AUR#789 Nov 14 Chicago Trade Exhibition & Conference; Woskob’s Donate To Penn State; Russian Subversion in Crimea; Viktor Baloha

                  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       

                          Ukraine’s Changing Place in the Global Economy 
                            December 14th to 16th, 2006, Chicago Illinois
Mr. E. Morgan Williams, Publisher and Editor  
               –——-  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
                      Ukraine’s Changing Place in the Global Economy 
                        December 14th to 16th, 2006, Chicago Illinois
Action Ukraine Report (AUR) #789, Article 1
Washington, D.C., Tuesday, November 14, 2006
Department of Germanic and Slavic Languages and Literatures
Penn State University, University Park, Pennsylvania
Action Ukraine Report (AUR) #789, Article 2
Washington, D.C., Tuesday, November 14, 2006


College of Agricultural Sciences, Penn State College
Action Ukraine Report (AUR) #789, Article 3
Washington, D.C., Tuesday, November 14, 2006

Interfax Ukraine Business Express, Kyiv, Ukraine, Fri, Nov 10, 2006

5.                          UKRAINE: OLIGARCHY REFORMED
PRESENTATION: By Anders Aslund, Senior Fellow
Peterson Institute for International Economics
Kennan Institute, Woodrow Wilson International Center

Washington, D.C., Monday, November 13, 2006

Business Digest, Sofia, Bulgaria, Friday, November 10, 2006

     Wants to invest more in Ukraine if government would improve conditions
Ukrainian News Agency, Kyiv, Ukraine, Friday, November 10, 2006


Ukrainian News Agency, Kyiv, Ukraine, Friday, November 10, 2006

Ukrainian News Agency, Kyiv, Ukraine, Thu, November 9, 2006

Business Digest, Sofia, Bulgaria, Tue, November 7, 2006


Eurasia Daily Monitor, Volume 3, Issue 210
The Jamestown Foundation, Wash, D.C., Mon, Nov 13, 2006


                              WITHIN NATO, EXPERTS BELIEVE
Interfax Ukraine Economic, Kyiv, Ukraine, Tuesday, November 7, 2006

OPENING REMARKS: By William Miller
Former United States Ambassador to Ukraine
Ukraine’s Quest for Mature Nation Statehood Roundtable VII:
Ronald Reagan International Trade Center
Washington DC, October 17-18, 2006

COMMENTARY: By Anders Aslund
Financial Times, London, UK, Wed, Nov 8, 2006

15.                          RUSSIAN SUBVERSION IN CRIMEA
Jane’s Intelligence Digest, United Kingdom, Friday, 3 November 2006

         Crime strong, government weak in Crimea – Ukrainian president’s envoy
With Henadiy Moskal,
President Viktor Yushchenko’s Representative in Crimea
BY: Valentyna Samar, Zerkalo Nedeli, Kiev, in Russian 4 Nov 06; p 3
BBC Monitoring Service, United Kingdom, Thursday, Nov 09, 2006

Irish Times, Dublin, Ireland, Wednesday, Nov 01, 2006

BBC Monitoring Service, United Kingdom, Sunday, Nov 12, 2006

   Ukrainian presidential office chief replaced by brother as regional party boss
By Vitaliy Pyrovych
Delovaya Stolitsa newspaper, Kiev, in Russian 23 Oct 06
BBC Monitoring Service, United Kingdom, Tuesday, Oct 24, 2006

20.                      “TARASYUK AND LUTSENKO OUT?”
             Ukrainian foreign, interior ministers will go, newspaper says
Segodnya, Kiev, in Russian 14 Nov 06; p 2
BBC Monitoring Service, United Kingdom, Tue, Nov 14, 2006

                             HEAVYWEIGHT WORLD TITLE
By Larry Fine, Reuters, New York, NY, Sunday, Nov 12, 2006
Ukrinform, Kyiv, Ukraine, Monday, November 13, 2006
       THEM TO DEATH”  Darfur Victim, Name Withheld To Protect Source
Save Darfur Coalition, Full Page Advertisement
The Washington Post, Washington, D.C., Thu, Nov 9, 2006, Pg A-9
Ekho Moskvy radio, Moscow, in Russian 1800 gmt 13 Nov 06
BBC Monitoring Service, United Kingdom, Monday, Nov 13, 2006
                       Ukraine’s Changing Place in the Global Economy 
                         December 14th to 16th, 2006, Chicago Illinois
Action Ukraine Report (AUR) #789, Article 1
Washington, D.C., Tuesday, November 14, 2006

WASHINGTON – The government of Ukraine will hold their first National
Exhibition and Conference in the USA in Chicago, Illinois, at the Sheraton
Chicago Hotel from Thursday, the 14th to Saturday the 16th of December

The exhibition will host over 50 leading Ukrainian companies from the
aerospace, mining, metallurgy, machine building, chemicals, food processing,
light industries and consumer goods as well as the science and information
technology sectors.

It will feature everything from the world’s most efficient satellite
launcher to the world’s smallest nano-metric engine and will provide a
unique opportunity for US companies to capitalize on the rapidly

expanding economy and low cost production centre right on the eastern
edge of Europe.

With foreign direct investment already outstripping last year by 350%,

and with an economy growing at 6 to 8% a year Ukraine has become an
investment and production focus where skilled and highly educated labor
coupled with a close proximity to major European markets, a massive
pool of high technology and a domestic market of over 48 million are
making US companies reconsider previously held perceptions.
A highlight of the event will be a conference “Ukraine’s Changing Place in
the Global Economy”. The conference will discuss current issues in
Ukraine’s economic development and will ask searching questions including:

     [1] Can Ukraine link East and West?
     [2] Do foreign investors underestimate Ukraine?
     [3] What are the opportunities for US companies?
     [4] Perception verses reality of the Ukrainian economy?

The conference plenary session will spotlight the strengths and weaknesses
of modern Ukrainian economy and the prospects for bilateral trade and
successful foreign investment.

Top economists from Ukraine and world renowned institutions will present
their visions and forecast of the country’s economic development.

The interests of particular industries will be discussed at break out
sessions devoted to Ukraine’s vast agricultural potential, harnessing unique
information technologies, the strengthening financial sector and of most
interest Ukraine’s massive and as yet untapped resources in scientific and
technical innovation.

It should be noted that Ukraine used to produce over 40% of the technology
of the former Soviet Union including the majority of the space and defense

The goal of the event is to introduce the U.S. business community to the
present-day economic potential of Ukraine in order to establish mutually
beneficial platforms for trade, commerce and investment.

As part of this conference, participants will be presented with a schedule
of the best investment projects in Ukraine today, as well as an investment
climate overview from leading international consulting companies and those
US companies that have already invested successfully including senior
representatives of Cargill and Kraft and senior representatives of the US
and EU funded Science and Technology Centre in Ukraine.

Who should attend?

     [1] Business executives interested in above average profit margins.
     [2] Scientific and research institutes, production and experimental
          development companies, machinery and equipment engineers
          and technology developers.
     [3] Financial and investment companies, banks and financial
     [4] Chambers of Commerce, leading consulting and information

For further information and to register for the Exhibition and Conference
please refer to

For additional information please contact: Elena Ivanova,

Project coordinator,

Media enquiries to: Chicago: Sharon Omizek, Partners Ltd
Telephone: (773) 919 3875 / Fax: (630) 834 5068.

Kyiv: Martin Nunn MCIPR, Whites International Public Relations
Telephone / Fax: (+38044) 494 4200;

[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Department of Germanic and Slavic Languages and Literatures
Penn State University, University Park, Pennsylvania
Action Ukraine Report (AUR) #789, Article 2
Washington, D.C., Tuesday, November 14, 2006

WASHINGTON, D.C. – Alex and Helen Woskob (Voskobijnyk), business-
people and owners of the AW&Sons apartment rental company in State
College, Pennsylvania, have donated one million dollars to the College
of Liberal Arts in support of Ukrainian studies at The Pennsylvania State

Two of the Woskobs’ children, George and Larysa, are graduates of Penn
State, and the recent donation continues the Woskob family’s generous
support for the Ukrainian as well as other artistic and cultural programs at
the University.

The Woskobs have previously donated significant funds to establish the Penn
State Center for Ukrainian Agriculture and have funded other local cultural
projects such as the Woskob Family Art Gallery at the Penn State Downtown

The Woskobs’ son George with his wife Nina, owners of the GN Associates
apartment rental and management firm in State College, have also been
extremely active in their financial support of cultural activities at Penn
State.  George Woskob also serves on the advisory board of the Penn State
Center for Ukrainian Agriculture.

The latest gift will significantly expand the Endowment for Ukrainian
Studies at Penn State and Mr. and Mrs. Woskob hope that others in the
Ukrainian community will contribute in the future to increase the scope of
the endowment’s activities.

The interest generated by the endowment will primarily support cultural and
scholarly activities at Penn State, including the teaching of Ukrainian
language and culture; visiting faculty, researchers and scholars;
publications and symposia on Ukrainian topics; speakers and performers;
student and faculty exchanges; study abroad programs in Ukraine; and other
activities that will acquaint the English-speaking world with the best that
Ukrainian culture has to offer.

Spearheading the Ukrainian program at Penn State is Professor Michael
Naydan, who has been teaching at the University since 1988.

Dean Susan Welch of the College of Liberal Arts at Penn State recently
announced that Professor Naydan has just been appointed to the rank of
distinguished professor with the title of Woskob Family Professor in
Ukrainian Studies for his “sustained record of scholarly achievement at the
highest level.”

Professor Naydan is the author-translator of 13 books and nearly 100 other
publications in scholarly and literary journals. His most recent books
include annotated translations of Yuri Andrukhovych’s novel Perverzion
(Northwestern University Press, 2004) and Viktor Neborak’s The Flying
Head and Other Poems (Sribne Slovo Publishers, 2005).

The former won the American Association of Ukrainian Studies translation of
the year award (2005) and the latter the poetry book of the year award in
Ukraine (2006).

In 1989, Professor Naydan established Penn State’s first Ukrainian culture
course, which has been taught uninterruptedly twice each academic year
either by Professor Naydan, by visiting scholars such as Oksana Zabuzhko,
Mykola Riabchuk, Maria Zubrytska, and Olha Luchuk.

Graduate students from Ukraine have also helped teach the course including
Oleksandra Shchur, Oksana Tatsyak, and Roman Ivashkiv, all three of whom
have continued their graduate studies in Ph.D. programs at the University of
Toronto and at the University of Illinois.

The current course is taught by Olha Tytarenko from Lviv. The culture course
began with an enrollment of 15 students when it was first taught and has
climbed to as many as 60 students. Most recently, it has been offered to
ever increasing numbers of students via the Internet during the spring

The University has also offered a three-semester sequence of Ukrainian
language on several occasions-a sequence that was generously funded by the
Woskob family during the previous academic year. With the increase in the
endowment, plans are to offer Ukrainian language courses on a yearly basis.

 Professor Naydan foresees the focus of the endowment to be cultural and
contemporary issues that will not duplicate the already good efforts in
history and politics in place at other universities.

He sees the Woskob family’s generous donation as a solid beginning and
welcomes other donors to establish graduate student teaching assistantships
for students from Ukraine, publication and conference funds, and
scholarships for students to assist them in attending study abroad programs
in Ukraine.

An additional faculty member at Penn State, Dr. Catherine Wanner, has been
particularly active in Ukrainian studies and will be working closely with
Professor Naydan toward establishing a Center for the Study of Modern
Ukraine at Penn State.

Professor Wanner is an Assistant Professor in the Department of History at
The Pennsylvania State University and received her doctorate in cultural
anthropology from Columbia University.

Her first book, “Burden of Dreams:  History and Identity in Post-Soviet
Ukraine (1998),” was an ethnographic study of how the nationalist paradigm
influenced historiography and cultural politics in Ukraine after the
collapse of the Soviet Union.

She is also the author of Communities of the Converted:  Ukrainians,
Evangelicalism and the Search for Salvation (2007), an analysis of how
Soviet-era evangelical religious practices and communities in Ukraine have
changed since the collapse of socialism and the introduction of global

She is also the co-editor of Reclaiming the Sacred:  Community, Morality and
Religion after Communism (2007), a collection of essays addressing religion
and cultural change in the former Soviet Union.

Her current research project analyzes the transformation of religious life
in the Western Ukrainian city of Chernivtsi after World War II and the
incorporation of this region into Soviet Ukraine.

Her research has been supported by awards from the National Science
Foundation, the National Endowment for the Humanities, the Social Science
Research Council and the National Council for Eastern European and
Eurasian Research.                                -30-
For further information on the Ukrainian studies program at Penn State
contact: Professor Michael M. Naydan, Dept. of Germanic and Slavic
Languages and Literatures, 303 Burrowes Building, The Pennsylvania
State University, University Park, PA 16802, 814-865-1675, 

FOOTNOTE: My congratulations to Alex and Helen Woskob for their
outstanding gift to Penn State University.  I have known and worked with
Alex and Helen for over 12 years.  They have assisted many programs
that support Ukraine including the Holodomor Education and Exhibition
Collection in Kyiv.  AUR Editor Morgan Williams
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
College of Agricultural Sciences, Penn State College
Action Ukraine Report (AUR) #789, Article 3
Washington, D.C., Tuesday, November 14, 2006

WASHINGTON, D.C. — During a September visit to Ukraine to receive an
honorary degree, the dean of Penn State’s College of Agricultural Sciences,
Robert Steele, announced a new joint program to encourage scholarship and
professional development among faculty at Ukrainian agricultural

Beginning in 2007, the Woskob International Research in Agriculture, or
WIRA, program — made possible by an endowment from real estate

developers Helen and Alex Woskob of State College — will bring as many as
four Ukrainian scholars to Penn State each year during the fall semester to
study educational methods, take and co-teach courses, establish links with
Penn State researchers and promote study-abroad opportunities for
undergraduate students.

“It’s very fitting that the Ukrainian word ‘wira’ means ‘trust,'” Steele
says. “We hope that the partnerships made possible by the Woskobs’
generosity will enhance agricultural research, education and productivity in
Ukraine and encourage global understanding, collaboration and friendship
among faculty members and students at participating universities.”

The announcement came during ceremonies at Lviv State Agricultural
University near Lviv, Ukraine, where Steele received an honorary doctorate.
The College of Agricultural Sciences has a long-standing relationship with
Lviv in co-sponsoring student and faculty exchange programs.

“The similarities between Penn State and LSAU are striking,” Steele says.
“Penn State celebrated its sesquicentennial in 2005, and Lviv is marking its
150th anniversary this year.

Both institutions are dedicated to generating scientific knowledge that can
be put to practical use and to training new generations of researchers and
educators.” Also coincidentally, “Lviv” translates to “lion” in English,
Steele notes, pointing out Penn State’s “Nittany Lion” mascot.

The honorary doctorate was Steele’s second from a Ukrainian university in a
little more than a year. He was similarly recognized by National Agrarian
University in Kiev in September 2005.

The WIRA scholars program will be open to full-time faculty members at

all Ukrainian agricultural universities.

Natives of Ukraine, the Woskobs are founders and co-owners of State
College-based A.W. and Sons Enterprises. Since 1963, they have developed
numerous real estate projects in Centre County, including housing for
thousands of Penn State students.

The Woskobs have a long history of support for higher education. In 1992,
they established the Ukrainian Agricultural Exchange Program, enabling
collaboration between the College of Agricultural Sciences and the Ukrainian
Agricultural Academy.

They have been involved in the university’s Ukrainian Studies program and
have served on the advisory board of the Centre for Ukrainian Agriculture.

More information on the Woskob International Research in Agriculture

program is available by calling the College of Agricultural Sciences’ Office
of International Programs at 814-863-0249 or by visiting their Web site.
EDITORS: For more information, contact Deanna Behring, director of
international programs, at 814-863-0249 or; or Anatoliy
Tmanov, international program coordinator, at 863-2703 or
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Interfax Ukraine Business Express, Kyiv, Ukraine, Fri, Nov 10, 2006

KYIV – U.S. President George Bush will visit Ukraine next year, according to
Ukrainian presidential secretariat deputy head Oleksandr Chaly, who referred
to a discussion held between presidential secretariat head Viktor Baloha and
U.S. Ambassador to Ukraine William Taylor.

“The meeting addressed the schedules of visits at all levels. The clear
common position of Ukraine and the United States [is] that a visit of the
U.S. president to Ukraine is desirable and the U.S. representative confirmed
that the visit is planned,” Chaly said.

He said the exact date of the visit had not been determined. Earlier, the
U.S. ambassador said Bush might visit Ukraine in the winter or spring
of 2007.                                              -30-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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5.                    UKRAINE: OLIGARCHY REFORMED

PRESENTATION: By Anders Aslund, Senior Fellow
Peterson Institute for International Economics
Kennan Institute, Woodrow Wilson International Center

Washington, D.C., Monday, November 13, 2006

For the last two years, Ukraine has undergone fast and complex changes
that are confusing to the outsider, but the salient features of Ukraine’s
development are rather clear.

The dominant themes of the Orange Revolution were freedom, democracy,
and justice, while economic and social themes were conspicuously absent.
You get what you ask for. The immediate and striking achievement of the
Orange Revolution was the freedom of speech and of the media.

The media appear securely diverse under multiple owners, and their quality
has greatly improved. All the time, various popular protest actions are
taking place at the local level, showing that Ukrainians are no longer

Similarly, Ukrainian democracy has made great advances. Ukraine has moved
far in the direction of a parliamentary system, which provides more
transparency and accountability. It has adopted a proportional election
system, which has generated a structured party system. A sound balance of
power has arisen between parliament and president.

Many Ukrainians are upset that “bandits” have not been sent to prison. But
the rule of law is not built through arbitrary revolutionary acts of
“justice”. The change of the judicial system must start from the top, and
the newly-composed Constitutional Court and Supreme Court are greatly

Representing different constituencies, these courts are balanced, and will
hopefully prove more objective. Corruption in Ukraine declined greatly in
both 2005 and 2006, according to authoritative Transparency International,
as would be expected with the much greater public criticism of corrupt acts.

Ukraine’s parliamentary election on March 26, 2006, was an unmitigated
success for democracy. Five parties passed the three-percent threshold for
representation in the parliament. To form a government, at least two of the
three main parties, Prime Minister Viktor Yanukovich’s Regions, Yulia
Tymoshenko’s Bloc, and President Viktor Yushchenko’s Our Ukraine, had
to join the coalition.

After an undignified intriguing, Yanukovich and Yushchenko finally agreed on
a coalition government in early August. At the time, it looked like a great
historical compromise. The western Our Ukraine obtained what matters the
most to it – foreign policy, law enforcement, and culture, while the Regions
got what matters to the east, namely the economy, though Yushchenko has
appointed the chairman of the central bank.

Unfortunately, this coalition did not quite come to fruition.

Embarrassingly, Our Ukraine disputed for another two months whether the
party should join the coalition or not, and finally decided not to do so,
effectively committing political suicide. Its leaders have quarreled more
with one another than anybody can stand, leaving this political constituency

With the demise of Our Ukraine, the oligarchs have returned to the main
stage. Ukraine is dominated by four eastern steel companies, each with about
100,000 employees. Two come from Donetsk and two from Dnepropetrovsk,
and they are all severe rivals.

The biggest is Rinat Akhmetov’s Donetsk-based System Capital Management,
which is the back-bone of the Regions. Yulia Tymoshenko has gathered many
big businessmen in her parliamentary faction, while then big Privat Group
from Dnepropetrovsk is more loosely allied with her.

After Our Ukraine collapsed in October, President Yushchenko undertook a
major realignment. He invited heavyweights from the third biggest industrial
group, the Industrial Union of Donbass from Donetsk, to his administration.
He also drew closer to the fourth biggest industrial group, Viktor Pinchuk’s
Interpipe based in Dnepropetrovsk.

As a result, Ukraine has now obtained multiple balances of power between
government, president, and parliamentary opposition, between the biggest
industrial groups, and the three leading political personalities, and they
can settle their disputes in the Constitutional Court. This political
structure is reminiscent of the United States in the 19th century.

Ukraine is still lagging behind most post-Soviet countries in terms of
legislation, but this new balance of power might generate common law, as
court precedence may develop faster than legislation.

Economic policy is entirely formed by politicians from the Regions, who
favor their big business interests. The new government is growth oriented
and fiscally conservative. Their top issue is WTO accession, and Ukraine is
likely to join by February 2007, long before Russia. It is trimming social
transfers by indexing them to prices rather than incomes.

As a consequence, the government expects to be able to cut the corporate
profit tax from 25 to 20% and VAT from 20 to 18% in 2008. It has abandoned
talk about re-privatization and advocates the reinforcement of existing
property rights as well as private sales of agricultural land in 2008.

The concern, however, is outright corruption. Bad habits before the Orange
Revolution have returned. The most egregious old practice is the corrupt
distribution of refunds of value-added tax to exporters. From the first
month of the new government, the West hardly received any refunds, while
the east obtained twice its share. The rumor is that tax officials demand a
kickback of 30 percent for VAT refunds.

Yanukovych’s government has also prohibited exports of grain, arguing that
exports would double Ukraine’s domestic grain price. In reality, Ukraine is
likely to export no less than 10 million of grain this year, but somebody
will be allowed to monopolize these exports, paying too low a price to the
Ukrainian farmers.

A third area arousing concern about corruption is the gas trade, where Yuriy
Boiko, the founder of the notorious gas trading company RosUkrEnergo has
become Minister of Energy. Prominent voices in the Ukrainian debate are
warning that Boiko is interested in bankrupting the Ukrainian state company
for oil and gas, Naftohaz Ukrainy in order to sell off its parts cheaply.

Planned free economic zones and new public investments are also likely
boondoggles for vested interests, while the worry is that small and
medium-sized enterprises will be repressed by higher tax burden if the big
businessmen pay less tax.

The question is whether Ukraine’s democracy is strong enough to halt this
outrageous restoration of old corrupt schemes. My sense is that the details
of most of these schemes are too well publicized and understood to render
them sustainable, but this is Ukraine’s test.                     -30-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Business Digest, Sofia, Bulgaria, Friday, November 10, 2006

KYIV – The Delo Polish hotel chain operator Orbis SA plans to expand in
Ukraine, starting from the western city of Lviv where it will build two
three-star hotels in 2007, Ukrainian newspaper Delo reported on November 9,

The two hotels, with a capacity of 80 to 120 rooms, will be built in
downtown Lviv, an Orbis representative told the daily, adding that the
construction of a room would cost at least 30,000 euro ($38,000).

The regional administration of Lviv refused to reveal the location of the
two hotels saying that only a preliminary agreement had been signed with the

Some 70 pct of the Orbis hotels are in the three-star category, but the
company targets to increase the share of one and two-star hotels to 50 pct
by 2009.

The group has 66 hotels in Poland and one in Lithuania. Many of the Orbis
hotels operate under French Accor’s brands Sofitel, Novotel, Mercure and

Lviv’s hoteliers should not fear competition as the city’s tourism potential
is yet to be developed and the hotel occupancy rate has been as high as 80
pct, said Oleg Podolyan, deputy manager of the Lviv Grand Hotel.

The manager of the Lviv Hotel, Vasiliy Panko, also expects the local hotel
market to remain calm after the entrance of Orbis as tourist arrivals in the
city double every year.

Investments in Lviv’s hotel sector pay off in three to four years, which is
quite high, Panko added. Nearly 100 hotels operate in the region of Lviv, of
which 30 are in the city. Investments in the region’s hotel industry topped
$50 mln (39.2 mln euro) in 2005.

Lviv, which is some 70 km from the Polish border, is a major cultural and
tourist centre. Its historic city centre is on the UNESCO World Heritage
List. (Alternative name: Lvov) (LINK:

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
     Wants to invest more in Ukraine if government would improve conditions

Ukrainian News Agency, Kyiv, Ukraine, Friday, November 10, 2006

KYIV – The American electronic components manufacturing company Jabil

plans to open its own plant in Ukraine in the spring of 2007, construction of
which began in September. Philippe Costemale, general director of Jabil
Circuit Ukraine Ltd., announced this to reporters and said Jabil has worked
in Ukraine since 2004.

He noticed, that it would be the first line of the 26,000-square-meter
plant; the company invests USD 50 million into its construction.

Particularly, for construction of the plant building in Rozivka village,
Uzhhorod region, USD 18 million would be spent and USD 2 million more –

for infrastructure, including laying of communications and repairing of roads.

Another USD 20 millions are investments into equipment. According to
Costemale, Jabil has already invested USD 11 million.

Now the company leases premises in the Mynai village, Uzhhorod region, from
the Yadzaki plant, which produces car parts.

After opening the new plant the company plans to completely move to Ukraine
assembling of mobile phones from its Hungarian plant Tiszaujvaros for one of
the world’s largest producers.
According to the Jabil Vice President for operations in Europe, Trevor Key,
if the government improves conditions for the investor, then it would invest
USD 50 more million into the second line by 2010 and create 5,000 more jobs.

Key added, that worsening of work conditions for investors in Ukraine and
simultaneous improvement of these conditions in other countries,
particularly Hungary, prompts large companies to make their choice not in
favor of Ukraine.

As Ukrainian News already reported, Jabil has asked Ukrainian authorities to
introduce preferences for foreign investors from January 1.

In particular, the company asks:
     [1] to simplify procedure of working with bills of credit for customs
     [2] reduce tax rate for the enterprise’s profit and also to
     [3] cancel duty for customs clearing by export and import of the goods
          for the companies that export 100% of their products.

The company was founded in 1966 in Detroit, USA, and has 45 plants in 20
countries of the world at which it produces electronic components for such
companies as Hewlett Packard, Philips, Alcatel, Nokia, LG, Sharp, Ericsson,
Whirlpool, Thompson, Cisco, Airbus etc.

In Ukraine Jabil produces components for Hewlett Packard data recording
devices and also assembles mobile phones for one of the largest producers.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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Ukrainian News Agency, Kyiv, Ukraine, Friday, November 10, 2006

KYIV – The Cabinet of Ministers thinks that their introduction of  grain
export quotas complies with the market trade principles of the World Trade

Prime Minister Viktor Yanukovych said this at the grand meeting of the
Cabinet of Ministers and the parliament coalition devoted to the results of
the Yanukovych Cabinet’s 100-day work.

“We also followed only market principles. The government would further
predict and eliminate all the possible negative results connected with the
changing of the global environment”, said Yanukovych.

He regards strengthening the country’s food safety [security – AUR] as one
of his Cabinet’s first 100 days’ achievements.

Yanukovych stressed, that the Cabinet of Ministers was compelled to
introduce grain export quotas although it was taken mixed as now the Cabinet
intends, first of all, to care of the citizens’ safety and not of commercial

Agricultural Policy Minister Yurii Melnyk, commenting on the US, German and
Netherlands Ambassadors statement about possible negative impact of the
grain quotas on the negotiations of the Ukraine’s entering the WTO, called
this pronouncement a subjective opinion.

“Why (grain export quotas) are not market methods? It is a subjective
opinion and we do not agree with it”, said Melnyk.

He said, that he had met the US, German and Netherlands Ambassadors
and explained them the government’s position.

Melnyk noticed, that the Cabinet, introducing the grain export quotas,
follows the WTO members’ modern legislation, which foresees in case of
critical shortage the country can take a number of measures, including
introduction of export quotas.

He underlined, that now the Agrarian Fund and the State Reserve are
purchasing grain to fill their reserves.

Melnyk also emphasized, that the Cabinet already defined that grain export
in this marketing year would be less then 9.5 million tons. “We strictly
fixed the amount (of grain), which can be exported in the marketing year –
9.5 million tons. That’s all”, said the minister.

As to him, 5.88 million tons of grain is already exported; it is by 1.2
million tons more than compared to the similar period of the previous year.

As Ukrainian News earlier reported, US ambassador in Ukraine, William
Taylor, German ambassador Reinhard Schaefers and Netherlands ambassador

Ron Keller warned the Cabinet of Ministers of possible negative impact of grain
export quotas on the negotiations on Ukraine’s entering the World Trade

Germany, USA and the Netherlands call on the Cabinet of Ministers to cancel
the quotas for export of grain.

According to their statement, Ukrainian government’s actions, directed at
limitation of export of wheat, barley and corn, are groundlessly preventing
normal operation of market; limitation of export seriously damages Ukraine’s
economy, its investment climate and reputation as a safe partner.

On October 11, the Cabinet of Ministers introduced quotas for grain export
until the end of 2006 and refused licensing it.                   -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]


Ukrainian News Agency, Kyiv, Ukraine, Thu, November 9, 2006

KYIV – Kraft Foods Ukraine has started the production of Milka Lila Stars
chocolate coated dragee. Ukrainian News has learned this from the company’s
press service.

According to the report, the company produces three kinds of Milka Lila
Stars dragee: Hazelnuts covered with chocolate, Peanuts and Corn Flakes
covered with chocolate and Krispello dragee – malt balls covered with
chocolate and rice crumbs and another layer of chocolate.

‘If consumers like the three new tastes, we may extend the range,’ senior
brand manager assistant of Milka and Ukraina Chocolate Factory trademarks
Ksenia Chernova said. The company said that shipments of the new products
began on November 9.

The retail price of Hazelnuts and Peanuts and Corn Flakes dragee will make
round UAH 3.85 per pack, while Krispello dragee will cost UAH 2.7 per pack.

As Ukrainian News earlier reported, according to the TOP-100 rating compiled
by InvestHazeta, Kraft Foods Ukraine ended 2005 with a net profit of UAH
104.2 million. In 2005, the company increased net revenues by 32.4% or UAH
272.07 million, compared to 2004, to UAH 1,113.08 million.

Kraft Foods Ukraine owns the Ukraina chocolate factory in Trostianets (Sumy
region), while the Vyshhorod affiliate of Kraft Foods Ukraine in Stari
Petrivtsi owns a factory producing chips and snacks under the Lux, Estrella,
and Cherezos trademarks and a factory packaging coffee.

Kraft Foods Ukraine sells three brands of coffee on the Ukrainian market,
namely Carte Noir, Maxwell House, and Jacobs. Kraft Foods Ukraine is a
division of Kraft Foods, the world’s second largest food producer.

FOOTNOTE:  Kraft Foods Ukraine is a member of the Ukraine-U.S.
Business Council in Washington, D.C.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Business Digest, Sofia, Bulgaria, Tue, November 7, 2006

KYIV – Swiss hospitality entrepreneurs are seeking expansion opportunities
in Ukraine, including setting up hotel chains in the capital Kyiv, Federico
Sommaruga, an executive with Swiss tourism body Switzerland Tourism,

said during a visit to Ukraine in early November 2006.

Sommaruga and Ukraine’s State Tourism Service chairman Anatoliy Pakhlia
discussed opportunities for attracting Swiss investments to the Ukrainina
tourist sector.

Agreements are expected to be signed in May 2007, during an investment

forum in Kyiv. Switzerland may offer Ukraine’s hotel operators and staff
internship programmes and training, Sommaruga said.

The Swiss organisation, whose main activity is to promote tourism in
Switzerland, operates 35 representative offices worldwide with a 50 mln euro
($63.6 mln) annual budget, mostly for advertising and promotional

A total 5,300 Swiss nationals visited Ukraine in the first half of 2006, up
21.3 pct from the previous year. Swiss arrivals to Ukraine stood at 10,800
in 2005, of which business trips and tourist arrivals accounted for more
than 70 pct.

For January to September 2006, Ukraine’s foreign tourist arrivals topped
14.9 million, marking an 8.0 pct rise from the corresponding period in 2005.
Currently, the number of hotels in Ukraine rounds 1,232, while recreation
and health centres make up 3,245. (

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
                                 FOR HOSTILE TAKEOVERS

By Vladimir Socor
Eurasia Daily Monitor, Volume 3, Issue 210
The Jamestown Foundation, Wash, D.C., Mon, Nov 13, 2006

Gazprom is moving rapidly to take over Ukraine’s gas transport system
through its monopolist offshoots in Ukraine: RosUkrEnergo and

UkrGazEnergo. The immediate target is Ukraine’s internal gas distribution
network, although the transit system is being targeted as well.

This month, on the threshold of winter, RosUkrEnergo’s front company,
UkrGazEnergo, has refused to sign supply contracts with 16 Ukrainian
companies, many of which distribute gas in Ukraine’s oblasts. The apparent
goal is to take them over by creating Russian-controlled joint ventures with

This could not have come as a surprise. Already in September, RosUkrEnergo
had announced plans to buy stakes in the gas distribution systems of seven
of Ukraine’s oblasts (out of 26) and place them under UkrGazEnergo’s
management, as a first stage in its intention to bring Ukraine’s
distribution system under Russian control.

Conveniently for Gazprom, the Aval Bank — a Ukrainian subsidiary of Austria’s
Raiffeisen Bank, which represented RosUkrEnergo from the outset  — was
entrusted with appraising those companies’ assets (Action Ukraine Report,
September 14; see EDM, September 15).

This is the first planned stage in a systemic takeover, and the number of
targeted Ukrainian companies is growing. On November 10, Ukrainian Fuel and
Energy Minister Yuriy Boyko confirmed that RosUkrEnergo intends to take over
16 companies. Boyko describes this method as normal and “civilized,” citing
Gazprom’s practices in certain European countries.

“We take the same path,” Boyko averred, ignoring the EU’s anti-monopoly
policy and the opposition of many European governments to that type of
arrangement with Gazprom (“2000” [Kyiv] cited by Interfax, November 10).

Apparently, gas-dependent Ukrainian factories might increase the number of
targets for hostile takeovers by Russian interests and their local
auxiliaries. According to Deputy Prime Minister for Fuel and Energy Andriy
Klyuyev, $130 per 1,000 cubic meters of gas (the price to take effect in
2007) is a high price that Ukraine’s economy is not yet prepared to afford.

With Ukraine’s export-oriented chemical industry particularly affected,
Klyuyev suggests resorting to a “merger of the chemical enterprises with the
suppliers of gas” as a means of capping the price of Russian-delivered gas.

Moreover, Klyuyev insists that UkrGazEnergo’s stoppage of deliveries to the
16 companies is a “purely commercial issue” beyond the government’s remit
(Interfax-Ukraine, November 7).

On that same day in Moscow, Gazprom was identically characterizing as “pure
commerce” its attempt to take over Georgia’s trunk pipeline under the threat
of stopping gas deliveries (see EDM, November 9).

According to National Security and Defense Council Secretary Vitaliy Hayduk,
those 16 Ukrainian companies risk either being forced to a halt or being
forced to change owners.

The NSDC plans to discuss the situation at an urgent session (One Plus One
TV [Kyiv], November 12). Hayduk was a critic of the January 2006 gas
agreements that paved the way to this situation.

Gazprom also seems to contemplate absorbing Ukraine’s state oil and gas
company, Naftohaz Ukrainy, through RosUkrEnergo. Gazprom board member

and RosUkrEnergo co-managing director Konstantin Chuychenko proposes
that Naftohaz Ukrainy become a stockholder in RosUkrEnergo.

Gazprom holds a 50% stake in RosUkrEnergo and claims unverifiably that two
Ukrainian partners of Gazprom hold the remainder. Merging Naftohaz into a
network of Gazprom-controlled structures looks like a first step toward its
absorption by Gazprom, whose ultimate target is Ukraine’s Naftohaz-operated
gas transit system.

Airing this proposal in the leading newspaper of Switzerland (where
RosUkrEnergo is nominally based), Chuychenko also explains the three-stage
monopolistic arrangements whereby Russia supplies gas to Ukraine:
Turkmenistan sells the gas exclusively to Gazprom; Gazprom sells that gas to
[its creation] RosUkrEnergo as the exclusive supplier to Ukraine; and
RosUkrEnergo sells that gas to [its creation] UkrGazEnergo as the exclusive
distributor within Ukraine.

In the first stage, Gazprom buys the Turkmen gas at $100 per 1,000 cubic
meters; RosUkrEnergo operates the transit through Gazprom’s pipelines, at a
cost of $25 per 1,000 cubic meters for the entire distance to the Ukrainian
border; and there, RosUkrEnergo sells the gas to UkrGazEnergo.

With the price of $130 in 2007, RosUkrEnergo reckons to make $5 in profits
for each thousand cubic meters of gas delivered to Ukraine (Neue Zuercher
Zeitung cited by Interfax, November 10).

While Chuychenko’s information on the profit margin must not be taken at
face value, his description of the mechanism is realistic. In 2007, this
mechanism will deliver at least 55 billion cubic meters of gas to Ukraine — 
a deceptive way to provide for “energy security,” designed to pave the way
for massive transfers of assets to the supplier.

As Hayduk observes, it is “nonsense” to speak about “market relations
between commercial entities” when RosUkrEnergo is a monopolist representing
the Russian state. As long as this is the case, the NSDC and Presidential
Secretariat take the position that Russia-Ukraine gas relations should
properly be handled at the inter-state level (One Plus One TV [Kyiv],
November 12).

Meanwhile, parliament and public opinion are still in the dark about the
details of the October 24 supply agreement signed by Boyko in Moscow. This
would seem to be an issue made to order for the Presidency and the Yulia
Tymoshenko Bloc to close ranks in the national interest.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

 If you are receiving more than one copy of the AUR please contact us.
                           WITHIN NATO, EXPERTS BELIEVE
Interfax Ukraine Economic, Kyiv, Ukraine, Tuesday, November 7, 2006

KYIV – The Ukrainian defense industry could develop successfully if

Ukraine joins NATO, experts believe.

The coordinator of international programs of the Democratic Initiatives
Foundation, and an expert on foreign policy from the institute of the
Diplomatic Academy of Ukraine’s Foreign Ministry Oleksandr Paliy gave

his assessment at a press conference at Interfax-Ukraine on Tuesday.

According to Paliy, Ukraine’s defense industry is capable of developing the
most advanced ammunition and create closed cycles of production for such
ammunition, which he said would be competitive on the world market.

Ukraine’s defense industry is capable of finding its place in the
distribution of work among NATO countries, and would be able to succeed
under new conditions brought by accession to the European Union, the expert

At the same time, Director of the Center for Army Studies Valentyn Badrak
believes the future of Ukraine’s defense complex depends on the country’s

Military expenses should be 2%-2.5% of Ukraine’s GDP, the expert said.
Poland, for example, annually spends $800 million on upgrading its defense
sector, whereas Ukraine’s expenditures do not exceed $100 million, he added.
The expert assessed that if Ukraine raises the financing of the defense
industry to 2%-2.5% of GDP a year, it would be able to take part in joint
programs of NATO member-states.

Additionally, to successfully develop its defense industry, Ukraine needs to
bring its legislation into line with NATO standards, Badrak said.     -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
             Send in a letter-to-the-editor today. Let us hear from you.

OPENING REMARKS: By William Miller
Former United States Ambassador to Ukraine
Ukraine’s Quest for Mature Nation Statehood Roundtable VII:
Ronald Reagan International Trade Center
Washington DC, October 17-18, 2006

It’s a pleasure to be here with friends; some friends, I haven’t seen for 25
years, but many of you, I saw just a week ago [ed.–at the US-UA Policy
Dialogue] and I simply want to welcome you back.  For those of you here for
the first time, welcome.

Our forum subject is crucial for Ukraine, namely, the issue of its future
position in NATO. But I want to go at the matter in a different way and
those who know me will know that I usually do that.

Ukraine belongs in NATO; there’s never been any doubt about that, from a
strategic point of view.  It’s the big player, the most significant part of
the former Soviet Union that should be a part of Europe.

It is also very clear, particularly since the Orange Revolution, that
Ukraine is a democracy, in fact, a vibrant democracy.  As we have seen
recently, the process of building democratic institutions can be turbulent,
full of unexpected reversals and twists and turns. Nonetheless, the people
of Ukraine on the Maidan have emphatically embraced democracy as their
system of governance.

Over the past two years, the people have been struggling with their leaders,
with the choice of leaders, and how those leaders should respond to their
wishes.  Their wishes, of course, were made very clear on the Maidan and the
program that Ukraine’s leaders ought to follow was made very clear on the

The problem has been for the institutions of governance, particularly the
newly forming political parties, to translate the will of the people into
meaningful political action.

 As all of us know, and Ukrainians who are here know better than anyone
else, that process has been very difficult, and has led to disappointment,
disillusionment and argument.

But, certainly in my view, and I know in the view of my Ukrainian friends:
“Don’t worry, it will turn out all right”. Whenever I express concern, they
say: “Don’t worry, It will be alright.” and I believe it.

Ukraine is a nation of music…..this is perhaps not a NATO subject, but it
should be. Anyone who has been to Ukraine or lived in Ukraine or been with
Ukrainians, knows that when all else fails, they sing. When they sing, you
should listen, because they tell you what they really think.

On the Maidan, we had remarkable parade of great singers from church choirs
to pop stars.

And, of course, the pop singers were saying what the people had in mind. All
of those who were on the Maidan, as I was, heard Slava Vykarchuk and Okean
Elzy; they were expressing what the people wanted. Maria Burmaka, Taras
Petrenenko of “Ukraina” [fame], Ruslana, Oksana Bilozir and of course, the
people on the podium themselves were singing, with their hand on their
heart, about what the future of Ukraine should and would be. The world
watched this.

Certainly those who were close to Ukraine saw it directly and they knew that
this was Ukraine’s future.  They knew that those songs, those pledges made
on the Maidan, are the political agenda that has to be followed, no matter
what the twists and turns of political organizations may be.

Those pledges have to be honored, because that is in the memory of the
people as a whole and it came from their hearts, as well as their

So what has a song to do with NATO?  Well it’s not an old song. In some
respects, there are old songs, that is, hurdles for Ukraine to leap over,
before it can enter.  But these are minor things.

Ukraine’s entry into NATO is open to Ukraine, when it is ready to take that
step.  It is a matter for Ukraine to decide.  Ukraine has proven itself to
be a democratic state by a process of the last several years.

It has proved that it can participate in turbulent politics without killing
each other.  It has proved that there can be free and fair elections.  It is
as democratic as any state that has already newly entered into NATO.

The choice is Ukraine’s.  When Ukrainians finally want to enter and make the
political decision, there is no doubt that the West will respond well.

What is it that Ukraine and NATO have in common?  Certainly in the military
aspect of it all, which is only 30% of the real NATO mission, Ukraine has a
crucial role to play.

It has been playing such a role through the Partnership for Peace and
through all of the work it has done since independence in peacekeeping. It
has proved its worth.

The further technical side of becoming an efficient military force is really
a secondary matter.  The most important element of NATO membership

resides in common values, democratic values which Ukraine shares with
Europe through the Orange Revolution.

What happened on the Maidan, the processes of the last two years, are proof
for all to see that Ukraine has met the test of democratic processes.

So the task that remains for all of us here as technicians and as advocates
and as friends is to ease that process as much as we can and to welcome
Ukraine as soon as possible into the association of democratic states that
we now call NATO.

Maybe we can or will find a better name, but the subtext is an “association
of democratic states”, with shared values of “decency, human rights and
concern for the welfare of their people, living in peace”.

So I welcome you all here, and I look forward to the deliberations, which
will take place over the next two days and wish you all success.    -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

COMMENTARY: By Anders Aslund
Financial Times, London, UK, Wed, Nov 8, 2006

Central Europe’s political malaise has caught international attention. The
region’s governments are weak. Populism and nationalism are rising. These
political problems are contrasted with good economic performance.

But central Europe’s economic results are impressive only by European Union
standards. From 2000 to 2005, Poland, the Czech Republic, Slovakia and
Hungary grew on average by 4 per cent a year, compared with 8 per cent a
year in the 15 former Soviet republics. Even in this boom year, central
Europe will grow by 5 per cent, while the former Soviet Union comes close
to 9 per cent. Star performers are Armenia, Azerbaijan and Kazakhstan.

Barely half as wealthy as the west European countries, the central European
nations need to grow more than twice as fast to converge with them. The
absence of convergence breeds a sense of permanent backwardness.
Unemployment remains high at 15 per cent in Poland. Budget deficits have
been abundant, ballooning to 10 per cent of gross domestic product in
Hungary. Apart from Slovakia, none of these countries has reformed
significantly in the past half decade.

This malaise has coincided with their EU accession. In a prescient paper of
1996, Jeffrey Sachs and Andrew Warner warned that the central European
countries would not converge economically with western Europe if they did
not cut their high taxes, reduce their excessive social transfers and
deregulate their labour markets. A decade later, their public expenditures
linger at 46 per cent of GDP, the EU average.

Formally, the EU has not forced these countries to maintain high public
expenditures, but its social charter and political pressures point in that
direction. Initially, EU accession contributed to deregulation, but its last
part was  dominated by illiberal chapters, such as the common agricultural

After having joined the EU, the central European countries behave as Greece
did under prime minister Andreas Papandreou from 1981 to 1996. Greece
maintained a large budget deficit, relying on EU subsidies, and undertook
few reforms. Growth was poor. Pious complaints from Brussels make little
difference as long as they do not influence the flow of subsidies.

Two-thirds of the much higher growth in the former Soviet countries can be
explained by their far lower public expenditures. The only other significant
factor is the high world prices for oil. The ex-Soviet countries have become
part of the high-growth belt from China via India to the Baltics and they
look to the economic models of east Asia, with low taxes, limited social
transfers and free labour markets, rather than the EU.

Until 1998, good things went together  privatisation, liberalisation,
macroeconomic stabilisation, democracy, good governance and economic

Cynics said that the closer to Brussels a country, the better off it was.
Now, the further a country is from Brussels, the higher its growth is. The
Russian financial crash of 1998 was the dividing line. It forced post-Soviet
countries to make large cuts in public expenditures to balance their
budgets. With the exception of Belarus, Turkmenistan and Uzbekistan, the
post-communist world is dominated by private enterprise, free markets and
low inflation.

Admittedly, the Baltic countries  Estonia, Latvia and Lithuania  are EU
members and they perform well, with growth  rates of around 8 per cent a
year, balanced budgets, low flat taxes and moderate public expenditures.

But the cause of their good fortune does not lie in their EU accession, but
in their fresh memory of horrendous financial crises and a potent Russian
threat. They have resisted accusations of both tax dumping and wage
dumping by west European leaders.

Central Europe’s problem is not political instability. Until recently, it
had relatively stable, but irresponsible governments, which did little while
their economic problems deepened. The recent political turmoil in central
Europe may be welcomed as a wake-up call. The Baltic countries are
maintaining their stellar economic performance by changing government once
a year.

In 1992, the grand old Hungarian economist Janos Kornai noticed that the
central European states had developed a premature west European social
welfare system. Their prime dilemma is economic and a general EU problem.
Like the EU, central Europe needs to overcome its poor economic dynamism
through lower taxes, reduced social transfers and freer labour markets.
Possible cures are increasing tax competition from the east and freer labour
migration within the EU.
The writer is senior fellow at the Peterson Institute for International
Economics, in Washington, D.C.,
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Jane’s Intelligence Digest, United Kingdom, Friday, 3 November 2006

On 11 October, President Viktor Yushchenko ordered the Security Service of
Ukraine (SBU) to upgrade its operational activities in the Crimea.

The SBU was given two months to, ‘look into the efficiency of intelligence,
counterintelligence and operative measures in order to identify, prevent and
halt intelligence, subversive and other illegal activities in the Crimea by
foreign secret services and NGOs’.

The SBU was also ordered to develop a plan of action to, ‘neutralise’
activities in the Crimea, ‘which harm Ukraine’s sovereignty and territorial
integrity, pose security threats and incite ethnic, racial and religious

Russia’s subversive tactics in supporting separatism among ethnic Russians
in the Crimea and eastern Ukraine are long standing. Kiev’s ability to
launch counter-measures are hampered by two factors, as clearly noticeable
during the well-organised anti-US and anti-NATO demonstrations in the

[1] There is a lack of political will by Yushchenko and within the
presidential secretariat and the National Security and Defense Council
(NRBO) to tackle the separatist threat.

These two institutions are the president’s two remaining levers of influence
following this year’s constitutional reforms that transferred much of
presidential powers to parliament.

[2] Second, there are divided loyalties between Kiev and Moscow within the
SBU and Interior Ministry (MVS). In 1994-1995 President Leonid Kuchma
successfully used non-violent tactics implemented by the SBU and the NRBO to
marginalise Crimea’s separatist voices.

Following a decade of rampant corruption under Kuchma, including the SBU’s
involvement in arms trafficking and repression of the opposition reminiscent
of the Soviet KGB, the SBU’s competence is now in doubt.

In the Crimea and eastern Ukraine, regions loyal to pro-Russian Prime
Minister Viktor Yanukovych’s Party of Regions, the local SBU branches remain
highly sceptical of Yushchenko. Further, the Crimean parliament, dominated
by the Party of Regions, has often disregarded Yushchenko’s directives.

Under Kuchma a number of officials from Russia were declared persona non
grata for short periods in retaliation for inciting separatism in Ukraine.
Under Yushchenko, Kiev’s official policy has hardened, especially following
the June protests in the Crimea where Russian politicians gave inflammatory

After Yushchenko’s inauguration in January 2005 former senior Kuchma-era
officials sought refuge in the Crimea.

In March 2006, the Party of Regions and its three extreme left allies – the
Communist Party, the Progressive Socialist Party and the Union party – swept
elections to the Ukrainian and the Crimean parliaments, gaining over 70 per
cent of the vote in the Crimea. Many of the former Kuchma figures re-entered
the political stage on the back of the election wins of Party of Regions.

These three political constituencies have allied with Russian intelligence
(FSB) and the Black Sea Fleet’s intelligence (GRU) and military officers to
incite anti-US and anti-NATO demonstrations, pickets and rallies in the

These reached a crescendo in June and led to the first ever cancellation of
joint military exercises with the US and with other NATO countries through
its Partnership for Peace (PfP) programme. These exercises had been
regularly held in the Crimea and in military bases in western Ukraine since

Russia has supplied intelligence on the location and plans for military
exercises and has given personnel to increase attendance at the rallies and
demonstrations. During the June rallies many of the leading organisers were
spouses of serving Russian Black Sea Fleet officers.

Russia is also involved in attempts to incite inter-ethnic strife in the
Crimea by fomenting clashes between Tatars and Russian-speaking Slavs.

The presidential secretariat has told JID of its fears that Russia is
attempting to ‘Abkhasize’ the Crimea by repeating its successful tactics in
Georgia’s two frozen conflicts, Abkhazia and South Ossetia.

The presidential secretariat has told JID that it has reports from loyal SBU
officers who have reported financial support being given to ethnic Russian
nationalist NGOs in the Crimea.

Logistical support is given to these groups by the Black Sea Fleet and by
nationalist youth groups from Russia who are dedicated to the Kremlin, such
as Nashi, a pro-Vladimir Putin NGO that has been involved in racist and
anti-Georgian violence in Russia.
                       RUSSIA’S STRATEGY IS TWO FOLD
[1] First, to foment instability in the Crimea to halt Ukraine’s drive to
join NATO. The anti-NATO and anti-US rallies in June in the Crimea have
reinforced the concerns of those NATO members that deem Kiev’s

membership aspiration in the organisation as impracticable in the near future.

[2] Second, Moscow seem to want to make use of increased political
volatility in the Crimea as a way to pressure Kiev to seek its assistance
which would enhance its leverage over its weaker and anxious neighbour. In
late October, President Putin offered to provide assistance to Ukraine if
Slav-Tatar tension increased in the Crimea.

Such protection would be reminiscent of similar tactics in Georgia’s two
separatist enclaves where Russia first incited inter-ethnic tension and then
offered ‘CIS’ (in reality Russian) ‘peacekeeping troops’ who have frozen the
conflict in Moscow’s favour. As Putin said, ‘Russia cannot be indifferent to
what happens in Ukraine and the Crimea’.

Related to this question, is Russia’s tactics of organising a lobby within
the Crimea and Ukrainian government to support its calls to extend the
twenty year lease for Russia’s Black Sea Fleet in Sevastopol.

The lease was negotiated in 1997 as part of a package of documents that
obtained Russian recognition of Ukraine’s sovereignty and territorial
integrity and is set to expire in 2017.

Ukraine’s constitution bans foreign bases but made a ‘temporary’ exception
with the Black Sea Fleet. The Anti-Crisis coalition, uniting the Party of
Regions, Socialists and Communists, has 240 deputies and is therefore unable
to change these constitutional provisions, which would require 300 votes.

Defense Minister Anatoliy Hrytsenko, a Yushchenko loyalist, has rejected
extending the 20 year lease and turned down offers of security assistance
from Russia. Prime Minister Yanukovych has supported negotiations to extend
the Russian base agreement beyond 2017.                     -30-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
        Crime strong, government weak in Crimea – Ukrainian president’s envoy

INTERVIEW: With Henadiy Moskal,
President Viktor Yushchenko’s Representative in Crimea
BY: Valentyna Samar, Zerkalo Nedeli, Kiev, in Russian 4 Nov 06; p 3
BBC Monitoring Service, United Kingdom, Thursday, Nov 09, 2006

Ukraine’s Crimea is not in danger of becoming another Kosovo, but central
authorities must keep their eye on the region, Henadiy Moskal, President
Viktor Yushchenko’s representative in Crimea, has said in an interview. The
authorities in Crimea are weak and have reinforced their position with
criminals, he said.

Decisions by the central authorities to rectify such issues as the
allocation of land were being sabotaged because Crimean leaders are not
interested in solving the problem and Kiev is failing to punish them for
their inaction, according to Moskal.

He noted there appears to be friction between criminals who served time in
jail and their fellow criminals who “got into parliament”.

The following is the text of the interview with Moskal by Valentyna Samar,
entitled “Henadiy Moskal: there are no authorities in Crimea”, published in
the Ukrainian analytical weekly Zerkalo Nedeli on 4 November, subheadings
have been inserted editorially:

Sometimes even this happens: right after the Orange Revolution in the
president’s secretariat, they began to think seriously about eliminating
such an unnecessary constitutional institution as the president’s permanent
representative in Crimea. For a long time the office of the presidential
representative was empty altogether.

But after Henadiy Moskal occupied it, it turned out that the president’s
representative office, though it has few powers, can be a very effective
instrument of control over the situation in the autonomous republic.

And if earlier under [former] President Leonid Kuchma, the presidential
representative was called his eyes and his ears, under President Yushchenko,
you can say a voice appeared as well – it is a rare day that goes by without
Mr Moskal giving an interview or commentary or his statements appearing in
the media. As a rule they are uncompromising, but nevertheless the general
has not said anything superfluous.
                              WEAK POWER IN CRIMEA
Without the obvious support of any political force represented in the
Crimean parliament, Mr Moskal actively works with public organizations.

I suspect that this is not least of all because there are nearly none of the
former head policeman’s “godfathers” in the “third sector”. But there are
many of them within the bodies of power in the autonomous region.

That is what he is asked about most frequently. We tried to get answers to
questions on another level.

[Samar] Mr Moskal, how do think the current competition for power between
the president and the prime minister [Viktor Yanukovych] will affect
relations between the centre and such a peculiar and difficult-to-manage
place as the Autonomous Republic of Crimea?

Practically all power in Crimea today belongs to the Party of Regions [which
Yanukovych heads]. Does the presidential secretariat have a vision on how
the head of state can keep control over Crimea?

[Moskal] First, there will be no Crimean-variety reform of local
self-government in the country. Second, neither the president nor the centre
are threatened by anything as long as Crimea has the kind of power it has

To be honest, there is no power here. There is merely a sham and appearance
of power.

The person who worked out this model was an absolutely short-sighted person.
Who proposed Anatoliy Hrytsenko, whose authority in Crimea is like a
temperature of minus zero, as speaker of the autonomy’s parliament?

That should have been known by the person who was the “watchdog” here.
And when they tried to choose the same kind of candidate for prime minister,
well the centre has nothing to worry about, since this power is absolutely

[Samar] Weak power carries another threat. And what is happening now – the
exacerbation of all chronic problems from land to interethnic relations –
will not end in anything good.

[Moskal] Yes, there is an exacerbation of problems which should be resolved
by the local authorities, and not by the centre. First is the land issue. In
order to bring order to this in Crimea, the law needs to be changed, the law
on local self-government…[ellipsis as published]

[Samar] Or maybe execute the law which already exists?

[Moskal] …[ellipsis as published] or adhere to the existing law. But you
see for yourself that problems are not being resolved.

There is a firm trend towards more and more land-grabbing and towards
building houses on it. People in parliament say: why is Moskal sounding an
alarm, those are shacks and not homes.

Well, shacks can be built out of cardboard, but construction here is being
built on foundations, electricity is being put in and water lines extended.

It is absolutely clear that no-one is going to leave this land, that is why
people are putting their money there. And the Crimean authorities make
statements, so endearing to my heart, that the problems are being
resolved…[ellipsis as published]

And time is passing by. What is the current leadership being led by? First –
a lack of desire to do anything. Why burden yourself with such difficult
problems? Let the next people come to power take care of it. And everything
is very simple.

The situation with land-grabbing is like it once was in Moscow: all visitors
ran to get in line at the central shopping centres in order to be certain to
get at least something. And the same is going on here.

Along with the Crimean Tatars who really do need land for homes, people who
don’t need it are taking part in the protests and there are people who have
staked claims in several protest areas at the same time.

The authorities need to put together a list of all those hopefuls from all
the protests, and there are 53 of them today; and they need to sift through
those lists to make sure that one person is not claiming several plots of
land, and they need to check that the rest really do need land and have the
right to it in accordance to the current law.

There will turn out to be not many such people and sessions at local
councils should review their documents and provide them with land.

[Samar] That’s true, but you are forgetting the main reason – the corruption
which is spread from the very bottom to the very top.

And that is exactly why nothing is being done for transparency and why work
to inventory land is not being done and why there has not been one meeting
of the National Security and Defence Council [NSDC] on Crimean issues and
no commission on the matter has come to a logical conclusion, and the
land-grabbing fiasco is continuing.

[Moskal] For some reason in our country, only a few drops of water or
nothing at all falls from a big cloud. No serious criminal case has gone to
court after the work of all these commissions.

Because everyone they dug down to turned out to have protection, and there
is not the openness today that there is in developed democracies.

For example, why is former Italian prime minister Berlusconi being dragged
from court to court today and he is not shouting about it; whereas here,
whoever you touch starts shouting about political persecution and political
repression. And all the land has been divided up either for bribes or for
knowing someone inside.
                       NO REPERCUSSIONS FROM KIEV
[Samar] There are fairly pessimistic predictions on the effectiveness of the
president’s decree on Crimean issues after the last meeting of the NSDC
[National Security and Defence Council].

Mr Yushchenko gave devastating criticism to both the Crimean and central
authorities for not carrying out the former NSDC decision, but the cabinet,
from the lips of [Deputy Prime Minister Dmytro] Tabachnyk, did not agree,
since they think the government is doing a lot for Crimea…[ellipsis as

[Moskal] Meetings of the NSDC must not only state the fact that the previous
decision is not being carried out. If it is not being carried out, then that
means the guilty should be punished. And today the president’s
representatives daily monitor the execution of the latest decision.

Both the Crimean parliament and the Council of Ministers and local bodies of
self-government tossed the NSDC decision in the trash. They did not even
begin nor intend to begin fulfilling it. If they got away with it once, then
what is there to fear? The NSDC will meet a third time and the same thing
will happen.

[Samar] Is that sabotage?
[Moskal] It is.

[Samar] On what level?
[Moskal] On the local level.

[Samar] So you want to say that the Crimean party leaders, that is the
leadership of the cabinet don’t have anything to do with it, but it is local
Party of Regions members who have initiated the sabotage of the NSDC
decision on their own?

[Moskal] I would not say they are doing so consciously. There is such a
thing in criminal law known as criminal arrogance, that is – what if I get
away with it? And that is why the NSDC needs to be tougher today. A
month has gone by and what has been done? Nothing.

We don’t need to hear more, we need conclusions. You simply can’t continue
turning Crimea into a seat of instability! I mean there were no such mass
acts of land-grabbing even in the first years of Crimean Tatars returning to
their homeland!

[Samar] So, we can say that today the NSDC is completely inactive as a lever
of power in the hands of the president, at least as far as Crimean land
issues are concerned?

[Moskal] I want to tell you one thing; on the local level the NSDC decision
will not be implemented. Because the current authorities in Crimea do not
gain from it.

If all the land is inventoried and all the boundaries are drawn, foremost
around national parks, then everything will be decided at the level of local
councils and not in the parliament and government of Crimea.

And then the authorities of the autonomy will not have the tool of
distributing land. And then what will they do, simply talk about NATO and
the Russian language meeting after meeting?

If you do everything envisioned by the law, that means making corruption
impossible and the only thing left to do is enforce strict control over the
legality of decisions by local bodies of power.

[Samar] If I am not mistaken, it was at your suggestion that the president’s
decree envisions opening a branch of the Ukrainian State Property Fund [SPF]
in Crimea – in contrast to the existing property fund of the autonomy, which
has double subordination. This serious step by the centre is taken by those
in power in Crimea as revoking the authority of the autonomy.

[Moskal] And why is it revoking the authority of the autonomy? If
agricultural firms engaged in vineyards and wine-making and which are
government property are continually giving up land along the coastline for
construction purposes and doing so upon decisions of the Crimean parliament,
then there is a need to open a branch of the SPF.

And every morsel of land given away should be given away based on its
permission. And I guarantee you that [SPF head Valentyna] Semenyuk will not
give such permission today.

There is a branch of the SPF in every region and there is a department of
communal property. So let these people take care of communal property, and
everything else will go to the SPF.

A document is now being prepared in the secretariat to repeal the decree by
[former] President Leonid Kuchma dated 1995 on privatization departments in
Crimea which was absolutely illegal.

Second, we need to introduce changes to the constitution of Crimea and close
the hands-on, in-the-pocket Crimean Accounting Office.

It exists to juggle accounts and principles appear only when someone has to
be kicked out of office. And if you want to have effective control over the
use and accrual of budget funds, a serious branch of the Ukrainian
Accounting Office has to be opened.
                          KEEPING ITS EYE EVERYWHERE
[Samar] It seems that even without all of that, the president’s
representative office today is keeping its eye on every single decision by
the Crimean parliament and government. The number of your suits filed in
court against the decisions of local and Crimean authorities beats all

Your relationship with speaker Hrytsenko is already on the verge of mutual
idiosyncrasy. Accusations of the criminal past of deputies is a separate
subject. Is this the position of the secretariat and the president or that
of the “executioner at large”?

[Moskal] Well, I am not a man who is going to wait for instructions from the
secretariat. When I came here and saw who had got into the Crimean
parliament, I asked: guys, whose stupidity is this?

In Crimea only newborn children do not know that these people are criminals.
There are 225 unsolved murders. There are fathers and children in the shadow
of these victims and they are waiting for the government to see justice

In my first days here I rejected bodyguards and freely walk around the
streets. And people, including former police department employees, stop me
and ask: “How can this be? This guy was killed, that one kidnapped, this
other one tortured and shot and no-one has been punished”.

I had to react to that as both the president’s representative and as a
person. And then I said in the secretariat: we must not allow Crimea to turn
into Latin America of the 1970s.

I asked the interior minister [Yuriy Lutsenko] to set up a special
investigative group and it was set up on instructions by the minister and
the prosecutor-general.

[Samar] We know that this group, under the leadership of department chief
Maj-Gen Vasyl Paskal, works absolutely autonomously, with a base that is not
even in Crimea, but rather in Odessa.

Why is that so? Is there pressure or a threat of danger to members of the
group or a lack of trust in Crimean law enforcement officers?

[Moskal] The group works that way so that none of that takes place. And the
group’s activity will be successful if no-one hinders it.

[Samar] You don’t even have to disband this group, it is enough to switch
the investigators as the prosecutors did with regard to the investigative
group in the [Oleksandr] Melnyk case…[ellipsis as published]

[Moskal] There are other ways, too: for example, burdening the group as much
as possible with cases from other regions…[ellipsis as published]

[Samar] Crimean parliamentary deputy Oleksandr Melnyk, who is suspected of
committing and organizing murders, and who, despite a signed statement to
not flee, left our territory unhindered, said in an interview that pressure
was being put on people detained in Odessa and illegal methods of getting
evidence were being used against him.

[Moskal] Mr Melnyk thinks that when his former pals testify against him,
then something is amiss. As far as I know, those who have already served
sentences are giving the most testimony to investigators, probably because
back then their friends promised they would help them…[ellipsis as
                            CRIMINALS WITH A GRUDGE
Samar] You mean to say that these people are offended that they were not
“taken care of” in the zone [prison]?
[Moskal] I think so, most probably. Because it turned out that some went to
jail and others ended up in parliament. And those people also have a sense
of social justice…[ellipsis as published]

[Samar] As far as I know from words by the leaders of the group, not a day
goes by that someone doesn’t come to them with a confession. And it
happens that there are three, five or 10 appearances with a confession.

[Samar] Where is Voronok, leader of the [alleged criminal group] Seylem
[Moskal] I don’t know where he is, or what intentions he has or what
influence he has. But I know the group intends to return to its documented
criminal activity.

[Samar] Law enforcement officials call deputy Melnyk one of the leaders of
Seylem, but journalists call him the “eyes” of Donetsk, or even of
[Ukrainian MP and tycoon] Rinat Akhmetov [who is from Donetsk].

But in an interview with Ukrayinska Pravda, Mr Akhmetov denies anything to
do with Melnyk. He says he has no interests here at all, since there is
nothing to look after except perhaps a vacation home.

[Moskal] I believe Mr Akhmetov. And really, what can link this guy and the
richest man in the country? By the way, I did not call Melnyk the “eyes of
Donetsk”. I called a different deputy that (Anton Pryhodskyy – author). I
think this is all Melnyk’s bragging.

But when there is no-one to lead, someone has to take power. Melnyk always
accompanies Hrytsenko on trips and to meetings, both to Moscow and to

There is weak power which has reinforced itself with criminals. I don’t see
anything else here.

[Samar] The last leak of information from the investigative group is that
Oleksandr Melnyk is suspected of having something to do with the 2001
murder of the Krotenko husband and wife – the owners of the popular
Kozatskyy Shlyakh restaurant.

Besides that, we hear that another Crimean deputy was directly involved in
the crime. If this is the influential deputy I am thinking of, then won’t
the speaker lose the support you were talking about in case of his arrest or
sudden departure? And this could lead to some other changes in the
leadership of the autonomy?

[Moskal] It is impossible to establish another configuration in parliament,
besides the one that is there today. But, based on statements by the leader
of the Russian Bloc on quitting the coalition, changes can’t be ruled out.
But probably what will happen is that none of the criminals will put
pressure on the deputies.

[Samar] As far as parliament is concerned, yes, but I meant the
prerequisites for changing the prime minister who depends entirely on the
speaker today, through whom, people say, Mr Melnyk and Mr Lukashov
exert their influence…[ellipsis as published]

[Moskal] As far as I know, the prerequisites are already set up, since the
council of ministers is not satisfied with [Crimean prime minister] Mr
Plakida and they have more complaints against him than the president does.

[Samar] So, one against the other and?..[ellipsis as published]
[Moskal] I have no doubt there will be a change of the head of the
government. Hrytsenko’s candidacy did not justify itself and the speaker
will not be able to synchronize his own management of both parliament and
the government.
                        TATARS “A RESTRAINING FACTOR”
[Samar] Whose interests could come into play in appointing the new leader of
the Crimean parliament? Those of Akhmetov or [Dmytro] Firtash [a tycoon
primarily known for his business in the gas industry]?

[Moskal] These people have no business interests in Crimea! There are only
three stable, working structures, the “whales” of the budget – the state
enterprises Chornomornaftohaz, Titan and the Crimea Soda Plant…[ellipsis
as published]

[Samar] But the last two are controlled by Firtash, by the way!
[Moskal] What difference does it make whose enterprises they are? The
important thing is that investment flows and the enterprises’ work is

[Samar] Of course, it is only with us that politics and business cannot be
separated. And so who influences politics in Crimea today and who is
interested in constant instability here?

[Moskal] Completely different factors influence events in Crimea. Not inside
of Ukraine, but from without. Since the president and the government and the
“Donetsk group” and Crimeans are interested in stability here. Crimea will
never be [the Moldovan breakaway region] Dniester and it will not be
Abkhazia or Kosovo.

And there is no Crimea-wide leader who can take up the role of [incumbent
president of Dniester region, Igor] Smirnov or even [pro-Moscow Yuriy]
Meshkov [who was president of Crimea in 1994]. And those who have been
offered it, have refused. They have offered everyone, but they all see they
are not up to it.

[Samar] Who is offering that role and to whom?
[Moskal] There were attempts, but it won’t happen. The people they made the
offers to have heads on their shoulders. And besides, there are Crimean
Tatars. No matter what anyone says, that is the main restraining factor here
today in Crimea against any anti-Ukrainian scenarios.

Yes, they have a lot of complaints against the authorities and in most cases
justified ones. But it is exactly they who are the restraining factor, the
ones who do not allow Crimea to become a Dniester or South Ossetia.

[Samar] Okay, so no-one can take up the role of a new Meshkov, but outside
influence is coming via someone. Everyone knows to which organizations and
party structures financing from Moscow comes. There is a NSDC resolution

and a number of instructions to special services…[ellipsis as published]
[Moskal] Hang on a second, we are not in Georgia and no-one here has caught
anyone by the hand.

[Samar] That’s just it…[ellipsis as published]
[Moskal] Let’s remember the words to a song by [Soviet-era bard Vladimir]
Vysotskiy: “Where there are not many real unruly types, there are no
leaders”. Don’t take Crimean marginals seriously and don’t create
advertising for them.

All these pro-Russian fronts and “movements” are vaudeville theatre. But of
27 regions, if anyone wants to set things off, they can’t do it anywhere but
in Crimea. The NSDC decision was made so no-one goes to sleep, so no-one
relaxes but rather they work as they should.                   -30-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Irish Times, Dublin, Ireland, Wednesday, Nov 01, 2006

For many it is where they spent some of the best months of their youth, at
Young Pioneer camps or on holidays.

Talk to Ukrainians driving around the peninsula and they will point to where
their camp was and what mountains they climbed. It can only be compared to
Irish people recalling their time in the Gaeltacht.

Crimea is a beautiful place. Ride the cable car up Ai Petri mountain and you
see eagles soaring. Its coastline is full of little inlets and beaches and
the landscape is dotted with vineyards.

As Ukrainians tell their stories someone will propose a toast. Vodka will be
held aloft: “to Ukrainian Crimea”. Then down goes the vodka.

The salute is politically loaded because Crimea is a contested place. In the
Black Sea resort of Alushta, the main rival to the more famous Yalta a few
miles up the coast, the season is coming to an end.

The bars and restaurants are only half-full, but it is still warm and many
people are out walking until late on the long promenade that borders the

Ukrainians like to live life outside when the climate allows, so groups of
young people sit and talk on the promenade and drink a few beers. Others

pay a few kopiyas to sing a song to the home-made karaoke machines. The
atmosphere is friendly.
But a little later small groups of young men stand around, eyeing other
similar groups. Some are wearing T-shirts proclaiming “Russia” or “Ukraine”.
A few insults are thrown, but little else happens even if the atmosphere is

Someone is wearing what looks like an old-fashioned military officer’s
uniform, with large peaked Russian- style cap, tunic and trousers, with a
wide red stripe tucked into boots. Beside him is another solider-like
figure, wearing a beret. Both are armed with long whips. They provide
security, we are told.

But who are they? Cossacks, is the answer. A walk around the town shows

the “Cossacks” are providing security everywhere.
Crimea never had Cossacks.

They were in other parts of Ukraine, and the country is quite proud of its
Cossack connection. One of the best Ukrainian vodkas, Hetman, is named

after the title of a Cossack commander.
Here in Crimea though, the Cossacks are Russian-speakers, whose main
function, they claim, is to defend the Russian Orthodox Church.

It is also a moot point as to whether they are all actually Cossacks at all,
but uniformed Russian nationalists. Their main enemy are the Tatars, and
secondly Ukraine.

The Tatars, under Genghis Khan, were once part of an empire that stretched
from Mongolia across central Asia and into eastern Europe. The Crimea Tatars
converted to Islam in the 12th century.

Crimea later became part of the Ottoman Empire and remained so until
Catherine the Great took Crimea, so giving Russia access to the Black Sea.
Catherine encouraged others, especially Russians, to settle in Crimea in
order to change the population balance. By 1863 the Tatar population was
outnumbered by immigrants.

In 1944 Stalin ordered the deportation to central Asia of all the estimated
remaining 200,000 Crimean Tatars for their alleged collaboration with the
German occupiers.

In 1954 the peninsula was handed to Ukraine as a “gift” from Russia to mark
the friendship between the two peoples. In 1991, when Ukraine gained its
independence, it inherited the peninsula and its overwhelmingly Russian

Crimean Tatars started returning in the 1980s. The number increased rapidly
after Ukrainian independence. Official figures show that 244,000 have now
returned. Tatar leaders say another 200,000 want to come back.

Today there is tension. Both Russians and Ukrainians say the Tatars want
returned to them the houses and land that belonged to their families before
the expulsion. The Cossacks also claim that Tatars are linked to Islamic
fundamentalist organisations.

The Tatar legacy is used as part of the tourism industry. Restaurants offer
an “authentic” Tatar experience. Real Tatars, though, are a marginal,
dispossessed group.

There are frequent fights between Tatars and members of the Russian
majority. The Tatars also complain of police harassment.
Meanwhile, the Cossacks provide “security” armed with their bullwhips,
claiming they are making Crimea safe for the Russian majority.

There are not many Irish links with Crimea, but there is one. It is now 150
years since the end of the Crimea War. That was covered for the London Times
by a man named William Howard Russell. Russell is considered the father of
war correspondents and could be considered the first reporter in the modern

His coverage had a huge impact. One government fell, a “War Department” was
created and Florence Nightingale brought her nurses to the Crimea to tend to
the British wounded. Russell, who is commemorated in St Paul’s Cathedral,
was from Tallaght in Dublin.                            -30-
[return to index] Action Ukraine Report (AUR) Monitoring Service]
     You are welcome to send us names for the AUR distribution list.

BBC Monitoring Service, United Kingdom, Sunday, Nov 12, 2006

Viktor Baloha, a former emergencies minister and regional governor, was
appointed head of President Viktor Yushchenko’s secretariat on 16 September.

Amid deteriorating relations with Prime Minister Viktor Yanukovych,
Yushchenko apparently sees Baloha as a tough manager who will be better
equipped to shore up his waning influence than his predecessor, Oleh
Rybachuk, who was widely seen as ineffectual.

Baloha’s new role has even been compared to that of the notorious “crisis
manager” Viktor Medvedchuk, the head of President Leonid Kuchma’s
administration and a one-time ally of Baloha in the United Social Democratic

Baloha may also attempt to build bridges with Yanukovych, with whom he says
that he has enjoyed good personal relations since the late-1990s, when they
both served as regional governors.

In an interview shortly after his appointment, he said: “I came here in
order to bury the hatchet of war. I’m hoping to calm down the radicals in
both [Yanukovych’s] Party of Regions and [pro-presidential bloc] Our Ukraine
and finally halt the senseless confrontation.”

Baloha is reported to have substantial business interests in Transcarpathian
Region, but he plays down suggestions that he is super-rich.

According to the Ukrayinska Pravda web site, in 2005, his family reported
income of around 200,000 dollars and shareholdings worth around 300,000
dollars. Baloha’s wife, Oksana, is a shareholder in a number of businesses
in the transport, furniture, food, media and other sectors.
Born in a Transcarpathian Region village in 1963, Baloha graduated from the
Lviv trade and economics institute. After military service, he returned to
his native region to work in consumer cooperatives.

From 1992-98, he was director of the Mukacheve firms Ryb-promin and Barva.
Baloha’s businesses were involved in the trade, food processing,
non-alcoholic beverages and construction sectors.

In 1998, Baloha was elected mayor of Mukacheve. Around this time, he appears
to have become associated with Medvedchuk and joined his United Social
Democratic Party (USDP).

Medvedchuk was elected to parliament in 1998 from a Transcarpathian
constituency, and he is believed to have arranged Baloha’s appointment as
regional governor in 1999.

As governor, Baloha built up the USDP presence in the region, where at one
time up to 80 per cent of bureaucrats were said to be party members. He also
appears to have facilitated strong support for the reelection of Leonid
Kuchma in the 1999 presidential election.

In 2000, however, Baloha appears to have broken ties with the USDP and
thrown his support behind Volodymyr Lytvyn, the then head of Kuchma’s
administration and a fierce opponent of Medvedchuk.

Facing imminent dismissal, Baloha eventually resigned in June 2001. The
Prosecutor-General’s Office subsequently opened a case against him for
financial abuses during his time as governor.
                                     OPPOSITION POLITICIAN
Baloha’s resignation came shortly after parliament sacked the government of
Viktor Yushchenko. Baloha soon joined forces with the former prime minister
and managed his Our Ukraine bloc’s 2002 parliamentary campaign in
Transcarpathian Region.

Baloha was elected to parliament in a Transcarpathian Region constituency.
He was also elected mayor of Mukacheve.

As an MP, Baloha was unable to hold another elected post and stepped down

as mayor. In the subsequent mayoral election in June 2003, Baloha’s cousin
(some sources indicate brother-in-law) and business partner Vasyl Petyovka
ran as the Our Ukraine candidate.

Although Petyovka was initially declared the winner, the result was
successfully challenged in court and Petyovka was eventually removed from
the post by presidential decree.

In April 2004, Baloha himself ran in the scandalous repeat mayoral election.
The election developed into an international scandal after observers
reported large-scale irregularities.

The candidate backed by the USDP was declared the winner, while Our Ukraine
said that the result had been falsified to deny Baloha victory. The election
was widely seen as a rehearsal for the presidential election that autumn.
                                     PRESIDENT’S MAN
After the Orange Revolution, Baloha returned to Transcarpathian Region as
governor. He also headed the regional branch of the pro-presidential party
Our Ukraine People’s Union.

During his time as governor, Baloha was accused of putting pressure on
businessmen and political persecution of USDP supporters, including the
former governor, Ivan Rizak. Baloha denied these allegations.

After the corruption scandal that led to the dismissal of Yuliya
Tymoshenko’s government in September 2005, Baloha was appointed

emergencies minister.

During his time in office, the ministry dealt with, amongst other things, a
bird flu outbreak, a mid-winter heating breakdown in the Luhansk-region town
of Alchevsk, and explosions of shells at the Novobohdanivka munitions depot.

Baloha appears to be a close friend of the Yushchenko family. In January
2006, he joined Yushchenko and Prime Minister Yuriy Yekhanurov for a
traditional swim in the icy Dnipro river to mark the feast of Epiphany.

Baloha and Yekhanurov are believed to have been behind an unsuccessful
attempt to expel Yushchenko’s “dear friends”, the group of
businessmen-politicians discredited in the corruption scandal, from
leadership positions in the Our Ukraine People’s Union ahead of the March
2006 parliamentary election.

Baloha himself did not run for parliament in election. After the election,
Baloha, together with Yekhanurov, advocated a grand coalition between Our
Ukraine and the Party of Regions.

Baloha remains a powerful figure in Transcarpathian Region, where Serhiy
Ratushnyak, a former business competitor and now mayor of Uzhhorod, is

seen as his only real rival.

Baloha is said to have considerable influence over the regional council,
where Our Ukraine is in a grand coalition with the Party of Regions.

Baloha has repeatedly been accused of cronyism and nepotism in appointments
in his native region. Vasyl Petyovka now serves as Mukacheve mayor.

While the godfather of Baloha’s child, Oleh Havashy, replaced him as
regional governor. Baloha’s younger brother, Ivan, a deputy regional
governor, has replaced him as head of the regional branch of Our Ukrainian
People’s Union.                                      -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
 Ukrainian presidential office chief replaced by brother as regional party boss

Delovaya Stolitsa newspaper, Kiev, in Russian 23 Oct 06
BBC Monitoring Service, United Kingdom, Tuesday, Oct 24, 2006

Ivan Baloha, the younger brother of presidential office chief Viktor Baloha,
has been elected leader of the Transcarpathian branch of President Viktor
Yushchenko’s Our Ukraine People’s Union party, a business paper has

Ivan Baloha took over from his brother, who apparently does not believe in
democratic principles, it wrote.

Nothing can now shake the positions of the Baloha family and their allies in
the Transcarpathian region, the paper concluded. Their only strong local
rival is Uzhhorod mayor Serhiy Ratushnyak, it added.

The following is the text of the article by Vitaliy Pyrovych entitled
“Baloha turned over, Baloha took over” published in the Ukrainian newspaper
Delovaya Stolitsa on 23 October; subheadings are as published:

The name of the leader of the Transcarpathian regional branch of
[propresidential] Our Ukraine People’s Union [OUPU] party did not change
after its conference held to hear reports and elect new leadership.

From now on, state secretary [as published; head of the presidential
secretariat] Viktor Bahoha’s younger brother Ivan will be the father and
commander of Transcarpathian Our Ukraine members.

“Kuchmism” [policy attributed to former President Leonid Kuchma] seems
likely to have left an ineffaceable trace on Viktor Baloha, and the former
Social Democrat does not much trust democratic principles.

This is the reason why he entrusts leadership in business, region and party
only to the people close to him and toughly presses for their promotion.
                              FAMILY AND PARTY BRANCH
The head of the presidential secretariat and the leader of the regional OUPU
branch did not consider necessary to be present at his one-man show in the
party, having sent and application requesting his fellow party members to
relieve him of party work in Transcarpathian Region.

The head of the executive board of the regional branch, Volodymyr Shkryba,
reported to fellow party members instead of him. Mr Shkryba’s report in
which the state secretary’s style could be recognized was accepted with
enthusiasm, and then delegates began praising the only contender for the
regional party boss.

The head of the executive board passionately announced that Ivan Baloha was
the one who headed Our Ukraine’s headquarters in Mukacheve during the 2006
[parliamentary] election where Our Ukraine had gained the largest number of

The regional council head and Viktor Baloha’s former speech writer, Mykhaylo
Kychkovskyy, said that “Mr Ivan Baloha is the most authoritative and
enterprising regional councillor who put forward a number of interesting
ideas as the head of the regional Our Ukraine faction [in regional

MP Ihor Kril summed up praises and glorification: “Ivan Baloha is a young
and prospective politician who is not only aware of regional problems, but
is also able to resolve them.” No need to say, it was just impossible not to
elect this prominent figure unanimously.

However, grateful Ivan Baloha complained to councillors: from now on, he has
got “another heavy burden”. Indeed, Baloha Jr has a great deal of work: he
is a formal manager of family business, and he has also got the post of
deputy head of the regional state administration as a burden since summer.

Nevertheless, Viktor Baloha has decided that his brother is able to be
successfully engaged in “party drudgery”.

Generally speaking, the chief of the presidential secretariat likes to
settle things “in family way”: he nominated his child’s godfather Oleh
Havashy as governor, his own brother as the latter’s first deputy and his
cousin Vasyl Petyovka as Mukacheve mayor.

The same way, the brother from Kiev does not want to lose control over the
regional Our Ukraine organization, as it enables him to retain influence in
the regional council.

Judging from the majority formed in the regional council, Viktor Baloha
still exerts influence upon local organizations of Our Ukraine, the Party of
Regions, two Hungarian ethnic minority parties and some [opposition] Yuliya
Tymoshenko Bloc [YTB] members.

The fact that governor Oleh Havashy has been the regional Reforms and Order
Party leader for a long time is significant. Some interlocutors of Delovaya
Stolitsa consider Ivan Baloha’s penetration into Our Ukraine’s ruling bodies
in the capital to be his next “fraternal” task, as this will enable Viktor
Baloha to have eyes and ears in his native party.

Viktor Baloha who has never actively tackled Our Ukraine’s affairs until
recently (if his last year’s unrealized initiative to remove “dear friends”
[President Viktor Yushchenko’s closest entourage accused of corruption] from
party readership after the “corruption scandal” [in September 2005] is not
taken into account) now intends to exert more influence on the party policy
on a national scale.
                       PATRIMONY WITH ROTTENNESS
If Viktor Baloha just intends to strengthen his positions in Our Ukraine,
no-one and nothing can shake his position in his native region any more.

Even the fact that the Party of Regions has come to power and Viktor Baloha
himself has left the Cabinet of Ministers after being the major instrument
of Viktor Yushchenko’s influence in the executive authorities is unlikely to
result in changes on the regional Olympus of power.

Viktor Baloha’s nominee, governor Oleh Havashy is not present on the
government’s black lists, but he has become the first governor honoured to
be received personally by the prime minister [Viktor Yanukovych] last week.

It should be noted that Mr Havashy left Viktor Yanukovych’s office “alive
and unhurt”, though he got a reminder “of regional leaders’ personal
responsibility for preparation for winter season”.

It can be concluded that the discussion was primarily related to the
beginning of the heating season in Transcarpathian Region, as it had been

Other topics of discussion between the Transcarpathian governor and the
prime minister, in addition to the coming cold, remained a secret, but we
can presume that Viktor Yanukovych was unlikely to blackmail Oleh Havashy
with the governor’s post, trying to obtain proofs of his devotion.

Mr Havashy cannot be loyal to Mr Yanukovych at the expense of his relations
with Viktor Baloha. But the prime minister is not interested in escalation
of relations with the head of the presidential secretariat either, while
“incursions” on his Transcarpathian protege can make the latter the prime
minister’s personal enemy.

Mr Yanukovych understands that, if he wants to peacefully cohabit with the
president, pragmatic Viktor Baloha is the one who can become a bridge for
achieving this goal.

Formation of a Transcarpathian grand coalition with the Party of Regions’
participation can serve as a proof of this kind of Viktor Baloha’s
pragmatism, and this approach cannot but attract Mr Yanukovych.

By the way, the majority of regional councillors, including representatives
of the Party of Regions, approved Oleh Havashy’s report in September, and
Viktor Yanukovych is unlikely to bring any kind of accusations against the
regional state administration chief in public, as he enjoys his
Transcarpathian fellow party members’ support.

On the other hand, Viktor Baloha has his own regional interest in Viktor
Yanukovych. Viktor Baloha’s only rival in Transcarpathian Region is the
Uzhhorod mayor, Serhiy Ratushnyak, who cannot be “neutralized” through the
city council, the same way as through the regional state administration or
the [presidential] secretariat.

There are now levers of influencing a legitimately elected city mayor in the
president’s arsenal, the same way as in the government’s one.

However, if the Cabinet of Ministers “helps” to organize heating disruptions
in Uzhhorod (for example, the beginning of the heating season in Vinnytsya
was postponed due to short gas supplies by the Naftohaz Ukrayiny national
joint-stock company’s [dealing with oil and gas supplies] daughter
enterprises, and if the Party of Regions’ central office persuades its
fellow party members in the city council (without having six Party of
Regions members, the mayor will control only one-half of votes in the city
council – precisely 25 councillors) to leave the majority, Serhiy
Ratushnyak’s positions will become more vulnerable for Viktor Baloha’s

However, another option is possible: wishing to press the head of the
presidential secretariat, Viktor Yanukovych will choose the latter’s
influential antagonist, Serhiy Ratushnyak, as his main support in this

Then the Transcarpathian Region will witness another “local war”, and its
producers will be located in the presidential secretariat in Kiev.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
20.               “TARASYUK AND LUTSENKO OUT?”
             Ukrainian foreign, interior ministers will go, newspaper says

Segodnya, Kiev, in Russian 14 Nov 06; p 2
BBC Monitoring Service, United Kingdom, Tue, Nov 14, 2006

Text of unsigned report by Ukrainian newspaper Segodnya, which is linked to
the Party of Regions headed by Prime Minister Viktor Yanukovych, published
on 14 November under the headline “Tarasyuk and Lutsenko out?”:

The fate of Interior Minister Yuriy Lutsenko and Foreign Minister Borys
Tarasyuk is known for sure, sources in the anti-crisis [government]
coalition have said. They will be sacked.

“This issue is 80 per cent solved. He [Lutsenko] will be dismissed pretty
soon, and nobody will even wait for the results of work of the parliamentary
commission on the Interior Ministry (it starts to work today – Segodnya),”
the sources said.

The main contender for the post is an MP representing the Party of Regions,
Mykola Dzhyha, who is a former deputy interior minister.

As to Tarasyuk’s dismissal, we shall recall that two candidacies are
considered to replace him: the deputy head of the presidential secretariat,
Oleksandr Chalyy, and former Foreign Minister Kostyantyn Hryshchenko.

There should be no legal problems with Lutsenko’s dismissal (he is appointed
and dismissed on request from the prime minister), but things are a bit
complicated with the head of the Foreign Ministry, whose candidacy it is up
to the president to submit.

Ihor Koliushko, an adviser to the president [Viktor Yushchenko], said
yesterday that he is going to ask the Constitutional Court who has the right
to dismiss this minister. Viktor Yushchenko yesterday said that the attempts
to dismiss Tarasyuk are tantamount to encroachment on Ukraine’s
Euro-Atlantic course.                              -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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                           HEAVYWEIGHT WORLD TITLE

By Larry Fine, Reuters, New York, NY, Sunday, Nov 12, 2006

NEW YORK – Vladimir Klitschko of Ukraine retained the International
Boxing Federation heavyweight world title on Saturday when he stopped
previously unbeaten challenger Calvin Brock in the seventh round at
Madison Square Garden.

Brock crumpled to the canvas after taking a devastating right-hand
punch to the jaw. The American rose to his feet after the count but
was so wobbly that referee Wayne Kelly waved an end to the scheduled
12-round bout at 2:10 of the seventh.

“It was a left hook, straight right combination,” Klitschko told
reporters. “I should have landed it that way earlier in the fight. But
it took that much time to get my rhythm and distance. He’s a good
defensive fighter.”

Klitschko, 30, improved to 47-3 with 42 of his wins coming within the

The 31-year-old Brock, a member of the 2000 U.S. Olympic boxing team,
suffered his first defeat after winning his opening 29 professional bouts.

“I saw the punch coming but I couldn’t react fast enough,” Brock said.
“He’s strong.”

Earlier, Muhammad Ali was lavished with cheers of “Ali, Ali, Ali,”
when he arrived to take a front row seat for his daughter Laila Ali’s
defense of her super middleweight title against fellow-American
Shelley Burton.

The 28-year-old WBC women’s champion unleashed a powerful left-
right combination that busted Burton’s nose in the fourth round. With
blood pouring from the challenger’s face, the referee stopped the bout
and Ali improved her record to 23-0.

Klitschko was making the first defense of the IBF and International
Boxing Organization (IBO) crowns he won by stopping American
Chris Byrd in the seventh round last April in Mannheim, Germany.

The 6-foot-6 Klitschko, who had a four-inch height and reach
advantage, relied on his stinging jab in the early rounds while Brock
countered with left and right hooks to the body.
Klitschko won five of the first six rounds on all the judges’ scorecards,
but the champion was not dominating the defensive-mindedBrock.

The bout began to turn after an accidental clash of heads in the sixth
round opened a cut over Klitschko’s left eye, sending blood trickling
down the side of his face. “I got mad,” said the champion.

Klitschko, who required stitches after the bout, fought with more
urgency from that point and unleashed his firepower in the seventh.

Looking to land his powerful right, Klitschko began throwing punches
in combination. He set up the knockdown with a left hook, hard right
combination, following up with a sharp jab and a short, devastating
right to the jaw that dropped Brock in a heap and ended the bout.

Klitschko, who also held the World Boxing organization heavyweight
title from 2000 to 2003, weighed in at 241 pounds. Brock tipped the
scales at 224.

The champion said he was eager to consolidate the heavyweight
division, which has four title holders including WBC champion Oleg
Maskaev, WBA title holder Nikolai Valuev, and American Shannon
Briggs, the WBO champion.

“I will fight anybody with a title,” Klitschko said.            -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]


Ukrinform, Kyiv, Ukraine, Monday, November 13, 2006

KYIV – Dniprodzerzhynsk is gearing up to marking the 100th anniversary of
birth of Secretary General of the Central Committee of the Communist Party
of the Soviet Union Leonid Brezhnev and name Dniprodzerzhynsk Central Park
of Culture and Resort after Leonid Brezhnev as Leonid Brezhnev was born in

Within the program of celebrations a scientific conference on Soviet history
and presentation of a catalogue of presents to Leonid Brezhnev will take

Former Secretary General of the Central Committee of the Communist Party

of the Soviet Union Leonid Brezhnev was born in Dniprodzerzhynsk on
December 19, 1906.

He graduated from the Dniprodzerzhynsk Metallurgic Institute and was
employed by the Dniprovsk Metallurgic Works. On 1976 the Bust of Leonid
Brezhnev was inaugurated in Dniprodzerzhynsk.

 Leonid Brezhnev has posed as Secretary General of the Central Committee of
the Communist Party of the Soviet Union since 1966 to 1982.  The Brezhnev
epoch was named the “Stagnation Period”. Under Leonid Brezhnev’s rule the
USSR passed a resolution on intervention into the Czech Republic and
Afghanistan.                                  -30-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
     THEM TO DEATH”  Darfur Victim, Name Withheld To Protect Source

Save Darfur Coalition, Full Page Advertisement
The Washington Post, Washington, D.C., Thu, Nov 9, 2006, Pg A-9


In 2003, Sudanese President Omar al-Bashir moved to crush opposition
by unleashing vicious armed militias to slaughter entire villages of his
own citizens. 

After three years, 400,000 innocent men, women, and children have
been killed.  2.5 million driven from their homes. 

Untold thousands raped, tortured and terrorized.  Concerned citizens
from around the globe are uniting to stop the genocide.  Join us.

              1 800 320 0095 – LEARN MORE – TAKE ACTION


FOOTNOTE:  Top officials in Ukraine continue to ignor the genocide
taking place in Darfur.  They do not speak out against the genocide, they
do not ask the United Nations to do more…just total silence from Ukraine.
Top officials talk about the genocide in Ukraine in 1932-1933 and how it
must not ever happen again, but then choose to do nothing about the
genocide today in Darfur. 
The Ukrainian American Coordinating Council (UACC), Ihor Gawdiak,
President, Washington, D.C., New York, New York has become the first
Ukrainian organization to join the Save Darfur Coalition.  Our thanks to
Ihor Gawdiak for his willingness to do more than just talk about genocide.
Hopefully many more Ukrainian organizations around the world will also
join the Save Darfur Coalition.       AUR Editor Morgan Williams
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Ekho Moskvy radio, Moscow, in Russian 1800 gmt 13 Nov 06
BBC Monitoring Service, United Kingdom, Monday, Nov 13, 2006

MOSCOW – The mass starvation in the early 1930’s – the so-called Ukrainian
famine – was not ethnically-based genocide, according to a statement issued
by the Russian Foreign Ministry.

The document says that what occurred did, indeed, to a large extent stem
from the policies of the then leadership of the Soviet Union, but it is
quite obvious that this policy was not pursued along ethnic lines.

The statement was made in connection with a discussion in the Ukrainian
press of the argument that the famine in the 1930s was directed exclusively
against the Ukrainian people.                              -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

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