AUR#754 Sept 7 Polish Investors Spur Development In Ukraine; Personal Incomes Up; Build The Holodomor Complex Now; Donetsk People To Many Key Posts

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

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

                                                     
ACTION UKRAINE REPORT – AUR – NUMBER 754
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED IN KYIV, UKRAINE, THURSDAY, SEPTEMBER 7, 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.               POLISH INVESTORS IN UKRAINE CAUSE BOOM IN
                              TRANS-BORDER SHIPPING MARKET
Polish News Bulletin, Warsaw, Poland, Wed Sep 06, 2006

2.     UKRAINIAN OIL CLOSER: ODESSA-BRODY-PLOCK PIPELINE
Polish News Bulletin, Warsaw, Poland, Wed, Sep 06, 2006

3.    UKRAINIAN PRIME MINISTER BELIEVES IN ALLIANCE WITH
                                   PROPRESIDENTIAL PARTY
Interfax-Ukraine news agency, Kiev, in Russian 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

4.            PERSONAL INCOMES 30 PER CENT UP IN UKRAINE 
Interfax-Ukraine news agency, Kiev, in Russian 0738 gmt 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

5.  GAZPROM GAS IMPORT DEAL HERALDS UKRAINE PRICE RISE 

By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, September 7 2006

6.     FITCH SAYS RISK IN ROMANIA AND UKRAINE INCREASED
Joanna Chung in London, Financial Times
London, United Kingdom, Thu, September 7 2006

7. UKRAINIAN, ROMANIAN TOP BRASS DISCUSS COOPERATION
Defense-Express website, Kiev, in Russian 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

8  UKRAINIAN MINISTER TALKS OF EVIDENCE OF MURDER OF
      PROMINENT POLITICIAN VYACHESLAV CHORNOVIL IN 1999
Ukrayina TV, Donetsk, in Russian 1800 gmt 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

9.                    BUILD THE HOLODOMOR COMPLEX NOW
Holodomor – induced starvation, death for millions, genocide of 1932-1933
OP-ED:
By Morgan Williams
Kyiv Post, Kyiv, Ukraine, Thursday, Sep 07 2006

10.            CELEBRATING THE UKRAINIAN AVANT-GARDE
       Chicago Cultural Center exhibits works by more than 70 modernists
By Timothy Inkebarger, Staff Writer, Chicago Journal
Chicago, Illinois, Wednesday, September 6, 2006

11. UKRAINE PRES AIDE: RUSSIAN TIES DON’T AFFECT GAS PRICES
Associated Press, Kiev, Ukraine, Wednesday September 6, 2006

12.                              “THE FRIAR’S GREED………”
  Prime Minister continues to appoint his people from Donetsk to key posts
Ostrov website, Donetsk, in Russian 0000 gmt 31 Aug 06
BBC Monitoring Service, United Kingdom, Tuesday, Sep 05, 2006

13YANUKOVYCH SETTLES INTO RETURN AS PRIME MINISTER
                           AS PRESIDENT WATCHES WARILY 

Mara D. Bellaby, AP Worldstream, Kiev, Ukraine, Wed, Aug 30, 2006

14.     UKRAINE APPEALS FOR ACTION TO STOP TRAFFICKING 
Associated Press, Kiev, Ukraine, Wed, September 6, 2006 

15.      PROFILE OF UKRAINIAN FUEL AND ENERGY MINISTER
                      YUIRY BOYKO FROM DONETSK REGION

BBC Research Service, UK, August 21, 2006 
BBC Monitoring Service, United Kingdom, Aug 21, 2006

16PROFILE OF UKRAINIAN TRANSPORT & COMMUNICATIONS
                           MINISTER MYKOLA RUDKOVSKYY
BBC Monitoring research in English 30 Aug 06
BBC Monitoring Service, United Kingdom, Wed, Aug 30, 2006
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1
       POLISH INVESTORS IN UKRAINE CAUSE BOOM IN
                        TRANS-BORDER SHIPPING MARKET

Polish News Bulletin, Warsaw, Poland, Wed Sep 06, 2006

WARSAW – In the first six months of 2006, the total value of Polish exports
to Ukraine reached $1.295bn, 55 percent more than in the same period of
2005.

From 2002 to 2005, it has increased from $1.180bn to $2.588bn. As a result,
as an importer of Polish goods Ukraine has overtaken Hungary and presently
holds the same position as Sweden.

Meanwhile, the value of Polish investments in the country exceeded $240m,
thus amounting to 2.5 percent of the total value of all foreign investments
carried out locally in H1 of 2006.

Polish investors are most willing to launch their projects in special
economic zones, which at present house investments of over 70 companies

from Poland. Alone the projects carried in the vicinity of Lvov are worth over
$150m.

The growing presence of domestic investors in Ukraine and consolidation of
the metallurgic industry resulted in a boom on the trans-border shipping
market. Since May, domestic company CTL Logistics has been shipping coke

to Ukraine and to Romania via Ukraine and Moldova for international giant
Mittal Steel.

It is the first case of the Ukrainian railways establishing co-operation
with a private shipping enterprise. “In the next few years, the volume of
raw material shipments from Ukraine to countries located further East, such
as Kazakhstan, may be expected to grow.

In order to facilitate shipments from EU member states to Central Asia, we
decided to spend ZL40m on the construction of two trans-shipment terminals
on the Polish-Ukrainian border,” says Trans Trade CEO Ireneusz Gojski.

Shipments from Ukraine usually carry mass loads of materials such as
minerals or steel, with machinery, home appliances and cars heading in the
opposite direction. Recently, shipping companies have included customs
services in their offer. In this way, they do not have to transport the
shipped goods to Kiev, where most of their clients have established their
local headquarters.

“Following the customs operations, which are performed at the border, the
goods are delivered directly to receivers. In this way, transport costs are
lowered by up to 20 percent,” estimates Andrzej Kozlowski from Ukrainian
branch of Raben.

Domestic companies are experiencing problems with distributors in Ukraine,
which is a country twice the size of Poland. In order to evade this
obstacle, Nowy Styl chair producer, which built a factory in the special
economic zone near Kharkov, decided to take shipping its products into its
own hands.

After investing in vehicles, it set up a network of warehouses in the entire
country. On the other hand, can manufacturer Can-Pack managed to establish
successful co-operation with local transport firms.

However, its representatives admit that warehouse space in Ukraine is
greatly insufficient. According to real-estate market research company DTZ,
the country is lacking as much as 400,000 square metres of warehouse space.

The existing warehouses are often located near railway tracks, which
encourages Polish shippers to use railways to deliver the goods to the
receiver.

Such is the case with Polfrost, whose Deputy CEO Marek Siwiec stresses that
so far the goods his company was responsible for were never stolen, whereas
in Poland he has seen entire loads disappear from warehouses.

However, investors operating in the country still have to deal with
omnipresent corruption. According to Transparency International, Ukraine
remains one of the most corrupted states in the world. On the other hand,
those willing to take the risk may hope for high profits.

So far, this incentive has tempted several shipping companies, including
Schenker, Kuehne + Nagel, Frank Maas and Raben. Over the last 12 months, the
latter firm has set up six trans-shipment terminals and increased employment
from 10 to 150 people.

So far, Polish logistics and shipping companies, such as Pekaes,
Trans-Poludnie, Link or Omega-Pilzno, are reluctant to enter the Ukrainian
market. “We might consider taking such steps in the future. At present,
however, the long queues at border crossings and the reigning corruption are
not in the least encouraging,” says Rafal Pijar from Trans-Poludnie.

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2.   UKRAINIAN OIL CLOSER: ODESSA-BRODY-PLOCK PIPELINE

Polish News Bulletin, Warsaw, Poland, Wed, Sep 06, 2006

WARSAW – At the Economic Forum in Krynica-Zdroj, PM Jaroslaw

Kaczynski agreed with his Ukrainian counterpart Viktor Yanukovych on
the construction of the Odessa-Brody-Plock pipeline, an investment
Poland has coveted for several years.

What remains to be settled are the sources of financing for the undertaking
and finding contractors to transport the oil from exploration sites around
the Caspian Sea, as well as its collection from the pipeline.

Kaczynski declared that he would bring the question up during his visit to
the US, as it is US companies that will drill for oil in the Caspian region.

Also interested in oil transport contracts is Kazakhstan’s KazMunaiGaz.

The company constructing the pipeline is the Ukrainian-Polish Sarmatia.

As far as financing is concerned, PM Kaczynski said that the EU agreed to
assist the enterprise estimated at $0.5bn with EUR400m. It is uncertain,
however, whether the Polish authorities had already discussed the matter
with Brussels.                                        -30-

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3. UKRAINIAN PRIME MINISTER BELIEVES IN ALLIANCE WITH
                                PROPRESIDENTIAL PARTY

Interfax-Ukraine news agency, Kiev, in Russian 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

KRYNICA, Poland – Ukrainian Prime Minister Viktor Yanukovych is confident
that the [propresidential parliamentary] faction of Our Ukraine will join
the anti-crisis coalition. Yanukovych was speaking at the 16th international
economic forum Krynica-2006 in the Polish town of Krynica today.

“We began talks today regarding the creation of a coalition with Our
Ukraine,” Yanukovych said, adding that the process of unification between
the coalition and Our Ukraine will take place shortly.

“I am confident that it will be so, that the main political players in
Ukraine know people’s moods, that people want an alliance,” Yanukovych said.

He also added that “time has come to implement political reform and it has
become possible for the branches of power, the cabinet, parliament and the
president to closely cooperate; there is political will for this”.

The main thing achieved recently in Ukraine, Yanukovych stressed, is that
“Ukraine will never return to the totalitarian system”.
Yanukovych said that the system has changed and that a real opportunity has
presented itself to adopt in Ukraine the democratic values shared by the
European Union.

As is known, the anti-crisis coalition, which was set up in July, comprises
the Party of Regions, the Socialist Party and the Communist Party. Talks are
under way on the possibility of adding Our Ukraine to this coalition. -30-
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4.     PERSONAL INCOMES 30 PER CENT UP IN UKRAINE 

Interfax-Ukraine news agency, Kiev, in Russian 0738 gmt 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

KIEV – Ukrainian population’s disposable incomes grew by 29.3 per cent year
on year and real incomes grew by 19.5 per cent year on year in January-July
2006, Interfax-Ukraine reported on 6 September, quoting the State Statistics
Committee. Nominal incomes grew by 30.3 per cent over the same period, the
committee added.

In July, disposable incomes grew by 21.3 per cent on June to 723.3 hryvnyas
per capita (about 143 dollars), real incomes grew by 20.2 per cent and
nominal incomes grew by 10.9 per cent.                  -30-
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5. GAZPROM GAS IMPORT DEAL HERALDS UKRAINE PRICE RISE 
By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, September 7 2006

Ukraine faces the prospect of more stiff increases in the price of natural
gas imports next year, following an agreement earlier this week between
Gazprom, the Russian energy company, and Turkmenistan.

Under the terms of the deal, which avoided a potential stand-off and the
threat of a cut in supplies, the Russian state-controlled monopoly agreed to
an increase from $65 (Euro51, £34) per 1,000 cubic metres to $100 for
natural gas bought at the border with the central Asian republic.

The gas is then transported through pipelines to Ukraine by RosUkrEnergo, a
Swiss-registered trading company co-owned by Gazprom and two Ukrainian
businessmen. The price rise, which comes into effect on October 1, will be
passed on to Ukraine.

It remains uncertain whether the increase will take place this year or next.
Analysts in Kiev said the higher price for Turkmen gas would raise Ukraine’s
bill to at least $135 per 1,000 cu m.

European countries are unlikely to be immediately affected by the increase.
But there is concern prices could rise if other central Asian countries,
such as Kazakhstan and Uzbekistan, follow Turkmenistan.

Ukraine is still adjusting to a $95 rate set in January after an earlier
price dispute with Gazprom that saw gas prices nearly double. That fuelled
inflationary pressures and led to stiff gas tariff increases for households
and industry.

Political manoeuvring by Viktor Yanukovich, Ukraine’s new prime minister,
may have prevented a price rise from taking effect this year.

During a visit to Russia last month, Mr Yanukovich claimed to have reached
an agreement in talks with President Vladimir Putin and other top Russian
officials who, in his words, gave assurances that gas prices for Ukraine
would remain unchanged this year.

Ukrainian officials remained confident yesterday prices for gas imports,
which are handled by RosUkrEnergo, will not rise until next year. But Sergey
Kupriyanov of Gazprom said the issue was “subject to negotiations”. Yuriy
Boyko, energy minister, is scheduled to visit Moscow today for talks on the
price Kiev will pay for gas.                                 -30-

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http://www.ft.com/cms/s/130bdfec-3e0e-11db-bd60-0000779e2340.html
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6.    FITCH SAYS RISK IN ROMANIA AND UKRAINE INCREASED

Joanna Chung in London, Financial Times
London, United Kingdom, Thu, September 7 2006

Rapid credit growth and strengthening exchange rates have increased the
systemic risk in Romania and Ukraine, according to a new report yesterday
from Fitch Ratings.

This could tip Romania, which is poised to join the European Union on
January 1, and Ukraine, another long-term EU hopeful, into one of the
highest risk categories monitored by the credit ratings agency in the next
six months.

Investors are increasingly focused on potential triggers to systemic crises,
particularly given recent market volatility.

The conclusions of the report, which examines 81 economies, are based on two
indicators. The banking system indicator measures intrinsic banking system
quality or strength while the macro-prudential indicator looks at excessive
lending growth when accompanied by either strong asset price appreciation or
real exchange rate strength.

Azerbaijan is the most vulnerable to potential economic shocks, followed by
Russia, Iceland, South Africa and Ireland, according to the report.

Earlier this year, Iceland and South Africa, in spite of relatively strong
banking systems, suffered heavily when risk aversion led to a widespread
sell-off across world financial markets.

Their potential risk stems largely from dramatic credit growth and currency
appreciation and sharp asset price growth. Both countries have been raising
interest rates in recent months to cool down their economies.

Richard Fox, senior director in Fitch’s sovereign team and co-author of the
report, said that in Romania and Ukraine, real credit growth exceeded 30-40
per cent last year.

That, along with strong real exchange rates and, additionally in Ukraine,
strong equity prices, meant the risk outlook for both countries could
deteriorate.

However, he pointed out that the data, particularly for the macro-prudential
indicator, were “volatile and notoriously difficult to forecast”.

He added that systemic risk indicators did not necessarily portend future
ratings actions.

Overall macro-prudential risk has increased only slightly in the past six
months, while strengthening in a number of banking systems has helped

reduce overall bank systemic risk.

However, 40 countries, or just under half of the countries monitored, find
themselves in high categories for systemic risk. The majority of these are
concentrated in central and eastern Europe.                      -30-
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http://www.ft.com/cms/s/28deaed6-3e0d-11db-bd60-0000779e2340.html

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7. UKRAINIAN, ROMANIAN TOP BRASS DISCUSS COOPERATION

Defense-Express website, Kiev, in Russian 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

KIEV – A border meeting involving the Ukrainian Ground Forces Commander,
Lt-Gen Vitaliy Frolov, and the head of the Romanian armed forces General
Staff, Lt-Gen Sorin Ioan, took place in Odessa on 5 September, the press
service of the Ukrainian Defence Ministry has said.

The generals exchanged views and shared the experience of reforming and
developing the ground forces, discussed prospects for further cooperation,
particularly in training personnel for the armies of the two states.

The generals paid special attention to joint events and training Ukrainian
and Romanian servicemen for peacekeeping missions.

The parties noted that the command of the ground forces should pay special
attention to preparation for the Light Avalanche exercise involving Slovak,
Romanian, Hungarian and Ukrainian servicemen from the Tysa international
battalion, which is due to be held in Transcarpathian Region, Ukraine, on
18-27 September.

The command and staff exercise involving multinational battalion Tysa is
held annually in the states whose personnel is part of the battalion. The
exercise was held in Ukraine in 2002, in Hungary in 2003, in Romania in 2004
and in Slovakia in 2005. This year the exercise will be held in Ukraine. -30-
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8.  UKRAINIAN MINISTER TALKS OF EVIDENCE OF MURDER OF
      PROMINENT POLITICIAN VYACHESLAV CHORNOVIL IN 1999

Ukrayina TV, Donetsk, in Russian 1800 gmt 6 Sep 06
BBC Monitoring Service, United Kingdom, Wed, Sep 06, 2006

KIEV – [Presenter] The death of the head of the People’s Movement of

Ukraine [Rukh], Vyacheslav Chornovil, was not accidental, Interior Minister
Yuriy Lutsenko said at a news conference in Dnipropetrovsk today.
[Chornovil died in a car crash near Boryspil in Kiev Region on 25 March
1999.]

According to him, the politician was assassinated rather than killed in a
road accident. Yuriy Lutsenko said he is ready to hand the materials of the
investigation to the son of the deceased, MP Taras Chornovil, on condition
he pledges not to disclose them.

[Lutsenko, in Ukrainian] A lot of new circumstances have emerged in the
case. I do hope the Prosecutor-General’s Office acts in line with the law in
this case.

If this happens, you and the whole of society will receive information that
Chornovil was not killed in a car crash, but was assassinated – if this
happens. Personally, I am deeply convinced of this, considering the
materials that I have.                                -30-
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9.            BUILD THE HOLODOMOR COMPLEX NOW
 Holodomor – induced starvation, death for millions, genocide of 1932-1933

OP-ED: By Morgan Williams
Kyiv Post, Kyiv, Ukraine, Thursday, Sep 07 2006

Among the major crimes committed against the Ukrainian people, the
Holodomor of 1932-1933 (induced starvation-death for millions-genocide)
stands apart and forms a category of its own.

It fits the criteria for genocide according to the United Nations Convention
on the Prevention and Punishment of the Crime of Genocide. The 75th
commemoration of the Holodomor takes place in 2007-2008.

The deliberate starvation of millions of Ukrainian citizens and the horrible
suffering endured by millions more is seen as the most destructive and
costliest in terms of human lives in Ukraine’s history. Its main target was
the peasantry, the mainstay of the Ukrainian nation.

A large portion of Ukrainian peasants died and the Kremlin engineered
the execution of a large part of Ukrainian national elites (cultural,
educational, religious, political).

Millions of these victims died from starvation, others were executed
with a shot in the head, or sent to the gulag to die.

The genocide against the Ukrainian nation as a whole and included the
Ukrainian minority living in the RSFSR, especially the Kuban region of the
Northern Caucasus, where the Ukrainian peasantry was starved to death,
and a large part of the Ukrainian elites physically exterminated. This
Ukrainian ethnic minority should also be remembered.

                                 HOLODOMOR COMPLEX
Dr. James Mace, outstanding U.S. scholar on the Holodomor, called for the
establishment of a Holodomor Commemoration, Educational, Research and
Historical Complex in Kyiv. Sadly, Mace’s many calls fell on deaf ears.

Leaders in Ukraine and around the world have felt strongly it was important
for the Ukrainian genocide to find its proper place in the collective memory
of the Ukrainian nation and the world community after being covered up and
denied by the Soviet Government for 55 years.

In 2002 the Ukrainian World Congress called for the building of a complex.
I wrote an opinion piece in the Kyiv Post back on Nov. 28, 2002.

On Feb. 12, 2003, the humanitarian deputy prime minister at that time,
Dmytro Tabachnyk, representing the government, called the famine a
voluntary terrorist act that claimed the lives of up to 10 million people,
and turned Ukrainian villages into “a horrible social reservation the size
of which shocked the entire world,” in a hearing before Parliament.

Minister Tabachnyk announced the government was planning to build a
National Famine Memorial Complex to include a monument, museum and
a historical research center.

President Yushchenko told the IV World Forum of Ukrainians
recently that he would make sure a Holodomor complex is built by fall
2008. He said the complex would be appropriate to the level of the tragedy.

                       COMPLEX NEEDS TO BE BUILT NOW
The Holodomor Complex needs to be built now. It must be a separate,
stand-alone institution, not combined with another facility, or organization
that covers other repression events or periods in Ukrainian history. It must
be wholly devoted to the Ukrainian genocide.

The historical complex should be a world-class structure with a research
center, library, exhibition hall, museum, monument, chapel, archive center,
bookstore and memorial gallery, as in the leading historical centers of the
world.

There are precedents for this type of genocidal commemorative structures.
One is the Vad Yashem in Israel and the Holocaust Museum in Washington
are devoted exclusively to the Holocaust and not to other crimes the Jewish
people have suffered.

Thus, the Holodomor Complex must be focused on the Ukrainian genocide,
otherwise its role in the education of Ukrainian youth and its testimony to
the world will be greatly diminished.

                                 INSTITUTE OF MEMORY
The Institute of Memory, created recently by the Cabinet of Ministers, is
said to be devoted to the crimes against the Ukrainian nation committed by
various regimes in the 20th century. There are two main concerns about the
Complex being included under this Institute.

Firstly, the 20th century is full of tragic moments for the Ukrainian
nation. Crimes were committed by the Tsarist regime, the Polish regime in
Western Ukraine between the two wars, the Soviet regime (three famines, mass
deportations around WWII and at other times), and German atrocities during
1918 and WWII, including the Holocaust.

Secondly, an institute devoted to a whole century of Ukraine’s national
history must not delve exclusively into the tragic moments of the country’s
past.

This is certainly not a healthy or sound way to cultivate national
consciousness, especially among the younger generation.

The Institute of Memory should also include heroic moments of the Ukrainian
struggle for independence or such joyous moments as the proclamation of
Ukrainian independence in 1918 and 1991.

The Holodomor Complex, representing the most destructive event in Ukraine’s
history, under the Institute, could get lost and just become one more event
in the long list of destructive and  heroic moments in Ukraine’s history.

                            GROUND LEVEL MONUMENT
The Holodomor Complex design jury met last week in Kyiv to review the final
designs and it will meet Sept. 8 to make the final decision. It will be
built underground with a large monument on top.

It should make a major, dramatic and strong statement against communism and
the people who were in charge, on behalf of the people, families and nation
who suffered under this horrible tragedy and pay tribute to those who died.

The monument itself can become a world recognized symbol for the Holodomor.
One that moves the human mind and heart to remember the evil systems of the
past and also present governments that destroy millions of lives.

Most current Holodomor monument models focus mainly on the victims, look
like church structures, and do not make a strong enough statement about the
crime.

Since the final decision will be made this week, it is far too late to begin
the process once again. Officials should work with the winner to develop a
design that focuses on the crime and the victims.

The President should issue the appropriate orders now, negotiate the
necessary political deals and ensure the Complex is completed by the end
of 2008.

Its construction would provide the momentum to the Holodomor 75th
commemoration programs around the world and become a world center for
the most tragic event in Ukraine’s history. No more speeches or promises,
just actions that deliver results.                       -30-
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Morgan Williams is Director, Government Affairs, Washington Office,
SigmaBleyzer Private Equity Investment Group. He is a member of the
Organizational Committee, 75th Anniversary of the Holodomor appointed
by the Cabinet of Ministers; Trustee, Holodomor Exhibition Collection;
Chairman, Mace Holodomor Memorial Fund of the Ukrainian Federation
of America. He is publisher and editor of the Action Ukraine Report (AUR)
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LINK: http://www.kyivpost.com/opinion/oped/25037/
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10.        CELEBRATING THE UKRAINIAN AVANT-GARDE
       Chicago Cultural Center exhibits works by more than 70 modernists

By Timothy Inkebarger, Staff Writer, Chicago Journal
Chicago, Illinois, Wednesday, September 6, 2006

Modern Ukrainian paintings and sculptures hidden away from Soviet police

in the early 20th century are finally seeing the light of day at an exhibition
running through the middle of October at the Chicago Cultural Center.

The exhibit, Crossroads: Modernism in Ukraine, 1910-1930, features more than
70 works by 21 artists of the Ukrainian avant-garde, many of whom were
persecuted, jailed, or killed.

“These were largely works that haven’t traveled even probably in Europe to
exhibition in Paris or anywhere else,” said Gregory Knight, deputy
commissioner of visual art for the Chicago Department of Cultural Affairs.

The exhibit is titled Crossroads in reference to the Western European
influences the artists drew from-Italian Futurism, French Cubism, and Art
Nouveau-when establishing their own styles. “One has to look hard to kind

of find what is indigenous in a crossroads situation,” Knight explained.

Besides paintings, the exhibit includes Cubist-influenced sculpture and the
abstract wooden assemblage of early Soviet-era Constructivism.

“Some of these artists are more celebrated and known as part of the Russian
avant-garde because that’s where their reputations were made after
immigrating from the Ukraine,” Knight said. “Others might have been Russian
by birth, I guess, and chose to live in Ukraine or Kyiv later in life
because the Soviet crackdown was slower to come there.”

In Sharpening Saws, a piece painted in 1927 by Cubo-Futurist Aleksandr
Bohomazov, workers are pictured using old techniques to prepare for the
future. The vibrant colors and themes in the painting celebrating work and
community are typical of the era.

“Ultimately it’s talking about traditional working methods of using handsaws
to split and create lumber, but then the suggestion in the background is
kind of a utopian modern architecture,” Knight said. “So its not like they
are just building log cabins; they’re actually kind of converting, if you
will, the past of falling trees and creating lumber with old hand methods
but with the suggestion of a modern world to come.”

The Kiss, a painting from 1913 by Vsevolod Maksymovych, is derivative of
1907 and 1908 Art Nouveau paintings of the same title by Austrian painter
Gustav Klimt, one of Maksymovych’s contemporaries.

Dairy-maid by Mykhailo Boi-chuk, uses a more primitive Eastern European
iconic style with hints of Cubism, depicting a woman carrying a canister of
milk through a forest. In the exhibition catalog, which is written in
Ukrainian with English translations, University of Southern California art
professor John Bowlt notes that Boichuk was accused of being a Ukrainian
nationalist for highlighting Ukrainian motifs in his paintings and was
“subsequently arrested and executed.”

The collection also features works by Alexandra Exter, David Burliuk, Vasily
Ermilov, and Kazimir Malevich. The works were compiled by Nikita
Lobanov-Rostovsky and Dmytro Horbachov from the National Art Museum

of Ukraine, the Museum of Folk Art of Ukraine, the Art Museum of
Dnipropetrovsk, the Theatre Museum and private collections.

In the exhibition catalog Lobanov-Rostovsky notes that the exhibit,
“provides contemporary artists with an opportunity to think about the past
and about the legacy, which a miracle has preserved.

Indeed, now is the time to contemplate the cultural future of a new Ukraine
and for art historians and archivists to uncover a treasure long buried
beneath the sands of time. I am fully convinced that, inevitably, a new and
vibrant art in Ukraine will be built upon the territory of this rich, but
neglected, legacy.”

Knight said the exhibit also will feature a forum at 6 p.m. Sept. 27, that
will draw parallels between Ukrainian art in the early 20th century and
during its recent liberation as a result of the breakup of the Soviet Union.
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11. UKRAINE PRES AIDE: RUSSIAN TIES DON’T AFFECT GAS PRICES

Associated Press, Kiev, Ukraine, Wednesday September 6, 2006

KIEV – Ukraine was wrong to expect that Russia would lower natural gas
prices if it had a government that Moscow considered more friendly, a top
aide to President Viktor Yushchenko said Wednesday.

Chief-of-staff Oleh Rybachuk was responding to comments by a senior aide to
Russian President Vladimir Putin, who said Tuesday that Moscow’s aim was to
sell gas to Ukraine at the same price it sells to the European Union.

Putin adviser Igor Shuvalov told reporters in Moscow that meant “gradual
changes in the cost” for the ex-Soviet republic.
A New Year’s dispute between the two nations over gas prices resulted in a
brief shutdown of gas to Ukraine, and a drop in supplies via Ukrainian
pipelines into Western Europe. The dispute rattled European energy consumer
and marked one of the lower points in Ukrainian-Russian relations since the
1991 Soviet breakup.

Many Ukrainians had expected that the comeback of Viktor Yanukovych, named
prime minister after his pro-Russian party won the March parliamentary
elections, might help Ukraine win more concessions from Moscow than the
Western-leaning Yushchenko, who has sought to drive Ukraine into NATO and
the European Union.

“The election is over, and so is all the talk that if we had a different
government that Moscow liked more, it would mean cheaper gas,” Rybachuk told
European business leaders in Kiev. “As far as Moscow is concerned, we are
already a member of the European Union.”

Yanukovych was strongly supported by Russia during his fraud-marred bid to
win the presidency in 2004, and his eventual defeat to Yushchenko was seen
as an embarrassing blow to Putin. After returning as premier, Yanukovych
called for improved relations with Moscow, but has also publicly pledged to
continue Yushchenko’s pro-Western policies.

Yanukovych said after his first meeting with Putin that he won an agreement
from Moscow to keep the current natural gas price of $95 per 1,000 cubic
meters steady until the end of the year. But he has called talks on the
price for next year “rather difficult.” His cabinet is preparing for a 40%
increase in the price next year.

The situation for Ukraine grew more complicated this week after Russia’s
state gas monopoly, OAO Gazprom (GSPBEX.RS), agreed to a 50% hike in

natural gas received from Turkmenistan. Under the complicated gas deal reached
between Kiev and Moscow earlier this year, Ukraine receives its gas via a
middleman company, with the more expensive Russian gas offset by cheaper
Turkmen supplies.

The Gazprom-Turkmen deal is likely to trigger an immediate -and difficult –
increase in costs for Ukraine, despite the government’s insistence that it
would be able to hold the price steady until year’s end, said Volodymyr
Saprykin, an analyst with the Kiev-based Razumkov Center for Political and
Economic Studies.                                   -30-
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12.                           “THE FRIAR’S GREED………”
  Prime Minister continues to appoint his people from Donetsk to key posts.

Ostrov website, Donetsk, in Russian 0000 gmt 31 Aug 06
BBC Monitoring Service, United Kingdom, Tuesday, Sep 05, 2006

The new Ukrainian prime minister continues to appoint his people from his
home region to the government, a Donetsk website has said. The author said
people from the industrial east region of Donetsk are taking over the
corridors of power.

He focused on the fuel and energy sector, finances, customs, transportation
and other smaller ministries, pointing out the advantages of control which
big business centered in Donetsk might enjoy.

The following is the text of an article signed by the Centre for Donbass
Social Trends Studies, entitled “The friar’s greed…”, published on the
Ostrov website in Russian on 31 August, subheadings appear as in the
original:

In principle, the cabinet of [Prime Minister Viktor] Yanukovych has not done
anything which would make it possible to judge its economic successes or
failures. But the very fact that there is a government, after long months of
instability, furthers the positive acceptance of Viktor Fedorovych
[Yanukovych]’s arrival in power.

Against this background, the only real and alarming step taken by the
coalition in power is the massive rotation of key personnel at all levels.
Of course, this cannot be compared to the size of the Orange purge of winter
2005, but that was justified then by the declared change in the ideology of
the authorities in power.

Since it has turned out that [President Viktor] Yushchenko’s arrival only
changed the colour, but not the ideology, then the need to now change state
managers in such numbers cannot be explained by anything other than an
attempt to carry out another economic “dividing-up-the-spoils” in one’s own
favour with the help of one’s own people.

On 10 August, Ukrainian Prime Minister Viktor Yanukovych stated: “There will
not be any lustration of personnel. I have signed a separate instruction in
which I obliged all leaders in departments to have conversations with those
who are to be dismissed and to see that jobs are found for them”.

As we see, the prime minister has a rather strange understanding of
lustration. But that is not the point. The point is not the label, but the
process. And the essence of the matter is such that the personnel rotation
in the country smacks of an openly revanchist nature, since it looks merely
like Yanukovych compensating his people who suffered for supporting him
after the Orange Revolution.

There are appointments which did not have to be made. And while the main
mass of everyday Ukrainians did not take notice, the intellectual elite took
this step as an insult, as Yanukovych laughing not at Yushchenko and the
Orange ideals Yanukovych has loved of late, but at the principles of
democracy and common sense.

One show in this series is the “eeny-meeny-miny-moe” of dividing up
parliamentary committees [Yanukovych’s Party of Regions did not live up to
its promise to divide committees evenly among the factions of parliament]
and inviting Mykola Plekhanov, who suffocated the student movement in Sumy,
to the cabinet.

The actions of these people, independent of the political regime, simply
discredit themselves and the power which embraces them.

Yanukovych’s team is forgetting that people do not judge the falsification
of the presidential election based on the Supreme Court ruling (which by the
way, no-one has overturned), but on their own personal voting experience and
in comparison to the previous parliamentary election.

And well, the strong-armed pressure on the peaceful student protest which Mr
Plekhanov built is assessed straightforwardly all the time and everywhere…
[ellipsis as published]

Holiday time and the general political apathy after the coalition soap opera
do not allow either politicians or simple folk to asses the magnitude and
meaning of the changes taking place in the country. Meanwhile, it is not
only the team which is changing, but the structure and base of power.

There is no system of counter-weights as there was under [former President
Leonid] Kuchma. Now there is a weak, though principled, president; and an
authoritative, though not completely independent prime minister and a
parliament still not tamed by either of them.

There are no evenly-significant political-economic clans, keeping their eyes
on each other. Now there is only one clan and one power. And if the Donetsk
people take power, it is not in order to willingly give it up. Judging from
the unceremonious personnel policy of the new cabinet, the next parliament
election will not be as democratic as this one [in March 2006] was.

For example, from a legal point of view, Donetsk Regional Tax Administration
Chief Oleksandr Zhurba and his first deputy, Mykhaylo Serbin, were dismissed
from the posts in a very suspect manner from a legal point of view. Less
than a week passed from the relevant decision by the State Tax
Administration [STA] until the unexpected presentation of the new directors
in Donetsk.

There was no information either in the press or on the STA website about the
change in the leadership of the Donetsk tax men until the presentation
itself. Serbin was on sick-leave at the time. Contrary to Yanukovych’s
words, he was not invited in for an interview and was not even given any
reason for the dismissal.

They found a replacement for ex-tax man in an indecently quick amount of
time. Giving the impression that there were check-marks next to Zhurba and
Serbin’s names even before Yanukovych came to the cabinet.

It is not surprising that the new STA leadership made its first personnel
changes in Donetsk. The people who came to power in Kiev and who make money
in Donetsk have taken care to see that the state did not control their
capital. And it is not likely that either of these dismissed gentlemen will
go to court, simply because they do not fit into [First Deputy Prime
Minister Mykola] Azarov’s team.

And maybe being dismissed is better for them, after all, this is the Serbin
who showed himself to be an active fighter against illegal conversion
centres. And if you believe [Internal Affairs] Minister Yuriy Lutsenko, the
Donetsk “businessmen” protect their “envelopes” in earnest. The murder of
police officer R. Yerokhin is testimony to that [Yerokhin investigated the
work of Donetsk conversion centres].

The Donetsk people are first rotating personnel in those sectors which have
a direct relationship to their business: energy, transport and
communications. Though they aren’t turning away from anything else. They are
trying to put their people everywhere.

One gets the impression that Yanukovych’s team does not plan to be in power
for long, and so they are stuffing their people in wherever they can so that
first, they can achieve some of their plans while they are in power and
second, to leave themselves a landing bridge into the executive after they
retreat – it is not that easy to fire a bureaucrat tenaciously holding onto
power in our time even for the president, he can just go to court to get
back.

                                        FUEL AND ENERGY 

The main conductor of the idea that all the smartest and most professional
people in this country are born and raised only in the Donbass was probably
Deputy Prime Minister Andriy Klyuyev, who divided up the entire fuel and
energy complex of the country with another Donetsk talent, Yuriy Boyko.

A deep and exact picture of the results of this select work was given by
journalist Orest Sokhar in today’s [31 August] article on Obozrevatel:

“Andriy Klyuyev (born in Donetsk) became the deputy prime minister of fuel
and energy and he entrusted Yuriy Boyko (Horlivka, Donetsk Region) with
running the fuel and energy ministry. Boyko’s deputies are Vadym Chuprun
(from Rovnopil, Volnovakhskyy district, Donetsk Region, and until recently,
governor of Donetsk Region) and Oleksiy Sheberstov (who for a long time
worked in DonbasEnergo).

Volodymyr Sheludchenko (Makiyivka, Donetsk Region, Donetskoblhaz) came to
head Naftohaz Ukrayiny and Serhiy Zubov (Kramatorsk, Donetsk Region) came to
head the state company Haz Ukrayiny.

Electric energy will also be run exclusively by people from Donetsk Region:
Ihor Hlushchenko (Belohirskyy town, Dobropolskyy district, Donetsk Region,
and director of Vostok-Enerho (SCM) [Systems Capital Management, controlled
by Party of Regions MP and Donetsk tycoon Rinat Akhmetov]) became president
of Enerhetychna Kompaniya Ukrayiny and Anatoliy Lutsyshyn (until recently,
the director of Servis-Invest, Donetsk, which is part of the SCM group)
became director of Enerhorynok.

The recently-appointed director of the National Electricity Regulating
Commission [NERC] is Oleksandr Rohozin (a long-time aide to Donetsk man,
Andriy Klyuyev). In addition to all of the above, one must add that Serhiy
Tulub (Donetsk) became coal industry minister”.

One may add Yuliy Yoffe, raised in neighbouring Luhansk Region in Kommunarsk
(now Alchevsk), to this list of professionals. Yoffe is now acting deputy
fuel and energy minister and, after sitting four convocations in parliament
suddenly seems to have for some reason decided he might like the executive
branch.

That is the reason for the total rotation of personnel in energy is far from
appointees’ professionalism, but rather the principle of being from the same
part of the country and personal loyalty, was unintentionally confirmed by
the former Donetsk governor Vadym Chuprun, who is now first deputy to Yuriy
Boyko.

In presenting Donetsk native Ihor Hlushchenko as president of the national
joint stock company Enerhetychna Kompaniya Ukrayiny, Vadym Prokofyovych
[Chuprun] told the now-former director of the company, Petro Omelyanivskyy
(who came to the company from Zakhidenerho): “Go back and put things in
order there”.

That means he was not such a bad director, if he is being sent somewhere as
an anti-crisis manager. They just had to put their own man in his
place…[ellipsis as published]

The exception to the policy of personnel rotations is Coal Industry Minister
Serhiy Tulub. Earlier, in coming to the new ministry, he completely rotated
personnel on the ground. People in Donetsk were waiting for a change in coal
generals – the directors of state coal enterprises.

But Serhiy Borysovych [Tulub] decided to make due without a revolution:
“People are working and I know them all; I brought many of them to their
posts and I know all of them. If anyone works poorly, doesn’t carry out his
tasks, then…[ellipsis as published] But there is no sense in that. No
revolutions, [just] calm work”. Of course, Tulub changed nearly all of his
deputies.

                                              FINANCES
Ukraine’s “great patriot” who came to Donetsk from Russia in 1984, Mykola
Yanovych Azarov, has also put his people in place on all the financial flows
of the state.

Wearing two hats, that of deputy prime minister and finance minister, Mr
Azarov not only changed all the deputy ministers and the entire leadership
of the STA, those structures which fill and allocate finances, but also of
those structures which directly or indirectly are supposed to control them –
the treasury and the State Auditing Directorate [SAD].

STA tax police chief Valeriy Koryachkin has been mobilized as first deputy
chair of the STA, he managed the tax police in Donetsk before the Orange
Revolution.

And Anatoliy Brezvin’s other first deputy is also a man from Donetsk – Vadym
Kaizerman, who was first deputy STA chair in Donetsk Region under Viktor
Yanukovych’s first tour as prime minister. One can say with certainty that
during their leadership Rinat Leonidovych [Akhmetov]’s structures had no
problems with VAT reimbursements in Donetsk. Well of course, these
structures had no problems at all then!

We were unable to uncover Donetsk roots for the new SAD chief Petro
Andriyiv, but his work for Azarov as director of the Finance Ministry’s tax
and customs policy department shows he is not unknown to Azarov. The new
chief of the State Treasury Serhiy Kharchenko is from the same nest; he
worked as deputy finance minister from August 2004 to March 2005.

As well, one should not forget such an important resource allocator as the
Tender Chamber. On 14 August one of the Party of Regions’ leaders, MP Rayisa
Bohatyryova, was elected the chamber’s honorary president. The first vice
president of the chamber is MP Lyudmyla Kyrychenko (Party of Regions), and
the chair of the supervisory council is MP Oleksandr Tkachenko (Communist
Party of Ukraine).

At a chamber congress, Raisa Vasylivna [Bohatyryova] spoke of the need to
increase public control in the sphere of state purchases, providing for the
maximum effective use of funds and strengthening the fight against
corruption.

                                              CUSTOMS
Export is the basis of the Donbass economy. And the prospect of special
economic zones being reopened under Azarov is more than realistic.
Apparently, in order that the customs “give the ok”, Ruslan Cherkaskyy was
appointed first deputy of this institution; until recently, he chaired the
Donbass Regional Customs Service.

                       TRANSPORT AND COMMUNICATIONS 

It is not hard to suppose that Transport and Communications Minister Mykola
Rudkovskyy, who is a member of the Socialist Party of Ukraine [SPU], is not
a professional in the sphere which he heads. A year ago, the Tovarishch
[Comrade] party newspaper called him a “specialist in the fuel and energy
complex”.

And so he has given the ministry’s main direction of activity, Ukrzaliznytsa
[Ukrainian Railways] and communications to more experienced comrades. From
Donetsk, of course.

The railway has not only always been an important factor in the economy in
general and in the determining of prices in particular, but also a lever of
pressure on enterprises. And so right after the Party of Regions cabinet
came to Hrushevskyy street “our own” people appeared in the State Railway
Transport Administration.

“When he sent me to Ukrzaliznytsa, Viktor Fedorovych [Yanukovych] told me:
you have no right to make a mistake. Of course, the team will be made up of
people you know, who are reliable and who are professionals”,
newly-appointed Ukrzaliznytsa acting director Volodymyr Kozak said,
commenting on personnel policy in Ukrzaliznytsa.

Kozak earlier ran Lemtrans, one of Akhmetov’s companies. And we point out
that this conversation took place before the head of the institution, Vasyl
Hladkyy, had been dismissed.

We will not comment on Mr Kozak’s appointment from the point of view of
effectiveness. Maybe he really is a better professional than those who came
before him. We are interested here in the new cabinet’s approach to
personnel policy as the policy of putting your own people in place.

To illustrate this, one can take an 11 August decision by the cabinet, in
which Yanukovych relieved the president of the right to appoint the general
director of the railway administration. That will now be done by the cabinet
upon the recommendation of the transport minister.

Under the previous edition of the Provision on “state administration of the
Ukrzaliznytsa Ukrainian railway transport”, the general director of
Ukrzaliznytsa was appointed by the president.

As far as communications, the former director of Akhmetov’s DCC, Leonid
Netudykhata, has returned as deputy transport and communications
minister…[ellipsis as published]

                                ENVIRONMENTAL PROTECTION 

Ecologists immediately called the appointment of Vasyl Dzharta as
environmental protection minister, the main anti-ecology decision of the
Yanukovych government. This metamorphose rocked the ecology world
on the Internet. Commentary was simply murderous.

But on the other hand, Donetsk Region with its plants and factories which
don’t belong to strangers is the biggest polluter of the environment in
Ukraine. Who besides Donetsk’s own Dzharta to keep an eye on pollutants in
Donbass only being let out at night like they are now?

At the same time, Vasyl Heorhiyovych [Dzharta] insured himself by calling
Svyatoslav Kurulenko into his team as first deputy. Mr Kurulenko once headed
the Donetsk Region Department of Environmental Management. And from

December 2003 to April 2005, he worked as deputy environmental protection
minister. Apparently, Svyatoslav Kurulenko is the one who is going to
professionally direct the ministry.

                   CONSTRUCTION AND ARCHITECTURE 
Another experienced bureaucrat also declined to make a revolution – the
minister of construction, architecture and communal housing Volodymyr Rybak.
He only brought one person with him from Donetsk – first deputy minister
Anatoliy Orlov. Since 1998, Orlov worked as general director of
Ukrpromvodchermet, the state external water supplies manufacturing
enterprise.

                                     INDUSTRIAL POLICY 
There is an interesting story with the Industrial Policy Ministry. It is now
headed by a representative of Zaporizhzhya Anatoliy Holovko. Although Rinat
Akhmetov said the Party of Regions nominated its own candidate for the
post – former general director of Azovstal, Oleksiy Belyy.

No-one knows where Holovko’s hands are, if he is appointed despite the
opinion of the Party of Regions. However, the Donetsk people insured
themselves here, too, appointing Dmytro Kolesnykov first deputy minister.
Kolesnykov earlier worked as first deputy mayor of Kryvyy Rih, and also as
purchasing and logistics director at Sever ore-enriching plant, which
belongs to Rinat Leonidovych.

                            LABOUR AND SOCIAL POLICY 
The Yanukovych government dismissed Pavlo Rozenko as first deputy labour and
social policies minister, replacing him with Lidiya Drozdova who headed the
Donetsk Department of Social Protection in the regional administration there
under Governor Yanukovych.

                                       HEALTH MINISTRY 
It is even good to have your own people in place in the health ministry:
what if you suddenly have to make public or deny the diagnosis of some
leader of the opposition. For such cases, the Party of Regions has delegated
its representative as first deputy minister, Oleksandr Orda, who is
experienced in this issue.

Yanukovych brought him to Kiev from Donetsk during his first term as prime
minister. He gained notoriety for his comments on the dioxin scandal in the
autumn of 2004 [when then-presidential candidate Yushchenko was apparently
poisoned by dioxin].

                          THE CONSTITUTIONAL COURT 

Just in case, Viktor Fedorovych delegated his own representatives to the
Constitutional Court as well. One understands when a new head of government
brings his own team of ministers to the cabinet. But the change in
executives looks like a quiet government coup…[ellipsis as published]

Perhaps it is against any such accusations, that the prime minister’s fellow
countryman, Yenakiyevo [Donetsk Region] city judge Vyacheslav Ovcharenko,
became a member of the country’s main court, though it is not clear for what
services.

There it is. Like they say, it’s all under control…[ellipsis as published]
the third coming of the Donetsk people to power is even greater than it was
under Kuchma. One gets the impression that it is going on under the slogan:
“Put your people everywhere!”

We will not assess this process from the point of view of economic
effectiveness for the country. Time will tell. But from the point of view of
tact, such personnel policies look very dubious. Politically it is simply
dangerous. Who more than those from Donetsk should know the story about

the friar being undone by greed. Including greed for power.

The Donetsk people in Kiev should not forget that the twin towers of the
World Trade Center were the victims of the terrorist acts in 2001, exactly
because they were taller than any other building in New York…[ellipsis as
published]                                          -30-

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13. YANUKOVYCH SETTLES INTO RETURN AS PRIME MINISTER
                           AS PRESIDENT WATCHES WARILY 
Mara D. Bellaby, AP Worldstream, Kiev, Ukraine, Wed, Aug 30, 2006

Ukraine’s President Viktor Yushchenko has been blunt: he’s keeping his eye
on the country’s new premier, Viktor Yanukovych.

The pro-Western president has rarely missed a chance to drill home this
point since he made the painful concession earlier this month to share power
with his archrival – the man he once accused of stealing votes in the 2004
presidential election that sparked the Orange Revolution.

But as Yanukovych settles back into the plush surroundings of Ukraine’s
Cabinet of Ministers – returning to the premiership he left just over a
year-and-a-half ago – he seems at ease with the changes the popular uprising
brought to Ukraine, eager to get off to a good start with his new boss and
determined to overcome his old gruff, stodgy image.

Many Ukrainians, the president included, appear wary of closing the door on
memories of Yanukovych’s fraud-marred bid for the presidency and the
corruption-fueled regime under which he served as prime minister to
then-President Leonid Kuchma. Both triggered the massive protests that
carried Yushchenko to power.

Yanukovych’s new ways were on display in a brief interview with foreign
journalists last week. He sank into an ornate armchair that his staff had
set aside for him, then frowned and switched to an ordinary chair like those
the reporters were in. “Let’s be entirely correct, we’ll sit as equals,” he
said, smiling.

Yanukovych also is fighting the perception that he’s pro-Russian, an image
bolstered by the strong backing he got from the Kremlin in the 2004 election
and by his being a native Russian-speaker who had to brush up on his
Ukrainian language skills.

Most of Yanukovych’s comments in the interview were in Russian, but when
asked about relations with Moscow, he pointedly answered first in Ukrainian:
“We need to work.”

He appeared perplexed when asked how Russia could help in Crimea, which is
populated largely by ethnic Russians, home to Russia’s Black Sea Fleet and
became part of Ukraine only in 1954 when ceded to the then-Soviet republic
by Nikita Khrushchev.

“Crimea is Ukrainian territory, just like any other Ukrainian region,”
Yanukovych said.

Yushchenko defeated Yanukovych in the 2004 presidential election on promises
to nudge this ex-Soviet republic into NATO and the European Union, and shake
off Russian influence. But Yanukovych’s party made a comeback in the 2006
parliamentary election, campaigning to make Russian a second state language
and improve ties with Moscow.

Since taking power, however, Yanukovych has championed what he calls a
pro-Ukrainian policy that bends neither to the West or the East. Relations
with Russia could prove his most difficult task. In the parliamentary
election, Yanukovych billed himself as just the person to improve ties with
Moscow and win Ukraine an advantageous gas deal.

He made Russia his first foreign trip and returned with what he said was a
promise to hold the gas price steady to the year’s end, but also spoke
vaguely about “a small increase” based on market prices for next year.

Talking about the thorny negotiations, Yanukovych admitted: “I have some
questions for our partners, which I would say, relate to the correctness of
our relations. That is to say, we want our joint activity to always be
predictable and transparent.”

Yushchenko, who endured strong criticism and suffered a vote of no
confidence in his former prime minister over this year’s gas price deal with
Russia, has appeared willing to hand this task off to Yanukovych _ even
declaring it the premier’s top assignment. But the president has bristled at
Yanukovych’s forays into foreign policy questions considered presidential
turf.

It was Yanukovych who declared that Ukraine would not launch its bid for
NATO membership at the alliance’s November summit. Yushchenko, a few days
later, suggested that Ukraine “won’t veer one iota” from its plan to join
NATO, and reminded Yanukovych of his pledge to uphold Ukraine’s national
security law, which stipulates NATO membership as a goal.

Asked if Ukraine needs NATO membership, Yanukovych chose his words
carefully.

“At this stage of time, this question is, from the point of view of the
population, still premature for Ukraine,” he said, adding that he supports
“continuing and deepening” cooperation with the alliance.

The unusual political partnership between Yushchenko and Yanukovych is still
finding its footing; experts say the real test likely won’t come until this
fall when the ex-Soviet republic’s politicians return from vacation.
Yushchenko has insisted that his government program take precedence, but
he’s largely dependent on Yanukovych and Yanukovych’s ministers to carry it
out.

“When I endorsed President Viktor Yushchenko’s program ’10 steps,’ I could
never have imagined that it would be fulfilled by his chief opponent in the
election,” Defense Minister Anatoliy Hrytsenko. “But it’s the political
reality.”                                           -30-

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14. UKRAINE APPEALS FOR ACTION TO STOP TRAFFICKING 

Associated Press, Kiev, Ukraine, Wed, September 6, 2006 

KIEV -Ukrainian officials Wednesday warned that human trafficking
threatened to become a major problem for this ex-Soviet republic, and
appealed for more international efforts to stop it.

Activists attending a major conference by the International Council of Women
say official statistics on human trafficking in Ukraine – and elsewhere –
belie the true scope of the problem.

“Ukraine is one of world supplier of slaves. Official statistics do not show
real figures for us,” said Alina Komarova, deputy head of the National
Council Of Ukraine’s Women.

“The sale of young girls and women, sex and economic slavery are part of

an international criminal business that has taken root in Ukraine,” Yuriy
Pavlenko, head of a state council to combat human trafficking, told the 31st
session of the council’s General Assembly.

“It spreads fast…It demands joint efforts and active co-operation from all
governments and societies,” he said.

About 300 activists from 22 countries came to Ukraine for assembly of the
council, a group that works to prevent discrimination and violence against
women.

Ukraine remains a primary source for men, women and children trafficked to
Europe, the Middle East and Russia for sexual exploitation and forced labor,
officials say. Low salaries and unemployment force thousands of Ukrainians
to seek employment abroad, increasing their vulnerability to exploitation,
they say.

The International Organization for Migration says it has provided assistance
to more than 2,700 Ukrainians who were victims of trafficking since 2000,
but estimates that number is only a small portion of the victims.

Pavlenko praised Ukraine’s government for launching new initiatives to
combat trafficking, including forming a special law enforcement division.

“It is a problem for all countries, but especially for all former Soviet
republics. Often our women go to other countries not knowing what they will
face there,” said Elena Bashun, a member of the Union of Russian Women.
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15. PROFILE OF UKRAINIAN FUEL AND ENERGY MINISTER
                YUIRY BOYKO FROM DONETSK REGION

 
BBC Research Service, UK, August 21, 2006 
BBC Monitoring Service, United Kingdom, Aug 21, 2006

Newly-appointed Fuel and Energy Minister Yuriy Boyko is an experienced
manager who headed state oil and gas company Naftohaz Ukrayiny for three
years under former President Leonid Kuchma.

Although a native of Donetsk Region, Boyko is seen as relatively independent
of the Donetsk-based Party of Regions led by Prime Minister Viktor
Yanukovych. Boyko is the leader of the minor Republican Party, which ran
unsuccessfully in the parliamentary election on a pro-Russian opposition
platform.

Since his appointment, Boyko has defended the controversial gas intermediary
RosUkrEnergo, which he says is essential for providing Ukraine with imported
gas at an acceptable price.

He has also said that the Odessa-Brody oil pipeline should continue to work
in the reverse direction, delivering Russian oil to Odessa rather than
Caspian oil to Europe, for at least another two years until the
Baku-Tbilisi-Ceyhan pipeline is operating at full capacity.

                                               CAREER
Born in the Donetsk Region town of Horlivka in 1957, Boyko graduated from
the Mendeleyev Institute of Chemical Technology in Moscow as a chemical
engineer. He also has an economics degree from the East-Ukrainian State
University (2001).

From 1981 to 1999, Boyko worked at the Zorya chemical plant in Rubizhne,
Luhansk Region, rising from technician to general director. From 1999 to
2001, he was board chairman of the Lysychansk oil refinery, Luhansk Region.
A controlling stake in the refinery was sold to Russia’s TNK oil company in
July 2000.

In August 2001, he became board chairman of the Ukrtatnafta refinery in
Kremenchuk. In February 2002, he was appointed head of Naftohaz Ukrayiny. He
also served as deputy state secretary at the Fuel and Energy Ministry until
July 2003, when he became deputy fuel and energy minister. Boyko is married
and has six children.

                                        NAFTOHAZ CHIEF 
Boyko was initially viewed as a protege of then First Deputy Prime Minister
Oleh Dubyna. When Viktor Yanukovych became prime minister in late 2002,
Boyko was seen as being primarily loyal to Kuchma. In a TV interview in July
2004 summing up his 10 years as president, Kuchma held up Boyko as a model
of a successful state manager.

In a newspaper interview in March 2003, Boyko said that under his management
Naftohaz Ukrayiny regained its leading role in the domestic gas market,
increasing the level of cash payments by industrial consumers. However,
Boyko’s effectiveness as a manager has been questioned.

An audit chamber report on the company for 2003, cited in the Global Witness
report “It’s a Gas: Funny Business in the Turkmen-Ukraine Gas Trade” (April
2006), pointed to a threefold decline in profits, while sales revenues
almost doubled.

While Boyko’s relations with Yanukovych appear to have been cool, those with
Fuel and Energy Minister Vitaliy Hayduk were antagonistic. Hayduk was
opposed to the reversal of the Odessa-Brody oil pipeline, which was being
lobbied by TNK-BP.

It has been suggested that Boyko influenced Kuchma’s decision to dismiss
Hayduk in December 2003. The Yanukovych government eventually approved the
reversal in July 2004.

Boyko is regarded as one of the main advocates of RosUkrEnergo, the
controversial intermediary company that delivers Central Asian gas to
Ukraine, and of its predecessor EuralTransGas. EuralTransGas replaced the
Itera corporation as supplier of Turkmen gas to Ukraine at the beginning of
2003.

In his March 2003 interview, Boyko said that the new arrangement allowed
Naftohaz Ukrayiny to take control of gas which previously went to Itera in
payment for transit services. When RosUkrEnergo was set up in July 2004,
Boyko was included on the company’s coordination committee – a position he
appears to have held until mid-2005.

 
                                            PARTY LEADER 
After the Orange Revolution, Boyko continued as head of Naftohaz Ukrayiny
until March 2005. In April, he became leader of the newly-founded Republican
Party. The party favoured holding referendums on Ukraine’s membership of the
EU, NATO and the Single Economic Space with Russia, Belarus and Kazakhstan.

Boyko warned that the adoption of the body of laws required to join the EU
would ruin the economy of Ukraine’s industrial regions. He also said that
the party “shares the position of the US Republican Party and other friendly
parties on the need to cut taxes”.

Boyko was highly critical of the activity of Yuliya Tymoshenko as prime
minister, particularly her handling of the petrol crisis in May 2005. In
August 2005, Boyko blamed the deterioration in Ukraine’s relations with
Gazprom on Tymoshenko’s lobbying of her business interests.

Meanwhile, Tymoshenko criticized the use of gas intermediaries such as
RosUkrEnergo, which she described as “a great criminal wart on the body of
Naftohaz Ukrayiny”. Boyko denied any wrongdoing and insisted that the
intermediaries ensured that Ukraine “received gas on time and at the lowest
price”.

In early September 2005, Boyko took part in protests against government
attempts to reverse the privatization of the Severodonetsk Azot chemical
plant by US investor Worldwide Chemical LLC.

At around the same time, Boyko said that he was under surveillance by the
Security Service of Ukraine, which was headed by Tymoshenko ally Oleksandr
Turchynov, and that he feared for his life.

After the dismissal of Tymoshenko, Turchynov complained that he had been
prevented from launching a criminal case against Boyko and others over
corruption in the gas sector by order of President Viktor Yushchenko.

The Republican Party ran in the March 2006 parliament election as part of
the Ne Tak (Not Right) opposition bloc alongside the United Social
Democratic Party of Ukraine, the Women for the Future Party and the
All-Ukrainian Centre Association.

Strongly opposed to NATO membership and sceptical about the European

Union, the bloc was strongly critical of what it described as the economic and
political incompetence of the authorities. It received 1.01 per cent of the
vote, and failed to enter parliament.                  -30-
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
16. PROFILE OF UKRAINIAN TRANSPORT AND COMMUNICATIONS
                             MINISTER MYKOLA RUDKOVSKYY

BBC Monitoring research in English 30 Aug 06
BBC Monitoring Service, United Kingdom, Wed, Aug 30, 2006

Ukraine’s new transport and communications minister, Mykola Rudkovskyy, is a
wealthy former businessman with a taste for flashy cars and stylish suits. A
close associate of Socialist leader Oleksandr Moroz, he was elected to
parliament for a second time in March 2006 as No 14 on the Socialist Party
list.

He was simultaneously elected mayor of Chernihiv, but soon gave up the post
to serve in parliament.

Long an uneasy and sceptical ally of President Viktor Yushchenko and former
Prime Minister Yuliya Tymoshenko, Rudkovskyy appears to have advocated

from an early stage that the Socialists should join forces with the Party of
Regions after the parliamentary election.

His appointment as transport minister came after his vigorous participation
in scuffles with the Socialists’ former Orange allies in parliament after
Moroz’s election as speaker and the formation of the anti-crisis coalition
of Regions, Socialists and Communists in July.

It has been suggested that Rudkovskyy’s real influence over the transport
and communications sectors may be limited with the appointment of figures
said to be close to Donetsk tycoon and Regions MP Rinat Akhmetov to senior
positions.

Volodymyr Kozak, the former manager of the Akhmetov-linked transport

company Lemtrans, has been appointed to head the state railway administration
Ukrzaliznytsya. Meanwhile, Leonid Netudykhata, the former manager of
Akhmetov’s DCC mobile communications company, has been appointed as
Rudkovskyy’s deputy.

                        BUSINESSMAN AND CIVIL SERVANT
Born in a Chernihiv Region village in 1967, Rudkovskyy graduated from the
Chernihiv teacher training college as a teacher of history and sociology.

n the early 1990s, he studied economics for three years in Vienna, where he
says that he made his first money shovelling snow from the streets and
working as a porter in a bakery.

He later set up a firm with Austrian partners exporting food and clothing
for oil workers in Siberia. On his return to Ukraine ahead of the 1994
presidential election, Rudkovskyy worked on Leonid Kuchma’s campaign team.

After Kuchma’s election victory, Rudkovskyy served for several years as an
economic consultant in his presidential administration under Dmytro
Tabachnyk, the current deputy prime minister for humanitarian issues.

Rudkovskyy has said that he left Kuchma’s team after Pavlo Lazarenko was
appointed prime minister and the president “ceased to be a democrat”.

Rudkovskyy later served as president of the Derzhinvest state investment
company, and as deputy chairman of the board of the state gas company
Ukrhazprom. He says he left Ukrhazprom because he opposed the plans of Ihor
Bakay to form the state oil and gas company Naftohaz Ukrayiny, which he saw
as corrupt.

Rudkovskyy says that he had some business projects at this time, but their
work was paralysed by police and tax inspectors after he switched his
support to Oleksandr Moroz.

In a November 2003 interview, Rudkovskyy downplayed his wealth, rejecting
suggestions that he was a dollar millionaire, and insisted that he was no
longer involved in business.

                                          TAPE SCANDAL
Rudkovskyy ran for parliament as a Socialist in the 1998 election from a
Chernihiv Region constituency. However, his initial victory was overturned
after several courts found that he failed to meet residence requirements.
The seat was subsequently won by Kuchma’s close associate Oleksandr Volkov.

Rudkovskyy then worked as an aide to Socialist MP Valentyna Semenyuk. He
came to prominence at the height of the “tape scandal” in January 2001, when
police used an acetylene torch to open the door of his flat and seized
computer equipment that was being used to listen to recordings allegedly
made in Kuchma’s study by presidential guard Mykola Melnychenko.

Prosecutor-General Mykhaylo Potebenko subsequently suggested that an
“underground laboratory” for manipulating the recordings was operating in
Rudkovskyy’s flat.

In October 2002, Potebenko’s successor Svyatoslav Piskun repeated the
allegation that Rudkovskyy’s computer was used to doctor the recordings that
implicated Kuchma and other officials in the death of reporter Heorhiy
Gongadze. Rudkovskyy denied this and he was never charged with any offence.

Rudkovskyy was elected to parliament on the Socialist Party list in 2002. In
parliament, he was a member of the fuel and energy committee. He was
responsible for the Socialist Party’s Chernihiv branch.

                                           PARLIAMENTARIAN
Rudkovskyy has been credited as one of those who steered Moroz away from

the nostalgic Soviet-style left towards a more centrist social-democratic
position. He was one of the strongest backers of political reforms shifting
power from the presidency to parliament and the government.

Rudkovskyy advocated Moroz as the single opposition candidate in the 2004
presidential election and was dubious about Viktor Yushchenko’s chances of
victory.

In a November 2003 interview, he described current prime minister and former
presidential candidate Viktor Yanukovych as “the most favourable candidate
from the authorities you could think of for being beaten by the opposition”.

In April 2004, Rudkovskyy broke an opposition taboo on talking of Yuliya
Tymoshenko’s contacts with disgraced former Prime Minister Pavlo Lazarenko,
telling parliament that the Socialists would sign a coalition agreement with
Tymoshenko’s bloc only if she gave testimony at Lazarenko’s trial in the
United States and returned without handcuffs.

When Tymoshenko became prime minister in early 2005 after the Orange
Revolution, Rudkovskyy was one of those who expressed scepticism about her
programme which he described as “a set of good intentions”. However, he
subsequently voted in support of the programme.

In September 2005, Rudkovskyy was, with Republican Party leader and
newly-appointed Fuel and Energy Minister Yuriy Boyko, one of the leaders of
protests by workers at the Severodonetsk Azot chemical plant against
government attempts to reverse the plant’s privatization by US investor
Worldwide Chemical LLC.

In November 2005, Rudkovskyy was photographed driving around Kiev in an
Aston Martin sports car worth several hundred thousand dollars. Rudkovskyy
insisted that he did not own the car (“it’s too rough on my bad back” he
told Ukrayinska Pravda), saying that he usually drives a Lexus.   -30-
———————————————————————————————–

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