned Ukrainian air
carriers Donbasaero and Ukrainian Mediterranean Airlines (UM Air) from
flying to Germany in 2004, but lifted the ban for the summer season, after
the Ukrainian aviation authority approved Lufthansa’s Kyiv-Munich route, the
Ukrainian News agency reported on May 27, 2004.] (Alternative names:
Dnepravia, Dnepropetrovsk, Um-Air, Kiev, Ukraviatrans)  -30-

————————————————————————————————
LINK: http://www.ukrrudprom.com
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
23. EBRD LOANS USD 59 MILLION TO HOSTOMEL GLASS FACTORY
         Kyiv Region factory produces more than 300 million bottles per year.

Ukrainian News-on-line, Kyiv, Ukraine, Tuesday, August 8, 2006

KYIV – The European Bank for Reconstruction and Development has allocated

a loan of USD 59 million to Vetropak Hostomel Glass Factory (Kyiv region).
Ukrainian News learned this from the statement of the EBRD.

According to the report, the loan is needed to reduce energy consumption
costs and increase glassware production by 40% to 750 million items
annually.

The loan will help save up to 9.2 million cubic meters of natural gas and
6.9 MW of electricity, or 33% of today’s consumption, the EBRD reported.
The sum will be provided in two stages and some part of it will be used to
refinance the current debt of the factory. It is a syndicated loan.

As Ukrainian News earlier reported, the EBRD Board of Directors decided in
June to grant a credit worth USD 68 million to the Hostomel factory. The
Hostomel glass factory changed its name to Vetropak Hostomel Glass Factory
in March.

In 2005, the factory made a net profit of UAH 42.97 million and increased
its net revenues by 58.3% or UAH 86.746 million compared with 2004, to UAH
235.595 million.

The factory produces more than 300 million bottles per year. Its assortment
comprises more then 200 types of glass containers, from 10 ml to 750 ml.
————————————————————————————————-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
24.   UKRAINE AIS CORP SIGNS $4.5 MILLION DEAL TO IMPORT
     5,000 MOTORCYCLES FROM CHINESE JIANGSU XINLING MFG
 
Business Digest, Sofia, Bulgaria, Tuesday, August 8, 2006

KYIV – AIS Corporation signed a $4.5 mln (3.5 mln euro) contract to import
5,000 motorcycles of Chinese motorcycle maker Jiangsu Xinling Motorcycle
Manufacturing Co. by the end of 2007, AIS said. The first shipment of 360
motorcycles of the TXM brand is due on August 27, 2006 at the Odessa port.

AIS will import some 500 motorcycles by the end of 2006. The TXM motor-

cycles will be available in AIS Corporation’s dealership network from September
2006. Jiangsu Xinling produces stride motorcycles, scooters, off-road
motorcycles, E-scooters, E-bicycles, mini E-scooters, generators and
engines.

The company’s annual capacity exceeds 200,000 engines and 500,000
motorcycles. AIS Corporation (www.ais.com.ua) has been official dealer of
French car maker Citroen and South Korean Ssang Yong since 2005.

The company distributes countrywide GAZ, ZIL, UAZ and IZH cars, and PAZ,
LiAZ, GolAZ and KAvZ buses. It is also the official dealer of VAZ, KamAZ,
Audi, Renault and FAW. AIS Corporation comprises 28 companies in Ukraine.
www.autoweek.com.ua.                                  -30-                       

————————————————————————————————
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AUR#748 Aug 8 Macroeconomic Sitution, July 2006, Report From SigmaBleyzer; Free Economic Zones; Tax Cuts Promised, Borderland Split; Marriage Of Opposites

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

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

                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 748
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN WASHINGTON, D.C., TUESDAY, AUGUST 8, 2006
 
                Help Build the Worldwide Action Ukraine Network
 Send the AUR to your colleagues and friends, urge them to sign up
               –——-  INDEX OF ARTICLES  ——–
              Clicking on the title of any article takes you directly to the article.               
    Return to the Index by clicking on Return to Index at the end of each article

1.       UKRAINE – MACROECONOMIC SITUATION – JULY 2006
MONTHLY REPORT & ANALYSIS: Olga Pogarska, Edilberto L. Segura
SigmaBleyzer Emerging Markets Private Equity Investment Group
The Bleyzer Foundation, Kyiv, Ukraine, Tuesday, August 8 , 2006
 
By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, Tuesday, August 8 2006

4.            UKRAINIAN MOBILE MARKET CONTINUES TO BOOM 

PRIME-TASS, Moscow, Russia, Tuesday, August 8, 2006

5. UKRAINE BUYS $201M WORTH OF NUCLEAR FUEL FROM RUSSIA
MosNews, Moscow, Russia, Thursday, August 3, 2006

6     EASTERN EUROPEAN NUCLEAR REACTORS IN BULGARIA
                       AND UKRAINE GET  NEW LEASE OF LIFE
       Building on its Bulgarian success, Invensys Nuclear has just won a
        major contract from DICS Intertrade to supply four Tricon safety
     controllers to the Rovno nuclear power plant at Kuznetsovsk in Ukraine.
EngineerLive website, Thursday, August 3, 2006


7CASPIAN ENERGY EXPORTS AND THE BLACK SEA CORRIDOR
       Keynote speaker Romanian President Basescu spoke on “Romanian:
                           An Energy Gateway to Western Europe”
The Jamestown Foundation, Washington, D.C., Thursday, August 3, 2006

8.          EBA FINDS BARRIERS TO INVESTMENT IN UKRAINE
Ukrainian Times newspaper, Kyiv, Ukraine, Monday, August 7, 2006

9.     TOURIST INDUSTRY: BRIGHT FUTURE, GLOOMY PRESENT
                   Ukraine only starts to develop its tourist industry
ANALYSIS & COMMENTARY:
By Roman Bryl
IntelliNews – Ukraine This Week, Kyiv, Ukraine, Mon, July 3, 2006

10 RUSSIAN COMPANY TO LAUNCH HOTEL CHAIN IN UKRAINE
                      Plans to build a 20-strong mid-market hotel chain
By Chris Druce, CatererSearch.com
Sutton, Surrey, United Kingdom, Wed, 02 August 2006

11.            NEW VILLAGE WILL SPRING UP IN KIEV REGION

Alexei Voskresensky The Ukrainian Times newspaper
Kiev, Ukraine, Monday, August 7, 2006

12UKRAINE’S GAS CHIEF SAYS GAS PRICE IS BOUND TO GROW

INTERVIEW: With Oleksandr Bolkisev, Head of State Run
Naftohazs Ukrayiny oil and gas company
By Roman Kulchynskyy, Kontrakty, Kiev, in Russian 31 Jul 06; pp 8-12
BBC Monitoring Service, United Kingdom, Wednesday,Aug 03, 2006

13.                          BORDERLAND SPLIT
By Mark Von Hagen, The Wall Street Journal
New York, New York, Tuesday, August 8, 2006

14.    FACTIONS INVEST HOPE IN A MARRIAGE OF OPPOSITES
                   Ukraine’s passage to becoming a “normal” economy
                         and society is likely to be long and bumpy.
ANALYSIS & COMMENTARY: By Quentin Peel, Columnist
Financial Times, London, United Kingdom, Saturday, August 5 2006

15UKRAINE’S NEW GOVERNMENT: DARK BLUE, PALE ORANGE,
                              SOME PINK, TOUCH OF RED
                  Ukraine’s new government: composition and politics
ANALYSIS AND COMMENTARY:
By Vladimir Socor
Eurasia Daily Monitor, Volume 3, Issue 153
Jamestown Foundation, Wash, DC. Tuesday, August 8, 2006

 
ANALYSIS & COMMENTARY: By Luca Brusati, Italy
Action Ukraine Report (AUR) #748, Article 16
Washington, D.C.,  Tuesday, August 8, 2006

17UKRAINIAN NEWSPAPERS DISAGREE OVER CRISIS RESOLUTION
              One idea seemed to dominate the print media – Yanukovych has
                    defeated Yushchenko and the Orange Revolution is over.
             People in Lviv discuss Yushchenko’s treachery and incompetence.
BBC Monitoring Research Service, UK, Friday, Aug 04, 2006
BBC Monitoring Service, United Kingdom, Friday, Aug 04, 2006

18UKRAINE’S COALITION DEAL PAPERS OVER ROOT DIFFERENCES
             The net result of the agreement leaves Ukrainian politics pretty much
                      as they were: stagnant, short of cash, and at loggerheads.
ANALYSIS: By Stefan Korshak, Deutsche Presse-Agentur
Hamburg, Germany, Friday, August 4, 2006

19.       MARKETS, GOVERNMENT, AND PUBLIC LANGUAGE USE
OP-ED: By Stephen Velychenko, Resident Fellow,CERES
Research Fellow, Chair of Ukrainian Studies, Munk Center
University of Toronto, Toronto, Ontario, Canada
Action Ukraine Report (AUR) #748, Article 19
Washington, D.C., Tuesday, August 8, 2006
========================================================
1
 UKRAINE – MACROECONOMIC SITUATION – JULY 2006

MONTHLY ANALYTICAL REPORT: Olga Pogarska, Edilberto L. Segura
SigmaBleyzer Emerging Markets Private Equity Investment Group
The Bleyzer Foundation, Kyiv, Ukraine, Tuesday, August 8 , 2006

                                        SUMMARY
[1] Over January-June, real GDP grew by 5% year-over-year (yoy), suggesting
that early concerns regarding the negative impact of the imported gas price
increase, political uncertainty and unfavorable external conditions did not
fully materialize.

[2] Stronger economic growth allowed the government to meet its budget
revenue targets for January-June. For the first half of the year, the
consolidated budget deficit was at a controllable 0.5% of period GDP.

[3] Consumer inflation continued to decelerate as the higher cost of
services was compensated for by decelerating food prices. Although CPI
growth was lower than expected for the first half of the year, the forecast
for end-of-period inflation was left unchanged at 11.4% due to further
upward adjustments of service tariffs in the second half of the year.

[4] For the first time since fall 2005, merchandise exports reported growth
in May (11.4% yoy.) However, despite encouraging export developments, the
merchandise trade balance continued to deteriorate.

[5]According to preliminary NBU estimates, the current account (CA) deficit
accounted for $0.9 billion over the period, which translates into 2.1% of
period GDP.

[6] At the beginning of August, the Ukrainian Parliament endorsed Mr.
Yanukovych as Prime Minister and appointed new Cabinet of Minister.

                                    ECONOMIC GROWTH

According to preliminary data from the State Statistics Committee (SSC), the
Ukrainian economy continued its remarkable acceleration in June. Following
the rather unexpected acceleration of 8.5% yoy in May, real GDP growth
picked up by a marked 9.3% yoy in June, bringing the cumulative January-June
figure to 5% yoy.

Although these figures are preliminary and may be revised, current real
sector developments suggest that early concerns about the economic situation
in 2006 related to the impact of the imported gas price increase, political
uncertainty, and forecasted worsening of external conditions, were
exaggerated.

The expansion of the economy in the first half of the year may be attributed
to stronger domestic demand for both consumer and investment goods and
better than expected external conditions (particularly, resumption of the
ascending trend of world steel prices in February, contrary to expectations
of their gradual decline during 2006, and stronger external demand for
Ukraine’s machine-building products).

On the demand side, rising income and declining interest rates boosted
private consumption growth to a record high 19.7% yoy in the first quarter
of 2006. In addition, GDP growth was supported by recovered investment
demand, as gross fixed capital investment increased by an encouraging 8.2%
yoy for the period.

Such a strong rebound of investment activity amid political uncertainties
related to parliamentary elections and the formation of a government
coalition was largely surprising.

At the same time, it may be explained by the need to modernize existing
production capacities and introduce energy-saving technologies, with the
latter especially acute following the recent price hike on imported gas and
its likely increases in the future, as well as by the improving business
climate in Ukraine.

Preliminary data on real sector performance for the first half of the year
suggests further acceleration of investment activity in the second quarter.

On the downside, robust domestic demand stimulated imports, which coupled
with sluggish export performance resulted in considerable worsening of
Ukraine’s foreign trade balance.

At the same time, the negative contribution of net exports may be lower in
the second quarter due to favorable external conditions for Ukraine’s major
export-oriented industries (metallurgy, machine-building, chemicals and
transport vehicles).

On the supply side, GDP growth was primarily driven by the service sector
over January-June. The growth of value added in domestic trade (8.6% yoy),
transport (8% yoy), healthcare (2.6% yoy) and education (1.8% yoy) together
explains about 45% of GDP growth over the first half of the year.

The growth of value added in construction and agriculture (3.4% yoy and 6.5%
yoy respectively) explains another 10% of GDP growth over the period.

At the same time, notable acceleration over May-June should be mainly
attributed to robust growth in the industrial sector over these months.
Although industrial output growth slightly decelerated from the 10% yoy
surge a month before, it remained at a high 9.6% yoy in June, bringing the
cumulative growth to 3.6% yoy.

Growth resumption in world steel prices and its acceleration over the last
two months triggered recovery of metallurgy. Following a 12.4% yoy increase
in May, metals production surged by almost 22% yoy in June, bringing the
cumulative growth to 4.8% yoy.

Strong external demand for chemicals helped the industry to adjust for more
expensive energy resources (particularly gas, which accounts for about 25%
on average in the production costs of chemicals). As a result, the chemical
industry demonstrated 0.4% yoy growth over the first half of the year.

Benefiting from buoyant investment demand as well as recovered metallurgy,
output in machine-building increased by 15.7% yoy in June, which translated
into 12.2% yoy growth to date. On the downside, coke and oil-refining
continued to decline, reporting a 15.2% yoy decrease in output for the first
half of the year.

At the end of June, the price of imported gas, one of the principal
determinants of Ukraine’s economic development, was officially confirmed to
stay unchanged at $95 per 1,000 m3 at the Russian-Ukrainian border through
the end of September. Moreover, in mid-July Ukrainian officials declared the
price will stay unchanged through the end of the year.

These assurances, plus acceleration of industrial production in recent
months and robust growth in the service sector give reason to expect that
GDP growth will be considerably higher than originally expected.

Although the official forecast has not yet been upgraded, acting Prime
Minister of Ukraine expects acceleration of GDP growth to 7% yoy over the
first nine months of the year.

However, considering the vulnerability of Ukraine’s real sector to external
conditions (particularly, evolution of world steel prices and cost of
imported energy resources), the anticipated slower growth of real household
income in the second half of the year and a more moderate harvest than last
year, we expect GDP to grow by a real 5-6% yoy in 2006.

                                      FISCAL POLICY
Acceleration of economic growth in May-June allowed the government to
collect revenues to the general fund of the central budget in an amount that
exceeded January-June’s target by 2.2%.

In particular, tax revenues were over-fulfilled by 1.5% over the period,
primarily thanks to VAT proceeds that were almost 14.1% above the target.
Unlike previous months, receipts from the enterprise profit tax (EPT) were
19.3% yoy above the target in June.

Higher EPT collections can be attributed to faster economic growth in recent
months, which positively affected enterprises’ profitability. Indeed,
according to SSC data, profits before taxes of Ukrainian enterprises were up
by 11.5% yoy in May, while the share of profitable enterprises increased to
61.8% for January-May (up from 60.2% in January-April).

However, due to poor enterprise performance over the first months of the
year, EPT revenues were 13.3% below target for January-June. High growth of
household income also contributed to 23.2% yoy growth of consolidated budget
revenues over January-June, which constituted UAH 72.1 billion ($14.3
billion).

The growth of consolidated budget expenditures continued to slow (28.7% yoy
over January-June compared to 36% yoy for January-April) but considerably
outpaced that of revenues. As a result, the consolidated budget reported a
deficit of UAH 1 billion for the first half of the year, which translates
into 0.5% of GDP.

The deficit was financed by the remainder of the funds received from last
year’s privatization of Kryvorizhstal, as privatization receipts were rather
modest for the period and new borrowings were considerably lower than
interest and principal public debt payments. For the first half of 2006,
receipts from privatization amounted to just UAH 162 million, or 7.6% of the
targeted amount.

External public debt has declined by 5.3% since the beginning of the year,
while in the absence of new issuance of domestic debt instruments in the
first half of the year, domestic public debt has declined by almost 6% since
the beginning of the year. As a result, total public debt declined by 5.5%
year-to-date to $14.6 billion.

                                    MONETARY POLICY
Consumer price inflation continued to decelerate in June despite growing
inflationary pressure from rising service tariffs. Following a 25% increase
in gas and electricity tariffs in May, the government raised the cost of
public railway transportation by 26.6% in June, contributing to 1.1%
month-over-month (mom) growth of service prices in June.

Rising international prices on crude oil over June and Russia’s increase of
the crude oil export duty to almost $200/ton (up by 7.2%) starting June 1st
resulted in a 2.9% mom increase in gasoline prices, driving the non-food
price index up by 0.3% mom.

Overproduction of some food products (e.g., meat, milk and dairy products,
eggs) on the back of the unresolved trade relationship with Russia resulted
in a 0.3% mom reduction of food prices in June. Since food has the most
weight in the consumer basket (almost 65%), consumer prices reported just a
0.1% mom increase in June.

Annual growth of consumer prices made up 6.8% yoy in June, decelerating from
7.3% yoy a month before. Benefiting from monthly deflation over the four
consecutive months and a high base effect, the growth of food prices slid to
5.1% yoy, down from 5.9% yoy in May and 11.4% yoy in February.

Non-food prices sped up to 2.8% yoy in June, while the service price index
slightly decelerated from 17.8% yoy in May to 17.6% yoy.

Despite deceleration, attributable to a high base effect, the growth of
service tariffs was among the highest for the last five years and is
expected to accelerate substantially in July. Starting July 1st, the
government increased gas prices for households by 85% while tariffs on
communication services were raised as of mid-July.

Further upward adjustments of service tariffs in the second half of the year
will be the main reason for acceleration of inflation. Thus, despite
moderate inflation in the first half of the year, the government forecast
for year-end inflation was left unchanged at 11.4% yoy.

Consumer price development in June was also favored by decelerating growth
of monetary aggregates. The growth of money supply (M3) slowed to 37% yoy,
down from 40.2% yoy in May, reflecting slower growth of deposits and
monetary base. In particular, deposits decelerated from 46% yoy in May to
42.2% yoy in June.

Deceleration of the growth of deposits should be attributed to the declining
deposit rate and expected acceleration of inflation in the near future,
which make deposits a less attractive form of money holding. The growth of
the monetary base slid to 22.4% yoy in June, down from almost 24% yoy a
month before, which is explained by a high base effect.

In monthly terms, the monetary base grew by 4.5% due to larger buyouts of
foreign currency by the central bank on the interbank forex market and the
decline of government deposits with the central bank by 16.1% mom.

Throughout 2006, the National Bank of Ukraine (NBU) continued to pursue the
policy of a de facto fixed exchange rate. The official exchange rate has
remained stable at 5.05 UAH/$ since April 2005. Following weaker demand on
cash foreign exchange and improving export performance, net foreign exchange
interventions by the NBU were positive and made up $247 million.

However, due to scheduled foreign debt payments, $/euro rate fluctuations
and gold price differentials, gross international reserves declined slightly
by $73 million to $17.6 billion, which translates into 4 months of future
imports.

In June, the banking system continued to improve liquidity as demand for the
NBU’s refinancing credits dropped to UAH 760 million (down from UAH 1.3
billion in May and UAH 3.5 billion in April) and the money market interest
rate continued to decline. This allowed commercial banks to further expand
their credit operations.

In June, commercial bank loans increased by 5.3% mom, bringing year-to-date
growth to 25.4%, the record high level for the last four years. However, the
cost of bank lending slightly increased by 10 basis points to 13.8% per
annum (pa), while the average deposit rate continued to decline to 6.3% pa,
down from 6.7% pa a month before.

                     INTERNATIONAL TRADE AND CAPITAL

In May, Ukraine’s export performance continued to improve. Increasing for
the first time since fall 2005, merchandise exports reported 11.4% yoy
growth. Favorable export dynamics were achieved thanks to stronger external
demand for Ukraine’s machinery, equipment and vehicles and acceleration of
world metal price growth.

In particular, the export of ferrous metals, which still comprise the
largest share in total exports (34.1%), increased by 1.3% yoy in May (for
the first time since mid-2005.)

As a result, exports of metallurgical products reported a 4.6% yoy decline
over January-May, which is a considerable improvement compared to the 7.4%
yoy decline in January-April. Exports of machinery and transport vehicles
continued to expand at a strong 14.6% yoy over January-May.

The increase in the share of high value-added products in total exports
(export of machine-building and transport equipment account for 13.3% in
total exports, up from 11.5% yoy for the respective period last year)
indicates a positive trend towards export diversification.

At the same time, the growth of imports considerably outpaced that of
exports. In May alone, merchandise imports went up 30% yoy, bringing the
cumulative growth to 24.4% yoy. The high growth of commodity imports was
primarily driven by more expensive energy resources.

Accounting for more than one-third of total merchandise imports, the import
of fossil fuels grew by 17.6% yoy over January-May, reflecting higher export
duties on crude oil raised by the Russian Federation in April.

Strong consumer and investment demand supported by high growth of population
income and extensive commercial bank lending activities contributed to
acceleration of imports as well.

In particular, imports of machinery and transportation equipment, accounting
for about 27% of total merchandise imports, grew by more than 40% yoy in
January-May 2006, up from 38.8% yoy in January-April.

Despite improving export performance, Ukraine’s merchandise trade balance
continued to deteriorate. Over the first five months of the year, the
foreign trade deficit increased to $2.6 billion. The widening foreign trade
deficit was the primary reason for the negative current account balance in
the first half of the year.

According to preliminary NBU estimates, the current account (CA) deficit
accounted for $0.9 billion over the period, which translates into 2.1% of
period GDP. At the same time, this data suggests substantial narrowing of
the CA deficit in the second quarter of the year on the back of resumed
export growth in May-June.

Because of better-than-expected export performance in the first half of the
year, we upgraded our estimates of the CA deficit for 2006 to $2 billion, or
2.1% of expected GDP, which will be securely covered by the financial
account surplus.

                           INTERNATIONAL PROGRAMS

A regular IMF mission visited Kyiv in late July to assess current economic
challenges in the country. The mission acknowledged acceleration of economic
growth in recent months despite continuing political uncertainties, the
lower pace of inflation and the controllable fiscal deficit, and improved
its forecast for Ukraine’s real GDP growth to 5% yoy in 2006 (up from 2.3%
yoy.)

However, IMF representatives indicated a number of risks, in particular
those related to the further rise in the cost of energy resources and
deteriorating external conditions, which may worsen the outlook for the
Ukrainian economy in the short-term.

To secure macroeconomic stability and good performance, the mission
recommended the following actions:

   (1)   adjust service tariffs to the rising cost of energy sources, which 
   will stimulate more effective budget and energy utilization;
   (2)   take measures to secure the 2006 fiscal deficit not exceeding the
   targeted 2.5% of GDP and reduce the 2007 deficit to 2% of GDP;
   (3)   gradually liberalize the exchange rate regime and strengthen
   commercial bank regulation and supervision;
   (4)   speed up structural reforms, including adoption of legislation needed
   for WTO membership, the law on joint stock companies, repeal the

   moratorium on acquisition of agricultural land, and resume the privatization
   process.

Since there is no active lending program, cooperation between Ukraine and
the IMF is limited to technical assistance. Moreover, the government intends
to reform its relationships with other international financial institutions
(IFIs) as it became evident from the Cooperation Strategy with IFIs for
2006-2008, approved by the Cabinet of Ministers in late June this year.

In particular, the strategy envisages a gradual shift from projects
supporting state budget and reform programs to investment projects that
would enhance development of infrastructure and free-market instruments
necessary to improve economic management of the country and increase
competitiveness of Ukrainian goods and services.

By adopting the strategy, the government hopes to seize available investment
potential of IFIs, rather modestly realized so far in Ukraine. This suggests
more intense cooperation with the World Bank (WB), the European Bank for
Reconstruction and Development (EBRD), a number of international investment
banks and other IFIs.

As a part of the above-mentioned strategy, Ukraine and the World Bank signed
a $150 million loan agreement to support better access to financial services
in Ukraine, especially small and medium enterprises in rural areas.

Moreover, in late July the WB’s Board of Executive Directors approved a
$154.5 million loan for the Second Export Development Project (EDP-2) to
support export and real sector growth in Ukraine, by providing medium and
long-term working capital and investment finance to Ukrainian enterprises.

The project also aims to further improve the ability of the Ukrainian
banking sector to provide financial resources to enterprises (through
additional development of financial intermediation by providing a wider
variety of better quality lending products.)

      OTHER DEVELOPMENTS AND REFORMS AFFECTING

                             THE INVESTMENT CLIMATE
On August 3rd, Ukrainian President Viktor Yushchenko nominated Viktor
Yanukovych as Prime Minister (PM). Mr. Yanukovych was PM of Ukraine from
November 2002 to January 2005 and was the rival of Mr. Yushchenko during the
presidential elections in the fall 2004.

During March 2006’s parliamentary elections, the Party of Regions, led by
Mr. Yanukovych, obtained 186 seats in the Parliament (or 41.3%), however
“supporters of the Orange Revolution” (Yulia Tymoshenko’s Block, Our Ukraine
and the Socialist Party) together obtained 242 seats (or 53.8%), which was
enough to form a ruling coalition.

Indeed, such a coalition was announced in late-June; however, lack of
agreement between the participants resulted in the Socialist Party’s
withdrawal on July 6th and formation of the new coalition involving the
Party of the Regions, the Socialist Party and the Communist Party. The new
coalition nominated the head of the Party of the Regions, Mr. Yanukovych, as
its candidate for Prime Minister.

The President took a constitutionally-permitted 15-day pause to decide
whether to nominate Yanukovych as Prime Minister or dissolve the Parliament.
On July 27th, in an attempt to solve the current political crisis, the
Ukrainian President called for a round table, involving the leaders of key
political forces and public figures, and proposed signing a declaration of
national unity.

Following tough consultations and a number of compromises regarding the
issues of NATO membership, federalization, and language policy, the
declaration was signed and President Yushchenko nominated Mr. Yanukovych

as PM. The next day, he was approved by the Verkhovna Rada with 271 votes.

In addition, Parliament swore in Constitutional Court judges that allowed
the Court to resume operation, stalled since late last year due to the lack
of a quorum.

Late in the evening, Parliament approved the new Cabinet of Ministers as
well. The majority of ministerial posts were given to the Party of the
Regions, including the ministries of economy, finance and energy, while
three ministries (of foreign and internal affairs and of defense) remain
nominees of the President.

The formation of the new government ends four months of political
uncertainty in the country. Ukraine can now expect smoother relationships
with Russia, especially regarding gas price negotiations, and further
progress towards WTO and EU membership.              -30-

————————————————————————————————-
NOTE: To read the entire SigmaBleyzer/The Bleyzer Foundation Ukraine
Macroeconomic Situation report for July 2006 and previous monthly
reports in a PDF format, including several color charts and graphics click
on the following link: http://www.sigmableyzer.com/en/page/532.
———————————————————————————————–
FOR FURTHER INFORMATION CONTACT: Olga Pogarska, Economist,
The Bleyzer Foundation, Kyiv, Ukraine. OPogarskia@SigmaBleyzer.com.ua
or Morgan Williams, Director, Government Affairs, Washington Office,
SigmaBleyzer, Washington, D.C., MWilliams@SigmaBleyzer.com.
http://www.SigmaBleyzer.com, http://www.BleyzerFoundation.com.
————————————————————————————————-
NOTE:  SigmaBleyzer/The Bleyzer Foundation also publishes monthly
Macroeconomic Situation Reports for Bulgaria and Romania. They are
 published at http://www.sigmableyzer.com/en/page/532.
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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2.       UKRAINE’S NEW GOVERNMENT TO RESTORE FREE
   ECONOMIC ZONES SAYS DEPUTY PRIME MINISTER AZAROV

Associated Press, Kiev, Ukraine, Monday, August 7, 2006

KIEV – Ukraine’s new government plans to reinstate tax privileges for
certain regions and will consider increasing import customs, the first
deputy prime minister said in an interview published Monday.

Both moves would be likely to benefit Ukraine’s industrial sector, whose
leaders are the dominant force behind new Prime Minister Viktor Yanukovych’s
Party of Regions, and could help boost the country’s economy.

The new government was settling into place Monday after being approved by
parliament last week. It brings back many of the people who saw their
careers upended when the 2004 Orange Revolution protests against election
fraud helped bring a group of pro-Western reformers to power.

President Viktor Yushchenko agreed to approve the nomination of his former
Orange Revolution rival, Yanukovych, after the latter publicly committed to
uphold the democratic principles and pro-Western path adopted by the
president.

First Deputy Prime Minister Mykola Azarov laid out his top priorities in an
interview posted Monday on Party of Regions’ Web site.

He said that three or four of Ukraine’s so-called free economic zones will
be restored. He didn’t specify where, saying it would depend on where “big
investment is truly located.”

The zones, which offer investors tax breaks and other incentives, were
canceled in 2005 by former Prime Minister Yulia Tymoshenko, who said they
allowed Ukraine’s oligarchs to bleed money from the state.

The cancellation sparked an outcry not only in Ukraine but also among
foreign investors, particularly Polish firms. Yushchenko, who later fired
Tymoshenko, called the cancellation a mistake.

“When I hear speculations that we’ll cause a huge hole in the state budget
and missed revenues will be in the tens of billions, I want to say in
answer: compared to other world economic zones, we are offering very few
advantages, a thousand or hundreds of thousands time less than what you see
in, say, China,” Azarov said.

He added that the government would explore how it could compensate investors
who suffered unexpected losses when the zones were canceled.

Azarov also said that the new government would take another look at the low
import customs on light industrial products and textiles, saying that
Ukraine had until 2009 to lower the rates under agreements reached toward
joining the World Trade Organization.

“However, the Cabinet of Ministers lowered customs already in 2005,” Azarov
said. “Importers were allowed to become rich at the expense of the state
treasury.”

The new government also said it would work to cut value-added tax and profit
tax rates in 2008. Azarov said the country would look into the financial
health of the state’s gas company, Naftogaz, to determine what was happening
with Ukraine’s own gas resources, which he said should be enough to supply
the domestic sector.

But as for revising this year’s controversial gas deal with Russia, and
possibly removing the middleman RosUkrEnergo, Azarov said that wasn’t atop
his agenda.

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3.          UKRAINE’S NEW LEADERS PROMISE TAX CUTS
 
By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, Tuesday, August 8 2006

Ukraine’s new government will cut taxes and provide other relief to business
in an effort to fuel economic growth, the finance minister vowed yesterday.

Mykola Azarov, who was also named first deputy prime minister in the
government of Viktor Yanukovich, said he planned to cut corporate taxes from
25 to 20 per cent and value added tax from 20 to 18 per cent. The cuts were
likely to be implemented in 2008 as part of broader tax reform.

“I think that 2008 will be the year of real tax reductions,” Mr Azarov said
in a statement released yesterday on the website of Mr Yanukovich’s Regions
party. “These reforms will take three to four years. After this, the economy
and business can expect a period of tax stability.”

Mr Azarov said the government would also seek to aid Ukraine’s
export-oriented economy by devaluing the currency, although he did not
specify by how much. The hryvnia is pegged to the US dollar at a rate of 5
to 1.

Devaluation is expected to benefit Ukraine’s vast steel industry, which in
recent years has been ranked the world’s seventh biggest and has been the
target of international investors such as Mittal Steel, which last year
acquired the country’s largest mill.

Steel exports have been the largest source of foreign currency in recent
years. Some steel barons, including the multi-billionaire Rinat Akhmetov,
are prominent supporters of the Regions party.

Mr Azarov, who served as first deputy prime minister in Mr Yanukovich’s
cabinet before the Orange Revolution of 2004, said he hoped that in the next
18 months Ukraine would achieve annual gross domestic product growth of “10
to 15 per cent minimum”.

Ukraine posted GDP growth of about 12 per cent in 2004, the year Mr
Yanukovich lost the presidential election to Viktor Yushchenko.

Annual GDP growth dropped sharply to about3 per cent last year because of
declining world steel prices and other factors but has picked up once again
since, finishing at 6 per cent for the first half of this year.

Mr Azarov said the government intended to review sharp and unpopular tariff
rises on electricity, natural gas and the railways introduced this year.

Separately, Yuriy Lutsenko, previously a fierce opponent of Mr Yanukovich,
has agreed to remain as interior minister. Mr Lutsenko, who was instrumental
in rallying support for Mr Yushchenko during the Orange Revolution, had
pledged never to serve in a government headed by Mr Yanukovich, claiming
that his investigators had evidence of a cover-up involving criminal
wrongdoing in Soviet days.

Prosecutors have refused to investigate the case, citing lack of evidence.

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http://www.ft.com/cms/s/3827410a-267a-11db-afa1-0000779e2340.html
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4.  UKRAINIAN MOBILE MARKET CONTINUES TO BOOM 
PRIME-TASS, Moscow, Russia, Tuesday, August 8, 2006

MOSCOW – Ukraine’s mobile market continued to boom in the first half of

this year, though the mobile subscriber base is unlikely to double as it did in
2005, analysts said. Mobile operators are trying to attract customers who
spend less, as well as people who want to use several SIM cards.

Ukraine’s market may reach 100% SIM-card penetration in 2007 as a result but
the ARPU is likely to fall. The boom is coming to and end, analysts said.

The Ukrainian mobile market, which is one year behind the Russian market in
terms of penetration, saw a boom in 2005, when penetration more than
doubled, jumping to 63.8% as of December 31, 2005 from 29% as of December
31, 2004, according to Advanced Communications & Media (AC&M).

Ukrainian mobile operators’ total subscriber base stood at 36.036 million
users as of June 30, or 75.7% penetration, and is expected by the end of
this year to increase to 39.5 million users, or a penetration of about 83%,
AC&M projected.

“The real subscriber base is likely even to exceed our (year-end) forecast,”
said Yelena Sayapina, analyst at AC&M. “Ukrainian mobile operators have
consistently signed up about 1 million users per month (this year). But the
reason for growth deceleration is clear – penetration has already reached
75%.

At this level, there should no longer be a booming market,” Sayapina said,
adding that fewer people in Ukraine could afford to buy mobile phones since
average income is lower than in Russia.

Alexei Danilin, analyst at iKS-Consulting’s Ukrainian branch, has a slightly
higher year-end penetration forecast of 85%, attributing it to the fact that
“in the third and fourth quarters mobile operators historically sign up more
users (compared with the first two quarters).”

Russia’s mobile penetration was comparable to Ukraine’s penetration in
September 2005, when it stood at 77%, according to AC&M.

All penetration figures are provided based on the number of valid SIM cards.
However, if in Russia the actual number of mobile service subscribers is
considerably different from the SIM card-penetration, Ukrainian mobile
operators seem to be more honest in reporting their subscriber bases,
analysts said.

“In Russia the difference (between SIM card-based penetration and the actual
number of users) is 20 to 25 percentage points, while in Ukraine it is
considerably lower – we can say that it is about 10 percentage points,”
Sayapina of AC&M said.

According to a market survey, real mobile penetration in Ukraine stood at
49% in May, Danilin of iKS-Consulting said, noting that it was not clear
whether the survey was representative.

“New subscribers are in most cases people who generate low revenues (to
mobile operators). Operators started to meet their demands by offering lower
tariffs for mobile services,” Danilin said.

Mobile operators are now likely to attract users from their rivals and the
penetration in Ukraine is likely to hit 100% in late 2007, but the figure
will be reached mostly due to the increasing number of people who use
multiple SIM cards, Danilin said, adding that old people and babies won’t
have cell phones in any case.

Per capita income in Ukraine stood at about U.S. $113 in May, compared with
about $373 in Russia in June, according to official statistics.

Any increase in the number of mobile service subscribers dilutes operators’
ARPUs. The average ARPU of Ukrainian operators fell 27% on the year and
19.8% on the quarter to U.S. $7.3 in January-March, according to
iKS-Consulting.

Danilin of iKS-Consulting attributed the decline partly to the low ARPUs of
the country’s third and fourth largest operators, Astelit and Ukrainian
Radiosystems (URS), which together control about 13% of the market.
“Astelit’s ARPU was less than $2, while URS had an ARPU of less than $3 in
January-March,” Danilin said.

The low ARPU of Astelit can be explained by its churn policy, while URS has
to offer lower tariffs in order to meet its aggressive market share target.

“Astelit set its churn rate at 13 months and has not announced any changes
to its policy yet,” Sayapina of AC&M said. For comparison, URS has a churn
rate of three months.

For many years Ukrainian operators’ ARPUs have been relatively stable, as
“there have been no price wars,” Sayapina said.

Until January 2005, Kyivstar and UMC dominated the market while Astelit and
URS started aggressive expansion in January 2005 and April, respectively.

“ARPUs are going to fall further due to VimpelCom, which is likely to be
aggressive on the market,” Sayapina added.

VimpelCom purchased URS, which had less than 1% of the market, in November
and announced its plans to grab about 10% of the market within three years.

“While entering the market VimpelCom introduced several new approaches. [1]
First, it offered low tariffs for calls made within a region. [2] Second, it
offered roaming service to mobile subscribers of Golden Telecom. And [3]
third, when entering the market VimpelCom, as well as some operators before,
did not charge calls made within its network,” Danilin of iKS-Consulting
said.

Golden Telecom has about 50,000 mobile users, mostly generating high
revenues, and operates in the capital, Kiev, and in Odessa.
Analysts at research agency Sotovik project competition on the Ukrainian
market to heat up in the third and fourth quarters. “URS will try to win as
large a market share as possible.

VimpelCom has already proven the efficiency of its marketing policy in
Russian regions – in 2006 we should expect direct price pressure from URS,”
Sotovik said in its research, adding that Kyivstar and UMC had “room to
decrease their average per minute prices.”

Competition on the mobile market is already tough, but there are no price
wars, Danilin of iKS-Consulting said. “All mobile operators spend a lot on
advertising. And VimpelCom has also been successful in this field, as its
Beeline brand (introduced in Ukraine in April) is already widely known in
Ukraine,” Danilin added.

Though ARPUs are falling, mobile operators continue to post soaring
revenues. According to iKS-Consulting’s estimates, Ukrainian mobile
operators’ total revenue soared 56% on the year in January-March to $688
million, as calculated under U.S. GAAP.

Though Astelit and URS have managed to win 13% of subscribers, their revenue
share remains still almost unnoticeable, as Kyivstar and UMC had 97% of
total mobile revenues (51% and 46% respectively).

Particularly noteworthy was that 40% of Astelit’s revenue in January-March
was generated by its subsidiary DCC, which operates in an outdated DAMPS
standard, Danilin of iKS-Consulting said.                   -30-

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5. UKRAINE BUYS $201M WORTH OF NUCLEAR FUEL FROM RUSSIA

MosNews, Moscow, Russia, Thursday, August 3, 2006

MOSCOW – Ukraine’s national atomic energy generating company
Energoatom has transferred $201 million to Russia’s TVEL for fresh
nuclear fuel it received from the beginning of 2006.

“Fresh nuclear fuel is supplied, and spent fuel taken away according to the
schedule,” Ukraine Fuel and Energy Minister Ivan Plachkov was quoted
by RIA Novosti as saying at a parliamentary session on Thursday.

Fuel has been delivered to nine of the 15 power generation units of the
Ukrainian nuclear power plants. Earlier TVEL was reported to sign a deal for
nuclear fuel delivery to all 15 of Ukraine’s nuclear power plants in 2006.

TVEL is one of the world’s biggest producers and suppliers of nuclear fuel
for energy and research reactors in Russia and abroad. The corporation
consists of 15 enterprises of the nuclear fuel cycle and auxiliary
infrastructure. TVEL keeps 17 percent of the world’s nuclear power station
reactors in operation.                        -30-
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LINK: http://www.mosnews.com/news/2006/08/03/ukrpays.shtml
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================      
6. EASTERN EUROPEAN NUCLEAR REACTORS IN BULGARIA
                     AND UKRAINE GET  NEW LEASE OF LIFE
         Building on its Bulgarian success, Invensys Nuclear has just won a
          major contract from DICS Intertrade to supply four Tricon safety
       controllers to the Rovno nuclear power plant at Kuznetsovsk in Ukraine.

EngineerLive website, Thursday, August 3, 2006

Many countries in Eastern Europe, especially those that were part of the
USSR, still rely on Russian-designed nuclear reactors for much of their
electricity output. Bulgaria, for example, has four such reactors that
generate nearly half of its electricity requirements.

The country’s interest in nuclear power generation began in the mid 1950s
with the construction of a research reactor. Then in 1966 Bulgaria signed an
agreement with the USSR for commercial units, some of which still form the
basis of its electricity supply programme today.

According to the Uranium Information Centre (UIC), the first pair of
pressurised water reactors (PWRs) were installed at the Kozloduy plant,
close to the River Danube border with Romania, shortly after this deal was
signed. These were WER440/230 models.

A second pair, also WER440s but incorporating the much-improved safety
features of the 213 model, were then installed. A third pair of much larger
WER1000/320 units were added to the site later.

Between 1991 and 1997 a great number of safety improvements were carried out
at Kozloduy in consultation with the International Atomic Energy Agency
(IAEA), the EU and the World Association of Nuclear Operators (WANO).

This short-term project cost E129m and was designed to bring standards
closer to international norms. From 1998-2002 further modifications were
carried out in line with IAEA safety criteria at a cost of E120m/y.

The UIC says that the promise of EU accession accompanied by the offer of
E200m from the EC led to Kozloduy reactors one and two being closed at the
end of 2002. Units three and four were originally to close in 2006.

However, as these have achieved levels of safety comparable with reactors of
a similar age in Western Europe, the Bulgarian parliament ruled that they
should stay open for the time being.

Since then, an IAEA mission has reported favourably on the units and a
two-week scrutiny by 18 international inspectors from the WANO found that
the units met all necessary international standards for safe operation. The
Bulgarian government is now aiming to renegotiate the agreed 2006 shutdown
and gain a reprieve until the licences expire in 2011 and 2013, giving a
30-year operating life.

An upgrade and modernisation programme for units five and six is ongoing,
but the UIC says there is no great concern about the safety of these units,
which conform well to international standards.
                            PWR CONTROL UPGRADE
All PWR reactors work in a similar fashion. First, water is highly
pressurised to prevent it boiling. Within the primary loop, it is then
pumped through the nuclear core where it is heated and passed though
thousands of tubes within two or more steam generators.

There the heat of the water is conducted across the tubes to a secondary
supply of water at lower pressure, which boils to make steam. This steam
spins the turbine, driving the electric generator and so producing
electricity.

Similar to fossil fired boilers, a system of turbine exhaust condensers, air
ejectors, heaters and pumps recover the condensed steam and return it to the
steam generator. An automatic control system ensures that the correct amount
of feedwater is returned, balancing the exiting steam flow and maintaining a
constant inventory of water within the reactor vessel.

It is this feedwater control system that is at the heart of a successful
control project which Triconex, part of Invensys, has just completed
successfully at Kozloduy.

Each of the Russian designed WER440 PWRs has six primary coolant loops
providing multiple paths for cooling the reactor. This design allows plant
personnel to isolate one or more of these loops for maintenance without the
need for a complete plant shutdown.

However, while providing a degree of fault tolerance, such flexibility
demands a complex control regime. Feed water control in particular is
critical. If the water level, or inventory, decreases significantly, reactor
cooling is jeopardised. If the level increases too much, water passes
through the steam header causing damage to the reactor’s turbines.

In other words, there is no acceptable failure mode. Any control solution
has to offer high and proven levels of reliability, availability and fault
tolerance.

“One of the means of achieving this involved developing and installing
protection systems for cold over pressurisation of the reactor vessel,”
explained Vladimir Urutchev, chief engineer at Kozloduy. “We eventually
selected the Tricon9 platform from Triconex because it has a very good
architecture and met our price requirements,” he added.

Although Tricons are used in thousands of critical applications worldwide,
this is the first time the technology has been involved with nuclear feed
water control.

Control at Kozloduy now involves a classic three-element system configured
for feed forward-feedback performance to control feed water flow. Dual and
triple redundant sensors and transmitters are installed to improve
reliability, matching fault tolerance in the field components.

“Operation of the steam generators within the prescribed limits is important
for plant operation, so the triple modular redundancy of Tricon9 and the 1E
certified basic software and hardware very much suited the importance of
this mission critical process control,” added Urutchev.

The new system dynamically balances steam generator inventory against steam
flow to the main turbine, feed water flow and level. Tricon pressure and
temperature control compensates for all three elements and uses an adaptive
gain control algorithm to maintain water level during steady state and
transient operation.

This control algorithm models the static and dynamic components of the
process. During low power operations such as start-up and shutdown, when
flow measurement is inaccurate and unreliable, the program uses diverse
measurements to estimate flow. Three-element control is used over the full
range of power operation, from 0-100percent and back.

In addition, the development of a plant model and simulation computer during
the course of the project allowed installation and start-up of the steam
generator water level control system without the need for post start-up
tuning.

The project also includes Wonderware InTouch-based operator interfaces. So
to review plant status, an operator simply uses the touch sensitive screen
to select and view grouped parameters. Meanwhile, multiple security levels
prevent unauthorised access to program code and/or stored data.

Triconex’s contract, which was won with the help of DICS Intertrade Limited,
also included all equipment such as transmitters, valves and wiring,
together with programming, simulation testing and project implementation
services.

So far the system has operated flawlessly and Triconex is confident that it
will win future business at the Kozloduy plant. “We are now considering
using Tricon systems in other safety-related aspects such as reactor
control, reactor protection systems, turbo generation control and total unit
control,” confirmed Urutchev.
                                    UPDATE IN UKRAINE
Building on its Bulgarian success, Invensys Nuclear has just won a major
contract from DICS Intertrade to supply four Tricon safety controllers to
the Rovno nuclear power plant at Kuznetsovsk in Ukraine.

Rovno also operates a Russian-designed WER440 PWR, which along with
14 other similar reactors provides over half of Ukraine’s electricity
output.

This contract covers the installation of a Tricon-based cold overpressure
protection system (COPS) on each of the two 400MW reactor units at Rovno.
Such protection is vital to the safe operation of PWRs, which are vulnerable
to vessel damage when below normal operating temperatures.

A COPS compares pressure and temperature inputs against a preset setpoint
curve and relieves the pressure when this setpoint is reached by opening
power-operated relief valves (PORVs). This relief is important because at
the low temperatures experienced during plant start-up and shutdown the
reactor vessel is at risk from brittle fractures.

Each of the Rovno units has two PORVs that are capable of working
independently and each will be linked to a dedicated, electrically isolated
and geographically separated Tricon controller. The four Tricons will
monitor three temperature detectors in each of six coolant loops and three
primary system pressure transmitters, opening redundant PORVs to prevent
pressure limits being exceeded.

Compared with other solutions, Invensys Nuclear says that Tricon-based
COPS applications offer great reliability, ease of online maintenance,
inherent self-test diagnostics and enhanced operator awareness.

According to the company, the accurate balance provided by Tricon technology
at Rovno will increase the coefficient of demand on the system, its
reliability and therefore its overall availability.
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http://www.engineerlive.com/power-engineer/nuclear-power/14431/eastern-european-nuclear-reactors-get-new-lease-of-life.thtml

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7. CASPIAN ENERGY EXPORTS AND THE BLACK SEA CORRIDOR
       Keynote speaker Romanian President Basescu spoke on “Romanian:
                           An Energy Gateway to Western Europe”

The Jamestown Foundation, Washington, D.C., Thursday, August 3, 2006

WASHINGTON, DC – On July 28, more than 250 people attended a conference
hosted by The Jamestown Foundation entitled “Caspian Energy Exports and the
Black Sea Corridor” at the Willard Hotel in Washington, DC.

The keynote speaker of the conference was President Traian Basescu of
Romania, who also gave a speech entitled, “Romania: An Energy Gateway to
Western Europe,” detailing Romania’s important role in becoming an energy
bridgehead for Caspian energy resources.

The topic was of utmost importance considering how energy supplies to
Western Europe were halted this past winter.

In part, he emphasized the growing importance of establishing alternative
shipping routes for crude oil and gas through the Caspian and Black Sea
regions given Gazprom’s recent heavy-handed treatment of energy supplies to
its neighbors both in Western Europe and in the Caucasus.

A full transcript of President Basescu’s speech can be acquired at the
following URL:
http://www.jamestown.org/docs/BasescuSpeech.pdf

This conference can be seen as a culmination of events focusing on The
Jamestown Foundation’s contributions to the discussions concerning Europe’s
growing energy dependency on Russia and the implications it has for European
energy security. In February 2006, Jamestown sponsored another conference
focusing on the Russia-Ukraine gas crisis.

The recent Jamestown conference was spearheaded by Jamestown Senior

Fellow Vladimir Socor. One of the foremost experts on energy affairs in the
Baltics, Belarus-Ukraine-Moldova, the South Caucasus, and the Caspian, Mr.
Socor has published a multitude of articles related to Eurasian energy
security.

A compilation of articles that Mr. Socor has written for Jamestown’s Eurasia
Daily Monitor, entitled “The Current Status of Petroleum Politics in the
Caspian Region,” can be found here:
http://www.jamestown.org/docs/Socor-CaspianGasArticles.pdf

Other participants in the conference included: Ambassador Steven Mann, the
Principal Deputy Assistant Secretary for South and Central Asian Affairs at
the U.S. Department of State; Lana Ekimoff, the Director of Russian and
Eurasian Affairs at the U.S. Department of Energy; Richard Ennis, the
Managing Director and Head of Natural Resources of ING Capital LLC; and
Edward C. Chow, an international energy consultant.

Founded in 1984, The Jamestown Foundation is an independent, non-partisan
research institution dedicated to providing timely information concerning
critical political and strategic developments in China, Russia, Eurasia and
the Greater Middle East.

Jamestown produces five periodic publications: Eurasia Daily Monitor,
Terrorism Monitor, Terrorism Focus, Chechnya Weekly and China Brief.
Jamestown research and analysis is available to the public free-of-charge
via Jamestown’s website, www.jamestown.org.
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8.      EBA FINDS BARRIERS TO INVESTMENT IN UKRAINE

Ukrainian Times newspaper, Kyiv, Ukraine, Monday, August 7, 2006

KYIV – The report ‘Barriers to Investment in Ukraine’ prepared by the
European Business Association (EBA) has been submitted to the Ministry
of Economy for consideration in late July.

Its purpose is to analyze major factors holding back the influx of foreign
capital into Ukraine and propose ways of overcoming barriers to investment.

Also, special attention is paid to the problem of wear and tear of
production capacities. According to observers, 60% of the capacities are
outdated.

It was pointed out at the press conference that one of the barriers to
investment was that it would take between two and three years to seek out a
plot of land and clear it legally with the authorities.

At the same time, Ukrainian legislation is unstable as 70% of businesspeople
are happy if laws are not amended for at least one year. “The legal system
requires not so much stability as predictability,” EBA Vice-President Jorge
Intriago told the press.

Participants in the press conference conceded that Ukraine was totally
lacking in an industrial estate brought up to the European standard,
compared with 93 industrial zones in the Czech Republic.

Moreover, Mr. Intriago said foreign investors felt betrayed when the former
Yulia Timoshenko government closed special economic zones.

Currently, however, if you believe deputy economy minister Liudmyla Musina,
the government rake their brains over the problem how to attract investments
together with high technologies.

She also noted that the political situation in Ukraine does not threaten the
influx of foreign investments because a relevant legal basis has been formed
already.

Data from the State Committee for Statistics shows that total foreign direct
investment volume increased by $922.5 million to $17,339.2 million in the
first quarter of this year.

The EBA is a non-profit organization bringing together about 550 European,
international and Ukrainian companies working in this country.    -30-
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9. TOURIST INDUSTRY: BRIGHT FUTURE, GLOOMY PRESENT
                  Ukraine only starts to develop its tourist industry

ANALYSIS & COMMENTARY: By Roman Bryl
IntelliNews – Ukraine This Week, Kyiv, Ukraine, Mon, July 3, 2006

According to various estimates made by government and independent
agencies the country can obtain up to USD 10bn annually from tourism

Kyiv can host up to 2-2.5mn tourists per annum and earn
USD 1.5bn. However, these figures are based on earnings of other
countries that have similar climate, geographical location and significant
cultural heritage.

At present, the country should invest billions of dollars to be able to have
such earnings. The industry is still undeveloped, but we can see some
changes that aim to improve the country’s attractiveness for tourists.
                                  Ukraine lacks modern hotels
There are at least two issues that hamper the successful development of
domestic tourist industry.
[1] The first is the lack of sufficient infrastructure (not enough hotels,
high quality highways, limited airport capacity, etc).
[2] The second issue is low level of services for tourists.

If we examine these 2 issues in detail we should say that the country lacks
premium-class hotels with large conference halls. Such hotels normally host
VIP foreign guests that come to the country for a certain international
event. The demand on such hotel was very strong last year, when the country
hosted Eurovision song contest.
                  Only 10 new hotels to be built in Kyiv this year
Local and foreign companies saw the demand for modern hotels started
investing in their construction. According to official plan of development
of Kyiv 40 new hotels with capacity of 4,300 rooms should be built by 2010.
But only 5 of them will correspond to 4-5 star level. To inform you in 2005
eleven small hotels were built with capacity 200 rooms each. Radisson SAS
Kyiv with 255 rooms was the largest project among them. This year another 10
hotels will be constructed in the capital.

It is expected that in 2006 big hotel Saint Sophie under management of Hyatt
International will be completed. The prospects of modern hotel network
development in other big cities are not so bright. At the moment the markets
there have limited capacity. We’ve got only one exception when in Donetsk.
System Capital Management built 5-star hotel Donbass palace. It is the only
hotel of such class in the eastern part of the country.
                       There are only 3 five-star hotels in Ukraine
According to Ernst&Young data there are 1,218 officially registered hotels
in the country and 3,200 sanatoriums and health rehabilitations resorts.
There are only 3 five-star hotels in the country (Premier Place in Kyiv,
DonbassPalace in Donetsk and Rixos in Truskavets water resort in Western
part of the country). Also there is only one national hotel chain, Premier
Hotels. It includes only 6 hotels.

Local investors start to spend funds for reconstruction of historical places
to boost tourist inflowNotably, local businessmen started to invest in
reconstruction of places of tourist attraction. When most such places are
restored it will increase the inflow of tourists and stimulate the investors
to build more hotels.

We’ve got already some examples when reconstruction of historical places
influenced the increase of tourist inflow. Thus national fund on restoring
architectural and cultural memorials supported personally by ex-president
Leonid Kuchma set up historical and cultural park “The Song of Igor’s
Campaign” in Novgorod-Siversky (place of birth of Leonid Kuchma).

A part of the project was the construction of 2 modern hotels. One was built
in the monastery in the centre of the park and another 4-stars hotel in the
town. It was said that the project was partially financed by billionaire
Victor Pinchuk.

On a separate note, Aval Bank participated in re-building Mikhaylovsky
cathedral and the monument to princess Olga (both in Kyiv). Billionaire
Rinat Akhmetov donated UAH 15mn to reconstruction of Sophia memorial
(one of the most ancient in the country) and UAH 1mn in Nikitsky botanic
garden (Crimea).
       State spends directly and indirectly  EUR 2.5bn annually to
                                  support tourist industry
We should say that Crimea peninsula, Carpathian mountains and Kyiv are at
present the most attractive places for tourism. At present, many local and
foreign companies started their projects in Crimea. Turkish companies are
the most active in purchasing land on the seashore of peninsula, planning to
invest more than USD 5bn in building resorts and hotels. Among local
investors only NRB Bank spent about USD 150mn in tourists projects in
Crimea.

But the industry needs at least 3 years before the actual positive changes
are seen. This is the most optimistic forecast. It is based on assumption
that the country’s investment attractiveness and macroeconomic indicator
stay at least at present level. This time is necessary to complete building
new hotels and resorts, to creating the market for qualified personnel and
optimize tourist logistics.

The state should also support the development of tourist industry by means
of financing its programs According to unofficial data the state spend EUR
2.5bn a year for various kinds of subsides to support the industry.
              Industry loses 100,000 domestic customers per year
Every year the number of people who prefers spending their vacations abroad
increases significantly. The cost of vacations in the most popular sea
resorts in Crimea often exceeds the expenditures for resorts abroad. And at
the same time the level of services is much higher on foreign resorts. The
same situation is with winter resorts.

This also indicates that it is necessary to invest in domestic tourist
industry. We witness the rise of investment in the industry today, but still
every year local market loses around 100,000 domestic customers. It will be
necessary to spend extra funds to bring their people back.
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10. RUSSIAN COMPANY TO LAUNCH HOTEL CHAIN IN UKRAINE
                    Plans to build a 20-strong mid-market hotel chain

By Chris Druce, CatererSearch.com
Sutton, Surrey, United Kingdom, Wed, 02 August 2006

MOSCOW – Russia’s Commercial Company has announced plans to
build a 20-strong mid-market hotel chain in the Ukraine.

The hotels, all in the three-star category, will cost a total of $100m
(£53m) and be built in the larger regional centres of the country.

Most will be in Crimea, where the company plans to invest in the resort area
around Alushta. A, as yet unnamed, Western consultancy will advise
Commercial Company on the project. Ukraine has a dearth of hotels priced
for the middle-class, and industry experts predict the new properties will
do well.

Commercial Company, set up in August 1999, has been in charge of all
investment initiatives of the National Reserve Corporation of Russia in the
Ukraine. The National Reserve Corporation of Russia is in turn the
non-banking asset management company of the National Reserve Bank of
Russia.                                       -30-
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http://www.caterersearch.com/Articles/2006/08/02/308107/Russian+investment+company+to+launch+hotel+chain+in.htm

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11.       NEW VILLAGE WILL SPRING UP IN KIEV REGION
 
Alexei Voskresensky The Ukrainian Times newspaper
Kiev, Ukraine, Monday, August 7, 2006

KIEV – A new village of Chervona Kalyna (“Red Cranberry”) will spring up

near the town of Vyshgorod, Kiev region, by 2008. Plans are in hand to build
65 cottages within the area of 6.5 hectares.
 
Occupying 120-160 square meters, each one-storied house with the attic is
designed for both permanent residence and vacations. The first 30 cottages
will be completed in June 2007 and the rest of them in summer of 2008. The
value of the houses ranges between $700 and $1,000 per sq.m.     -30-
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12. UKRAINE’S GAS CHIEF SAYS GAS PRICE IS BOUND TO GROW
INTERVIEW: With Oleksandr Bolkisev, Head of State Run
Naftohazs Ukrayiny oil and gas company
By Roman Kulchynskyy, Kontrakty, Kiev, in Russian 31 Jul 06; pp 8-12
BBC Monitoring Service, United Kingdom, Wednesday,Aug 03, 2006

The head of Ukraine’s state-run Naftohaz Ukrayiny oil and gas company,
Oleksandr Bolkisev, has said that natural gas will inevitably become more
expensive for Ukraine. Speaking in an interview, he did not give an exact
figure because of the complex nature of the negotiations process.

Bolkisev said much depended on Ukraine’s relations with Turkmenistan. He
said there was currently no question of transferring Ukraine’s gas transport
network over to Russian ownership. However, Ukraine needs Gazprom’s
participation to develop its network of gas pipelines, he said.

Bolkisev said Ukraine has enough gas to see through the winter without any
problems and he denied that Naftohaz is on the verge of bankruptcy.

The following is the text of the interview with Bolkisev by Roman
Kulchynskyy entitled “The Turkmen gambit: Chairman of the Naftohaz Ukrayiny
board Oleksandr Bolkisev maintains that this year Turkmenistan has not
supplied Ukraine directly with a single cubic metre of gas”, published in
the Ukrainian business weekly Kontrakty on 31 July; subheadings have been
inserted editorially:
               RELATIONS WITH RUSSIA AND UKRAINE’S

                                 GAS TRANSPORT SYSTEM 
[Kulchynskyy] As soon as you were appointed you said that the idea of
setting up a consortium with the Russians to run the Ukrainian gas
transportation system [GTS] was worth considering. Were you serious?

[Bolkisev] I was talking about taking part in a consortium as one of three
possible mechanisms for ensuring a period of transition towards economically
based gas prices. The transition period from subsidized prices to market
prices is of great importance in Ukrainian-Russian gas relations.

Ukraine needs a delay in order to prepare the domestic market and consumers
for world prices. At the same time, I emphasize that we can only have equal
relations with Russia when we transfer to market prices for fuel.

We are now living in a situation of permanent mutual concessions, sometimes
economic and sometimes political. And, to be frank, we have had to consider
what possibilities there are for prolonging the transition period of price
concessions from the Russian side.

One such possibility is to give practical content to the already created
consortium to run the GTS in the area of constructing new gas pipelines to
increase transit capacities. I would like to stress that there is no
question of transferring the GTS into Russian ownership.

[Kulchynskyy] So what is the question?
[Bolkisev] Taking decisions on the possible principles of administration in
the broader sense is not part of the remit of the state-owned Naftohaz
Ukrayiny company. It is the central bodies of legislative and executive
power who must take such a decision.

[Kulchynskyy] Can you make it clear, what sort of plan for running the GTS
is Gazprom proposing?
[Bolkisev] I don’t want to talk about this plan in detail, because according
to current Ukrainian legislation, the GTS can only now be under state
control. Moreover, we must define the term “control” in practical terms,
because at the moment none of the three proposed options for running the GTS
can be implemented for one reason or another.

Generally speaking, the question of creating a consortium stands alongside
another major issue – are intermediaries necessary in supplying Russian gas?
As head of Haz Ukrayiny (a subsidiary of Naftohaz Ukrayiny – editor), I said
more than once that the Swiss-owned RosUkrEnergo company and the
UkrGazEnergo joint venture, which was constructed with its participation,
were a very serious concession on Naftohaz’s part.

I still stick to what I said, but I realize that creating the joint venture
gave our economy a transition period from preferential gas prices to market
prices. From that point of view, the existence of the joint venture has to a
certain extent been justified.

[Kulchynskyy] At the beginning of the year [Prime Minister] Yuriy Yekhanurov
promised Kontrakty that the government would not give up a single metre of
the Ukrainian GTS to Gazprom until the Ukrainian economy was ready for world
gas prices. What is stopping you adhering to this policy now?
[Bolkisev] I agree with the prime minister’s logic. The question now is, who
will allow time to prepare Ukrainian enterprises for the price increase? The
cost of fuel will grow, and this will inevitably lead to an increase in
domestic prices. We cannot hide the problem which the consumers will
inevitably face.

By holding back prices we are bestowing a doubtful benefit on the economy.
If we raise prices gradually we will avoid a shock price hike and give
consumers the chance to adapt to the new conditions. As far as the GTS is
concerned, then Russia is expecting a clear message from Ukraine about our
intentions.
                                 WORKING WITH GAZPROM 

[Kulchynskyy] So what is your message to Gazprom?
[Bolkisev] Gazprom is expecting a formulated position on the consortium not
from the Naftohaz management, but from the government, the president and
parliament. This position has been clearly formulated.

We have a vested interest in increasing the throughput capacity of the GTS
by means of the Bohorodchany-Uzhhorod sector and in the construction of the
new Aleksandrov Gay-Novopskov-Uzhhorod gas pipeline. In my view, these
intentions will meet with the approval even of the most radical patriots.

The Russians have the money to do the construction work and they have the
gas which can then be transported through these sectors. Without Gazprom’s
participation, all these projects make no sense, because without gas the
pipes will be empty.

[Kulchynskyy] With whom, apart from Gazprom, will you be discussing the
conditions for creating this consortium?
[Bolkisev] Gazprom is not against third parties joining the consortium. The
most realistic partner is the German Ruhrgaz company. Its representatives
are currently having talks with us. As far as I know, the Germans have not
had any talks lately with Gazprom. Turkmenistan, for example, may also join
the consortium. We are talking, first and foremost, about developing and
expanding the GTS not just in Ukraine, but beyond the country, too.

[Kulchynskyy] The Gazprom deputy chairman, Aleksandr Medvedev, said that the
gas price for Ukraine would be increased from the second half-year of 2006.
In July, members of our government maintained that the price would not
change until 2007. Did the Russians believe that the idea of the consortium
would be carried through?
[Bolkisev] No. Ukraine’s price for ensuring a transit period was the
creation of a joint venture with the participation of RosUkrEnergo. The
appearance of this joint venture on the Ukrainian market helped to maintain
a preferential price – 95 dollars for 1,000 cu.m. of gas.

[Kulchynskyy] For what period did Ukraine receive a price deferment?
[Bolkisev] At least until the end of 2006, although the contract between
RosUkrEnergo and the joint venture (in other words, UkrGazEnergo) was for
five years.

[Kulchynskyy] Why do you think 95 dollars per 1,000 cu.m. of gas is a
preferential price when Ukraine provides the Russians with a preferential
price for transit?
[Bolkisev] I head Naftohaz Ukrayiny and I inherited what I have. Yes, there
could have been a different logic in the development of relations with
Russia. If we had agreed to a gradual price increase, then one of the
arguments in favour of this could have been a transport tariff. All this had
to be reflected within the framework of annual inter-governmental protocols.

But it should be remembered that a transit tariff must be economically
based. We cannot increase it arbitrarily by reacting to an increase in gas
prices. In the European Energy Charter there are mechanisms for forming
tariffs for gas transportation. In order that we can increase the price of
transit services properly and appropriately, we had to carry out a number of
complex organizational measures.

[Kulchynskyy] What measures precisely?
[Bolkisev] For example, to re-appraise capital stock. It is currently
believed that the carrying book value of the Ukrainian GTS is 9bn hryvnyas
[about 1.8bn dollars].
International auditors (and we called in two companies to do the checking)
value the GTS at approximately 18bn dollars. If we had conducted an official
reappraisal of the value of the GTS, we would have received quite different
depreciation charges, which would have substantially influenced the
rationalization of the transit tariff.

[Kulchynskyy] What will be the guide price for gas for Ukraine, starting
from 2007?
[Bolkisev] To talk about price guidelines for 2007 would be tantamount to
guessing. Whatever price conditions we are able to get, the price on the
domestic market will increase.

Even if we are able to maintain a price of 95 dollars per 1,000 cu.m. (and I
don’t rule out this option), domestic prices will have to go up to prevent
Ukrainian consumers from being blackmailed by the sharp hike. We have gas
price calculations which we shall be proposing to the government and the
NERC [National Electricity Regulation Commission].

It is time to do away with talk about the Ukrainian market being subsidized
and gas prices being preferential, and so, Ukraine must make some
concessions, including the question of running the GTS.

[Kulchynskyy] What is the tentative price for gas for Ukrainian industry?
                             CONTRACT WITH TURKMENISTAN
[Bolkisev] If I gave you a figure I would risk tilting the balance in the
complex negotiations process with the gas suppliers to our disadvantage. The
specific nature of the talks is such that the one who makes the first move
and names an acceptable price (or a critical one) usually ends up the loser.

All I can say is that Ukraine’s relations with Turkmenistan will not play
the last role in fixing the price. The validity of the Russians’ contracts
for Turkmen gas supplies this year expires in the third quarter. Gazprom has
clearly defined price parameters in its hands, but there are no obligations
on Turkmenistan for gas supplies in the fourth quarter. We have a contract
with Turkmenistan for this year, but it is not being fulfilled.

[Kulchynskyy] Is the contract with Turkmenistan not being fulfilled because
of Ukraine’s debt?
[Bolkisev] The failure of Turkmenistan to fulfil its obligations has nothing
to do with our debt to them. We have almost cleared the debt, which amounted
to about 300m dollars at the beginning of 2006, and is now about 60m
dollars. This is not monetary debt but goods debt. We have already signed
all the necessary documents on the supply of goods to clear this debt.

By October we shall have completely fulfilled our obligations and we shall
start the fourth quarter without any debts towards Turkmenistan. So far
Ukraine has not received a single cubic metre of gas from Turkmenistan on
direct contract, whereas Russia has received and will receive before the end
of the third quarter the gas it is contracted to receive, i.e. 30bn cu.m.

[Kulchynskyy] Your predecessor – Oleksiy Ivchenko – said quite the opposite.
[Bolkisev] I want to emphasize that this year we have received Turkmen gas,
like other Central Asian gas, only via RosUkrEnergo. Gazeksport (a Gazprom
subsidiary – editor) has been selling this company its own Turkmen gas, so
that it can ensure Ukraine’s balance via the UkrGazEnergo joint venture.

Incidentally, Mr Medvedev spoke to you about this in his interview. I hope
that in the fourth quarter Turkmenistan will supply gas to Ukraine. At the
moment our Turkmen partners are trying to raise the price for gas for us and
for Gazprom. Russia is insisting that Turkmenistan fulfil its commitments in
price parameters, which were agreed in the contract. We are also trying to
get Turkmenistan to fulfil the contract within the agreed price parameters.

But this doesn’t mean that we and Gazprom have agreed on joint action
against Turkmenneftegaz [Turkmen oil and gas company], it is just that at
this stage our interests have coincided.

[Kulchynskyy] What are the chances that Ukraine will receive Turkmen gas in
2007 without intermediaries?
[Bolkisev] This year the situation has not changed – we have no contract
with Turkmenistan, whereas the Russians have, but, as a year ago, the price
at which they will get their gas has not been agreed. This makes us equal.

The fact that Gazprom has a contract with Turkmenistan without a fixed price
does not guarantee gas supplies 100 per cent. Moreover, Turkmenistan has a
contract for the supply of about 30bn cu.m. of gas to China. Of course, our
Turkmen partners will choose contracts which are more to their advantage,
from both the economic and political points of view.

One way or another, Turkmen gas will flow towards Ukraine. I believe that we
and the Russians should avoid competing for a contract with Turkmenistan.

[Kulchynskyy] If Turkmenistan has not supplied gas to Ukraine in 2006, then
by what formula was the price of gas for Ukraine calculated?
[Bolkisev] The formula is Gazprom’s business. I can confirm that
RosUkrEnergo is supplying Ukraine with all the gas which we import. We have
no direct contracts with Gazprom, but we know that RosUkrEnergo sells us
Russian gas as well.
                     NO PROBLEMS WITH WINTER SUPPLIES 
[Kulchynskyy] What brought about the problems with filling the gas storage
tanks?
[Bolkisev] There have been problems, but they are being resolved. According
to a plan, which is being implemented, we must pump about 16bn cu.m. of gas,
which will enable us to accumulate 23.4bn cu.m. of active gas in the tanks.

This amount will help us to get through the winter without problems. At the
same time, in order to ensure the reliability of Russian gas supplies to
Europe, if we have a repeat of last year’s extreme frosts, we need a reserve
supply of another 2bn cu.m. of gas, and we have made this clear.

Two problems are linked with this question. The first: because of the heavy
frosts in the first quarter of this year we consumed 2bn cu.m. of gas more
than we planned.

The second: because of the delay in UkrGazEnergo entering our market, the
schedule of gas supplies was somewhat disrupted. Now, after our meeting with
Fuel and Energy Minister Ivan Plachkov and Gazprom chief Aleksey Miller, we
agreed to pump 1.5bn – 2bn cu.m. of gas into the storage tanks. Russia, in
turn, will seek a resources base.

[Kulchynskyy] At what price are Ukrainian industrial enterprises currently
buying gas?
[Bolkisev] 108.5 dollars per 1,000 cu.m., not counting VAT and
transportation costs.

[Kulchynskyy] What profit will Gaz Ukrayiny make this year?
[Bolkisev] At the present moment the company is non-profit-making.

[Kulchynskyy] What share of the industrial consumer market is the subsidiary
left with now that UkrGazEnergo has entered it?
[Bolkisev] Not a lot. Mainly small enterprises to whom Gaz Ukrayiny sells
fuel via the regional gas companies. Virtually 100 per cent of the market is
controlled by the new joint venture, but the situation could change with
time.

[Kulchinskyy] But in the beginning the government decided that the joint
venture would receive a licence from the NERC for the supply of only 5bn
cu.m. of gas. Why have these conditions changed with time?
[Bolkisev] Answering that question is outside my remit.
                               NAFTOHAZ “NOT BANKRUPT|” 
[Kulchinskyy] If the joint venture controls the more profitable segment of
the Ukrainian gas market, then Naftohaz must be on the verge of bankruptcy?
Is that right?
[Bolkisev] The rumours about Naftohaz’s bankruptcy have been strongly
exaggerated. Companies which are of strategic importance to the state cannot
be bankrupt by definition. Yes, there is a crisis, and it was caused by the
challenges we faced at the beginning of the year, because we signed the
agreements on 4 January.

Recently, we presented to the government a plan for a way out of the crisis
and we are not hiding it from our creditors who continue to work with us. No
problems have arisen with the serious international financial institutions.
From 1 June we raised the price of gas to the population and district
heating supply enterprises.

This move will enable us to make up the losses we sustained in the first
quarter when we imported 16.5bn cu.m. of gas at a price of 95 dollars per
1,000 cu.m. Among other things, this gas went towards meeting the demands of
the population and the district heating supply companies, which bought it
cheaper than it cost on entry into Ukraine.

But even after the price increase, the annual financial result will not be a
positive one, and we hope to be in profit in the first quarter of 2007. The
population demands 20bn cu.m. of gas – this is quite a demand to make the
retail gas trade a profitable business.

[Kulchynskyy] You were taking about a plan to reduce Naftohaz’s investment
projects. What projects are you talking about?
[Bolkisev] First and foremost, those we are marketing abroad. I can’t say
which ones precisely, this is also to do with costs which we are trying to
minimize.

In Ukraine we shall be concentrating on the most lucrative long-term gas
deposits, and only after we find they are profit-making will we move towards
developing others. Of course, the development of the Black Sea deposits is
one of the priority projects.

[Kulchynskyy] What sort of profit will UkrGazEnergo be making this year?
[Bolkisev] All we have are preliminary results which we need to clarify. I
estimate their profits at roughly 90m dollars. The dividends will be
allocated based on the yearly results and Naftohaz has the right to 50 per
cent of the total cost. I hope that nothing will stop us taking advantage of
this right.

[Kulchynskyy] The former head of Naftohaz, Oleksiy Ivchenko, said that he is
working towards freeing UkrGazEnergo from having to pay VAT on imports. Do
you support your predecessor’s idea?
[Bolkisev] At the moment both Naftohaz and UkrGazEnergo pay VAT on imports –
20 per cent of the price. We are trying to make sure that in 2007 a zero
rate is returned to Naftohaz. As far as UkrGazEnergo is concerned, that is
its affair.

[Kulchynskyy] Will you be able to remove the join venture’s head, Ihor
Voronin?
[Bolkisev] No, not without a joint decision with the Russian side. But
Voronin is a Ukrainian citizen, and he, I hope, will behave in the
appropriate manner in this post.

[Kulchynskyy] Prime Minister Yekhanurov admitted that Voronin has special
relationships with Gazprom. What are they, in particular?
[Bolkisev] Voronin is the best person to answer that question.

[Kulchynskyy] Will Naftohaz be selling gas to third countries?
[Bolkisev] Along with the Poles, we own a small distribution system in their
country, and according to the conditions of cooperation, we provide gas for
local consumers. But these are tiny amounts – about 5m cu.m.

[Kulchynskyy] RosUkrEnergo’s co-owner Dmytro Firtash has spoken of his
intention to build another gas pipeline from Russia to Ukraine in order to
provide enterprises in the Donbass with gas. Do you support this project?
[Bolkisev] I know nothing about any plans of Mr Firtash to build another gas
pipeline. I believe that current capacities are sufficient to ensure gas
supplies to eastern Ukraine.

[Kulchynskyy] How much will petrol go up in the near future?
[Bolkisev] Fuel prices will go up according to the price of oil.
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
             Send in a letter-to-the-editor today. Let us hear from you.
========================================================
13.                         BORDERLAND SPLIT

 

COMMENTARY: By Mark Von Hagen, The Wall Street Journal
New York, New York, Tuesday, August 8, 2006

Fifteen years after Ukraine’s surprise birth, the struggle continues over
its place in the world. The Orange Revolution of 2004 didn’t settle it. Nor
did this spring’s parliamentary elections.

Last week, following four months of political paralysis, brought the
surprise return, as prime minister, of pro-Russian politician Viktor
Yanukovych, whose attempt to steal the 2004 presidential elections sparked
the Orange uprising.

The country was, and is, split along multiple registers — regional and
generational, linguistic and cultural, though not, as some mistakenly claim,
ethnic. Perhaps the most serious divide is between Ukrainians who see their
future with Russia and an economy dominated by the state and its oligarchs,
and those who see it moving closer to the West.

The first group finds powerful allies in Russia that want the two Slavic
countries brought closer together again; this is Mr. Yanukovych’s electoral
base. The second sees a wholly sovereign Ukraine tied to Europe, and
continues to back Orange Revolutionaries like President Viktor Yushchenko
and former Prime Minister Yulia Tymoshenko.
                      SLAVOPHILES AND WESTERNIZERS
A major battleground is history. The “reintegrationists” think that
Russians, Ukrainians and Belarusans are fated again to live in a single
Slavic Christian Orthodox state. This view of the past has its origins in
imperial Russia, and insists that the medieval state of Kievan Rus in the
10th through 13th centuries was the birthplace of Russian civilization and
Moscow its rightful heir.

During the last century, communist ideologues in Moscow and Kiev recast this
argument as “the great friendship of peoples”; Russians were “elder
brothers” to all the other non-Russian peoples, above all the Ukrainians and
Belarusans.

Much as the the current-day Slavophiles lay claim to history for political
purposes, so do those in Ukraine — and the few Westernizers in Belarus — 
who want to build democratic, sovereign nation-states and get close to
modern Europe.

Here the common past shared with Poland and Lithuania, now in the elite
European clubs, is emphasized while the Russians are portrayed as invaders
and illegitimate occupiers.

For this project to succeed, the histories of Ukraine and Russia have to be
disentangled in order to claim a separate existence for the Ukrainian nation
even under Moscow’s rule.

This “nationalization” of the past was well under way at the dawn of the
20th century. Myhailo Hrushevsky, the father of modern Ukrainian history,
became the father of the modern Ukrainian state when he was elected head of
the Central Rada, or parliament, in 1917. The Bolsheviks soon ended this
brief experiment in self-rule.

During an early wave of Stalin-era repressions, Hrushevsky was arrested and
exiled to Moscow and died, in 1934, in mysterious circumstances. There was
no place for such an advocate of Ukraine’s independence or even autonomy.
Stalin drove the “renationalization” project underground and into the
Ukrainian diaspora.

That’s where it stayed until the second breakup of the Russian empire in
1991, the year an independent Ukrainian state resumed life with full force.

Today one of Kiev’s central boulevards, on which sit the Ukrainian
parliament and main government building, is named after Hrushevsky. A
monument to him stands in front of the Pedagogical Museum that housed the
1917 Rada government and across the street from the Ukrainian National
Academy of Science.

Other figures from the Ukrainian past — the Kievan Princes Volodymyr and
Yaroslav, Cossack Hetmans Bohdan Khmelnytsky and Ivan Mazepa, the poet

bard of the Ukrainian nation Taras Shevchenko and 20th-century hetman Pavlo
Skoropadsky — are similarly honored in a not-so-subtle effort to retell the
story of Ukraine’s past.

Many Ukrainians dealing with their messy history today are tempted to claim
that the nation was always so — characterized by primordial and unchanging
traits.

This idea, implied in Hrushevsky’s work, originated with another
19th-century Ukrainian intellectual, Mykola Kostomarov. It tries to explain
how “Ukraine” withstood world wars, occupations, terror, deportations,
famine, nuclear contamination and other plagues and stayed purely Ukrainian.

Just as the Russian imperialists distorted Ukraine’s past for their own
political ends, the new nationalists are guilty of a similar sin.

The major stumbling block in their attachment to the “primordial” Ukrainian
theory is the fact of history. Nothing close to a “pure” genetic pool, rare
enough in any place, could have possibly been preserved on such a large and
diverse territory occupied by a host of invaders who intermingled with the
local population.

Mongols, Poles, Russians, Crimean Turks, Germans, Austrians, Hungarians and
Romanians, to name a few, passed through contemporary Ukraine and left their
mark, genetic included. Add to this violent history the collective biography
of millions of Jews who lived there — under Polish, Austrian and Russian
rule — and those who resettled in Ukraine after feeling serfdom in Russia.

It’s hard to imagine who or what this genuinely primordial Ukrainian might
be. Reducing national identity to biology is an insult to millions of
Ukrainians.

Throughout its history, Ukraine the place and the idea has been located at
the frontiers of powerful Eurasian empires and states. Its “borderland”
characteristic shaped such key social institutions as the Cossacks, who
built a state in the 17th century that was distinct from both an ascendant
Muscovite autocracy to the northeast and the declining constitutional
monarchy of Poland-Lithuania to the west.

The Greek Catholic, or Uniate, Church also could have taken root only in a
borderland, which is what the word Ukraine literally means. Since the Union
of Brest in 1569, Greek Catholics practice the Byzantine rite (largely the
same as the Orthodox Christians) but acknowledge the Roman Catholic pope as
their spiritual leader.

The religious communities of the Greek Catholic Church confronted frequent
persecution by both Roman Catholic (mostly Polish) and Orthodox (mostly
Russian) churches, but emerged in the 20th century as advocates for
ecumenism and reconciliation of eastern and western Christianity.

The borderlands were also, importantly, multiconfessional and multinational.
So the history of Ukraine’s people is shared with the history of Poland,
Russia, Israel and other states. Certainly, this diversity contributed to
very bloody interethnic conflict, above all in the last century. But this
diversity also forced intellectuals to grapple with the dilemmas of
intolerance and inequality.

Some concluded that ethnic purity and violence were the solution; that
included the Ukrainian Dmytro Dontsov and a Jewish counterpart from Odessa,
Vladimir Zhabotinsky, one of the spiritual fathers of modern Israel. But the
mainstream of Ukraine’s intellectual life has more often embraced diversity
and tried to work out models for peaceful and productive coexistence and
even cooperation.
                                   EMPIRES’ CHILDREN
To address the argument that Ukraine differs little from Russia, one must
take a trip to Moscow and Kiev. The differences, which have emerged most
clearly in the past 15 years, are not merely expressions of separate
“national character.” Compare the relatively pluralist religious situation
in Ukraine with the hegemonic power of the Orthodox Church in Russia.

In politics, Ukraine from the beginning of its independence embraced a
parliamentary system that allowed a strong opposition to take root. Not so
in Russia. As the previous and allegedly pro-Kremlin President Leonid
Kuchma, who left in disgrace in 2004, pointed out, Ukraine is not Russia.
It’s also not Poland or Belarus.

Many of Ukraine’s current divisions are legacies of the rival occupations
that shaped its distinctive regions. Western Ukraine — today’s Galicia and
Bukovyna — is historically tied to Poland, Lithuania and Austria-Hungary,
whereas the south and east of the country — the homeland of the Cossacks — 
for centuries have been in the Russian or Soviet, as well as the Ottoman
empires.

Today’s Ukraine lies at a new borderland between the European Union and
NATO, which leave open the door for Ukraine’s membership, and Russia and

its allies in the former Soviet empire, which carry the powerful carrots (and
sticks) of oil and gas. President Yushchenko tries to put Ukraine on the
European track.

The new Yanukovych government may want to veer the country back toward
Moscow. Neither man will have an easy time of it. Ukraine’s distinctive
history, and the shadows it casts on the present and future, refuses to put
the country firmly in the East or West, but somewhere in between.
————————————————————————————————
Mr. von Hagen is Boris Bakhmeteff professor of Russian and East European
studies and chair of the history department at Columbia University.
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
14. FACTIONS INVEST HOPE IN A MARRIAGE OF OPPOSITES
                   Ukraine’s passage to becoming a “normal” economy
                           and society is likely to be long and bumpy.

ANALYSIS & COMMENTARY: By Quentin Peel, Columnist
Financial Times, London, United Kingdom, Saturday, August 5 2006

It has taken four months of fraught, inconclusive and – for Ukraine’s
friends and neighbours – often infuriating negotiations to produce a
Coalition of National Unity to rule in Kiev.

By bringing together the parties of Viktor Yushchenko, the president who was
co-leader of the Orange Revolution in January 2005, and Viktor Yanukovich,
the Russian-speaking rival whom he defeated in bitterly contested elections,
it looks like a marriage of opposites with little chance of survival.

Yet it may prove the most stable solution for a country that is bitterly
divided between the factions they represent.

The deal they have done will leave all the major economics ministries in the
hands of Mr Yanukovich’s Party of the Regions and all the principal “power”
ministries, such as defence, foreign affairs and the interior, controlled by
Mr Yushchenko’s Our Ukraine.

It is a pragmatic solution that recognises the reality that the president is
responsible for defence and foreign policy, whereas Mr Yanukovich’s party
emerged from parliamentary elections last March as the single largest.

On the face of it, the deal would appear to mark the end of the Orange
Revolution, in which the nationalist parties led by Mr Yushchenko and Yulia
Tymo-shenko, his more populist and charismatic rival, joined forces on the
streets to force the old regime – represented by Mr Yanukovich – from power.
Ms Tymo-shenko will now be in effect leader of the opposition.

Yet in economic terms, the new coalition brings together two parties that
might both be described as “liberal-conservative”, pro-business and
pro-privatisation, whereas Ms Tymoshenko is more of a social liberal or
social democrat.

The third party in the new government, the Socialists, are ex-communists who
still oppose privatisation and excessive deregulation in the economy, but
their votes are not necessary to keep the new government in power, as they
would have been for a Tymoshen-ko-Yushchenko coalition.

Anders Aslund, senior ­fellow at the Institute for International Economics
in Washington and a long-time observer of post-Soviet Ukraine, believes the
outcome is “about as good as anybody could have hoped for”.

The coalition represents a “strategic realignment” between the unacceptable
alternatives of an all-western “orange” coalition and an all-eastern
Russian-speaking alliance, he argues in a commentary for the Centre for
European Reform.

“National tensions have been resolved,” he says. “This is quite an
impressive outcome of the negotiations, and there is good hope that this
alliance will hold.”

Another natural assumption is that Moscow would be pleased at the outcome,
getting the Russian-speakers of eastern Ukraine into power and in control of
the Ukrainian economy.

Mr Aslund argues the opposite: that Mr Yanukovich and his most important
supporter, Rinat Akhmetov, Ukraine’s richest oligarch with vast interests in
metals and energy, see Russian interests as their greatest economic
competitors. If anything, they will be protectionist in their policies,
seeking to restrict Russian access to the Ukrainian economy.

On the other hand, the US administration is also likely to be disappointed.
President George W. Bush and Donald Rumsfeld, his defence secretary, have
both been pushing the Nato alliance to open the door to Ukraine at its Riga
summit in November, by starting a “membership action programme”.

Although the new coalition agreement calls for “mutually beneficial
co-operation with Nato”, a concession by Mr Yanukovich, it seems unlikely
that Kiev will request any such programme in the near future. The partners
have agreed to hold a referendum before giving the green light to Nato
membership, and popular opinion is hostile.

Mr Yushchenko has prevailed in keeping open negotiations for a free-trade
zone with the European Union, while Mr Yanukovich has a vague commitment to
support Moscow’s favoured “single economic space” with Russia and Belarus.

Whether the new government can make significant headway in rooting out the
corruption that bedevils commercial and daily life in Ukraine is more
questionable. Oligarchs such as Mr Akhmetov are keen to get firm property
rights and a clearer rule of law, to protect assets acquired in the
post-Soviet chaos. But corruption scandals, Mr Aslund believes, will
continue to dog the political system.

Ukraine’s passage to becoming a “normal” economy and society is likely
to be long and bumpy.                             -30-
——————————————————————————————–
AUR FOOTNOTE: Quentin Peel is international affairs editor of the
Financial Times. He is also an associate editor, responsible for leader
and feature writing, and has a foreign affairs column, which appears
every Tuesday.
——————————————————————————————–
http://www.ft.com/cms/s/d474f09c-241e-11db-ae89-0000779e2340.html

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
15.         UKRAINE’S NEW GOVERNMENT: DARK BLUE,
                 PALE ORANGE, SOME PINK, TOUCH OF RED
                   Ukraine’s new government: composition and politics

ANALYSIS AND COMMENTARY: By Vladimir Socor
Eurasia Daily Monitor, Volume 3, Issue 153
Jamestown Foundation, Wash, DC. Tuesday, August 8, 2006

The mere fact that Ukraine finally has a cabinet of ministers since August 4
is an achievement after a seven-month vacuum. (The outgoing cabinet had
been dismissed by parliament in January, continued as a powerless caretaker
beyond the March elections, resigned officially in May both collectively and
at the level of individual ministers, and limped on without proper legal
authority.)

Prime Minister Viktor Yanukovych’s new cabinet includes ministers nominated
by President Viktor Yushchenko, the Socialist Party, and the Communist
Party, alongside a preponderance of ministers from Yanukovych’s Party of
Regions, which is the “Donetsk clan’s” political vehicle.

This cabinet is top-heavy with officials who personified the corrupt fusion
of business interests with the government and the manipulation of elections
before the short-lived Orange period. Thus, Yanukovych’s government marks
a return to power not just of the Party of Regions, but to a certain extent
of the phenomenon of Kuchma-ism and some of its personalities.

Their antecedents do not necessarily or fully presage their conduct in the
new government (just as the coalition’s National Unity Declaration is no
guide to the government’s policy — see EDM, August 7). However, those
antecedents suggest that the Yanukovych government is ill equipped to lead
Ukraine toward democratic institution building — the unfulfilled Orange
mission.

The Verkhovna Rada approved the cabinet’s composition at an agitated session
with 269 votes in favor out of 450, the balance not voting or voting
against. The Yulia Tymoshenko Bloc voted solidly against this cabinet, with
only six deputies bolting from the bloc to vote for the new government.

Despite Yushchenko’s final deal with Yanukovych, only 30 of Yushchenko’s
Our Ukraine deputies voted for the new government, while 51 of them
variously refused to vote or voted against. This action reveals that Our Ukraine’s
majority disapproves not only of the cabinet’s composition but also of the
president’s actions.

The Party of Regions holds the first deputy premiership and all three deputy
premierships, in addition to the prime minister’s post. First Deputy Prime
Minister and concurrently Finance Minister Mykola Azarov had earlier
exemplified the selective and arbitrary use of taxation while serving as
head of the State Tax Administration and Finance Minister during the Kuchma
era.

Deputy Prime Minister Andriy Kluyev, now in charge of the energy sector,
is among Ukraine’s wealthiest businessmen as well as former minister, in a
political system that has yet to internalize the notion of conflict of
interest. Azarov and Kluyev are personally close to the Party of Regions’
most influential decision maker, Renat Akhmetov (formally number seven
on the party’s slate of deputies).

Another deputy prime minister, Dmytro Tabachnyk, the former head of
Leonid Kuchma’s presidential administration, helped coordinate the use of
“administrative resources” in presidential and parliamentary elections
during that period. He has meanwhile reincarnated as a Crimean deputy.

The third deputy prime minister and concurrently construction minister,
Volodymyr Rybak, is also a veteran Kuchma-era office holder. The Minister
of the Cabinet of Ministers, Anatoly Tolstoukhov, is also a throwback to
that period, when the cabinet’s resources and property were used in the

interest of power holders with little public accountability.

The new fuel and energy minister, Yuriy Boyko, headed the state oil and gas
company Naftohaz Ukrainy during the first Yanukovych government (November
21, 20002, to January 5, 2005) and is one of the principal figures who
brought the notorious RosUkrEnergo gas company into Ukraine in August 2004.

The Party of Regions has also appointed the ministers of economy, of the
coal industry, of labor, of the environment, and for ties with parliament

The Socialist Party retains the Transport Ministry and Education Ministry as
in the predecessor government and for the same two incumbents. The party
reckons to retain the chairmanship of the State Property Fund as well, based
on an informal understanding with the Party of Regions.

The unreconstructed Communist Party has entered the government thanks to the
Party of Regions. The Communists have appointed Agricultural Policy Minister
Yuriy Melnyk and Industrial Policy Minister Anatoliy Holovko based on the
party’s coalition quota.

Melnyk was the predecessor government’s deputy prime minister responsible
for agriculture, nominated by the Socialist Party, which opposes the
privatization of land, as does the Communist Party. Meanwhile, the
nonbinding National Unity Declaration envisions “putting land into economic
circulation” by September 2008.

Yushchenko had hoped in vain to be spared the embarrassment, to himself and
his ministers, of accepting Communists in the coalition. The Communist Party
had barely passed the 3% threshold to enter the parliament, holds only 20
seats, is not needed for forming a numerical majority, and cannot make any
serious trouble within parliament or outside, having lost almost all
influence on society. In fact, the Party of Regions has seamlessly inherited
the lion’s share of Communist votes in eastern Ukraine.

Thus, appeasement or cooptation of the Communists was unnecessary. However,
the Party of Regions needs the Communist group of deputies as a watchdog on
the pro-presidential Our Ukraine as well as a reserve of votes for Regions
within the coalition. Communist leader Petro Symonenko has promptly and
snarlingly announced his readiness to play that role.

With the Communists inside the coalition, the Party of Regions will be less
dependent on pro-presidential deputies for approval of decisions, and by the
same token the pro-presidential group will be limited in its leeway to
oppose decisions it may not like.

Yushchenko has re-appointed Minister of Foreign Affairs Borys Tarasyuk
(Rukh), Defense Minister Anatoliy Hrytsenko (non-party), and Internal
Affairs Minister Yuriy Lutsenko (hitherto Socialist) to those same posts and
will also appoint the security service chief and prosecutor-general, all
within the presidential quota under the amended constitution.

In addition, as part of the deal with Regions, Yushchenko has managed to
obtain the ministerial posts at justice, health, family and sports, culture,
and emergency situations and Chernobyl cleanup for the Our Ukraine bloc.

Tarasyuk and Hrytsenko are determined to pursue a Western orientation under
the president’s political authority and constitutional prerogatives to set
the course of foreign and defense policies. Meanwhile, the majorities in the
cabinet and parliament seem set to ponder a return to the Kuchma era’s
two-vector policy.

The incoming Justice Minister, Roman Zvarych of Our Ukraine, served in that
same post for some months in 2005, until he was found to lack a law degree
and to have misrepresented his degree in another field of study. Despite the
ensuing scandal, Zvarych retained Yushchenko’s trust and helped negotiate
the deal with Regions.

At the moment, Zvarych calls for substantially expanding the powers of the
secretary of the National Security and Defense Council, a presidential
appointment, giving him the right to vet government decisions. The proposal
may well be designed to prepare a return of Zvarych’s current political
patron, Petro Poroshenko, to that post, which he held in 2005.

Lutsenko reported sick and did not attend the voting in parliament that
confirmed him as internal affairs minister. He had warned repeatedly that he
was not going to be part of a Yanukovych government, and quit the Socialist
Party in July as a protest against the deal party leader Oleksandr Moroz cut
with Yanukovych.

In the run-up to the August 4 parliamentary vote, Lutsenko publicly
denounced as “forgery” the court documents that purported to rescind
Yanukovych’s two criminal convictions as a youth in Donbas. As minister in
2005-2006, Lutsenko had aggressively targeted some prominent Donetsk
figures for anti-corruption investigations.

Also on August 4, the Verkhovna Rada approved with 274 votes in favor (of
307 deputies in attendance, out of the 450 total) changes to the law on the
Constitutional Court.  Yushchenko immediately signed this bill into law.

Under the changes, the Court does not have the right to review the
constitutionality of the December 2004 amendments that have transferred
some presidential powers to the parliament and the prime minister.

With this development, Yushchenko loses the opportunity to appeal to the
Constitutional Court for rescinding the December 2004 amendments. Until now,
Yushchenko had insistently called for rescinding them, out of concern that
they weaken the presidency unduly in favor of the prime minister and
parliament.

Overall, Regions emerges as the clear winner while Yushchenko seems at this
point to be losing support from most of Our Ukraine, and Our Ukraine risks
losing much of its electorate if it joins the Regions-Socialist-Communist
parliamentary coalition.

The Yulia Tymoshenko Bloc offers a simple message: “betrayal” of the
Orange Revolution, “political capitulation” by the president, and need for a
“cross-party opposition” to organize around this bloc.
———————————————————————————————-
(Interfax-Ukraine, UNIAN, Ukrainian News Agency, Ukrainian Television
Channel One and Channel Five, August 2-7; see EDM, August 7).
———————————————————————————————-
LINK: http://www.jamestown.org
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
16.        UKRAINE ONCE MORE AT THE CROSSROADS

ANALYSIS & COMMENTARY: By Luca Brusati, Italy
Action Ukraine Report (AUR) #748, Article 16
Washington, D.C.,  Tuesday, August 8, 2006

In the heady days of December 2004, disturbed by the unilateral picture the
news articles in the Action Ukraine Report were providing about the events

taking place in Ukraine, I sent a strongly-worded e-mail expressing my
dissent to the Editor, who in turn decided to share it with all the AUR readers.

In a nutshell, I was raising two questions:

(1) Why should Yuschenko prove to be such a trasfigurative leader as he was
described by Western media back then, based on his personal history as a
politician (head of the Central Bank first, then Prime Minister nominated by
Kuchma, and eventually undecided leader of the Parliamentary opposition to
Kuchma himself)?

(2) Wouldn’t Ukraine end up being stuck hopelessly in the middle, once it
bowed eventually to years of Western pressure and distanced itself for good
from Russia, taking into account that the chances of EU membership were
close to zero?

Following the circulation of my e-mail, I received a number of messages from
AUR readers who preferred to attack me on a personal level, rather than
addressing my questions.

One reader declared me unworthy of my professorial job; another asked how
much Russia was paying me for protecting its interests in Ukraine.

Unfortunately for my bank account, nobody was willing to finance my inputs
(a few wealthy Russians were illegally funding the “revolutionaries”
instead, as some Orange leaders acknowledged, but this is another story).

Unfortunately for Ukraine, though, time proved that my questions were both
right on target.

My e-mail back then was a reaction to the articles I had just read, so I did
not articulate my thinking in detail. Those who replied to me got a more
comprehensive feedback, though, and in some cases ended up acknowledging

I had a point.

It is worth reminding that the doubts about Yuschenko’s ability to lead
large-scale change were there among many Ukrainians already in 2004 (but not
in the West, which basically had never heard of him before the presidential
elections).

The question about Ukraine’s place at the crossroads between the EU and
Russia is still relevant, though, especially after the latest political
developments in Kiev.

I believe it is important for the AUR to address it, even more taking into
account the widespread ignorance about how EU institutions actually work
(among most EU citizens in the first place, let alone outsiders).

Alas, at the end of the day the EU is not about sharing European ideals or
embracing democracy (Ukraine is definitely more democratic today than what
it used to be under Kuchma, even without Brussels’ helping hand); once we
set the rhetoric aside, membership is primarily about access to the
“internal market” and to EU budgetary allocations.

For decades, the European Economic Community first and the European Union
then managed to square the circle, by sorting out these thorny commercial
and financial issues in a collaborative manner: at the basis of the entire
exercise laid the assumption that “ever closer integration” was not a
zero-sum game, but could benefit all players in the medium term.

This assumption is still there in the rhetoric, but it is no longer the
background of EU policy-making. Each Member State by now is extremely

keen to check how much it is contributing to and how much it is getting from
Brussels, with no serious long-term perspective. A very natural fact is
happening: the new Member States are catching up.

This phenomenon is a success story for Europe as a whole, but (especially in
a phase of social tensions and sluggish economic growth) it is perceived as
a threat by the “old” Member States: the truth is that they are really
funding with their taxes the Member States which steal their jobs, by
attracting companies from “Old Europe” looking for less red tape and a
cheaper labour force.

The results of the French and Dutch referenda on the EU Constitutional
Treaty are only the tip of a much larger iceberg; many more elements signal
this simmering tension.

One can look, for instance, at how Dalia Grybauskaité, EU Commissioner
responsible for financial programming and the budget, had to walk on a tight
rope when presenting the final accounts for 2004 in September last year,
trying to convince the audience that mathematics no longer mattered, and
everybody had actually benefited from EU enlargement.

Another telling symptom is the attitude towards Romania and Bulgaria by the
“new” Member States, which had been arguing that their budgetary allocations
should not be reduced once the EU expands from 25 to 27 countries.

The consequence of these dynamics might not be immediately visible, but is
pretty straightforward: the EU is less and less built around the principle
of solidarity.

A stark illustration of this point is the composition of the EU budget for
2007-2013, which earmarks less money for budget lines such as agriculture
and local development (of special concern for the “new” Member States) and
more for budget lines such as research and infrastructure (cross-cutting
issues, consequently relevant for “Old Europe” as well).

Add to this the fact that the seats in the European Parliament and the
voting rights in the Council of Ministers are distributed based on the
population of each Member State; plus the fact that funds addressing
regional imbalances are awarded based on the per capita income of each
Region vis-à-vis the EU average, and only allocated to Regions ranking below
a given threshold (meaning, for instance, that as a consequence of
enlargement Sicily will no longer receive this money as of 2007).

The implications for Ukraine are pretty clear: no matter how hard it tries,
the country is too big and too poor to get into the EU, unless (or until?)
the EU itself evolves into a club very different (but probably much less
appealing) from what it is now.

The fact that Turkey stands in line for membership before Ukraine definitely
does not help: if Turkey does get in some day, the impact is going to be so
large to prevent further enlargements for a very long while; if it does not,
then this very fact is going to serve as an excellent excuse against
Ukrainian membership.

Incidentally, it is worth reminding that the neighbours who had welcomed the
“Orange revolution”, such as Poland and Lithuania, would be the first to
loose out handsomely from an EU enlargement including Ukraine, so it

would be foolish to expect them to support for real a Ukrainian bid for
membership.

What next, then? Well, it is probably appropriate for the new leadership
emerged eventually from the latest parliamentary elections to consider with
caution its next steps. In other words, Ukraine must choose carefully its
bedfellows, and necessarily do this in a long-term perspective.

Based on the remarks highlighted above, the EU might well be the wrong
direction where to head for: if Ukraine is serious about strategic thinking,
probably it should take into account that in twenty or thirty years’ time
the relative weights of Europe and Asia are likely to be very different from
what they are now.

Turkey, for instance, is not only building very strong economic partnerships
with Russian companies in a broad range of industries, but in a
little-noticed development decided last year to apply for observer status in
the Shangai Cooperation Organization, i.e. the regional organization linking
Moscow, Peking, Astana, Tashkent and the other capitals of Central Asia.

Granted, we are not witnessing a new Pereyaslav. But maybe one day Viktor
Andreevich will be able to claim that he did take the right step, by
nominating his nemesis as Prime Minister.

Let’s hope so, for the sake of Ukraine’s future.              -30-
————————————————————————————————
NOTE: Luca Brusati is Associate Professor of Management, and since

1996 has been working across most countries of the former Soviet Union.
Since 2003 he has been working in Ukraine on a regular basis, primarily as
a health sector management consultant. Luca G. Brusati
(luca.brusati@unibocconi.it) – August 5th, 2006
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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17. UKRAINIAN NEWSPAPERS DISAGREE OVER CRISIS RESOLUTION
             One idea seemed to dominate the print media – Yanukovych has
                   defeated Yushchenko and the Orange Revolution is over.
            People in Lviv discuss Yushchenko’s treachery and incompetence.

BBC Monitoring Research Service, UK, Friday, Aug 04, 2006
BBC Monitoring Service, United Kingdom, Friday, Aug 04, 2006

Ukraine’s mainstream media has offered diverging views of President Viktor
Yushchenko’s 3 August decision not to disband parliament, but endorse the
appointment of his arch rival, Party of Regions leader Viktor Yanukovych as
prime minister.

Opinions expressed in the newspapers on 4 August ranged from total
disapproval of the compromise between Yushchenko and the Party of Regions,
some even calling this a “betrayal” of the Orange Revolution of December
2004, to the understanding of Yushchenko’s position.

One idea seemed to dominate the print media – Yanukovych has defeated
Yushchenko and the Orange Revolution is over.
            EXPRESSED DESPERATION, DISMAY AND SHOCK
The nationalistic Ukrainian-language daily Ukrayina Moloda has expressed the
shock that many supporters of the orange forces experienced.

“It’s a pity, but we have to say that the Maydan [i.e. the Orange
Revolution] is dead. When Yanukovych again becomes the head of government,
no politician will have any moral right to appeal to the Maydan as an event
that defined a certain period of Ukraine’s history.

This is, in principle, a step back,” Ukrayina Moloda’s columnist Dmytro
Lykhoviy writes in an article entitled “How about betraying the Maydan?”.
             RE-INCARNATION OF FORMER CONVICT AT PM
“This is our mentality and our fate,” he continues, “to witness a
re-incarnation of a former convict as prime minister. This is because it is
one thing to say about implementing the slogan ‘East and west are together’,
and it is a completely different thing to drop the slogan ‘Prisons to
bandits’.”

“Yanukovych is almost a co-thinker of Yushchenko,” Gazeta Po-Kiyevski, a
Russian-language daily traditionally sympathizing with Yushchenko’s main
ally in the Orange Revolution, Yuliya Tymoshenko, writes.

“Yanukovych is finally back – not as a result of a coup or storming of the
cabinet by miners, but after elections, having capitalized on the incessant
squabbles in the orange camp.”

Reporting on Tymoshenko’s behaviour, Gazeta Po-Kiyevski writes: “Tymoshenko
was about to burst into tears, but she restrained herself. Addressing loudly
a crowd of her supporters, she promised to be in the opposition to
parliament, but not to the president.

Was it self-victimization on the part of the leader of the eponymous bloc or
a desire to show consistency in politics? Perhaps, it was cold calculation –
to break all ties to Mr Yushchenko ahead of a next presidential election.”

Reporting on the moods on the streets of Yushchenko’s and Tymoshenko’s
stronghold, the western city of Lviv, Gazeta Po-Kiyevski says: “People speak
in the offices, on the buses and at home. Lviv discusses Yushchenko’s
treachery and incompetence.”
                            SATISFACTION AND SYMPATHY
The newspapers that have been in the opposition to the orange camp see the
situation in a different light.

“In the small hours of 3 August, Viktor Yushchenko drew a line under the
Orange Revolution. The man [Yanukovych] against whose coming to power the
Maydan gathered one time takes this power from the hands of the president
now,” the Russian-language daily Segodnya, which is linked to Yanukovych’s
Party of Regions, says.

“The president explained his decision by a wish to unite Ukraine,” Segodnya
continues. “But he hardly had any choice. There is a majority in parliament
that has decided on its candidate for prime minister, so Yushchenko had to
either accept it or dissolve parliament, which would mean another three
months of instability in this country, whereas [Yushchenko’s party] Our
Ukraine would still have very low chances of winning an election. Mr
Yushchenko chose the lesser evil.”

Another newspaper sympathetic with Yanukovych’s camp, the Russian-language
daily Kiyevskiye Vedomosti, notes that “if Mr Yushchenko dissolved
parliament, the situation would have slipped out of his control (those
parliamentarians who are members of the anti-crisis coalition had warned
that they would ignore the president’s decrees and initiate his
impeachment).

Second, if the head of states eventually disbanded parliament, this would
have looked like a fairy tale in which Yushchenko the wizard meets the
wishes of a capricious princess.

“In reality, the coalition on several occasions proved that it can work, so
that the president had no reason to dissolve parliament explaining this by
the majority’s inability to make decisions.”
                                            WHAT NEXT?
The web site ProUA offers a scenario of further developments.

“Now the anti-crisis coalition will try to conduct a blitzkrieg campaign
involving – in order of priority – approving the new prime minister,
electing the Constitutional Court judges, ratifying a grand coalition
agreement, and finally forming the new Cabinet. The coalition hopes to do
all this in two days, after which everyone will get what they want.

The Ukrainian people will take a break from politics, the president will go
and relax at his Crimean dacha, and Yanukovych and Moroz will get the hang
of running the country.

Only Yuliya Tymoshenko has been left without a prize. At the crucial moment,
she failed to apply sufficient pressure. Now it is she who will be subject
to pressure.”                                             -30-
—————————————————————————————————
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18. UKRAINE’S COALITION DEAL PAPERS OVER ROOT DIFFERENCES
             The net result of the agreement leaves Ukrainian politics pretty much
                      as they were: stagnant, short of cash, and at loggerheads.

ANALYSIS: By Stefan Korshak, Deutsche Presse-Agentur
Hamburg, Germany, Friday, August 4, 2006

KIEV – Ukraine’s newly-signed coalition agreement Thursday papered over most
of the key political disputes facing the former Soviet republic, and
resolved little.

The politicians involved didn’t spin things that way, of course. One of the
architects of the document, pro-Europe President Viktor Yushchenko, praised
the agreement as ‘a fundament for the construction of national unity.’

Pro-Russia politician Viktor Yanukovich, soon to become Yushchenko’s prime
minister as one of the key conditions of the agreement, was similarly
effusive, saying, ‘I salute the president for compromising, and for putting
the interests of the nation ahead of politics.’

But as details of the agreement became known in the hours after Yushchenko
and Yanukovich put their names on the dotted line, far more disputes put off
to a later date were visible, than thorny political issues laid to rest by
sage compromise.

Ukrainian policy towards NATO was one of the cleverer waffles, with the
coalition agreement committing the government to continued cooperation with
the Atlantic alliance until some nebulous future date when the country is
ready to join, at which point there will be a national referendum.

NATO is unpopular in Ukraine because of continued Soviet attitudes, and
because NATO bombed Slavic Serbia, a traditional Ukrainian ally. Less than
one in three Ukrainians would even consider joining the alliance, a recent
poll showed.

The Ukrainian Army, however, is enthusiastic about NATO, as without NATO
there would be very little money for Ukrainian military training.

The probably even more decisive foreign policy question of which economic
alliance Ukraine sees itself as a potential member of – the European Union
or the Russia-led Single Economic Space – is neatly dodged in the agreement
with a firm commitment for the Ukrainian Government to work towards both
those goals equally.

Domestic economic reform planning in the agreement more closely resembles a
pack of soon-to-be forgotten campaign promises, than a blueprint for the
future.

The coalition agreement sets forth as official government policy an effort
by Ukraine to join the World Trade Organization (WTO), the general guarantee
of the right of private property, the creation of a middle class and 1
million jobs and sustained GDP growth at 5 per cent annually.

Sounds nice, but in Ukrainian reality all those nice ideas can’t exist
simultaneously. The ‘guarantee of private property’ is a political code
phrase in the country for no review of privatizations of billions of dollars
of Soviet industrial concerns in the 1990s, creating a privileged tycoon
class running the country’s economy.

The agreement does not even mention plans to combat corruption, according

to most Ukrainians the number one problem in the country.

A key feature of the agreement is a removal of the ‘tax inspectorate
press’ – in other words efforts by the government to squeeze money out of
industry.

Unfortunately for Ukraine’s Ministry of Finance, the national budget is
already running a deficit beyond the 3-per-cent maximum allowed a country
before it can join the WTO.

Land reform is simply put off until 2008, at which time the government
should create a land register.

The agreement term thus effective halts foreign investment – which is
unlikely to send money to a place with no land property rights – in
Ukraine’s theoretically bountiful black earth agriculture.

Energy policy is simply murky, with the coalition charged only ‘to provide
the energy security of Ukraine’ – leaving absolutely open the politically
explosive question as to whether Ukraine should buy energy from Russia or
Europe.

Yushchenko and Yanukovich are on opposite sides of the issue.

Also frankly ignored is the legal status of the Russian language, with the
sides agreeing Ukrainian should be the state language, but anyone not
employed by government could use Russian or whatever other language suited
him ‘without prejudice’ – therefore leaving quite open the question of what
language citizens and government officials will communicate in.

Then there are the plans that haven’t worked before for simple lack of
government cash, that are repeated in the coalition agreement with little
hope of working in the future – among them increased anti-HIV funding,
better medical care, increased pensions, and higher-quality education.

The net result of the agreement leaves Ukrainian politics pretty much as
they were: stagnant, short of cash, and at loggerheads – this time with a
pro-Russia parliament led by Yanukovich, and pro-Europe Yushchenko ready

and willing to slap a presidential veto on almost any of its legislation.
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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19. MARKETS, GOVERNMENT, AND PUBLIC LANGUAGE USE

OP-ED: By Stephen Velychenko, Resident Fellow,CERES
Research Fellow, Chair of Ukrainian Studies, Munk Center
University of Toronto, Toronto, Ontario, Canada
Action Ukraine Report (AUR) #748, Article 19
Washington, D.C., Tuesday, August 8, 2006

The  PROEKT DERZHAVNOI MOVNOI POLITYKA (1) that will be
discussed this summer in Kyiv has a number of shortcomings that must
be addressed.

1. The document ignores the institutional-economic aspect of language- use
and considers only governmental issues. In a mixed economy policy towards
public  language-use must include  the private sphere.

2. In the private sphere the institutional basis of public language- use is
determined by global and large domestic corporations. Both in Ukraine
distribute and produce  in Russian.

The document in question says nothing about why this is so or  how to make
producing in Ukrainian and English profitable for the owners of these
organizations.

3. Mr Jed Sunden, for example, in Kiev, publishes the respected KYIV POST.
Yet he also publishes 12 glossy magazines. These are all in Russian and
thereby Mr Sunden is Russifying Ukraine and keeping it in the Russian
language communications sphere (efir).

How can people like him be persuaded to publish their magazines in Ukrainian
and English and thereby moving  Ukraine into the English language
communications sphere – and giving  it direct contact with the rest of the
world?

4. How to make Columbia Pictures, Bill Gates and the owner of the BURDA
fashion chain distribute Ukrainian-language versions of their products? Why
do they use the national languages  in Poland, or Slovakia, or Holland, or
Estonia, but not in Ukraine?

Why, can the owners of MacDonalds  advertise in Ukrainian, but not the
owners Coffee Time,  Brita, or Parker and Obolensky? Why can employees in
PUZATA KHATA all address customers in Ukrainian, while in DOMASHNIA
KUKHNIA they all use Russian?

5. If Mr Surkis has dubious national loyalties and will not promote
Ukrainian public language-use, Mr Pinchuk  might. Mr. Akhmetov  supports
the Party of Regions. But his profits have been seriously hurt by EU tariffs
because he supports this pro-Russian party.

His profits have also been hurt by Syrian embargo of his pipes because they
are “radioactive.” Syria acted on Russian orders and now Russia on the same
spurious grounds will ban all imports of  Akhmetov’s pipes.

Mr. Akhmetov is rumoured to be learning Ukrainian and since his  present
interests and loyalties seem to be diverging, perhaps even he could  be
approached to reconsider his support for Russian-language media products.

5  Ianukovych now controls the government until the 2009  elections and will
do nothing to change public language-use – he  can’t even make Azarov speak
Ukrainian. In the interim, national leaders must stop thinking about
language in nineteenth-century terms.

They must consider how  to provide Ukrainian with an institutional and
market base with the assistance of corporate leaders. They must not simply
publish more books in Ukrainian.

They must create private and public institutions aimed at moving Ukraine out
of the Russian-language communications sphere (efir).          -30-
————————————————————————————————

FOOTNOTE: (1) THE PROEKT DERZHAVNOI MOVNOI POLITYKA 
IS AN OUTLINE GUIDE FOR THE RECENTLY ESTABLISHED
LANGUAGE POLICY COUNCIL AND IT WILL BE PUBLICALLY
DEBATED AT THE UKRAINIAN WORLD CONGRESS THIS
MONTH, AUGUST 18-20, IN KYIV.
————————————————————————————————
CONTACT: Stephen Velychenko, velychen@chass.utoronto.ca
———————————————————————————————–
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