AUR#792 Nov 22 Business Investments Strong; CEO Writes PM Yanukovych; No Orange Revolution Celebration; NATO Ukrainian Perspective

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In 2007, five large hotels will be launched, in 2009, two more hotels will open
Interfax-Ukraine, Kyiv, Ukraine, Tuesday, Nov 21, 2006

Interfax-Ukraine, Kyiv, Ukraine, Tuesday, November 21, 2006

Interfax-Ukraine, Kyiv, Ukraine, Tuesday, November 21, 2006

                             AFTER DIFFICULTIES IN RUSSIA
AFX News Limited, Beijing, China, Monday, November 20, 2006


Interfax Ukraine News, Kyiv, Ukraine, Friday, November 17, 2006

Itar-Tass, Hanoi, Vietnam, Monday, Nov 20, 2006

Ukrainian Times, Kyiv, Ukraine, Monday, November 20, 2006

New Europe, Athens, Greece, Wed, November 22, 2006

Polish News Bulletin, Warsaw, Poland, Tuesday, Nov 21, 2006

Interfax-Ukraine news agency, Kiev, in Russian, 17 Nov 06
BBC Monitoring Service, United Kingdom, Friday, Nov 17, 2006


   Robert Bensh Publishes Open Letter to Mr. Yanukovich on Eve of U.S. Visit
PRNewswire, Houston, Texas, Tuesday, November 21, 2006

Defense-Express website, Kiev, in Russian 21 Nov 06
BBC Monitoring Service, United Kingdom, Tuesday, Nov 21, 2006

Associated Press (AP), Kiev, Ukraine, Saturday, November 18, 2006

                                 IS LOOKING WEST FOR DEALS
      Report found Russian groups dominate energy and telecommunications

        in Ukraine, Belarus, Kazakhstan and Uzbekistan and are moving into
                             metals, retail, food and financial services.
By Neil Buckley, Joanna Chung and Peter Marsh
Financial Times, London, UK, Tuesday, November 21 2006

Agro Perspedctiva, Kyiv, Ukraine, Monday, November 20, 2006

                   2nd Orange Revolution Anniversary with a bitter taste
Maksym Strikha, Ph.D. (Physics and Mathematics), writer
The Day Weekly Digest in English, Kyiv, Ukraine, Tue, Nov 21, 2006

   Ukraine prepares to mark 2nd anniversary of the Orange Revolution quietly
Mara D. Bellaby, AP Worldstream, Kiev, Ukraine, Tue, Nov 21, 2006

18.                      UKRAINE: A REVOLUTION RECEDES
COMMENTARY: by Peter Brookes, The Conservative Voice
Kernersville, North Carolina, Monday, November 20, 2006


                                  UKRAINIAN PERSPECTIVE
KEYNOTE SPEECH: By Volodymyr Khandohiy
Deputy Minister of Foreign Affairs of Ukraine
Ukraine’s Quest for Mature Nation Statehood Roundtable VII:
Ronald Reagan International Trade Center
Washington DC, October 17-18, 2006

20.                      NATO NEEDS TO BE LESS AMBITIOUS
COMMENTARY: By Francois Heisbourg, Financial Times
London, United Kingdom, Tuesday, November 21 2006

Ukrainian News Agency, Kyiv, Ukraine, Monday, November 20, 2006
PERSONAL COMMENTARY: By Natalia Dziubenko-Mace
The Day Weekly Digest, Kyiv, Ukraine, Tuesday, November 21, 2006
Natalia Bukuvch, Ukrinform, Kyiv, Ukraine, Monday, November 20, 2006
25.                             NOT ENOUGH INFORMATION
      Absence of mechanisms of delivering important information to society
By Viktoria Herasymchuk, The Day Weekly Digest #37
Kyiv, Ukraine, Tuesday, 21 November 2006 
EDITORIAL: The Independent, London, UK, Tue, Nov 21, 2006
27.                                       POLITICAL POISON
A coincidence that enemies of Vladimir Putin keep ingesting toxic substances?
EDITORIAL: The Washington Post
Washington, D.C.,Tuesday, Nov 21, 2006; Page A26
 In 2007, five large hotels will be launched, in 2009, two more hotels will open

Interfax-Ukraine, Kyiv, Ukraine, Tuesday, Nov 21, 2006

KYIV – Four new hotels will open by the end of this year in Kyiv, Kyiv’s
chief department for municipal economy has told Interfax-Ukraine.

According to a department report, a five-star hotel named the Opera, with
140 rooms, at 53 Bohdan Khmelnytsky Street, is soon to open. The hotel

cost UAH 140 million to build.

A three-star hotel complex, the Riviera, with 71 rooms, will be launched at
the corner of Borychev Uzviz and Sahaidachny Street. The cost of the

complex was UAH 21 million.

Moreover, a four-star hotel, the Podil-Plaza, with 57 rooms at 7-a
Kostaintynivska Street, will also open this year. The cost of the project
was UAH 20 million.

And another four-star hotel, with 30 rooms, is to open at 34 Kostaintynivska
Street. The cost of the project was UAH 7.4 million. At present, another 23

hotels are under construction in Kyiv, all of which are to be launched in 2007
through 2009.

In 2007, five large hotels will be launched. In particular, the Hyatt
Regency Saint Sophia Kyiv (a five-star hotel with 237 rooms at 5 Tarasova
Street); the Golden Domes (a five-star hotel with 280 rooms at 2-a
Zhytomyrska Street); and an international hotel complex at 79 Antonovych
Street (a four-star hotel with 192 rooms).

In 2007, a hotel with 99 rooms at 25-b Sahaidachny Street and a hotel with
50 rooms at 3-b Toulouse Street are scheduled to open.

In 2008, two large hotels are to open- the Hilton, with 270 rooms and 150
suits at 28-30 Taras Shevchenko Street, as well as an international hotel
complex at 14-v Liuteranska Street – a four-room hotel with 330 rooms.

In 2009, four large hotels will be opened, in particular, the Leipzig hotel
complex with 209 rooms at 24/39 Prorizna Street, a five-star hotel complex
with 371 rooms at 21 Naberezhno-Khreschatytska Street, an administrative

and hotel complex Pan Ukraine with 104 rooms at 69 Honchar Street, and a
hotel complex with 100 rooms at 92-b Hlushkov Street.

Moreover, a number of small hotels will be opened. A project to create a
small hotel network in Kyiv has been drawn up to support small business in
the hotel sector and to create a favorable investment climate in Kyiv.  -30-

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

Interfax-Ukraine, Kyiv, Ukraine, Tuesday, November 21, 2006

KYIV – German investors are planning to invest EUR70 million in growing

and processing rapeseeds in Ukraine’s Kharkiv region, the regional
administration said in a press release.

Work is underway to establish a Ukrainian-German enterprise that will plant
and process rapeseeds, the release says, citing Mykola Horoshko, head of

the region’s Shevchenko district.

The construction of the rapeseed processing plant and the installation of
the equipment are scheduled for 2007 or the beginning of 2008. Other

project details and investor information have not been disclosed.  -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Interfax-Ukraine, Kyiv, Ukraine, Tuesday, November 21, 2006

KYIV – The Ukrainian representative office of Lithuania’s Narbutas & Ko, the
office furniture producer, in January through October 2006 increased its
sales in Ukraine by 39%, to EUR 4.669 million, according to a company

press release issued on Monday. The press service said that this figure has
already exceeded sales in 2005 by 10%.

The company said that at present, the Ukrainian office furniture market is
estimated to be worth between EUR 385 million and EUR 415 million, and it
has grown since 2000 by approximately five times.

‘The pace of growth in sales of the Ukrainian representative office of
Narbutas & Ko is high,” reads the release. If in 2000 the volume of sales in
the country was EUR 13,000, in 2003 it was EUR 2.33 million, and in 2005 it
was EUR 4.244 million.

According to the release, in January through October, the overall volume of
sales of all representative offices of Narbutas & Ko grew by 24% compared to
2005, to EUR 17.17 million, including a Lithuanian share of 35%, a Ukrainian
share of 22% and a British share of 20%. The company also sells its products
in Russia, Latvia and Germany.                         -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

                            AFTER DIFFICULTIES IN RUSSIA

AFX News Limited, Beijing, China, Monday, November 20, 2006

BEIJING (XFN-ASIA) – Great Wall Motor is considering a change in location
for a planned 70 mln usd factory to Ukraine from Russia if the project
continues to be blocked by the Russian government, the South China Morning
Post reported, citing a company official.

The plant, which is scheduled to have a maximum assembly capacity of

50,000 cars mainly for sale in Russia, was scheduled to begin operations by
mid-2007, the Hong Kong newspaper reported.

However, the timetable has been delayed due to Russian concerns that the
factory will undercut locally owned producers.

‘We will make the final consideration early next year,’ the newspaper quoted
Great Wall Motor deputy general manager Bai Xuifei as saying.

China’s Ministry of Commerce has said it is in contact with Russian
authorities to mediate, and the company expects a final decision later this
month, the report said. Russia currently accounts for 33 pct of the exports
of Great Wall, China’s largest pick-up truck and sport-utility vehicle
maker.  (

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Interfax Ukraine News, Kyiv, Ukraine, Friday, November 17, 2006

KYIV – Joining the World Trade Organization will be a good step for

Ukraine to take, despite the pain it might cause to some sectors of the
country, according to Douglas Kremer, counselor for economic affairs
at the U.S. Embassy in Ukraine.

“The integration of the world economy means tougher competition, which is

an advantage for consumers but may also be sensitive in the short-term period
for certain producers. There is no sense in Ukraine being isolated from the
world trade system,” Kramer said at a science and practical conference on
the social and economic policies of Ukraine in Kyiv on Friday.

The opening of the Ukrainian market, he said, will be an incentive to
restructure the nation’s industry. The short-term complications, he said,
might not be as bad as some believe in Ukraine.

Although some businessmen and industries may suffer losses, he said, the
long-term advantages for all Ukrainians would outweigh the short-term
negative consequences. Furthermore, Ukraine’s joining the WTO will open

up the prospect of a free trade agreement with the European Union, he said.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Itar-Tass, Hanoi, Vietnam, Monday, Nov 20, 2006

HANOI- Russia will be able to protect its interests, when joining the
World Trade Organisation (WTO), and to join it on more favourable
terms, than Ukraine, for example, Konstantin Kosachev, head of the
Duma committee for international affairs, told Itar-Tass on Monday.

He is staying here together with a Russian delegation, which accompanies
President Vladimir Putin in his visit to Vietnam. He believes other
countries, specifically Georgia, will not manage to use the multilateral talks

on Russia’s joining of WTO, which are beginning now, for furthering its
own aims.

“It is of key importance that Russia signed the bilateral protocol with the
United States not for a special date, but after reaching agreement on the
terms, which are acceptable both for Russian and American interests,”
Kosachev said, commenting on the signing on Sunday of the Russian-
American protocol on the end of the talks on Russia’s joining of WTO.

He believes that the failure to sign the Russian-American protocol in July
is evidence of the fact that “the talks were really constructive, and the
documents are the result of painstaking work.”

“Multilateral talks for China took 20 months. Russia has more ambitious
plans: to complete such talks much more quickly . This is a realistic
target, but we are not going to set any time limits . Russia will be a WTO
member on the terms, which are advantageous for us. We have managed
to protect all our interests without exception,” Kosachev continued.

He compared the work for joining WTO done by Russia and by Ukraine.
In his opinion, Kiev chose a different way. “The impression is that time
was the key factor for Ukraine. They wanted to join WTO at all costs,
but sooner than Russia,” he said.

He believes the haste will “play a bad joke on them.” Kosachev explained
that Ukraine “reduced almost to naught the import duties on sugar and
on the aircraft imported by Ukraine.” This might create serious problems
for the Ukrainian economy in the future.

Kosachev believes it is quite probable that another CIS member country,
Georgia, will try to use the coming multilateral talks on Russia’s joining
WTO for furthering its own interests. “Georgia will not be allowed to abuse
the situation, and I do not expect serious delays for Russia,” he said.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Ukrainian Times, Kyiv, Ukraine, Monday, November 20, 2006

KYIV – According to forecasts by the European Business Association

(EBA), $4-5 billion will be invested in the Ukraine’s economy in 2007.

Jorge Intriago, EBA vice-president and partner of PricewaterhouseCoopers,
told The Ukrainian Times that the country received $4 billion worth of
foreign investments this year, compared with a peak of $7 billion in 2005 in
consideration of the sale of the mining and smelting plant KryvorizhStal to
Mittal Steel.

Note that from 1991 through 2004 the influx of foreign investments has
totaled only $7 billion. “Ukraine deserves $8-9 billion at best versus $5-6
billion being invested in Poland per year but it can be $4-5 billion in
reality,” said Mr. Intriago.

At present, foreign investors and particularly venture capital funds are
rather interested in practical aspects of doing business than concerned
about the investment climate in the country.

To encourage them to business activity in Ukraine, the EBA held an
investment forum in London, which was attended by about 100 managers

of British companies.

It was pointed out at the get-together that the great boom in the Kiev’s
real-estate market set in: commissioning of nearly 900,000 square meters

of offices, the trading and industrial premises is scheduled for next year
alone in the Ukrainian capital city.

The implementation of two pilot projects of establishing industrial parks
will start in the near future. One of them is expected to be carried out in
the town of Pryluky, Chernihiv region, on the initiative of British Tobacco.

In addition, the projects of launching a building materials plant,
enterprises designed to make cables, household appliances and electronic
equipment, among others are under discussion.       -30-

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New Europe, Athens, Greece, Wed, November 22, 2006

KYIV – Ukraine and Poland plan to draft an intergovernmental agreement on
transporting Caspian oil via the Odessa-Brody-Plock pipeline, based on the
European Commission’s recommendations, the Ukrainian Fuel and Energy
Ministry reported on November 16.

The agreement is to be drafted in line with a protocol of the first meeting
of the Ukrainian-Polish Intergovernmental Commission for Economic
Cooperation, signed by Ukrainian Fuel and Energy Minister Yury Boiko and
Polish Economy Minister Piotr Wozniak in Kiev on November 15.

The commission recommended that the two countries form a working group to
convene before December 15 and negotiate the document as soon as possible.

The protocol also said third countries – oil suppliers – must be involved in
cooperation under the Odessa-Brody-Plock project.

The Ukrainian-Polish commission also asked Poland’s Przedsiebiorstwo
Eksploatacji Rurociagow Naftowych “Przyjazn” and Ukrtransnafta to finalise
the Odessa-Brody-Plock business plan, and find investors and oil suppliers
in the Caspian Sea, as well as oil consumers.

Przyjazn and Ukrtransnafta were recommended to explore the possibility of
expanding operations by the Ukrainian-Polish pipeline company Sarmatia and
increasing its charter capital before the end of the year.

The Ukrainian-Polish commission expressed interest in cooperation between
Polish and Ukrainian companies in prospecting and extracting oil in Poland,
Ukraine and third countries, the protocol read.

Przyjazn and Ukrtransnafta formed Sarmatia in 2004 to draw up estimates, to
find investment and to build the Brody-Plock oil pipeline.

Ukrainian President Viktor Yushchenko and Poland’s Prime Minister Jaroslaw
Kaczynski discussed the implementation of the Odessa-Brody-Plock pipeline
during the latters official trip to Kiev on November 15.

Yushchenko and Kaczynski stated the completion of the pipeline as the
ultimate priority in Ukraine’s cooperation with Poland and the European
Union and reiterated the necessity to begin the practical implementation of
the project in the near future.

Ukraine and Poland have also decided to join forces to work on a project to
ship crude oil through the Odessa-Brody pipeline to the Czech town of
Kralupy, Ukrainian Prime Minister Viktor Yanukovich announced on November

“The solution of this problem will add optimism to all participants in the
project, and this will be a real step toward starting work on the project,”
Yanukovich told a joint news conference in Kiev with Kaczynski.Caspian
states potentially interested in the project “are interested in this step,”
Yanukovich added.

“The Polish premier and I have reached an agreement to work jointly to that
end,” he said.Kaczynski did not say when the Odessa-Brody pipeline would be
extended to Plock, Poland, but said his country “has financial resources to
put this project into practice.”Ukraine is also looking for oil suppliers in
the Caspian Sea.

The Ukrainian Cabinet of Ministers has directed the energy ministry,
Naftogaz Ukrainy, and Ukrtransnafta to hold talks by 2008 with Kazakh
national oil and gas company KazMunaiGaz regarding its participation in a
project to extend the Odessa-Brody oil pipeline to Plock in Poland.

This directive is contained in a programme for the diversification of oil
supplies to Ukraine until 2015, which the cabinet of ministers endorsed on
November 8.

The Odessa-Brody pipeline was built in 2001 to transport Caspian oil. It was
not used for several years. At the end of June 2004 the Ukrainian government
permitted its use in reverse to transport Russian oil.

A contract to transport oil to Ukraine’s Yuzhny terminal, signed on June 8,
2004, deals with the transportation of up to nine million tonnes of Russian
Urals oil per year. However, in the first half of 2006 only 1.8 million
tonnes were pumped in reverse.                        -30-

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

Polish News Bulletin, Warsaw, Poland, Tuesday, Nov 21, 2006

For the last few years, the goals of Polish foreign policy towards Ukraine
have remained unchanged. The policy’s main objectives include strengthening
the country’s partnership with the EU, backing its efforts to meet the
Copenhagen criteria and manifesting this support on the international scene.

During the Ukrainian Orange Revolution, Warsaw showed just the type of
activity in this field that the situation called for, with former Polish
President Aleksander Kwasniewski developing ties with both the then
Ukrainian head of state Leonid Kuchma and his successor Viktor Yushchenko.

In the last few months, however, Polish-Ukrainian relations have not been
paid the necessary attention, which is detrimental for both the countries
involved and, in the broader perspective, for the whole of Europe.

While the recent visit of PM Jaroslaw Kaczynski to Kiev does create brighter
prospects for the future, there are several other issues which should
simultaneously be taken care of.

One such issue is the relaunching of the Polish-Ukrainian intergovernmental
committee for economic co-operation. In order for it to increase its
influence on economic ties between the two countries, its functioning should
be overseen at least by deputy PMs responsible for economic issues.

Following the definition of the most important matters to be attended, the
committee should establish specialised working groups, which would be
responsible for forming guidelines and coming up with specific solutions
concerning Polish-Ukrainian co-operation in the field of commerce,
investment and labour market, as well as power, agricultural, food and
constructions sectors.

Unlike the declarations made regarding the matter by current Ukrainian PM
Viktor Yanukovych, forming the working groups and ensuring their efficient
functioning would be likely to breathe new life into the long-delayed
project of extending the Odessa-Brody oil pipeline to Plock.

On the other hand, it cannot be forgotten that despite the changes made to
the Ukrainian constitution, the power and influence the president of the
country has remain vast, especially in the field of foreign policy and

Keeping this in mind, it seems natural that the Polish head of state should
make efforts to tighten relations with Ukraine at the presidential level.

While during his stay at the helm Lech Walesa established a special
committee for this purpose, since the swearing-in of Lech Kaczynski it has
remained inactive.

This situation is most disturbing, given the role that the president has to
play is shaping the bilateral relations between Poland and Ukraine. His main
areas of interest and activity should include regional and international
policy, as well as military co-operation.

In order for Warsaw to be able to effectively support Kiev’s efforts
concerning Ukraine’s integration with the EU, Poland should prepare a set of
concrete proposals regarding the European Neighbourhood Policy in the
region. These proposals should be consulted with Ukraine both on the
governmental and presidential level.

In this way, Poland would gain real possibility to represent Ukraine’s
interests on the European forum, at the same time not acting as a mentor for
its Eastern neighbour.

Probably, the Polish authorities should follow the example of Germany, which
for many years has maintained a group of experts in Kiev, where they counsel
the Ukrainian PM on various matters.

It can safely assumed that with their experience from the political and
economic transformation in Poland, domestic economists and management
experts could play a similar role in Ukraine.

Last but not least, there is a lot to be done at the regional level. For
example, despite the lofty declarations, the Polish-Ukrainian college in
Lublin has still not been transformed into a proper Polish-Ukrainian
university, which would have surely strengthened the bonds between the

youth of both countries.

While the importance of official visits is undeniable, perhaps greater
efforts should be taken in order to encourage development of ties among

the population of the Polish and Ukrainian border regions.      -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Interfax-Ukraine news agency, Kiev, in Russian, 17 Nov 06
BBC Monitoring Service, United Kingdom, Friday, Nov 17, 2006

KIEV – Ukrainian Fuel and Energy Minister Yuriy Boyko has said the

country is planning to develop a gas supply project in southeastern Poland,
Interfax-Ukraine news agency reported on 17 November.

Speaking in the Macedonian capital Skopje today, Boyko said: “Our
crossborder cooperation is progressing in a rather intensive manner. We

have the gas supply project. It will be developed.”

A gas pipeline stretching from Ustiluh in Ukraine’s Volyn Region to Poland’s
Hrubieszow, which can transport up to 400m cu.m. of natural gas per year,
started operating in 2005. It supplies gas to Poland’s southeastern areas. -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

   Robert Bensh Publishes Open Letter to Mr. Yanukovich on Eve of U.S. Visit

PRNewswire, Houston, Texas, Tuesday, November 21, 2006

HOUSTON – Today, Cardinal Resources CEO Robert J. Bensh published

an open letter in The Washington Times urging Ukrainian Prime Minister
Viktor Yanukovich to support foreign direct investment in Ukraine and
reject oligarchic control of state companies and industries.

The ad appeared days before Mr. Yanukovich’s expected visit to

Washington, DC.

“Your visit to the U.S. in early December will no doubt seek additional
funding from U.S. investors,” Mr. Bensh wrote in his public letter to Mr.

“But investors will have hard questions for you regarding Ukraine’s
treatment of foreign investors and the paralyzing corruption you have
promised to fight.”

Cardinal Resources is a U.K.-based energy company with subsidiaries

in the United States and operations in Ukraine.

Cardinal has a contractual commitment with Ukrnafta, a private/public
state oil and gas company, to invest millions of U.S.-based venture capital
in Ukraine for continued development of natural gas resources.

Cardinal’s contract has not been executed due to the influence of a
Ukrainian oligarch who has an ownership stake in Ukrnafta and opposes
foreign investment in the region and partnerships with Ukrnafta to develop
oil and gas properties. However, the Ukrainian government holds more than

a 50 percent ownership interest in Ukrnafta.

Mr. Yanukovich has the power to send a clear message to the U.S. investment
community that it opposes corruption, stands for rule of law and welcomes
foreign direct investment by honoring Cardinal’s contract with the
country — goals he has stated as a platform for his appointed government in
advance of his trip to the United States.

Mr. Bensh wrote that companies such as Cardinal “answered the call after the
Orange Revolution and committed millions of new dollars to develop Ukraine’s
moribund energy resources.”

But he added Ukraine thus far has turned “a blind eye to a state-owned
company run by an oligarch that tramples the rule of law. This is what is
happening with my company’s contract for joint development of gas fields

and investment of additional capital.”

Today, Ukraine imports upwards of 85 percent of its natural gas from other
countries. Cardinal’s investment would benefit the people of Ukraine by
drastically reducing the country’s dependence on foreign sources of natural
gas and help the country become more energy self-sufficient.

Mr. Bensh stated: “Mr. Yanukovich: Take this opportunity to now demonstrate,
through action, that Ukraine supports sanctity of contracts and foreign
investment and opposes those who corrupt the system and rob you and your
country of what it needs: Recognition. Investment. Credibility. Domestic
Energy.”                                                    -30-
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Defense-Express website, Kiev, in Russian 21 Nov 06
BBC Monitoring Service, United Kingdom, Tuesday, Nov 21, 2006

KIEV – Iran has lost about 120m dollars in the IrAn-140 aircraft project but
failed to achieve a desirable result. The economic adviser of the Iranian
embassy in Ukraine, Ali Akbar Mehrabi, told this to a Defense Express

Only three aircraft have been assembled and another one is being assembled
since the contract was signed 11 years ago. “Under the project, we should
assemble 12 aircraft a year,” Mehrabi said.

Parts for An-140 come to Iran with great delay. He said that this is the
problem of the company which produces the aircraft and parts for it. Some
difficulties can be resolved during talks, Mehrabi said. They would appear
anyway as the project is implemented. Some others were caused by Ukraine
changing the terms of cooperation, Mehrabi believes.

“It should be noted that Ukraine has agreed at the tope level that the
project has not been implemented appropriately and Iran has already lost
about 120m dollars,” Mehrabi said. [Passage omitted: The project was
discussed on 2 November in Kiev – see Mehr news agency, Tehran, in

English 1440 gmt 28 Oct 06.]
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Associated Press (AP), Kiev, Ukraine, Saturday, November 18, 2006

KIEV – An influential Ukrainian business association on Saturday condemned

a recent spate of attacks on businessman, warning that violence and killings
were again being used to solve business disputes in this ex-Soviet republic.

The Ukrainian Confederation of Employers, which brings together top magnates
from across the political spectrum, noted that two businessman had been
killed in the eastern city of Donetsk and one in central Ukraine, as well as
four attacks on business leaders in the western city of Lviv, including a
killing this past week.

“Such crimes must not be hushed up,” the group said in a statement. “We are
alarmed that raiders, pressure, violence and, most horribly, murder are more
often becoming the main method of doing business in Ukraine. The wave of
killings that has seized Ukraine must be stopped,” it said.

The latest slaying occurred Tuesday when a prominent businessman in the
western city of Lviv, Bohdan Datsko, was shot to death. Datsko was director
of one of Europe’s largest Christmas tree ornament factories, Halimpeks.

In Ukraine, business leaders are often major players on the political stage,
and some analysts have suggested the increasing violence is linked to
battles for power in the wake of the March parliamentary elections that
shook up the political landscape.

The Ukrainian Confederation of Employers is unusual, however, in that it
brings together tycoons with competing political bases.

“We call on everyone who seeks to live in a civilized country to condemn
these horrible crimes,” the group said. It urged dialogue among the business
community, everyday citizens and the government.

Among the businessmen killed were the director of one of Europe’s largest
Christmas tree ornament factories and the head of an eastern Ukrainian oil
product company.                             -30-
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                             IS LOOKING WEST FOR DEALS
    Report found Russian groups dominate energy and telecommunications

      in Ukraine, Belarus, Kazakhstan and Uzbekistan and are moving into
                           metals, retail, food and financial services.

By Neil Buckley, Joanna Chung and Peter Marsh
Financial Times, London, UK, Tuesday, November 21 2006

Agleaming steel plant stands out among the smokestacks of a 1955 steelworks
in the northern Russian city of Cherepovets – both as a symbol of how parts
of the country’s industry have been transformed in the past decade and as a
monument to what might have been.

The high-technology facility run by Severstal, Russia’s biggest steelmaker,
is a joint venture with Luxembourg’s Arcelor to make sheet steel for the car
industry. This summer, Severstal came close to going a step further and
merging with Arcelor to create the world’s number one steelmaker.

Mittal Steel of India edged it out, so this attempt by Alexei Mordashov,
Severstal’s owner, to create a Russian-inspired world-beater failed. But
within weeks Russia’s Rusal and Sual merged and incorporated assets from
Switzerland’s Glencore to form the world’s biggest aluminium producer.

Russian forays into western business are coming thick and fast. Yesterday
alone, two metals groups announced acquisitions in the US.

Evraz, Russia’s largest steel producer by volume, said it would buy Oregon
Steel Mills for $2.3bn (£1.2bn, E1.8bn). Evraz is 41 per cent owned by
Millhouse, a company of Roman Abramovich, owner of Chelsea Football Club.

Meanwhile Norilsk Nickel, the world’s largest nickel producer, agreed to buy
the nickel division of the Cleveland-based OM Group for $408m. Mikhail
Prokhorov, Norilsk general director, said the deal was “an important step
for Norilsk Nickel as it builds international business and expands
operations outside Russia”.

A dozen years on from its messy privatisation programme, Russian business is
coming of age. Groups, in some cases built around Soviet enterprises or
assets virtually written off in the 1990s, are emerging restructured and
modernised, as players in global consolidation.

Yet the questionable way some groups were assembled in the 1990s, coupled
with the Kremlin’s increasingly interventionist role, especially in energy,
means Russia’s rising giants are meeting wariness in the west. These
dealmakers are provoking the same questions from investors, suppliers and
regulators as the flood of Russian initial public offerings in London.

Will these companies export Russia’s “wild east” ways? Are they arms of
Kremlin policy? Or are they reformed, modern and independent businesses?

Mr Mordashov’s planned tie-up with Arcelor fell victim partly to such
concerns, investors fretting over his group’s opaque structure – even though
its recent history is less murky than some.

A bright young economist at the plant in the 1990s, Mr Mordashov ended up in
control by buying up Severstal shares from the workers and winning the trust
and support of the previous director.

When Arcelor shareholders chose Mittal’s offer over his, the Severstal chief
complained of “prejudice”; Viktor Khristenko, Russia’s industry minister,
called it “Russophobia”.

Undaunted, Mr Mordashov has completed a $1bn IPO in London, revamped
Severstal’s accounting and pledged to bring in western non-executive
directors to give it the credibility to ensure it does not get beaten next

Many Russian tycoons are recognising that cleaning up their image is their
biggest challenge. It is, he says, “very important for us to be as public a
company as possible with a lot of transparency”.

Russia’s emerging multinationals are mostly, but not all, from the energy
and natural resources fields. Some, like Mikhail Fridman’s Alfa Group,
Vladimir Potanin’s Interros – which controls Norilsk Nickel – or Lukoil,
headed by Vagit Alekperov, are owned by first-generation oligarchs.

Others, such as Severstal, Oleg Deripaska’s Rusal or Vladimir Lisin’s
Novolipetsk Steel, are headed by slightly later-emerging business barons. A
third group is state-controlled, including Gazprom, the natural gas
monopoly, and Rosneft, the oil giant that absorbed choice assets from the
now-bankrupt Yukos.

All are hugely ambitious and, buoyed by Russia’s economic revival and high
commodity prices, their valuations have mushroomed. Gazprom’s market
capitalisation hovers around $250bn, rubbing shoulders with ExxonMobil,
General Electric and Microsoft among the world’s most valuable companies.

Rosneft’s value topped $100bn last week; that of Lukoil is touching $80bn.
Sberbank, the biggest state-controlled bank, could see its value approach
Deutsche Bank’s $60bn-plus after it completes a $10bn share issue.

The privately owned Alfa has assets estimated at $25bn. “Russian business
has already grown certain financial ‘muscles’ and we are ready to make a
more sizeable expansion into the world,” says Mr Fridman.

The rise of such groups shows Russia’s controversial privatisation programme
did accomplish at least some of its goals. It was chaotic, distorted,
corrupt and sometimes bloody, concentrating wealth in a few hands. But it
created a handful of global competitors headed by tough and savvy owners and

Many tycoons who spent the first post-Soviet years in a bare-knuckle fight
for assets – often using tactics to squeeze out foreigners or minority
investors that would make western corporate raiders blanch – have moved to
the next stage.

Following the trail blazed by Mikhail Khodorkovsky of Yukos, they are
attempting to reinvent themselves – investing in their businesses, bringing
in international technology, management and governance practices. Unlike
Russia’s former richest man, they are staying out of politics. From a
western perspective, many Russian tycoons are now talking the talk.

“Over the past three years, companies have come to understand that corporate
governance matters,” says Mr Potanin of Interros. Not all embrace it
enthusiastically, he adds. Some believe greater openness creates headaches
and risks but “everyone understands its importance”.

Various factors are behind the Russian push to expand abroad. Domestic
growth opportunities are dwindling. Some companies want access to new
markets or technologies, or to get around trade barriers – though these
could be lowered if Russia enters the World Trade Organisation next year.
Liquidity from high commodity prices is making it easy to finance deals.

Some magnates are undoubtedly looking to swap Russian assets for stakes in
bigger foreign businesses as an insurance policy, because assets abroad
would be difficult for any future Kremlin administration to take away.
Similar calculations may partly underlie the IPO rush.

Few believe anyone but an anointed successor will replace Vladimir Putin as
president in 2008. But, as Mr Putin showed by turning against some oligarchs
who backed him to succeed Boris Yeltsin, even chosen successors can be

Yet the same inner drive that made owners grab the opportunity of Russia’s
1990s sell-off is pushing some to become global leaders. They also find that
the attributes that prevailed in Russia – fast decision making and a
brass-necked approach to political and economic risk – give them particular
advantages in emerging markets.

A report commissioned by Rusal from the Economist Intelligence Unit last
month found Russian groups dominate energy and telecommunications in
Ukraine, Belarus, Kazakhstan and Uzbekistan and are moving into metals,
retail, food and financial services.

A search for raw materials is turning Russian groups into big players in
Africa. Rusal has bought bauxite assets in Guinea and invested in its
industrial and social infrastructure. Ahead of its Oregon deal yesterday,
Evraz acquired South African vanadium assets.

In developed markets, Russian groups have been prepared to take on assets
few believed viable. After a $300m purchase, Severstal turned around Rouge
Industries, the fifth-largest US steelmaker and big Ford supplier that had
filed for bankruptcy protection. Now Russian companies are looking for more
mainstream deals.

Such forays have, according to the United Nations conference on trade and
development, turned Russia into the third-biggest outward investor from
emerging markets. The central bank estimates that Russia’s foreign direct
investment stock rose from $20bn in 2000 to $140bn last year.

Yet that expansion has occurred below the radar of many international
businesses. An EIU survey of more than 330 high-level executives in Europe,
North America and Asia found only 7 per cent expected to see Russian
companies become increasingly active overseas acquirers.

Only 10 per cent agreed Russian businesses were “world-class competitors”;
60 per cent expected Russian expansion into their home markets to face
political barriers.

Those who deal with Russian companies say international perceptions are
often outdated. “Russia’s top companies can clearly compete with the leaders
of the pack,” says Henk Paarde-kooper, managing director of ABN Amro in
Russia. “They are gaining ground very, very fast.”

Progress is patchy, however. Standard & Poor’s, the ratings agency, found in
a survey that while some had made strides, Russia’s 70 largest listed
companies overall made minimal progress in transparency and disclosure in
the past year. Western concerns also remain that the hand of the Kremlin may
be behind some corporate activity.

The legal assault that left Mr Khordor-kovsky in a Siberian prison – on
charges dating from the lawless 1990s that some other tycoons privately
admit could be deployed against them – is seen as having cowed the

The impression of Kremlin string-pulling is reinforced by the practice of
showing business leaders such as Mr Deripaska or Mr Abramovich discussing
deals with Mr Putin on television. Mr Mordashov travelled to the president’s
summer residence to seek his blessing for Severstal’s Arcelor plan.

The link with state-controlled companies is more overt; nearly all are
chaired by Kremlin officials or ministers. Few believe the decision that
Gazprom should cut gas supplies to Ukraine in a pricing dispute in January,
for example, was not taken in the Kremlin.

Those strong-arm tactics have perhaps done most to damage the expansion
ambitions of Gazprom and, by association, Russia’s other state companies.
Such is the suspicion over Gazprom and the Kremlin’s intentions that Nato
officials this week issued a report warning that Russia might attempt to
create a natural gas cartel along the lines of Opec. The Kremlin denied any
such intentions.

Echoes of Gazprom’s blunderbuss approach could be found in the stealthy
accumulation by the state-controlled Vneshtorgbank of 5.4 per cent of EADS,
the parent of Airbus. Vneshtorgbank’s claims that the move was a financial
investment on its own initiative were undermined by comments by senior
officials and Mr Putin that Russia aspires to a role in Airbus.

Kremlin officials retort that it is normal for business people everywhere to
inform governments of big acquisition plans and for governments to lobby on
behalf of companies.

“Our private companies are growing because local markets are not sufficient
any more and they find themselves in the process of globalisation. But they
are doing it on their own,” says Dmitry Peskov, a spokesman for Mr Putin.
“Our state-owned companies live in accordance with the laws of the market
and corporate laws, not state decrees.”

Mr Peskov insists Gazprom’s Ukrainian cut-off was not political but a
justifiable commercial decision, mis-explained by Russia and
misinterpreted – perhaps willfully – in the west.

One European industrialist who has served on a Russian corporate board
believes direct state manipulation is limited to a few areas. “I think it’s
true in strategic sectors. The Kremlin is definitely playing that game in
oil and gas. But I don’t think steel, for example, is a strategic sector for
them,” he says.

Some say cultural differences are at the root of the misunderstanding
between Russian and western business and political worlds. “Gazprom does
not comprehend why its language of thinly veiled threats and bullying
behaviour is not, as at home in Russia, seen as a normal negotiating tactic,”

says Vlad Ivanenko, an Ottawa-based trade analyst who has studied Russian
business practices.

Russia’s state-controlled giants may gain greater acceptance if they follow
their privately owned counterparts in bringing in foreign directors,
managers and governance practices – as some are starting to do. Some
ministers also say the government will eventually make state companies more
arm’s-length by appointing independent chairmen.

Even if they do not get taken over by Russian companies, international
businesses could start coming under Russian influence. Rory MacFarquhar,
executive director in Goldman Sachs’ Moscow office, says Russian businesses
are breeding a new generation of smart, ambitious managers. “Western
companies could end up being run by some of these Russians,” he says. “It’s
maybe half a generation away.”                       -30-
Additional reporting by Peter Marsh and Joanna Chung

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

Agro Perspedctiva, Kyiv, Ukraine, Monday, November 20, 2006

KYIV – Ukrainian President Viktor Yushchenko has prompted Cabinet to work
out a compromise solution which would simultaneously assure domestic market
grain replenishment, grain export problems solving and grain market
artificial obstacles liquidation, reported President press-service.

As to press-service, Yushchenko is convinced grain export, one of important
country economic sphere, has been totally stopped due to implementation of
Cabinet decision on 2006 grain export quoting/licensing introduction.

President emphasized now Ukrainian ports are crammed with vessels loaded
with over 200,000 MT grain, while still other 1.5 mn MT grain are to be
unloaded from port elevators. Grain owners/exporters suffer multi-million
losses caused by Government/corresponding executive bodies ill-prepared

Yushchenko made it known this situation aroused world community (incl.

somecountries Governments) serious concern about predictability of
Ukrainian authorities decisions; Ukraine faces a threat of curtailment of
further active partnership with international financial institutions/foreign

Each day Ukraine looses its image (gained with much efforts) of favorable
investments conditions country which is open for international cooperation.

President thinks all that may involve unpredictable consequences,
substantial slowdown of Ukrainian economy integration, international
cooperation narrowing, rising of tensions within bilateral relations with
countries which import Ukrainian grain as well as loosing of Ukrainian
goods traditional external sale markets.               -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
                 2nd Orange Revolution Anniversary with a bitter taste

Maksym Strikha, Ph.D. (Physics and Mathematics), writer
The Day Weekly Digest in English, Kyiv, Ukraine, Tue, Nov 21, 2006

Ukraine has celebrated one anniversary of the Maidan as an official holiday.
True, even last year it had a bitter taste due to the rift between former
allies (who turned out merely situational).

Honestly, I find it hard to imagine how they will celebrate the second
anniversary. Any event on a mass scale would play out of tune, especially
with politicians in the foreground, considering that it was because of them
that we lost probably the best chance in our history.

However, people ought to walk out on Khreshchatyk on the date, even if to
show today’s victors that we, the victors of 2004, are still there and that
we do not regret the choice we made two years ago. Also, to remind

ourselves of what Maidan was to each of us at the time.

On Nov. 21 [2004] after the polling stations closed, I was on the 1st Polish
Channel broadcasting live from the Maidan, together with Marek Siwiec,
Jerzy Buzok , and Prof. Bohdan Osadchuk.

Frankly speaking, I did not believe in our victory. I knew only too well
what forces were concentrated on the other side of the barricade, but I had
what turned out a poor idea about the potential we had on our side.

The next morning I went to the Maidan simply to prove to myself and the
world that we were not giving up struggle.

Yet by the evening, when instead of several dozen thousand I had expected I
saw several hundred thousand on the Maidan, with the numbers constantly
increasing, my mood started to improve.

When activists from a district center appeared at the party headquarters on
Tuesday after blocking a railroad with their own old Zhiguli cars, stopping
a trainload of coal miners recruited in the east, without receiving any
instructions (that day our leaders were still too confused), I realized that
defeating these people would be difficult.

Noted Western analysts are still debating whether the Orange revolution

was a revolution per se or simply a spectacular phase in the unfinished
Ukrainian revolution of 1991.

This question makes no sense to me because what really matters is the
essence, not a formal definition. The Orange revolution did more than
rediscover Ukraine for the world that had forgotten all about it.

Most importantly, this revolution discovered the Ukraine for ourselves. We
turned out capable of fighting for our rights, of making sacrifices, and
even of showing mercy to the defeated enemy.

The only bad luck the proved fatal was our political elite. It is capable of
mobilizing its energy and rising to the occasion, but then it slumps back
into narcissism, shortsightedness, incompetence, egotism, greed, and

After the victory of the revolution I realized that the expectations were so
high that even the most ideal, professional, and virtuous team would soon
cause disillusionment.

After all, assignments to posts in Feb. 2005 did not necessarily have to be
so bad. A team could be shaped up that would at least have similar views on
the economy.

Of course, it is a shame that Yushchenko did not become a model social
standard; that Tymoshenko as prime minister became an idol for that granny
Paraska but failed to be an effective manager.

Yet I would rather discuss the actual treacherous behavior of egotistic
European elites. They would not have taken any risks by sending a positive
signal to Ukraine at the beginning of 2005, for this would be binding on no
one and the negotiating process with the EU would stretch for more than a
decade anyway. But no such signal was sent.

All told, the past two years have made us less romantic and more realistic.
We have paid a dear price for this; according to sociologists, Ukrainians
are viewing their future with greater pessimism than before the 2004
election campaign.

After experiencing bitter disappointments these ordinary Ukrainians were
prepared to give the new “professional government” a big credit of

True, the domination of Donetsk people in all administrative institutions,
the “manual” redistribution of VAT refunds for the benefit of a certain
region (it takes only one guess to name it), along with difficulties in
starting the heating season and the expected shock from increasing prices
and tariffs can exhaust this credit much faster than Yushchenko and
Tymoshenko’s ratings faded away after being dampened in early 2005.

The question is, When and under what conditions people can again walk
out in the streets?

As a publicly active individual, I am prepared to express my stand now,

the way I did out in the street, in the late 1980s and during the Ukraine
without Kuchma campaign. What makes the Maidan special is that we
were all of us together on it.

What can cause a new Maidan and when remains an open question. One thing
is obvious to me: it is impossible today. The burden of disillusionment is
too heavy, yesterday’s idols have been discredited too much, and no new

ones have appeared.

I think that the president was right to act the way he did on the critical
days in July-August this year. He wanted a way out of an extremely
complicated situation with minimum losses (although he was also largely
responsible for that situation), compared to those urging people out on
streets and squares, calling for new elections.

At the time the democratic pro-European forces had no potential for

winning the new elections.

However, this does not mean that preconditions for the victory of those
campaigning for a just and European Ukraine will not appear in one, two or
five years.

It is important for the new generation of leaders to be in the foreground,
free from the burden of mistakes, failures, and responsibility for passing
up the excellent opportunities the Maidan offered Ukraine in Nov.-Dec. 2004.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
  Ukraine prepares to mark 2nd anniversary of the Orange Revolution quietly

Mara D. Bellaby, AP Worldstream, Kiev, Ukraine, Tue, Nov 21, 2006

KIEV – There are no orange banners hanging from the street lamps, no stage
being erected on Ukraine’s Independence Square, no festivities planned.

Quietly, quietly is how Ukraine plans to mark what has become for many in
this ex-Soviet republic a bittersweet occasion: the second anniversary
Wednesday of the Orange Revolution. Ukraine’s topsy-turvy politics have

made any official celebration of the mass protests awkward.

The man whose fraud-marred presidential victory sparked the uprising is back
in his old job as prime minister. And the Orange Revolution team is again in

But President Viktor Yushchenko’s popularity is so low that a recent opinion
poll showed he would get less than 15 percent of the vote if the election
were held now.

The revolution’s slogans _ including “Bandits in Jail,” referring to corrupt
bureaucrats and their businessman cronies _ and its promises of a quick
embrace by NATO and the European Union turned out to be naive. Now

members of Yushchenko’s camp, too, have been accused of corruption.

Ukrainians’ quality of life has not significantly improved since the popular
uprising: salaries and pensions rose, but so, too, did energy and food

Even the hopes of shrugging off Russia’s influence seem premature; analysts
say Ukraine’s energy dependence on Moscow means the Kremlin’s shadow

will continue to advance over this nation of 47 million.

But on the eve of the anniversary, Yushchenko defended his record in a
televised interview, insisting the mass protests had brought results.

“The main thing that was achieved is something which you never feel when you
have it _ it is freedom,” Yushchenko said. “It cannot be put on a sandwich,
it cannot be seen by the size of your salary.”

Many Ukrainians, however, expected more.

“We were very romantic and idealistic,” former Prime Minister Yulia
Tymoshenko, whose glamour and fiery speeches made her the revolution’s
heroine, told The Associated Press earlier. “We believed that everything
would happen quickly and beautifully.”

Today, the only prominent orange on Independence Square is on the hats and
scarves of girls working for a Ukrainian mobile phone company, and hawkers
manning the souvenir tables have added buttons and T-shirts depicting his
2004 foe, Viktor Yanukovych to their stocks. Portraits of the unpopular
president have been dropped altogether.

We stood on the square for a month in the bitter cold and what did we get?
They’re in opposition again,” said Kiev resident Pavel Korneichuk, who said
he spent a month freezing in the protesters’ tent camp two years ago. “What
kind of victory is that? I don’t see anything to celebrate.”

Yushchenko’s party initially planned festivities on Independence Square –
the focal point of the 2004 protests – but called them off after
consultations with its “orange blood brothers,” party spokeswoman Tetyana
Mokridi said.

Instead, Our Ukraine members will mingle with whoever shows up, and
Yushchenko will host a small reception at Mariynskiy Palace.

Tymoshenko, who plans to be out of the country, has said political leaders
don’t deserve to mark the day publicly until they have fulfilled their

“Most people are disillusioned with politicians but not disillusioned with
the ideals of the Orange Revolution,” said analyst Serhiy Taran of the
International Institute of Democracy. “They realize that what they did two
years ago was the right thing, but there is still a way to go.”

The Orange Revolution began hours after the polls closed in the Nov. 21,
2004, presidential election. As the Central Election Commission began
churning out fraudulent vote counts in favor of Yanukovych, Russia’s choice,
Yushchenko – the pro-Western candidate – summoned his supporters to
Independence Square.

They flooded in. Night after night, Yushchenko and his allies rallied the
orange-bedecked crowds from a giant stage, promising them a bright,
democratic future. Musicians kept the crowds boogying through the cold.

Twelve days later, the Supreme Court declared the vote count fraudulent and
ordered a rerun _ which Yushchenko won.

But the euphoria ended as Ukrainians grew disillusioned with the power
struggles, rising gasoline and meat prices, and allegations of corruption
among a group that had promised to be squeaky clean.

By the one-year anniversary, the leaders were divided against one another, a
division that cost them dearly in the March parliamentary election.

Yanukovych’s pro-Russian party won the most votes, put together a majority
coalition and formed the Cabinet. Yanukovych – the victor of a vote
recognized as Ukraine’s freest and fairest ever – took back the premier’s
job. And thanks to Constitutional reforms, he also enjoys more power than

“My heart cries over how this turned out,” said Lubov Slesarchuk, 68, who
manned a booth dedicated to providing information about the benefits of

NATO membership – a Yushchenko promise that Yanukovych has put on

But Slesarchuk said she was still hopeful. She and others say despite the
disappointments of the Orange Revolution, there is a new openness in
Ukraine: freedom of speech and an end to the monopoly on power that had
persisted since the breakup of the Soviet Union.             -30-

[return to index] Action Ukraine Report (AUR) Monitoring Service]
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18.                    UKRAINE: A REVOLUTION RECEDES

COMMENTARY: by Peter Brookes, The Conservative Voice
Kernersville, North Carolina, Monday, November 20, 2006

JUST two years after Ukraine’s Orange Revolution inspired the world’s
democratic imagination, the movement has all but collapsed – and many of the
antidemocratic politicos swept away by “people power” are making a strong

Hopes of Kiev’s rapid integration with the West via NATO and the European
Union are fading fast in the wake of a pro-Russian power shift. But, despite
this, Ukraine has fundamentally changed for the better – perhaps

Two years ago this week, crowds of 500,000 or more – many draped in the
orange of pro-West Viktor Yushenko’s Our Ukraine party – started gathering
in Kiev’s Independence Square to protest widespread voter fraud by
pro-Kremlin presidential candidate Viktor Yanukovich.

The Orange Revolution’s peaceful civil disobedience led not only to the
election’s invalidation by Ukraine’s Supreme Court, but to Yushenko’s
election as president in a December runoff.

But, two years on, Yushenko is faltering – badly. Economic growth tops 6
percent, but he hasn’t provided decisive political leadership, advanced
integration with the West or implemented a domestic-reform agenda beyond
slogans. His approval ratings hover around 10 percent.

Even such former Orange allies as nationalist firebrand Yulia Tymoshenko,
leader of the BYuT party, are going their own way, sometimes even into the
opposition in the Rada (Ukraine’s parliament).

Yanukovich’s Regions Party pounced. It soared in March’s parliamentary
elections, allowing President Yushenko’s former foe, Yanukovich, to take the
powerful prime minister’s post in a bitter political power-sharing deal
between Our Ukraine, Regions Party, the Socialists and the Communists.

Many believe that PM Yanukovich already overshadows President Yushenko

and plans to seize political power from the weakened president by picking off
his diminishing allies, filling the vacuum with the like-minded from the
Rada’s five scattered political factions.

Just last week, in a constitutionally questionable power play, Yanukovich
called Yushenko’s handpicked appointees serving as foreign and defense
ministers on the carpet, questioning their job performance, and openly
considering sacking them in the coming weeks.

Yanukovich has made ties with Russia a priority. That’s always been his
program; Russia is Ukraine’s largest trading partner, after all, and its
main supplier of natural gas and nuclear-reactor fuel. (Last January, Russia
cut off the gas – a strong signal that helped weaken the stumbling

The prime minister also hails from eastern Ukraine, where ties to next-door
Russia are historically strong. Many native Russians settled there during
the Soviet-era, and Russian – not Ukrainian – is the lingua franca.

If horse-trading in the Rada lets Yanukovich snatch the reins of political
authority from Yushenko, future Euro-Atlantic integration by Kiev goes off
the agenda. Yanukovich won’t likely be a total Russian toady but will aim
for a course that sees Kiev generously courted by both East and West.

All this will disappoint many – especially pro-West Ukrainian-Americans and
neighbors such as Poland that want Russian influence/power as distant as
possible. But the Orange Revolution’s legacy still stands.

For instance, Freedom House now rates Ukraine’s political system as “free” –
the first former Soviet state beyond the Baltics to achieve that status. The
March elections were considered to be Ukraine’s freest yet.

The media have also taken a marked turn since the Orange Revolution. The
press still isn’t completely free, but the quality/depth of reporting has
improved after years of essentially Soviet-era “what the authorities want us
to say” news.

Some outlets may still exercise self-censorship out of fear of governmental
retribution, but press freedom in Ukraine looks pretty darn good compared

to the situation in neighboring Russia and Belarus.

Moreover, politics have caught fire with the public. Foreign spin doctors –
usually Americans – fly in to advise candidates on running campaigns.
(Indeed, some pro-Orange locals complain bitterly that U.S. political
consultants helped Yanukovich come back from the political dead .)

There are frank TV debates and strong newspaper op-eds; major politicians
inspire near cult-like followings such as that of the ever-more-popular
Tymoshenko, famous for her plaited blonde locks. Most agree that democratic
institutions are firmly entrenched here for the foreseeable future.

So – though Yushenko has been a disappointment to many over the last two
years and the glory of the history-changing Pomeranchevi (the Oranges) has
faded – the Orange Revolution’s spirit lives on here.

Even though many Ukrainians are rightly concerned by recent political
developments, most would concede that the Orange Revolution has

established the floor – not the ceiling – for political freedom and democratic
institutions in Ukraine.                           -30-
Heritage Foundation senior fellow Peter Brookes is a former deputy assistant
secretary of defense.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

KEYNOTE SPEECH: By Volodymyr Khandohiy
Deputy Minister of Foreign Affairs of Ukraine
Ukraine’s Quest for Mature Nation Statehood Roundtable VII:
Ronald Reagan International Trade Center
Washington DC, October 17-18, 2006

CHAIR: Ambassador of Ukraine to the United States

Oleh Shamshur

I am not going to consume too much of your time, because I think we
should concentrate more on the upcoming practical discussions. Never-
theless I would like to mention a couple of matters.

First of all, I would like to thank the organizers for staging this forum
and giving the possibility for all those who have gathered today and who
will be coming tomorrow to discuss the most pertinent issues concerning
Ukraine’s process of accession to NATO.

I would also like to mention three short points, which might be relevant,
before I introduce our keynote speaker for today.

[1] First of all, I would like to point out that this forum is timely
because it is actually quite obvious that the issue of Ukraine’s NATO
membership has become one of the most important issues, not simply of
Ukraine’s foreign policy agenda, but of Ukraine’s internal discussion.

It is important to note that it is, as much as anything else, about choosing
the model for Ukraine’s development, the shaping of Ukraine in a way we
would like to see the country for ourselves and for our children.

[2] A second layer of what we have been witnessing recently is an attempt
to forge for the first time in our history a real consensus within the
Ukrainian society, as far as NATO membership is concerned.

What is quite telling is that, more and more, we are hearing serious voices
who recognize that there is no alternative to Ukraine’s membership in NATO.

[3] The third point I would like to mention and to underscore is that, at
our stage of the internal discussion, as well as in our interaction with
international actors in this field, issues have been increasingly gone
beyond the issues of symbolism, though Ukraine’s joining NATO is indeed
a very symbolic issue.

We are concentrating more and more on the practical work, which brings
Ukraine closer to the goal of full fledged membership in the transatlantic
community of democratic nations; we also see people from all parts of
Ukraine realizing that this movement corresponds to the core national
interests of our country.

All of this is very positive.

I will stop here. I am extremely pleased, to introduce the keynote speaker
of the day: the Deputy Minister of Foreign Affairs, Volodymyr Kandohiy.

And I do it with great pleasure, because we have some history of working
together, and more specifically, on issues related to NATO.

I see in my country few individuals are more competent than he. In
addressing those issues, he served as ambassador to NATO for five years
and has been very much involved in all practical and political issues
related to Ukraine’s moving towards NATO membership. It is therefore
my pleasure to introduce Deputy Minister of Foreign Affairs of Ukraine

KEYNOTE: Deputy Foreign Minister Volodymyr Khandohiy –

Thank you very much Oleh. First of all, I would like to thank the organizers
of this conference for bringing us together for a very important issue. I
see some old friends in this audience from the Ukrainian American community
and I would like to greet them.

I would also like to greet so many of the distinguished individuals who
contributed greatly to the development of United States-Ukraine relations
that I see in the hall. I have noticed here today a number of former US
ambassadors to Ukraine; I would like to greet them in particular.

Thank you very much and a deep appreciation goes to the organizers again for
making sure that everyone was present for the conference, which is an very
important event.

For me personally, it is an important event, since, as Oleh mentioned, I
have been privileged to serve as an ambassador to NATO for more than five
years, I have been the representative of NATO in the Ministry for Foreign
Affairs, and now, as Deputy Foreign Minister, I’m likewise dealing with
issues concerning NATO-Ukraine relations. So this issue is of importance
and very deep professional interests for me as well.
Looking back into the history of Ukraine’s NATO relations, one cannot but
say that we have a very profound, long history and very rich history. The
record of our relations is really impressive.

A resume with the Alliance includes twelve years experience in the favorable
Partnership for Peace program —that is since 1994, six years experience in
the framework of the NATO Ukraine Charter under a Distinctive
Partnership —since Madrid summit of 1997, and four years of practical
cooperation within the framework of the Action Plan and annual Target
Plans — since the Prague summit of 2004.

In April last year, we opened up yet another chapter in our relations though
our partnership, mainly an effort to intensify dialogue on Ukraine’s
membership aspirations and the reforms that would be necessary to achieve

This format of relations was necessary for us in order to focus NATO support
on Ukraine’s reform goals, but it was also an important opportunity for the
Ukrainian authorities and indeed for the Ukrainian people to learn more
about NATO as an organization —about its goals and principles and about
Ukraine’s future place in the alliance.

The decision to launch an intensified dialogue was of crucial importance. It
was a signal that all of the NATO allies recognized Ukraine’s aspiration to
join the alliance as a legitimate one and were committed, individually and
collectively, to help Ukraine achieve that goal.

One wonders why we were so eager to attain that intensified dialogue. I can
answer that question simply by saying that we had been earlier privileged to
have special relations with NATO or relations that were distinctive.
Apparently, as it normally happens when you have special relations, it is
something that is forever.

For instance, I can draw a parallel with the so-called EU neighborhood
policy with Ukraine, which is designed for those countries that would never
be members of the European Union, since neighbors are forever.

In our view, special, distinguished relations that are specifically tailored
and designed for a particular country is something that will not bring those
countries to real membership.

That’s why the shift from the distinctive partnership —and such is the
format that is in NATO books, was very important and now we are pursuing
our relations within a new framework, quite satisfied with a fact that the
Intensified Dialogue turned into the practical process of substantive
consultations that Ukraine and NATO used to achieve a better understanding
of the requirements and expectations of each other in the context of
strategic course towards membership in the alliance.

Much has been done since April 2005. In various areas of our county’s
development, let me mention several benchmarks against which one can
judge Ukraine’s performance in reaching membership criteria.

It is clear that Ukraine made significant steps towards Euro Atlantic
standards of democratic government, government strengthening civil society,
shared values, free and fair elections. We have likewise had positive
results in defense reform and we are on the right track in the security

Here I would like to refer to very recent meeting of NATO and Ukraine
defense ministers in Tirana that was a very important one; during  that
meeting, NATO defense ministers recognized the performance of Ukraine and
the progress that Ukraine has reached in the pursuing needed changes in the
defense and security sector. Positive results have been found also in the
fight against corruption and de-shadowing of the economy.

Certainly there are some problems, drawbacks and shortcomings, for
example, in spite of some obvious steps forward, with regard to ensuring
the independence and strengthening of judicial authorities.

This area is widely recognized as one that needs further progress. At the
same time we are quite confident in our ability to bring our judicial system
in line with European standards in the nearest future.

Over the early part of last year, some negative tendencies developed in the
economic field, namely slow down of economic growth and flow of

However, lessons have been learned and there are already obvious signs the
Ukrainian government has managed to take the situation under control and
started improving it.

The latter effort consisted of the creation of the more favorable and
transparent environments for business as well as needed reforms of the tax
system. I can only say, despite all the political discussion and turbulence
that continue to go on in Ukraine, the level of the economic growth was
recently cited at a figure of 6% and that is quite an important development.

The government also has been working hard to achieve rapid WTO accession.
As we know now, the government has introduced to the parliament the
necessary draft laws and we expect those draft laws to be adopted very soon
in order to enable us to become a WTO member by the end of this year.
Ladies and Gentlemen, in the summer of this year a new coalition government
led by Prime Minister Viktor Yanukovych was formed in Ukraine as a result of
democratic parliamentary elections.

The country is now going through a period of active political dialogue
related mostly to the transition to a parliamentary-presidential model. Let
me touch upon recent developments in terms of Ukraine’s policy towards

On September 14, the Prime Minister visited NATO headquarters to participate
in the NATO-Ukraine Commission meeting. Viktor Yanukovych clearly
highlighted Ukraine’s government priorities vis-a-vis the alliance.

Among them, I would like to mention the following: the strategic course
towards NATO membership remains unchanged, as does the continuation
of democratic reforms.

Ukraine is dedicated to implementing civilian and democratic control over
the military, promoting good neighborly relations, including with Russia —
which should benefit all countries in Euro Atlantic area, strengthening the
alliance’s ability to contribute to European and international security by
participation of Ukraine’s military in NATO— led peace keeping and anti
terrorist operations,  putting into effect an entire range of practical NATO
Ukraine projects and, what is extremely important,  intensifying public
awareness campaign and creation in Ukraine of a positive NATO image.

                            OF NATO RELATIONSHIP
At the same time, the PM’s critical point, which caught the attention of
Ukraine’s, and indeed, the international mass media, was that Ukraine’s
government proposed to temporarily postpone the issue of upgrading
NATO-Ukraine relationship up to the level of Membership Action Plan
because of low public support.

Given the fact that in February 2005, at the NATO Ukraine Brussels summit,
President Yushchenko clearly expressed Ukraine’s aspirations for NATO
membership and our strong will to join MAP, the current position of the
coalition as presented by the government remains the subject of internal
political discussion.

It should be specially noted that there are no principle divergences between
president and the prime minister on the strategic goals….I would like to
emphasis this point…..that is, on the strategic perspective goal of
Ukraine’s foreign policy and aspirations for NATO membership.

But, due to different political platforms, the two sides have different
technical visions on the time frame work on Ukraine’s readiness to join
NATO’s Membership Action Plan and on the holding of a referendum on
the issue.

There is admittedly, I would say, no unanimity as yet among the Ukraine’s
political activists with regard to the tactics in further advancing our
relationship with NATO at this juncture.

In view of this, our major challenge today is to succeed in forming a firm
consensus on Ukraine’s NATO perspectives among the Ukraine political
forces on the basis of national unity pact, the Universal, as you know.

Once this consensus is reached, the issue about joining MAP, which would
then get a new impulse to the overall discussion on NATO membership for
Ukraine, will become rather technical.

While such discussion is under way, we continue to focus particular
attention on a NATO awareness program and practical operations likewise
remain a priority.
Now what kind of a strategy should be adopted in this situation? In my
view the answer is lies in essentially four dimensions, namely: the
political, the Parliamentary, the public and, of course, the practical.

[1] First, the political dimension…..and that means intra Ukrainian
political dialogue. I’m convinced that the political dialogue between major
activists of Ukraine’s political process, first of all, the leading
political parties and their members and associates, should be strengthened.

Special attention should be paid, in this regard, to explaining to the
politicians the true nature of NATO as an organization, about its goals and
principles and Ukraine’s possible place in it, including possibilities which
would be opened for Ukraine.

[2] Next, the Parliamentary dimension….this means intensification of inter
Parliamentary dialogue with the members of parliaments of NATO countries,
especially from new NATO member states.

By this, I mean, Slovakia, Bulgaria, Romania, others new members. The
political forces as we all know, even from the left spectrum, managed to
find a consensus on the issue of NATO and the EU membership. This
evident example could be applied to Ukraine.

[3] Third, the public dimension…..that means, in my view, intensification
of the information policy, first and foremost. Ukraine realizes the need to
enhance significantly its information activities related to NATO-Ukraine
cooperation. For the government of Ukraine, conducting an information
campaign is the main priority regarding the Euro Atlantic integration

The government of Ukraine intends to achieve transparency and understanding
about NATO within the Ukrainian society. We have started the deliberation of
a national information strategy on the issues of Euro Atlantic integration
of Ukraine. Our strategic priority is winning the minds of Ukrainians.

Interested NGOs, think tanks, journalists and experts from new NATO
member states have devised a set of measures to reinforce and strengthen
and streamline the NATO communication campaign in Ukraine. Special
attention is going to be paid to raise public awareness at the regional

I would like to emphasize, in this connection, that it not a brainwashing
campaign about how good NATO is. More than anything else, it is about
bringing objective information to the population and ending old stereotypes
about NATO as an aggressive bloc. So now you can positively present
NATO and US decisions to assist Ukraine in this endeavor.

[4] Lastly, in the practical dimension…..cooperation means that, despite a
continuing political debate, Ukraine remains committed to robust and
effective partnership with the alliance.

Ukraine continues to do more and more serious work with NATO….under the
NATO-Ukraine Intensified Dialogue…..on membership questions and related
reforms, by de facto introducing NATO standards into Ukraine’s politics,
economy, security and defense.
Ukraine remains fully committed to the fight against terrorism by
participation in NATO’s Operation Active Endeavour, together with Russia.

Ukraine remains a contributor to KFOR, to NATO’s training mission in Iraq
and stands ready to contribute to NATO’s logistic support of African unity
in Darfur, Sudan. Ukraine is interested in engaging in the postwar
reconstruction in Afghanistan.

We are ready for the discussions concerning practical aspects of our
involvement in NATO  international security assistance forces, transit
agreements and provincial reconstruction teams, PRT activities.

Recent parliamentary decisions to ratify Ukraine NATO memorandum on
strategic air lift has become a major development in further advancing our
joint efforts in strengthening this decisive dimension of the alliances

To summarize, I would like to say, that at this moment, we are planning
the following:

[1] to strengthen and streamline political dialogue and public awareness
     campaign as number one,
[2] to continue step by step policy of “rapprochement” with the alliance,
[3] to remain a strong contributor to Euro Atlantic security and NATO
[4] to continue a wide range reform process, including reforms in political,
     economic, defense and security areas.

This is a test that requires much work and commitment to reforms. If we are
successful in these systemic efforts, then the question of joining MAP is
just a matter of time. I am sure that Ukraine did not lose a chance to move
ahead and join the alliance.

How quickly it will be done depends first and foremost on Ukraine itself.
But US support and the support of other countries cannot be overestimated in
this regard. We hope that the NATO open door policy will remain a corner
stone of the alliance’s relationship with Ukraine and other countries for
the future.

In our meeting today and throughout the conference, we look forward to
hearing more about what we can do collectively to further enhance our
cooperation with NATO and, ultimately, Ukraine’s success is in our common
interest. Thank you for your attention.                         -30-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
20.                   NATO NEEDS TO BE LESS AMBITIOUS

COMMENTARY: By Francois Heisbourg, Financial Times
London, United Kingdom, Tuesday, November 21 2006

The summit of Nato leaders in Riga next week will be more important than

the alliance’s usual biennial summit. The decisions taken there will be vital
not only to the future activities of the Atlantic alliance but also to its
long-term prospects as a relevant organisation.

On the face of it, Nato is doing better than could have been expected in the
wake of the Iraq crisis. In recent years, the alliance has successfully
incorporated 11 new members and the attractions of eventual membership
remains a powerful motivator in the countries of the Balkans and the
Caucasus. Nato’s contribution to regional stability has been and continues
to be crucial in the former Yugoslavia.

Yet it is as clear that Nato is no longer a pivot of US strategy, as
demonstrated by its marginal treatment in America’s latest quadrennial
defence review. Indeed, the word “Nato” is all too often, in American
political and media parlance, a euphemism for the phrase “the European
allies” – which is not saying quite the same thing.

Nato’s expansion may be reaching the limits beyond which it would become

a force of regional instability rather than one of stabilisation: Ukraine is
literally split down the middle over the issue of entry to the Nato

Going “out of area”, as in Afghanistan, has helped keep Nato in business

but in the process the alliance has become an à la carte multilateral

The Atlantic alliance has also ceased to be the principal point of
US-European consultation on the key strategic issues of our times: the rise
of China, the nuclear ambitions of Iran and North Korea and the fate of the
crisis-ridden Middle East are dealt with mainly outside the Nato framework.

In itself, this reduction of Nato’s place in the overall scheme of strategic
affairs should not be a big concern for those who live and work beyond the
confines of the Nato bureaucracy.

After all, Nato is immensely and uniquely useful in fostering
interoperability between the military forces of its members, which is key to
forming effective coalitions of forces.

In a world in which the mission determines the coalition, this ability is
more important than ever. Similarly, Nato remains key in ensuring that the
partner states of eastern Europe press on with reform of their security

Unfortunately, Nato is not sticking to its core competencies. In a quest to
carve a greater role for itself and demonstrate global relevance, the
alliance is running the risk of overreaching itself in strategic and
political terms, with potentially dangerous consequences.

In the run-up to Riga, there has been much talk of a “Nato-bis”, or second
version, of a privileged partnership between Nato and hopefully like-minded
states in the Asia-Pacific region such as Japan and Australia. The wisdom of
this is questionable, to put it mildly, given its potential for needless
friction with a rising China.

The push for a Nato-bis is probably not intended to foster a “west against
the rest” alignment in east Asia; but that could be its inadvertent effect.
Nato should not be acting like a solution in search of a problem.

In the military sphere, there is a similar element of disregard for the
consequences of Nato’s decision to broaden the scope of its presence in
Afghanistan and to extend its war aims.

These now go well beyond the initial intention immediately after the
September 11 2001 terrorist attacks of toppling the Taliban from government
and of going after al-Qaeda leaders and operatives.

Nato’s aims of state-building and reconstruction are noble and ambitious;
but Afghanistan is a country larger than Iraq, with a history of impatience
vis-à-vis the presence of even well-intentioned foreigners.

Even if Nato’s members come up with all the soldiers and kit they have
promised, it is unlikely that the alliance can fulfil its goals, with  only
about one-third of the manpower deployed by the Soviet Union in the

same country a quarter of a century ago.

The Soviets had a no-less ambitious agenda of social and­ ­economic
modernisation and failed – not just because the Red Army tended to

behave less well than Nato’s ­soldiers.

The leaders assembled in Riga would render Nato and the west a signal
service if they were to steer clear of premature and ill-thought-out
entanglements in east Asia and if they were to lower the scope of the
alliance’s ambitions in Afghanistan – while actually giving their soldiers
there the wherewithal to fulfil a more realistic mission.     -30-
The writer is special adviser at the Fondation pour la Recherche
Stratégique, Paris
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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Ukrinform, Kyiv, Ukraine, Tuesday, November 21, 2006

KYIV – While on a Tuesday working trip to Lviv and meeting there with
officials of local self-government bodies, Verkhovna Rada Chairman Oleksandr
Moroz said the Parliament will consider 1932-1933 Famine bills, which were
initiated by President Viktor Yushchenko and the Regions Party, and will
“make a just decision.”

In this connection Oleksandr Moroz recalled his native village and noted

that he views the Famine as genocide.

As is known, on November 17 the parliamentary anti-crisis coalition, which
incorporates the Oleksandr Moroz-led Socialist Party, refused to consider
the presidential bill, which qualifies the famine as an act of genocide
against the people of Ukraine.

The Regions Party faction initiated a bill on the same day, in which the
term “genocide” was replaced with the phrase “famine, from which the
Ukrainian people suffered,” though the devastating famine was masterminded
by the Stalin totalitarian regime.

Oleksandr Moroz, who met with the officials of Ukraine’s region,
particularly sensitive to the  problem of OUN – URA veterans, promised

to objectively consider this delicate issue.

As he said, he will also initiate amendments to electoral legislation,
toward shifting from today’s proportional system to a mixed
majority-proportional one, which will allow to make local communities

duly represented and will allow electors to vote for political parties.

In the Speaker’s opinion, no individual political force must be allowed to
dominate in Ukraine. Any political force, he noted, should realize its
capability within the system of Ukraine’s state order.

It should be reminded that, according to the Aleksandr Razumkov Center’s
sociological surveys, the Socialist Party, which joined the coalition with
the Regions Party, sizeably weakened its footing in early November.

If new parliamentary elections were held right away the Socialist Party
might count on collecting a meager 2.4 percent of the national electorate’s
votes versus 5.69 percent in the March 2006 elections.          -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]


Ukrainian News Agency, Kyiv, Ukraine, Monday, November 20, 2006

KYIV – Parliamentary deputies Vladyslav Zabarskyi, Vadym Kolesnychenko,
and Orest Muts (all members of the Party of the Regions faction) have
proposed that the parliament declare the 1932-1933 famine in Ukraine as an
act of mass destruction of people.

They made this proposal in the draft law No. 2470-1 entitled ‘On the
1932-1933 Famine in Ukraine,’ which was registered with the parliament on
November 17.

In particular, this draft law proposes declaring the 1932-1933 famine as an
act of mass destruction of people and a national tragedy for the Ukrainian
people and establishing that public denial of the famine amounts to an act
of outrage against the memories of the victims of the famine and undermining
the dignity of the Ukrainian people.

Moreover, the deputies are proposing that the parliament make it the duty of
the government and local self-government organs to immortalize the memory
of the victims of the famine.

The draft law also proposes designating the Ukrainian Institute of National
Memory as the central executive government organ in charge of realization of
state policy in the area of restoration and preservation of national memory
and to guaranteeing state support for research into the famine.

Moreover, the deputies are proposing directing the Cabinet of Ministers and
the Kyiv municipal administration to facilitate construction of a memorial
complex in Kyiv to mark the 75th anniversary of the famine.

As Ukrainian News earlier reported, President Viktor Yuschenko submitted
the draft law No. 2470 entitled ‘On the 1932-1933 Famine in Ukraine’ to the
parliament in early November for consideration.

In his draft law, Yuschenko proposed declaring the 1932-1933 famine in
Ukraine as an act of genocide against Ukrainians. The parliaments of 10
countries have recognized the 1932-1933 famine in Ukraine as an act of
genocide against Ukrainians.                         -30-

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

PERSONAL COMMENTARY: By Natalia Dziubenko-Mace
The Day Weekly Digest, Kyiv, Ukraine, Tuesday, November 21, 2006

As I touch the little box shrubs, violets, and marigolds and look at the
surprisingly living photo of a smiling man, which is attached near the cross
on the grave of my late husband, in spite of the never-ending pain and
bitterness I still feel a shimmer of hope deep in my heart: a sudden rain
has given way to warm sunshine and the flowers brighten – this must be a
sign from him.

The snow is knee-deep, but I stand looking for evergreen wreaths decorated
with the guilder rose. Somebody has tenderly laid a white rose and someone
else, a handful of rye.

Someone, perhaps one of his female students, has strung multicolored ribbons
on the cross. Suddenly I come across a beautifully crafted pot with forget-

Fall, spring, summer, and winter, the winds, sunrises, and sunsets pass
without you, Jim, without you.

But nothing has ended, everything is just beginning for you and me in some
different dimension, under a different sun and moon, as long as people will
remember and keep coming and bowing to you.

Meanwhile, Baikova Hill is growing with marble and granite monuments. In the
past 18 months I have been feeling some unthinkable guilt about you, Jim,
because no matter how highly I value this scrap of ground, it is still our
Ukrainian tradition to put up a commemorative sign that will forever bear
the name of one’s beloved.

Thanks to the sculptor Volodymyr Koren, there was one more flash of granite
energy on Baikova Hill at the place where my Jim, our Professor James Mace,
is resting.

This tombstone was nurtured for so long and so arduously, was created out of
such moral and financial torments and in such inhumane solitude that when I
finally saw it, my heart contracted in pain, because now almost every
periodical mentions his name and his publications.

The newspaper Den/The Day published the book Day and Eternity of James
Mace; the National University of Kyiv-Mohyla Academy is studying his
archives and library; and through the efforts of the president and the
government one more part of his priceless archive on the Holodomor and
genocide will at last be published in Ukraine.

Somehow I feel that we will manage to surmount the formal obstacles, such
as customs clearance, transportation, and the sorting process.

His literary legacy will inevitably produce new young scholars and thinkers
for whom the history of their native land will be a matter of honor and
conscience. The new historians will find answers to the thorny questions of

James Mace was posthumously awarded the Order of Yaroslav the Wise.
There have been many offers from publishers, which I did not exactly
hurry to accept.

Everything else remained in the background until I managed to fulfill my
duty as a widow and beautify the gravesite. No one else, no state, and no
sponsor can do this, for it is a private matter.

Many conferences, symposiums, and campaigns, such as “Light a Candle!”
are taking place, and the nations of the world are gradually beginning to
understand that Ukraine lived through the hell of genocide.

After James’s death someone said that Ukraine had already overcome all the
medical, psychological, and sociopolitical consequences of the Holodomor.
Meanwhile, the communists are issuing calls simply to forget it because, as
they claim, it is a dubious fact of bygone days.

Here I would like to draw the readers’ attention to James’s article “Ukraine
as a Post-Genocidal Society,” in which he established a cause-and-effect
relationship between almost all our failures and Ukraine’s nationwide
cataclysms of the 1930s.

This article also applies to the present, and I believe that the president
of Ukraine will succeed in getting the UN to recognize the 1932-1933
manmade famine as genocide, as a crime against humanity that is not
subject to any statutes of limitation.

And even though there will be no Stalins, Molotovs, Kaganoviches, and
Khataeviches, and the never-ending numbers of other barbarians and
vandals in the prisoner’s dock, there is bound to be a trial of the system
and ideology that defiled the name of the Lord on earth.

I tremblingly touch the granite tombstone. There is no more room here for
flowers. Only green grass spirals its way around the meteorite-like bust.

This stone dropped like a bitter tear from the sky. There is nothing more
depressing than this petrifaction and inevitability. There is only a name,
and years, and these words:

Farewell, beloved person, and forgive us.
I flow to you as a tear.
Ukraine, light an eternal candle for widows, and orphans!
Light a candle!

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

Natalia Bukuvch, Ukrinform, Kyiv, Ukraine, Monday, November 20, 2006

WASHINGTON, DC, – The St Patrick’s Cathedral, NYC hosted a requiem

for victims of the 1932 – 1933 Famine in Ukraine on occasion of the Famine’s
73rd anniversary, Ukrinform’s correspondent was told in the Ukrainian
Embassy in the USA.

The requiem was attended by President of the Ukrainian Congress Committee
Mykhailo Savkiv, Head of the Ukrainian Orthodox Church in the USA,
Metropolitan Kostiantyn and many other Ukrainian and American public

An address by US President George Bush was read out during the ecumenical
memorial service.

Ukrainian Ambassador to the USA Oleh Shamshur expressed sincere gratitude

to the Congress and the President of the United States for the allotment of a
land plot for erection of a monument to victims of the 1932 – 1933 Famine in
Ukraine.                                              -30-            
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
25.                         NOT ENOUGH INFORMATION
       Absence of mechanisms of delivering important information to society

By Viktoria Herasymchuk, The Day Weekly Digest #37

Kyiv, Ukraine, Tuesday, 21 November 2006 

The majority of the adult population in Ukraine – more than 94 percent –
have heard or read about the famine of 1932 – 1933. The best informed people
are residents of the country’s central region (15 percent), somewhat less
informed are the residents of eastern Ukraine (10 percent) and southern
Ukraine (9 percent).

Based on information that they have heard or read about the famine of 1932 –
1933, more than one-third of Ukrainians believe that the famine was caused
mainly by the actions of the Soviet government, while only 12 percent
consider that the famine was mainly caused by natural phenomena.

One-quarter of those who believe that the Holodomor was a deliberate action
think that it was specifically aimed against Ukrainians.

These are the results of a survey conducted by the Kyiv International
Sociology Institute (KMIS), entitled “The Ukrainian Population’s Thoughts on
the Holodomor of 1932 – 1933: The Dynamics of Xenophobia in Ukraine in
1994 – 2006.”

This material was prepared on the basis of data from a nationwide poll among
Ukraine’s adult population, which was conducted by KMIS during the period

of Sept. 8 – 14, 2006.

A total of 2,015 respondents aged 18 and over, who live in villages,
urban-type settlements, towns, and cities in all oblasts and the Crimea, as
well as in Kyiv, were interviewed.

Approximately two-thirds of the respondents (61 percent), who said that the
government organized the Holodomor of 1932 – 1933 deliberately, believe that
it targeted all the residents of Ukraine, irrespective of their nationality.

More residents of the western region consider that the Holodomor was aimed
specifically against Ukrainians (30 percent), while only 13 percent of
respondents from the central region think this; from eastern Ukraine (8
percent) and the southern region (7 percent).

Among the different age groups, the proportion of people who believe that
the government organized the famine of 1932 – 1933 deliberately against
Ukrainians is relatively the smallest among the oldest citizens, aged 60 and
over (one in eight people, or 12.5 percent).

The researchers explain these discrepancies in the population’s
interpretation of the Holodomor’s “direction” by the vagueness of scholars
and politicians. Historians give different versions of this historical
event, while politicians muddy the issue.

“These figures testify to the absence of mechanisms of delivering important
information to society,” says the historian and deputy director of the
Institute of Ukrainian History Stanislav Kulchytsky. “The government has

not provided scholars with such a mechanism.”

At the same time, 69 percent of Ukrainians who acknowledge that the Soviet
government deliberately engineered the Holodomor is not a bad result. This
historical memory has struggled through a curtain of silence.

“We have not managed to convince the population that the Holodomor of

1932-1933 was a genocide aimed specifically against Ukrainians,” says Dr.
Volodymyr Paniotto, the director general of KMIS and a professor of
sociology at National University Kyiv-Mohyla Academy. “But this shared
grief should have consolidated us…I hope that these figures will give
politicians something to think about.”

The spread of xenophobic moods is also not normal, Paniotto adds. The level
of xenophobia rose between 1994 and 2001. True, the situation stabilized in
2002 – 2003, but it rose again during the 2004 elections, and in 2006 it
rose again to the 2004 level.

“One can hypothesize that if there is no increase in international tensions,
the level of xenophobia will drop to the 2003 level,” the Ukrainian
sociology expert said.

The following statistics are shameful, but they must be reported. Ukraine’s
population is least biased in its attitude to Ukrainian-speaking Ukrainians
(although 0.2 percent said that they would never allow Ukrainian-speaking
Ukrainians into Ukraine); next come Russian-speaking Ukrainians, then
Russians, and Belarusians.

Next, at a certain distance come Jews, Poles, Frenchmen, Canadians,
Americans, and Romanians. Ukrainians trust blacks and gypsies (these terms
were used in the research) least: 40.7 percent of Ukrainians would not allow
gypsies into the country, while 18 percent would not allow blacks.

Scholars explain this attitude to dark-skinned people by the fear of
strangers, which is actually the definition of xenophobia. It is
understandable that elderly people from the country’s remotest areas have
the most fear of blacks.

Generally, the older the respondent the higher the level of xenophobia. But
the higher a respondent’s educational level, the fewer fears and less
rejection there are. The level of xenophobia is higher in villages than in
cities, and the bigger the city the lower the level of xenophobia.

The main factors that influence the level of xenophobia, scholars think, are
the country’s economic situation, wars and conflicts in different regions of
the world, which are widely highlighted in the mass media, and the use of
materials aimed at the separation rather than consolidation of different
linguistic-ethnic groups for purposes of agitation during Ukraine’s
presidential elections.                                -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

EDITORIAL: The Independent, London, UK, Tue, Nov 21, 2006

A former Russian spy is fighting for his life in a London hospital after
being poisoned with the lethal substance thallium. Pictures published
yesterday showed Alexander Litvinenko, who was in the prime of life only

two weeks ago, a shadow of his former self. Yesterday he was returned to
intensive care after his condition worsened.

There is no reason to beat about the bush. This attempted murder, for that
is surely what it is, bears all the hallmarks of the Russian security
services, the FSB. Thallium, without taste and fatal in even tiny
quantities, is the secret services’ drug of choice.

Its last known use was against the Ukrainian opposition politician, Viktor
Yushchenko, when he was standing for the presidency. In the case of Mr
Litvinenko, the Kremlin had plenty of reasons for wanting the troublesome
former FSB lieutenant colonel out of the way for good.

Mr Litvinenko was indicted three times for treason in Russia in the late
Nineties. He was twice cleared, and defected to Britain where he was granted
political asylum before the last case against him was heard in absentia. He
used what he presumably felt was the safety of Britain to expose the black
arts of the FSB.

He wrote a book, which was sponsored by the former oligarch who is probably
the Kremlin’s chief bte noir in London, Boris Berezovsky. And last month he
publicly held President Putin responsible for the murder of the
investigative journalist Anna Politkovskaya.

Neither Mr Litvinenko’s high public profile, nor the associates he chose in
exile, were calculated to endear him either to the Russian authorities or to
his former colleagues. He was clearly a man who lived dangerously, eschewing
the judicious silence that might have kept him out of harm’s way.

Like Ms Politkovskaya, he made no secret of his hatred of Mr Putin and held
it a point of principle to speak his mind. Despite the Kremlin’s
characteristically tardy denial yesterday, the evidence points in that
direction. That this might be a freelance operation by aggrieved former
colleagues is not necessarily more reassuring. What would this say about the
reach of Mr Putin’s authority in Russia?

This case has two other profoundly disturbing aspects. The first is that
Russia’s leaders – or the secret services acting on their behalf – appear to
be returning to venal Soviet ways. Those who voice dissent risk being
silenced’ another critic of the Chechen war was sent to prison yesterday.

Those who do not heed initial warnings may reasonably fear for their lives.
This is very far from being the free and democratic Russia that we hoped
would rise from the wreckage of communism.

The second is the evidence that it supplies of increasingly brazen FSB
activity abroad, targeted specifically on the emigrant community. Accounts
differ about precisely how or where Mr Litvinenko was poisoned, but it
appears that it was at a meeting, probably with one or more former
colleagues, in the very centre of London.

Our capital has become a centre for Russians living working or just visiting
abroad. Every strand of Russian politics and society is represented here. It
is perhaps not surprising that in this relatively relaxed and cosmopolitan
atmosphere, foreign security services feel free to go about their business
and murderous plots maybe hatched.

Until now, with the exception of the high-profile super-rich, such as Roman
Abramovich, the Russians have not drawn attention to themselves. The
Litvinenko poisoning will bring unwelcome scrutiny. But it should also alert
our police and security services to lurking danger.

If those granted refuge here obey our laws, we have an obligation to extend
to them the full protection of the law. Alexander Litvinenko deserved to
have his fears taken more seriously than they were.          -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
27.                                 POLITICAL POISON
A coincidence that enemies of Vladimir Putin keep ingesting toxic substances?

EDITORIAL: The Washington Post
Washington, D.C.,Tuesday, Nov 21, 2006; Page A26

FOR THE PAST 15 years it has been commonly assumed that Russian
leaders gave up the Soviet practice of murdering political dissidents,
inside and outside of the country.

Maybe not. British authorities say they are investigating the apparent
poisoning of Alexander Litvinenko, an outspoken critic of Russian President
Vladimir Putin, who is fighting for his life in a London hospital after
ingesting highly toxic thallium.

A former agent of the KGB secret service and its successor, the Federal
Security Service (FSB), who sought asylum in Britain six years ago, Mr.
Litvinenko had alleged that the agency maintained a secret poisons

Along with many others, he also charged that the Kremlin was behind the
2004 poisoning of Ukraine’s pro-Western president, Viktor Yushchenko.

There’s no concrete evidence as yet that the FSB or Mr. Putin is behind the
poison attacks — but there is plenty of reason for suspicion. Mr.
Litvinenko was investigating the recent murder of the country’s best known
opposition journalist, Anna Politkovskaya, who was gunned down in her
apartment building on Oct. 7.

She, too, was hospitalized in 2004 and said she believed she had been
poisoned. Ms. Politkovskaya’s editor at the newspaper Novaya Gazeta,

Yuri Shchekochikhin, died after a suspected poisoning three years ago.

No one has been arrested in these murders, but Mr. Putin publicly disparaged
Ms. Politkovskaya while implausibly charging that his political enemies were
somehow behind her death.

Former colleagues of Mr. Putin in the KGB don’t doubt who is responsible.
One, Oleg Kalugin, pointed out that the president pushed the Russian
parliament to authorize the secret service to take action against
“terrorists” outside the country.

Another, Oleg Gordievsky, the former KGB chief in Britain, told the Times
of London that he believed the attack was “state-sponsored” and was carried
out by another former Russian agent.

We trust that the British authorities will vigorously investigate the attack
on Mr. Litvinenko — who is now a British citizen — and that Prime Minister
Tony Blair will take seriously the possibility that a colleague in the Group
of Eight sanctioned a political murder attempt in London.

While Mr. Litvinenko’s story was emerging over the weekend, President Bush
was pictured exchanging jollities with his “friend Vladimir” at a summit in

Does Mr. Bush regret having given so much support to a leader who has
dismantled his country’s nascent democracy and whose opponents keep
turning up in hospitals and morgues? If so, he’s keeping his own secret.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

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