AUR#870 Sep 21 Oligarchs Loom Over Election; Party of Regions; Election Without Choice; EU-Ukrainian Cacophony; Voting Patterns; Biofuels Market

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

Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World       
                        
ACTION UKRAINE REPORT – AUR – Number 870
Mr. E. Morgan Williams, Publisher and Editor, SigmaBleyzer
WASHINGTON, D.C., FRIDAY, SEPTEMBER 21, 2007
 
INDEX OF ARTICLES  ——
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
1.  OLIGARCHS LOOM OVER UKRAINE POLLS
By Roman Olearchyk and Stefan Wagstyl
Financial Times, London, UK, Friday, Sep 21, 2007

2INTERNATIONAL OBSERVERS’ LIAISON GROUP OBSERVES
THE TRANSPARENCY OF THE ELECTIONS IN UKRAINE
Leonid A. Kozhara, Member of the Parliament of Ukraine
News release distributed on behalf of the Party of Regions
PRNewswire, London, UK, Thursday 20 September 2007

3UKRAINE: ELECTION WITHOUT CHOICE
ANALYSIS & COMMENTARY: By Oleh Bereznyuk
Head of the Kyiv Legal Society
Original article in Ukrainian, Translated by Eugene Ivantsov

Ukrayinska Pravda, Kyiv, Ukraine, Monday, Sep 17, 2007

4EU-UKRAINIAN CACOPHONY
ANALYSIS & COMMENTARY: By John Marone,
Kyiv Post Staff Journalist, Kyiv, Ukraine
Eurasian Home, Moscow, Russia, Monday, September 17, 2007

 
5CAN UKRAINE AVOID COALITION CHAOS?
ANALYSIS: By Peter Dickinson, Business Ukraine
Kyiv, Ukraine, Monday, September 17, 2007
 
6THE CAMPAIGN THAT COULD CHANGE VOTING PATTERNS
ANALYSIS & COMMENTARY: By Tammy Lynch
The ISCIP ANALYST, An Analytical Review, Volume XIV, Number 1,
Institute for the Study of Conflict, Ideology & Policy at Boston University
Boston, MA, Thursday, September 20, 2007
 
7TRENDS & OPINION POLLS REVEAL SHIFTING VOTER
PREFERENCES IN UKRAINE
ANALYSIS & COMMENTARY: by Taras Kuzio
Eurasia Daily Monitor, Volume 4, Issue 171
Jamestown Foundation, Wash, DC, Monday, September 17, 2007

8UKRAINE ELECTION: THE EASTERN FRONT
ANALYSIS: By Oksana Bondarchuk
Business Ukraine, Kyiv, Ukraine, Monday, Sep 17, 2007

9TYMOSHENKO GOES HARD ON AKHMETOV’S HEIRS
COMMENTARY: by Viktor Chyvokunya, Kremechug-Poltava, UP
Original article in Ukrainian, translated by Eugene Ivantsov
Ukrayinska Pravda, Kyiv, Ukraine, Thursday, September 20, 2007

10UKRAINE’S TIES WITH RUSSIA RUN DEEP, AND THAT’S
NOT ABOUT TO CHANGE
COMMENTARY: by David Marples, Professor
University of Alberta, History and Classics Department
Edmonton Journal, Edmonton, Canada, Monday, July 30, 2007

11UKRAINE TORN BETWEEN RUSSIA, THE WEST
COMMENTARY: By Mykola Riabchuk, Freelance
Edmonton Journal, Edmonton, Alberta, Canada, Wed, Aug 08, 2007

12OECD: TELL ‘EM SOMETHING THEY DON’T KNOW
Tough economic times could be right around the corner,
ANALYSIS & COMMENTARY: John Marone,
Kyiv Post Staff Journalist, Ukraine
Eurasian Home, Moscow, Russia, Monday, September 10, 2007

13CAN UKRAINE CAPITALISE ON THE GROWING BIOFUELS MARKET?
ANALYSIS: by Jim Davis, Business Ukraine
Kyiv, Ukraine, Monday, September 17, 2007

14FIRST EDITION OF RESPONSIBLE BUSINESS DIRECTORY
UKRAINE LAUNCHED IN KYIV
UNIAN, Kyiv, Ukraine, Thursday, September 20, 2007
========================================================
1
 OLIGARCHS LOOM OVER UKRAINE ELECTION

By Roman Olearchyk and Stefan Wagstyl
Financial Times, London, UK, Friday, Sep 21, 2007

At the recent convention of Ukraine’s Regions party, the man at the centre
of attention was not Viktor Yanukovich, prime minister and party leader, but
Rinat Akhmetov, the country’s richest man.

Sitting in the front row, two seats from Mr Yanukovich, he attracted the
biggest crowds of journalists, politicians and cameramen.

Meanwhile, Yulia Tymoshenko, the leader of the rival Bloc Yulia Tymoshenko,
has been seen on the campaign trail riding in a helicopter with Kostyantin
Zhevago, an iron ore billionaire.

And even President Viktor Yushchenko, who has often decried the political
influence of Ukraine’s oligarchs, has allowed himself to get close to
leading businessmen, who have donated money to Yushchenko-backed

charities.

With all parties campaigning hard for the September 30 parliamentary
elections, politicians are taking all the support they can. And some –
though not all – of the country’s business oligarchs are ready to lend a
hand.

But it is a delicate relationship. Mr Yushchenko has warned openly that the
oligarchs are once again interfering in politics and gaining “the taste of
power”.

His remarks will strike a chord with those voters who believe businessmen
have too big a say in politics. But his comments will be dismissed as
electioneering by others, who claim the oligarchs’ influence is exaggerated.

The oligarchs were formidable political players before the 2004 Orange
Revolution, but they were generally obedient to ex-president Leonid Kuchma,
currying favour to expand their businesses, often through privatisation
deals.

When Mr Yushchenko came to power, supported by the firebrand Ms

Tymoshenko, some businessmen feared the new leaders would seek to
reverse a decade of privatisation.

But those concerns waned after Mr Yushchenko and Ms Tymoshenko fell

out in 2005 and the privatisation review ended with the cancellation of just one
big deal – the Kryvorizhstal steel mill.

The president then said he wanted to move on and work with business. That
message was reinforced once Mr Yanukovich, the president’s arch-rival,
returned to power as prime minister last year.

With the economy booming, the oligarchs recovered their poise – and enjoyed
unprecedented increases in profits and asset values. Meanwhile, the
political reforms that followed the Orange Revolution devolved power from
the president to parliament – giving MPs, many of them millionaire business
people, greater access to power.

With Mr Yushchenko and Mr Yanukovich at loggerheads, and both battling Ms
Tymoshenko, the principal opposition leader, post-Orange Revolution politics
has offered many openings for oligarchs. Mr Yushchenko called the elections
early mainly because he was concerned about corruption in parliament.

The business oligarchs have broadly accepted the president’s plans to
balance Ukraine’s longstanding ties with Russia with closer ties to the
European Union. And with Europe becoming Ukraine’s main trading partner in
recent years, they have increasingly supported Kiev’s EU-oriented policy.

“[They] understand the need to put their suit s on before entering world
markets and the need to clean up their act, push reforms in the country and
in their companies,” says Kost Bondarenko, a political analyst.

Another analyst, Andriy Yermolaev, sees a divide between pro-Yanukovich
businessmen, led by Mr Akhmetov, whose companies are based in east

Ukrainian heavy industry, and those oligarchs supporting the president and Ms
Tymoshenko, who tend to have more diversified financial and trading
interests, such as Igor Kolomoisky, head of the Privat banking-based group.

The Yushchenko/Tymoshenko supporters favour rapid economic reform and
liberalisation. The pro-Yanukovich businessmen are more conservative. “The
rivalry between these two groups is quite damaging and ruthless,” says Mr
Yermolaev.

Mr Yushchenko is particularly worried about Mr Akhmetov, who stands out
among oligarchs as the richest and most overt in his political involvement.
An MP for the Regions party, the largest in parliament, he has long backed
Mr Yanukovich and worked with him in managing rich, Russian-speaking eastern
Ukraine.

The party recently infuriated the president by pushing for a referendum
calling for official status for the Russian language and challenging Mr
Yushchenko’s hopes of closer ties to Nato.

Ms Tymoshenko claims Mr Akhmetov profits from his loyalty to Mr Yanukovich,
citing his recent acquisition of a stake in a big state-controlled power
generator, Dniproenergo. Mr Akhmetov has denied that he benefited from
preferential treatment.

Mr Kolomoisky and Mr Akhmetov did not respond to requests for comment

about their political interests. Among several other business leaders, only Serhiy
Taruta, co-owner of the leading steel producer ISD Group, agreed to answer
questions about politics.

The business elite was generally “seeking to be apolitical, as playing in
politics can unearth serious risks” for long-term business relations and
reputations, he said.

That may be true for Mr Taruta, but clearly not for some of his big rivals.
THE OLIGARCHS
[1] Rinat Akhmetov, aged 41.
Controls assets in steel, coal, energy,
banking, hotels, telecoms, television and soccer. Estimated worth: $15.6bn
(£7.7bn, Euro11.1bn). Backed Viktor Yanukovich in the 2004 presidential
elections.

A dedicated member of the premier’s Regions party and, since March 2006, an
MP, but has some discreet links with Viktor Yushchenko too. He backs the
president’s EU membership bid but opposes his plans for speedy Nato
accession. Backs making Russian official language.

[2] Viktor Pinchuk, aged 46. Controls assets in steel pipe production,
railway wheels, media and banking. Estimated worth: $7bn. Son-in-law to
former Ukrainian president Leonid Kuchma. Backed Mr Yanukovich in 2004
elections. Ex-MP, stepped down after the Orange Revolution.

Some close associates from his past have recently joined Mr Yanukovich’s
Regions party as parliamentary candidates. Supports EU membership
aspirations. Has not been vocal on Mr Yushchenko’s Nato plans or the

Russian language issue.

[3] Igor Kolomoisky, aged 44. Controls assets in banking, ore mining, steel,
energy, ferro alloys, hydrocarbons and media. Estimated worth: $3.5bn. Main
co-owner of Ukraine’s Privat business group with Gennady Bogolyubov, aged
45.

Privat holds assets outside Ukraine, including factories in Russia, Romania,
Poland and the US. Neither has served in parliament or government but
according to analysts, both have backed various political parties. Neither
has publicly expressed personal views on the EU, Nato or Russian language.

[4] Sergey Taruta, aged 62. Assets in steel, machine building, hotels, gas
production. Estimated worth: $2.3bn. Co-owns Ukraine’s industrial ISD Group
along with Vitali Gayduk, an ex-government official.

Like Mr Akhmetov’s empire, this group started in the industrial Donbass. ISD
has invested outside Ukraine, including in steel mills in Hungary, Poland
and the US. The group appears to try avoid intervening in politics but is
viewed as pro-Yushchenko, even though it has not publicly support an EU
membership bid.

[5] Kostyantin Zhevago, aged 32. Assets in ore mining, banking, truck
manufacturing, hydrocarbons and real estate. Estimated worth: $2bn. Has
served as legislator, switching between parties since the late 1990s.
Currently member of Yulia Tymoshenko’s bloc. Supports EU integration,

but has not expressed views on Nato or language.

[6] Dmitry Firtash, aged 42. Assets in gas and electricity trading,
chemicals, media and real estate. Estimated worth: $1.4bn. Not publicly
active in politics since an unsuccessful bid for parliament in 2002. Viewed
as a backer of various parties and political projects.

Has strong relations in Moscow as a partner of Russia’s Gazprom in
Swiss-registered gas trader RosUkrEnergo. Has not expressed his views on

EU membership, Nato or the Russian language issue.
————————————————————————————————-
Source: Estimated wealth calculated by Kiev-based investment bank Dragon
Capital and published by Ukraine’s Korrespondent magazine in a 2007 listing
of the country’s wealthiest people.
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
2.  INTERNATIONAL OBSERVERS’ LIAISON GROUP OBSERVES
THE TRANSPARENCY OF THE ELECTIONS IN UKRAINE

Leonid A. Kozhara, Member of the Parliament of Ukraine
News release distributed on behalf of the Party of Regions
PRNewswire, London, UK, Thursday 20 September 2007

KYIV, Ukraine – While the early parliamentary elections in Ukraine are

just about to enter the finishing straight, the favourites in the race were
already determined some time ago.

All polls reveal that the Party of Regions – the party delivering the
foundation of today’s ruling coalition – is clearly ahead.
Recent studies indicate that the Party of Regions is on course to repeat
last year’s success and is likely to even outperform it by winning about 33
to 35% of the votes.

The Bloc Yulia Timoshenko (BYT) is lagging more than 10% behind, and the
pro-presidential political group “Our Ukraine – People’s Self-Defense” (OU –
PSD), which is headed by the former minister of the interior Yuri Lutsenko,
is heading for a safe third place.

Most analysts are unanimous that the fourth party to enter parliament will
be the Communist Party, which is predicted to receive 3 to 5% of votes.

The remaining participants (among them the bloc of former chairman of
parliament V. Lytvyn and the Socialist Party of current chairman O. Moroz)
are currently ranging in the “danger zone”.

Forecasts suggest that the Party of Regions will clearly dominate the
elections, thereby gaining the basis to repeatedly participate in the
formation of ruling coalitions and that the party’s chairman Viktor
Yanukovich will continue to serve as the country’s prime minister.

Meanwhile, the early elections are being held on an obviously insufficient
and at times even frankly questionable legal basis. The underlying
resolutions obviously have a political rather than a constitutional
character.

The elections became possible as a result of a situational compromise
reached between the principal political forces, above all between the
Coalition of National Unity, on the one hand, and the president and the
united opposition, on the other.

It is common knowledge that the resources of the Ukrainian administration
are deployed in the electoral race. Against the background of the
artificially initiated parliamentary crisis, the Council of National
Security and Defence as part of the presidential administration began to
high-handedly take over many government functions.

Additionally, since May, the president and the people associated with him
have actually been blocking the activities of the Constitutional Court that
would have been able to act as arbitrator in the complex crisis.

In many regions, the heads of the regional and district administrations were
also appointed heads of the electoral committees of the president’s bloc,
raising justified doubts concerning the legality and transparency of the
elections in the regions headed by loyal and dependent followers of the
president.
————————————————————————————————
Contact: Mr. Kozhara A. Leonid, Member of the Parliament of Ukraine
Kyiv, Ukraine; Phone: +38-044-255-35-65; +38-044-255-23-42
Mobile: +38-063-183-85-30; E-mail: kozhara_l@rada.gov.ua
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3.   UKRAINE: ELECTION WITHOUT CHOICE

ANALYSIS & COMMENTARY: By Oleh Bereznyuk
Head of the Kyiv Legal Society
Original article in Ukrainian, Translated by Eugene Ivantsov

Ukrayinska Pravda, Kyiv, Ukraine, Monday, Sep 17, 2007

Early parliamentary election is approaching really fast but many voters

have not yet decided what party of bloc they will vote for.

Indeed, it is very difficult to make a choice if you want to back a certain
political force which has negative characters in its list you will never
vote for.

This is one of the main defects of the proportional voting system that
implies formation of the election list by congresses of the political
parties and blocs.

People have no choice and that is why they are forced to vote for the
candidates proposed by the political parties only. Besides, parliament
formed in such a way is a legislative body run by several politicians.

Adoption of a bill by the highest legislative authority depends on leaders
of the political parties but not 450 MPs.

Under such circumstances proposals to decrease the number of MPs from

450 to 300 are quite reasonable. However, it does not really matter how many
lawmakers parliament will have.

In fact, current voting system brings to naught the idea of a direct
election and people’s representation in authority. The Verkhovna Rada
lawmakers are elected through mediation of the political parties and rather
represent these parties than the people. In this connection MPs think over
the ways to please their leaders than to defend interests of the people they
represent.

That is why election lists of the political parties consist of drivers and
secretaries of the political beau monde rather than authoritative public
figures.

It is quite obvious that such election system makes sense only for the
political leaders of parliamentary factions because it makes easier control
over subordinate MPs than over independent MPs capable of standing their
ground.

Thus, to secure transparence of the election and real people’s
representation in parliament it would be reasonable to refuse the
proportional vote system and return to the majoritarian system, having
improved the Law on Election of People’s Deputies of Ukraine which was in
action in 1994.

The new law must stipulate election of MPs in 450 single member
constituencies through a direct voting. This number of MPs would be the best
representation of voters in parliament and feedback between MPs and their
voters.

It needs mentioning that MP from the majoritarian constituency is dependent
on voters in his constituency. That is why he will be forced to take into
consideration interests and opinion of the people who elected him.

Besides, it would be better a two-stage election. In this case, voters will
elect only those candidates who have received over 50% of votes in their
constituencies.

If none of MPs gets 50% of votes the second stage of election must be held.
Two candidates who received the most votes in the first stage will compete
in the second stage. The one who gets relative majority of votes is elected
to parliament.

This approach will enable to elect candidates who are really popular with
the voters which will decrease election of accidental people to the
Verkhovna Rada.

Given the current situation in Ukraine, majoritarian system is more
democratic than the proportional one, because it enables citizens to elect
candidates other than proposed by the political parties to the Verkhovna
Rada.

At the same time, this system does not interfere with activity of the
political parties. Parties can nominate and support their candidates in
single member constituencies. If a party is supported by voters its
candidate will be elected to parliament. Experience of carrying out election

campaigns in Great Britain proves it.

Taking into account all above-mentioned arguments, it becomes obvious that
the proportional vote system must be rejected.

Let’s talk about the procedure of amending election legislation. Parliament
elected according to the existing law will most likely be unable to adopt a
new law and that is why this issue needs to be included to the question list
of an all-national referendum.

The president himself or on request of three million citizens is empowered
to call the referendum. With a weak parliament, adoption of new bills and
amending the existing legislation is possible only through the referendum.

This is the only way to legitimize normative legal acts because, as provided
by the Law on Referendums, “laws and other decisions adopted by people at a
referendum have a supreme legal effect to bills adopted by the Verkhovna
Rada of Ukraine, the Verkhovna Rada of the Crimea, the President of Ukraine,
the Cabinet of Ministers of Ukraine, all legislative and executive bodies of
the Crimean Republic, and local governments. Decisions adopted at the
referendum have a supreme legal effect to the local governments where the
referendum was held.”

So, one can draw a conclusion that the existing law on election is
imperfect, and thus needs to be amended. Besides, the above-mentioned
defects this law has some other flaws.

Parliament elected according to the existing law must form parliamentary
majority that will form government.

If none of the political forces has majority in the Verkhovna Rada then a
coalition of the political parties needs to be formed. Formation of a
coalition if a very difficult and painful process. If politicians fail to
meet halfway the parliament will be incompetent and the Cabinet of Ministers
will be never formed again.

The president will be forced to dissolve parliament again but he will not be
able to do it because Article 90 of the Constitution stipulates that “powers
of the Verkhovna Rada elected at an early election held after the President
of Ukraine terminated powers of parliament of the previous convocation,
cannot be terminated during one year since the election date.”

Ukraine will be plunged into the political crisis again, but this is not
defects of election legislation but the current Constitution and
parliamentary political system which is less stable as compared to the
presidential one.

Under current political and legal system there are no guarantees that the
government formed by the coalition of parliamentary factions will be able to
perform its functions as it will fully depend on ambitions of the political
leaders.

Any quarrel between politicians will have a negative impact on the
government performance. Thus, in order to secure stability of the highest
branch of executive power and the public in general, the Constitution of
Ukraine needs to be amended.

Again, the referendum can resolve this problem and the necessary amendments
can be decided by the people of Ukraine.

Some political forces are trying to persuade the society that it is only the
newly elected parliament that will be able to amend the Fundamental Law. But
what to do if parliament is incompetent and the Constitution must be amended
anyway? The answer is easy.

Taking into account that, as provided by Article 5 of the Constitution, the
people of Ukraine are the only source of power and only the people of
Ukraine can amend and adopt the Constitutional order, it becomes obvious
that amendments to the Constitution can be adopted only through an
all-national referendum.

So, it will be impossible to overcome social and political crisis in our
country without amendments of the current legislation and the Fundamental
Law.

Gallup Polls proves that the balance of the political forces in the new
parliament will most likely remain the same and none of the political
parties will have majority in the Verkhovna Rada.

It is impossible to say if the lawmakers will be able to form a coalition.
But if the coalition is not formed Ukraine will be plunged into another
political crisis.

Of course, any crisis is harmful for the state and leads to decline of the
country’s economy. Under such conditions, the question of amending the
Constitution and the election Law is still open.
———————————————————————————————-

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
4.  EU-UKRAINIAN CACOPHONY

ANALYSIS & COMMENTARY: By John Marone,
Kyiv Post Staff Journalist, Kyiv, Ukraine
Eurasian Home, Moscow, Russia, Monday, September 17, 2007

When EU leaders visited Kyiv on September 14 for the annual Ukraine-EU
Summit, they didn’t say a lot that was new. Ukrainian President Viktor
Yushchenko, their host, also stuck to his usual, pro-Western rhetoric.

Nevertheless, taking place just two weeks before Ukraine’s fateful, early
parliamentary elections, the summit served as a nice sounding board,
revealing the dissonance that remains between Kyiv and Brussels and within
Ukraine itself.

As always the Europeans underscored the need for Kyiv to consolidate
democracy, strengthen the rule of law and beef up protection of human
rights.

Since Ukraine’s 2004 Orange Revolution, which handed Yushchenko the
presidency, democracy has been alive and – well – lively. Unlike under
former president Leonid Kuchma, the head of state no longer lords it over
everyone else.

 Instead, the Ukrainian president has been in a seemingly never-ending war
with the country’s prime minister, Viktor Yanukovych.
Rule of law, always vulnerable, was the first casualty of this war. As for
human rights, they’re like war refugees trying to stay out of the line of
fire.

Appearing in Ukraine in the run up to what has been billed as the deciding
battle, Euro top dogs like Javier Solana and Jose Manuel Barroso reiterated
the EU’s unofficial position as a modern-day, regional League of Nations.

The EU’s mandate as European arbiter is bolstered by the carrot of greater
integration for its “neighbors”. “Free and fair early parliamentary
elections … and the formation of an effective and stable government would
be the best evidence of the country’s ability to accomplish this goal,”
reads a joint statement from the summit.

Ukraine’s last parliamentary elections in March 2006 were deemed the newly
independent nation’s fairest ever. But forming a coalition government proved
less successful.

As a result, Orange Revolution hero Yushchenko found himself with Orange
Revolution villain Yanukovych as a prime minister.
Now Eurocrats are concerned that Ukraine might regress to the way it held
elections in 2004, when it took hundreds of thousands of street protesters
to reverse Yanukovych’s fraud-filled presidential victory over Yushchenko.

Mr. Yushchenko tried to allay these concerns. “In the presence of our
European partners, I want to underline my firm guarantee that the early
elections will be transparent and in accordance with international
standards,” he said on Friday in Kyiv.

Unfortunately, thanks to his own past indecision and lack of team-building
skills, Yushchenko is no longer as well placed to guarantee smooth
elections.

Yanukovych controls the government. And this means that although Yushchenko
may not be as vulnerable as he was as an opposition candidate for the
presidency in 2004, he doesn’t wield the same control over the state machine
as he did during the March 2006 elections, when his man controlled the
government.

Already some of the dirty election tricks of the past, such as home voting
and calls for single-seat constituencies, are resurfacing on the initiative
of the Regions.

Yanukovych has a solid support base in the country’s Russian speaking east
and south, but he could still lose control of the government if the
president forms a coalition with popular opposition leader Yulia Tymoshenko.

With billions of dollars in privatization deals and state support for the
eastern industrialists who back Yanukovych at stake, no one expects him to
give up his job without a fight. And the fight might get very dirty.

On the eve of the Summit, Solana told Ukrainian media that Ukraine should be
serious about the elections. In what sounded like a swipe aimed at
Yanukovych, Solana criticized a recent attempt by the premier’s team to play
the NATO card as a campaign tool.

But Europe isn’t so much interested in the election campaign as it is the
election results. What the EU really wants is a Ukrainian government
committed to long delayed reforms in the country’s corrupt VAT system,

the sale of agricultural land and a level playing field for smaller businesses
and foreign investors.

“It is important to achieve stability for the Ukrainian government to
concentrate its energy on reforms,” European Commission president Jose
Manuel Barroso said straight out.

In an attempt to portray the summit as an endorsement of his pro-Western
policy goals, President Yushchenko ignored his failure at reforms, playing
up economic achievements instead.

“I am pleased to note today that even during such a serious parliamentary
crisis, the economy has stayed alive, reaching new heights, beginning with a
rise in GDP, central bank reserves and levels of imports.”

What the President didn’t note, however, was that the economy is being
driven by public consumption and fueled by still relatively cheap Russian
gas – both of which are expected to end soon.

The summit delegates reaffirmed their joint strategic interest in energy
co-operation, however, despite its promises of lighter visa restrictions and
better trade conditions, Europe isn’t helping Ukraine where it counts.

European countries led by EU powerhouse Germany are more interested in
cutting individual gas deals with Russia than ensuring alternative energy
routes through Ukraine.

Ukraine has definitely got to wean its Soviet era industry off cheap gas,
but Europe has done a poor job of standing up to the Kremlin’s gas bullying.

In this sense, the use of east versus west rhetoric in Ukraine’s election
campaign is a reflection of the country’s geopolitical reality.

Ukraine only stands to gain by integrating with Europe, and if the EU and
Ukraine work together they might be able to break Moscow’s hydrocarbon
headlock on its western neighbors.

But not everyone in Ukraine sees revived Russian imperialism as a problem.
The Kremlin was virtually the only country to recognize Yanukovych’s
fraudulent 2004 election victory.

Equally important are the millions of eastern Ukrainians who make up
Yanukovych’s electorate – many are not ethnic Ukrainians.

That’s why, despite his attempts over the last few years to present himself
as a liberal economic pragmatist, Yanukovych is still very much bound to
neo-Soviet issues such as not joining NATO, making Russian a second

language and keeping the country under the control of eastern industrialists.

On September 11, three days before the summit hosted by his political
nemesis, the prime minister revealed some of these leanings in an attack on
EU policies toward Ukraine.

“In several areas of relations with the EU, a situation is forming which
doesn’t please us at all,” he told a government meeting.

Yanukovych referred to the EU’s visa policy as “quite tough,” and accused
the EU of protectionism against Ukrainian goods.

The Yanukovych team, financed by powerful eastern industrialists, can hardly
be described as anti-Western. Pro-Yanukovych businessmen have led the drive
toward greater corporate transparency in order to obtain Western loans to
revamp their ageing Soviet-era assets. And Yushchenko’s team also has its
fair share of oligarchs.

But in terms of both rhetoric and policy, the President has been more
consistently liberal, pro-European and reformist.

The question is whether this is enough to return him control over the
government. If it isn’t, the dissonance between the President’s unfulfilled
policy goals and Europe’s unsatisfied policy expectations will only grow.
————————————————————————————————-
http://www.eurasianhome.org/xml/t/opinion.xml?lang=en&nic=opinion&pid=856
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
Send in names and e-mail addresses for the AUR distribution list.
========================================================
5.  CAN UKRAINE AVOID COALITION CHAOS?

ANALYSIS: By Peter Dickinson, Business Ukraine

Kyiv, Ukraine, Monday, September 17, 2007

The election campaign has yielded neither new faces nor particularly
original ideas, but that is no reason to assume that the September 30 ballot
will not transform the political landscape

Accepted wisdom has it that the current elections will merely produce the
same results as the 2006 round of voting, leaving the political status quo
intact.

This assumption fails to take into account the fact that until the Moroz
defection, the 2006 vote was an almost exact ideological repeat of the 2004
presidential results.

Opinion polls suggest that this pattern will indeed be repeated, meaning
that we could soon witness the return to power of a renewed orange
coalition, with Yulia Tymoshenko no longer a junior partner this time round
but instead very much in the driving seat.

Assault on fortress Donbass
In a bid to cement her ascendancy, the Tymoshenko campaign strategy has
focused on a bold offensive into the Party of Regions bastions of southern
and eastern Ukraine.

If she succeeds in winning over a significant proportion of disgruntled
Regions voters and alienated former Socialist Party devotees, Tymoshenko
will have achieved what no other politician among the current crop has
succeeded in doing, namely bridging the regional schism which hampers the
country’s progress. This would represent an unprecedented mandate from the
Ukrainian electorate.
The rise and rise of Ms. Tymoshenko
There would be a certain sense of continuity if the Tymoshenko Bloc’s drive
to claim a chunk of the Yanukovych vote proves decisive. After all,
Tymoshenko has been at the epicentre of all the country’s major political
earthquakes of the past three years.

If we look back and ask why the first orange government fell apart in 2005,
the shorthand answer is simple enough: because of Tymoshenko. Rivalries and
jealousies provoked by her attempts at strong government were at the core of
the Orange collapse.

Why did attempts to form a renewed Orange coalition unravel after the 2006
parliamentary elections? Again, it was all down to clashes over Tymoshenko,
whose stated desire to return to the Prime Minister’s office was so bitterly
opposed by her Orange allies that it paved the way for a Yanukovych
comeback.

The Yulia factor was also the driving force pushing President Yushchenko to
dissolve parliament in April. His decree was in many ways an overt admission
that whatever his personal reservations may have been, playing second fiddle
to Yulia had, by spring 2007, become a political necessity in order to stave
off the present danger of becoming a lame duck president.

For her part, Tymoshenko has never been as low profile as she was throughout
the political crisis that followed, a sure enough indication that she had
gotten what she wanted and was content to let the boys squabble it out among
themselves.
Yushchenko as kingmaker
Barring a major surprise at the polls the only potential obstacle now
blocking Tymoshenko’s path to the premier’s office would come in the shape
of post-election efforts by President Yushchenko to revive his discredited
collaboration with a returning Yanukovych government.

At first glance it might appear unthinkable that Yushchenko could consider
working with a team which has relentlessly attacked his presidential powers
since coming back to office and failed to keep faith with any of the policy
commitments made in the notorious Universal Agreement on National Unity
struck in August 2006.

Given Yushchenko’s taste for the middle ground and fear of Tymoshenko’s
popular appeal, such compromises can never be ruled out.

However, the only conceivable argument for such a compromising coalition
would be one of national consolidation. Crucially, Tymoshenko can now
effectively render that position redundant by securing a foothold in the
South and East of the country.

If her bid to capture Donbass hearts and minds fails, then Yushchenko will
be strengthened in his position as kingmaker, with the end result that we
could be in for a new round of prolonged coalition talks.

If Yulia succeeds in the East, however, it should prove decisive and force
Yushchenko to accept as Prime Minister the lady who may well be his closest
rival for the 2009 presidency.
————————————————————————————————
LINK: http://www.businessukraine.com.ua/can-ukraine-avoid-coalition
————————————————————————————————

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================      
6.  THE CAMPAIGN THAT COULD CHANGE VOTING PATTERNS

ANALYSIS & COMMENTARY: By Tammy Lynch
The ISCIP ANALYST, An Analytical Review, Volume XIV, Number 1,
Institute for the Study of Conflict, Ideology & Policy at Boston University
Boston, MA, Thursday, September 20, 2007

On 30 September, Ukraine’s voters go to the polls for the fifth time in four
years. This time, they will vote again for their parliament (Rada) after the
convocation elected last year was dismissed by President Viktor Yushchenko.

Three important factors in the current campaign are identifiable and will
likely affect the vote: [1] apathy, [2] the use of American campaign
consultants and [3] a new battle for Eastern voters.

In particular, while two of the country’s major blocs generally are focusing
on historical regional strongholds, one is embarking on a potentially risky
strategy designed to break through the East-West voting divisions that have
plagued Ukraine since its independence 16 years ago.
WILL VOTERS GO TO THE POLLS?
The campaign to date has been characterized by general disinterest. While
pollsters are suggesting that upward of 65% of voters nationally still say
they plan to cast their ballot, there is genuine concern among Ukraine’s
biggest parties that this apathy could lead to a serious decrease in
turnout.

This is especially true for Prime Minister Viktor Yanukovych’s Party of
Regions and the leading opposition Bloc of Yulia Tymoshenko (BYUT),

both of which view turnout as key to their success on election day.

Yanukovych, in particular, appears worried about surveys that suggest
supporters in his traditional Eastern and Southern strongholds will vote at
lower rates than the supporters of other parties in the Central and Western
regions.

Speaking on a regional television station in Zaporizhya, the Prime Minister
suggested that he has seen statistics that predict less than 60% of voters
in the East and South will cast a ballot.

“If this indeed will be the turnout,” he said, “then … it won’t be necessary
to blame anyone. … If the Ukrainian people want to have an orange government
in power, it means, this is what we’ll get, if this will be the turnout. If
it [Ukraine] does not want this – it is necessary for everybody to get out
and vote. September 30th – go to the elections. This is the main question
for the country and the Ukrainian people.” (1)

However, judging by the lack of campaign energy in Kyiv, it is clear why
Yanukovych is not the only politician who is worried. “If I have time,” said
one man on Kyiv’s main Kreshchatik Boulevard, “I will vote for Yulia
[Tymoshenko].” Then, with a shrug, he added, “”It doesn’t really matter.
They’re all the same. Well, maybe she’s a little bit better, but it doesn’t
make a difference.”

This opinion was echoed by numerous Kyivites around the city in informal
conversations with this author.

Seamstresses working in one of Kyiv’s tailoring shops, men standing in line
at the central McDonald’s, women relaxing in a park, and waiters working at
a restaurant on the outskirts of the city all said they would vote “if I
have time,” or “if I am near a polling station,” or simply “if I feel like
it.” These are, of course, unscientific samples, but illustrative
nonetheless. (2)

Both Yanukovych and Tymoshenko have tried to respond to this attitude with
aggressive television and radio advertisements calling on Ukrainians to
vote. Tymoshenko has introduced a new advertisement with a very direct
message: “All politicians are not the same. Yulia is different.”

Since polls suggest that the race between the Party of Regions and
Tymoshenko’s bloc is tightening, both leaders understand that the loss of
even a few percentage points of support as the result of apathy could
determine whether or not they will be able to form a governing coalition
with their partners.
GOODBYE RUSSIAN SPIN DOCTORS, HELLO AMERICANS
Recently, in the Washington Times, an opinion editorial appeared by Michael
Caputo, whose byline on the piece noted that he is a “Miami writer” who
“lived in Russia from 1994 to 1999 as an election adviser to Boris Yeltsin’s
administration and was a media director of former President George H.W.
Bush’s 1992 re-election [campaign].” (3)

In actuality, Michael Caputo is a public relations specialist who has worked
in the past with representatives of Davis, Manafort & Freeman, an American
consulting company now working for Prime Minister Viktor Yanukovych.

It is unclear why the Washington Times chose to allow Caputo to appear as an
independent analyst; a quick Google search uncovers his profession and
connections.

Caputo’s likely connection to the Party of Regions is further suggested by
the tone of the piece, and by the use of – to put it nicely – alternative
interpretations of events over the past two years.

Listing the piece’s questionable interpretations would take too much time
and space, but it is perhaps instructive that these interpretations relate
only to the work of Yulia Tymoshenko, and that they somehow always support
Caputo’s call for voters to reject Tymoshenko’s campaign.

The Caputo piece serves primarily to spotlight the emergence of American
political spin doctors in Ukraine. Davis, Manafort & Freeman first worked
for Yanukovych during the 2006 parliamentary campaign, when they established
a base in Kyiv to assist the campaign.

Davis, Manafort and their allies have gradually replaced Russian spin
doctors, who have become less important over the past year. “Strategies
which could work well on Russian territory often did not work out in
Ukraine,” wrote Irina Khmara in Nezavisimaya gazeta. (4)

Davis and Manafort, however, created a new Western-friendly public image for
Yanukovych and the Party of Regions, which helped propel the party to a
first place showing in 2006, and earned praise from Western corporations.

However, this image has been undermined by recent government decisions
instituting manual price controls in the gas and wheat sector, as well as
major delays in passing WTO-related legislation. There are signs, therefore,
that the strategy may not have the success in 2007 that it had previously.

American PR consultants are reportedly working also with President Viktor
Yushchenko. According to Business Ukraine magazine, Washington lobbyist Sten
Anderson now advises the president on media communications and has done so
since the beginning of the year. Anderson’s influence is evident in Yushchenko’s
new confident appearances before the media.

There is no evidence, however, that Anderson is influencing the day-to-day
campaign of Yushchenko’s Our Ukraine-People’s Self-Defense Bloc (OU-PSD).
(5)

Lobbyist Ron Slimp of Washington, DC-based TD International also has been
representing Yulia Tymoshenko and BYUT in the United States, since the
beginning of the year.

Slimp appears to be the only US representative of a Ukrainian politician
officially registered under the Foreign Agents Registration Act (FARA),
which “requires persons acting as agents of foreign principals in a
political or quasi-political capacity to make periodic public disclosure of
their relationship with the foreign principal, as well as activities,
receipts and disbursements in support of those activities.” (6)

Tymoshenko has encouraged other DC lobbyists working for Ukrainians to
comply with FARA, as required by the US State Department. Slimp is based in
the US and appears to focus solely on Tymoshenko’s outreach to US media and
political representatives.
A NATIONAL PARTY?
Unlike in 2006, when significant focus was placed on Kyiv, today’s campaign
is taking place largely outside the capital. Yushchenko and OU-PSD so far
have spent considerable time campaigning in Western regions that were the
president’s strongholds in 2004.

Our Ukraine lost a fair amount of support in a number of Western regions to
Yulia Tymoshenko in 2006 and now hopes to bring these regions back into the
Our Ukraine stable.

At a 10,000 strong rally (named a “popular assembly”) in Lviv Oblast,
Yushchenko praised all “democratic forces,” saying Our Ukraine and BYUT were
working “shoulder to shoulder” against “betrayal.” But he asked voters to
“support my team, Our Ukraine-People’s Self-Defense.

As president and as a citizen, I am convinced I have the right to request
you to do this, as they are the third force, patriotic and professional,
which can effectively help me implement your plans.” (7)

Although Yanukovych immediately lashed out at Yushchenko for injecting
himself into the parliamentary campaign, calling the action
“unconstitutional,” it appears that technically Ukraine’s president is
prohibited from being a member of a political party, but not from
campaigning for it.

Unlike OU-PSD, the Party of Regions and BYUT are both, to different extents,
attempting to attract voters in regions where previously they have found
little support. This focus on territory that crosses established East-West
and North-South voting patterns is new and could signal a shift in voter
allegiances.

The Party of Regions is concentrating largely on its Eastern base, but also
has shown a significant increase in campaign activity in the capital and
surrounding towns, which have been “orange” strongholds.

Party leaders suggest that voters in this area are unhappy with President
Yushchenko and the orange forces, and are working to convince these voters
to support Yanukovych.

Party of Regions billboards predominate in Kyiv (BYUT complains that many of
its billboards have been summarily removed), with the party’s campaign
booths clearly outpacing those of BYUT and OU-PSD. At a large BYUT rally in
Bila Tserkva (Kyiv Oblast), the Party of Regions held a small, but
significant demonstration nearby.

In the Central region, which appears to be both the most apathetic and the
most politically savvy, it is unclear the extent to which this campaign by
the Party of Regions can work. It demonstrates, however, the desire of the
Party of Regions to position itself as more of a “mainstream,” center party.

In an interview on 12 September, Tymoshenko confirmed that her bloc had
decided to use the majority of its resources to try to break through in the
East and the South of the country, which historically have been Yanukovych
strongholds.

“After a year and a half of the current Yanukovych government, there are
significant numbers of voters in eastern and southern Ukraine who are
disappointed,” she said, “which is why we are focusing two thirds of our
entire campaign time in the region.”

The BYUT leader suggested that, for the first time, ideological differences
of language and foreign policy in the East have been overtaken by concerns
about the standard of living. This, she said, has provided an opportunity to
compete for Eastern votes. (8)

So far, although Tymoshenko’s Eastern and Southern rallies have gained far
more participants than in 2006, surveys still indicate that old voting
patterns will prevail.

Valeriy Khmelko, president of the respected Kyiv International Institute of
Sociology told the Kyiv Post that in the eight westernmost regions of the
country, (22 percent of all voters), Orange support is eight times higher
than that for the Party of Regions.

Meanwhile, voters in the three easternmost regions (also 22 percent of
voters) are eight times more likely to vote for Yanukovych’s party. (9)

Apparently because of this remaining polarization in the extreme Eastern and
Western regions, Tymoshenko has chosen to concentrate not on the far Eastern
Luhansk and Donetsk (Yanukovych’s home oblast) regions, but on those Eastern
regions considered to border the “center.”

She has held over 50 events in that “border” area, including Dnipropetrovsk,
Kirovohrad, Kherson, and Zaporizhya, and has also focused on Kharkiv, which
borders Russia, but boasts some of the country’s most active student groups.
At an early September rally in Kharkiv, BYUT claimed 55,000 in attendance.

Although local officials suggested the number was 20,000, the turnout was
significantly higher than at any previous Eastern rally. (10) Two separate
polling firms found that in Kharkiv, BYUT’s rating had increased by at least
5 percent in the last several months. (11)

All of this activity has led observers to suggest that 2007 may be the year
when Ukraine’s parties begin to break down the regional voter division that
has plagued the country since its independence – or perhaps the year when
the country sees its first national party.

To do so, political leaders will have to overcome apathy and growing
cynicism. If this occurs, Ukraine will have taken one more step toward
consolidating its democracy.
——————————————————————————————–
SOURCE NOTES:
(1) Zaporizhya TV, 13 Sep 07 via ForeignNotes.blogspot.com.
(2) Interviews, Kyiv, 5 Sep-16 Sep 07.
(3) “Ukraine Elections,” Washington Times, 12 Sep 07.
(4) “A million dollars for Manafort. Americans replace Russian spin doctors
in Ukraine,” Nezavisimaya gazeta, 22 Aug 07, p. 6; BBC Monitoring, 30 Aug 07
via Action Ukraine Monitoring Service for the Action Ukraine Report (AUR);
An e-mailed request for comment from Caputo received no response over
several days.
(5) “Bringing in the American Spin Doctors,” Business Ukraine, 10 Sept 07.
(6) “Foreign Agents Reporting Act,” United States Department of Justice via
http://www.usdoj.gov/criminal/fara/.
(7) UNIAN News Agency, 17 Sept 07, 12:32 CET via www.unian.net/eng.
(8) Interview with Tymoshenko, 12 Sep 07, Bila Tserkva, Kyiv Oblast,
Ukraine. See also “Yulia Marches East: The Eastern Front,” Business Ukraine,
17 Sep 07.
(9) “Polarization High, Voter Turnout Critical,” Kyiv Post, 12 Sep 07.
(10) For more specifics about Tymoshenko’s Eastern rallies, see “Yulia
Marches East: The Eastern Front,” Business Ukraine, 17 Sep 07.

(11) Ibid.
————————————————————————————————
LINK: www.bu.edu/iscip
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
7.  TRENDS & OPINION POLLS REVEAL SHIFTING
VOTER PREFERENCES IN UKRAINE

ANALYSIS & COMMENTARY: by Taras Kuzio
Eurasia Daily Monitor, Volume 4, Issue 171
Jamestown Foundation, Wash, DC, Monday, September 17, 2007

Ukraine’s parliamentary elections on September 30 are unlikely to bring
overwhelming victories for either the “orange” camp of Our Ukraine-Self
Defense and the Yulia Tymoshenko Bloc or the “blue” camp of the Party
of Regions.

Ukraine’s regional and linguistic divide makes such a landslide unlikely;
instead, both camps will remain in the 45-55% range. Nevertheless, there
are trends that do reflect changes in electoral geography and voter
intentions.

Ukraine’s regionalism means that no political force has country-wide
support. Thus the winning side in a Ukrainian election is unable to put
the other side out of business, making it impossible to institute an
autocracy.

A narrow win for either camp precludes the formation of a huge
parliamentary majority. In addition, the defeated camp will be in a
position to establish a powerful opposition bloc with, at a minimum,
45% of the seats in parliament.

As thresholds make it more difficult for many parties to win seats in
parliament, the political field has consolidated into a limited number
of parties and blocs. Twenty parties and blocs are registered this year,
down from 45 in 2006. Ukraine’s 3% threshold for parties and blocs to
enter parliament is the lowest in Europe and Eurasia. Nevertheless, it
has not led to a large influx of small parties into parliament. Eight
groups received seats in 1998, six groups in 2002, and only five last
year.

Left-leaning parties, which dominated politics in the 1990s, have
dwindled and only the Communist Party (KPU) is likely enter parliament
this fall. The Socialist Party (SPU), won four parliamentary elections
between 1994-2006, but its current popularity stands at 1-2%. The KPU
has fallen from 24.65% in the 1998 to 3.66% last year. Support for the
far-left Progressive Socialist Party, which last won a seat 1998, has
declined to less than 2%.

The 2007 elections are also changing Ukraine’s electoral geography. The
Yulia Tymoshenko bloc (BYuT), which came second in a majority of
eastern and southern Ukrainian districts in 2006, is replacing the left as a
viable alternative to the Party of Regions in these districts.

The Party of Regions will likely still take first place in eastern and
southern Ukrainian districts, but by a smaller margin and therefore
taking fewer seats than in last year’s elections. BYuT is particularly
growing in Kharkiv, Dnipropetrovsk, and even the Crimea. After
Tymoshenko’s rally in Kharkiv earlier this month, one poll gave BYuT
a narrow lead over the Party of Regions in that key oblast.

Our Ukraine-Self Defense (NUNS) remains unable to break out of its
western Ukrainian base, and polls show that it has barely improved on
last year’s poor performance of 14%.

The Party of Regions leads in all polls, but this does not guarantee
that it will head a majority coalition and government. Three out of four
recent polls show the two orange forces beating the Party of Regions.
Still-undecided voters tend to be from the orange camp and they could
still improve orange results.

Polls show a narrowing gap between the Party of Regions and BYuT,
which finished first and second last year, respectively. The Kyiv-based
Concorde Capital reported that the Party of Regions has 26-28% and

BYuT 20-26%.

The gap between them last year was 10% and is now narrowing to
5-7%. A poll by the T. Shevchenko Political and Sociological Institute
gave only a 1% lead to the Party of Regions over BYuT. Therefore,
Ukrainian analysts believe Yulia Tymoshenko is poised to head of the
next government.

Polls show that three political forces will enter parliament: Party of
Regions, NUNS, and BYuT. They may be joined by the KPU and former
speaker Volodymyr Lytvyn’s bloc.

But should a fifth political force enter parliament it would prevent the
Party of Regions from increasing from its current 186 seats to half of
the seats (225) available. It would be in the Party of Regions’ interest
for fewer parties and blocs to enter parliament, leaving more seats to
be distributed via the proportional system.

The Lytvyn bloc and BYuT are likely to pick up disaffected SPU voters in
central Ukraine. The SPU has lost voters after it defected from the
orange camp in summer 2006 and joined the Party of Regions and KPU in
the Anti-Crisis coalition and the government of Prime Minister Viktor
Yanukovych.

After the 2006 elections the SPU held a swing vote, enabling the
creation of a coalition not dominated by the orange (Our Ukraine, BYuT)
or blue (Party of Regions, KPU) camps.

The Lytvyn bloc could again be the spoiler this year. The bloc’s
allegiances remain unclear. Lytvyn was head of the presidential
administration from 1999-2002 and headed the pro-Leonid Kuchma “For a
United Ukraine bloc” in 2002. During the 2004 elections and Orange
Revolution Lytvyn sat on the fence and maintained good relations with
both the orange and blue camps. As speaker, Lytvyn kept parliament open
and facilitated the motion that declared Yanukovych the winner.

While President Viktor Yushchenko and his business allies have always
had good relations with Lytvyn, relations with BYuT are poor. Therefore,
the Lytvyn bloc could be courted by both the Party of Regions and NUNS.

This year’s elections are likely to give the orange camp its second slim
majority. Time will tell if they again fail to use it, as they did last year.
————————————————————————————————
(Kyiv Post, July 12, August 23; Kyiv Weekly, July 26-August 8;
bbc.co.uk/Ukrainian, August 3; Ukrayinska pravda, August 27, 28,
September 3, 9, 12; tymoshenko.com.ua, August 16)

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
NOTE: Send in a letter-to-the-editor today. Let us hear from you.
========================================================
8.  UKRAINE ELECTION: THE EASTERN FRONT

ANALYSIS: By Oksana Bondarchuk
Business Ukraine, Kyiv, Ukraine, Monday, Sep 17, 2007

The Tymoshenko Bloc has gone on the offensive prior to the September 30
parliamentary vote and focused its election campaign on the core
Yanukovych-supporting regions of eastern and southern Ukraine. But can
this assault on the Party of Regions’ stronghold bridge the great Ukrainian
divide?

Throughout the current election campaign, analysts have consistently stated
that the results of the September 30 vote are unlikely to be substantially
different from those of the March 2006 parliamentary elections, leaving the
country facing yet more political stalemate and uncertainty.

This has not deterred the Tymoshenko Bloc (BYUT) from launching an ambitious
promotional campaign throughout the southern and eastern regions of the
country long considered the heartlands of Yanukovych support in what is
being portrayed as an ambitious bid to break through the partisan
regionalism dividing the Ukrainian electorate.
Region ready for change?
This deliberate focus on Party of Regions’ voters has seen Yulia Tymoshenko
appear in over 50 towns and cities across the region during the first three
weeks of the campaign in a whirlwind tour which drew huge crowds and allowed
the iconic opposition leader to speak at as many as seven or eight meetings
a day.

Herself a native of the largely Russian-speaking south-eastern industrial
city of Dnipropetrovsk, Tymoshenko is perhaps the best placed of all the
country’s Orange politicians to make inroads into areas of the country
traditionally suspicious of Ukrainian nationalism.

After years of entrenched voting patterns across the region, Tymoshenko now
sees room for a significant swing in support throughout south-eastern
Ukraine in her favour and has focused her bloc’s campaign accordingly.

“After a year and a half of the current Yanukovych government, there are
significant numbers of voters in eastern and southern Ukraine who are
disappointed, which is why we are focusing two- thirds of our entire
campaign time in the region,” Tymoshenko told Business Ukraine.

The BYUT leader feels that the time is right to win over what was previously
perceived as a partisan Regions bloc vote, arguing: “It’s true to say that
over 30% of people [in the South and East] feel nostalgic for Soviet times
and what it offered. They believe that the Party of Regions can bring those
things back, but what these people really need are a decent standard of
living and fair government.

“They are simply looking for stability and comfort. It’s unfortunate that
for 16 years the country has not been able to provide them these things. Our
political force will try to meet that challenge.”

Tymoshenko is far removed from existing stereotypes of Ukrainian patriots
and has never courted the more militant nationalist vote in west Ukraine,
making her more palatable to voters who are prone to equating staunchly
nationalistic ideas with fascism.

She believes that the ideological barriers which the Orange Revolution
served to highlight no longer pose an insurmountable barrier to her eastern
crusade.

“More and more people now realise that the Party of Regions doesn’t stand
for love of the Russian people or for Soviet values. It represents a love
for resources and state assets,” she says.

“I believe that this time round the vote will differ greatly from the 2006
results. In Kharkiv I even heard people say that the Party of Regions would
be ready to speak Mongolian in order to preserve their assets and
questionably acquired capital.”
Counting on charisma
The Tymoshenko factor is the central pillar of BYUT’s eastern campaign, with
organisers counting on the winning effect of personal appearances from the
bloc’s firebrand leader. “Mass rallies where we can interact with the
general population remain the key point, or basis, of our election campaign.

It is very important to deliver our message directly to the people,”
explains Oleksander Sochka, head of the BYUT press service, who notes that
whereas the national Ukrainian press is now largely impartial and
even-handed in its coverage of the election campaign, local media outlets
often remain the mouthpieces of their regional paymasters.

This has had the effect of making media campaigning in the regions
problematic but has also served to increase interest in Tymoshenko’s more
personal approach.

Until the votes are counted on September 30, it will remain difficult to
gauge just how successful this strategy has been in winning over new
supporters, but Tymoshenko’s tour of the region has undoubtedly managed to
draw big crowds.

Party officials cite a record attendance of 55,000 in the eastern capital
Kharkiv, and claim that a further 20,000 attended in the southern port city
of Kherson, despite heavy rain throughout the rally.

These ambitious figures cannot be confirmed, but offer some insight into the
pull of the opposition leader’s personal appearances. Anatoliy Boyko, a
representative of the Voters’ Committee of Ukraine for Odessa region,
witnessed a recent BYUT rally in Odessa and reflects: “I couldn’t put an
exact number on the size of the crowd but I saw a lot of people coming out
of the stadium where she was speaking.”

However, Serhiy Tkachenko, a representative of the same voter committee for
the Donetsk region, came away with a different impression from the BYUT
leader’s recent well-publicised visit to Yanukovych’s home base, where she
visited party activists who claimed to have been beaten up for their
political affiliations.

“I felt that she came here more in order to secure some positive PR on the
national level than to meet the local population,” he says, adding that the
Donetsk region as a whole remains staunchly loyal to the Party of Regions.
“It’s impossible to change this situation in one single campaign,” he adds.
Signs of waning dogmatism
 The Tymoshenko Bloc’s efforts to win over Regions voters may benefit

from a thaw in the political divide, according to analysts.

“People have stopped viewing everything in terms of black and white,”
Tkachenko says, suggesting that widespread disappointment in the country’s
political leadership has reduced the tendency to hold categorically to
political beliefs. This disillusionment, he thinks, has effectively made
voters more open to new ideas and new hopes.

Oleksiy Holubutskiy, the deputy director of the Situational Models
analytical agency, has been monitoring voter trends in Kharkiv region and
estimates that Tymoshenko’s rating has risen by 7% to 20%.

In the parliamentary elections of 2006 she received just 12.7% in Kharkiv
oblast. He sees the bloc’s evolving image as a key factor in the rise of its
voter appeal in areas where anti-Orange sentiment remains strong.

“BYUT has ceased to be perceived as simply an Orange party. This is not only
a matter of different logos, but also a result of attempts to address a
broader electorate directly and reach out beyond the middle classes,” he
comments.

Holubutskiy states that the number of potential BYUT supporters could be
even higher than current estimates suggest, but concedes that accurate
forecasts remain impossible. “Some people are still afraid of expressing
their positions,” he explains.

Research carried out by TNS Ukraine for Focus magazine in Kharkiv oblast
supports this theory while demonstrating that the figures involved can vary
significantly. Their analyses also found a surge in support for Tymoshenko,
putting her current rate at 15.6% following her visit to the city.

This coincided with a drop in support for both the Party of Regions and the
Our Ukraine-People’s Self-Defence Bloc, which Tymoshenko has committed
herself to allying with to form a renewed Orange coalition in the event of
an election victory.
Rising culture of political pluralism
Unlike during previous Ukrainian election campaigns, BYUT press secretary
Sochka states that the bloc has met only relatively minor incidences of
official opposition throughout their regional tour above and beyond isolated
spoiling tactics and the dissemination of negative campaign materials.

“In Kharkiv we uncovered leaflets featuring portraits of Lutsenko and
Tymoshenko and the slogan, ‘Get away from here, Kushnaryov’s murderers!'”
Sochka relates. (Yevgeniy Kushnaryov was a Party of Regions member and
former Kharkiv governor well known for his outspoken anti-Orange Revolution
views who died in 2006 following a hunting accident).

Individual activists have also been victims of intimidation and physical
assault, while campaign posters have been vandalised or removed, but pundits
analysing the Tymoshenko campaign say there has been a sharp decline in the
systematic abuses that were commonplace in previous years.

BYUT officials say they did not meet with any major difficulties when
dealing with state officials in even the most hostile regions, and outside
of the Donbass proper many local officials have received the Tymoshenko
bandwagon with relative enthusiasm.

According to Odessa analyst Anatoliy Boyko, when Tymoshenko came to Izmail
in Odessa oblast she was invited to make a speech to the assembled public to
mark the city’s annual holiday, while in Odessa the opposition leader was
allowed to appear unhindered at a local stadium.

Analysts suggest that this encouraging reception can be attributed to the
fact that Tymoshenko has become a focus for regional authorities who have
fallen out with the Yanukovych government.

Mykhaylo Pohrebinskiy, the director of the Kyiv Political Research and
Conflictology Centre, agrees, saying that Tymoshenko has managed to mobilise
the support of existing local opposition to the central government.

Nevertheless, the most significant sign of approval comes from the country’s
ruling oligarch elite, and Tymoshenko’s ties to big business have acted as a
significant stepping stone towards bolstering support in the heavily
industrialised east.

Holubitskiy identifies BYUT’s significant popularity in the Donetsk oblast
town of Alchevsk and argues that this is directly connected to the support
she enjoys from the power brokers of the Industrial Union of the Donbass.
“They support Tymoshenko here because they don’t want to put all their eggs
in one basket,” he explains.
No substitute for hard work
Beyond all the big business ties and the support generated by
dissatisfaction with the current government, Kyiv analyst Pohrebinskiy
attributes Tymoshenko’s rising ratings to her work ethic, arguing, “She
simply organises and conducts all her election campaigns more actively than
other politicians.”

Meetings have been both frequent and memorable, accompanied by a huge array
of merchandise, witty slogans, guest appearances from Ukrainian celebrity
supporters and lavish firework shows.

The effect has been tangible. Boyko recalls that even in traditionally
apolitical Odessa, her arrival made an immediate impact. “Following her
visit the bloc’s symbols started appearing for sale around town. If a
campaign is as active as her’s, it should definitely bring results,” he
says.
The chances of a south-eastern swing
Most analysts agree that success in the south and east offers Tymoshenko the
only realistic chance of improving on her showing in the 2006 elections
given the strong showing she already enjoys in central and western Ukraine
as well as the tough opposition she will encounter there from the Our
Ukraine-People’s Self-Defence Bloc.

Rather than risk cannibalising their own Orange vote in the centre or west,
Yulia’s only realistic chance of making a decisive electoral breakthrough
lies in her audacious assault on the Yanukovych constituencies. “BYUT can
only win the extra votes it needs in these regions,” Holubitskiy argues.

Most experts identify former Socialist Party voters alienated by the
defection of party leader Oleksandr Moroz and those disappointed with the
Yanukovych government as the most likely sources of new votes.

The end result of all those potential swing voters could well prove
decisive. Valeriy Khmelko, the president of the Kyiv International Institute
of Sociology, has compared opinion polls for the period three weeks prior to
voting day for the current election and the 2006 ballot.

“In the eastern regions in 2006 at this stage BYUT had around 3% support.
That figure is now about 6%. In southern Ukraine support was less than 7% in
2006, and today it stands at more than 13%.”

Expert opinion remains divided, but among all the public polls currently in
circulation the general consensus is that BYUT can expect to increase its
national vote by 3% to 4%.

In March 2006, Tymoshenko’s bloc received 22.3% overall, but if this
increase materialises it could be enough to place Tymoshenko in the driving
seat ahead of possible government coalition talks.

However, in 2006 Ukraine’s pollsters unanimously underestimated the appeal
of the Tymoshenko Bloc, estimating that she would pull between 10% and 15%,
only to be surprised by the bloc’s strong performance, so there remains the
possibility that the high ratings figures we are now being fed are the
product of a desire to over-compensate for the failures of 2006.
———————————————————————————————–
LINK: http://www.businessukraine.com.ua/the-eastern-front

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
9.  TYMOSHENKO GOES HARD ON AKHMETOV’S HEIRS

COMMENTARY: by Viktor Chyvokunya, Kremechug-Poltava, UP
Original article in Ukrainian, translated by Eugene Ivantsov
Ukrayinska Pravda, Kyiv, Ukraine, Thursday, September 20, 2007

Yulia Tymoshenko acquired the latest modern trends of the 2007 election.

A helicopter took her to the rally held on Sunday in Kremenchug.

The helicopter belongs to Kostyantyn Zhevago, the richest BYuT member

who received the fifth position in the top-100 influential people in Ukraine
with $2.7 billion, according to Korrespondent ratings.

Mr. Zhevago accompanied Yulia Tymoshenko aboard. Mrs. Tymoshenko
started her tour with visiting Kremenchug Automobile Enterprise owned
by Mr. Zhevago.

Poltava region is considered the ‘expansion area’ where Yanukovych’s
campaign headquarters intend to improve the election results as compared to
the previous election.

Besides, traditionally Poltava region was the Socialist region where, Mr.
Moroz’s party received almost 13%. Now, the Orange and the blue-and-white
are fighting over the regional electorate.

According to one of the regional officials, the Party of Regions that put
agitation on a wide scale, having their agitators almost in every village,
turned out more successful due to unlimited financing. Mrs. Tymoshenko went
to Poltava to correct the situation using her traditional methods.

“They are coming,” reported employees of the BYuT local headquarters to
Andriy Verevsky. According to some estimate, this man controls one fourth
of Ukrainian refined oil market. It is his second election campaign in the
office of the BYuT campaign headquarters in Poltava.

Tymoshenko came down from “heaven to earth”
Italian helicopter Agusta landed on the territory of AutoKraz Automobile
Enterprise. Armored Mercedes that had come from Kyiv was waiting for the
BYuT leader there. But Mrs. Tymoshenko did not like such an idea.

“She says she get very tired of such trips. She wants to fly from Kremenchug
to Poltava by helicopter,” the head of the BYuT local headquarters addressed
Mr. Zhevago.

“Be my guest! It takes an hour by car and only 15 minutes by helicopter,”
answered a young billionaire who failed to have Mrs. Tymoshenko visit his
meat packing enterprise.

Mr. Zhevago was present in parliament only once. But he flew to Kremenchug
because of Mrs. Tymoshenko’s visit. Photo by Oleksandr Prokopenko

Yulia Tymoshenko’s visit began with a meeting with representatives of small
and mid-sized business who gathered in AutoKraz to discuss touchy issues. In
order not to break ‘the rules of weight categories’ Mr. Zhevago did not even
enter the hall.

“I know from my own experience that it is hard to run business in this
country!” complained Mrs. Tymoshenko. “I have four private entrepreneurs in
my family: my sister, my immediate family. They tell me how state officials
humble you,” she went on.

Mrs. Tymoshenko’s statement that the number of private entrepreneurs in her
family has increased was rather surprising. Previously, it was known that
her husband ran a poultry farm. The BYuT leader refused to share information
about occupation of her immediate family or at least her daughter Evgenia.

“She learns how to take a banking loan to start her own small business,”
Yulia Tymoshenko avoided a direct answer.

The BYuT leader promised Kremenchug businessmen (and even those who
do not know yet they will run business) her assistance.

“There are thousands of people who do not know what business is profitable
and promising. We will create database and registry of businesses available
on the Internet,” Mr. Tymoshenko promised an original start of a business
career.

Also, Yulia Tymoshenko stated that she would resolve the problem of the
initial capital for such people: “Defects of the credit system will be
eliminated. Businessmen will be offered a 3-6% basic lending rate. It is now
a standard rate in Europe.” The audience kept silent.

There was a group of people among representative of the ‘small and mid-sized
business’ who were brought to the meeting by bus. These people looked like
street vendors. Yulia Tymoshenko had a message for them as well.

“I know the state fights against street vendors and market places to build
supermarkets there. They must not do it because street vendors have a better
education than some government members. I do not want to offend the PM.
Some ministers have the same problem,” she cheered up the audience.

Yulia Tymoshenko promised to cancel the VAT by introducing a new tax: “If a
person buys bread and water or yachts and mansions only they must pay
different taxes. In such a case none of them will feel the tax burden.”

But corruption is the main problem of business. “We will develop a website
with the registry of services for which state officials demand bribes. You
will be able to anonymously file complaints so that we will be able to fight
against the corruption,” she said.

Besides, Mrs. Tymoshenko stated that she would decrease influence of state
officials on private business. She said that she had cancelled about five
thousand normative acts causing corruption in the office of the PM.

“But it was state officials who cancelled all those normative acts! Can you
imagine that they cancelled all those resolutions which were not critical
for them! This vertical corrupt scheme was headed by the ministers.

“When, for example, we inspected fire prevention systems, the Minister for
Emergency Situation was the first to oppose us. The Agrarian Minister fought
against inspection of the veterinary service,” said the BYuT leader.

According to Mrs. Tymoshenko, future opposition will be the main fighter
against the corruption: “I hope Yanukovych will be in the opposition with
powers to control authority. We will give him knife and fork they will use
to check the breakfast menu of a state official.”

For example, Mrs. Tymoshenko offered the opposition powers of a new
law-enforcement structure able to act “bypassing the Prosecutor General’s
Office through parliamentary committees of investigation.”

Mrs. Tymoshenko proposed her most radical means of fighting against the
corruption. According to her, it is life sentence.

“But I think this norm will never be used because everybody will be afraid.
There are no death sentences for corruption in China because there is no
corruption there!” said Yulia Tymoshenko.

When Mrs. Tymoshenko finished her speech she offered to ask her questions.
But the audience and the BYuT leader were keeping silent. When this pause
became rather awkward one man raised his hand.

His did not want to ask any questions. The man handed over his written
proposals to Yulia Tymoshenko. She took them but advised to use the BYuT
website for such purposes. “We are living in the 21st century,” she said.

Her monologue ended in Mrs. Tymoshenko’s signing a unilateral agreement with
the small business. It is one of the BYuT methods in this election campaign.
Yulia Tymoshenko signs agreements with doctors, teachers or businessmen.

The Victory Square was Mrs. Tymoshenko’s next destination. The rally
gathered about four thousand people and several huge Kraz trucks decorated
with the BYuT slogans.
Trucks support Tymoshenko
Mrs. Tymoshenko said that she was offered to join the broad coalition for
the sake of saving the dissolved parliament. “I was offered the Speaker’s
office and half of ministerial offices. When I refused they asked me: “What
else do you want? Do you want a dozen of enterprises?” But I will never join
the broad coalition! I will not! This coalition will tie us down with
seeking compromise,” she explained.

According to Yulia Tymoshenko, Yanukovych’s government would try to
make her consent to share of state property.

“On September 1 children go to school.Some parents present their child with
a schoolbag, some children receive daybooks. But Rynat Akhmetov presented
his son with the DniproEnergo Company. From now on you will receive
electricity bills not from the state but from Mr. Akhmetov or his son. In 20
years his grandson will run the family business,” Mrs. Tymoshenko chose her
favorite topic.

Then Yulia Tymoshenko started agitating the audience to be active at the
early election. “They will say that “your participation in election will not
change anything and the parliament will be all the same,” she said.

“But it is not true. Moroz will not enter parliament. Moroz has had enough
authority. It is high time he retired” she sent Mr. Moroz her regards.

Having said this, Mrs. Tymoshenko took a pause and made a typical
fisherman’s gesture stretching her arms as if boasting of a great take of fish.

 
“Moroz will not just retire but he will R-E-T-I-R-E,” said Tymoshenko in
such a voice as if there will be as many zeros in Moroz’s retired pay as letters
in this word.

Communists were Mrs. Tymoshenko’s next target:  “It is 50/50 that they will
enter parliament. What did they expect? They collaborated with the wild
capitalism!” To humiliate Petro Symonenko, Mrs. Tymoshenko recalled her
student years.

“I had an “A” in Science of Communism that is why I know what a true
communism is. I can even make a bet – if anyone of you finds communism in
Symonenko’s party I will vote for him,” she offered.

“If you decided to vote for the Party of Regions I ask you to go to church
and kill the hoodoo,” said Yulia Tymoshenko. “Ha-ha-ha,” the audience
burst in laughter.

In fact, it is quite clear why Mrs. Tymoshenko keeps saying at every rally
that only three political forces will enter parliament. Only in such a case
the BYuT and Our Ukraine -People’s Self-Defense will altogether have more
seats than the Party of Regions. In the event the Communists or Lytvyn’s
Bloc are elected to parliament the situation becomes unpredictable.

According to Mrs. Tymoshenko, there are four reasons why people vote for
Viktor Yanukovych.

“They say: “Yanukovych will give chance for the Russian language to become
the second state language. But Leonid Kuchma has twice used this initiative
to win the presidential election. The language issue is a screen. This issue
distracts people from real problems!” she said.

NATO is the second populist issue promoted by Mr. Yanukovych. “In 2004 the
Party of Regions headed by Mr. Yanukovych voted to send our soldiers to
Iraq. It is not just NATO membership it is war together with NATO,” she
expressed her indignation.

According to Mrs. Tymoshenko, relations with Russia is the third reason why
people support PM Yanukovych. “What is he talking about? My friendship with
Russia was manifested by the gas price of $50 per 1000 cubic meters,
Yekhanurov’s friendship – $95, while Yanukovych’s friendship brought us the
price of $130,” she touched upon gas relations between the two countries.

Yulia Tymoshenko heard the fourth reason during her visit to Luhansk:
“Several elderly women came up to me saying: “Why do you scold Yanukovych.
You have been in power for ten years. Yanukovych is a young promising
politician. Why cannot you leave him in peace?”

This maneuver was very skilful. Mrs. Tymoshenko ‘passed the ball to herself
and it was a goal pass’. “Indeed, Yanukovych was the governor of Donetsk
region. But he left scorched earth behind him. There are many empty blocks
of flats there in which no one wants to live even for free,” said the BYuT
leader.

“Who was the PM during the last years of Kuchma’s reign? The Pope? No, it
was Viktor Yanukovych! The three of them (there was also Kuchma’s

son-in-law in the team) shared the entire country having stolen every strategic
enterprise,” Yulia Tymoshenko went on.

However, it was not the end of Yanukovych’s criminal record. “When
Yanukovych became the PM for the second time his first resolution restored
Leonid Kuchma’s privileges, his 2 000 square meter dacha with waitresses,
masseurs and a swimming pool. He exempted the poor ex-president communal
fees!” “U-u-u-u,” people responded.

According to Tymoshenko, dissolution of parliament was the only way out.
“There is no tragedy here. Americans hold election every two years. If one
gathers 100 000 signatures in support of the early election in Israel then
the early election is inevitable,” said Yulia Tymoshenko.

Despite strong criticism of Viktor Yanukovych this rally ended peacefully
taking into account that several supporters of the Party of Regions with the
blue-and-white flags were also present there.

Poltava became the nest destination in Mrs. Tymoshenko’s tour. About 10 000
people gathered to listen to the Orange lady. The rally in Poltava took
place at the stadium Vorskla which also belongs to Mr. Zhevago

Mrs. Tymoshenko’s speech was almost the same. She even made identical
statements. “They will say that your participation in election will not
change anything and the parliament will be the same. But it is not true.
Will Moroz enter parliament?” she asked the audience.  “No-o-o-o!” people
responded.

“Do the communist ideology and the Communist Party of Ukraine have anything
in common? If Lenin saw what Petro Symonenko is doing now, he would spin in
his coffin at the speed of 60 rpm!” she said.

Then she made public the four reasons why people vote for Yanukovych. Yulia
Tymoshenko really enjoyed finishing off Yanukovych with NATO issue:

“When Mr. Yanukovych became the PM he gave interview to German periodical
Frankfurter Allgemeine Zeitung”. I understand you do not know anything about
it. But this interview is available on the Internet.

The journalist asked Yanukovych: “You have agreed with President Yushchenko
that NATO membership will be decided at the referendum. How would you vote?”
Viktor Yanukovych responded: “Joining NATO remains our strategic goal.” The
journalists asked again: “Does this mean NATO membership?” He answered:
“Yes. No one gave up this goal.”

Yulia Tymoshenko savored every Yanukovych’s answer. However, when
Ukrayinska Pravda addressed Mrs. Tymoshenko herself with the same question
she avoided a direct answer.

As the rally in Poltava was the highlight of her visit to Poltava region
Mrs. Tymoshenko made a longer speech. In particular, she tried to respond to
accusations that she raised salaries for state officials. Some of Mrs.
Tymoshenko’s arguments were the figment of her mind.

“When I became the PM the minister’s salary was UAH 500 ($100). How did
state officials support their families? For instance, there were special
grants for agricultural development in budget. But not a single cow received
this grant. Two-legged animals stole this money. That is why I raised their
salaries having closed all holes in budget,” she explained.

This answer contradicts her confession made during the meeting with
representatives of small and mid-sized business that she did not manage to
eradicate the most developed corruption schemes.

According to Yulia Tymoshenko, discharge from the PM’s office prevented her
from completing this job. During the meeting she never mentioned President
Yushchenko in the negative context. Unlike the previous election campaign,
she made a hint on Viktor Yushchenko only once.

“Corruption scandal broke out in their team, but they decided to get rid of
me. They were not strong enough to work with such PM. I was in opposition
to both pre- and post-revolution authorities,” confessed Mrs. Tymoshenko
refusing to name her employers, Kuchma and Yushchenko.

At the end of the rally, Yulia Tymoshenko warned people of the election
fraud. “They offer people in Zhytomyr region to write an application with
the request to vote at home in exchange for UAH 150. These votes will be
counted somewhere in the dark corner,” the BYuT leader stated.

“Why does the Party of Regions have 20% in Poltava region? Raise your hand
those who will persuade 10 his friends to vote for the BYuT during the time
left before the election?” Mrs. Tymoshenko addressed the people.

“I will! I will!” they responded. “What about 15 people?” she laughed. This
time less people expressed their readiness.

According to Mrs. Tymoshenko, only ‘people’s telegraph’ can save the
situation. Her election campaigns of 2002 and 2006 went on according to
the identical scenario.
———————————————————————————————–
LINK: http://www.pravda.com.ua/en/news/2007/9/20/8939.htm

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
10.  UKRAINE’S TIES WITH RUSSIA RUN DEEP, AND
THAT’S NOT ABOUT TO CHANGE

COMMENTARY: by David Marples, Professor
University of Alberta, History and Classics Department
Edmonton Journal, Edmonton, Canada, July 30, 2007

In what was termed the Orange Revolution of late 2004, protests in the
streets of Kyiv forced a rerun of the second round of the presidential
election in Ukraine, resulting in the victory of Viktor Yushchenko over his
rival Viktor Yanukovych, who was backed by former president Leonid

Kuchma and Russian president Vladimir Putin.

Both at the time and subsequently, the outcome was perceived as a victory
for pro-Western forces in Ukraine over a ruling group that hitherto was
oriented toward Russia.

In similar fashion, the parliamentary elections of 2006 also saw a narrow
victory for the Orange forces (which later split catastrophically) over the
Regions Party led by Viktor Yanukovych.

However, two opinion polls that have been conducted in recent weeks by
reputable institutions suggest that Ukrainian residents are hesitant about
deepening ties with the West and opposed especially to NATO, and a
substantial number would rather some form of union with neighbours Russia
and Belarus than join the European Union.

Last week, Interfax Ukraine cited the results of the most recent survey
conducted by the Yaremenko Ukrainian Institute of Social Research and the
“Social Monitoring” Centre between July 10 to 18. It is based on 2,014
respondents over the age of 18, residing in 132 cities and villages in all
regions of Ukraine, and has a margin of error of 1.34-2.24 per cent.

Less than 20 per cent of respondents are in support of Ukraine joining NATO,
with 57 per cent opposed, a figure that would seem to preclude any immediate
prospects of a referendum on whether to join the military body.

About 25per cent are in favour of joining the EU, whereas 43.4 per cent wish
to join a union with Russia and Belarus, and 27 per cent think it better to
pursue equal relations with both the EU and Russia. Thus over 70 per cent of
those surveyed support some form of close relationship with Russia.

On the status of the Russian language in Ukraine, the attitude is generally
benign: 33.5 per cent feel that the existing status of that language should
remain as it is currently; 26.4 per cent believe that it should be raised to
the status of a state language; 24.7 per cent consider that Russian should
be elevated to the second state language in areas where a majority is in
favour of this step; and only 11.7 per cent think that Russian should be
removed from official communications throughout Ukraine.

Thus over 51 per cent support some strengthening of the status of the
Russian language in Ukraine.

These results may be compared to those of another poll carried out between
June 19 and July 2 by the Ukrainian Sociology Service and Democratic
Initiatives Foundation, with 2,000 respondents from all regions and an error
margin of under 2.2 per cent and cited by the Kyiv Post.

This poll reveals that had the parliamentary elections — scheduled for late
September — been held earlier this month, the East Ukrainian-based Regions
Party led by Yanukovych would have won 44 per cent of the vote and gained
about 206 seats in the legislature of 450 members.

Regions could then have formed a working partnership with the Communist
Party and established a majority government. Yushchenko’s Our Ukraine and
the Yulia Tymoshenko Bloc would have formed the opposition.

This same poll also revealed the declining faith of residents of Ukraine in
democracy (only 44 per cent feel that it is the best state system), whereas
a substantial group — one fifth of respondents — believes that Ukraine
would be better off with an authoritarian system.

On the question of whether order, democracy, freedom, or liberalism was
needed, “order” was the preferred commodity, with 93 per cent in support
whereas less than 25 per cent opted for liberalism.

The results of these two polls are both disturbing and revealing. On the one
hand, they suggest that the progress of Ukraine toward a Western-style and
Western-leaning democracy has been consistently exaggerated by some Western
sources. On the other hand, they offer a more accurate account of the way
Ukrainians really think.

A large plurality or even a small majority of residents of Ukraine prefer
closer ties with Russia and enhanced status for the Russian language. A
similarly substantial portion of the population is skeptical about Western
influence, democratic structures, and the way the country has been run since
the success of the Orange Revolution.

In truth, the Orange Revolution was not about a pro-Western or pro-Russian
orientation at all (Putin’s ill-advised interventions notwithstanding).

It was about the way the country had been run for the previous decade, with
a spate of political murders, corruption, and muzzling of the media by the
Kuchma government.

Ukrainians are not pro-Western today partly because the example set by
Western democracies in recent times has hardly provided a model to emulate:
beginning with NATO’s attack on Serbia in 1999 and culminating with the
invasion of Iraq. Many also have been alienated by the EU’s negative
response to Ukrainian desires for membership.

And Ukrainians are for the most part pro-Russian because they see Russia as
a strong counterforce to the United States and a nation with which they have
more in common than with either the new democracies of Eastern Europe or the
long-established democracies that no longer seem capable of providing
fitting examples to follow.

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
11.  UKRAINE TORN BETWEEN RUSSIA, THE WEST
Even after the supposedly pro-Western Orange Revolution,
opinion polls show a reluctance to sever strong ties with Moscow

COMMENTARY: By Mykola Riabchuk, Freelance
Edmonton Journal, Edmonton, Alberta, Canada, Wed, Aug 08

The wise man who distinguished the truth, the lie, and statistics, might
well have included among the last, opinion surveys — at least as they
function in Ukraine.

David Marples’ article in The Journal (“Ukraine’s ties with Russia run deep,
and that’s not about to change: New polls confirm majority don’t think West
offers best example to follow,” Looking Ahead, July 30) is highly dependent
on recent opinion polls.

They seem to support firmly not only the first part of the title, which is
rather obvious, but the second part as well, which is rather debatable.
Marples perfectly captures the essence of Ukraine’s East-West dilemma in his
conclusions.

“Ukrainians,” he contends, “are not pro-Western today partly because the
example set by Western democracies in recent times has hardly provided a
model to emulate: beginning with NATO’s attack on Serbia in 1999 and
culminating with the invasion of Iraq. Many also have been alienated by the
EU’s negative response to Ukrainian desires for membership.

And Ukrainians are for the most part pro-Russian because they see Russia as
a strong counterforce to the United States and a nation with which they have
more in common than with either the new democracies of Eastern Europe or
the long-established democracies that no longer seem capable of providing
fitting examples to follow.”

People wave orange flags during a rally in support of the opposition in
Kiev, March 31. Tens of thousands of Ukrainians backing the country’s
opposition thronged Kiev’s main square urging President Viktor Yushchenko
to call a new parliamentary election to end a protracted political deadlock.

The only big “but” in this case, however, is that virtually all notions and
terms in Ukraine are quite vague and fluid. For example, the concepts
“pro-Western” and “pro-Russian” do not have the same meaning in the
positivistic West and the highly ambivalent and ambiguous post-Soviet
Ukraine.

True, if being “pro-Russian” or “pro-American” means a sort of realpolitik,
a pragmatic approach to the inherited geopolitical, cultural-linguistic and
economic reality, then Ukrainians — for the most part — are certainly more
“pro-Russian” than “pro-Western.”

They simply prefer one bird in hand to two in the bush. They prefer the
status quo because they feel that — in a country with feeble institutions
and no rule of law, weak mechanisms for conflict resolution, low Western
support and strong Russian pressure — any instability is dangerous. They
opt for a bad peace over a good war just because they do not believe that a
good peace is possible.

This does not mean, however, that they absolutely oppose a good peace —
that is, the EU or even membership in NATO — as the opinion surveys
purportedly reveal.

The surveys point out only that a good peace is not on the agenda (to
paraphrase the standard response of Eurocrats to Ukrainians’ claims for EU
membership prospects). Ukrainians, therefore, merely choose between the
lesser of two evils.

Yet again, these “evils” are not the West and Russia per se, but the most
likely results people expect in their own cost-benefit analysis.

Obviously, the benefits from Ukraine’s western integration would be much
higher, but they appear largely unachievable; the costs — that is,
punishment for such attempts by Russia — are rather real and palpable.

To clarify this psychological mechanism, one must refer to the two
referendums Ukrainians held in 1991. In March of that year, 70 per cent
supported Gorbachev’s idea of a “renewed federation,” in other words, the
preservation of the U.S.S.R. A few months later, in December, 90 per cent of
Ukrainian voters endorsed national independence. This was not some mystical
insight or miraculous breakthrough.

In March they were quite supportive of independence, but not to the point of
rocking the boat and putting their relative well-being and stability at
risk. The cost-benefit balance sheet in March was unfavourable for
independence.

Yet by December, when the Soviet Union de facto collapsed and national
independence, declared by the Ukrainian parliament, was a fait accompli,
people felt that to oppose independence was more risky and more
destabilizing than supporting it.

Another graphic example comes from 2002 when President Leonid Kuchma,
cornered by internal and international scandals, declared Ukraine’s resolve
to join NATO. This was a clear attempt to reduce tensions with the U.S. and
to counter Ukraine’s growing international ostracism. (Today, few people
remember that it was not Viktor Yushchenko, the “pro-Western” president, who
made NATO membership a national strategic goal, but rather his allegedly
“pro-Russian” predecessor).

This strategic decision, and the equally strategic choice of sending
Ukrainian troops to Iraq — again, made by the “pro-Russian” Kuchma, while
the “pro-American” Yushchenko eventually withdrew them — did not evoke
any serious protests in Ukraine or even lead to substantial public debate.
Ukrainians simply do not much care about such things.

Other opinion surveys reveal that such issues as membership in NATO or
strengthening/weakening of the status of the Russian language are not among
the top 10 (and even top 20) issues of importance to Ukrainians. Moreover,
as many as 90 per cent of Ukrainians surveyed confess they know nothing or
very little about NATO.

A few years ago, Ukrainian journalists contrived a nice hoax: they asked the
same people about their attitude towards both “NATO” and the “North Atlantic
Treaty Organization.” Apparently, in most cases the latter was evaluated
much more positively.

This reveals two more problems with opinion surveys in Ukraine: the low
political awareness of the people being surveyed and the widespread
misunderstanding (and misuse) of terms.

The Russian language question serves as a good example of such ambiguity.
Thus far there has been no real public debate setting out clearly for
everyone what official bilingualism might mean, how it might work in
practice, and what legal and other mechanism would be needed to facilitate
it.

Some people have a Soviet understanding of “two state languages”; they view
this as a right of the dominant Russophone group not to learn, and never to
use, Ukrainian — an idea that is graphically made real in today’s Belarus.

Other people understand the idea in a Western, liberal manner, as a legally
prescribed duty of all post-Soviet bureaucrats (predominantly
Russian-speaking) to communicate with all citizens — understood as
“clients” and taxpayers — in the language of their choice and not vice
versa, as was the case with Soviet “bilingualism.”

In short, opinion polls in a society such as Ukraine primarily reveal
confusion and a secret desire to maintain the status quo — because change
is precarious, with easily predictable high costs but mostly indeterminate
benefits.

Ukrainian society, however, can be considered not only a glass that is half
empty — namely, lacking civic maturity, national unity and strong
commitment to Western values — but also half full. Forty-four per cent of
Ukrainians believe that democracy is the best state system, while only 17
per cent opt for authoritarianism.

This is actually a good result for a nation that has had very limited
experience with a functioning democracy, and even less experience with
national independence and self-rule. Neither in Russia nor Belarus can one
find anything approaching this.

And the fact that 93 per cent of surveyed Ukrainians opted for “order” as
the most needed commodity while only 25 per cent opted for “liberalism,”
does not prove an “authoritarian” preference. It only proves the lack of
“order” in the country and the need to fix a feckless democracy, rather than
dismantling it in the Russian or Belarusian manner.

In this sense, the Orange Revolution, indeed, was not about “pro-Western” or
“pro-Russian” orientations, as Marples rightly suggests, but about the way
the country should be run. In other words, it was about values.

But if one examines the values of the Kuchma regime, which were opposed by
the revolution, one will see that exactly those values still dominate Russia
and other post-Soviet states. Conversely, if one looks at the values
defended by the revolution, we will see that they are the very principles
upon which the West is built.

Consequently, the Orange Revolution was clearly pro-Western in its spirit,
if not necessarily in political rhetoric and in actual geopolitical
programs.

So far, it has brought mixed results but, in most terms, post-revolutionary
Ukraine is much closer to the fledgling democracies of Eastern Europe than
to the consolidated authoritarianisms of post-Soviet “Eurasia.”

Thus, the headline on Marples’ article might be usefully paraphrased to
read: “Ukraine’s ties with Soviet attitudes run deep, but they are
changing.”
———————————————————————————————-
NOTE: Mykola Riabchuk is a Ukrainian writer and political and cultural
analyst. He is the author of seven books available in English, French,
German, Polish and other languages. This academic year, he will be teaching
at the University of Alberta (in the departments of modern languages and
cultural studies, and history and classics) as the Stuart Ramsay Tompkins
Visiting Professor
————————————————————————————————
http://www.canada.com/edmontonjournal/news/ideas/story.html?id=266ff57f-8075-478a-a401-516ba41eced9

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
If you are receiving more than one copy of the AUR please contact us.
========================================================
12.  OECD: TELL ‘EM SOMETHING THEY DON’T KNOW
Tough economic times could be right around the corner,

ANALYSIS & COMMENTARY: John Marone,
Kyiv Post Staff Journalist, Ukraine
Eurasian Home, Moscow, Russia, Monday, September 10, 2007

If Ukraine wants to maintain its dynamic economic growth, it’s going to have
to cut red tape and bring down barriers to competition, according to a
report by the Organization for Economic Co-operation & Development
(OECD).

The report marks the first-ever assessment of Ukraine by the OECD, a largely
Western organization dedicated to free markets and representative democracy.

However its contents are nothing new.

Ever since the euphoria of Ukrainian independence wore off in the early
nineties, Western governments and organizations have been telling Ukrainians
how to develop democracy and a free market.

Some saw this as natural. After all, Ukrainians seemed eager to obtain the
freedoms and material wealth enjoyed by the West and, increasingly, much of
Asia.

In order to get there, the former Soviet republic would need foreign aid and
commercial loans.

Others, more suspicious, couldn’t help but notice that grants come lined
with geopolitical provisos and advisors whose salaries and benefits comprise
much of the aid.

As for loans – yeah, Ukraine needed the money, but no more than
international banks needed borrowers.

All this having been said, Ukraine has come a long way since independence.
Its leaders are chosen in elections, and private enterprise is booming.

Along the way, there have been many bumps in the road, such as the 1998
economic crisis and the 2004 Orange Revolution, but representative democracy
and free-market economics have survived.

So where does the country go from here?

Well, according to the OECD, and others of the liberal persuasion, Ukraine
needs to open its market to more foreign players.

McDonald’s rules Ukraine’s fast food market, and the country’s biggest steel
mill is in the hands of the world’s largest steel company, but much more
could be done, we’re told.

The main argument here is that foreign players introduce new technology and
practices that domestic companies learn from. One of these practices is
transparency, which means the foreigners will be more likely to pay taxes.
Also, Ukrainians gain from cheaper and better products.

If you were a Ukrainian, however, you’d know that a) paying taxes and
getting commensurate state services are two different things, and b) the
price of everything is going up anyway. Moreover, why does a country have
to be ashamed of wanting to keep its industry in the hands of local
businessmen?

The freemarketeers would argue, among other points, that there is no danger
of an international corporation pushing people around, as the company is
subject to local laws.

But the world abounds in examples of multinationals destroying local
eco-zones and allowing abuses of labor that would not be tolerated in their
own countries.

Indeed, there are reasons why companies seek new countries to set up
production. The big multinationals are more powerful than many governments,
which can’t take all the blame for the abuse of people and the environment.

Of course, Ukraine, and the Soviet Union in general, were no strangers to
human-rights abuses and environmental disasters long before international
companies arrived. And, many are quick to point out, the abuses continue.

By now, everyone has heard of the post-Soviet oligarch. He is the stuff of
Hollywood films: rich, powerful and decadent.

Western governments and organizations like OECD have long associated
corruption with privileges for the oligarchs.

The main remedy for corruption is creating laws that work for everyone.
Clearly, workable legal systems are one thing that the West can preach
about. But does the average Ukrainian really want everything spelled out in
law, as it is in America?

Some would surely like the courts to make a reckless driver pay up for
destroying their little lada, but few would welcome the level of litigation
seen in America.

Ukrainian oligarchs are no different. The only reason any of them have
opened their books is because they had to in order to get Western loans.

Making oligarchs pay a fair price for the state assets that they ‘acquire’
would also be welcomed by the average Ukrainian. This is plain social
justice. But Western governments and business have reacted in horror to
proposals to review past privatization. Ironically, on this issue, they
support the oligarchs.

Many foreigners got their foothold in Ukraine by courting the same corrupt
officials as Ukrainian businessmen.

So, what the West really seems to want is an equal playing field to set
things straight from now on.

If fighting corruption means making everyone equal before the law, this is
certainly a good thing. If it means making everyone pay taxes, and prices
for apartments and consumer goods so high that Ukrainian will soon be as
debt ridden as North Americans, then what’s the moral point here?

To put it another way, Ukrainians see corruption in a different light that
many Western well-wishers.

On the other hand, the OECD mentioned in its report that Ukraine’s low state
debt is a good thing. I would say low public debt is also good.

The report additionally mentions tax reform. Ukrainian taxes are indeed too
high, but few are paying them anyway.

Then there was a call for “self-sustaining investment and innovation-led
growth.”This advice could be given to any country on the globe. How does a
country create the newest technology? The US drains brains from everywhere
else, but it has the money to attract them.

As far as investment, there is the example of Ireland, which went from a
country of emigrants to an IT hub by investing in education. No Ukrainian
would argue against improving education. That’s why some of the poorest
parents will pay their last kopeck to educate their children.

Ukrainians are as worried about the future as anyone else, maybe more,
considering the country’s dismal recent past.

Unlike much of the advice and exhortations that Western organizations and
governments have directed at Ukraine, the OECD report points to a very real
threat.

It notes that Ukraine’s average annual growth to over 7 percent over the
past six years since recovery from the 1998 economic collapse will not last
forever.

The price of Russian gas is going up, and the current consumer boom cannot
last forever, as household debts reaches its limit.

Do Ukrainians already know this? I have no doubt that the country’s leaders
have such information available to them.

As for the average guy on the street, he’s too busy trying to make enough to
buy a flat and raise his kids. Tough times could be right around the corner,
you say. Tell ’em something they don’t know.
————————————————————————————————-
http://www.eurasianhome.org/xml/t/opinion.xml?lang=en&nic=opinion&pid=848
—————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
Send in a letter-to-the-editor today. Let us hear from you.
========================================================
13.  CAN UKRAINE CAPITALISE ON THE GROWING

BIOFUELS MARKET?

ANALYSIS: by Jim Davis, Business Ukraine
Kyiv, Ukraine, Monday, September 17, 2007

With fossil fuel prices steadily rising and the world’s dwindling energy
supplies increasingly being used as political weapons, the attraction of
biofuel options is on the rise and Ukraine has more than most to gain

Biofuels are nothing new to world energy markets. Ethanol first became
widely regarded as a partial solution to petroleum supply problems during
the short-lived but chaotic Arab oil embargo, which began in October 1973.

As is almost always the case, the embargo was not seamless, but it was
strong enough to send shockwaves through the West and effective enough to
convince the Arab states of their oil-derived strength and influence.

Most important of all, the whole world came to realize that the elasticity
of prices on the demand side was much greater than had ever been imagined
and that relatively higher prices could be extracted from the world’s
captive oil markets indefinitely.

Soon thereafter, so-called gasohol, a product made from a 90% petroleum base
married with a 10% pure alcohol additive entered the market in some parts of
the United States. After an approximate 25-year period in which growth was
incremental, ethanol production and use are now booming as never before.

While most that is said and written today uses the term biofuels, in reality
the terminology really applies primarily to two related but different
products.

Ethanol is a product that can be derived from almost any vegetable matter.
However, the preferred and most widely used ethanol feedstock is corn – or
in European parlance, maize.

The other major item, biodiesel, is a product derived from agricultural
sources such as vegetable oils (mostly rapeseed oil, sunflowerseed oil,
etc.), or other raw materials (used frying oils, animal fats) that can
either be mixed with conventional fuels or used in a pure form.

It performs efficiently as both a transport fuel and heating oil and
represents a concrete solution to tackle climate change and promote
sustainable development.
Support from high places
With the enthusiastic backing of everyone from George W Bush to small
agribusiness, and with huge subsidies coming from the US Treasury, the
United States is currently enthusiastically building ethanol plants which
will allow them to process corn and other feedstocks into an alcohol pure
enough to make it an excellent additive for gasoline – or benzin as it is
known in Ukraine.

America’s farmers are enjoying some of their highest profits in decades,
with corn production forecast at 13.1 billion bushels, 10.6% above the
previous record of 11.8 billion bushels set in 2004, according to an August
10 report by the USDA National Agricultural Statistics Service.
Brazil leading the way
While the United States has certainly become the world hot spot for ethanol,
Brazil has long been a major booster of ethanol, with sugar cane bagasse
making an excellent feedstock.

Brazil was the world pioneer in the use of 100% alcohol fuels and there are
already many thousands of alcohol-only cars on Brazil’s highways today.

Ethanol has its critics and they have more than adequate facts to back up
their criticisms. First and foremost is the question of ethanol’s fuel
efficiency, which is lower than traditional gasoline. Added to this is the
fact that corn production requires large amounts of nitrogen fertilizer,
which can seriously contaminate groundwater.

However, the major concern is that so much land is being sacrificed to corn
production that in many areas is crowding out other, unsubsidised crops,
leading to charges that America is sacrificing it ability to feed its people
in order to fill the needs of its gas-guzzling sports utility vehicles that
now number in the millions.
Europe pursuing breakthrough
While ethanol has played a commanding role in the United States, Europe has
been dancing much more to the biodiesel tune. European Biodiesel Board (EBB)
official figures confirm that overall biodiesel production in EU has
increased from 3.2 million tonnes in 2005 to nearly 4.9 million tonnes in
2006.

This represents a 54% yearly growth for EU biodiesel production, which
follows on from a record 65% growth rate in the previous year 2005.

As a result EU biodiesel production has more than doubled in the last two
years. In 2002, 2003 and 2004 biodiesel production had risen by the
relatively lower rate of 30-35%.

Today in Europe there are already 185 fully operational biodiesel plants.
Another 58 plants are currently under construction. In 2007, capacities for
biodiesel production reached 10.2 million tonnes, laying the foundations for
a further strong expansion of the EU biodiesel industry that according to
projections should be able to meet 2010 EU targets with at least two years
to spare.

Once the many plants which are currently under construction begin to
operate, production capacities are expected to reach much higher levels
accordingly, with industrial output growing by the same exponential rate at
least until the end of 2008.
Ukraine a beneficiary of the boom?
This growth in biofuel production capabilities bodes well for Ukraine, with
the country’s huge agricultural industry capable of meeting the commodities
needs of the biofuel boom.

Because ethanol may be made from so many different sources worldwide prices
for the agricultural commodities that Ukraine excels in have seen some
appreciation. And there is a consensus that, with the world’s burgeoning
population and the continued growth of demand from China, commodity prices
appear on the verge of a higher plateau that may remain indefinitely.

One of Ukraine’s most respected agricultural leaders, Leonid Kozachenko, a
former vice prime minister of agriculture and current president of the
Ukrainian Agrarian Confederation, told Business Ukraine that he sees Ukraine
on the brink of a period in which it could enjoy greater agricultural
success than at any time in its history, both as a producer of agricultural
commodities and also as a producer of feedstocks for the biofuels market
domestically.

“Wheat will always be important for Ukraine, but we need no more than 20% of
Ukraine’s land to grow sufficient wheat and other foodstuffs to feed our
population. We have the land, the people and the capacity to become one of
the world’s greatest exporting countries without sacrificing our ability to
supply our own market quite adequately,” Kozachenko says.

He also points out that Ukraine’s farmers are capable of producing large
quantities of corn, the preferred feedstock for ethanol, with a high level
of profitability. There are, however, some changes that need to be made in
order to make the Ukrainian role more productive.
Restructuring to supply Europe
“Ideally, farmers should consider organising themselves into cooperatives
for turning their corn into ethanol and other products. Experience has shown
that farmers may earn USD 100 per tonne on corn under the right
circumstances. And that is just on the corn as it leaves the field.

If we then add value by turning the corn into fuel alcohol with the residual
miller’s grain available for animal feed, we have a win-win situation for
both individual farmers and the country as a whole,” Kozachenko adds.

“Even if we use half of our production capacity to meet local needs, we can
still build up ethanol plant capacity, pay for the plant investment within
three years, and export as much as two million tonnes of ethanol per year to
Europe and other buyers. Also, we can develop the capacity to export as much
as 3 million tonnes of biodiesel based on rapeseed,” Kozachenko explains.

Kozachenko says that some reforms are needed to provide legislation which
will support export efforts, while change is also needed in the attitudes of
some of Ukraine’s neighbours over their import policies.

“The Europeans talk about helping Ukraine, but I would suggest that they
take concrete steps to do so. The best thing that Europe could do would be
to lift the EUR 0.18 per litre tariff that effectively blocks Ukrainian
ethanol exports to Europe today,” he argues.
Time to end Soviet stereotypes
While some private interests may be considering a revitalization of interest
in ethanol in Ukraine, there are still major problems that must be overcome,
not least the attitudes of many in parliament who view the entire alcohol
sector, for both potable and fuel purposes, as inseparable.

Unless the new parliament is willing to act decisively, an industry that is
booming worldwide may remain mired in old Soviet-era thinking in Ukraine.

A well-informed source who spoke on condition of anonymity told Business
Ukraine that recent government efforts to turn some old potable alcohol
plants into ethanol plants are doomed to failure. All of the government’s
efforts are based on old technology that is highly dependent on increasingly
expensive natural gas.

“The state has no money to upgrade plants and, at least until we get a more
enlightened parliament, we are unlikely to see any change in the current law
that gives the government an absolute monopoly over both ends of the alcohol
market,” the source says.
Not all convinced
As many in Ukraine look for ways in which they may turn the country from an
onlooker into a major player on the increasingly expanding biofuels market,
at least one of the best-known and most progressive agricultural firms has
taken a hands-off attitude after studying the situation in depth several
years ago.

A source within Agro-Soyuz, considered one of the most technology driven
agricultural firms in Ukraine, located in the village of Majskoye in
Dnipropetrovsk province, said that the company made an intensive evaluation
that could have led to a major investment in ethanol production.

However, we “placed it on the back burner,” the source says. “We spent most
of 2001 and 2002 engaged in serious investigation of ethanol possibilities,
including personnel on the ground in the United States looking at operations
there.

“At the end of the day, the company was simply not willing to undertake the
kind of investment that would have been necessary while all of the
decision-making was left in the hands of Ukrainian government agencies,” the
source adds.

Another of the major agricultural players, Alexei Sizov, a banker with a
background that includes work throughout the CIS with Renaissance Capital
and J. P. Morgan who was recently named CEO of Ukrainian Agrarian
Investments, LLC, told Business Ukraine that his firm is taking what it
considers the correct approach in view of the current Ukrainian reality and
the worldwide surge in biofuels interest.

“In our planning, our major consideration is the energy capacity of the
crops we plant. We produce corn, rapeseed, and other crops with high energy
potential for the regular markets. However, we always take into
consideration the possibility that a crop has for diversion as a feedstock
for the biofuels industry,” Sizov says.
An industry crying out for subsidies
Yuriy Alatortsev, an independent agricultural analyst who covers agriculture
in the CIS for publications in Europe and the United States, summed the
situation up, “It is generally accepted that the biofuel industry, both in
Ukraine and abroad, has little chance of survival without governmental
subsidies.

“The low production cost of grains and oilseeds in Ukraine has attracted
neighbours from countries where biofuel laws are in place to come and buy
raw materials, mostly rapeseed. These include the Baltics, Germany and
Poland.”

“The world energy market drives the prices for grains and oilseeds and this
game has started to involve Ukraine more and more. If Ukrainian farmers
learn to increase their yields from lands they are farming now they can
potentially triple their yields of rapeseed, soybeans and possibly corn and
thus enjoy higher margins and profits from farming, in spite of highly
negative domestic biofuel legislation.”

“What Ukrainian farmers really need is for the government to stay away from
the market, stop playing banning games, and listening to the crushing
lobbies that want to introduce a rapeseed export quota and other restrictive
measures.”

Most crushing companies in Ukraine prefer to crush rapeseed, soybeans and
trade vegetable oils. Currently Ukraine is considering duplicating already
existing German legislation in this sector but it is unclear how soon it
will be passed given the political instability.

So Ukraine needs to sit tight, increase yields and enjoy the high prices
paid by richer neighbours who can afford it, thanks to their subsidies for
biofuel production and processing.

The other biofuel, biodiesel, has enjoyed some success but so far has had
nothing like the market-moving attention of ethanol. Many scientists believe
that some of the technical problems with biodiesel will eventually be
solved, but, for the time being at least, it remains a less important but
growing player on the biofuel energy field.
———————————————————————————————
LINK: http://www.businessukraine.com.ua/can-ukraine-capitalise-on-the

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
14.  FIRST EDITION OF RESPONSIBLE BUSINESS
DIRECTORY UKRAINE LAUNCHED IN KYIV

UNIAN, Kyiv, Ukraine, Thursday, September 20, 2007

KYIV – The launch of the first edition of Responsible Business Directory
Ukraine was conducted today in Kyiv at the conference hall of the Hyatt
Hotel within the frameforke of the Global Compact Initiative in Ukraine,
and in partnership with the Ukrainian Chamber of Commerce and Industry,
European Business Association, American Chamber of Commerce and
with the support of Ukraine Citizen Action Network (UCAN).

According to the UN Office in Ukraine, during the launch the first bilingual
publication in Ukraine featuring socially responsible companies that work in
the local market and implement corporate social responsibility practices in
the country was presented.

“The Directory is a unique publication since for the first time it presents
Ukrainian companies from a different perspective – the perspective of their
behavior as corporate citizens”, stated UN Resident Coordinator in Ukraine
Francis O’Donnell, in his welcoming address to the attendees of the launch.

“The responsibility of the companies finds its way in two dimensions:
striving to respond to the needs of the society by engaging in community
development and environmental protection, and trying to be responsible
towards their employees and to practice business ethics principles at
workplace”, he added.

This event was also attended by the Government representatives, Ms. Oksana
Slyusarenko, Deputy Minister of Economy and Ms. Natalya Ivanova, Deputy
Minister of Labour and Social Policy who complimented private sector’s
engagement, realized in corporate social responsibility, on the way to
social and economic well-being of the country.

The publication aims to contribute to the promotion of a new image of
national businesses that meet social, environmental and governance
objectives.

The event attracted more than 120 participants including representatives of
the country’s leading companies, featured in the Directory, foreign
diplomatic corps and media.

Ms. Barbara Felitti, UCAN Country Director stressed the Directory’s
importance for the overall development of business sector in Ukraine.
“UCAN has been a proud partner in the preparation of this valuable
publication”, noted Ms. Felitti.

“Ukrainian business is a part of European business, especially when the
mutual cooperation ties become stronger, social responsible business
practices and standards appear very high on the agenda” stated Ms. Andrea
Raffaseder, President of the European Business Association in Ukraine. “I
hope that the Responsible Business Directory will become an annual
publication”, she added.

Mr. Jorge Zukoski, President of the American Chamber of Commerce
expressed a hope that the publication would serve as an inspiration to the
Ukrainian business community by inheriting the corporate social
responsibility principals in their activities and thus boosting the development

of Ukraine.

The Responsible Business Directory incorporates CSR company profiles into
one source of information. The Directory will be also contributing to the
establishment of a new business community in Ukraine that justifies its
existence not only in terms of profit, but also service to the society at
large which becomes a tribute to the international business practice
tendencies.

This publication is a wonderful resource of information for a wide audience
and will be distributed within the country and also abroad.
——————————————————————————————-

——————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
If you are receiving more than one copy of the AUR please contact us.

Please contact us if you no longer wish to receive the AUR.    
You are welcome to send us names for the AUR distribution list.
If you are missing some issues of the AUR please let us know.
========================================================
“ACTION UKRAINE REPORT – AUR”
A Free, Private, Not-For-Profit, Independent, Public Service Newsletter
With major support from The Bleyzer Foundation
Articles are Distributed For Information, Research, Education
Academic, Discussion and Personal Purposes Only
Additional readers are welcome.
========================================================
SigmaBleyzer/The Bleyzer Foundation Economic Reports
“SigmaBleyzer – Where Opportunities Emerge”
 
The SigmaBleyzer Emerging Markets Private Equity Investment Group
and The Bleyzer Foundation offers a comprehensive collection of documents,
reports and presentations published by its business units and organizations.
 
All publications are grouped by categories: Marketing; Economic Country
Reports; Presentations; Ukrainian Equity Guide; Monthly Macroeconomic
Situation Reports (Romania, Bulgaria, Ukraine).
 
You can be on an e-mail distribution list to receive automatically, on a
monthly basis, any or all of the Macroeconomic Situation Reports (Romania,
Bulgaria, Ukraine) by sending an e-mail to mwilliams@SigmaBleyzer.com.
“UKRAINE – A COUNTRY OF NEW OPPORTUNITIES”
=======================================================
 TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR,
around three times a week, please send your name, country of residence,
and e-mail contact information to morganw@patriot.net. Information about
your occupation and your interest in Ukraine is also appreciated.
 
If you do not wish to read the ACTION UKRAINE REPORT please
contact us immediately by e-mail to morganw@patriot.net.  If you are
receiving more than one copy please let us know so this can be corrected. 
========================================================
PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer, The Bleyzer Foundation
Emerging Markets Private Equity Investment Group;
President, U.S.-Ukraine Business Council, Washington;
1701 K Street, NW, Suite 903, Washington, D.C. 20006
Tel: 202 437 4707
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
========================================================
Power Corrupts and Absolute Power Corrupts Absolutely.
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================
Advertisements

Leave a comment

Filed under Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s