AUR#839 May 7 Deal Struck On Elections; Book Business Humming; Yale World Fellow Andriy Shevchenko; Carpathian Adventures; EU Has Failed Ukraine

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              Agreement is a major victory for President Viktor Yushchenko
                                                   (Article One)
Mr. E. Morgan Williams, Publisher and Editor, SigmaBleyzer

               –——-  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
             Agreement is a major victory for President Viktor Yushchenko
By Mara D. Bellaby, Associated Press, Kiev, Ukraine, Sat, May 5, 2007

                            ON CRISIS SETTLEMENT DECISION
Itar-Tass, Moscow, Russia, Saturday, May 5, 2007

BBC Monitoring Service, United Kingdom, Saturday, May 05, 2007

                           New elections seem a done deal in Ukraine
Eurasia Daily Monitor, Volume 4, Issue 88
The Jamestown Foundation, Wash DC, Friday, May 4, 2007

         Upscale shops and hip cafes amid statues of Lenin-a literary city of
        contrasts, Kharkiv also is home to a Bertelsmann local success story.
BusinessWeek’s European regional editor
BusinessWeek, New York, New York, Friday, May 4, 2007

Bertelsmann is making a bundle off Old Media in former Soviet bloc countries
BusinessWeek, New York, New York, Monday, May 14, 2007
7.                                     ASSERTING DIGNITY
            “We live, work, raise children and educate them to give them a
                    means of achieving success and asserting dignity.”
ANALYSIS & COMMENTARY: By Volodymyr Senchenko
The Ukrainian Observer #231, The Willard Group, Kyiv, Ukraine, May 2007

          List of 18 Includes Andriy Shevchenko, Ukraine, Member of Parliament
Yale University, New Haven, Connecticut

M2 Presswire, United Kingdom, Friday, May 04, 2007

9.                                    A HARD-PRESSED TRADE
                   Consider, for example, one of my heroes, Natalia Dmytruk

COMMENTARY: By Chrystia Freeland
Financial Times, London, UK, Saturday, May 5 2007


The Ukrainian Times, Kyiv, Ukraine, Monday, May 7, 2007

11.                                    COPYRIGHT ATTACKS
By Lesya Potapenko, for EP (in Ukrainian)
Ukrayinska Pravda, Translated by Eugene Ivantsov
Kyiv, Ukraine, April 25, 2007 and May 4, 2007

12.                               CARPATHIAN ADVENTURES
  Are you brave enough to take a trip into the unknown and invest in Ukraine?
Kasia Maciejowska, The Times, London, United Kingdom, Fri, May 4, 2007

Svetlana Sytina, The Ukrainian Times, Kyiv, Ukraine, Monday, May 7, 2007

COMMENTARY: By Wolodymyr Derzko
Toronto, Ontario, Canada, Thursday, April 26, 2007


                            FOR A WESTERN-STYLE DEMOCRACY
COMMENTARY: By Uffe Ellemann-Jensen
Foreign Minister of Denmark, 1982-1993
The Taipei Times, Friday, May 04, 2007, Page 9

16.                        UKRAINE IS NOT A HISTORICAL JOKE
OPINION & ANALYSIS: By Gennady Bordyugov
NIA Novosti, Moscow, Russia, Friday, May 4, 2007

17.                               KHRUSHCHEV AND UKRAINE
The Ukrainian Observer #231, The Willard Group, May 2007

18.                           YELTSIN THE REVOLUTIONARY
COMMENTARY: By Masha Lipman, The Washington Post

Washington, D.C., Wednesday, April 25, 2007; Page A17

COMMENTARY: By Rodric Braithwaite
Financial Times, London, UK, Tuesday, May 1 2007

                             Open in Kyiv until Sunday, May 20, 2007
Centre for Contemporary Art, PinchukArtCentre, Kyiv, Ukraine, May, 2007
              Agreement is a major victory for President Viktor Yushchenko

By Mara D. Bellaby, Associated Press, Kiev, Ukraine, Sat, May 5, 2007

KIEV — Ukraine’s president and prime minister reached agreement yesterday
on holding early parliamentary elections in a bid to end a political
standoff between the rival leaders.

The agreement is a major victory for President Viktor Yushchenko, whose
April 2 decision to dissolve parliament and call early elections was a huge
risk and looked in danger of backfiring as the crisis dragged on.

But although Yushchenko won the battle, the real fight for control over the
next parliament still looms ahead, and all polls show pro-Western
Yushchenko’s parliamentary allies trailing Prime Minister Viktor
Yanukovych’s Russian-leaning party.

Yushchenko called the agreement “the answer that the nation was waiting
for.” “I would not like for what happened today to be understood as the
victory of one force over another,” he said.

After emerging from talks with the president, Yanukovych went to speak to
thousands of flag-waving supporters gathered on Kiev’s Independence Square.
“There is no other way to solve this crisis except by holding democratic and
fair elections,” he said.

The former Soviet republic has been mired in a political crisis since
Yushchenko’s decree — a move he said was necessary to prevent Yanukovych
from usurping power. Yanukovych and his majority in parliament ignored the
decision, calling it unconstitutional.

As the standoff dragged on, both sides brought their supporters to the
streets for major rallies, and accused each other of acting in bad faith.
Yanukovych appealed to the Constitutional Court, but it moved slowly in its
deliberations and Yushchenko said the 18-judge panel was not up to the task,
firing two of the judges this week.

Yanukovych emerged from the meeting with the president to say a breakthrough
had been made. He told thousands of his supporters at the rally that the two
leaders agreed to the creation of a working group that will decide what laws
need to be adopted and when the election will take place. Previously,
Yushchenko had set the election date for June 24.

The bloc of former Prime Minister Yulia Tymoshenko and other pro-Western
parties welcomed the agreement, as did many of Yanukovych’s supporters
gathered on Independence Square.

“It is correct because the longer this lasted, the worse it became,” said
Svetlana Piven, 40, as thousands of Yanukovych supporters began to disperse.

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

Itar-Tass, Moscow, Russia, Saturday, May 5, 2007

KIEV – A working group comprising of representatives of the president and
the premier of Ukraine agreed on a package of decisions for a political
compromise in order to ensure early parliamentary elections, first deputy
head of the presidential secretariat Ivan Vasyunyk, who participates in the
negotiations for settlement of the crisis, said on Saturday.

The sides agreed that it is necessary to take several political and legal
decisions – a package of political compromise – for the settlement of the
political crisis, the presidential press service reported.

The package is based on a range of decisions, which are needed to ensure
fair, transparent and democratic elections in the Supreme Rada.

In particular, the early parliamentary elections should be properly funded.
Some decisions are aimed at preventing the circumstances, which entailed the
current political crisis.

The sides also agreed to form on a parity basis a common working group for
drafting a new version of the Ukrainian Constitution. All this weekend
experts are drafting several legal acts, which will be submitted to the
president and the premier upon coordination by the working group on May 7.

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

BBC Monitoring Service, United Kingdom, Saturday, May 05, 2007

KIEV – Ukraine’s president and prime minister agreed on 4 May to hold early
parliamentary elections in a bid to end weeks of political deadlock. No date
has yet been set. Reaction to the deal reflects the stance of politicians
and political commentators alike.

Supporters of President Viktor Yushchenko and his allies hail the compromise
as being in the interests of the country as a whole, while those supporting
the government see it more as a strategic move on the part of Prime Minister
Viktor Yanukovych.

[1] Former Interior Minister and Yushchenko supporter Yuriy Lutsenko,
speaking on Ukrainian TV on 4 May:
“This is the logical consequence of the position of the president, who
fulfilled his civic and state duty and announced the dissolution of a
parliament that was deformed as a result of political corruption.”

[2] Yushchenko ally Yuliya Tymoshenko, speaking on Ukrainian TV on 5 May:
“After all have admitted that an early election is needed, we have to make
sure that neither political side considers itself a loser. This is why today
we are looking for a compromise on a very wide range of issues, starting
with a date for the election.”

[3] Oleh Medvedev, adviser to Yuliya Tymoshenko, speaking on Ukrainian

TV on 4 May:
“If what was said today is taken to its logical conclusion and a normal,
democratic election is held, then – even though I devoted several years of
my life to political conflict with Viktor Yanukovych – it will be necessary
to give him his due, because he has taken a decision that must have been
very difficult for him but is very responsible towards the country and his
own party.”

[4] Russian MP Konstantin Zatulin, speaking on Ukrainian TV on 4 May:
“Viktor Yanukovych must have had very weighty reasons to break so

completely with his previous line of behaviour, to split the ranks of his
allies, and agree to what he was rejecting yesterday.”

[5] Journalist Vakhtanh Kipiani, speaking on Ukrainian TV on 4 May:
“At least two sides in this conflict have agreed that it is necessary to
negotiate, agree a road map, and use it to move forward. This is a signal to
me as a citizen that there will not be a huge crisis. The civil war that
hawks on both sides warn of will not take place.”

[6] Russian-language pro-Yushchenko daily Gazeta Po-Kiyevski, 5 May:
“Yanukovych spared no efforts to exaggerate that he made his decision to
save Ukraine.”

[7]Ukrainian-language pro-Yushchenko daily Ukrayina Moloda, 5 May:
“Yesterday the prime minister finally surrendered under pressure from the
president… The Party of Regions [Yanukovych’s party] sometimes suffers
defeats too. What has happened to their tough stand on the need for a
Constitutional Court verdict on a snap election? Now it is time for their
supporters to leave Kiev and start campaigning.”

[8]Russian-language pro-Yanukovych daily Segodnya, 5 May:
“According to sources at the Party of Regions, the head of government

agreed on the snap election because he was sure he would never lose.

The president promised him too much… Yanukovych agreed on the snap
election after the president and, according to some reports, head of
Yushchenko’s secretariat Viktor Baloha, promised him that they would assist
in setting up a coalition between Our Ukraine and the Party of Regions and,
the main thing, nominating Yanukovych as prime minister after the election.”

[9] Bilingual pro-Yushchenko website Ukrayinska Pravda, 5 May:
“If Viktor Yanukovych really betrayed his allies, he expects to win a
majority in parliament on his own. If not, Socialist and Communist leaders
Moroz and Symonenko should have received some guarantees, for instance

the creation of a joint coalition bloc.”                  -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
                             New elections seem a done deal in Ukraine

Eurasia Daily Monitor, Volume 4, Issue 88
The Jamestown Foundation, Wash DC, Friday, May 4, 2007

Once seen as a lame duck, Ukrainian President Viktor Yushchenko now is
out-maneuvering the Anti-Crisis coalition (ACC) and the government of Prime
Minister Viktor Yanukovych.

During the last week the president has reappointed Syatoslav Piskun as
prosecutor, removed the deputy head of the Constitutional Court and a second
member of the Court by presidential decree, and appointed a loyalist, Stepan
Havrysh, to the Court. He also issued a decree rescheduling early
parliamentary elections from May 27 to June 24 (see EDM, May 3).

Piskun and Havrysh had been allies of former president Leonid Kuchma before
joining Yushchenko’s steam. Piskun was prosecutor for the first ten months
of 2005 and was elected to parliament in 2006 as part of Yanukovych’s Party
of Regions.

His defection to Yushchenko and appointment as prosecutor is a defeat for
Yanukovych. The defections will be widely seen among Ukraine’s elites as a
power shift in Yushchenko’s favor.

Havrysh is a senior representative of the Kharkiv clan, the intellectual
center of eastern Ukraine. On the eve of his appointment he had ridiculed
the parliamentary resolution in support of simultaneous parliamentary and
presidential elections as “political hysterics.”

Simultaneous elections would be legally impossible to undertake, he argued,
as this would leave a vacuum as to who was running the country.

The defections increase Yushchenko’s ability to negotiate from a position of
strength with the Party of Regions and to compete with them in elections in
eastern Ukraine.

Yushchenko already has the support of former Kuchma loyalist and pro-Western
national security expert Volodymyr Horbulin. Former presidential secretariat
head Oleksandr Zinchenko has been reappointed as his adviser.

Similar shifts in Yushchenko’s favor are also emerging in the business
sector. Dnipropetrovsk oligarchs Viktor Pinchuk (Interpipe) and Igor
Kolomoyskiy (Pryvat), who until 2005 were mortal enemies, have now created
a joint venture to manage the Nikopol ferro-alloy plant over which they were
in severe dispute in 2005. Both are now pro-Yushchenko loyalists.

The ACC had banked on encouraging divisions to widen between the radical
and moderate wings of the Orange camp. But instead, the revived orange
coalition, which signed an opposition agreement on February 24, has remained

The ACC had also mistakenly assumed that Yushchenko would retreat from
his demand for early elections. His second presidential decree on early
elections, which was legally prepared in a more professional manner, has
convinced them that this step is also unlikely.

The ACC are concerned about the tough tone Yushchenko took in a speech
on April 29, in which he promised to punish anyone who fails to fulfill his
second decree. Prosecutor Piskun has pledged to ensure that this decree is

The ACC, or the two left parties in it (Socialists, Communists), could still
call for a boycott of the elections. However, this would open up the
possibility of a complete Orange takeover of the new parliament.

In Ukraine’s full proportional system any boycott would mean that the
parties that took part and crossed the 3% threshold would obtain a larger
proportion of the final seat distribution.

A complete Orange takeover of parliament would have two consequences.

[1] First, the Orange camp could annul recent constitutional reforms on the
division of power and adopt legislation in support of NATO membership.

[2] Second, it could lead to greater regional divisions in Ukraine, with
eastern Ukrainians feeling excluded from the political process.

The Yushchenko camp clearly hopes that any boycott would only be

undertaken by parties on the left end of the political spectrum, which have
everything to lose in an early election.

Opinion polls show that the Socialists — with 1% support — would be wiped
out as a political force and fail to enter parliament for the first time
since they were established in 1991. The Communists might still scrape

Polls show that the Party of Regions will again come in first with about
one-third of the vote. In a proportional system this does not signify that
they would automatically create the coalition and government, as they could
be still out-flanked by Orange parties.

Yanukovych is likely to personally lose, as he would only be prime minister
if the ACC prevailed. The Tymoshenko bloc’s first preference is an Orange
coalition, but it is unofficially willing to enter a grand coalition that
would create a government of national unity.

The stumbling block would be who would receive the post of prime minister,
which neither Yushchenko nor Tymoshenko would return to Yanukovych.

The Tymoshenko bloc is banking on increasing its support to the 30% mark
by attracting Socialist voters and increasing its support in eastern and
southern Ukraine.

Our Ukraine is likely to improve its support beyond that of 2006 (14%) but
will be unlikely to regain its 2002 support of 24%.

This is because of three factors.

[1] First, Yushchenko’s ratings have doubled in the last month, putting him
for the first time ahead of Tymoshenko in the polls.

Yushchenko will use a successful outcome to the crisis to re-launch his bid
for a second presidential term in the 2009 elections. Prior to the crisis
all observers had written off his chances of winning a second term.

[2] Second, Our Ukraine is establishing a mega-bloc consisting of itself,
the Ukrainian Rightists, and the Yuriy Lutsenko bloc.

[3] Third, Our Ukraine has been reinvigorated as a national democratic party
now that it has returned it to its more successful 2002 composition.

The ACC had pinned hopes on international organizations and foreign
governments pressuring Yushchenko to back down, but this never happened.

International organizations and Western governments remain distrustful of
Yanukovych’s authoritarian instincts, blame both sides equally for the
crisis, and accept that it is up to Ukrainians to peacefully resolve the

Only Russia has tried come to “rescue Ukrainian democracy,” by one-sidedly
condemning Yushchenko. But on a visit to Washington this week, Ukrainian
Foreign Minister Arseniy Yatseniuk stated that Ukraine was able to resolve
its crisis without outside intermediaries.

Despite Moscow’s efforts, the elections seem likely to happen. Central
Election Commission chairman Yaroslav Davydovych has publicly stated
his readiness to organize the vote.

Minister of Finance Mykola Azarov, a high-ranking Party of Regions loyalist,
has agreed to increase the allocation in this year’s budget to finance the

Recent events and a sense of defeatism in the ACC suggest that the tide of
events is shifting in Yushchenko’s favor. Early parliamentary elections are
likely to take place on June 24, but before the voting booths open both
sides are likely to reach some form of political compromise.     -30-
(Ukrayinska pravda, April 29-31, May 1-3, Zerkalo Nedeli, April 21-27,

( (LINK:
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
    Send in names and e-mail addresses for the AUR distribution list.
         Upscale shops and hip cafes amid statues of Lenin-a literary city of
        contrasts, Kharkiv also is home to a Bertelsmann local success story.

BusinessWeek’s European regional editor
BusinessWeek, New York, New York, Friday, May 4, 2007

My head was swimming with stereotypes as the cramped Austrian Air short-
haul jet touched down in Kharkiv, a city of 1.5 million in the plains of
eastern Ukraine.

I had imagined this Russian-speaking part of the Ukraine to be a gritty
post-Soviet city still struggling to come to terms with Ukrainian
independence and the collapse of the U.S.S.R.

Initial impressions tended to confirm my prejudices. The airport was tidier
than I expected, but a freshly painted gold hammer and sickle still crowns
the Stalin-era terminal. A couple of dilapidated, decommissioned Aeroflot
jets were parked at the edge of the tarmac.

Thanks to my hosts at German media company Bertelsmann, whose
phenomenally successful local book publishing operations I had come to
observe, I was whisked straight from the plane to a VIP customs area where
a guard in a Soviet-style military cap promptly stamped my passport (see, 5/14/07, “Where the Book Business Is Humming”).

But in the days that followed I was forced to develop a more nuanced picture
of this metropolis a short drive from Vladimir Putin’s Russia. The city-also
known by its Russian name of Kharkov-still boasts enormous bronze statues
of Lenin and other stern-looking socialist heroes.

In the center of town there is a big, empty central square of the kind once
used for ostentatious displays of military might. A rusting Red Army tank,
one of thousands manufactured here, decorates a park.
                                 A LITERARY LIFESTYLE
But the city is more than just a Bolshevik theme park. Thanks to the
presence of several major universities and thousands of students, Kharkiv
has a chic, bohemian side. There are cafes where you can get an excellent
cappuccino, and broad clean avenues lined with upscale shops and filled
with fashionably dressed young people.

There are hip restaurants where you can eat grilled sturgeon with caviar,
and bars like Fidel’s, a basement joint with a red décor where I met
23-year-old Ukrainian author Ljubko Deresch, a former accounting

student who has already published five novels.

Deresch, whose latest book, “A Bed of Darkness,” is published by
Bertelsmann’s Family Leisure book club, described how the Ukrainian
people’s traditional reverence for books is helping to drive a revival in
local-language literature.

“There are people who are deeply interested in literature, who read new
texts, who make literature a part of their lifestyle,” Deresch said over a
cup of tea.

“The most persuasive reason to keep on writing is that you know there is a
dialogue between your text and their inner lives.” Bertelsmann is profiting
nicely from this tradition, which meshes with a budding entrepreneurial

The Ukrainian unit is Bertelsmann’s most profitable book club, and also an
example of how an old business model can find new life in the fast-growing
economies of Eastern Europe.

Bertelsmann’s success wouldn’t have been possible, though, without an
energetic local team led by Oleg Shpilman, an affable, slightly harried
Russian Army veteran who is proof that growing up under socialism doesn’t
prevent somebody from becoming a savvy business person.
                                   LEARNING BY DOING
You have to admire Shpilman’s chutzpah. He and some Dutch investors
created the Family Leisure Club in 2000. The plan was to shamelessly copy
Bertelsmann’s book-club business model, then sell the company to

The plan worked, with Bertelsmann buying the club for less than $10 million
in 2004. (Bertelsmann has already recouped the investment and then some.)

Shpilman stayed on to run the business. On the side, he also owns an
Irish-style pub which caters to expatriates and visiting foreign business

Shpilman has never actually been to Ireland, but never mind. He and his
employees at Bertelsmann have an anything-is-possible mindset that you
don’t often find amid the cubicle farms of Western Europe and the U.S.

Unable to find off-the-shelf software suitable for their ordering and
distribution system, for example, Bertelsmann’s Ukrainian team wrote their
own. “Many things we simply learned by doing,” says Shpilman.

There are, of course, reminders that the Ukraine is still an economy in
transition. In one neighborhood, prostitutes stroll in front of concrete
apartment blocks.

At a site outside of Kharkiv where Bertelsmann is converting a former
insulation factory into a new book distribution center, rough-looking
security guards patrol the grounds in camouflage jumpsuits, an effective
deterrent to anyone thinking about stealing construction materials.
                                 FEELING THE SUCCESS
The Ukraine still suffers from rough politics as well. In recent weeks the
Ukrainian government has been in crisis after President Viktor Yushchenko,
leader of the Orange Revolution, dissolved parliament amid a power struggle
with pro-Russian legislators.

But in Kharkiv people seem to pay little attention. (The crisis eased May 4
after the two sides agreed to hold new elections.)

To the contrary, the mood in Kharkiv seems upbeat. For many people, life is
a lot better. Natalia Obraztsova used to hawk children’s toys from a kiosk
in Kharkiv to make ends meet, even though her romantic adventure novels,
set in medieval times, sold tens of thousands of copies through a Russian

“I didn’t feel the success,” says Obraztsova, who writes under the pseudonym
Simona Vilar-a name chosen by her former publisher because it sounded
French. Now she writes full-time, often working through the night when
inspiration strikes.

Bertelsmann’s Shpilman draws a parallel with Western Europe after World War
II, when the old structures were wiped away and the continent was a clean
slate. “If you have some common sense and some money in your pocket, you
can do well,” he says.                                   -30-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
 Bertelsmann is making a bundle off Old Media in former Soviet bloc countries

BusinessWeek, New York, New York, Monday, May 14, 2007

You wouldn’t typically expect to find a high-profile executive of a major
media company in drab Kharkiv. The gritty city of 1.5 million is the kind of
place where local leaders haven’t yet gotten around to tearing down statues
of Lenin, and outside Ukraine it’s best known (if it’s known at all) for the
Red Army tanks it used to make.

But on a sunny April afternoon, Ewald Walgenbach, a member of the executive
board of Germany’s Bertelsmann, smiles as he watches a battered steam shovel
ladle bricks onto a dump truck at a dilapidated factory that’s being
converted into a distribution center for the company’s Family Leisure book

Above the din, Oleg Shpilman, CEO of the Ukrainian unit, shouts that the
new facility will be able to ship 20 million books a year. “What will happen
next year when you have 21 million?” Walgenbach replies with a laugh.

Optimism about the printed word is pretty rare these days. In
fast-modernizing Ukraine, though, Bertelsmann is enjoying dot-com-like
expansion for its book club, a category that’s a slow- or no-growth
proposition in the U.S. and Western Europe.

Family Leisure moved 12 million books last year-everything from cookbooks
to local potboilers to Stephen King thrillers-while sales grew 55%, to $50

Today, Bertelsmann is Ukraine’s biggest bookseller, with 12% of the market.
And the operation enjoys profit margins that are triple the 4% global
average for similar Bertelsmann units, which include the Book-of-the-Month
Club and Literary Guild in the U.S.

Ukraine is the most spectacular example of Bertelsmann’s success with book
clubs in the former Soviet bloc. And it’s proving that with the right mix of
marketing and merchandise, there’s money to be made even with low-cost

The region has well-educated populations hungry for a good read but
relatively few bookstores where they can indulge their passion. As a result,
Bertelsmann has also become the biggest book publisher in the Czech
Republic and has scored big successes in Poland, Russia, and elsewhere.

The book clubs are part of a broader trend of booming print media in the
developing world. In India, newspapers are thriving, with Mumbai alone
boasting a half-dozen major dailies. Swiss magazine giant Ringier saw 18%
sales growth last year from its lifestyle publications in Vietnam.

In Argentina, the number of books published has more than doubled since
2002. And emerging markets are also proving lucrative for another
Bertelsmann unit, Gruner + Jahr, which is the second-largest magazine
publisher in China via a joint venture.
                                 TEXTING THE ORDERS
Bertelsmann’s allegiance to Old Media in newer markets is paying off in
other ways. In the U.S., its book clubs tend to serve older customers. By
contrast, nearly half the Family Leisure Club’s 2 million members (in a
nation of 47 million) are under 30.

The secret: The Bertelsmann club recruits hot young Ukrainian authors

and serves as their exclusive distributor, a smart strategy in a country with
only about 300 bookstores.

“They’re very effective, much more than other publishers,” says Ljubko
Deresch, an intense 23-year-old who has published five novels-the latest
with Bertelsmann-dealing with youthful disenchantment and pop culture.

Keeping prices low is crucial. The average Ukrainian makes less than $8,000
per year, and in Kharkiv, Bertelsmann’s main competition is an open-air book
market. Dozens of merchants in corrugated metal stalls sell everything from
textbooks to science fiction.

Family Leisure titles typically go for under $5, competitive with the
outdoor market. Then to keep costs down, the club delivers shipments to
post offices, where customers claim their books.

No doubt Bertelsmann would like to bottle its Ukraine formula for export to
other countries. Although few offer such a favorable mix of book-hungry
citizens, cooperative postal authorities, and energetic local management,
some innovations from Ukraine can travel.

Customers there, for instance, are world leaders in ordering via
mobile-phone text messages, a promising e-commerce strategy in poorer
countries where few can afford Internet access. Says Shpilman: “Our goal is
not to be a book club, but an integrated bookseller.”                -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
7.                         ASSERTING DIGNITY
          “We live, work, raise children and educate them to give them a
                     means of achieving success and asserting dignity.”

ANALYSIS & COMMENTARY: By Volodymyr Senchenko
The Ukrainian Observer #231, The Willard Group, Kyiv, Ukraine, May 2007

Ukrainian citizens have been quite worried lately about slow changes in the
country’s education. It should be noted that it was the least affected
sector after the Soviet Union’s political and economic downfall in 1991.

All other spheres of our life underwent drastic and often destructive
transformations, economic, cultural and social. There were crises in
Ukraine’s cinematography and book publishing. Lots of pioneer camps,
children’s centers and extra-curricular courses were closed.

Nevertheless, these industries began to revive a few years ago, this time in
line with market principles and bolstered by private capital. We can watch
our first Ukrainian films created by Ukrainian directors and producers in
wonderfully-furnished and equipped movie theatres.

More and more Ukrainian books are published every year. Lots of children’s
sanatoriums, camps and kindergartens have been opened in the past several
years. Our people are obviously living better, even though this progress is
not as fast as we would prefer it to be.

The educational system has been quite stable in those chaotic years of
transformation. It too survived quite a few blows, like poor financing. In
the mid-1990s, an average school teacher earned only 30-35 US dollars per

Their colleagues from higher education establishments in Kyiv, Kharkiv,

Lviv and other big cities were luckier because they could lecture in several
schools at a time. School and college teachers had no such opportunity,
partly because the number of schools and colleges was decreasing.

The system was saved by a decision to allow universities and institutes to
charge money for their services, as well as by the unbelievable desire of
our citizens to gain knowledge and get a university degree.

It was truly surprising to see thousands of young people enter private
universities every year, when the country was being plagued by economic
stagnation, unemployment (up to 10 million people) and colossal inflation
(11,000 %).

The apparently doomed and hopeless nation made it its priority to study,
even though many educated professionals went to seek their fortune abroad,
beyond the just lifted iron curtain.

Hundreds and thousands of scientists and artists saw that no one appreciated
their qualifications in Europe. They worked part-time, often doing the
dirtiest and most unpleasant jobs. Their diplomas and degrees rarely
affected their salary.

Those millions of people realized that their education was not needed. It
would have been pragmatic to think there is no necessity to spend money on

However, the logic of Ukraine’s labor migrants was opposite. They asphalted
roads and gathered crops in Europe . and sent money home to educate their

The number of higher education establishments in Ukraine has doubled in the
past several years. There are 232 universities in the country today, both
state and commercial. The number of students has also been growing steadily.
There are now 2.7 million students, one of the highest figures in Europe.

Almost one million pay for their education, investing in the sector as much
as the government does. Ukraine’s professional educators stimulated this
explosive boom. The West refused to invite them, luring only our scientists.

However, it does not help answer what made Ukrainians want to get higher
education in that challenging period of transformation. What made them see
higher education, which seemed to have no value at all, particularly to
western employers, as their paramount objective?

No special research was carried out to find out why it was so. However, as a
professional pedagogue who often communicates with students, their parents
and those wishing to have one more diploma, I can express my own opinion.

I asked them many times what made them seek education when there

was no obvious demand for it. Traditionally, I heard two answers.

[1] First, all those who worked in European countries and met specialists
there realized that our education was not worse than that in the West. They
all told me they had seen no difference between the qualifications of
specialists in Europe and Ukraine.

This sense of professional and educational equality made our people
confident that sooner or later their knowledge would be in popular demand

in the modern world.

To be frank, European employers ignored the educational level of our fellow
citizens not deliberately but because they hired them for part-time jobs.

Those employers had no idea that their Ukrainian employees had diplomas and
had worked successfully in science, which was as developed in the Soviet
Union as in the rest of the world. The only real barrier, which, however,
could be quite easily overcome, was language.

Recently, their forecasts have become reality. Russia, for example, offers
our specialists excellent working conditions and social benefits. Germany
welcomes eagerly our IT professionals. Some schools and colleges in Ukraine
have signed agreements with firms in Portugal to prepare specialists for

Many European companies open their offices in Ukraine, particularly to test
their innovations and devices. And this is only the beginning!

Europe is slowly but surely overcoming its biased attitude to the competence
of our specialists, which helps Ukrainians feel as equals in Europe. Their
experience, education and professionalism are valued.

[2] The second reason why Ukrainians seek higher education lies in their
mentality and innate desire to gain knowledge. It has always been
prestigious to be educated in our society, particularly for unmarried women,
whose education was their dowry.

In Ukraine, there has always been a link between education and social
status. By the way, a person with an academic degree automatically became a
member of the country’s nobility.

It is quite probable that our society began to appreciate the importance of
education during the rule of Grand Prince Yaroslav the Wise, who founded

the first school in St. Sophia’s Cathedral to teach chroniclers and book
copiers, who were highly esteemed.

This respect for educated people explains why there were so many literate
Ukrainians between the 15th and 18th centuries, when the Cossacks were
ruling the country. There are lots of accounts by those visiting Ukraine

Here is what one of them, Pavlo Alepsky, wrote when crossing Ukraine on his
way to Moscow in 1653: “In that Cossack land, we witnessed a miraculous and
great fact: they all, particularly women and their daughters, with very few
exceptions, are literate and know how to stage church services and sing
religious hymns. Priests teach orphans and do not allow them to roam the
streets without studying.”

The traveler did not know there were lots of schools and teachers in Ukraine
and that there was no connection and interdependence between our social
hierarchy and the right to study. Russia imposed social divisions in
education in Ukraine only in the 18th century.

In 1737, in the Kyiv Mohyla Academy, there were children of military
leaders, municipal officials, merchants, Cossacks, craftsmen and even
peasants. Education did not depend on people’s social status and helped
promote equality. This must have made average people and peasants wish to
seek education.

By the way, the Russian government used education and language as their
weapons, contributing to social inequality.  It closed high schools, then
fraternal schools, and imposed Russian in religious schools, where students
could not understand it. Its prohibition on the writing and publishing of
Ukrainian books was valid until the revolution of 1917.

However, there is still no peace in Ukraine because of the Ukrainian
language. Pro-Moscow forces demand that Russian be granted an official

Recently, one of such politicians stated that the Ukrainian language was a
language of folklore, not science. However, Ukrainians prefer to learn their
own language and to use it in their studies at or European universities.

So getting higher education is not only the means of having a better job or
earning a competitive salary but also a moral factor helping achieve high
social status. It strengthens our self-esteem and dignity.

A friend of mine went on a car trip across Western Europe and Great Britain
in the first year of Ukraine’s independence. When I asked him to compare
what he had seen there with our reality, he replied: “Our tanks will never
appear on the shores of the English Channel. It is senseless to conquer or
ruin them. It is vital to find ways how to coexist with them. Intelligent
people would do this.”

So Ukrainians chose education as a passport to Europe. Education is a
universal key to success in any community. There is no surprise Ukrainians
monitor closely and react emotionally to all plans by the Education

They want education to be improved but not reformed, seeing reforms as a
ruination of what has been known as one of the world’s best systems. All
political forces and social classes demand that the Education Ministry
ensure that education is of the highest quality.

Thus we believed it was a formality and waste of time to introduce a new
12-point grading system. Ukrainian society refused to understand this
change, as well as plans by the ministry and certain political forces to
merge smaller universities to reduce their number. Students staged rallies
and marched to the capital to protest against those steps.

However, Ukrainians supported and approved plans to reduce the number

of ineffective and merely virtual affiliates of universities, providing low
quality services. They welcomed ideas to introduce computer testing,
computerize schools throughout the country and retrain Ukrainian teachers

This would be an exaggeration to think that Ukrainians are only thinking
about politics. We live, work, raise children and educate them to give them
a means of achieving success and asserting dignity.

Most of us cannot afford to support our offspring financially but we can
give them a fishing line to fish for success and happiness.       -30-

AUR FOOTNOTE: Dr. Volodymyr Senchenko, Ph.D., Economics, is
highly qualified in economic and social planning and first distinguished
himself since Ukrainian independence working with the Ukraine market
reform public education program sponsored by the U.S. Agency for
International Development.
He was involved in developing long-range strategies to educate the
Ukrainian public about the goals and pace of mass privatization in the

He lectured throughout Ukraine shaping public opinion in favor of
privatization and market reform, and created special educational

materials to promote mass privatization in the Eastern Ukraine.

Dr. Senchenko had also participated in implementing social programs
pertaining to mine closures in major industrial centers of the Donetsk
region under a contract with The World Bank.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
    NOTE: Send in a letter-to-the-editor today. Let us hear from you.
          List of 18 Includes Andriy Shevchenko – Ukraine Member of Parliament

Yale University, New Haven, Connecticut

M2 Presswire, United Kingdom, Friday, May 04, 2007

New Haven, Conn. — Yale University President Richard C. Levin announced
Wednesday the selection of the 2007 Yale World Fellows.

The Yale World Fellows Program–the only program of its kind among top-tier
American universities–aims to build a global network of emerging leaders
and to broaden international understanding.

The Program conducts a worldwide competition each year to select 18 highly
accomplished men and women from diverse fields and countries for a
four-month leadership program at Yale.

“I am very pleased to introduce this extraordinary group of men and women to
the Yale community,” said Levin. “The World Fellows Program attracts
outstanding talent, and Yale will benefit greatly from the Fellows’ presence
on campus.”

Selected from outside the U.S. at an early mid-career point, World Fellows
come from a range of fields, including government, business, media,
non-governmental organizations, the military, religion and the arts.
This year’s World Fellows include the premier television news broadcaster in
China, a policy adviser to Russian President Vladimir Putin, the Chief
Operating Officer of the BBC’s New Media unit, members of parliament from
Singapore and Ukraine [Andriy Shevchenko] and one of Southeast Asia’s most
critically acclaimed dramatists. 

“The 2007 Yale World Fellows not only have remarkable records of
leadership,” said Yale World Fellows Program Director Daniel C. Esty, the
Hillhouse Professor of Environmental Law and Policy at Yale, “but they
promise to achieve even more in the future. It is exciting that they will be
joining a growing network of global leaders trained at Yale.”

The just-named 18 World Fellows were selected from a pool of 970 applicants
from around the world. Four represent countries new to the Program’s
network. Since its inception in 2002, 107 World Fellows from 66 different
countries have been accepted into the Program.

“This is a tremendous opportunity,” said Nicolas Ducote, a 2007 World Fellow
who founded the leading public policy think tank in Argentina. “I am looking
forward to learning as much as I can in order to be a more effective leader
at home, and to sharing my experiences with my Program colleagues and the
Yale community.”

From August to December, the 2007 World Fellows will engage in a specially
designed seminar taught by some of Yale’s most eminent faculty; take any of
the 3,000 courses offered at the University; participate in weekly dinners
with distinguished guest speakers; receive individualized skill-building
training; and meet with U.S. and foreign leaders.

Past World Fellows have met with Kofi Annan, Mark Malloch Brown, John
Negroponte, Jeffrey Sachs, Ruth Bader Ginsburg and Tom Friedman, among

The Program covers all of the World Fellows’ expenses–tuition fees,
housing, travel and health care–and grants them a $30,000 living stipend.
In addition, all World Fellows, both past and present, are invited to a
biennial Return to Yale Forum where past and current Fellows meet and

build a global network of world leaders as well as renew their ties to Yale.

The next Forum will take place October 24-27, 2007 at Yale.

The Yale World Fellows Program has at its core three main goals: to provide
advanced global leadership training to emerging leaders from a diverse set
of fields and countries, to link these world leaders to each other and to
Yale in a tangible way, and to facilitate the internationalization of the

Nominations to the 2008 Yale World Fellows Program will be accepted

online starting May 1, 2007 online.                     -30-
  2007 Yale World Fellow – Andriy Shevchenko
Andriy Shevchenko – Ukraine Member of Parliament, Age 30, As Chairman
of the Free Speech Committee in parliament, Shevchenko is working to create
a system of public broadcasting in Ukraine. A seasoned television journalist,
he helped establish the first 24-hour television station and became the
“face” of the 2004 Orange Revolution for television viewers.
————————————————————————————————- on the world wide web. Inquiries to
FOOTNOTE:  Our congratulations to Andriy Shevchenko for this
excellent honor for himself and for Ukraine.  AUR EDITOR
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
9.                      A HARD-PRESSED TRADE
                 Consider, for example, one of my heroes, Natalia Dmytruk
COMMENTARY: By Chrystia Freeland
Financial Times, London, UK, Saturday, May 5 2007

A few weeks ago, I listened to one of Vladimir Putin’s advisers complaining
that many of his country’s journalists “were far from being of very
highquality”. He added, in an aside meant to flatter his western listeners,
that “your journalists are probably more honest than ours”.

His comments struck me as a clear attack on the very idea of a free press.
But to my astonishment, a couple of the billionaire American businessmen in
attendance murmured sympathetically that, in fact, many western journalists
were little better than the low-quality Russian variety.

I shouldn’t have been surprised. After all, Barbara Amiel, recently caught
in an elevator with a couple of reporters in the Chicago courthouse where
her husband Conrad Black is on trial, snarlingly described them as “vermin”.

Part of the problem, as a Wall Street banker admitted to me, is that many
people aren’t satisfied with the “fair” coverage that is our ostensible
collective goal.

What he actually wanted, he had the candor to confess, is “good” coverage –
which is quite a different thing. It is also often true that, as my high
school English teacher informed us when teaching Macbeth: “Evil always
fascinates, but goodness rarely entertains.”

In the late 1990s, Mikhail Berger, a Russian editor and friend who was
struggling with that decade’s challenge of finding a space to operate
between the oligarchs and the state, made a similar point. Newspapers, he
told me, were essentially “factories of dirt”.

He meant it in a good way. Indeed, many of the precious moments when
journalism rises from being a job and a service to being a calling and a
civic good involve this risky kind of reporting.

Consider, for example, one of my heroes, Natalia Dmytruk, the sign language
interpreter who broke state censorship of the main TV channels in Ukraine
when she abruptly deviated from the official script and, in sign language,
said that everything the government was saying about the Orange Revolution
was a lie.

That kind of journalism takes great courage: had events turned out
differently, she risked not just her job, but her life. She had one luxury
though – the ethics of her action were clear.

In free societies, things aren’t always so black and white. The privacy
debate in Britain, made more salient by the tragic fall of Lord Browne, is
one example. Another is the rise of hard-hitting celebrity journalism in the

As a display of the reporter’s craft, it is clearly superior to the
sycophantic coverage it is outselling on the news-stand. But does it
provide the social benefits associated with a free press?

The waters have been further muddied by rising income inequality. In
post-Watergate America, reporters came to occupy a privileged place in
society. Even as we prided ourselves on our mission of afflicting the
comfortable, we were offered a seat at their table.

David Brooks described this social position as one of status-income
disequilibrium. Reporters earned less than many of their professional
subjects and peers, but they enjoyed a higher profile and prestige.

Recently though, with the soaring rewards going to the best and brightest in
the financial services, the disparity has increased. As columnist Daniel
Gross pointed out on Slate, “the economics of the business” have made
journalists downwardly mobile. Gross didn’t want sympathy: “We New
York-area journalists shouldn’t ask for pity and we don’t deserve it.”

He did contend, however, that reporters’ changing status might affect their
work, pointing in particular to the “nose-pressed-to-the-glass quality” of
much of the coverage of the super-rewards of the new economic order.

This shift hasn’t escaped the plutocrats themselves: fund manager Larry Fink
recently told the FT that part of the reason executive pay is under fire is
that “a lot of people in the media make a lot less money”.

Reporters aren’t the only educated Americans fretting that they may slip
down the social totem pole. Princeton economist Alan Blinder has identified
some of the professions we once thought were guarantees of the good life –
including mathematics, financial analysis, even economics – as potentially

As he pointed out in an interview with the Wall Street Journal: “This is
something factory workers have understood for a generation it’s now coming
down on the heads of highly educated, politically vocal people and they’re
not going to take it.”

It is a truism that an economic slowdown becomes a recession only when
someone a reporter knows gets laid off. In this moment of unprecedented
prosperity, the dynamics are more subtle. In a further twist, many of the
barons of our new gilded age have taken a fancy to newspapers.

Hank Greenberg, Jack Welch, David Geffen, Ron Burkle and Eli Broad have all
said they would like to own one. Sam Zell already does. And Rupert Murdoch
this week made a “big, generous” bid to extend his reach into one of
American journalism’s holiest of holies, the Wall Street Journal.

Particularly when you work in an undervalued sector, there is something
flattering about being wooed by a billionaire. Let’s just hope that the
growing class divide between journalists and these new moguls doesn’t end in
the sort of antipathy the wife of an earlier businessman-turned-media-magnate

expressed so clearly in that Chicago courthouse.                  -30-
Chrystia Freeland is the FT’s US managing
More columns at
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

The Ukrainian Times, Kyiv, Ukraine, Monday, May 7, 2007

At present, there are only four specialized plants in the world that have
up-to-date technologies of manufacturing insulin preparations within a
closed cycle. The Kiev-based joint stock company Indar
( is one of them.

According to Aleksei Lazarev, Doctor of Biological Sciences and Indar
Director, this young enterprise is the keystone of Ukraine’s insulin
sovereignty and the state program “Diabetes Mellitus”, with which the life
and health of two million Ukrainian diabetics is connected.

“This unique pharmaceutical site – in actual fact, the whole sector of
national security and defense can be sold now like a trivial store,” he

The plant Indar has been entered in the list of enterprises subject to
privatization. Both experts and the Ukrainian public at large were shocked
at the news.
Mr. Lazarev pointed out that preparations for the entry of Indar in the list
were made in the strictest secrecy without compulsory consultations with
the Ministry of Public Health.

Moreover, this was done without necessary conclusions of experts of
specialized institutes, without comprehensive consideration of the vital
problem by a competent parliamentary committee and the National Security
and Defense Council, even without the feasibility study and analysis of
issues affecting the supply of vital medicines to a great number of people.

“Frankly, I can’t imagine fighting against diabetes mellitus with the help
of privatization of Ukrainian insulin sovereignty,” noted Aleksei Lazarev,
citing several indisputable facts.

[1] Firstly, the problem of diabetes affects the life and health of millions
of Ukrainians.

[2] Secondly, according to experts’ estimates, the effective fight against
this disease requires about two billion hryvnias per year at the expense of
each patient and budgets at all levels.

[3] Thirdly, today the government allocates 174 million hrn for the fight
against diabetes mellitus. Given that the funds have been exclusively
channeled into the centralized purchase of insulin in recent years,
guaranteed aid was provided to only 140,000 people.

At the same time, 1.1 million officially registered diabetics and at least
one million Ukrainians who do not even know they have diabetes received

“It turns out that we have been practicing self-deception all the time,”
thinks Mr. Lazarev. “Any privatization without mentioning the shady one
will never resolve the headache problem in the public health system.”

It was absolute insulin sovereignty exercised by the state-owned enterprise
Indar that enabled Ukrainian people to cope with unheard-of insulin famine
in 1991-2000.

The disaster was prevented on a country scale after Ukraine had set about
implementing the large-scale state program “Diabetes Mellitus” with

As Aleksei Lazarev put it, it was the Ukrainian state that established the
efficient system of centralized supplying of insulin preparations to
patients and provided for its financing at the expense of the national
budget as well as built the insulin plant, into which the government pumped
not only a loan of about 100 million deutsche marks but also heavy
intellectual and technical investments.

Indar fully satisfied the needs of the country for insulins in one year
after its commissioning. Today this unique enterprise produces 28 insulin
preparations within closed cycle and ensures the high quality of drugs that
allows physicians to use any treatment regimen.

“The level of purification of our insulins is 6-10 times higher than the
permissive standard set by European and American pharmacopeias,” said
the director of the unique Ukrainian enterprise that received the
certificate GMP (Good Manufacturing Practice) of production of 28 insulin

preparations with the full technological cycle.

The government has effectuated unprecedented monitoring of the efficacy
of insulin preparations, involving more than 80,000 diabetics from all
Ukrainian regions. Results of the monitoring that has been lasting nine
years are in keeping with the best world practice.

Ukraine develops production of insulin. In particular, Indar has organized
technology-intensive production of genetically engineered insulin crystals.
In the meantime the enterprise is reducing prices of its medicinal

According to Mr. Lazarev, Ukraine saved over 15 million hryvnias for the
budget last year alone, thanks to the difference between prices of Indar’s
and foreign-made insulins. Over the course of six years the insulin project
has enabled saving in the amount of 120 million hrn.

Ukraine is entering the world insulin services market. Currently, the
Ukrainian drugs are being registered in 17 countries.

Indar takes care of the dissemination of scientific information about its
medicinal preparations and is constantly providing a considerable amount
of humanitarian aid.

Aleksei Lazarev pointed out that in recent years Indar had gratuitously
supplied regions with insulins and special equipment worth more than seven
million hrn.

He is sure that presently, it is necessary to strengthen Ukraine’s insulin
sovereignty and introduce state order into use of budget allocations.
“Elaboration and the implementation of national programs in the sphere of
protection of the people’s health should be aimed at assistance to our
citizens only, not foreign companies,” stressed the Indar director.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

11.                         COPYRIGHT ATTACKS

By Lesya Potapenko, for EP (in Ukrainian)
Ukrayinska Pravda, Translated by Eugene Ivantsov
Kyiv, Ukraine, April 25, 2007 and May 4, 2007

“I offered the company management to change OS Windows into Linux.
Lots of software works under Linux, but this OS is free,” says an IT
department employee of one of the largest supermarkets in Kherson.

He has serious reasons to be worried. In the near future, legal
representatives of Microsoft may come with an inspection and if they find
‘pirated’ Windows a criminal case and numerous fines are inevitable.

Lots of midsized companies plan to switch to Open Source (free software
available for download on the Internet).

In addition this software is becoming more popular due to support of
investors who consider it a promising developing market. In 2005, $400
million has been invested in free software. The volume of this market
reached $16.4 billion.

Licensed Microsoft software is too expensive for small companies. An
installed licensed OS Windows will cost UAH 340-830 depending on the

It is dangerous to install software pirated also because of trials with
software companies.

In October of the last year legal representative of Microsoft in Ukraine
reinforced their inspections of using licensed software in the regions. Now
western and northern regions are being inspected. Such raids will reach
southern regions of the country by the end of the year.

According to legal representative of Microsoft in Ukraine Vladyslav
Shapoval, in 2006 Microsoft inspected about 150 companies and private
entrepreneurs that sell and use Microsoft official software.

82 companies appeared to used ‘pirated’ software, so 82 criminal cases were
initiated. For the first quarter of 2007, 89 inspections have been carried
out, as a result of which 59 cases are being tried in courts at the moment.
                             LICENSE TO CATCH PIRATES
Last year it became possible to start a large-scale campaign of inspecting
legality of software. In February the Verkhovna Rada adopted amendments
to the Criminal Code and now ‘piracy’ may end up in a 3-6 year imprisonment
(it was up to a two-year imprisonment before) or a fine which ran up to UAH
51 thousand (about $10 thousand)

Besides, now the company may sue any private entrepreneur who caused
software company damages of minimum UAH 4.2 thousand (previously, this
sum was ten times smaller).

Microsoft Ukraine took advantage of such possibilities. As known, this
company suffers considerable losses, as about 80% of its software sold in
Ukraine is unlicensed.

“Purchase of this software seems like a good bargain but using such software
is risky as you may lose important data any minute, and your information is
always insecure,” says compliance manager of Microsoft Ukraine Yevhen

Legal representatives of the company established contacts with the police
that agreed to collaborate on this issue, launching raids in the regions.
Cyber-cafes, producers and sellers of computers were the first target of
such raids.

‘Secret customer’ is the most popular form of inspection. Police officers,
playing a ‘client’ role buy 2 computers from the store (according to
legislation, usage of unlicensed software can be proved when installed and
activated at least on two computers).

If software appears ‘pirated’, preliminary losses are estimated and the
software company takes legal procedures.

“All visit of such ‘customers’ have been successful (of course for the
software company),” said Director General of IT-Consulting Company
Oleksandr Bernatovcyh.

Normally two computers is enough to cause software developer loss of minimum
UAH 4.2 thousand. According to one of private entrepreneurs, once he got
caught by such ‘customers’. As a result, he suffered losses of UAH 10
thousand, including all fines.

At that, it is not so easy to pay fines: legal representatives of Microsoft
will determine the fine only in July and the case will be tried at least
till autumn, besides, no one is sure about the verdict.

In fact, a violator may keep running his business. Such raids are just
another deterrence. Besides, often it is possible to avoid trial and settle
the problem with the police. Businessmen say the average bribe reaches $700.
                                              PART II
If a big firm can afford a bribe of $500-700, it is too much for small cyber
cafes. There are about 3 thousand small cyber cafes now in Ukraine.
Normally, a monthly income of a cyber café with 20-25 PCs does not exceed

Thus, they can afford neither fines nor bribes. Many cyber cafes have
switched to alternative software long ago.

“Our association, consisting of 20-25% of all cyber cafes in Ukraine,
refused to install unlicensed Microsoft software two or three years ago. Why
install software which may cause a criminal case? There is good software
which completely suits customers. It is free software,” says Head of
All-Ukrainian Associations of cyber cafes Mr. Bernatovych.

To install a licensed Windows OS in a cyber café, one needs to spend UAH
340 for each PC. For this reason, and because of excessive sanitary and fire
requirements, Aventures Group Holding refused to build a network of cyber
cafes “Sector” last year. Moreover, it closed its only one cyber café in

“Observing the legislation, we will turn bankrupts” said President of the
holding Volodymyr Kolodyuk. According to Mr. Bernatovych, sanitary
requirements to internet cafes are higher than for instance in GB.

An area for one PC must be 6 square meters, while the same figure is two
times less in GB. Very few cyber cafes stick to these norms. That’s why
sanitary service often gets bribes.

Now, the police does not pressure cyber cafes so much as it did in
2002-2004, when computer clubs were closing on a mass scale (out of 300
only 70 cyber cafes remained). But now the number of internet cafes is still

“This time it is not the police. It happens because of mass computerization
of the country. Local networks are rapidly developing. Local networks are
also called ‘killers of cyber cafes’. Such networks are absolutely illegal,”
says Mr. Bernatovych.

“For instance, only in Kharkiv there are tens of local networks, consisting
of 40-50 thousand computers. They all use pirated software. Moreover, 99%
of the content is illegal! There are numerous pirate sites hosted by private
Internet Service Providers,” he adds.

Microsoft Ukraine is also concerned by this fact, but the company cannot
control local ‘pirates’.
                                EDUCATIONAL EFFECT
Large companies, selling and producing computers, are main targets of
Microsoft’s raids.

“60% of the most famous firms have got caught. Almost all big stores,
selling computers, sell pirated software. A customer may be even unaware
that he has been sold unlicensed software together with the computer. It
happens very often,” says Mr. Bernatovych. As a result, a customer turns
out a pirate and has to bear responsibility.

Mr. Shapoval admits that Microsoft’s inspections were merely educative
measures. “It is enough to institute criminal proceedings against one
‘pirate’ to make another ten companies understand it is better to use
licensed software,” he says.

For this reason, the company purposely draws attention to a certain criminal
case, where the fine is relatively small but the company is famous.

“Microsoft does not earn money this way. Their aim is to convince customers
to buy licensed software,” Mr. Shapoval explains strategy of Microsoft.
That’s why Microsoft never calculates total losses stated in criminal cases.

By the way, no company has been punished yet, because not a single case

has been finished so far. “Hearings normally take 6 months or even a year. I
think that fist court decisions will be delivered in May. Also in May,
companies will have to pay fines,” added Mr. Shapoval.

However, a number of pirates remain unpunished, as they are unreachable for
Microsoft. These are both private and state organizations that cannot be
inspected without special permits. “They are using 95% of pirated software
but it is impossible to check it up and prove it,” says Mr. Bernatovych.

Microsoft Ukraine admits that 80% of software used in Ukraine is unlicensed.
If in 2005 the rate of pirated soft usage decreased by 6%, losses of the
national IT-industry caused by usage of illegal software keep growing,
having amounted $239 million ($200 million in 2004).

“It is money Ukraine’s IT-industry lost because of unlicensed software
usage,” says regional manager of IDC Company Volodymyr Pozdnyakov.
IDC assesses all Ukrainian software market in $1 billion.

Excessive spreading of pirated soft negatively affects formation of a
national software market. It is unprofitable to develop own software (which
will be immediately ‘cracked’ and illegally spread) if you can buy a cheap
pirated version.

That is why Ukrainian IT-specialists prefer to order software. The situation
is not likely to change until ‘piracy’ remains unpunished in Ukraine.  -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

If you are receiving more than one copy of the AUR please contact us.
12.                   CARPATHIAN ADVENTURES
     Are you brave enough to take a trip into the unknown and invest in Ukraine?

Kasia Maciejowska, The Times, London, United Kingdom, Fri, May 4, 2007

A GOOD deal of hyperbole is used in Ukraine: “This palace is the most
beautiful in Europe”; “Ukraine’s economy is growing faster than China’s”;
“The population of Kiev is now incredibly wealthy”.

These part-truths were among the comments made in our minibus as it bumped
over potholed roads through villages south of Lviv, near the Polish border.

Our destination? A ski resort of the future. The tendency toward
misinformation is one inherited from the Soviet system and is something of a
hindrance when trying to discern whether there is money to be made in such a
scheme. There is, but it’s not a sure bet.

Hanroc, a British developer responsible for Eagle Rock and Lakeland Golf
Village in Bulgaria, is planning an apartment complex for skiers, called
Eagle Valley, in the rural town of Slavs’ke in the foothills of the

The success of the scheme is reliant on the political situation continuing
to improve. With Ukraine still a fledgeling democracy, the possibility of a
change in government is ever present. For those brave enough, the pay-off
for the risk may be high returns.

Yields of 15 per cent, as predicted for Eagle Valley by Hanroc, are unlikely
to be achieved in established markets on a relatively small initial
investment. The smallest investment option at Eagle Valley is £25,000 for a
studio flat, with a small reservation fee, later deducted from a 30 per cent
initial instalment.

The remaining 70 per cent can be paid on completion, scheduled for July
2009. The scheme is for cash investors only.

With development lagging 20 years behind neighbouring Poland, the country’s
crippled postSoviet economy is evolving in a rushed fashion; corruption
remains a problem.

Hanroc hopes that Eagle Valley will be the first of many developments, which
might spoil the view from the balconies (every apartment has one), but would
launch the town as a resort and a leading Ukrainian skiing location.

The pistes in the Carpathian Mountains leave something to be desired
compared with Western Europe. Local bureaucrats are keen to emphasise that
development is only beginning, with many ski lifts still being built and two
gondolas in the pipeline.

For now the town exists in a time warp. The little local houses are painted
lilac, sky blue and pea green; many have corrugated-iron roofs. Holiday
accommodation has been in traditional guesthouses, which lack many of the
facilities that tourists might expect.

The first restaurants and shopping facilities will be provided on the ground
floor of the Eagle Valley building (along with spa, gym, pool and sun
terrace). It is designed to appeal to the national, not international,
holidaymaker and this limited rental market relies wholly on the national
economy’s increasing buoyancy.

While much of Ukraine remains poor, a minute proportion is enjoying
new-found wealth, made in industries reclaimed from Russia, such as steel
manufacturing. Eagle Valley targets an emerging middle class that earns a
moderate amount working in professional sectors, of which IT is the

They can afford to take holidays, but not to stump up for a visa,
international flights and Alpine living costs. They are already going on
holiday in Slavs’ke, but many have to stay out of town because guesthouse
places are hard to come by, with the best booked up two years in advance.

With demand for more and better accommodation, the four-star Eagle Valley
would be the best place to stay in the area and the only apartments option.

It could be feasible to rent out the property in winter and summer. The
Carpathian ski season is November to March, and summer holidays cover June,
July and August. High season is December to February, during which the local
population reportedly rises from 4,000 to 50,000.

The developer claims that a £25,000 studio, if rented out year-round, would
refund the initial investment in only four years. There would also be a
significant amount of capital appreciation over that time.

Whether or not year-round rentals are realistic is questionable, but the
region does have a number of advantages. Such areas of hilly beauty are
scarce in Ukraine and the fabulous architecture of Lviv is two hours’ drive

If all goes to Hanroc’s plan, it will work wonders for unemployment in
Slavs’ke. The five-bedroom penthouses on offer at £150,000 indicate the

anticipation of relatively big money – much needed in a country still finding
its feet.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
         Send in a letter-to-the-editor today. Let us hear from you.

Svetlana Sytina, The Ukrainian Times, Kyiv, Ukraine, Monday, May 7, 2007

KYIV – “We need between $15 billion and $25 billion to build roads and
improve their condition so that Ukraine could host the 2012 European
Football Championship,” stated Nikolai Rudkovsky, minister of transportation
and communications.

According to him, the funds can be obtained from investors if a law on road
building on terms of a concession is passed. In particular, the concession
is to be extended to a Kiev ringway and the expressway Lviv-Luhansk, the
latter costing some $7.5 billion.

Frontier territories will be maximally loaded during the championship
because the greater part of foreign football fans are expected to come by
their own cars. That is why top priority must be given to mending of
roadways in western Ukraine.

“Currently, the roadway Lviv-Brody is being renovated and the concession
expressway Krakovets-Brody designed,” said Mr. Rudkovsky.

By 2010 road infrastructure is supposed to be improved near the cities that
will host Euro 2012. The projected Ukrainian venues include Donetsk,
Dnipropetrovsk, Lviv and Kiev, with Kiev hosting the final.

Incidentally, readers of The Ukrainian Times know that the state roadway
service UkrAvtodor offers the following projects on terms of the concession:

[1] construction of the 735km southern transeuropean highway between the
village of Kosyny at the Ukraine’s western border and Kiev, the project
being valued at about $5 billion;
[2] construction of the new roadway Kosyny-Ivano-Frankivsk-Ternopil-
Vinnytsia-Dnipropetrovsk-Donetsk-Izvar of the transportation corridor
Europe-Asia.                                          -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

COMMENTARY: By Wolodymyr Derzko
Toronto, Ontario, Canada, Thursday, April 26, 2007

While visiting Lviv recently, most of my time was spent with family around
Easter celebrations. I couldn’t help but ask people about the current
political chaos. Most were ambivalent, too busy preparing for the holidays
and getting Easter baskets ready for church blessing.

Even the sensational news on Good Friday that Sergey Kivalov, the former
head of the Central Election Commission, who was accused of accosting a
court clerk and stealing a judge’s stamp, unfazed most people. “Those kind
of stunts happen all the time,” said one person, dismissing it as

Many voters are disillusioned by Yushchenko and never had any illusions
about Yanukovych. Opinion is split on Tymoshenko. Some are mistrustful,
thinking she’s unpredictable and too authoritarian. Others see her as a
modern Joan of Arc that can rid Ukraine’s government of corruption and

The political situation is changing daily, difficult for even seasoned
analysts to keep up, let alone predict, what will happen next.

The Constitutional Court seems deadlocked and all sides are saying that they
will not abide by the Court’s ultimate decision because of the biased nature
of the appointments and the well-publicized accusations of political
pressure and bribe-taking.

Some say the stalemate can be resolved through compromise, negotiation
and conciliation.  I do not think it will work. To begin, all sides need to
be willing to sit down and discuss trade offs. The Party of Regions does not
seem interested in fair discussions and, as history has shown, goes back
against their word.

The problem with conventional politics in a clash is that you only have
trade-offs and compromise as tactics. Invariably, one side wins and the
other looses – to plot political revenge.

Ukraine needs to design a way out of this situation –creating new political
concepts, as groundbreaking as the first constitution in the 16th Century.

One new concept that might be explored is that political leaders (presidents
or prime ministers) can serve only one four-year term. They would then
spend more time actually running the country, forgetting about re-election.

Another dire flaw is that voters now vote for a political party, represented
by a secret slate instead of a representative that is accountable to them in
parliament. Without such drastic changes, there is no guarantee that these
stalemates will not reappear again in the future.
              Three added surprises emerged in the last week.
[1] First,
Yulia Tymoshenko drew a line in the sand in the UK’s Daily
Telegraph on April 16. The Russian DUMA began meddling again in internal
Ukrainian affairs, passing a resolution that Ukrainian President
Yushchenko’s decree to dissolve parliament was unconstitutional.

In a story clearly aimed at Western consumption, Tymoshenko promised to
act swiftly to end Russia’s recent attempts to pull Ukraine back into its
sphere of influence.

“Our leaders have been too mentally dependent on Russia.We have behaved
like vassals from day one of our independence. I want friendly relations
with Russia but they must be to our mutual benefit.” To take on Russia, she
says she must take on the Party of the Regions and the oligarchs in the
eastern industrial heartland of Ukraine.

“The Party of Regions is a vast corporation that runs Ukraine as though it
were a limited company,” she said. “Yanukovich is not an independent
politician. He is a double marionette of Russian elites and clan managers.”

Evidence of this appeared in Ukraina Moloda on April 11 when the Party of
Regions was accused of embezzling $140 million for elections through the
Finance Ministry and Naftohaz Ukrayiny.

[2] The second surprise was Yanukovych’s statement in the same Daily
Telegraph on April 22 -“I support a pro-Western course, which means
building a democratic, wealthy and socially healthy society,” he said. “The
difference between my position and that of my opponents is that they are
trying to go Western as soon as possible.”

He supports “gradual integration” with the West. Even the journalist was
taken aback.. “Mr. Yanukovich speaks with a permanent frown . [in] a stark
building from the Stalin era, which made his conciliatory words about the
West – seem all the more surprising.”

Choosing his words carefully was also meant for Western consumption. A
test will be if this stance is highlighted in the Party of Regions’ election

[3] Surprise number three was the decision to award soccer’s 2012

European Championship to Ukraine and Poland which may do far more for
Ukrainian unity than what any politician can say or do. If done right, cities like
Lviv and Kyiv will get new jobs to build modern hotels, roads and airports.

What is so sad throughout this political theatre of the absurd it that the
average voter has been totally ignored. So, football and economics have
largely replaced politics in the past week – a short reprieve from the
ongoing political circus in Ukraine.
Wolodymyr Derzko is an Associate of CERES, Munk Centre, University
of Toronto and an expert on strategic thinking, planning and foresight.

P.S. Ukraine drastically needs to engineer/design a new supra-political
mechanism for resolving political conflicts, that is just as groundbreaking
as the first constitution was (this concept came out of Ukraine too).

I have some thoughts about creating /designing a new conflict solving
algorithm/mechanism  for Ukrainian politics that goes beyond the traditional
paradigms or styles of resolving conflicts and disputes (such as avoidance,
fight/compete, compromise/negotiate, accommodate/submission/compliance,
collaborate/problem-solve) to “design, or designing a way out of a standoff
situation by creating new political concepts/ paradigms.

It would require a radical new way of thinking for politicians, judges and

The only question left —Is Ukraine up to it?

“…….Without changing our patterns of thought, we will not be able to
solve the problems we created with our current pattern of thought.”
–A. Einstein

Your ideas are welcome.
W. Derzko (
[return to index] [Action Ukraine Report (AUR) Monitoring Service]


COMMENTARY: By Uffe Ellemann-Jensen
Foreign Minister of Denmark, 1982-1993
The Taipei Times, Friday, May 04, 2007, Page 9

Once again, Ukraine is in the eye of a political hurricane. Faced with a
possible constitutional coup that would have eviscerated his powers,
Ukrainian President Viktor Yushchenko has dissolved the parliament and
called for new elections.

His political opponent — Prime Minister Viktor Yanukovich — is violently
opposing that move, fueling a bitter constitutional struggle that ultimately
will settle Ukraine’s future orientation.

Will Ukraine continue its turn towards the West, as Yushchenko and Orange
Revolution ally Yuliya Tymoshenko want, or return to Russia’s strategic
embrace, as Yanukovich and his allies want?

It was Russia’s attempt, only two and a half years ago, to install
Yanukovich as President via rampant electoral fraud that touched off the
“Orange Revolution.”

After months of struggle, Yushchenko rightfully claimed the presidency. But
the revolution petered out, former partners were soon at loggerheads, giving
Yanukovich and his allies a chance to return to power.

                           THE EU HAS FAILED UKRAINE
Throughout this difficult period, the EU has failed Ukraine, bluntly
declaring that it should not hold any hope of future membership and
justifying this stance by citing its internal problems — the stranded
Constitutional Treaty — and growing public sentiment against further

But political leaders in the EU are merely succumbing to ill-informed fears.
Rather than informing their populations about the economic and political
benefits of the recent enlargements, most are playing on voters’
“enlargement fatigue.” 
This has denied Ukraine the lighthouse that helped guide other
post-communist states — most recently Bulgaria and Romania — toward
Western-style democracy and rule of law. As a result, there is now an
obvious risk of a new internal split in the country.

Even current EU members feel abandoned: There is a growing sense in Estonia,
Latvia, Lithuania, Poland and Hungary that the EU is allowing them to be
squeezed by Russia, particularly on energy policy.

Of course, EU membership gives these countries a greater sense of security.
But the EU’s old members have brought on an enormous sense of

disappointment by ignoring its new members’ security concerns in favor of
preserving their own ties with Russia, particularly in cutting energy deals that
they think will assure them of supplies.

Other post-Soviet countries are also experiencing internal pressure to
reorient themselves towards Russia and feel abandoned by the EU.

Georgia and Moldova both face secessionist-minded, Russian-dominated
enclaves that are to a large extent controlled from Moscow — Abkhasia and
South Ossetia in Georgia and Transnistria in Moldova. Both countries suffer
from Russian trade embargoes on their most important export products —
wines and foodstuffs.

Moldova appears set to cave in to Russia’s pressure, partly to attract
desperately needed inward investment at a time when little aid has come from
the West, particularly the EU.

Indeed, like Ukraine, Moldova and Georgia have been left without any clear
signals from the EU that they will have the prospect of membership at some
point in the future.

Russia is also flexing its muscles over the question of Kosovo’s future,
raising objections in the UN Security Council to the UN’s plan for
independence and openly supporting Serbia’s quest to maintain its supremacy
over Kosovo.

Russia argues that independence for Kosovo may “create a precedent” — a
veiled threat to mobilize its secessionist proxies not only in Georgia and
Moldova, but also in Ukraine’s Crimea region.

Moreover, Russia is hinting at the many worries within EU countries about
potential demands for self-rule, by, for example, the Basques in Spain, the
Turks in northern Cyprus, and the large Hungarian minorities in Romania and

All of these countries are now acting with great hesitation in the debate
about Kosovo, clearly influenced by Russian warnings about “setting a

But this argument overlooks the fundamental difference between Kosovo
and the situation in all other areas with large national minorities. Whereas
Kosovo was part of a federation, the former Republic of Yugoslavia, the
EU’s other potential trouble spots are all parts of unitary nation states.
Thus, independence for Kosovo in no way creates a “precedent.”

Of course, Russia knows this. But, by using its energy resources and
recovered confidence to fuel instability and discord, it is seeking to
expand its sphere of interest — an outcome that can be averted only by a
unanimous and determined EU response.

Unfortunately, instead of reaching out to endangered nations

like Ukraine, the EU beacon remains dark and its leaders silent.              
Uffe Ellemann-Jensen was foreign minister of Denmark from 1982 to
1993 and a member of its parliament from 1977 to 2001.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

OPINION & ANALYSIS: By Gennady Bordyugov
NIA Novosti, Moscow, Russia, Friday, May 4, 2007

MOSCOW – Sooner or later, the crisis in Ukraine will be overcome. But
standing behind the trivial election blocs, two or three party marches of
the confronting sides, and the inevitable question of the power structure
(upheavals have been programmed into the current one) is the Ukrainian
issue, the destiny of Ukraine as a state. A country may even be split if
some party goes for victory at whatever the cost.

The past century was a cradle for many national states although for the then
advocates of globalism or, to be more precise, global revolution this notion
was devoid of any sense.

History repeats itself in the 21st century even if someone believes that the
world is ruled by capital while some nations do not have independent banks.

The intelligentsia was the first to welcome the emergence of post-Soviet
national states and tried to become the national elite and distance itself
as much as possible from Russian (or formerly tsarist and Soviet) statehood.

But property ownership and social policy are the overriding issues for the
other strata that initially followed the elite. Nationalist attitudes run
counter to the interests of the majority.

If national parties are unable to resolve urgent issues, it is possible to
ask the West or Moscow for help and make a choice depending on the

terms offered and on condition that national feelings are not hurt. It is clear
that any infringement on interests fans up nationalistic attitudes and
provokes Ukraine-for-Ukrainians sentiments.

I believe that the main political issue in Ukraine is the choice of a
development model. Should it follow the West or choose its own road?

Russia and Belarus seem to have made their choices.

Choice of one’s own model is the main test for the new statehood.
Unequivocal orientation to the West or Russia is fraught with new conflicts
and may even lead to a split.

Unbiased historians know well that the act of 1654 was an alliance of two
independent partners. At worst, it was a limited-in-time Moscow protectorate
but by no means absorption of Ukraine by the Muscovite state.

Kiev has unequivocally accepted the (Russian) transitional government’s
recognition of the Ukrainian parliament that proclaimed Ukraine’s autonomy
on June 10, 1917.

The relevant decree (called the First Universal in Ukrainian) had references
to resolutions of the Hetmanate of the 17th century, which was viewed as

the Golden Age of Ukrainian statehood.

The current crisis has again reveled Ukraine’s classic division into the
West -(former Polish territories), the Russia-associated East, and the
conquered cosmopolitan South. Geographical, economic, historical and
ethnic differences predetermine the political orientation of these regions.

But we must bear in mind that since the start of the past century these
regions were united by the dominance of the Ukrainian farmer family and

its institutions that did not include communes.

Farmers preserved their original culture and the Ukrainian language, whereas
the educated classes switched to Russian, which became a language of state

All regions were equally affected by tsarist modernization and
industrialization from above, huge social upheavals in the empire,
revolutions in 1905 and 1917, and wars. Even if there are deep differences
between these regions, Ukraine can still function as a unitary state.

An alternative is a split but not federalization that is so extensively
discussed by Russian political scientists and viewed as an indispensable
condition for democratization (as if there is none in Ukraine).

In order to resolve Ukraine’s issue and keep it as a single country, its
eastern and western regions should opt for mutual assimilation covering
economic ties, guest workers and bilingualism.

At the same time, they should give up attempts to Ukrainize non-Ukrainians
and overcome the obsolete great-power ambitions based on the Uniate

model of development based on Petlura and Bandera ideology.

Last but not the least, nobody should forget or desecrate the past, as it
happened in some areas in Ukraine when the Ukrainian SS division was

If this does not happen, Russia should get ready to deal with two Ukrainian
countries. But even in this case they would not be a historical joke because
they would deserve their independence.                   -30-
Gennady Bordyugov is a member of the RIA Novosti Expert Council.
The opinions expressed in this article are the author’s and do not
necessarily represent those of RIA Novosti.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
17.                  KHRUSHCHEV AND UKRAINE

The Ukrainian Observer #231, The Willard Group, May 2007

Nikita Khrushchev, a bulky man with a provincial face and a wart on his
cheek, led Ukraine’s Central Committee of the Communist Party for eight
years, including the period of the Great Patriotic War.

When he was a Kremlin official, his actions affected Ukraine as well. Of all
the Soviet leaders, Khrushchev was the most unpredictable and impetuous
“helmsman of the party.”

Unlike the more reserved Stalin, he impulsively and resolutely demonstrated
the country’s military might, plunging the world into the Cuban missile
crisis. However, Khrushchev, unlike his reclusive predecessor, traveled
abroad widely and often welcomed “imperialistic” leaders to Moscow for

It was Khrushchev who energetically resolved the housing problem by
building primitive but much needed five-story apartment blocks, the
so-called khrushchovkas.

Khrushchev rudely forced writers and artists to fit the procrustean bed of
communist ideology, instructing them on how to write books and paint

It was during his rule that peasants shook off the yoke of serfdom and were
given passports. Hundreds of thousands of energetic Ukrainians born in rural
areas headed for cities and towns. They soon renounced their rural Ukrainian
and began speaking the urban Russian language.

There were lots of mystical and strangely odd episodes in Khrushchev’s

For example, clay pits above the district of Kurenivka in Kyiv had
accumulated loess, a loamy deposit formed by wind, for years.

The Kremlin was going to use this dirt to flood Baby Yar, the site where
more than 100,000 Kyiv residents, mostly Jews, had been exterminated by
Nazi-directed but mostly Ukrainian death squads.

The Soviet leaders hoped this would help the nation forget the Zionist idea
of erecting a monument to the victims of the mass killings. In the spring of
1961, thousands of tons of that watery clay broke through a dam and flowed
down, covering a nearby village, not Baby Yar. The tragedy left 1,500 people

A few days after the disaster, the planet’s first cosmonaut, Yuriy Gagarin,
flew into the space. Khrushchev kissed this immaculately honest guy many
times upon his arrival from the orbit.

He must have been asking humanity to forgive his blasphemous intention to
blanket Baby Yar in clay waste. A memorial to the Baby Yar tragedy was
unveiled in 1976 after Moscow had been stubbornly reluctant to honor the
Jewish Holocaust for years.

It was under Khrushchev that farmers chopped down their fruit orchards to
protest against fruit tree taxes. It was Khrushchev who ordered a
demonstration of starving workers in the provincial town of Novocherkassk
dispersed with rifles.

Khrushchev’s attempts at ideological futurology resulted in a shattering
fiasco. His slogans, “We will outrun America in the per capita production of
milk and meat,” and “This generation of the Soviet people will live under
Communism,” proved impractical, idealistic and unachievable.

Khrushchev was not a typical Soviet leader; he was mobile and public.
Working as a regional reporter in the southeast of Ukraine, I rarely saw the
Kremlin ruler but popularized his economic innovations in my articles.

Nevertheless, I had first seen Khrushchev before the war broke out.
It was May 1, 1941. I was 11 years old. I remember standing on a sunlit
Khreshchatyk, holding a little red flag. People gathered downtown to watch
the Labor Day military parade. After it, industrial workers marched in

Soviet newsreels made me unusually politicized for my age. I immediately
recognized Khrushchev on a government platform. He was gesticulating
merrily, wearing a peaked cap, a so-called stalinka.

The demonstrators left Khreshchatyk, taking away the sounds of brass bands.
Khrushchev went down from the platform immediately. He will now walk into
the crowd, someone said, both with approval and blame.

When I grew up, I appreciated Khrushchev’s bravery. When Lazar Kaganovich,
Stalin’s closest ally, was flying to Bandera’s Ukraine one day, he was
accompanied by a squadron of fighter planes.

When Khrushchev, a member of the Military Council of the First Ukrainian
Front, visited the liberated capital of Ukraine on November 7, 1943, he rode
along the ruined and smoldering Khreshchatyk in an open-topped convertible

Khrushchev’s “crowd walking” on May 1 resulted in a startling discovery made
by my aunt, who was hosting my mother and me that day. My aunt, whose
husband was one of the big bosses in Kyiv, was standing near Khrushchev that
day, and saw that he was wearing “an indecently shabby raincoat.”

She even advised her husband to dress more modestly, so as to avoid
contrasting with Khrushchev’s shabby dress. However, he did not heed her
advice. The war started a month later, and both Khrushchev and my uncle were
sent to different fronts.
                                STALIN’S PERSONAL CASE
In 1956, I was a member of the Soviet Union’s only party. My skepticism
prevented me from becoming a devout communist. I did not appreciate the
bureaucratic falsity of public party meetings. A notice about a closed
gathering contained at least some intrigue.

We often considered personal cases of some communists during such meetings.
Usually we were discussing those who had committed adultery, or reprimanded
poets for “wrong and inappropriate” poems or journalists for “distorting the
Soviet reality.”

At one of such meetings we were considering Joseph Stalin’s case. The debate
was very nervous.

Everything started in February 1956, when Khrushchev delivered his historic
Secret Speech to the 20th Communist Party Congress.

He read the Report on the Personality Cult and Its Consequences quickly and
anxiously. Then all the secretaries of local party organizations throughout
the country were made to read it to their “congregants.”

Our retired communists were unanimous: “You can criticize him [Stalin], but
there should be some limit.” The young demonstrated their awareness and
presented sensational details. Here is one of them.

Once Khrushchev came to Stalin’s office late and sat quietly at the corner
of the table. Stalin looked at him gloomily and asked him rudely why he was
hiding. “Don’t be afraid. I will not execute you,” he promised sinisterly.

Delegates of the 20th Congress demanded Khrushchev remove this episode
from his report but it still became known.

Khrushchev hated Stalin. Embarrassment reinforced his hatred: this
apparently decent man had been compelled to carry out Stalin’s atrocious
orders. Many of Stalin’s allies were also afraid and therefore hated him.
But they could not dare to be morally vindictive. Khrushchev did.

.In 1946, the country celebrated the 20th anniversary of Stalin’s
constitution. On that day, Khrushchev unveiled a monument to Lenin in Kyiv
without asking Stalin’s permission. Stalin, who had wanted to have his own
statue erected in Kyiv for years, remembered this surprise for the rest of
his life.

The Lenin monument was built opposite the Bessarabsky market, on the spot
where a gallows, used to execute Ukrainian foes of the German Reich during
the war, once stood. The stone Lenin still stands there today.

“The nation will not be able to feed another party”

In the May of 1959, I came to Kyiv to attend a meeting of regional
journalists, while Khrushchev, then the leader of the country, came to Kyiv
to present the Ukrainian capital with the second Order of Lenin.

He was loyal to his habit and rode along Khreshchatyk in an open-topped
limousine. However, it was a new Khrushchev: there was no peaked cap but an
elegant hat, no old shabby raincoat but a fashionable jacket. He was waving
his hat to salute thousands of Kyiv residents.

These people were brought to Kyiv’s central street by their directors and
stood in the scorching sun, waiting for their leader. I felt as
uncomfortable as those people when returning from Kyiv to propagandize
Khrushchev’s innovation in the provincial press. It infuriated party
functionaries at all levels.

Maryinka was an administrative center of a rural district in Donbass. It had
a tile plant, a furniture factory, a dairy, and a granary, and 45 collective
farms in the area. A district party committee of 30 members controlled
blacksmiths, carpenters, farmers, schoolteachers and polyclinic doctors.

When Khrushchev ordered the disintegration of the monolithic party
structure, he must have wanted to make national and regional leaders control
one another. But this innovation was a caricature in poor districts.

 So there were two party committees in Maryinka. The number of party
functionaries had doubled. They all worked in the same building and sat
there like hens in a hencoop, and oversaw the same processes and projects.

They were so ashamed to hear laughs of wise local workers and farmers that
they made up an anti-Soviet anecdote, which was not spoken openly but

. A communist asks a communist, “Do you think we should have one more
party in the country?” “No, the nation will not be able to feed another

The substance of this joke is that the Communist Party by itself absorbed
almost the entire national budget.
                       CRIMEA: A SLAP FOR ARROGANCE
In the summer of 1972, the steppe Crimea saw the first artificial rain,
sparkling and multicolored. The trimmed fields absorbed it greedily. The
irrigation system was built on an artificial river.

I was writing an article about the Dnipro River for a regional newspaper,
sitting by that canal, which saved the Crimean peninsula. My interlocutor
was Petro Marchuk. He headed a collective farm growing tons of rice,
wheat, grape, and watermelons.

Khrushchev’s dream came true in Crimea: it had the sun and other climatic
characteristics to grow his favorite maize.

Marchuk was among those who started building this canal from the Kakhovka
reservoir on the Dnipro. The construction began in 1956, soon after
Khrushchev had officially given Crimea to Ukraine.

Geodesist Marchuk was in charge of a team of bulldozer drivers. He was
crying when his native village with the graves of his relatives was being
flooded, as well as dozens of other Ukrainian villages.

However, like the Soviet government, he understood that it was vital to give
water to the arid Crimea. When he had built half of the canal, he started
growing wheat.

He had a degree in agriculture and generalized his irrigation experience in
a Ph. D. dissertation. Crimean residents no longer remembered and spoke the
Tatar language in the 1970s.

Marchuk was almost illegally collecting information about Crimea’s
indigenous population, deported in 1944 by Stalin to Siberia and Middle

Settlers from Russia occupied the territory. Their reaction to the Crimean
climate was panicky, even though water was practically beneath their feet,
Marchuk explained. The banished Tatars had gathered morning dew in special

He showed me a copy of a report to the Ukrainian government compiled by

a special commission in 1954: it said only three collective Crimean farms of
three hundred were functioning properly.

The experienced agrarian Khrushchev must have understood that only
Ukraine could save Crimea by helping it build a canal for irrigation. The
400-kilometer-long North-Crimean Canal took 20 years to build.

It took so long because the country’s new leader, Leonid Brezhnev, made
Ukraine finance the project after Khrushchev’s forced resignation in 1964.

Russians, both in Ukraine and Russia, as well as in Crimea, forgave Stalin
for his atrocities, including the deportation of Tatars. But they still
insist Khrushchev cannot be forgiven.

They say Russia conquered Crimea with blood and iron but Ukraine

received it as a gift, thanks to Khrushchev’s generosity.

Khrushchev has been criticized for his unmotivated innovations and
injustice, caused by disinformation and deliberate silence. The Izvestiya
newspaper contributed to Khrushchev’s oblivion.

On October 14, 1971, this official media outlet published a short obituary
“on the demise of the personal pensioner Nikita Sergeyevich Khrushchev.”

No condolences from the Kremlin were presented to his family in that
article. Why? Khrushchev must have been right to give away Crimea to
Ukraine but his gesture has been seen as a slap in the face by the arrogant
Russians since then.                                 -30-

AUR FOOTNOTE: Serhiy Kharchenko was one of the most senior regional
journalists during the latter period of the Soviet Union. More recently he has
been a prolific and interesting writer, exposing how journalists of that period
really felt about the Soviet socialist realities.
[return to index] Action Ukraine Report (AUR) Monitoring Service]
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COMMENTARY: By Masha Lipman, The Washington Post
Washington, D.C., Wednesday, April 25, 2007; Page A17

MOSCOW — Boris Yeltsin was an immense and unparalleled figure in
Russian history. Today he remains largely unappreciated by his fellow
countrymen, and most Russians think of him as a negative figure, but last
night thousands of people lined up to bid farewell to their first president,
waiting for many hours outside Moscow’s biggest Orthodox cathedral,
where his body was laid.

Yeltsin was the first Russian politician whose legitimacy rested on the
genuine popular support of the masses — and he brought public politics to a
country where for centuries politics had been confined to the czars’ court
intrigues and Politburo fights behind the curtain.

Unlike his predecessor Mikhail Gorbachev and his successor, Vladimir Putin,
Yeltsin was able to overcome his Soviet background. After rising to a
high-ranking position in the Communist Party, he reformed into a staunch
anti-communist and associated himself with Russia’s liberals and
Westernizers, including prominent Soviet dissident Andrei Sakharov.

Yeltsin was a statesman with a clear vision and a strong sense of purpose:
He committed himself to ridding Russia of communism and attaining freedom
for his country, whose people had always lived in fear of the state.

Yeltsin achieved both goals: He made his victory over communism
irreversible, and he turned Russia into a free nation. The coup in 1991 was
above all a revolution — even if it proved short-lived — of public
attitudes. The Russian people overcame their fear, they came to believe in
freedom and in themselves, and they united to change the country’s

Yeltsin was very much a Russian character — unrestrained and
unrestrainable, very emotional, even passionate. He was a natural
politician, a tenacious warrior and a survivor who loved risk and excelled
in times of crisis.

In a way, his rule was a permanent crisis, as he faced fierce,
irreconcilable opposition from the Communist Party that disrupted every move
he sought to make. His drinking bouts and bizarre escapades were probably
the only relief he had from the terrible strain.

Yeltsin made many mistakes. Some were inevitable; some probably could have
been avoided. But he took responsibility for all that he did. He probably
tormented himself more than any of his harshest critics did. He yearned to
make his country a better place and gave his heart, which was already weak,
to his people.

But he was running against time: The hardship and turmoil of the early
post-communist years left the Russian people frustrated and disillusioned,
and they came to hate him as fiercely as they had loved him only a few years

His compatriots, having no experience with freedom, failed to use their
newfound options to make their lives better; they expected him to be their
benefactor, and when he failed to deliver they resented and condemned him.

His efforts to establish a multiparty system, representative government, and
an independent media and judiciary remain unappreciated, and during the rule
of his successor, the phrase “the chaos of the ’90s” has been firmly tied to
Yeltsin’s tenure.

Though Yeltsin set the path for democracy and freedom, he failed to secure
them and was forced to step down in December 1999 and anoint a successor
rather than democratically transfer authority. The new president, Putin,
remained personally loyal to Yeltsin

Within hours of Yeltsin’s death Monday, Putin spoke movingly about his
legacy and ensured that the nation would pay due tribute to its first
president. Putin even postponed his state of the country address and
announced a day of national mourning.

But Putin’s policies have largely destroyed what was left of Yeltsin’s
political achievement. While Yeltsin was an innovator seeking to create and
nurture a free Russia with public participation and a limited role for the
state, Putin scrapped the fledgling institutions and political freedoms and
pushed Russia back toward its traditional track: loyal bureaucrats instead
of statesmen; and an omnipotent and forbidding state and an impotent
society, deeply alienated from each other.

The defeat of communism is mostly regarded now as but an episode in a
struggle for power at the top. Most of those inebriated with joy and a sense
of achievement back in August 1991 today feel ashamed of their naivete and
idealism. From the early days of his tenure, Putin strongly dissociated
himself from Yeltsin’s efforts.

In a series of symbolic moves after he became president, Putin got rid of
the new state anthem that Yeltsin had adopted and brought back the old
Soviet one. He also stopped the celebration of the new Russian national
holiday Yeltsin had introduced.

Throughout his presidency, though, Yeltsin was the master of political
symbols. The sight of him atop a tank has become the most recognized image
of the end of communism.

His death just one week after a small, peaceful political rally in Moscow
was extinguished by 9,000 riot policemen — complete with beatings and
unlawful detentions — looks like a symbolic protest against the trampling
of freedom, a cause to which he devoted himself.               -30-
Masha Lipman, editor of the Carnegie Moscow Center’s Pro et Contra
journal, writes a monthly column for The Washington Post.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

COMMENTARY: By Rodric Braithwaite
Financial Times, London, UK, Tuesday, May 1 2007

The sour western comments on Vladimir Putin’s latest – and final? – annual
address to the nation last week are only the most recent in a series of
damaging rhetorical exchanges, fuelled on both sides by domestic
considerations rather than a sensible understanding of the best interests of

Some of the lang­uage is reminiscent of the cold war, even though today
there is no compar­able clash of interests between Russia and the west.

It is partly a matter of disappointed love. We have come a long way from the
hopes that seemed to unite Russia and the west after the Soviet Union
collapsed. Two years ago Mr Putin described that collapse as “the greatest
geopolitical catastrophe of the cent­ury”.

He was greeted by a storm of criticism in the west: was the Russian
president really calling for the return of the old regime? Was the spectre
of Stalin stalking Europe yet again?

It was more complicated than that. After 1991, the Russians lost in short
order their ancient empire, military pride, political system, ideology and

Millions fell into such poverty that former enemies sent them food aid,
accompanied by well-meant but often inappropriate advice about building a
liberal market democracy from the ruins.

This was an overwhelming trauma, even for Russians who were delighted to see
communism go. After years of humiliation, most are glad that Mr Putin’s
Russia has now recovered some of the respect to which they believe their
country is entitled.

Russian politicians are once again confident enough to express their own
view of Russia’s national interest, whether or not their views converge with
those of the west.

But the confidence is still shaky, still too rooted in the chance windfall
of a high oil price, still too dependent on a domestic political
stabilisation imposed by a centralising and stifling discipline. A sense of
Russia’s truculent vulnerability still filters through all the brave words.

Take what Mr Putin said about the US proposal to base anti-missile
installations in Poland and the Czech Republic. The Czechs and the Poles
welcome the installations not because they will shield the US from
non-existent Iranian missiles – the ostensible US justification – but
because they strengthen their own countries’ political guarantee against the
Russians. It is all to do with politics, not defence.

Condoleezza Rice, US secretary of state, dismisses the Russian concerns as
“ludicrous”. Mr Putin threatens to freeze the agreement on conventional
forces in Europe in response.

That agreement has in any case not been ratified by the Nato countries. In
the real world, it will make no difference whether Mr Putin freezes the
agreement or not. Meanwhile the politics deteriorates.

Mr Putin worries that foreign money could destabilise his domestic politics.
Perhaps that too is a symptom of in­security. But he saw what happened in
Ukraine, where millions of dollars were poured in to achieve an Orange
revolution that would probably have taken place anyway.

Russian paranoia was inflamed, and inflamed again when Boris Berezovsky, the
exiled Russian billionaire, recently said he supported a forceful overthrow
of Mr Putin’s regime.

All this makes life much harder for those gallant Russian non-governmental
organisations that are trying to promote the evolution of democratic
institutions in their country.

Most of Mr Putin’s countrymen thoroughly dislike the corruption, the antics
of the super-rich, the arrogance of politicians and bureaucrats, the
influence of the secret policemen, the abuse of the courts and the gross
failure to enforce the law that disfigure their country’s domestic politics.

They may know in their hearts that Mr Putin’s version of “stability” has
come at a price. But they still resent the constant lectures from

Whether we like it or not, most Russians believe that events in Iraq and
elsewhere have thoroughly undermined our democratic credentials and our
right to give them lessons.

The name-calling serves no obvious Russian or western purpose. Both sides
take even reasonable criticism as a deliberate offence: what can be said
within the family is unacceptable if it comes from outside. Everyone would
be better off if the politicians cooled things down.

Real life being what it is, alas, they are more likely to go on stirring
things up with intemperate language designed to please their own domestic
audiences, regardless of the effect on the outside world.           -30-
NOTE: Sir Rodric Braithwaite, UK ambassador to Moscow 1988-92 then
foreign policy adviser to John Major and chairman of the joint intelligence
committee, is author of ‘Moscow 1941’ (Profile, 2006)

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
                          Open in Kyiv until Sunday, May 20, 2007

Centre for Contemporary Art, PinchukArtCentre, Kyiv, Ukraine, May, 2007

The Centre for Contemporary Art PinchukArtCentre (Kyiv, Ukraine) presented a
personal exhibition of the world famous Brazilian artist and photographer
Vik Muniz “Vik Muniz: A Survey”.

The works of the artist were exhibited in the largest museums of the world
and at the most prestigious exhibitions of the last decade.

At press-conference on the occasion of presentation the president of
PinchukArtCentre Peter Doroshenko noticed, that it is the first exhibition
of Vik Muniz to be seen in the Eastern Europe.

“It is very important for PinchukArtCentre to be the first in our
cooperation with worldwide famous artists. I think those who visit us from
the very first exhibition – in fact this is our third exhibition – see that
we come up with very actual for contemporary art subjects and work with
world known artists. We are the first in the Eastern Europe who presents the
Vik Muniz exhibition”, the PinchukArtCentre president said.

In Vik Muniz opinion, the PinchukArtCentre part as an institution is very
important for contemporary art development in Ukraine. “In Brazil, for
example, the similar centers also presented the works of international

And at the same time they showed to the world the Brazilian artists, whose
works today are represented almost in all famous galleries in the world.
Exactly in the same way, as I can see, PinchukArtCentre begins to acquaint
the world art-community with the Ukrainian artists”.

About the exhibition and the artworks presented there Vik Muniz said, that
the process of objects creation and shooting, not the objects themselves,
are the most important for him.

Credo of the artist is: “There are no more objects for shooting. If you want
to shoot anything, first create it”. For the last 20 years Vik Muniz has
been constantly expanding boundaries of modern photography and paintings.

His works never reflect surrounding reality, except the one created by the
artist himself. Unique installations, which are sometimes destroyed right
after shooting, further live in works of Muniz.

According to the Muniz vision, an artist role is to impress the viewer and
make him/her (by means of materials, idea) “do not pass by with no
expression on the face”, but stop in front of the work to look it through.

“I do not create something to be original, – I am looking for an original,
looking for a special. And I try by my works to deliver something special to
the world”.

The next Vik Muniz project will be social, involving the people who live in
garbage dumps. “I have already used dust in my works, now I want to use the
real garbage. I was surprised how many people in the world are living in
such places. While I have been there I saw many people suffering from skin

My idea was to attract those people to create their own portraits using the
garbage, and afterwards to make art-objects on the basis of it. The money
from the sale of those works will go for the opening a hospital for people
with skin diseases”, he concluded.

The Vik Muniz exhibition in PinchukArtCentre is open everyday from until May
20 except Monday. The admission is free.

As informed before, the “Vik Muniz: Survey” exhibition presents 50 specially
selected artworks, created by Vik Muniz in 1993-2007. For their creation he
used non-traditional materials, such as caviar, diamonds, chocolate, gold,
soil, sugar, junk, cotton wool, peanut butter, jam, nails, yarn and even

PinchukArtCentre is one of the biggest centers for contemporary art in the
Eastern Europe. The main activities include: exhibition organization,
supporting the cultural projects, etc.

More than 75,000 people visited PinchukArtCentre since it was opened. About
40000 people visited the previous exhibition of young Ukrainian and American
artists GENERATIONS.UsA, which lasted for three months.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

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