Daily Archives: November 7, 2007

AUR#888 Nov 7 U.S. Amb Taylor Speaks Out In Kyiv; Lies, Damn Lies and Ukraine’s WTO Bid; Pepsi; UPS; Cardinal; Ikea; UNESCO; NKVD Child;

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       
Corruption, Judicial System Reform, Investment Climate Improvement, 
Energy Dependency, Non-Transparent Mediator, NATO, WTO
[Articles One, Two, Three and Four]
Mr. E. Morgan Williams, Publisher and Editor, SigmaBleyzer
Clicking on the title of any article takes you directly to the article.               
Return to Index by clicking on Return to Index at the end of each article
Ukrainian News Agency, Kyiv, Ukraine, November 5, 2007
Ukrainian News Agency, Kyiv, Ukraine, Monday, November 5, 2007


Ukrainian News Agency, Kyiv, Ukraine, Monday, November 5, 2007

Ukrainian News Agency, Kyiv, Ukraine, Monday, November 5, 2007

Commentary: by John Marone, Kyiv Post Staff Journalist
Eurasian Home, Moscow, Russia, Tuesday, October 30, 2007


Interfax Ukraine, Kyiv, Ukraine, Monday, November 5, 2007

Interfax Ukraine, Kyiv, Ukraine, Mon, November 5, 2007

Ukrainian News Agency, Kyiv, Ukraine, Tuesday, November 6, 2007


Interfax Ukraine, Kyiv, Ukraine, Monday, November 5, 2007


Interfax Ukraine, Kyiv, Ukraine, Monday, November 5, 2007


Interfax Ukraine, Kyiv, Ukraine, Monday, November 5, 2007

Business Wire, MN & NY, Tuesday November 6, 2007

Have raised a follow-on private equity fund of $130 million
U.S.-Ukraine Business Council (USUBC), Wash, D.C. Mon, Nov 5, 2007

U.S.Ukraine Business Council (USUBC), Wash, D.C. Wed, Nov 7, 2007


Behind the Breaking News, Briefing: By Tammy Lynch, Senior Fellow
Behind the Breaking News, Volume VI, Number 1,
Institute for the Study of Conflict, Ideology and Policy,
Boston, MA, Thursday, 1 November 2007

By Volodymyr Obolonsky, The Ukrainian Times
Kyiv, Ukraine, Monday, November 5, 2007

Ukrainian News Agency, Monday, November 5, 2007


Property Xpress, Sofia, Bulgaria, Thursday, November 1, 2007

Property Xpress, Sofia, Bulgaria, Tuesday, October 30, 2007

Bloc of Yulia Tymoshenko (BYuT) Newsletter Issue 52
Kyiv, Ukraine, Tuesday, November 6, 2007

Presentation: by Robert McConnell, Attorney
2007 Convention Gala of the Ukrainian-American Bar Association
Washington, D.C., Saturday, September 22, 2007
Action Ukraine Report (AUR) #888, Article 21
Washington, D.C., Wednesday, November 7, 2007
Action Ukraine Report (AUR) #888, Article 22
Kyiv, Ukraine, Wednesday, November 7, 2007
By Mykola SIRUK, The Day Weekly Digest #33
Kyiv, Ukraine, Tuesday, November 6, 2007
Ukrainian News Agency, Kyiv, Ukraine, Tuesday, November 6, 2007
Opinion & Analysis: by Andrei Marchukov, PhD (History),
Staff Researcher, Russian Academy of Sciences’ Institute of Russian History.
RIA Novosti, Moscow, Russia, October 16, 2007
Commentary: by David A. Mittell, Jr.
Providence Journal, Providence, RI, Thu, November 1, 2007
Action Ukraine Report (AUR) #888, Article 28
Kyiv, Ukraine, Wednesday, November 7, 2007

Ukrainian News Agency, Kyiv, Ukraine, November 5, 2007

KYIV – US Ambassador to Ukraine William Taylor considers that the

primary issues for the new Ukrainian Cabinet of Ministers are fight against
corruption, reformation of the judicial system and improvement of the
investment climate. He disclosed this in a statement at the open lecture
entitled “Ukraine as Young Democracy.”

“All political forces, which took part in the elections promised to improve
political and investment climate in the country. It is higher time to do
that: decrease state regulation, launch fight against corruption and reform
the judicial system,” he said.Taylor marked that Ukrainian three largest

parties are sharing this position.

He also called problems of the judicial system and corruption as
difficulties all young democracies face. “The fight against corruption in all

sectors will be an important test of new government on the way to Europe,”
Taylor said.
He also marked permanence of the US government position: readiness to
cooperate with any new Ukrainian government.

The ambassador marked importance of improvement of the investment climate

in Ukraine in the frames of preparations for Euro 2012. To prepare for Euro
2012, considerable sums are needed. The state budget won’t manage to find
the funds. It is necessary to attract investments, he said.

Taylor considers that the fight against corruption and reformation of the
judicial systems will assists attraction of more investors to Ukraine. As
Ukrainian News earlier reported, the early Verkhovna Rada elections took
place on September 30.

On October 15, the Yulia Tymoshenko Bloc and the Our Ukraine People’s
Self-Defense Bloc agreed to create the coalition at the Verkhovna Rada of
the sixth convocation.

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

Ukrainian News Agency, Kyiv, Ukraine, Monday, November 5, 2007

KYIV U.S. Ambassador to Ukraine William Taylor has said that a transparent
contract on natural gas supplies will reduce Ukraine’s energy dependency on
Russia. He presented the assessment during an open lecture entitled “Ukraine
as a young democracy.”

“The current contract of gas supplies is not transparent and depends on a
mediating company between Ukraine and Russia. I believe that an opportunity
to reduce the energy dependency of Ukraine can be transparent contracts on
commercial basis,” he said. Taylor said he didn’t understand why Ukraine
needed a non-transparent mediator.

According to him, there were other ways to reduce the energy dependency of
Ukraine on other states, including the necessity to develop own sources of
energy, alternative energy, diversification of fuel supplies to Ukrainian
NPPs. “Now all sources of nuclear fuel are in Russia. This cannot be so,” he

Taylor said Ukraine was working to produce own nuclear fuel. Such designs,
in his opinion, will facilitate competition in the sector and reduce
Ukraine’s dependency on one source of nuclear fuel.

As Ukrainian News earlier reported, Premier Viktor Yanukovych gave Fuel and
Energy Minister Yurii Boiko until November 7-10 to complete talks with
Russian gas monopoly Gazprom on gas prices for 2008.

Ukraine is not buying natural gas of Russian origin in 2007 because it has
reached agreement with Uzbekistan on annual delivery of 7 billion of gas
through RosUkrEnergo Company (the exclusive supplier of gas to Ukraine,
reached agreement with Kazakhstan on annual delivery of 8.5 billion cubic
meters of gas, and signed contracts with Turkmenistan for delivery of 42.5
billion cubic meters of gas per year.

Since 2007, Ukraine has received natural gas at the price of USD 130 per
thousand cubic meters on the border of Ukraine and Russia, which is 36.8%
more than the gas price supplied in 2006 (USD 95 per thousand cubic meters).

Ukrhaz-Energo joint enterprise buys natural gas from RosUkrEnergo Company

at the Ukrainian-Russian border and sells it to Ukrainian industrial
enterprises and heating utilities as well as to the Naftohaz Ukrainy
national joint-stock company for meeting the requirements of the population,
the fuel and energy complex, and the state sector. RosUkrEnergo buys all its
gas from Gazprom Company, the Russian gas monopoly.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Ukrainian News Agency, Kyiv, Ukraine, Monday, November 5, 2007

KYIV U.S. Ambassador to Ukraine William Taylor forecasts that Ukraine

will take final decision concerning its accession to NATO in 1-2 years. He
disclosed this in a statement at an open lecture entitled Ukraine as Young
Democracy. “It will take Ukraine 1-2 years to take final decision,” he said.

Taylor also marked that Ukraine has to decide itself and nobody intends to
make Ukraine enter NATO. He said that the Ukrainians have to have time to
understand how NATO has changed since Warsaw Pact.

“What does to be a NATO member mean? Does it mean deployment military

bases on its territory? No. It is deployment of nuclear weapon on its territory?
No. Does it mean forceful participation in wars? No,” Taylor said.

He marked that NATO takes all decisions only via consensus and taking of

the decisions depends on agreement of all 26 countries. Besides, he added
that despite the time it will take Ukraine to make the decision, NATO always
welcomes Ukraine to join it.
As Ukrainian News earlier reported, President Viktor Yuschenko believes
that the issue of Ukraine’s membership of NATO should be resolved via a

In December 2006, Yuschenko said that he opposed organization of a
referendum on Ukraine’s membership of NATO until Ukraine received an
invitation to join NATO.

In October 2007, Yuschenko called on Ukraine’s European partners to
facilitate the accession to the NATO Membership Action Plan.

NATO’s Deputy Assistant Secretary-General for Public Diplomacy Stefanie
Babst has forecast that Ukraine will join the Action Plan on NATO Membership
in 2009.

On September 19, 2006, the Ukrainian parliament adopted a resolution
supporting Prime Minister Viktor Yanukovych’s position that Ukraine is not
ready to join the NATO Membership Action Plan. The parliament’s resolution

also states that the issue of NATO membership will be decided only via a
national referendum.
Yanukovych said at a meeting of the Ukrainian-NATO Commission in Brussels
(Belgium) that broadening cooperation with NATO was a pressing issue for
Ukraine but added that only 12-25% of Ukrainian citizens presently support
accession of Ukraine to NATO.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Ukrainian News Agency, Kyiv, Ukraine, Monday, November 5, 2007

KYIV – The United States’ Ambassador to Ukraine William Taylor believes

that the new Ukrainian parliament should accelerate adoption of a decision
on admission of Ukraine into the World Trade Organization (WTO). Taylor
stated this in an open lecture entitled “Ukraine as a Young Democracy.”

“There is a decision that the new parliament should adopt soon, particularly
the final decision on accession to the WTO,” he said.

Taylor believes that all the political forces in the previous parliament
supported the laws necessary for accession to the WTO and hopes that the
new parliament will adopt the final decisions.

“It will be very positive for Ukraine, for its economy, and a very important
consequence will be the start of a serious discussion on inclusion of
Ukraine in a free trade zone with the European Union.

“This will demonstrate to the world Ukraine’s readiness to move into
Europe,” Taylor said. He also noted the existence of a consensus in

Ukraine on issues of European integration.

As Ukrainian News earlier reported, Ukraine’s representative at the WTO’s
headquarters in Geneva (Switzerland) Volodymyr Baluta has forecast that
Ukraine will join the organization in the fall of 2008.

The Cabinet has announced that it has reached agreement on a WTO accession
protocol with Kyrgyzstan, which is the last country with which Ukraine
needed to reach an agreement. The Cabinet of Ministers is aiming to complete
the preparation of the final report on admission of Ukraine into the WTO in
late November.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
U.S.-Ukraine Business Council (USUBC): http://www.usubc.com

COMMENTARY: By John Marone, Kyiv Post Staff Journalist
Eurasian Home, Moscow, Russia, Tuesday, October 30, 2007

If Ukraine’s efforts to join the World Trade Organization are any indication
of the country’s overall commitment to economic reform, then we’re all
being fed a plate of lies.

The working group monitoring Kyiv’s WTO bid held an informal meeting in
Geneva on October 25, followed by the usual rosy progress report issued by
the Ukrainian government.

The web site of the Cabinet of Ministers carried a statement on October 26
indicating that a breakthrough had been reached with Kyrgyzstan on the
signing of an agreement on mutual access to the market of goods and

The tiny Central Asian republic is the last country with which Ukraine has
to sign a bilateral agreement as a requirement for WTO entry. The obstacle
to achieving this has supposedly been a $25 million debt going back to
Soviet times that Kyrgyzstan claims to be owed.

“Kyrgyzstan has admitted that its claims on Ukraine are unfounded and
instead agreed to a zero import duty on agricultural products in exchange
for signing the bilateral protocol on access to the market of goods and
services,” the Cabinet statement reads.

As a result, according to the government, the next, official meeting of the
working group will be the last, clearing the way for final approval of
Ukraine’s WTO bid by a 43-nation general meeting in February.

Unfortunately, nobody told the Kyrgyz about this.

The AKIpress news agency website based in Bishkek ran a report on
October 27, in which it quoted the country’s Ministry of Industry, Economic
Development and Trade as accusing the Ukrainian government of trying to
use the media to force a WTO settlement.

“It is greatly unfortunate that Ukraine has been striving to resolve issues
solely in its own favour throughout the negotiating process and in a
coercive way without taking into account Kyrgyzstan’s legal trade and
economic interests,” the Kyrgyz government statement reads.

Kyrgyzstan’s ambassador to Kyiv confirmed his government’s position and
denied that his country had dropped its monetary claims on Ukraine.

Ukraine has been negotiating WTO entry for the past 13 years, signing one
bilateral treaty after another while getting feedback in Geneva on its reform

efforts. The WTO boasts 150 member states, but only 43 have a say on
Ukraine’s entry, and Kyrgyzstan is one of them.

By early 2006, when the United State recognized Ukraine as a market economy
and cancelled the largely symbolic Jackson-Vanik amendment, Kyiv looked like
it had made it over the hump.

A year earlier, President Viktor Yushchenko had come to power with promises
of greater European integration.EU officials have made WTO membership a
condition to Ukraine’s obtaining a free-trade agreement.

Experts point out other benefits of WTO membership such as the promotion
of efficiency and badly needed foreign investment.

However, opening the doors to international competition also poses a threat
to vested Ukrainian interests, companies content with holding a monopoly
over a captive consumer audience.

In addition, there is Russia, which has proposed that the two “brotherly”
nations join together.

According to WTO entry rules, if Ukraine were to get in first, it could hold
Russia’s bid hostage to outstanding bilateral trade issues such as Russia’s
export tax on oil, which punishes energy-dependent Ukrainian consumers.

Some observers have accused Russia of using its influence over the otherwise
insignificant Kyrgyzstan to hold up Ukraine’s WTO bid.

But this is too convenient an excuse for Kyiv. Considering all the economic
benefits of WTO entry, would it really be such a burden to pay out $25
million to Bishkek?

The motivation of Ukrainian businessmen with influence if not seats in
parliament to keep out foreign competition should not be underestimated.

One need only do a quick cost comparison of what consumers are forced
to pay in the Ukrainian capital for food, clothing, mobile communications,
etc. in order to guess what kind of profits are at risk from a freer market.

Why improve efficiency and customer service when you can just keep out the
competition by buying a seat in the legislature?

The drive to join the WTO has turned into a forced march through the mud
without wheels, regardless of who is in control of the government.

Ukraine’s representative at the WTO headquarters in Geneva, Volodymyr
Baluta, said his country would enter the WTO in fall 2008.  Following the
approval of a final report in November, then a vote by a WTO general meeting
in February, it’s just a matter of a couple of months, Baluta would have us

“In June 2008, Ukraine will be able to complete all preparations. And if in
early fall the council ratifies the agreement on Ukraine’s joining to the
World Trade Organization, Ukraine will become its member in 30 days,”
he was quoted as saying in a government statement.

But Ukraine’s parliament still has to give final approval, and lawmakers
have been the main obstacles in the first place. But you wouldn’t guess this

by the statements released by the government over the last year and a half.

The last official working group meeting was held on July 23, after which the
Economy Ministry said everything was moving along as planned. The same
picture was drawn in May, when the parliament was said to have approved
final amendments to WTO-related bill passed late last year.

The problem with such bills is that they always fall short of the working
group’s approval and thus have to be reworked, revoted and revisited in
Geneva, while months are lost in the process.

Yushchenko first promised WTO membership in the fall of 2006, only to push
the deadline back to the end of this year. But the president has been hard
pressed to push through any of the reforms he promised during the country’s
much touted Orange Revolution.

And with the Orange parties winning only a slim majority in the last
elections, their ability to pass much liberal bills looks equally dim until
the next presidential poll in 2009.

By that time, the effects of the country’s consumer spending spree and
certain favorable external circumstances will have been reduced to show
the economy for what it really is.

And all the lies, damn lies and WTO waffle won’t be able to cover it up.

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

Interfax Ukraine, Kyiv, Ukraine, Monday, November 5, 2007

KYIV – Ukraine’s joining the World Trade Organization (WTO) would increase
the competitiveness of the country’s economy, according to senior economist
of CASE Ukraine Center for Social and Economic Research, Vladimir

“In the context of joining the World Trade Organization, this would raise
[Ukraine’s] competitiveness,” he said at a press conference at
Interfax-Ukraine on Wednesday.

He said that some representatives of domestic business are against the
country’s joining the World Trade Organization, as they would face stiffer
competition after joining.

In turn, CASE Ukraine CEO Dmytro Boyarchuk said that any international
integration improves the country’s competitiveness.

Asked whether some economic sectors could die after Ukraine’s joining the
World Trade Organization, he said that some spheres could replace some
owners with more efficient ones, and no more. If the sector is in demand, it
would exist, he said.

CASE Ukraine experts introduced The Global Competitiveness Report 2007-2008
at the press conference, which is published by World Economic Forum (WEF).
Ukraine’s position worsened: the country moved from 69th to 73rd position in

Dubrovskiy said that the fall in the rating is linked with the fact that
over the past year there was GDP growth per capita, although the economy’s
efficiency did not improve. He said that there are no serious reforms of the
economy in Ukraine.

He said that the Competitiveness Report is drawn up for governments and not
for private investors. He said that the Ukrainian government has been very
interested in this rating over the past years.

According to WEF, the United States confirmed its position as the most
competitive economy in the world. WEF provides the competitiveness research
on yearly basis covering 131 countries. The report is the most comprehensive
analysis of competitiveness factors of national economies.

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

Interfax Ukraine, Kyiv, Ukraine, Mon, November 5, 2007

KYIV – The process of Ukraine’s admission to the World Trade Organization
may be completed in the fall of 2008, Volodymyr Baluta, Ukraine’s official
representative at the headquarters of the WTO, has said.

“In June 2008, Ukraine may end the preparation process for obtaining
membership. If early in the fall the council [of the WTO] ratifies the
agreement on Ukraine’s admission in the WTO, Ukraine will become a member

of the WTO in 30 days, the department for public relations of the secretariat
of the Cabinet of Ministers quoted Baluta as saying.

As earlier reported, the process of Ukraine’s admission in the WTO started
in 1993. Of all of the neighbors of Ukraine, only Russia and Belarus are not
members of the WTO.

According to a posting on the Web site of the Ukrainian government, in
February 2008 there will be a meeting of the working group and a special
addendum will be drafted later concerning commitments on duties on goods,
the regime of access to the markets of goods and services and the limitation
of the budget subsidies to Ukrainian agribusinesses.

According to the posting, if Ukraine reaches agreement with the WTO in
March, the finalized draft report on Ukraine will be ready by the end of
April 2008.

The check of the final report will take another month and the preparations
for the meeting of the General Council of the WTO will take another 15 days.

“If the last country stalling the admission in the WTO has ungrounded claims
against an applicant, this is a matter for the attention of such members of
the WTO as the United States and the countries of the EU.

If Kyrgyzstan refuses to sign the bilateral protocol with Ukraine, Ukraine
may be admitted to the WTO without a protocol with Kyrgyzstan,” the posting
quoted Deputy Economy Minister Valeriy Piatnytsky as saying.

The posting further reads that Kyrgyzstan recognized its claims against
Ukraine as ungrounded during an unofficial meeting of the working group on
Ukraine’s accession to the WTO on October 25.

The posting reads that the question of $27 million of Ukrainian technical
aid to Kyrgyzstan as the redemption of the debt of the Soviet times will be
negotiated outside the question of Ukraine’s admission in the WTO.

“The Kyrgyz side agreed with its claims against Ukraine being ungrounded and
proposed instead to introduce zero duties on farm produce imports.Ukraine
promised to retain the current zero [duty] regime of bilateral trade,” the
posting reads. After the meeting on October 25 there are still three issues left

to be settled within a month, the posting said.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
NOTE: Send in a letter-to-the-editor today. Let us hear from you.

Ukrainian News Agency, Kyiv, Ukraine, Tuesday, November 6, 2007

KYIV – The Foreign Affairs Ministry of Ukraine says that the long-term
positives of Ukraine’s accession to the World Trade Organizationoutweighs

possible domestic negatives.

First Deputy Foreign Minister Volodymyr Khandohii said this, addressing
conference “Diplomacy and Business: Dialogue of Partners.”

‘We believe that the long-term character of positive is much greater than
local negatives that will partially involve some enterprises of our economic
system as a result of Ukraine’s accession to the WTO,’ he said.

Khandohii recognized the possibility of some risks for Ukraine at the first
stages, after joining the WTO.  ‘It may lead to a worsening of the situation
in certain regions,’ he added.

At the same time, Khandohii pointed out a special importance of
restructuring of the Ukrainian economy and improvement of investment

In his opinion, entry in the WTO will create the necessary conditions for
Ukraine’s entry in the zone of free trade with the European Union, and will
open Ukrainian market for investments.

Khandohii also expressed the importance of Ukraine’s entry in the free trade
zone for deepening economic relations with the European countries that are
not members of the European Union.

‘The point at issue is to fix Ukraine in Europe’s business space, and
today’s entry in the WTO provides the chance of doing so,’ he added.

As Ukrainian News reported, the United States’ Ambassador to Ukraine William
Taylor says that the new Ukrainian parliament should accelerate adoption of
a decision on admission of Ukraine into the World Trade Organization.

Ukraine’s representative to the WTO headquarters in Geneva (Switzerland)
Volodymyr Baluta has forecast that Ukraine will join the organization in the
fall of 2008.

The Ukrainian Cabinet announced that it had reached agreement on a WTO
accession protocol with Kyrgyzstan, which was the last country with which
Ukraine needed to reach the agreement.  The Cabinet of Ministers is aiming
to complete preparation of a final report on admission of Ukraine into the
WTO in late November.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]


Interfax Ukraine, Kyiv, Ukraine, Monday, November 5, 2007

KYIV – First Vice Premier and Finance Minister Mykola Azarov has ordered

a Ukrainian delegation, which holds talks on joining the World Trade
Organization (WTO) with Kyrgyzstan in Geneva, to agree with the Kyrgyz

“I can say that I ordered our delegation to agree with all conditions, which
proposes Kyrgyzstan concerning joining the World Trade Organization,” he
told the press on October 29.

Azarov said that the two countries have almost a zero turnover, and the
country would loose or win few things from signing an agreement with
Kyrgyzstan under any conditions.

He said that Kyrgyzstan has already said that the country does not link
Ukraine’s joining the World Trade Organization with settling debt
commitments between the two countries, and it is ready to concentrate on
problems of the bilateral agreement. “There is a possibility to sign a
bilateral agreement in a month or two,” he said.

As reported, on October 23, Ukrainian Economy Minister Anatoliy Kinakh said
Ukraine would sign an agreement with Kyrgyzstan as part of its accession to
the World Trade Organization by the end of 2007.

The minister noted that Ukraine had already drafted a draft of the
respective memorandum, in which the country is ready to cooperate on
humanitarian issues, technical aid, and joint participation in investment
projects with Kyrgyzstan.

The Ukrainian government has many times reviewed forecasts for Ukraine’s
accession to the World Trade Organization, last time the forecast for the
second half of 2007 was made in summer.

The endorsement of necessary bills and the signing of bilateral agreements
on the access to the goods and services market with WTO member states, apart
from Kyrgyzstan, were completed in late 2006.

Ukraine’s Economy has forecast that the country would join the World Trade
Organization by 2008. In May, Ukraine’s parliament adopted a number of laws
necessary for the country’s accession to the World Trade Organization.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Interfax Ukraine, Kyiv, Ukraine, Monday, November 5, 2007

KYIV – If Ukraine agrees to all of the terms from Kyrgyzstan for gaining
membership of the World Trade Organization, which concern the settlement of
debts, this could provoke a number of additional demands from other trade
and economic partners, president of the anti-crisis research center Yaroslav
Zhalilo has said.

“It is unnecessary to make concessions only to Kyrgyzstan. If Kyrgyzstan
wants to set a zero import rate for some goods, this means that we also
agree to such a rate for all of our trade partners,” he said in an interview
with Deutsche Welle on Wednesday.

Zhalilo said that Ukraine would join WTO countries only in the autumn of
2008, adding that a date of Ukraine’s gaining access to the organization
would depend on the government forming its future policies.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Interfax Ukraine, Kyiv, Ukraine, Monday, November 5, 2007

KYIV – The World Bank expects that GDP growth in Ukraine in 2007 will be
6.7%, while earlier the forecast was 6%.

According to a World Bank report, the index of consumer prices is expected
to grow by 12.5% in 2007, though the bank’s previous forecast was 9.7%.

According to the bank, in 2008, 2009 and 2010, Ukraine’s GDP is expected to
grow by 5.5%, 5% and 5% respectively. Inflation in these years is expected
to be 9.6%, 8.3% and 7.4% respectively.

Earlier this year, in July, the World Bank reviewed its forecast for
Ukraine’s real GDP growth in 2007 upwards from 5.5% to 6%, while the
inflation forecast was changed from 10.9% to 9.7%.

Ukraine’s real GDP growth was 7.1% in 2006, while in 2005 it was 2.7%. The
government forecasts a GDP growth slowdown to 6.5% in 2007, along with a
fall in inflation from 11.6% to 7.5%.

The Ukrainian and international expert centers that draw up consensus
economic projections under the aegis of Ukraine’s Economy Ministry have

also improved their GDP forecast: in October their forecast for GDP growth
for 2007 was 7%, while in July it was 6.9%, according to a posting on the
Ministry’s official Web site.

However, the ministry said that the inflation forecast for 2007 had risen in
October to 11.6% from 8.6% in July.

According to an October consensus projection, GDP growth in 2008 will be
6.4% with 9.8% inflation, while in July 2007 these figures were 6.4% and
7.9% respectively.

The forex exchange rate by late 2007 will be UAH 5.05/$1, while in July it
was forecasted at UAH 5.07/$1, and by late 2008 it will be UAH 5.06/$1

(UAH 5.11/$1).

At the same time, World Bank experts stress that it would be expedient to
make the exchange rate of the hryvnia, Ukraine’s national currency, more
flexible, as the revaluation of the hryvnia could slow the pace of inflation
in the country.

Although Ukraine was possibly not ready for a shift to a free floating
exchange rate, the revaluation of the hryvnia could, under current
conditions, treat the fever on the markets, an expert said.

Describing Ukraine’s banking sector, Ruslan Piontkovsky, an economist of

the Ukrainian office of the World Bank, said that difficulties in accessing
foreign financial resources would slow the development of the Ukrainian
banking system in 2008.

“The pace of the growth in domestic credits from foreign finance will slow.
Next year and in future we will probably see slowed growth in banking
indicators,” he said at a press conference on November 1.

He said the Ukrainian banking system would grow faster than in other
countries but slower than in Ukraine in this, and previous years.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

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Business Wire, MN & NY, Tuesday November 6, 2007 

MINNEAPOLIS & PURCHASE, N.Y.- PepsiAmericas, Inc. and PepsiCo today
announced that they have completed the joint purchase of the remaining 20
percent of Sandora, LLC (“Sandora”), the leading juice company in Ukraine.

The acquisition for a total purchase price of $136.7 million completes the
transaction and provides PepsiAmericas and PepsiCo with a strong platform
for growth.

PepsiAmericas and PepsiCo originally purchased an 80 percent interest in
Sandora through a joint venture in August 2007. PepsiAmericas holds a 60
percent interest in the joint venture, and PepsiCo holds 40 percent.

The transaction is not expected to have an impact on PepsiAmericas’ nor
PepsiCo’s previously announced earnings per share guidance for 2007.
PepsiAmericas consolidates the joint venture into its financial results on a
one-month lag basis.
Sandora has established itself as the leader in the high growth juice
category with a range of distinctly positioned brands that represent
approximately half of the total juice volume consumed in Ukraine. With over
3,500 employees, Sandora has a powerful sales and distribution organization
and two modern production facilities located in Nikolaev.
PepsiAmericas is the world’s second-largest anchor bottler in the Pepsi
system and in the U.S. serves a significant portion of a 19 state region,
primarily in the Midwest.

Outside the U.S., the company has operations in Europe and Caribbean,
specifically in Poland, Hungary, the Czech Republic, Republic of Slovakia,
Romania, Ukraine, Puerto Rico, Jamaica, the Bahamas, and Trinidad and

The company also has distribution rights in Moldova, Estonia, Latvia,
Lithuania and Barbados. The company serves areas with a total population of
more than 150 million people. PepsiAmericas manufactures, distributes and
markets a broad portfolio of PepsiCo and other national and regional
beverage brands. For more information, please visit www.pepsiamericas.com.
PepsiCo (NYSE:PEP – News) is one of the world’s largest food and beverage
companies, with 2006 annual revenues of more than $35 billion. The company
employs approximately 168,000 people worldwide, and its products are sold in
approximately 200 countries. Its principal businesses include: Frito-Lay snacks,

Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker

PepsiCo is listed on the Dow Jones North America Sustainability Index and
Dow Jones World Sustainability Index. For more information, please visit
This release contains forward-looking statements of expected future
developments, including expectations regarding anticipated earnings
associated with the Sandora acquisition.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Have raised a follow-on private equity fund of $130 million

U.S.-Ukraine Business Council (USUBC), Wash, D.C. Mon, Nov 5, 2007

WASHINGTON – The Board of Directors of the Western NIS Enterprise
Fund (WNISEF) met in Washington, DC on October 30, 2007.  While in
Washington the top management of WNISEF, along with the board,
provided financial highlights from the past year at an informal luncheon
briefing attending by officials of the U.S. government, Ukraine Embassy,
think-tanks. businesses and other organizations interested in Ukraine.

Natalie Jaresko, President and Chief Executive Officer said, “In 1995 when
Ukraine and Moldova were in the early years of their transition to a market
economy, WNISEF set upon a path to help these economies build a strong
private sector. A great deal has changed in the region since that time.

“A substantial M&A market has developed in Ukraine; foreign direct
investment and fixed capital investment overall are rising dramatically. The
banking sector of both Ukraine and Moldova is growing rapidly along with
consumer disposable income.

“This year we opened a new chapter in our effort to fulfill our mission. We
succeeded in raising a follow-on private equity fund of $132 million in less
than a year based on the team’s experience and expertise, as well as the
region’s promise.”

Mark Iwashko, Executive Vice President and Chief Investments Officer
stated, “WNISEF has completed its twelfth full year of operations in
the region with over $130 million invested in 31 companies in Ukraine and
Moldova since inception and a second, private $132 million fund almost
fully invested.

Our track record is proof to the marketplace that profitable investments
can be undertaken in this region and, as a result, create the human,
technological and investment capital needed to sustain these market

WNISEF was established by the U.S. Congress and funded by the U.S.
government via U.S. Agency for International Development (USAID).

WNISEF is managed by Horizon Capital, a private equity fund manager
that originates and manages investments in mid-cap companies with
outstanding growth and profit potential in Ukraine and Moldova.

Horizon Capital team currently manages two funds, Emerging Europe
Growth Fund, LP (EEGF) and Western NIS Enterprise Fund (WNISEF).

Horizon Capital Advisors, LLC-Emerging Europe Growth Fund is
a member of the U.S.-Ukraine Business Council (USUBC). Natalie
Jaresko, Managing & Founding Partner, is a member of the USUBC
board of directors.  USUBC was represented at the WNISEF briefing
by its president, Morgan Williams.
LINK: www.wnisef.org; LINK http://www.horizoncapital.com.ua/
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

U.S.Ukraine Business Council (USUBC), Wash, D.C. Wed, Nov 7, 2007

WASHINGTON – The Executive Committee of the U.S.-Ukraine
Business Council (USUBC) is pleased to announce that UPS has
just been approved as the forty-ninth member of the USUBC and
is the twenty-seventh new USUBC member this year.

USUBC met with Arnold F. Wellman, Vice President, Corporate
Public Affairs, Domestic/International, in Washington. Mr. Wellman
confirmed the very strong business interest UPS has in Ukraine and
the desire of UPS to become a member of USUBC.

Morgan Williams, SigmaBleyzer, president of the USUBC said
Mr. Wellman will represent UPS on the USUBC board of directors.

The USUBC welcomes UPS into our rapidly growing membership.
UPS has over 300 employees in Ukraine and provides services to
many Ukrainian cities.

UPS was founded in Seattle, Washington on August 28, 1907 and
thus are celebrating 100 years of service.

Mr. Wellman has been to Ukraine many times and just recently
returned from a one week trip there. Arnold many times goes to the
Ukrainian village of Nizankowice, on the far western border near
Poland, where he works on a People-To-People project UPS has
implemented to support the development of the local school and
also to provide computers and satellite Internet connection.

UPS also has a People-To-People project in the neighboring small
villages of Lipa and Sierakosce, Poland. Last year, 80 UPS employees
from 11 countries built a fully functioning 38-foot by 42-foot computer
lab, complete with high-tech computers, printers, software, and training
for students, teachers, and residents in Lipa.

The People-To-People project is a part of UPS’ unique strategy to
personally get to know and understand the residents of a rural
community in a country where the company is doing business.

UPS has adopted a distinctly different approach to entering a new
market by encouraging its employees to immerse themselves in the
local culture as they work side-by-side with residents of the community
to improve their way of life.

The UPS Foundation enables nonprofit organizations to serve
communities more effectively around the world.  The UPS
Foundation’s global giving focus addresses three areas:  literacy,
hunger and volunteerism (www.community.ups.com).
UPS is the 27th new member for the U.S.-Ukraine Business Council
(USUBC) in the last eleven months and brings the Council’s total
membership to forty-nine. Information about the USUBC can
be found on the website: www.usubc.org

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Ukraine Monthly Macroeconomic Report From SigmaBleyzer:


Behind the Breaking News, Briefing: By Tammy Lynch, Senior Fellow
Behind the Breaking News, Volume VI, Number 1,
Institute for the Study of Conflict, Ideology and Policy,
Boston, MA, Thursday, 1 November 2007

In the midst of Ukraine’s ongoing political negotiations to create a new
government, a number of worrying signs for the country’s potential investors
have gone almost unnoticed internationally.

During the last two weeks, an independent US energy firm chose to leave the
country, while a military-style raid on a major oil refinery called into
question the country’s ability to enforce the rule of law.
On 30 October, Cardinal Resources plc announced plans to sell its Ukrainian
assets.  The US-owned corporation was one of the first independent oil and
gas exploration firms to invest heavily in Ukraine 10 years ago, drawing
largely from US investors.

Its experience speaks volumes about the difficulties of working in an
environment that provides no legitimate avenues for influence on government
decisions and no clear rule of law.

According to Cardinal CEO Robert Bensh, his company’s exit from the country
is necessary because government price controls and increased fees make it
impossible to earn a profit – or even to break even. The company, he said,
“can’t generate any revenue because of capped prices.”  (1)

Bensh said the sale of the company’s interests was the only viable option
available, with bankruptcy protection being the company’s sole  alternative.
(2)  The Kuwait Energy Corporation (KEC), which bought Cardinal’s assets for
$71 million, will take over the company’s share in the operation of four gas
fields and three licenses in Ukraine.

According to those close to the operation, Cardinal had intended to invest
roughly $100 million in further exploration, in an attempt to increase
Ukraine’s domestic gas production.  The country now depends on Russia’s
Gazprom for 85% of its gas.  KEC likely will move forward with these plans,
after a pause to allow more favorable conditions to develop.

Investors are waiting, said Bensh, and are hopeful for more favorable
conditions under the new government, which should be confirmed by
mid-November. Regulations have “stopped most foreign investment” in the
energy field, leaving the country “18 months behind” where it would have
been, he said. (4)
Cardinal’s difficulties began in December 2006, when Ukraine’s government
included a new regulation for international and domestic businesses in its
2007 state budget.

The regulation specifies that all companies in joint-ventures with
state-owned enterprises must sell their products to one state-designated
company at a fixed price. (5)

In February 2007, Ukraine’s government enacted the widely condemned “Decree
31.”  This measure forces energy companies like Cardinal to sell its product
to the state-owned Naftohaz Ukrainy, at a price set by Naftohaz Ukrainy.

The price offered was approximately $1.50 mcf (1 mcf=1,000 cubic feet).
This price is almost 300 times lower than the market price of around $4 mcf
for which Cardinal sold its product in 2006, before the new regulations.  It
is also below Cardinal’s production costs of $1.70 mcf. (6)

At the same time, the cabinet raised taxes and royalties on profits for most
companies operating in Ukraine to 30%-50% of gross profits.  It, therefore,
became impossible for Cardinal and other similar companies to break even,
let alone to make a profit.

In response, Cardinal repeatedly met with Ukraine’s officials, including
Fuel and Energy Minister Yuriy Boiko, to urge them to rescind Decree 31 and
return to market pricing. Cardinal representatives also say they sought
assistance from US government officials, but to no avail.

Another oil and gas exploration firm, Europa Oil and Gas plc, went to court
following the passage of Decree 31.  The company won its case based on
Ukrainian legislation governing foreign investment that guarantees the right
to sell at market prices.

The court ruled that the company could sell its gas at market prices, but it
has been reported that the government is simply ignoring the ruling. (7)

In response, several production companies attempted to stop selling their
gas domestically, pumping it into storage instead.  Cardinal received
information, however, that its gas has been taken from storage by Naftohaz
Ukrainy.  The company has been unable to confirm this report. (8)

Bensh and others interviewed for this article suggest several reasons for
the government’s actions:

First, Decree 31 was passed during the pre-election season.  By capping gas
prices, Yanukovych could guarantee low domestic prices for a limited time.
The increased taxes also could be used to help maintain budget expenses,
which ballooned prior to the election.

Second, some suggest that companies like Cardinal and Europa have been
caught in a larger struggle between Ukrainian business interests for control
of both Ukrnafta, Cardinal’s state-owned joint venture partner, and the
country’s overall gas network. The gas network is Ukraine’s most lucrative
asset, generating up to a quarter of the country’s GDP.
In 2006, Ukrnafta produced 70% of Ukraine’s total oil and gas condensate and
16% of its natural gas output, according to a May 2007 report from Dragon
Capital.   (9)

Although the state owns a 50% + 1 share in Ukrnafta, it has been de facto
controlled by Pryvatbank (a subsidiary of the Pryvat Group), which
technically owns only 42%.

The CEO of Pryvatbank/Group, Ihor Kolomoisky, controls the Ukrnafta board
and most of its assets. This is thanks to former President Leonid Kuchma,
who reportedly allowed Pryvat “free rein in directing Ukrnafta,” and who
allowed Kolomoisky to install personnel loyal to him. (10)

Those close to the situation suggest that Yanukovych’s government may have
attempted to dilute Kolomoisky’s control over Ukrnafta through various
techniques, in order finally to assert the state’s majority interest.  Those
techniques appear to include minimizing Ukrnafta’s profits through Decree

According to Ukrainian investment firm Concorde Capital, Ukrnafta has
suffered significantly from the price caps imposed by Decree 31 and by an
increase in their tax and royalty payments to 50%.

Like Cardinal, Europa and others, Ukrnafta has been unable to profit from
sales of its product. The company reported a 48% year on year drop in 9M
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization).
This drop in revenue has allowed fellow oligarch Dmitro Firtash to gain a
foothold in Kolomoisky’s interests. Firtash controls the gas distribution
company Ukrgazenergo – a subsidiary of gas intermediary RosUkrEnergo

– and Ukrnafta’s direct competitor. His interests are primarily co-owned with
Russia’s Gazprom.

Firtash has pushed in the last year to dominate Ukraine’s entire gas system,
from extraction to production to distribution.  The government’s new
regulations have (possibly unintentionally) assisted him, as his
international gas sales have cushioned his companies from the cap on
domestic prices. (12)

All of this reportedly has forced Kolomoisky into a deal.  Firtash now is
said to have taken over the controlling share of Ukrnafta.   This
information could not be confirmed.

If it is true, one company, backed by Russia, may now control Ukraine’s
entire gas system, with only the pipelines remaining clearly under state
control.  The most important effect of Decree 31 may be a lessening of the
already limited competition that existed in the gas sector.
This is an issue that likely will be one of the first on the agenda of the
new Ukrainian government of Yulia Tymoshenko.  At an investor event in
September, Tymoshenko suggested that the state must create more effective
competition in the energy field.

She also stated that she would initiate a complete overhaul of business
regulations, with many simply being removed.  In particular, when asked
about “Decree 31,” she said, “Without question, that has to go.  It can’t
remain.  It’s not a complicated issue.”  Further, “We need market
mechanisms.” (13)

Tymoshenko and her allies also have expressed concern at the increasing
number of “corporate raids” on large companies, and the effect of these
raids on the energy market.  The raids have affected at least two of the
country’s oil refineries, as businesses fight for control of production
Just two weeks ago, a group of “private security guards in camouflage
uniforms” arrived at the Kremenchug Oil Refinery, located in Ukraine’s
Poltava Oblast, and physically took control of the plant.

The CEO who has run the plant since 2004 was removed, while the former

CEO (from 2004) was reinstated. The Ukrtatnafta corporation, which is largely
owned by Russia’s Republic of Tatarstan and which controls the plant,
immediately stopped supplying the refinery with oil. (14)

Since the refinery provides up to 50% of all domestic oil products, the
price for petrol and other oil products in Ukraine has begun to increase.

Pavlo Ovcharenko, the CEO reinstalled by armed guards, claims he was
reinstated to the position thanks to a court order.  That court—located in
another oblast—reportedly ruled that 18% of the shares in Ukrtatnafta, which
are controlled by companies friendly to Tatarstan’s interests, should be
transferred to the state, giving it control.
In its report “Corruption, Democracy and Investment in Ukraine,” The
Atlantic Council of the United States identified “raiding” as one of the key
areas of corruption in the country. (15) Various sources suggest that, in
the last two years, from 2,000-3,000 raids have occurred against major
corporate entities.

 In essence, the money (or to be blunt, bribes) reportedly paid for court
decisions and for the passivity of law enforcement officials, which
facilitates the raids, undermines the country’s entire system of rule of

During a telephone conference call on 28 October, former (and likely future)
Finance Minister Viktor Pynzenyk (BYUT) identified both arbitrary
regulations and corporate raiding as the largest detriments to foreign
investment in Ukraine.

“The goal [of the new government] is to give all investors access, and we
would also like to introduce legislation to prevent further spreading of
raiders’ attacks, against which ordinary investors are defenseless.” (16)

Despite all of these concerns, foreign investors continue to express
interest in Ukraine, and the economy continues to perform well, given the
pressures on it, growing at least 6% per year.

The number of small and medium businesses in the country is steadily
increasing, as they generally are untouched by the battles raging over
Ukraine’s largest assets, while market mechanisms show signs of taking root
in many sectors.

Cardinal Resources’ Robert Bensh said he is “encouraged” by the country’s
prospects.  Most who have suffered losses because of arbitrary decisions or
unworkable fees also seem to believe that these issues can be addressed,
even though valuable time and momentum already has been lost.

Large investors say they are waiting, but not turning away.  It will be up
to Ukraine’s next government to ensure that this optimism is not misplaced.
(1) Bensh telephone interview with author, 26 Oct 07.
(2) Ibid.; (3) Ibid.; (4) Ibid.
(5) Taras Kuzio, “Yanukovych and gas price capping,” Kyiv Post, 15 Aug 07.
(6) Interview with Robert Bensh by Morgan Williams, US-Ukraine Business
Council, in the Action Ukraine Report, 12 Aug 07.
(7) Bensh, ibid and Kuzio, ibid.; (8) Bensh, ibid.
(9) Dragon Capital, Ukrnafta: Ukraine Equity Guide, May 07.
(10) Zeyno Baran, “Energy Reform in Ukraine: Issues and Recommendations,”
The Nixon Center, Mar 05.
(11) Concorde Capital, Ukrnafta: Under Review Alert, 29 Oct 07.
(12) Bensh, ibid.; (13) “Contract with Investors,” Yulia Tymoshenko,

Investor/Press Event, Kyiv, 10 Sep 07.
(14) Bloomberg, 1153 EDT, 19 Oct 07 via www.bloomberg.com.
(15) “Corruption, Democracy and Investment in Ukraine,” Policy Paper, The
Atlantic Council of the United States, Oct 07.
(16) Conference Call with Viktor Pynzenyk, hosted by Concorde Capital, 28
Oct 07.
LINK: http://www.bu.edu/iscip/bbn.html
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

By Volodymyr Obolonsky, The Ukrainian Times
Kyiv, Ukraine, Monday, November 5, 2007

KYIV – The firm Zelmer-Ukraine, which is the subsidiary of the Polish
kitchenware manufacturer Zelmer, has started operating in Kiev.
Among Zelmer products are more than 40 models of vacuum cleaners,

microwave ovens, coffee makers, juicers and mixers.

Owing to high quality and reliability the Polish kitchenware find a market
in CEE countries. The receipts from export of Zelmer products amount to a
third. Established 70 years ago, the Polish enterprise has set up
subsidiaries in the Czech Republic, Slovakia, Romania and Russia.

According to the head of a Zelmer sales department, the tasks that face the
Kiev representative office are to promote Zelmer products on the Ukrainian
market, establish the system of servicing household appliances and organize
their production in Ukraine.

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

Ukrainian News Agency, Monday, November 5, 2007

KYIV – The Cabinet of Ministers has postponed the start of exports of

1.203 million tons of grain from November 1, 2007, to December 31, 2007.

Ukrainian News learned this from resolution No.1287 of October 31 by the
Cabinet of Ministers, the wording of which was made available to the agency.

The document amends government resolution No.1179 of September 26
introducing that the export of 1.203 tons of grain was permitted from
November 1, 2007 to March 31, 2008. The resolution amends only the start

of grain exports.

The volume of allowed grain exports remains the same – 1.203 million tons,
as well as the date of the end of the exports – March 31, 2008.

As Ukrainian News earlier reported, the Cabinet of Ministers has permitted
to export 1.203 million tons of grain from November 1, 2007 to March 31,

In particular, the Cabinet of Ministers allowed export of 600,000 tons of
corn, 400,000 tons of barley, 200,000 fodder wheat of the sixth. Earlier,
the Cabinet of Ministers fixed quota for grain exports of 12,000 for
2007/2008 marketing year.

In particular, quotas were introduced in the volume of 3,000 tons for
exports of each culture: wheat, mixture of wheat and rye [meslin], barley,
corn and rye as of July 1 – October 1.
[return to index] Action Ukraine Report (AUR) Monitoring Service]
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Property Xpress, Sofia, Bulgaria, Thursday, November 1, 2007

KIEV – Ukraine’s largest retail operator Fozzy group signed last week an
agreement on the acquisition of Zaporozhie-based Kit supermarket chain.

This is the group’s second large-scale supermarket chain purchase within
a month, www.retai.net reports.

Velikaya Kishenya, Fourchet and Eco-Market were also bidders for taking over
the USD 30 mln Kit chain of 24 stores (17 in Zaporozhie, one in Berdyansk
and six more to be opened soon in different cities in the district).

 Kit supermarket network offers four store sizes: premium class
(Kit-Favorite supermarkets), the classical Kit, Hit mini market and cash &
carry Euro Kit. Middle and Middle + class clients are targeted by the chain.

The first Kit supermarket was opened in August 1999. The company registered
EUR 44 mln turnover for 2005, while the turnover for 2006 was unofficially
estimated at USD 78 mln. The company’s General Director Tim Samarskiy, a
member of Zaporozhie City Council, is the main shareholder of the chain.

According to experts, the reason for the Kit network acquisition is the
tough competition on the Zaporozhie market. The transaction allows Fozzy
Group, operator also of four Silpo stores in Zaporozhie and one in each of
cities like Berdyansk, Militopol and Dneprorudniy, to become leader of the
local market.
LINK: http://www.propertyxpress.com/getnews/0000003593
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Plans four mega commercial centers in Ukraine’s regions.

Property Xpress, Sofia, Bulgaria, Tuesday, October 30, 2007

KIEV – IKEA, Swedish largest furniture retailer, has acquired a 20 ha
land lot in the Ukrainian capital. According to market players the deal is
estimated at USD 50 to 80 mln. The land is in Kiev’s Podolsk section,
Building reports.

IKEA branch promised to comment on the transaction later. Earlier, Per
Kaufmann, General Director at IKEA for Russia and CIS, noted that the
company will acquire its first parcel for construction of a commercial
center near Odessa.

As indicated in Property Xpress, by the end of this autumn, IKEA will sign
a contract with the European Bank of Reconstruction and Development
(EBRD) on receiving a USD 100 mln loan.

According to the documentation, the loan is a part of a USD 414 mln plan
for construction of four mega commercial centers in Ukraine’s regions.

Anchor tenants in these commercial centers will be IKEA furniture outlets.
The entire project is due for completion within two years. IKEA Group,
founded in 1943, has a commercial center network of 223 outlets in 24
countries. Besides this, 30 stores, managed by private franchisees, operate
in 16 countries.
LINK: http://www.propertyxpress.com/getnews/0000003568
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Bloc of Yulia Tymoshenko (BYuT) Newsletter Issue 52
Kyiv, Ukraine, Tuesday, November 6, 2007

Despite its growing economy, Ukraine still languishes behind many former
Soviet bloc countries in Eastern Europe when it comes to attracting
entrepreneurs. According to a report published in the Economist, Ukraine
lies in 70th place out of 82 countries surveyed.

Understanding the need to make Ukraine a more attractive proposition to
investors, Viktor Pynzenyk of the Bloc of Yulia Tymoshenko (BYuT) and leader
of the Reforms and Order Party took time to convey to western investors the
main thrust of BYuT’s economic policies.

The former finance minister held a conference call hosted at the offices of
Concorde Capital, one of Ukraine’s leading investment banks.

The call attracted representatives from more than 60 western funds and came
hot on the heels of a similar call hosted by Bear Stearns earlier last
month. Both interactions underline the investment community’s thirst for
information as it prepares to come to grips with the impending new

Business New Europe described it as “a slick performance by Pynzenyk, who
was on message to sell a transfer of power that should end in November with
Tymoshenko taking control as Ukraine’s new prime minister.”
Once questions on the timing and likely make-up of the new government were
out of the way the question on most people’s minds was privatisation policy
and whether a Tymoshenko-led coalition government would embark upon a
wholesale re-privatisation programme?

According to Concorde Capital: “On the topic of privatisation Pynzenyk’s
goal was clear: the only criterion for those wishing to take part in public
tenders was price, with assets going to the highest bidder. One of the main
goals of the new government will be providing greater access to all who wish
to take part in privatisation tenders.”

On the issue of re-privatisations, Mr Pynzenyk was equally emphatic. “Even
back in 2005, Yulia Tymoshenko’s Cabinet had no plans to revise the outcomes
of privatisations. Nor does Yulia Tymoshenko have plans like that today.

“What the government will do is to take corrective measures through the
courts and challenge certain privatisation projects,” he said. Mr Pynzenyk
made it clear that it should be a non-political issue with the matter left
to the courts to examine some cases where the tender process did not
correspond to the law.

The great irony is that Yulia Tymoshenko has never advocated a mass
privatisation programme. A news report in 2005 which suggested she advocated
reprivatising 3,000 companies was a cynical misrepresentation of the point
she was making, which was that unless there was clarity on the issue there
could be 3,000 disputes going through the courts which would harm investment

Ironically, she was campaigning for the very thing her party has always
stood for: clear policy and the protection of property rights in accordance
with the rule of law.

Mr Pynzenyk’s tone underlined a maturity in the Orange camp that was not
lost on the audience. “Tymoshenko is pitching a new pragmatic stance and has
backed off from her fiery rhetoric,” commented Business New Europe.

Going forward Mr Pynzenyk promised that a Tymoshenko-administration would
end the crony-capitalism that characterised the Yanukovych-administration.
The entire process of privatisations and the sale of licenses will be
subject to open tenders and fair competition.
This process will also be extended to the sale of land which Mr Pynzenyk
pledged would be “radically simplified” with land sold only after
pre-defining its purpose.

This will come as a relief to many and in particular to backers of
greenfield construction projects who will be able to invest with greater


On the thorny issue of the sale of agricultural land, Mr Pynzenyk said that
the present moratorium was meant to be short-lived whilst the government
made important changes to agricultural property legislation. Rules for
altering land and the creation of a single unified land registry were
mentioned as regulations that must be adopted.
One of the objectives of the new administration will be to increase foreign
direct investment into Ukraine. Mr Pynzenyk recommended to “abolish all
taxes on investment” so as to create an even playing-field in which “all
investors should enjoy an equal standing.”

This would rule out special economic zones which, in the past, have been
havens for fraud and corruption. Also planned is a change in the way taxes
are collected with greater focus on businesses that deviate from the rules.

“Those companies that pay taxes in good faith should never see the face

of a tax inspector on their doorstep,” said Mr Pynzenyk.

In answer to a question on the exchange rate, Mr Pynzenyk said that he saw
significant appreciation potential for the hryvna, which he thought should
no longer be pegged to the dollar if the country wants to avoid inflation.
He advocates a more liberal exchange rate with an emphasis on inflation

He endorsed the Central Bank’s policy in this respect and outlined the need
to slow external borrowing and focus more on the domestic market where

bank liquidity is high and has put heavy upward pressure on inflation.

The conference call underlined BYuT’s commitment to attracting foreign
investment and conveyed a strong message that a Tymoshenko-led
administration would have a positive impact on the investment climate.

Furthermore, it strengthened the arm of the growing band of revisionists by
dispelling the spin that has been skilfully applied in the past to black
paint Ms Tymoshenko’s economic and fiscal credibility.

Speaking after the call Mr Pynzenyk said, “It’s really quite simple when it
comes down to it; stability, transparency and accountability, that’s what we
stand for.”
Questions or comments? E-mail us at nlysova@beauty.com.ua
For the latest English-language news from BYuT visit www.ibyut.com

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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COMMENTS: By Robert McConnell, Attorney
2007 Convention Gala of the Ukrainian-American Bar Association
Washington, D.C., Saturday, September 22, 2007
Action Ukraine Report (AUR) #888, Article 21
Washington, D.C., Wednesday, November 7, 2007

Thank you for that introduction Andrij (Steckiw) – – I must admit that it
has been a number of years since I joined you at one of these events.

And as I reflected on those years in the early 1990s when I was a regular
attendee at UABA functions I was also reminded of the early days of
Ukraine’s coming out from behind the Iron Curtain.

As Judge Futey and Taras Szmagala and some of the others here tonight know,
my wife Nadia – who is in Kyiv tonight – and I, along with several others
brought the first republic-specific delegation of officials from the Soviet
Union to the United States in 1991 – it was a delegation of 13 members of
the Rada for two weeks in the United States for a program on the American
System of Governance.

During that trip one of the sessions was in the United States Supreme
Court – lunch with Justice Sandra O’Connor followed in one of the Court’s
wonderful conference rooms then-Solicitor General of the United States,
Ken Starr.

Ken explained the role the Solicitor General plays as a bridge of sorts in
the intra-branch relationship between the Executive and the Judiciary in our
system.  In his talk he used an example of a case he had recently argued
before the Court.
To put this story in perspective remember that Ukraine was still part of the
Soviet Union, Ukraine’s blue and yellow flag was not yet legal but it was
being displaying in Kyiv and across Ukraine more and more.

Rekindled Ukrainian pride was emerging and the flag was a big part of that
phenomena.  All of the deputies present were proud of that blue and yellow

The example Ken used was a recent flag burning case he had argued.
Essentially he gave the delegation a summarized version of his case to the
Court – why the Court should uphold the law making the burning of the
United States flag a criminal offense.

He talked about the importance of the flag to the nation, about how it was
in the fabric of our society, how after an all night battle in Baltimore
harbor “by the dawn’s early light” the flag was still there, how the
pictures of the flag raising over Iwo Jima lifted the nation and made us
believe the war in the Pacific could be won.  Our flag was sacred and not
to desecrated.

You could watch the faces of the deputies – – you could see that they were
“into” Ken’s argument, approved of every point and emotion.

But then Ken said, “But the Court has ruled and it ruled that I was wrong.”
You could see the deputy’s faces fall. Ken explained that the Court ruled

that the principal of freedom for which the flag stood was more important
than the symbol itself.

You could watch the deputies.  Intellectually you could see that they
understood the point but they didn’t like it, their emotions were in

I think reflecting on that story is relevant today maybe as much as it was
in the early 1990s.   It was an example of the power of the rule of law and
the rule of law continues to be elusive in Ukraine – painfully so.
With the voting in the parliamentary elections coming up in a few days I
offer tonight a few reflections on the political situation and possibly a
few ideas for the Association.  But first I reflect on one – just one –
story from what was popularly called the Orange Revolution.

As we all know, upon the conclusion of the initial Presidential election in
2004 the ruling party declared its candidate, Viktor Yanukovych, the winner.

Tens of thousands of peaceful demonstrators filled the streets of Kyiv
protesting the rigged election and the country’s general and rampant
corruption – and abuse of authority by those in power.

Soon many Ukrainian television reporters were on strike, protesting
government pressure to slant the news coverage.  The major media bosses
blacked out coverage of the huge popular demonstrations.

It seemed as if no one was left with access  or the courage – to speak out
and tell the nation the truth on the largest media outlets in the country.

But as The Wall Street Journal reported, the Kuchma government had not
counted on Natalia Dmytruk – as Bohdan Futy and Terry Szmagala know,
you can’t count of my pronunciation of Ukrainian names – you are simply
going to have to accept my version.

Ms. Dmytruk, a sign-language interpreter at Ukrainian state television
network, “. adopted guerilla tactics to break the information blockade.
Conspiring with her makeup artist, (she) tied an orange ribbon inside her

Then, after interpreting the news broadcast for the deaf, (she) bared her
wrist. ‘Everything you have heard so far on the news was a total lie,’ she
told viewers in sign language. ‘Yushchenko is our true president.  Goodbye,
you will probably never see me here again.'”

Ms. Dmytruk was immediately greeted with hugs from her colleagues and
word spread rapidly.  The station’s technicians and the staffs of the daily
children’s show and other non-political programs decided to join the strike
over media coverage.

Happily the forces of democracy gained ground and essentially backed by the
Rada and the Constitutional Court there was, as we all know, a revote and
Viktor Yushchenko became Ukraine’s president.
My point here is that Ms. Dmytruk and thousands like her who stood up to
the corrupt authorities were the heroes of the Orange Revolution.  The
beneficiaries of their demands for change may have been the politicians on
the stage of the Maidan, but the heroes were the citizens of Ukraine.

They showed a shocking collective drive toward self-determination and a
refusal to accept the top-down power structure that had essentially carried
forward from Soviet days.

The popular mandate for the Orange leadership was therefore to govern on
the basis of the rule-of-law, a mandate the new president and government
pledged to respect in their bid to build a country worthy of its rich
European heritage.  The world applauded and anticipation grew inside

and outside Ukraine.

I believe it is fair to say Ukrainian-Americans were euphoric over the
anticipated release of what was believed to be the long suffering and
hostage Ukrainian potential.

Well, as we have seen – and as we really should have anticipated – nation
building is not that easy, nor is systemic corruption shed so quickly.
Legal reform was a key Orange priority.  Yet nothing was done – nothing.

As a result, the first year of the new presidency saw inconvenient court
rulings, such as the one by the Supreme Court annulling the removal of the
Kyiv oblast governor, not only ignored but used as a pretext for attacking
the credibility of a widely corrupt legal system.

And this continual criticism was never counterbalanced by any positive moves
to improve the performance of the courts through systematic reforms.

In the Rada – OH, in the Rada – the obvious public corruption is the type of
thing we would see here on Saturday Night Live.

The constitution forbids deputies voting any voting cards but their own –
and yet national television coverage of the Rada sessions often show very
few deputies present during voting and party and faction leaders standing in
front of the voting machines voting – card, after card, after card.

How can the citizens of Ukraine take seriously the rule of law when law
makers themselves offer not even a public pretext of adherence to
constitutional restrictions?

It is shameful and certainly not limited to any party or faction.  This
blatant disregard for the laws governing voting is universal in the Rada.
So, the great and exciting promises of the Maidan remain unfulfilled.

Without pointing fingers and analyzing who did and didn’t do what and where
fault might lie the reality is that corruption remains, lines blur between
good and bad, right and wrong, personal egos and personal agendas reign
supreme in a patchwork of alliances that are hard to believe and constantly
shifting.  And, for emphasis here, I reiterate – a legitimate rule of law at
best remains elusive.

Among the political elite there is ambivalence toward the constitution, an
almost comical disregard for the nation’s laws and any real pretence of
governance according to law.  Orange has morphed into blue and then into a
kaleidoscope of confusing and contradictory political colors.

This is all fed by the continuing thrashing about of Ukraine’s government
and politicians – the internal jousting of the original Orange coalition –
and to me the bazaar return to power of Viktor Yanukovych.
Obviously there is disappointment and a feeling of betrayal among those who
took to the streets, slept in tents, froze through the nights and spread out
across Ukraine to campaign and monitor the Presidential revote.

And here in the United States you can see and you can feel that a very
similar fatigue that has set in within the community and here in Washington.
Exciting promises dashed has a way of doing that.

And, I believe it is quite fair to say that the upcoming parliamentary
elections offer little to no hope of breathing life into the promises of the
Maidan, and they certainly offer no promise of a renewed effort to establish
governance under any true rule of law.

All parties to the latest political crisis have shown few qualms in using
courts at all levels as an instrument in the pursuit of narrow
party-political goals instead of striving to ensure the development of the
courts as genuine arbiters of Ukraine’s still relatively fragile democracy.
But, despite all I have said and how I have sounded here, I am optimistic.

Ukraine is changing.  One of the lasting political gains of the Orange
Revolution is that all political forces now understand that they do have to
sell themselves to the public – voters matter.

Given where Ukraine was this is a critical early step toward democracy and
it now is a permanent feature of the political fabric of Ukraine.

A next step is forcing those elected, through the institutions of civil
society and the rule of law, to implement the promises made.  This will be
more difficult.  And, I believe there is a definite role for
Ukrainian-American lawyers in helping Ukraine meet the challenges of this
This is not a time to claim “Ukraine fatigue” and withdraw from the great
cause that has been the dream of many of you and so many of your parents
and grandparents.

As an American with no hyphen I also believe strongly that we cannot
withdraw from this great cause because the existence of a free, independent
and democratic Ukraine is in the United States’ national security interests.

You know back in early 1991 at one of your meetings another McConnell,
Nadia, spoke to you.  Not too long before we had established the
U.S.-Ukraine Foundation and set up offices here and in Ukraine.

Nadia suggested working together on programs relating to constitutional
reform and the rule off law.  Obviously since that time the Association –
and the Foundation – have carried out any number of programs and individual
members of the Association have been deeply involved in democratic
institution building programs in Ukraine.
Yet I want to emphasize that building and maintaining a democracy and
governance under the rule of law is not a sport, there are no time outs,
there is no time clock.  There is no end. Here in the United States there is
a constant ebb and flow within our system.

There are groups like the Federalist Society that continually foster
wide-ranging debate on the great and on-going legal issues of the day –
making sure that our Constitution is honored and that the Constitution is a
part of all discussions about the evolutionary trends within the distinct
areas of our law. As one of our Founding Fathers said, “You now have

a democracy if you can keep it.”

This business of government – democratic government – whether here in the
United States or in emerging Ukraine is a serious undertaking that is never
easy. So why when I see so challenges and so much corruption and

ambivalence toward the rule of law in Ukraine do I remain optimistic?

As I said, elections are contested and politicians now have to pay attention
to the voters, they have to convince the electorate to vote for them.
But the real reason for my optimism is the people of Ukraine, especially the
young people of Ukraine.  They went to the streets and they see what is
going on and they want something better for their country.

When I monitored polling places in Eastern Ukraine, in Mr. Yanukovyich’s
hometown, during the 2004 revote we found a number of young college-age
students serving on the election commissions.

In fact in a number of polling stations we found college age Yushchenko
supporters who had traveled from central and western Ukraine and who had
been elected chairmen of the local election commissions.  Why?

Because, we were told, they came into town days before the revote,
introduced themselves, showed their credentials and showed that they clearly
understood all of the details of the election law and satisfied everyone
that all they wanted as a fair and honest vote. Honest, and thoughtful citizen

involvement – another key to successful democracy.

I see young people in Ukraine, following political events and seeing clearly
the continuing need for change.  I see lawyers persevering and trying to tug
and pull the processes toward governance under the law.

I see young Ukrainians here in Washington – interns, Fulbright scholars,
students – bright, inquisitive young people who have a grasp of what is
happening in Ukraine and can see clear comparisons from the perspective
gained during their time in the West.

And, most important, we see these young people not beaten down by Ukraine
fatigue but energized by their vision of what can be.  They are returning to
Ukraine and taking with them the knowledge and experiences they have
gained – – anxious to put those experiences to work in their country.
And – it is important for us to remember – Ukraine is their country.  The
decisions about what the people of Ukraine want in and from their government
are theirs to make.  We should only assist and support their efforts – but –
we should assist and support and share our experiences.

You, the members of the Ukrainian-American Bar Association should – and I
believe have an obligation to – share your talents and experiences with
those who thirst for support, guidance, counsel and positive reinforcement.

Most of you – perhaps all of you – have seen the appreciation of the young
Ukrainians who listen to discussions of the law, its meaning, and its
indispensable value to fair and honest governance.   You need to be there
for them.

Surely there are any number of programs you can add to your arsenal from
your individual and collective experiences here.  I mentioned the Federalist
Society and its constant programs about the great legal issues of the day.

I don’t know how our continuing legal education-type programs might best
be adapted to the Ukrainian situation, but I must believe a thoughtful
national debate about the constitution and the rule of law could teach and

excite – yes, excite Ukraine.

Just think – what the printing and circulation of the Federalist Papers and
stimulating national debate over those papers did for the growth of our

I did not come here to design programs.  But I do want to call for continued
involvement and voluntary commitment from the Association and each of you.

The cause is just; the need is great; and the rewards can truly extend beyond

your beloved Ukraine to the United States and to the world.

Thank you (in Ukrainian)
God bless America And Slava Ukrainia. 

NOTE: Robert A. McConnell, attorney, is co-founder of the U.S.-
Ukraine Foundation (USUF) and Vice President of Hawthorne & York
International Ltd. He is a former top official of the U.S. Department of
Justice.  He has spent endless hours over the past 20 years or more
working on behalf of an independent, democratic, prosperous Ukraine.
FOOTNOTE: Subheadings inserted editorially by the Action Ukraine Report.

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


Action Ukraine Report (AUR) #888, Article 22
Kyiv, Ukraine, Wednesday, November 7, 2007

KYIV, Ukraine – The “We Accuse: Holodomor Genocide 1932-1933”
International Exhibition for the 75th Commemoration of the Holodomor

1932-1933 (induced starvation, death for millions, genocide) will be held
in Kyiv at the Ukrainian House from Tuesday, November 20 through
Thursday, December 6, 2007.

The Administration of President Viktor Yushchenko is in charge of the
exhibition which is under the direction of Ivan Vasiunyk, First Deputy

Head of the Presidential Secretariat, and Vasyl Vovkun, production
and artistic director.

The international commemorative and educational exhibition will feature
four individual Holodomor presentations which will be displayed for

seventeen days in the Ukrainian House in the center of Kyiv.
Historical and educational presentations will be made by the:
[1] Ukrainian National Institute of Memory, Ihor Yukhnovsky,
[2] Ukraine 3000 International Charity Fund, Kateryna Yushchenko,
     Head of the Supervisory Board;
[3] Security Service of Ukraine (SBU), Valentyn Nalyvaichenko,
     Acting Chief, and by the 
[4] Holodomor Education and Exhibition Art Collection, Morgan
     Williams, SigmaBleyzer, Founder and Trustee. 
The National Institute of Memory will display their newly created
set of sixty-four panels/posters that tell the story of the Holodomor
in documents, historical data, testimonies, photographs and other
historical information. 
The Ukraine 3000 International Charity Fund will display a large
number of posters about the Holodomor created by students and
artists this year in response to a Holodomor poster contest organized
by the Ukraine 3000 Fund.  People attending the exhibition will be
able to vote for the posters they think are the most outstanding. 
The Security Service of Ukraine (SUB) will display their set of
over 60 panels/posters created from material in their archives about
the Holodomor such as historical decrees, letters, government
documents, photographs, and other items from the SBU archives.
The Holodomor Education and Exhibition Art Collection will display
over 100 original art works depicting the “Holodomor Through the
Eyes of Ukrainian Artists.”  The original artworks will include oil on
canvas paintings, black and white drawings, linocuts, paint on board
poster art and other graphical materials. 
Many of the artworks were created between 1989 and 1993, the first
years artists in Ukraine were ever allowed to deal with such subjects
as the major crimes of communism. Some of the poster art will
include works by students at the Art Academy in Kyiv created in
2006 and 2007 under the direction of Professor Vitaliy Shostia, a
program sponsored by the Holodomor Education and Exhibition
Art Collection. 
High school students from the Poltava Oblast will also have
some Holodomor works on display.  Movies and documentaries
will be shown throughout the seventeen day exhibition. Books
about the Holodomor will also be on display.  The exhibition will
be the largest Holodomor exhibition ever held in Ukraine and is
open to the public. 
Ukrainian President Viktor Yuschenko has called on the international
community and governments around the world to condemn the crimes
committed by the Stalin regime and to declare the Holodomor of
1932-1933 as a genocide against the Ukrainian people.
‘The crimes of the Stalin regime – the 1932-1933 famine-genocide in
Ukraine, the major terror of the 1930s – should be fully condemned by
the international community. It is the duty of all countries, political and
public forces that accept the values of democracy,’ Yuschenko said.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

By Mykola SIRUK, The Day Weekly Digest #33
Kyiv, Ukraine, Tuesday, November 6, 2007

On Nov. 1, 2007, the 34th General Conference of UNESCO, consisting of

193 countries, unanimously adopted the resolution “Remembrance of
Victims of the Great Famine (Holodomor) in Ukraine.”

Recalling the 1932-33 Holodomor, which claimed millions of innocent
Ukrainian lives, the UNESCO General Conference stated that the Holodomor
tragedy, caused by the cruel actions and policies of the totalitarian
Stalinist regime, should be a warning to the present and future generations
with the goal of upholding democratic values, human rights, and rule of law.

The Ukrainian media instantly noted that the word “genocide” is missing from
the text of the resolution. It is common knowledge that Ukraine insists that
the 1932-33 Holodomor be recognized worldwide as genocide of the Ukrainian

During a press conference held by President Viktor Yushchenko of Ukraine,
attended by journalists from five Ukrainian print publications, The Day’s
correspondent asked the Ukrainian head of state to comment on the UNESCO
resolution and say whether he thinks it is in line with the Ukrainian vision
of the tragic events that occurred 75 years ago.
“It is not too late. We must understand that informing the entire world
about the tragedy – the great famine of 1932-33 – is not a matter of one
calendar year. We should understand clearly that this issue entails very
many challenges that the Ukrainian nation is facing.

What happened yesterday (Nov. 1. – Ed.) in fact proves that the work that
Ukraine and its political forces and diplomacy have done in the past two
years has been duly recognized by 193 countries that passed a unanimous
decision yesterday. \

“It is very important for me that for the first time the world community has
passed such a high- level joint decision on recognizing the Great Famine of

This is the most important victory of yesterday. Other, more specific,
details of this tragedy are our future work. Excuse me, but if it took our
society 73 years to have a parliament that recognizes this as the Holodomor,
can we reproach the world?

“For 73 years we were afraid to say clearly that this is so, but now are
demanding that 193 countries do what the nation itself, Ukrainians
themselves, the leaders themselves did not have enough courage to do.

“I think we have received three messages.
[1] First, we have proved to the world that this is not an exclusive tragedy
of the Ukrainian nation: this is a tragic page that should be known and
commemorated throughout the world.

[2] Second, it is significant that the UNESCO General Conference is also
marking the 75th anniversary of this tragedy.

[3] Third, it is important that with this resolution UNESCO has recommended
that the signatory countries make sure that this course of history, this
truth, will be part of curricula and educational programs in every country
of the world so that they will better understand the tragic nature of this
event in Ukraine.

“I think these are the three strongest messages of which we can be proud.
For, above all, this is about our tragic history and the ideas that we would
like the world to accept.”
We requested a comment from our regular contributor Stanislav Kulchytsky,
whose book “Why Did He Exterminate Us? Stalin and the Ukrainian \

Holodomor” was published this year in The Day’s Library Series.

“Online publications reacted to this event on the day it took place. Ukraine’s
Internet space is almost entirely filled with Russian mass media, so the
headlines typically said, ‘UNESCO fails to recognize the 1932-33 famine as
genocide.’ So The Day’s expert should comment on both the event and the
first reactions to it.

“This event was predictable. The international community expressed sympathy
with the Ukrainian people because this tragedy is now known to a certain
number of people who are shaping public opinion in every country.

“This is a major achievement for our diplomats, journalists, statesmen, and
academics. This is another step in understanding the tragic history of our
people by those who until very recently could not even find Ukraine on a

“Following standard procedure, our diplomats drew up a draft UNESCO
resolution. The actual resolution included the most important provision of
the draft: an appeal to UNESCO member states to disseminate information
about the Holodomor by including it in educational and research programs so
that the generations to come will learn the lessons of this tragedy.

“It is also important that the recommended appeal was in the form of a
UNESCO resolution.

“In 2003 the UN marked the 70th anniversary of the Holodomor by adopting a
lower-status document – a joint statement by a group of countries. The
Ukrainian delegation’s attempts to grant the document resolution status were
thwarted at the time.

“Very soon, on the 75th anniversary of the Holodomor, Ukrainian diplomats
will again be urging the UN to recognize it as an act of genocide.

“We have a year during which the president of Ukraine intends to proclaim a
year in honor of the memory of Holodomor victims. I think we will do a lot
during that year to convey the magnitude of this tragedy to the Ukrainian
public and people in other countries.

Will these efforts be enough to convince Russian politicians and ordinary
people that the 1932-33 famine in the Soviet Union had a qualitatively
different form – the Holodomor – in Ukraine? I doubt it, and not because we
will be insufficiently convincing.

So far Russia and a large number of Ukrainians who support the Party of
Regions do not want to enter into a dialogue on this issue. This
unwillingness is linked with today’s circumstances, not with a different
viewpoint on the events of the 1930s. This is the main obstacle.

“What should be done in this situation? That which the UNESCO conference
unanimously advised us in the Holodomor resolution: to disseminate
information on the Holodomor by making it part of educational and research

“If the UN fails to recognize the Holodomor as genocide in 2008, which is
quite possible because of Russia’s negative position, we will go on working.

“All of us, in both Ukraine and Russia, must learn from the lessons of the
past. The past must not ruin our future, the lives of our children,
grandchildren, and great-grandchildren.”

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

Ukrainian News Agency, Kyiv, Ukraine, Tuesday, November 6, 2007

KYIV – Germany is ready to assist in delivering information about the

1932-1933 Famine in Ukraine to its citizens.

Ukrainian News learned this from the press service of the Ministry of
Foreign Affairs, which referred to a meeting between First Deputy

Minister of Foreign Affairs Volodymyr Ohryzko and Minister of State
of the Federal Ministry of Foreign Affairs of Germany Gernot Erler in

According to the report, the officials agreed on the German ministry’s
assistance in the conduct of joint measures at parliamentary, academic
and non-governmental institutions with the aim of delivering objective
information about the 1932-1933 Famine to the public.

Additionally, the officials discussed the process of building a
parliamentary majority and the new government in Ukraine, Ukraine’s
entry to the European Union and NATO, bilateral relations.

Erler indicated hope for the soonest appointment of the Ukrainian
government and continuation of active cooperation in the areas
prioritized by both sides.

He further emphasized on Germany’s readiness to deepen bilateral
dialogue in implementation of Ukraine’s key foreign policy priorities.

As Ukrainian News earlier reported, on November 1, the 34th session
of the General Conference of UNESCO adopted a resolution on

commentating the victims of the 1932-33 Famine in Ukraine.

The Foreign Affairs Ministry presented the draft of the resolution on
infirming member-states of UNESCO about the Holodomor of 1932-33

in Ukraine to UNESCO for consideration on October 4.

President Viktor Yuschenko declared 2008 as the year of commemoration
of the Holodomor victims. The Ukrainian parliament declared the

Holodomor of 1932-33 in Ukraine as an act of genocide against the
Ukrainian people in 2006.

Ukraine will honor the memories of the victims of famines and political
repression on November 24. Between 3 million and 7 million people died

during the 1932-33 Famine in Ukraine, according to various estimates.
Moreover, some historians are saying there were famines in Ukraine in
1921-1923 and 1946-1947.
LINK: http://www.ukranews.com/eng/article/78297.html
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

OPINION & ANALYSIS: By Andrei Marchukov, PhD (History),
Staff Researcher, Russian Academy of Sciences’ Institute of Russian History.
RIA Novosti, Moscow, Russia, October 16, 2007

MOSCOW – The Soviet famine of 1932-33 was an act of genocide against
Ukrainians. Kiev has been forcing this point on the world, the United
Nations and Moscow for several years now, in a vast and aggressive

The Famine (Holodomor, in Ukrainian) is an all-pervading ideological
concept, a tool of public indoctrination. It is not only a tribute to the
victims’ memory but also a pressing political demonstration by present-day
Ukrainian leaders, spearheaded against Russia as much as against the
communist past.

The matter returned to the United Nations on October 15, when Ukraine
submitted to a UNESCO conference a resolution demanding the greatest
possible information about the Great Famine. In fact, this information is
not withheld, even though the world does not regard the Famine as a
deliberate genocidal act.

While fully recognizing the Ukrainian tragedy, there is no explicit proof
that the famine was provoked by the Kremlin and intended to exterminate the
Ukrainian nation.

The holodomor concept first arose amongst the Ukrainian Diaspora. Many
books and press publications appeared in the West in the 1940s-70s
describing the Famine as a Kremlin plot to kill off Ukrainians and undermine

the survivors’ spirit. Public attention to the holodomor skyrocketed in the

This was the time when President Ronald Reagan was referring to the U.S.S.R.
as the Evil Empire. Ukrainian emigres added fuel to the fire with their
reminiscences and analyses of the holodomor.

In 1984, the U.S. Congress established an ad hoc commission to investigate
the causes of the Great Famine in Ukraine in 1932-33. Its 1988 Report to
Congress described the famine as “man-made” and denied any causal
connection with drought.

“Joseph Stalin and those around him committed genocide against Ukrainians
in 1932-1933,” the report says. Perestroika, with its outspoken spirit,
brought the concept to Ukraine. Mourning the millions starved to death went
hand-in-hand with wrathful denunciations of genocide.

Today’s propaganda aims to make the holodomor part of the Ukrainian
world-view. President Viktor Yushchenko called on politicians of his
generation to “preserve historical memory and spare no efforts to make the
world qualify the Famine of 1932-33 as genocidal”.

Why is such sensation whipped up over bygones? On the one hand, Ukrainian
propaganda has found a satanic enemy, the epitome of Absolute Evil, and is
now out to develop a guilt complex in Russians to make them feel morally and
materially responsible for the tragedy.

On the other hand, it seeks to make Ukrainians feel like innocent victims,
and spread this assumption worldwide. Tellingly, Ukrainian leaders are ever
more frequently referring to the Famine as the “Ukrainian Holocaust” – thus
putting the U.S.S.R. on a par with Nazi Germany.

Cardinal Lubomir Husar, head of the Ukrainian Greek Catholic Church,
concisely described the goal of the campaign: “Memory of the holodomor is
what our nation shall stand on.” Words of equal aptitude belong to former
President Leonid Kuchma: “Ukrainian national consolidation has a long way
to travel yet. We have made Ukraine. Now is the time to make Ukrainians.”

“Making Ukrainians” implies a new national ethic and mentality, with the
idea of Ukrainians and Russians as two nations apart. What several Ukrainian
generations firmly believed in has been turned on its head.

The young regard their country’s recent past as a time of colonialism, when
Ukrainians were ruthlessly exterminated. It is hard to find a more graphic
example than the Famine.

Was it really genocide or ethnocide against Ukrainians? The U.S.S.R. owed
the terrible famine of 1932-33 to agricultural collectivization.

The rapid creation of a thoroughly new type of farming went together with
the cruel dispossession of well-to-do farmers, so-called “kulaks”. Peasant
resistance inevitably followed.

Bloated grain procurement quotas envisaged total confiscations-seed, food
and fodder grain. The 1932 quota for Ukraine was 400 million poods, or 6.4
million metric tons, but even the severest possible confiscations brought
only 261 million poods, so extra procurements were launched, with searches,
ruinous fines-and firing squads. Peasants were dying of starvation as early
as October 1932, and the famine went on up to the next year’s end.

Those two years saw 2.9-3.5 million deaths from starvation in Ukraine alone,
according to various estimates. Yet it was not ethnocide proper.

Registry office statistics for 1933 show death rates in urban localities no
higher than average, in contrast to an exorbitant death toll in the
countryside not only in Ukraine but all over the Soviet Union. People were
doomed not on the grounds of ethnicity, but merely because they lived in
rural areas.

Grain shortages were exacerbated by a rapid increase of the urban
population. It swelled by 12.4 million nationwide in the four years 1929-32,
and by 4.1 million in Ukraine within 1931, mainly because persecuted
peasants fled their villages.

Nothing could have been easier for the regime than to starve townspeople,
who depended on food supplies from elsewhere for their survival. Yet, it
was not done. The regime made do with harsh food rationing.

Peasantry as a social class was the victim of the cruel policy. This point
clearly follows from the geography of the Great Famine.

It spread throughout the Soviet breadbasket areas-Ukraine, the middle and
lower reaches of the Volga, the North Caucasus, the central part of the
Black Earth Zone, the Urals, part of Siberia, and Kazakhstan – with a total
population of 50 million. The Famine killed 6-7 million people nationwide.
All Soviet peoples were victims.

Arguments cited to prove that the famine was a deliberate act of genocide do
not hold water. Still, many Ukrainians do not want to turn the tragic page
of history. This is understandable. If they did, public attention would turn
to their own, present-day, policy and its dire fruit.

The Ukrainian population shrank by 4.3 million in 1991-2003-3.6 million
died, and over 1.2 million emigrated, while only 500,000 former emigres

If we extrapolate the figures to the end of 2006, the population decline
exceeds 5.4 million-this without wars, famine, or the Kremlin’s imperialism.
Don’t these statistics give food for uneasy thought?
NOTE: Andrei Marchukov, PhD (History), is staff researcher of the Russian
Academy of Sciences’ Institute of Russian History. The opinions expressed
in this article are the author’s and do not necessarily represent those of
RIA Novosti.
LINK: http://en.rian.ru/analysis/20071016/84171679.html

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

COMMENTARY: By David A. Mittell, Jr.
Providence Journal, Providence, RI, Thu, November 1, 2007

THE EFFORT by some in the U.S. House to answer the historical dispute
about whether the death of at least a million Christian Armenians in
the predominantly Muslim Ottoman Turkish Empire in 1915 “rates” as a
genocide is an unfortunate chapter in a deeply unfortunate contemporary
phenomenon: treating mass murders like competitions, and ranking them
as if they were U.S. News & World Report’s annual rating of colleges.

In Greek, holocaust means “burnt whole.” The Holocaust — capitalized —
denotes Hitler’s attempt to exterminate European Jewry during World War
II. Genocide, from Greek (genos, “race”) and Latin (cidium, “murder”),
means the attempt to kill an entire race or people. The point can be made
(I will deal with it below) that a million acts of murder do not constitute
a genocide if they are not directed against a race, ethnic group, religious
population or social class.

 In sheer numbers of those killed, the greatest mass murder of the 20th
Century was Mao Zedong’s Great Leap Forward, from 1956 to 1959,
when an estimated 30 million rural Chinese died in agricultural
collectivization and from the removal of the able-bodied from villages.

Yet today, most Westerners are willing to philosophically accept Robert
Frost’s observation that “the longest peace in China ends in strife.”

The worst most historians will say of Mao is that he was a butcher, and
some still accept him as one of the great men of his age. Benignity on
the part of intellectuals may reflect their racism: In part, they
excuse Mao because the Great Leap Forward was just Chinese killing

 Mass murders that directly compete with the Jewish Holocaust for
remembrance are the Armenian catastrophe of 1915 and the Ukrainian
Holodomor of 1932-33. (Ukrainian, holod: “hunger” and mor: “plague.”).

The best account of 1915 probably remains “The Murder of a Nation,”
written on the spot by the American ambassador to Turkey, Henry
Morgenthau Sr. (father of Franklin Roosevelt’s Treasury secretary).

In World War I, the “Central Powers” – of Austria, Germany and Turkey –
were opposed by the “Triple Entente” of Britain, France and Russia. By
1915, Turkish Armenians were suspected of being pro-Russian, and
were accused of committing atrocities in Turkish villages whose young
men had been drafted.

The decision was taken to disarm Armenians and remove them to “safe”
areas. Some Armenians were actually given train tickets. But, as
Morgenthau writes, Armenian soldiers in the Turkish army were disarmed
and put into “labor battalions,” where many perished from cold and
hunger. The civilian population was put on a death march to the Syrian

The atrocities en route were committed by fanatic Muslim Kurds
and Turks, but were planned by “Young Turk” atheists, who would
organize the post-Ottoman government. The present-day Turkish wish to
ascribe all things to the Ottoman regime is based on false assertions.

Before the war, the Ottoman government had visited similar privations
on Greeks, of whom more than 100,000 were removed from their ancestral
homes on the Mediterranean coast. Morgenthau wrote: “It was probably
for the reason that the civilized world did not protest . . . that the
Turks decided to apply the same methods on a larger scale . . . to the
Armenians, Syrians, Nestorians, and others.” Hitler would use the
civilized world’s lack of protest about the destruction of the
Armenians to ridicule the idea that anyone would care what he did to
the Jews.

The most compelling survivor’s account of the Ukrainian Holodomor is
Miron Dolot’s 1985 “Execution by Hunger.” Under Lenin, the USSR had
attacked kulaks – unacceptably rich peasants – by confiscating all
grain, then partly redistributing it.

The policy had the effect of making the rural population compliant in
surrendering its food and complicit in reporting hoarders. Stalin revived
the policy, and when Ukrainians resisted agricultural collectivization, he
withheld the government’s meager return-of-rations – leading to an
estimated 7 million deaths from starvation.

Stalin later purged the Ukrainian Communist Party and destroyed most
of the republic’s cultural elite. But he did have a purpose beyond killing
Ukrainians: subservience. Kazakhstan, southern Russia and the Volga
German Republic experienced many of the same horrors.

 Today, the legitimacy of the Armenian and Ukrainian agonies as
genocides is opposed by defenders of the uniqueness of the Jewish
Holocaust on both principled and unprincipled grounds. The principled
ground is (it is argued) that however evil the purposes and methods of
the Turks and Soviets, they did not set out to kill Armenians and
Ukrainians only because of their birth.

Hitler, by contrast, contrived for Germans to despise and ultimately murder
Jews simply because of who they were, and without any political purpose
other than using innocents to unify Germany in a frenzy of hatred. I agree
with that distinction.

The illegitimate grounds are: As to Armenians, 1) denial of the facts
and, 2) (worse) an unwillingness by some Jewish organizations to offend
modern Turkey, which has a pro-Israeli foreign policy.

As to Ukrainians, the Holodomor was always categorically denied by the
Soviets and by Western apologists, such as Walter Duranty, of The New
York Times, who received an unrescinded Pulitzer Prize for his lies.
The Soviets also perpetrated the myth that Ukrainians – not they – were
anti-Semites and had been Nazi collaborators.

There were, of course, collaborators in Ukraine, as in every occupied
country. Prof. Omer Bartov, of Brown University, has researched this in
“Erased, Vanishing Traces of Jewish Galicia in Present-day Ukraine.” It
is not a pretty picture. But it is beside the point of 7 million dead.

Ordinarily I think words are important. But the descendants of the dead
should not be quarreling about semantics. Let us say that Armenians,
Chinese, Jews and Ukrainians were all victims of genocides. Then let us
admit that among genocides there are distinctions.
NOTE:  David A. Mittell is a member of the editorial board of
The Providence Journal.

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

By Gennady Sakharov, Source: www.maidan.org.ua
Kharkiv Human Rights Protection Group (in English)
Kharkiv, Ukraine, Monday, October 29, 2007

This year marks 70 years since the largest-scale repressions of the former
USSR. The repressions were planned with quotas for the numbers of arrested
and executed “enemies of the people” to be fulfilled and exceeded. Some top
officials in Ukrainian regions actually asked for the numbers to be

People became victims for speaking “the wrong language”, with charges
trumped up over alleged spying and nationalist organizations. They looked
for enemies everywhere and found them.

There are people today who try to prove that there was no Holodomor
[Famine of 1932-1933] in Ukraine and that the repressions under Stalin were
a necessary step to protect the Soviet regime against saboteurs, spies and
other enemies.  Let such arguments be on the conscience of those who
circulate them.

There are ever less witnesses of those events.  Each account from people
who lived through those times is particularly to be valued.

I spoke with Ida Vasilivna Borodai [Styopkina] in her flat in a five-storey
block on Kirov Avenue. She is eighty years old, but has a good memory and
told us about the events in her life in detail.

She spoke of how she became an “NKVD child” as they called the children
of parents who had been repressed and who were themselves kept in special
children’s homes.

In 1937 Ida lived with her parents in the large village Andriyivka in the
Kharkiv region. Her parents were village teachers. During the night of 22
September NKVD men came to their house and carried out a search.

Ida’s mother took the half-asleep nine-year-old from one room to another.
When the search was ended, the men took her father away. One said: “Say
goodbye to your daughter”.

He kissed his daughter and left. He left for ever, since as Ida Vasilivna
later discovered after her father had long been rehabilitated, he was
convicted in 1937 and executed for “his part in a counterrevolutionary
nationalist spying organization”.

The main “crime” of village teacher Vasyl Fedorovych Borodai in the eyes of
the NKVD was clearly that he belonged to the village intelligentsia and he
spoke Ukrainian.

The village teachers often met, played the bourgeois game of “preference” [a
card game] and discussed events in the country. Perhaps somebody expressed
a view considered seditious at the time.

There was an informer present, one of those “secret employees” whom the
NKVD had in all places of work, particularly among the intelligentsia. And
as was also customary, they manufactured a case about a nationalist
organization in Andriyivka.

That night eight teachers from the school were arrested. Soon they arrested
Ida’s mother. That very day they came and took Ida away from school. The
teacher told her she had to leave the class because people were waiting for

The stranger waiting there was polite and kind. He took her to the police
station where in a large room there were around forty children since the
NKVD had taken other families from the village as well as teachers’

The children were told that they would be taken to their parents, were put
in open trucks with benches to sit on and in a cold winter night taken to
the Balakliya district centre.

There the children were held in a building with forty to fifty children in
each room.  From there they were taken to Kharkiv. On the way the children
saw columns of people being led by armed convicts. They were stopped at one
point by a person shouting: “Who’s in the truck?”  The answer was: “NKVD

They brought the children to an NKVD reception and distribution centre where
the children were held in groups of forty – fifty. They weren’t allowed
outside, there was nowhere to wash and neither their underwear nor clothes
were changed. The windows looked out into the courtyard.

It was effectively a transit camp for children. In a month the children were
placed in children’s homes. They were taken to the railway station and given
a packed meal for the journey.

Among the 300 children in Ida’s children’s home, there were Russians,
Ukrainians, Belarusians, Germans and Jewish children. All were children of
those repressed.  The children did not go hungry and the staff treated them

In the winter of 1939 Ida’s mother was released from prison in Kharkiv where
she had spent more than a year without any investigation or trial. They’d
demanded that she “confess” to subversive activities, to helping her
nationalist husband and had intimidated her. The conditions in the prison
were terrible.

Perhaps they realized that they wouldn’t get any incriminating information
from her, or they’d already over-fulfilled their quotas.

They also released two other women teachers from Andriyivka, whose
husbandshad also been executed. The women came and collected their
children.  It should be mentioned that not all children in the home were so

Andriyivka following their release, and in fact there was nowhere to return
to – all their property had been confiscated, and the homes devastated. The
Borodai family lost their library which had been collected by not just one

Ida and her mother ended up in the village of Shevelyovka in the Balakliya
district which was populated by settlers from Russia.  They had a very hard
time, labelled enemies of the people and Hitler supporters.

With one bag of possessions they moved to another village Vovchy Yar where
nobody knew them. They lived in poverty, supplementing their diet from the
vegetable garden. Ida’s mother again worked as a teacher.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Action Ukraine Report (AUR) #888, Article 28
Kyiv, Ukraine, Wednesday, November 7, 2007
KYIV – An art exhibition featuring the paintings of Alla Rogers
and sculpture by Yevhen Prokopov will open at The Ukrainian
National Museum of Fine Arts in Kyiv on Friday, November 9
at 5:00 p.m. The exhibition will be open until December 19, 2007.
The Museum is at 6, Hrushevskoho str. Kyiv. Contact: tel:
8(044) 278-1357 email: namu@i.com ua.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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