AUR#794 Dec 5 Prime Minister Visits USA, Mend Fences, Democracy, European Choice, NATO; Energy Deals; Poland; Chicago Exhibition

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

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

                        
ACTION UKRAINE REPORT – AUR – NUMBER 794
Mr. E. Morgan Williams, Publisher and Editor, SigmaBleyzer
WASHINGTON, D.C., TUESDAY, DECEMBER 5, 2006 
           –——-  INDEX OF ARTICLES  ——–
         Clicking on the title of any article takes you directly to the article.               
Return to the Index by clicking on Return to Index at the end of each article
1.UKRAINE PM YANUKOVYCH AIMS TO MEND FENCES WITH U.S.
By Mara D. Bellaby, The Associated Press
Kiev, Ukraine, Saturday, December 2, 2006

2.      PM VIKTOR YANUKOVYCH ASSURES AMERICANS THAT
                     UKRAINE IS COMMITTED TO DEMOCRACY
The Associated Press, Washington, DC, Monday, December 4, 2006

3.   UKRAINE PM FIRM ON NATO AS HE COURTS UNITED STATES
By Stephen Collinson, AFP, Washington, Monday, Dec 4, 2006

4. UKRAINE: YANUKOVYCH COURTS U.S. OFFICIALS & INVESTORS
By Heather Maher, Radio Free Europe/Radio Liberty (RFE/RL)
Washington, D.C. Monday, December 4, 2006

5.   CSDU MEMORANDUM DELIVERED ON THE OCCASION OF THE

   VISIT BY PRIME MINISTER YANUKOVYCH TO WASHINGTON, DC
Action Ukraine Report (AUR), Washington, D.C., Tue, Dec 5, 2006

6.    UKRAINE PM, US VP DISCUSS UKRAINE-RUSSIA RELATIONS
Itar-Tass, Moscow, Russia, Tuesday, December 5, 2006

7.                  UKRAINE CONFIRMS ITS EUROPEAN CHOICE
Itar-Tass, Moscow, Russia, Monday, December 4, 2006

8. USA ALLOCATES FUNDS: HELP UKRAINE COMBAT CORRUPTION
Interfax-Ukraine news agency, Kiev, in Russian 2111 gmt 4 Dec 06
BBC Monitoring Service, United Kingdom, Tuesday, Dec 05, 2006

9.     UKRAINE: PREMIER HAS MUCH TO DISCUSS ON U.S. VISIT
INTERVIEW: With William Taylor, U.S. Ambassador to Ukraine
Radio Free Europe, Radio Liberty (RFE/RL)

Prague, Czech Republic, Monday, December 4, 2006

10. UKRAINE’S YANUKOVYCH PROTECTS RUSSIAN INTERESTS

                            SAYS NOVEMBER OPINION POLL
People’s Union Our Ukraine, PRNewswire
Kyiv, Ukraine, Monday, December 4, 2006

11.          CLOSER TO THE WEST, BUT CLOSED TO SCRUTINY
                          Ukraine’s Natural Gas Business Is a Mystery
By Steven Mufson, Washington Post Staff Writer
The Washington, Post, Washington, D.C., Sat, Dec 2, 2006; Page D01

12.    RUSSIAN GAS DEAL CALLED ‘PRAGMATIC’ SOLUTION BY
                  UKRAINE’S ENERGY MINISTER YURIY BOYKO
By David R. Sands, The Washington Times
Washington, D.C., Tuesday, December 5, 2006

13.       WILL UKRAINE’S ORANGE REVOLUTION BE UNDONE

                                      BY ENERGY DEALS?
Radio Free Europe/Radio Liberty (RFE/RL)
Washington, D.C., Friday, December 1, 2006

14.      UKRAINIAN GOVERNMENT TO DROP FREE ECONOMIC
                                  ZONES FROM BUDGET BILL 
AP Worldstream, Kyiv, Ukraine, Monday, Dec 04, 2006

15.          EU SWINGS FOCUS ONTO EX-SOVIET NEIGHBOURS
                New neighbourhood policy not up to the job says Ukraine
Andrew Rettman, Euobserver, Brussels, Belgium, Mon, Dec 4, 2006

16.                 POLISH BANK BEKAO TO STORM UKRAINE

Polish News Bulletin, Warsaw, Poland, Monday, Dec 4, 2006

17.   LET THEM EAT TURKEY: POLISH TURKEY PRODUCER WILL
                            INVEST IN RUSSIA OR UKRAINE
By Katarzyna Debek, Warsaw Business Journal
Warsaw, Poland, Monday, December 4, 2006

18.   POLISH CONSTRUCTION SITES ARE DESPERATE FOR LABOR                       

By Ryan Lucas, Associated Press, Warsaw, Poland, Tue, Dec 5, 2006

19KATERYNA YUSHCHENKO TAKES PART IN AWARDS CEREMONY
         OF THE MANMADE FAMINE OF 1932-1933, GENOCIDE OF THE
                          UKRAINIAN NATION POSTER CONTEST
                   Contest initiated by Morgan Williams of SigmaBleyzer
           Cash prizes donated by the Helen and Alex Woskob Foundation
Ukraine 3000 International Charitable Fund, Kyiv, Ukraine, Fri, Nov 29, 2006

20.   ‘GREAT FAMINE’ NOW CONSIDERED GENOCIDE BY UKRAINE
By Julia Lamaleem, Epoch Times Ukraine Staff
New York, New York, Monday, December 04, 2006

 
          CONSOLIDATE AROUND 1932-1933 HOLODOMOR MEMORY
Itar-Tass, Moscow, Russia, Saturday, November 25, 20006
                                        HISTORY TEXTBOOKS
Itar-Tass, Moscow, Russia, Friday, December 1, 2006
 
23.    YUSHCHENKO POISONING PROBE NOT FINISHED YET FOR
                            POLITICAL REASONS SAYS ADVISOR
Interfax-Ukraine, Kyiv, Ukraine, Friday, December 1, 2006
 
24.             A TRIBUTE TO US ALL: OREST DEYCHAKIWSKY
FACES AND PLACES: by Myron B. Kuropas
The Ukrainian Weekly, Ukrainian National Association (UNA)
Parsippany, New Jersey, Sunday, November 12, 2006
 
25. KYIV LIONS CLUB DONATES $100,000 TO CHARITY PROJECTS
Action Ukraine Report (AUR), Kyiv, Ukraine, Tuesday, December 5, 2006
 
26. LOOKING FOR HIGHER PROFITS? TAKE A LOOK AT UKRAINE
UKRAINE: National Exhibition and Conference in the USA
Chicago, Illinois, Thurday-Saturday, December 14-16, 2006
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1
UKRAINE PM YANUKOVYCH AIMS TO MEND FENCES WITH U.S. 

By Mara D. Bellaby, The Associated Press
Kiev, Ukraine, Saturday, December 2, 2006

KIEV, Ukraine — He was cast by critics as the Russian-backed bad guy during
Ukraine’s Orange Revolution two years ago, the burly politician who almost
stole the presidential election from the pro-Western leader Viktor
Yushchenko.

But Prime Minister Viktor Yanukovych, scheduled to arrive in Washington
Sunday for a four-day visit, says he hopes to renovate his image in the West
during his meetings with U.S. officials.

According to his Web site, Yanukovych will meet Vice President Dick Cheney,
Secretary of State Condoleezza Rice and Energy Secretary Samuel W. Bodman.
He also plans to meet with business leaders in New York.

As for all the news reports that portray him as a tool of the Kremlin, a foe
of reform? Spin, Yanukovych said. “As for my party and my myself, we adhere
and will adhere to policies that are pro-Ukrainian, and will always defend
the national interests of Ukraine,” he said.

The Orange Revolution began hours after polls closed in the Nov. 21, 2004,
presidential election between Yanukovych, the Kremlin’s favorite, and

Yushchenko, who called for closer ties to the West.
As the Central Election Commission began churning out fraudulent vote counts
in favor of Yanukovych, Yushchenko summoned his supporters to Independence
Square for night after night of protests.

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

Yanukovych and his supporters complained bitterly that the mass protests,
supported by many political leaders in Europe and the U.S., robbed him of
the presidency.

But now Yanukovych praises the demonstrators. “On the question of democracy
and freedom of speech, no one can deny the country changed for the better,”
he said. “There is more freedom of speech, more democracy, more freedom.”

His political resurrection began in March, when he was the top vote-getter
in a parliamentary vote described as Ukraine’s freest and fairest. It
climaxed in August, when he was named prime minister in a political deal
with his former foes.

Yushchenko and Yanukovych share power in the awkward arrangement that

was initially billed as an effort to unite Ukraine but instead has turned into a
tug-of-war for influence, with the president largely on the losing end.

In the latest battle, lawmakers on Friday fired a key ally of the president,
the pro-Western Foreign Minister Borys Tarasyuk, along with Interior
Minister Yuriy Lutsenko, one of the leaders of the Orange Revolution.
Yushchenko said Tarasyuk’s dismissal will be challenged before the nation’s
Constitutional Court.

Yanukovych is still regarded as the Kremlin’s friend in Ukraine – and it has
paid off for him. He helped strike a deal on gas prices for next year that,
while still a significant increase for the ex-Soviet republic, is lower than
what Russia proposed to neighboring states.

Of late, Yanukovych has tried not to overtly antagonize the West. For
instance, while delaying Ukraine’s membership bid into NATO, he does support
continuing cooperation with the alliance. On Tuesday, he called the U.S. “a
strategic partner of Ukraine.”

The prime minister is trying to improve his soft powers along with his
hard-nosed political moves. Before the Orange Revolution, he came across as
stiff and grumpy when he met journalists, and when interviews ended, he
simply stood up and left.

Now, he smiles and mingles. Meeting with reporters on Tuesday, he loitered
long enough to autograph copies of a book celebrating his first 100 days in
office. Heading out the door, Yanukovych stopped suddenly, as if remembering
something, and spun around to say goodbye.

Political analyst Mykhailo Pohrebinsky said that Yanukovych clearly had
changed his presentation. “We see that he says democratic things and poses
himself as a protector of the freedom of speech,” Pohrebinsky said. “Whether
this is sincere, I can’t say.”                               -30-
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2.   PM VIKTOR YANUKOVYCH ASSURES AMERICANS THAT
                  UKRAINE IS COMMITTED TO DEMOCRACY

The Associated Press, Washington, DC, Monday, December 4, 2006

WASHINGTON – Ukrainian Prime Minister Viktor Yanukovych wants to
reassure officials in Washington that he is an ally of the United States and
Europe, but his offers of partnership stopped short of asking that his
country be allowed into NATO.

In a speech to a Washington think tank Monday, Yanukovych said his
parliament soon would complete action on a series of bills designed to meet
the demands of the World Trade Organization for entry. But his country was
not ready to join NATO, he said, repeating a long-standing position that
puts him at odds with the Ukraine’s pro-Western president, Viktor
Yushchenko.

On his first visit to the United States since becoming prime minister in
August, Yanukovych met with Secretary of State Condoleezza Rice for
discussions the State Department said ranged from investment and Ukraine’s
bid for WTO membership to regional energy issues.

Yanukovych also met with other officials including Vice President Dick
Cheney and national security adviser Stephen Hadley.
Today in Americas

Earlier, Yanukovych assured the audience at the Center for Strategic and
International Studies that his country is on a path toward political and
economic reform.

“There can never be too much democracy in the Ukraine, just as there can
never be too much freedom,” Yanukovych said.

About NATO, he did not rule out eventual membership but claimed that most
Ukrainians feared that joining the Atlantic alliance would harm relations
with Russia. Several members of the old Soviet bloc, including the former
Soviet republics Estonia, Latvia and Lithuania, already are among the
alliance’s 26 members.

Yanukovych said he hoped Ukraine would begin talks about joining the
European Union while he is prime minister.

He offered assurances that Ukraine could be relied upon to deliver Russian
gas to Western Europe. Last year, Russia temporarily suspended gas exports
to Ukraine which pinched the supply on the continent.

Yanukovych said improved relations with Russia and a deal he reached in
October with Russian energy giant Gazprom had eased the threat.

Speaking about another concern often raised by European and American
officials, Yanukovych said that his parliament was pursuing legislation to
reduce Ukraine’s endemic corruption. He announced Ukraine would sign an
anti-corruption agreement Monday with the Millennium Challenge Corp., a U.S.
program that seeks to reduce poverty by rewarding countries for establishing
open markets and following other good governance practices.

The most urgent goal of the visit may be to convince U.S. officials that his
election as prime minister would not stunt democratic reform.

“The main goal that Yanukovych is coming with is to establish some
credibility with the administration,” said Steven Pifer, a former U.S.
ambassador to Ukraine and now a senior adviser at the Center for Strategic
and International Studies.

In 2004, Western officials expressed outrage at stolen votes that initially
helped him win the presidential election. Huge demonstrations arose in what
became known as the “Orange Revolution,” and the country’s Supreme Court
overturned the election and ordered a new vote. He lost to Yushchenko.

Yanukovych was widely discredited, while Yushchenko was praised in the West
and given a standing ovation when he addressed the U.S. Congress last year.

But Yanukovych became prime minister after parliamentary elections in March
that were declared Ukraine’s freest and fairest ever. He now shares power
with Yushchenko.

The Ukrainian parliament on Friday ousted the country’s foreign and interior
ministers, two key allies of Yushchenko. Pro-Western Foreign Minister Borys
Tarasyuk was fired after criticizing Yanukovych’s Washington trip and
grappling with Parliament about the president’s constitutional primacy over
foreign policy.

U.S. officials have played down the moves by Yanukovych’s party against the
ministers as an internal Ukrainian matter. They caution that Ukraine’s
democratic development is the primary concern of the United States. -30-
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3.  UKRAINE PM FIRM ON NATO AS HE COURTS UNITED STATES

By Stephen Collinson, AFP, Washington, Mon Dec 4, 2006

WASHINGTON – Ukraine’s Prime Minister Viktor Yanukovich portrayed himself

as a reforming democrat, but was lukewarm to NATO and the European Union,
as a curious Washington sized him up for the first time.

Yanukovich, seen as more sympathetic to Russia than the pro-Western policies
of his rival, President Viktor Yushchenko, met Vice President Dick Cheney
and Secretary of State Condoleezza Rice.

In a speech apparently designed to refashion his image in the West, where he
is still seen as the villain of disputed elections and the ‘Orange
Revolution’ in 2004, Yanukovich pledged to fight for judicial reform and
democracy.

“There can never be too much democracy in Ukraine, just as there can never
be too much freedom,” he said, but warned Ukraine would not be rushed into
membership of NATO or the EU.

“A great number of our people fear that our accession to NATO” would be
directed “against Russia,” Yanukovich said at the Center for Strategic and
International Studies (CSIS) think-tank.

“Only one in five Ukrainians would be in favor of filing a membership
application,” he said, but stressed however Ukraine would continue to work
closely with the Western alliance to tighten military cooperation. “Ukraine
can join NATO when it is ready, and if it needs to do so,” he said.

Though Yanukovich did not get to meet Bush, and there was no press
availability of his meeting with Rice, the State Department said he was not
being snubbed.

“There’s no slight that’s intended and we are absolutely ready to work with
him as well as his government,” said State Department spokesman Sean
McCormack.

Yanukovich said that though that his country’s ultimate future lay in
Europe, it would be unwise to press too hard for membership at this stage.

“We have decided to introduce a pragmatic element in our policies, we
believe that pushing the membership issue and heating up the debate can only
lead to stalemate,” he said.

Yushchenko had pressed for EU accession talks to start in 2008 but last
month the European bloc said Ukraine had not made enough reform to be a
contender for membership.

In remarks which appeared especially tailored towards foreign investors,
Yanukovich said he was pushing for judicial reform in Ukraine, launching a
battle against corruption and pledged to develop the stock market and
improve regulatory conditions.

Entry into the World Trade Organisation (WTO) was also a key aim of his
government, he said, adding that he was in favor of limiting government
interference in private business.

Yanukovich will also attend an economic forum in New York during his trip
and meet Richard Lugar, chairman of the Senate’s Foreign Relations
Committee.

Photo opportunities include visits to the  New York Stock Exchange and
Ground Zero — the former site of the World Trade Center toppled in the
September 11 attacks, on Wednesday.Before travelling to Washington,
Yanukovich made a quick trip to visit Russian President  Vladimir Putin.

Analysts in Kiev said that Washington initially balked at his visit and its
concerns only subsided when Ukraine accelerated legislation linked to its
bid to join the WTO.

The trip will give the Americans “a chance to get to know him, sound out his
positions a little more clearly,” said Stephen Larrabee, an analyst with the
Rand Corporation think tank.

“They may have their doubts, but it is also a chance to possibly influence
him, to show him he has a lot to gain by being more forthcoming with
relations with the West, with the US in particular,” he said.

The trip to the United States has caused plenty of controversy in Ukraine
itself. Foreign Minister Boris Tarasyuk, a pro-Westerner close to President
Yushchenko, sought to block the visit before he was voted out of office on
Friday.

Yanukovich accused Tarasyuk during his speech at CSIS of trying to score
political points, and said he had failed to decide whether he wanted to be
in government or opposition.                            -30-
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4. UKRAINE: YANUKOVYCH COURTS U.S. OFFICIALS & INVESTORS

By Heather Maher, Radio Free Europe/Radio Liberty (RFE/RL)
Washington, D.C. Monday, December 4, 2006

Ukrainian Prime Minister Viktor Yanukovych is in the midst of a 4-day trip
to the United States, his first since taking office in August. On Monday, he
told an audience at the Center for Strategic and International Studies in
Washington that his government is committed to democratic and economic
reforms.

WASHINGTON, December 4, 2006 (RFE/RL) – Praising the United States’
founding fathers and quoting Martin Luther King, Yanukovych sounded nothing
like a man who until a few months ago was associated with rigged elections
and an anti-Western bias.

In front of a throng of television cameras and a standing-room only crowd
that included State Department officials, pro-democracy leaders, and foreign
diplomats, Yanukovych declared that Ukraine is fully committed to political
and economic reform.

It was a statement aimed squarely at convincing U.S. government officials
and business investors that he supports civil rights, democracy, and
transparency – his first chance to do so in person since rising to the
premiership in August following the political rebirth of his Party of
Regions in Ukraine’s parliamentary elections in March.

“We will not abandon the path we have chosen, the path of democratic market
transformations,” he said. “There can never be too much democracy in
Ukraine, just as there cannot be too much freedom.”
                                     REFORMS AHEAD
One by one, Yanukovych — the former villain of the Orange Revolution —
addressed Western fears.

He struck an anti-corruption chord by saying that the Ukrainian government
is guided by one truth: transparency. He invited Washington, Brussels, and
Moscow to approach Kyiv confident in the knowledge that all deals happen in
the open.

He insisted that the period of instability is now behind Ukraine, and
promised that the next five years would be “predictable and stable.”

Those years, he said, will include many reforms that should have been
implemented in the country’s first few years of independence. They include
modernizing the economy, imposing fiscal discipline, and increasing
Ukraine’s competitiveness.

Soon, Yanukovych vowed, the country will experience high economic growth,
and Ukrainians “will finally get decent standards of life and work.”

Without directly mentioning it, he invoked the energy crisis of last winter,
when Ukraine’s gas pipelines were shut off by Russia’s Gazprom monopoly,
prompting a short-lived but alarming energy crisis further downstream in
Europe.

Today he promised that Ukraine would be a responsible partner in
transporting energy resources and that this winter European consumers will
have adequate supplies of natural gas.
             SHARING POWER? AND A POINT OF VIEW?
At home, Yanukovych is locked in a contentious power-sharing arrangement
with the man who defeated him in 2004, President Viktor Yushchenko, the
pro-Western leader of the Orange Revolution.

Today, Yanukovych sought to play down differences between himself and
Yushchenko, insisting that he has “no disagreements with the president of
Ukraine” when it comes to the country’s strategic direction and future.
However, he did allow that the two men have different “tactical approaches.”

Yanukovych’s U.S. trip — during which he will meet with U.S. Vice President
Dick Cheney and Secretary of State Condoleezza Rice — follows a week of
political squabbling in Ukraine over the visit.

Foreign Minister Borys Tarasyuk, one of only two cabinet ministers chosen by
Yushchenko, led an apparent attempt to block Yanukovych’s trip, saying the
prime minister had failed to seek presidential approval on guidelines for
the U.S. talks.

It was later announced that Yushchenko had approved the trip. On December
1, the Verkhovna Rada voted to dismiss Tarasyuk.

In Washington, however, Yanukovych was eager to stress the concept of
cooperation.

He said when it comes to Ukraine’s foreign policy, preserving the country’s
unity is the most essential consideration. As an example, he cited public
skepticism of NATO membership, calling it a “significant and controversial
problem.”

“It’s hardly surprising that the stereotypes of the cold war live too
long — a great number of our people still fear that our accession to NATO
will be directed toward Russia, would harm our friendly relations,” he
noted. “As a result, only one in five Ukrainians supports filing a
membership application to the alliance. And one cannot fail to take this
situation into account.”

But he insisted that Ukraine is committed to full membership in the
alliance, and cited U.S. President George W. Bush’s comment at the recent
NATO summit in Riga that Ukraine should move toward NATO membership
on its own timetable, when it is ready.

“I want to leave no doubt,” he said. “Ukraine remains a reliable and
essential partner for the alliance.”

Yanukovych said he had recommended several steps after the September meeting
of the NATO-Ukraine Committee in Brussels, including an expansion of
Ukraine’s cooperation in peacekeeping missions and the launch of a massive
public information campaign.
                             EUROPEAN INTEGRATION
He also addressed the widespread perception that he is pro-Moscow in his
outlook.

“I believe that the other foreign policy issues are much less controversial,
perhaps with the exception of my attitude toward our relations with Russia,
which for some reason attracts increased attention,” he began.

“Let me say that I view Russia in a much broader way than just a market for
our products and a supplier of energy resources. And I feel this way for a
number of factors – historic factors, cultural, family-related, and
geopolitical ones.

We have to develop our [own] relations in all areas, but we have to behave
as equal partners and base our policies upon our own national interests and
priorities, primarily economic ones. This is very important for Ukraine.”

As to future membership in the European Union, Yanukovych said he favors a
slow approach, but appeared to leave no doubt that he aspires to accession.

“My government has a realistic assessment of today’s situation. We believe
that pushing the membership issue and heating up the debate cannot resolve
the stalemate and will only lead to mutual disappointment and reinforced
Euroskepticism,” he said.

“That’s why we believe that in the short term it’s important to focus on
some specific actions: the most important step is to start negotiations on
the establishment of the free trade area with the European Union.”

His discussions with U.S. officials will focus on Ukraine’s possible entry
into the World Trade Organization. Yanukovych today said that membership
in that trade body, and the flourishing of deep trade ties with Europe,
would-be the first step toward Ukraine’s integration with Europe.

And that, in turn, will form the basis for the country’s eventual membership
with the EU, which Yanukovych said he hopes will happen while he is still in
office.

“Martin Luther King famously said, ‘I have a dream.’ Ukrainian politicians
have their dreams, too. My government not only dreams, it acts,” he said.

“That’s why I hope that Ukraine will come close to start negotiating its
accession to the European Union with me as its prime minister. Maybe we will
start the negotiations. It will not happen today, or tomorrow, but I believe
it will happen.”

The once-divisive politician seemed decidedly eager to embrace an
all-encompassing foreign policy — one that looks both East and West.

“In foreign policy there is a common vision, a compromise,” Yanukovych said.
“Everyone recognizes our European choice as the key foreign policy priority.

Everyone also understands the importance of developing of strategic
partnership with the United States and special partnership with NATO. And I
have not yet met politicians who would be opposed to developing friendly
relations with Russia.”
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5.  CSDU MEMORANDUM DELIVERED ON THE OCCASION OF THE
   VISIT BY PRIME MINISTER YANUKOVYCH TO WASHINGTON, DC

Action Ukraine Report (AUR), Washington, D.C., Tue, Dec 5, 2006

WASHINGTON – The Coalition for a Secure and Democratic Ukraine
(CSDU) delivered a memorandum to Ukrainian Prime Minister Viktor
Yanukovych at a reception held in his honor at the Ukrainian Embassy in
Washington, Monday evening, December 4.

The memorandum was delivered to the PM by Vera Andrushkiw of the

U.S.- Ukraine Foundation.  Accompanying Andrushkiw were Marta
Matselioukh, U.S.-Ukraine Foundation, Vera Andryczyk and Zenia Chernyk
Ukrainian Federation of America and Morgan Williams, SigmaBleyzer
Private Equity Investment Group.  Coalition members Mark Levin, NCSJ,
CSDU Co-chairman, Ambassador William Miller, and Markian Bilynskyj,
U.S-Ukraine Foundation, Kyiv, were also in attendance at the reception.

The memorandum delivered by CSDU to PM Yanukovych:

Coalition for a Secure and Democratic Ukraine (CSDU)
Moving U.S.-Ukraine Relations Forward
Ambassador Steven Pifer and Ambassador William Miller, Co-Chairmen
Secretariat:  U.S.-Ukraine Foundation (USUF)
Washington, D.C., Monday, December 4, 2006

The CSDU.  The Coalition for a Secure and Democratic Ukraine seeks to
promote strong relations between the United States and Ukraine, a close
institutional relationship between Congress and the Verkhovna Rada, and the
integration of a democratic, market-oriented Ukraine into the Euro-Atlantic
community.  Americans want to see Ukraine succeed as a modern European
state, which offers the brightest future for the Ukrainian people.

The CSDU is the successor to the Jackson-Vanik Graduation Coalition, which
united the efforts of more than 250 businesses and Ukrainian-American,
Jewish-American and other non-governmental organizations to promote
Ukraine’s graduation from the provisions of the Jackson-Vanik amendment.

That goal was accomplished in March 2006, when President Bush signed
legislation removing Ukraine from the purview of Jackson-Vanik and granting
permanent normal trade relations status to Ukraine.

The CSDU welcomes Prime Minister Yanukovych’s visit to the United States
and hopes it will strengthen U.S.-Ukraine relations and Ukraine’s ability to
realize its full potential.  The CSDU believes the following are important
for Ukraine’s ability to move forward.

DEMOCRATIC CONSOLIDATION. Ukraine has recorded significant
democratic gains over the past two years.  It is important that the
government safeguard these gains; promote further steps to protect the
independent media and non-governmental organizations; and institute measures
to make government at all levels more accountable to its citizens.

A COMMON VISION. Prime Minister Yanukovych and President Yushchenko
should have a common vision for Ukraine’s democratic future in Europe.  This
vision should be pro-Ukraine, practical and understandable to Ukraine’s
partners. It should respect the constitutional roles of the President and
Prime Minister.

The appearance of two competing foreign policies in Kyiv, as has been the
case in the past few months, causes confusion among Ukraine’s partners and
seriously undermines Ukraine’s international authority.

WTO.  Accession to the World Trade Organization will integrate Ukraine into
the global economy, open the way for negotiation of a free trade agreement
with the European Union, and help protect Ukrainian exporters in key
markets.  The Prime Minister and President both say they support WTO
accession.

They should together work with the Rada for immediate passage of legislation
to bring Ukraine’s trade regime into conformity with WTO requirements, so
that Ukraine can complete its accession and begin enjoying the trade and
broader economic benefits of WTO membership.

INFORMATION ON NATO. The CSDU supports Ukraine’s rapid integration
into and membership in NATO, but understands this is a subject of debate
within Ukraine.  Obviously, how far to go with NATO is a question for the
Ukrainian government and people to decide.  But this should be decided based
on a correct understanding of NATO today and the benefits, obligations,
advantages and disadvantages of membership.

Both the Prime Minister and President have called for a public information
effort on NATO.  The government should live up to its announced intention to
stimulate a comprehensive public information campaign with appropriate
funding but without exclusionary limits on access to and use of such funds.

ENERGY SECURITY. No issue is more critical for Ukraine than energy security.
Kyiv needs an energy strategy that supports economic growth and minimizes
the prospect that another country could politically exploit its dependence
on energy imports.

Key elements of such a strategy should include allowing prices to rise to
cost-recovery levels, energy efficiency measures, creating conditions for
Ukrainian and international investors to expand domestic production,
developing renewable energy sources and diversifying imports.

ANTI-CORRUPTION MEASURES. Major corruption at all levels continues
to plague Ukraine, imposing great costs on its citizens and discouraging
investment.

For example, in recent months rebates of value added taxes have been
distributed in a discriminatory manner, and reports suggest that some
businesses with political connections to the government are not paying their
full taxes.

Transparency is important:  the government should regularly publish value
added tax rebates returned to oblast governments and make public the tax
payments made by Ukraine’s largest businesses.  Transparency is also vitally
important in the energy sector; too many questions remain, for example,
about the operations and ownership of RosUkrEnergo.

A MODERN ECONOMY. Investment by domestic and international investors
will spur economic growth, create new jobs, and generate greater tax
revenues.

But investors will not invest in Ukraine if they fear arbitrary actions and
interference in the market by the government.

In this regard, the decision to impose grain export quotas has hurt
Ukrainian farmers, badly affected Ukraine’s investment image, and set back
Ukraine’s ability to become a major exporter of agricultural products.  The
quotas should be ended immediately.

LANGUAGE. Ukraine’s practice over the past 15 years of having Ukrainian as
the sole state language while Russian can also be used on a practical basis
has worked.  Attempts to change this, by trying to make Russian a second
state language, would only make language a divisive issue among Ukrainians.

Finally, performance is the standard by which governments are judged.
Translating words, such as those in recent op-eds by Prime Minister
Yanukovych and President Yushchenko in The Washington Post, and by
the Prime Minister in his December 4 speech at the Center for Strategic &
International Studies, into concrete actions will be important for the
people of Ukraine and for Ukraine’s ability to succeed as a modern,
European state.

From the point of view of the CSDU, actions will be important for securing
Washington’s continued strong interest in Ukraine and its future development.                
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6.   UKRAINE PM, US VP DISCUSS UKRAINE-RUSSIA RELATIONS

Itar-Tass, Moscow, Russia, Tuesday, December 5, 2006

WASHINGTON – Ukrainian Prime Minister Viktor Yanukovich discussed
with US Vice President Richard Cheney here on Monday the issue of
Ukrainian-Russian bilateral relations, an informed source close to the
Ukrainian delegation told Itar-Tass. Yanukovich is on a working visit to the
United States.

Among other matters discussed in the White House the source named strategic
partnership between Kiev and Washington, as well as internal political
situation in Ukraine. The source noted that Yanukovich-Cheney talks
continued half an hour longer than planned.

On the same day, the Ukrainian prime minister held a meeting with US
Secretary of State Condoleezza Rice.

According to Yanukovich, he informed Rice that in 2007 Ukraine will launch
major reforms aimed at combating corruption, strengthening of the country’s
judicial system and creation of an efficient economy.

Yanukovich also expressed his vision of the political processes currently
underway in Ukraine. He called for the establishment of “normal relations”
between the president, government and parliament. “Not only Ukrainians, but
also our international partners expect this,” he added.

Yanukovich said after talks with Rice that relations between Ukraine and
Russia should be built only on a positive foundation, which will be
beneficial for the world.

Talking to journalists the Ukrainian government head did not give a direct
answer whether the Russian issue was discussed at the talks with the US
state secretary, although such a possibility would be logical taking into
account his recent visit to Moscow.

“The thing is that we should build our relations only on a positive basis,”
Yanukovich told Itar-Tass. “Russia should understand that our efforts (in
this direction) will be beneficial both to Europe and the whole world. And
this is the kind of relations we are currently developing,” the Ukrainian
prime minister noted.

The prime minister also expressed his views regarding prospects for
Ukraine’s
NATO entry. Speaking earlier at the Centre for Strategic and International
Studies he warned that a major part of his country’s population is worried
over the prospect of Ukraine’s admission to NATO, also due to possible
negative consequences for its relations with Russia.

“So this is the stance on NATO we have. There cannot be two or three truths,
it must be one,” Yanukovich told reporters.

Two intergovernmental agreements were signed on the results of talks
Yanukovich held in Washington – on cooperation in the sphere of science and
technology and on Ukraine’s participation in the programme of the American
government organisation Millennium Challenge aimed at fighting corruption in
the public sector.

Millennium Challenge Corporation’s aims include providing financial aid to
other countries in the form of grants for the implementation of investment
projects for ensuring economic development conditions and fighting poverty.

According to Yanukovich, the anticorruption programme is a priority for the
executive power. The prime minister said it is planned to allocate some 500
million US dollars for its implementation.

Itar-Tass has learnt that Ukrainian Minister of Fuel and Energy Yuri Boiko
who accompanied Yanukovich discussed with his American colleague Secretary
of Energy Samuel Bodman issues related to cooperation in the sphere of the
nuclear power industry, in particular, ways of diversification of nuclear
fuel supplies to Ukraine.                            -30-
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7.        UKRAINE CONFIRMS ITS EUROPEAN CHOICE

Itar-Tass, Moscow, Russia, Monday, December 4, 2006

WASHINGTON – Ukraine’s European choice remains its key foreign policy
priority, Prime Minister Viktor Yanukovich confirmed in a speech at the
Centre for Strategic and International Studies in Washington on Monday.

Having said that his government would maintain good relations with the
United States and NATO, Yanukovich said he had not met politicians at home
would be against good relations with Russia.

“I regard Russia as something much bigger than a market and a supplier of
energy resources” for Ukraine, the prime minister said.

He said Ukraine and Russia were very close for a several reasons and his
government would continue to develop relations with Russia in various areas.

While advocating practical cooperation with NATO, Yanukovich at the same
time warned that a considerable number of people in Ukraine were worried by
prospects for accession to the North Atlantic Alliance, including because of
possible negative consequences for relations with Russia. “We cannot but
take into account such feelings,” he said.

Yanukovich gave a great deal of time to economic and trade issues. He
assured the audience that Ukraine was and would remain a reliable partner in
supplying energy resources to Europe.

In his words, work in this area will continue with Russia and Caspian
states. He said Ukraine had sufficient reserves of liquefied gas for the
coming winter and there would be no disruptions in gas supplies to Europe.

Among his government’s foreign trade priorities, the prime minister called
Ukraine’s accession to the World Trade Organisation and commitment to
creating a free trade zone with the European Union.

He expressed hope that the government would be able to “come close” to
tackling the latter task.
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8. USA ALLOCATES FUNDS TO HELP UKRAINE COMBAT CORRUPTION

Interfax-Ukraine news agency, Kiev, in Russian 2111 gmt 4 Dec 06
BBC Monitoring Service, United Kingdom, Tuesday, Dec 05, 2006

KYIV/USA – 4 December: Ukraine and the USA have signed an intergovern-

mental [cooperation] agreement in the area of science and technology and an
agreement on combating corruption in Ukraine. An Interfax-Ukraine
correspondent has reported that the signing ceremony took place in
Washington on Monday [4 December].

The two agreements were signed by [Economics Minister] Volodymyr Makukha

on behalf of Ukraine. The second agreement on opening a threshold programme
for Ukraine was signed between the Cabinet of Ministers and the Millennium
Challenge Corporation.

Ukrainian Prime Minister Viktor Yanukovych told journalists that the
programme provides for the allocation of about 500m dollars by the USA for
combating corruption in Ukraine.

Economics Minister Volodymyr Makukha explained to journalists that the
programme provides for the allocation of 45m dollars for Ukraine for
countering corruption in government bodies, the judicial system and the
system of education.

According to the minister, the implementation of these events will allow
Ukraine to hope for receiving a grant of about 500m dollars for implementing
projects. According to him, these funds may be used for implementing an
energy-saving programme.                          -30-

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9.     UKRAINE: PREMIER HAS MUCH TO DISCUSS ON U.S. VISIT

INTERVIEW: With William Taylor, U.S. Ambassador to Ukraine
Radio Free Europe, Radio Liberty (RFE/RL)
Prague, Czech Republic, Monday, December 4, 2006

KYIV – William Taylor was appointed U.S. ambassador to Ukraine in May,
two months after the country’s parliamentary elections saw the political
resurrection of Viktor Yanukovych, now Ukrainian prime minister.

Taylor spoke to Marianna Dratch of RFE/RL’s Ukrainian Service on November
27 ahead of Yanukovych’s official visit to the United States on December
3-7.

RFE/RL: Yanukovych has said that the United States is a country with which
Ukraine must build strategic relations. Does the United States see Ukraine
in the same way?

William Taylor: The United States does consider Ukraine a strategic partner.
It is strategic in many ways. The people of Ukraine have demonstrated over
many years — but in particular over the past two years — their strong
desire for independence. They have demonstrated their strong desire for a
democratic form of government.

This in the United States’ — and indeed the world’s — strategic interest.
And, as a strategic partner, Ukraine is a leader in that effort to move
toward independence and move toward democratic government. The United
States is very pleased that we are strategic partners.

RFE/RL: U.S. Vice President Dick Cheney will be meeting with Yanukovych
in Washington, but U.S. President George W. Bush will not. Is this simply
because of the protocol of the prime minister’s working visit, or is it more
of a political decision?

Taylor: No, it is a protocol decision. President Bush’s counterpart in the
Ukrainian government is, of course, President [Viktor] Yushchenko. We don’t
have a prime minister, but we do have a vice president. In the past, on many
occasions, prime ministers visit the United States and meet the vice
president and that turns out to be a very productive discussion.

Vice President Cheney is, of course, very interested in the whole democratic
and strategic flavor of Ukraine. He is very interested to get to know the
new prime minister. He is very interested in some of the specific issues
that the prime minister knows about very well — in particular, energy,
relations with Russia.

The prime minister has made some comments about Ukraine’s role with respect
to NATO. These are all very strong interests of the vice president, so I
think this is going to be a very productive meeting.
                                         ENERGY SECURITY
RFE/RL: Regarding energy, the United States has already offered to help
Ukraine ensure greater transparency in energy deals. To my knowledge, there
has been no reply from the authorities in Kyiv. Do you understand why this
is?

Taylor: Energy security, of course, is a big issue for Ukraine; it is a big
issue for Europe. And it is an interesting issue for the United States as
well. We have offered to be of assistance in transparency.

But there are other ways that we have offered [help] that have gotten a
response. For example, in nuclear energy security, the United States has
been for the past several years conducting an experiment with Ukraine and
its nuclear power plants to see if a U.S. company, Westinghouse, has the
capability of building, of constructing, nuclear fuel that is compatible
with Ukraine’s nuclear power plants.

This experiment has been going on for several years. It has another couple
of years to go. It is about to be expanded because it is going well so far.

If this experiment, this pilot project, works, then Ukraine would have two
sources of nuclear fuel. It would have the Russian source and an American
source. This is good for Ukraine’s security — energy security — because
diversification is a key component of energy security.

Another example where we have gotten a good response from the Ukrainian
government is in oil and gas exploration. Of course, Ukraine has great
potential to develop its oil and gas reserves. A U.S. company — an
international company that happens to be U.S. — has won a contract to
explore in very deep water in the Black Sea, much deeper than has been
explored in the past.

Discussions are ongoing right now between this company and the government
of Ukraine to come up with a production-sharing agreement that will set the
terms for the development of those oil and gas resources.

RFE/RL: You’re talking about Vanco Energy. I understand that there is a
conflict regarding the future possibilities of this company to develop
offshore resources in the Black Sea. Recently, Ukrainian Fuel and Energy
Minister Yuriy Boyko actually invited Russian companies — specifically,
Gazprom — to participate. What are the U.S. expectations on this?

Taylor: U.S. expectations are very clear. We expect there to be good-faith
negotiations between Vanco and the Ukrainian government and those
negotiations are ongoing. We have no reason to believe — we have no reason
to even suspect — that this contract will not be fulfilled.

The normal procedure is to award the contract, which happened last spring.
Then the normal procedure is to proceed to negotiate the production-sharing
agreement. That is ongoing right now and we hope that will be concluded very
soon.
                                       WTO PROSPECTS
RFE/RL: The key issue on the Ukrainian agenda is the World Trade
Organization (WTO). In your view, what steps are necessary to ensure the
speedy entry of Ukraine into this trade club?

Taylor: This is a very important trade club and it is very clear that the
Ukrainians broadly and the Ukrainian government in particular recognizes the
importance of this trade club. This is clear because of the speed and
urgency with which the Verkhovna Rada is dealing with the legislation.

In answer to your specific question, it is important that two sets of things
happen. One, the laws that are necessary to bring Ukraine into compliance
with the agreements it has already made — those laws need to be passed.

A dozen of them, 12 of them, have already been passed. This week, the Rada
will take up eight more and they can be done this week. If that were done,
it would be a great achievement on the part of Ukraine.

The second thing that needs to happen is that there are two outstanding
bilateral agreements that have to be finally negotiated in order to move to
the final stage of a working group meeting in Geneva. The two outstanding
countries are Kyrgyzstan and Taiwan.

The Kyrgyz negotiation has been going on for a long time, and it still needs
work. The Taiwanese negotiation, I understand, is virtually complete and
just needs to be signed.

RFE/RL: When do you think Ukraine can join the WTO?

Taylor: It could happen this year. More likely is that the working group
will go into early next year and then it could be the end of January or
February for Ukraine to join.
            ‘BETTER INFORMATION’ ON NATO NEEDED
RFE/RL: On the topic of Euro-Atlantic integration: The U.S. Senate recently
adopted a NATO bill offering technical assistance to Croatia, Serbia,
Albania, and Georgia. The Senate is ready to support the efforts of Ukraine
should it decide it wants to join NATO — but it does not, at the same time,
offer any aid. Is this a reaction to the line of Prime Minister Yanukovych,
who says that Ukrainian society is not ready for NATO?

Taylor: This is a reaction to the general perception that the Ukrainian
people have more questions about NATO right now than do the people in the
other countries that were listed in that bill. That is, the Ukrainian
people, when you ask them today, less than half, well less than half, say
they support NATO today. A little bit more than half say they don’t support
Ukraine joining NATO today.

And that, I think, is a good indication of what the prime minister said when
he was in Brussels. He said that the Ukrainian people have questions about
this and that he intends to have an information campaign to describe to the
Ukrainian people what the pros and the cons, the costs and the benefits, the
good things and the bad things associated with NATO membership are. We
think that’s an important thing to do as well.

When the Ukrainian people are ready, when the Ukrainian people have made up
their minds, had their questions answered — and, indeed, when they are
asked, if they say, yes, then the door is open. The door to NATO is open and
the Ukrainian people will decide when to walk in.

RFE/RL: The Ukrainian president continues to say that Ukraine’s goal remains
unchanged — its course toward NATO. In your view, who is responsible for
the fact that public support for NATO in Ukraine has declined over the last
two years?

Taylor: I guess the information that has been available to the Ukrainian
people has not been adequate from NATO, hasn’t been adequate from NATO
allies, and it hasn’t been adequate from the Ukrainian government.

All of these entities — that is, the allies, the NATO organization, the
Ukrainian government — are in the process of developing that support,
developing ways to answer those questions. And those are perfectly
legitimate questions that the Ukrainian people have and they deserve
answers.

RFE/RL: Yanukovych, before he went to the United States, said it is time for
Ukraine and the United States to look into each others’ eyes. When looking
into his eyes, do Americans see any of the anti-American slogans that his
campaign used in 2004, or has this issue been forgotten?

Taylor: Issues are not forgotten. However, many people have observed this
prime minister and this government and have made the observation that things
have changed. We know — anyone who is here has observed — that the
Ukrainian people today, the Ukrainian nation today, is different from what
it was two years ago.

The politicians who represent the Ukrainian people and lead the Ukrainian
people and take guidance from the Ukrainian people — they have changed too.
That’s an important conclusion to draw.

And it is important for the prime minister, when he goes to Washington, to
demonstrate that he has a European focus, that he is very pleased to be
meeting with Americans. The Americans are going to be very pleased to meet
with him, so I think this is going to be a good visit.               -30-
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10.  UKRAINE’S YANUKOVYCH PROTECTS RUSSIAN INTERESTS
                            SAYS NOVEMBER OPINION POLL

People’s Union Our Ukraine, PRNewswire
Kyiv, Ukraine, Monday, December 4, 2006

KYIV, Ukraine – Ukrainians believe their Prime Minister Viktor Yanukovych
is twice as likely to protect Russian interests than the interests of
average Ukrainian citizens, a November opinion poll found.

Forty-five percent (45%) of those questioned believe Yanukovych is more
likely to protect the interests of his home region Donetsk, while 30%
believe him more likely to protect Russian business interests. Only 13.5%
believe Yanukovych will protect the interests of average Ukrainian citizens.

The poll of 2006 Ukrainian citizens was conducted by the Kyiv-based Razumkov
International Center for Economic and Policy Studies and has a 2.3% margin
of error.

Yanukovych is currently visiting the United States, where he is attempting
to deflect his pro-Russian reputation and re-cast himself as a pro-western
leader. He will meet with U.S. government and congressional leaders, as well
as opinion makers in Washington’s international policy community.

Since becoming Ukraine’s Prime Minister in August, Yanukovych has halted
Ukraine’s progress in becoming a member of the Euro-Atlantic Community.

During a September trip to Brussels, Yanukovych refused to sign a
non-binding NATO Membership Action Plan, despite a domestic national
security law that clearly proscribes NATO membership as a key security step
on Ukraine’s path to full European integration.

In November, Yanukovych announced Ukraine’s forthcoming accession to the
World Trade Organization (WTO) should be slowed down and synchronized
with Russia, following a meeting with Russian Prime Minister Mikhail
Fradkov.

Ukraine’s President Viktor Yushchenko has pushed WTO accession as a key
economic priority — the country is ready to join the body as soon as
February 2007. Russia’s accession is expected to take months and even years
longer.

Yanukovych’s pro-Russian sympathies were evident during an historic
parliamentary vote last week recognizing the 1932-33 man-made famine in
Ukraine as an act of genocide.

His Party of Regions and the Communists, who currently form the ruling
government coalition, refused to support legislation defining the famine, in
which 7-10 million perished in Ukraine, as genocide against the Ukrainian
people ordered by Soviet Leader Josef Stalin.

Members of parliament beholden to Yanukovych resisted support for the
language of the bill, which was construed as an affront to the Russian
Federation, the self- proclaimed successor state to the USSR.

Despite modern public relations efforts to deflect from Prime Minister
Viktor Yanukovych’s long established reputation, opinion polls in Ukraine
show average Ukrainians continue to view their Prime Minister as
pro-Russian.                                      -30-
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LINK: http://biz.yahoo.com/prnews/061204/dcm037.html?.v=66
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11. CLOSER TO THE WEST, BUT CLOSED TO SCRUTINY
                         Ukraine’s Natural Gas Business Is a Mystery

By Steven Mufson, Washington Post Staff Writer
The Washington, Post, Washington, D.C., Sat, Dec 2, 2006; Page D01

WASHINGTON – Has Ukraine cleaned up its act?

On Nov. 8, the Millennium Challenge Corp. — established by President Bush
to use development aid to reward good governance — announced that Ukraine
had qualified for assistance.

On Dec. 4, the Ukrainian prime minister, Viktor Yanukovych, arrives in
Washington to meet Vice President Cheney, another date in the U.S. courtship
of a government that is trying to find its place between Russia and the
West.

But many energy industry experts say that a shroud of secrecy regarding
Ukraine’s natural gas business should have kept the country from meeting the
Millennium Challenge Corp. standards for U.S. assistance.

These experts point especially to the hidden identities of the owners of a
Swiss-based company called RosUkrEnergo, which has been handed the rights
to negotiate for all of Ukraine’s natural gas imports from Russia and
Turkmenistan, raising questions about possible conflicts of interest or
corruption.

U.S. companies that have explored doing business with RosUkrEnergo have
been frustrated by its lack of transparency. One firm uncovered links to
more than 140 offshore companies and trusts, from remote island nations such

as Nauru and the Seychelles to Cyprus and Panama, according to an internal
document.

Another U.S. company’s representative said that a lawyer for the
RosUkrEnergo owners didn’t see why the American company needed to know
who it was doing business with. After further discussions, the U.S.
company’s representative said he received only partial answers.

Yanukovych said in a recent interview that he was grateful to be awarded aid
status, and he pledged to improve the ethical and administrative standards
of his government.

The energy business is not only a key test of Ukraine’s progress in the 16
areas measured by the Millennium Challenge Corp., it is also an area of
vital interest to Europe. Ukraine is both a big consumer of natural gas and
the transit point for more than a quarter of Western Europe’s gas imports
from Russia and Turkmenistan.

That flow of natural gas to Europe seemed secure until last New Year’s Day,
when Russia cut off shipments after Ukraine refused to agree to a sharp
increase in prices. Three days later the dispute ended when the Russian
natural gas monopoly Gazprom and the Ukrainian national oil company Naftohaz
signed a supply agreement that gave RosUkrEnergo the role of Ukraine’s
middleman.

Why the need for RosUkrEnergo? The most likely answer is the company’s
connections rather than its expertise. Half of RosUkrEnergo is owned by
Gazprom; the other half is managed by a subsidiary of an Austrian firm
called Raiffeisen Zentralbank on behalf of a group of Ukrainian businessmen.
RosUkrEnergo is registered in Zug, Switzerland, where taxes are low and
financial secrecy laws are strong.

One international consultant believes that RosUkrEnergo has earned hundreds
of millions of dollars for transactions that could easily have been handled
by the state oil and gas company. Ukraine’s energy minister said the country
had paid RosUkrEnergo $300 million this year and owed another $300 million,
Agence France-Presse reported last month.

“RosUkrEnergo, the controversial Swiss-based gas trading company, is playing
a growing and persistently opaque role in the Ukrainian gas sector,”
according to a report issued in October by the International Energy Agency.
“Its ownership structure is murky, and the company appears to make
significant profit simply because it signs contracts to transit gas from
Central Asia to Ukraine.”

Yanukovych said he was unable to alter his government’s relationship with
RosUkrEnergo. “Whether we want it or not, this is the inheritance that my
government got. The legal basis . . . was signed by our predecessors with
RosUkrEnergo,” he said. “Ukraine had no legal basis to destroy this
contract. To do so would . . . put under threat gas supplies to Ukraine and
to Europe.”

Yanukovych said Ukraine also had no choice but to accept Gazprom’s terms.
“If there is a company able to supply us with necessary volumes of gas and
prices lower than Gazprom, then we would negotiate with that company,”
Yanukovych said. “Unfortunately, this company has not been found, so we
accepted Gazprom’s proposal.”

Carlos Pascual, former U.S. ambassador to Ukraine and vice president of the
Brookings Institution, said he supported the Millennium Challenge Corp.
decision on aid because of Ukraine’s improvements in governance and progress
in the fight against corruption. But he said the energy sector was a dark
spot in the overall picture.

“The fact that there is such a lack of clarity about why this company has
this arrangement and can maintain a monopoly on the transport of gas remains
extremely troubling,” Pascual said.

A Ukrainian businessman, Dmytro Firtash, has claimed that he owns 45 percent
of RosUkrEnergo, but diplomats and investigators for companies and
nongovernmental groups like London-based Global Witness believe he is a
front man for well-connected Russians and Ukrainians.

Recently, RosUkrEnergo has moved deeper into Ukraine’s domestic gas supply
business. A new joint venture with Gazprom has been given most of the
domestic distribution business. How it will run that network remains the
subject of some anxiety; in November the venture refused to sign new gas
supply deals with 16 Ukrainian companies in what some observers see as an
effort to extract ownership stakes in the companies.

Tom Mayne of Global Witness, which in April issued a 63-page report on the
Turkmen-Ukraine gas trade, said he was dismayed that even after the
pro-democracy Orange Revolution in Ukraine, government leaders failed to
clean up the energy sector.

One official who has survived is Yuri Boyko, the energy minister, who will
be part of the prime minister’s delegation here. Boyko was chairman of the
state oil and gas company, Naftohaz, from 2002 to 2005 under Leonid Kuchma,
Ukraine’s former pro-Russia president. Global Witness said it had obtained
an unpublished audit of the “hair-raising practices” of Naftohaz under
Boyko.

Global Witness said that documents show that Boyko, while Naftohaz chairman,
also sat on a coordination committee of RosUkrEnergo. Dismissed after the
Orange Revolution, Boyko was named energy minister after new elections
brought back many pro-Russian officials.

Meanwhile, Western oil and gas companies are hoping for greater clarity as
they seek approval to explore in the Black Sea.

Last Christmas Eve, the government published, in Ukrainian only, a notice
inviting tender bids on a 12,000-square-kilometer deep-water exploration
bloc in the Ukrainian portion of the Black Sea.

It would be the first deep-water exploration project, and despite the
low-profile announcement, it drew five bids from companies, including
ExxonMobil.

The surprise winners were Vanco Energy Co., a small Houston-based firm that
has prospected for oil and gas in deep water off the coast of West Africa,
and JNR, an investment arm of the Rothschild family. But just as a final
contract seemed close to completion, the new government decided to toss out
the company’s draft and come up with its own. Vanco is still waiting.

“I’m not discouraged,” said John Imle, the former president of Unocal who is
now at Vanco, which already has a rig lined up for work. But he said he
hoped that the deal would be done by the end of the year and that Cheney
would urge Ukraine to wrap it up.

“The emerging market investors of the world are looking at Ukraine,” Imle
said. “A lot of them are looking at this deal as a bellwether deal for
determining whether large energy investments are sensible.”       -30-
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Correspondent Peter Finn in Kiev contributed to this report.
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12.   RUSSIAN GAS DEAL CALLED ‘PRAGMATIC’ SOLUTION BY
                 UKRAINE’S ENERGY MINISTER YURIY BOYKO

By David R. Sands, The Washington Times
Washington, D.C., Tuesday, December 5, 2006

Ukraine’s energy minister yesterday defended a controversial deal to
purchase natural gas from the giant Russian monopoly Gazprom, saying it
would prevent confrontations such as the standoff that briefly cut oil and
gas supplies to much of Western Europe a year ago.

Fuel and Energy Minister Yuriy Boyko, who accompanied Ukrainian Prime
Minister Viktor Yanukovych on his trip this week to Washington and New York,
said his government has taken a “pragmatic” approach with Gazprom to ensure
critical supplies at a reasonable price.

“Show me someone else willing to sell Ukraine natural gas at $130 per 1,000
cubic meters [of gas] next year,” said Mr. Boyko. “Show me that company,
and I will become a lobbyist for them as well.”

Mr. Boyko, who ran Ukraine’s state oil and gas company from 2002 to 2005
under former President Leonid Kuchma, also defended the lucrative deal given
to an obscure Swiss-based firm in mediating the Gazprom-Ukraine natural-gas
deal.

Critics say ownership and other conflict-of-interest questions surround the
company, RosUkrEnergo, making it a potential source for corruption.

“If Ukraine is going for the quick fix of cheap gas prices now, then it was
very shortsighted,” said Tom Mayne, researcher for London-based Global
Witness, a private watchdog group.

“These mysterious companies might start demanding anything, and nobody
can tell you what their price is,” Mr. Mayne said.

Global Witness and others say Mr. Boyko had a hand in the unusual
arrangement, but Mr. Boyko yesterday insisted it was Gazprom who had
insisted on the go-between firm as a condition of the deal.

“If [RosUkrEnergo] was not there, we would be paying a much higher price
at the border for our gas,” Mr. Boyko said.

Mr. Yanukovych is on a delicate fence-mending visit to Washington. The
Bush administration backed his rival, President Viktor Yushchenko, in the
standoff over a fraudulent election in December 2004 that sparked Ukraine’s
pro-Western Orange Revolution.

Mr. Yanukovych, seen as much more sympathetic to Russia than the president,
staged a remarkable political comeback after losing the presidential race.
His party won the largest single bloc in parliamentary elections in the
spring, and Mr. Yushchenko was forced to invite his rival to form a
government in August.

Attempting to burnish his image in the West, Mr. Yanukovych said in an
address to the Center for Strategic and International Studies yesterday he
was committed to political and economic reforms and was not turning his
back on the West.

“There can never be too much democracy in the Ukraine, just as there can
never be too much freedom,” he said.

U.S. officials said they are willing to work with Mr. Yanukovych as the
democratically elected head of a strategically placed ally.

He is meeting with Vice President Dick Cheney and Secretary of State
Condoleezza Rice during his visit, his first to Washington as prime
minister.

But in a sign that things have cooled since the heady days of the Orange
Revolution, Mr. Yanukovych is not scheduled to meet President Bush, and
there were no photographers allowed at his private meeting with Miss Rice.
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LINK: http://www.washingtontimes.com/world/20061204-110520-9846r.htm
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13. WILL UKRAINE’S ORANGE REVOLUTION BE UNDONE

                                        BY ENERGY DEALS?
 
Radio Free Europe/Radio Liberty (RFE/RL)
Washington, DC, Friday, December 1, 2006
 
WASHINGTON – During a recent briefing at RFE/RL, Adrian Karatnycky,
president of the non-partisan international initiative “The Orange Circle” and
RFE/RL regional analyst Roman Kupchinsky expressed very different views
of events in Ukraine since a split among the former parliamentary allies, known
as the Orange Coalition, three months ago returned former presidential
candidate and Prime Minister Viktor Yanukovych to power.

Karatnycky said the changes to the political leadership in Ukraine were not
necessarily destabilizing; rather, Yanukovych’s return to the Prime
Minister’s seat represents a “new [political] architecture in Ukraine” that
has come into being in the aftermath of the collapse of the Orange
Coalition.

He said that competing political groups are now struggling over policy
within “a reconfigured Ukrainian constitution,” where “the Ukrainian courts
will play a significant and powerful role.”

According to Karatnycky, economic and political reforms can continue if
there is cooperation between Ukraine’s President, Viktor Yushchenko and
Prime Minister Viktor Yanukovych. “If there are endless challenges,”
Karatnycky said, it will “paralyze forward movement.”

Ukraine’s current balance of political power, Karatnycky said, remains “the
same as in the 2004 presidential election,” judging from the results of the
March 2006 parliamentary elections. Karatnycky noted that Ukraine’s voters
continue to support the same power blocs, voting 52 to 43 percent in favor
of parties identified with reform.

The collapse of the Orange coalition came about when the leaders of the
Socialist bloc defected to Yanukovych after the March 2006 election, but
“Yanukovych’s party [The Party of the Regions] does not control the
majority” or dictate policy, Karatnycky said.

Karatnycky said that there are “pragmatically oriented blocs” within all of
the parliamentary parties in Ukraine today that are prepared for a
“comfortable cohabitation,” if not with the reform party Our Ukraine, then
at least with President Yushchenko.

Karatnycky described the balance of power between the President and Prime
Minister as “a Greco-Roman wrestling match with two evenly matched
heavyweights,” because the presidency retains significant powers “to bend
all legislation more in his direction.”

Although there may be attempts to change Ukraine’s constitution to a fully
parliamentary democracy, Karatnycky said there will be “at best a deadlock”
on the issue. Karatnycky maintained that there are “many vectors in Ukraine,
and therefore one needs [the support of] lots of players to move policy.
This is institutional pluralism; this is democracy… While Orange
Coalitions and orange politicians failed, the Orange Revolution succeeded,”
Karatnycky said.

Focusing on only one aspect of the Ukrainian government’s decision-making,
energy policy, Kupchinsky said little progress was being made by the
Yanukovych-Yushchenko partnership in setting Ukraine on the road to a
reformed and modernized economy.

Kupchinsky said that Ukraine, the sixth largest consumer of natural gas in
the world, has an “energy intensive economy” that is consuming energy
badly — in Kupchinsky’s terms, “wasting it.”

Kupchinsky questioned the decision by Prime Minister Yanukovych to appoint
Yuri Boyko, the former head of Naftogaz Ukrainy as head of the Ministry of
Fuels and Energy, as well as the failure of Ukraine’s top political leaders
to protest that appointment.

“Boyko has always been part of the problem,” said Kupchinsky, because he is
responsible for the creation of UralTransGas in 1991, “which eventually
turned into a company called RosUkrEnergo in July 2004.” Kupchinsky sees both
companies as unnecessary middle men in Ukraine’s energy sector who add costs
to the purchase and distribution of natural gas in Ukraine.

Kupchinsky noted that it has been announced that RosUkrEnergo will be the
“operator for Central Asian and Russian gas to Ukraine” and “be paid 13
billion cubic meter of gas per year.”

According to Kupchinsky, “This is more gas than Austria uses; this is
billions of dollars as a commission for signing customs declarations.”
Another part of the current arrangement dictates that “Ukraine doesn’t have
the right to buy gas directly from Turkmenistan,” Kupchinsky said.

Since natural gas prices are “up for review every six months” under existing
contracts with Russia’s natural gas monopoly Gazprom, Kupchinsky noted that
Ukraine’s current price of $95 per 1,000 cubic meters of gas may not last
long. In June 2006, Kupchinsky said, Turkmenistan raised its price from $65
to $100 per 1,000 cubic meters, as did Kazakhstan.

Ukraine will import 55 billion cubic meters of natural gas starting in
January 2007, all of which is being purchased from Central Asian producers
through Gazprom and RosUkrEnergo. Kupchinsky sees both Turkmenistan

and Russia as unreliable suppliers of natural gas to Ukraine — Turkmenistan
“will not reveal how much natural gas the country has,” while Russia is
itself experiencing “severe domestic shortages of natural gas.”

Ukraine produces 20 billion meters of its natural gas domestically, said
Kupchinsky, but Minister “Boyko has said the Ukrainian government doesn’t
want Western foreign investment in its energy sector.” Off-shore drilling in
the Black Sea, Kupchinsky said, can cost $700,000 per day and Ukraine
doesn’t have the experience or the equipment to explore and develop those
gas fields on its own.

 The Ukrainian gas pipeline which supplies Western Europe, Kupchinsky said,
is old and needs major repairs, but rather than bringing in Western
investment, Yanukovych “has revived the idea of an International Gas
Transport Consortium.”

“Yanukovych energy policies are absolutely a return to the past. There’s
nothing progressive,” according to Kupchinsky, who added, “The critical
mistake was bringing Boyko back; this will endanger Ukrainian and European
energy security.”                                    -30-
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14.      UKRAINIAN GOVERNMENT TO DROP FREE ECONOMIC
                                  ZONES FROM BUDGET BILL 

AP Worldstream, Kyiv, Ukraine, Monday, Dec 04, 2006

KYIV – Prime Minister Viktor Yanukovych’s Cabinet dropped a controversial
proposal to re-establish free economic zones from next year’s budget, bowing
to a request by President Viktor Yushchenko, the president’s office said
Monday.

Critics had warned that the zones, which provide tax breaks and other
incentives to businesses, could feed corruption and bleed money from state
coffers. The Cabinet instead agreed to allow parliament to hold separate
votes on each proposed zone, rather than lump them in with the rest of the
2007 budget.

“That was the correct decision, which will allow for effective monitoring
and will ensure that there is a sound basis for re-establishing this or that
zone,” Yushchenko said.

After the 2004 Orange Revolution, Yushchenko’s new government canceled all
economic zones, arguing that they had been used to help business cronies of
his predecessor. The cancellation angered Ukrainian and foreign investors,
and Yushchenko called it a mistake, but warned that the zones could only be
reintroduced under tighter controls.

Yushchenko also praised the government for including state telephone company
Ukrtelecom on the list of state enterprises to be sold off to private
investors next year. Ukraine has long talked about privatizing the telephone
company, which analysts expect to fetch a high price.

The president also criticized the government for setting the monthly minimum
wage at 395 hryvna (US$78; A62), 434 hryvna less than what was recommended
to cope with inflation. He warned that he wouldn’t sign the draft budget
unless this was corrected.

In Ukraine, all social payments are based on the monthly minimum living
wage.                                                 -30-
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15.  EU SWINGS FOCUS ONTO EX-SOVIET NEIGHBOURS
             New neighbourhood policy not up to the job says Ukraine

Andrew Rettman, Euobserver, Brussels, Belgium, Mon, Dec 4, 2006

BRUSSELS – Brussels’ new neighbourhood policy will try and get ex-Soviet
states to catch up with Mediterranean rim countries in terms of pro-EU
reforms – but the policy is not up to the job, one of the EU’s biggest
neighbours, Ukraine, says.

The new-look “European Neighbourhood Policy” (ENP) will see the EU boost

its role in eastern issues such as conflict resolution in Georgia and Moldova by
getting involved for the first time in multilateral foreign ministers’
meetings of nearby post-Soviet states.

The EU wants to join the Black Sea Economic Cooperation Council as an
observer to take part in regular talks between countries such as Ukraine,
Moldova, Georgia, Armenia and Azerbaijan as well as Russia and Turkey.

Under the ENP, it also wants to set-up new “regular or ad-hoc” meetings with
the foreign ministers of Ukraine, Moldova, Georgia, Armenia and Azerbaijan
as well as Belarus, if Minsk decides to take pro-democracy steps.

In 2007 to 2013, the ENP will spend 32 percent more cash – E12 billion in
total – than in the previous EU budget period, splitting spending on a
E3.34/per capita basis for the southern ENP states and E3.64/per capita for
the eastern countries.

But Brussels will continue to treat Mediterranean and eastern European
states the same way in terms of political status (zero recognition of
anybody’s EU accession hopes) and opportunities for deeper trade integration
(the EU is keen to create free trade zones with all ENP states).

The ENP embraces 10 countries in the Mediterranean region – where
multilateral talks with the EU began in 1995 in the Barcelona process
format – and six ex-Soviet states that currently talk to the EU on a
bilateral basis only, with Russia not part of the ENP scheme.

Unveiling the re-vamped ENP in Brussels on Monday (4 December) the European
Commission said Morocco, Jordan and Ukraine have been the fastest reformers
over the past 18 months, while Algeria, Libya, Syria and Belarus lag in the
group having all but opted out.
                                EAST NOW, SOUTH LATER
“Germany is now making a focus on the east,” external relations commissioner
Benita Ferrero-Waldner said on Brussels’ thrust to boost the eastern wing of
the ENP in line with the upcoming German EU presidency’s policy priorities.

“But the Portuguese presidency [in July 2007] will make a focus on the
south, so it’s very balanced…the south does not have to fear anything [in
terms of losing EU aid],” she added, with the per capita weighting still
seeing most ENP cash go south in net terms.

The new eastern European foreign ministers’ meetings “should mean a more
active EU role for conflict resolution in the region,” Ms Ferrero-Waldner
explained, adding that Russian foreign minister Sergei Lavrov has expressed
“interest” in her idea.

But she warned the new EU role will be limited to “reinforcing trust and
creating the right climate” for rapprochement between, say, Russia, Georgia
and Georgian separatists, rather than anything more radical, such as sending
EU border monitors to Georgia.
                            UKRAINE UNDERWHELMED
Ukraine’s ambassador to the EU, Roman Shpek, criticised Brussels’
neighbourhood vision however, saying “the ENP is de-facto positioned as an
alternative to enlargement [and as] such contradicts the EU membership
aspirations of Ukraine.”

“Ukraine cannot accept to be treated in the same way as non-European
countries,” he stated, adding that in the past the EU has “cherry-picked”
the kind of reforms that suit its interests, such as energy, while letting
others, such as visas or aviation, stagnate.

“Failing to [address these issues] will see the revised ENP lose credibility
in the eyes of Ukrainian society as well as weight in our relations,” the
ambassador warned, at a time when the new Russia-friendly Ukraine government
is exploring various foreign policy ideas.
                                         ‘NOT SO SEXY’
Meanwhile Georgia, which has recently pushed the EU to send border monitors
and to become a formal negotiating partner in UN-led conflict resolution
talks with Russia, took a more sanguine approach to the commission’s plans.

“We welcome any new EU role in conflict resolution – this could add value.
But we will have to wait and see the details and it should not exclude other
possibilities [for EU engagement],” Georgia’s EU ambassador, Salome
Samadashvili, said.

Defending the ENP’s stress on long-term political reform instead of direct
solutions to urgent problems – such as Ukraine’s post-revolutionary future
or the Georgia-Russia dispute – Ms Ferrero-Waldner said “Maybe it doesn’t
sound so sexy, but don’t underestimate it.”
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LINK: http://euobserver.com/9/23023?rss_rk=1
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16.           POLISH BANK BEKAO TO STORM UKRAINE

Polish News Bulletin, Warsaw, Poland, Monday, Dec 4, 2006

WARSAW – Polish Pekao SA, one of the first entirely foreign-owned banks

in Ukraine, which since its opening in 1997 has operated locally, near the
border, plans expansion on a major scale.

Federico Russo, CEO of UniCredit Bank Ukraine (Pekao’s Ukrainian brand
name), said that the bank aimed to have a branch in every major city,
translating to five to 15 branches in every region.

Still, the network will remain under complete Pekao control and will be
managed from Warsaw. Pekao wants to take advantage of the considerable space
on the Ukrainian market: seventy percent of Ukrainians’ savings are kept at
home, 27 percent of Ukrainians own only one debit card, while current
accounts are used by only 7 percent of citizens.

At the same time, Ukraine’s number of savings accounts has been growing on
average by 30 percent per year, while the banks’ global profits proved twice
as large as last year. Next year, Pekao SA will also merge with HVB Bank. –
LOT to the WSE

In his interview with Gazeta Wyborcza, Deputy Treasury Minister Ireneusz
Dabrowski presents the company’s financial plans, new connection ideas and
praises the firm’s current head: “LOT will become listed in the autumn of
next year. We have begun preparations for this.

The Treasury, which now has 67 percent of shares, will keep 51 percent. The
rest will go towards raising capital. LOT will start generating profits for
the state soon. The current head of LOT is planning many changes and
expansion. He is a very good professional. I myself have ordered the opening
of new eastern connections.

We need links with China, India and Singapore. We also need to increase the
number of connections with the US. Kuwait is an important destination too.
LOT must fly and generate profits from its main activity. We must reach
beyond Europe. Europe has been taken over by budget airlines.”  -30-
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17.  LET THEM EAT TURKEY: POLISH TURKEY PRODUCER WILL
                            INVEST IN RUSSIA OR UKRAINE

By Katarzyna Debek, Warsaw Business Journal
Warsaw, Poland, Monday, December 4, 2006

WARSAW – Turkey-meat producer Indykpol wants to invest R10 million in a
plant in Russia or Ukraine. Within the next three months WSE-listed Indykpol
will decide whether its new production plant will be built in Ukraine or
Russia.

“We can’t afford to start the investment from scratch in both countries. In
Ukraine poultry production facilities already exist and we could start
pretty fast, but in Russia we were offered government guarantees and tax
breaks,” said Piotr Kulikowski, CEO of Indykpol.

He expects the EUR 10 (zl.38) million investment to pay for itself within 18
months. Half of the money will come from the company’s own resources and
the other half will be financed from bank loans. Indykpol wants to build an
abattoir, part of a turkey farm and a feed-mixing facility.

Kulikowski believes the Eastern market has great development prospects.
“The consumption of  turkey in Eastern countries equals that of Poland 15
years ago,” he said, adding that while the average Pole eats 5.5 kg of
turkey annually, his or her Russian counterpart consumes only 0.1 kg, and
in Ukraine the figure is a mere 0.25 kg.

Indykpol’s financial result for this year will be weaker than last year
because of the impact of avian flu on poultry prices. In 2005, Indykpol’s
sales revenues amounted to zl.665.6 million and net profit reached zl.23.2
million.                                           -30-
————————————————————————————————
LINK: http://www.wbj.pl/?command=article&id=35092&type=wbj

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18. POLISH CONSTRUCTION SITES ARE DESPERATE FOR LABOR
                       
By Ryan Lucas, Associated Press, Warsaw, Poland, Tue, Dec 5, 2006

WARSAW, POLAND – With unemployment hovering around 15 percent, it’s
hard to fathom how Poland could lack able bodies for work. But this fall,
Filip Wilczynski had to push back an office building renovation by two months
because he couldn’t find workers to install the plumbing or lay bricks or
tiles.

“Everybody’s left for Britain or Ireland,” said Wilczynski, who runs a
gravel and construction company in Ostroleka. “There’s nobody left to hire.”

Lured by higher wages in Western Europe, doctors, architects and nurses

have bolted since Poland joined the European Union in 2004, leading some
officials to warn of a brain drain to Poland’s richer EU cousins.

But “brawn drain” is also taking a hefty toll. Many employers have been left
short-handed, especially in the country’s construction industry.

“It’s difficult to find people because the vast majority of good workers has
left,” Wilczynski said. “Either the people here don’t want to or just aren’t
capable of the work. I would need two supervisors for every worker just to
make sure they know what they’re doing.”

On a muddy construction site in Warsaw, electrician Robert Siudek gazes up
at the luxury apartments covered in scaffolding rising around him.

“There’s a ton of work right now, and not enough people to do it,” says
Siudek, who worked in France for five years before returning to Poland in
February. “I think builders here would take almost anybody that came along.”

He’s contemplating a return to Paris early next year, where he says he could
earn $3,400 a month. “Nobody’s going to pay me that much here,” he says,
adding that he brings in around $850 a month in Poland.

According to rough estimates, up to 1 million Poles have left this country
of 38 million since it joined the EU in May 2004. The mass migration has left

Poland’s construction giants feeling pinched.

“There is a large lack of workers in the Polish construction industry,” said
Zbigniew Bachman, director of the country’s construction chamber of
commerce.

But the exodus west isn’t the only culprit. The shuttering of technical
schools that once trained the industry’s labor, coupled with an ongoing
building boom amid strong economic growth at 5 percent annually, has also
squeezed construction companies.

Bachman said his association estimates the industry could absorb an
additional 150,000 workers. But the question is where to find so many pairs
of working hands. Industry officials have called on Poland to open the labor
market to workers from the east – Belarus, Ukraine, Romania and Bulgaria.

Unemployment tied to Poland’s communist past also has a hand in the high
unemployment rate, the ministry says. Many of the aging laborers who once
worked in the sprawling communist farms or heavy factories – both of which
have crumbled since the jump to a capitalist democracy in 1989 – are
essentially unemployable in the new economy.                  -30-
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19. KATERYNA YUSHCHENKO TAKES PART IN AWARDS CEREMONY
       OF THE MANMADE FAMINE OF 1932-1933, GENOCIDE OF THE
                          UKRAINIAN NATION POSTER CONTEST
              Poster contest initiated by Morgan Williams of SigmaBleyzer
           Cash prizes donated by the Helen and Alex Woskob Foundation

Ukraine 3000 International Charitable Fund, Kyiv, Ukraine, Fri, Nov 29, 2006

KYIV – Head of the Supervisory Board of the Ukraine 3000 International
Charitable Fund Kateryna Yushchenko took part in the awards ceremony of
the Manmade Famine of 1932-1933: Genocide of the Ukrainian Nation poster
contest.

In her speech Mrs. Yushchenko thanked all the participants of the contest.
“The time has come when we are able to speak about this horrible tragedy,
the genocide of the Ukrainian nation.

However, not only artists and historians ought to speak about it. It is
important that every Ukrainian understood what happened to his people, lit a
candle, and said a prayer for these people,” she said.

The Manmade Famine of 1932-1933: Genocide of the Ukrainian Nation contest
was held among second to fifth year students of the National Academy of Fine
Arts and Architecture. The winner is Yuliya Kunshchykova with her 1933:
Silent Grief Has Come to the Courtyard.

The second award was split between Svitlana Boldyreva (What the Life Has
Brought), Olha Nepravda (Heavy Crop of the 1933), and Olena Kozak (My
Ukraine, Why Do You Lay Waste? What Are You Dying For?).

The third place was awarded to Mariya Khmelnytska (Manmade Famine in
Ukraine: a Sore Spot for the Russian Government), Arianna Lazareva (In Our
Beautiful Ukraine, In Ours, Not in Theirs), Kseniya Rezyna (Nothing Left
Besides the Memory), and Yuri Antonov (Oh, Woe, the Mother Cannot Feed
Her Own Children).

After the event, Mrs. Yushchenko viewed the works of the contestants, talked
to the prizewinners and the administration of the National Academy of Fine
Arts and Architecture.

The contest was initiated by Morgan Williams of the SigmaBleyzer Private
Equity Investment Group and the Bleyzer Fund “Gift”. The ‘Tell the World
About the Holodomor,  Through the Eyes of Ukrainian Artists’ collection was
started by Williams, ten years ago. Another sponsor of the contest was Helen
and Alex Woscob Fund, granting money awards to the winners.   -30-

——————————————————————————————————
NOTE:  The ‘Tell The World About the Holodomor Through The Eyes
Of Ukrainian Artists’ Education and Exhibition Collection is also supported
by private donors through the Dr. James Mace Hololodmor Memorial Fund
of the Ukrainan Federation of America.
——————————————————————————————————
LINK: http://ukraine3000.org.ua/eng/news/5671.html
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20. ‘GREAT FAMINE’ NOW CONSIDERED GENOCIDE BY UKRAINE

By Julia Lamaleem, Epoch Times Ukraine Staff
New York, New York, Monday, December 04, 2006

The commemoration of 1932-1933 “Great Famine” victims took place in the
Ukraine on Saturday, November 25.

Some thousands of Ukrainians, amongst whom were witnesses and relatives
of those lost to the “Great Famine,” gathered at Michaelovskaya Square in
the Ukrainian capital Kiev. The Ukrainian President of Victor Yushchenko
delivered a speech at the monument to the victims.

Yushchenko said, “Those who deny the “Great Famine” today, in fact, hate
the Ukraine deeply and with conviction. They detest us, our spirit, and our
future.”

According to his words, about ten million innocent people had died as a
result of this disaster, even more than during World War II.

The president recounted the methods used by the communist party to
exterminate Ukrainians. He specifically emphasized the period of August
1932, when villagers were prohibited from buying and selling bread. They
could only turn it over to the government.

In the fall of 1932, the communist party started a complete withdrawal of
food supplies from all so-called “debtors.” In fact, all citizens were
regarded as “debtors.” At that time, 17 people were dying every minute, one
thousand every hour, and 25 thousand people were dying every day.

Yushchenko declared, “I do not ask, I demand the Ukrainian Parliament to
acknowledge the “Great Famine” as a genocide against our nation. That is a
responsibility of the Supreme Council. This is an imminent requirement of
history.”

He added, “I call on the Russian Federation to join us in honoring the
memory of those who became victims of the “Great Famine” and to show a

lofty example of the inherent empathy of the Russian people. I call up each
nation that has suffered from a communist regime, to unite with us. We were
all hostages and victims of that past evil and we must together clean ourselves
of it.”

Yushchenko thanked the parliaments of all states that acknowledged the
“Great Famine” in the Ukraine as a genocide. These countries include the
USA, Canada, Australia, Argentina, Italy, Poland and others.

He said, “I express our appreciation to all nations that have legislatively
and politically recognized the “Great Famine” as being a genocide against
the Ukrainian people. And I believe, that the United Nations will
unanimously add its voice, as the 75th anniversary of this tragedy
approaches.”

On November 28, Verkhovna Rada of the Ukrainian parliament declared the
motion that the 1932-1933 “Great Famine” be considered a genocide against
Ukrainian people.                                     -30-
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LINK: http://www.theepochtimes.com/news/6-12-4/48953.html

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21. UKRAINE’S PRESIDENT YUSHCHENKO CALLS ON CITIZENS TO 
          CONSOLIDATE AROUND 1932-1933 HOLODOMOR MEMORY

Itar-Tass, Moscow, Russia, Saturday, November 25, 20006

KIEV – Ukrainian President Viktor Yushchenko called on his fellow citizens
on Saturday to consolidate around the memory of the Holodomor that
claimed several million lives in the 1930s.

The president said public dialogue on those events would lead not to the
search for those guilty but to better understanding of history, which will
“boost the people’s spirit and show the grandeur of our soul and heart.”

Yushchenko spoke at a groundbreaking ceremony in Kiev where a memorial
for the victims of mass famine in Ukraine in 1932-1933 will be built.

The memorial will be completed by the 75th anniversary of the tragedy. The
names of the villages and districts of Ukraine that suffered the most will
be carved on black plates.

Memorial ceremonies for the victims of the Holodomor began with a service
at Kiev’s St. Sophia Cathedral. It was to be followed by a minute of silence
and a nationwide memorial campaign called “Light the Candle”.

Famine that began in 1932 in eastern and central regions of Ukraine claimed,
according to various estimates, 5-10 million lives in two years. The United
Nations recognised that period, also known as Holodomor, as a tragedy of
Ukraine and other former Soviet republics.

In October 2006, Yushchenko signed a decree proclaiming November 25
Remembrance Day for the victims of mass famine and political repressions.

A memorial service was held at Kiev’s St. Sophia Cathedral. A memorial
march, a minute of silence and a nationwide campaign called “Lit the Candle”
were also scheduled.

On November 2, Yushchenko asked the parliament to recognise the events
of 1932-1933 as genocide against Ukrainians and introduce a penalty for the
public rejection of the Holodomor.

However most people in the country do not think those events were genocide
against ethnic Ukrainians. A poll conducted by the Kiev International
Institute of Sociology across the country shows that 60.8 percent of
respondents all people in Ukraine, irrespective of their ethnicity, suffered
from famine.

Famine also swept the Saratov region, the North Caucasus, the Volga
region, the Black-Earth zone all the way to the Urals, and even Kazakhstan.

In April, the Council of the CIS Foreign Ministers rejected Ukraine’s
proposal to consider the question of the Holodomor of 1932-1933
because no consensus had been achieved.

Russia believes there are no reasons to regard the tragic events of
1932-1933 in Ukraine as ethnic genocide.

It is quite often stated that famine in that period “was deliberately
provoked by the leadership of the USSR and aimed precisely against
the Ukrainian people,” the Russian Foreign Ministry noted.

“The existing archival materials indicate that the mass famine of the early
’30s indeed largely stemmed from the policy of the Soviet Union’s
leadership,” the ministry said, adding, “It is quite clear, however, that
the policy was not based on the nationalities principle.”

“We all should take a more balanced attitude to such complicated and
sensitive matters of our common history, and not to allow for their
politicisation,” the ministry said.

The ministry recalled that “at the 58th session of the U.N. General Assembly
in 2003 most of the CIS countries, including Ukraine and Russia, as well as
many other states, adopted a joint statement expressing deep grief over the
deaths of millions of Ukrainians, Russians, Kazakhs and people of other
ethnic origin claimed by famine in those years.”

“However tragic those events were, there are no reasons to define them as
genocide for ethnic reasons,” the ministry stressed. “This statement was
circulated as an official document of the United Nations.”

Russia “has a grievous memory of the tragedy that took the toll of millions
of lives of Ukrainians, Russians, Kazakhs, and people of other ethnic groups
in the Soviet Union,” the ministry said. “This is our common grief and
common memory,” the ministry said.                -30-
————————————————————————————————-
http://www.itar-tass.com/eng/level2.html?NewsID=11019439&PageNum=0

————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
22.   RUSSIAN AND UKRAINIAN SCIENTISTS TO REWRITE

                                   HISTORY TEXTBOOKS

Itar-Tass, Moscow, Russia, Friday, December 1, 2006

KIEV – Russian and Ukrainian scientists will write new history textbooks
and correct the existent ones, Education Ministers Andrei Fursenko and
Stanislav Nikolayenko said after a Friday meeting of the Humanitarian
Cooperation Sub-Committee of the Putin-Yushchenko Interstate
Commission.

“We are preparing a special issue of history textbooks for higher
educational establishments,” Fursenko said. “Russian scientists will write
about the history of Russia, and their work will be translated into
Ukrainian. Ukrainian scientists ill do the same for Russian students.”

“The interpretation of past events will be objective, honest, legitimate and
exempt from political speculations,” Nikolayenko said.

The project is very important for solving the language problem, both
ministers said.

“The network of subsidiaries of Russian higher educational establishments in
Ukraine will broaden,” Fursenko said. So far, the six subsidiaries fail to
meet the requirements, and “we are working on their improvement,” he said.
“Humanitarian cooperation must not be political. It is oriented at citizens
and comfortable social environment,” Fursenko said.            -30-

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
23.  YUSHCHENKO POISONING PROBE NOT FINISHED YET FOR
                           POLITICAL REASONS SAYS ADVISOR

Interfax-Ukraine, Kyiv, Ukraine, Friday, December 1, 2006

KYIV – The investigation into the poisoning of Ukrainian President Viktor
Yushchenko has not yet been completed for political reasons, Mykola
Polishchuk, presidential adviser and former health minister, told Interfax.

“The Prosecutor General’s Office, which had all the information connected
to the case, handled the investigation. However, the prosecutor general has
sided with those who denied the poisoning of Viktor Andreyevich. I think
that it is increasingly difficult today to go ahead with the inquiry in this
political situation,” he said.

“However, this will be done in any case, but when I cannot say. The
political situation needs to change,” he said.

The condition of Yushchenko’s face has considerably improved over the

past two years, Polishchuk said.

“I think that the government’s effective work will now help improve the
president’s health. The development of Ukraine will slow down if the
government fails to function effectively. We will have to think then whether
or not this government, which stops the president’s health from improving
faster and hampers Ukraine’s development, is competent,” he said.

Yushchenko has no health problems and has undergone regular medical
checkups, Polishchuk said.

Ukrainian Prosecutor General Oleksandr Medvedko said earlier that the sort
of dioxin that was used to poison Yushchenko is produced in the United
States, the United Kingdom and Russia. The Prosecutor General’s Office is
checking whether or not officials from the south of the country could be
involved in the president’s poisoning, he said.

For the full version of Polishchuk’s interview, please visit
http://www.interfax.kiev.ua.                              -30-

————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
24.    A TRIBUTE TO US ALL: OREST DEYCHAKIWSKY

FACES AND PLACES: by Myron B. Kuropas
The Ukrainian Weekly, Ukrainian National Association (UNA)
Parsippany, New Jersey, Sunday, November 12, 2006

Many Ukrainian Americans work for the U.S. government in one capacity or
another. Most live in the nation’s capital. A number of them hold sensitive
positions in the foreign policy arena. Although rarely recognized by the
greater Ukrainian American community, their efforts have often been crucial
in promoting Ukraine’s aspirations.

One individual who has played an extraordinary role in Washington is Orest
Deychakiwsky, staff advisor for the Commission on Security and Cooperation
in Europe (the Helsinki Commission) since November of 1981, a 25-year stint.

The Helsinki Commission is an outgrowth of the Final Act of the Conference
on Security and Cooperation in Europe (CSCE) adopted in Helsinki, Finland,
in 1975. It was signed by representatives of 35 states, including the United
States, Canada and the Soviet Union.

The Soviets signed the Helsinki Accords  because certain clauses affirmed
the territorial integrity and  the inviolability of existing national
borders existing at the time. From the Soviet perspective, the accords
recognized the USSR’s territorial gains in Eastern Europe during World War
II.

The U.S. supported the Helsinki Accords because of provisions relating to
increased cooperation in economics, science, technology and the environment.
Most important for the U.S. was what was called the “third basket,” clauses
that clearly addressed humanitarian and human rights issues.

When President Gerald R. Ford signed the accords, he was severely criticized
by “Captive Nations” leaders in the United States.

Their anger was reinforced when, according to The Ukrainian Weekly of August
23, 1975, “Comrade Brezhnev said that provisions contained in the ‘third
basket,’ including freedom of movement, freer flow of ideas and peoples,
will require further negotiations … The Communist Party boss,” concluded The
Weekly, “merely confirmed what scores of Western political analysts feared
for some time: that the West gained little from the Conference on Security
and Cooperation in Europe, but may have lost quite a bit …”

The president of the Ukrainian Congress Committee of America was so outraged
that he openly declared his opposition to President Ford in the 1976
election. This despite the fact that the UCCA president had consistently
praised Congressman Ford for his steadfast support of the Captive Nations,
as well as Mr. Ford’s many pro-Ukrainian statements over many years.

The UCCA president had even worked as the ethnic vote coordinator for the
Republican National Committee during presidential campaigns.

I had the privilege (and misfortune) to represent President Ford at the 1977
UCCA convention, where I was roundly booed by the delegates.

Contrary to its critics, the Helsinki Accords were a boon for Soviet
dissidents, wrote The Weekly in 2000, impelling them “to form groups aimed
at monitoring fulfillment of the provisions contained in this historic
agreement – among them the Moscow Helsinki Monitoring Group and the
Ukrainian Public Group to Promote Implementation of the Helsinki Accords.”

Founded on November 9, 1976, group members, wrote The Ukrainian Weekly

on August 7, 2005, “were jailed, exiled, sent to psychiatric institutions,
sentenced to hard labor, convicted on trumped-up criminal charges, beaten
and terrorized.” They prevailed and in the end, concluded The Weekly, the
accords “ultimately brought freedom to millions.”

President Ford appointed Sen. Bob Dole to serve on the U.S. Helsinki
Commission in 1977. I was the senator’s liaison with the commission and that
same year the two of us traveled to Vienna, where the senator met with
Hungarian, Czech and Ukrainian dissidents. From there we flew to Belgrade
for the first of a series of biennial conferences to monitor Soviet
compliance.

Ukrainians from the free world later attended similar CSCE compliance
conferences in Madrid, Vienna, Paris, Ottawa, Copenhagen, Geneva, even
Moscow, all in an effort to call attention to Ukraine’s freedom aspirations.

During the past 25 years, Mr. Deychakiwsky has remained in the center of
activities related to the formulation of U.S. policy towards Ukraine as well
as Belarus, Hungary and Bulgaria. He has written and often presented the
official U.S. position at OSCE conferences.

He has been an international observer at some two dozen elections in Ukraine
(including every election since 1990), Belarus, Russia, Bulgaria, Slovakia
and Bosnia. He worked on and helped draft the 1991 legislation calling on
President Bill Clinton to recognize Ukraine.

Other U.S. resolutions he has helped craft include resolutions addressing
the Millennium of Christianity in Ukraine (which called for the legalization
of Ukrainian Orthodox and Catholic Churches), Chornobyl, free and fair
elections in Ukraine, and the Gongadze debacle.

Mr. Deychakiwsky drafted several hundred Congressional Record statements,
press releases and remarks on Ukrainian independence, individual political
prisoners and U.S. foreign policy.

Mr. Deychakiwsky grew up in Cleveland, where he was a member of Plast and
attended Ukrainian Saturday School. He earned his bachelor’s degree from
Notre Dame and his master’s from Georgetown University. He was one of the
founding members and has served as an officer of The Washington Group

(TWG). He is the proud father of a daughter, Natalie, 19, and step-daughter
Hanna, 27.

Readers of The Weekly will recognize Mr. Deychakiwsky as the author of
dozens of articles related to Ukraine. Among the best is the August 7, 2005,
article titled “A guide to who’s who in D.C.’s Ukraine-related activities,”
which he co-authored with Taras Kuzio.

Given the strategic importance of Washington, for Ukraine, they wrote, it is
“imperative that Ukrainian Americans” provide “sufficient resources and
personnel to have a meaningful, sustained presence in Washington, which
includes having influential and committed people on the ground.”

Mr. Deychakiwsky is certainly one of those “influential and committed people
on the ground” who quietly, often behind the scenes, works on behalf of
freedom for all peoples in Europe.

Our “Ukrainian presence” in Washington  includes such luminaries as Dr. Lev
Dobriansky, Paula Dobriansky, the late Eugene Iwanciw, Nadia McConnell,
Adrian Karatnycky, Nadia Diuk, Taras Kuzio, Nicholas Krawciw, Andrew

Bihun and others. Among the best of them is Orest Deychakiwsky, whose
professional life is a tribute to all of us.

Mnohaya Lita, Orest, on your 25th!                        -30-
=======================================================
The Ukrainian Weekly, Roma Hadzewycz, Editor-in-Chief
The Ukrainian Weekly, Parsippany, ukweekly@att.net.

Article reprinted with permission.
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
25. KYIV LIONS CLUB DONATES $100,000 TO CHARITY PROJECTS 

Action Ukraine Report (AUR), Kyiv, Ukraine, Tuesday, December 5, 2006

KYIV – At the recent annual Gala Dinner at the Radisson Hotel, the ‘outgoing’
President of Kyiv Lions Club Pierre Sleiman announced that during 2006 Kyiv
Lions Club had raised over $100,000 which had been distributed to worthy
causes in the Kyiv region.

The charitable projects ranged from the purchase (with Children of Chornobyl
Relief and Development Fund) of a specialized new born baby ventilator for
the Institute of Obstetrics and Gynecology (which is projected to save the
lives of 80 to 100 babies per year) to the funding of the First Special
Olympics National Games and street advertising poster to help find missing
children.  In all Kyiv Lions Club supported nine charitable projects in
2006.

Kiev Lions Club is a voluntary community service organization whose members
include both expatriate and Ukrainian personalities that has been active in
Ukraine since 2002. It is linked to the ‘International Association of Lions
Clubs’ which has clubs in 192 countries.

As is traditional the ‘outgoing’ President handed over his chain of office
to ‘incoming’ President Ken Nachbar. Thanking the guests and sponsors for
their support, Pierre highlighted the achievements of the past year. Pierre
will continue as Zone Chairman for the International Association of Lions
Clubs in Ukraine.

In his inaugural address Ken Nachbar stated that; “Lions seek to promote
good ethics, friendships and citizenship within the community. Our main
mission is to seek out and help those in need”. One of Ken’s objectives for
the next year is “to further expand the membership of Kiev Lions so that
more support can be provided to the most needy in our community”

The black tie gala dinner raised over $18,000 all of which will be donated
to charitable projects in 2007.                      -30-
——————————————————————————————
For further information contact: Martin Nunn, Whites International Public
Relations, Suite 17, 51 Predslavinskaya Street, Kyiv 01014 Ukraine, E-mail:
martin.nunn@wipr.com.ua

The International Association of Lions Clubs is one of the largest and most
effective community service organization in the world, with more than 1.4
million members. Kyiv Lions Club is one of over 40,000 clubs in 192
countries around the world. Regardless of language, religion or political
persuasion all ‘Lions’ are dedicated to seeking out and helping those in
need. Kyiv Lions Club was registered in 2002.

Since 1917 Lions Clubs have offered people from all walks of life the
opportunity to give back to their communities. Lions support projects from
the very small to the truly international: from local projects, such as
cleaning up neighborhood parks to those as far-reaching as bringing sight to
the world’s blind.  Lions Clubs have always embraced those committed to
building a brighter future for their community.

Today Lions have expanded their focus to help meet the ever-increasing needs
of the global community. Their programs are continually changing to meet the
new needs and greater demands, but their mission has never wavered.
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
26. LOOKING FOR HIGHER PROFITS? TAKE A LOOK AT UKRAINE

UKRAINE: National Exhibition and Conference in the USA
Chicago, Illinois, Thu-Sat, December 14-16, 2006

Procter & Gamble predict Ukrainian sales will exceed US$ 1 billion in 2007.
Kraft Foods, Motorola, Microsoft, Intel, Boeing, Coca-Cola, General Motors
and Cargill all report well above average growth and profits.   What do they
know that you don’t?

Find out at the first National Exhibition and Conference in the USA, hosted
by the government of Ukraine, designed to introduce the US business
community to the economic potential of Ukraine and the opportunities for
trade, commerce and investment.

Ukraine is growing, fast.  With foreign direct investment already exceeding
last year by 350%, sales of consumer goods rising at 37% per year,
increasing consumer spending power and GDP growing at over 8% this year,
Ukraine has become a focus for investment and as a low cost production
springboard into Europe, Russia and the countries of the former Soviet
Union.

With a skilled and highly educated labor force and a huge domestic market
(comparable to France) a massive pool of high technology opportunities and
well above average return on investment, Ukraine is making US companies
reconsider previously held perceptions.
                            WHY YOU SHOULD ATTEND
The exhibition will feature over 50 leading Ukrainian companies, from
aerospace and high technology to food processing and consumer goods

industry many of whom are looking for US partners.

Conference participants will learn about real sales and investment
opportunities, receive an investment climate overview from leading western
consulting companies and hear from major US companies that have benefited
from their investment success.

The plenary session and workshops on current issues in Ukraine’s economic
development will focus on:

The investment climate – opportunities and how to make it work
The agricultural power of today’s “Breadbasket of Europe”
High-end computing, software and outsourcing
Harnessing Ukraine’s extensive former military science and technology
The growing power of the Ukrainian consumer and opportunities in

banking and financial services

Come and be a part of the fastest growing economy in Europe! 

See you there!

To learn more and to register visit the conference Web-site at
www.ukrdzi.com/usa. Please note that space at the conference is limited so
book early.

For more information, contact Deborah Bullwinkel and Sharon Ozimek

at (630) 834 – 5032 or (773) 919 – 3875, via email at partnersltd@core.com.
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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Kyiv Project Director, Kyiv, Ukraine. Web: http://www.USUkraine.org
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A program of the U.S.-Ukraine Foundation, Washington, D.C.
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Washington Office, SigmaBleyzer, The Bleyzer Foundation

Emerging Markets Private Equity Investment Group
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