AUR#782 Oct 27 Economic Performance, How Strong?; Retail Stores Expand; WTO When?; Who Will Win Race For Power?; Recognizing Genocide

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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 782
Mr. E. Morgan Williams, Publisher and Editor  
WASHINGTON, D.C., FRIDAY, OCTOBER 27, 2006
                
               –——-  INDEX OF ARTICLES  ——–
              Clicking on the title of any article takes you directly to the article.               
    Return to the Index by clicking on Return to Index at the end of each article
1.        HOW STRONG IS UKRAINE’S ECONOMIC PERFORMANCE?
PRESENTATION: by Dr. Edilberto Segura, Director and Chief Economist
SigmaBleyzer Private Equity Investment Group/The Bleyzer Foundation
Ukraine and NATO Membership, VII Roundtable
Ukraine’s Quest for Mature Nation Statehood,
Washington DC, Wednesday, October 18, 2006
Action Ukraine Report (AUR) # 782, Article One
Washington, D.C., Friday, October 27, 2006

2UKRAINE’S ECONOMIC RECOVERY SHOULD HAVE BEEN EXPECTED
OP-ED: By Valentin Zelenyuk, Economist and Professor
Kyiv Post, Kyiv, Ukraine, Thursday, Oct 26 2006

3  UKRAINE: GDP GROWTH 6%, INFLATION 10% 2006-07 SAYS IMF
Interfax-Ukraine, Kyiv, Ukraine, Wednesday, October 25, 2006

4UKRAINIAN CARGO AIRWAYS IN NEGOTIATIONS TO PURCHASE
                                BOEING B-747-200 AIRPLANES
Ukrinform, Kyiv, Ukraine, Thursday, October 26, 2006

5.        FRENCH RETAIL STORE OPERATOR AUCHAN REPORTED

                         PLANNING AN EXPANSION TO UKRAINE
Business Digest, Sophia, Bulgaria, Thursday, October 26, 2006

6UKRAINE RETAIL OUTLETS EPICENTER K, ATB-MARKET EXPAND

Business Digest, Sophia, Bulgaria, Thursday, October 26, 2006

7.   UKRAINIAN MFG OF VOLKSWAGEN & SKODA CARS OBTAINS
             EUR22.5 CREDIT PACKAGE TO EXPAND OPERATIONS
Interfax-Ukraine, Kyiv, Ukraine, Thursday, October 26, 2006

8UKRAINE TO BRIEF RUSSIA ON ITS PROGRESS TO WTO, SAYS
PM YANUKOVYCH, BUT WILL KEEP ON SCHEDULE FOR ACCESSION
Interfax-Ukraine, Kyiv, Ukraine, Thursday, October 26, 2006

9. YUSHCHENKO HOPES UKRAINE MAY JOIN WTO BY END OF YEAR
Itar-Tass, Moscow, Russia, Thursday, October 26, 2006

10.      WHAT’S THE NEXT STEP FOR EU-UKRAINE RELATIONS?
                          Energy issues loom large over the summit
Jabeen Bhatti, Deutsche Welle, Germany, Friday, October 27, 2006

11EU/UKRAINE CLINCH VISA DEAL, DOUBT ON FUTURE RELATIONS
Andrew Rettman, Euobserver, Brussels, Belgium, Friday, October 27, 2006

12.     POLAND LOOKING TO DIVERSIFY ITS ENERGY SOURCES
By Judy Dempsey,  International Herald Tribune
Paris, France, Thursday, October 26, 2006

13.   YULIA TYMOSHENKO BLOC SAYS RUSSIAN GAS TALKS FAIL 

Ukrainian News Agency, Kyiv, Ukraine, Thursday, October 26, 2006

14PRES: UKRAINE ABLE TO DEFEND NATIONAL SOVEREIGNTY 

Interfax-AVN, Helsinki, Finland, Thursday, October 26, 2006

15.           UKRAINE: WHO WILL WIN THE RACE FOR POWER?
ANALYSIS & COMMENTARY: By Serhiy Hrabovskyi
Deputy Editor-in-Chief of Suchasnist periodical
Ukrayinska Pravda, Kyiv, Ukraine, Monday, October 16, 2006

16.                     POLICE GOVERNMENT IN UKRAINE?
ANALYSIS & COMMENTARY: By Volodymyr Chemerys

Board member of Respublika (republic) Institute,

Board member of Ukrainian Helsinki Human Rights Group
Ukrayinska Pravda, Kyiv, Ukraine, Monday, October 16, 2006

17.            FAMINE MEMORIAL’S CONCEPTUAL CONFUSION
LETTERS TO THE EDITOR: Andrew Sorokowski, Rockville, MD
The Ukrainian Weekly newspaper, No. 43, Vol. LXXIV
Ukrainian National Association (UNA)
Parsippany, New Jersey, Sunday, October 22, 2006, page 7

18.                             “RECOGNIZING GENOCIDE”
EDITORIAL, The Ukrainian Weekly newspaper
Ukrainian National Association (UNA), No. 43, Vol. LXXXIV
Parsippany, New Jersey, Sunday, October 22, 2006, page 6

19.        CROSSROADS: MODERNISM IN UKRAINE, 1910-1930
            Major Exhibition of Early 20th Century Ukrainian Modern Art
     The Ukrainian Museum, NY, NY, November 5, 2006 – March 11, 2007
The Ukrainian Museum, New York, NY, Friday, October 27, 2006

20CONGRESSMAN CURT WELDON: ADVOCATE AND FRIEND TO
 UKRAINE AND UKRAINIAN-AMERICANS HONORED AT RECEPTION
By Andrea Porytko-Zharovsky, Jenkintown, Pennsylvania, October 2006

 
21.                    ‘WHY DON’T YOU DRESS UP AS A GIRL?
  It was just after the Second World War in Germany at a camp for displaced
  persons — so-called DPs. Buchok had fled from the Carpathian mountains
  in Ukraine, escaping his village with a loaf of bread and a chicken his mother
  had killed and cooked.
By Lesley Simpson, The Hamilton Spectator
Hamilton, Ontario, Canada, Tuesday, October 17, 2006
 
22.               SOVEREIGN FOOTBALL: A POLITICAL FABLE
COMMENTARY: By Celeste A. Wallander, Moscow Times
Moscow, Russia, Friday, September 29, 2006
 
23.   RUSSIA HALTS ALL ACTIVITIES OF MANY INTERNATIONAL
                  NONGOVERNMENTAL ORGANIZATIONS (NGOS)
    National Democratic Institute, International Republican Institute, Adoption
    Agencies, Doctors Without Borders, Amnesty International, All Shut Done
By Peter Finn in Moscow, Foreign Service, The Washington Post
Washington, D.C., Friday, October 20, 2006; Page A01
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1
HOW STRONG IS UKRAINE’S ECONOMIC PERFORMANCE?

PRESENTATION: by Dr. Edilberto Segura, Director and Chief Economist
SigmaBleyzer Private Equity Investment Group/The Bleyzer Foundation
Ukraine and NATO Membership, VII Roundtable
Ukraine’s Quest for Mature Nation Statehood,
Washington DC, Wednesday, October 18, 2006
Action Ukraine Report (AUR) # 782, Article One
Washington, D.C., Friday, October 27, 2006

Despite the political uncertainties that Ukraine has faced over the last two
years, its economy has continued to perform very well. In fact, during the

last five years, from 2000 to 2005,  few countries in the world can match
the following combination of economic achievements of Ukraine:

     [i] a high average rate of economic growth at about 8% pa;
     [ii] a low average annual inflation rate of less than 7% pa;
     [iii] a low average fiscal deficit of about 1% of GDP;
     [iv] an average current account surplus of about 6% of GDP;
     [v] fairly stable foreign exchange rates,
     [vi] increasing Foreign Direct Investments,
     [vii] high international reserves in excess of three months of imports; and
     [viii] a very low ratio of external public debt to GDP of about 20%.

Even in 2005, when political uncertainties were high, the economic
performance of the country was much better that originally expected.

[1] First, GDP performance in 2005 was reasonable. Although the official
statistics indicate that in 2005 GDP grew at a relatively low rate of 2.6%,
the actual rate may have been higher, possibly around 5%.

This is because in 2004, the rate of growth of exports was probably
overestimated due to some irregularities in the statistics of free economic
zones.

This “high base” for exports in 2004 led to poor results in 2005, with
exports declining by 11%.  Although some export decline did take place in
2005 (particularly metals), it was probably not as high as reported in the
official statistics.

On the other hand, in 2005 the major component of GDP, private consumption,
expanded by a significant amount of about 16.6% – which encouraged banking
and retail trade — while investments declined only slightly by 0.3% due to
political uncertainties.

[2] Second, the fiscal budget performance in 2005 was also better than
expected:  At the beginning of 2005, many analysts had feared that the
fiscal deficit in 2005 would be as high as 5% of GDP.  These fears did not
materialize.

Despite sizable increases in fiscal expenditures, the record high growth of
budget revenues, backed by elimination of tax privileges and exemptions and
the elimination of free economic zones, made it possible to end the 2005
fiscal budget with a reasonable fiscal deficit of -1.8%, in accordance with
IMF recommendations.

[3] Third, the Current Account showed a reasonable surplus of about $2.5
billion (3.1% of GDP).

[4] Fourth, the current account surplus and high growth of foreign direct
investments resulted in a more than twofold increase in the National Bank’s
(NBU) foreign reserves, which reached $19.4 billion at the end of 2005. As a
result, the national currency appreciated by 4.8% from UAH/$ 5.31 in 2004 to
UAH/$ 5.05 by the end of 2005.

[5] And fifth, sound monetary policy made it possible to keep inflation on a
lower than initially expected level of 10.3% yoy.
                                     OUTLOOK FOR 2006
The year 2006 is also showing better economic performance than initially
forecast.  Even thought the January 2006 increase in the price for imported
gas may have dampened the rate of growth of GDP in 2006 by about 2%,

GDP in 2006 is expected to grow by a reasonable rate of about 5.5% yoy.

The GDP increase in 2006 is due to a strong recovery of industrial growth,
construction, transportation and trade. Within industry, the most dynamic
sectors are machine-building, chemicals, metallurgy and food processing.

Furthermore, the successful implementation of plans to introduce energy
saving technologies may boost GDP growth further and compensate partly

the effect of gas price increases.

In fact, Ukraine badly needed the incentives to save energy as the country
consumes almost 3 times more energy per unit of GDP than Western Europe.

The fiscal budget performance in 2006 is also expected to be reasonable:
during the first eight months of 2006, despite increases in public
expenditures, the consolidated fiscal budget showed a surplus of 0.8% of
period GDP.

This surplus occurred because consolidated budget revenues continued to
increase rapidly, while expenditures were below targets.

VAT, profit and income taxes continued to generate the lion’s share of the
budget fiscal revenues (about two-thirds of consolidated budget revenues),
supported with surging retail trade, growing household incomes and improving
financial performance of enterprises.

For the entire 2006 year, the fiscal budget is likely to show a manageable
deficit of about 2.5% of GDP, in line with IMF recommendations.

The postponement of gas price increases (originally expected in July 2006)
will also result is a lower rate of inflation for 2006.  The annual
inflation rate in August 2006 was around 7.4% yoy.  By the end of the year,
inflation is likely to remain in single-digits, at about 9.5%.

The merchandise trade account deficit is another indicator which is
improving.  Although the trade account is still negative, the deficit has
been narrowing since March 2006.  As a result, the cumulative current
account deficit for the first half of 2006 was about 2% of period GDP.

For the entire year, the current account deficit is likely to be less than
2% of GDP, a number that can be easily financed by foreign direct
investments and manageably increases in foreign debt.
                                OUTLOOK BEYOND 2006
Over the next year or so, the Ukrainian economy is likely to continue
perform reasonably well. However, there is a growing realization in the
government that future high rates of economic growth will depend on the
ability of Ukraine to improve the country’s Business Environment to
encourage higher levels of foreign and domestic investments.

The agenda of economic reforms to achieve improvements in the business
environment is now well-known by most people in Ukraine.  The problem

is not in defining or understanding “what” needs to be done.

The problem is “how to do it”, in “what sequence of steps” and “at what
costs”.  The issue is the lack of implementation capacity in the country.
 PUBLIC ADMINISTRATION REFORM A TOP PRIORITY
In order to successfully implement reforms that would improve Ukraine’s
investment climate, the new government must start with reforming itself into
an administration that is capable of designing and implementing economic
policy efficiently.  A comprehensive Public Administration Reform should

be now a priority for Ukraine.

Ukraine’s current government structure retains many of the problems
inherited from the former Soviet Union, including cumbersome decision-

making, bureaucracy, and unclear responsibilities among government
agencies.
The existing system of developing, passing and implementing economic
policies stalls implementation of economic reforms that would improve
the country’s business environment.  There is now an urgent need to
“de-sovietalize” public institutions.

Without transforming the way government agencies presently work, it is
likely that the current numerous obstacles to investment will be removed
very slowly or will be quickly reversed or substituted by new regulations.

On the contrary, if well done, public administration reform will stimulate
fast implementation of other reforms, make the public sector less prone to
corruption and red-tape, and improve the country’s image, thereby putting
the country on a different path, on an accelerated course to attract
investment and faster development and growth.

Public administration will become a facilitator rather than an obstacle to
implementation of other economic reforms.

The reform of public administration is a lengthy process with many stages.
The government should start the reform by approving a plan of action for
implementing the concept of administrative reform.

The plan of action should take into account the experiences of other
countries, which shows that a comprehensive and drastic reform of public
administration has a better chance of succeeding than piecemeal or
incremental reform.

A number of countries have experienced success in reforming their public
administration (such as Canada, New Zealand, Poland, and Ireland).

The reform of public administration would require the following steps:

     (i) clearly define the Objectives/Role of the Government limiting it to
         “public” goods and support – not substitution – of the private sector;
     (ii) undertake a comprehensive “audit” of all government programs, with
          a view to transfer some of them to local governments, sub-contract

          others to the private sector and eliminate unnecessary/overlapping
          activities;
     (iii) develop the concept of well-defined ‘Programs and projects” for
           all government activities (this will help to improve administrative 
           efficiency, deal with corruption and also bring equilibrium to the
           fiscal budget);
     (iv) improve the efficiency in retained “core” government activities 
           and local governments, increasing public transparency and access
           to government information; and
     (v) carry out a civil service reform introducing effective “Incentives”
           and “Control” Systems.
            ADDITIONAL REFORMS NEEDED IN UKRAINE
In addition to Public Administration Reform, other reforms that are critical
to improve Ukraine’s business environment include the following:

[1] Improve macroeconomic stability by strengthening fiscal policies
(improving tax administration, reforming the pension system, decentralizing
financing), monetary policies (developing techniques for inflation
targeting -open market operations, forecasting models) and foreign

exchange rate policies (abandoning the exchange rate anchor)

[2] Improve the legal environment by:

     (i)  improving the practice of “public” consideration of any
          legislative act to be adopted, including their correspondence with
          existing legislation;
     (ii) improving the functioning of the Judiciary and securing its
          independence by inter-alia enacting the draft laws on the Status of

          Judges and on the Functions of the Judiciary (Organization, Court
          Procedures, and Court system) and further improving the financing
          of courts; and
     (iii) improving court enforcement procedures.

[3] Accelerate further quick deregulation and liberalization of business
activities (permits, licenses).

[4] Develop sound corporate governance practices by enacting key pending
legislation (e.g., the Joint Stock Companies law), abolishing the Commercial
Code while amending the Civil Code, developing corporate governance

codes, and accelerating the adjustment of Ukrainian accounting standards to
international accounting standards.

[5] Liberalize trade, join the WTO, sign free trade agreements with the EU,
CIS, and other countries, and simplify trade clearance procedures.

[6] Strengthen the financial sector, particularly by enforcing banking
regulations and supervision.

[7] Implement a prevention program to deal with corruption.

[8] Improve the country’s image by strengthening an Investment Promotion
Agency and implement specific activities for large investors (identify major
projects, carry out targeted promotional campaigns, identify niches/sectors)
and for small/medium firms (access to bank credit, better information on
laws, etc).                                                -30-

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CONTACT: Walter Zaryckyj, Program Coordinator, Ukraine’s Quest
for Mature Nation Statehood Roundtables, Center for US-Ukrainian
Relations, New York, NY, waz1@nyu.eduhttp://www.cusur.org.
————————————————————————————————-
NOTE:  The SigmaBleyzer Emerging Markets Private Equity Investment
Group is a member the Ukraine-U.S. Business Council in Washington.
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2. UKRAINE’S ECONOMIC RECOVERY SHOULD HAVE BEEN EXPECTED

OP-ED: By Valentin Zelenyuk, Economist and Professor
Kyiv Post, Kyiv, Ukraine, Thursday, Oct 26 2006

Remember the anecdotal incident that happened in May of 2006, when the
president of the EBRD, Jean Lemier, publicly accepted a bet from Yuriy
Yekhanurov (at that time the Ukrainian prime minister) that Ukraine’s
economy would grow at a much faster rate than EBRD economists had
forecasted?

The stake was quite peculiar: if Yekhanurov were to lose then he would have
to praise the professionalism of the EBRD economists during his lectures in
economics at his university.

On the other hand, if Yekhanurov were to win, then according to the bet, the
EBRD must increase its investments into Ukraine by 100 million euros for
each 0.1 percent above the EBRD forecasted growth rate for Ukraine.

The timing of the bet is coming to an end, and someone must get prepared to
lose. Who do you think that will be? Well, at the beginning of 2006, the
EBRD believed that Ukraine would grow only at 1.2 percent (in terms of real
GDP) and later updated its forecast, but only to 2 percent.

Already at this point, it should have been clear that the EBRD was highly
underestimating Ukraine’s capability to return to high economic growth this
year.

For example, if we compare August 2006 to August 2005, the Ukrainian
economy grew at a rate of 5.7 percent (according to the State Statistics
Committee), and by our estimates it is expected to attain an annual growth
rate of about 8 percent (plus or minus about 1 percent, depending on the
international market conditions for metals and energy products).

This means that the EBRD had better prepare enough cash – about 5 to 7
billion euros – to invest into the Ukrainian economy, while Yuriy Yekhanurov
ought to probably get a medal of honor from the Ukrainian people.

Was it hard to see that Ukraine would return to a decent growth rate at that
time? I think Yuriy Yekhanurov must have known what he was doing when
suggesting the bet.

By looking a little bit back into history, one should note that before the
hectic year of 2005 and since 2000, Ukraine was growing at an average rate
of about 8 percent.

What is also important to consider is that it was a recovery-driven growth,
and Ukraine was just at the beginning of the recovery path -from a deep,
decade-long economic crisis that brought Ukrainian official real GDP in
1999 down to about 40 percent compared to that of 1990.

So, even after an extraordinary growth of 12.1 percent in 2004, Ukraine’s
real GDP was still under 65 percent compared to that of 1990. So, under
‘normal’ circumstances (which assumes gradual implementation of important
reforms to liberalize the market), the recovery process should have
continued for at least five more years with an average growth of about seven
to nine percent.

The problem was that in 2005, Ukraine did not have  ‘normal’ circumstances,
but rather a post-revolutionary mess that Yekhanurov managed to clean up by
the end of that year. Indeed, one of the main reasons for the unexpected
underperformance in 2005 (2.6 percent relative growth) was the ‘shakeout of
property rights.’

It was not even  re-privatization per se, but the real threat of having a
massive re-privatization, fueled by the disagreements within the Orange team
that scared away many investors.

Ironically, the investment climate was spoilt for both the losers and the
winners of the Orange Revolution: many investors were just busy fighting to
secure or take over the existing assets of others, instead of starting new
business projects. Or they were just waiting for things to calm down.

Another important reason for the sudden underperformance was frequent
government intervention into markets, which scared many investors even
more.

By the way, it seems that among Western economists, it was only Anders
Aslund who openly and widely criticized the Orange team for these problems,
being the first to predict the resulting problems of 2005, while the
majority of Western economists had great expectations.

The property-rights shakeout was finally pacified in September of 2005,
and this is perhaps the main contribution of Yuriy Yekhanurov  as prime
minister.

The other main contribution of Yekhanurov was further liberalization of the
economy. Although not many formal reforms happened,  his government
substantially reduced interventions into private businesses and markets.

These two contributions were critical in helping to revive private
investment and to make Ukraine substantially more attractive for foreign
investors.

In 2005 and 2006, most of the foreign investors were banks and financial
companies, but these are just the ‘first birds’ that arrive to later
accommodate the entrance of others.

What about the prospects for 2007 and further on? Well, under normal
conditions, the economy must continue its recovery. The exact rate of future
economic growth in Ukraine will certainly depend on many factors, and so it
is extremely hard to predict and very easy to make a mistake in the
forecast.

In fact, most of the official forecasts of Ukraine’s economic growth, made
by various renowned institutions, both foreign and domestic, both for 2005
and 2006, failed because of this difficulty.

What is certainly clear, however, is that the growth rates for the following
years will strongly depend on the success of the country’s reforms (mainly
tax, administrative and land reforms) as well as world market prices for its
main exports (steel, machinery, chemicals) and for the main imports (oil and
gas).

In particular, if the government manages to substantially  reduce the tax
burden (specifically, to reduce corporate taxes and VAT) then the economy
should boom with a high rate of about 8 percent for the coming three to four
years.

Noteworthy is the fact that, according to the estimates of various
international scholars and the World Bank, the shadow economy in Ukraine
is huge: about 50 percent relative to the official GDP, and much of it is
due to the excessive tax burden.

So, in principle, even higher economic growth is possible, 10 to 15
percent -that is if the new government successfully implements the necessary
economic reforms to improve economic conditions for both local and foreign
investors, and encourage existing businesses currently operating in the
shadow to go legit.

Finally, if we are to go back to that bet, the huge investment from the EBRD
into Ukraine should help boost the long-term growth of the Ukrainian
economy.

The impact of this investment should be especially large if it is directed
into strategic sectors like high-tech production and services, as well as
production and provision of transportation  and public services.

Last but not least, there is also a hope that the EBRD would hire some
Ukrainian economists (e.g., Yekhanurov) to help with forecasting of
economic growth and development in Ukraine.
—————————————————————————————————
Valentin Zelenyuk has a Ph.D in economics; is a senior economist at the
Kyiv Economics Institute (KEI),  and a  professor of EERC (Kyiv-
Mohyla Academy). The views expressed in this article are his own and
not those of the above institutions.
—————————————————————————————————
LINK: http://www.kyivpost.com/opinion/oped/25298/

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3. UKRAINE: GDP GROWTH 6%, INFLATION 10% 2006-07 SAYS IMF

Interfax-Ukraine, Kyiv, Ukraine, Wednesday, October 25, 2006

KYIV – The International Monetary Fund (IMF) is predicting that Ukrainian
inflation will be around 10% in 2006-2007, Albert Jaeger, head of an IMF
mission that is visiting Ukraine from October 12-25, said at a Wednesday
press conference.

Inflation will be around 10% in 2006. It could remain at this level in 2007
based on the policies the government conducts, he said. Jaeger said that one
of the biggest inflationary risks is a increased price for imported natural
gas.

The improved IMF forecast for GDP growth in Ukraine – to 6% – is based

on higher-than-forecast steel prices on the international market and on a
growth in consumption in Ukraine, Jaeger said.

Existing economic risks will remain in 2007 because of possible further
price hikes for imported natural gas and a possible drop in steel prices,
Jaeger said.

This could have a negative effect on the current accounts balance, which is
why the IMF is forecasting that Ukrainian economic growth will slow to 4.5%
in 2007. Although the current accounts deficit is expected to grow next
year, it will be easier to finance because of the inflow of capital to the
country, he said.

The current forecast is based on an expected price for imported natural gas
for Ukraine of $130 per 1,000 cubic meters, Jaeger said.

The IMF said it would be acceptable for Ukraine to post a 2007 federal
budget deficit of 2.5% of GDP, Jaeger said. We think the government’s
intention is correct to keep a low fiscal deficit at 2.5%, he said.

He also gave a positive assessment to a reduction in the social burden
envisioned in the draft 2007 federal budget. The revenue part of the draft
2007 budget is too optimistic and real tax payments to the budget could be
lower than planned, Jaeger said.

Moreover, the IMF is not recommending establishing tax breaks for free
economic zones and said it is feasible to introduce a new tax regime for the
value added tax (VAT) for agriculture. Ukraine’s decision to introduce
quotas for grain exports is a negative signal for investors, Jaeger said.

He said he was concerned over delays in compensating for VAT. This

problem needs to be dealt with and solved, he said. Jaeger also said fees
for conducting foreign currency cash operations need to be abolished.

The draft 2007 budget envisions reducing fees for mandatory state pension
insurance in buying or selling cash foreign currency to 1% from 1.3% of the
amount of the operation. The IMF is also recommending full payment of
natural gas for key consumers, Jaeger said.                  -30-
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4.    UKRAINIAN CARGO AIRWAYS IN NEGOTIATIONS TO
                 PURCHASE BOEING B-747-200 AIRPLANES

Ukrinform, Kyiv, Ukraine, Thursday, October 26, 2006

KYIV – The state-run “Ukrainian Cargo Airways” is, presently, engaged in
negotiations with the Boeing company on acquisition of planes B-747-200,
Director General of the “Ukrainian Cargo Airways” Vitaliy Popov told a news
briefing in Kyiv.

According to Vitaliy Popov, the company performs diversification of its
equipment as the Il-76MD planes, ran by the company, function at a loss. The
company intends to utilize as many as 50 plains Il-76 and An-26 out of the
general 120.

The Director General of the Ukrainian Cargo Airways noted that the company
intends to purchase 10 planes An-70-100 in case the Antonov Aircraft Design
Manufacturing Complex will agree to elaborate the machine.

In 2006 the company performed 55 flights to Afghanistan and 34 flights
within the framework of the “Sea Breeze” program. The company has purchased

the Mi-8MTV helicopter and rented three similar ones.             -30-
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5.     FRENCH RETAIL STORE OPERATOR AUCHAN REPORTED
                     PLANNING AN EXPANSION TO UKRAINE
 
Business Digest, Sophia, Bulgaria, Thursday, October 26, 2006
French retail store operator Auchan, reportedly planning an expansion to
Ukraine, will endanger the market share of German rival Metro AG and local
hypermarkets, local daily Delovaya Stolitsa reported on October 19, 2006.

The German chain operator, currently the leader in the hypermarket segment
in Ukraine, will see its sales go down after Auchan’s entry, mainly due to
the broader product range of the French operator and Metro’s reluctance to
shift its focus from wholesale to retail, Lyudmila Komrakova, head of the
Ukrainian arm of Russian retailer Paterson, said in an interview for the
daily.

Auchan’s presence could affect the sales volume of all domestic
hypermarkets, as the number of visits to Auchan’s Moscow outlet stands at

10 million a year, none of Auchan’s peers in Kyiv can boast such popularity,
noted Oleksandr Lanetskyi, an executive with Ukrainian retailer BM Trade,
owner of the Bumi Market brand.

Competition will further sharpen if rival chains choose adjacent retail
locations, which is unlikely to happen in the near future, added Lanetskyi.

The Kyiv regional administration has offered several sites for Auchan’s
consideration, including locations along the ring road and on the left side
of the Dnepr river, Yuriy Kovbasyuk, deputy head of the administration, told
the daily.

Downtown locations are not excluded, sources from the town hall told the
paper. Sites in the region’s larger towns of Belaya Tserkov and Fastov have
also been put forward, although the French chain is more likely to go for a
location in Kyiv’s closer vicinity.                           -30- 

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Delovaya Stolitsa, http://dsnews.com.ua
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6. UKRAINE RETAIL OUTLETS EPICENTER K, ATB-MARKET EXPAND

 
Business Digest, Sophia, Bulgaria, Thursday, October 26, 2006
KYIV – Ukrainian leading DIY chain EpiCenter K opened on October 21,
2006 its first construction materials outlet in the central city of Poltava.

The new shopping centre, which covers an area of 10,000 sq m, will offer a
total 100,000 items for construction, decoration and furnishings from some
800 suppliers.

EpiCenter K opened an outlet in the western city of Lviv on October 7, 2006,
in addition to three other stores already operating in the capital Kyiv. The
chain operator also plans to set up outlets in the southern cities of Odessa
and the western Chernivtsi by the end of 2006.

Ukrainian supermarket operator ATB-Market, based in the eastern
Dnipropetrovsk region, opened on October 26, 2006 its first discount store
in the region’s town of Dneprorudnoye. The outlet covers an area of 521 sq
m, company public relations (PR) manager, Anna Lichman, said.

ATB-Market, set up in 1993, runs 158 stores in 35 Ukrainian cities under the
ATB brand. ATB-Market is part of Ukrainian food group ATB, which

operates in the confectionery and meat sectors. Link: www.rynok.biz
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7. UKRAINIAN MFG OF VOLKSWAGEN & SKODA CARS OBTAINS
           EUR22.5 CREDIT PACKAGE TO EXPAND OPERATIONS

Interfax-Ukraine, Kyiv, Ukraine, Thursday, October 26, 2006

KYIV – CJSC Eurocar, Ukrainian producer of Volkswagen and Skoda cars,

has attracted a syndicated credit worth EUR22.5 million.

“Implementing the second stage of large project for Volkswagen car
production in Ukraine, CJSC Eurocar has attracted a syndicated loan worth
EUR 22.5 million. The loan was issued for seven years,” a company press
release reads.

According to the company, the participants of the credit are HVB Munich
(Bayerische Hypo- und Vereinsbank AG: Munich, Germany), DEG (Deutsche
Investitions- und Entwicklungsgesellschaft mbH: Koln, Germany) and HVB
Ukraine bank (Kyiv).

The assets will be used to finance construction, purchase new equipment,
create infrastructure and replenish the company’s circulating assets.   -30-
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8. UKRAINE TO BRIEF RUSSIA ON ITS PROGRESS TO WTO, SAYS
PM YANUKOVYCH, BUT WILL KEEP ON SCHEDULE FOR ACCESSION

Interfax-Ukraine, Kyiv, Ukraine, Thursday, October 26, 2006

KYIV – Ukraine is ready to inform Russia about its progress on the path to
joining the World Trade Organization and will adhere to its schedule for
accession to the WTO according to Prime Minister Viktor Yanukovych.

“We will keep to the schedule of the WTO accession. We are planning that the
issue of Ukraine’s membership in the WTO will be put on the agenda of the
WTO General Council next year in February,” Yanukovych said.

He stressed that the government is actively working to allow Ukraine to join
the WTO as soon as possible. “The fact that Ukraine and Russia are connected
with close trade ties is good grounds for informing our trade partner about
our intentions while passing decisions on European integration or WTO entry,
as well as for finding joint decisions on disputed issues,” he said.

Similar actions should be made in solving other issues; “for example, in the
area of foreign policy,” Yanukovych said. “The economy and common sense
should prevail” in Ukraine’s foreign policy. “It is normal and right to be
honest and predictable with our partners.

The main concept of our policy remains invariable: we have acted and will
always act based on Ukraine’s national interests,” the prime minister said.
Russian-Ukrainian relations should be based on “mutually beneficial
cooperation and the mutual respect of national interests.

A clear position by the state on all cooperation issues and predictability,
as well as the skill to reach the needed balance of interests, is required,
he said. WTO entry is not “a race, this is a serious issue that requires
thoroughly verified steps,” the premier said.

Possible negative consequences for Ukrainian producers, which should have
the opportunity and time to adjust to new conditions preserving
competitiveness, should be taken into consideration while the Verkhovna Rada
passes WTO bills, he said. “That is why we will insist on a transition
period, which many country did,” the premier said.

The government’s goals at the final stage of Ukraine’s accession to the WTO
is to guarantee the adoption of some 20 bills to harmonize national
legislation with WTO standards, as well as to complete the signing of
protocols on mutual access to the market of commodities and services with
Kyrgyzstan and Taiwan, Yanukovych said.

The parliament has already received five bills, while the government will
discuss several other bills with associations of Ukrainian producers, he
said. One will be able to speak about concrete terms of Ukraine’s entry to
the WTO after the aforementioned tasks are solved, the prime minister said.

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9. YUSHCHENKO HOPES UKRAINE MAY JOIN WTO BY END OF YEAR

Itar-Tass, Moscow, Russia, Thursday, October 26, 2006

HELSINKI – Ukrainian President Viktor Yushchenko said he is hopeful that his
country will be able to join the World Trade Organisation (WTO) till the end
of this year.

Yushchenko, who is currently in Helsinki on an official visit, told
journalists on Thursday that parliament would debate all package of
documents on Ukraine’s accession to the WTO till November 20.

The Ukrainian president said he would meet the leadership of parliament and
government to discuss this issue. In his words, Ukraine-Europe future
integration talks will be based on the country’s membership in the WTO.
“Ukraine had no such chance to become a WTO member,” Yushchenko added.

Yushchenko comes against synchronising Ukraine’s and Russia’s accession to
the WTO. In the run up to the meeting with Russian Prime Minister Mikhail
Fradkov, Yushchenko had not given support to this idea.

The head of state holds that each country has its own logic, its own
priorities, acceding to the WTO, and it is illogical to synchronise them.
Yushchenko said Ukraine’s earlier accession to the WTO would pose no danger
to Russia.

The Ukrainian president had earlier urged parliament to endorse a package of
documents regarding the WTO by mid-November for the country’s accession to
the organisation in December 2006.

Meanwhile, Ukraine’s First Deputy Premier and Finance Minister Nikolai
Azarov, who attended the Yushchenko-Fradkov meeting the other day, said, “By
synchronising the WTO accession the Russian premier meant the protection of
Russian and Ukrainian markets against goods from third countries.

Azarov pointed out that Ukraine and Russia would have different regimes of
tariff protection of the markets in the WTO framework.

At the same time, the two countries are conducting talks on the creation of
the common economic space. The first deputy prime minister suggested that
Fradkov’s idea on the synchronisation should not be differently construed.

“I do declare that nobody talked about synchronising the date of Russia’s
and Ukraine’s accession to the WTO. The matter was not even raised, and is
not raised, since we conduct our talks and they conduct their talks,” Azarov
said.

Addressing a news conference upon the conclusion of the first meeting of the
committee on economic cooperation in Kiev, Fradkov said there is a need to
arrange bilateral plans regarding the WTO. “We must synchronise the
negotiating process on the two countries’ accession to the WTO,” he said.

“A spate of problems of arranging economic relations of Russia and Ukraine
arises with Eurointegration – transportation, industrial cooperation,”
Fradkov said. “All the matters are interrelated and must be settled without
getting stuck with some or other matters. It is necessary to be guided,
above all, by the interests of the countries, the interests of regions.” “It
is a world task,” Fradkov said.                  -30-

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http://www.itar-tass.com/eng/level2.html?NewsID=10927605&PageNum=0
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10.   WHAT’S THE NEXT STEP FOR EU-UKRAINE RELATIONS?
                       Energy issues loom large over the summit

Jabeen Bhatti, Deutsche Welle, Germany, Friday, October 27, 2006

At an EU-Ukraine summit Friday, EU officials will discuss trade, visas and
energy. But the subtext of the meetings is the future of EU-Ukrainian
relations after a pro-Russian prime minister took over in September.

There is always plenty to talk about when a former Soviet satellite state
knocks on the EU’s door. This time around, at the EU-Ukraine summit in
Helsinki on Friday, the agenda is longer than usual.

That is because Russian President Vladimir Putin angered western leaders by
refusing to sign an energy agreement guaranteeing access to Russian oil and
gas last weekend.

Thus, energy will be the hot topic when Ukrainian President Viktor
Yushchenko meets with Finnish Prime Minister Matti Vanhanen and EU
officials, including European Commission President Jose Manuel Barroso.

Both sides want to reassure EU member states there will be no repeat of last
year’s fiasco, when a Russia-Ukraine showdown over gas prices threatened
supplies that transit through the Ukraine to EU countries.

It reminded Europeans of their Russian energy dependence, some 80 percent of
Russian gas supplies to Europe pass through the Ukraine.

A deal made between Ukraine and Russia on Tuesday secured supplies through
2007, guaranteeing Ukraine cheap fuel at almost half the market rates in
exchange for closer cooperation between the two countries on foreign policy,
particularly Ukrainian aspirations to join the World Trade Organization and
NATO.

“I would say quite openly that we need to synchronize the negotiation
process of our countries regarding WTO,” Russian Prime Minister Mikhail

Fradkov said after announcing the deal.
                         PRO-RUSSIA STANCE PAYING OFF
These days a new chapter has begun in EU-Ukrainian relations as well as in
Russian-Ukrainian relations.

Pro-Russian former Prime Minister Viktor Yanukovych again became prime
minister in August after chaotic elections earlier this year and has worked
to improve relations with its large neighbor.

In some ways, this has paid off for the Ukraine and the EU so far —
Yanukovych was always the favored candidate of Russia, especially during the
2004 elections that ushered in his opponent Yushchenko and the so-called
Orange Revolution.

It was Yushchenko’s pro-EU stance that many say led Russia to punish the
Ukraine — and its heavily energy intensive steel and chemical industries —
by trying to double energy prices in January.

“Ukraine is in a difficult situation as they must constantly maneuver
between the west and Russia,” said Alexander Rahr, an expert on Russia and
the former Soviet states at the Berlin-based German Council on Foreign
Relations. “And they are particularly dependent on Russia, even if they
don’t like it.” That dependence is putting a damper on Yushchenko’s EU
aspirations.
                             LOOKING FOR A ‘BEACON”
In advance of the summit, the pro-western president said he wants the EU to
be a “beacon” for the Ukraine.

“A ship must always know what its destination harbor is,” Yushchenko told
Finnish newspaper Helsingin Sanomat. “The same holds true for our strivings
for Europe. We would like to see the shine, the light that shows our country
and our people what the destination is.

“Please note that we are not asking when,” he added. “We are only talking
about the aim, the goal that should stay more or less in place. Everything
else is the responsibility of my people and my country.”
                                           HAT IN HAND
Although he has not asked for formal talks on EU or NATO accession, the
president is not coming to Finland without requests.

One is that the EU set up a free trade zone with Kiev — the bloc is
Ukraine’s largest trade partner with exports valued at 7.7 billion euros
($9.8 billion) in 2005.

Travel is another of the issues on the Ukrainian president’s card. Ukraine
wants a simplified process for visas issued to its citizens and in some
cases a waiver of fees, an initiative preliminarily agreed to this month.

The main subtext of the summit, however, is the future of EU-Ukraine
relations. The EU lent strong support to Yushchenko and the Orange
Revolution in 2004, but since then, the country’s orientation has become
more uncertain as the government split, with only Yushchenko and the foreign
and defense ministers appointed by him looking to the west.

Most of the rest of the government — and the majority of Ukrainians who
still back Yanukovych — do not.

The EU states have come to realize that “these people are back,” Rahr said,
adding that the Ukraine’s pro-Russian prime minister might not be such a bad
thing for the EU.

“Western leaders might feel relieved that they need not keep promises made
at an emotional time,” he said. “Yanukovych is better able to negotiate with
Russia and takes a more pragmatic approach, something badly needed. And
since he enjoys such support at home, maybe he can achieve more regarding
the internal situation of the country.”                         -30-
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LINK: http://www.dw-world.de/dw/article/0,2144,2215697,00.html
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11. EU/UKRAINE CLINCH VISA DEAL, DOUBT ON FUTURE RELATIONS

Andrew Rettman, Euobserver, Brussels, Belgium, Friday, October 27, 2006

BRUSSELS – The EU is set to relax visa rules for Ukraine at a summit in
Helsinki today (27 October) but bilateral relations are becoming
increasingly ambiguous as Brussels refuses to clarify its position on Kiev’s
EU accession hopes and Ukraine prime minister Viktor Yanukovych begins to
rebuild relations with Russia.

“I am very pleased that the agreements on visa and readmission have been
agreed,” European Commission chief Jose Manuel Barroso said on Thursday.
“This means that Ukrainians will now be able to travel more freely and
easily while maintaining efforts to clamp down on illegal migration.”

The move means Ukrainians will continue to pay Euro35 to enter the EU from
2007 onward, avoiding scheduled price hikes to Euro70, in return for taking
back any illegal migrants found to have entered the EU via Ukraine after a
two year grace period on “readmission” expires in 2009.

Experts clinched the visa deal on Wednesday after bitter haggling over the
grace period – the EU wanted one year and Ukraine three years in line with
what Brussels gave Moscow – that saw Ukraine diplomats complaining the EU
was giving Russia favourable treatment while denigrating Ukraine support for
EU policies in the region.

The visa debate points to wider tension in EU-Ukraine relations, with Kiev
pushing Brussels to insert the phrase “the EU recognises the European
aspirations of Ukraine” into the preamble of a new post-2007 “Enhanced
Agreement.”

“We hope that the discussions tomorrow will present us with a good
initiative, with a clear mandate…for our role in the future negotiations
with the EU,” Ukraine president Viktor Yushchenko said in Helsinki on
Thursday night, AP reports. “One of the strategic goals is to get a European
perspective in our foreign policy.”

Mr Yushchenko’s camp has been pressing for an EU accession promise since

the Orange Revolution in 2004, arguing that his transitional country needs an
EU goal to stay on track with painful reforms after severing historical ties
with major energy supplier Russia.

President Barroso said merely that “the EU has greatly appreciated the
progress Ukraine has made since the Orange Revolution in the field of
political reform” on Thursday. “On this basis, the EU and Ukraine can aspire
to a qualitatively higher level in their relationship.”

Earlier in the week he told Polish daily Gazeta Wyborcza that “[Ukraine] is
a European country and as such must have a European perspective,” with the
remarks prompting commission spokespeople to explain that Mr Barroso meant
“European” in the “geographic” rather than political sense.
                          THE YANUKOVYCH QUESTION
The return to power in September this year of Kremlin-friendly PM Viktor
Yanukovych – accused of cheating in the 2004 elections and tainted with
suspicion in a plot to poison president Yushchenko – has also injected a new
element of uncertainty into future EU-Ukraine relations.

Addressing MEPs this week, external relations commissioner Benita
Ferrero-Waldner said “we were worried if the new Ukrainian government would
change tack on the issue” of supporting EU border monitors [EUBAM] in the
breakaway Moldova region of Transdniestria – an operation disliked by
Russia.

EUBAM is safe for now, with analysts such as CEPS’ Michael Emerson
saying Mr Yanukovych is too canny to push a hard pro-Russia line due
to the strong sense of independence and national identity that unfolded in
post-revolutionary Ukraine.
                                         TIME WILL TELL
But Europe has to wait and see if Mr Yanukovych’s pro-EU rhetoric will
translate into pushing EU-compliant and WTO-compliant bills through
parliament and if the prime minister’s political camp will be able to work
with the strongly pro-western party of president Yushchenko.

Moscow gave Mr Yanukovych a soft deal on Russian gas prices for 2007 this
week, but the deal appeared to come with strings attached on delaying
Ukraine’s NATO-entry process and tying Ukraine’s WTO-entry to Russia’s
WTO agenda, The Times’ Moscow correspondent reports.

“I would say quite openly that we need to synchronise the negotiation
process of our countries on WTO,” Russian prime minister Mikhail Fradkov
said after signing the gas price deal, with Ukraine WTO entry forming a
pre-requisite for opening a free trade zone with the EU in future.  -30-
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LINK: http://euobserver.com/9/22751?rss_rk=1

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12.    POLAND LOOKING TO DIVERSIFY ITS ENERGY SOURCES
 
By Judy Dempsey,  International Herald Tribune
Paris, France, Thursday, October 26, 2006

WARSAW – The conservative government in Poland plans to invest well over
Euro1 billion in the energy sector in an attempt to modernize its
infrastructure, and perhaps more crucially, reduce its dependence on Russia,
its main supplier of oil and gas.

The plans reflect growing fears in Poland that the Russian president,
Vladimir Putin, will use his country’s energy clout as a political hammer,
something he was judged to have done in January when Gazprom, the giant
state-owned energy monopoly, cut its gas deliveries to Ukraine in a dispute
over gas prices.

Ukraine agreed last week to a 36 percent increase in the cost of natural gas
supplied by Russia next year.

Warsaw is also concerned that a Russian-German pipeline project in
development will result in a loss of gas supplies to Poland.

“We want to diversify because we fear that Russia will use the export of its
gas as a political tool,” Piotr Naimski, secretary of state in charge of
energy security in Poland’s Economy Ministry, said in an interview Thursday.

Poland is not alone in Europe in its uneasiness over energy independence and
Moscow’s ascendant role in the industry, before the Continent’s energy
market is fully opened to greater competition next year.

Lithuania, for instance, plans to build a nuclear power plant to reduce its
dependence on Russia. France is attempting to merge utilities, Suez and Gaz
de France, in a bid to maintain a healthy and locally owned energy sector.

Over 70 percent of Polish energy needs consist of imports, of which 95
percent comes from Russia and other countries belonging to the Commonwealth
of Independent States. The rest is provided by domestic production,
particularly coal.

Naimski said the investments, when complete, would mean that Poland would
not have to increase its imports of gas from Russia even as domestic energy
consumption increases. “The level of Russian imports would remain stable,”
Naimski said. His goal is to eventually meet a third of Poland’s energy
needs outside Russia and the Commonwealth.

One investment is the construction of a large liquefied natural gas terminal
to be located in either the ports of Gdansk or Szczecin, both on the Baltic
Sea.

“We are in the final preparations for sending out the bids,” Naimski said,
putting a price of “several hundred million euros” on the project. “The
preparations and feasibility studies should be ready by the end of November
or early December.”

In addition, the Polish Gas and Oil Company is negotiating with Gassco, the
state-owned Norwegian gas transport operator, to take a stake in a new
off-shore pipeline which could be extended to the Polish coast if Poland
commits to buying a certain minimum amount of gas.

Gassco kicked off the process of developing that 7.3 billion Norwegian
kroner, or $1.1 billion, pipeline this month, saying it would open
negotiations with Norwegian and Swedish companies.

It would run from a point near Stavanger to Norway’s Grenland region and
then to western Sweden.

Inside Poland, Naimski said the government intended to invest Euro1 billion,
or $1.26 billion, in modernizing the country’s transmission and distribution
gas networks. The financing, spread over five years, would be made available
through the EU’s structural funds.

The government plans to complete the LNG terminal by 2010, when the
Russian-German Nord Stream pipeline is expected to be finished.

The pipeline will run under the Baltic Sea and allow Gazprom for the first
time to send gas directly from Russia to northern Germany, where it would
become a hub for distributing this gas to other parts of Western Europe.

Gazprom advanced those plans last week, announcing it had bought a
disbanded mine in northern Germany which would be converted into a
large underground gas storage facility.

Poland is concerned that once the Nord Stream pipeline starts sending gas to
Europe, Gazprom may close for repairs part of another pipeline, the Yamal,
that runs across Belarus into Poland.

Naimski said that Western Europe would not be affected by such repairs
because any shortfall would be met by the Nord Stream’s available capacity,
but Poland would suffer because the Nord Stream does not reach Poland.

“That is why the need to diversify is so important,” he said. “That is why
the Nord Stream pipeline is against our interests.”              -30-
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LINK: http://www.iht.com/articles/2006/10/26/business/polgas.php

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13. YULIA TYMOSHENKO BLOC SAYS RUSSIAN GAS TALKS FAIL
 
 Ukrainian News Agency, Kyiv, Ukraine, Thursday, October 26, 2006

KYIV – The Bloc of Yulia Tymoshenko says that the gas talks with Russia are a
failure. This follows from a statement by the bloc, a copy of which was made
available to Ukrainian News.

The bloc says that the government of Yanukovych has failed to carry out the
pre-election promises made by the Regions Party to reduce gas prices and
resume existing long-term inter-governmental agreements with Russia and
Turkmenistan regarding gas supplies to Ukraine.

“The government of Yanukovych is manipulating the facts, showing off their
unprofessional performance and incompetence as a triumph,” the statement
reads.

In the bloc’s opinion, the new price policy will push up tariffs for housing
and municipal services for the public, resulting in bankruptcy of housing
and public utility enterprises, NJSC Naftohaz Ukrainy, reducing profits of
industrial enterprises, cutting GDP and unbalancing the budget.

The current situation when the old clans headed by Yanukovych have returned
to the power is used for external governance of the country, the BYT says.

The bloc notes the biggest mistake in Ukraine’s energy policy is the
withdrawal of Yekhanurov’s cabinet from long-term inter-governmental
agreements on gas supplies until 2010 and elimination of the scheme that
bounded the gas price with the transit fee, while the government of
Yanukovych only increased negative results.

“The Bloc of Yulia Tymoshenko believes that the government’s full and
indisputable failure in the gas talks should result in the immediate
dismissal of the Cabinet of Ministers, not mentioning other shady schemes by
the “team of professionals,” including those with VAT, resumption of shadow
free economic zones, protection of RosUkrEnergo, “Mongol-Tatar” personnel
policy, etc.,” the statement reads.

According to the message, the BYT asked President Viktor Yuschenko and
National Security and Defense Council to immediately examine the gas policy
issue at a security council meeting.

As Ukrainian News earlier reported, on October 24, the Ukrhaz-Energo joint
venture and RosUkrEnergo signed an agreement on delivery of at least 55
billion cubic meters of natural gas to Ukraine at the price of USD 130 per
1,000 cubic meters in 2007.

Fuel and Energy Minister Yurii Boiko and the board chairman of Russia’s
Gazprom gas monopoly, Aleksei Miller, agreed during negotiations in Moscow
(Russia) on September 26-27 to retain RosUkrEnergo in the mechanism for
delivering natural gas to Ukraine.

Ukraine decided not to buy natural gas of Russian origin in 2007 because,
according to Boiko, it reached agreement with Uzbekistan and Kazakhstan on
annual delivery of 7 billion and 8.5 billion cubic meters of gas,
respectively and signed contracts for delivery of 42.5 billion cubic meters
of Turkmen gas per year.

RosUkrEnergo company is the exclusive supplier of natural gas to Ukraine.
Through Ukrhaz-Energo, the joint venture it created with the Naftohaz
Ukrainy national joint-stock company, RosUkrEnergo sells gas to industrial
consumers as well as to Naftohaz Ukrainy for the needs of the population,
municipal heat supply companies, and budget-financed organizations.

RosUkrEnergo sells gas at USD 95 per 1,000 cubic meters at the
Ukrainian-Russian border.

Ukraine consumes 76-78 billion cubic meters of natural gas per year.

On January 10, the Verkhovna Rada of the fourth convocation sacked the
cabinet after hearing the government reports of gas supplies from Russia.

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14. PRES: UKRAINE ABLE TO DEFEND NATIONAL SOVEREIGNTY 
 
Interfax-AVN, Helsinki, Finland, Thursday, October 26, 2006

HELSINKI – Ukraine has all the necessary means to defend its territorial
integrity and national sovereignty without other countries’ assistance,
President Viktor Yushchenko told journalists in Helsinki on Thursday.

“We have Ukraine’s military forces which are fulfilling this important
mission today. This is a function of the Ukrainian state,” Yushchenko said
after an Interfax correspondent asked him to comment on Russian President
Vladimir Putin’s statement announcing Russia’s readiness to protect Ukraine
from interference by a foreign country.

“On the other hand, if Vladimir Vladimirovich Putin means the guarantees
given by Russia within the framework of the nuclear disarmament agreement
together with the U.S. and other countries, we are grateful that this
position has been confirmed,” he said.

Answering a question from Sevastopol during Wednesday’s televised

question and answer session, Putin said that Crimea is Ukraine’s internal
affair, but Russia is ready to protect Ukraine from attempts by foreign
countries to influence the Ukrainian authorities’ decisions on such matters. 
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15.  UKRAINE: WHO WILL WIN THE RACE FOR POWER?

ANALYSIS & COMMENTARY: By Serhiy Hrabovskyi
Deputy Editor-in-Chief of Suchasnist periodical
Ukrayinska Pravda, Kyiv, Ukraine, Monday, October 16, 2006

Last week the Cabinet of Ministers addressed the Constitutional Court with
the request to officially interpret provisions of the Fundamental Law
concerning appointments and discharges of the governors.

The government wants to have the following issues cleared up:

[1] is the president empowered to appoint or discharge heads of local state
administrations without relevant decree issued by the government;

[2] in what form can the president adopt decisions on appointment or
discharge of the governor after local authorities passed a no-confidence
motion against him;

[3] what legal effects has non-approval of decision by the president if
local authorities passed a no-confidence motion against city mayor or a
governor. What happens in case local authorities receive no explanations
and legal grounds for that;

[4] what are the legal effects in case the president fails to approve the
decision on discharge of the governor if 2/3 of the city council passed a
no-confidence motion against him.

As we can see, nominally, the president and the government want to dispute
one issue in the court: who really controls local authorities?

In fact, the court decision will give the answer to the question if after
the Political Reform Ukraine will have a mixed political system
(semi-presidential) or it will become so called ‘bureaucratic’ republic,
instead of having purely parliamentary model.

In such a republic real power belongs to the government while the president
acts perhaps as a moral authority. The parliament just comes down to
formation of this government.

The character of relations between the president and the premier suggests
such conclusions. We may recall here the countersign conflict with the
presidential decrees and the interview of Vice-Premier Dmytro Tabachnyk with
Segodnya periodical in which he offered to review the principles of cultural
policy and teaching of history in the country.

The Cabinet of Ministers is working out the bill which will empower the
government to reject any bill at its own discretion so that it is not even
brought in for parliament’s consideration, irrespectively of its author.

So, the government is not too picky in the means they use to get total
control over the country. The revived President’s Secretariat, in its turn,
acts as the apologist of the Constitutional Reform, though strange it may
seem, trying to secure at least those president’s rights stipulated by the
classic ‘mixed’ government model.

However, Viktor Baloha seems to be willing to get wide powers, Viktor
Medvedchuk used to have de jure and what’s more important de facto.

At the same time nearly every day Viktor Yanukovych says that together with
President Yushchenko he wants to build a happy life for Ukrainian people.

At the same time Viktor Yushchenko stresses that together with Premier
Yanukovych he defends and will defend national interests for the sake of
Ukraine. That’s why, Yushchenko claims, the war between the government
and the President’s Secretariat is no more than an inevitable discord in the
cooperation of the abovementioned government bodies.

Is it an inevitable discord, indeed?

If one Viktor gathers governors the other Viktor does the same.  If one
Viktor visits regions the other Viktor also hits the road.

They go abroad almost at the same time. Though, for some reason foreign
policy vectors and the two Victors constantly tend to clash.

Thus, we may expect this race for power to cover new political realms soon.

As to the provisions of the Fundamental Law, even if the Constitutional
Court interprets the abovementioned issues in favor of the government the
president still has Article 118, part 8 which says: “Decisions brought by
the heads of local state administrations, which do not comply with the
Fundamental Law, Ukrainian legislation and other normative acts, may be
cancelled by the president or the head of regional state administration of a
higher level, as provided by Ukrainian legislation.”

What is the applicable law here? The Law on Local State Administrations?
If so, this bill has the provisions only concerning heads of local state
administrations of a higher level.

But the Constitution of Ukraine has a direct application itself, so the
government is welcome to get a total control over local authorities since
the president is empowered to cancel any decree issued by the Cabinet of
Ministers, if he (the president) ascertains its illegitimacy without
assistance of the Constitutional Court.

I doubt the government will argue each president’s decree in this court.

For the time being, the government is able to hamper implementation of
presidential decrees on appointment and discharge of ambassadors, reforms
in the court system, introduction of the emergency state and execution of
National Security and Defense Council (NSCD) decisions until the
Constitutional Court comes us with the relevant decision.

Let’s recall that the Cabinet of Ministers considers such ratification the
countersign, i.e. prior consent of the commissioners while the President’s
Secretariat believes it is the approval subjected to execution.

Obviously, the country may be paralyzed being plunged in the deep crisis
if the government intends to stand its ground till the last.

In this context attempts of the government to bind NSDC decision to the
Prime Minister’s signature look particularly interesting.

NSDC is a collective government body and its decision are collectively
adopted and implemented by the presidential decrees only.

So, following the logic of the Fundamental Law the president signs and
implements such a decree even if he voted against it.
The Prime Minister demands a veto right. If he gets it Ukraine is sure to
turn into parliamentary republic.

In fact, the government is able to change the mixed model to purely
parliamentary manipulating the State Budget. To achieve that the Cabinet of
Ministers needs to establish control over court system and security services
leveling the president’s rights as the Supreme Commander-in-Chief.

What can the president do in return? Not to approve the Draft State Budget?
It will result in the deep crisis again.

The government is also empowered to dismiss ministers who entered the
Cabinet of Ministers by the president’s quota. A simple parliamentary
majority is enough for that since Article 85 of the Fundamental Law says:
“the issues of appointments and discharges of the Cabinet of Ministers
members come within the Verkhovna Rada jurisdiction.”

However, there is no legal mechanism for that which is good for Viktor
Yanukovych if he de facto establishes control over the main government
bodies.

President Yushchenko, in his turn, may suspend all decrees and resolutions
issues by the government submitting them to the consideration of the
Constitutional Court with a view to ascertainment of their legitimacy.

There are lots of such documents. While the court will be in session to
consider each of them, lots of things may happen and emerge in the country.
Chaos, for instance. Or revolutionary situation.

The president is empowered to cancel any decrees issues by the government of
the Autonomous Republic of the Crimea run by Yanukovych’s closest allies.
That means the president will abolish this regional government body. Who
will run the peninsula then?

The president has the right to veto any bills adopted by the Verkhovna Rada.
As the coalition does not have constitutional majority the president is able
to paralyze the work of the parliament and hamper adoption of the State
Budget.

As mentioned above it will have unpredictable consequences for the country
but will enable the president to get control over financial leverage.

Finally, the president has the sole right to appoint and discharge high
command of all military units and to confer the highest military ranks. With
the political situation so unstable these authorities may have a decisive
role, although God save Ukraine from such situations. Don’t you think so?

However, there is one positive moment in this duel. We can see the numerous
discrepancies in the Fundamental Law after the ill-famed Constitutional
Reform came into force.

Ukraine has got the chance to bring the Fundamental Law in order, amending
it and taking into account decisions of the Constitutional Court. However,
to achieve that president’s and premier’s teams have to unite their efforts.

Meanwhile, they keep fighting.                               -30-
————————————————————————————————
Translated from Ukrainian into English by Eugene Ivantsov
————————————————————————————————
LINK: http://www.pravda.com.ua/en/news/2006/10/18/6593.htm
———————————————————————————————–
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16.                  POLICE GOVERNMENT IN UKRAINE?

ANALYSIS & COMMENTARY: By Volodymyr Chemerys

Board member of Respublika (republic) Institute,

Board member of Ukrainian Helsinki Human Rights Group
Ukrayinska Pravda, Kyiv, Ukraine, Monday, October 16, 2006

If you saw what was happening in Khreshchatyk Street on October 14th,
you’d think the authorities imposed the state of emergency in Ukraine.

Central and neighboring streets were barricaded; special tourniquets and
SWAT blocked all the streets in the centre of Kyiv. If you wanted to have a
walk there you had to have an ID the police would like.

On October 14th Ukraine showed the whole world it was a police country.

His Majesty Cop ran the state controlling movement of people in the capital
city.

“It wasn’t that bad even during Kuchma’s reign,” said my colleague,
participant of the protest action Ukraine Without Kuchma.
Indeed, opposite political forces planned to carry out their rallies which
could result in the street row like it was last year.

Indeed, Shevchenkivskyi District Court adopted the decision forbidding 5
political organizations to carry out rallies in the centre of Kyiv.

But why non-Party citizens who came to Khreshchatyk having no intentions

to slit noses of their ideological opponents were not able to get to the
underground or bus station?

After all, the court forbade rallies so that the marchers would not spoil
rest for Kyivers and guests of the capital. However, it was the policemen,
not the marchers, who spoiled them rest.

Having recovered from shock, a citizen must ask himself two questions and

of course have them answered by the authorities.

Question #1: was the prohibition of rallies legal? (October 14th is the day
of UPA (Ukrainian Insurgent Army) foundation and Orthodox religious

holiday Pokrovy).

Question #2: did the police act within its jurisdiction preventing mass
disorders in Kyiv?

On Friday, judge of Shevchenkivskyi District Court Natalia Buzhak passed a
judgment forbidding rallies for communists, nationalists and, for some
reason, Chornobyl veterans just because Kyiv City Council, Police Department
and President’s Administration believed that on October 14 street fights in
Khreshchatyk Street were highly probable.

Thus, this court decision is not based on legal arguments. The court just
‘legitimated’ wishes of the top state officials, including the president.

Regrettably, the decision was adopted by the court which in 2004 rejected
the claim of forbidding the rally which was destined to become the beginning
of the Orange Revolution.

However, we must state that on October 13 Shevchenkivskyi District Court
adopted a decision which does not comply with European Convention for

Human Rights, European Court practice, the Constitution of Ukraine and
Ukrainian legislation.

Also, the decision does not comply with the natural and indefeasible right
of Ukrainian citizens for peaceful assembly.

The thing is that the situation emerged in the streets of Kyiv on Saturday
is called ‘counter-rallies’ in European Court practice.
European Court has already adopted decisions concerning cases of
‘counter-rallies’.

Article 17 of the Law on Application of European Court Decisions says these
decisions are the source of law. In fact, these are mandatory decisions on
the territory of Ukraine.

One of the European Court decisions (as in case called Platform ‘Doctors

for Life Against Austria’) says: “Rallies may irritate or offend those who
oppose the idea of the rally. However, rally participants must have the
opportunity to carry out a rally having no fears of any violence from their
opponents; such fears might prevent other groups of people that support
general ideas or interests to express their viewpoint on the most
controversial issues for the society. The right for counter-rallies cannot
co-exist with the limitation of the rights for rallies in a democratic
country.”

Then, the European Court says any country that has joined European
Convention has positive obligations regarding peaceful assemblies and
associations.

That means the authority must secure the right for rallies both for
demonstrants and counter-demonstrants. These positive obligations are
provided by Article 11 of European Convention which guarantees all

Europeans the right for associations and assemblies.

So, the court does not have the right to forbid the rally just because
counter-rally is planned. Positive obligations of the police do not consist
in the limitation of the rights for all the citizens, even those, who were
not going to take part in the rallies on October 14th, but in securing the
rights of all citizens, including the right of assembly for those who was
going to take part in any rally on October 14th.

That means the policemen did not have to block Khreshchatyk Street for
everyone but to protect two rallies of supporters and opponents of UPA.

They had to protect and prevent mass disorders at that. The Law on Police
obliges them to act so.

Policemen used to say on Saturday: “How can we prevent fights if we do not
block Khreshchatyk?”

The author of this article could give the policemen some pieces of advice
but he will not do that as he is not a policemen. It is the budget financed
Interior Ministry that has to work out and implement all security measures.

After all Ukrainian policemen could study experience of the Northern Ireland
Police which manages to keep the peace during counter-rallies of the
Catholics and Orangists being in the far more difficult situation.

I will repeat that Ukrainians pay courts and the police not for the latter
infringes their rights but for the law-enforcement agencies secure these
rights, possibly posing no questions coming beyond cognizance of an

ordinary citizen.

Of course the easiest solution for the police is to impose a curfew and just
forbid people to show up in the streets. Then there will be no
demonstrations, mass riots and disorders. The police will get their wages
and enjoy rest instead.

The curfew is the author’s fancy, though. However, the events of October
14th showed the trend which may result in the curfew.

So, Ukrainian society has to stop Mr. Cop from the very beginning.
Otherwise it will be too late.

We have already answered the questions posed to ourselves on October 14th.
Now it is time the president, Interior Ministry and Kyiv mayor do the same.
————————————————————————————————-
Volodymyr Chemerys, board member of Respublika (republic) Institute,

board member of Ukrainian Helsinki Human Rights Group
————————————————————————————————-
LINK: http://www.pravda.com.ua/en/news/2006/10/16/6581.htm
————————————————————————————————-
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17.  FAMINE MEMORIAL’S CONCEPTUAL CONFUSION

LETTERS TO THE EDITOR: Andrew Sorokowski, Rockville, MD
The Ukrainian Weekly newspaper, No. 43, Vol. LXXIV
Ukrainian National Association (UNA)
Parsippany, New Jersey, Sunday, October 22, 2006, page 7

Dear Editor:

A monument is effective only if it represents a clear conception. Judging
from the report on the planned Famine commemorative complex in Kyiv
and Morgan Williams’s comments (September 17), there is some
conceptual confusion about the project.  Should it focus on the victims
or the perpetrators?  Should it be religious or political? Is it a
commemoration or a condemnation?

Underlying these uncertainties there is, I think, a deep ambivalence. On
the one hand, we want to build a monument that will symbolize the
suffering, death and resurrection of the Famine victims of 1932-1933.

This called for a mood of compassion and contemplation.  On the
other hand, we want to condemn the genocidal policies of the Soviet
Communist state.  That requires a bold political indictment.

Can a single monument do both?  Can we reconcile mourning and
outrage?  Or does spirituality mute the impulse to political action?
And does the triumphant narrative of resurrection blunt the tragedy
of death?  If we cannot answer these questions, we cannot create a
conceptually coherent monument to the Famine.

Yet we can answer these questions. Just as faith and joy in the
Resurrection hardly diminish our horror at Christ’s torments, so our
prayer for the Famine victims need not deter us from condemning the
crimes of the perpetrators. Nor should anything hold us back from
exposing the nihilistic ideology which, with inexorable logic, led to
a policy of annihilation.

But how can we embody such a complex conception in a concrete
memorial?  As described, the monument will have a binary symbolism,
tracing a path downward to death, then upward to renewed life – a
universal narrative (and, incidentally, not an exclusively Christian one).

The facilities for the study of the historical famine – the narrative of
death – would belong to the first part.  They should include the museum,
library, archive, genealogical and research center.  The chapel would
naturally belong to the second part – the narrative of resurrection.

Of course, many visitors might simply walk through the complex
without pausing.  There must be some way to convey the message to
them.  Here, as Mr. Williams suggests, the Holocaust Museum in
Washington could provide some guidance.  Perhaps engraving the
walls with the names of depopulated villages, together with their death
tolls, would be a fitting way to touch even the most casual visitor.

But these are matters for the planners and architects to decide.  I am
confident that Mr. Haidamaka and his associates will do so with
feeling and imagination.

Andrew Sorokowski, Rockville, MD                   -30-
—————————————————————————————–
The Ukrainian Weekly newspaper, Ukrainian National Association
(UNA), Parsippany, New Jersey, Roma Hadzewycz, Editor-in-chief.
Archive: http://www.ukrweekly.com; staff@ukrweekly.com.
———————————————————————————————–
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18.                          “RECOGNIZING GENOCIDE”

EDITORIAL, The Ukrainian Weekly newspaper
Ukrainian National Association (UNA), No. 43, Vol. LXXIV
Parsippany, New Jersey, Sunday, October 22, 2006, Page 6

On September 25, Ukraine’s Foreign Affairs Minister Borys Tarasyuk stated
in the U.N. General Assembly: “Ukraine calls upon the United Nations, as the
collective voice of the international community to contribute to the
commemoration of the 60th anniversary of the Convention [on the Prevention
and Punishment of the Crime of Genocide] by recognizing the Holodomor as
an act of genocide against the Ukrainian people.”

He noted that 7 million to 10 million people – about 25 percent of Ukraine’s
population at that time – died during the Famine-Genocide. Thus, he launched
Ukraine’s campaign to seek U.N. recognition of the Holodomor as a genocide,
hopefully in time for commemorations of the Famine’s 75th anniversary.

Back in 2003, Ukraine had succeeded in having 25 countries sign a statement
that condemned the murderous acts of the Stalin regime, but fell short of
characterizing them as a genocide. It was also in 2003 that Ukraine’s
Verkhovna Rada passed a resolution declaring the Famine “an act of genocide
against the Ukrainian nation.”

The resolution also stated that “in an independent Ukraine the terrible
truth of those years must be publicized by the state, inasmuch as the Famine
of 1932-1933 was organized by the Stalin regime and should be publicly
condemned by the Ukrainian nation and the international community as one
of the largest genocides in history in terms of the number of victims.”

Significantly, the Rada’s resolution cited the conclusion of the
congressionally mandated U.S. Commission on the Ukraine Famine that
the Famine was a genocide against the Ukrainian nation.

Though the commission’s report, which was released in 1988 put the U.S.
government on record as calling the Famine a genocide, a stronger iteration
of that position, embodied in Senate Resolution 202, never did pass as it
did not make it out of the Foreign Relations Committee. That resolution
clearly stated that “the man-made Ukraine Famine of 1932-1933 was an act
of genocide as defined by the United Nations Genocide Convention.”

Most recently, the Congress passed a bill, signed into law by President
George W. Bush on October 13, which authorizes the government of Ukraine
to establish in Washington a memorial “to honor the victims of the Ukrainian
Famine-Genocide of 1932-1933.” The Senate committee report on the bill
noted that “26 nations, including the United States, have recognized Stalin’s
‘famine’ as an act of genocide.”

A day earlier, Ukrainian President Viktor Yushchenko issued a presidential
decree on commemorations of the Famine and political repression on a
special memorial day scheduled for November 25 of this year.

His decree also directed: authorities to allocate land for a memorial to
victims of the Famine that is to be erected in Kyiv; the Cabinet to make
provisions in the budget for 2007 to fund the memorial and research the
Famine (the budget does not now provide for any such funding); and the
Foreign Affairs Ministry to be more active in seeking international
recognition of the Famine as a genocide, to study the possibility of
erecting Famine monuments in other countries, and to organize memorial
days at Ukrainian embassies.

Certainly, these are steps in the right direction. However, we strongly feel
that the appeal of the World Forum of Ukrainians, issued this past August,
which calls for a Holodomor memorial complex (not simply a memorial) to
be built in Kyiv is worthy of serious concrete support – not merely fine
words – from the Yushchenko administration, the Cabinet of Ministers
and the Verkhovna Rada.

If Ukraine does not take the lead in remembering the deaths of millions of
its own people and recording for posterity the history surrounding the
Holodomor, then we can hardly expect other nations to recognize this
genocide and to learn its all-important lessons.

President Yushchenko himself said in 2005: “The world must know the truth
about all crimes against humanity. Only in this way can we all be sure that
indifference will never again encourage evil-doers.”
————————————————————————————————

The Ukrainian Weekly newspaper, Ukrainian National Association
(UNA), Parsippany, New Jersey, Roma Hadzewycz, Editor-in-chief.
Archive: http://www.ukrweekly.com; staff@ukrweekly.com.
————————————————————————————————
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========================================================
19.   CROSSROADS: MODERNISM IN UKRAINE, 1910-1930
            Major Exhibition of Early 20th Century Ukrainian Modern Art
     The Ukrainian Museum, NY, NY, November 5, 2006 – March 11, 2007

The Ukrainian Museum, New York, NY, Friday, October 27, 2006

NEW YORK CITY – Crossroads: Modernism in Ukraine, 1910-1930, the first
major exhibition of early 20th century Ukrainian art to be shown in New York
City, opens November 5th at the new Ukrainian Museum, a state-of-the-art,
25,000-square-foot facility located at 222 East 6th Street. The exhibition
will be on view through March 11, 2007.

Featuring the best of high modernism from Ukraine, the exhibition includes
more than 70 rarely seen works by 21 Ukrainian artists; each of the works is
being shown for the first time in the United States.

Examples from the Avant-Garde, Art Nouveau, Impressionism, Expressionism,
Futurism and Constructivism movements are presented in a fresh, new light.

Crossroads:  Modernism in Ukraine includes the works of well known artists
such as David Burliuk, Alexandra Exter, and Kazimir Malevich as well as
those of many artists still unknown to American audiences.

Although the former are commonly associated with the Russian Avant-Garde,
one of the revelations emerging from the exhibition is that much of what has
been regarded as Russian modernism was, in fact, incubated in Ukraine.

The works in the show range from huge oil canvases to graphic arts to
theater and opera design.  The first impression is of an abundant use of
color. Another striking aspect of the works is the way they mesh the past
and the present, bowing to the influences of cultural traditions, but
expressing them through modernism.

The abstract works are rooted in the principles of Ukrainian folk art; they
also resonate with Byzantine aesthetics, with medieval ecclesiastical art,
and with the tensions inherent in classic 17th century Ukrainian Baroque.

According to one of its organizers, Nikita Lobanov-Rostovsky, the exhibition
is designed to show American audiences the talent and unique nature of
Ukrainian Avant-Garde artists. “Viewers will be able to observe that not
only Moscow and St. Petersburg were breeding grounds of new, non-

objective art of the 20th century,” he explains.

“Form and color were combined also in Kyiv and Kharkiv, where these ideas
prospered and succeeded since 1908.  Many “founding fathers” of this art in
the Russian Empire of that time were Ukrainians born and bred.”

The works on exhibition are from the National Art Museum of Ukraine, the
Theater Museum, and the Museum of Folk Art of Ukraine in Kyiv, the Art
Museum of Dnipropetrovsk, and private collections.

They were selected by Professor Dmytro Horbachov and Nikita
Lobanov-Rostovsky, who are dedicated to preserving and disseminating
knowledge about the Ukrainian Avant-Garde.

The show was organized by the Foundation for International Arts and
Education with the National Art Museum of Ukraine.  The Foundation, a
non-profit organization was created to help preserve and protect artistic
and cultural legacies in the countries of the former Soviet Union through
exhibitions, financial support and education.

The National Art Museum of Ukraine was founded in 1904 and has grown
into a prestigious national institution, whose collections reflect the
history of art in Ukraine.

The Ukrainian Museum will be the second stop for this exciting exhibition,
which opened this summer at the Chicago Cultural Center.  A richly
illustrated, bilingual catalogue accompanies the exhibition.

The catalogue includes essays, written by leading international experts,
tracing Ukrainian artistic expression and experimentation over the years
1910-1930 while contextualizing the works that emanated from this period of
prolific creativity.  Professor John E. Bowlt of the University of Southern
California served as editor of the catalogue.

As volatile as Ukraine’s politics were in the months leading up to the
recent Orange Revolution, so too was the cultural exuberance beginning with
the turn of the century. This exhibition offers a taste of the electrifying
energy of that period that soon ended with the Stalinist purges that
decimated Ukraine.

A majority of the artistic output of this extraordinarily prolific period
was destroyed and most of the artists forced underground, exiled, or
executed.

Through this show, examples of modern Ukrainian art offer a rare glimpse
into a long-neglected area of modernist endeavor, of cultural endurance and
creative freedom.

The exhibition’s national tour is sponsored by by The Boeing Company and
Konstantin Grigorishin. Financial support has also been provided by AeroSvit
Airlines;  Chadbourne & Park, LLP; Nour USA, Ltd.; Mykola M. Shymone;
Oleksandr Tabalov; and The Trust for Mutual Understanding.

Additional support has been provided by the Mission of Ukraine to the United
Nations; the Embassy of Ukraine in Washington, D.C.; and the Consulate
General of Ukraine in New York.

The Ukrainian Museum, an institution showcasing Ukrainian culture and
history, has been serving its constituency and the public since 1976 through
exhibitions, educational programs, and public events.

Its purpose is to preserve the cultural heritage of Ukrainian Americans and
to document the contributions of Ukrainian immigrants to America’s cultural
treasury.

In 2005 the Museum inaugurated its new facility with a dynamic retrospective
exhibition of the works of Alexander Archipenko, a leading voice of
Ukraine’s modernist era.
      ACCOMPANYING PROGRAMS TO THE EXHIBITION
To provide additional information and expand on the topic of the exhibition,
the Ukrainian Museum will present lectures and films.

On Monday, November 6th at 6:30 p.m. Professor Dmytro Horbachov, an
authority on the avant-garde period in Ukraine and contributor of an essay
on Kazimir Malevich to the exhibition catalogue, will deliver a lecture (in
the Ukrainian language) entitled Formula for the Ukrainian Avant-Garde –
Europe + the Village.

Prof. Horbachov will also present his newly published book “He and I Were
Ukrainian: Malevich and Ukraine.”

On Sunday, November 12th, at 2:00 p.m. Dr. Myroslava Mudrak, Prof. of art
history at the Ohio State University, an expert on Ukrainian modernism in
art and contributing author to the exhibition catalogue, will deliver a
lecture on Color and Its Dynamics in Ukrainian Modernist Painting.

Co-lecturer, Dr. Oleh Ilnytzkyj, Prof. of the Ukrainian language and
literature at the University of Alberta, in Edmonton, whose expertise is
Ukrainian modernism and avant-garde, will speak about The Verbal and
Visual Arts in Ukrainian Futurism. Both lectures will be in English.

Dr. Yuri Shevchuk, founder and director of the Ukrainian Film Club of
Columbia University will introduce a selection of short contemporary
Ukrainian films by Ukrainian filmmakers. The event, presented in

conjunction with UFCCU will be held at the Museum on Friday, November
10th at 7:00 p.m.                              -30-
—————————————————————————————————–
The Ukrainian Museum, 222 East 6th Street (bet. 2nd and 3rd Aves.) New
York, NY 10003, Wed. thru Sun. 11:30 am – 5:00 pm (212) 228-0110
E-mail: info@UkrainianMuseum.org
LINK: http://www.ukrainianmuseum.org/ex_061105crossroads.html
——————————————————————————————————
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20.  CONGRESSMAN CURT WELDON: ADVOCATE AND FRIEND TO
 UKRAINE AND UKRAINIAN-AMERICANS HONORED AT RECEPTION

By Andrea Porytko-Zharovsky, Jenkintown, Pennsylvania, October 2006

JENKINTOWN, PA – Ukrainian Americans do not forget their friends in
Congress. U.S. Rep. Curt Weldon (R., Pa.), a long-time advocate of Ukraine
and a friend of the Ukrainian American community, was honored at a
reception, Saturday, October 7, 2006, in the Main Hall of the Ukrainian
Educational and Cultural Center (UECC), in Jenkintown, PA.

Representing the 7th Congressional District in Pennsylvania and currently
serving his tenth term, Congressman Weldon has been a leader on committees
ranging from national security to the environment, as well as serving as
Co-chair of the Congressional Ukrainian Caucus, Vice-chair of the House
Armed Services Committee, and Vice-chair of the House Homeland Security
Committee.

As Co-Chair of the Congressional Ukrainian Caucus, Congressman Weldon is

the voice of Ukraine in Congress and has personally worked on improving
relations between the United States and Ukraine, successfully restoring the
presence of pro-democracy organizations in Ukraine such as the International
Republican Institute (IRI) and the National Democratic Institute (NDI),
developing a working relationship between the members of the United States
Congress and the Ukrainian Parliament in the Rada Exchange Program, and
recognizing the 1932-1933 Ukrainian Genocide.

Congressman Weldon was recently instrumental in the passing of legislation
H.R. 1053 to graduate Ukraine from the Jackson-Vanik Amendment on March

8, 2006.

A candidate in the U.S. General Election on November 7, 2006, Congressman
Weldon spoke at the reception enthusiastically about the issues that have
united him with the Ukrainian Diaspora and how he got involved with the
Ukrainian American community.

He voiced his regrets that he did not spend enough time on Ukraine’s
development in the early 1990’s and mid 90’s, and stated that the American
response to the Orange Revolution was not quick enough.

“Unfortunately, we did not take those steps. We did not act quickly enough
on Jackson-Vanik. We should have given Yushchenko Jackson-Vanik on

his first visit to America.”

Congressman Weldon believes that the Ukrainian Diaspora is a critical
component in allowing Ukraine to unleash its potential and its power and
pledged when re-elected that he will continue to work and push the issues
dear to the Ukrainian Diaspora.

“The Ukrainian-American relationship is one of the most important strategic
relationships in the world. We must stay the course, as Ukraine changes its
leaders, we must not waiver from our support to the Ukrainian people. There
is no nation with the potential in the world that Ukraine has – the
breadbasket of the world.”

Friends of Congressman Curt Weldon, with the participation of the Heritage
Action Council, formed to involve Ukrainian Americans in the American
political process, raised over $10,000, in a two-week period, from sponsors
in Pennsylvania, New Jersey, Maryland, Virginia and Delaware.

This was a true bipartisan effort with recent U.S. citizens originally from
Ukraine actively participating, in support of a friend to Ukraine and a
friend to the Ukrainian American community, who has a record of introducing
legislation and policy beneficial to Ukrainian Americans and Ukraine.

The evening concluded with a musical interlude by “Kalynonka”, a bandura
duet by Halyna Bodnar and Lada Pastushak.                  -30-
———————————————————————————————–
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21.             ‘WHY DON’T YOU DRESS UP AS A GIRL?
  It was just after the Second World War in Germany at a camp for displaced
  persons — so-called DPs. Buchok had fled from the Carpathian mountains
  in Ukraine, escaping his village with a loaf of bread and a chicken his mother
  had killed and cooked.

By Lesley Simpson, The Hamilton Spectator
Hamilton, Ontario, Canada, Tuesday, October 17, 2006

Mychailo Buchok was a pretty boy, 17 years old, with high cheekbones and
a face that had not yet felt a razor. He had broad shoulders, but they could
easily be disguised with the right attire.

When a girl caught his eye and spoke his Ukrainian language, it wasn’t long
before she whispered an offer he could not refuse.

It was just after the Second World War in Germany at a camp for displaced
persons — so-called DPs. Buchok had fled from the Carpathian mountains in
Ukraine, escaping his village with a loaf of bread and a chicken his mother
had killed and cooked.

“Here you’ll die. There you’ll live,” his mother ordered, making the sign of
the cross and kissing him goodbye in the darkness of night.

He prayed. He stole bread. He dug potatoes from fields. He begged. He
dodged bullets. He fled in the fall of 1944 as the Germans were retreating,
the Soviets moving in.

He walked for three months until he made it to the camp where he met the
Ukrainian girl who suggested a different adventure.

“Why don’t I dress you up as a girl?” she said. “You’ll get chocolate.”
She’d created her own survival strategy. She knew American soldiers would
give chocolates for pleasures of another kind. Buchok wasn’t new to
adventure. He was not afraid.

“I put my faith in God.” He’d been active in the Ukrainian resistance during
the war. In his Hamilton dining room more than 60 years later, a framed
photo of Jesus sits on a hutch near a floral arrangement, like a family
member.

In the German camp, the Ukrainian girl had a date with an American soldier
who had a buddy who wanted a date, too. She said she’d bring a friend.
She gave Buchok a skirt, a blouse and a handkerchief to cover his hair.

She arranged his blouse, puffing it up to make it look as if he had breasts.
He sat. She attached clip-on earrings. She applied lipstick. She lent him
the requisite heels. The “girls” walked to a nearby park to meet their
dates. Then Buchok’s friend left with her date.

Buchok didn’t speak English. His American date didn’t speak German or
Ukrainian. They exchanged what few words they knew, sitting together on a
park bench.

The soldier gave Buchok chocolate and Buchok put it into his pocket. He put
his arm around Buchok and moved closer. Then the soldier made his move:

“All I know is when he put his hand under my skirt, I started to shiver,”
recalls Buchok, now 79, and speaking from his Hamilton home. Buchok
pretended he had to go to the washroom. He bolted. “I never returned.”

He raced back to the camp, washed off the makeup, threw his blouse and skirt
under his bed and crawled under the covers. Shortly after he heard a loud
knocking. He closed his eyes and pretended to sleep. It was the American
soldier, searching, yelling, “Where is my girl? Where is my girl?”

The story is true. A fictionalized version, A Bar of Chocolate, by Buchok’s
daughter Natalia, is featured in a new book about the Ukrainian experience
called “Kobzar’s Children: A Century of Untold Ukrainian Stories” (Fitzhenry
& Whiteside, $14.95.)

It’s one piece of levity in a collection that explores famine, concentration
camps, immigration and death machines, from Soviet repression to Nazi
Germany.

Buchok came to Hamilton around 1950. He is the only local person whose
story is featured in this national collection edited by Marsha Forchuk
Skrypuch, an award-winning Canadian writer.

About 3,000 people in the Hamilton area identified themselves as ethnic
Ukrainian in the last census. Across the country, there are more than 1.2
million Canadians of Ukrainian background, according to the Ukrainian
National Congress.

For Ukrainians, the word kobzar is loaded with multiple meanings. Kobzars
were blind musicians. “Kind of like singing Homer, not Peter, Paul and Mary.

Like the minstrels in medieval Europe, or the elders of our First Nations,
they were the repository of oral culture in the days before newspapers,”
suggested Lubomyr Luciuk, a professor of political geography at Royal
Military College in Kingston.

The kobzars played a stringed instrument called a kobza. Kobzars were like a
merger of television, Internet and radio. They told stories. They performed
poems. They travelled from village to village. They were welcomed, clothed
and fed. The word is also used to mean overcoming artistic repression.

For many, the word would trigger the name Taras Shevchenko, Ukraine’s
best loved poet whose first collection of poetry was called Kobzar. For
non-Ukrainians, the story of the kobzars is the movement of a culture
reclaiming its identity and history.

The kobzars’ repertoire evolved to include stories of Soviet famine,
repression and terror. Soviet leader Joseph Stalin heard about the kobzars.

He ordered a national meeting of the minstrels in the early 1930s in
Kharkiv, in eastern Ukraine. Hundreds came. They were arrested. Many
were shot.

And that’s when their stories and some of the storytellers — keepers of the
Ukrainian national consciousness — began to die.

There is a fictionalized story of the famine in this collection called The
Rings. In the famine in 1932-33 many millions died.

Estimates vary widely from 4.5 million to 10 million. But it was that kind
of story that got the kobzars murdered, said Skrypuch.

“Cannibalism was not uncommon. Human remains were for sale,” said Luciuk
who co-edited a book called The Foreign Office and the Famine. “This was
not a famine from drought. It was manmade. Politically engineered.”

Skrypuch received a death threat when she wrote about the famine for her
local newspaper, The Brantford Expositor, in the 1990s.

When she wrote a folk tale about how a girl and her father save a village
from famine, a children’s book called Enough, (illustrated by Michael
Martchenko published by Fitzhenry & Whiteside in 2000), she got hate mail.
Police accompanied her to one of her book events. “There are still people
alive who think Stalin was a good guy.”

Kobzar’s Children is an anthology of historical fiction, memoirs and poems
about the experience of Ukrainian-Canadians.

The collection begins with A Home of her Own, a homesteader tale of 1905,
and moves in chronological order to the election of Ukrainian President
Viktor Yushchenko in 2004.

“When you don’t write your own stories, others will write their own versions
for you,” said Skrypuch. “The injustices we forget we are bound to repeat.”
———————————————————————————————–
lsimpson@thespec.com; http://www.hamiltonspectator.com/
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
22.         SOVEREIGN FOOTBALL: A POLITICAL FABLE


COMMENTARY: By Celeste A. Wallander, Moscow Times
Moscow, Russia, Friday, September 29, 2006

Once upon a time, there was a bright but slight young schoolboy named
Vladislav who, like most young boys, had a strong desire to fit in and,
well, be one of the guys.

He did well in school and used his brains to good effect by doing homework
for some of the tough boys on the playground. This won him their tolerance,
but it didn’t quite make him one of the guys.

Slava noticed that three of the toughest boys — Vladimir, Sergei and
Igor — always talked about someday playing in the big leagues. Knowing that
the global big league is football, Slava got the brilliant idea that his
playground toughs should form a team and become a great football power.

The three toughs were intrigued. How better to become rich and famous than
to become a great football power?

But there was a problem: While the boys were strong and clever, and could
dominate the neighborhood playground in any fight, they had never spent time
developing the skills necessary to win at football.

They were strong and athletic, but had little patience for passing, foot
speed or ball control drills.

As a result, when they did play football in the neighborhood, more skilled
teams could easily steal the ball, get past their defenses and score. As a
result, the young toughs tended to win some but mostly to lose.

Of course, that is the essence of competitive sports, but the boys did not
like to lose.

Besides, they pointed out to Slava, if we lose on our home turf, we cannot
be certain of becoming a great football power, so what’s the point?

Slava, being very clever, knew better than to suggest that his new team
spend time practicing its football skills to become a better and more
competitive team.

Instead, he recognized that the reason his tough friends tended to lose the
ball and get scored against was because they were limited by the rules of
the game to controlling and moving the ball with their feet.

“Just think!” he told Vladimir, “how we will dominate the football pitch if
we control the ball with our hands!”

“That’s a great idea!” Vladimir answered. “If we use our hands, we cannot
lose, and our domination of football at home will propel us to the big
leagues!”

And so, the team implemented its clever plan.

When other teams would call fouls for using their hands, Slava would argue
with them about the rules, while his team members went on scoring goals and
declaring victory. Referees who ruled against them would disappear from the
neighborhood and be replaced for the next match with friends of the toughs.

These friends had been coached to rule that in this form of neighborhood
football, the need for order and stability on the pitch meant that
Vladimir’s team (as it became known) must be allowed to use its hands.

“Besides!” playground supporters exclaimed, “they are on a winning streak
and have a chance to make it to the big leagues!”
“Isn’t it good for our neighborhood,” Slava cleverly argued, “for a team of
our own to go undefeated so we can climb into the ranks of the great
football powers?!”

And so, Vladimir’s team came to dominate football in the neighborhood, and
to claim a place in the upcoming great football power tournament. The great
football powers were impressed to hear of a new, undefeated aspirant to
their league, and looked forward to welcoming Vladimir’s team to the
competition.

The teams drew lots, and it turned out that the first match would be between
Vladimir’s team and George’s team. You can imagine what happened when the
whistle blew and play began: when Sergei, Vladimir or Dmitry ran with the
ball in his hands, or used his hands to knock the ball away from one of
George’s players, the referee would call a foul and stop play.

Not long into the game, the players on Vladimir’s team were being sent off
with red cards for their repeated violation of the most basic rule of
football: no hands. This went on all day, as Vladimir’s team played against
each of the big league teams.

The big leaguers were, of course, astonished to learn that Vladimir’s team
thought it acceptable to play football with their hands. They were
nonplussed that Vladimir, Slava and their teammates were unapologetic for
their behavior, and were even angry and resentful that the fouls called
against them were costing them game after game.

By the end of the day, the controversy reached such a fever pitch that the
great football power team coaches called out the new team’s coach, Slava, to
demand that his team play by the well-defined rules of football.

Slava was defiant. He knew that Vladimir and his team could not win if they
played by the rules.

They had not trained, practiced, or committed themselves to football. Their
dream of being a great football power, and his own of being one of the guys,
would fail if they played by the rules.

So Slava stood defiantly and declared to these great powers: “You can define
the rules of football however you like, and play only with your feet. We do
not mind. Have we ever complained?

But as a great football power, we have decided that we are not just playing
football, we are playing sovereign football. In sovereign football,
Vladimir’s team gets to play with its feet, or its hands or whatever it
wants.

We learned to play football on a tough playground in a tough neighborhood,
so this is how we have to play to win. Our fans like it, and we win. You
cannot tell us that we are not playing football; we are playing sovereign
football.”

It was a sad day for the world’s “beautiful game,” because the other teams
did not stand up for the game of football as it had been played in its
simplicity for generations of boys and girls.

With one prominent team claiming the right to play sovereign football, other
teams began to adopt their own rules to do whatever necessary to win. Soon
even small children in remote parts of the globe were using their hands to
play “football.”

Some followed Slava’s lead by claiming they were playing sovereign football,
but in the cynical treatment of honorable sport that developed, some began
to use entirely new terms for the strange games that developed.

It turned out that back home in the neighborhood where George’s team played,
the new version of football in which hands were used far more than feet
became very popular. They also called it football, which seems strange for a
game played hardly at all with one’s feet, but this shows you how messed up
things had become.

As with every fable, there is a moral of course.

But it may not be the one you expect. Yes, one of the morals is that when
you have something beautiful that brings out the best in children all over
the world, it is best to keep the standards high and the rules and
definitions intact. The point of playing football is not just to win, but to
train, and practice and truly to play.

Sovereign football was not football at all, and those who played and loved
the true game — win or lose — should have refused to play anything less.

However, the real moral of our fable lies in the ultimate fate of Vladimir’s
team. It turns out that it was able to win with sovereign football only when
everyone else played by the rules of true football. Once everyone started
cheating and making up rules as they went along, Vladimir’s team began to
lose.

They were not the only ones who were strong and clever, you see: once other
neighborhood toughs could make up their own rules, Vladimir, Dmitry and the
others often found themselves bruised, bloodied and bested by even more
determined aspirants to the big leagues.

Sovereign football escalated to violent contests. I heard that a team once
even brought weapons to the playground to ensure their win.

Pretty soon, the old neighborhood was so unsafe that none of the children
could play there, and everyone knew that it was Slava and Vladimir’s team
that had made it so.

So, the true moral of this fable is simple: When you cheat, you eventually
lose the truly important game.                            -30-
———————————————————————————————–
NOTE: Celeste A. Wallander is a visiting associate professor in the School
of Foreign Service at Georgetown University and a senior associate at the
Center for Strategic and International Studies.

———————————————————————————————-
LINK: http://www.russiaprofile.org/cdi/2006/9/29/4480.wbp
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
23.  RUSSIA HALTS ALL ACTIVITIES OF MANY INTERNATIONAL
             NONGOVERNMENTAL ORGANIZATIONS (NGOS)
National Democratic Institute, International Republican Institute, Adoption
Agencies, Doctors Without Borders, Amnesty International, All Shut Done

By Peter Finn in Moscow, Foreign Service, The Washington Post
Washington, D.C., Friday, October 20, 2006; Page A01

MOSCOW, Oct. 19 — Russia on Thursday suspended the activities of Human
Rights Watch, Amnesty International, the International Republican Institute
and more than 90 other foreign nongovernmental organizations, saying they
failed to meet the registration requirements of a controversial new law
designed to bring activists here under much closer government scrutiny.

Across the country, foreign grass-roots organizations that investigate human
rights abuses, promote democracy and work with refugees folded their tents
until further notice, informing staff that all operations must cease
immediately. The only work officially authorized was the paying of staff and
bills.

The law, signed by President Vladimir Putin at the start of the year, drew
broad criticism as part of a general rollback of democratic freedoms in
Russia. Activists said it was intended to rein in one of the last areas of
independent civic life here; Putin called it necessary to prevent foreigners
from interfering in the country’s political process.

On Thursday, officials said the suspensions resulted simply from the failure
of private groups to meet the law’s requirements, not from a political
decision on the part of the state. The groups would be allowed to resume
work once their registrations are completed, they said.

“No political order has been given . . . to tighten the screws,” said
Vladimir Lukin, Russia’s federal ombudsman, speaking at a Moscow forum
hosted by the Council of Europe, a 46-country human rights organization
based in Strasbourg, France. “Colleagues from international NGOs are not in
the habit of keeping their affairs and documents in order.”

Many nongovernmental organizations fear that the current bureaucratic tangle
might be the beginning of a larger crackdown on activism that is not
controlled by the Kremlin. They note too that successful registration would
not end their dealings with the Justice Ministry.

After that, they would have to report on planned activities for the year,
and they worry that officials could reject their plans or penalize the
groups if they deviate from the plans because of unexpected events.

Many of the suspended organizations are American, including adoption
agencies, the National Democratic Institute and the International Republican
Institute. The latter two are funded by the U.S. Congress but act
independently to promote democracy.

Other suspended groups include two branches of Doctors Without Borders, the
Danish Refugee Council and the Netherlands-based Russian Justice Initiative,
which helps Russians bring cases to the European Court of Human Rights.

Under the law, Russian nongovernmental organizations are also subject to new
regulation. But a Wednesday deadline to meet the paperwork requirements or
stop operation applied only to foreign groups.

Russian officials stressed that the suspensions, which went into effect at
midnight Wednesday, are temporary. “We are not speaking about closing
organizations; that is out of the question,” said a senior Justice Ministry
official, Natalia Vishnyakova, in a telephone interview.

Concerning the registration process, she said: “We are working properly, and
put all our efforts into making it even faster. It is not at all
complicated, believe me, absolutely not. It’s really their own headache. On
our part, we provided all necessary conditions.”

Activists complained, however, that the requirements of the law are so vague
and cumbersome that meeting the deadline was extremely difficult. Russian
officials, they said, nitpicked their way through the submitted documents.

The local Human Rights Watch operation, for instance, called itself the
“Representative Office of the Non-Governmental Organization Human Rights
Watch in the Russian Federation.”

Officials at the registration office rejected that description and said the
group should call itself the “Representative Office of the Corporation Human
Rights Watch Inc. (USA) in the Russian Federation.”

That change, among others, required Human Rights Watch to send its
submission back to its headquarters in New York to have the document revised
and re-notarized, then retranslated into Russian and re-notarized in Russia.

Officials at the Human Rights Watch office in Moscow said they could not
speak on the record to a reporter because they interpreted the strictures of
the suspension to extend to news media interviews. The law says that
suspended groups can do nothing that would advance the aims and goals of
their offices in Russia.

“We are registering, and we are complying with the law,” said Carroll
Bogert, associate director of Human Rights Watch, in a telephone interview
from New York. “But we have been really distracted from our work by the
onerous burdens that this law imposes. But this is not particular to us.
It’s a hassle for everyone.”

Other groups, however, said they found the registration office helpful. The
American Chamber of Commerce, for instance, said Russian officials there
pointed out errors before the organization formally submitted its documents,
allowing it to correct them and expedite the registration.

In all, the office accepted the registrations of 99 foreign organizations,
freeing them to continue their work, officials at the Justice Ministry said.
The American groups included the chamber, the Ford Foundation and the
Carnegie Moscow Center.

Amnesty International said it was exploring whether it could continue field
research in Russia by flying in researchers from its London headquarters.
“We are seeking clarification,” said Lydia Aroyo, a spokeswoman based in
London.

“But we are very unhappy. There were no clear guidelines as to what
documents were required or how to fill them out. The process was very
cumbersome and very time-consuming.”                  -30-
—————————————————————————————————
http://www.washingtonpost.com/wp-dyn/content/article/2006/10/19/AR2006101900831.html
——————————————————————————————————————

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