AUR#864 Sep 7 President Upbeat Before Election; Elitism Hurts; Same Old Box Of Tricks?; Election Resolution; Dynamic Software; Boryspil Airport;

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President Viktor Yushchenko’s face and hands
tell a story of his struggles – and Ukraine’s.

Above his dark suit and striped red tie, his face is badly scarred
three years after he suffered dioxin poisoning during his presidential
campaign against Viktor Yanukovych – then, as now, the prime
minister and still Yushchenko’s bitter rival going into parliamentary
elections. (Article One)
Mr. E. Morgan Williams, Publisher and Editor, SigmaBleyzer
Clicking on the title of any article takes you directly to the article.               
Return to Index by clicking on Return to Index at the end of each article
By Andrew Braddel, Associated Press (AP)
Kiev, Ukraine, Thursday, September 6, 2007

EDITORIAL: Kyiv Post, Kyiv, Ukraine, Thursday, Sep 06 2007

COMMENTARY: By Peter Dickinson
Business Ukraine, Kyiv, Ukraine, Monday, Sep 3, 2007

Business Ukraine, Kyiv, Ukraine, Monday, August 27, 2007

Global Intelligence Brief, Stratfor, Austin, Texas, Tue, Sep 4, 2007

Congressman Alcee L. Hastings, U.S. House of Representatives
Washington, DC, Monday, August 20, 2007

Eurasia Daily Monitor, Volume 4, Issue 164
Jamestown Foundation, Washington, D.C., Thu, Sep 6, 2007
Kyiv Post, Kyiv, Ukraine, Wednesday, Aug 29 2007

Jim Davis, Business Ukraine, Kyiv, Ukraine, Monday, September 3, 2007


John Marone, Kyiv Post Staff Writer
Kyiv Post, Kyiv, Ukraine, Thu, Sep 06 2007

Morgan Williams, SigmaBleyzer
President, U.S.-Ukraine Business Council (USUBC)

Washington, D.C., Wednesday, September 5, 2007

OP-ED: By Volodymyr Bilotkach, Kyiv Post, Kyiv, Ukraine, Thu, Sep 06 2007


AgriMarket.Info, Ukraine, Thursday, August 30, 2007
Union, Kyiv, Ukraine, Tuesday, September 4, 2007

Hockey horror – Ukrainian corruption puts gun to a boy’s head
COMMENTARY: By David Mittell in two parts
The Providence Journal, Providence, RI, August 29 & September 6, 2007


By Morgan Williams, SigmaBleyzer
President, U.S.-Ukraine Business Council (USUBC)
Washington, D.C., Friday, September 7, 2007
On September 5, 1967, Soviet authorities issued a decree
By Volodymyr Prytula, Radio Free Europe/Radio Liberty (RFE/RL)
Prague, Czech Republic, Wednesday, September 5, 2007


The Associated Press, Tucson, Arizona, Fri September 7, 2007

A Somber Homecoming, Everything is So Run-down
By Jan Puhl, Der Spiegel, Berlin, Germany, Thu, September 6, 2007

UNIAN, Ivano-Frankovsk, Ukraine, Monday, 3 September, 2007

By Andrew Braddel, Associated Press (AP)
Kiev, Ukraine, Thursday, September 6, 2007

KIEV – Sitting down for an interview, President Viktor Yushchenko’s
face and hands tell a story of his struggles – and Ukraine’s.

Above his dark suit and striped red tie, his face is badly scarred three
years after he suffered dioxin poisoning during his presidential campaign
against Viktor Yanukovych – then, as now, the prime minister and still
Yushchenko’s bitter rival going into parliamentary elections.

Below the cuffs, bandages on both palms are signs of Yushchenko’s latest
battle: He hurt his hands when he pitched in to fight a forest fire raging
in southern Ukraine last month, a well-publicized show of concern for the
country before the crucial Sept. 30 ballot.

The vote, the product of a hard-won agreement between the two leaders, is
meant to ease a confrontation that has paralyzed politics and denied
Ukraine’s 47 million people the sense of normalcy they have been desperate
for since gaining independence in the Soviet collapse of 1991.

The pro-Western Yushchenko and the more Russian-leaning Yanukovych

have been wrestling for dominance since 2004, when Yushchenko led the
Orange Revolution – street protests denouncing fraud during a presidential
election in which Yanukovych was initially declared the winner.

The Supreme Court threw out the results, and Yushchenko won the rerun. But
Yanukovych rebounded in 2006 when his party won the biggest block of seats
in parliament, propelling him back into the prime minister’s post and
ushering in a Cabinet that has opposed Yushchenko.

Speaking to The Associated Press in his office this week, Yushchenko
predicted that this time around, his side will come out on top.

He expressed confidence that his supporters and one-time Orange Revolution
allies – what he calls the “democratic forces” – can gain enough seats to
push Yanukovych’s government from power and end the political stalemate.

“I think that there are more Orange forces,” he said. “So today the
possibility of forming a democratic government is very high.”
Others are not so sure. Analysts say the vote is unlikely to shift the
balance of power and resolve the issue of who is in charge.

Polls suggest all three major parties – Yushchenko’s Our Ukraine,
Yanukovych’s Party of Regions and a party led by Yushchenko’s Orange
Revolution ally Yulia Tymoshenko – could end up with about the same number
of seats as in the 2006 vote.

That would leave Yanukovych with plenty of pull when it comes to forming a
governing coalition. Yushchenko’s prospects are also clouded by his fragile
relationship with Tymoshenko, his most powerful potential coalition ally but
the woman he fired as prime minister in 2005.

Yushchenko spoke of the need for “consolidation” of the forces in opposition
to Yanukovych, bringing his hands together and intertwining his fingers as
if trying to physically will a process that he said “requires big efforts.”

Despite the uncertainty, the president said the elections are a chance for
Ukraine to shrug off what he called the “lost years” of political crisis and
tackle the problems that have plagued the country since independence, most
notably official corruption.

A former central bank chief and prime minister, Yushchenko pointed to
economic achievements that he stressed came despite his lack of support in

“One must understand the conditions in which the president works. There was
not a single day when I had a majority in parliament,” he said.

He said average wages are up 50 percent in three years and the economy is
growing about 8 percent annually. But then he conceded those gains might not
satisfy his people’s desire to “get a better life and get it quicker,” after
decades of privation.

Yushchenko has pushed integration with the European Union and NATO and
sought to decrease Russia’s influence in Ukraine, most of which was
dominated by Moscow for centuries.

His foreign policy agenda has been hampered by the government of Yanukovych,
who has warmer ties with Moscow and strong support in Ukraine’s largely
Russian-speaking east.

The president suggested eventual integration with Europe is a foregone
conclusion, noting that the EU is the nation’s leading trade partner and
pointing to projects linking the two in energy, space and other industries.

But he acknowledged the rift that has aggravated the country’s post-Soviet
turmoil, saying it was etched over centuries in which there was no Ukrainian
state and its lands were controlled by external powers – mainly Poland and

The shadow of the Soviet era is still so strong that some Ukrainians will
never be swayed to support his policies, Yushchenko said.

“I understand that a portion of the nation was formed under an alien
ideology, under alien propaganda, orientation – that to convince a certain
portion of the people that this country needs European ideals and values is
very difficult,” he said. “In fact, maybe it will be beyond my power to
convince some.”

But he said Ukraine’s youth “are already different people.”

“They understand more clearly who we were and where we are going,” he

said. “And this, of course, creates great optimism. This gives strength and
energy. and this is what we must live for.”
Associated Press Writer Steve Gutterman contributed to this report.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
EDITORIAL: Kyiv Post, Kyiv, Ukraine, Thursday, Sep 06 2007

Prime Minister Viktor Yanukovych saw a little of what Kyivans have to deal
with on a daily basis on Sept. 4 when he spent the day in the capital on a
working visit.

His government cortege had a chance to see what traffic is really like when
the police aren’t clearing the way for the prime minister and other high

Yanukovych’s “modern” solution: helicopters for top officials.

A few days earlier, Internal Affairs Minister Vasyl Tsushko was on the stump
in Kharkiv, where he said that someone “helped me fall ill” when journalists
asked about his May heart attack.

Tsushko was whisked away to Germany, where he underwent surgery paid

for by his friends. He said that if he remained in Ukraine for medical treatment,
then he would have been dead more than 40 days ago.

Tsushko was not the first and will not be the last high-level Ukrainian
politician to seek expensive medical treatment abroad instead of turning to
the domestic medical system that millions of Ukrainians rely on.

Many in the Ukrainian political elite trust their health and children’s
higher education to foreigners, sending them to expensive schools abroad
instead of the institutes millions of Ukrainian students attend.

There are expensive foreign schools in Kyiv attended by children of foreign
embassy staffs and businessmen, rich Ukrainian businessmen and politicians.
Last week, veteran television journalist Ihor Slissarenko was dismissed
after what he claims was his report that President Viktor Yushchenko’s three
children are attending one such school, where tuition stands at $12,000 per
child per year.

At first glance these three episodes may seem unrelated, but they point to
an underlying problem with the psyche of the political elite that smacks of
the Soviet era, when the privileged caste called the nomenklatura, comprised
of high-level Communist and government officials, lived in a separate
reality than millions of regular people.

These three episodes – 16 years after independence – show that the shadow of
the Soviet system still lingers and high-level officials consider themselves
to be somehow better and thus deserving of a lifestyle far better than that
of the average person.

Yanukovych should have addressed the issue of traffic in the capital city
and explained to voters the government’s plans for relieving the congestion
instead of explaining how he personally will avoid the jams.

Tsushko is sending a politically dangerous message to the country’s doctors
by essentially saying that he does not trust the country’s medical system.

And the people responsible for the firing of TV journalist Slissarenko have
done a great disservice to Yushchenko, who has pointed to the freedom of the
media as one of the Orange Revolution’s great achievements.

As for the voters, they should challenge all wealthy politicians to explain
why they deserve support at the polls when they are living in a parallel
reality, where the standard of living is far better than that enjoyed by the
entire country.

Politicians, in turn, should explain their plans for raising the quality of
Ukrainian services to European standards in medicine, education, and even

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

COMMENTARY: By Peter Dickinson
Business Ukraine, Kyiv, Ukraine, Monday, Sep 3, 2007

Ukraine turned sixteen last month, yet the country seems perpetually trapped
in an adolescent circle of argumentative historical posturing. Can Ukraine
finally grow up and come to terms with its troubled past?

Last weekend saw protests in Odessa over the unveiling of a monument to
Katherine the Great, the Russian Empress who initiated the often brutal
conquest and colonisation of eighteenth century Ukraine.

The monument has angered and infuriated Cossack groups who regard
Katherine as an evil influence responsible for destroying their ancestors’
way of life and ushering in a despotic era of russification and oppression.

Such claims may well be historically accurate, but they ignore the
inescapable truth that if this monument to Katherine is really an
unacceptable stain on Ukraine’s national honour, then so is Odessa itself.

After all, this is a city which often cheerfully pokes fun at the
pretensions of the independent Ukrainian state and proudly guards its
historical associations with the Russian past while maintaining an air of
utter indifference towards the political squabbles of the age.

It is a city state of enormous parochialism that is among the pearls of
modern Ukraine but one which would no doubt be horrified to hear of itself
referred to as such. You could call it an accident of geography if you like,
but Odessa and Ukraine are stuck with each other and it is about time
everybody got used to the fact.

While there is no doubting that officials behind this latest monument are
guilty of deliberately playing on divisive attitudes towards the country’s
history, it is impossible to deny that they are also very much in tune with
local sentiment, which is as resistant to historical revisionism as areas
elsewhere in the Ukrainian heartland were to Soviet rule. Nor are such
historically confrontational gestures restricted to Ukraine’s pale of
Russian sentiment.

Traditional centres of Ukrainian nationalism are often just as guilty as the
Russophiles of demonstrating their inability to work towards any sort of
consensus, and officials were busy last week erecting monuments to
controversial Second World War guerrilla leader and nationalist figurehead
Stepan Bandera in western Ukraine.

Both parties would no doubt claim, with much justification, that it is their
sacred right and obligation to pursue these highly emotive historical
missions, but is this really the way to build a better country?

At what point will the various parties decide that it is time to try and
focus on what unites the population rather than harping on endlessly about
issues which can only divide them?

The fact that monuments to eighteenth century Russian rulers are being
erected now, sixteen years since Ukraine declared independence, is a sign of
how little has been done to heal the wounds of the past and how much time
has been wasted exploiting perceived historical injuries for short-term
political gain.

It would be unfair to blame the political classes exclusively for this
abject failure, as the general population has consistently displayed a
remarkable lack of enthusiasm for any of the many parties over the years
who have tried to campaign on a ticket of non-partisan bridge-building.

The truth is that Ukraine remains in many senses a country trapped in its
own past and it is hard to see it ever reaching true maturity until this is

There are promising signs in the lack of emphasis being placed on historical
ties and linguistic issues in the current election campaign, and the prize
that awaits the political leader who can actually overcome the historical
prejudices and paranoia of the country is potentially huge.

As it stands, though, the only sentiment that the entire population seems to
share is one of disdain for the political classes in general, an irony which
would go down just as well in Odessa as it would in Kyiv or Lviv.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]


Business Ukraine, Kyiv, Ukraine, Monday, August 27, 2007

As Ukraine’s parliamentary campaign reaches its half-way point, there are
increasing concerns that some may not want a free and fair election

Attempts to reintroduce undemocratic practices, such as the much-abused
home  voting privileges of 2004, are threatening to derail Ukraine’s
democracy less than three years since the population took to the streets to
overturn a rigged presidential election.

In mid-August, several international election monitoring organizations began
working in Ukraine in advance of the extraordinary September 30
parliamentary elections. Their timing couldn’t have been better.

Even as campaign monitors began to deploy in all regions of the country, the
Central Election Commission (CEC) issued a series of rulings that both
confounded and concerned election specialists. Domestically, the rulings
also galvanised the country’s opposition against what it labeled “political
repression” and “subversion of the democratic process.”

The decision that provoked the biggest question was the initial refusal of
the CEC to register the candidates of the opposition Bloc of Yulia
Tymoshenko (BYUT). If upheld, the ruling could have led to the exclusion of
the country’s largest opposition bloc from the election.

This decision reportedly led to a number of concerned telephone calls from
Western diplomats to Ukraine’s leaders. European People’s Party President
Wilfried Martens publicly suggested that the CEC ruling violated “not only
the legal system but also the free will of the Ukrainian people.”

Adrian Severin, the chairman of the EU-Ukraine Interparliamentary
Cooperation Committee, warned that election observers “will monitor very
carefully whether all political forces are assured equal and fair conditions
of participation in the Ukrainian elections.”

Three days after the initial decision, Kyiv’s Administrative Court satisfied
BYUT’s claims against the CEC, calling the decision “illegal.” The next day,
BYUT was registered.

There was little doubt that the court would find in favour of the opposition
bloc, given the shaky grounds on which the registration was initially
refused. CEC members suggested that BYUT had not met electoral requirements
when it included the postal addresses of its candidates on the wrong form.

The addresses were submitted on the candidates’ biographies, while only
their region of residence was placed on their official requests to register.

Bloc leader Yulia Tymoshenko countered that the registration forms were
submitted in the same manner as in 2006, when the bloc was easily registered
for that year’s parliamentary elections. She immediately charged that the
decision was purely political and pointed out that no electoral regulation
or law exists to govern the way in which addresses are submitted.

Indeed, an examination of the CEC’s own regulations and forms shows that a
concrete postal address is specifically requested on the biographies, but
not on the registration forms.

While the swift and unwavering judgment of the court in this matter is
encouraging, the CEC’s original decision was viewed immediately by many
Western officials as a potentially dangerous signal for the fairness of the
upcoming election.
The home voting question
The concern of election observers was compounded when, on the same day that
BYUT was registered, the CEC voted to allow a home voting procedure similar
to that used during the discredited first two rounds of the 2004
presidential elections.

That procedure, which was said by the Organization for Security and
Cooperation in Europe (OSCE) to have been a ‘major source of electoral
fraud’ in 2004, allows ballots to be cast in homes with little control and under
the watch of potentially biased election workers.

The ‘home’ ballot in Ukraine is intended to be used by disabled voters who
are unable to travel to the polling place. In 2004, hundreds of thousands of
ballots were found to have been cast at home, with the figure reaching as
high as 30% of votes cast in some oblasts.

These figures dwarf the percentage of the population with disabilities
impeding their ability to travel, according to observers. In fact, in 2004,
as home ballot boxes were removed from the polling precincts and kept
generally out of view of monitors, it was impossible to know where the
ballots inside these ballot boxes came from and who marked them.

In order to deal with this concern, in 2005 Ukraine began requiring medical
certificates in order to receive approval for home voting. The CEC’s new
ruling would eliminate this safeguard.

On 22 August, Kyiv’s Administrative Court supported an appeal filed by the
country’s second opposition bloc, Our-Ukraine-People’s Self-Defense
(OU-PSD), against the CEC decision. BYUT also joined the lawsuit. The court
ordered the CEC to require medical certificates, but the CEC promptly
appealed the decision.

All sides are awaiting the decision of the appeals court. If home voting is
conducted as it was in 2004, this could “open the door to significant
falsification of votes,” according to a newly released pre-election
assessment from the US-based National Democratic Institute for International
Affairs (NDI).
No to a referendum?
The CEC also halted a plan by BYUT to try to collect enough signatures to
hold a referendum on proposed constitutional changes simultaneously with the
parliamentary elections.

As per procedures for triggering a popular referendum, BYUT filed petitions
from several hundred ‘citizen initiative groups’ endorsing the referendum
questions and asking to be allowed to begin collecting the required three
million signatures in support.

The CEC refused their requests, suggesting that the proposed questions could
not be the subject of popular votes, according to the Constitution.

In fact, Ukraine’s Constitution prohibits referenda questions on territorial
change, amnesty of individuals, taxes and the budget. The questions proposed
by BYUT – asking primarily whether judges should be elected or appointed, if
parliamentary immunity should be eliminated, if the parliamentary opposition
should receive official status, and if the voters prefer a presidential or
parliamentary republic – clearly do not fit within these prohibitions.

Therefore, while it is doubtful that a referendum could be organised in time
for 30 September, it is unclear why the CEC prohibited the simple attempt to
collect signatures.

BYUT has filed yet another court appeal, requesting that the Administrative
Court order the CEC to allow signature collection. The number of court
appeals filed within such a short time led NDI, in its assessment, to note
concern ‘about future problems in election administration if the CEC and
other commissions cannot work collegially.’

The Institute’s delegation, which included former Congressman and House
Democratic Caucus Chair Martin Frost and former United Nations Assistant
Secretary General Cedric Thornberry, noted that ‘partisanship might lead to
unnecessary obstacles to certifying election results. This would severely
undermine Ukrainians’ confidence in those results.’
Down with the billboards
On the evening of August 18, Yulia Tymoshenko announced that her bloc’s
billboards had been removed in several areas of Kyiv. She suggested that the
advertising company controlling the billboards had come under pressure from
Kyiv’s mayor, who is allied with Prime Minister Viktor Yanukovych.

Tymoshenko has vowed to work to impeach Mayor Leonid Chernovetsky, and
has led numerous blockades of Kyiv City Council meetings. The owner of the
advertising agency denied Tymoshenko’s charge, and there is no clear
evidence of Chernovetsky’s involvement. But the agency provided no reason
why recently installed advertising suddenly would have been removed in the
middle of the night over the objection of the advertiser.
The battle for the east
Tymoshenko’s allies suggest that pressure against her bloc may have
increased because of her attempt to increase support for BYUT in several
eastern regions that have traditionally favoured Yanukovych.

These areas include the regions of Dnipropetrovsk, where Tymoshenko was
raised; Kirovohrad, where Tymoshenko’s numbers have shown increases over
the last two elections; Luhansk, which is the home base of a number of
highly-placed candidates on the BYUT list; and Kharkiv and Zaporizhya, which
boast some of the country’s most active student groups.

Tymoshenko also recently signed an agreement to form a coalition government
with the Our Ukraine-People’s Self-Defense Bloc, should they together
achieve a majority in the elections. This agreement could put an end to
divisions among former Orange Revolution leaders – divisions which led to
the loss of the majority in 2006.

President Viktor Yushchenko is the honorary leader of OU-PSD and has taken
an active role in supporting the party’s rejuvenation after its third place
finish one year ago.

Yushchenko has been embroiled in a fierce power struggle with Yanukovych
since the latter was able to patch together a parliamentary majority, which
then nominated him to the prime minister’s chair. Ukraine’s
parliamentary-presidential government provides significant and sometimes
overlapping powers to both the Prime Minister and the President.

Polls indicate that support for the Tymoshenko-Yushchenko tandem currently
equals that for a Yanukovych-Communist Party coalition. Should the
pro-presidential coalition win, Tymoshenko could well replace Yanukovych as
prime minister.

Tymoshenko’s removal from the election, then, would not be unwelcome to
Yanukovych or his allies. OU-PSD so far seems to have escaped the recent
pressure apparently being exerted on BYUT. This is likely because of the
bloc’s concentration on western areas less contested by the governing
coalition, and because of its generally more moderate tone.

However, during the spring, OU-PSD leader Yuriy Lutsenko saw his home
and office searched by state security services for reasons that were never
adequately explained. The searches came on the heels of an announcement by
Lutsenko that he would organize a major demonstration against the

BYUT and OU-PSD both have reported worrying break-ins at several of their
regional headquarters in recent months. BYUT, in particular, has seen two
break-ins in the last several weeks.

The office of Kyiv City Council and BYUT election staff member Oleksandr
Bryhinets was broken into and a computer stolen and burglars stole documents
and digital storage devices from BYUT’s local headquarters in Malyniv,

Both BYUT and OU-PSD also saw their Kharkiv region offices ransacked over
the summer. These incidents appear unconnected and neither systemic nor
systematic. However, such problems have not been reported by political
parties in Ukraine since President Leonid Kuchma left office in January of
Still cause for optimism
Nevertheless, while the recent actions of certain officials may be worrying,
all international observation missions note clearly that Ukraine overall has
made impressive strides on its path toward consolidating its nascent
democracy. The incidents noted above were all reported in Ukraine’s mass
media, to which all political blocs have access.

In spite of questionable CEC decisions, all blocs currently have a
relatively equal opportunity to campaign. (This equality is tempered, of
course, by the ‘incumbent advantage’ provided to both Prime Minister
Yanukovych and President Yushchenko.)

Unlike during the parliamentary election of 2002 or the presidential
campaign of 2004, opposition members are not being pursued by security
officials, denied television air time, placed in jail, forced into car
accidents, or restricted from traveling to campaign.

In fact, the level of real political competition and contestation meets or
exceeds that found in most European countries.

Journalists, too, are freer, even if press freedom is sometimes hindered by
local officials and the relatively liberated Ukrainian press community
continues to question the country’s politicians.

The hurdles placed in front of BYUT in the last two weeks stand out because
they do not fit within the norm that has developed in Ukraine over the last
two years. This, in itself, is worrying. The CEC’s overturned decisions
underscore the fragility of Ukraine’s democracy.

There are five weeks remaining before voters choose the people and parties
that will form their next government. Have the problems and irregularities
of the last three weeks been a small bump on the road, or is it a sign of
real regression? International observers will be watching to see if the
country is truly able to conduct an election that meets European standards
for freedom and fairness.
NOTE: Tammy Lynch is a Senior Research Fellow at Boston University’s
Institute for the Study of Conflict, Ideology & Policy and a regular
international commentator on Ukrainian politics.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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Global Intelligence Brief, Stratfor, Austin, Texas, Tue, Sep 4, 2007

Ukrainian President Viktor Yushchenko warned some 300 members of
parliament Sept. 4 that any decisions they adopted would lack legal force.
While technically true, that does not necessarily mean the representatives
will not get their way.
Some 300 representatives of the Ukrainian parliament loyal to Prime Minister
Viktor Yanukovich met Sept. 4 and passed a document barring the scheduled
Sept. 30 national parliamentary elections.

The events of Sept. 4 are simply the latest in a now three-year power
struggle between Yanukovich and President Viktor Yushchenko, who are
themselves the local representatives of a wider conflict between Russia and
the West over the future of Ukraine.

The reason for the sudden meeting of Ukraine’s parliament, known as the
Rada, is simple: Yanukovich fears public opinion has turned against him and
that his party will lose in the Sept. 30 elections. Such an electoral defeat
would be crippling not just for him, but for Moscow, which sees Yanukovich
as Russia’s point man in Ukraine.

With Russia gunning to restore its influence throughout the former Soviet
space, Ukraine is critical. Ergo, Yanukovich — almost certainly with
extensive Russian backing — struck deals with enough opposition
parliamentarians to get a two-thirds majority to suspend the elections.

Yanukovich’s problem is that his Rada lacks a legal standing. In April, the
pro-Western Yushchenko dissolved the parliament and ordered new elections.
Legally and technically, Yushchenko is in the right, as dissolving the Rada
is something well within his powers as president.

Technically, the Rada is not even the Rada right now — it is merely around
300 former parliamentarians meeting to discuss opinion. The reality of the
situation, however, is somewhat different from what is legally correct.
Yushchenko is not confident in his legal authority. Such insecurity is what
prompted him to dissolve the Rada in the first place.

Ukraine has a split government — and not split in the U.S. sense of
executive vs. judiciary vs. legislative — but rather split between
personalities and loyalties to other countries. Put another way, Ukraine’s
institutions are so weak that even its constitution has very little impact
on how the country’s political life is led.

Instead, charisma is the currency of the nation, and the country’s power
brokers negotiate among themselves to determine the country’s path. Right
now, the three most critical are Yanukovich, Yushchenko and Yulia
Timoshenko, who is looking to play the kingmaker in the current round of

So will there be elections on Sept. 30? Probably. But not certainly. The
next step in the Ukrainian drama will be another meeting of the three to
hash out what to do now that the Rada and the presidency have spoken
on the issue.

Just as in the Orange Revolution of 2004, the same three people are
dominating the country’s political life. And just as in 2004, outside powers
are destined to play a critical role. But unlike in 2004, the United States
is distracted and locked into a bitter internal feud over the future of Iraq.

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

Congressman Alcee L. Hastings, U.S. House of Representatives
Washington, DC, Monday, August 20, 2007

Cosponsor H. Con. Res 189: Urging all sides to the political crisis in
Ukraine to abide by the May 27, 2007 agreement which calls for a new round
of parliamentary elections on September 30, 2007, and to ensure a free a
fair, transparent democratic system in Ukraine based on the rule of law

Cosponsors:  Louise Slaughter, Doris Matsui, Michael McNulty, Jim Gerlach,
Sander Levin, Darrell Issa, Corrine Brown, Marcy Kaptur, Danny Davis, Joseph

Dear Colleague:

Please join me in supporting democratic processes and the rule of law in
Ukraine by cosponsoring H. Con. Res. 189, which urges all sides to abide by
the agreement signed by Ukraine’s leadership on May 27, providing for a new
round or parliamentary elections to be held on September 30, and encouraging
the holding of these elections in a free, fair and transparent manner in
keeping with Ukraine’s commitments as a participating State of the
Organizations for Security and Cooperation in Europe  (OSCE) .

This resolution is a demonstration of Congress’ interest, concern, and
support for Ukraine as that strategically important country perseveres
towards full democracy and the rule of law.

A political dispute between Ukraine’s President Viktor Yushchenko and Prime
Minister Viktor Yanukovich — rooted in weak constitutional delineations of
their powers —  resulted in a political crisis in April and May.  After
weeks of tense standoff,  Yushchenko, Yanukovich and Parliamentary Speaker
Oleksandr Moroz reached an agreement calling for early elections to be held
on September 30.

Ukraine has made important progress since the 2004 Orange Revolution, but
its democratic institutions and the rule of law are still emerging and lack
in their ability to safeguard democratic gains.  It is important for the
September 30 elections to be held in a free, fair, open and transparent
manner — following the pattern of Ukraine’s last two elections.

While democratic elections will not, in and of themselves, resolve all of
the challenges facing Ukraine in strengthening the rule of law and
delineating power among branches of government, they are a critical
stepping-stone in Ukraine’s democratic development.

Democratic consolidation and the rule of law will enhance Ukraine’s
aspirations for full integration with the West and, importantly, serve as a
positive model for other former Soviet countries, many of whom are in the
grip of authoritarianism.

Please have your staff contact Orest Deychakiwsky at the Helsinki Commission
at 5-1901 or e-mail regarding cosponsorship.

Below please find the text of the resolution.

Alcee L. Hastings

110th CONGRESS; 1st Session; H. CON. RES. 189
Urging all sides to the political crisis in Ukraine to abide by the May 27,
2007, agreement which calls for a new round of parliamentary elections on
September 30, 2007, and to ensure a free and fair, transparent democratic
system in Ukraine based on the rule of law.

Mr. HASTINGS of Florida (for himself, Ms. SLAUGHTER, Ms. MATSUI,
Mr. MCNULTY, Mr. GERLACH, and Mr. LEVIN) submitted the following
concurrent resolution; which was referred to the Committee on Foreign Affairs

Urging all sides to the political crisis in Ukraine to abide by the May 27,
2007, agreement which calls for a new round of parliamentary elections on
September 30, 2007, and to ensure a free and fair, transparent democratic
system in Ukraine based on the rule of law.

Whereas the Ukrainian people, most spectacularly during the Orange
Revolution of 2004, demonstrated their ability to resolve political
differences through nonviolent protest and in a manner consistent with
democratic principles;

Whereas Ukraine has accepted numerous specific commitments governing

the conduct of elections as a participating State of the Organization for
Security and Cooperation in Europe (OSCE);

Whereas the March 26, 2006, Ukrainian parliamentary elections were
pronounced to be free and fair by the OSCE-led International Election
Observation Mission;

Whereas free, fair, and transparent elections are of vital importance to
Ukraine’s continued democratic development;

Whereas the people of Ukraine deserve to participate in free and fair
elections and must be assured that the integrity of their democratic process
continues to be consolidated and strengthened;

Whereas Ukraine is currently grappling with political uncertainty, rooted in
hastily conceived constitutional reforms, that could jeopardize that
country’s hard-fought and substantial democratic gains;

Whereas on April 2, 2007, Ukrainian President Viktor Yushchenko issued a
decree dissolving the Ukrainian Parliament (Verkhovna Rada) and calling for
early parliamentary elections, asserting that Prime Minister Viktor
Yanukovich and his coalition government were overstepping their
constitutionally-limited bounds and `attempting to monopolize political

Whereas weeks of tension nonetheless gave way to negotiations between
President Yushchenko, Prime Minister Yanukovich, and Parliamentary

Speaker Oleksander Moroz in an attempt to end the constitutional dispute;

Whereas the May 27, 2007, agreement accepted and signed by the Ukrainian
President, Prime Minister, and Parliamentary Speaker stipulated new
parliamentary elections for September 30, 2007;

Whereas the United States supports the principles of the May 27, 2007,
agreement, as a forward-looking path to making Ukraine a more democratic

and more united country;

Whereas the United States Congressional delegation to the 16th annual
session of the Organization for Security and Cooperation in Europe
Parliamentary Assembly (OSCE PA) in Kyiv held a discussion with Ukrainian
President Viktor Yushchenko, who reiterated his commitment to democratic
principles and to holding elections on September 30, 2007, consistent with
the May 27, 2007, agreement; and

Whereas the United States Congress has consistently demonstrated strong
bipartisan support for an independent, democratic Ukraine: Now, therefore,
be it

Resolved by the House of Representatives (the Senate concurring),

That Congress–
(1) acknowledges and welcomes the strong relationship formed between the
United States and Ukraine since the restoration of Ukraine’s independence in
1991 and especially following the Orange Revolution of 2004;

(2) applauds Ukraine for holding free, fair, and transparent presidential
elections consistent with Organization for Security and Cooperation in
Europe (OSCE) standards on December 26, 2004, and parliamentary elections

on March 26, 2006;

(3) urges the leadership and political parties of Ukraine to abide by the
May 27, 2007, agreement and conduct elections as scheduled on September

30, 2007;

(4) supports the holding of free, fair, and transparent elections on
September 30, 2007, in a peaceful manner consistent with Ukraine’s
democratic values and national interest, in keeping with its commitments as
a member of the OSCE;

(5) expresses strong and continuing support for the efforts of the Ukrainian
people to consolidate the democratic gains of the Orange Revolution of 2004
by strengthening respect for human rights and the rule of law, including an
independent judiciary; and

(6) pledges its continued assistance to the further development of a free
and transparent democratic system in Ukraine based on the rule of law, a
free market economy, and consolidation of Ukraine’s security and
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Eurasia Daily Monitor, Volume 4, Issue 164
Jamestown Foundation, Washington, D.C., Thu, Sep 6, 2007

Ukraine’s most popular opposition politician, former prime minister Yulia
Tymoshenko, is pushing for a referendum to change the constitution.

She wants the vote to be held simultaneously with the early parliamentary
election on September 30. President Viktor Yushchenko also wants a
referendum, but he believes it should be held later.

When the Central Electoral Commission (CEC) refused to consider the
signatures of Ukrainians that the Yulia Tymoshenko Bloc (BYuT) had collected
in favor of the referendum, Tymoshenko appealed in court to overturn the CEC’s

She also accused Yushchenko’s team of conspiring against her referendum with
the Party of Regions, which is led by her arch-rival, Prime Minister Viktor

Yushchenko and Tymoshenko have been in favor of changing the constitution
ever since the 2004 presidential election, which brought Yushchenko to
power. They are against the constitutional amendments adopted by parliament
on December 8, 2004, that shifted the balance of powers in favor of
parliament and weakened the president.

Many in Yushchenko’s team believe the amendments were designed by

Yushchenko’s opponents and were aimed specifically against him. Yushchenko’s
party had to accept them in 2004 in return for an additional round of the
controversial presidential election, in which Yushchenko ultimately emerged the

The flaws of the amended constitution became evident after August 2006, when
Yushchenko grudgingly endorsed parliament’s choice for prime minister,
Yanukovych, his opponent in the presidential vote. For the first time under
the new constitution, Ukraine was to be governed by a president and a prime
minister from rival camps.

Since then, each of the two has been interpreting weak points in the
constitution in his favor and accusing the opponent of violating the
constitution. This was one of the main causes of the political crisis in May
2007 that prompted Yushchenko to call an early election.

Yushchenko and Tymoshenko have decided to go further than merely reversing
the 2004 constitutional reform. They want an entirely new text of the
constitution to be approved by a referendum in order to transform Ukraine
from the current semi-presidential system into a presidential republic.

As Tymoshenko put it in a recent interview with Silski visti, “The president
should simultaneously perform the prime minister’s functions, which is the
usual way in presidential republics.”

Tymoshenko believes the referendum has to be held on September 30, because
she wants to kill two birds with one stone.

First, Tymoshenko’s control over the media is very limited, but television
carries reports about her referendum campaign almost every day, thereby
raising the BYuT’s profile for the parliamentary election.

Second, by telling ordinary Ukrainians that they can change the constitution
by voting in the referendum, Tymoshenko earns their sympathies, which may
lead her to victory in the next presidential campaign.

A recent poll by the All-Ukrainian Sociology Service has revealed that 20%
of Ukrainians are ready to vote for Tymoshenko in the presidential election
in 2009. Only Yanukovych is more popular, with 29.8%, while Yushchenko
trails with only 12.9%.

The BYuT said that it has collected 200,000 signatures across the country in
favor of a constitutional referendum on September 30. However, on August 17
the CEC refused to give the formal go-ahead to the collection of signatures.

Tymoshenko appeared on TV screens accusing Yanukovych and Yushchenko’s

Our Ukraine party of conspiring against the referendum, as representatives of
those parties on the CEC had voted against the collection of signatures.

Yushchenko and CEC chairman Volodymyr Shapoval, however, explained that a
referendum would be legally impossible on September 30, as the law provides
for three months for referendum preparation after it is formally announced.
This did not stop Tymoshenko from suing the CEC on August 20.

Yushchenko has made it clear that he fully supports the idea of a referendum
to approve a new constitution. This would put an end to the troublesome
constitutional reform of 2004, he told a press conference on August 20.

Tymoshenko and Yushchenko also agree that the constitutional assembly should
be comprised of constitutional law experts, rather than politicians.

In his Independence Day address on August 24, Yushchenko said that he would
authorize the creation of a constitutional assembly in order to draft a new
constitution, which should then be approved by a referendum. Speaking during
a trip to Chernihiv on August 29, Yushchenko said that the year 2008 should
be devoted to changing the constitution.

The first attempt to change the Ukrainian constitution by a popular
referendum in order to boost presidential powers, launched by former
President Leonid Kuchma, failed.

In the referendum of April 16, 2000, the majority of Ukrainians voted in
favor of allowing the president to dissolve parliament if it cannot form a
majority, canceling deputy immunity from prosecution, and introducing a
bicameral legislature. Parliament, however, did not agree to the amendments.

(Channel 5, August 17; 1+1 TV, August 19; UT1, August 20, 24;
Silski visti,August 22; Interfax-Ukraine, August 29, September 3)
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
NOTE: Send in a letter-to-the-editor today. Let us hear from you.

By Stephen Bandera, Kyiv Post Editor,

Kyiv Post, Kyiv, Ukraine, Wednesday, Aug 29 2007

Changing the country’s Constitution has become a central issue in the
election campaign ahead of the Sept. 30 snap parliamentary elections, as
Ukraine’s major parties and politicians fight over who will lead the
Constitution-amending process.

On Aug. 26, President Viktor Yushchenko said that a special commission
should draft the new Constitution “composed of representatives from
different institutions that are respected by the people.”

Yushchenko said that a referendum on the new Constitution would be
held only after the elections.

Addressing Ukrainians amid celebrations marking the country’s 16th year
of independence on Aug. 24, the pro-Western president called for a new
Constitution to be adopted in a bid to end longstanding political paralysis
in the country.

“The country is in need of strengthening,” Yushchenko said, adding that “a
strong state means effective and clear-cut management.”

Much of Ukraine’s political troubles are rooted in constitutional changes
adopted in the midst of the Orange Revolution, which propelled Yushchenko to
the presidency. The constitutional changes were pushed for by Yushchenko’s
opponents, including his main rival Prime Minister Viktor Yanukovych.

After loosing the presidential contest in 2004, Yanukovych returned as prime
minister one year ago. Both leaders have been locked in a bitter struggle
over authority ever since.

“The chaos of lawlessness is an evil that has stalled and blocked our
movement forward. The experiments of politicians have wedged us into a
corner,” Yushchenko said.

Yushchenko’s erstwhile ally Yulia Tymoshenko, meanwhile, wants to adopt
a new Constitution simultaneously with the Rada elections. The Central
Election Commission, however, rejected an application by Tymoshenko’s
Byut bloc to hold the referendum.

The idea of voting for the Rada and a new Constitution at the same time has
been criticized by watchdogs as unfeasible with the little time left in the
snap election campaign.
One of the proposed changes to the fundamental law is the cancellation of
blanket immunity from prosecution for elected officials.

This cause has been taken up by the Yanukovych-led Party of Regions,
which has proposed that parliament cancel the immunity before elections
at an extraordinary session on Sept. 4.

“Many issues vital to society have piled up that need to be resolved,”
Yanukovych said Aug. 28. He said that his party would make a decision on
attending an extraordinary Rada session next week.

The president maintains that such a session would be illegal. Parliament has
no right to hold a session after being dissolved by presidential decree
earlier this year, Yushchenko has said.
Yushchenko said that in 2004 the Constitution was amended without the
public’s participation and was not thoroughly discussed in parliament.

But the political compromises that were reached during the height of the
Orange Revolution paved the way to the Yushchenko presidency, as the sides
agreed to repeat presidential elections in exchange for the reforms that
ostensibly weakened the presidency. The reforms came into force on Jan. 1,

The reforms to transform the state from a presidential-parliamentary
republic to a parliamentary-presidential one were introduced unilaterally by
President Leonid Kuchma in 2002 when Viktor Medvedchuk was the head
of the presidential administration.

The former leader of the Social Democratic Party of Ukraine (united), the
Socialists and the Communists championed the cause of a parliamentary

Proponents of the reforms have at various times suggested that the president
may be elected by parliament or that the institution be reduced to a purely
ceremonial role. The Communists want to do away with the presidency
altogether. Polls, however, show little public support for the measure.
Prior to initiating the campaign to weaken the country’s presidency, Kuchma
had embarked on one to give the head of state more powers.

In 2000, Kuchma initiated a consultative referendum on four constitutional
issues that included immunity from prosecution for parliamentarians.
Eighty-nine percent of voters supported canceling immunity.

Eighty-four percent supported granting the president powers to dismiss the
legislature if it was unable to create a functioning majority or adopt a
state budget in three months’ time.

More than 80 percent of Ukrainians supported the reduction of elected
deputies to 300 from 450 and the creation of a bicameral parliament, with
one of the houses “representing Ukraine’s regions,” as officially worded by
the referendum question.

“The president should take the results of the 2000 referendum and implement
them today – they correspond 90 percent to the latest proposals, including
canceling immunity and a bicameral parliament,”  according to independent
elections expert Serhij Vasilchenko, adding that doing so would save the
country a lot of time and money.

Prior to the 2000 plebiscite, the Constitutional Court ruled that the
country’s Constitution cannot be adopted by national referendum, but
allowed the vote to go forward on the four specific issues.
Meanwhile, adviser to President Yushchenko and former SDPU(o)
parliamentarian Stepan Havrysh said this week that simultaneous pre-term
presidential and Rada elections would be held if the country’s politicians
fail to reach agreement on a new wording of the Constitution.

“If there is no single process on drafting the Constitution, or the [new]
parliament chooses not to participate, this will lead to contemporaneous
early elections of both the parliament and the president,”  he said on Aug.

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

Jim Davis, Business Ukraine, Kyiv, Ukraine, Monday, September 3, 2007

In the past sixteen years, Ukrainian pioneers have turned offshore software
development into world-beating major industry which, according to industry
sources, is set to grow at an annual rate of 50%

Ukraine is best known for its iron age industrial base concentrated in the
eastern Donbass region that has churned out huge amounts of steel,
aluminium and allied metal products for most of the last century.

However, the cutting age arena of IT outsourcing is fast growing into a
success story to rival the might of the Soviet-era mega plants. One of the
major resources supporting this sector is an educational system that still
values the basics of physics and higher mathematics.

Many of the best and brightest Ukrainian students are still channeled into
fields that had strategic value during Soviet times and find practical
economic value in the post-Soviet hi-tech world. Software outsourcing had an
interesting development curve in Ukraine, starting with the 1991-2000 period
when there were large numbers of bright young students turned out by
universities and institutes who at the time could find only relatively
poorly paid employment in Ukraine.

Thousands of those who gained experience and had the potential to go further
were recruited by market leaders in Europe and the United States at what
seemed to them at the time to be princely salaries, some starting as high as
USD 40-50,000 a year.

Some of the better prepared of those who emigrated are now industry leaders
in the West. However, there were others who found that the high salaries on
offer were not enough to overcome the cultural differences and returned to
their homeland.

Although the IT sphere is by definition one of the most global of
industries, the reappearance of these returnees in Ukraine sparked a boom
within the domestic IT economy and has became a major factor in the
development of small Ukrainian software development companies, some
of which have turned into relatively large, profitable and growing

Even with worldwide software development demand leveling off amid much
greater competition, Ukraine remains well situated to maintain and expand
its growth in the industry.

With USD 400 million of income in 2006, Ukraine’s outsourcing industry
remains somewhat concentrated in Kyiv, but with living costs growing in the
capital city at a much greater rate than in the rest of the country,
outsourcing companies in other cities are finding their recruiting easier.

Industry sources say that Kyiv now boasts 53% of the Ukrainian outsourcing
market, followed by Lviv with 18% and Kharkiv with 13%. Other outsourcing
centers include Dnipropetrovsk (5%); Vinnytsia (4%); Odessa and Donetsk (2%
Domestic start-ups growing
A number of foreign companies have moved their software development
operations into Ukraine, but homegrown start-ups are still a major factor in
the sector. For example, SoftServe began as an idea in the heads of a couple
of recent Lviv University graduates in 1993.

Beginning with only three employees, including the founders, the company has
grown to become one of Ukraine’s largest in the field, and expects to expand
its current 900 employees to over 1,000 by the end of 2007.

Taras Vervega, executive vice president of SoftServe, told Business Ukraine:
“We expect growth to continue at over 40% a year for at least the next two

Building on our base in Lviv, we now also have development facilities in
Rivne and Dnipropetrovsk and have recently launched new centres in
Ivano-Frankivsk and Chernvitsi. In addition to our Ukrainian operation, we
also have sales and marketing offices in Boston, Massachusetts; Santa Ana,
California and Kyiv.”

Vervega also explains how the company is investing in human capital as part
of their growth plans. “Rapid expansion requires great human resources; that
is why SoftServe intensively invests in the education of its personnel.

To increase the professional level of prospective co-workers, we launched
SoftServe University, a full-scale educational institution giving students
the opportunity to receive the latest practical and theoretical education.”

According to Global Skills Report 2006 published by Brainbench®, Inc., an
internationally acclaimed skill-assessment company, “.eastern Europe,
specifically the former Soviet bloc, has become a fascinating study in
social and economic change.”

Highly-qualified, veteran managers and developers will surely get your
project done in time and on budget, while a seemingly less-expensive
workforce is likely to incur future costs through ill-documented processes,
lack of upward compatibility or bug-ridden builds.
Handing down the experience
The nature of software development is such that it requires high levels of
dedication from workers who are mostly individualists and, according to
employers, some who are downright prima donnas.

Alexander Timanyuk, president of the Technical Writers Club of Ukraine,
explains that his organisation has been successful through its interaction
between more experienced technical writers and the less experienced in
bringing general skill levels to a higher plane.

Timanyuk points out that often the desires of managers to keep a project on
schedule and on budget comes into conflict with the work habits and
mentality of the typical Ukrainian programmer. “Most, probably 99%, of
Ukraine’s developers are perfectionists. In other words, they are likely to
go beyond the call of duty to write the software that would meet the
industry’s highest standards, even if it means putting the deadline at
stake,” he says.

“It requires really skilled managers to match this programmer desire for
perfection with the stresses and strains that come with meeting customer
demands, particularly when the customers are often thousands of miles away
and usually only conversant in another language.”

One of the greatest hurdles for employers and employees has been differences
in language proficiency. However, in recent years a growing number of
Ukrainians have successfully overcome the English-language barrier, a very
important development.

“What might seem like an insignificant communication issue in everyday life
poses a real risk when it comes to written specifications. Incorrect
comprehension by a programmer might result in ambiguous requirements, and,
subsequently, inadequate software or outright project failure,” Timanyuk

The consensus among programmers might be summed up as “room for
improvement, but much to be viewed with pride.” The Global Skills Report
2005 Country Skill Rankings states that Ukraine ranks among the top five
countries well-versed in project management. According to the latest 2006
report, Ukraine now shares fourth with the United Kingdom.

It is estimated that there are currently around 500 private firms and
startups, with an average workforce of four to seven each. Also, there are
about 45 larger corporate operations developing software for the world’s
heavy-hitters, like Adobe, Inc. (the makers of Acrobat and Photoshop) and
other household names.

According to Timanyuk, the most serious problem, and maybe the only one,
currently plaguing Ukraine’s outsourcing sector is a growing lack of human
resources. Timanyuk says this was reflected in a controversial agreement
struck among 10 outsourcing companies, binding each of them to inform the
others if an employee of a group member sends their resume to another member
of the group.

Some programmers consider this agreement as highly negative, almost a form
of virtual slavery. However, the reporting agreement was still in effect as
late as the end of 2006.

Luckily, those people who started their programming careers as early as 1988
for as little as USD 40 per month have by now grown into a highly organised,
well qualified workforce with a strong sense of camaraderie, blacklisting
those companies involved in the above-described agreement, and resulting in
those firms eventually loosening their human resource retention policies.
Stiff competition for the best talents
With no letup in the headhunters’ cut-throat competition for prospective
employees, software development costs are unlikely to go down anytime soon.

However, in spite of being higher than those in India and lower than the
ones offered by Russia, the price for choosing Ukraine remains extremely
competitive, which plays a major role in securing the country’s leading role
in today’s outsourcing market.

As a representative of the programmers, Timanyuk believes that, unable to
match India in costs, Ukraine’s only way to cement its current success would
be via a process of branching out into long-term, elaborate and highly
specialised projects.

He concludes by noting that the country is definitely not a venue if you are
looking for a lucrative call center or 24/7 support, but, with the
populace’s keen interest in programming careers, steadily growing numbers of
computer-science university graduates and unparalleled expertise in complex
software projects, it will is likely to remain one of the most
cost-effective destinations for high-end outsourcers for some time to come.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
John Marone, Kyiv Post Staff Writer
Kyiv Post, Kyiv, Ukraine, Thu, Sep 06 2007

The government has announced it will auction off the state’s blocking stakes
in six regional electricity distribution companies, known in Ukrainian as

As the state no longer controls the so-called oblenergos, and the
government’s other privatization efforts have nearly ground to a halt this year,

the tenders appear to be welcome news and could beef up state coffers.

However, all six oblenergos are the subjects of bitter disputes for full
control by competing Ukrainian and Russian tycoons.

And the tenders have been announced just a month ahead of the country’s snap
parliamentary elections, which were called to end the political deadlock
between pro-Western President Viktor Yushchenko and his arch rival, Prime
Minister Viktor Yanukovych.

The timing of the announcement of the tenders, as well as the particularly
close relations between business and politics in Ukraine, have industry
insiders concerned that the state’s blocking stakes may be sold not to the
highest bidder, but rather on the basis of the buyers’ campaign support.
Energy analysts have said foreign bidders are not expected to take part in
the bidding due to time constraints and political noise.

Nevertheless, the government has decided to sell the state’s blocking stakes
in Odessaoblenergo, Poltavaoblenergo, Prykarpattyaoblenergo, Sumyoblenergo,
Chernihivoblenergo and Lvivoblenergo. State Property Fund (SPF) chief
Valentina Semenyuk announced the tender during an Aug. 30 press conference
in Kyiv.

Semenyuk, of the Socialist Party, is a member of Yanukovych’s governing
coalition, which has pressed forward with this and other privatization sales
to be held around election time despite disapproval from Yushchenko’s
administration, which fears the sales could be less than transparent.

The idea for the share sales had been suggested as early as last year, but
it gained momentum as the struggle for executive power between Yushchenko
and Yanukovych shifted into high gear earlier this year.

SPF spokesperson Nina Yavorska told the Post that the SPF would monitor

the privatization process every step of the way to make sure that it is
conducted fairly.

“If we see any abnormalities in the tender process, we always have the right
to step in and even suspend it,” she said. Yavorska denied that the timing

of the tender was chosen for political reasons.

“Privatization is an economic process, not a political one. Elections or no
elections, it goes on.”

According to Yavorska, the tender will be held sometime in October during
the coalition-building process following snap elections on Sept. 30.
According to Ukrainian legislation, state auctions must be held at least 30
days following their announcement, she said.

Of Ukraine’s 27 regional power distributors, six have already been
completely sold off to American and Russian companies. The state holds a
blocking stake of around 25 percent in six others, and a majority stake in
all but one of the rest. A blocking stake of at least 25 percent allows the
owner to prevent changes to a company’s charter but not manage it.

Alexander Parashchy, an analyst at Kyiv-based investment firm Concorde
Capital, said the power distributors in Odessa, Poltava, Prykarpattya, Sumy,
Chernihiv and Lviv regions are the most energy efficient and best managed of
those with a significant state interest. As monopoly suppliers of
electricity in their regions, they are attractive to foreign and domestic
investors alike, he said.

Virginia-headquartered AES Corporation, which operates more than 100
generation, and 17 distribution companies in 27 countries, paid $90 million
for two Ukrainian power distributors – Kyivoblenergo and Rivneoblenergo – in
a 2001 privatization tender.

VS Energy International, a company controlled by a Russian business group,
owns the other four fully privately-owned oblenergos. Ukrainian and Russian
press reports have linked VS Energy to Russian Duma deputy Alexander
Babakov, chairman of the right-wing Rodina party.

Ukrainian businessmen are also interested in controlling their country’s
regional electricity distributors.

A well-informed industry source told the Post that all six oblenergos in
which the state holds a blocking stake are the subject of intense conflicts
between shareholders, neither of whom has been able to gain control.

“They are ready to pay anything for the shares, as none of them currently
has full control,” the source said.

These power distributors are valued at significantly more today than the
prices paid back in 2001, the source said.

Three high-profile Ukrainian tycoons – Igor Kolomoisky of the powerful
Privat group, Hryhory Surkis, who is best known for owning the Dynamo Kyiv
football team, and Surkis’ reputed business foe Konstantin Grigorishin – are
involved in a struggle for five of the energy distributors.

Surkis and Grigorishin clashed for control of the Poltava- and Prykarpattya-
oblenergos in 2005, with each side’s security guards facing off outside
company facilities.

Privat has gone to Ukrainian and UK courts in their battle for control of
the Prykarpattya-, Poltava-, Lviv-, Chernihiv- and Sumy- oblenergos.

Odessaoblenergo is the subject of a battle between VS Energy and Ukrainian
billionaire Kostyantin Zhevago. Companies from Babakov’s group control a
majority interest in the utility. The state and Zhevago have minority

Zhevago is running for parliament again on the ticket of opposition leader
Yulia Tymoshenko. Kolomoisky reportedly has associates on the ticket of
Yushchenko’s Our Ukraine-People’s Self-Defense bloc.

In 2004, when Yushchenko and Yanukovych first faced off in elections for the
presidency, the country witnessed a spate of rushed privatizations favoring
well-connected tycoons. Ukraine’s flagship steel mill, Kryvorizhstal, was
privatized for $800 million – a fraction of its worth – in the run-up to

The buyers were businessmen linked to outgoing President Leonid Kuchma and
Yanukovych, who was serving his first term as prime minister.

After rising to power through the Orange Revolution of 2004, Yushchenko and
the government of then-Prime Minister Yulia Tymoshenko had the privatization
overturned through court proceedings and resold the mill for $4.8 billion in
2005 to the world’s largest steel group, Mittal Steel (today known as
Arcelor Mittal).

More recently, shady privatizations have been making a comeback with this
year’s sell-off of Luhanskteplovoz, a monopoly producer of locomotives

and trams that went to Russian buyers for half its market price in a
controversial tender that was sharply criticized by Yushchenko.

It’s still not clear which if any of Ukraine’s tycoons will have an
advantage in bidding for the oblenergos to be auctioned off this fall.

As the Post reported last week, there are also concerns that the sale of a
large chemical plant, Odessa Portside Plant, also scheduled during the
election process, could fall short of being transparent. 

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

Morgan Williams, SigmaBleyzer
President, U.S.-Ukraine Business Council (USUBC)

Washington, D.C., Wednesday, September 5, 2007

WASHINGTON –  You will find below a news article about the release

of the Organisation for Economic Co-operation & Development’s
(OECD) first ever “Economic Assessment of Ukraine 2007” report
and an executive summary of the contents and findings. USUBC is
pleased the OECD has prepared an economic assessment of Ukraine
and is working to distribute the OECD report to a wide audience.

If you would like to have a copy of the complete edition of the “OECD

Economic Assessment of Ukraine 2007″ document with all the charts,
tables and graphs, please contact the USUBC at
The USUBC will send it to you as an attachment. The attachment is a
PDF 2.70 MP file.

For links to the executive summary, etc. see the OECD links at the end

of this article.

Organisation for Economic Co-operation & Development (OECD)
Paris, France, Tuesday, September 4, 2007

PARIS – Sustaining Ukraine’s strong economic growth will require firm action
to cut red tape and bring down barriers to competition, says a new OECD

It adds that opening up markets to domestic as well as  foreign entrants
would boost productivity growth while public administration reform and a
stronger legal system are needed to improve the business climate and tackle

In its first Economic Assessment of Ukraine, the OECD says the factors that
have helped boost average annual growth to over 7 percent over the past six
years are unlikely to last. Import prices for energy are set to rise as
cheap Russian gas becomes a thing of the past.

Meanwhile, the current boom in consumer credit is bound to slow as household
debt increases. Rapid productivity growth, which came quite easily during
the initial recovery from the economic crisis of the 1990s, is now becoming
harder to achieve.

Nevertheless, the OECD concludes that with the right policies and
institutions, the country should be able to sustain strong economic growth
over the longer term.

The key will be Ukraine’s success in shifting to a pattern of
self-sustaining investment and innovation-led growth. But framework
conditions for business are poor, making any long-term undertaking
extremely risky.

Entrepreneurs are hampered by the uncertainty and unpredictability
surrounding much public policy as well as by heavy-handed regulation in
many spheres.

Excessive state intervention fuels corruption, as well as distorting
markets, while the weakness of the legal system undermines the security of
property rights.

The report recommends regulatory and other reforms to boost competition
and calls for a reduction of the role played by state-owned companies in the

According to the analysis of product-market regulation presented in the
Assessment, the regulatory burden in Ukraine is heavier than in any OECD
member country. Yet de-regulation can provide only part of the solution.
The report adds that Ukraine needs better, rather than simply less,

It also needs continued prudent macroeconomic management. The report
praises the budgetary discipline that has kept debt low and public deficits
in check since 1999.

This has helped restore confidence and supported economic growth. But
taxes are too high and the scope to cut them is limited by the heavy burden
of pension spending, according to the study.

Allowing the Ukrainian hryvnia, nominally pegged to the US dollar, to
fluctuate more freely on the foreign exchange markets could help reduce
inflation volatility and reduce the risks associated with the increasing use
of the dollar inside the country.

Ukraine is not one of the 30 member countries of the OECD but has
participated in number of OECD studies in areas such as agriculture,
energy, the environment and investment policy.

LINK: Economic Surveys:
LINK: Policy Brief:
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
If you are receiving more than one copy of the AUR please contact us.

OP-ED: By Volodymyr Bilotkach, Kyiv Post, Kyiv, Ukraine, Thu, Sep 06 2007

While waiting for my flight at Boryspil International Airport (KBP) earlier
this summer, I noticed something was different. It is true, Terminal B has
been expanded, but this was done at least a year before, and is not what I
am talking about here.

I noticed (from announcements made in the terminal) that some passengers –
and more than before – travel not to and from Ukraine, but through Ukraine,
using KBP as their transfer airport.

Does this mean that the gateway to Ukraine is actually becoming a hub, as
envisioned by both airline executives and officials over the past several
years? Do Ukraine’s airlines pursue the right strategy by trying to channel
passengers through KBP? How successful will they be?

 which happened in 1978. Once the market was liberalized, the airlines
discovered they could optimize their operations by routing their passengers
via one or several points in their network. This way, it became possible for
the airlines to service more cities with fewer flights.

As an example, to connect five cities on the West Coast to the same number
of cities on the East Coast, the airline could either offer 25 non-stop
coast-to-coast flights, or direct all its coast-to-coast traffic via a hub
in the middle, which will only require offering 10 flights (five from the
West Coast to the hub, and five from the East Coast, also to the hub).

As they now say in the Southern States, “You may go to heaven or hell when
you die, but you will have to stop in Atlanta (Delta Air Lines’ hub and the
world’s busiest airport) on the way.”

In addition to optimizing their networks, airlines using the hub-and-spoke
system were able to both offer higher frequency of service and fill up their
planes more.

In a very competitive airline business, the carriers have to keep their
costs in check, and filling up the airplanes is one way to do so.

Economists call this ‘economies of traffic density,’ which translated means
“per passenger cost is lower the fuller the flight is.”

Of course, every solution brings about new problems. The ones associated
with running a hub-and-spoke system relate to overcrowding of the hub
airport (recent research showed that a good portion of flight delays in the
US are ‘self-imposed’ by airlines running overcrowded hub airports); and
potentially devastating effects of adverse weather affecting the airline’s
hub for the airline’s entire network (again, on the US market, I can name
three such events this year alone off the top of my head, each of them
receiving a lot of media attention).

Let me, however, return to the questions I posed in the first paragraph. So,
is Boryspil becoming a hub? There is some progress in this direction, but
the number of transit passengers at KBP is definitely small relative to the
airport’s total traffic.

I do applaud Aerosvit’s and Ukraine International Airline’s (UIA) ambition
for developing sound networks (and it is my impression that Aerosvit is
doing more in this respect than UIA), but none of the two airlines will be
able to turn Boryspil into a hub alone.

Ukraine International has a well-established position in Western Europe;
whereas Aerosvit’s primary presence is in Asia, North America and Eastern

This is a somewhat simplified description, as both carriers fly to the
Middle East, and Aerosvit does have some flights to Western Europe, but
these facts do not change what I see as the fundamental problem on the way
to turning KBP into a true hub.

Specifically, given the current network structure of the two airlines, the
lucrative Western Europe-Asia market remains closed to Ukrainian carriers.
Instead, in addition to many direct services available, people travel via
Moscow, Istanbul, or Helsinki.

Moreover, a good number of Ukraine-Asia traffic goes via Moscow – these are
people who could be on (yet non-existent) direct flights from Kyiv; and
adding transit passengers from Europe is precisely what could make such
flights cost-effective.

So, my advice to UIA and Aerosvit is simple – cooperate. Enter into an
agreement, which will allow passengers arriving to Kyiv on Aerosvit’s
flights from Shanghai, Beijing or New Delhi to hop on Ukraine International’s
flights to Amsterdam, London, or Paris.

Of course, there will be certain problems that need to be overcome:
Schedules will need to be coordinated; potentially higher frequencies will
need to be stipulated in air services agreements with some countries.

However, this cooperation will bring higher traffic, fuller flights, more
frequent services to existing destinations, and quite possibly non-stop
flights to more cities. After all, this will put Boryspil on the map as one
of the world’s major airports, and make Ukraine’s airlines more competitive
on the global market.

Some may say that instead of cooperation, the airlines should simply merge.
While this definitely will make routing passengers through KBP easier, this
will also mean less competition on Ukraine’s domestic market. An alliance
between Ukraine’s two main carriers, on the other hand, will not produce
such an adverse effect.

Operationally, with two runways, KBP looks ready to handle more flights,
which is something potential hub status will require. What the airport will
need to work on, however, is adding the terminal capacity and simplifying
the procedure for handling transit passengers.

So far, the latter looks to me like the one I experienced flying via
Sheremetyevo last year – works fine if you have very few transit passengers,
but becomes confusing and quite inconvenient as more people fly through the

As I think about Ukrainian carriers’ position on the future global airline
market, the Europe-Asia and North America-Asia niches look like a natural
choice, with traffic channeled via KBP.

However, achieving this goal will require cooperation between the airlines,
adding terminal capacity to Boryspil, and simplifying transit procedure.

Hopefully, several years from now people in London will be sharing their
(doubtlessly good) impressions about a recent flight from Tokyo via Kyiv.
Volodymyr Bilotkach is a Research Fellow at the Kyiv School of Economics

and Assistant Professor at the University of California, Irvine.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Send in a letter-to-the-editor today. Let us hear from you.

AgriMarket.Info, Ukraine, Thursday, August 30, 2007
According to First Deputy Chairman of “Ukrzernoprom” Evgeniy Leng,
“Ukrzernoprom Agro”, one of the largest rapeseeds producers in Ukraine,
is against introduction of limits for rapeseeds export.

According to him, for today, fat-and-oil industry is developed and
investment-attractive industry and does not need such support.

At present, such bans like rates and quotas for all kinds of agricultural
crops function in Ukraine, and this affects first of all the profitability
of agrarian business. Today, rapeseeds crop is one of the most profitable
crops due to strong demand from the global market.

Leng noted that introduction of any rates or quotas for rapeseeds would
complicate entrance of the country to WTO (rapeseeds export do not threaten
the food security of Ukraine) and would decrease investments to this crop.
In order to introduce any kind of limits first of it all interested sides
should discuss this question.

Hereby we remind you that on August 28, 2007, General Director of
“Ukroliyaprom” Stepan Kapshuk informed that association offers to consider
the opportunity to introduce quotas for rapeseeds deliveries for domestic
market, cancel compensation of VAT while exporting this crop, introduce
benefits for its import to Ukraine.

Besides, “Ukroliyaprom” offers to introduce zero VAT rate for rapeseeds
deliveries to oil-extracting plants and enterprises in biodiesel production.

Reference: “Ukrzernoprom” is one of the largest bread producers in Ukraine.
Company represents vertically-integrated holding, combining plant growing,
flour milling and baking enterprises in different regions of Ukraine.

“Ukrzarnoprom Agro” Ltd is Agrarian Department of the Holding uniting 16
agrarian firms in 10 oblasts of Ukraine and is the largest rapeseeds
producer in the country. The total land area exceeds 70.000 ha.

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

Union, Kyiv, Ukraine, Tuesday, September 4, 2007

KYIV – Ukraine’s President Victor Yushchenko insists that the government
must be “highly professional and realistic” when drafting next year’s budget
and more careful and accurate in its macroeconomic projections, according to
the President`s press-office.

“2008 budget hearings are an important political and economic issue. I am
convinced we have all chances to learn good lessons from what we have been
doing this year and what we have failed to do in the area of economic
motivations, in fiscal policy and especially in the social sector,” he said
in a speech to open a session of the National Security and Defense Council
of Ukraine on Tuesday.

Yushchenko demanded that the country’s budget deficit must not be higher
that 2% of GDP. “This must become a rule,” he said, urging the government to
make local budgets more independent by finding additional sources of
revenue. “This can be income tax, license fees or taxes on the use of
natural resources and other sources, which are expected to bring up to UAH
30 billion in 2007.”

The president also demanded that the government must ensure there is enough
money in next year’s budget to implement strategic national programs, which
have been insufficiently funded this year.

He said these were the programs to develop the Ukrainian language and the
national book industry, preserve the country’s cultural and historic
heritage, buy school buses in rural areas, computerize schools, help the
disabled and build new border-crossing stations. “This is an extremely
important task, especially in the context of the Euro 2012 soccer finals,”
he said.

Yushchenko asked Ukraine’s governors to decide what sectors of the economy
and programs should become their “priority number one” in the 2008 budget.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Hockey horror – Ukrainian corruption puts gun to a boy’s head

COMMENTARY: By David Mittell in two parts
The Providence Journal, Providence, RI, August 29 & September 6, 2007

KHARKIV, Ukraine – DRUZHBA MEANS friendship in Russian and Ukrainian.
“Druzhba-78” was founded in Kharkov, USSR, now Kharkiv, Ukraine, in 1982,
by hockey coach Ivan Pravilov, originally to serve children born in 1975
with a
combination of sports – mainly hockey and soccer – and an academic program
that eventually led to six special Druzhba classes in Kharkiv public school
No. 11. To participate, Druzhba club members must maintain good discipline
and high grades.

The name Druzhba-78 came from a group born in 1978 that produced many
successes, including Dainius Zubrus, who is currently a member of the NHL
New Jersey Devils. The program introduced ice hockey to girls in Ukraine,
and one young woman who became an outstanding scholar-athlete will enter
Harvard College two weeks from now.

During the last two academic years 19 Druzhba-78 students from Kharkiv have
had full scholarships at public and private New England high schools. Their
travel, health insurance and other expenses are paid by grants from the
Eugene Kinasewich Fund, to which I am an unpaid adviser, and by which I
came to this story.

Ivan Pravilov is an entrepreneur in the true sense that he joins people with
ideas and makes things happen. He built Druzhba-78, which currently serves
200 boys and girls ages 6 to 16. It is his life’s work. He is an intense man
who has had periodic dust-ups with authorities in charge of Kharkiv’s only
hockey rink, beginning when the authorities he had to deal with were

In May 2005, the current city administration under Mayor Mihail Dobkin
appointed Sergei Brizha “principal,” or director, of the rink. Under Mr.
Brizha’s regime there have been accusations of corruption, theft and

There has been violence against Druzhba’s coaches, parents and players; the
jailing for three weeks in July and August of parent Alexander Alifanov,
without any charges being filed; and the jailing – ongoing in its fifth week
as of this writing – of coaches Oleg Chekryshov and Vladimir Eryomin. Two
other Druzhba coaches from Russia, whose border is 30 miles from Kharkiv,
have been removed by Mr. Brizha and are being deported.

I heard the outline of this story from the Kinasewich Fund before leaving
for Ukraine on a trip that already had a busy agenda. But when Victoriya
(“Vika”) Mykolenko, a remarkable young woman who will be a senior at Proctor
Academy in New Hampshire this year, asked me to come to Kharkiv (she is
home for the summer) to investigate, her request was my command.

In the Soviet system, surviving was a crime in that people often broke rules
just to survive. If one worked in a food dispensary and took some things to
feed one’s family, or to make a few rubles on the black market, this
malenkiy (petty) corruption, in contradiction to and under the nose of the
velikiy (great) corruption of the whole society, actually served to
introduce a sprig of humanity to a state organized to suppress humanity in
the people’s name.

With the collapse of the 1largest land empire in the history of the world,
this should have stopped, but of course it didn’t. I was perfectly prepared
to accept the possibility that Mr. Pravilov might be doing the good I
already knew about, and at the same time be doing well by breaking a few

He might be completely honest or partly honest, and so might Mr. Brizha. At
the end of a 20-hour train ride to Kharkiv I kept an open mind.

The first thing I said to Vika when I got off the train was that, while I
would try, there was probably nothing I could do to get Oleg and Vladimir
out of prison. My main purpose was to bear witness to druzhba in the
lower-case meaning of the word and to assure Druzhba-78 families that they
would not be forgotten by their friends in the United States.

Still, I remained prepared for the possibility I would learn things that
would be less flattering than an alumnus in the National Hockey League and
an alumna at Harvard.

I met extensively with three remaining Druzhba-78 coaches, with about 20 of
the parents and several dozen children. I reviewed videotapes of the
confrontations at the rink and the later public protest outside the city
jail, which led to the jailing of the two coaches and the parent.

With a translator, I watched the extensive local TV coverage of the
controversy. (Under President Viktor Yushchenko, uncensored television is a
great advantage that independent Ukraine now has over Soviet Ukraine – and
over contemporary Russia.)

Finally, I had truncated interviews with the assistant head prosecutor of
the Kharkiv Oblast (region); with the head of investigators in the city of
Kharkiv; and with the chief investigator of the case against the coaches.

I have read Natan Sharansky’s account of his imprisonment as a Soviet
dissident, and of how, while they always denied it, his jailers were spooked
whenever they knew Westerners were poking around.

Bluffing with a business card, my expectation was not to get ones who had
already refused to speak to the families of the jailed to talk openly with
me. My purpose was to get them talking with each other.

“That guy was in your office, too?!” I told each of them I had spoken to the
parents and coaches, asked if they had any comment, and assured them the
story was going to be told in the United States.

As I will explain next week, the story I learned to satisfaction fit to
print was: 1) Based on carefully reviewed videotapes, Mr. Brizha (who
declined to be interviewed) is a violent man who should never have been put
in a position of authority over children.

2) The current government of Kharkiv and the judicial system it manipulates
for its own dishonest purposes are rotten to the core. 3) Druzhba-78 is a
free, private institution, suffused with the voluntarism of parents seeking
a better life for their children.
COMMENTARY – by David Mittell, Second of two parts,

Providence Journal, Thu, September 6, 2007
KHARKIV, Ukraine – THE CONCRETE RINK, locker rooms and offices that
Druzhba-78 uses for athletic programs serving 200 Kharkiv boys and girls
would be barren except that the walls are kept freshly painted, and parents
and coaches have hung hundreds of pictures of Druzhba’s teams and their
opponents over 25 years.

Current rink director Sergei Brizha is quoted as demanding that these
pictures be removed because they are “political.”

The proximate cause of the crisis described in last week’s column seems to
be that a picture was found broken on the concrete floor. A parent accused a
worker with a screw gun of preparing to remove more pictures.

A shouting match ensued and the worker turned the loaded screw gun on the
parent. The hole in his T-shirt is clear in a video taken a few minutes

Parents and coaches surrounded the worker, while one of them called the
police. Hearing, or hearing of, the incident and subsequent commotion from
his office, Mr. Brizha picked up a loaded tear-gas gun and headed for the

A group of boys was milling in the hallway as he approached. Possibly
deliberately, possibly not, they did not clear a path. According to every
witness, he raised the tear-gas gun and put it to the head of a boy named
Artem Vorobyiv. Artem confirmed that when I interviewed him on Aug. 13.

Mr. Brizha did not fire what probably would have been a fatal shot to
Artem’s head, but soon did pull the trigger – apparently to disperse the
crowd blocking the worker’s escape. Then he retreated to his office,
followed by outraged parents.

This is all on videotape. More than two years of bad blood between
Druzhba-78 and the rink’s management seems to have prompted the former
to be prepared to document things.

In his office, Mr. Brizha continued to be confronted by shouting,
finger-pointing parents. Suddenly, he pointed the tear-gas gun at them at
close range and pulled the trigger a second time. One of his assistants
began wildly swinging round-house punches.

The melee unfolds quickly on the video, and it is hard at first to make
sense of what was going on. I had it stopped and rewound some six times,
and could not find an act of violence by any of the parents. Only by the
trigger-happy Mr. Brizha and his assistant.

Mr. Brizha contended that the worker with the screw gun had been the
victim – that he was beaten up by coaches Vladimir Eryomin and Oleg
Chekryshov. When Mr. Eryomin returned from a tournament in the United States
he was arrested. No charges were filed, but he was accused of leaving the
country illegally and “kidnapping” his players, in addition to beating up
the worker.

The next day, Mr. Chekryshov visited the jail to try to sort out things. He,
too, was arrested. (Unbeknown to him, his mother subsequently suffered a
paralytic stroke. She died on Aug. 23 and he received bail after being held
for a month; Mr Eryomin remains in custody for the sixth week.)

When parents organized a protest outside the jail, parent Alexander Alafinov
was arrested for trying to pull a child (not his own) away from policemen
who were roughing up the child.

When I arrived in Kharkiv, the two coaches had been held three weeks without
charges. Mr. Alafinov had been released the day before without being
charged. On Aug. 14, I happened to be at the jail when the coaches’ lawyer
arrived with a 10-inch high bundle of documents. Finally, charges against
the coaches! I doubt the conspirators who murdered Czar Alexander II in 1881
rated as large a packet of particulars.

Zinoviy Galavan, the head of investigators for the city of Kharkiv, had
refused to meet with me, but I saw him leaving the jail and approached him
as he was getting into his car.

He brusquely stated that the coaches were guilty of beating up the worker,
that the parents who had staged the protest were guilty of blocking a public
way, and that Ivan Pravilov, the founder and leader of Druzhba-78, was
“hiding in America” (he was at a hockey tournament with a team of younger
players), is guilty of unnamed crimes, and would be arrested on his return.
I cannot refute every crime Mr. Galavan cited in our five-minute
conversation. The allegations caught on videotape are fiction.

I believe the underlying story is about real estate (the hockey rink) and
greed. City fathers want to privatize the public rink for their own
enrichment, and Druzba-78 is in their way. Druzhba parents, by contrast,
understand that this free and independent program carries their hopes for
their children.

That is why they take the extraordinary risk of staging public protests, and
why every night they take turns sleeping in one of the locker rooms – lest
come morning all they have worked for be removed.

Observers of Russian President Vladimir Putin fall into critics and
apologists. I am of the former. But the degree of corruption in Kharkiv puts
Mr. Putin’s tactics in different light. “L’etat, c’est moi,” he effectively
said to the oligarchs he inherited from Boris Yeltsin. They are now in jail
or in exile.

In Ukraine, President ViktorYushchenko has been saying all the right things
about corruption for two and a half years. But the men who are ultimately
behind Sergei Brizha’s tear-gas gun continue to operate with no concern for
appearances and little concern for consequences.

I have not encountered this degree of corruption elsewhere in Ukraine. Some
say it is par for the course in cities where Prime Minister Viktor
Yanukovich’s Party of the Regions has predominated. What is plain is that
with a legal system as easily manipulated as Kharkiv’s apparently is,
Ukraine is not ready to enter the World Trade Organization.

The story playing out in Kharkiv is really a contest between the future and
the past. Druzhba-78 students studying in the United States will return
prepared to lead Ukraine to the third step in her national development. The
first was independence, in 1991. The second was democracy, however
imperfect in practice, which people voted for in 2004.

The third is national greatness for a bounteous country with an educated,
hard-working, preternaturally peaceful population. But greatness will not
come to a country that eats its young.
David A. Mittell Jr. is a member of The Journal’s editorial board.

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

By Morgan Williams, SigmaBleyzer
President, U.S.-Ukraine Business Council (USUBC)
Washington, D.C., Friday, September 7, 2007
WASHINGTON – The Executive Committee of the Board of Directors
of the U.S.-Ukraine Business Council (USUBC) has just approved the
Ukrainian -American Environmental Association (UAEA) as the 44th
member of the Council.

The Council has been working closely with Ken Bossong, a member
of  UAEA’s founding board of directors who serves as Co-Director.
Ken has been very supportive of the Council’s work and has attended
several of our meetings this year. 

Taras Lychuk, Rivne, Ukraine, serves as a co-director and is on the
board of directors. Carol Werner is one of the leaders of the UAEA
and on the board of directors.

One of the Council’s senior advisors, Andy Bihun, also serves as
a member of the Board of Advisors of the UAEA.

The Ukrainian-American Environmental Association (UAEA) is a
private, non-governmental, non-profit organization founded in 2004
and chartered in both the United States and Ukraine.  The U.S. office
is in Takoma Park, MD. The Ukraine office is in Rivne, Ukraine. 

It is a network of more than 850 Ukrainian and American NGOs,
academic researchers, businesses, government officials, and
individual citizens founded to facilitate the exchange of information
on a broad array of environmental issues including, but not limited
to, energy policy, climate change, air and water pollution, toxic
wastes, soil conservation, sustainable agriculture, and wildlife and
wilderness protection. 
UAEA publishes a free-of-charge, biweekly electronic newsletter
“Ukraine and the Environment.” Persons can be added to the mailing
list by sending an e-mail to

8606 Greenwood Avenue, #2; Takoma Park, MD 20912
Ukraine Address: 11 Strutynska Street, #18; Rivne, Ukraine 33003
E-Mail:; Web:

UAEA is the 22nd new member for the U.S.-Ukraine Business
Council in the last nine months. The Council’s membership now
stands at 44. The Council’s membership has doubled this year. The
new members are:
           (1)    American Continental Group, LLC
           (2)    Atlantic Group
           (3)    Bracewell & Giuliani LLP
           (4)    Bunge North America
           (5)    Cardinal Resources
           (6)    Cisco Systems
           (7)    The Coca-Cola Company
           (8)    The Eurasia Foundation
           (9)    Holtec International
           (10)  International Environmental Trading Group
           (11)  Kennan Institute, of the Woodrow Wilson
                   International Center for Scholars (WWICS)
           (12)  Kyiv-Atlantic Group of Companies
           (13)  Marathon Oil Corporation
           (14)  Marks and Sokolov, LLC
           (15)  Northrop Grumman
           (16)  Open World Leadership Center at the
                   Library of Congress
           (17)  Shell Oil Company
           (18) TD International, LLC
           (19) Ukrainian-American Environmental Association (UAEA     
           (20) U.S. Civilian Research Development Foundation (CRDF)
           (21) U.S.-Ukraine Foundation (USUF)
           (22) Vanco Energy Company

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
On September 5, 1967, Soviet authorities issued a decree
By Volodymyr Prytula, Radio Free Europe/Radio Liberty (RFE/RL)
Prague, Czech Republic, Wednesday, September 5, 2007

SIMFEROPOL, Ukraine – In the main mosque of Crimea’s capital, Simferopol,
relatives pray for the soul of Idriz Efendi. They say Efendi, an ethnic
Tatar, died poor but happy to have spent the last years of his life in his
ancestral homeland, Crimea.

His father, Jelal Efendi, was not so fortunate. Soviet authorities did not
permit him to resettle in Crimea — now part of Ukraine — after he was
deported to remote Uzbekistan.

The Efendis’ story is all too common. In May 1944, Soviet authorities
rounded up Crimea’s 190,000 Tatars and loaded them onto freight trains

bound for Central Asia, mainly for Uzbekistan.

This collective punishment was ordered by Soviet dictator Josef Stalin, who
accused the entire Crimean Tatar population of collaborating with Nazi
Germany in World War II.

The 1944 deportation remains a painful chapter in the history of Crimean
Tatars. Almost half of the deportees are estimated to have died during the
journey or shortly afterward.

On September 5, 1967, Soviet authorities issued a decree exonerating Crimean
Tatars from alleged wrongdoing. The decree allowed thousands of Tatars

deported to seek repatriation to Crimea.
Continuing Discrimination
Forty years later, however, many Tatars remain outside their homeland or
continue to face discrimination at home.

Refat Chubarov is the deputy head of the Mejlis, the legislative body
created after the Soviet collapse to represent Crimean Tatars.
Soviet authorities, he says, never had any genuine intention of giving
redress to Crimean Tatars.

“The growth of the Crimean Tatar movement in the 1960s, external aspects of
Soviet foreign policy of that time, the impending 50th anniversary of the
October revolution, but above all the pressure exerted by Crimean Tatars,
forced Soviet authorities to pretend they were solving the Crimean Tatar
problem,” he says.

Following the 1967 decree, the government did nothing to facilitate The 1944
deportation remains a painful chapter for Tatars (RFE/RL)the resettlement of
Crimean Tatars on the peninsula.

On the contrary, authorities adopted legislation tightening rules for
returnees seeking to obtain a passport and housing in Crimea.

Those who were able to find housing were rarely granted residence permits,
which in turn prevented them from finding work. Like Jelal Efendi, who
attempted to return home in the 1960s, large numbers of Crimean Tatars were
eventually deported back to Central Asia.

Chubarov says the decree only strengthened their determination to return to
their native country.

“They understood that the problem of their return depended on the mass
character of the Crimean Tatar national movement and the unity of their
movement,” he says. “I think that was the main result of that decree for
Crimean Tatars.”

It wasn’t until perestroika in the late 1980s that Crimea opened its door
wide for Crimean Tatars. But like Crimean political analyst Mykola Semena,
many accuse Moscow of turning its back on Crimean Tatars after the Soviet

“International problems should be settled by countries who are connected
with these problems,” Semena says. “In this case, the Crimean Tatar issue
should be settled by Russia.

When it comes to rights and legal obligations, Russia proclaims itself the
Soviet Union’s heir. But when it comes to responsibilities, to helping other
countries solve problems, Russia distances itself and declares this is an
internal problem of such or such country.”
No Celebrations
Today, Crimea is home to some 300,000 Tatars. The Ukrainian government over
the past decade has been allocating some $10 million annually to help Tatars
resettle in Crimea. Half of them have been allocated plots of land.

But Crimean Tatars say they are still struggling to find their place in
Ukrainian society. Many of them say they continue to face discrimination and
higher unemployment than Crimea’s Slavic majority population.

This is why the September 5, 1967 decree has gone largely unnoticed, and
uncelebrated, in Crimea.
[return to index] Action Ukraine Report (AUR) Monitoring Service]
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The Associated Press, Tucson, Arizona, Fri September 7, 2007

WASHINGTON – When Masha Spivak’s parents and two siblings were killed

in Ukraine during the Holocaust, she decided to go into hiding.

Two of her teachers heard about her family, took her in and helped her
change her Jewish identity – at a huge risk to their own lives.

More than 60 years later, one of those teachers has become the first person
to be honored at the U.S. Holocaust Memorial Museum with the Righteous

Among the Nations medal, given to non-Jewish rescuers by Yad Vashem,
Israel’s national memorial to the Holocaust.

The late Yevgenia Zamoroko-Lysenko was honored Thursday, but no living
relatives could be found to accept an award for Klavdia Sopova, the second
teacher. Both worked in the population registration department under police
command while Germany occupied Ukraine.

Spivak, the girl whose life they probably saved, died in 2004.

“The righteous showed physical and moral courage when it was sorely
lacking,” said Fred S. Zeidman, chairman of the U.S. Holocaust Memorial
council. “Happily today, we honor one of those rare heroes.”

Nikolay Zamoroko, of Ellicott City, Md., accepted the award for his mother.
She died in 2001, shortly after the Israeli memorial began reviewing her

Zamoroko, 59, said his mother was modest and wise – and completely

devoted to her students over a 50-year teaching career.
“It was no surprise for me that my mom, as I knew her, would do this –
without any doubt,” he said. “She was an inspiration.”

The longtime physics teacher and widow was a Christian, said Zamoroko, who
attributes many blessings in his life to the choices his mother made during
the Holocaust. “Your mom not only saved a life, she helped save the world,”
said Sen. Ben Cardin of Maryland.

More than a dozen Holocaust survivors from the Washington area came to honor
Zamoroko-Lysenko in the museum’s Testimony Theater, which is built with
stone from Jerusalem and usually shows films with survivors’ stories.

Nearly 22,000 Holocaust rescuers around the world have been awarded the
Righteous Among the Nations medal since 1963. A tree is planted for each
person along a walkway near the Holocaust memorial in Jerusalem. Three
Americans have received the award, along with more than 2,100 Ukrainians.

Cardin and Israeli officials said they must recommit to ending ongoing
genocides, such as that in Sudan’s Darfur region, to honor
Zamoroko-Lysenko’s legacy.

“The heritage of the Holocaust is not only about the 6 million (killed). It
is also the story of the few people who chose to stand against evil and live
up to the highest level of human values,” said Sallai Meridor, Israel’s
ambassador to the United States. “When we see evil, we can choose to be
indifferent or to make a difference.”

Spivak eventually lost her job, and her rescuers encouraged her to enroll in
forced labor to stay alive in Germany until the camp was liberated by
American troops. She moved to Israel in 1948 and lost contact with her
rescuers until 2000, when she learned of Zamoroko-Lysenko’s deteriorating

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
A Somber Homecoming, Everything is So Run-down

By Jan Puhl, Der Spiegel, Berlin, Germany, Thu, September 6, 2007

Many Poles were displaced from their homes in what is now Ukraine in the
turmoil after the end of World War II. Now the elderly expellees are
traveling east to revisit their old homes — and are often saddened by what
they find.

A summer downpour explodes over the Ukrainian town of Nadvirna, but
Zbigniev Deptula doesn’t even notice the rain. He is so excited that he has
removed his rain poncho, his hands pulling at the plastic as he runs through
the muddy puddles along the roadside.

“There’s the church,” he says excitedly. “It’s still there. We’re very close
now.” He strains his eyes to find the landmarks of his childhood, but
everything looks very different today compared with 60 years ago. The
once-meandering brook has been straightened and lined with concrete, there
are now houses where there were once fields, and the street names have

Deptula was born here in 1935, when Nadvirna was still called Nadvórna, and
Galicia, the area surrounding the city of Lviv (formerly known as Lemberg),
was part of Poland. In 1945, he and his mother were forced to abandon their
house within a few hours. This is Deptula’s first visit to his childhood

“That’s it, that’s the house of my parents,” he says, pointing to a red,
two-story wooden building with small lattice windows and simple ornamental
carving along the edges of the flat roof. “Typical Polish architecture,” he
explains. “There used to be a veranda in the back.”

The old man hurries through the garden of his childhood, now paved over in
concrete. “This is where the well was. They blocked it up.” He looks around
nervously and continues his story. “We were standing on the veranda when we
saw a German run by. They shot him in the back.” Deptula, now 72, clutches
his stomach and back, mimicking the soldier’s fall.

Deptula was 10 years old when he witnessed the Red Army chasing the Germans
out of what is now Ukraine, and then forcing the Poles westward. He wants to
know who lives here today. Does anyone remember the Poles, his mother,
perhaps even him?

He rings the doorbell, but no one is home. A hunched-over elderly woman
calls out to him from the garden next door. Deptula addresses her in Polish.
No, she says, she doesn’t remember the family. She hasn’t been living here
long enough.

She accompanies Deptula as he walks down the street to another house.
Another old woman opens the door. “Deptula?” No, the name means nothing to
her. But she does remember the Czerkavskis who lived two doors down — well,
“maybe,” she says. Deptula’s gaunt face freezes for a moment.

It has taken him more than 60 years to return home. “I remember everything
very clearly,” he insists, and yet the Poland of his childhood has vanished,
even from the minds of the elderly. “I will go to the church tomorrow to
pray,” says Deptula.
Back from Exile
Deptula is an exile. After World War II, Russian dictator Josef Stalin had
his troops drive more than two million Poles out of Poland’s former eastern

Most of them were resettled in formerly German territory that went to
Poland, because Stalin had appropriated close to half of Polish territory.
Deptula himself spent most of his life in Silesia. Today he lives in Biala,
once known as Zülz when it was part of Germany.

It was in Biala that Deptula watched the first visitors from West Germany
return to the houses of their childhood in the 1980s. Now Deptula himself is
a nostalgia tourist seeking to rediscover his own childhood home.

While the German exiles quickly organized into clubs and began lobbying work
in West Germany after the war, their Polish counterparts have only gradually
felt their way back into the past.

The borders of Poland and Ukraine shifted dramatically after the end of
World War II.Deptula has traveled to Ukraine with a group of Polish exiles.

Their bus has now reached Ivano-Frankivsk, about 40 kilometers (25 miles)
from Nadvirna. It’s pouring outside, and so the group’s tour through the
town, once known as Stanislawów when it was Polish, ends in a local pub
after half an hour.

The vodka flows freely, with the Ukrainians selling it in 100-gram
(3.5-ounce) glasses, a holdover from the country’s socialist past. One of
the tourists picks up a guitar and starts playing Polish tunes, loud and sad
at the same time. Deptula doesn’t like it. Since his wife died three years
ago, he has stopped drinking and keeps to himself.

But Jan Dolny feels completely at home in the crowd. It’s the 63-year-old’s
first time in Ukraine. Born in Prudnik in what is now Poland, a Silesian
town formerly called Neustadt, he has been living in Hamburg for close to 50
years now. Anyone who is involved in German-Polish reconciliation is likely
to know who Dolny is.

A retired dockworker, he has spent decades promoting understanding between
the two peoples. He has often accompanied German exiles to Prudnik and
arranged meetings with its Polish residents. He has witnessed mistrust
gradually give way to cautious friendship.

Now Dolny himself is surprised. “The Poles here are experiencing the same
thing that the Germans who were displaced from their homes in Silesia went
through a few years ago — and they’re behaving exactly the same way.”
The Poles are now about 15 years ahead of the Ukrainians. During that time,
they rebuilt their economy and established a solid foundation for democracy.
The crumbling facades of hulking office buildings in Poland’s cities have
given way to glass-and-steel towers developed with Western venture capital.

The Poles have even become accustomed to drinking espresso and wine instead
of inexpensive tea and vodka. Their country is a member of NATO and of the
European Union. Average incomes in Poland, adjusted for inflation, have
grown by about 70 percent in the last 15 years.

For many Poles, it takes a walk through the pedestrian zone of a town like
Ivano-Frankivsk to realize how far their country has come. Poles are the
Westerners here, while socialism seems to be less of a distant memory for
their eastern neighbors.

Very few houses are renovated, cows and flocks of geese roam along the sides
of potholed streets, factories are crumbling and illuminated billboards
advertising Western department store chains are few and far between.

Hundreds of thousands of Ukrainians work in Poland today — as careers for
the elderly, cleaning women and construction workers. Many Ukrainians hope
to achieve the same economic successes as their neighbors and even — some
day in the future — EU membership.

East of Poland, the Polish currency, the zloty, is seen as hard Western
currency and is as welcome as the German mark once was in Silesia. This
helps to explain why the visitors from Poland view the Ukrainians from the
same perspective as German nostalgia tourists once saw their eastern
neighbors — from a slightly patronizing standpoint.

“Everything that is beautiful and old here is Polish,” says an elderly woman
in the group. “The Ukrainians only built gray Soviet architecture.” A man
sitting at the next table downs his 100-gram shot of vodka, shakes his head
and complains: “Everything is so run down.”
‘You Have Two Hours to Leave’
The hardships of Galicia’s Polish population began long before 1945. The Red
Army marched into eastern Poland in 1939. The two dictators to the west and
east, Hitler and Stalin, had already divided up the country between them.
The communist secret service persecuted Polish priests, teachers,
aristocrats and intellectuals.

The Germans came later, deporting the Jews but giving Ukrainian nationalists
free rein. The troops of Ukrainian militia leader Stepan Bandera ran
roughshod over their Polish neighbors while the German military looked the
other way.

Whenever the Ukrainians went on their rampages, armed with scythes and
pitchforks, young Deptula would hide in the hay. He was once forced to watch
as Bandera partisans tortured his aunt with sharpened wooden skewers in an
effort to force her to speak Ukrainian instead of Polish.

Despite the Ukrainian atrocities, the arrival of the Red Army was no
liberation. Poland’s borders were pushed westward. Millions of its
inhabitants, most of them women, the elderly and children like Deptula, were
forced to move to accommodate the new boundaries.

“It was June 15, 1945,” he recalls. “An officer walked into our house, his
pregnant wife by his side. ‘You have two hours to get out, and then we move
in,’ he said.”

To add emphasis to his demand, the soldier pulled his Makarov pistol from
its holster and fired at the dishes and porcelain figures in the Deptulas’
glass cabinet. Deptula and his mother managed to pack two suitcases with
clothing and a small amount of food.

The pair encountered hundreds of refugees at the train station. It took them
three days to get a spot in a livestock car. But they counted themselves
lucky. At least the railroad offered them a roof over their heads and,
together with five other families, a few chickens and goats, they made their
way into the unknown.

Deptula has forgotten exactly how long the odyssey lasted through the
war-torn landscape to Silesia. All he knows is that it took several weeks.
The journey ended in Kedzierzyn-Kozle.

The town, previously known as Heydebreck-Cosel, had just been given its
Polish name, which it still has today. The Deptulas stepped off the train,
and the car they had been riding in was soon loaded with machinery from a
dismantled German factory bound for the Soviet Union.

Deptula and his mother were initially taken in by Germans. The newcomers
spent the next few weeks living with the established residents under one

The Germans’ chaotic attempts at fleeing the Red Army were over by then, and
even the wildly exaggerated stories of Germans being chased out of their
homes at gunpoint were diminishing.

It was the late summer of 1945, and the Germans who had remained in the
region were given the choice of becoming Polish citizens or making the
journey to the West.

Very few remained, and soon the Deptulas had the apartment they had been
sharing with Germans to themselves. To this day, the old man is convinced
that the Germans’ lot was much less severe than theirs. “They were allowed
to choose, but we were just driven out,” he says.

It took the Poles from the former east a long time to become established in
the country’s new west. “We believed that it was a great injustice, and that
we would certainly be allowed to return. The English would help us, or the
Americans, we thought.”

It wasn’t until the 1960s that the first of the exiles began renovating the
houses of former German residents, houses that now belonged to them. Deptula
also adapted to his new environment, eventually obtaining a degree in
agriculture and becoming the head of an agricultural cooperative.

How does he feel about the Germans who, like him, feel drawn to their old
homes decades after being driven out? Deptula hesitates. “We aren’t
demanding that they give us back our houses and our property in Ukraine,” he

Like many Poles, Deptula is concerned about the Prussian Trust (Preussische
Treuhand), a Düsseldorf-based company that plans to file lawsuits against
Poles (more…) to force them to return the property of German expellees.

The claims stand little chance of holding up in court, but Deptula can
understand the motives behind them. “I know exactly how it feels when you’ve
had to give up your home,” he says.
Translated from the German by Christopher Sultan,1518,504308,00.html

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

UNIAN, Ivano-Frankovsk, Ukraine, Monday, 3 September, 2007

IVANO-FRANKOVSK – The first joint memorial to Soviet soldiers and

warriors of OUN- URA in Ukraine was sanctified in Krykhovytzy village of
the Ivano-Frankivsk Oblast on occasion of the 566th anniversary of the village.
According to the press service of the Ivano-Frankivsk City Council, village
chairman Vassyl Vladin noted that the place for the memorial was prepared as
early as in 1992. “We, evidently, are the first who united the perished
people and call upon everybody not to sow discord among the Ukrainian
 nation”, noted the village chairman, stressing: “It is our history and it
is not necessary to speculate in it”.

According to the information of the City Council, the memorial was built at
the expense of the local community and sponsors. On the both sides of the
grave marble steles were established: – from the right side – to Soviet Army
soldiers and on the opposite side – OUN – URA warriors. Names of village
residents, who gave their life for Ukraine are stamped at the stone slab. 44
Soviet soldiers, 16 warriors of URA found their last shelter there.

According to the Krykhovytzy village chairman, the construction of the
memorial will start the unification of Ukraine and reconciliation of the
Great Patriotic war veterans and former warriors of the Ukrainian Rebel
Army. V. Vladin thinks that “the permanent hostility has to be stopped”
otherwise it is impossible to build the Ukrainian state.

However, chairman of the URA Brotherhood of the Carpathian Region Fotij
Volodymyrskiy pointed out: “the URA will never get reconciled with NKVD

and KGB employees, who tortured and jeered at rebels. It is impossible to
forget this”, he noted.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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