Monthly Archives: September 2008

AUR#911 Sep 30 Yushchenko in Washington; Ukraine-U.S. Business Forum; Great March on Washington 25 years ago

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

Ukrainian History, Culture, Arts, Business, Religion, Economics,
Sports, Government, and Politics, in Ukraine and Around the World       
 
PRESIDENT VIKTOR YUSHCHENKO IN WASHINGTON, D.C.
Meets with President Bush and the U.S.-Ukraine Business Council

GREAT MARCH ON WASHINGTON, SUNDAY, OCTOBER 2, 1983
Twenty-five years ago 18,000 Ukrainians came to remember/protest
                   
ACTION UKRAINE REPORT – AUR – Number 911
Mr. Morgan Williams, Publisher and Editor, SigmaBleyzer
WASHINGTON, D.C., TUESDAY, SEPTEMBER 30, 2008
 
INDEX OF ARTICLES  ——
Clicking on the title of any article takes you directly to the article.               
Return to Index by clicking on Return to Index at the end of each article
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Tue, Sep 30, 2008
 
Press office of President Victor Yushchenko, Kyiv, Ukraine, Monday, September 29, 2008
 
The White House, Washington, D.C., Monday, September 29, 2008
 
Meets with Presidents of Lithuania and Ukraine
Olivier Knox, AFP, Washington, D.C., Monday,  September 29, 2008
Marks, Sokolov & Burd, Philadelphia, PA, Monday, September 29, 2008
 
6UKRAINE-U.S. BUSINESS FORUM TO BE HELD IN KYIV, UKRAINE
Friday, October 3, 9:30 a.m. to 3:30 p.m., with reception at 5:00 P.M., Kyiv
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Monday, September 29, 2008
 
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Tuesday, September 30, 2008
 
8UKRAINIAN AMERICANS COMMEMORATE FAMINE IN HOMELAND 50 YEARS AGO
By Caryle Murphy, Washington Post Staff Writer, The Washington Post, Wash, D.C., Sat, Oct 1, 1983
 
9GENOCIDE IN UKRAINE RECALLED WITH MARCH “FREEDOM FOR UKRAINE”
Ukrainian-Americans demonstrate against the Soviet Union
By Edmond Jacoby, Washington Times Staff, Washington Times, Wash, D.C., Oct 3, 1983
 
10AN OPEN LETTER TO THE KREMLIN
The 1932-33 famine in Ukraine was a deliberate act of genocide
Letter From Americans of Ukrainian Descent, read by Orest Deychakiwsky, Beltsville, Maryland
Soviet Embassy, Washington,, D.C., Oct 2, 1983, The Ukrainian Weekly, Oct 9, 1983, No. 41, Vol. LI
 
11 18,000 ATTEND UKRAINIAN FAMINE MEMORIAL EVENTS IN D.C.
Huge crowd rallies at Washington Monument
Roma Hadzewycz, The Ukrainian Weekly, Parsippany, NJ, Oct 9, 1983, No. 41, Vol. LI 
 
To make others aware of the Soviets’ horrible crime against humanity
By Marta Kolomayets, The Ukrainian Weekly, Parsippany, New Jersey, Sun, Oct 9, 1993. 
By George B. Zarycky, The Ukrainian Weekly, Parsippinany, New Jersey, Sun, Oct 9, 1983
===================================================
1
 UKRAINIAN PRESIDENT YUSHCHENKO MEETS WITH MEMBERS
OF THE U.S.-UKRAINE BUSINESS COUNCIL (USUBC)
 
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Tuesday, September 30, 2008
 
WASHINGTON, D.C. – The U.S.-Ukraine Business Council (USUBC) hosted the President of Ukraine, Victor Yushchenko, at a breakfast meeting in Washington attended by 100 members of USUBC and special guests on Monday, September 29.   
 
President Yushchenko spoke for almost an hour and addressed the main political and economic issues facing Ukraine.  He outlined his vision for Ukraine’s Euro-Atlantic integration, discussed the recent events in Georgia, spoke about Ukraine’s business environment, thanked the U.S. companies for their investments in Ukraine and indicated there were many more investment projects in Ukraine that would be interest to American investors.  
 
Yushchenko shared his optimism regarding the economic situation in Ukraine, mentioning that it had entered the World Trade Organization this year. He positively assessed the level of international investment in the Ukrainian economy. The president also shared his hope for an increase in U.S. investment to Ukraine. 
 
In his opinion, high-tech projects could be of a special interest to American investors. He praised the high level of Ukrainian computer professionals and program assistants. Ukraine and the U.S. could also cooperate more in the area of space, the president stated. He also called for American businessmen to invest in the agricultural sector of the Ukrainian economy, noting that it has a great potential.
 
BUSINESS AND EURO-ATLANTIC INTEGRATION
The president was introduced by Morgan Williams, SigmaBleyzer, president of USUBC.  Williams said in his opening remarks, “Mr. President, the businesses in attendance today have billions of dollars invested in Ukraine, have created thousands of jobs and are totally committed to an independent, strong, democratic, prosperous Ukraine, driven by an private, market-driven economic system, under the rule-of-law.”
 
“Ukrainian and international businesses are the best friend and partner the Ukraine government has to help Ukraine reach its goals and is making Euro-Atlantic integration a reality,” Williams continued. “For business to continue to move Ukraine forward a stable political and governmental environment is needed.  The government also needs to view business as a partner and friend and pass the many reforms needed to bring about a much stronger, pro-business environment in Ukraine.”
 
President Yushchenko stated the current political crisis in Ukraine is a “normal” democratic process. At the same time, he accused the “union”, as he put it, comprised of the Block of Yulia Tymoshenko, the Party of Regions and the Communists of having  another partner – Moscow.
 
President Yushchenko called the recent events in the Ukrainian parliament  “Georgia II,” the aim of which was to destabilize the situation in the country. Yushchenko also noted that he does not believe a coalition will appear among the Block of Yulia Tymoshenko, the Party of Regions and the Communists.  In his opinion the situation is moving toward elections and is not, as some have described it, a political tragedy.
 
MEMBER OF NATO
Yushchenko also stated once again that Ukraine should become a member of NATO. The crisis in Georgia proved that NATO should expand to the east, he said. The president noted that a referendum would be held on NATO accession.  This would be, he said, the most democratic way of solving such a difficult issue.
 
No one has invited Ukraine to join NATO so far, he said, but Ukraine should use this time to work on receiving such an invitation in the form of a Membership Action Plan (MAP). In President Yushchenko’s opinion, there is no other alternative for Ukraine than entering a system of collective security. He said that the Black sea region has become the area of instability.
 
SPECIAL GUESTS AND U.S. AMBASSADOR’S TO UKRAINE 
Special guests at the breakfast from the government of Ukraine included: Volodymyr Ogryzko, Minister of Foreign Affairs; Andriy Goncharuk, Deputy Head of the Secretariat of the President of Ukraine; Valentyn Nalyvaichenko, Acting Head of the Security Service of Ukraine, Raisa Bohatyreva, Head of the National Security and Defense Council of Ukraine and Dr. Oleh Shamshur, Ambassador of Ukraine to the United States.
 
Four of the six United States Ambassador’s to Ukraine since independence in 1991 were at the presidential breakfast.  They were: William Green Miller, Steven Pifer, John Herbst and William B. Taylor, who is now serving at the U.S. Ambassador in Ukraine.
 
ORIGINAL HOLODOMOR MARCH ON WASHINGTON POSTER FROM 1983
At the end of the breakfast USUBC presented President Yushchenko with a framed original copy of a poster used in the huge October 2, 1983 march on Washington, D.C. by the Ukrainian-American community to protest the Soviet occupation of Ukraine and to commemorate the 50th anniversary of the genocide against the Ukrainian people in 1932-1933 when millions were starved to death. The poster was designed by Roxolana Luczakowsky Armstrong. 
(To see a copy of the poster click on http://www.artukraine.com/famineart.armstrong.htm.)
 
Approximately 18, 000 Ukrainians gathered in the shadow of the Washington Monument on Sunday morning, October 2, to mourn those of their kinsmen who had perished in the Great Famine of 1932-33 and to renew their pledge to always remember and to never allow the world to forget the holocaust inflicted upon the Ukrainian nation by the Soviet regime. The Ukrainians also protested the Soviet occupation of Ukraine in front of the Soviet Embassy.  
 
COMPANIES/ORGANIZATIONS IN ATTENDANCE
Companies/organizations in attendance at the USUBC presidential breakfast included: 3M, AES, Aitken Berlin, American Continental Group, American Councils on International Education, Baker & McKenzie, BBC World Service/Ukrainian Service, Boeing, Bracewell & Giuliani, Bunge, Cargill, Chevron, Coca-Cola, ContourGlobal, Crumpton Group, DHL Express, DRS-Technical Services, Edelman, First International Resources, and Global Trade Development, Inc. 
 
Also in attendance were Halliburton, Harris Corporation, Heller & Rosenblatt, IBM, Intercontinental Commerce Corporation, Kyiv Post, Kraft Foods, Kyiv-Atlantic, Lockheed Martin, Magisters, Marathon, Marks, Sokolov, & Burd, MaxWell Biocorporation, McDonald’s, Merrill Lynch, Microsoft, Motorola, Nationwide Equipment, Northrop Grumman, Office of the Vice President, and Pratt & Whitney/United Technologies.
 
Also attending were: Procter & Gamble, Reservoir Capital, Salans, SigmaBleyzer, Squire Sanders & Dempsey, SE Raelin, Standard Chartered Bank, Sweet Analysis Services Inc., (SASI); TD International, The Heritage Foundation, The PBN Company, The Ukrainian Weekly, The Washington Group (TWG); The Washington Times, TNK-BP, Ukrainian American Bar Association, Ukrainian Development Company, Ukrainian Embassy/Trade and Economic Mission; Ukrainian International Airlines, Umbra, U.S. Civilian Research Defense Foundation (CRDF), U.S. Department of State, U.S.-Ukraine Foundation (USUF), Voice of America (VOA) and Westinghouse.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
2.  MEMBERS OF THE U.S.-UKRAINE BUSINESS COUNCIL (USUBC) MEET

WITH UKRAINE PRESIDENT VICTOR YUSHCHENKO IN WASHINGTON
 
Press office of President Victor Yushchenko, Kyiv, Ukraine, Monday, September 29, 2008
KYIV – Within the framework of his working visit to the USA President Victor Yushchenko met with representatives of the US-Ukraine Business Council [USUBC]. At the meeting the President said that American investments are very important for Ukraine, and invited the investors to deeper cooperation.
According to him there are many projects that might be of interest for American investors, particularly in the field of high-tech, agriculture, energy, preparation to holding EURO 2012, etc. He assured American businessmen that Ukrainian authorities conduct a consistent policy in providing stable and beneficial working conditions to foreign investors.
Also President Yushchenko reminded that the ninth meeting of Consultative Council on Foreign Investments under the auspices of the President of Ukraine is about to take place soon. The meeting of the council, in which the American businessmen have the broadest representation, will be dedicated to problems and obstacles, foreign investors are facing in their work in Ukraine.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
3.  U.S. PRESIDENT BUSH MEETS WITH PRESIDENT YUSHCHENKO OF UKRAINE

 
The White House, Washington, D.C., Monday, September 29, 2008
PRESIDENT BUSH: I was disappointed in the vote with the United States Congress on the economic rescue plan. We put forth a plan that was big because we got a big problem. I’m going to be talking to my economic advisors after my meeting here with the President, and we’ll be working with members of Congress — leaders of Congress on the way forward. Our strategy is to continue to address this economic situation head on. And we’ll be working to develop a strategy that will enable us to continue to move forward.
 Mr. President, welcome. I welcome you here to the Oval Office. I admire your steadfast support for democratic values and principles. A lot of Americans have watched with amazement how your country became a democracy. We strongly support your democracy. We look forward to working with you to strengthen that democracy.
You and I just had a good discussion about a variety of issues. We discussed, you know, the NATO and Membership Application Process. We discussed energy independence. We discussed ways that we can work together to bring stability and peace to parts of the world. And I thank you for joining us here in Washington in the Oval Office. And I send my respect to the people of Ukraine.
PRESIDENT YUSHCHENKO: (As translated.) First of all, Mr. President, I would like to thank you for the atmosphere that our negotiations were held in. We had our conversation in a very constructive manner.
 
We touched upon the range of issues, starting from our bilateral relations, and the implementation of U.S.-Ukraine action plan, and we consider this road map as being implemented in a successful way. A lot of attention was paid to the security component and security itself. And special attention was paid towards Ukraine integration into European and Euro-Atlantic structures.
We raised the issue of energy cooperation, which is a very urgent issue for us. And we believe that we’ve done excellent job on the adaptation of American nuclear fuel for our nuclear power units, and we intend to continue that.
We also discussed the domestic political situation in Ukraine, which in my opinion is far away from being tragic, and not dramatic. Ukraine has enough democratic resource and tools to give sufficient response to any crisis that may occur in the Ukrainian parliament. And this is probably where the Ukrainian strength and optimism is.
I also asked Mr. President to delegate the high-ranking delegation from the United States of America to participate in the commemorating event of the great famine in Ukraine of 1932 and 1933. The commemoration day will be on November the 22nd, and this will be the commemoration of the biggest humanitarian catastrophe in our country. And we need to do everything for that issue to be included in the UNGA agenda.
PRESIDENT BUSH: Thank you, sir.
PRESIDENT YUSHCHENKO: Thank you.
PRESIDENT BUSH: You’re welcome.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
4. BUSH WARNS MOSCOW AGAINST ‘BULLYING’ NEIGHBORS 

Meets with Presidents of Lithuania and Ukraine
Olivier Knox, AFP, Washington, D.C., Monday,  September 29, 2008
 
WASHINGTON – US President George W. Bush met Monday with the leaders of Lithuania and Ukraine to discuss the fallout from Russia’s war in Georgia and warned Moscow against “bullying” its democratic neighbors. 
 
In separate White House talks, Bush sought to reassure the former Soviet republics of US support in the face of a newly assertive Kremlin, which some analysts warn may be sizing up other neighbors after the August conflict.
Bush, meeting with Lithuanian President Valdas Adamkus, said they had “talked about Georgia-Russia, and the need for democracies to be able to stand on their own feet without fear of bullying.”
Bush also pledged help for Lithuania, as the former Soviet republic and NATO member looks to diversify its sources of energy, and restated the US obligation under the NATO charter to come to the aid of an alliance member under attack.
“It’s important for the people of Lithuania to know that when the United States makes a commitment through, for example, Article 5 of the treaty, we mean it,” the US president assured his guest.
With Lithuania seeking greater energy independence, Bush pledged the United States will “try to help you as best as we can.” And the US president expressed “hope” that, by mid-October, Lithuanians would be able to travel to the United States without first seeking a visa.
Adamkus thanked Bush for his support for Lithuania joining NATO, which it did in 2004, saying that would not have happened without US leadership “and the entire security question in the region would be in doubt.”
The Lithuanian leader also appealed for a lasting US presence in Europe, implying such a presence might be necessary to dissuade a newly assertive Moscow from any designs on former Soviet republics. “I hope that United States will be visible … just to show our neighbors that we’re definitely not alone, and we are building the democracy together,” said Adamkus.
In talks with Ukraine President Viktor Yushchenko, Bush evoked US support for Kiev’s accession to NATO over vehement objections from Russia, which has also denounced Washington’s backing of alliance membership for Georgia.
“We discussed the NATO and membership application process. We discussed energy independence. We discussed ways that we can work together to bring stability and peace to parts of the world,” said Bush.
Yushchenko sought to reassure his host about political turmoil in Ukraine, where the ruling post-Western alliance has collapsed and some officials warn that any snap elections could result in a victory for pro-Moscow forces.
The situation, “in my opinion, is far away from being tragic, and not dramatic. Ukraine has enough democratic resource and tools to give sufficient response to any crisis that may occur in the Ukrainian parliament,” he said. “We raised the issue of energy cooperation, which is a very urgent issue for us,” said the Ukrainian leader.
Moscow has seen relations with former Soviet republics and the West deteriorate sharply since its early August war with Georgia, after years of tensions over access to energy supplies controlled by Russia.
Russia has regularly been accused of using its control of a hefty slice of Europe’s market for political ends, allegedly turning off the taps to punish governments in Moscow’s communist-era stomping ground that are too critical of the Kremlin.
Lithuania, which broke free from the crumbling Soviet bloc in 1991 and joined the EU and NATO in 2004, has been sparring with Russia since August 2006, when the Russian pipeline monopoly Transneft cut supplies to the country’s only refinery. And supplies to Europe were briefly disrupted in January 2006 as a consequence of a gas price dispute between Russia and Ukraine.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
==============================================================
U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
Promoting U.S.-Ukraine business relations & investment since 1995.
==============================================================
5.   UKRAINE PRESIDENT YUSHCHENKO TO SIGN JOINT STOCK COMPANY LAW

 
Marks, Sokolov & Burd, Philadelphia, PA, Monday, September 29, 2008
WASHINGTON, D.C. – In a private conversation today President Yushchenko confirmed that he will sign the Joint Stock Companies Law. President Yushchenko was in Washington with the official visit to meet with President Bush. 
 
In the morning President Yushchenko attended a breakfast organized by the U.S. -Ukraine Business Council (USUBC) after which Gene Burd, managing partner of the firm’s Kyiv’s office discussed with him situation with the new Joint Stock Companies Law. 
 
The President confirmed to Mr. Burd that he will sign the law, which will apparently take place after the President’s return to Kyiv tomorrow.  The deadline for the President to sign the law is October 2.

The new law has been approved by the Supreme Rada amid political reshuffling on September 17 by over 80% vote.  Comparing to the old 1991 law, the new one provides significantly more detailed framework for organization, management and dissolution of the companies including clarifications of provisions governing Supervisory Boards, Auditing Committees, exclusive competence and procedures governing shareholders meetings, and simplification of procedures for companies with a sole shareholder.

While the existing law may not be a panacea for issues facing foreign companies in Ukraine, it clearly moves Ukraine closer to the European legal standards, improving the overall investment climate. 

 
According to USUBC President Morgan Williams, “It is hard to overestimate the relevance and importance of this piece of legislation for the improvement of the investment climate and the general economic situation in Ukraine.  Adoption of this law is a significant step forward in bringing Ukraine to world standards in the sphere of corporate governance and ownership issues.”
For the text of the law “On Joint Stock Companies” click on http://www.marks-sokolov.com/documents/Joint_Stock_Company_Law.pdf.
Marks, Sokolov & Burd is an international law firm with offices in Philadelphia, Pennsylvania, Moscow, Russia, and Kyiv, Ukraine.  The firm is known for its substantial experience in handling matters for Western clients doing business in Russia and Ukraine and Russian/Ukrainian clients doing business internationally.
For more information about the firm, visit firm’s web site at www.marks-sokolov.com. For more information about firm’s Ukrainian practice, please contact Gene M. Burd, managing director of the Kiev office at email: gburd@mslegal.com;  tel. +1 215 569 8901 (US) or +380 (44) 235-68-66 ( Ukraine ).
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================      
6.  UKRAINE-U.S. BUSINESS FORUM TO BE HELD IN KYIV, UKRAINE
Friday, October 3, 9:30 a.m. to 3:30 p.m., with reception at 5:00 P.M., Kyiv

 
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Monday, September 29, 2008
 
WASHINGTON, D.C. – The U.S.-Ukraine Business Council (USUBC), in cooperation with the Ministry of Economy of Ukraine, is sponsoring a Ukraine-U.S. Business Forum in Kyiv in conjunction with the first meeting of the Ukraine -U.S. Council on Trade and Investments.  The Council is a new intergovernmental commission to promote bilateral business relations and was established during U.S. President George Bush’s recent trip to Ukraine.
 
This first meeting of the new Council and the Ukraine-U.S. Business Forum was initially going to be held in Washington but was recently moved to Kyiv. The Council meeting will be held on Thursday, October 2nd  followed by the Ukraine-U.S. Business Forum on Friday, October 3rd.  
 
YOU ARE INVITED TO PARTICIPATE
You are invited to attend and participate in the Ukraine-U.S. Business Forum on Friday, October, 3, 2008  from 9:30 a.m. to 3:30 p.m., to be held at the offices of the Ukrainian Chamber of Commerce and Industry, 33 Velyka Zhytomyrska St., Kyiv, followed by a reception at 5 p.m.
 
The co-chairmen of the Ukraine-U.S. Council on Trade and Investments, Minister of Economy of Ukraine Bohdan Danylyshyn and Deputy U.S. Trade Representative (USTR) Ambassador John K. Veroneau, will address the Business Forum. They will present information about the key bilateral business and economic issues and trends between the two countries. 
 
KEY ISSUES TO BE RAISED
Since the Business Forum will follow the government-to-government meeting, USUBC expects Minister Danylyshyn and Ambassador  Veroneau to give an update regarding some of the key issues of concern to USUBC members such as OPIC, vat tax refunds, corporate raidership, customs clearances, air safety legislation, reforms to allow private land purchases, inflation and other issues.
 
Representatives of the Ukrainian Chamber of Commerce and Industry, the Ukrainian Union of Entrepreneurs and Industrialists, the Ukrainian National Committee of the International Chamber of Commerce, as well as officials from the State Tax Administration of Ukraine, State Customs Service and the National Bank of Ukraine. The InvestUkraine/Ukrainian Center for Foreign Investment Promotion will speak about the investment climate in Ukraine.
 
EXPANDING EXPORT OPPORTUNITIES 
From the U.S. side a member of the USTR delegation, Madieth Sandler, GSP Program Director, USTR will make the presentation entitled “Expanding Ukraine’s Export Opportunities through the U.S. Generalized System of Preferences (GSP) Program.” Representatives of USUBC and U.S. businesses will also make presentations on the program.
 
The main session of the Forum will be followed by a networking session where those attending will be able to dialogue with each other and meet Ukrainian business leaders, Ukrainian officials, members of the USTR delegation and others.
 
RECEPTION
After the Business Forum program finishes there will be a reception in honor of the Ukraine-U.S. Council on Trade and Investments delegations and Business Forum participants.  The reception will be from 5:00 p.m. to 7:00 p.m. at the SigmaBleyzer offices (4-A Baseyna St., Mandarin Plaza, 8th Floor).
The reception is sponsored by the U.S.-Ukraine Business Council (USUBC) with USUBC member, SigmaBleyzer, as co-sponsor.
 
You are urged to attend the Ukraine -U.S. Business Forum and reception this Friday. If you are not able to attend please USUBC would appreciate you making arrangements for someone else to represent your company/organization.  If you have any questions please contact us.
 
RSVP PLEASE
Please RSVP YES or NO as soon as possible to Ludmyla Dudnyk, USUBC program manager in Kyiv, at: ldudnyk@usubc.org
Sincerely,

Morgan Williams, SigmaBleyzer
President, U.S.-Ukraine Business Council (USUBC)
 
Ukraine-U.S. Business Forum
Offices of the Ukrainian Chamber of Commerce and Industry
Friday, October 3,  9:30 a.m. to 3:30  p.m., reception at 5 p.m.
33 Velyka Zhytomyrska St., Kyiv, Ukraine

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
7.  U.S. EMBASSY ISSUES STATEMENT REGARDING BORCHAGIVSKY PHARMACEUTICAL COMPANY

 
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Tuesday, September 30, 2008
 
WASHINGTON, D.C. – The U.S.-Ukraine Business Council (USUBC) has been informed by Edward Kaska, Economic Counselor, U.S. Embassy Kyiv that the following press release was issued by the U.S. Embassy in Kyiv on Friday, September 26, 2008. 
 
Mr. Kaska said the U.S. Embassy press release was given wide dissemination among the media in Ukraine and was in response to articles indicating the Borchagivsky Pharmaceutical Company may be sold.
 
USUBC notes that the Borchagivsky Pharmaceutical Company has been the subject of a long standing expropriation claim by R & J Trading, a United States company, which alleges that the Borchagivsky Pharmaceutical Company was established entirely with assets which were stolen from a Ukrainian company in which R & J Trading owned a 50% interest.  R & J Trading, mentioned in the U.S. Embassy press release, is a member of the U.S.-Ukraine Business Council (USUBC). 
 
The complete text of the U.S. Embassy press release follows:
 
PRESS RELEASE

 

“Press reports have been brought to the attention of the U.S. Embassy regarding the possible pending sale of the Borchagivsky Pharmaceutical Company.  R&J Trading, a U.S. firm, was an original investor in 1993 in this company, having entered into a joint venture in which it held 50 percent ownership in a local pharmaceutical plant.

 

R&J Trading has stated that the joint venture managers in 1995 issued new stock and diluted R&J Trading’s stake in the enterprise to 37.5 percent.  The managers then declared the joint venture bankrupt and fraudulently transferred its assets to another firm.  In September 2001, the City of Kyiv bought 30 percent of the Borchagivsky enterprise.

 

The U.S. investors since 1995 have sought to recover their loss, which they consider an expropriation.  R&J also has advised the Embassy it is determined to recover its lost assets, and will continue to make its claim known to any prospective buyers of the Borchagivsky Pharmaceutical Company.

 

The Embassy has followed this matter since the late 1990s.  Over this period, including recent months, U.S. State Department and Embassy officials have met with city of Kyiv and National Government officials at the highest levels to urge an equitable resolution of this case.  The Embassy will continue to remind prospective buyers of the Borchagivsky firm, as well as Ukrainian authorities, of the legitimacy of R&J Trading’s claim.

 

The Embassy urges a rapid resolution of this matter in a way that fairly addresses R&J Trading’s loss of assets.  Such a resolution would signal a commitment on the part of Ukrainian officials to the rule of law and the fostering of a business climate in which foreign investors in Ukraine’s economy can be assured of fair and equitable treatment.”

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

===================================================
9.  UKRAINIAN AMERICANS COMMEMORATE FAMINE IN HOMELAND 50 YEARS AGO

By Caryle Murphy, Washington Post Staff Writer, The Washington Post, Wash, D.C., Sat, Oct 1, 1983

WASHINGTON, D.C. – Hundreds of Ukrainian Americans are in Washington this week to commemorate a famine in their homeland 50 years ago in which millions died and to protest what they say is the Soviet Union’s continued refusal to acknowledge the breadth of the famine on the part of Soviet policies played in causing it.

The gathering will be the first national commemoration of the so-called “Great Famine” of 50 years ago, a crisis that is now a rallying point for anti-Soviet Ukrainians.

“We believe it was a genocide,” said Andrij Bilyk, one of the spokesman for the National Committee to Commemorate Genocide Victims in Ukraine 1932-33, a coalition of about 70 Ukrainian organizations that organized this week’s events.

“It’s a very important moment in Ukrainian history–an important as the Holocaust is in the history of the Jews,” said Omeljan Pritsak, director of the Ukrainian Research Institute at Harvard University, the largest center for Ukrainian studies in the United States.

Last Sunday [September 25, 1983], Ukrainian churches across the country held services inaugurating the commemoration, which also has included nightly candlelight vigils outside the Soviet Embassy and a panel discussion of the famine at the American Enterprise Institute. Organizers say they expect up to 5,000 people Sunday for the final event–a march from the Washington Monument to the Soviet Embassy.

In literature, Ukrainians have called their fertile homeland, now one of the 15 republics in the Soviet Union, “the second-largest European country.” There are hundreds of Ukrainian organizations among the estimated 1 million Ukrainian Americans and many of the younger ones still speak the language of their parents and grandparents.

Pritsak said that demographic studies have shown that between 5 and 6 million Ukrainians died in the famine that resulted from Stalin’s drive to collectivize agriculture. In his determination to crush Ukrainian peasant resistance to the collectivization and to break their anti-Russian nationalistic spirit, he ordered harsh measures by government troops against farmers.

Despite a drop in food production, harvests continued to be exported, food was confiscated from granaries and homes, there was a physical “blockade” on food imports to the Ukraine and the death penalty for “hoarding” food, according to academicians taking part in this week’s panel at the American Enterprise Institute. New internal controls on travel kept peasants from going to cities to search for food or from leaving the Ukraine. Resisting peasants were deported to Siberia. The result was widespread death by starvation.

Although Stalin’s policies affected all regions and were anti-peasant, not specifically anti-Ukrainian, they caused the most suffering in the Ukraine and were seen by its inhabitants as a policy of genocide to subjugate the Ukraine to communist rule. “There is no debate that this famine was manmade and encouraged by the authorities,” said Vojtech Mastny, a specialist in Soviet and East European affairs at Boston University.

“It was a major outrage and a major tragedy.” Soviet historical literature on the Ukrainian famine is almost nonexistent and there is nothing that approximates admission of government errors during that period according to James E. Mace and Robert Conquest, two experts on the famine who took part in the AEI panel.

The only admission they have found in any Soviet publication was in 1975 when V. I. Kozlov, writing on mortality rates in various parts of the Soviet Union in a book titled “Nationalities of the U.S.S.R.,” noted that ” a crop failure in 1932 in the Ukraine probably even led to a temporary increase in mortality.”
It is this failure to speak about the famine that angers many Ukrainians and has brought many of them to this week’s commemoration.

“It’s completely hushed up, it’s as if nothing happened.” said Jaroslawa Francozenko of Rockville, a Kiev-born woman who was at the candlelight vigil outside the embassy Wednesday night. She said she wants the Soviets “just to make a mention of it.”

Others, like Bilijk, however, demand more. Asked what he wants from the Soviets, Biljyk answered with one word: “Independence.”

 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
============================================================
NOTE: Send in a letter-to-the-editor today. Let us hear from you.
============================================================
8.  GENOCIDE IN UKRAINE RECALLED WITH MARCH “FREEDOM FOR UKRAINE”
Ukrainian-Americans demonstrate against the Soviet Union

By Edmond Jacoby, Washington Times Staff, Washington Times, Wash, D.C., Oct 3, 1983

Thousands of Ukrainian-Americans from more than 50 American cities trekked to within a few hundred feet of the Soviet Embassy yesterday afternoon to read a “Letter to the Kremlin” accusing the Soviet Union of murdering 7 million of their fellow Ukrainians 50 years ago.

The demonstration timed to coincide with a similar march on the Soviet Embassy in Paris, was the culmination of a nine-month organizational effort by the National Committee to Commemorate Genocide in Ukraine.

Although yesterday’s march was without incident and no effort was made by marchers to breach police lines around the embassy, some of the demonstrators were openly angered at being prohibited from carrying their letter to the embassy itself. Instead, the statement was read through a bullhorn at 16th and K street NW by Orest Deychakiwsky of Beltsville.

More than 1,000 of the protesters were teens enrolled in one of three organizations that fielded uniformed marching units, the Ukrainian Scouts (boys and girls) and the Ukrainian Democratic Youth. They were kept on the periphery of the crowd during the confrontation at the barricades, one organizer said, “because there are some hotheads there.”

Most of the crowd was unable to hear Deychakiwsky read the letter over the public-address system set up for the purpose, and began chanting, “Svoboda Ukraini! Svoboda Ukraini!—Freedom for Ukraine!”

Metropolitan Police Capt. Louis Widawski said the official estimate of the crowd at the embassy was 8,000. March organizers claimed 15,000 to 20,000 at the Sylvan Theater on the grounds of the Washington Monument earlier in the day. They said they thought as many as 12,000 were at the embassy.

The march, and a concert at the Kennedy Center afterward, marked the end of a week of events in Washington commemorating the 50th anniversary of a devastating famine that Ukrainians have called “the forgotten holocaust.”

That famine was brought about largely by policies of Soviet dictator Josef Stalin–policies that led to collection of virtually the entire farm output of food and seed grain in the Ukraine, leaving the farmers who opposed communist collectivization of their farms, to starve.

Oscar Kain, chairman of the book of Monarch Mirror Door Co. of Chatsworth, Calif., a guest at the Capital Hilton were many of the marchers massed, said he was impressed with the turnout.

‘I’ve got two Russians who work for me.” Kain said. “They told me what happened to them when they tried to leave the Soviet Union. It makes me believe every word the Ukrainians say, America needs to remember this.

 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
10.  AN OPEN LETTER TO THE KREMLIN
The 1932-33 famine in Ukraine was a deliberate act of genocide

Letter From Americans of Ukrainian Descent, Read by Orest Deychakiwsky, Beltsville, Maryland
Soviet Embassy, Washington,, D.C., October 2, 1983, The Ukrainian Weekly, October 9, 1983, No. 41, Vol. LI

The following letter to the Kremlin from Americans of Ukrainian descent was read in front of the Soviet Embassy at the demonstration on October 2 [1983].
The statement was read by Orest Deychakiwsky, 27, of Beltsville, Md., a staff member of the Congressional Helsinki Commission.

We Ukrainian-Americans are 1 million strong, living in cities and towns throughout this great land of the United States of America. There are two additional millions of us living in other countries of the free world. You have enslaved 50 million of our brothers and sisters in Ukraine and countless millions more who live in daily terror of your dictatorship.

You hide behind a constitution that promises all freedoms, including independence for Ukraine, yet in the past 14 years your tanks have rolled across Czechoslovakia and Afghanistan. You continue to threaten Poland. One month ago you shot a Korean airliner out of the sky, cutting short 269 innocent lives.

Whenever the world questions your actions, your great propaganda machine is mobilized to twist the truth and to lie. Unfortunately, many people believe those lies. And among them are innocent children, like Samantha Smith, who says that she still trusts you.

We don’t trust you. We Americans of Ukrainian descent who survived your 1932-33 manufactured famine which destroyed 20 percent of the people of Ukraine; we Americans of Ukrainian descent whose forebearers immigrated to these shores, like millions of Americans before them, to enjoy the freedoms not available elsewhere; and, we Americans of Ukrainian descent who were born in Rochester, Los Angeles, Chicago, Philadelphia, Cleveland, New York and the other great cities and towns of America – we want you to know that this is just the beginning.

We who have lived in Ukraine or learned about our heritage from our parents and grandparents, we want you to know that we have come of age in America. We have come of age as Americans and as communicators. Utilizing all of the forums available to us in this land of liberty, we are going to tell our fellow Americans about the real Soviet Union.

And we are ready to meet head on the propaganda machine that we know you will launch against us. We know you want to discredit us. But you will not succeed. For when you shot down the Korean airliner, and lied about it, the world finally understood what you really are.

We have come here from more than 50 cities, more than 5,000 strong to remind the world that 50 years ago you murdered 7 million Ukrainians by purposely starving them to death.

Almost half – 3 million – were little innocent children, many of whom died alone, without their mothers and fathers, in mass camps. Their bodies have long since decayed in mass graves in the black earth of Ukraine. You took the breadbasket of Europe and you laid it to waste. And then you lied about it.

You refused international aid to the starving masses of Ukraine. You shot people who tried to find food You erected watchtowers across Ukraine to better be able to spot people fleeing the villages. You turned them back to starve.

We have come here to tell the world that this assault on the Ukrainian nation – its people, its language, its culture and its religions – continues today. You liquidated the Ukrainian Autocephalous Orthodox Church headed by Metropolitan Vasyl Lypkivsky, and you liquidated the Ukrainian Catholic Church headed by Patriarch Josyf Slipyj. Many of Ukraine’s finest writers, and the flower of its cultural elite languish in the gulag and psychiatric prisons in internal exile far from Ukraine.

The 1932-33 famine in Ukraine was a deliberate act of genocide – the only man-made famine in the history of the world. Although today your methods are different, your goal remains the same – you want to destroy the Ukrainian identity.

Your current leadership is aware of the genocidal famine and today’s Russification policies. But they continue to deny them. Your history books make no mention of them. The Ukrainian Famine of 1932-33 has not entered into Western consciousness as it should have. It became the “forgotten holocaust.” But it is forgotten no longer. In the tragic death of the 269 aboard the Korean airliner, there is a new awareness of what you are.

We, Americans of Ukrainian descent, together with all Americans and people of the world who respect human life, and value human liberty, will see to it that those who died in your man-made famine in Ukraine; that those who died aboard the Korean airliner, that those who continue to suffer under your dictatorship – we will see to it that they did not die, nor will they suffer, in vain.

LINK: The Ukrainian Weekly, Parsippany, NJ, October 9, 1983, http://www.ukrweekly.com/old/archive/1983/418313.shtml

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=============================================================
U.S.-Ukraine Business Council (USUBC) www.usubc.org.
Promoting U.S.-Ukraine business & investment relations since 1995. 
=============================================================
11.  18,000 ATTEND UKRAINIAN FAMINE MEMORIAL EVENTS IN D.C.
Huge crowd rallies at Washington Monument

By Roma Hadzewycz, The Ukrainian Weekly, Ukrainian National Association, Parsippany, NJ, Oct 9, 1983, No. 41, Vol. LI 

WASHINGTON – Thousands of Ukrainians gathered in the shadow of the Washington Monument on Sunday morning, October 2, to mourn those of their kinsmen who had perished in the Great Famine of 1932-33 and to renew their pledge to always remember and to never allow the world to forget the holocaust inflicted upon the Ukrainian nation by the Soviet regime.

They began arriving shortly after 9 a.m. in preparation for the 10 a.m. rally. By the time the program began, the grounds near the Sylvan Theater were filled with a sea of placards and banners, some identifying the hometowns of the groups in attendance or the organizations present, others scoring the USSR for crimes against humanity such as the artificially created famine, and still others warning the free world to beware of the ever-present Soviet threat.
During the two-and-a-half-hour rally, the participants heard speakers – including a representative of President Ronald Reagan and Rep. Don Ritter of Pennsylvania – expressing sympathy for the loss of 7 million lives and lauding the Ukrainian nation’s courage and continued resistance to Soviet Communist subjugation.
As the rally progressed and buses carrying Ukrainians from throughout the United States continued to arrive, the crowd of 6,000 tripled in size to an estimated 18,000, according to Washington police.
The rally and the subsequent march, demonstration and memorial concert at the Kennedy Center, were the culmination of a series of events held during the Great Famine Memorial Week in the nation’s capital.
The rally got under way with the singing of “The Star-Spangled Banner” by Jarema Cisaruk, a member of the Ukrainian Bandurist Chorus of Detroit, and brief welcoming remarks by Dr. Peter G. Stercho, chairman of the National Committee to Commemorate Genocide Victims in Ukraine, a community organization that sponsored the week’s events.
Invocations were then delivered in Ukrainian by Metropolitan Mstyslav of the Ukrainian Orthodox Church, and in English by Pastor Wladimir Borowsky of the Ukrainian Evangelical Alliance of North America.
Metropolitan Mstyslav was accompanied that day by three other Ukrainian Orthodox hierarchs: Archbishop Mark of New York, Archbishop Constantine of Chicago and Bishop Wolodymyr Didowycz of Germany.
Metropolitan Mstyslav noted in his prayer that the purpose of the rally was “to bow our heads before the known and unknown graves of the millions of Ukrainian martyrs who died 50 years ago in the agony of death by starvation.”
Three symbolic black coffins, each marked “7,000,000 Ukrainians murdered,” were carried onto the stage, as members of the Plast and ODUM Ukrainian youth organizations formed an honor guard. Pastor Borowsky then delivered the English-language invocation, stating: “we are here to redeem from oblivion” the 7 million who died in the Great Famine.
Conduct of the rally program was then assumed by Dr. Myron B. Kuropas, former special assistant for ethnic affairs to President Gerald R. Ford.
Dr. Kuropas welcomed the representative of President Reagan, Morton Blackwell, special assistant for public liaison.
 
Mr. Blackwell proceeded to read a message from the president, the full text of which follows.
PRESIDENT RONALD REAGAN’ MESSAGE
“I am pleased to join those gathered for this ceremony honoring the memory of the millions who died in the Ukrainian Famine of 1932-33.
“This event provides an opportunity to remember those who suffered and died during the farm collectivization and subsequent forced famine and period of severe repression. That attempt to crush the life, will and spirit of a people by a totalitarian government holds important meaning for us today.
“In a time when the entire world is outraged by the senseless murder of 269 passengers on Korean Airlines Flight 007, we must not forget that this kind of action is not new to the Soviet Union.
“That the dream of freedom lives on in the hearts of Ukrainians everywhere is an inspiration to each of us.
“I commend your participation in this special observance and the moral vision it represents. May it be a reminder to all of us of how fortunate we are to live in a land of freedom.”
U.S. CONGRESSMAN RITTER’S ADDRESS 
Next to address the rally was Rep. Ritter, who is chairman of the Ad Hoc Committee on the Baltic States and Ukraine and a member of the Congressional Helsinki Commission.
Rep. Ritter began his remarks in Ukrainian, saying: “Today, my dear friends, I honor the 7 million who died in the famine/holocaust and the millions who lived through those terrible years. But that is not enough. Today, I devote myself with all my heart and soul to the cause of freedom for our oppressed brothers and sisters living in Ukraine.”
“We are here to tell the story to the world of the people who suffered, the victims, the survivors,” he said. “Yes, we want the world to know about this crime against humanity, not that they may feel sympathy towards the victims. That is given. But, even more important is that the world better understand that the disease of totalitarian control over people longing to be free is what creates holocausts.”
He concluded his speech, too, in Ukrainian. “May the memory of those who died live on in our hearts and in the hearts of all Americans so that the flame of freedom for Ukraine will never die. Long live the flame of freedom. Glory to Ukraine,” he said. (The full text of Rep. Ritter’s address appears on page 6.,
A message of sympathy was delivered by Rabbi Andrew Baker, Mid-Atlantic regional chairman of the American Jewish Committee. “We share memories of suffering in the Soviet Union. We also share the hope that our brethren, locked behind an iron curtain, will one day be free,” he said.
He continued: “We are, of course, gathered here to recall a very specific event of unspeakable horror – the enforced famine and the intentional death of millions of Ukrainians. As one reads the first-person historical accounts, as one examines the photographic evidence, the shock and revulsion are nearly overwhelming. But it is not only the monstrous crime at which one recoils. It is the willingness of so many to look the other way, of governments to carry on with ‘business as usual,’ and of people quick to relegate such events to the dusty corners of distant history.
“We Jews share with you the experience of such horrors in our own recent history and the experience of a world quick to close its eyes, quick to forget what had taken place. We join with you in the firm belief that only through remembering can we hope to ensure that such evil deeds will not recur.”
Rabbi Baker then noted: “We share in your memories on this day and in your hopes that we all may learn from them. For our sake and the sake of our children we can do nothing less.”
KEYNOTE ADDRESS 
The keynote Ukrainian-language speaker was John O. Flis, newly re-elected chairman of the Ukrainian American Coordinating Council and supreme president of the Ukrainian National Association.
“When they were dying – the bells did not toll. And no one wept over them … And there were millions of them. At least 7 million, but there may have been 10 million or more. Millions of children, women and men, our sisters and brothers by blood – Ukrainians.
That is why, he said, “it is our sacred duty to ourselves remember and to make others aware of history’s greatest crime, its perpetrators and its victims.”
He then went on to point out that Ukrainians should recall “this dark night” of Ukrainian history with the hope that “a new morn” will bring with it a better fate for the Ukrainian nation.
In the memory of those millions of Ukrainian martyrs of the Great Famine, Mr. Flis urged, “let us pledge that we will do all that is possible to see to it that Ukraine does indeed get its own Washington with his righteous law.”
Former Soviet dissident Vladimir Bukovsky and Marek Czyselczyk, a representative of the Solidarity trade union, also spoke at the rally.
The KAL incident represents “just a drop of blood into the ocean of misery caused by the Soviets,” said Mr. Bukovsky, referring to the recent downing of a Korean passenger jet. Millions of others died in the collectivization campaign during the famine, the purges, the show trials, he noted, adding to this list of Soviet horrors the tragedies of the Baltic States, Ukraine, Hungary, Czechoslovakia, Afghanistan and Nicaragua.
The Solidarity representative expressed his sympathy for the famine victims, and, speaking as a Pole, noted that it is his sincere hope that both the Ukrainian and Polish nations will one day live in democracy.
“May the free flag of Poland fly over Warsaw, and may the free flag of Ukraine fly over Kiev,” he said. “Long live free Poland, long live free Ukraine.”
Other speakers who addressed the rally participants were: Chris Gersten, chairman of the Freedom Federation, a coalition of 19 ethnic organizations; Dr. Mario Lopez Escobar, Paraguayan ambassador to the United States and chairman of the Organization of American States; Maj. Gen. (ret.) George Keegan, former chief of intelligence of the U.S. Air Force and current chairman of the Congressional Advisory Board; Mykola Plawiuk of the World Congress of Free Ukrainians; Ulana Mazurkevich of the Ukrainian Human Rights Committee of Philadelphia; and Stephen Procyk, executive member of the National Committee to Commemorate Genocide Victims in Ukraine and chairman of its Washington branch.
Messages were received from many members of Congress, among them the following senators: Rudy Boschwitz (R-Minn.), Dave Durenberger (R-Minn.), John Glenn (D-Ohio), Mark O. Hatfield (R-Ore.), John Heinz (R-Pa.), Frank R. Lautenberg (D-N.J.), Carl Levin (D-Mich.), Charles McC. Mathias Jr. (R-Md.), Daniel P. Moynihan (D-N.Y.), Charles H. Percy (R-Ill.), Donald W. Riegle Jr. (D-Mich.), Arlen Specter (R-Pa.) and Edward Zorinsky (D-Neb.).
The following representatives also sent messages: Glenn M. Anderson (D-Calif.), Frank Annunzio (D-Ill.), Sherwood L. Boehlert (R-N.Y.), Philip M. Crane (R-Ill.), Brian J. Donnelly (D-Mass.), Hamilton Fish Jr. (R-N.Y.), Bill McCollum (R-Fla.), Henry J. Nowak (D-N.Y.), Mary Rose Oakar (D-Ohio), Frank R. Wolf (R-Va.) and Gus Yatron (D-Pa.).
Messages were later received from Reps. Joseph P. Addabbo (D-N.Y.), Mario Biaggi (D-N.Y.), Edward F. Feighan (D-Ohio) and Samuel S. Stratton (D-N.Y.).
In addition, Gov. Dick Thornburgh of Pennsylvania, and Canadian Member of Parliament Jesse P. Flis sent greetings to the rally participants.
At the conclusion of the rally Dr. Stercho once again took the podium, this time to thank all the participants. Msgr. Walter Paska, who appeared at the rally in the name of Archbishop-Metropolitan Stephen Sulyk who is in Rome at the World Bishops Synod, offered the benediction.
The program concluded with a performance by the Ukrainian Bandurist Chorus directed by Hryhory Kytasty, which presented two selections, a Ukrainian patriotic song and “God Bless America.” The rally was formally closed with the singing by all present of the Ukrainian national anthem.

NOTE:  http://www.ukrweekly.com/old/archive/1983/418301.shtml; Check out The Ukrainian Weekly’s extensive famine archives:  http://www.ukrweekly.com; (To see a copy of the official march poster click on http://www.artukraine.com/famineart.armstrong.htm.)
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=========================================================

Receiving more than one copy of the AUR please contact us.
=========================================================
12.  THEY CAME FROM NEAR AND FAR TO COMMEMORATE THE
VICTIMS OF THE GREAT FAMINE IN UKRAINE 1932-1933
To make others aware of the Soviets’ horrible crime against humanity
By Marta Kolomayets, The Ukrainian Weekly, Parsippany, New Jersey, Sunday, October 9, 1993. 
WASHINGTON – They came from all over the United States; they came by bus, by car, by train and by plane. They all converged upon the nation’s capital. Some 18,000 Ukrainian Americans gathered at the Washington Monument on Sunday, October 2, for one reason: they came to commemorate the millions of victims of the Great Famine in Ukraine 1932-33.
Some had carried the memory of the tragedy in their hearts and in their minds for 50 years. Some knew only of the genocide through stories told by parents and relatives. Still others, second- and third-generation Ukrainians learned of the holocaust through English-language accounts in the Ukrainian press and through word of mouth. They all came to honor the memory of innocent victims – Ukrainian brothers and sisters – and to make others aware of the Soviets’ horrible crime against humanity.
Pawlo Malar, of Syracuse, N.Y., was an eyewitness to the famine in the Poltava region. He, along with a full bus of Plast members and parishioners of St. John’s Ukrainian Catholic and St. Luke’s Ukrainian Orthodox churches, traveled to Washington to rightfully commemorate the great tragedy.
“As a 22-year-old student in the city, I saw the trucks coming around to pick up the corpses, I saw death all around me,” he stated, recalling the famine years. “And through the years I have tried to spread the word about the famine,” he added. Mr. Malar said he participated in the 15th, 25th and 40th year commemorations of the famine held in the diaspora. He is the author of a trilogy “Zolotyi Doshch,” in which he devotes several chapters to the famine.
On Sunday he came to Washington because he feels the Reagan administration is not apathetic to the politics of the Soviet Union, as administrations in the past were.
He was one of many demonstrators who arrived as early as 9:30 a.m. The chartered buses from various cities kept pulling up near the Washington Monument to let rally-goers off. The dark sky, scattered with rain clouds, seemed almost appropriate for the somber event.
By 10:30 a.m. the masses extended to either side of the stage and stretched way back to the Washington Monument, a distance of several hundred feet. The sun started breaking through the clouds and the umbrellas were folded and put away.
The people still kept coming; chartered buses from all parts of the United States – the Rochestarians carried their symbolic coffins, imprinted with the words “7,000,000 Ukrainians Murdered”; the Plast members assembled, staking out a good piece of land to accommodate 1,000 uniformed members of all ages.
Women in embroidered blouses and dark skirts, members of the Ukrainian National Women’s League of America and the Ukrainian Gold Cross listened attentively to the speakers on the stage. Eleven full buses from the Philadelphia area carried both young and old to the commemorations in Washington.
Among the sea of faces, signs proclaiming all the cities and towns represented emerged. They read San Diego; Los Angeles; Chicago; Dayton, Solon, Youngstown (Ohio); Pittsburgh, Monessen (Pa.); Buffalo (N.Y.); Hartford (Conn.); Detroit; Richmond (Va.); Trenton (N.J.); Boston; New York and Baltimore. The list of cities grew longer and longer as the rally continued past noon. Ukrainians from Texas, Florida, Rhode Island, and Washington made their way through the crowds.
Signs, some meticulously printed and others scrawled in a hurried fashion, were carried by many of the demonstrators. They carried such slogans as “The West Must Not Forget,” “Whole Ukrainian History is Holocaust,” “7,000,269 Murdered – 1933 Soviet Genocide in Ukraine, 1983 Soviet Attack on KAL 007.”
As the solemn march to the Soviet Embassy began the demonstration took on a somber tone. The uniformed members of Plast and ODUM gave the march a formal air, followed by representatives of women’s organizations and communities.
The Ukrainian Orthodox League, numbering over 200 from New Jersey, Pennsylvania, Indiana and Illinois, marched together, caught up in the spirit of unity which, their president Dr. Gayle Woloschak remarked, has prevailed since their summer convention.
Marching the mile-long route from the Washington Monument to the Soviet Embassy, the Ukrainian Americans conscientiously informed passers-by of the great tragedy perpetrated upon the Ukrainian people by the Soviet regime.
A young marcher from St. Mary’s parish in Solon, Ohio, remarked “I’ll bet you could not even find a handful of people on the street who know about this tragedy,” and continued marching on proudly with his group, which had traveled 10 hours to get to Washington.
“We’re a small community in Richmond, Va.,” remarked Ihor Taran in a southern drawl, “but we’re aware of the famine and we came here today to commemorate the memory of the victims. My parents came from Zaporizhzhia and Kiev and I’ve grown up being aware of the tragedy of the genocide,” he said.
A handful of marchers from Kentucky, representing the cities of Louisville and Lexington, were organized by the local UNA branch and had traveled to Washington to commemorate the event on a national level. “We’ve had local television and press coverage in Kentucky,” Oksana Mostovych stated.
Road-weary Chicagoans who spent 17 hours on a chartered bus, their travels extended due to bad weather in Pennsylvania, arrived in Washington on Friday. Many of them spent the day visiting U.S. senators and congressmen with fellow members of Americans for Human Rights in Ukraine.
The first-, second- and third-generation Ukrainian Americans who have never experienced the tyranny of the Soviet system took part in the commemorations. So did newly arrived Soviet emigres. Former dissident Nadia Svitlychna and her entire family showed up in Washington, as did former political prisoner Valentyn Moroz, who now resides in Toronto with his wife, and recent defector Victor Kovalenko, presently a Plast member in Philadelphia.
The United States Ukrainian community was not the only Ukrainian community represented. Torontonians came down by bus to observe U.S. national famine commemorations. One Canadian student remarked that he thought it was important for Canadians also to take part in one of the largest commemorations of the 50th anniversary of this holocaust. Ukrainians from Australia and Europe took part in the commemorations as did many non-Ukrainian friends of Ukrainians.
Maria Petrauskas – dressed in traditional Lithuanian garb – and her daughter Solamaja, joined the masses of Ukrainians at the Washington Monument. “We have always known about the famine, today we come out to the demonstration in solidarity with our oppressed brothers,” Solamaja said.
Some of the marchers, too old to walk the route of the march, were driven to the embassy to watch the crowds assemble and hear the statement addressed to the Kremlin. Hlib Naumenko of St. George’s Church in Yardville, N.J., who was 23 at the time of the famine, said that his family in Poltava was saved by eating gruel even dogs refused to eat. “Today, I come to remind myself of those days and to make others aware,” he said, slowly making his way to a bench.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
13.  18,000 UKRAINIANS PROTEST NEAR SOVIET EMBASSY IN WASHINGTON

By George B. Zarycky, The Ukrainian Weekly, Parsippinany, New Jersey, Sunday, October 9, 1983
WASHINGTON, D.C. – An estimated 18,000 Ukrainians, marching in a phalanx that at one point stretched nearly a mile, assembled within 500 feet of the Soviet Embassy here on Sunday afternoon, October 2, to commemorate the 50th anniversary of the artificial famine in Ukraine which killed 7 million people in 1932-33.
As the marchers moved down 16th Street toward the embassy, many carrying colorful banners castigating the Soviet regime, they were met by a large contingent of uniformed police, who had cordoned off the block between K and L streets near the embassy, which is between L and M streets. Over 15 blue Metro Police cruisers lined the street, while others were parked bumper to bumper sealing off both ends of the block.
Police had expected a group of some 5,000 people, but as row after row of demonstrators continued to stream down 16th Street, it soon became clear that at least three times as many were at the rally. The first to arrive at the police barricades were members of the Plast Ukrainian Youth Organization – 1,000 strong – who marched in uniformed formations behind a large banner. It took another 40 minutes for the rest of the huge crowd to make its way from the Washington Monument.
As the crowd continued to swell, many groups were forced to fan out on either side of K Street to keep the intersection clear.
At about 2 p.m., Orest Deychakiwsky, a 27-year-old staff member of the Congressional Helsinki Commission, read an open letter to the Kremlin.
 
Surrounded by a sea of demonstrators and reporters, Mr. Deychakiwsky called the Soviet-engineered famine “a deliberate act of genocide” against the Ukrainian people, and warned the Kremlin that the Ukrainian community in the United States would continue to “tell our fellow Americans about the real Soviet Union.” (For the full text of Mr. Deychakiwsky’s remarks, see page 6.)
Chastising the Soviets for the invasion of Afghanistan, the shooting down of Korean Airlines Flight 007 and the continuing policies of Russification in the non-Russian republics, Mr. Deychakiwsky said that the world is finally becoming more aware of the nature of the Soviet system.
“We Americans of Ukrainian descent, together with all Americans and people of the world who respect human life – and value human liberty – will see to it that those who died in your man-made famine in Ukraine, that those who died aboard the Korean airliner, that those who continue to suffer under your dictatorship – we will see to it that they did not die, nor will they suffer, in vain,” he said.
The march itself began at the Washington Monument following a special famine commemorative program. With parade marshals wearing blue-and-gold armbands issuing instructions, the demonstrators marched north up 15th Street, the southbound lanes of which were closed to traffic. As motorists looked on, marchers made their way past government buildings for several blocks before turning left onto Pennsylvania Avenue.
While the demonstrators filed past Presidential Park directly across the avenue from the White House, curious onlookers came forward to ask what the march was all about or to take famine literature being distributed by several parade marshals.
From the White House, the marchers snaked through tree-lined residential streets with elegant brownstones before turning north again on 16th Street.
Although the march was called to commemorate the Great Famine, many of the demonstrators carried placards denouncing Soviet aggression, calling for freedom of religion in Ukraine or protesting the downing of the Korean passenger plane.
 
One sign read “Koreans and Ukrainians united against the USSR,” while another said “Stop KGB infiltration in U.S. courts,” a reference to the government’s use of Soviet-supplied evidence in denaturalization proceedings against East Europeans suspected of collaborating with the Germans during World War II.
Most, however, dealt with the anniversary of the famine and its 7 million victims, with inscriptions such as “The West must not forget” and “Moscow before tribunal of justice.” One group, from Rochester, N.Y., carried three makeshift black coffins inscribed with white lettering which read “7,000,000 Ukrainians murdered.”
While the vast majority of the demonstrators were Ukrainian Americans, some from as far away as Chicago, Ohio and upstate New York, there was a large contingent from Canada. A few of the protesters were non-Ukrainians including a Lithuanian mother and daughter who carried a sign, complete with a hammer and sickle, that read “Wanted for murder.”
Although the over-all tone of many of the signs was one of anger and outrage, the pervasive mood of the demonstration was one of seriousness and restraint in deference to the somber anniversary of what many demonstrators called the “unknown holocaust.” Although there were intermittent chants of “Freedom for Ukraine,” most of the demonstrators marched in silence or talked quietly among themselves in keeping with the wishes of rally organizers.
Once assembled at the intersection of K and 16th streets, about one and a half blocks from the Soviet Embassy, the demonstrators presented an impressive sight, with marchers massed against the police line and on K Street on both sides of the intersection. Several, including eyewitnesses who had survived the famine, clustered around reporters and photographers from the news media.
After Mr. Deychakiwsky read the open letter to the Kremlin, rally participants sang the Ukrainian national anthem, “Shche ne vmerla Ukraina,” and scores released the black balloons they had been carrying as mournful symbols of the famine and its victims. As the ballons drifted gently into the clear Washington sky, the demonstrators began to disperse, many to get ready for a 3 p.m. memorial concert at the Kennedy Center. Most seemed to conclude that the rally had been orderly, dignified and an unequivocal success.
 
LINK: http://www.ukrweekly.com/old/archive/1983/418302.shtml; to see a copy of the official poster created for the freedom march click on http://www.artukraine.com/famineart.armstrong.htm.
——————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
“ACTION UKRAINE REPORT – AUR”
A Free, Private, Not-For-Profit, Independent, Public Service Newsletter

With major support from The Bleyzer Foundation, Kyiv, Ukraine
Articles are Distributed For Information, Research, Education, Academic,
Discussion and Personal Purposes Only. Additional Readers are Welcome.
LINK TO THE AUR 2008 ARCHIVE: http://www.usubc.org/AUR/
SigmaBleyzer/The Bleyzer Foundation Economic Reports
“SigmaBleyzer – Where Opportunities Emerge”
 
The SigmaBleyzer Emerging Markets Private Equity Investment Group and The Bleyzer Foundation offers a comprehensive collection of documents, reports and presentations published by its business units and organizations.
 
All publications are grouped by categories: Marketing; Economic Country Reports; Presentations; Ukrainian Equity Guide; Monthly Macroeconomic
Situation Reports (Romania, Bulgaria, Ukraine).
 
You can be on an e-mail distribution list to receive automatically, on a monthly basis, any or all of the Macroeconomic Situation Reports (Romania,
Bulgaria, Ukraine) by sending an e-mail to mwilliams@SigmaBleyzer.com.
“UKRAINE – A COUNTRY OF NEW OPPORTUNITIES”
 
TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR, several times a month, please send your name, country of residence, and e-mail contact information to morganw@patriot.net. Information about your occupation and your interest in Ukraine is also appreciated.
 
If you do not wish to read the ACTION UKRAINE REPORT please contact us immediately by e-mail to morganw@patriot.net.  If you are receiving more than one copy please let us know so this can be corrected. 
 
SPAM & BULK MAIL BLOCKERS ARE A REAL PROBLEM                 
If you do not receive a copy of the AUR it is probably because of a SPAM OR BULK MAIL BLOCKER maintained by your server or by yourself on your computer. Spam and bulk mail blockers are set in very arbitrary and impersonal ways and block out e-mails because of words found in many news stories or the way the subject line is organized or the header or who know what.
 
Spam blockers also sometimes reject the AUR for other arbitrary reasons we have not been able to identify. If you do not receive some of the AUR numbers please let us know and we will send you the missing issues. Please make sure the spam blocker used by your server and also the one on your personal computer, if you use a spam blocker, is set properly to receive the Action Ukraine Report (AUR).
HOTMAIL.COM AND YAHOO.COM

We are also having serious problems with hotmail and yahoo servers not delivering the AUR and other such newsletters. If you have an e-mail address other than hotmail or yahoo it is better to use that one for the AUR.
 
ACTION UKRAINE PROGRAM – SPONSORS
“Working to Secure & Enhance Ukraine’s Democratic Future”

1.  THE BLEYZER FOUNDATION, Dr. Edilberto Segura,
Chairman; Victor Gekker, Executive Director, Kyiv, Ukraine;
Additional supporting sponsors for the Action Ukraine Program are:
2. UKRAINIAN FEDERATION OF AMERICA (UFA), Zenia Chernyk,
Vera M. Andryczyk, President; Huntingdon Valley, Pennsylvania
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, kau@ukrnet.net
4. RULG – UKRAINIAN LEGAL GROUP, Irina Paliashvili,
President; Kyiv and Washington, general@rulg.com, www.rulg.com.
5. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX  77024; bill.hunter@volia-software.com.
6. U.S.-UKRAINE BUSINESS COUNCIL (USUBC), Washington,
D.C., Promoting U.S.-Ukraine business investments since 1995.
7. UKRAINIAN ORTHODOX CHURCH OF THE USA, Archbishop
Antony, South Bound Brook, New Jersey, http://www.uocofusa.org
8. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
9. U.S.-UKRAINE FOUNDATION (USUF), Nadia McConnell, President;
John Kun, Vice President/COO; http://www.USUkraine.org
10. WJ GROUP of Ag Companies, Kyiv, Ukraine, David Holpert, Chief
Financial Officer, Chicago, IL; http://www.wjgrain.com/en/links/index.html
11. EUGENIA SAKEVYCH DALLAS, Author, “One Woman, Five
Lives, Five Countries,” ‘Her life’s journey begins with the 1932-1933
genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
12. ALEX AND HELEN WOSKOB, College Station, Pennsylvania
13. SWIFT FOUNDATION, San Luis Obispo, California
14. DAAR FOUNDATION, Houston, Texas, Kyiv, Ukraine.
 
PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer, The Bleyzer Foundation
Emerging Markets Private Equity Investment Group;
President, U.S.-Ukraine Business Council (USUBC)
1701 K Street, NW, Suite 903, Washington, D.C. 20006
Tel: 202 437 4707; Fax 202 223 1224
 

Power Corrupts and Absolute Power Corrupts Absolutely.
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================

Leave a comment

Filed under Uncategorized

AUR#910 Sep 24 Ukraine Macroeconomic Update; Joint Stock Company Law; IBM Ukraine, Russian Passports

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

Ukrainian History, Culture, Arts, Business, Religion, Economics,
Sports, Government, and Politics, in Ukraine and Around the World       
 
NEW JOINT STOCK COMPANY LAW, MAJOR STEP FORWARD
“It is hard to overestimate the relevance and importance of this piece of legislation for
the improvement of the investment climate and the general economic situation in Ukraine. 
Adoption of this law is a significant step forward in bringing Ukraine to world standards
in the sphere of corporate governance and ownership issues.”
                     
ACTION UKRAINE REPORT – AUR – Number 910
Mr. Morgan Williams, Publisher and Editor, SigmaBleyzer
WASHINGTON, D.C., WEDNESDAY, SEPTEMBER 24, 2008
 
INDEX OF ARTICLES  ——
Clicking on the title of any article takes you directly to the article.               
Return to Index by clicking on Return to Index at the end of each article
Monthly Analytical Report: By Olga Pogarska, Edilberto L. Segura
SigmaBleyzer Emerging Markets Private Equity Investment Group, Kyiv
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Wed, Sep 24, 2008
 
ANALYSIS: By Armen Khachaturya, Partner, Asters and Asters law firm legal team, Kyiv
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Wed, Sep 24, 2008
 
Sokrat Daily, Sokrat Financial Company, Kyiv, Ukraine, Thursday, September 18, 2008
 
4NEW JOINT STOCK COMPANY LAW ADOPTED BY VERKHOVNA RADA OF UKRAINE 
“Hard to overestimate the relevance and importance of this piece of legislation.”
Analysis & Commentary: Arzinger & Partners Ukraine, Kyiv, Ukraine, Thu, Sep 18, 2008                                                                         
 
Adam Smith Conferences’, London, UK, Monday, September 22, 2008
 
International Investment Summit of Donetsk Region, Donetsk, Ukraine, Wed, Sep 24, 2008
 
Large international computer technology and consulting corporation is member ninety-two 
U.S-Ukraine Business Council (USUBC), Washington, D.C., Monday, September 22, 2008
 
8PROCREDIT RECEIVES US$20 MILLION LOAN AGREEMENT FROM INTERNATIONAL FINANCE CORPORATION (IFC)
International law firm Salans acts as legal advisor to IFC (International Finance Corporation)
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Wednesday, September 17, 2008
 
Jackie Stewart, Viasat, Stockholm, Sweden, Tuesday, September 23, 2008
 
Too many indicators are deteriorating and too many warning lights flashing
LEX TEAM: Macroeconomics and Markets, Financial Times, London, UK, Sun, Sep 21 2008
 
11 UKRAINE AND GEORGIA IN NATO NOT SEEN TO BE IN U.S. INTEREST 
Former U.S. ambassador to Moscow Jack Matlock said on Tuesday 
By Susan Cornwell, Reuters, Washington, Tuesday, September 16, 2008 
Interfax, Moscow, Russia, Saturday, September 20, 2008 
 
Reuters, New York, New York, Monday, September 22, 2008 
BYuT’s priority is to re-establish the democratic coalition
BYuT Newsletter Inform, Issue 86, Kyiv, Ukraine, Monday, 22 September 2008
 
15 DON’T BE FOOLED AGAIN
Commentary: BYuT Newsletter Inform, Issue 86, Kyiv, Ukraine, Mon, 22 Sep 2008
 
Window On Eurasia: by Paul Goble, Vienna, Tuesday, September 9, 2008
 
17 RUSSIAN PASSPORTS AS MOSCOW’S GEOPOLITICAL TOOL
Kremlin uses handing out of Russian passports to destabilize Ukraine
Analysis & Commentary: By Taras Kuzio, Eurasia Daily Monitor, Volume 5, Issue 176
The Jamestown Foundation, Washington, D.C., Wednesday, September 15, 2008
Window on Eurasia: by Paul Goble, Vienna, Tuesday, September 23, 2008

 

Interfax Central Europe, Warsaw, Poland, Tuesday, September 23, 2008
20 THE HISTORY IS COMPLEX, BUT THERE’S NO DOUBT CRIMEA IS PART OF UKRAINE 
The border with Russia was agreed at the UN, and talk of moving it now is dangerous.
Letter-to-the-Editor: By Ihor Kharchenko, Ambassador of Ukraine to the United Kingdom
The Guardian, London, UK, Wednesday, September 24, 2008
 
Analysis & Commentary: by Mihai Hareshan
Nine o’Clock, Bucharest, Romania, Monday, September 22, 2008
 
Op-Ed: By Mikheil Saakashvili, President of Georgia, The Washington Post
Washington, D.C., Tuesday, September 23, 2008; Page A21
 
23FUTURE OF VIKTOR YUSHCHENKO AND POLITICAL CRISIS IN UKRAINE
Analysis & Commentary: by Vadim Karasyov, Vitaly Portnikov, Kyiv
Eurasian Home, Moscow, Russia, Tuesday, September 16, 2008
===================================================
1
 UKRAINE MACROECONOMIC SITUATION, SEPTEMBER 2008
 
Monthly Analytical Report: By Olga Pogarska, Edilberto L. Segura
SigmaBleyzer Emerging Markets Private Equity Investment Group, Kyiv
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Wed, Sep 24, 2008
 
The entire Ukraine Macroeconomic Situation analytical report for September 2008, from SigmaBleyzer/The Bleyzer Foundation, a member of the U.S.-Ukraine Business Council (USUBC), www.usubc.org, is found below.  It is also found in the attachment to this e-mail in pdf format which includes seven detailed statistical charts in color.
 
SUMMARY
[1] In July, economic growth accelerated to 7.3% yoy due to a strong recovery in agriculture, bringing the cumulative growth back to 6.5% yoy. At the same time, continuing value added growth deceleration in other sectors gives reason to expect moderation of economic growth to about 6.3% yoy for 2008, despite a record high harvest.
[2] Thanks to above-target revenues and controlled expenditures, the consolidated budget balance was positive, reporting a 1.5% of GDP surplus in the first half of 2008. Despite good fiscal performance so far, the fiscal outlook for the rest of the year remains uncertain considering the sluggish privatization process, tighter borrowing conditions, increased expenditures related to unfavorable weather conditions and government plans to amend the 2008 budget raising further social liabilities.
 
[3] Inflationary pressures continued to soften as consumer prices fell by 0.5% month-overmonth in July. However, reducing annual inflation  below 20% may still be a challenging task for Ukrainian authorities.
 
[4] On the back of surging world commodity prices, Ukraine demonstrated record high export growth. However, the growth of imports  kept outpacing
exports, triggering further deterioration of foreign trade and, thus, current account balances.
 
[5] Though the economic links between Ukraine and Georgia are quite modest, the recent Russia-Georgia conflict may have far-reaching  consequences for the Ukrainian economy.
 
ECONOMIC GROWTH
 

Abrupt GDP growth deceleration in June was taken as a tentative sign of macroeconomic adjustment. However, GDP growth bounced back in July to 7.3% from a year earlier, bringing cumulative growth to 6.5% yoy.
 
The upsurge is mainly attributed to a recovery in agriculture, which more than offset weakening growth in industry and domestic trade, as well as a continuing slowdown in construction, education and healthcare.
Value added growth in agriculture reached 10.8% yoy for January-July backed by an outstanding harvest this year. As of August 1st, Ukraine had harvested 26.3 million tons of grain from about 60% of the total area under grain crops. Despite the recent floods that affected western Ukraine (which accounted for
about 15% of total grain production in 2007), the grain crop is expected to top 43 million tons, a 15-year record amount.
 
The increase in the overall harvest is attributed to good weather as well as an increase in planted area as the rise in food prices (both domestically and globally) was a strong incentive for agricultural producers.
The rich harvest this year will help to ease inflationary pressures in the country as soaring food prices were the main driver of consumer inflation since the second half of 2007. At the same time, while consumers take advantage of falling agricultural prices, producers (particularly small farm enterprises) may not fully reap the expected profits.
 
In July, the average price of wheat on the domestic market was UAH 807.5 ($166.5) per ton, representing a fall of almost 20% from June’s level and about 27% from March’s peak.
 
Given strong external demand, Ukraine’s grain exports may reach about 17.5 million tons (1), which would prevent a sharp fall in domestic prices, thus maintaining the financial stance of agricultural producers.
However, due to limited storage capacities and outdated and/or insufficient infrastructure, this potential may not be fully realized. Consequently, falling domestic prices on the back of rising production costs (due to more expensive fuel, fertilizers, freight, storage, etc.) may drag agricultural production down in the future. Indeed, despite possessing extensive black soil and having favorable climate conditions, Ukraine’s agricultural performance has been rather disappointing.
Insufficient investments, stemming from slow structural reforms, have turned Ukraine into a net importer of grain during 2000/2001 and 2003/2004. Over the last five years, the average crop yield was 45–50% lower than in the EU-27. (2) Supply side constraints and existing inefficiencies in the agricultural sector were among the main causes of recent spikes in food prices.
Timely and consistent implementation of comprehensive agricultural reform will help to expand crop production and other agricultural products, ensure a smooth food supply on the domestic market and build a competitive agricultural sector.
Over January-July, value added growth in the mining sector accelerated to 5.7% yoy. Faster growth in the sector was achieved thanks to an 8.2% yoy rise in output of non-energy minerals production and a 2.4% yoy increase in extraction of fossil fuels. Ukrainian producers and exporters of iron ore are taking advantage of booming iron ore prices, underpinned by strong demand for steel products in developing countries (particularly China, Russia and India).
 
High world energy prices (crude oil and natural gas) on the back of falling domestic production of these commodities stimulated extraction of thermal coal, which grew by 6.8% yoy in the first half of the year. Production of other fossil fuels, however, continued to decline.
 
Thanks to robust domestic and foreign trade, rising household disposable income (up by a real 14.7% yoy over the first half of 2008), value added in transportation and communication grew by 8.4% yoy, an unchanged rate compared to the first six months of the year.
Other sectors, however, demonstrated weaker growth. Industrial production continued to decelerate, demonstrating a 7.3% yoy increase in January-July compared to 7.5% yoy in 1H 2008. Growth in food processing slowed to 4.4% yoy, as a poor 2007 harvest continued to exact a toll on the industry. At
the same time, the outstanding harvest this year will help to improve industry performance in the second half of the year.
 
Despite soaring world steel and fertilizer prices, metallurgy and the chemical industry reported moderate 3.5% yoy and 5.2% yoy increases in production. Domestic shortages of coking coal, though partly compensated for by imports, and rallying iron ore prices continued to suppress metallurgical production. Rising production costs are the main reason for slower output growth in the chemical industry.
At the same time, the industry benefited from high world chemical prices, demonstrating growing export values and, consequently, profitability. According to State Statistics Committee of Ukraine, the share of profitable enterprises in the industry grew to 69.4% over the first five months of the year compared to 67.2% in the respective period last year, while the declared profits were 2.3 times higher in nominal terms.
 
Machine-building has remained the growth leader as its production grew by 28.7% yoy in January-July. At the same time, the growth was slightly weaker compared to 29.3% yoy demonstrated in 1H 2008, which may be attributed to weaker domestic demand for these products affected by slower credit
growth.
 
The coke- and oil-refining industry continued to be among the main contributors to a growth slowdown in the industrial sector as it reported a 21.4% yoy decline in output production, mainly on account of lower production of oil products.
Wholesale and retail trade performance continued to worsen as value added in the sector sharply decelerated to 11.8% yoy in January-July, down by 3 percentage points compared to 1H 2008. Deceleration in retail trade (turnover rose by 26.6% yoy in January-July vs. 29.8% yoy in January-June) may be attributed to slowing growth of real household disposable income as well as consumer credits.
 
However, as retail trade accounts for less than 30% of total domestic trade, (3) wholesale trade dynamics should be blamed for the sharp deceleration in
the sector. Despite buoyant foreign trade and improved agricultural performance, the sector’s performance may be attributed to a continuing decline in the construction sector (by almost 5% yoy in the first seven months of the year), decelerating industrial production, a high statistical base as well as changes in the administration of VAT.
 
Electronic administration of VAT, introduced in April this year, has impeded the functioning of company-mediators, artificially created to minimize VAT payments and/or receive fraudulent VAT refunds. The situation resembles that in 2005, when a drastic change in administration of taxes caused a sharp reduction in the number of mediators in the wholesale trade, thus leading to a notable decline in value added in the sector. (4)
 
As the new system of tax administration just recently started to function, it is expected that value added growth in domestic trade sector will continue to decelerate. In turn, this will negatively contribute to total GDP growth, as the sector accounts for almost 13%. Given also weaker growth of industrial production and continuing depression in construction, GDP growth may slow to 6.3% yoy for the whole year, regardless of the remarkable harvest this year.
 
FISCAL POLICY 
Over the first half of 2008, the consolidated budget posted a surplus of UAH 6.5 billion ($1.3 billion), which is equivalent to 1.5% of period GDP. The surplus was achieved thanks to over-fulfillment of consolidated budget revenues and below-target expenditures. Consolidated budget revenues were up by about 44% yoy in nominal terms, primarily on account of an almost 50% yoy rise in tax collections.
 
Proceeds from VAT rose by a nominal 60.4% yoy over the first half of 2008, reflecting robust economic growth, high inflation, buoyant imports, and improved tax administration.
 
Modernized customs procedures secured a 91% yoy increase in import duties, while strong growth in household income and improving profitability of
Ukrainian enterprises allowed for collection of 41% yoy and 53.3% yoy higher proceeds from personal income and corporate profit taxes respectively.
At the same time, the growth rate of tax collections in January-June was slightly lower than in the preceding period, which may be attributed to gradual cooling of the economy (in June, economic growth notably decelerated to 5.4% yoy versus 7.2% yoy in May).
Despite strong growth in fiscal revenues, the consolidated budget surplus shrunk almost in half in January-June compared to January-May, which may be attributed to better execution of budget expenditures as well as higher spending from the reserve fund.
 
In particular, expenditures from the general fund of the state budget were under-fulfilled by 5.5%. At the same time, the annual growth of consolidated budget expenditures slowed to a nominal 46.8% in January-June versus about 50% in the previous period.
 
The deceleration may be attributed to a high statistical base effect as the government started the second stage of implementing the Unified Tariff Scale for setting public sector employee salaries in June of last year, while realization of the next stage is planned for this fall. In contrast, the growth of capital expenditures notably accelerated in January-June 2008, picking up by almost 19% yoy in nominal terms compared to about 12% yoy growth in January-May.
 
Additional funds from the budget were allocated to finance infrastructure repair works following a storm that swept over western Ukraine in June of this year. Moreover, July’s severe flooding in western Ukraine may cause notable acceleration of budget expenditures in the coming months. At the end of July,
the parliament amended the budget, raising expenditures by UAH 5.8 billion ($1.2 billion), or by 2.5%, to liquidate in the aftermath of floods.
 
Though budget revenues were raised as well, leaving the targeted deficit unchanged, the likely revenue-expenditure execution mismatch will cause rapid deterioration in fiscal balance performance in the coming months.
Above-target revenues and under-fulfilled expenditures led to accumulation of substantial budget funds on the State Treasury accounts. By July 1st, the State Treasury had accumulated UAH 14.4 billion ($2.9 billion). This amount as well as continuing strong growth in budget revenues will be sufficient to meet increased government liabilities in the coming months. Moreover, the government still plans to amend the 2008 budget this fall, further raising social security payments.
 
The increase is substantiated by the need to adjust living standards with the inflation rate, which proved to be much higher than forecasted in the current budget law. At the same time, even if the budget is left unchanged, the outlook for the rest of the year looks quite uncertain. The government may fall short of the required funds to finance the targeted budget deficit due to the sluggish privatization process. Indeed, about 47% of the expected budget deficit is planned to be financed through privatization receipts.
 
However, as of August 1st only UAH 350 million ($71.5 million), or less than 4% of the targeted amount, was received into state coffers. Furthermore, it is planned that new domestic and external borrowing will constitute UAH 7.8 billion and UAH 8.1 billion respectively. For January-June, only 5.1% and 21% of the planned amounts respectively were received.
Moreover, due to tighter liquidity on both domestic and external markets, new borrowings might turn out to be a rather costly source of deficit financing. So far, the stock of public and publicly guaranteed debt grew by less than 1.0% year-to-date (ytd) to $17.7 billion at the end of June.
 
Due to hryvnia appreciation with respect to the US dollar and therefore other currencies, hryvnia denominated public and publicly guaranteed debt has declined by 3.2% since the beginning of the year and was less than 9% of projected full-year GDP.
 
MONETARY POLICY
 

The anti-inflationary program, which included stricter monetary policy, appreciation of the national currency and tight control over fiscal expenditures,
started to bear fruit amid an increasing supply of new harvest products. For the first time since April 2006, consumer prices fell by 0.5% month-over-month (mom) in July 2008. In annual terms, the disinflation trend strengthened as consumer price index growth declined to 26.8% in July, down from 29.3% in the previous month.
 
Deceleration of consumer price increases was attributed to a declining trend for foodstuff prices. Last year, unfavorable weather conditions, loose credit conditions as well as expansionary fiscal policy caused a sharp acceleration in food prices. Conversely, the good harvest this year coupled with NBU/government measures to curb inflation contributed to a 1.3% mom reduction in food prices, which brought annual growth down to 39% versus almost 44% yoy in June.
 
Fruits, vegetables and meat products respective price growth decelerated to 70.6% yoy, 3% yoy and 52.9% yoy in July versus 79.1% yoy, 33.1% yoy and 54.3% yoy in June. This was the most significant contributor to easing food inflation, offsetting the continuing increase in prices for bread, fish and fish products, sugar and confectionary. However, despite a positive trend, it is too early to see inflation relief.
 
[1] First, non-food and service tariffs inflation continued to pick up. In particular, growing utility tariffs (up by 12.3% yoy in July vs. 11.5% yoy in June), more expensive household appliances (up by 7.2% yoy in July), city transportation (up by 33.4% yoy), education and recreation services (up by 19.3% yoy and 15.4% yoy respectively) led to higher overall prices in the economy. Moreover, despite easing world crude oil prices, Ukraine’s retail fuel prices continued to pick up (by 47% yoy in July vs. 42.5% yoy a month before).
 
[2] Second, easing inflation provided some room for government authorities to allow a gradual pass-through of higher energy prices to consumers. Starting September 1st, tariffs for natural gas will be raised by about 13%-14% for households, the public sector and heating enterprises. The tariffs have remained unchanged since the end of 2006, although the price for imported natural gas (which accounts for almost ? of Ukraine’s total natural gas consumption) grew by about 38% at the beginning of 2008. (5)
 
[3] Third, producer price inflation continued to accelerate, reaching 46.3% yoy in July (up from 43.7% yoy a month ago).  Producers have been increasing their prices compensating for growing input costs, particularly surging raw materials prices and rising transportation costs. Strong external demand also contributed to a pick up in producer prices.
 
The divergence in the growth trajectories between producer and consumer prices may be explained by the existence of price regulations as well as the high share of exported goods. However, twice as high producer inflation creates significant pressures for consumer price growth in future periods.
 
[4] Fourth, monetary and exchange rate policies bore mixed results so far. The tightening of reserve and capital requirements, raising the NBU discount rate to 12%, sizable sterilization operations at the end of 2007/beginning of 2008 and appreciation of the national currency helped to subdue buoyant money supply and credit growth, thus contributing to easing inflation.
These measures, however, led to notable liquidity strains in the Ukrainian banking sector, requiring the NBU to support commercial banks with extra liquidity through its refinancing operations. During May-July, the NBU provided commercial banks with UAH 27.1 billion ($5.6 billion). Moreover, high domestic interest rates attracted robust foreign capital inflow to Ukraine.
 
To prevent a sharp national currency appreciation, the NBU had to intervene on the inter-bank forex market by buying out the surplus of foreign exchange. In July alone, net NBU purchases of foreign currency amounted to $2.5 billion and reached $4.5 billion for the last three months. Sizable forex interventions
spurred the National Bank to partially sterilize these amounts.
 
In July, it withdrew UAH 10.3 billion ($2.1 billion) from the market. The combined
result of these measures, however, was acceleration of monetary base growth to 41.6% yoy in July (up from almost 39% yoy in June).
 
At the same time, money supply (M3) growth decelerated to 47.5% yoy, down from 48.7% yoy in June, which was attributed to slower deposit growth. The latter, in turn, may be explained by a reduction of the hryvnia deposit rate amid improved banking sector liquidity.
 
At the same time, the importance of this source for banks’ credit creation may increase in the coming months as starting August 1st the NBU raised reserve requirements for commercial banks’ foreign funds attracted for less than 6 months to 20% (up from previous 4%).
 
So far, the growth of commercial banks credit portfolios slowed to 61.1% yoy in July. The NBU has been purposely cooling credit growth, in response to
growing concerns over banking sector vulnerability to various risks as well as the realization that the credit boom over the last several years notably contributed to inflationary pressures by driving consumption.
At the beginning of July, the government revised its year-end inflation forecast upwards to 15.9% yoy, up from the previous 15.3% yoy. However, given the above arguments, even the revised forecast looks overly optimistic, despite easing inflationary pressures in June-July. We forecast inflation to reach about 20% yoy this year.
INTERNATIONAL TRADE AND CAPITAL
 
Surging world commodity prices supported Ukraine’s strong export performance. In June, export of goods picked up by a record high 62.7% yoy, bringing the cumulative merchandise export growth to 40.7% yoy. By product breakdown, ferrous metals (up by 57% yoy over January-June), chemicals (up by 28.4% yoy), machinery and transport equipment (up by 44.3% yoy) were the main contributors to total export growth.
 
Following the enlargement of grain export quotas in April and their elimination at the end of May, export of agricultural products accelerated to 31.8% yoy in January-June, up from 27.8% yoy in the previous period.
In addition, growth of mineral products exports (mainly gasoline and coal) contributed strongly to the overall growth of merchandise exports, as their sales to foreign partners increased by 56.8% yoy in the first half of 2008, up from 27.3% yoy in January-April.
Despite remarkable export performance, Ukraine’s foreign trade balance continued to deteriorate as imports growth also sped up. On the back of high commodity prices and strong domestic consumption, imports of goods grew by 69.3% yoy in June, bringing cumulative growth to 55.3% yoy. Energy resources and machinery and transport equipment, the import values of which were up by 51% yoy and 60% yoy respectively, were the main contributors to total merchandise import growth.
 
As a result, the FOB/CIF merchandise trade deficit reached $9.8 billion, 2.3 times higher than in the first half of 2007. Considering merchandise trade performance, the current account gap this year may reach $14.4 billion. However, strong FDI inflow and still robust private sector borrowing from abroad will cover the forecasted CA gap.
OTHER DEVELOPMENTS AFFECTING INVESTMENT CLIMATE 
At the beginning of August, Moody’s Investors Service affirmed Ukraine’s long-term foreign and local currency ratings. The agency acknowledged declining external public debt, controllable fiscal situation and high international reserves. However, the rapidly widening current account gap amid volatile international financial markets was among the main reasons for keeping the rating unchanged.
 
According to agency estimates, FDI inflow will cover the CA deficit by 80% in 2008, increasing the country’s dependence on foreign financing in an uncertain environment.
The recent military confrontation between Georgia and Russia may have mixed but crucial consequences for Ukraine. Impact in the short-term on the Ukrainian economy is likely to be minimal as the economic links between Ukraine and Georgia are quite modest, but the conflict uncovered the latent flashpoints that could affect investor sentiments about Ukraine.
 
With a prolonged common history with Russia and a large ethnic Russian minority, Ukrainian society remains highly divided in choosing pro-Western or pro-Russian development.
 
Following Viktor Yushchenko’s victory in the 2004 presidential elections, the country declared its desire to join NATO and seek EU integration, a direction discordant with Russia’s efforts to retain its influence on former Soviet republics.
 
Moreover, according to the lease agreement signed in 1997, Russia’s Black Sea fleet, which was directly involved in the Russia-Georgia conflict, will be based in Crimea until 2017. Many political forces in Ukraine believe that this agreement should not be renewed, a position that would antagonize Russia.
 
Furthermore, the conflict may spur Ukraine’s aspirations to join NATO, which may further worsen Ukraine-Russia relations. Although it is very unlikely
that the “Georgian scenario” can play out in Ukraine, the rising geopolitical tensions in the region may adversely affect investor sentiment, which in turn may translate into lower FDI inflow and growing costs of borrowed resources for Ukraine.
 
Furthermore, Ukraine’s energy-extensive economy is almost entirely dependent on Russia’s energy imports. Deterioration of Ukraine-Russia relations in the aftermath of the Russia-Georgia conflict may result in a sharp increase in imported natural gas prices next year.
Though Ukraine demonstrated strong resilience to energy price shocks, a combination of higher energy prices, the coming presidential election and a fragile external environment caused by financial distress on international markets and a generally over-heated domestic economy may drag down economic growth in the coming year.
 
FOOTNOTES:
(1) An estimate of the Ukrainian Grain Association.
(2) Source: EC Memo/08/537 on Annual Crop Yield Forecast for 2008 as of August 7, 2008; State Statistics Committee of Ukraine, The Bleyzer Foundation estimate.
(3) Estimate based on wholesale and retail trade turnover data for 2007.
(4)  According to data released from the State Tax Administration of Ukraine at the beginning of July, thanks to the introduction of electronic administration of VAT, it identified about 170 companies that manipulated taxation in just one month.
(5) Natural gas tariffs for heating and power engineering enterprises remained unchanged since mid-2006.
———————————————————————————–
NOTE: To read the entire SigmaBleyzer/The Bleyzer Foundation Ukraine Macroeconomic Situation update report for September 2008 in a PDF format, including color charts and graphics click on the attachment to this e-mail or go to the following link, and click on Ukraine September 2008,
http://www.sigmableyzer.com/publications/monthly_reports
 
UKRAINE, BULGARIA, ROMANIA, & KAZAKHSTAN REPORTS
SigmaBleyzer/The Bleyzer Foundation also publishes monthly Macroeconomic Situation reports for Bulgaria, Romania and Kazakhstan. The present and past reports, including those for Ukraine can be found at http://www.sigmableyzer.com/en/page/532.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
2.  UKRAINE: MAJOR FEATURES OF THE NEW LAW ON JOINT STOCK COMPANIES

 
ANALYSIS: By Armen Khachaturya, Partner, Asters and Asters law firm legal team, Kyiv, Ukraine
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Wednesday, September 24, 2008
 
KYIV – On 18 September 2008 Ukrainian Parliament, the Verkhovna Rada, adopted by 358 affirmative votes the long awaited Law on Joint Stock Companies (the “New Law”).
 
As this voting coincided with political crisis in Ukraine it is to be seen if and when the President of Ukraine and the Chairman of the Verkhovna Rada complete all post-voting procedures required for the Law to come into force.
 
The New Law shall become effective six months following its official publication, which is expected to occur within 15 days of its execution by the President of Ukraine who must formally receive it from the Verkhovna Rada’s Chairman for review.
 
FOLLOWING NEW FEATURES INTRODUCED INTO THE CURRENT REGULATION
The New Law introduces the following major novelties to the current regulation of joint stock companies, as provided in the Civil Code of Ukraine, the Commercial Code of Ukraine, and the Law of Ukraine on Business Associations (collectively, the “Current Law”):
 
(1)  Two types of joint stock companies, an open joint stock company and a closed joint stock company, are renamed in the New Law into a public joint stock company and a private joint stock company. The number of shareholders in a private joint stock company may not exceed 100.
 
(2)  The founders of a joint stock company will be required to pay the full value (not 50 percent, as provided by the Current Law) of initially issued shares before convocation of the founding meeting of a joint stock company.
 
(3)  The founding meeting of a joint stock company will need to be held not later than three months (not two months, as provided by the Current Law) after the founders pay for the first share issue in full.
 
(4)  There should be unanimous vote of all founders for adopting resolutions on establishment of a joint stock company (currently 3/4 of the founders’ votes is required), on appraisal of in-kind contribution to the capital fund (currently simple majority of the founders’ votes is required) and on approval of the joint stock company’s charter (currently 3/4 of the founders’ votes is required).
 
(5)  There is a long list of mandatory provisions in the charter of a joint stock company, such as the company’s name, the amount of its capital and the reserve fund, the general information regarding the company’s issued shares, the composition and competence of the company’s corporate governing bodies, etc.
 
(6)  The shareholder’s pre-emptive right to subscribe for newly issued shares is preserved only for shareholders of a private joint stock company (currently shareholders of both open and closed joint stock companies have pre-emptive rights to subscribe for newly issued shares).
 
(7)  The New Law expressly stipulates that shareholders of a private joint stock company do not have pre-emptive right to buy shares transferred to a heir-at-law or a legal successor of a current shareholder.
 
(8)  The joint stock company’s reserve fund shall not be less than 15 percent (currently 25 percent) of its capital fund.
 
(9)  Joint stock company’s shares shall be issued only in non-documentary form (this provision will take effect upon expiration of a two-year period after official publication of the New Law).
 
(10)  Joint stock company’s preferred shares may be now issued in one or several classes providing different rights to their owners.
 
(11)  A joint stock company is entitled to issue shares or bonds with the purpose to convert its obligations into securities.
 
(12)  A public joint stock company is obliged to list its shares and to be registered at least at one stock exchange. On the contrary, shares of a private joint stock company may not be listed.
 
(13)  Dividends may be paid to shareholders only in the monetary form (currently dividends may be paid either in the monetary form or in-kind).
 
(14)  The exclusive competence of a general meeting of shareholders will now include, inter alia, all questions regarding issue of shares and approval of the joint stock company’s internal regulations.
 
(15)  A written notice on convocation of the general meeting of shareholders shall be sent to the shareholders not later than 30 days (not 45 days, as currently required) before the planned date of the meeting.
 
(16)  The general meeting of shareholders shall be held in the city/town where a joint stock company is incorporated (while under unfair interpretation of the Current Law, shareholders of a company have an option to hold a general meeting of shareholders at any place in Ukraine), unless a joint stock company is a wholly owned subsidiary of a foreign parent, including an international organization or a stateless person.
 
(17)  Voting at the general meeting of shareholders of a joint stock company with more than 100 shareholders shall take place only by means of voting bulletins signed by a shareholder or shareholder’s proxy.
 
(18)  If there are not more than 25 shareholders in a joint stock company, they may adopt resolutions by polling in lieu of the general meeting of shareholders (the Current Law does not provide for such option).
 
(19) A supervisory council in a joint stock company is mandatory, if there are 10 or more (50 or more under the Current Law) shareholders.
 
(20) The supervisory council’s exclusive competence is significantly increased to include, inter alia, placement and buy out of the company’s securities other than shares, election and recall of the head and members of the executive and other corporate bodies of the company, and various issues regarding general meeting of shareholders.
 
(21)  The New Law introduces a position of the corporate secretary of a joint stock company who is elected by the supervisory council and is in charge of the company’s relations with shareholders and third parties..
 
(22)  The New Law introduces the notion of a “significant contract” of a joint stock company defined as its contract valued at more than 10 percent of the company’s assets, provided that conclusion of a significant contract with the value up to 25 percent of the company’s assets requires a preliminary approval of the supervisory council (if established), conclusion of a significant contract with the value from 25 to 50 percent of the company’s assets must be approved by a simple majority of the shareholders’ votes at a general meeting of shareholders, and a significant contract exceeding 50 percent of the company’s assets must be approved by 3/4 of the shareholders’ votes at a general meeting of shareholders.
 
(23)  An acquirer of 10 or more percent of the capital fund of a joint stock company shall notify a joint stock company and the State Commission on Securities and Stock Market of Ukraine at least 30 days prior to the anticipated acquisition.
 
(24)  An acquirer of 50 or more percent in the capital fund of a joint stock company shall (a) within 20 days from the acquisition date send to all other shareholders a public irrevocable offer to purchase their shares and (b) send an acquisition notification to the State Commission on Securities and Stock Market of Ukraine and the stock exchange where joint stock company’s shares are listed.
 
(25)  A shareholder may demand that a joint stock company buy out this shareholder’s shares, in case of a general meeting of shareholders’ decision on (a) the reorganization of a joint stock company, (b) the change of the capital fund, and (c) entering into a significant contract, provided that this shareholder voted against the respective decision.
 
(26)  Joint stock companies with up to 100 shareholders may elect a sole auditor, while in other cases election of an audit committee is mandatory.
 
(27) The New Law provides for certain simplified corporate procedures in joint stock companies with one shareholder, e.g., there is no necessity to execute the founders’ agreement or to comply with the general procedure on convocation and holding of the general meeting of shareholders.
 
Under the Law, charters and internal regulations of existing joint stock companies shall be made compliant with the new requirements within two years of its effective date.
 
FOOTNOTE:  Asters law firm is a member of the U.S.-Ukraine Business Council (USUBC), www.usubc.org.  Asters was established in Kyiv, Ukraine in 1995 by two partners – Igor Shevchenko and Oleksiy Didkovskiy – and bore their names for 12 years, Shevchenko Didkovskiy & Partners. Shevchenko Didkovskiy & Partners announced on February 21, 2008 that it changed its name to Asters. Today, with 9 partners, more than 70 lawyers and 110 employees, Asters is one of the largest Ukrainian law firms (www.asterslaw.com).

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
3.  UKRAINE PARLIAMENT ACCEPTS JOINT STOCK COMPANY LAW 

 
Sokrat Daily, Sokrat Financial Company, Kyiv, Ukraine, Thursday, September 18, 2008

KYIV – On Wednesday, September 17, 2008 The Parliament accepted a law regulating the activity of joint stock companies. The law defines the order for the creation, activity and liquidation of JSCs, as well as their legal status, rights and responsibilities of the shareholders.
Specifically, the law especially protects the rights of minority shareholders and is aimed at JSC protection against raiders and more efficient decision-making.  The law requires any JSC with more than 100 shareholders to use signed ballots when voting at the GMs.
 
Additionally, shareholders’ meetings may be organized only at the JSC’s venues, thus reducing risks of raiders’ attacks. The meeting quorum is achieved whenever shareholders owning more than 50% of the voting rights participate. The law also describes a number of other JSC procedures regulating these companies.
Most parts of the law will come into force in six months, except of the part requiring stocks to exist in electronic form only, which will come into force in two years’ time instead of the initially proposed term of five years.
The law was supported by 358 parliamentarians out of 450.  This number is more than enough to bail the President’s veto out if it occurs. The Parliament has tried to accept the JSC law several times already since 1996, but it has been vetoed by both President Leonid Kuchma and, later, by President Viktor Yuschenko.
The lack of such a law has often been named as the main reason for the Ukrainian stock market’s underdevelopment and for the problem with raiders.  International financial organizations have stressed the necessity of such a law and argued that its absence impedes foreign investment in the Ukrainian market.
SOKRAT FINANCIAL COMPANY VIEW: We applaud the passing of the JSC law and anticipate that its acceptance will send a positive signal to foreign investors.  We also anticipate that the law’s passing will improve Ukraine’s sovereign ratings and will reduce domestic stock market risks.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
4.  NEW JOINT STOCK COMPANY LAW ADOPTED BY VERKHOVNA RADA OF UKRAINE 
Hard to overestimate the relevance and importance of this piece of legislation

ANALYSIS & COMMENTARY: Arzinger & Partners Ukraine, Kyiv, Ukraine, Thu, Sep 18, 2008                                                                         
 
KYIV – We are very pleased to announce that on September 17th the Verkhovna Rada of Ukraine has adopted The Joint Stock Company Law.
 
The law will come into force six (6) months from the moment it is officially published. Existing joint stock companies must bring their statute documents in compliance with the law within two years from the date the law comes into force. The joint stock companies that will be created after the law comes into force must be established in compliance thereof.
 
NEW LAW IS A SIGNIFICANT STEP FORWARD
It is hard to overestimate the relevance and importance of this piece of legislation for the improvement of the investment climate and the general economic situation in Ukraine.  Adoption of this law is a significant step forward in bringing Ukraine to world standards in the sphere of corporate governance and ownership issues.
 
The law removes many gaps in current legislation in the sphere of establishment, operating, governing and cessation of joint stock company activity. In particular according to the new legislation:
 
[1]
 Clearer and more comprehensible requirements concerning formation and activity of the management bodies such as the Supervisory Board and the
       Revision Commission of joint stock companies are envisaged;
[2] This will allow for the implementation of more flexible operative management procedures: the most important issues which concern shareholders’
       interests remain in the exceptional competence of General Meetings; many issues have been transferred to the competence of the Supervisory Board;
[3] The procedure for summoning and holding the General Shareholders’ Meeting is simplified;
[4] The procedure for managing the Company with one shareholder is implemented for the first time: the law envisages issuance of a written decision made
       by a shareholder.
 
Changes of legislation about joint stock companies will allow the implementation in Ukraine of modern principles of corporate governance. In particular, according to the new law, the importance of the Supervisory Board which will be elected by cumulative voting is significantly strengthened. The Supervisory Board will consist of individuals that will allow it to appoint unbiased non-executive directors.
 
The Law envisages the right of the Supervisory Board to organize committees and commissions and to elect a corporate secretary. One of the issues of the exceptional competence of the General Shareholders’ Meeting will be adopting The Code of corporate governance.
 
Adoption of the law significantly moves Ukraine forward towards the protection of interests of both minority shareholders and major investors restricting at the same time possibilities of usage of ‘raiding’ mechanisms. In particular the law implements:
 
[1] The transfer to non-documentary (electronic) circulation of shares that will take place within two years from the moment the Law is in force and is
       aimed at restricting the possibilities of manipulating the register of shareholders;
[2] The responsibilities of shareholders to inform about the intention to acquire shares and as a result of this acquisition they together with the affiliated
       persons will control more than 10% of shares of the company. And after the acquisition of the controlling stock, such a shareholder will be obliged to
       offer to the other shareholders the option to sell the shares they possess;
[3] The detailed mechanism of realization by the shareholders of the preemptive right for the acquisition of shares of the additional emission, which will
       provide protection of existing shareholders from ‘dilution’ of their shares;
[4] The definition of significant transactions, interested party transactions and the procedure for the approval of entering into such transaction;
[5] Additional in comparison to the current legislation guarantees for the shareholders for obtaining information concerning the company’s activity.
 
INCREASE INVESTMENT ATTRACTIVENESS

We are reckoned that the adoption of the law facilitates the increasing investment attractiveness of Ukraine due to the implementation of civilized mechanisms of protection of investors’ interests, increasing the positive image of Ukraine as a country with a market economy, growth of capitalization of joint stock companies and further adjustment of the legislation of Ukraine to that of the European community.
 
The Law company Arzinger & Partners provides the necessary advice and legal support to all interested parties in the process of adjusting the activity of already existing companies and newly established companies to the requirements of the new Joint Stock Companies Law which will allow them to take full advantage of the new possibilities of this important piece of legislation in corporate governance. 
 
NOTE: Arzinger & Partners Ukraine with offices in Kyiv and Lviv is a full service law firm with a professional staff of 70 specializing in all major areas of business law and serving large international, as well as domestic companies, in Ukraine and beyond.  [www.arzinger.ua]
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
==============================================================
U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
Promoting U.S.-Ukraine business relations & investment since 1995.
==============================================================
5.  UKRAINIAN PHARMACEUTICAL FORUM IN KYIV, OCTOBER 14-15 
Pharmaceutical market grows rapidly in Ukraine
 
Adam Smith Conferences’, London, UK, Monday, September 22, 2008
 
KYIV – Today, the Ukrainian pharmaceutical market is in second place after the Russian Federation, according to the rating of pharmaceutical markets of post-Soviet countries, and is, without a doubt, the fastest growing and the most actively developing. Regular monitoring and analysis have convinced all sector participants, both domestic and international, of the existence of huge potential for pharmaceutical business in the region.

Various factors affect the development trends of the Ukrainian pharmaceutical market today: Ukraine’s WTO accession, compulsory implementation of GMP production standards from the 1st January 2009, plans to introduce obligatory medical insurance, and many more. Government regulation and the formation of a corresponding regulatory framework play the most significant role in determining the market’s direction.

 
UKRAINIAN PHARMACEUTICAL FORUM IN KYIV
The Ukrainian Pharmaceutical Forum will serve as a platform for networking, discussing existing opportunities and challenges facing the sector. Many leading company executives of the Ukrainian pharmaceutical sector have been invited to attend, as well as organisations interested in the sector’s development, for example: representative of government regulation bodies; Ukrainian and international company-producers, distributors and retail operators, active and potential investors, analysts, and many more.
The Ukrainian Pharmaceutical Forum is run in parallel with one of the biggest Adam Smith Institute Events – “The Pharmaceutical & Healthcare Sector in Russia” forum. After 13 years of success, each year attracting over 350 participants from all over the world, the forum has established itself as the most prestigious event for pharmaceutical professionals. The Forum will be held Tuesday and Wednesday, October 14th and 15th. 
 
This experience, together with numerous recommendations from sector representatives, has allowed to organise a timely and productive conference for all industry leaders, which will take place in October in Kiev.  Besides plenary sessions and presentations, the forum’s programme will include group discussions in various formats, which will, in turn, ensure that the forum is packed full of thought-provoking information.
MAIN TOPICS …
[1] Formulating an effective development strategy for the Ukrainian pharmaceutical market – what are the problems facing the industry today, what
      obstacles do companies perceive exist in the Ukrainian pharmaceutical market?
[2] How to choose the right strategy to ensure your position as industry leader
[3] How to significantly increase domestic production efficiency
[4] An overview of the development of the Ukrainian distribution market and retail sector
[5] Building an effective marketing structure – how to achieve optimal sales volumes and ensure a good turnover
[6] Product portfolio optimisation – how to create an optimal structure aimed at increasing profit
[7] “Personnel are the be all and end all” – Human resources; how to determine the right set of requirements; training and motivation … and many more.
 
If you have any questions please contact Lyudmyla Durneva on +44 207 0177339/7444 or write to Lyudmyla@adamsmithconferences.com
 
You can access the latest information about the Forum by visiting web-site http://www.adamsmithconferences.com/HU1DUS.  The U.S.-Ukraine Business Council (USUBC), www.usubc.org, Washington, D.C., is one of the promotional sponsors of the Ukrainian Pharmaceutical Forum.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================      
6.  UKRAINE: INTERNATIONAL INVESTMENT SUMMIT OF DONETSK REGION, OCT 29-31

 
International Investment Summit of Donetsk Region, Donetsk, Ukraine, Wed, Sep 24, 2008
DONETSK – The International Investment Summit of the Donetsk Region, “Donbass Investment Destination,” will take place on Wednesday through Friday the 29th -31st of October 2008 in Donetsk, Ukraine. The Presidents of Ukraine and Poland Viktor Yushchenko and Lech Kaczynski are expected to take part in the Summit. You are invited to attend.
 
The Investment Summit will be held on the initiative of Deloitte, Ernst & Young and Altera Finance companies, with participation of the leaders of Ukrainian business, System Capital Management and the Industrial Union of Donbass.  The Summit is supported by the Donetsk Region Council, Donetsk Region State Administration and Donetsk City Council.
 
PRESENT OPPORTUNITIES OF THE DONETSK REGION
The main goal of the Summit is to present the opportunities of the Donetsk Region, which is one of the most dynamically developing industrial regions of Ukraine, is to demonstrate the largest investment projects and discuss conditions and prospects for foreign companies’ activity in the Region. The participants will get acquainted with the opinions of the leading European experts about the prospects of the Region’s development and its investment opportunities.
 
DEDICATED TO THREE MAIN THEMES
Representatives of the government and key players in Ukrainian politics and business are expected to take part in the Summit’s work. The Summit will be dedicated to several themes: 
 
(1) International Conference “Real Estate & Infrastructure Euro-2012” by Deloitte
(2) International Conference “Investments into Real Estate Sector of Donbass” by Ernst & Young
(3) International Conference “Innovations and Energy-Saving Technologies” by Altera Finance
The biggest investment projects of the Region, such as the new micro district in Donetsk city, the airport in the regional town, recreational towns in Svyatogorsk and on the Sea of Azov coast, motorways, large brick and concrete works, and more than 100 projects, will be presented in the framework of the Conferences and the exhibitions accompanying the event.
 
The International Investment Summit of Donetsk Region is expected to host more than 300 participants from 20 countries and will become one of the most significant investor meeting in Ukraine over the next few years.
 
The technical organizer of the Summit, Conference House Company (www.ch.kiev.ua), is ready to provide you with more detailed information about the Summit Program and the terms of participation. We will help you organize your representatives’ participation in the event.
 
The Summit contact person is Alexi Mirontchouk mirontchouk@ch.kiev.ua, tel/fax+38 044 541 18 38. You will find more detailed information and participant registration form on the Summit web site www.investment.donetsk.ua.
 
We are looking forward to having you participate in the Summit and to you being in Donetsk, Ukraine, from the 29th to the 31st of October 2008.
 
On behalf of the Organizing Committee, General Director of Conference House Company, Igor Zavilinsky.
 
AUR FOOTNOTE:  Ernst & Young Ukraine is a member of the U.S.-Ukraine Business Council (USUBC). USUBC, www.usubc.org, is one of the promotional sponsors of the “Donbass Investment Destination,” Forum.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
7.  IBM UKRAINE JOINS U.S.-UKRAINE BUSINESS COUNCIL (USUBC)
Large international computer technology and consulting corporation is member ninety-two 

U.S-Ukraine Business Council (USUBC), Washington, D.C., Monday, September 22, 2008

WASHINGTON, D.C. – The executive committee of the U.S.-Ukraine Business Council (USUBC), on behalf of the entire membership, is most pleased to announce that IBM Ukraine has been approved for USUBC membership.  IBM Ukraine is USUBC member ninety-two. 

IBM is a multinational computer technology and consulting corporation head-quartered in Armonk, New York, USA.  IBM manufactures and sells computer hardware and software, and offers infrastructure services, hosting services, and consulting services in areas ranging from mainframe computers to nanotechnology.

IBM has been known through most of its recent history as the world’s largest computer company; with over 388,000 employees worldwide, IBM is the largest information technology employer in the world.

 
A representative office of IBM’s Russian subsidiary was opened in the Ukraine in 1992 and then a separate IBM subsidiary was established in Kyiv in October of 2006. The Ukrainian IT market worth over 2 billion dollars and is growing at an average of close to 20% per year. Over two thousand Ukrainian companies have purchased IBM products or services over the years.

IGOR PASTUSHENKO HEADS IBM UKRAINE
USUBC has been working with Igor Pastushenko, Country General Manager for IBM for over a year.  Igor has attended a number of USUBC meetings in Kyiv.  Igor has developed a very solid business program for IBM in Ukraine, one that is growing rapidly.  IBM is well-known in Ukraine for the top professional services they provide to the business community. 

Christopher G. Caine, is Vice President, Governmental Programs, for the IMB office in Washington, D.C. Chris attended a recent luncheon USUBC sponsored in Washington with the U.S. Ambassador to Ukraine, William Taylor. USUBC has also been working closely with Luba M. Labunka, Senior Project Manager, Emerging Markets Financing, Global Finance Treasury, at the IBM headquarters in Armonk, New York.

IBM INNOVATION CENTERS FOR BUSINESS PARTNERS 
The IBM Innovation Center for Business Partners is “your” IBM in Ukraine. The Center advises and guides customers through the development process.
Through workshops clients can build skills and leverage IBM’s architecture consultations. IBM’s IT specialists help clients with proof-of-concept, integration, migration and testing needs. There is no charge for most of the offerings.

IBM Innovation Center assistance with: IBM Systems and software enablement. Products offered include: Hardware; IBM BladeCenter; IBM System i; IBM System p; IBM System x; IBM storage technologies Software; Information Management (DB2); Linux® (System p, x and z); Lotus; Tivoli; WebSphere.

IBM Innovation Center for Business Partners
IBM Ukraine, Artem Business Centre, 4 Hlybochytska Street,
Kyiv 04050 Ukraine, Telephone: +38 044 501 18 88; Fax: +38 044 501 18 89

E-mail: iic_kiev@ua.ibm.com; Hours of operation: 9 a.m. – 5 p.m.

Additional information about IBM can be found at: http://www-304.ibm.com:80/jct09002c/isv/spc/kiev.html and at www.ibm.com/ibm/gp.

“The U.S.-Ukraine Business Council (USUBC) is most pleased to have IBM Ukraine as a member.” said Morgan Williams, SigmaBleyzer,  who serves as President of USUBC. “USUBC has grown very rapidly during the past 19 months and now has a membership base which will allows USUBC to be a full-time operation with an expanded program of work.” 
 
USUBC MEMBERSHIP WILL TOP 100 IN 2008
IBM Ukraine is the 41st new member for 2008, and the 71st new member since January of 2007. USUBC membership has quadrupled in the past 21 months, going from 22 members in January of 2007 to 92 members in September of 2008. Membership is expected to top 100 very soon.

The other new members in 2008 are MaxWell USA, Baker and McKenzie law firm, Och-Ziff Capital Management Group, Dipol Chemical International, MJA Asset Management, General Dynamics, Lockheed Martin, Halliburton, DLA Piper law firm, EPAM Systems, DHL International Ukraine, Air Tractor, Inc., Magisters law firm, Ernst & Young, Umbra LLC., US PolyTech LLC, Vision TV LLC, Crumpton Group, Standard Chartered Bank, TNK-BP Commerce LLC, Rakotis, American Councils for International Education, Squire, Sanders & Dempsey LLP, International Commerce Corporation, IMTC-MEI, Nationwide Equipment Company, First International Resources, the Doheny Global Group, Foyil Securities, KPMG, Asters law firm, Solid Team LLC, R & J Trading International, Vasil Kisil & Partners law firm, AeroSvit Ukrainian Airlines, ContourGlobal, Winner Imports LLC (Ford, Jaguar, Land Rover, Volvo, Porsche), 3M, Edelman, CEC Government Relations and RZB Finance LLC (Raiffeisen). 

The complete USUBC membership list and other information about USUBC can be found at: http://www.usubc.org.

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
============================================================
NOTE: Send in a letter-to-the-editor today. Let us hear from you.
============================================================
8.  PROCREDIT RECEIVES US$20 MILLION LOAN AGREEMENT FROM
INTERNATIONAL FINANCE CORPORATION (IFC)
International law firm Salans acts as legal advisor to IFC (International Finance Corporation)

U.S.-Ukraine Business Council (USUBC), Washington, D.C., Wednesday, September 17, 2008

WASHINGTON, D.C. – The international law firm Salans acted as legal advisor in Ukraine to IFC, a member of the World Bank Group, in relation to a loan agreement with ProCredit Bank Ukraine (the Bank) for the amount of US$ 20 million.  This loan is intended to enable the Bank to extend financing for
energy efficiency improvements to micro, small, and medium-size enterprises and individuals.

IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing
private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s
vision is that people should have the opportunity to escape poverty and improve their lives.

In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69
developing countries. IFC also provided advisory services in 97 countries.

Ukraine became a shareholder and a member of IFC in 1993. As of March 31, 2008, IFC had invested around $887 million in 38 projects in the country.
IFC’s investment program is expanding rapidly, with a focus on Ukraine’s financial, agribusiness, construction materials, retail trade and services, energy, and infrastructure sectors.
 
IFC also offers advisory programs in the country on leasing, agribusiness, mortgage finance, and on improving the business environment. For more information, visit  www.ifc.org/ukraine.
 
PROCREDIT BANK UKRAINE
Founded in early 2001, ProCredit Bank Ukraine is part of ProCredit Group. Its target market consists of micro-and SME customers and its core product
is lending.  The bank’s head office is located in Kyiv.  ProCredit Bank was ranked 39th in Ukraine by assets at end of September 2007.

The Bank has over 60 branches throughout the country and plans further expansion of the network.  Since its foundation, ProCredit Bank Ukraine has
grown rapidly in absolute terms and by number of customers.

 
SALANS LAW FIRM UKRAINE
Salans’ Banking and Finance Group of lawyers: Natalia Selyakova, Vladilsav Kysil, and Nikolay Zhovner acted as legal advisors to IFC on the loan
agreement with the ProCredit Bank Ukraine.

AUR FOOTNOTE:  Salans law firm is a member of the U.S.-Ukraine Business Council (USUBC), www.usubc.org. Salans has over 35 lawyers in Kyiv, assisting domestic and cross-border clients with their corporate, M&A, banking, tax and competition needs across a range of sectors including real estate, financial services, energy and natural resources as well as capital markets. With 37% growth in revenues globally for the 2007 financial year, Salans now has 176 partners worldwide as part of over 750 lawyers globally operating from 18 offices.  Salans has been active in Ukraine since 1988, and officially opened an office in Kyiv in 1992 (www.salans.com).
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

===================================================
9.  VIASAT UKRAINE NAMES NEW CEO, DIGITAL PREMIUM SATELLITE TV COMPANY

 
Jackie Stewart, Viasat, Stockholm, Sweden, Tuesday, September 23, 2008
STOCKHOLM – Oksana Ferchuk has been appointed as the new CEO of Viasat Ukraine.  Richard Caproni, who has been the CEO will assume the position of chief financial officer of the company.
 
Previously Ferchuk was the marketing and sales director of the national telecommunications systems provider PEOPLEnet in Ukraine, commercial director of MSG and its nationwide retail chains Astel & Mobilochka, and prior to that worked for more than six years in various positions within Ukrainian Mobile Connection. 
 
“Oksana Ferchuk has extensive experience from related business in telecom as well as from start ups, which we consider a perfect background for when Viasat Ukraine goes into the next, commercial phase,” said Ulrik Bengtsson, the CEO of Pay TV for emerging markets at MTG.

 
Caproni has been CEO of Viasat Ukraine since it was founded as Vision TV in 2006. “Aligned with the plans, Richard Caproni remains in the company in a position where we can continue to utilize his top expertise in finance and administration, ” said Bengtsson.
 
Viasat Ukraine, a joint venture between Modern Times Group (MTG) and Strong Media Group, was the first digital premium DTH satellite TV operator in Ukraine when it launched in April 2008.  LINK: http://www.worldscreen.com:80/newscurrent.php?filename=viasat092308.htm
AUR FOOTNOTE:  Vision TV is a member of the U.S.-Ukraine Business Council (USUBC), www.usubc.org.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
10.  NOT-SO-DYNAMO KIEV: BAD ECONOMIC INDICATORS FOR UKRAINE

Too many indicators are deteriorating and too many warning lights flashing
 
LEX TEAM: Macroeconomics and Markets, Financial Times, London, UK, Sun, Sep 21 2008
After all the mayhem, where is the world’s worst-performing market so far this year? Russia’s 43 per cent decline is beaten, among others, by Shanghai’s 66 per cent fall – but all are outstripped by the 70 per cent plunge of Russia’s neighbour, Ukraine.
 
At first blush, that looks odd. Ukraine’s growth, forecast at 6.5 per cent this year though slowing to 5 per cent next, remains among Europe’s best. The problem is, too many indicators are deteriorating and too many warning lights flashing – several connected with the lumbering bear on its borders.
Number one is falling prices of metals – which contribute one-quarter of gross domestic product and more than 40 per cent of exports. Meanwhile, the gas-guzzling metals industry, and other Ukrainian mainstays such as chemicals, have long enjoyed subsidised energy prices from Russia. Moscow has progressively cut subsidies – provoking the spat that notoriously saw Russia turn off the gas in January 2006.
 
Russia is threatening to double prices to western European levels next year; Moscow’s mood has not been improved by President Viktor Yushchenko’s vociferous support for Georgia. Ukraine’s smokestack industries have offset higher prices by raising woeful standards of energy efficiency, but scope for further improvement is limited.
 
Higher energy prices will complicate taming inflation, which peaked at 31.1 per cent, year on year, in May – fuelled by soaring government spending. They will also worsen the mushrooming current account deficit. Political instability has been a constant since the 2004 Orange Revolution, but the latest coalition’s recent collapse – in part because of squabbles over Russia policy – could provoke early elections.
 
And while conflict with Russia is unlikely, Moscow has scope for mischief-making through, for example, trade restrictions or fomenting unrest among ethnic Russians in Crimea. With the MSCI Ukraine index trading on about 6 times current earnings, Ukraine looks less oversold than Russia – only on 5.5 times even after Friday’s astonishing 30 per cent bounce in its market.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=============================================================
Join the U.S.-Ukraine Business Council (USUBC). www.usubc.org
Help promote U.S.-Ukraine business & investments and a strong Ukraine. 
=============================================================
11.  UKRAINE AND GEORGIA IN NATO NOT SEEN TO BE IN U.S. INTEREST 
Former U.S. ambassador to Moscow Jack Matlock said on Tuesday 

 
By Susan Cornwell, Reuters, Washington, Tuesday, September 16, 2008 
 
WASHINGTON, D.C. – NATO membership for Georgia and Ukraine is not in Washington’s or the alliance’s interest, former U.S. ambassador to Moscow Jack Matlock said on Tuesday as he and other ex-U.S. envoys decried the poor state of ties with Russia.
 
At a gathering of five former U.S. and Russian ambassadors, Matlock, the last U.S. envoy to the Soviet Union, questioned a central tenet of Bush administration policy: its firm support for the NATO membership bids of both Georgia and Ukraine.
 
Some European countries have doubts about the policy, and some U.S. analysts have blamed it for helping provoke the brief war last month between Russia and Georgia over the breakaway region of South Ossetia.
 
Since Russian troops crushed Georgian forces in that conflict, U.S. ties with Moscow have plummeted. “To simply say every country should have the right to apply to any alliance it wants, that’s true. But an alliance and its members should also have the right to determine whether it’s in their interests to take in a member,” Matlock told the forum in Washington, sponsored by the Carnegie Endowment for International Peace.
 
“I’m saying it’s not in the United States’ interests, and it’s not in NATO’s interests,” said Matlock, who was ambassador to Moscow from 1987 to 1991 under former President George H.W. Bush, the current president’s father. Georgia had not settled territorial disputes with its neighbours, and appeared to want to use the NATO military alliance to help resolve them, Matlock said, in a reference to its conflict with Russia.
 
As for Ukraine, which like Georgia is a former Soviet republic, most of its population opposed membership and joining NATO would risk splitting the country, Matlock said. He added that genuine strategic cooperation with Moscow, which vehemently opposes NATO membership for the two former Soviet republics, would be nearly impossible “as long as we’re pushing this.”
 
In New York on Monday, U.S. Secretary of State Condoleezza Rice met Ukraine’s foreign minister and pledged Washington’s firm support for Ukraine’s bid to join NATO. But in Washington, Matlock and former U.S. envoys to Moscow James Collins and Arthur Hartman pointed to the consequences of ignoring Russia’s attitude on NATO expansion.
 
They shared a platform with two former Soviet ambassadors to Washington, Alexander Bessmertnykh and Yuri Dubinin, who denounced the NATO expansion policy as a major irritant in relations. “I personally believe that we need to go slow. … If we don’t, we will find that this is not something that stabilizes but rather divides,” Collins said.
 
Hartman said that at the time the Soviet Union was collapsing in the early 90s, it was a “great failure” that the West didn’t think creatively about a structure to replace NATO — because the main purpose of its existence, to defend against a Soviet threat, no longer existed.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=========================================================
Receiving more than one copy of the AUR please contact us.
=========================================================
12.  RUSSIA’S FM SAYS WEST HAS TO MAKE STRATEGIC CHOICE IN RELATION TO UKRAINE

 
Interfax, Moscow, Russia, Saturday, September 20, 2008 
 
MOSCOW – The West will have to make a strategic choice in relation to Ukraine, bearing in mind that Ukraine’s possible accession to NATO would lead to a deep rift between Moscow and Kyiv and most negatively affect security of the whole of Europe, said Russian Foreign Minister Sergei Lavrov.

“Ukraine’s accession to NATO will lead to a grave crisis in Russian-Ukrainian relations. This crisis will have a most negative effect on the common European security. Thus, the West should make a choice, and this choice will be strategic,” Lavrov said in an article published in the Ukrainian weekly
2000.

“Assigning the role of a buffer between Europe and Russia to Ukraine is to belittle Ukraine itself,” Lavrov said. “It would be much more constructive to build relations with the surrounding world together,” he said.

Ukrainian Foreign Minister Volodymyr Ohryzko’s remarks in favor of Ukraine’s integration into NATO are “part of a common trend of shameless exploitation of the Caucasus crisis for unscrupulous political ends, primarily with the aim of dragging Ukraine into NATO against the will of an overwhelming majority of its population and in violation of the basic democratic procedures,” he said.

In particular, Lavrov pointed out that Ohryzko pushed ahead with the idea of “a NATO-centric system of European security,” while “it is exactly NATO-centrism that is splitting the Euro-Atlantic community and has proven to be absolutely flawed and unpromising,” Lavrov said.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
13.  U.S. SECRETARY OF STATE RICE GIVES STRONG BACKING FOR UKRAINE NATO BID 

 
Reuters, New York, New York, Monday, September 22, 2008 
 
NEW YORK – U.S. Secretary of State Condoleezza Rice on Monday pledged Washington’s firm support for Ukraine’s bid to join the NATO military alliance despite strong Russian opposition to the move.
In a meeting with Ukraine’s foreign minister on the sidelines of the U.N. General Assembly, Rice said the United States stood by a commitment made at a summit in Bucharest last April for Kiev to join NATO’s Membership Action Plan (MAP) — a first step toward membership of the military alliance.
“We, of course, are, have been and will continue to be supportive of Ukraine’s Transatlantic ambitions. And of course, the U.S. position on MAP was very clear,” said Rice, with Ukraine’s Foreign Minister Volodymyr Ohryzko at her side. “I should just say the Bucharest declaration is also very clear,” she added.
At the April summit, NATO leaders stopped short of putting Ukraine and Georgia immediately on the path to membership of the alliance, but pledged the two ex-Soviet states would one day become members.
Russia strongly opposes Ukraine’s proposed membership of NATO, as well as that of Georgia. Russia and Georgia fought a brief war last month after Tbilisi sent in troops to try to seize back the rebel region of South Ossetia, provoking massive retaliation by Moscow and a plummet in U.S.-Russia relations to their lowest level since the end of the Cold War.
While the United States has strongly backed both Georgia and Ukraine’s membership bids, allies including Germany, France and smaller NATO states have opposed it for fear of further provoking Russia.
The idea of membership has not been fully embraced in Ukraine either. Polls show a majority of Ukrainians oppose NATO membership and the leader of the country’s biggest parliamentary party has said the issue should be decided by the Ukrainian people. (Reporting by Sue Pleming; editing by Todd Eastham)
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
14.  UKRAINE: DPM HRYHORIY NEMYRIA ON BBC TV’S HARD TALK

BYuT’s priority is to re-establish the democratic coalition
 
BYuT Newsletter Inform, Issue 86, Kyiv, Ukraine, Monday, 22 September 2008

KYIV – Hryhoriy Nemyria, Ukraine’s Deputy Prime Minister appeared on BBC TV’s Hard Talk last week. It was his second appearance this year on the programme that puts leading politicians at the mercy of a 30 minute grilling by Stephen Sackur – a seasoned interviewer famed for his “take no prisoners” approach.
  
The deputy premier responsible for European integration answered questions on the political crisis in Ukraine, driving home the message that his bloc’s priority was to re-establish the democratic coalition. “It was not the prime minister who pulled out of the coalition. We are persistent in our line that we would welcome back our partners in the coalition, and we are ready to negotiate a strategic compromise for the sake of Ukraine’s European future,” said Mr Nemyria.
  
The interview was highly topical given the collapse of the democratic coalition that day and the opening of a 30 day window to enable parliamentary factions to form a new coalition government. If no new government is formed in that time, the president has the right, if he decides to exercise it, to disband parliament and call a pre-term parliamentary election.

 
BYuT WISHES TO AVOID ANOTHER ELECTION
Mr Nemyria made it clear that BYuT wished to avoid another election and requested the democratic partners put aside their personal differences and unite. He also indicated that an outline agreement had already been reached with the centrist Lytvyn block to be part of a reconstituted democratic coalition.
  
When asked if BYuT would be prepared to join a coalition with the Party of Regions he answered, “We are still in the space where we haven’t exhausted all the possible ways for reaching a strategic compromise.” However, he doubted a coalition with the Party of Regions would occur, saying that, in any event, BYuT’s principles were non-negotiable.  
   
On the issue of the Georgia-Russia conflict he expressed concern that the security vacuum in the post-Soviet space had expanded and argued that Ukraine pursue a dual strategy. He suggested integration into the EU security and defence policy and said that the NATO Membership Action Plan remains an option, while stressing that any question of membership be subject to a national referendum.
  
RUSSIAN PASSPORTS
Quizzed over reports that Russian passports were being handed out in the Crimea, he told the BBC that the government had insisted on a full report from the Russian authorities. He noted that early indications reveal there was no spike in the rise of passports being made available.
  
Mr Nemyria was emphatic that Crimea will remain part of Ukraine. “We are against irresponsible statements of some odious Russian politicians that questioned Crimea’s future or Sevastopol’s future. We were very pleased when Prime Minister Putin clearly said that the Russian Federation does not question that Crimea belongs to Ukraine – this is a very important statement. The principle of territorial integrity should be respected by all players.”
 
NOTE: The BBC Hard Talk interview can be viewed at: http://www.bbc.co.uk/iplayer/episode/b00dnzh9
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
15.  DON’T BE FOOLED AGAIN

Commentary: BYuT Newsletter Inform, Issue 86, Kyiv, Ukraine, Mon, 22 Sep 2008

KYIV – If you ask people in the West what the Orange Revolution was about, it is likely they will tell you it concerned a fraudulent election and the future orientation of Ukraine. Many still believe it was a tussle between East and West and the self-determination of the people to finally break free from Russia’s yoke. This of course was never true, but the line was often reported in the western media.
  
Central to the Orange Revolution was the simple demand for justice – ordinary people fed up with being deceived and standing up for democracy against autocracy. 
  
With the collapse of the democratic coalition, some headline writers are once again putting two and two together and coming up with six. Several headlines last week pinned the collapse of Ukraine’s governing coalition on the recent war in Georgia. What is disturbing is that the Bankova Street spin machine appears to be in overdrive, doing everything it can to propagate this curious positioning.
  
It is true that the coalition partners were not in full accord in their response to the Georgia-Russia conflict. Although analysis will reveal they agreed on many points of principle, Prime Minister Yulia Tymoshenko took a measured response, refraining from the tough-talking language adopted by President Viktor Yushchenko. Nevertheless she did condemn the unilateral actions and disproportionate use of force, calling for Russia to “respect the sovereignty of Georgia and its territorial integrity.” 
 
A major bone of contention was the president’s hard-line policy restricting the Russian Black Sea Fleet’s use of Sevastopol. Ms Tymoshenko believed that Ukraine should honour its contractual obligations – Russia has leased use of the port until 2017 – and cited that the president’s policy was unworkable as it lacked the necessary procedures to verify breaches of the new rules.
  
Not missing a trick, the presidential secretariat then accused Ms Tymoshenko of kowtowing to Russia in return for the Kremlin bank-rolling her future bid for the presidency. But this was bluster, an unsophisticated smokescreen aimed at de-positioning Ms Tymoshenko ahead of the 2010 presidential election. It belies the fact that the prime minister fully supports the EU position on the conflict – a position endorsed by the president.
  
So if the war was not the reason for the coalition’s collapse, what was?
 
THWARTING OF REFORMS  
The difference of opinion over the Georgia-Russia conflict was merely the most recent manifestation of a long-running feud between Ukraine’s two branches of executive power.
 
This feud is not based on policy differences. Indeed, Hryhoriy Nemyria, Deputy Prime Minister responsible for European integration said, “The policy differences between the two Orange partners are miniscule compared to the policy differences between the Christian Democrats and Social Democrats in Germany’s grand coalition government.”
 
 The nub of the issue is “constitutional.” Sadly Ukraine has not one government but three. There is the parliamentary government, the office of the president and the National Security and Defence Council (NSDC). The latter is headed by Raisa Bohatyryova (recently expelled from the Party of Regions), whose appointment was seen widely as a counterweight to the Tymoshenko government.
  
The NSDC is unashamedly a political tool of the president and has backed him in throwing up roadblocks that have brought the government’s reform agenda to a grinding halt. Privatisation plans, anti-inflation initiatives and anti-corruption measures have all been stopped in their tracks, paralysed by a flurry of presidential decrees and NSDC resolutions.
  
For months Ms Tymoshenko endured searing criticism and seeing her reforms vetoed. She eventually spoke out publicly against the president in May, by which time the attacks had become increasingly personal. The final straw was an accusation of “treason” – an allegation subsequently investigated and dismissed by the deputy prosecutor general.
  
Driving this criticism is the desire of the secretariat to turn public opinion against the premier so as to scupper any bid by her for the presidency in 2010. But most people view it as persecution and the strategy has backfired, serving only to depress further the president’s ratings.
 
CONSTITUTIONAL CHANGE: THE HEART OF THE MATTER   
The response by the Bloc of Yulia Tymoshenko (BYuT) to the paralysis of government was to side tactically with the Party of Regions to pass laws (on 2 September) that prevent the president and NSDC from overturning the lawful decisions of parliament. This, and the establishment of an unambiguous process for presidential impeachment, proved to be too much for the president.
  
Mr Nemyria explained why BYuT lawmakers voted for the new laws. “The decision was about a clear division of power. What we have had unfortunately is a phenomenon of parallel government, two or three at once, namely a National Security and Defence Council and a secretariat of the president trying to intervene in the competency of the government.” This uneasy division of power was key to the last political crisis nearly a year ago, which culminated in the dismissal of parliament and pre-term elections.
  
Clearly, this corrosive constitutional arrangement that pits president against parliament must be resolved. “Our position is clear,” said Ms Tymoshenko, “we have to amend the constitution and bring Ukraine to a type of parliamentary system enjoyed by most European democracies.  

 
Of course the subject of constitutional reform is far less glamorous to the media than a David and Goliath West vs. East tug-of-war. For a start, the issues are complex and require detailed explanation.
  
Yet we should not blame journalists. The president’s constant sabre rattling with Russia does nothing to dissuade those coming fresh to the story. Indeed, the president’s secretariat is content to propagate the myth that the collapse is owed purely to a West-East power struggle over the future direction of Ukraine.
  
But Ms Tymoshenko is in no doubt about Ukraine’s future direction. “We are totally committed to Ukraine’s European integration and we’ll do whatever we can to bring Ukraine closer to the EU,” she said.
 
Perhaps the few skewed headlines prove the old adage: never let the truth get in the way of a good story.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=========================================================
Join the U.S.-Ukraine Business Council (USUBC). www.usubc.org
Help promote U.S.-Ukraine business & investments and a strong Ukraine. 

=========================================================
16.  MOSCOW’S USE OF RUSSIAN PASSPORTS IN GEORGIA DISTURBS OTHER POST-SOVIET STATES

 
Window On Eurasia: by Paul Goble, Vienna, Tuesday, September 9, 2008
VIENNA – Even if Moscow does not employ again the strategy it used in Georgia of intervening militarily after extending dual citizenship and Russian passports to people in neighboring countries, that action has transformed the Russian passport into “something like a dangerous germ” whose spread can “lead to catastrophic consequences,” a Russian analyst says. 
“The first time” the Russian passport “unexpectedly” took this form, Anton Orekh’ writes in today’s “Yezhednevniy zhurnal,” was in Abkhazia and South Ossetia. Apparently “having landed there almost by chance, the passport began to multiply in these regions with such speed that it led to an epidemic or even pandemic” (www.ej.ru/?a=note&id=8381). 
After only a short time, he continues, “there did not remain in these places anyone who had not received this passport.  Then the war began.  And it turned out that the Russian passport [almost by itself and] in a surprising way made possible its development, escalation and intensification.”
Not surprisingly, many of the leaders of the countries neighboring Russia began to ask whether Moscow would use such a passport strategy against them.  The Ukrainian foreign ministry, for example, has regularly warned that “in Crimea a general Russian passportization is gaining ground.”
For the time being, Orekh’ argues, Kyiv’s fears are without any foundation.  The Kremlin has explicitly declared that it respects the territorial integrity of Ukraine, but especially given what has happened in Georgia and what has appeared in the Russian media, it is no surprise that officials there and elsewhere should be concerned.
After all, Russian President Dmitry Medvedev has said that Russia has a right and an obligation to protect its citizens wherever they live – a statement that Orekh’ implies should not be taken literally given the constraints Moscow is operating under.  And he adds that Russia would not attack Estonia because that would involve Russia in a war with NATO.
That of course is how all this looks from Moscow’s side, the Moscow writer says, but for those on whose territories Russian passports are spreading, “barricades are already being prepared” in response to what the Russian government is doing, something that heightens tensions and thus creates new dangers.
Both Russia’s use of passports in Georgia and Ukraine’s suggestions that Moscow is doing the same thing in Crimea have sparked a serious discussion not only about such passports themselves but about the implications of the dual citizenship for both the countries on which such people live and the countries to which they are thus linked.
In a commentary on the Babr.ru portal this week, Anna Mesherova considers the debate over whether “dual citizenship is a good thing or a bad one” and offers the perhaps unsatisfying conclusion that under some conditions, it is a good thing and draws nations together and under others, it pushes them apart
 
Dual citizenship is not a universal right. Rather it is in every case up to now the product of interstate agreements, with some states agreeing and others not. Nonetheless, she writes, it is not all that rate.  “What is rare is when the MAJORITY of citizens of a certain country or its region have the passport of a neighboring country.”
With Russia’s actions in Georgia, Moscow has invoked a principle which has not yet been accepted by the international community or even by the Russian government as a universal precedent has been created that suggests a country has the right to intervene in a territory on which “compactly live” its dual citizens.
Many countries, such as Ukraine, prohibit dual citizenship either in their constitutions or by law because their governments fear that the most dangerous situation would be to have a large number of people on their territories who sometimes could act as citizens of their country and sometimes as citizens of another.
And that danger only increases, Mesherova continues, when one country secretly or semi-secretly passes out passports as the Russians did in Abkhazia and South Ossetia and reportedly are doing so in Crimea as well despite the laws of the country in which Russian officials are acting in this way.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
17.  RUSSIAN PASSPORTS AS MOSCOW’S GEOPOLITICAL TOOL
Kremlin uses handing out of Russian passports to destabilize Ukraine
 
Analysis & Commentary: By Taras Kuzio, Eurasia Daily Monitor, Volume 5, Issue 176
The Jamestown Foundation, Washington, D.C., Wednesday, September 15, 2008
The official protest by the Russian Ministry of Foreign Affairs (MFA) on September 11 over the allegedly “unfriendly” attitudes of the Ukrainian authorities to Russia was met by a stern response on the same day by Ukraine’s Foreign Ministry (www.mfa.gov.ua).
 
Russia’s MFA protested about President Viktor Yushchenko’s support for Georgia, including supplying “heavy military hardware”; Ukraine’s drive to join NATO “against the will of the Ukrainian people”; “attempts by the Ukrainian authorities to reconsider our common history in an anti-Russian spirit”; and the standard complaint about official hostility to the Russian language.

Ukraine’s response pointed to Russia’s inability, despite nearly two decades of Ukrainian independence, to accept Ukraine as an “independent state.” Ukraine’s MFA also described Ukraine as “under no circumstances belonging to the so-called ‘privileged interests’ of any country.”

The Russian protest also complained about the “practice of banning Russian deputies and eminent politicians from entering Ukraine.” The following day Russian Duma deputy Viktor Vodolatsky was refused entry into Ukraine to attend a coordinating council meeting of Cossack Hetmans (leaders) from Ukraine, Russia, Belarus, and Moldova’s Trans-Dniestr region. The week before, Russian political technologist Sergei Markov was refused entry into Ukraine.

Russia has retaliated by creating a long list of Ukrainian politicians and businessmen banned from entering Russia. It includes the head of NUNS Vyacheslav Kyrylenko, Petro Yushchenko (the president’s brother and a NUNS deputy), the governors of Kyiv and Kharkiv, BYuT head of the parliamentary committeeon foreign affairs, heads of the armaments company Ukrspetsexport, and others (www.korrespondent.com.ua, September 15).

Ukraine’s MFA warned “that attempts by Russia to destabilize the situation in Ukraine through fifth columnists who for some reason position themselves as the ‘healthy political forces of the country’ have no prospects.” The accusations and the very tone of the exchange are at odds with Prime Minister Vladimir Putin’s assurances that “Crimea is not disputable territory” (German ARD television, August 29).

Leon Aron of the Washington-based American Enterprise Institute warned in The Wall Street Journal (September 10) that “Russia’s Next Target Could Be Ukraine.” The Moscow city council is providing $34 million in support of “compatriots” abroad.

Aron warns of a scenario in which Russia takes control over-night of the port of Sevastopol, which might be “impossible to reverse without a large-scale war.” The EU’s unwillingness to deal with Russia’s new assertiveness since August 8 has demonstrated the vacuous nature of its European Common Foreign and Security Policy. If the EU has permitted Russia to get away with de facto annexation of South Ossetia and Abkhazia, why would it react any differently to a Russian annexation of the Crimea?

The September 9 EU-Ukraine summit threw “away a golden opportunity to stabilize [Ukraine’s] eastern frontier and encourage political and economic reform in Kiev” (Financial Times, September 10). The EU “foolishly ducked a chance to throw the country a political and economic lifeline” (The Economist, September 11).

Two arguments why West European states, such as Germany, Italy, and France, have not supported NATO or EU enlargement to Ukraine and Georgia do not stand up.

 
[1] First, Germany, Italy, and France do not support either NATO or EU enlargement, although it is only the former that is usually considered likely to “antagonize” Russia.
 
[2] Second, energy links to Russia are not a factor in appeasing Russia. France, Italy, and Germany are only reliant for 26 percent, 30 percent, and 39 percent, respectively, of their gas imports from Russia. Poland, Lithuania, Bulgaria, and Slovakia, which support NATO and EU enlargement to Ukraine, import respectively 61 percent, 84 percent, 94 percent, and 100 percent of their gas from Russia.

Ukrainian authorities have become highly sensitive to the threat of a Russian policy of destabilization since the Kremlin invasion of Georgia. One particular area of concern is the issuing of Russian passports to Ukrainian citizens in the light of Russia’s pretext of coming to the “defense” of Russian citizens in the two frozen conflicts where Russia had illegally distributed passports.

Ukraine’s Minister of Foreign Affairs Volodymyr Ohryzko said that Ukraine’s repeated protests to the Russian consulate in Simferopol over its distributing of passports continue to be ignored. Ohryzko announced that the Security Service, prosecutor’s office, Interior Ministry, and MFA were now investigating the problem (www.mfa.gov.ua, September 6).

 
Ukraine’s Ambassador to Slovakia Inna Ohnivets, who previously worked on this issue, told of repeated Ukrainian demands to the Russian Consulate in the Crimea to halt the practice (www.bbc.co.uk/Ukrainian, August 28).

A week after Ohryzko’s comments, 34 inhabitants of Sevastopol who maintain dual citizenship had their Ukrainian citizenship withdrawn. Further investigations have located 1,595 inhabitants of Sevastopol, primarily serving on the Black Sea Fleet, who have dual citizenship, which is banned by Ukrainian law (www.pravda.com.ua, September 13).

Both political forces in the Orange coalition have raised the issue of the distribution of Russian passports as a threat to Ukrainian security. Our Ukraine-Self Defense deputy Volodymyr Stretovych warned that increasing the number of Russian citizens in the Crimea would give Russia, as in Georgia, a pretext to come to the “defense” of its citizens (www.nuns.com.ua, August 13, 15).

 
Deputy Nuns faction leader Borys Tarasiuk described the distribution of passports as Russia’s “secret aggression against Ukrainian citizens.” Yulia Tymoshenko Bloc deputies have drawn up a draft law making the obtaining of dual citizenship a criminal offence (www.pravda.com.ua, September 9).

The problem Ukrainian authorities are faced with is that they do not have concrete data on the number of Russian passports distributed in the Crimea. During Leonid Kuchma’s decade in office from 1994 to 2004 the Ukrainian authorities turned a blind eye to the illegal practice. Estimates of the number of Russian passport holders in the Crimea range from a low of 6,000 (Newsweek, August 23) to 100,000 (Los Angeles Times, August 25).

Consequently, the EU is ignoring the fact that the consequences for European security of Russian destabilization in the Crimea would be far more severe than that of Russia’s invasion of Georgia. [http://www.jamestown.org]

——————————————————————————–
[return to index] Action Ukraine Report (AUR) Monitoring Service]
===================================================
Welcome to send us names for the AUR distribution list.
===================================================
18.  MOSCOW CAN  NOW OFFER RUSSIAN CITIZENSHIP TO EIGHT MILLION UKRAINIANS

 
Window on Eurasia: by Paul Goble, Vienna, Tuesday, September 23, 2008

 

VIENNA – Under the terms of new legislation nominally intended to promote the repatriation of “Russian compatriots” and thus help solve Russia’s demographic problems, Moscow can now offer Russian Federation citizenship to more than eight million Ukrainians, even though the Ukrainian constitution prohibits dual citizenship.     

 

Had Moscow taken this step six months ago, Verkhovna Rada deputy Kseniya Lyapina told Kyiv’s “Delo” yesterday, “it might have been possible to consider this as part of Russia’s domestic policy.” But after Moscow’s invocation of its right to protect Russian citizens in South Ossetia, these changes look like “preparation for aggressive actions” (delo.ua/news/87411/).

 

According to that newspaper, “those who want to receive a Russian passport do not need to live on the territory of the [Russian] Federation for five years, provide evidence of the source of their incomes or demonstrate a knowledge of Russian” if they are former citizens of the USSR and were born on the territory of Russia.

 

If Ukrainians were to give up their Ukrainian citizenship in order to take Russian citizenship and then move to the Russian Federation, as some demographers and political analysts have suggested is the reason behind the new rules, that would not necessarily create a problem for Kyiv, especially since the number of those likely to do so would not be large.

 

But if because of these simplified procedures, more Ukrainians take Russian citizenship without giving up their Ukrainian citizenship in violation of the Ukrainian constitution and then remain in Ukraine, Moscow would likely be able to exploit them in the same way it used the presence of dual citizens of Abkhazia and South Ossetia to justify military action.

 

Unfortunately, the comments of Russian officials in recent days suggest that there is little reason to put a positive interpretation on this new act. Indeed, in an article carried in Ukrainian papers over the weekend, Russian Foreign Minister Sergey Lavrov provides the basis for just the opposite reading (www.mid.ru/brp_4.nsf/0/5F3D95AD906E3A42C32574CA002A4FA2).

 

The Russian minister sharply criticized Kyiv for its failure to criticize Georgia and for its assumptions that what Moscow had done there was not “a response to aggression” but rather an indication of some kind of grand imperial design that gives Ukraine no choice but to seek protection from the West.

 

Not only is this insinuation entirely false, Lavrov said, but it is being made by those in Kyiv who want to push Ukraine into NATO “in spite of the opinion of the overwhelming majority of its population and elementary democratic procedures” but one that will divide Ukraine from its Russian neighbor.

 

And Russia has demonstrated, the minister argued, that it is interested only in protecting people as it did in Georgia and making sure that “Tbilisi will not use force again.” Moscow has no “hidden agenda,” something he said had been proved by President Dmitry Medvedev’s agreement with French President Nicholas Sarkozy.

 

But in words that many Ukrainians and others will see as an indication that Moscow does have a broader agenda if no longer a “hidden” one, the Russian foreign minister  said that “the entrance of Ukraine into NATO would bring its wake a deep crisis in Russian-Ukrainian relations” and have “the most negative” impact on European security more generally.

 

And then the minister added that Russia has some “serious concerns” about how Ukraine is acting domestically:

 

[1] First of all, he said, Moscow is very disturbed by “the discrimination and exclusion from all spheres of life of the Russian language,” which restrict “the rights of millions of Russian-language citizens of Ukraine.

 

[2] Second, he said, “we can hardly agree with the pseudo-historical treatment by Kyiv of the events connected with the famine of the 1930s in the USSR  as some kind of ‘genocide of the Ukrainian people’,” an approach which slanders the memories of “millions of famine victims of other nationalities.”

 

[3] And third, Lavrov concluded what many in Kyiv and elsewhere will see as a bill of indictment of the current Ukrainian government, the Russian government currently notes “with regret, “the growth of Russophobic and also anti-Semitic attitudes among the nationalistically inclined organizations of Ukraine.”

——————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
19.  UKRAINIANS UNNERVED BY RUSSIAN MOVE TO EASE NATIONALITY RESTRICTIONS

 
Interfax Central Europe, Warsaw, Poland, Tuesday, September 23, 2008
WARSAW – Russian moves to ease passport restrictions for those of Russian heritage in Ukraine is seen as “a first  step  in  aggression” toward Ukraine, Ukrainian experts and politicians warn, as cited by the Tuesday edition of the Polish daily Gazeta Wyborcza.
“A fight over the Crimea would be a battle of crazy men,” said Ukrainian columnist  Vitali Portnikov, according to the paper. “However, we cannot
rule this out because there is no lack of crazy men in Russia.”
 
Ukrainian politicians in Kiev have called a move to allow those with Russian  background instant nationality and passports provocative – even though the  Kremlin insists that those wanting nationality must move to Russia to gain a passport,  according  to  Gazeta Wyborcza.
 
Ukrainian politicians have also warned that “half  of  Ukrainians” could theoretically apply for such a passport, with experts stating that Russia is  attractive for many because wages are twice as high as in Ukraine.
Ukrainians  have  also  made much of Russian President Dmitry Medvedev’s call to  defend  “Russian  brothers” in Georgia and see the instant
nationalization as a possible lead up to come to the defense of Russians living in Ukraine.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
20.  THE HISTORY IS COMPLEX, BUT THERE’S NO DOUBT CRIMEA IS PART OF UKRAINE 
The border with Russia was agreed at the UN, and talk of moving it now is dangerous.

 
Letter-to-the-Editor: By Ihor Kharchenko, Ambassador of Ukraine to the United Kingdom
The Guardian, London, UK, Wednesday, September 24, 2008
 
LONDON – Your report from Sevastopol, “the historic home of Russia’s Black Sea fleet”, gave the impression that Ukraine should be feeling guilty because the Crimean peninsula falls within its own territory (Divided peninsula plays host to Russian warships and Ukrainian pride, September 16).
“On the streets of Sevastopol, the mood is defiantly pro-Russian,” you report. “It is also vehemently opposed to Ukraine’s President Viktor Yushchenko and his plans to join Nato.” You then go on to quote several locals who claim that Crimea should be part of Russia, with no counterbalance. One of these, an MP in Crimea’s parliament, goes on to question the status of Ukraine itself. “It’s a myth that Ukraine is not part of Russia,” he says. “We don’t believe it.”
It is true, as you say, that the decision of the then Soviet authorities in 1954 to incorporate Crimea into the Ukrainian Soviet Socialist Republic is still is regarded as a mistake by some Russians as well as some Ukrainians. Moreover, in the list of historical “invaders” of Crimea one may find Scythians, Greeks, Ottoman Turks, Russians, even British and French, but no Ukrainian trace at all. So it may appear surprising that Crimea belongs to Ukraine.
However, the history is complex, and the fact is that the Crimean Autonomy is now a constituent part of Ukraine. Since 1954 this status has been reconfirmed twice – in the treaties between Russia and Ukraine of 1990 and 1997, stipulating the inviolability of existing frontiers. Probably that is why the Russian official you quote says firmly that Russia “doesn’t lay any claims on Sevastopol”.
Probably one other reason is the fact that, back in 1993, the Russian parliament tried to revisit the issue of Sevastopol’s affiliation and put the city, by means of parliamentary decree, back into Russian sovereignty.
The Ukrainian government sought advice from the UN security council, and I was a part of its delegation. On July 20 1993 the security council adopted a statement stressing that “in the treaty of 1990 Russia and Ukraine committed themselves to respect each other’s territorial integrity within their currently existing frontiers”, and adding that the Russian decree “is incompatible with this commitment as with the principles of the charter of the UN, and without effect”.
Given current events on Russia’s borders, it is surely ill-advised for you to speculate that “staging a coup in Sevastopol would be easy”.
Your report mentions “optimists” who “believe talk of Russia wrestling back Crimea from Ukraine is simply overblown”. It is said that pessimists in fact are well-informed optimists. Nevertheless, I remain optimistic and dare to believe that optimists on the issue are in the vast majority in both Ukraine and Russia.
In 1993 the UN security council’s note ended with a statement that “the security council will remain seized of the matter”. Irrespective of that, optimists hope that the security council won’t ever need to look into the matter again.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
Please contact us if you do not wish to receive the AUR.
===================================================
21.  UKRAINE BETWEEN THE WEST AND THE EAST

 
ANALYSIS & COMMENTARY: by Mihai Hareshan
Nine o’Clock, Bucharest, Romania, Monday, September 22, 2008

The Georgian crisis, erupting on the international scene with the ‘five-day war’ between Russia and Georgia on August 7, 2008, has registered a new and one of the most significant episodes last week.

 
Yulia Timoshenko’s Government has been dismissed by President Viktor Yushchenko on September 16 on the backdrop of the latter’s accusations that the Prime Minister has an ambiguous – verging on treasonous – attitude towards the war that pitted Georgia against Russia last month, accusations amounting to no less than being in the pay of Moscow.
 
What is of course strange, to say the least, is the fact that Viktor Yushchenko and Timoshenko are the heroes of the 2003 ‘orange’ revolution in Ukraine, a revolution that led to the installation of a reformist power in Kiev, and that the current Government was formed in Parliament after the latest snap elections last year, through an agreement between the parties of the aforementioned politicians.

The crucial question in the case of the current Government crisis and that of the political crisis that subsequently erupted – the second crisis registered in the three years of the current Parliament, the previous one having to do with a conflict between them too and being resolved through snap elections – is the following: what is the main cause?

The answers that can be given to this question cannot rule out references to Russia, nor to the Ukrainian political system and to the conflict between the two politicians.

Could Russia be behind the current Government crisis? The answer is difficult. Moscow’s stance towards the complex problems of the former Soviet area is known. President Dmitry Medvedev has shown very clearly that Russia has special interests in this area and even beyond it and that his country will defend the dignity of Russians living in adjacent states (over 10 million of them in Ukraine).

 
Likewise, he reiterated Russia’s unyielding opposition to NATO’s expansion towards the Russian borders, and Moscow’s behaviour vis-à-vis Georgia emphasizes that when it comes to this issue, Russia is ready to go up to the final consequences.
 
As known, Ukraine is one of the countries that are due to undergo a NATO evaluation in December in order to receive the MAP statute that precedes the accession to the alliance. Moreover, port facilities for the Russian fleet in the Black Sea have been rented in Ukraine’s Crimea until 2017, and the fleet’s ships have been used in the war against Georgia.
 
In recent weeks embryos of separatist movement have made themselves felt in the Crimea – with most of the locals being ethnic Russian or Russophiles – and in Moscow one could hear voices asking for the reclaiming of the peninsula that Russia ceded to Ukraine as a ‘gift’ in 1954.

On the other hand, even President Viktor Yushcenko issues unveiled hints referring to Russia’s involvement in the current crisis. In a recent interview he did not exclude this possibility, pointing out that such a scenario certainly exists in Moscow. ‘Will they repeat the Georgian scenario?’ Yuschenko asked. ‘For sure, no. Ukraine is not Georgia’ he said. ‘I think that today to deal with a country like Ukraine in such an inconsiderate manner… is not a good idea for anyone.’

Hence, a true and complex political background that presents Russia as the beneficiary of the political crisis in Kiev, now that Moscow has shown simultaneously with the recognition of South Ossetia’s and Abkhazia’s independence that the political rearrangement of the former Soviet area has begun.

 
The more the crisis is prolonged, the more the chances of Ukraine’s positive evaluation for a MAP in December drop, the more it splits the country in two antagonist parts – anti and pro Russian, the more the country’s destabilization deepens and the more Ukraine’s orientation towards Russia could gain consistency. And NATO would be unlikely to accept within its ranks o country that is in the midst of political crisis and that has tense relations with the Russian neighbour.

It’s just that standing to gain from it does not automatically mean you are the initiator of the crisis – whether through covert or a different kind of action – with Russia having the benefit of the doubt until proven otherwise. However one cannot ignore the accusations that President Viktor Yushcenko brought against the Prime Minister, accusations regarding the latter’s double dealing stance towards Russia, nor could one ignore Timoshenko’s statements.

 
Unlike Yushcenko, who openly condemned the Russian aggression and politically backed Georgia by restricting the movements of Russian ships from the Crimea, she said that although she does not support Moscow’s recognition of the separatist entities in Georgia, nevertheless she considers that Kiev needs good relations with its neighbour to the east.

Other recent developments come to give credence to the possible implications of the Russian action in escalating the crisis in Ukraine. Thus, Victor Yanukovich, the leader of the Party of Regions, Yushcenko’s former strong counter-candidate in the previous Presidential elections and the future candidate in the 2010 presidential elections and a politician known for his pro-Russian orientation, is considered to have chances of building a new Parliamentary majority along with Yulia Timoshenko.

 
When it comes to Russia, their stances are close to identical – the neighbor to the east should not be irked, there is a need of good relations with it – and their anti-Presidential position has recently become staunch. Recently he stated that ‘the Ukrainians feel no threat coming from Russia.
 
Speaking about such a threat, I think, are only those people that were cloned by the ‘orange’ revolution experiment. I don’t know how to call them – mutants, monsters. The rest normal people want to live in peace with their neighbours.’

If we refer to the servitudes of the Ukrainian political system and to the traits of the personalities involved in this crisis the picture is likewise complex. On the one hand, there is a strong current in support of amending the Constitution and limiting the President’s prerogatives was tried out (a move that has basically led to the current crisis, Timoshenko’s party voting alongside the opposition in support of limiting the Presidential prerogatives, in what Viktor Yushchenko called ‘a political coup’).

 
On the other hand, Yushchenko and Timoshenko are strong personalities whose will for exclusive power brings them into conflict. That is what happened almost a year ago when snap elections had to be called in order to end another political crisis. An official stated that: ‘It’s not about being pro-Western or pro-Russian. It’s about who gets to sit on the pipe,’ referring to the state’s large revenues obtained from the transit of fossil fuels.
 
‘Timoshenko is only interested in what serves her. She wants a monopoly on power. She was pro-Western when she needed the West’s support. Now she is trying to be pro-Russian.’ Both Yushchenko and Timoshenko are emerging as opponents in the Presidential elections of 2010, and the current crisis could be the beginning of their split for that competition.

According to the Constitution, by mid-October the Parliament has to come up with a new Government based on a new majority. If it fails then early elections will be next.

Irrespective of how it comes about, most of the political analysts foresee a prolonged crisis and a deepening instability in Ukraine in the near future, since Moscow revealed its intentions in the former Soviet area after the war in Georgia.

 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
22.  ANSWERING RUSSIAN AGGRESSION

 
OP-ED: By Mikheil Saakashvili, President of Georgia, The Washington Post
Washington, D.C., Tuesday, September 23, 2008; Page A21
 
TBILISI, Georgia — When tens of thousands of Russian troops and armored vehicles overwhelmed our country last month, the international community rallied to support us. Had Georgia been just another autocracy on Russia’s border, it is unlikely that so many world leaders would have traveled to Tbilisi to stand with the Georgian people.
This show of solidarity reinforced our belief that Georgia’s survival depends on becoming an ever more open and democratic society, firmly embedded in the community of free nations. How we respond is also pivotal to the future of the West.
Georgia was a corrupt, failing country that transformed itself into a liberal and promising nation in only a few years. To be sure, our democracy is still a work in progress. But it is a beacon in a difficult part of the world. And because Georgia lies at a crucial energy crossroads, an open, transparent government is even more vital.
Georgia also stands for the ability of the free world to respond with resolve to Moscow’s violent attempts to roll back democracy, reassert its empire and control European energy resources.

In hurrying to recognize the “independence” of our regions of South Ossetia and Abkhazia, Moscow erased universally recognized borders and challenged the system of sovereignty that underpins international law. It also concealed the ethnic cleansing that was undertaken by Russia and its proxies.

The West’s challenge now is to stand up to Russia without resorting to its brutal tactics. Our best protection lies in the ideas and values that guide our community of nations.
My government understands that how we conduct our affairs is a matter of consequence not only for us but also for our allies. We recognize that Russia’s insistence on using force has left it isolated politically and vulnerable economically.
Our belief in openness is not mere rhetoric. Despite the ruins created by the invasion — hundreds dead; nearly 200,000 displaced, according to the United Nations; our economy disabled — my government is putting our convictions into practice.
Transparency must begin with an understanding of how the war started. For years, Russia sought to slander Georgia and my government while also blocking any meaningful negotiations with the separatists. This was part of a campaign to weaken international support for Georgia and lay the groundwork for invasion. As has been reported, Russia began a sharp military buildup this spring in both conflict zones, leading to armed attacks this summer by its proxy militias.
 
Russia then started its land invasion in the early hours of Aug. 7, after days of heavy shelling that killed civilians and Georgian peacekeepers. At the time, Russia announced that 2,100 South Ossetian civilians had been killed by Georgians, thus forcing Moscow’s “humanitarian intervention.” This lie, subsequently debunked by Human Rights Watch (which estimated 44 dead) and others, was an attempt to conceal Moscow’s true motives.
On Aug. 17, standing next to German Chancellor Angela Merkel, I called for an international investigation into the origins of the war. My government is ready to share every piece of evidence and provide access to every witness sought by investigators. Is Russia willing to do the same?
Our second front in pursuing openness and transparency is at home. Last week, I announced a series of measures to strengthen Georgia’s democracy, giving opposition parties a central role in our reconstruction and defense planning.
 
We are working to foster pluralism in media and civil society, including giving opposition parties more funding and greater influence over public broadcasting. Initiatives also aim to make our judicial system more independent.
We are committed to transparency with our partners as well. My government has established rigorous mechanisms to ensure the accountable use of the aid that has been pledged so generously by, above all, the United States as well as by Europe, Japan, Canada, Australia and others.
But the West also must respond to Russia with conviction. We cannot allow Russia’s annexation of South Ossetia and Abkhazia to stand. Nor can Moscow be permitted to continuously flout the cease-fire to which it has repeatedly agreed.
My government welcomed the European Union’s decision to accelerate Georgia’s integration into European institutions. Last week, we were heartened by the first official visit to Georgia by the North Atlantic Council, and we hope that NATO will move forward with our membership application.
We Georgians will continue building our democratic future. We are focused on strengthening the community of democratic nations. The world must not permit Russia or others to assert spheres of influence and thus deny the right of free people to associate with like-minded nations.
 
LINK: http://www.washingtonpost.com/wp-dyn/content/article/2008/09/22/AR2008092202581.html
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=========================================================
U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
Promoting U.S.-Ukraine business investments since 1995. Join Today.
=========================================================
23.  FUTURE OF VIKTOR YUSHCHENKO AND POLITICAL CRISIS IN UKRAINE

ANALYSIS AND COMMENTARY: By Vadim Karasyov, Vitaly Portnikov, Kyiv

Eurasian Home, Moscow, Russia, Tuesday, September 16, 2008

[1] By Vadim KARASYOV, Director of the Institute of Global Strategies, Kyiv

Among all Ukrainian top politicians only President Viktor Yushchenko regards the presidency as an opportunity to realize the nation-building project. For Yuliya Tymoshenko and Viktor Yanukovych, the presidency is the project of seizing supreme power. In other words, they see the presidency as a goal rather than a tool. Tymoshenko and Yanukovych are effective and popular policy-makers and party leaders. But unlike Viktor Yushchenko they are not statespersons.
What is the difference between a statesman and a politician? A statesman, even if he is not popular now, can gain wide popularity in the future, while a popular politician who has no national project can lose his or her rating quickly.
In Ukraine only Viktor Yushchenko demonstrates statesmanship and has a historical vision of presidency, but he is unpopular now, which is quite explainable. The idea of the Ukrainian nation is not consistent with the divided country (the same is true for Georgia). Ukraine is a country of minorities,
which are forced to create the parliamentary majority. This is the disadvantage that keeps causing the permanent political crisis in the country.
Before discussing the future of Viktor Yushchenko within the framework of the current political crisis in Ukraine, there is a need to say a couple of words about his presidency.
In 2004 Ukraine must have finished its post-Soviet development. Russia did that in 2000, when Vladimir Putin came to power.
Any president of Ukraine, who would have come to power in 2004, should have decided what policy the state would follow after the finishing of Ukraine’s post-Soviet development. A new leader should face new challenges. Viktor Yushchenko chose the nation building project. However, he had no enough powers to implement it. Since 2006 Viktor Yushchenko has had neither parliamentary majority nor loyal Cabinet of Ministers.
But I believe that Yushchenko’s situation is not hopeless. Everything will depend on how the election campaign will be conducted. If Yuliya Tymoshenko concludes an official coalition agreement with the Party of Regions, she may lose the support of the West Ukrainian electors who will vote for Yushchenko again.
 
If Tymoshenko does not conclude the agreement with Viktor Yanukovych and three major political forces take part in the elections, Yushchenko will have every chance of taking about 15 percent of the vote and then the main intrigue will take place in 2009-2010.
[2] By VITALY PORTNIKOV, “Svoboda” broadcasting station’s observer, Kyiv
Viktor Yushchenko’s high popularity rating in 2004 was neither based on the nation building project, nor on the study of the Cucuteni archeological culture, from which the Ukrainian people is said to descend, nor on the condemnation of the Great Famine (Holodomor) in Ukraine.
 
During his premiership in 1999-2001 he was the first Prime Minister in the independent Ukraine who paid off arrears of wages and pensions. So, he was the first social Premier who in 2004 was expected to become the first social President.
 
What did he promise when running for President in 2004? He promised the people wellbeing and prosperity. He also promised to fight against corruption, to create favorable conditions for the development of small business and many other things that were supposed to improve the ordinary people’s living. Viktor Yushchenko’s high rating was based on the broad social programmes of his election campaign. The voters regarded him as, above all, a successful economist and banker. 
Did he position himself as an anti-Russian presidential candidate? No, he didn’t, except in the propaganda of his political opponents and the Russian mass media maybe. Yushchenko himself tried his best to show that he wanted good relations with Russia. As the Prime Minister of Ukraine, he made such unprecedented concessions to maintain friendly relations with Russia that no Ukraine’s Premier had ever made.
Yushchenko’s opponents said: “He is against Russia. He hates Russia. He wants Ukraine to join NATO to defend it from Russia”. Viktor Yushchenko and his adherents denied those accusations. But Yushchenko’s position during the recent Russian-Georgian conflict indicates that all his previous projects, which were aimed at improving relations with Russia, are fading. Now Yushchenko is associated only with his anti-Russian project, while Yuliya Tymoshenko has become the social leader of Ukraine instead of him.
As a matter of fact, her position is the same as Yushchenko made public in 2004. She is a European-oriented politician and opposes the confrontation with Russia. Apart from that, she advocates improving the wellbeing of the people, fighting corruption, in a word all those things Yushchenko supported in 2004.
 
Currently there are a few people in Ukraine backing Viktor Yushchenko’s nation building and cultural project, and the votes at the early elections if they were called could be distributed, in the main, between the Party of Regions and Yuliya Tymoshenko Bloc.
I am not sure that the early parliamentary elections will take place in Ukraine. I concede that the Party of Regions and Yuliya Tymoshenko Bloc can come to an agreement with each other in the Parliament and form a coalition that will exist till the next elections. It can be called “the coalition of national reconciliation” or “the stability coalition”.
 
Those politicians will decide that the general presidential elections divide the country and they will not be held any more. Then Viktor Yanukovych will be nominated Ukraine’s President, Yuliya Tymoshenko will become Prime Minister and Viktor Yushchenko will be sidelined.
But Yushchenko can avert that, calling the presidential elections. Undoubtedly, he will lose them. In that case, Tymoshenko will be elected as President, and Yanukovych will become Prime Minister. This makes almost no difference.
Does Viktor Yushchenko have any allies in this struggle? Yes, he does. Surprisingly, the two previous Presidents of Ukraine Leonid Kravchuk and Leonid Kuchma won the presidential elections thanks to the East Ukrainian voters and, later on, they gained the Western Ukraine’s support. On the contrary, Viktor Yushchenko was elected by the Western and Central Ukraine and he won the Eastern electorate’s favour without changing ideologically.
 
In terms of ideology, he continues to be the President of the Central and Western Ukraine, but he has got support from the businessmen from the Southeast of Ukraine, first and foremost, from Rinat Akhmetov and Boris Kolesnikov, Ukrainian tycoons who are the sponsors of Viktor Yanukovych’s Party of Regions.
 
Yushchenko has come to realize that he should be the President of only the rich Ukrainians, which helped him to remain in power. But it is worse to be the President of the rich Ukrainians than the President of all the Ukrainians, since, unlike the rich Ukrainians, the ordinary Ukrainians do not dupe you. And rich people, when seeing that Yushchenko is unable to preserve their capital, seek to find a replacement for him.
For all that, Yushchenko’s future positive role is that he can prevent the state from becoming authoritarian. The coalition of Yuliya Tymoshenko Bloc and the Party of Regions would be an ideal pattern existing in Russia: effective Prime Minister (in Russia – Vladimir Putin, in Ukraine – Yuliya Tymoshenko), respected President (in Russia – Dmitry Medvedev, in Ukraine – Viktor Yanukovych) and security of the financial and industrial groups that came to terms with those political forces.
NOTE: The material is based on the experts’ addresses to Moscow-Kyiv television bridge “The future of Viktor Yushchenko and political crisis in Ukraine” organized by the Russian Agency of International Information RIA Novosti on September 10.
 
LINK: http://www.eurasianhome.org/xml/t/expert.xml?lang=en&nic=expert&pid=1729
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
“ACTION UKRAINE REPORT – AUR”
A Free, Private, Not-For-Profit, Independent, Public Service Newsletter

With major support from The Bleyzer Foundation, Kyiv, Ukraine
Articles are Distributed For Information, Research, Education, Academic,
Discussion and Personal Purposes Only. Additional Readers are Welcome.
LINK TO THE AUR 2007-2008 ARCHIVE: http://www.usubc.org/AUR/
 
TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR, several times a month, please send your name, country of residence, and e-mail contact information to morganw@patriot.net. Information about your occupation and your interest in Ukraine is also appreciated.
 
If you do not wish to read the ACTION UKRAINE REPORT please contact us immediately by e-mail to morganw@patriot.net.  If you are receiving more than one copy please let us know so this can be corrected. 
 
PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer, The Bleyzer Foundation
Emerging Markets Private Equity Investment Group;
President, U.S.-Ukraine Business Council (USUBC)
1701 K Street, NW, Suite 903, Washington, D.C. 20006
Tel: 202 437 4707; Fax 202 223 1224
LINK TO THE AUR 2007-2008 ARCHIVE: http://www.usubc.org/AUR/
 

Power Corrupts and Absolute Power Corrupts Absolutely.
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================

Leave a comment

Filed under Uncategorized

AUR#909 Sep 21 Genocide Against the Ukrainians Within the Whole Soviet Empire 1929-1938

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

Ukrainian History, Culture, Arts, Business, Religion, Economics,
Sports, Government, and Politics, in Ukraine and Around the World       
 
GENOCIDE AGAINST THE UKRAINIANS
The genocide was against the Ukrainians as a national/ethnic group
living within the whole Soviet empire over a period of years 1929-1938
 

Ukraine Remembers -The World Acknowledges 
2008 – 75th Commemoration Of The Holodomor 1932-1933
“Induced Starvation, Death for Millions, Genocide”

                     
ACTION UKRAINE REPORT – AUR – Number 909
Mr. Morgan Williams, Publisher and Editor, SigmaBleyzer
Founder/Trustee, “Holodomor: Through the Eyes of Ukrainian Artists”
WASHINGTON, D.C., SUNDAY, SEPTEMBER 21, 2008
 
INDEX OF ARTICLES  ——
Clicking on the title of any article takes you directly to the article.               
Return to Index by clicking on Return to Index at the end of each article
Ukraine government says Soviet Union orchestrated shortage
By Russell Working, Reporter, Chicago Tribune, Chicago, Illinois, Sat, Sep 20, 2008
 
Interfax Ukraine News, Kyiv, Ukraine, Thursday, September 18, 2008
 
Interfax Ukraine News, Kyiv, Ukraine, Friday, September 19, 2008
 
UNIAN, Kyiv, Ukraine, Monday, September 15, 2008
 
Ukrinform, Kyiv, Ukraine, Thursday, September 18, 2008
 
6HOLODOMOR EXHIBIT OPENS AT THE U.S. DEPARTMENT OF STATE
Presentation: David J. Kramer, Assistant Secretary for Democracy, Human Rights, and Labor
U.S. Department of State, Holodomor Exhibit Opening
Ralph J. Bunche Library, Washington, DC, Tuesday, September 16, 2008
 
The Ukrainians call it the Holodomor – the Hunger.
By Simon Sebag Montefiore, award winning author of “Young Stalin”
The Mail on Sunday, London, United Kingdom, July 26, 2008
 
Commentary: By Professsor Roman Serbyn, Montreal, Quebec, Canada, Sunday, July 27, 2008
 
The Day Weekly Digest #21, Kyiv, Ukraine, Tuesday, 8 July 2008 
 
10REGARDING THE RESOLUTION OF OSCE ON THE HOLODOMOR IN UKRAINE
Commentary: Professor Roman Serbyn, Montreal, Quebec, Canada, Thursday, July 3, 2008
 
Interfax, Moscow, Russia, Wednesday, June 4, 2008

12 UKRAINE IRKS RUSSIA WITH PUSH TO MARK STALIN FAMINE AS GENOCIDE
By Daryna Krasnolutska & Halia Pavliva, Bloomberg, Kyiv, Ukraine, New York, NY, Fri, Jan 4, 2008 

 
13 RUSSIA: 1930’S FAMINE MAINLY IN SOVIET UKRAINE WAS NOT GENOCIDE 
By Steve Gutterman, Associated Press Writer, AP, Moscow, Russia, April 2, 2008
 
Analysis & Commentary: By Peter Borisow
Kyiv Post newspaper, Kyiv, Ukraine, July 16, 2008
The Ukrainian Weekly newspaper, Parsippany, NJ, Sunday, August 17, 2008
 
New book edited by Lubomyr Luciuk: A series of essays by leading scholars and

journalists on the causes and consequences of the Great Famine of 1932-33 in Soviet Ukraine.
By Morgan Williams, Publisher and Editor, Action Ukraine Report (AUR)
Washington, D.C., Sunday, September 21, 2008
 
New issue of the Canadian American Slavic Studies Journal, Fall 2008
By Morgan Williams, Publisher and Editor, Action Ukraine Report (AUR)
Washington, D.C., Sunday, September 21, 2008

17.  UKRAINE: NEW BOOK BY THE LATE NOTED HISTORIAN JAMES MACE 

Collection of scholarly and journalistic works entitled “Your Dead Choose Me”
By Olha Risheltylova, The Day Weekly Digest, Kyiv, Ukraine, Tue, Sep 16, 2008

18LAW OF UKRAINE No.376-V “ON HOLODOMOR IN UKRAINE IN 1932-1933”

Parliament of Ukraine, Verkhovna Rada, November 28, 2006, Kyiv, Ukraine
English translation by Action Ukraine Report (AUR), Washington D.C., Sun, Sep 21, 2008
 
An orphan in Kiev in 1934. Her parents had died of starvation and she survived on charity from a neighbour
Tony Halpin in Kiev, The Times, London, UK, Sunday, June 22, 2008
20 75 YEARS LATER, HORROR STAYS FRESH, 1930’S FAMINE IN UKRAINE MARKED
Melissa Dunne, The Windsor Star, Windsor, Ontario, Canada, Saturday, May 24, 2008
===================================================
1
HISTORIANS, SURVIVORS HOPE TO DRAW ATTENTION TO UKRAINIAN FAMINE
Ukraine government says Soviet Union orchestrated shortage
By Russell Working, Reporter, Chicago Tribune, Chicago, Illinois, Sat, Sep 20, 2008
 
CHICAGO – Behind Neonila Scherstiuk Lychyk’s school in the Ukraine of her childhood, there was a cemetery and, sometimes during recess, horse carts arrived loaded with corpses.  At first, Lychyk said, the teacher would shoo the children indoors. In time, she didn’t bother.

The entire Ukraine was experiencing the horror anyway: the corpses in the streets, the villages emptied of people, the little ones who disappeared—rumored to have been kidnapped by cannibals.

This fall, Chicago-area Ukrainians like Lychyk of River Forest are commemorating the 75th anniversary of the Holodomor, or death by hunger, which the Ukrainian government says was a Soviet-engineered famine that killed as many as 10 million people in 1932-33.

Anniversary events include seminars, an exhibition, memorials and requiem masses. Organizers and survivors said their efforts to spread the word are urgent. Like those who lived through the Holocaust, survivors of what has been called the “genocide famine” are growing fewer by the day.

Unlike the Holocaust, which was exposed and recorded by conquering armies, the Holodomor was hidden for at least two generations by a communist regime that had no qualms about using food as a weapon but didn’t want the world to know, historians said.

Historians and the Ukrainian government say the famine was engineered by the Kremlin, which sent communist thugs door to door to steal food out of pantries and off of tables. Meanwhile, the government exported Ukrainian grain to the West throughout the famine.

This summer, the Ukrainian government released historical documents it says prove the Holodomor was an intentionally manufactured genocide. Moscow has resisted the label of “genocide,” saying Russians and others in the Soviet Union—not just Ukrainians—suffered under Stalin’s iron rule.

Taras Hunczak, a Ukrainian-born history professor emeritus at Rutgers University, has studied original documents related to the famine. Estimates of deaths have ranged widely and are difficult to prove, but Hunczak said he believes 7 million to 10 million people probably died.

The Chicago-based Ukrainian Genocide Famine Foundation USA annually memorializes the victims of the Holodomor through talks in schools and a memorial service. But this year the foundation is making an extra push to remind the world, foundation president Nicholas Mischenko said.

Mischenko was born in Ukraine a year after the Holodomor. He never met two older siblings who starved to death. “They took away our farm. Took away everything that we had: cows, horses, chickens—everything. And after that they took away all the foodstuffs.”

During World War II, his family fled Ukraine, spending three years traveling across central Europe before gaining refugee status in Austria and emigrating.

Anatole Kolomayets, a Chicago artist who was born in 1927 and survived the famine with his younger brother, George, said his family lived on a farm in a devastated rural area. His father fled out the back door as the police arrived to arrest him. Kolomayets’ father soon found a job at a Poltava railroad station, where he received a bread ration and the family rejoined him.

Lychyk’s family survived because her father was a state employee and received a food ration. But every day as a 7-year-old, she saw the fate of families who couldn’t feed their children.

For years, Lychyk didn’t tell her children about what she had survived. But recently, she wrote down her memories for them.

“This is something that is very hard to discuss, because you just don’t want to take the joy of life from young generations,” she said. “But I think that’s wrong. We should tell our children and grandchildren so this doesn’t happen again.” [rworking@tribune.com]

 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
2. DRAFT RESOLUTION ON HOLODOMOR FAMINE IN UKRAINE

TO BE DISCUSSED AT UNITED NATIONS GENERAL ASSEMBLY
 
Interfax Ukraine News, Kyiv, Ukraine, Thursday, September 18, 2008

KYIV – A draft resolution on the Holodomor Famine in Ukraine in 1932-1933 will be discussed at the next sitting of the General Committee of the 63rd session of the UN General Assembly, the press service of Ukrainian Foreign Ministry reported on Thursday.

The Foreign Ministry said the draft resolution “contains an appeal to honor the memory of the victims of the Holodomor famine in Ukraine in 1932-1933, which took the lives of millions of Ukrainians, and people of other nationalities who lived in Ukraine during that time.”
The draft resolution also calls on UN member states “to include information on the Holodomor famine in Ukraine in 1932-1933 in their educational programs aimed as preventing future generations from [repeating] a sorrowful lesson from a tragic page in global history.”
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
3.  RUSSIA THINKS UKRAINE’S ATTEMPTS TO PROMOTE HOLODOMOR ISSUE IN UN GA ARE INCORRECT

 
Interfax Ukraine News, Kyiv, Ukraine, Friday, September 19, 2008

MOSCOW – Moscow thinks that Ukraine’s attempts to promote the so-called Holodomor in the UN General Assembly is incorrect and flawed.

The General Committee made a decision “to postpone the inclusion of the Holodomor issue on the agenda [of the UN General Assembly], which is actively promoted by the Ukrainian delegation” at the UN headquarters in New York a day earlier, a spokesman of the Russian Foreign Ministry Andrei Nesterenko told a news conference on Friday.
“Russian representatives in the General Committee told that the attempt of the Ukrainian side to usurp tragic pages of common history of many USSR nations are incorrect and are flawed from a moral point of view,” Nesterenko said.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
4.  COMMUNIST REGIME FOUGHT AGAINST HOLODOMOR IN UKRAINE WITH RESOLUTIONS
 
UNIAN, Kyiv, Ukraine, Monday, September 15, 2008

KYIV – Russia declassified some documents about the hunger in USSR in 1930-1940ies, which took place because of the collectivization of farms and industrialization, in particular, in Ukraine, Kazakhstan, Belarus, and Ural. Copies of the declassified documents were posted at the official web site of the Russian Foreign Affairs Ministry.

 
The declassified documents indicate that, beginning from May of 1930, the Central Committee of the All-Union Communist Party of Bolsheviks (VKP(b)) received information about hunger, deficit of grain and bread from Senior Political Departments of Soviet Union republics.
 
On the basis of the received information, the Political Bureau of VKP(b) issued resolutions on aid to suffering regions almost every day. Thus, as for Ukraine, they made decisions to give help with seeds, to lift reservation on rye flour and to buy additional grain from eastern regions, etc..

On the other hand, the official web site of the Russian Foreign Ministry posted materials showing inactivity of the Ukrainian party leadership in solving the food crisis in the republic.

 
In particular, M.Zhyvanov [his position is not specified – UNIAN], wrote in his letter to Stanislav Kosior, first secretary of the Central Committee of the Communist Party in Ukraine: “Open your eyes to the reality. What are you doing with your policy, you, silent slaves of Moscow? You have ruined Ukraine and its agriculture within two years: you turned the Ukrainian party organization into a flock of parrots, who have learnt that it’s forbidden to say “unreal”, it’s opportunism.
 
“Last year these parrots left the Ukrainian economy without any slice of bread, without potato, without corn. At least, calculate, how many children and aged people have died from hunger here. At least you could show courage and calculate those victims, and familiarize Moscow with the results of our carefree and irresponsible “struggle for socialism”.

At the same time, a report from Mendel Khatayevych, Secretary of the Central Committee of the Ukrainian Communist Party, sent to the VKP(b), reads about a rise of epidemics in Ukraine, as of January 2, 1933:

“A rise of epidemics, in particular, typhus, has been recorded in Ukraine. The total number of cases for the whole year 1931 made up 8 thousand 384, during January-November of 1932 -15 thousand 458”, M.Khatayevych wrote.
 
As early as on March 17, 1933, the secret political department of the United State Political Directorate prepared a special report about hunger in the Ukrainian SSR, with indicating cases of mass death and cannibalism.
 
“Volodarskiy district of the Kyiv Oblast. In Rude village, a mother left her three children home alone. Having absolutely nothing to eat, a 9-year old boy, together his elder sister, killed their 3-year old younger sister. The children cut off her head and began to eat the raw meat of the dead body”, the special report informs. Very many such cases were listed in numerous reports from different regions of Ukraine.

The Russian Foreign Ministry informs that the publicized digital copies of original documents were received from funds of Russian federal archives. “These are just a part of a huge documental array about the hunger in USSR”, reads the preface to the declassified materials.

 
LINK: http://www.unian.net/eng/news/news-272942.html
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
==============================================================
U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
Promoting U.S.-Ukraine business relations & investment since 1995.
==============================================================
5.  HEAD OF UKRAINIAN INSTITUTE OF NATIONAL MEMORY BLAMES RUSSIA
FOR BIASED PUBLICATION OF DOCUMENTS ON HUNGER IN EARLY 30’S 
 
Ukrinform, Kyiv, Ukraine, Thursday, September 18, 2008
KYIV – X-file documents on the hunger of early 1930s in the USSR, recently put on the Russian foreign ministry website, were selected tendentiously, as among them there are no resolutions and directives most brightly proving the deliberate character of the Great Famine (Holodomor) in Ukraine, Academician Ihor Yukhnovskyi, acting head of the Ukrainian Institute of National Memory, told a press conference Thursday.
“We are greatly pleased that the Russian party, particularly its foreign ministry, showed interest in the issues of hungers in the Soviet Union and published the documents. We were glad to use some of them that we did not have before. Yet, I insist with authority that the set of documents is biased,” he said.
The Russian MFA website published 200 documents, saying it was just a small part of the mass of information about the hunger in the USSR in early 30s.
Ukrainian historians say the publication bears secondary papers and lacks principal ones, on the real nature of famine in Ukraine that was struck most of all.
Yukhnovskyi said his Institute would send to the Russian ministry documents from Ukrainian archives attesting to masterminded hunger in Ukraine. “It is up on to them whether to put those documents on the web or not,” the Academician noted.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================      
6.  HOLODOMOR EXHIBIT OPENS AT THE U.S. DEPARTMENT OF STATE

Presentation: David J. Kramer, Assistant Secretary for Democracy, Human Rights, and Labor

U.S. Department of State, Holodomor Exhibit Opening
Ralph J. Bunche Library, Washington, DC, Tuesday, September 16, 2008
 
WASHINGTON, D.C. – Ambassador Shamshur, honored guests: Thank you for the opportunity to take part in the opening of this exhibition to commemorate the 75th anniversary of the Holodomor tragedy.

Seventy-five years ago, the world witnessed a horrific episode of human suffering and deprivation in Ukraine. The Holodomor is an extraordinarily sad chapter in human history, all the more tragic because it was man-made.  It is necessary that we honor the memory of the lives lost as a result of this communist oppression. I join with you and people everywhere in remembering the victims of this terrible tragedy, one that never should have happened.

A year ago, we co-sponsored a resolution on the Remembrance of Victims of the Great Famine in the United Nations Educational, Scientific, and Cultural Organization, to call for promoting awareness of the Great Famine through educational and research programs.

We are also committed to permanently recognizing the victims in the United States. In October 2006, President Bush signed legislation authorizing a Holodomor memorial in Washington, D.C. This memorial will stand as a tribute to all people who suffered from the injustices of totalitarian regimes.

President and Mrs. Bush visited the Holodomor monument in Kyiv during their trip earlier this year, and Vice President Cheney earlier this month paid his respects as well. 

 
In the words of President Bush, during the Holodomor, “… millions died because they resisted Stalin’s brutal regime. We honor their memory and pledge to never forget their suffering. As we remember their struggle, we also condemn all authoritarian governments who have terrorized their people in the past and who continue to do so, thus continuing the fight for freedom and safety of all people.”

Since those dark days, Ukraine has regained its status as an independent nation and today is marked by political freedom and economic growth. The political situation is never dull but very importantly has remained peaceful. The United States strongly supports Ukraine’s efforts to strengthen democracy, rule of law, and good governance in order to better bring the fruits of representational government to the Ukrainian people.

The opening of this exhibition is a time for remembrance, and a time for moving forward. As we reflect on this tragic event in history, we should also celebrate Ukraine’s progress and look to the future with hope and confidence. Thank you.  [AUR Footnote: Your editor attended the Holodomor Exhibition event at the U.S. Department of State.]

LINK: http://www.state.gov/g/drl/rls/rm/2008/109839.htm
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
7.  HOLOCAUST BY HUNGER: THE TRUTH BEHIND STALIN’S GREAT FAMINE

The Ukrainians call it the Holodomor – the Hunger.
 
By Simon Sebag Montefiore, award winning author of “Young Stalin”
The Mail on Sunday, London, United Kingdom, July 26, 2008
 
The demented Roman Emperor Caligula once mused that if all the people of Rome had one neck he would cut it just to be rid of his troublesome people.
The trouble was there were simply too many Romans to kill them all.
Many centuries later, the brutal Soviet dictator Josef Stalin reflected that he would have liked to deport the entire Ukrainian nation, but 20 million were too many to move even for him.
 
So he found another solution: starvation.
 
Now, 75 years after one of the great forgotten crimes of modern times, Stalin’s man-made famine of 1932/3, the former Soviet republic of Ukraine is asking the world to classify it as a genocide.
The Ukrainians call it the Holodomor – the Hunger.
 
Millions starved as Soviet troops and secret policemen raided their villages, stole the harvest and all the food in villagers’ homes. They dropped dead in the streets, lay dying and rotting in their houses, and some women became so desperate for food that they ate their own children. If they managed to fend off starvation, they were deported and shot in their hundreds of thousands.
 
So terrible was the famine that Igor Yukhnovsky, director of the Institute of National Memory, the Ukrainian institution researching the Holodomor, believes as many as nine million may have died.
 
For decades the disaster remained a state secret, denied by Stalin and his Soviet government and concealed from the outside world with the help of the ‘useful idiots’ – as Lenin called Soviet sympathisers in the West.
 
RUSSIA IS FURIOUS THAT UKRAINE HAS RAISED THE ISSUE OF THE FAMINE
Russia is furious that Ukraine has raised the issue of the famine: the swaggering 21st-century state of Prime Minister Putin and President Medvedev see this as nationalist chicanery designed to promote Ukraine, which may soon join Nato and the EU. They see it as an anti-Russian manoeuvre more to do with modern politics than history. And they refuse to recognise this old crime as a genocide.
They argue that because the famine not only killed Ukrainians but huge numbers of Russians, Cossacks, Kazakhs and many others as well, it can’t be termed genocide – defined as the deliberate killing of large numbers of a particular ethnic group. It may be a strange defence, but it is historically correct.
So what is the truth about the Holodomor? And why is Ukraine provoking Russia’s wrath by demanding public recognition now?
The Ukraine was the bread basket of Russia, but the Great Famine of 1932/3 was not just aimed at the Ukrainians as a nation – it was a deliberate policy aimed at the entire Soviet peasant population – Russian, Ukrainian and Kazakh – especially better-off, small-time farmers.
It was a class war designed to ‘break the back of the peasantry’, a war of the cities against the countryside and, unlike the Holocaust, it was not designed to eradicate an ethnic people, but to shatter their independent spirit.
 
RANKS AS ONE OF THE MOST TERRIBLE CRIMES OF THE 20TH CENTURY
So while it may not be a formal case of genocide, it does, indeed, rank as one of the most terrible crimes of the 20th century.
To understand the origins of the famine, we have to go back to the October 1917 Revolution when the Bolsheviks, led by a ruthless clique of Marxist revolutionaries including Lenin, Trotsky and Stalin, seized power in the name of the workers and peasants of the Russian Empire to create a Marxist paradise, using terror, murder and repression.
The Russian Empire was made of many peoples, including the Russians, Ukrainians, Kazakhs and Georgians, but the great majority of them, especially in the vast arable lands of Ukraine, southern Russia, the northern Caucasus, and Siberia, were peasants, who dreamed only of owning their own land and farming it.
Initially, they were thrilled with the Revolution, which meant the breakup of the large landed estates into small parcels which they could farm.
But the peasants had no interest in the Marxist utopian ideologies that obsessed Lenin and Stalin.
Once they had seized their plots of land, they were no longer interested in esoteric absurdities such as Marx’s stages in the creation of a classless society.
The fact is they were essentially conservative and wanted to pass what little wealth they had to their children.
This infuriated Lenin and the Bolsheviks, who believed that the peasantry, especially the ones who owned some land and a few cows, were a huge threat to a collectivist Soviet Russia.
 
LENIN’S HATRED OF THE PEASANTRY BECAME CLEAR
Lenin’s hatred of the peasantry became clear when a famine occurred in Ukraine and southern Russia in 1921, the inevitable result of the chaos and upheaval of the Revolution. With his bloodthirsty loathing for all enemies of the Revolution, he said ‘Let the peasants starve’, and wrote ranting notes ordering the better-off peasants to be hanged in their thousands and their bodies displayed by the roadsides.
Yet this was an emotional outburst and, ever the ruthless pragmatist, he realised the country was so poor and weak in the immediate aftermath of its revolutionary civil war that the peasants were vital to its survival. So instead, he embraced what he called a New Economic Policy, in effect a temporary retreat from Marxism, that allowed the peasants to grow crops and sell them for profit.

It was always planned by Lenin and his fellow radicals that this New Economic Policy should be a stopgap measure which would soon be abandoned in the Marxist cause. But before this could happen, Lenin died in 1924 and Stalin defeated all his rivals for the Soviet leadership.

Then, three years later, grain supplies dropped radically. It had been a poor crop, made worse by the fact that many peasant farmers had shifted from grain into more lucrative cotton production.

Stalin travelled across Russia to inspect supplies and ordered forcible seizures of grain from the peasantry. Thousands of young urban Communists were drafted into the countryside to help seize grain as Stalin determined that the old policies had failed.

Backed by the young, tough Communists of his party, he devised what he called the Great Turn: he would seize the land, force the peasants into collective farms and sell the excess grain abroad to force through a Five Year Plan of furious industrialisation to make Soviet Russia a military super power.

He expected the peasants to resist and decreed anyone who did so was a kulak – a better-off peasant who could afford to withhold grain – and who was now to be treated as a class enemy.

DESTRUCTION OF THE KULAKS AS A CLASS
By 1930, it was clear the collectivisation campaign was in difficulties. There was less grain than before it had been introduced, the peasants were still resisting and the Soviet Union seemed to be tottering. Stalin, along with his henchman Vyacheslav Molotov and others, wrote a ruthless memorandum ordering the ‘destruction of the kulaks as a class’.

They divided huge numbers of peasants into three categories.

[1] The first was to be eliminated immediately; the

[2] second to be imprisoned in camps; the
[3] third, consisting of 150,000 households – almost a million innocent people – was to be deported to wildernesses in Siberia or Asia.

Stalin himself did not really understand how to identify a kulak or how to improve grain production, but this was beside the point. What mattered was that sufficient numbers of peasants would be killed or deported for all resistance to his collectivisation programme to be smashed.

In letters written by many Soviet leaders, including Stalin and Molotov, which I have read in the archives, they repeatedly used the expression: ‘We must break the back of the peasantry.’ And they meant it.

In 1930/1, millions of peasants were deported, mainly to Siberia. But 800,000 people rebelled in small uprisings, often murdering local commissars who tried to take their grain. So Stalin’s top henchmen led armed expeditions of secret policemen to crush ‘the wreckers’, shooting thousands.

The peasants replied by destroying their crops and slaughtering 26 million cattle and 15 million horses to stop the Bolsheviks (and the cities they came from) getting their food. Their mistake was to think they were dealing with ordinary politicians.

But the Bolsheviks were far more sinister than that: if many millions of peasants wished to fight to the death, then the Bolsheviks were not afraid of killing them. It was war – and the struggle was most vicious not only in the Ukraine but in the north Caucasus, the Volga, southern Russia and central Asia.

The strain of the slaughter affected even the bull-nerved Stalin, who sensed opposition to these brutal policies by the more moderate Bolsheviks, including his wife Nadya.
 

STALIN KEPT SELLING GRAIN ABROAD
He knew Soviet power was suddenly precarious, yet Stalin kept selling the grain abroad while a shortage turned into a famine. More than a million peasants were deported to Siberia: hundreds of thousands were arrested or shot. Like a village shopkeeper doing his accounts, Stalin totted up the numbers of executed peasants and the tonnes of grains he had collected.

By December 1931, famine was sweeping the Ukraine and north Caucasus. ‘The peasants ate dogs, horses, rotten potatoes, the bark of trees, anything they could find,’ wrote one witness Fedor Bleov.
 
By summer 1932, Fred Beal, an American radical and rare outside witness, visited a village near Kharkov in Ukraine, where he found all the inhabitants dead in their houses or on the streets, except one insane woman. Rats feasted on the bodies. Beal found messages next to the bodies such as: ‘My son, I couldn’t wait. God be with you.’

One young communist, Lev Kopolev, wrote at the time of ‘women and children with distended bellies turning blue, with vacant lifeless eyes. ‘And corpses. Corpses in ragged sheepskin coats and cheap felt boots; corpses in peasant huts in the melting snow of Vologda [in Russia] and Kharkov [in Ukraine].’

Cannibalism was rife and some women offered sexual favours in return for food.  There are horrific eye-witness accounts of mothers eating their own children.

In the Ukrainian city of Poltava, Andriy Melezhyk recalled that neighbours found a pot containing a boiled liver, heart and lungs in the home of one mother who had died. Under a barrel in the cellar they discovered a small hole in which a child’s head, feet and hands were buried. It was the remains of the woman’s little daughter, Vaska.

A boy named Miron Dolot [pen name] described the countryside as ‘like a battlefield after a war. ‘Littering the fields were bodies of starving farmers who’d been combing the potato fields in the hope of finding a fragment of a potato. ‘Some frozen corpses had been lying out there for months.’

On June 6, 1932, Stalin and Molotov ordered ‘no deviation regarding amounts or deadlines of grain deliveries are to be permitted’. A week later, even the Ukrainian Bolshevik leaders were begging for food, but Stalin turned on his own comrades, accusing them of being wreckers. ‘The Ukraine has been given more than it should,’ he stated.

When a comrade at a Politburo meeting told the truth about the horrors, Stalin, who knew what was happening perfectly well, retorted: ‘Wouldn’t it be better for you to leave your post and become a writer so you can concoct more fables!’ In the same week, a train pulled into Kiev from the Ukrainian villages ‘loaded with corpses of people who had starved to death’, according to one report.

Such tragic sights had no effect on the Soviet leadership.

When the American Beal complained to the Bolshevik Ukrainian boss, Petrovsky, he replied: ‘We know millions are dying. That is unfortunate, but the glorious future of the Soviet Union will justify it.’
 
Stalin was not alone in his crazed determination to push through his plan. The archives reveal one young communist admitting: ‘I saw people dying from hunger, but I firmly believed the ends justified the means.’

Though Stalin was admittedly in a frenzy of nervous tension, it was at this point in 1932 when under another leader the Soviet Union might have simply fallen apart and history would have been different.
 
Embattled on all sides, criticised by his own comrades, faced with chaos and civil war and mass starvation in the countryside, he pushed on ruthlessly – even when, in 1932, his wife Nadya committed suicide, in part as a protest against the famine.

‘It seems in some regions of Ukraine, Soviet power has ceased to exist,’ he wrote. ‘Check the problem and take measures.’ That meant the destruction of any resistance. Stalin created a draconian law that any hungry peasant who stole even a husk of grain was to be shot – the notorious Misappropriation of Socialist Property law.
 

“IF WE DON’T MAKE AN EFFORT, WE MIGHT LOSE UKRAINE”
‘If we don’t make an effort, we might lose Ukraine,’ Stalin said, almost in panic. He dispatched ferocious punitive expeditions led by his henchmen, who engaged in mass murders and executions.

Not just Ukraine was targeted – Molotov, for example, headed to the Urals, the Lower Volga and Siberia. Lazar Kaganovich, a close associate of Stalin, crushed the Kuban and Siberia regions where famine was also rife.

Train tickets were restricted and internal passports were introduced so that it became impossible for peasants to flee the famine areas. Stalin called the peasants ‘saboteurs’ and declared it ‘a fight to the death! These people deliberately tried to sabotage the Soviet stage’.
 
BETWEEN FOUR AND FIVE MILLION DIED IN UKRAINE
Between four and five million died in Ukraine, a million died in Kazakhstan and another million in the north Caucasus and the Volga. By 1933, 5.7 million households – somewhere between ten million and 15 million people – had vanished. They had been deported, shot or died of starvation. As for Stalin, he emerged more ruthless, more paranoid, more isolated than before.
 
Stalin later told Winston Churchill that this was the most difficult time of his entire life, harder even than Hitler’s invasion. ‘It was a terrible struggle’ in which he had ‘to destroy ten million. It was fearful. Four years it lasted – but it was absolutely necessary’. Only in the mind of a brutal dictator could the mass murder of his own people be considered ‘necessary’.

Whether it was genocide or not, perhaps now the true nature of one of the worst crimes in history will finally be acknowledged.

AUR FOOTNOTE: Simon Sebag Montefiore is the award-winning and critically acclaimed author of the bestselling books “Young Stalin”, “Stalin: The Court of the Red Tsar” and “Catherine the Great & Potemkin.” “Sashenka,” a novel of love, family, death and betrayal in 20th century Russia, by Simon Sebag Montefiore, is out now. [http://www.simonsebagmontefiore.com/]

LINK: http://www.mailonsunday.co.uk/news/worldnews/article-1038774/Holocaust-hunger-The-truth-Stalins-Great-Famine.html

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
============================================================
NOTE: Send in a letter-to-the-editor today. Let us hear from you.
============================================================
8.  ROMAN SERBYN: MONTEFIORE ON HOLODOMOR AND MY COMMENT 

 
COMMENTARY: By Professor Roman Serbyn, Montreal, Quebec, Canada, Sun, Jul 27, 2008
From: “Roman Serbyn” serbyn.roman@videotron.ca
To: “aaus” aaus-list@ukrainianstudies.org
Sent: Sunday, July 27, 2008 7:14 PM
Subject: [aaus-list] Montefiore on Holodomor & my comment

MONTREAL: There is an article by Simon Sebag Montefiore “Holocaust by hunger: The truth behind Stalin’s Great Famine.”  
http://www.mailonsunday.co.uk/news/worldnews/article-1038774/Holocaust-hunger-The-truth-Stalins-Great-Famine.html.

I wrote a comment on the online publication, but I don’t know if it will appear, so I am joining it here, in case someone would care to read it.

This is a welcome addition to popular literature on the Great Famine. The author is right to stress the ruthlessness of Stalin, his henchmen and the
Bolsheviks, who were not afraid to kill people by the million.

 
The author accurately identifies the goals of collectivization: “to break the backbone of the peasantry”, “to shatter their independent spirit” and with the stolen grain from the starving peasants to industrialize and “make Soviet Russia a military super power”.

Montefiore’s description of “the Great Turn” – the destruction of the peasantry, the horrors of the famine, with dekulakization, deportation, starvation, cannibalism, and so forth – can be appreciated.

There are, however, errors in his historical narrative that should be pointed out, and unwarranted assertions that must be challenged. Stalin’s musings about deporting Ukrainians revealed by Khrushchev refer to the post WW II period and not to the time of the famine. Ukrainians, according the 1926 census numbered  28.5 million (as citizens of Ukr. SSR) and 31 million (as an ethnic minority in USSR). If anything, the figures would be a million or so higher in 1932.

NEP was introduced in the beginning of 1921 because agriculture was collapsing, and not in response to the famine, which began only towards the end of that summer and continued until 1923. The first famine (1921-1923) was, to a large extent, due to the requisitions practiced by the Red Army during the Russian civil war (and wars of reconquest of the seceding republics like Ukraine); peasants’ delight over the Bolshevik seizure of power was rather short-lived.

Some of the author’s descriptions and claims lack precision or completeness. The author fails to take into account that while “the Cossacks” formed a more or less homogenous social group, they belonged to two different nationalities.

 
MOST KUBAN COSSACK WERE OF UKRAINIAN BACKGROUND
Most of the Kuban Cossack were of Ukrainian background and in the deportation of the Kuban Cossack stanytsias (settlements) the national factor played a decisive role. At the beginning of the famine there were some 8,000,000 ethnic Ukrainians living in RSFSR, mostly along the Ukrainian border: the Kuban was 62% Ukrainian, the Don about 40 %.

The rise of Ukrainian national consciousness, and the “infiltration” of the party and state institutions in these regions by “Ukrainian nationalists” was blamed for the problems in grain procurement (read confiscations).

 
As a result, on 14 December 1932, the Ukrainian language was banned in all schools, local administration, mass media throughout the RSFSR. This and other national factors in 1932-1933 tragedy are ignored by the author, thus giving the whole presentation a rather lopsided interpretation.

Montefiore states that train tickets were restricted and internal passports were introduced so that it became impossible for peasants to flee the famine areas.

 
Here he confuses two different issues:

1) passport system whose purpose was to the main urban centres from growing and which came into effect towards the end of the main period of the famine, and

2) a Stalin/Molotov directive of 22 January 1933 closing cordoning off Ukrainian SSR and the North Caucasus Territory (chiefly aimed at the Kuban) from the rest of the Soviet Union to any peasant movement. This directive had a specifically anti-Ukrainian factor which is completely ignored by the author.

 
PRESENTS ARGUMENT HEARD FROM RUSSIAN DENIERS
The author presents the argument often heard from Russian political and academic deniers of the Ukrainian genocide, namely that, “because the famine not only killed Ukrainians but huge numbers of Russians, Cossacks, Kazakhs and many others as well, it can’t be termed genocide — defined as deliberate
killing of large numbers of a particular ethnic group.” What is surprising, is that the author then defends this illogical position: “It may be a strange defence, but it is historically correct.”

Well, I beg to differ: it is not correct, either logically or historically. Logically, the question of the Ukrainian genocide has to be decided on its own merit.

 
Whether Russians and Kazakhs (ethnically the Cossacks were either Russians or Ukrainians – there was no Cossack nationality) were victims of genocide has no bearing on Ukrainian genocide, any more than the destruction of Gypsies and Poles had any influence on the recognition of the genocide of the Jews.
Each case has to be decided on its own merit. Bringing Russians and Kazakhs into the discussion of Ukrainian genocide is to confuse the issue.
 
Historically, the Russians’ argument is incorrect for the simple reason that the famine was not the sums total of the genocidal atrocities and the Ukrainian peasantry was not the sum total of the Ukrainian victims of the genocide. The genocide was against the Ukrainians as a national/ethnic group living within the whole Soviet empire.
 
MONTEFIORE LEAVES OUT MILLIONS OF UKRAINIANS
Montefiore leaves out not only the 8 million Ukrainians in the RSFSR but also the other segments of the Ukrainian population (national elites, professional class etc,) that were also part of the overall target of Stalin’s genocidal policies.
 
We cannot go into detail here, and I shall make just two short comments.

[1] First, concurrently with the destruction of the village elites in 1929-1930 (“dekulakization”) the regime began the elimination of the  national elites with the roundup of hundreds of intellectuals accused of organizing a Union for the Liberation of Ukraine (Soiuz Vyzvolennia Ukrainy). One of their “crimes” was organizing cells in the countryside. There was no corresponding witch-hunt of Russian elites accused of Russian nationalism.

[2] Second example. Montefiore (mis)quotes Stalin’s letter to Kaganovich (whose role in Ukraine Montefiore underestimates, in favor of Molotov),

“Unless we begin to straighten out the situation in Ukraine, we may lose Ukraine” and leaves it dangling because two paragraphs further he insists that “not just Ukraine was targeted – Molotov … headed to the Urals, … Kaganovich … crushed the Kuban”.
 
It is what Montefiore leaves out that gives sense to the Stalin’s reference to Ukraine. “Keep in mind that the Ukrainian Communist Party (500,000 members, ha-ha) has quite a lot (yes, quite a lot!) of rotten elements, conscious and unconscious Petliura adherents … As soon as things get worse, these elements will waste no time opening a front inside (and outside) the party, against the party.”
 
The sequence to this declaration was the second series of elimination of Ukrainian elites, this time from the faithful party cadres, suspected of siding with the Ukrainian peasantry “as soon as things get worse” (no better indication that Stalin was anticipating widespread starvation). The national factor always present in Stalin’s genocidal policies in the 1930s. It behooves the commentators on those years to present the full picture of events.
 
AUR FOOTNOTE: Roman Serbyn, is a leading and well known Canadian professor, scholar, researcher, author (Universite du Quebec a Montreal).  He is one of the world’s foremost authorities on the history of Soviet Ukraine from 1920 through 1939. He is the editor with Bohdan Krawchenko of a book entitled “Famine in Ukraine 1932-1933” published by the Canadian Institute of Ukrainian Studies, University of Alberta, Edmonton, 1986.  He is the author of the book “The Famine of 1921-1923 [Ukraine] and the Canadian Press in Canada.”  The book was published in Ukrainian by the Ukrainian Canadian Research and Documentation Centre, Toronto, 1995. 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
9. OSCE PARLIAMENTARY ASSEMBLY (PA) RECOGNIZED HOLODOMOR OF 1932-1933
 
The Day Weekly Digest #21, Kyiv, Ukraine, Tuesday, 8 July 2008 

KYIV – The 17th session of the OSCE [Organization for Security and Co-operation in Europe] Parliamentary Assembly (PA) passed a resolution on the Holodomor of 1932-1933 in Ukraine last Sunday in Astana.

 
OSCE PA “pays tribute to the innocent lives of millions of Ukrainians who perished during the Holodomor of 1932 and 1933 as a result of the mass starvation brought about by the cruel deliberate actions and policies of totalitarian Stalinist regime”, “welcomes the recognition of the Holodomor in the United Nations, by the United Nations Educational and Scientific Organization and by the national parliaments of a number of the OSCE participating States,” “endorses the Joint Statement of 31 OSCE participating States on the 75th anniversary of the Holodomor of 1932-1933 in Ukraine, delivered at the 15th Meeting of the OSCE Ministerial Council,” the resolution says in particular.
 
Besides, OSCE PA “supports the initiative of Ukraine to reveal the full truth of this tragedy of Ukrainian people, in particular, through raising public awareness of the Holodomor at international and national levels, organizing the commemorations of the Holodomor as well as academic, expert and civil events aimed at discussing this issue.”
 
OSCE PA “invites the parliamentarians of the OSCE Member States to participate in the events, commemorating the 75th anniversary of the Holodomor of 1932-1933 in Ukraine” and “strongly encourages all parliaments to adopt acts regarding recognition of the Holodomor.”
COMMENTARY —
Stanislav KULCHYTSKY , Deputy Director, Institute of the History of Ukraine (National Academy of Sciences):
“For the world community to recognize the 1932-1933 Holodomor as genocide, we should cooperate more with unbiased foreign historians. As it has already been reported, the book “Why Was He Destroying Us? Stalin and the Holodomor in Ukraine” of The Day Library series was recently launched in Bucharest.
 
Speaking at this ceremony, member of the Rumanian Academy of Sciences Florin Constantinium noted that it is strange that the polemics, which has lasted for 20 years now since the publication of Robert Conquest’s Harvest of Sorrow , is inadequately based on the findings of Ukrainian historians.
 
As is known, in this polemics the Ukrainian side does not deny the fact of an all-USSR famine in 1932-1933, but it speaks about something entirely different – the Holodomor in Ukraine, and it has enough facts to differentiate between the two phenomena. As for the attitude of Russia to this subject, we should react to the way it treats this ticklish question by way of third countries’ mediation.”

LINK: http://www.day.kiev.ua/203967/

The OSCE [Organization for Security and Co-operation in Europe] Parliamentary Assembly [PA]
Seventeenth Annual Session, Astana, Kazakhstan, June 29 – July 3, 2008
 
RESOLUTION ON THE HOLODOMOR OF 1932-1933 IN UKRAINE

1. Reiterating the crucial role of the OSCE in the promotion of human rights and values,

2. Reminding that parliamentary institutions play a decisive role in defining humanitarian policies and legislation and represent the will of the people of relevant countries,

3. Emphasizing that raising public awareness of humanitarian tragedies of our history is an important tool of restoring the dignity of victims through acknowledgment of their suffering and preventing similar catastrophes in the future,

4. Reminding the OSCE participating States of their commitment to “clearly and unequivocally condemn totalitarianism” (1990 Copenhagen Document),

5. Recalling that the rule of the totalitarian Stalinist regime in the former USSR had let to tremendous human rights violations depriving millions of people of their right to live,

6. Recalling also that crimes of the Stalinist regime have been already revealed and condemned and some still require both national and international recognition and unequivocal condemnation,

The OSCE Parliamentary Assembly:

7. Pays tribute to the innocent lives of millions of Ukrainians who perished during the Holodomor of 1932 and 1933 as a result of the mass starvation brought about by the cruel deliberate actions and policies of totalitarian Stalinist regime;

8. Welcomes the recognition of the Holodomor in the United Nations, by the United Nations Educational and Scientific Organization and by the national parliaments of a number of the OSCE participating States;

9. Endorses the Joint Statement of 31 OSCE participating States on the 75th anniversary of Holodomor of 1932 and 1933 in Ukraine, delivered at the 15th Meeting of the OSCE Ministerial Council;

10. Supports the initiative of Ukraine to reveal the full truth of this tragedy of Ukrainian people, in particular, through raising public awareness of the Holodomor at international and national levels, organizing the commemorations of the Holodomor as well as academic, expert and civil events aimed at discussing this issue;

11. Invites the parliamentarians of the OSCE Member States to participate in the events, commemorating the 75th anniversary of the Holodomor of 1932-1933 in Ukraine;

12. Strongly encourages all parliaments to adopt acts regarding recognition of the Holodomor.

 
Click on Read More then click on 2008 Astana Declaration available here in English
Go to page 45 and you will get the RESOLUTION ON THE HOLODOMOR OF 1932-1933 IN UKRAINE
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
10. SERBYN: REGARDING RESOLUTION OF OSCE ON THE HOLODOMOR IN UKRAINE

Commentary: Professor Roman Serbyn, Montreal, Quebec, Canada, Thursday, July 3, 2008

From: Roman Serbyn
To: Orysia Tracz; Stefan Romaniw & Members of the International Holodomor Committee (IHC)
Sent: Thursday, July 03, 2008 1:28 PM
Subject: Re: OSCE Resolution

MONTREAL – OSCE RESOLUTION: This is not the full recognition of genocide that the Ukrainians want to hear. However it can be a step in the right direction if properly pursued. The substitution of Holodomor for Famine in the declaration is of great significance. The notion of “Famine” (even if called the Great Famine or man-made famine) was too limitative, the Holodomor is more open-ended.

 
GENOCIDE AGAINST THE UKRAINIANS
However, it should NOT be treated as only a more monstrous Holod, but a more encompassing catastrophe of which HOLOD was the main part in terms of human lives lost but not the only component of the GENOCIDE AGAINST THE UKRAINIANS.
 
In this sense, THE HOLODOMOR must be seen in the same way that THE HOLOCAUST is conceived: a genocide against a ethno/national group, in one case the Jews and in the other case the Ukrainians. This means treating as part of the genocidaires’ target and as part of the genocide victims.

[1] ALL the Ukrainians that were killed during the genocide not only by forced starvation but by other means (execution, exposure, etc) from among the other sectors of Ukrainian population (intellectuals, liberal professions, workers).

[2] Secondly, the whole Ukrainian population under the rule of Stalin’s communist regime (including the 8 million ethnic Ukrainians in Kuban’ and elsewhere in the RSFSR) must be included in this notion of victims of Holodomor. 

Until Ukrainian scholars, Ukrainian politicians and the Ukrainian community in general begins to view and speak about the Holodomor in these terms (which then fit into the UN Convention and its definition of genocide), we shall not be able to convince the world academic community and the politicians on the highest echelons of power that Ukraine had been victim of a genocide.

Ukraine must start speaking about the Ukrainians in the RSFSR, who were 8 million according to the census of 1926 but were reduced to 4 million by the census of 1937.

In this sense, the most interesting articles of this OSCE resolution are points 9 to 12:

10. Supports the initiative of Ukraine to reveal the full truth of this tragedy of Ukrainian people, in particular, through raising public awareness of the Holodomor at international and national levels, organizing the commemorations of the Holodomor as well as academic, expert and civil events aimed at discussing this issue;

The Ukrainian people in 1932-1933 included the 8 million Ukrainians in the RSFSR, and the whole truth cannot be revealed by leaving them out of the tragic picture.

 
WE MUST RECONCEPTUALIZE THE CONCEPT OF THE HOLODOMOR
Ukrainian academics must RECONCEPTUALIZE the Holodomor to include:
 
a) Ukrainian victims of the RSFSR, and
 
b) the other sectors of the Ukrainian society of those years who became victims of the Soviet  regime  by other means of destruction than starvation.

11. Invites the parliamentarians of the OSCE Member States to participate in the events, commemorating the 75th anniversary of the Holodomor of 1932-1933 in Ukraine;

In these commemorations Holodomor must be presented as an all encompassing genocide. If Ukraine cannot speak openly about the all encompassing Holodomor on its own turf, then where can it do so?

12. Strongly encourages all parliaments to adopt acts regarding recognition of the Holodomor.

The lobbying of parliaments to adopt such acts is an excellent opportunity to educate, first of all the Ukrainian community (most people have very vague knowledge about the famine, and almost none about the rest of the genocide. The Act passed by the Canadian Parliament can serve as a model, but it can be improved upon.

The door has been opened just a little more, will we be able to take advantage of this opportunity to push it still wider?

 
AUR FOOTNOTE: Roman Serbyn, is a leading and well known Canadian professor, scholar, researcher, author (Universite du Quebec a Montreal).  He is one of the world’s foremost authorities on the history of Soviet Ukraine from 1920 through 1939. He is the editor with Bohdan Krawchenko of a book entitled “Famine in Ukraine 1932-1933” published by the Canadian Institute of Ukrainian Studies, University of Alberta, Edmonton, 1986.  He is the author of the book “The Famine of 1921-1923 [Ukraine] and the Canadian Press in Canada.”  The book was published in Ukrainian by the Ukrainian Canadian Research and Documentation Centre, Toronto, 1995. 
——————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=============================================================
U.S.-Ukraine Business Council (USUBC) www.usubc.org.
Promoting U.S.-Ukraine business & investment relations since 1995. 
=============================================================
11.  EX-SOVIET LEADER CRITICIZES UKRAINE FOR CALLING FAMINE GENOCIDE 

Interfax, Moscow, Russia, Wednesday, June 4, 2008

MOSCOW – The former Soviet president, Mikhail Gorbachev, has said that the attempts of Ukrainian politicians to qualify the famine of the 1930s as the genocide of Ukrainian people are politically motivated.

“I think there are certain political accents here,” Gorbachev said today at a news conference held at the Interfax news agency. In particular, he emphasized that the famine affected not only Ukraine but other Soviet regions, too.

“What was the famine of the 1930s? It was on the south of Russia. I will tell you that 40 per cent of population in my native village of Privolnoye (Stavropol Territory) perished. Three of six children of my paternal grandfather died of hunger,” Gorbachev said. He said that the famine was caused by severe draught and collectivization.

The head of the Memorial society, Arseniy Roginskiy, held a similar opinion. “Memorial’s position is very simple. It was a series of terrible crimes. But the concept of genocide seems to us somewhat inaccurate,” Roginskiy said.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=========================================================

Receiving more than one copy of the AUR please contact us.
=========================================================
12.  UKRAINE IRKS RUSSIA WITH PUSH TO MARK STALIN FAMINE AS GENOCIDE

By Daryna Krasnolutska & Halia Pavliva, Bloomberg, Kyiv, Ukraine, New York, NY, Fri, Jan 4, 2008 

Maksym Kravets remembers watching hunger kill his father, then his mother.

Kravets, who was 14 when famine struck Ukraine in 1932, says he survived by eating a dog. About a third of the 1,000 people in his village, Lozova, perished as Soviet leader Josef Stalin cut off food supplies to force peasants onto collective farms.
“A special group of people was in the village taking away all the food we had,” says Kravets, now 89, sitting in his kitchen in Kamyanets-Podilsky, 300 kilometers (186 miles) from where he almost starved to death. “There were cases when people ate their dead children and parents.”
The yearlong famine, which killed at least 7 million people, is now the focus of books, exhibitions and documentaries marking the 75th anniversary.
 
Ukraine’s government is asking the United Nations to recognize the disaster as an act of genocide, worsening already frosty relations with Russia, which says the famine resulted from drought.
 
Russian nationalists vandalized an exhibit at the Ukrainian embassy in Moscow in November. While the Russian government didn’t condone the attack, it called Ukraine’s depiction of the famine a “one-sided falsification of history.”
“It’s completely impossible to treat it as genocide,” says Dmitry Peskov, spokesman for Russian President Vladimir Putin. “What happened there happened not only in Ukraine but in many parts of the former Soviet Union.”
STATE OF DENIAL 
Ukraine’s famine was kept out of official history until 1991, when the country of 47 million won independence. It is recognized as genocide by countries including the U.S.
“Russian society is, broadly speaking, still in a state of denial about the crimes of the communist past,” says Robin Shepherd, a senior research fellow at the Royal Institute of International Affairs at Chatham House in London. Putin and his government see the drive to label the famine genocide as “an insult to Russian pride.”
Ukraine didn’t do much to put the famine on the historical map until the pro-European Union President Viktor Yushchenko took power in the 2004 Orange Revolution. Ukraine commemorated the victims for the first time two years ago.
Yushchenko now plans to make it an offence to deny the famine was an act of genocide. Violators would be subject to as much as two years in jail and a fine of 5,100 hryvnia ($1,020). The move would mirror Germany, where it’s a crime to deny the Holocaust.
POLITICAL BATTLE 
Communist Party leader Petro Simonenko says Yuschenko is “stirring up hatred” as Ukrainian and ethnic Russian politicians battle for control of the government.
Putin openly supported the pro-Russian candidate in the 2004 presidential election before the result was overturned as rigged by a Ukrainian court. Russia is opposed to the policies of the Orange coalition now in government, which is seeking closer ties to the North Atlantic Treaty Organization and the EU.
The anniversary events started Nov. 24, when thousands of people gathered in Kiev and on the main squares of other cities.
“The main killer was the totalitarian communist regime,” Yushchenko told the crowd in the capital. “Fear is at the root of today’s political and social problems.”
In 1929, Stalin decreed that all agricultural workers had to join collective farms, bringing with them their livestock and tools. They were to plant and harvest together, so that the state could ship food to industrial areas. Some farmers resisted leaving their land, and many were sent to labor camps. Those who remained risked death from starvation.
GRAIN SEIZED 
Across the Soviet Union, more than 10 million people died from hunger during the collectivization drive, according to research by historian Robert Conquest. The majority of the deaths were in Ukraine, the second most populous republic in the Soviet Union and the largest grain producer after Russia.
Stalin wrote in August 1932 to one of his politburo members expressing concern that Ukraine wasn’t complying and must be forced into submission. “If we don’t fix the situation in Ukraine immediately, we may lose Ukraine,” he wrote. The letter was published by Russia’s Nezavisimaya Gazeta in 2000.
While the harvest was poor because of drought, as much as half of the grain was shipped out, says Vasyl Marochko, head of the Center for Ukrainian Genocide Studies in Kiev.
“The 1932 harvest was swept away completely,” says Halyna Mendzyak, who was 9 and lived in Mynkivtsi, western Ukraine. “When they put it in rail wagons, an orchestra was playing with slogans like `Let’s give all grain to our state!”’
Kravets says peasants in his area refused five orders to collectivize their farms in the years before the famine began. His parents finally went to work on a state farm in 1932, leaving him alone in their house.
When two aunts came to his parents’ home to check for survivors, they found only his emaciated body. Kravets recalls hearing them say he wouldn’t last the night before they walked away, leaving the door ajar.
“A dog then entered and started to lick me, so I got up very slowly, tied him to a bed with a towel and then took an axe and killed him,” he says. “I still can’t understand where I got the energy. I was eating that dog for several days.”
To contact the reporter on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net; ; Halia Pavliva in New York at hpavliva@bloomberg.net
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
13.  RUSSIA: 1930’S FAMINE MAINLY IN SOVIET UKRAINE WAS NOT GENOCIDE 

By Steve Gutterman, Associated Press Writer, AP, Moscow, Russia, April 2, 2008

 
MOSCOW – The 1930s famine that killed millions of peasants, mainly in Soviet Ukraine, should not be considered genocide, Russia’s lawmakers said in a resolution Wednesday.
Renowned writer and Soviet-era dissident Alexander Solzhenitsyn backed the Kremlin line on the divisive issue, dismissing Ukrainian claims that the famine was genocide as a “fable.”
The 370-56 vote in Russia’s lower parliament house and the rare comment from the 89-year-old Solzhenitsyn were a pointed rejection of claims by Ukrainian leaders that the Soviet authorities engineered the famine to target Ukrainians.
They came amid Russian anger over the pro-Western Ukrainian leadership’s drive to join NATO, which will decide at a summit this week whether to grant the nation a road map for membership.
Russia has opposed the Western alliance’s eastward expansion and is particularly concerned about potential membership for Ukraine, a large country with far closer cultural and historical ties to Russia than any other that has joined NATO.
Historians agree that the 1932-33 famine was engineered by Soviet authorities under dictator Josef Stalin to force peasants to give up their private plots of land and join collective farms.
Ukraine, with its rich farmlands, suffered the most. Authorities confiscated grain from village after village and prohibited residents from leaving, effectively condemning them to starvation.
Some are convinced the famine targeted Ukrainians as an ethnic group. Others argue authorities set out to eradicate private landowners as a social class and say the Soviet Union sought to pay for its rapid industrialization with grain exports at the expense of starving millions of its own people.
“There is no historical proof that the famine was organized along ethnic lines. Its victims were million of citizens of the Soviet Union, representing different peoples and nationalities living largely in agricultural areas of the country,” the Russian State Duma resolution said.
Ukrainian President Viktor Yushchenko is leading a bid to gain international recognition of the famine as an act of genocide.
Solzhenitsyn criticized that effort in a front-page comment in the daily Izvestia, writing that the famine also affected Russia’s neighboring Kuban region.
“This provocateur’s cry of ‘genocide’ began to germinate decades later — first secretly, in the moldy minds of chauvinists maliciously set against (Russia), and now elevated to government circles of today’s Ukraine,” he wrote.
Solzhenitsyn suggested the Ukrainian appeal might be supported by Western governments for geopolitical purposes. “They have never understood our history, all they need is a ready fable, even if it is an insane one,” he wrote.
In Ukraine on Tuesday to stress U.S. support for its leaders’ NATO aspirations, President Bush visited a memorial honoring famine victims along with Yushchenko and their wives.
A document signed during Bush’s visit said that “Ukraine and the United States will closely cooperate to promote remembrance and increase public awareness of the 1932-33 man-made Great Famine (Holodomor) in Ukraine, including within the framework of the international organizations.” Holodomor, or death by hunger, is what Ukrainians call the famine.
The Duma warned the West to stay away from the issue. “This tragedy does not have — and cannot have — any internationally recognized indications of genocide and should not be used as a tool for modern political speculation,” it said.
President Vladimir Putin’s government has clashed with former Soviet bloc nations over interpretations of 20th century events, accusing them of seeking to rewrite history and cast Moscow as a culprit.
Yushchenko has said up to 10 million Ukrainians died of hunger in 1932 and 1933. Stanislav Kulchitsky, a respected Ukrainian historian, believes the number is closer to 3.5 million.
Under Stalin, who ruled from 1922 until his death in 1953, some 20 million people are estimated to have been executed, imprisoned or deported to other parts of the former Soviet Union under Stalin, and more than 10 million of those are believed to have died. [Associated Press writer Mike Eckel contributed to this report.]
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
14.  VLAD AND THE SPINMEISTER: THE ABC’S OF HOLODOMOR DENIAL 

 
ANALYSIS & COMMENTARY: By Peter Borisow
Kyiv Post newspaper, Kyiv, Ukraine, July 16, 2008
The Ukrainian Weekly newspaper, Parsippany, NJ, Sunday, August 17, 2008
 
By 2003 the movement for Holodomor recognition has gathered enough steam to draw serious attention from non-Ukrainian quarters.  Walter Duranty’s Pulitzer was a major issue: Important exhibits and major conferences were held from Columbia to UCLA. 
 
Ukrainians were beginning to gain momentum and ambitions plans were laid for 2008, the Holodomor’s 75th anniversary.  With few exceptions, the big bang everyone expected for 2008 has turned out to be a whimper. The torch came and went without notice; the conferences have been at significantly lesser venues; there is no memorial in Kyiv or anywhere else.  What happened?
 
I submit that this year’s failure to meet many Ukrainians’ expectations and promises is neither the result of Ukrainian incompetence nor the result of the world’s general lack of interest.  I submit it is the result of a campaign by those behind the Holodomor in the first place to dull, divert, diminish and extinguish Ukrainian efforts. 
 
I suggest the anti-Holodomor efforts may have been hatched in discussions such as an exchange of fictional letters along the following lines.  And, of course, as they say, any resemblance to any person living or dead is purely coincidental.  However, if the shoe fits……… [Peter Borisow]
—————————————-
December, 2004
My Dear Dr. Spinmeister,
Last year we had a close call with this Holodomor business. These pesky Ukrainians have started to get some serious attention and almost got our beloved Duranty’s Pulitzer Prize revoked. We must make sure this momentum does not bring serious consequences in 2008 when they will try to push even harder on their 75th “Anniversary.”
Can you imagine what would happen if these Ukrainians actually managed to convince the world the Holodomor was Genocide? Even if it is all blamed on the USSR and the Party, we are still the Successor State. When the USSR fell apart, we took all the assets. Someone is bound to say we should take the liabilities as well. And, look at me – I’m KGB, successor to the NKVD that did the dirty work! Can you imagine Nuremburg trials for senior Party members?
We could even be held accountable in some crazy civilian court in the USA or Europe! I’ll be damned if I’m going to send my petrodollars to some Ukrainian Victims and Survivors’ Fund! We need to bring Ukraine back into the Russian Empire, not finance its independence! Without Ukraine there is no Empire anyway! What can we do to make sure this Holodomor stuff doesn’t mess up all our futures?
Yours faithfully,
Vladimyr Volodymirovich
——————————-
Moscow
January, 2005
My Dear Vladimyr Volodymirovich,
We need not fret too much. This is a rather straightforward matter which we can handle with existing resources. After all – History is written by the Victors – and we, or I should say, our dear Comrade Stalin, did win the Great War! If Hitler had won the war, who would have ever heard of the Holocaust? The advantage is ours. Here’s what we need to do:
A frontal assault denying the genocide will NOT work. It may, in fact, backfire as the core sentimentality of the public will always bond with the image of starving babies. Rather than challenge that sentimentality, we must redirect it – away from Ukrainians. This is best done by first diluting the issues with small steps – like water constantly dripping on a rock; it will eventually wear a hole in the rock and allow us to crack it. It will be death to the Holodomor by a thousand little cuts.
Holodomor Dilution is prerequisite to Holodomor Denial. It starts with questioning the basic facts. When enough doubts are raised about the details, we can put it all to rest.
1) Challenge the numbers. Let them count the sculls! It’s a fool’s errand as the numbers can not be proven mathematically for any genocide. The nature of the beast is such that it destroys its own evidence. We’ve had 75 years to “correct” the records. We can debate any number! Whatever the number, we will water it down. The more times we water it down, the less credibility they will have. For us, this is a perfect debate.
2) Challenge the victims. We must claim this was at a time of great social upheaval. We were making history’s greatest omelet! Of course, we broke eggs! And, we suffered as much as these Ukrainians did, maybe more! Talk about Kuban – lots of victims there and it’s in Russia!! Who will know they were almost all Ukrainians? And, if the Ukrainians say that, deny, deny, deny!
 
Insist this was Russia and they were Russians! Remember, after we killed off the Ukrainians, we repopulated entire regions of Eastern and Central Ukraine with our own loyal Russians. Point to the children of these Russian brothers still living in Ukraine. Proclaim loudly “they are the real Ukrainians!” Complain how they suffer to this day under Ukrainian rule!
3) Challenge the “genocide.” Demand they prove it technically beyond a shadow of a doubt. Debate the details of that UN definition. The more we debate the details, the more we can wrap them up in their own underwear! Keep talking about collectivization. Keep talking about tragic errors by bureaucrats, incompetent administrators, bad commissars – anything but the “G” word.
4) Always talk about the “Famine” – Even better, the “Great Famine.” Keep talking about Russian and Soviet victims of a whole series of “famines.” Talk about “famine” in Kazakhstan (who will care it was a year later and 5,000 miles away?)
 
Surround Holodomor with other “famines,” other “human tragedies.” When people hear the word “famine,” they think of drought and locust, not genocide. They think Ethiopia, not Auschwitz. For us, “artificial famine” and “famine genocide” are wonderfully confusing terms. Leave it to the Ukrainians to give us some of our best weapons against them!
5) Join in, cosponsor, co-opt resolutions at the United Nations and other international bodies, civic organizations, etc., to remember the events in Ukraine as a “tragedy,” always insisting on watering down with other nationalities. Always make sure the “G” word is never used. We all know once a mealy mouthed resolution is passed, it is virtually impossible to change it later. No one likes to redo old business. Once it’s done, it’s done. The Ukrainians will be so eager to get something, even anything, done they will go along. Later, we will ram it down their throats.
6) We have considerable weight in international forums, even in the U.S. Congress, especially with the lobbyists we’ve hired with our newly found oil wealth. We must use this to make sure no one offends the Great Russian People. Having suffered themselves in the Great War and the “Great Famine Tragedy,” the Great Russian People are sympathetic to All its victims. Let’s get that sympathy working for us.
7) Invite (or challenge) them to “scholarly” and “scientific” conferences of “experts.” We still have lots of our old fellow travelers (or their progeny) in influential places, especially in Western universities and “think tanks” (see, I told you that would be a good investment!) They will keep these Ukrainians debating how many devils can dance on the head of a pin until doomsday! We don’t need to prove anything. As long as we keep them debating, they have proven nothing!
8) These Ukrainians are such polite little lambs, like wide-eyed little children, so eager to prove their case. Let’s just hope no one tells them some things are simply not debatable. The Jewish community would never allow Alfred R. Butz or exNazis to speak about the Holocaust! But Ukrainians will allow any Communist or Ukrainian hating Holodomor denier a forum – Even Us!
9) Co-opt some of their “experts” and “scholars.” This is a lot easier than most people think. Start now by building relationships, especially with those in second tier universities out in the provinces. Tell them they are underappreciated geniuses. Invite them to speak at conferences.
 
They all have unpublished manuscripts. Tell them you will get their books published; you will get them tenure; even that coveted Chairman of the Department position. You will get the world to finally appreciate their real genius!
Then, here’s the pitch – “Gee, there’s just one problem. It’s this Holodomor bit. You’re just too radical on it and people aren’t comfortable with radical scholars. Yet, your work is such genius – maybe if you’d just tone down that Holodomor stuff a little – maybe use a more ‘realistic’ number? And, at the end of the day, are you that absolutely positive it was genocide? I mean, were you there? It was so long ago, who can really prove it?”
Before you know it they’ll be meow-meowing any tune you suggest. And, others will follow. And, here’s the best part – once they’re done, you’ll never have to publish any of their crap anyway!
10) Waste their resources on little things while blocking serious efforts. In Kyiv, there must be No Holodomor Memorial complex by 2008. Let them talk about monuments, but remember to make sure nothing ever stands taller than our Titanium Queen.
There must be no major Ukrainian movie on Holodomor. You never know, it might just catch on. Look what Anne Frank did for the Holocaust! We can’t have anything like that! There must be Nothing that can really catch the imagination of the world.
We have enough agents of influence in Ukraine and in the Diaspora to channel this. In Ukraine, make sure there’s no State funding and keep reminding their Oligarchs that WE are their business partners. Keep them busy chasing their own tails within their own little circles.
 
In the Diaspora, let them waste their time and money on chasing monuments no one will see anyway. Let them sing in the showers! Never let them near a stage. Make sure nothing happens that can impact on the real world.
11) Use our influence on media in Ukraine to block out news and programs about the Holodomor. Counterprogram — put Holodomor stuff on little watched channels, at odd times in the middle of the night, etc.
 
Start complaining this Holodomor stuff is getting wearisome, that it’s anti-Russian propaganda by fascists, traitors, enemies, etc. “Enough already with this Holodomor stuff – this is starting to sound like a broken record! It’s all nonsense anyway!”
12) Use our influence on media in the West to block out news and programs about the Holodomor. Counterprogram with stuff on other genocides. Call for more programming on the Holocaust – a “real” genocide! Pressure the television and news executives that this Holodomor stuff is not proven, that it’s anti-Russian propaganda, hate mongering legends.
 
Promote stories of anti-Semitism in Ukraine instead. Most U.S television is owned by corporations. Remind them of Russian wealth and influence, the importance of the Russian market for their programs and movies. Do they really want to insult all these innocent people, offend this huge emerging market?
13) Drag out those documents we forged in the 50s with the East Germans about collaboration between Ukrainians and Germans during the war – the stories we invented about how they turned our Jewish friends over to the Nazis. Keep talking about Ukrainian Nazi collaborators, over and over. We’ve been telling those lies for so long now that even I am starting to believe them!
 
No one will know the opposite is true, that the Ukrainians issued orders to protect Jewish people from the Nazi! Even if the Ukrainians figure out our documents are forged lies, by the time they get their act together to tell the world about it, the debate will be over. What a brilliant idea that was! What a great way to shift blame from the perpetrators to the victims!
14) Remember that kid’s finger your grandfather cut off and tossed into the sausage machine? It became more ubiquitous than Kilroy! Remember the photographs of “cannibals” they staged for the press? Always talk about cannibalism. How can cannibals be “victims” of anything? Who would ever feel sorry for a cannibal? The more we talk about cannibalism, the less sympathy they get from all those dead babies. Always attack the victims, make them the guilty ones!
15) Let’s find some naive Ukrainian pups (or some of our own) out there to promote a “Truth and Reconciliation Commission” on Holodomor. This will channel Ukrainian energies into a dead end. They will talk their hearts out into a void no one will remember. We will control the “genocide” bit and focus on little individual tragedies.
 
The world doesn’t really want to deal with genocide any more. After Cambodia, Rwanda, Darfur, the sticker shock of genocide is gone. This will put it all into an easy little box no one will have to look into anymore. For us, it will be contained, harmless and over. The world will never miss it.
Look at South Africa – all “Truth and Reconciliation” did was white wash the guilty in exchange for “confessions.” Can you imagine if Nuremburg had been a “Truth and Reconciliation Commission”? Why, we’d be having drinks on the terrace with old Adolf at his villa in Versailles! I can live with that!!
So, here we have it – It wasn’t that many; we all suffered; it wasn’t genocide; no one is really sure what happened – they can’t even agree among themselves! Waste their time and resources. Frustrate their best efforts. They’re such bad people any way, maybe they even did it to themselves!
 
If need be, let’s embrace them to help them “find the truth.” We suffered too! Let’s work together, let’s reconcile and all live together happily ever after. Let’s put a positive future on all this. Enough of the negative past!!
We have the best propaganda machine in the world. We sold “Communism” to half the planet! Only that damned Coca-Cola has done better! Ukrainians aren’t like Jews or Armenians. Those people will never forget and will never let anyone else forget. In time, Ukrainians will get over it. They don’t really like these unpleasant things anyway.
 
They really will be happiest back in the Russian Empire. It’s always been their place. They need to feel the master’s hand on their leash as it tightens around their necks! And, if they’re obedient, we will reward them, just like in the old days!
Trust me. We can do this.
Your faithful servant,
Herman V. Spinmeister et al
New York, Londongrad and St. Leningrad
———————————————–
FOOTNOTE: Peter Borisow is president of the Hollywood Trident Foundation and a member of the board of directors of the Center for U.S. Ukrainian Relations. Borisow’s business is film finance risk management. He travels frequently to Ukraine to advise the film sector as well as to support Ukrainian identify and independence.  His interest in Holodomor came from his parents, both of whom were Holodomor survivors.  He says his mantra is straightforward: “Holodomor – Genocide – 10 million killed.”
 
LINKS: Kyiv Post: http://www.kyivpost.com/opinion/29260; The Ukrainian Weekly, Ukrainian National Association, Parsippany, NY.  Editor-in-chief: Roma Hadzewycz.  The Ukrainian Weekly archive: www.ukrweekly.com
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
15.  HOLODOMOR: REFLECTIONS ON THE GREAT FAMINE OF 1932-1933 IN SOVIET UKRAINE
New book edited by Lubomyr Luciuk: A series of essays by leading scholars and
journalists on the causes and consequences of the Great Famine of 1932-33 in Soviet Ukraine.

Morgan Williams, Publisher and Editor, Action Ukraine Report (AUR)
Washington, D.C., Sunday, September 21, 2008

WASHINGTON, D.C. – Lubomyr Luciuk, a leading scholar, researcher, analyst, and author, who is professor of political geography at The Royal Military College of Canada in Kingston, has edited a new book entitled “Holodomor: Reflections on the Great Famine of 1932-1933 in Soviet Ukraine.” The book is a series of essays by leading scholars and journalists on the causes and consequences of the Great Famine of 1932-33 in Soviet Ukraine.

 
The anticipated publication date is October 31, 2008. Information about ordering the new book edited by Professor Luciuk:

Please send me ___ copy(ies) of “Holodomor: Reflections on the Great Famine of 1932-1933 in Soviet Ukraine” (Kashtan Press, 2008) at $45 per copy, plus $10 Shipping and Handling. The anticipated publication date is 31 October 2008. I enclose a cheque or money order made payable to “The Kashtan Press” in the amount of $_________.

Name (please print), Address, Street, City, State/Province, Country, Postal Code/Zip Code; Telephone Number. Please mail this completed form to: The Kashtan Press, 849 Wartman Avenue, Kingston, Ontario, Canada, K7M 2Y6. Thank you for your order.

 
AUR FOOTNOTE:  Lubomyr Luciuk is the editor of the book “Not Worthy, Walter Duranty’s Pulitzer Prize and The New York Times,” published for the Ukrainian Canadian Civil Liberties Association by The Kashtan Press in 2004. 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
16.  HOLODOMOR: THE UKRAINIAN GENOCIDE 1932-1933
New issue of the Canadian American Slavic Studies Journal, Fall 2008
 
Morgan Williams, Publisher and Editor, Action Ukraine Report (AUR)

Washington, D.C., Sunday, September 21, 2008

WASHINGTON, D.C.- Charles Schlacks, Jr., publisher, Canadian America Slavic Studies journal, is preparing a special new issue of the journal, Vol. 42, No. 3, Fall 2008, in honor of the 75th commemoration of the Ukrainian genocide of 1932-1933. The new edition is entitled “Holodomor: The Ukrainian Genocide, 1932-1933.” 

 
The publication will contain articles and documents by scholars in Ukraine, Poland, Australia, Canada and the USA. The guest editor is Roman Serbyn, a leading and well known Canadian professor, scholar, researcher, author (Universite du Quebec a Montreal).  Publication date is scheduled for mid-October, 2008.
 
TABLE OF CONTENTS: CANADIAN AMERICAN SLAVIC STUDIES JOURNAL, FALL 2008
Yurij Shapoval. “Foreign Diplomats on the Famine in Ukraine”;
Heorhii Papakin. “‘Blacklists’ as a Tool of the Soviet Genocide in Ukraine”;
Hennadii Yefimenko. “The Soviet Nationalities Policy Change of 1933, or Why ‘Ukrainian Nationalism’ Became the Main Threat to Stalin in Ukraine”;
Mykola Riabchuk. A review article about David Marples. Heroes and Villains: Creating National History in Ukraine (2007);
Rafael Lemkin. “Soviet Genocide in Ukraine” (with an introduction by Roman Serbyn);
Robert Kusnierz. “The Question of the Great Famine in Ukraine of 1932-1933 in Polish Diplomatic and Intelligence Reports”;
Siriol Colley. “A Curtain of Silence: An Essay of Comparison”;
Lesa Morgan. An article about Western Australian studies of memories of people in Ukraine in the 1930s;
Cheryl Madden. An article about disease in Ukraine in the 1930s;
Peter Borisow. Interviews of Ukrainians who lived in Ukraine in the 1930s, and stills from his documentary film about Kravchenko.
Morgan Williams. Holodomor: Through The Eyes Of Ukrainian Artists;
Some documents with translations of leaders’ letters and orders of 1932-1933 (Stalin, Kaganovich, Molotov).
Some of articles were translated by Marta Olynyk in Montreal.
The Guest Editor is Roman Serbyn, Universite du Quebec a Montreal.
 
TO ORDER THE NEW EDITION OF THE JOURNAL:
Copies of this special “Holodomor” edition of the Canadian American Slavic Studies Journal (Fall, 2008) are available for purchase by the general public.
Please send in your order as soon as possible as the number ordered in advance will determine the number to be published.
 
The price is $20.00 each plus $10 shipping and handling (U.S. dollars). Appropriate additional shipping costs should be added for multiple orders. Orders by post should be sent to Charles Schlacks, P.O. Box 1256, Idyllwild, CA 92549-1256, USA. Orders can be sent by e-mail.  They should be sent to Charles Schlacks at Schlacks.Slavic@Greencafe.com.  Journal will be available in mid-October, 2008.  If you have any questions please contact Charles Schlacks.
 
AUR FOOTNOTE:  The Fall 2003 edition of the Canadian American Slavic Studies, published by Charles Schlacks, was also a special edition entitled, “Holodmor, The Ukrainian Genocide 1932-1933.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
17.  UKRAINE: NEW BOOK BY THE LATE NOTED HISTORIAN JAMES MACE 

Collection of scholarly and journalistic works entitled “Your Dead Choose Me”
 
By Olha Risheltylova, The Day Weekly Digest, Kyiv, Ukraine, Tue, Sep 16, 2008

LVIV – At the ceremony to launch the book James Mace: “Your Dead Chose Me,” held during the 15th Lviv Forum of Publishers, the American scholar’s widow, Natalia Dziubenko-Mace, said her husband was eager to publish this book in Uk­raine.

 
“Unfortunately, I am the one who is launching it, and he is gone. But I think this is James’s second arrival in Ukraine – through these books, his work, his colleagues, through the fact that he has finally reached your hearts and minds.”
The Lviv launch is the first in a series taking place in many cities of Ukraine, timed to coincide with the 75th anniversary of the 1932-1933 Holodomor.
 
The Day has already reported that the 670-page book is the first collection of scholarly and journalistic works about the Holodomor and lingering sociopolitical issues by James Mace, the renowned US academic and researcher of the Ukrainian Holodomor. According to Mace’s widow, however, this is not a complete collection of the author’s immense legacy.
The Day is planning to have the book translated into several languages, and government agencies and NGOs in every region of Uk­raine have already placed orders for it.
 
During the launch it was correctly noted that publications about the Holodomor are no longer a novelty. The situation was different in the 1990s, when few people wanted to know about the Great Famine. In his articles for The Day, Mace was the first to blaze a trail with his research on this tragic page in Ukraine’s history.
Mace was well known in Lviv, the city where his widow was born and which the couple frequently visited. Many of Mace’s colleagues from this western Ukrainian city attended the launch.
 
Among them was Oleh Romanchuk, the writer and editor of the journal Universum, the well-known Lviv entrepreneur Oleksandr Dziubenko, the writers Yaroslav Pavliuk, Yurii Hurhula, and Vitalii Protsyk, who is researching the period of Soviet repressions.
Stanislav KULCHYTSKY, historian and author of the book:
“As an historian, James ap­proached research problems from a historical viewpoint. This was interesting and convincing. This book now contains his total legacy. The publication was funded by The Day, which sells these books but, more often than not, gives them away to interested organizations. I hope this book comes out in English.
“In his report on the Holodomor to the US Congress, Mace said, ‘The use of food as a political weapon by despotic regimes is not a thing of the past.’ When he was trying to persuade the world to recognize the Holodomor, he meant that this was a lesson for Ukraine. This lesson is also useful for Russia, Venezuela, and other countries.
 
Unfortunately, the 4th session of the UN General Assembly postponed the question of the Ukrainian Holodomor for one year. And although there will be no round date to time this question to, we will do our utmost to tell the world about what happened in Ukraine in the winter of 1932-1933. We will be able to do so thanks to this collection of political articles that James Mace contributed to The Day.”
Petro KRALIUK, professor and pro-rector, National University of Ostroh Academy:
“We have a lot of phony Heroes of Ukraine now, while the man who is truly a hero of Ukraine was not awarded this title, much to our regret. When we talk about James Mace, I remember the 1990s. Ukraine was in a deep crisis and nobody knew if we would ride it out. An American arrived in Ukraine, settled here, and began working for the benefit of our country. It is a shame that we failed to raise the problem of the Holodomor.
 
The first to study it was a person of non-Ukrainian parentage. Thanks to Mace, the subject of the Holodomor began to be discussed in the media and became a subject of research. To most Ukrainians at the time this was nonsense. The truth is that even today many of our compatriots do not accept the fact that the Holodomor took place. Ukraine was Mace’s life, and this book is our modest tribute to a true Hero of Ukraine.”
Oleksandr DZIUBENKO, close friend of James Mace:
“As long as the Soviet Union existed, the Americans were interested in studying the Holodomor. Once the USSR broke up, the US no longer needed Mace’s research. James was not a rich man; he came to Ukraine with very limited finances. But he brought his knowledge of the Holo­do­mor. To our bureaucrats, James was like a pesky fly. He persistently published articles on the Holodomor.
 
I clearly remember how many parliamentarians became indignant about his articles. It is primarily his doing that the Holodomor has been recognized in Ukraine. Restoring our historical memory is what unites Ukrainians. Mace worked on this topic in the US and he continued to work on it in Ukraine. It was his life’s vocation.”
——————————————————————————–
[return to index] Action Ukraine Report (AUR) Monitoring Service]
===================================================
Welcome to send us names for the AUR distribution list.
===================================================
18.  LAW OF UKRAINE No.376-V “ON HOLODOMOR IN UKRAINE IN 1932-1933”
 
Parliament of Ukraine, Verkhovna Rada, Nov 28, 2006, Kyiv, Ukraine
English translation by Action Ukraine Report (AUR), Washington D.C., Sep 21, 2008
 
THE LAW OF UKRAINE No.376-V “ON HOLODOMOR IN UKRAINE IN 1932-1933”
Verkhovna Rada rules:

– commemorating millions of Ukrainians who fell victims to the Holodomor in 1932-1933 and its consequences;

– commemorating the sufferings of people who survived this terrible tragedy in the history of the Ukrainian nation;

– being aware of the moral duty towards the past and future generations of Ukrainians and recognizing the need to restore historical justice and uproot
tolerance to any forms of violence;

– recognizing that the tragedy of the Holodomor in 1932-1933 in Ukraine has been officially denied by the Soviet authorities for many decades;

– condemning criminal deeds of the totalitarian regime in the USSR aimed at engineering the Holodomor and thereby killing millions of Ukrainians,
destroying the social base of the Ukrainian people, its age-long traditions, spiritual culture and ethnic identity;

– sympathizing with other peoples of the former USSR who suffered as the result of the Holodomor;

– highly appreciating the solidarity and support of the international community in denouncing the Holodomor of 1932-1933 in Ukraine which has been
reflected in declarations made by the parliaments of Australia, Republic of Argentina, Republic of Georgia, Republic of Estonia, Republic of Italy, Canada, Republic of Lithuania, Republic of Poland, the United States of America, Republic of Hungary as well as in the Joint Declaration on the 70th anniversary of the Holodomor – the Great Famine in Ukraine in 1932-1933 – which was released as an official document by the  58th session of the UN General Assembly and signed by Republic of Argentina, Republic of Azerbaijan, People’s Republic of Bangladesh, Republic of Belarus, Republic of Benin, Republic of Bosnia and Herzegovina, Republic of Guatemala, Republic of Georgia, Arab Republic of Egypt, Islamic Republic of Iran, Republic of Kazakhstan, Canada, State of Qatar, Republic of Kirghizia, State of Kuwait, Republic of Macedonia, Mongolia, Republic of Nauru, Kingdom of Nepal, United Arab Emirates, Islamic Republic of Pakistan, Republic of Peru, South African Republic, Republic of Korea, Republic of Moldavia, Russian Federation, Kingdom of Saudi Arabia, Syrian Arab Republic, United States of America, Republic of Sudan, Republic of Tadjikistan, Turkmenistan, Democratic Republic of Timor-Leshti, Republic of Uzbekistan, Ukraine, and Jamaica, as well as was supported by Australia, Israel, Republic of Serbia and Montenegro and by 25 member states of the European Union;

– proceeding from the recommendations taken in the wake of parliamentary debates on commemorating the Holodomor victims of 1932-1933 which were
approved by Verkhovna Rada resolution No. 607-IV of March 6, 2003 and the Appeal to the Ukrainian people by the participants of VR ad hoc session on
May 14, 2003 on commemorating the victims of the Holodomor which was endorsed by VR resolution No. 789-V of May 15, 2003 in which the Holodomor is recognized as an act of genocide against the Ukrainian people deliberately engineered by the totalitarian repressive Stalinist regime and aimed at massive killings of a part of the Ukrainian people and other peoples of the former Soviet Union;

– recognizing the Holodomor of 1932-1933 in Ukraine, pursuant to the Dec. 9, 1948 Convention on preventing genocide and imposing punishment for it as a
deliberate act of the massive murdering of people, Verkhovna Rada passes this Law.

Article 1. The Holodomor of 1932-1933 in Ukraine is genocide against the Ukrainian people.

Article 2. Public denial of the Holodomor of 1932-1933 in Ukraine is an outrage upon the memory of millions of victims of Holodomor, abasement of the dignity of the Ukrainian people and is, thereby, against the law.Article 3. Central and local governments are obliged within the scope of their authority:

–  to participate in mapping out and implementing the state policy aimed at restoring and preserving the national memory of the Ukrainian people;
–  to promote consolidation and development of the Ukrainian nation, its historical consciousness and culture as well as raise awareness about the Holodomor of 1932-1933 in Ukraine among the citizens of Ukraine and worldwide,
–  to ensure the study of the tragedy of the Holodomor in the educational institutions of Ukraine,
–  to take steps to keep alive the memory about Holodomor victims, specifically, to install monuments and commemoration plaques,
–  to ensure access to archive and other sources of information related to the Holodomor for research and public organizations, scholars, individuals who are involved in studying the Holodomor and its consequences.
Article 4. The Ukrainian government is to promote research and implementation of programs aimed at commemorating the victims of the Holodomor of 1932-1933 by launching an appropriate all-Ukrainian program for which funding must be earmarked in the state budget of Ukraine.

Article 5. Closing provisions.

1.  This Law comes into force on the day of publication.
 
2.  The Cabinet of Ministers of Ukraine is obliged:
1) to determine the status and functions of the Ukrainian Institute of the National Memory as an authorized central executive agency in the area of restoring and preserving the national memory of the Ukrainian people, and ensure its funding from the state budget;
 
2) within three months of this Law coming into force:
–  to submit to Verkhovna Rada proposals on harmonizing the Ukrainian legislation with this Law;
–  to ensure the revision and cancellation by the executive of the by-laws contradicting this Law;

3) jointly with the Kyiv city state administration to enact a resolution to erect a memorial to the victims of the Holodomor in Kyiv by the 75th anniversary of the Famine.

President of Ukraine Viktor Yushchenko
November 28, 2006
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
19.  THE UKRAINIAN ‘GENOCIDE BY STARVATION’ ‘

An orphan in Kiev in 1934. Her parents had died of starvation and she survived on charity from a neighbour
Tony Halpin in Kiev, The Times, London, UK, Sunday, June 22, 2008
KIEV – Grigori Garaschenko remembers seeing his classmates starve slowly to death in a famine that killed millions of people in Ukraine. A neighbour driven mad by hunger killed her six-year-old daughter and began to eat her, he said, after Soviet soldiers confiscated all the food in their village during house-to-house searches.
Mr Garaschenko, 89, is one of the few remaining survivors of the famine of 1932-33. Now, 75 years on, Ukraine wants the world to recognise that what it calls the Holodomor was a deliberate act of genocide by Stalin’s Soviet Union.
It is a campaign that infuriates modern Russia. Moscow argues that there was no such crime because Russians and other nationalities also starved under Stalin’s policy of turning peasant farms into large state-run collectives. 
 
The Institute of National Memory, the Ukrainian body responsible for researching the Holodomor, calculates that three million people died in the months after Stalin punished the collective farms for failing to meet grain production targets in 1932. Soviet troops confiscated the harvest and all the food in villagers’ homes.
Igor Yukhnovsky, the director of the institute, told The Times that as many as nine million may have died as a result of the famine and its aftermath. Stalin’s intention, he said, was to break Ukraine’s national identity.
 
“The land gives birth to the nation. During the Holodomor, the nation was destroyed, and this was the basic purpose,” Mr Yukhnovsky, 82, said. “Now that Ukraine has restored its statehood, the first thing we must do is restore our history.”
 
He said that preparations would begin next week for a judicial inquiry to establish who was guilty of implementing the Holodomor. He said the institute had received government approval to conduct the investigation, based in part on Soviet-era archives.
“We must know the names of the people in authority who were in charge of this criminal enterprise. They must be convicted. Of course, a lot of these people are already dead or too old, but they must have sentence passed so that their descendants can be freed from guilt,” Mr Yukhnovsky said.
The institute is also overseeing the construction of a memorial complex in Kiev as part of commemorations to mark the 75th anniversary of the Holodomor in November.
Its campaign to name the guilty men is likely to exacerbate tensions with Russia, which does not deny that millions died, but insists that the famine was not a weapon aimed only at Ukrainians.
The Russian parliament, the Duma, passed a resolution in April rejecting claims that the famine “was organised along ethnic lines”, and warning Ukraine against using the tragedy as “a tool for modern political speculation”. Alexander Solzhenitsyn was equally vociferous, condemning the “provocateur’s cry of ‘genocide'” in a newspaper article.
Discussion of the Holodomor was taboo in Soviet times. But the Ukrainian parliament backed a declaration put forward by President Yushchenko in 2006 that the famine was genocide, rejecting an attempt by pro-Russian deputies to characterise it simply as a “tragedy”.
 
Mr Garaschenko remembers helping to bury the dead and says that he survived only because a teacher managed to obtain tiny rations of bread for children who attended school. The teacher was later shot as an “enemy of the people”.
He adds that people over the border in Belarus, close to his village, did not starve. Mr Garaschenko said: “There were only Ukrainians in the villages. When they tell you it wasn’t a genocide against the Ukrainian people, it’s all lies. The Soviet soldiers went house to house taking away all our food. They left the people nothing to eat and left them to die.”
Katerina Kholivach, 80, another survivor, was only 4 when her family left her in an orphanage because she was too weak to travel as they fled the famine. When her mother returned to collect her later, Soviet officials told her that Katerina had died. Mrs Kholivach discovered that her brother and sister were alive only in 2002. She said: “The Holodomor was a huge crime and I was a victim of it. I have suffered the consequences all my life.”
THE GREAT HUNGER
At the height of the Ukrainian famine in 1933, an estimated 25,000 people died each day
By the end of 1933, almost 25 per cent of the Ukrainian population is thought to have perished
An estimated 80 per cent of Ukraine’s population were small-scale farmers
By mid-1932 almost 75 per cent of farms had been seized by the state to force Ukrainian peasants into the Soviet system of land management
Grain exports were raised dramatically and agents were sent to villages to confiscate grain, bread and any other food they could find
The Soviet Union exported 1.7million tonnes of grain to the West during the famine. Nearly a fifth of a tonne of grain was exported for each person who died of starvation
Holodomor, the Ukrainian name for the famine, means murder by hunger
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
20.  75 YEARS LATER, HORROR STAYS FRESH, 1930’S FAMINE IN UKRAINE MARKED

Melissa Dunne, The Windsor Star, Windsor, Ontario, Canada, Saturday, May 24, 2008

WINDSOR – If not for finding some buried dead horses and empty corn husks, Stefanie Korostil and most of her family may not have made it through the Ukrainian famine. Korostil was only 12 when her family had to survive on horse meat and ground-up husks, mixed with tree leaves.

 
EATING CORPSES
Many of her neighbours, near the Dnieper River about 321 kilometres south of Kiev in Ukraine, resorted to eating human corpses, pets, and grass to stay alive during the Ukrainian famine in the mid-1930s.

Eventually, Korostil would lose six relatives, including one of her two brothers, to the what they say was a genocide, also known as the Holodomor.
“There was no bread, no nothing,” recalled Korostil after a ceremony in Jackson Park Friday, aimed at raising awareness of the Holodomor. “People were dying everywhere … the bodies were everywhere.”

This period in Soviet history was kept silent for decades. From 1932-33 approximately seven million Ukrainians were starved to death in what is called the breadbasket of Europe. Ukrainians say it was an act designed to undermine the social basis of Ukrainian national resistance.

Mainly peasants and farmers, like Korostil’s family, were stripped of all of their food, animals, and most of their possessions. At the height of the famine, Ukrainian villagers were dying at the rate of 17 per minute, 1,000 per hour, 25,000 per day.

 
ONLY KNOWN SURVIVOR IN WINDSOR
Now, as the only known survivor of the famine living in Windsor, Korostil does her part to pressure the local, national, and international community to publicly acknowledge the Holodomor as an act of genocide, not a famine.

As part of this movement to raise awareness, an international remembrance flame is travelling across 33 countries leading up to the 75th anniversary of the famine this November.

When the flame came to Windsor Friday about 50 people, along with Brian Masse (NDP — Windsor West) and Joe Comartin (NDP — Windsor-Tecumseh), held a ceremony at the Holodomor Monument in Jackson Park, which was erected in 2005 to commemorate the 72nd anniversary.

In Canada a bill to recognize the Holodomor as a genocide and to designate an official annual day of remembrance is set to be approved just before the 75th anniversary this fall.

The Soviets denied the famine until 1989, when then-president Mikhail Gorbachev spoke publicly of the tragedy.

Despite everything, Korostil has built a rich life for herself in Windsor. With Hitler’s invasion of Russia in 1942, Korostil was shipped to Bavaria to a slave labour camp. After the war, she married and immigrated first to the U.S., and later to Canada.

 
“PEOPLE EATING PEOPLE – YOU DON’T FORGET”
She went on to have three children with her husband, who died last month, three grandchildren and three great-grandchildren. But the events of her early life still haunt her. “I remember everything,” said Korostil, now an octogenarian. “People eating people — you don’t forget.”
 
LINK: http://www.canada.com/windsorstar/news/story.html?id=d77e4d96-4e5f-4ab3-8099-b594b482d523
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
“ACTION UKRAINE REPORT – AUR”
A Free, Private, Not-For-Profit, Independent, Public Service Newsletter

With major support from The Bleyzer Foundation, Kyiv, Ukraine
Articles are Distributed For Information, Research, Education, Academic,
Discussion and Personal Purposes Only. Additional Readers are Welcome.
LINK TO THE AUR 2008 ARCHIVE: http://www.usubc.org/AUR/
TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR, several times a month, please send your name, country of residence, and e-mail contact information to morganw@patriot.net. Information about your occupation and your interest in Ukraine is also appreciated.
 
If you do not wish to read the ACTION UKRAINE REPORT please contact us immediately by e-mail to morganw@patriot.net.  If you are receiving more than one copy please let us know so this can be corrected. 
 
ACTION UKRAINE PROGRAM – SPONSORS
“Working to Secure & Enhance Ukraine’s Democratic Future”

1.  THE BLEYZER FOUNDATION, Dr. Edilberto Segura,
Chairman; Victor Gekker, Executive Director, Kyiv, Ukraine;
Additional supporting sponsors for the Action Ukraine Program are:
2. UKRAINIAN FEDERATION OF AMERICA (UFA), Zenia Chernyk,
Vera M. Andryczyk, President; Huntingdon Valley, Pennsylvania
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, kau@ukrnet.net
4. RULG – UKRAINIAN LEGAL GROUP, Irina Paliashvili,
President; Kyiv and Washington, general@rulg.com, www.rulg.com.
5. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX  77024; bill.hunter@volia-software.com.
6. U.S.-UKRAINE BUSINESS COUNCIL (USUBC), Washington,
D.C., Promoting U.S.-Ukraine business investments since 1995.
7. UKRAINIAN ORTHODOX CHURCH OF THE USA, Archbishop
Antony, South Bound Brook, New Jersey, http://www.uocofusa.org
8. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
9. U.S.-UKRAINE FOUNDATION (USUF), Nadia McConnell, President;
John Kun, Vice President/COO; http://www.USUkraine.org
10. WJ GROUP of Ag Companies, Kyiv, Ukraine, David Holpert, Chief
Financial Officer, Chicago, IL; http://www.wjgrain.com/en/links/index.html
11. EUGENIA SAKEVYCH DALLAS, Author, “One Woman, Five
Lives, Five Countries,” ‘Her life’s journey begins with the 1932-1933
genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
12. ALEX AND HELEN WOSKOB, College Station, Pennsylvania
13. SWIFT FOUNDATION, San Luis Obispo, California
14. DAAR FOUNDATION, Houston, Texas, Kyiv, Ukraine.
 
PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer, The Bleyzer Foundation
Emerging Markets Private Equity Investment Group;
President, U.S.-Ukraine Business Council (USUBC)
Founder/Trustee: “Holodomor: Through The Eyes of Ukrainian Artists”
1701 K Street, NW, Suite 903, Washington, D.C. 20006
Tel: 202 437 4707; Fax 202 223 1224
 

Power Corrupts and Absolute Power Corrupts Absolutely.
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================

Leave a comment

Filed under Uncategorized

AUR#908 Sep 19 Yushchenko to New York; Joint Stock Law; Software Outsourcing; Crime Against Humanity & Genocide

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

Ukrainian History, Culture, Arts, Business, Religion, Economics,
Sports, Government, and Politics, in Ukraine and Around the World       
                
ACTION UKRAINE REPORT – AUR – NUMBER 908
Mr. Morgan Williams, Publisher and Editor, SigmaBleyzer
WASHINGTON, D.C., FRIDAY, SEPTEMBER 19, 2008
 
INDEX OF ARTICLES  ——
Clicking on the title of any article takes you directly to the article.               
Return to Index by clicking on Return to Index at the end of each article
Meeting with top U.S. business leaders in NYC suddenly cancelled
Interfax Ukraine, Kyiv, Ukraine, Wednesday, September 17, 2008
 
Ukrainian News-on-line, Kyiv, Ukraine, Wednesday, September 17, 2008 
 
Ukrainian president sees no Russian military move
Exclusive Interview: Viktor Yushchenko, President of Ukraine
Natalia A. Feduschak, The Washington Times, Washington, D.C., Thu, Sep 18, 2008

Interfax Ukraine News, Kyiv, Ukraine, Thursday, September 18, 2008

Reuters,  Kiev, Ukraine, Wednesday September 17 2008
 
6NATION’S DEPENDENCE ON RUSSIAN ENERGY SUPPLIES HURTING ECONOMY, SECURITY 
Ukraine’s leaders should step up production of natural gas and invest in renewable energy
Yuliya Melnik, Special to Kyiv Post, Kyiv, Ukraine, Thursday, September 18, 2008
 
7UKRAINE IS BECOMING A TOP SOFTWARE OUTSOURCING DESTINATION
But some experts warn that education system needs improvement.
Elena Plekhanova, Staff writer, Kyiv Post, Kyiv, Ukraine, Thursday, September 18, 2008
 
Jonathan Holmberg, Editor, Kyiv Post, Kyiv, Ukraine, Thursday,  Sep 18, 2008 
 
FACTOR FOR WEAKENING OF HRYVNIA EXCHANGE RATE, SAY FINANCIERS
Interfax Ukraine Economic, Kyiv, Ukraine, Thursday, September 18, 2008
 
Gongadze who has become a symbol of the struggle for freedom of speech and human dignity.

Abridged version of an article at www.umoloda.kiev.ua
Kharkiv Human Rights Protection Group, Kharkiv, Ukraine, Tue, Sep 16, 2008
 
Analysis & Commentary: Yevhen Zakharov, Kharkiv Human Rights Protection Group, Kharkiv, Ukraine, Sat, Sep 13, 2008
===================================================
1
PRESIDENT YUSHCHENKO TO LEAVE FOR UN MEETING IN NEW YORK 
 
Interfax Ukraine, Kyiv, Ukraine, Wednesday, September 17, 2008
 
KYIV –  Ukrainian President Viktor Yuschenko will leave for the United States on September 22 to take part in the 63rd session of the UN General Assembly, the presidential press service reported on Wednesday. Yuschenko will present the position of Ukraine on vital issues of the modern world during the general debates of the 63rd session, the press service said.
“Bilateral meetings are also scheduled with the heads of delegations of other states, with representatives of the Ukrainian community in the United States, representatives of business circles of the United States, and members of the Atlantic Council of the United States,” the press service said.

FOOTNOTE:  President Yushchenko’s Meeting with Top U.S. Business Leaders in NYC Suddenly Cancelled
NEW YORK – Twenty-seven top U.S. business leaders, whose companies have hundreds of millions of dollars invested in Ukraine and who have created thousands of jobs in Ukraine, were scheduled to meet with Ukrainian President Victor Yushchenko, at a working luncheon next Tuesday in New York City. 
The leaders of U.S. business were invited to have a discussion with the President about expanding their trade, business and investment in Ukraine.  The top U.S. business leaders were suddenly informed this week that their working luncheon with President Yushchenko has been cancelled by the Presidential Administration.  
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
2.  PRESIDENT YUSHCHENKO TO VISIT U.S. FOR UN GENERAL ASSEMBLY SESSION 

 
Ukrainian News-on-line, Kyiv, Ukraine, Wednesday, September 17, 2008 

KYIV – Ukrainian President Viktor Yuschenko intends to visit the United States for participation in the UN General Assembly session in September, the Ukrainian presidential press service reported referring to Yuschenko’s phone conversation with US President George Bush.

The parties reached agreement to instruct their foreign ministers to elaborate the question by the time of the Ukraine – US summit meeting in the course of Yuschenko’s participation in the scheduled session of the UN General Assembly.
President Yuschenko said in an interview with The Washington Times that the major topics of the Ukraine-U.S. talks would be questions of the strategic cooperation, security, the energy sector, trade and investment cooperation [as reported previously the meeting on trade and investment cooperation was cancelled by the Presidential Administration].
While commenting on the political situation in Ukraine, Yuschenko said it was important to achieve a solution to the crisis through a democratic way.
In his opinion, a coalition between the Bloc of Yulia Tymoshenko and the Party of Regions, which has formed in the Verkhovna Rada de-facto, is an unnatural one, as it is based on agreements on sharing posts in the central government and regional governments.
Meantime, Yuschenko said the formalization of the coalition was being delayed by the participants in the coalition, as they acknowledge absence of public approval of the alliance. The 63rd session opened on September 16.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
3.  UKRAINE: VIKTOR YUSHCHENKO ADVOCATES NATO AS BALANCE
Ukrainian president sees no Russian military move
 
Exclusive Interview with Viktor Yushchenko, President of Ukraine
Natalia A. Feduschak, The Washington Times, Washington, D.C., Thu, Sep 18, 2008

KIEV – Ukrainian President Viktor Yushchenko blamed the Russia-Georgia war on a security imbalance in the Black Sea region that he said could be corrected by NATO’s further expansion to the East.

But he downplayed fears that his country is vulnerable to military aggression by Moscow even if it does not gain admission to the Western alliance.

“I don’t believe that kind of danger exists for Ukraine, because Ukraine is not Georgia,” Mr. Yushchenko told The Washington Times Wednesday. “Ukraine has a different potential, different possibilities. In other words, our relations [with Russia] can only bring about a dialogue.”

Asked about recent remarks by Republican vice-presidential candidate Sarah Palin that NATO membership for Georgia would require a military response from the Western alliance, Mr. Yushchenko spoke in broader terms of the need for collective security throughout the region.

“This showed that the Black Sea region is unbalanced and that it can be a source of danger,” Mr. Yushchenko said. “This is a problem not only for Georgia.

I am convinced this is a problem not only for our region. This is a problem for the European continent and, in a wider sense, even a world problem.”
Looking composed and relaxed, the silver-haired Mr. Yushchenko, 54, has regained the youthful vigor for which he was famous before dioxin poisoning left his face badly scarred in a purported 2004 assassination attempt.

He answered questions for nearly an hour, touching on a wide range of issues, including his nation’s quest for membership in NATO and the European Union and his desire for Russia’s Black Sea Fleet to eventually leave its base in the Ukrainian port of Sevastopol.

He also expressed disappointment at the rivalry with a one-time political ally, Prime Minister Yulia Tymoshenko, that led to the collapse of a parliamentary coalition this week.

Ukraine’s relationship with Russia sparked the dispute, with Mrs. Tymoshenko accusing Mr. Yushchenko of unnecessarily antagonizing Moscow after last month’s invasion of Georgia.  The two are expected to run against each other for the presidency when Mr. Yushchenko’s five-year term ends in January 2010.

 
UKRAINE’S QUEST FOR NATO MEMBERSHIP
Mr. Yushchenko will travel to the United States next week to attend the 63rd session of the U.N. General Assembly, where he will have an opportunity to discuss with dozens of world leaders the war in Georgia and its impact on the centerpiece of his four-year presidency: Ukraine’s quest for NATO membership.
“When we talk about the best answer for Ukraine, including its territorial integrity, and the inviolability of our borders, the answer is only one – joining a collective system of defense,” he said. Russian President Dmitry Medvedev has stated repeatedly that former Soviet republics lie in his country’s sphere of interest. 
 
“I’m not going to say, however, that there aren’t going to be ways for destabilization. In this country, there are instruments, and there are many of them,” Mr. Yushchenko said of Russia. He said he was unhappy that the leadership in Moscow has kept silent when some Russian politicians have laid claim to Crimea.
The peninsula has a large ethnically Russian population and was ceded to Ukraine in 1956. Both the Ukrainian and Russian Black Sea fleets are based there, on opposite sides of the same harbor at Sevastopol.
Mr. Yushchenko said it was critical that Kiev and Moscow shore up the agreement that allows Russia to base its fleet in Sevastopol until its lease expires in 2017. “The Black Sea Fleet should not be a negative in our relationship with the Russian Federation,” Mr. Yushchenko said. At the same time, he said, he prefers that the fleet leave Ukraine when its lease ends.
The president expressed frustration that Ukraine has fallen short in its bid for eventual NATO membership. He chided NATO for not offering his country a membership action plan at an April summit in Bucharest.
Many analysts think the Russian invasion of Georgia last month will make it more difficult for Ukraine and Georgia to join NATO or even gain a membership action plan when NATO foreign ministers meet again in December.
“Everyone needs to understand that everything Ukraine needed to do to obtain a positive answer [on NATO membership], if we speak openly and honestly, it has done that,” he said.
Today, he said, “when we aren’t talking about NATO membership, we’re talking about a partnership agreement, that we want to have tighter cooperation. … We need to get a signal from the alliance itself that we are respected, that we are valued.”
Mr. Yushchenko, however, saved his harshest words for Ukraine’s prime minister, Mrs. Tymoshenko, his ally in the 2004 Orange Revolution that toppled a pro-Russian government.
Their relationship has since dissolved. Earlier this month, Mrs. Tymoshenko pulled out of a coalition government and joined forces with Viktor Yanukovych, the president’s political nemesis who heads the pro-Russia opposition.
“It’s disgusting to speak about this because what happened in the last two months is an example of how easily national interests can be demolished with blackmail … and how easily internal politics and external politics can be changed to suit one’s own self interest,” Mr. Yushchenko said of his former ally.
Mrs. Tymoshenko, in turn, has accused Mr. Yushchenko of ruining Ukraine’s relationship with Russia. She urged Ukraine to follow a “balanced” policy with Moscow and blamed Mr. Yushchenko of antagonizing Russia.  “I think that the president carries personal responsibility for everything bad that will happen in relations between Ukraine and Russia,” Mrs. Tymoshenko told reporters in Kiev on Wednesday, the Associated Press reported.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
4.  DRAFT RESOLUTION ON HOLODOMOR FAMINE IN UKRAINE
TO BE DISCUSSED AT UNITED NATIONS GENERAL ASSEMBLY
 
Interfax Ukraine News, Kyiv, Ukraine, Thursday, September 18, 2008

KYIV – A draft resolution on the Holodomor Famine in Ukraine in 1932-1933 will be discussed at the next sitting of the General Committee of the 63rd session of the UN General Assembly, the press service of Ukrainian Foreign Ministry reported on Thursday.

The Foreign Ministry said the draft resolution “contains an appeal to honor the memory of the victims of the Holodomor famine in Ukraine in 1932-1933, which took the lives of millions of Ukrainians, and people of other nationalities who lived in Ukraine during that time.”
The draft resolution also calls on UN member states “to include information on the Holodomor famine in Ukraine in 1932-1933 in their educational programs aimed as preventing future generations from [repeating] a sorrowful lesson from a tragic page in global history.”
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
==============================================================
U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
Promoting U.S.-Ukraine business relations & investment since 1995.
==============================================================
5.  UKRAINE PASSES JOINT STOCK COMPANY LAW

Reuters,  Kiev, Ukraine, Wednesday September 17 2008
KIEV – Ukraine’s parliament passed on Wednesday a joint stock company law, sought for years by foreign and Ukrainian investors to protect shareholders through regulation of the basic business entity.
The law will regulate the creation of joint stock companies, the rights and obligations of shareholders and management, the payment of dividends and access to information.
It also says shareholder meetings can only take place at the premises of the company, avoiding what has become to be known as “raiders’ hits” — when control of a firm has been wrested by a few big shareholders through ad hoc meetings and votes. Such incidents have led to lengthy court procedures, much to the frustration of hundreds of shareholders.
The law was passed by 358 deputies out of 450 in the absence of a ruling coalition which collapsed this month. This latest political crisis may lead to the third parliamentary election in as many years, dampening foreign investor sentiment.
President Viktor Yushchenko, whose party left the coalition, has yet to sign the bill. According to the securities regulator, there are 35,000 joint stock companies in Ukraine. (Reporting by Yuri Kulikov; Writing by Sabina Zawadzki; Editing by Quentin Bryar)
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================      
6. NATION’S DEPENDENCE ON RUSSIAN ENERGY SUPPLIES HURTING ECONOMY, SECURITY 
Ukraine’s leaders should step up production of natural gas and invest in renewable energy.

Yuliya Melnik, Special to Kyiv Post, Kyiv, Ukraine, Thursday, September 18, 2008

WASHINGTON, D.C. – Ukraine’s economy and national security remain vulnerable to energy imports from a hostile northern neighbor, experts warned at a Sept. 15 press conference in America’s capital city. Unfortunately, energy specialists said, Ukraine’s leaders have repeatedly squandered opportunities to break free from Moscow’s grip.

Currently, Ukraine depends on Russia for roughly 80 percent of its energy supplies – mainly oil, natural gas and nuclear fuel. However, experts said that if Ukraine’s leaders would take the right steps, renewable energy sources – such as solar power – could supply up to 30 percent of the nation’s needs.

While the nation’s politicians have missed many opportunities, experts at the “Energy Options for Ukraine” conference said it’s not too late. They urged the country’s leaders to lure fresh investments to boost domestic hydrocarbon production, cut wasteful consumption and increase the usage of alternative power.

There is little time to waste, according to the event’s organizers, who said the five-day war between Russia and Georgia in August underscores the need for Ukraine to swiftly “slash reliance on imports of Russian energy.”

Organizers of the event held at John Hopkins University included The Washington Group [TWG], the U.S.-Ukraine Foundation [USUF], the U.S.-Ukraine Business Council [USUBC], and the Ukrainian American Environmental Association [UAEA].

One place for Ukraine’s leaders to start, according to panel speaker and U.S. energy consultant Edward Chow, is to boost domestic production of conventional fuels.

Chow, a 20-year veteran of Chevron Corporation who has also advised Ukraine’s government on energy strategy, reminded the audience that Ukraine used to export natural gas to Russia in Soviet days. Significant investments could boost domestic production once again to help fill the nation’s demand, Chow said.

DOMESTIC GAS PRODUCTION CAN EASILY BE INCREASED
“Domestic gas production can easily be increased,” he said, adding that Ukraine’s unique geographic location gives it leverage in future price talks with Russia. An estimated 80 percent of Russia’s Europe-bound gas goes through Ukraine, and its vast natural gas pipeline system remains the largest transit channel for supplies to European markets.

Unfortunately, Ukraine did not use the momentum of the Orange Revolution to bargain tough on gas prices with Russia. “Some current political leaders are still trying to convince the public that [subsidized] gas prices instead of modern market prices are the goal,” Chow said, explaining that such a policy makes the country less attractive for hydrocarbon exploration and production ventures.

 
NUCLEAR POWER IMPORTANT
Another priority, experts said, should be nuclear power.

Ukraine inherited a vast nuclear power generation capacity built in Soviet days. It currently satisfies about half of the country’s electricity needs and there are plans to build new nuclear blocs. But it is highly dependent on Russia to import fresh and process spent nuclear fuel. The country pays Russian companies some $100 million per year to process spent nuclear fuel, and much more to purchase fresh supplies used in generating nuclear power.

Hence the importance of a project led by U.S.-based Holtec International, which is building a spent nuclear fuel storage facility for Ukraine at the closed Chornobyl atomic power plant, home to the worst nuclear disaster. The  first storage capacity is expected to be completed in 2011. Facilities to process spent nuclear fuel, making it reusable, could follow.

William Woodward, vice president of Holtec International, described his company’s project in Ukraine as a “key to independence.” But some panel participants underlined the necessity for Ukraine to be cautious with its massive nuclear power expansion plans, pointing to potential terrorist threats and a water deficit.

IMPROVING ENERGY EFFICIENCY
Brian Castelli, executive vice president of the Alliance to Save Energy, a non-partisan non-governmental organization, said Ukraine is gradually improving its energy efficiency at a rate of 4 to 6 percent per year, but remains very wasteful.

The lack of simple technologies such as power meters, basic building insulation, erratic payments by consumers and poor service provided to them remain large challenges to be tackled by the country in future years. To speed up the process, the Alliance urged Ukraine to introduce meter-based billing, privatize energy companies and increase tariffs to levels that would allow energy companies to generate enough profits to modernize.

Castelli pointed to carbon finance, repair and maintenance funds, vendor credits and housing renovation loans among possible solutions. The Alliance boasts successful experience in helping to pass a district heating law in Lithuania, introducing bill collection software in Kyiv and carbon financing in Ivano-Frankivsk, among other projects.

Castelli also underlined the importance of launching a nationwide energy efficiency project for schools in order to create awareness among children and bring up a new generation of responsible energy consumers.

So for Ukraine to become more energy independent, it will have to also boost the production of alternative, renewable energy. Current figures show the country lags far behind, with renewable power sources accounting for 2 percent, a fraction of the 7 percent in the United States, 12 percent in Germany and 70 percent in some regions of Spain, according to Ken Bossong, co-director of the Ukrainian-American Environmental Association.

“Ukraine was the center of solar thermal research in the former Soviet Union and it has arguably better potential than Germany, which is a solar power leader,” he said, adding that it is reasonable for Ukraine to get some 17-31 percent of its energy needs from renewable sources by 2030.

 
 ——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
7.  UKRAINE IS BECOMING A TOP SOFTWARE OUTSOURCING DESTINATION
But some experts warn that education system needs improvement.

Elena Plekhanova, Staff writer, Kyiv Post, Kyiv, Ukraine, Thursday, September 18, 2008

Well–known for a relatively inexpensive yet professional work force, Ukraine’s software development business is steamrolling ahead, posting
double-digit growth and cashing in on lucrative contracts from both foreign and domestic customers.

However, some software developers are beginning to complain about the deteriorating professional level of information technology graduates and
predict industry growth will slow unless the education system improves. Currently, there are more than 300 companies working in Ukraine’s software
development field and growth has been impressive.

According to SoftServe, a Lviv-based software development company, the software market in terms of sales grew by 75 percent, from $175 million in
2005 to $310 million in 2006.

By the end of last year, the industry had increased to more than $350 million, SoftServe said, but other estimates put it at much higher. While growing fast, Ukraine’s software development potential in dollar terms is tiny compared to world leader India, which earns more than $17 billion annually. Yet it competes with Russia, where developers handle some $1.75 billion in contracts.

While Russia has more information technology labor resources, and Western Europe leads in the level of information technology education and infrastructure, Ukraine wins a significant share of international software development contracts because its labor rates are comparatively low.

“The demand for Ukrainian software development services is growing steadily in the West. Our main customers are the United States and Western Europe. In the last several years, the Ukrainian brand has become internationally recognized and there is no doubt that Ukraine is in the top ten software
development countries of the world,” said SoftServe’s executive vice president Taras Vervega.

Since independence in 1991, Ukrainian developers have focused much of their effort on landing lucrative foreign contracts. But domestic demand is picking up, as is competition.

“The time of hyper-profits is over and competition in the local market is rapidly growing. In order to keep their market positions, local companies need high-quality software, for example, cost control programs and other IT (information technology) products to solve different economic issues,” Vervega added.

Ukrainian programmers commonly produce information technology solutions for health care, industrial and commercial niches. One of the most promising
sectors today is project management and consulting software, according to experts.

Today, seven percent of Ukrainian commercial enterprises have introduced automated business processes designed specifically for them, says Lana
Chabakha, business development director at Terrasoft, a customer relationship management software solutions provider.

“The potential in this area is very big. We do not expect the market to reach a saturation point for several years. The interest in customer relations management technology is growing both in small and medium enterprises and in the major Ukrainian companies,” she said.

Despite the Ukrainian software development industry’s cost competitiveness, a new weakness – poor education levels – may dent growth.

“Today about 30,000 young information technology professionals graduate from Ukrainian universities annually, but the skill level is far from the demands
of the outsourcing market,” Vervega said. He believes increasing the education budget to 6.5 percent of GDP would solve the problem and brighten
long-term prospects.

Liudmila Kuzmenko, the head of human resources at NetCracker, a software company that provides solutions to the industry, believes the weak education
standards are already curtailing growth.

“The information technology education system in Ukraine is in dire need of investment from the government and private enterprise. It should be a top
priority in Ukraine’s national strategy, because information technology outsourcing is one of the country’s international successful niches,” she added.

LINK: http://www.kyivpost.com/business/29763

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
============================================================
NOTE: Send in a letter-to-the-editor today. Let us hear from you.
============================================================
8.  UKRAINE COULD BE A SECOND INDIA SAYS HEAD OF MICROSOFT 

 
Jonathan Holmberg, Editor, Kyiv Post, Kyiv, Ukraine, Thursday,  Sep 18, 2008
  
The director of Microsoft Ukraine believes the nation will play a big role in software development. Eric Franke has been the general director of Microsoft Ukraine since December 2007. The Dutch national has more than 20 years of information technology industry experience.
 
No stranger to Ukraine, Franke led the development of UMC, now MTS, from a mobile phone subscriber base of 400,000 to more than 11 million between 2001 and 2005. During his interview with the Kyiv Post, Franke said that Ukraine has the potential to become a second India in software development outsourcing. 

KP: What is the situation in Ukraine’s software development industry today?
EF: Ukraine is a unique country when it comes to software development. There are 30,000 to 40,000 individual software developers in Ukraine. It has huge potential and is well­placed, close to Russia and Europe. Infrastructure is relatively OK. It could be better, but it is OK. And there is a lot of intellectual potential.

 
From our point of view – from a sales and marketing perspective ­ we see the potential as we’re selling them the developmental tools. A number of these developers are actually working on products for Microsoft. We have identified at least 400 developers working on Microsoft products actually writing code, integrating, supporting, localizing and adapting software.
 
Ukraine is in an exceptional position because when Microsoft looks for developers they look to the huge countries like India, Russia, China and, of course, the United States. Compared to these countries, Ukraine is relatively small, but there are a lot of good programmers here.

KP: The universities are producing highly qualified programmers?
EF: Yes, they are producing high quality programmers. When [Microsoft CEO] Steve Ballmer was here, he was surprised by a question a student asked about robotics and parallel processing. He was astonished that the student asked a question that usually only gets asked at Microsoft labs.

 
We have formed partnerships with the 10 core universities in Ukraine. We also opened the Microsoft Innovation Center at National Taras Shevchenko University. We supply them with development tools and provide free training to help incubate talent.

KP: How mature is the software development market in Ukraine?
EF: About 85 percent of the IT (information technology) business is in hardware. Software is still is a small slice. This shows Ukraine is at the beginning of the developmental cycle. If you look at Europe, the ratio is 50­60 percent hardware the remainder in software.

 
The IT (information technology) business is growing at about 40 percent each year. We are growing even faster. Microsoft Ukraine started with four employees in 2003, and now we have 150. The growth will not slow for at least three years.

KP: Your growth is coming from which segments?
EF: The biggest growth is from solutions sales and partners. Our main target is to increase the reach of the company by working with partners. At the moment we have over 1,000 partners.

KP: What are the outsourcing trends? Is Ukraine attracting clients?
EF: Outsourcing represents about 80 percent of software development work in Ukraine. That can be anything from integration jobs, quality assurance and conversion projects. They come because the high quality work is less expensive than it would be in the U.S. or Western Europe.

 
Ukrainians are hard working people who know how to work towards targets. They know how to dig into the earth. They know how to do things with their own hands and, in this case, their brains.

KP: Is there a “brain drain” problem?
EF: The IT (information technology) job market is overheated at the moment. It is no longer an employers’ market. It is a job candidate’s market. We see that in our company as well. Talented people with Microsoft on their resume can get any job they like.

KP: How is the piracy situation today?
EF: It is a problem. No company would dream about launching a product here because the next day it will be pirated. The piracy rate in Ukraine is 83 percent of the installed base. Last year it was 84 percent, so it is a huge problem that is not improving quickly. We do see improvement with the big companies, but small and medium sized companies, companies with five to 50 computers, are a challenge.

KP: Where do you see the software development market in five to 10 years?
EF: While Ukraine isn’t as big as India, I think it can play a big role in outsourcing and development. Looking at the potential, looking at the 40 percent annual growth, I think Ukraine could be a second India. It has all the ingredients: huge intellectual capital and proximity to the West.

 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
9.  WITHDRAWAL OF FOREIGN INVESTORS FROM UKRAINIAN MARKET IS KEY
FACTOR FOR WEAKENING OF HRYVNIA EXCHANGE RATE, SAY FINANCIERS

Interfax Ukraine Economic, Kyiv, Ukraine, Thursday, September 18, 2008

KYIV – Foreign investors are leaving the Ukrainian market, and this is a strong factor behind the fall in the hryvnia exchange rate to the dollar, according to financiers interviewed by Interfax-Ukraine on Wednesday.

“Investors are leaving the Ukrainian market, selling shares, corporate bonds and gradually selling state foreign loan bonds. Due to the global financial
crisis, access to long-term resources is blocked to the banks, and most economic entities stock up the currency, fearing a deficit in the future,” said the director for strategic development of Kyiv-based UFC-Capital Investment Company, Serhiy Kulpinsky.

“The situation on the interbank has mainly been provoked by the reaction of the Ukrainian market to the financial crisis on the international markets, and, in particular, on the Russian market. The factor of the withdrawal of capital from the Russian market affected the Ukrainian market,” said the board chairman of Kyiv-based CJSC Daughter Bank of Sberbank of Ukraine, Vyacheslav Yutkin.

The experts expect that the exchange rate situation on the interbank will stabilize, and hope that the NBU will intervene. “I think that in the next two months the hryvnia exchange rate will not fall lower than UAH 5.05/$1, and the panic that is forcing the exchange rate down will disappear soon,” Yutkin said.

“It is likely that the NBU will enter the interbank soon, and a further sharp devaluation of the hryvnia is unlikely,” Kulpinsky said, however.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
10.  GONGADZE ANNIVERSARY WITHOUT BURIAL OR PUNISHMENT

Gongadze who has become a symbol of the struggle for freedom of speech and human dignity.

Abridged version of an article at www.umoloda.kiev.ua
Kharkiv Human Rights Protection Group, Kharkiv, Ukraine, Tue, Sep 16, 2008
It is eight years today, 16 September, since Georgy Gongadze disappeared. Those who ordered the killing have not been brought to justice, and the victim has not been buried.
This evening, as has become traditional (however terrible that sounds) concerned individuals will light candles on Maidan [Nezalezhnosti – Independence Square] and honour the memory of Georgy Gongadze and all Ukrainian journalists who have died.  It is also tradition now that many will ask the authorities “Where is Gongadze?” and will receive no reply. This year there will be eight moments silence, one for each year since the journalist’s disappearance and brutal murder.
It has become standard for various politicians, etc to gain publicity on this day.  The author mentions some of the likely events. The organizing committee for the meeting on Maidan has consistently asked people to come as individuals and leave any politicizing for other issues.
As already reported here, one difference from last year is that three of the four men accused of carrying out the killing, former police officers, are now serving sentences of 12-13 years.
Whether those who ordered the killing remember Gongadze on this day nobody knows, and they remain unnamed. Among those remembered on this day in a most unfavourable light is at least one ex-Prosecutor General Mykhailo Potebenko.
 
Head of the Institute for Mass Information Victoria Sumar is not alone in expressing bemusement at the authorities’ lack of response to public outcries when Potebenko was awarded the Order of Yaroslav Mudry [the Wise]. 
 
Not to speak of the promotion to judge of the Kyiv Court of Appeal of Maria Pryndyuk who was responsible for revoking a resolution of the Prosecutor General’s Office regarding General Pukach and releasing him from custody.
 
Pukach is the fourth man accused of carrying out the crime and is now on the international wanted list.  His evidence, as head of the department the other three worked in would be vital.
Georgy Gongadze’s body has not yet been laid to rest. His mother Lesya Gongadze does not believe that the body held in a Kyiv morgue is that of her son.  His widow believes it is.
For those in Kyiv:  on Tuesday evening at 19.00 on Maidan Nezalezhnosti, a meeting will be held in memory of Georgy Gongadze and all Ukrainian journalists killed.
It is a meeting of remembrance.  Please bring candles to honour the memory of Georgy Gongadze who has become a symbol of the struggle for freedom of speech and human dignity.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=============================================================
Join the U.S.-Ukraine Business Council (USUBC) www.usubc.org.
Promoting U.S.-Ukraine business & investment relations since 1995. 
=============================================================
11.  MOSCOW’S EFFORT TO PRESENT ITSELF AS DEFENDER OF CRIMEAN TATARS FALLS FLAT

 
Window on Eurasia: Paul Goble, Vienna, Wednesday, September 17, 2008

VIENNA – Last week, Russian news portals and blogs featured reports that a group of the Crimean Tatars had called on Russian President Dmitry Medvedev and Tatarstan President Mintimir Shaimiyev to defend their nation’s rights against Ukraine’s “unceasing genocide,” a story that some Western media outlets picked up from Russian media reports.

But yesterday, the Crimean Tatar party that supposedly wrote and distributed this appeal said that it had not done so, pointing out that the individual member of the group that had taken this step was not authorized to do so and would be subject to discipline, a denial that so far has appeared only on the Crimea-L discussion list. 
Thus, the original report and the way many have handled it provide yet another example of the kind of disinformation campaign Moscow has again been engaged in as well as a transparent effort to put pressure on Ukraine by coming up with another justification for Russian intervention there – the protection of an ethnic minority.
On September 8th, a document purportedly reflecting the views of the Milli Firqa Party in Crimea surfaced in the Russian media. It called on the governments of the Russian Federation and Tatarstan to “defend the indigenous and other numerically small ethnic communities of Crimea” against the “genocidal” policies of Ukraine (www.nr2.ru/crimea/196012.html).
The appeal said that the situation in Crimea had become serious because the Crimean Tatars had exhausted “all possible means of defense in Ukraine” against the “rampant nationalism” there and that the Milli Firqa Party plans to appeal to the European Union, Turkey and the Turkic republics of the former Soviet Union as well.
Signed by Vasvi Abduraimov, who identified himself as a leader of the party, the document said that he and his party were not afraid of being accused of having “adopted a pro-Russian position in Crimean Tatar politics” because without outside support, there was little possibility that the Crimean Tatars will be in a position to flourish.
Consequently, “if it so happens that the interests of Crimea and the interests of the Crimean-Tatar people correspond with the interests of Russia for example,” Abduraimov concluded, “then why not use this [coincidence] for the resolution of the chief problems of the nation.”
Russian media quickly picked up the story, and Russian politicians and commentators reacted. Konstantin Zatulin, the first deputy chairman of the Duma’s committee on CIS affairs and compatriots abroad, said that this appeal certainly did not reflect the views of all Crimean Tatars but was important from Moscow’s point of view (www.nr2.ru/moskow/196179.html).
It showed that at least some Crimean Tatars are now unhappy both with the way in which Kyiv has used them as a political football for the last 20 years and with what he described as the often extreme statements made by some of the members of the Milli Mejlis, the Crimean Tatar parliament.
Obviously, he continued, Moscow could not casually interfere in the internal affairs of Ukraine “but the Russian Federation is carefully following what is taking place in Crimea since it is interested in the well-being of Crimea, the largest region beyond the borders of the Russian Federation where Russians live.”
And Zatulin added that Russia’s consul general in Crimea will be open to receiving more formal requests for Russian assistance and in the meantime “beyond doubt will receive the assignment of clarifying the situation,” one that he doubted was as extreme as genocide but nonetheless is serious enough to be a matter of concern. 
Meanwhile in Crimea itself, Mustafa Dzhemilyev, the leader of the Milli Mejlis, said that the appeal of Milli Firqa does not reflect the position of all Crimean Tatars.  “Every nation has the right to have a certain number of fools,” he said, noting that the Milli Firqa is “not an enormous party.” It has only 20-25 members.
But yesterday the Milli Firqa disowned the statement, declaring in a message posted on the Crimea-L list that the appeal “was drafted, signed and forwarded” in violation of “all Milli Firqa rules, and therefore cannot be considered an official document of the organization” as it purports to be.  It added that Abduraimov would be subject to party discipline.
Today, in Simferopol, a group of Crimean Tatar organizations held a press conference to denounce the Milli Firqa declaration. But these statements emanating from Crimea are unlikely to receive the same wide dissemination that the original “appeal” to Medvedev and Shaimiyev did. And consequently, that document has already been useful to Moscow for two reasons.
On the one hand, it has given some in the Russian government the chance to test the waters for the notion that Moscow is prepared to defend not just Russian citizens abroad, something that is a more difficult case to make in Ukraine given that country’s constitutional ban on dual citizenship.
And on the other, it has given Moscow another chance both to blacken the reputation of Ukraine and at least potentially to set at odds the Ukrainian and Crimean Tatar communities in Crimea, something that the Russian community there and Moscow itself could in the event of a crisis exploit.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=======================================================
Receiving more than one copy of the AUR please contact us.
=======================================================
12.  LEGAL CLASSIFICATION OF HOLODOMOR 1932-1933 IN UKRAINE
AND IN KUBAN AS A CRIME AGAINST HUMANITY & GENOCIDE
 
ANALYSIS & COMMENTARY: Yevhen Zakharov, Kharkiv Human Rights Protection Group, Kharkiv, Ukraine, Sat, Sep 13, 2008

This opinion is intended to demonstrate that Holodomor 1932-1933 in Ukraine and Kuban has elements of a crime against humanity in accordance with the Rome Statute of the International Criminal Court [hereafter RC ICC) from 17 July 1998, and of genocide according to the Convention on the Prevention and Punishment of the Crime of Genocide (hereafter the Convention), adopted on 9 December 1948. 

According to Article 7 – 1 of the RC ICC “crime against humanity” means “any of the following acts when committed as part of a widespread or systematic attack directed against any civilian population, with knowledge of the attack:
(a) Murder;
(b) Extermination;
(c) Enslavement;
(d) Deportation or forcible transfer of population;
(e) Imprisonment or other severe deprivation of physical liberty in violation of fundamental rules of international law;
(f) Torture;
(g) Rape, sexual slavery, enforced prostitution, forced pregnancy, enforced sterilization, or any other
     form of sexual violence of comparable gravity;
(h) Persecution against any identifiable group or collectivity on political, racial, national, ethnic, cultural, religious, gender as defined in paragraph 3,
      or other grounds that are universally recognized as impermissible under international law, in connection with any act referred to in this paragraph or any
      crime within the jurisdiction of the Court;
(i) Enforced disappearance of persons;
(j) The crime of apartheid;
(k) Other inhumane acts of a similar character intentionally causing great suffering, or serious injury to body or to mental or physical health.”
According Article 7 – 2 of the RC ICC
“For the purpose of paragraph 1:

 (b) “Extermination” includes the intentional infliction of conditions of life, inter alia the deprivation of access to food and medicine, calculated to bring about the destruction of part of a population;”

The Convention on the Prevention and Punishment of the Crime of Genocide (hereafter the Convention) was adopted by Resolution 260 (III) A of the U.N. General Assembly on 9 December 1948 and entered into force on 12 January 1951.  It was ratified by the Presidium of the Supreme Soviet of the USSR on 18 March, 1954.

According to Article 6 of the RC ICC and Article II of the Convention genocide means: “any of the following acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group, as such:
(a)  Killing members of the group;
(b)  Causing serious bodily or mental harm to members of the group;
(c)  Deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part;
(d)  Imposing measures intended to prevent births within the group;
(e)  Forcibly transferring children of the group to another group.”
According to the Article III of the Convention the following acts shall be punishable:
(a)  Genocide;
(b)  Conspiracy to commit genocide;
(c)  Direct and public incitement to commit genocide;
(d)  Attempt to commit genocide;
(e)   Complicity in genocide.

SUMMARY OF THE HISTORICAL FACTS 

 

For a correct assessment of Holodomor 1932-1933 we need to consider the historical events in Ukraine and Kuban and determine whether the policy of the Soviet regime was deliberate, whether it included an ethnic factor, and whether it was aimed at creating a mass-scale artificial famine resulting in the death of millions of people. The results of numerous studies of the Famine of 1932-1933 by Ukrainian, Russian and other foreign scholars can be summed up as follows.
After the completion of total collectivization, a system was introduced under which the kolkhoz had first to settle with the State according to a quota issued from above (“The first commandment” in Joseph Stalin’s words), and only later divide what remained among the workers for their labour. However the quotas imposed were unrealistic and as a result the kolkhozes were unable to compensate people for their labour. T
 
his created a huge shortage of grain in the countryside. The kolkhoz workers could only count on what they could gather on their garden plots – potatoes, vegetables, etc, and went unwillingly to the kolkhoz with no certainty that they would be paid. 
 
The grain shortage was created by Stalin’s policy of “geeing up” (“podkhlyostyvanye” – Stalin’s term): the initial quota which was already unattainable was unexpectedly increased to mobilize people to achieve the first quota. That led to an even greater shortage of grain and in the long run to famine.
When people talk of the famine of 1932-1933, three different periods of hunger need to be differentiated. Each of them, in addition to common features, had their own specific causes, characteristics and consequences which varied in their scale. The famine in the first half of 1932 was caused by non-fulfilment of the grain requisition quota from the 1931 harvest and the Kremlin policy with regard to rural areas due to their not meeting the quotas.
 
That famine was stopped by the return from ports of a part of the grain intended for export, as well as purchase of grain from abroad. In the third quarter of 1932, the famine occurred again as the result of non-fulfilment of the requisition quotas from the harvest of 1932. 
 
 It must be stressed that the nature of the famine in Ukraine up till November 1932 was the same as in other agricultural regions of the USSR. Starvation during the famine of the first and second periods should be considered as a crime against humanity.
Famine during the third period was caused by the confiscation of grain and any food products which was carried out only in the rural areas of Ukraine and in Kuban. This confiscation in November – December 1932 was partial, but became total in January 1933.  Moreover, due to measures organized by the Party and Soviet leadership of the USSR and Ukrainian SSR people were prohibited from leaving in search of food or receiving it from outside. 
 
Left without any food, the peasants died of starvation. From February 1933 this developed on a mass scale and from February to August in Ukraine millions died of starvation in Ukraine, and hundreds of thousands in Kuban.
 
According to demographic statistics the direct losses to Ukraine from famine of 1932-1933 were according to some data 3-3.8 million, while other figures suggest 4-4.8 million. Wide-scale famine was combined with political repression against the intelligentsia and national communists in 1933, as well as the stopping of the policy of Ukrainization.  Death from starvation during the famine of the third period and from political repression should be viewed as a crime against humanity and as the crime of genocide.
To establish that crimes against humanity and of genocide were committed in Ukraine and Kuban, one needs to consider the events of 1930-1933 in total. A brief description of the historical facts is provided in Appendix.

DEATH FROM STARVATION DURING THE PERIOD

FROM JANUARY TO OCTOBER 1932
– A CRIME AGAINST HUMANITY 

A determining factor in classifying Holodomor 1932-1933 as a crime against humanity is proving conscious acts aimed at  “the intentional infliction of conditions of life, inter alia the deprivation of access to food and medicine, calculated to bring about the destruction of part of a population” (Article 7 – 2.b of the RS ICC)
As mentioned in items 1 and 2[1] , the grain requisition quota for 1930 was already excessive, however the Soviet leadership increased it still further from 440 to 490 poods, and the 1930 quota was fulfilled already in spring 1931, taking away all grain reserves. It did not prove possible to meet the increased quota, although 127 million poods of grain were collected, this being 127 million poods more than in 1929. 
 
The grain requisition quota for 1931 issued from the Kremlin according to Stalin’s policy of “geeing up” once again significantly exceeded Ukraine’s capacity, being 510 million poods. At the end of the year the quota had been 79% met (Item 3).
 
To fulfil the “first commandment” – first meet the quota and only then settle with people for their labour – in January 1932, on Molotov’s instructions, grain began being taken away, this leading to famine in the first half of 1932.  As a result of the grain being taken away, tens of thousands of peasants in Ukraine died of starvation during this period (Items 4, 5 and 6). It was only at the end of April 1932 that the State became providing food aid to the starving (Item 7).
The “first commandment” and “geeing up” showed that the Soviet leadership had a purely functional attitude to the villages, seeing them as merely a source of grain supplies for accelerating industrialization. Furthermore the food produced on the kolkhozes was considered to be just as much State property as the products from sovkhozes.
 
Yet sovkhoz employees received wages, while those who worked on kolkhozes were supposed to receive produce for their labour. Since all the grain had been handed over to the State to meet the quota and almost nothing remained, the kolkhoz workers were simply working for nothing. Kosior reports that half the kolkhozes did not pay anything at all for people’s labour in 1931.[2]
H. Petrovsky and V. Chubar in their letters to Stalin and Molotov at the beginning of June wrote of famine in the villages resulting from the impossibility of meeting an unrealistic quota and the need to increase food aid.  The response was an irritated reaction from Stalin and the cessation of food imports into Ukraine (Items 7-9).
 
Despite the request from the Ukrainian Party organization to reduce the grain requisition quota for 1932 and the presentation at the III All-Ukrainian Party Conference on 6-7 July of graphic accounts of cases of starvation and criticism of policy in the villages, Molotov and Kaganovich forced the conference to adopt the unrealistic quota from the Kremlin (Item10).
In justifying the need for additional food aid, both Chubar and Petrovsky in their letters wrote of possible theft of grain from the new harvest. Chubar warned: “So as to be better stocked up for the winter then last year, wide-scale grain thefts will begin. What is being seen at present – digging up planted potatoes, beetroot, onion, etc – will take on much greater proportions during the period when the winter crops ripen since the food stocks from the resources provided will not last beyond 1 July”[3]. 
 
Petrovsky wrote about the same thing: “Assistance needs to be provided also because the peasants will be driven through starvation to pick unripe grain and a lot of it will be wasted”.[4].  Stalin and Kaganovich responded by stopping food aid and initiating the draconian “5 ears of corn law” – the Resolution “On the protection of property of State enterprises, kolkhozes and cooperatives, and the consolidation of socialist property”. 
 
For theft of kolkhoz and cooperative property this envisaged the death penalty with the confiscation of all property, with the possibility of commuting this to a term of imprisonment of no less than 10 years where there were mitigating circumstances (Item 11).
One can conclude that Stalin’s policy in the villages meant the deliberate deprivation of access by kolkhoz workers and independent farmers to the grain they had grown unless they had fulfilled the grain requisition quota with this leading to a part of the population dying of starving. This part of the population was eliminated through the conscious policy of the Soviet State.
 
The death of a part of the population thus took place as a result of their knowingly being deprived of access to food products, this constituting a crime against humanity. The State policy of grain requisitions applied to all rural regions of the USSR, therefore this conclusion covers all those who died of starvation on the territory of the Soviet Union during that period.

HOLODOMOR 1932-1933 – THE CRIME OF GENOCIDE 

THE OBJECT OF THE CRIME OF GENOCIDE 

According to the Convention, genocide is understood as certain “acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group, as such”.  “According to the International Criminal Tribunal for Rwanda, the term ‘national group’ refers to ‘a collection of people who are perceived to share a legal bond based on common citizenship, coupled with reciprocity of rights and duties'”[5].
The interpretation of “national group” gives grounds for viewing as the object of the crime of genocide a part of the Ukrainian people – the total of victims of Holodomor and of political repression in Ukraine during the period from November 1932 to August 1933, regardless of ethnic, religious or other features.
At the same time, the element of destruction of a part of the group lies in “the destruction of a considerable part of the specific group … the part of the group should be sufficiently large to have an impact on the group as a whole”[6] 
 
The practice of the international tribunals demonstrates that for the action to be classified as genocide it is sufficient that the perpetrator of the crime intended to eliminate a significant part of the group. In determining what part of a group can be considered significant, both quantitative and qualitative indicators need to be applied.
 
For example, the Trial Chamber of the International Tribunal for Former Yugoslavia in a judgment on the case of Jelisic (1999)[7] stressed that:
 
“82. /…/ As a crime directed towards a group, the genocidal intent is necessarily directed towards mass crimes. The genocidal intent must therefore cover a substantial part of the targeted group. 
 
According to the Trial Chamber, this can take two forms: 1) the intent can be to destroy a large number of members of the targeted group or 2) to target a limited number of selected people, whose disappearance would endanger the survival of the group”.
An analysis of demographic statistics undertaken by Ukrainian and foreign researchers indicates that the direct losses to the Ukrainian people as a result of Holodomor 1932-1933 according to some calculations constitute 3-3.9 million people, and according to others – 4-4.8 million.[8].  The largest number of deaths is for the period under consideration (November 1932 – August 1933) since during the period from January to October 1932 tens of thousands died of starvation.
 
In any case the number of people who died of starvation during the period in question is not less than 10% (according to other figures – 15%) of the total population of Ukraine. This percentage of the Ukrainian people is considerable and can be considered as the object of the crime of genocide in accordance with the Convention on Genocide of 1948.
It should be stressed that the secret resolutions of the Central Committee of the All-Soviet Communist Party [Bolshevik] (Item 26) totally changed the policy of Ukrainization and placed the responsibility for the food crisis not only on the peasants, but on the leaders of Ukrainization, marking the beginning of the elimination of Ukrainian national communists.
 
During this period numerous representatives of the cultural, economic and political elite were repressed (cf. Items 39, 40 and 41). This had enormous impact on the development of the Ukrainian people. In describing the group, therefore, we should include not only peasants who died of starvation, but also those who died as victims of political repression.
According to the definition of the International Tribunal for the Former Yugoslavia in the case of Bosnia Herzegovina v. Serbia and Montenegro, an “ethnic group” is “a cultural, linguistic or other clearly marked feature distinguishing a minority, both within the country, and outside it.”[9].
This understanding of “ethnic group” with regard to the position of Ukrainians living in Kuban and the events of 1932-1933 gives grounds for considering Ukrainians of Kuban as an ethnic group which became the object of the crime of genocide. The following arguments provide confirm the justification of this assertion.
Ukrainization of territory with a dense population of ethnic Ukrainians had been the official policy of the USSR. According to the All-Soviet Census of 1938 there were 915 thousand Ukrainians in Kuban, this being 62% of the population. They had generally retained their language and culture.
 
729 thousand of them said that Ukrainian was their native language. In some areas of Kuban Ukrainians made up 80% or even 90% of the population[10], while overall in the North Caucuses there were 3,06 thousand Ukrainians.
The policy of Ukrainization was supported by the Ukrainian population of the North Caucuses Territory. The number of Ukrainian school students studying in Ukrainian schools increased from 12% in the 1928/1929 academic year to 80% in 1931/1932[11]. The cultural-educational policy was developed under the management of the People’s Commissariat for Education of the UkrSSR and of Mykola Skrypnyk directly, and was funded from the Ukrainian State Budget.[12].
 
However the secret resolution of the Central Committee of the Soviet Communist Party from 14 December 1932 put an end to Ukrainization. Ukrainian cultural life in Kuban came under attack: all Ukrainian schools and publishing was now in Russian, newspapers and journals in Ukrainian were closed down, as in fact were many other Ukrainian cultural institutions.
 
Many of the people working in them were repressed as enemies of the Soviet regime (Items 46. 47 and 48). Another secret resolution of the Central Committee of the Soviet Communist Party from 15 December also stopped Ukrainization in other regions where there were dense populations of Ukrainians.

THE ELEMENTS OF THE CRIME OF GENOCIDE

The death from starvation of millions of Ukrainian peasants as well as hundreds of thousands of peasants from Kuban was caused by the following actions of the Party-Soviet-economic leadership of the USSR:

1. The deliberate forced imposition of an unrealistic grain requisition quota from the 1932 harvest, despite the protests from Ukrainian leaders (Item 10);
2.  The passing by  the Central Executive Committee and the Council of People’s Commissars of the USSR [Sovnarkom] of the Resolution  “On the protection of property of State enterprises, kolkhozes and cooperatives, and the consolidation of socialist property” (“The 5 ears of corn law”) (Item 11);
3. The Directive passed by the CC CPU  on 29 October at the initiative of Molotov, and the telegram from Molotov and Khataevych from 5 November on intensifying repressive measures (Items 16 and 17);
4. The Resolutions of the CC CPU from 18 and of the Council of People’s Commissars of the Ukrainian SSR from 20 November “”On measures to increase grain requisitions» prepared by the Molotov Commission (Items 18, 19 and 20) and the resolutions of the politburo of the North Caucasus Territory Committee of the All-Soviet Communist Party (Bolshevik) of Russia, prepared by the Kaganovich Commission which ordered the confiscation of grain previously distributed, and the introduction of fines in kind.
5. The creation of “troikas” and Special Commissions which were given the power to carry out accelerated examinations of “grain cases” and to apply the death penalty (Items 21, 22)..
6. The practice of placing villages and kolkhozes on “black boards” at Kaganovich’s initiative, first in Kuban (through resolution of the politburo of the North Caucasus Territory Communist Party from 4 November  (Item 4), and then in Ukraine (Resolution of the All-Ukrainian Central Executive Committee and the Council of People’s Commissars of the UkrSSR from 6 December, (Item 23)).
7. Blanket searches of peasant’s farmsteads in December 1932 in order to find “squandered and stolen grain” on the basis of the resolutions from 18 and 20 November 1932 (Items 23 and 27), intensification of repression over “grain cases” in Ukraine (Item 28) and  Kuban (Item 45).
8. The secret resolutions of the Central Committee of the Soviet Communist Party from 14 and 15 December on intensifying repression against “saboteurs with Party tickets in their pockets” and stopping Ukrainization in Kuban and other regions with a dense Ukrainian population in the USSR . These resolutions set in motion repression of those Ukrainian communists active in all aspects of Ukrainization. (Items 25 and 26).
9. Deportation to the North of more than 62 thousand Kuban peasants for “sabotage” (Item 44).
10. The Decision of the CC CPU on confiscating seed funds from 29 December 1932, passed under pressure from Kaganovich (Item 27).
11. Stalin’s telegram from 1 January 1933 which demanded that grain be handed over and threatening with repression those who did not comply (Items 29 and 30).
12. The Directive from Sovnarkom and the Central Committee of the Soviet Communist Party from 22 January which imposed a blockade of those starving in Ukraine and Kuban and introduced patrol units at railway stations and roads (Items 32 and 33).
13. Through a government resolution from 17 February 1933, initiated by Khataevych and Postyshev, collection of seeds was carried out through grain requisitions, with a part of what was collected being given to those who confiscated the grain (Item 36)..
14. According to a Resolution of the Central Committee of the Soviet Communist Party from 31 March 1933, initiated by Postyshev, food aid was provided only to those capable of working (Item 37).
15. The political repressions of 1933 against the intelligentsia and those communists linked with Ukrainization, initiated by Postyshev, and the campaign against “”skrypnykovshchyna” [from the name of Mykola Skrypnyk, a key figure in Ukrainization – translator] (Items 39, 40 and 41).
16. The total destruction of all ethnic-cultural forms of existence for Ukrainians in Kuban (Item 48).
In their entirety  the actions listed here mean inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part (Article II (c) of the Convention).  It is also possible to prove that these acts were deliberate. It will similarly be proven that Holodomor 1932-1933 was a crime against humanity since in the given circumstances the death of a significant part of the population took place as the result of the intentional deprivation of access to food (Article 7 – 1.b of the RC ICC).
The course of events which led to genocide can be briefly outlined as follows. After the unrealistic grain requisition quota was not met, Stalin placed the blame for this on the peasants who, in his view, had sabotaged the gathering of the harvest, and on the Ukrainian communists who had encouraged them in this.
 
Party and government decisions were taken demanding that grain be returned, paid for in kind for labour from the next harvest. They also introduced fines in kind and allowed searches aimed at confiscating grain already distributed, as well as encouraging the GPU to intensify political repression through accelerated procedure and the use of the death penalty.
Blanket searches and other punitive measures did not bring the result, and therefore at the beginning of 1933, the peasants received an ultimatum: either voluntarily hand over all grain or be severely punished.  For this searches and fines in kind were merged into one punitive action, with the peasants having all food confiscated.  On 22 January 1933, a blockade was imposed preventing peasants leaving in search of food in areas which were in a better position.
 
This led to mass starvation and the death of millions of people in the villages. At the same time a campaign of political repression was launched against Ukrainian national communists, those linked with Ukrainization. They were blamed for sabotaging the grain requisition quotas and were declared enemies of the people. Ukrainization was stopped, and Ukrainian cultural life in areas where there was a dense Ukrainian population effectively stood still.
Determined and forced russification of Ukrainians resulted in a formal reduction in their number. According to the census of 1937 3 million citizens of the Russian SSR called themselves Ukrainians (as opposed to 7.8 million in the 1926 Census). 
 
With the cessation of Ukrainization the younger generation of Ukrainians lost the possibility of preserving their own ethnic identity. It can therefore be said that in the case of Ukrainians from Kuban children of the group were forcibly transferred to another group (Article II(e) of the Convention.

MOTIVES FOR THE CRIME OF GENOCIDE

The Convention on Genocide does not demand proof of the perpetrator’s motives. At the same time, establishing the motives for why a crime was committed can help determine the criminal intent of the perpetrator of a crime.
The key to understanding the motives for creating an artificial Holodomor can be found in a letter from Stalin to Kaganovich from 11 August 1932.  We quote the relevant extract.
:  […] 3) The most important thing now is Ukraine. The current situation in Ukraine is terribly bad. It’s bad in the Party. They say that, in two regions in Ukraine (Kiev and Dnipropetrovsk, I think) around fifty district committees have spoken out against the grain requisition quota, calling it unrealistic. Things are no better, so they say, in the other district committees. What is this? It’s not a party, but a parliament, and a caricature of a parliament.
 
Instead of managing the districts, Kosior has been manoeuvring between the directives of the Party Central Committee and the demands of the district committees: Now look where he’s ended up. Lenin was right that a person who doesn’t have the courage to go against the tide at the necessary time can’t be a real Bolshevism leader. Things are bad with the soviets. Chubar is no leader. And it’s bad with the GPU.
 
Redens isn’t up to being in charge of the fight against counter-revolution in a republic as large and specific as Ukraine. If we don’t immediately set to straightening out the situation in Ukraine, we could lose Ukraine. Remember that Pilsudski never rests, his espionage capabilities in Ukraine are far stronger than Redens and Kosior realize.
 
And remember too that, in the Ukrainian Communist Party (500 000 members, ha ha !), there are not just a few (no, not a few!) rotten types, conscious and unconscious ‘petliurites’, and also direct agents of Pilsudski. As soon as things get worse, these elements will lose no time in opening up a front within (and outside) the Party, against the Party. The worst thing is that the Ukrainian leaders don’t see these dangers
It can’t continue like this.
It’s necessary:
a) to take Kosior away from Ukraine and for you to replace him, while remaining secretary of the Central Committee of the Soviet Communist Party;
b) after this transfer Balytsky to Ukraine for the post of head of the Ukrainian GPU (or the Authorized Representative of the GPU in  Ukraine, since there isn’t, I don’t think, the post of head of the GPU of Ukraine), while keeping his position as deputy head of the SGPU, and make Redens Balytsky’s deputy for Ukraine;
c) in several months after this replace Chubar with another comrade, say, Hrynko or somebody else, and make Chubar Molotov’s deputy in Moscow (Kosior can be made one of the secretaries of the Central Committee of the Soviet Communist Party;
d) Set ourselves the task of turning Ukraine as soon as possible into a real fortress of the USSR, into a truly exemplary republic. No money should be spared on this.
Without this and similar measures (economic and political consolidation of Ukraine, in the first instance its border raions, and so forth), I repeat, we could lose Ukraine.
The economic and social crisis which gripped the USSR at the beginning of 1932 threatened the Soviet regime. Famine caused by the campaign against kulaks, forced collectivization, bad organization of the kolkhozes, their poverty, the merciless and never-ending confiscation of grain for export so as to pay back foreign debt, resistance from the peasants who didn’t want to recognize the “new serfdom” and work without pay, problems with industrialization, all of these things aroused doubts in the Party and in the correctness of the chosen path, concealed, or sometimes open opposition. An economic crisis could become political.
Some Russian government officials – O. Smirnov, V. Tolmachov, M. Eismont – expressed the view that Stalin was responsible for the failure of grain requisitions, and blamed him. On 27 November 1932 Stalin called a joint session of the Politburo and the Presidium of the Central Committee of the Soviet Communist Party at which he spoke out against Smirnov’s group.
 
He said that anti-Soviet elements had penetrated kolkhozes and sovkhozes in order to organize sabotage and destructive measures, and that a significant percentage of rural communists had the wrong attitude to kolkhozes and sovkhozes.
 
Stalin called for the use of coercion to eradicate sabotage and anti-Soviet phenomena, and stressed: “It would be unwise if communists, , working on the premise that the kolkozes are a socialist form of management, did not respond to the blow inflicted by these particular kolkhoz workers or kolkhozes with a devastating blow”.[13].
The greatest threat to Stalin’s power was in his view Ukraine. He was clearly disturbed by the resistance of the Ukrainian Politburo to the passing of a grain requisition quota and the adoption of the “5 ears of wheat law” (see Items 15, 16 and 17). Stalin was afraid of a union between “petlurites” and Pilsudski, and suspected Ukrainian communists of having connections with the Poles. It is typical that having written “The most important thing now is Ukraine”, he put the words “most important thing” in italics.
 
Stalin was most afraid of losing Ukraine which over the period of Ukrainization had developed its own nationally oriented communist –Soviet elite (Ukrainians made up the absolute majority of the members of the Ukrainian Communist Party) and was trying to get the territories of adjoining regions of Russia and Byelorussia where there was a majority Ukrainian population, for example, Kuban joined to Ukraine.
 
This elite was carrying out an active policy of Ukrainization there, and could generally in the conditions of crisis exercise its rights and declare its withdrawal from the USSR.
The policy of Ukrainization by the end of the 1920s had gone well beyond the boundaries set by the Bolsheviks. Ukrainian national consciousness had by that stage taken on proportions which placed the united structure of the USSR in jeopardy.  Ukraine was endeavouring to carry out autonomous policy, including with regard to international relations.
 
One of the leaders of the CC CPU, Volodymyr Zatonsky, asserted that the first aim of Ukrainization was the consolidation of the Ukrainian SSR as a State organization within the framework of a Union of Soviet Socialist Republics.
 
Such a course of events could not suit Stalin and his henchmen. If the process in Ukraine continued in the same direction, this would significantly influence all processes in the USSR, since Ukraine at that time was a single national and State unit which could stand up to pressure from the Kremlin. For these reasons Stalin went out for direct war against Ukrainian peasants as the social resistance to the State organism.
 
He decided to pay the villages a preventive devastating blow so as to eliminate the threat to his regime. As James Mace very accurately expressed it back in 1982: “Stalin wanted to destroy the Ukrainian people as a political factor and as a social organism[14].  This was the motive of the crime.
Kuban was the second after Ukraine and single region of the USSR where more than two thirds of the population were ethnic Ukrainians. .Of all regions with a dense Ukrainian population, it was the one most under the influence of Ukraine. Kuban was also a centre for Cossacks who were no less favourite targets for Stalin than Ukrainians and were constantly subjected to repression by the Soviet regime.
 
Furthermore, like in Ukraine, there was great resistance to collectivization. It was thus no chance that Stalin considered the Kuban Cossacks to be a source of danger for his power.

INTENT

The definitive element for a crime being classified as genocide according to the Convention is that there was direct intent to eliminate the members of a particular group by virtue of their being part of the group.

 
The actions set down in the provisions of Article II of the Convention clearly demand the presence of certain subject factors, including intent, to make the crime that of genocide: “the actions indicated in Article II must have been committed with intent to eliminate [the defended] group totally or a part of it”.[15]
Did Stalin have the intention to organize an artificial famine? Scholars are divided in their answer to this question. One group of researchers believes that the mass famine was begun deliberately, organized from back in 1930 in order to reduce the vital capacity of the Ukrainian people, turning them into slaves who would meekly work in kolkhozes and not make any encroachments against the Soviet regime.
 
Another group considers that Stalin’s policy was criminal however explains the famine as being caused by a complex political situation, the wish to modernize the economy, and payment of interest on foreign loans. This group denies direct intent to organize an artificial famine and does not agree with the classification of Holodomor 1932-1933 as an act of genocide.
In our view it is not possible to say definitely whether Stalin had a plan in advance for eliminating a part of the Ukrainian peasants by organizing an artificial famine. Here it is useful to apply the approach taken by researcher into famine in the USSR Andrea Graziosi who made a summary of different explanations given for the cause of Holodomor.[16].  He asserts that the famine in the third quarter of 1932 had the same causes as the famine in the first half of 1931 – non-fulfilment of an excessive grain requisition quota.
 
While in October 1932 Stalin took the decision to use famine to destroy the peasants of Ukraine and Kuban who provided the greatest resistance to the “new serfdom”.  For example, all the actions of the Communist Party leadership of the USSR beginning from October 1932 suggest direct intent to organize Holodomor and political repression against those who obstructed these plans.
On 22 October 1932 Stalin gave the Molotov and Kaganovich Commissions special powers with regard to Ukraine and Kuban in order to meet the grain requisition quota.  The decisions adopted by Party and Soviet bodies at the initiative of these commissions (Items 16-22, 43-47) show the intent to deprive the peasants of the grain distributed to them as remuneration for work done, and to confiscate other food (meat, potatoes) by means of blanket searches and fines in kind.
 
Harsh punishments were introduced for peasants and local functionaries (“saboteurs” with Party tickets in their pocket”) who distributed grain to starving peasants for their labour. Hundreds of them were executed and thousands arrested and convicted (Item 28).
Indication of the intention to destroy the Ukrainian “opposition” and place responsibility on it for deliberately organizing famine can be found as well in the plans of OGPU and their implementation. At the end of November 1932, Stalin sent Vsevolod Balytsky from OGPU with special powers to Ukraine.
 
His task, set out in “Operational Order of the GPU of the Ukrainian SSR No. 1” which spoke of “organized sabotage of the grain requisitions and autumn sowing; organized mass-scale thefts in kolkhozes and sovkhozes; terror against the most steadfast and consistent communists and activists in the village;  the deploying of dozens of petlurite emissaries; the distribution of petlurite leaflets” in Ukraine.
 
From this it drew conclusions regarding “the undoubted existence in Ukraine of an organized counter-revolutionary, insurgent underground which has links abroad and with foreign intelligence services, mainly, the Polish military headquarters”.
 
The order ended by setting out the task: “the basic and main task is an urgent breakthrough, uncovering and crushing the counterrevolutionary insurgent underground and inflicting a decisive blow against all counterrevolutionary kulak-petlurite elements which are actively opposing and sabotaging the main measures of the Soviet regime and Party in the villages.”[17]. 
 
In Operational Order No. 2 from 13 February 1933 of the GPU of the Ukrainian SSR, Balytsky was already summing up the implementation of Stalin’s Order: operational activist group No. 2 “has uncovered a counter-revolutionary, insurgent underground in Ukraine which covered up to 200 raions, around 30 railway stations and depots, a number of points on the border zone.
 
In the process of liquidating it, its link was established with foreign Ukrainian nationalist centres (UNR, “UVO”, UNDO) and the Polish Military Headquarters.[18]   This meant that OGPU was provided with a ready strategy for uncovering artificially organized counter-terrorist organizations.
Stalin’s awareness that “the national issue is in essence a peasant issue”[19],prompted him to solve both the national and the peasant problems together. A plan was set in motion for destroying the national political elite, the representatives of which were accused of being in conspiracy with peasant saboteurs (see Stalin’s letter to Kaganovich from 11 August 1932).
 
On 14 and 15 December 1932, the Politburo of the Central Committee of the Soviet Communist Party passed two secret resolutions (Items25, 26, 47, 48), which brought in special national policy with regard to Ukrainians (it did not apply to other ethnic groups). According to these resolutions, responsibility for the food crisis was placed not only on the peasants, but also on the Ukrainian political elite.
On 20 December 1932, at Kaganovich’s suggestion, the Politburo of the CC CPU, passed a decision to seek an increase in supplies of grain for which on 29 December an order was issued to hand over all kolkhoz funds, including the seed fund (Item 27). None of this can be described as anything else but as deliberately depriving the peasants of their last reserves of grain they owned.
On 1 January 1933 a telegram was sent from the “leader, teacher and friend of all peasants” (Item 29). It was made up of two points, the first being that those who voluntarily handed over to the State “previously stolen and hidden grain” would not face repression. The second point stated that those who continued to hide it would face the harshest forms of punishment. 
 
All grain which was not recorded had to be handed over. If they didn’t hand it over there would be a search. If they found grain, the punishment was the death penalty or 10 years imprisonment. If they didn’t find it, they would take away, as a fine, other foodstuffs.
 
Stalin’s telegram resulted in the merging of searches and fines in kind. Furthermore, Stalin had been informed about the results of previous searches (Item 27) and knew that there was no grain in the villages, and that the requisition quota could not be met. This was his “devastating blow”[20], which demonstrates the intention to remove food from the peasants in order to organize famine.
A Directive from Sovnarkom and the Central Committee of the Soviet Communist Party from 22 January 1933 prohibited the exodus of starving peasants to other regions in search of food. This must also be viewed as deliberate acts aimed at depriving the starving of their last options for finding food for their families.
The political repressions of 1933 (Items 39, 40 and 41) in their turn demonstrate the intention to destroy the political and intellectual elite of the republic.
The intention to destroy the peasants through starvation was reflected in the words of the Second Secretary of the CC CPU Mendel Khatayevych from 1933: “A fierce struggle is waging between the peasants and our regime. This is a fight to the death. This year has become the test of our strength and their resilience. The famine has proved to them who is boss. It cost millions of lives however the kolkhoz system will last forever. We’ve won the war!”[21]

THE PERPETRATOR OF THE CRIME 

The main organizer and ideologue of the genocide was Joseph Stalin himself. Three of his hendhmen – Lazar Kaganovich, Viacheslav Molotov and Pavlo Postyshev – were the direct organizers of Holodomor in Ukraine and in Kuban. It was carried out also by the Party – State apparatus of the All-Soviet Communist Party (Bolshevik) Party, the Communist Party (Bolshevik) of Ukraine and the North Caucuses Territory Committee of the All-Soviet Communist Party (Bolshevik) Party (Stanislav Kosior, Vlas Chubar, Mendel Khatayevych, Boris Sheboldaev, Anastas Mikoyan)  and the repressive-punitive bodies of the OGPU and GPU of the UkrSSR (Vsevolod Balytsky, Henrikh Yagoda, Stanislav Pedens) and the courts.

Thousands of local activists, members of committees of poorly-off peasants directly implemented Party-State decisions regarding searches and confiscation of grain and other food.
As follows from the conclusion of the International Criminal Tribunal for Rwanda of 1998 – “the offender is considered guilty since he knew or should have known that the acts he committed would destroy in part or totally the group”.[22] –  Stalin and his henchmen should be considered guilty of genocide.
 
They knew of the size of the harvest, knew and understood the consequences of confiscating food and preventing peasants from leaving regions gripped by famine.

THE CONSEQUENCES OF HOLODOMOR 1932-1933

The consequences of Holodomor 1932-1933 were terrible. They concern “the dead, the living and those unborn” {Taras Shevchenko). Besides millions who died of starvation or who were not born, which in itself had considerable impact on the genofund and development of the Ukrainian people, Holodomor had a devastating effect on those who survived it.

 
It adversely affected their level of social and political activeness and instilled fear of the authorities. The historical memory and the psychology of those who survived 1932-1933 were ravaged by memories of cannibalism, denunciations of neighbours etc. The tragic events are to this day reflected in the psychological makeup of their descendants.
Holodomor and the destruction of the Ukrainian intelligentsia, the elite, which were taboo subjects right up to the end of the1980s, disrupted the intellectual and cultural development of the Ukrainian nation, led to a loss of identity and common values. The tragedy of Holodomor also resulted in an unrecognized inferiority complex for a large number of Ukrainians.
Ukraine’s post-genocide society badly needs conscience at rest, liberation from psychological complexes, freedom from fear. This is impossible without public recognition that Holodomor was a crime, and this should be at a legal level. 
 
This is the moral duty of the nation before those who perished. It is vital for the restoration of historical justice, and for the strengthening of the Ukrainian people’s immune system against political repression, violence and unwarranted State coercion.
We would note also that the European community insists upon the investigation and condemnation of the crimes of totalitarian regimes. The Resolution of the Parliamentary Assembly of the Council of Europe 1481 (2006) “The need for international condemnation of Holodomor in Ukraine in 1932-1933” states:
“The fall of totalitarian communist regimes in central and eastern Europe has not been followed in all cases by an international investigation of the crimes committed by them. Moreover, the authors of these crimes have not been brought to trial by the international community, as was the case with the horrible crimes committed by National Socialism (Nazism).
Consequently, public awareness of crimes committed by totalitarian communist regimes is very poor. Communist parties are legal and active in some countries, even if in some cases they have not distanced themselves from the crimes committed by totalitarian communist regimes in the past.
The Assembly is convinced that the awareness of history is one of the preconditions for avoiding similar crimes in the future. Furthermore, moral assessment and condemnation of crimes committed play an important role in the education of young generations. The clear position of the international community on the past may be a reference for their future actions.
Moreover, the Assembly believes that those victims of crimes committed by totalitarian communist regimes who are still alive or their families, deserve sympathy, understanding and recognition for their sufferings.”

THE OPTIONS FOR LEGAL CLASSIFICATION OF

HOLODOMOR 1932-1933 AS GENOCIDE 

We have endeavoured to demonstrate that the famine in Ukraine of 1932-1933 has all the necessary elements of a crime against humanity in accordance with the Rome Statute of the International Criminal Court of 1998  and of genocide according to the Convention on the Prevention and Punishment of the Crime of Genocide of 1948.  The object, subject, event and makeup of the crime of genocide have been established, as well as its motive and the direct intent to commit this crime. 

 
Can one however apply the provisions of these international agreements with regard to events in Ukraine 1932-1933, and in keeping with them classify Holodomor 1932-1933 as a crime against humanity and act of genocide? Do these international agreements have retroactive force in the given case?
 
The following questions arise:
 
1) whether there are punishable acts which were not at the formal juridical level previously recognized as offences or crimes;
 
2) whether there is no time limit for criminal prosecution over crimes committed in 1932-1933.
Pursuant to Article 7 – 1 of the European Convention on the Protection of Human Rights and Fundamental Freedoms (1950), “No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed”.
 
This fundamental principle is enshrined in the first paragraph of Article 15 of the International Covenant on Civil and Political Rights. The second paragraphs of these same articles of both the Convention and the Covenant states that offences shall be punishable if at the time they were committed, they were considered crimes “according to the general principles of law”.
 
For example,  Article 7 – 2 of the 1950 Convention reads that: “This article shall not prejudice the trial and punishment of any person for any act or omission which, at the time when it was committed, was criminal according the general principles of law recognized by civilized nations.”
 
On the basis of this provision, some researchers have concluded that the Convention on Genocide can have retroactive force. Certainly mass extermination of people, later called genocide, like other crimes against humanity, was classified as a crime by civilized nations earlier as well. 
 
Moreover, according to the UN Convention on the Non-Applicability of Statutory Limitations to War Crimes and Crimes against Humanity of 1968, no statutory limitations apply to the crime of genocide. This means that any statutory limitation set down in law, does not apply to judicial prosecution and punishment for war crimes and crimes against humanity
Other lawyers reject the possibility of applying the Convention on Genocide with respect to events which took place before it came into effect. They consider that the commitments taken on through the UN Convention of 1968 to not apply statutory limitations in the case of crimes against humanity, including genocide, do not indicate retroactive force at the time of the 1948 Convention, and that application of Article 7 – 2 of the European Convention and Article 15 – 2 of the Covenant on Civil and Political Rights is not possible since the international community had still not recognized such acts as a crime at that time.
 
Furthermore, according to Article 58 of Ukraine’s Constitution “No one shall bear responsibility for acts that, at the time they were committed, were not deemed by law to be an offence”.  The Criminal Code of the Ukrainian SSR of 1927 did not include genocide among criminally liable acts. The word “genocide” did not then exist, it being suggested for use by the author of the Convention on Genocide Raphael Lemkin in 1944..
These lawyers also point out that pursuant to Article 3 – 3 of the Ukrainian Criminal Code of 2001, “the criminality of actions, as well as whether they are subject to punishment and other criminal-legal consequences, are determined by this Code”.  According to Article 4 – 2 of the Criminal Code which regulates issues regarding the force of the law on criminal liability in time, the criminality and liability of an action are determined by the law on criminal liability which was in force at the time the act was committed.

The principle prohibiting retroactive force of a law which establishes criminal liability is one of the fundamental principles of law. This principle is enshrined in Article 28 of the UN Conference on the Law of Treaties (Vienna 1969), according to which “Unless a different intention appears from the treaty or is otherwise established, its provisions do not bind a party in relation to any act or fact which took place or any situation which ceased to exist before the date of the entry into force of the treaty with respect to that party”.

The Convention on Genocide of 1948 does not contain provisions regarding its own retroactive force, which does not make it possible to apply it for recognizing as genocide actions committed before it came into effect.  The 1948 Convention can thus not be applied for classification of Holodomor 1932-1933 as genocide.

One can conclude that the issue around whether there can be retrospective application of the Convention on Genocide of 1948 remains in dispute. However the Convention can always be used to provide a historical assessment of certain events.
 
Such an assessment was given by the Verkhovna Rada which “recognizing Holodomor 1932-1933 in Ukraine in accordance with the UN Convention from 9 December 1948 on the Prevention and Punishment of the Crime of Genocide as a deliberate act of mass destruction of people; passed the Law “On Holodomor 1932-1933 in Ukraine “. Article 1 of this Law recognizes Holodomor to have been genocide of the Ukrainian people.
Holodomor 1932-1933 was condemned by 64 member-states of the UN in a joint declaration from 7 November 2003, by member – states of OSCE in a joint declaration from 3 November 2007 and by UNESCO on 1 November 2007 in its Resolution “On Remembrance of victims of Holodomor 1932-1933 in Ukraine”.
Holodomor 1932-1933 has been recognized as an act of genocide by the parliaments of Australia, Canada,  the Czech Republic, Columbia, Ecuador, Estonia, Hungary,
On 3 July 2008 the OSCE Parliamentary Assembly passed a  Resolution “Holodomor 1932-1933 in Ukraine” which states that “Recalling that the rule of the totalitarian Stalinist regime in the former USSR had led to tremendous human rights violations depriving millions of people of their right to live, … The OSCE Parliamentary Assembly: pays tribute to the innocent lives of millions of Ukrainians who perished during the Holodomor of 1932 and 1933 as a result of the mass starvation brought about by the cruel deliberate actions and policies of the totalitarian Stalinist regime … Strongly encourages all parliaments to adopt acts regarding recognition of the Holodomor”. .
On 21 November 2007 the President of the European Parliament Hans-Gert Poettering made a statement about Holodomor 1932-1933 in Ukraine. He called for remembrance of Holodomor and stated  that the famine, which had taken the lives of 4-6 million Ukrainians during the winter of 1932-1933 had been cynically and cruelly planned by Stalin’s regime in order to force through collectivization against the will of rural people in Ukraine. “Today we know that the famine, known as Holodomor, was in reality a terrible crime against humanity,” Mr Poettering said.
The Parliamentary Assembly of the Council of Europe has included on its agenda consideration of a report on the issue of condemning Holodomor as a crime of the totalitarian regime in Ukraine and in other regions of the former USSR.
 
The PACE Political Committee on 26 June 2008 appointed a rapporteur on this issue – PACE Vice President Alexander Biberaj (Albania). Two years have been set aside for preparation of the report, however Alexander Biberaj expects to complete it much earlier.
The above-mentioned facts demonstrate the attention of the world community to Holodomor 1932-1933 and the understanding of the need for a legal qualification of Holodomor as a crime against humanity and the crime of genocide. 
 
For this it would be possible to amend the Convention on Genocide of 1948, by adding a provision about the retrospective force of the Convention with respect of events which took place from the beginning of the twentieth century. Crimes of the totalitarian regimes in the twentieth century, in the first instance of the communist regime in the USSR, require legal assessment, condemnation and punishment.
 
There are also other reasons for introducing amendments to the Convention. Its scope is too narrow to respond adequately to the tempestuous events of the second half of the twentieth century. We would point out that the signing of the Convention in its present form was a compromise between Western governments and the USSR whose representative insisted on removing victims of “political groups” from the list of victims. It was criticized by scholars for this almost immediately after its signing, as well as for its concentration of the purely physical side of violence.
The domestic legislation of some countries has gone further in defining genocide. For example, the 1991 French Criminal Code adds to the groups listed in the Convention “a group defined on the basis of any other normative criterion”.[23].
 
With respect to this it is worth recalling the comments from the author of the Convention Raphael Lemkin, who a short time before its adoption, noted that “Generally speaking, genocide does not necessarily mean the immediate destruction of a nation, It is intended rather to signify a coordinated plan of different actions aiming at the destruction of essential foundations of the life of national groups, with the aim of annihilating the groups themselves.”[24].
Another approach to achieving a legal classification of Holodomor 1932-1933 would be in the founding of a special International Tribunal for the legal classification of the famine of 1931-1933 as a crime of the totalitarian regime of the USSR (analogous to the International Nuremberg Tribunal set up in 1945, the International Criminal Tribunal for the Former Yugoslavia, established in 1993 and the International Criminal Tribunal for Rwanda from 1994).
 
This approach seems more realistic than making amendments to the 1948 Convention. The creation of an International Tribunal for the legal classification of the famine of 1931-1933 as a crime of the communist regime of the USSR could be approved by inter-state organizations – the UN, the Council of Europe, OSCE.
An international tribunal, if created, should use the results of the US Congress Commission on the Ukrainian Famine 1932-1933 led by James Mace, the International Commission on the Crimes of the Famine 1932-1933 in Ukraine, headed by Jacob Sandberg, archival documents and testimony of victims and witnesses of Holodomor gathered since Ukraine gained independence.
It should be especially stressed that although the Russian Federation is the successor to the USSR, the modern Russian State is not responsible for the crimes of the totalitarian regime of the USSR. The Russian people were victims of these crimes together with the Ukrainian, Kazakh and other peoples, as well as social and political groups.

GENERAL CONCLUSIONS 

1. The deaths of tens of thousands of people from starvation in Ukraine from January – October 1932 were as a result of a crime against humanity organized by the Party-Soviet leadership of the USSR.

2. The death of millions of people in Ukraine from starvation and political repression during the period from November 1932 to August 1933 corresponds to the definition of genocide in the UN Convention on the Prevention and Punishment of the Crime of Genocide, adopted on 9 December 1948, in particular Article II (c) “Deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part”.
3. The deaths of hundreds of thousands of people from starvation and political repression in Kuban during the period from November 1932 to August 1933 corresponds to the definition of genocide in the UN Convention from 9 December with respect to Article II (c) “Deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part” and (e) “forcibly transferring children of the group to another group”. .
4. Holodomor was the result of deliberate and systematic action by the totalitarian Soviet regime for which there is documentary evidence which was aimed at “the destruction of the Ukrainian  people as a political factor and as a social organism” (James Mace).
5. The terrible consequences of Holodomor 1932-1933 require legal classification of Holodomor as a crime of the totalitarian regime of the USSR.
6.  Some researchers believe it possible to apply the UN Convention on the Prevention and Punishment of the Crime of Genocide, adopted on 9 December 1948, to make a legal classification of Holodomor 1932-1933 as the crime of genocide, while others deny this. The issue has yet to be finally resolved.
7. In order to establish the legal classification of Holodomor as a crime, it is proposed that an International Tribunal be set up to make a legal classification of the famine of 1931-1933 as a crime of the totalitarian regime of the USSR.  The decision to create such a tribunal could be approved by inter-state organizations – the UN, the Council of Europe, OSCE.

APPENDIX

BRIEF DESCRIPTION OF THE HISTORICAL FACTS 1930-1933

THE 1930 HARVEST 

1. The requisition quota for 1930 for Ukraine was set in April 1930 at 440 million poods (this despite the fact that the Ukrainian Grain Centre was expecting a harvest of 425-430 million poods),and in September was increased to 472 million poods. However this quota could also not be met since there were already no grain reserves in the villages.
 
On 27 January 1931 the Politburo of the Central Committee of the All-Soviet Communist Party (Bolshevik) [hereafter Politburo] stated that the villages owed 34 million poods. Stalin reduced the debt to 25 million poods and ordered the Central Committee of the Communist Party of Ukraine (hereafter CC CPU) to declare February a month of accelerated grain requisitions and to fulfil the quota[25].
2. Sowing began, yet the previous year’s quota could still not be met. At the beginning of May V. Molotov reported that the harvest quota for 1930 was returning to the previous figure of 490 million poods (“geeing up”). The leadership of the republic was forced to recommence a requisition campaign for the previous year’s grain.
 
After taking away all grain reserves, Ukraine achieved the previous version of the quota which in February 1931 seemed unattainable. By June 1931, in the agricultural sector (kolkhozes and independent farmers) 393 million poods from the 1930 harvest had been gathered, and in all for the republic – 471 million poods. This was 167 million poods more than the figure for 1929.[26]

THE 1932 HARVEST. THE FIRST WAVE OF FAMINE 

3.  In the requisition quota for 1931 even more demands were imposed on Ukraine. The agricultural sector was set a quota for 434 million poods, i.e. 41 million poods more than the amount of grain actually handed over for 1930.  The overall requisition quota was set at 510 million poods.

 
At the end of 1931 this quota had only been 79% met[27]  Molotov was sent to Kharkiv to intensify the requisition process.  As the reports of the Party leaders indicate, this “intensification”, in accordance with Molotov’s directives and the Resolution of the CC CPU from 19 December 1931 turned into searches by local activists to confiscate “grain squandered or stolen from kolkhozes”.
 
Until the quota was fulfilled, kolkhoz workers could not receive grain for their labour therefore any grain found in a peasant’s home was a priori considered squandered or stolen.[28]  However the grain was confiscated regardless of whether the kolkhoz workers had fulfilled their obligation to the State. The requisition quota could still not be achieved. As of 25 June 1932 the quota was only 86.3% met.[29]
4. The confiscation of grain during the first half of 1932 resulted in hunger which in some regions turned into real famine. A similar situation was seen in other agricultural regions of the USSR, however in Ukraine the famine was on a wider scale since the quota, being more excessive, was achieved to a worse extent and therefore considerably more pressure was brought to bear. 
 
Tens of thousands died in this famine. In 1931-1932 it was only in Kazakhstan that the famine was on a greater scale. There hundreds of thousands of people died.
5. A large number of peasants left their villages in search of food. As of the middle of July 1932, according to OGPU figures in some rural areas of Ukraine up to half of the population had left. 116 thousand peasants had left 21 raions[30]. 
 
If you extend this figure to cover the entire number of raions – 484, then the approximate number of peasants fleeing starvation would be around 2 million, 700 thousand. This migration elicited strong irritation among the Soviet Party leaders, however at that time they did not obstruct wide-scale moves in search of food.
6. We can cite testimony about the situation with starvation in the countryside. In April 1932 the Deputy People’s Commissar of Agriculture in the USSR A. Hrynevych arrived in the Zinovyevsky raion (now the Kirovohrad region) in order to see how the sowing was getting on. 
 
In a reporting note to the People’s Commissar Y. Yakovlev he says that the raion has been 98% collectivized, since 1 January 28.3 thousand peasants have left, including all the qualified tractor drivers (the total population of the raion was about 100 thousand). Those who’ve remained are mostly going hungry with kolkhoz workers’ grain having run out back in March, and there are cases of people bloated from starvation. 
 
Within the raion several dozen food points for the children of kolkhoz workers have been organized. Those working in the field have State assistance of 200 g. of bread a day, with tractor drivers having 400 g.  The supply of food stuffs for providing food aid to the population among raion organizations was exhausted by 5 May.
 
The productive forces of the raion are so undermined that the raion will not be able to cope with harvesting the grain without assistance in the form of forage for the cattle and food for the kolkhoz workers, without purchasing draft animals, without the provision of tractors and loading vehicles.[31].
7. Worrying about the fate of the future harvest of 1932, the State began providing assistance in the form of seeds, forage and food grain o the countryside which was starving as the result of its policy.  On 6 March 1932 the grain requisitions campaign was halted.
 
At the end of April 15 thousand tonnes of maize and 2 thousand tonnes of wheat intended for export were returned from ports.  9.5 million poods of grain were purchased from China, Persia and Canada for the needs of the Requisitions Committee.[32] 
 
At the end of May 1932 those starving began receiving dried fish, sardelle, cereals, and other food products. Stalin, however, considered that “Ukraine has been given more than it should get” (from a letter to Kaganovich from 15 June).[33]  On 23 June the Politburo passed a decision to stop the supply of grain to Ukraine.[34].
8. Stalin’s irritated reaction and the decision of the Politburo of 23 June were in total contradiction to the conclusions in the letters from Petrovsky and Chubar to Molotov and Stalin on their impressions from travelling about raions in the republic. Both letters reached the Kremlin on the same day – 10 June.[35] 
 
Hryhory Petrovsky wrote that the CC CPU was to blame for having unconditionally agreed to a requisition quota of 510 million poods of grain that was unrealistic for the republic. Meeting this quota had caused starvation and many villages were still gripped by famine.
 
Petrovsky warned that there was still a month or 6 weeks to the new harvest and in that time the famine would intensify unless the State provided the villages with more food aid. Vlas Chubar in his letter pointed out that at the beginning of June at least 100 raions were in need of food aid (against 61 at the beginning of May).
 
Due to the severe situation of these raions the sowing campaign was not being carried out satisfactorily. Chubar asked for the republic to be provided with at least 1 million poods of food cultures as aid. He suggested rejecting a quantitative extension of the tasks and basing themselves on qualitative indicators.
9. Stalin reacted to Chubar and Petrovsky’s letters in a letter to Kaganovich from 15 June in the following way: “The first is trying on “self-criticism” so as to get new millions of poods of grain from Moscow, the other is playing self-righteous, and sacrificing himself to the “directive” of the Central Committee of the Communist Party” so as to get a reduction in the grain requisition quota. Both the first and the second are unacceptable.””[36]. The Ukrainian village in 1932 once again faced an unrealistic quota and new waves of famine.

THE HARVEST OF 1932: THE SECOND WAVE OF FAMINE 

10. The new grain requisition quota from the harvest of 1932 for Ukraine was approved on 6 July at the III All-Ukrainian Party Conference at 356 million poods, 40 million poods less than from the 1931 harvest. Yet this quota was also beyond the capacity of the republic’s weakened agricultural economy. On the eve of the conference, the Politburo of the CC CPU demanded that Molotov and Kaganovich who had been sent by Stalin to Kharkiv reduce the quota.
 
The Ukrainian communists also tried in vain to influence Molotov and Kaganovich during the conference. For example, Mykola Skrypnyk directly said that in the villages of Ukraine everything that could be taken had already been taken away.
 
Yet Molotov and Kaganovich declared that “there will be no concessions, no vacillation in implementing the tasks imposed on Ukraine by the Party and Soviet government”[37]  and that the party forces must mobilize to fight losses and squandering of grain”[38].  The Ukrainian Party leadership gave in and the quota was passed.
11. In July 1932 2 million poods of grain from the new harvest was requisitioned (against 16.4 million poods in July 1931). The leadership of the Soviet Communist Party was convinced that the peasants were stealing grain.
 
In response and on Stalin’s initiative, on 7 August 1932 the Central Executive Committee and the Council of People’s Commissars of the USSR [Sovnarkom] passed the Resolution  “On the protection of property of State enterprises, kolkhozes and cooperatives, and the consolidation of socialist property” which was known among the population as the “5 ears of corn law”.
 
This imposed the death penalty for theft of kolkhoz and cooperative property – execution (by shooting) and confiscation of all property. For “mitigating circumstances” execution could be commuted to a sentence of no less than 10 years.
12. After the publication of this resolution the “Pravda” editorial office, together with the Communist Party local machine organized a mass-scale two week raid aimed at fighting thefts of grain in which 100 thousand “press udarniki” [udarnik was the term for ultra-productive and enthusiastic workers – translator].  They searched for an “underground wheat city”, but in vain, since they found nothing.[39].
 
At the same time Stalin understood that he had forced the Ukrainian leadership to take on a clearly unrealistic grain requisition quota. On 24 July, in a letter to Kaganovich and Molotov, he wrote that overall the position of unconditional fulfilment of the quota was correct, but that it would be necessary to make an exception for “particularly affected raions of Ukraine”.
 
However he preferred to announce the reduction of the quota later “so that the sowing of winter crops will be more energetic”[40].  And the peasants didn’t want to work in the sovkhozes, rightly considering that they would again receive nothing for their labour.
13.  In the third quarter of 1932 starvation continued in Ukraine’s villages. This is demonstrated, for example, in the statistics for mortality recorded in registrar offices. For the period from March to June they recorded 195,411 deaths, while from July to October the number was 191,105.[41].  In order to escape starvation, the kolkhoz workers even resorted to such measures as uncovering mouse burrows.
 
Workers from the “Peremoha” [“Victory”] Kolkhoz in the Barvinkovsky raion of the Kharkiv region through superhuman efforts uncovered mouse burrows over an area of 120 hectares. As a result they received 17 centners of good-quality grain. Each burrow had between 2 and 6 kilograms of wheat.[42]. 
14. The August “assault” on Ukraine’s villages gave the State 47 million poods of grave, and in September they squeezed out another 59 million. As of 5 October from 23,270 kolkhozes only 1,403 had met the requisition quota. After staff changes in the Ukrainian local leadership and the plenum of the CC CPU, on 12 October 1932 the entire Party organization was mobilized for the gathering of the harvest. Nevertheless, the year’s requisition quota had been 39% met as of 25 October.[43].
15. Not wishing to admit that his policy of the “first commandment” and “geeing up” had not worked, Stalin laid all the blame for the failure of the grain requisitions on the peasants who had supposedly sabotaged the collection of the grain. He considered that through the use of ever more force the harvest could be gathered. For this he decided to send committees with special powers to the main agricultural regions of the country.
 
On 22 October 1932 the Politburo passed a decision to send the Molotov Commission to the Ukrainian SSR for 20 days, and the Kaganovich Commission to the North Caucasus Territory. The commissions set off at the end of October.

THE ACTIVITIES OF THE MOLOTOV COMMISSION 

16. On 29 October 1932 at a session of the Politburo of the CC CPU, together with the first secretaries of the regional committees of the Party, the Commission reported that the Kremlin had agreed to a reduction of the quota.  On 30 October the final quota task divided up into regions, sectors and grain cultures was passed. The Ukrainian SSR had to provide 282 million poods of grain: the kolkhozes 224.1 million, independent farmers – 36.0 million, and sovkhozes – 21 million poods.
 
At the same time, Molotov managed to get a directive passed by the CC CPU on increasing help from the justice bodies to those carrying out the grain requisitions. The courts were ordered to examine this category of case first during outreach sessions at local level and applying harsh repressive measures.[44].
17.  On 5 November Khataevych and Molotov sent secretaries of the regional committees of the Party a telegram with the following: “In reports from the regional bodies of the OGPU there are a lot of accounts of theft, criminal squandering and concealment of kolkhoz grain with the participation and under the leadership of the kolkhoz management, including some communist members who are in fact kulak agents who are dividing the kolkhozes. Despite this, the Central Committee of the CPU does not know what the regional committees are doing to fight this phenomenon.
 
Noting the unacceptable inaction of the courts and prosecutor’s office and the passivity of the press with regard to the relevant specific facts, the CC CPU categorically demands that regional committees take immediate and decisive measures to fight this phenomenon with mandatory and swift undertaking of judicial repression and merciless punishment of criminal elements in the kolkhoz management on the basis of the well-known decree on the protection of public property, with coverage of these facts in the press and issuing of decisions of kolkhoz meetings which condemn these facts.”[45].
18.  On 18 November 1932 the CC CPU and on 20 November the Council of People’s Commissars of the Ukrainian SSR passed resolutions with the same name “On measures to increase grain requisitions” prepared by the Molotov Commission. These resolutions demand that the grain requisition quotas be met by 1 January 1933 and that seed funds be created by 15 January 1933.
 
It is prohibited to spend the natural funds created in kolkhozes which have not settled with the State.  The district executive committees must immediately check these funds and appoint people in cooperatives responsible for their preservation.
 
The district executive committees were given the right to count all natural funds of the kolkhoz as part of the grain requisition quotas. And those kolkhoz debtors who issued advances for people’s labour or for public food over the established norm (15% of the actual amount threshed) had to immediately organize the return of “unlawfully issued grain” in order to direct it towards meeting the quota. 
 
The district executive committees were instructed to organize the confiscation from kolkhozes, those not part of a collective and workers of sovkhozes grain stolen when cutting, threshing or transporting. In order to crush sabotage in the management ranks, it was required that accountants, bookkeepers, storekeepers, managers etc be held to answer if they concealed grain from the inventory, on the basis of the resolution from 7 August 1932, as thieves of State and public property.[46].
19. In Item 9 of the Resolution of the Council of People’s Commissars of the Ukrainian SSR of 20 November it is stated that “With respect to kolkhozes that have allowed the theft of kolkhoz grain and maliciously sabotage the grain requisition quota, fines in kind are applied in the form of an additional quota from the meat requisitions of the size of the 15-month norm of the meat task for the given kolkhoz, both of the common cattle, and that of the kolkhoz workers.[47]. 
 
The Party resolution duplicated this item, however added to it the following: “In kolkhozes which do not satisfactorily meet the grain requisition quota, with regard to kolkhoz workers who have grain sown on their garden plots, all grain which they get from these garden plots as natural issue for labour with the removal of the excess of grain handed over to fulfil the grain requisition quota”[48]. 
 
The Party resolution included yet another item not in the government’s resolutions: those farming not in a collective who did not meet their grain quotas could be fined by the imposition of extra demands not only from the meat requisitions of the 15 month norm, but also from potatoes (the annual norm).[49].
20.  Furthermore, the resolution further pushed the idea that there was grain and that it was communist saboteurs and former petlurites who were obstructing implementation of the quota.
 
“Since a number of agricultural party organizations, especially during the period of cattle requisitions there has proved to be unity between whole groups of communists and some leaders of party branches with kulaks, petlurites, etc which in fact turns such communists and party organizations into agents of the class enemy and is clear proof of how far removed  these branches and communists are from the poor and middle-level kolkhoz masses, the Central Committee and the Central Controlling Commission decrees that a purge be carried out immediately of a number of village party organizations which are clearly sabotaging the implementation of the grant requisition quotas and are undermining fact in the Party among the workers.”[50].
21. On 21 November Molotov, Chubar, Stroganov and Kalmanovich addressed a request to Stalin to provide the CC CPU, as represented by a special commission (the General Secretary of the Central Committee, the Head of the GPU of the UkrSSR, and a representative of the Central Controlling Committee) for the duration of the grain requisitions with the right of decision with regard to using the death penalty. The Special Committee of the CC CPU needed only to report once every 10 days before the Central Committee of the CPSU on its decisions in these cases.[51].
22. Similar commissions at the regional (oblast) level, made up of the First Secretary of the regional committee, the head of the regional division of the GPU and the regional prosecutor were created in order to accelerate the repressions in accordance with the Resolution of the CC CPU from 5 December 1932. 
 
The courts had to consider cases within 4-5 days under the direct leadership and surveillance of the commission[52]. Analogous “troikas” and Special Commissions were created in regional divisions of the GPU (Order of the GPU UkrSSR from 11 December 1932).

HOLODOMOR 1932-1933 IN UKRAINE 

23. In order to force the peasants to give up their grain, the Party bosses made examples of villages which for a long time could not settle with the State, putting them on the so-called “black board”. This term was first used in Kaganovich’s diary during his visit to Kuban. It entailed closure of all State and cooperative shops with the confiscation of all reserves, total ban on trading, kolkhoz or private, a purge of counter-revolutionary and kulak elements and ban on leaving the village.[53].

 
The idea was supported in Ukraine and already on 6 December 1932 a resolution of the All-Ukrainian Central Executive Committee and the Council of People’s Commissars of the UkrSSR placed six villages on the black board, while local authorities applied this against 400 villages.
24. Despite the exceptional measures, the rate of grain requisitions fell. As S. Kosior wrote to Stalin on 8 December 1932, the hay threshing had ended almost everywhere, and therefore the Ukrainian Party organization should be redirected “towards uncovering concealed, wrongly issued and stolen grain”[54]. 
 
Grain could be taken from kolkhoz workers or independent farmers either through searches or repression. Kosior considered the best means to be repression in the form of “fines in kind” (“a kolkhoz worker and even an independent farmer is now holding tight to a cow or pig”) or depriving them of their garden plots[55].
25. Displeased with the activities of the Ukrainian and Kuban leaders, Stalin subjected them to severe criticism at a meeting of the Politburo on 10 December 1932.  On 14 December a secret resolution of the Central Committee of the Soviet Communist Party and Sovnarkom “On grain requisitions in Ukraine, North Caucuses and in the Western Region” was passed.  This changed the deadline for fulfilling the grain requisition quota for Ukraine to the end of January, and in the North Caucasus Territory to 10-15 January.  
 
The resolution again asserted that as the result of the poor work of the Party leadership, former kulaks, officers, petlurites, etc had penetrated the kolkozes and were trying to organize “a counterrevolutionary movement and the sabotage of the harvest and sowing campaigns”. 
 
The Central Committee of the All-Soviet Communist Party and Sovnarkom issue the order “to resolutely extirpate these counterrevolutionary elements by means of arrests, long-term deportation to concentration camps, without stopping short of capital punishment for the most malicious of these elements”. 
 
The Resolution also stated that “the worst enemies of the party, working class, and collective farm peasantry are saboteurs of grain procurement who have party membership cards in their pockets” and ordered that they apply “severe repressions, five- to ten-year deportation to concentration camps, and, under certain circumstances, execution by shooting”[56].
26. The Central Committee Resolution of 14 December 1932 sharply criticized the policy of Ukrainization. It asserted that it “was carried out mechanically, without taking into consideration the peculiarities of every raion and meticulous selection of the Bolshevik cadre. This made it easier for bourgeois-nationalistic elements, Petliurites and others to create their legal cover-ups and counterrevolutionary cells and organizations”. 
 
The Central Committee and Sovnarkom suggest “paying serious attention to the correct implementation of Ukrainization, eliminating its mechanical implementation, expelling Petliurite and other bourgeois-nationalistic elements from Party and government organizations, meticulously selecting and raising Ukrainian Bolshevik cadre, and ensuring systematic Party management and supervision over Ukrainization”[57]. 
 
The Resolution basically contained the instruction to stop Ukrainization in the North Caucasus Territory (more about this in Items 46, 47, and 48). And on 15 December 1932 a telegram signed by Stalin and Molotov was sent to the Central Committees of the republic communist parties; the territory and regional (oblast) committees, the heads of the councils of people’s commissars of the territory and regional committees. 
 
This contained yet another secret resolution which ordered the immediate cessation of Ukrainization in al places with Ukrainians living together throughout the entire territory of the USSR. As well as the North Caucasus Territory (3,106 million Ukrainians), this included such regions as the Kursk region (1.3 million), Voronezh region  (1 million); the Far East, Siberia and Turkestan (with around 600 thousand Ukrainians each).
27. No longer relying on Ukrainian leaders, on 18 December 1932 Stalin sent Kaganovich and P. Postyshev to Ukraine with special powers to use “all necessary measures of an organizational and administrative nature for fulfilling the grain requisition quota”. The Deputy Head of the OGPU of the USSR V. Balytsky had been sent to Ukraine at the end of November 1932.
 
On 20 December 1932 during a meeting of the Politburo of the CC CPU Balytsky stated that from the beginning of December through blanket searches 7 thousand pits and 100 concealed storing places had been uncovered, holding 700 thousand poods of grain.[58].  It followed from this that it was impossible to meet the quota in this way.
 
Nonetheless Kaganovich considered that it was necessary to uncover “an underground grain city” in Ukraine. On 29 December he forced the CC CPU to adopt a decision on confiscating all kolkhoz funds, including seed funds.  Chubar deemed the lack of fines in kind a failing of the grain requisitions.[59].
28. At the Politburo meeting, Balytsky reported that from the middle of July to the middle of November 11 thousand people had been arrested on “grain cases” and from 15 November to 15 December 1932 – 16 thousand people, including 409 heads of kolkhozes and 107 heads of district executive committees. The “troika” had issued 108 death sentences and a further 100 cases were presently under examination.[60].
29.  On 1 January 1933 the UkrSSR leadership received the following telegram signed by Stalin:
“Be informed of the Central Committee Resolution from 1 January 1933: “Suggest that the CPU and the Council of People’s Commissars of the UkrSSR widely inform, via their village councils, kolkhozes, kolkhoz workers and working individual farms that:
a)  those of them who voluntarily hand over to the State grain previously stolen and hidden from inventory, shall not be repressed;
b)  with regard to kolkhoz workers, kolkhozes and individual farmers who stubbornly persist in hiding grain previously stolen and hidden from inventory, the most severe measures of punishment set out in the Resolution of the Central Executive Committee and Sovnarkom of the USSR from 7 August 1932 “On the protection of property of State enterprises, kolkhozes and cooperatives, and the consolidation of socialist property” will be applied.[61]
30. The telegram notified the peasants that they must hand over all grain and if they don’t do this, they faced blanket searches aimed at rooting out “grain stolen and hidden from inventory”. If grain was found, punishment would be according to the “5 ears of wheat law” (the death penalty or no less than 10 years deprivation of liberty), and if none was found, there would be a fine in kind, that is confiscation of meat, including “in live” weight, and potatoes..
31. At the present time many oral accounts from survivors have been gathered, and a lot published. This testimony coincides with the historical facts. After Stalin’s telegram the searches and confiscation of grain were merged into a single campaign of repression.
 
Brigades of activists were organized who removed from the kolkhoz workers and independent farmers not only grain, meat and potatoes, but all food that they found, even cabbage, pickled beetroot,  a handful of wheat – absolutely everything, and if they found food cooked, they destroyed it.
 
In this way they saved themselves from starvation, since they got to keep a part of what they found. The three volume work Oral History Project on the Ukrainian Famine which fills 1,734 pages and published by the US Congress Commission on the Ukrainian Famine 1932-1933 led by James Mace, is full of such accounts from all regions of the country.
32. As in 1932 the peasants tried to leave for other areas of the USSR in search of food. Yet now the Soviet State organized a real blockade to not let them leave Ukraine. On 22 January 1933 a directive was issued by the Sovnarkom and the Central Committee of the Soviet Communist Party on preventing the wide-scale exodus of starving peasants in Ukraine and Kuban to find food. It was written by Stalin personally.
 
On the very next day an identical letter of instruction was issued by the CC CPU and the Ukrainian Council of People’s Commissars, signed b Khataevych and Chubar. It was to all regional party committees and regional executive committees and spoke of the unacceptability of wide-scale moves by kolkhoz workers and independent farmers beyond Ukraine.
“Following last year’s example a mass exodus has begun from some raions of Ukraine to the Moscow, Western regions, Central Chernozem [Black Earth] Region, Byelorussia “for grain”. There have been cases where almost all individual farmers and some of the kolkhoz workers have left their village.
 
Without a doubt some mass exoduses are being organized by enemies of the Soviet regime, social revolutionaries [esery], and agents of Poland in order to campaign “because of the peasants”  in the northern regions of the USSR against the kolkhozes and against the Soviet regime.
 
Last year the Party, Soviet and chekist bodies in Ukraine failed to pay heed to this counter-revolutionary trick by enemies of the Soviet regime. This year there must be no repeat of this mistake.
 
The CC CPU and the Council of People’s Commissars propose:
1.  that decisive measures are taken with no delay in each raion to prevent the mass exodus of individual farmers and kolkhoz workers, on the basis of the directive from Balytsky sent around through the GPU line.
2.  the work of all recruiters of labour for travel beyond Ukraine is checked, that they are held under strict  control, and that all  suspicious counter-revolutionary elements are dismissed from this work and removed;
3.  that widespread explanatory work is undertaken among individual farmers and kolkhoz workers against wilfully leaving and abandoning their households, and that they are warned that if they leave for other regions they will be arrested there;.
4.  that measures are taken to stop the sale of tickets beyond Ukraine for peasants who do not have permission to travel from the raion executive committee or a document from industrial, construction or State organizations confirming that they have been recruited for a particular job outside Ukraine. The relevant instructions should be sent to the People’s Commissariat of Communications and the transport sections of the GPU;
5.   that brief reports be provided no later than 6 p.m. on 24 January about the actual situation with mass exodus of peasants for your oblast”[62]
33. Special patrols and operations groups, as well as filter points, were created at railway stations. Chekists [secret police], police officers and local activists monitored the roads.
 
According to figures from the OGPU, during 50 days following the issuing of the directive 219.5 thousand peasants were stopped, this including 38 thousand in the UkrSSR, 47 thousand in the North Caucasus Territory , in the Central Chernozem Region – 44 thousand, in the Western Region – 5 thousand and at railway stations – 65 thousand peasants.
 
Of those detailed, 186.5 thousand were sent home under convoy, and almost 3 thousand had been convicted, while the rest were awaiting trial or under investigation in filtration camps.[63].
34. Ukrainian peasants, tormented by the endless searches, confiscation of food productions, and blockade were starving en masse. Those who survived testify that beginning from February 1933 the famine became particularly horrific. Whereas up till January tens of thousands were dying, from February to May the numbers were in the millions.
 
According to a document from the GPU of the UkrSSR, during the entire period from 1 December 1932 to 25 January 1933 14,956 pits, 621 “black cellars” and 1,359 other hiding places were found, with 1,718.5 thousand poods of grain confiscated.[64].
35. On 5 February a resolution of the Central Committee of the Soviet Communist Party concluded the requisitions from the 1932 harvest. The UkrSSR had in total fulfilled 83.5% of a quota which had twice been reduced. A total of 4,171.4 thousand tonnes of grain had been requisitioned against 7,047.1 thousand tonnes of grain from the 1931 harvest. Up to 1 November 136.1 million poods were handed over, and from November through January 1933 – another 87 million poods of grain.
36. At the end of January 1933 Postyshev was again sent to Ukraine to prepare the spring sowing which against a background of mass starvation and the lack of seeds was problematical. Back on 23 September, on Stalin’s initiative, the Central Committee of the Soviet Communist Party and Sovnarkom passed a resolution according to which all proposals to provide seed loans were rejected, and sovkhozes and kolkhozes were warned that there would be no loan either for the winter crops or for the spring sowing[65].
 
Therefore on 4 February Postyshev stated that seeds would be gathered by means of grain requisitions. Since there was no grain among the starving peasants, the party leaders resorted to rewards for denunciations. Each person who informed where a neighbour was hiding grain received between 10 and 15% of the grain discovered. On 17 February 1933 these “measures” were approved by a government resolution.[66].
37. In February the Ukrainian leadership began providing aid to the starving in order to safeguard the sowing. On 19 February 1933 Postyshev received Stalin’s consent to unblock 3 million poods of State grain reserves to provide food aid to the peasants. However the scale of the famine was increasing by the day. Therefore Postyshev decided that it wasn’t worth giving food to those not working.
 
A CC CPU Resolution from 31 March 1933 on the preparations for the spring sowing contained the following: “Suggest that the Kyiv regional committee carry out the following measures for organizing food aid to kolkhoz workers and independent farmers in need:
 
a) stop any food from the food aid for non-able-bodied  kolkhoz workers and independent farmers even if they ask for such assistance;
 
b) divide all those hospitalized into the ill and those recovering, and considerably improve the food supplied to the latter so that they can be discharged and back to work as quickly as possible.”[67].
 
Thus, the peasants were divided into those who could provide labour and those weakened by hunger and unable to work. The first survived, the second died. This was the “charitable” State assistance.
38. Mortality in the first half of 1933 increased each month. And despite the fact that the work of the registrar offices was partly paralyzed, from March to August 1933 they registered hundreds of thousands of deaths.[68]. Overall for 1933 registrar offices registered 1,678 deaths in rural areas, 1,552 of these being Ukrainians. These statistics cannot give an idea of the scale of Holodomor as they are incomplete.[69]
39. Against a background of mass starvation in the villages in 1933 Postyshev began an offensive against the Ukrainian intelligentsia and Ukrainian Communist party. 1933 became a year of unabated political repression.  It was impossible to conceal a disaster on the scale of the famine and the deaths of millions of people, and therefore the regime tried to fend off possible accusations by diverting them against “saboteurs”, in the first instance at agricultural specialists.
 
In 1933 Stalin blamed agrarian professors of deliberately “injecting the cattle in the kolkhozes and sovkhozes with plague or anthrax; of encouraging the spread of meningitis among horses, and others”.
 
In March 1933 a panel board of the OGPU of the USSR examined the cases (“according to a list”) of 75 civil servants of people’s commissariats for agriculture and sovkhozes of Ukraine, Byelorussia and the North Caucasus Territory. Less than a day was spent on example the case of the 75 officials. 35 were shot on the basis of the examination into the case.  A real pogrom was carried out in the Kharkiv agricultural and zootechnical institutes. Scientific research institutes and universities in Ukraine lost up to 270 professors and lecturers.
40. At the beginning of 1933 the fabrication began of a “Ukrainian Military Organization” which they “included” three writers in – Oles Dosvitniy, Serhiy Pylypenko and Ostap Vyshnya. The first extrajudicial “terrorist” trial behind closed doors in Ukraine took place in Kharkiv on 3 March 1934. Dosvitniy, Pylypenko and Vyshnya were accused of planning the murder of Postyshev, Chubar and Balytsky.
 
Only Ostap Vyshnya was “pardoned”, receiving a sentence of 10 years labour camp. The other nine people charged in the “Ukrainian Military Organization” Case (still unfinished, in all 148 people were arrested) were shot. There were also trumped up cases over the “Polish Military Organization” [POV] and the “Bloc of Ukrainian Nationalist Parties”.
41. At the end of February 1933 a campaign was launched against Mykola Skrypnyk and the communists supporting him. Skrypnyk was removed from his post as Minister of Education. Everything that was linked in Ukraine with the literary renaissance, introduction of the literary language standards, creation of new dictionaries, development of Ukrainian theatre, historical research and Ukrainization of schools was all stigmatized as “skrypnykovshchyna” [i.e. connected with Skrypnyk], became the target of political repression which did not abate through 1933 and 1934.
 
People carrying out Ukrainization – from rural teachers to members of the Academy of Sciences – were repressed on a wide scale as bourgeois nationalists. On 13 May 1933 the well-known writer Mykola Khvylyovy committed suicide.
 
In June 1933 at the plenum of the CC CPU Postyshev blamed Skrypnyk and his nationalist “deviation” for all the “difficulties of the previous year”, and accused him of harbouring in the People’s Commissariat of Education “deviationists, saboteurs, counter-revolutionaries”.[70]. On 7 July 1934, unable to withstand the hounding, Skrypnyk killed himself.
 
His death spelled the end to Ukrainization and nationalism as a whole (overall the CPU was halved, while the members of the Ukrainian Politburo were later, during the Great Terror of 1937-1938 all eliminated).
 
Another leader of Ukrainization and People’s Commissar of Education Oleksandr Shumsky was also arrested, together with communists connected with him. On 5 September 1933 Shumsky was sentenced to 10 years imprisonment. In November 1933 the Director of the “Berezil” Theatre Les Kurbas was arrested. 
 
In 1934 first-class writers who were later to become known as “rozstrilyane vidrodzhennya” [“Executed Renaissance”] were repressed, being labelled as “bourgeois nationalists” and “terrorists”. 
 
In total the OGPU arrested 199 thousand people in Ukraine in 1932-1933, against 119 thousand in 1929-1931, and 71 thousand in 1934-1936. Death from starvation coincided with repression of the national Ukrainian cultural, intellectual, creative and political elite.

HOLODOMOR 1932-1933 IN KUBAN 

 
42. Just as Ukraine received the most onerous grain requisition quota among agricultural regions in 1931-1932, so to were the planned figures for grain requisitions in Kuban for 1931-1932 higher than for the other 10 districts of the North Caucasus Territory. It was for this reason that the rural population of Kuban, together with Ukraine, had the worst results for grain requisition quotas and became the target of efforts by the Party-State leadership of the USSR aimed at extracting grain. 
 
As stated in the decision of the Soviet Politburo from 1 November 1932 with regard to the commission headed by Kaganovich: “the main task of the said group of comrades is to devise and carry out measures aimed at breaking down sabotage of the sowing and grain requisition, organized by counter-revolutionary kulak elements in Kuban.”[71].
43. The Kaganovich Commission immediately began punitive measures. A resolution of the politburo of the North Caucasus Territory Communist Party from 4 November 1932 added three stanitsas to the “black board” and the population was warned that if it continued to sabotage the sowing and grain requisitions, they would all be exiled North, and the stanitsas would be taken over by diligent kolkhoz workers who work in conditions where there is little arable land or on uncomfortable land in other areas.
 
The resolution also contained measures analogous to the measures in the Resolution of the Central Committee of the Soviet Communist Party from 18 November 1932: intensifying the struggle against saboteurs, especially those with Party tickets in their pocket, the confiscation of grain previously distributed in payment for labour and the introduction of fines in kind.
44. Kaganovich’s threat was carried out, and from four large stanitsas – Poltavska, Medvedovska, Urupska and Umanska – 51.8 thousand people were exiled to the North of the country. and from other stanitsas – no less than 10 thousand. All of their property and livestock was left for those “diligent kolkhoz workers” who would settle in these stanitsas. In fact, the inhabitants of those stanitsas, already emaciated, were deported to a sure death.
45. Those who refused to rob the peasants and Cossacks themselves ended up within the machine of repression. Even before the arrival of the Kaganovich Commission, the OGPU had arrested 5 thousand communists of Kuban, and overall around the territory – 15 thousand.
 
On 4 November 1932 another decision was adopted by the North Caucasus Territory Committee, this being to carry out a purge of the Party organizations of the Territory, and first and foremost, Kuban. Throughout November and December 1932 and in 1933, approximately 40 thousand people were expelled from the Party, while up to 30 thousand other members of the Party fled beyond the Territory.[72].
46. The people of Kuban faced the same fate as the Ukrainian peasants – blanket searches, confiscation of food, and after 22 January 1933 – a blockade with it being impossible to leave in search of food. Earlier, however, discrimination had been added on ethnic grounds.
 
Item 7 of the Resolution of the Central Committee of the Soviet Communist Party “On grain requisitions in Ukraine, North Caucuses and in the Western Region” from 14 December 1932 stated that “the irresponsible, non-Bolshevik “Ukrainization,” which was at variance with the cultural interests of the population and which affected nearly half of the raions in the Northern Caucasus, as well as the complete lack of supervision on the part of territorial agencies over the Ukrainization of schools and the press, had provided the enemies of the Soviet power with a legal form for organizing resistance to the oviet authorities’ measures and tasks on the part of kulaks, officers, Cossack resettlers, members of the Kuban Rada, etc.”[73].
47. “For the purpose of crushing the resistance to grain requisitions mounted by kulak elements and their party and non-party menials”, the Central Committee and Sovnarkom among other things, issued orders to: “immediately switch Soviet bodies, cooperative societies, and all newspapers and magazines in the Ukrainized raions of the Northern Caucasus from Ukrainian to Russian, as being more understandable to Kuban residents, and to prepare and change the language of instruction in schools to Russian by the autumn.
 
The Central Committee and Sovnarkom oblige the Territory Party and Executive Committees to urgently examine and improve the composition of school teachers in the Ukrainized raions”[74].
48. This resulted in the destruction of all ethno-cultural forms of life led by Ukrainians in the Northern Caucuses, the closing of Ukrainian schools, newspapers, journals, other Ukrainian cultural structures. Added to the physical suffering from starvation in Kuban, was the psychological suffering caused by the denigration of the honour and dignify of the inhabitants of Kuban – ethnic Ukrainians who made up more than two thirds of the population of Kuban.
 
FOOTNOTES:
[1]  Here and later references are to the numbers of the items in Appendix “Brief description of the historical facts 1930-1933”
[2] S. Kulchytsky: Holodomor 1932-1933 as genocide, p. 183.
[3]  Commander of the great famine – p..209.
[4]  Ibid . – p. 214.
[5] William A. Schabas, Genocide in International Law. The Crime of Crimes (Cambridge: Cambridge University Press, 2000), “Chapter 3. Groups protected by the Convention”.  (Quoted in Serbin, The Ukrainian Famine of 1932-1933 and the UN Convention on Genocide, p.5).
[6] Id. at 10 (emphasis added).
[7] Prosecutor v.Goran Jelisic, ICTY (Trial Chamber I), Case No. IT-95-10 “Breko”,  Judgement of 14 December 1999.
[8] S.V. Kulchytsky. Holodomor 1932-1933 as genocide… – pp. 396-415.
[9] Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro); Summary of the Judgment of 26 February 2007, p.9.
[10] http://ukrsvit.kiev.ua/us/gazeta/statii.html.vatra2
[11] S.V. Kulchytsky. Holodomor 1932-1933 as genocide… – pp. 287-288.
[12] James Mace.  Political causes of Holodomor in Ukraine (1932-1933). Ukrainian Historical Journal, No. 1, 1995: Posted in Ukrainian at: http://maidan.org.ua/n/lib/1044901106
[13] S.V. Kulchytsky. Holodomor 1932-1933 as genocide… – p. 264-265.
[14] S.V. Kulchytsky. Destruction for rescue // Krytyka, No. 3, 2008 – pp. 15-17
[15] Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro); Summary of the Judgment of 26 February 2007, p. 9.
[16] Andrea Graziosi: Soviet famine and Ukrainian Holodomor. Available in Russian at: http://www.strana-oz.ru/?numid=34&article=1406
[17] Y. Shapoval and V. Zolotahyov: Vsevolod Balytsky: the person, his time and surroundings – K. 2002, p. 189.
[18]  Famine-genocide 1932-1933 in Ukraine – p. 297.
[19]  “Proletarian Pravda” from 22 January 2008 (quoted from the publication: “Mass-scale famine as social genocide”.
 
[20] “It would be unwise if the communists, working on the premise that the kolkozes are a socialist form of management, did not respond to the blow inflicted by these particular kolkhoz workers or kolkhozes with a devastating blow” (Stalin, 27 December 1932).)
[21] Serhiy Makhun. War on the “literary front”. // Dzerkalo tyzhnya [“Weekly Mirror”] No. 45, 24-30 November 2007
[22] Cited in the work by Andriy Portnov. The concepts of genocide and ethnic cleansing: western scholarly discussions // Ukraina moderna, part 2 (13), 2008 – p. 99
[23] Cited in the work by Andriy Portnov. The theory of genocide before the challenge of Holodomor” // Krytyka, No. 5, 2008 – pp. 11-13.
[24] Raphael Lemkin’s Axis Rule in Occupied Europe: Laws of Occupation – Analysis of Government – Proposals for Redress, (Washington, D.C.:  Carnegie Endowment for International Peace, 1944), p. 79 – 95. http://www.preventgenocide.org/lemkin/AxisRule1944-1.htm
[25]  The Famine of 1932-1933 in Ukraine: causes and consequences – p. 394.
[26]  S.V. Kulchytsky. Holodomor 1932-1933 as genocide: difficulties in understanding – Kyiv: Nash chas 2008 – p. 186.
[27]  The Tragedy of the Soviet Village – v. 3, p. 227.
[28]  The Tragedy of the Soviet Village – v. 3, pp. 239-240.
[29]  S.V. Kulchytsky. Holodomor 1932-1933 as genocide… – p. 195.
[30] The Tragedy of the Soviet Village… – v. 3 – p. 420.
[31] S.V. Kulchytsky. Holodomor 1932-1933 as genocide.. – p. 200.
[32] The Tragedy of the Soviet Village… – v. 3 – pp. 362-363, 365.
[33] Stalin and Kaganovich. Correspondence, 1931-1936. – p. 169.
[34] The Famine of 1932-1933 in Ukraine: through the eyes of historians, in the language of the documents – p. 190.
[35] The Commander of the Great Famine. – pp..227-228.
[36] Stalin and Kaganovich. Correspondence, 1931-1936. – p. 169.
[37] “Pravda” 14 July 1932
[38] Stalin and Kaganovich. Correspondence, 1931-1936. – p. 205.
[39]  S.V. Kulchytsky. The Price of the “Great Turn”. – p. 212.
[40] Stalin and Kaganovich. Correspondence, 1931-1936. – pp.. 241-242.
[41] S.V. Kulchytsky. Holodomor 1932-1933 as genocide.. – p.. 399..
[42] S.V. Kulchytsky. 1933: The Tragedy of the Famine  – K.: 1989. – p. 32.
[43] S.V. Kulchytsky. Holodomor 1932-1933 as genocide.. – pp. 256-257.
[44] The Tragedy of the Soviet Village… – v. 3 – pp.528-529.
[45] The Commander of the Great Famine. – p..236.
[46]  Collectivization and famine in Ukraine. 1929-1933. – pp..548-549.
[47]  Ibid . – p.549.
[48] The Famine of 1932-1933 in Ukraine: through the eyes of historians, in the language of the documents – p.254.
[49] Ibid.
[50] The Famine of 1932-1933 in Ukraine: through the eyes of historians, in the language of the documents – p. 256.
[51] The Tragedy of the Soviet Village… – v. 3 – p.548.
[52] The Famine of 1932-1933 in Ukraine. Documents and Materials. – p. 443.
[53] The Commander of the Great Famine. – p.315.
[54] The Famine of 1932-1933 in Ukraine: through the eyes of historians, in the language of the documents – p. 282.
[55] Ibid. – pp. 284, 286.
[56] The Famine of 1932-1933 in Ukraine: through the eyes of historians, in the language of the documents – p..291.
[57] The Famine of 1932-1933 in Ukraine: through the eyes of historians, in the language of the documents – pp..291-292.
[58] The Commander of the Great Famine. – p.315.
[59] Ibid. – p.317.
[60] Ibid. – p.316.
[61] The Famine of 1932-1933 in Ukraine: through the eyes of historians, in the language of the documents – p..308
[62] The Famine of 1932-1933 in Ukraine: through the eyes of historians, in the language of the documents – p…354. Our translation.
[63] S.V. Kulchytsky. Holodomor 1932-1933 as genocide.. – p. 310.
[64] Ibid. – p. 299.
[65] S.V. Kulchytsky. 1933: the tragedy of the Famine, p. 41.
[66]  Ibid.
[67] The Famine of 1932-1933 in Ukraine: through the eyes of historians, in the language of the documents – p….473.
[68] S.V. Kulchytsky. Holodomor 1932-1933 as genocide.. – p. 340.
[69] S.V. Kulchytsky. Why did he destroy us? – p. 154.
[70] James Mace.  Political causes of Holodomor in Ukraine (1932-1933). Ukrainian Historical Journal, No. 1, 1995 Posted in Ukrainian at:
http://maidan.org.ua/n/lib/1044901106
[71] The Commander of the Great Famine. – p. 250.
[72] [language used would not reprint, see link below for exact text] 
[73] The Famine of 1932-1933 in Ukraine: through the eyes of historians, in the language of the documents – pp…292-293.
[74] Ibid – pp. 293-294.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
“ACTION UKRAINE REPORT – AUR”
A Free, Private, Not-For-Profit, Independent, Public Service Newsletter

With major support from The Bleyzer Foundation, Kyiv, Ukraine
Articles are Distributed For Information, Research, Education, Academic,
Discussion and Personal Purposes Only. Additional Readers are Welcome.
LINK TO THE AUR 2008 ARCHIVE: http://www.usubc.org/AUR/
TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR, several times a month, please send your name, country of residence, and e-mail contact information to morganw@patriot.net. Information about your occupation and your interest in Ukraine is also appreciated. If you do not wish to read the ACTION UKRAINE REPORT please contact us immediately by e-mail to morganw@patriot.net. If you are receiving more than one copy please let us know so this can be corrected. 
 
PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer, The Bleyzer Foundation
Emerging Markets Private Equity Investment Management Group;
President, U.S.-Ukraine Business Council (USUBC);
Founder and Trustee, “Holodomor: Through The Eyes of Ukrainian Artists”
1701 K Street, NW, Suite 903, Washington, D.C. 20006
Tel: 202 437 4707; Fax 202 223 1224
 

Power Corrupts and Absolute Power Corrupts Absolutely.
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================

Leave a comment

Filed under Uncategorized

AUR#907 Sep 17 Ukraine Bank Profits & Assets Grow; Huge Grain Crop; Raiffeisen; UIA; Volia; Ruling Coalition Collapses

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

Ukrainian History, Culture, Arts, Business, Religion, Economics,
Sports, Government, and Politics, in Ukraine and Around the World       
 
“BUSINESS INVESTMENT & ECONOMIC GROWTH
DRIVES UKRAINE FORWARD, LEADS UKRAINE’S
EURO-ATLANTIC & WORLD INTEGRATION”
U.S.-Ukraine Business Council (USUBC), Washington, D.C.
                     
ACTION UKRAINE REPORT – AUR – Number 907
Mr. Morgan Williams, Publisher and Editor, SigmaBleyzer
WASHINGTON, D.C., WEDNESDAY, SEPTEMBER 17, 2008
 
INDEX OF ARTICLES  ——
Clicking on the title of any article takes you directly to the article.               
Return to Index by clicking on Return to Index at the end of each article
1.  UKRAINIAN BANKS’ PROFIT GROWN SLOWS TO 60% IN EIGHT MONTHS
Interfax Ukraine Business Panorama, Kyiv, Ukraine, Mon, Sep 15, 2008
 
2 NET ASSETS OF UKRAINIAN BANKS TO GROW BY 40% IN 2008
Interfax Ukraine, Kyiv, Ukraine, Monday, September 15, 2008
3.  UKRAINE’S GRAIN CROP MAY REACH 53 MILLION METRIC TONS
Largest grain crop in Ukraine since 1991.
UkrAgroConsult, Kyiv, Ukraine, Tuesday, September 16, 2008
 
Agro Complex News, Kyiv, Ukraine, Monday, September 15, 2008 
 
5UKRAINE’S REAL GDP IN 2008 TO GROW BY 6.8%, SAYS CONCORDE CAPITAL
Interfax Ukraine Economic, Kyiv, Ukraine, Tuesday, September 16, 2008
 
Analysis: U.S.-Ukraine Business Council (USUBC), Washington, D.C., Wed, Sep 17, 2008 
 
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Tuesday, September 16, 2008
 
8UKRAINE INTERNATIONAL AIRLINES (UIA) CONTINUES SPECTACULAR GROWTH
Ukraine International Airlines (UIA), Kyiv, Ukraine, Tuesday, September 16, 2008
 
Oreanda – News from Regions, Moscow, Russia, Tues, September 16, 2008
 
Interfax Ukraine, Kyiv, Ukraine, Tuesday, September 16, 2008

By Natalya Zinets, Reuters, Kiev, Ukraine, Monday September 15 2008
 
Interfax Ukraine Business Panorama, Kyiv, Ukraine, Monday, September 15, 2008
 
bne Ukraine Daily List, Berlin, Germany, Tuesday, September 16, 2008
 
Delo, Kiev, Ukraine, in Russian 8 Aug 08; pp 8, 9., BBC Monitoring Service, UK, in English, Tue, 16 Sep 2008
Maksim Birovash, Korrespondent, Kyiv Post, Kyiv, Ukraine, Thu, Sep 11, 2008
 
By Maria Danilova, Associated Press (AP), Kiev, Ukraine, Tuesday, Sep 16, 2008  

20 UKRAINE’S RULING COALITION COLLAPSES, ELECTIONS LOOM 

By Daryna Krasnolutska and Halia Pavliva, Bloomberg, Kiev, Ukraine, Tue, Sep 16, 2008
 
OP-ED: By Doug Bandow, Eureka Reporter, Eureka, CA Sunday, Sep 14 2008
 
Analysis & Commentary: Jonathan Russin, Leonid Sevastianov, Tom Thomson
Moscow Times, Moscow, Russia, Wednesday, September 17, 2008 
 
Analysis & Commentary: by Chuck Spinney, Huffington Post, USA, Mon, Sep 15, 2008
 
OP-ED: by Doug Bandow, National Interest, Washington, D.C., Tue, Sep 9, 2008
 
25CRIMEA: DIVIDED PENINSULA PLAYS HOST TO RUSSIAN WARSHIPS AND UKRAINIAN PRIDE
Tensions have risen since the war in Georgia and Kiev’s plans to join Nato
Luke Harding in Sevastopol, The Guardian, London, UK,  Tuesday September 16 2008 
 
Analysis & Commentary: by Bernardo V. Lopez, Business World
New Manila, Quezon City, Philippines, Wednesday, September 17, 2008 
===================================================
1
 UKRAINIAN BANKS’ PROFIT UP 60% IN EIGHT MONTHS

Interfax Ukraine Business Panorama, Kyiv, Ukraine, Mon, Sep 15, 2008

KYIV – Ukrainian banks’ net profit January through August 2008 amounted to UAH 6.8 billion, which was 60% up on same period last year, while growth
over seven months was 63% and growth over six months was 71%, the National Bank of Ukraine said in a statement posted on its official Web site.

The banks’ aggregate net profit in August 2008 alone was UAH 700 million (in July 2007 it was UAH 900 million), whereas it was UAH 1 billion in June
2008, UAH 400 million in May 2008, UAH 1 billion in April 2008, UAH 800 million in both March and February 2008, and UAH 1.3 billion in January
2008.

Over the eight months, the NBU said, the banks’ revenues January through July increased by 68% year-over-year, to UAH 67.9 billion, while spending
rose by 67.6%, to UAH 61 billion.

According to the statement, from January to July 2008, the banks’ net worth expanded by 32.6%, to UAH 92.2 billion. The share of paid-in, registered
statutory capital was 65.2% of the banks’ own capital, general reserves, the reserve fund and other funds accounted for 10.7%, and reassessed fixed assets, intangible assets, securities in a bank’s portfolio for sale, and investment in associated companies accounted for 10%.

The banks’ liabilities over the eight months grew by 22.4%, to UAH 648.3 billion, the NBU said. Fixed deposits or loans by other banks accounted for
28% of all liabilities, economic entities’ funds for 20.5%, individuals’ assets for 30.9%, loans from international and other financial organizations for 5.4%, the banks’ own debt securities for 2.9%, and subordinated debts for 1.5%.

Over the eight months, the bank’s overall assets expanded by 23.7%, to UAH 765.8 billion. The share of highly liquid assets was 9% of overall assets, that of loan operations was 80.4%, and investments in securities 4.1%. The NBU also reported that long-term loans January through August grew by 25.2%,
to UAH 365.6 billion (59.4% of the amount of extended loans). According to the NBU, by the beginning of September, there were 180 banks registered in Ukraine.
——————————————————————————–

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
2.  NET ASSETS OF UKRAINIAN BANKS TO GROW BY 40% IN 2008

Interfax Ukraine, Kyiv, Ukraine, Monday, September 15, 2008

KYIV – Kyiv-based Foyil Securities Investment Company has confirmed its forecast of a 40% rise in the net assets of the Ukrainian banking system in 2008, according to a company survey, with the reference to one of its analysts, Ahshyn Mirzazade.

“According to data from NBU, the Ukrainian banks from January to August considerably increased their credit and deposit volumes. However, we’ll have
to wait for official data from the NBU to see the whole situation in assets growth. We confirm our forecast of a 40% rise in net assets in 2008,” the analyst said.

As reported, referring to data from the NBU, the total volume of credits in the banking system in January to August 2008 grew by 28.4%, to UAH 547.9
billion year-over-year, while credits issued to the public grew by 30.2%.

The total volume of deposits grew by 20.2%, to UAH 336 billion. Deposits by the general public as of September 1 were UAH 202 billion. Their share of
the total deposits of the banking system is 60%.
——————————————————————————–

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
3.  UKRAINE’S GRAIN CROP MAY REACH 53 MILLION METRIC TONS
Largest grain crop in Ukraine since 1991.

UkrAgroConsult, Kyiv, Ukraine, Tuesday, September 16, 2008

KYIV – Ukraine’s grain crop may reach 53 MMT, the Deputy Ag Minister reported last week. According to Ag Ministry reports, 43 MMT of grain were gathered so far.

In addition, Ukraine is planning to harvest another 10 MMT of late grains, in particular of corn. This is the largest crop registered in Ukraine since 1991 when so large a total grain crop (51 MMT) was observed.

UkrAgroConsult believes that the crop estimate of 53 MMT is correct for grain in raw weight. UkrAgroConsult predicts the total crop in finished weight will be 47.5 MMT.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

===================================================
4.  UKRAINE REMAINS AMONG FIVE LEADING GLOBAL POTATO PRODUCERS
 
Agro Complex News, Kyiv, Ukraine, Monday, September 15, 2008 
 
KYIV – According to the estimations of the experts of Association “Ukrainian Club of Agrarian Business” , in 2007 Ukraine, having 19.1 mln. tonnes, took the forth place on gross production of potatoes after China, Russia and India, and the third place on production of potatoes per head after Belarus and Netherlands.
Ukraine also occupies the leading global positions for consumption of this product. In general, Ukrainians consume about 6.5 mln. tones of potatoes yearly and take the sixth place according to this figure after such high-populated countries as China, Russia, India, the USA, Great Britain, leaving behind the traditional consumers of potatoes – Poland and Germany.
 
On an average, each Ukrainian consumes about 141 kg of potatoes yearly or 380 gramms daily, taking the fourth place on potato consumption per head. The leaders of potato consumption are Belarusian with the level of 1 kg per head daily (338 kg per head yearly). It should be noted that seven from ten consumption leaders are the countries of ex-USSR which traditionally have the high level of consumption.
According to Alex Lissitsa, the President of Ukrainian club of agrarian business, despite high places of Ukraine in the global rates of potatoes producers, the industry still has a lot of problems restricting the following growth of production and expanse to the markets of Russia, China and India.
 
Lissitsa said that these problems are connected with the potato production structure in Ukraine because almost 90 % of potatoes are produced mostly for domestic consumption. Farms and agrarian holdings enter potatoes business reluctantly, growing grain and oilseeds, adding shortage of infrastructure for storing and transportation of potatoes.
The industry development may be stimulated by governmental support of investment projects, enterprises-producers or infrastructure development that is enable to lead Ukraine to the global leader in export of potatoes.
You can get the detailed information about the prospects of potato market in Ukraine and Russia visiting during the largest conferences in the CIS: the Third International Conference “Fruit & Vegetable Business of Russia – 2008″ and the Fifth International Conference ” Fruits and Vegetables of Ukraine 2008″ .
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
==============================================================
JOIN THE U.S.-Ukraine Business Council (USUBC) NOW 
Promoting U.S.-Ukraine business relations & investments since 1995
==============================================================
5.  UKRAINE’S REAL GDP IN 2008 TO GROW BY 6.8%, SAYS CONCORDE CAPITAL

Interfax Ukraine Economic, Kyiv, Ukraine, Tuesday, September 16, 2008

KYIV – Ukraine’s real GDP growth in 2008 would be 6.8%, according to a survey of Kyiv-based Concorde Capital Investment Company, referring its
analyst Andriy Parkhomenko. “We stick to our forecast at 6.8% of real GDP growth in 2008, and believe that the slow in industry and other sectors will be compensated by a rise in the agricultural sector,” the analyst said.

The expert said that in August 2008 GDP growth was only due to a rise in agriculture. “The agricultural sector grew by 24.4% in January to August 2008 year-over-year thanks to the rich harvest and large investment in the sector [their growth was 45.3% in H1 2008 year-over-year],” he said.

Parkhomenko said that growth slowed in most sectors, in particular, in August 2008 industry fell by 0.5% compared to August 2007. As reported, referring to the State Statistics Committee, real GDP growth in Ukraine in January to August was 7.1% year-over-year, while in January to July it was 6.5%.

According to estimated data, nominal GDP in January to August was UAH 628.108 billion, including UAH 97.832 billion in August. Index GDP deflator
in January to August was 134.3%. In 2007, Ukraine’s GDP grew by 7.6%.
——————————————————————————–

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================      
6.  OIL REFINING INDUSTRY IN UKRAINE FACES MANY CHALLENGES

 
ANALYSIS: U.S.-Ukraine Business Council (USUBC), Washington, D.C., Wed, Sep 16, 2008 
 
WASHINGTON, D.C. – Maintaining and developing a strong oil refining industry should be an important matter of national security for Ukraine. Since Ukraine is two-thirds dependent on the import of hydrocarbons – oil and gas – it is vital for the country to preserve the ability to produce sufficient amounts of oil products domestically to avoid the situation of being dependent even for the import of ready-made oil products.
 
This is particularly important when viewed in the context of the major geopolitical changes caused by recent dramatic events in the Caucasus.
 
However, the current situation on the Ukrainian oil products market is quite the opposite. The elimination of import duties for oil products in 2005 placed outdated Ukrainian refineries in an extremely vulnerable position when compared to neighboring markets with a surplus of oil products supply.
 
Furthermore, no measures were undertaken by the Ukrainian government to provide domestic producers with either the time or preconditions to modernize and gradually adapt their refineries to meet the new market and economic conditions. As a result in three years time the situation on the Ukrainian market has been reshaped dramatically.
 
Today Ukraine is heavily dependent on imported oil products whose market share is expected to grow by more than 55% by the end of 2008. Though there are six refineries situated on the territory of Ukraine only two of them are working on a relatively stable basis. A number of key legal issues and the current state over regulation of the oil products market results in only about a 60% utilization of the actual refining capacity in Ukraine.
 
Consequently, import consignments are the major factor that sets the reference point for pricing oil products in Ukraine as domestic producers are no longer a benchmark for pricing on the market because of the insufficient level of production, technically lagging refineries and lower quality of fuels compared to imports.
 
As a result Ukraine is now highly dependent on the supply and price of imported oil products.
 
All off this leads to serious losses for the Ukrainian state budget (unpaid taxes) and for oil refining enterprises (no return on investments or even negative margin) and keeps reducing the stimulus needed for major investments in the development of the Ukrainian refining industry. Moreover, except for affecting the investment climate, some of these issues put the investments already in place and the existing businesses, as well as a entire Ukrainian oil refining industry, under real threat.
 
KEY ISSUES AND RECOMMENDED ACTIONS
1. Timely export VAT refund —–
The inappropriate implementation of legislative mechanisms for refunding export VAT has been a huge problem for businesses in Ukraine for many years. Today this results in hundreds of millions USD outstanding in arrears to the domestic producers of both Ukrainian and international origin in such a vital industry as oil refining.
 
Because of the enormous delays in export VAT refunds Ukrainian refineries are placed in a disadvantaged position compared to importers and are forced to slow down implementation of their investment plans and suffer heavy losses.
 
Further insufficient attention to this issue on behalf of the government may not only significantly reduce investments in the Ukrainian oil refining industry but even lead to the termination of the operations of major refineries which would result in a fuel crisis and soaring oil products prices in Ukraine as well as increasing the country’s energy dependence.
 
2. Create real stimuli for investments in developing oil refining as a strategic industry for Ukraine in terms of energy security
Today there are no real stimuli for domestic oil products producers to increase volumes and quality of production. The following steps should be made by the government to boost investments in the development of the industry and to create equal conditions for both domestic producers and importers:
[1] Eliminate duties and VAT for importing equipment purposed for modernization of Ukrainian refineries
[2] Establish a working system of oil products quality control: increase funding for equipping controlling bodies with essential gear, introduce stiffer penalties for trading low-quality oil products, provide stimuli for producing high-quality fuel on legislative level and eliminate practice of prolonging allowance for production and trade of ecologically-dangerous and  high-sulfur fuels
 
[3] Standardize tariff policy on services of natural monopolies’ bodies such as “Ukrzaliznycya”, which unreasonably raises tariffs on rail transportation of oil products in Ukraine, thus making export activities of domestic refineries loss-making  
 
[4] Change Ukrainian antimonopoly legislation that allows the Antimonopoly Committee of Ukraine to be a tool of political pressure on businesses
 
If implemented, the above mentioned recommendation will provide the preconditions and stimuli for larger investments in the Ukrainian oil refining industry which will consequently produce a secure stable oil products market in Ukraine and reduce the country’s severe energy dependence. 
 
LINK:  U.S.-Ukraine Business Council, Washington, D.C., www.usubc.org.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
7.  RZB FINANCE LLC (RAIFFEISEN) JOINS U.S.-UKRAINE BUSINESS COUNCIL (USUBC), MEMBER 91

 
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Tuesday, September 16, 2008

WASHINGTON, D.C. – The executive committee of the U.S.-Ukraine Business Council (USUBC), on behalf of the entire membership, is most pleased to announce that RZB Finance LLC (Raiffeisen) has been approved for USUBC membership.  RZB Finance LLC is USUBC member number 91 according to Morgan Williams, SigmaBleyzer, who serves as president of the USUBC.

 
RZB Finance LLC is organized under the laws of the State of Delaware and is a wholly owned subsidiary of Raiffeisen Zentralbank Osterreich AG (RZB), the central institution of the Austrian Raiffeisen Group and third-largest Austrian bank with assets in excess of $200 billion.  
 
While RZB has a long history of representation in the US dating back to 1980, RZB Finance LLC commenced operations in 1997. The company is head-quartered in New York with offices in Bethel, CT, Chicago, IL, Houston, TX and Los Angeles, CA.
 
USUBC has been working with Vice President Brad Woodhouse for several months.  Brad heads up the RZB Finance Ex-Im Bank Group and works in the Bethel, CT office. Dieter Beintrexler, President, will represent RZB Finance LLC on the USUBC Board of Directors. 

RAIFFEISEN INTERNATIONAL BANK 
One of the leading banking groups in Central & Eastern Europe
With its constantly expanding network in Central and Eastern Europe (CEE), Raiffeisen International Bank-Holding AG has developed into one of the region’s leading banking groups. Raiffeisen International is a fully-consolidated subsidiary of Raiffeisen Zentralbank Osterreich AG (RZB). RZB owns about 69 per cent of the common stock, the balance is free-float. The shares are traded on the Vienna Stock Exchange.

Starting already in 1986 by founding what is today Raiffeisen Bank, Hungary, Raiffeisen International has consistently entered growth markets and expanded its regional and local presence. Recent examples are the acquisitions of banks in Kosovo, Belarus, Albania and Ukraine from 2002 through 2005.

In January 2006, Raiffeisen International acquired 100 per cent of Russian Impexbank. In July 2006, it purchased Czech eBanka. Both banks were integrated into the network by merging them with the existing local Raiffeisen banks.

As of 30 June 2008, Raiffeisen International managed subsidiary banks, leasing companies and a number of other financial service providers in 17 markets

of the region. More than 61,800 employees serve 14.4 million customers in more than 3,000 business outlets. No other international bank in the region has a similarly extensive and closely-knit distribution network.
 
RAIFFEISEN BANK AVAL IN UKRAINE
Raiffeisen Bank Aval was founded in 1992 as Joint Stock Post-Pension Bank Aval and rapidly developed into one of Ukraine’s leading retail banks. Raiffeisen International acquired 93.5 per cent of the bank in October 2005 and increased its stake to 95.7 per cent by December 2007.
 
Raiffeisen Bank Aval confirmed its position as the country’s second-largest bank with a balance sheet total of euro6.1 billion, which represents an increase of 42 per cent. It also has one of the largest local networks, comprising 1,180 business outlets.
 
At the end of 2007, Raiffeisen Bank Aval was serving 4.1 million personal customers, about 196,000 small and medium-sized enterprises, and more than 9,000 corporate customers. Particular success was once again achieved in personal customer business in 2007. That segment’s loan portfolio grew by 43 per cent to 2.9 billion euro, and deposits rose by 20 per cent to 2.6 billion euro.
 
The product range for affluent customers was extended by the founding of Asset Management Company Raiffeisen Aval in September 2007. LLC Raiffeisen Leasing Aval surpassed all expectations with new business amounting to almost 115 million Euros already in its first full year.
 
Moody’s gave Raiffeisen Bank Aval a foreign currency bank deposit rating of B2 with a positive outlook in May 2007. That put the bank only negligibly below the country rating of B1 with a positive outlook.
 
The Banker honored Raiffeisen Bank Aval in 2007 as Bank of the Year. Additional information can be found at www.rzbfinance.com.
 
“The U.S.-Ukraine Business Council (USUBC) is most pleased to have RZB Finance LLC join the rapidly expanding USUBC membership.” said Morgan Williams, SigmaBleyzer, who serves as President of USUBC. 
 
USUBC MEMBERSHIP WILL REACH 100 IN 2008
RZB Finance LLC is the 40th new member for 2008, and the 70th new member since January of 2007. USUBC membership has quadrupled in the past 20 months, going from 22 members in January of 2007 to 91 members in September of 2008. Membership is expected to top 100 very soon.

The other new members in 2008 are MaxWell USA, Baker and McKenzie law firm, Och-Ziff Capital Management Group, Dipol Chemical International, MJA Asset Management, General Dynamics, Lockheed Martin, Halliburton, DLA Piper law firm, EPAM Systems, DHL International Ukraine, Air Tractor, Inc., Magisters law firm, Ernst & Young, Umbra LLC., US PolyTech LLC, Vision TV LLC, Crumpton Group, Standard Chartered Bank, TNK-BP Commerce LLC, Rakotis, American Councils for International Education, Squire, Sanders & Dempsey LLP, International Commerce Corporation, IMTC-MEI, Nationwide Equipment Company, First International Resources, Doheny Global Group, Foyil Securities, KPMG, Asters law firm, Solid Team LLC,  R & J Trading International, Vasil Kisil & Partners law firm, AeroSvit Ukrainian Airlines, ContourGlobal, Winner Imports LLC (Ford, Jaguar, Land Rover, Volvo, Porsche), 3M, Edelman, and CEC Government Relations.

The complete USUBC membership list and other information about USUBC can be found at: http://www.usubc.org.

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
============================================================
NOTE: Send in a letter-to-the-editor today. Let us hear from you.
============================================================
8.  UKRAINE INTERNATIONAL AIRLINES (UIA) CONTINUES SPECTACULAR GROWTH

Ukraine International Airlines (UIA), Kyiv, Ukraine, Tuesday, September 16, 2008

KYIV – Ukraine flag carrier airline Ukraine International Airlines (UIA) continues its spectacular growth carrying 21% more passengers in the period
from January to August 2008 than in the same period in 2007.

August has proven to be another record braking month for UIA carrying 200,000 passengers on 1,900 flights to 32 destinations. The passenger load factor across the whole fleet of 17 aircraft rose by 9.7% from 68.8% in August 2007 to a record of 78.5% in 2008.

Deputy President of UIA Richard Creagh said.  “Our growth in August alone was 14% higher than in the previous year and our passenger total for the year to date is already well over a million passengers.  This is nothing short of extraordinary as many airlines in Europe today are closing routes and mothballing aircraft as the real cost of flying becomes a reality.

“UIA is now demonstrating the benefits of our low operating cost approach and high utilisation factor.  Our new freighter is also proving its worth carrying 30 tons more cargo and mail that in previous months”.

Ukraine International Airlines is Ukraine’s leading international carrier. Founded in 1992, UIA was one of the first businesses in Ukraine to attract foreign investment. UIA was the first airline in CIS to introduce Boeing 737 aircraft. Today UIA’s fleet consists of 16 modern Boeing 737 aircrafts of different
configurations.

he airline connects Ukraine with nearly 3,000 locations of the world, operating about 300 scheduled flights a week to London, Paris, Amsterdam, Brussels, Berlin, Frankfurt, Vienna, Zurich, Rome, Milan, Madrid, Barcelona, Lisbon, Helsinki, Dubai, Kuwait, Tbilisi, Pula, Morastir, Dubrovnik, Nice, Lviv and Simferopol.  The base airport for UIA is Kiev-Boryspil (KBP).

The shareholdings in Ukraine International Airlines are as follows: State Property Fund of Ukraine – 61.6%, Austrian Airlines – 22.5%, Aer Cap – 6%
and European Bank for Reconstruction and Development (EBRD) – 9.9%. Detailed information about UIA is available at www.flyUIA.com

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
9.  KYIV’S LARGEST CABLE TELEVISION OPERATOR VOLIA BECOMES
OFFICIAL SPONSOR OF ORELI CHILDREN FOLK FESTIVAL
 
Oreanda – News from Regions, Moscow, Russia, Tues, September 16, 2008

KYIV – On 16 September it was announced, that Volia supported the First All-Ukrainian ORELI Children Folk Festival popularizing Ukrainian traditions
of child fostering.

This kind of partnership strictly corresponds to Volia’s activity in terms of principle of business social responsibility. One of the goals of such activity is informational and educational youth-oriented projects.

 
“This step absolutely meets our principles. Supporting such projects is of great significance when it goes about harmonic fostering of rising generation.
Such events urge development of our children’s spiritual potential and talent, and thus they are important for cultural, social, and economic development of Ukraine as well as for strengthening its international image. We believe in success of this undertaking”, noted Volia President Sergiy Boyko.

‘Oreli’ is an ancient name for cradle. As a rule cradle was transferred from generation to generation together with traditions of child fostering. The “cradle” of the festival made its home in the Ukrainian Centre of People’s Culture “Ivan Gonchar Museum”.

Owing to this offspring given birth to by active Ukrainian culture popularizes – artist Petro Gonchar and singer Nina Matviyenko – such rarely used and so much saturated word “plekannia” (author’s note: outdated Ukrainian word for ‘fostering’) meaning “cherishing” becomes current again.

In the course of the festival parents (especially city residents) will open for themselves a traditional Ukrainian custom of fostering-cherishing. And the children… are going to have a real holiday! During these two days they are going to visit arts and crafts workshops.

They will be taught by folk craftsmen who are at the same time experienced pedagogues. This all-Ukrainian master-class will be decorated with performances from 15 original children’s teams from different regions of the country. Here you can listen to the tales of the wise grandmas from all over
Ukraine and those told by Sashko Lirnyk and watch the presentation of Lys Mykyta (Fox Named Mykyta) animated cartoon.

The organizers are planning to make the festival annual and its activities are going to take place across the country all the year through. In particular, their plans include arranging folk camps where children will study the whole list of Ukrainian holidays.

Volia employees as well as their children are looking forward to the festival, since all the events offered to the public by the Ivan Gonchar Museum are imbued with kind and faith in the future. We are going to witness and participate in the national act for the sake of children’s love. And the fact that it is going to be opened by lullabies sung by the inimitable Nina Matviienko – is a good sign! (http://www.oreanda.ru)

 
NOTE: Volia Limited operates in more than 15 large cities of Ukraine, providing cable television and Internet access services to over 2.5 million
households. Volia was founded in 2000 by the SigmaBleyzer Emerging Markets Private Equity Management Company.  SigmaBleyzer manages funds and special investment companies worth over $1 billion, and from 1994 has invested in over 80 companies in Ukraine.  SigmaBleyzer is a member of the U.S.-
Ukraine Business Council (USUBC) in Washington, D.C.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
10.  UKRAINE’S CABINET AGAIN WORSENS FORECAST FOR DEFICIT OF BALANCE OF TRADE IN 2008
 
Interfax Ukraine, Kyiv, Ukraine, Tuesday, September 16, 2008

KYIV – Ukraine’s cabinet has increased the forecast for the deficit of the balance of trade for 2008 from $15.416 billion to $17.713 billion. The relevant forecast of the cabinet is stipulated in an explanatory note to the draft 2009 national budget.

“As a whole, goods and services exports in 2008 are expected at 38.2% [earlier, the government forecasted a 30.2% rise], imports by 47.7% [37.4%]. The deficit of the balance of foreign trade would be $17.7 billion,” reads the document.
According to the explanatory note, total exports of Ukrainian goods and services in 2008 would reach $88.449 billion, while imports would be $106.162 billion.
“The pace of growth in exports would be explained by a rise in Ukrainian production volumes, favorable international situation on the markets,[although a small fall in the prices of metals is possible, but they would remain high], the growth in demand on engineering products, and a rise in exports of agricultural products,” reads the document.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
==============================================================
JOIN THE U.S.-Ukraine Business Council (USUBC) www.usubc.org
Promoting U.S.-Ukraine business relations & investments since 1995. 
==============================================================
11.  UKRAINE RATINGS NOT AFFECTED BY GOVERNING COALITION BREAK UP SAYS S&P

Standard & Poor’s, London, UK, Tuesday, September 16, 2008

LONDON – The dissolution of the governing coalition in Ukraine is not unexpected, and will have no immediate impact on the sovereign credit ratings on the country (foreign currency, B+/Stable/B; local currency, BB-/Stable/B), international credit rating agency Standard & Poor’s (S&P) said on September 16, 2008.

Since the Orange Revolution in 2004 the frequent turnover of governments and the abbreviated electoral cycle has fostered pro-cyclical fiscal policy and
impeded progress on privatisation and structural reforms. Over the near term, the demise of the governing coalition may not wreak much macroeconomic
damage, as it could prevent the passage of another supplementary budget, and therefore lead to a tighter than previously anticipated fiscal stance.

Over the longer term, however, the dissolution further reduces prospects for reform as it ushers in the beginning of the campaign for presidential elections, scheduled for early 2010.

As long as the atmosphere remains politicised, there will be little room for consensus policy-making on key issues including any passage of further
anti-inflation measures, privatisation, or adjustment of debt issuance plans. Ukraine’s potential growth rate remains among the highest of all rated sovereigns.

However, as the global liquidity squeeze tightens, the fate of the economy hinges more than ever on what happens to the terms of trade, particularly to
steel prices, and prices of imported gas. For this reason, downside risks to growth over the medium term remain high and uncertain.

LINK: www.standardandpoors.com
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=========================================================

Receiving more than one copy of the AUR please contact us.
=========================================================
12.  UKRAINE CENTRAL BANK BROADENS ’09 HRYVNIA RATE VARIATION

 
By Natalya Zinets, Reuters, Kiev, Ukraine, Monday September 15 2008
 
KIEV – The council of Ukraine’s central bank said on Monday it would in 2009 broaden to five percent from four the variation to be allowed in the hryvnia currency’s forecast value of 4.85 to the U.S. dollar. Chairman Petro Poroshenko announced the change at a news conference that followed a council meeting.
 
Next year’s forecast, like this year’s adopted in July until the end of the year, assumes the same base rate of 4.85 hryvnias. “For now, the range of permitted variations has been broadened to 5.0 percent from 4.0 this year,” Poroshenko said.
He said that figure could be revised early next year depending on the budget to be adopted by parliament, the price to be paid for imported gas from Russia and the situation on international markets.
“It was agreed that the central bank will take a further look at exchange indicators,” Poroshenko said. “We firmly believe that on the bases of information available now, the range of permitted variation is to be expanded.” He also said he believed the hryvnia would remain within the permitted variation from now until the end of 2008.
“We believe that the forecast rate set at the last council meeting will hold throughout the year,” he said. “For now, we see no reason to review this regardless of the situation throughout the world.” There were no grounds, he said, for any further revaluation of Ukraine’s currency.
The central bank had maintained the hryvnia within a narrow corridor of 5.0-5.06 hryvnias for three years until it revalued the currency last May to 4.85. It has since made several adjustments, with the currency currently trading at that level.
Ukraine’s government last week approved macroeconomic indicators for 2009 that see inflation slowing to 9.5 percent in 2009 from a 2008 forecast of 15.9 percent and GDP growth of 6.0 percent against a 2008 forecast of 6.8 percent. (Reporting by Natalya Zinets, writing by Ron Popeski; Editing by Ron Askew)
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
13.  SPEAKER CRITICIZING NBU ATTEMPTS TO RETAIN INFLATION USING MONETARY WAY

Interfax Ukraine, Kyiv, Ukraine, Monday, September 15, 2008
 
KYIV – Ukrainian Rada Speaker Arseniy Yatseniuk is criticizing attempts of the National Bank of Ukraine to retain inflation using monetary means. During a meeting with students of the National Technical University in Zaporizhia on Friday, Yatseniuk compared this method to “stopping bleeding in the brain by applying a tourniquet to the neck.”
He said that a neutral position of the NBU would bring more positive results than the steps to cut credit activity and strengthen the national currency taken by the NBU.
 
“I don’t support the position of the central bank on the issue… restraining of inflation by monetary means cannot be seen in the modern Ukrainian economy,” he said. He said that one possible way to fight inflation is to make a cut in social payments. [Yatseniuk formerly served as the Minister of Economy and as the Minister of Foreign Affairs.]
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
14.  POLITICAL INSTABILITY IN UKRAINE FRIGHTENS INVESTORS,
SAYS HEAD OF AMERICAN CHAMBER OF COMMERCE IN UKRAINE
 
Interfax Ukraine Business Panorama, Kyiv, Ukraine, Monday, September 15, 2008
 
KYIV – The lack of political stability in Ukraine affects the country’s investment attractiveness, President of the American Chamber of Commerce in Ukraine Jorge Zukoski said in an exclusive interview with Interfax-Ukraine.
Today’s situation, with the lack of the political stability and lack of predictability of the business environment, causes the competitive level of Ukraine’s investment attractiveness to fall considerably. All countries compete to attract a limited amount of foreign direct investment funds and unfortunately, due to political instability, Ukraine is not competing well, he said.
He voiced confidence that the majority of foreign investors that have already invested into Ukraine will remain committed to the country. They will stay in Ukraine to develop their business, he said.
“However, the political instability in the country prevents it from attracting new investors. Most of them prefer not to invest in the Ukrainian market, as there are many other markets which are more stable and which can offer higher returns,” he said.
Zukoski said that a statement announced at the recent Ukraine-EU summit on the possible provision of the status of the associated member of the European Union to Ukraine and on the start of a dialogue on the introduction of non-visa regime was unlikely to radically change Ukraine’s investment climate in the eyes of investors.
“Businesses are very pragmatic, but this is a good sign for them,” he said. They will wait for further practical steps and will fix their eyes on Ukraine’s integration to Europe, he added.
He also said that Ukraine needs to conduct many reforms in legislation to improve its investment climate. He said that the adoption of the Tax Code of Ukraine is of top-priority, as is a law on joint-stock companies, which would protect the rights of minority shareholders.
——————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
15.  LEHMAN BROTHERS FALLOUT HITS UKRAINE HARD

 
bne Ukraine Daily List, Berlin, Germany, Tuesday, September 16, 2008

As we expected, the Ukrainian stock market sank like a stone yesterday on the back of global markets working out the Lehman Brothers bankruptcy shock, and so it was no surprise that by midday the PFTS stock exchange suspended trading to prevent a crash.

However, this did not help much, as in the end the PFTS Index fell by 5.9% while the broad-based Foyil Ukraine 40 Index suffered an even bigger loss of 9.4%. The stock trading volume was a meager USD 3.6m, while the steel stocks Zaporizhstal and Azovstal were what passed for the darlings of the market with the majority of the trading volume (26% in total).

The major price decliners were Sumy NVO Frunze (-17.7%) and Bank Aval (-14.3%), while the sectors that brutalized the Foyil 40 Index were construction (-36.6%), mining (-21.5%), and banks (-18.9%). As of today, only the rarely traded Zaporizh Ferroalloy remains on our YTD-gainers list. As of 11:15 today, trading on the main Ukrainian stock exchange was suspended again after a massive drop in quotes.

Alfa writes: The most oversold market
The PFTS Index is the most oversold market in the world, according to Bloomberg, and this trend will certainly be reinforced by the 5.9% decline seen on Monday.

 
The market has ignored the acceleration in GDP growth in 2M08 and two months of deflation, as the pending Lehman bankruptcy and poor expectations for UBS’s upcoming report has pushed stock markets down globally. In Ukraine, the official announcement of the break-up of the Ukrainian parliamentary coalition only adds nervousness to the market.

According to our estimates, there is still room for further correction on the market, with approximately 15% downside potential. However, the Ukrainian economy remains fundamentally sound, as it is not directly exposed to commodity bubbles. The major export commodity prices for steel and fertilizers are determined outside exchanges and directly between producers and consumers.

 
There are no instruments for speculators to gain exposure to these commodities, unlike oil, for example. The real estate sector is expecting a boom, especially as preparations gather pace for Euro-2012. All in all, it is hard to believe that the pending bankruptcy of Lehman will have any influence on real estate prices in Ukraine or on price instability on the steel and fertilizer markets.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
16.  UKRAINE WANTS BANKS TO BORROW $3.7 BILLION FOR MORTGAGES 

Reuters, Kiev, Ukraine, Tuesday September 16 2008

KIEV – Ukraine’s government on Tuesday asked its state banks to borrow up to $3.7 billion on foreign debt markets to fund mortgage lending in return for
raising their charter capital. Under the 2009 budget draft law, Ukraine’s Oshchadbank and Ukreximbank and the state mortgage institute will receive 500 million hryvnias (just over $100 million) to boost their charter capital.

“We are giving them the opportunity to borrow cheap money on foreign markets worth more than six times their charter capital,” Prime Minister Yulia
Tymoshenko said at a public presentation of the budget draft.

“This cash will be set at up to 18 billion hryvnias. It can be received via Oshchadbank and Ukreximbank with a minimal first down payment and at low
rates, naturally, for 25-30 years.”

The central bank has recently tightened consumer lending and increased payment requirements, worried that the domestic debt market would overheat and in an attempt to cool inflation. At the same time, the construction sector has slowed.

She did not say, however, who could lend to the banks under the current expensive and illiquid climate in the debt markets thanks to the credit crunch sparked last year by the collapse of low standard mortgage lending. (Reporting by Natalya Zinets; writing by Sabina Zawadzki)
——————————————————————————–

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
17.  UKRAINIAN STATE-RUN TV STRIVING TO OVERCOME FINANCIAL STRAINS

 
Delo, Kiev, Ukraine, in Russian 8 Aug 08; pp 8, 9. , BBC Monitoring Service, UK, in English, Tue, 16 Sep 2008
The management of the state-run UT1 TV channel has been trying hard to overcome the channel’s financial difficulties, the acting head of the State TV and Radio Company, Vasyl Ilashchuk, has said in an interview with a business daily. He said that the management has decided to declare redundant half of the channel’s personnel to be able to upgrade its technical equipment and launch new projects. He added, however, that the changes will be implemented gradually.
 
The following are excerpts from Ilashchuk’s interview with Olena Khladskykh entitled “Head of the first button” published in the Ukrainian business daily newspaper Delo on 8 August:
Our interview with Vasyl Ilashchuk was recorded the evening before his trip to the Olympic games in Beijing, which will be broadcast by the state-run UT1 channel. The acting president of the National TV and Radio company of Ukraine talked about his accomplishments during his first half year in the post, as well as how he plans to “freshen up” the channel.
[Delo] You came to the channel six months ago. Did you bring your team with you?
[Ilashchuk] Yes. I came with my three deputy heads. But the other three vice presidents used to work at the channel, too.
[Delo] Could you name the people you rely on.
[Ilashchuk] First Vice-President for Economic Issues Mikhail Koblya. He’s just a powerhouse when it comes to these affairs. He quickly learned the ropes of the television industry. And I can’t hide the fact that today he understands many things about television better than people who have worked here for years.
[Delo] Where is he from?
[Ilashchuk] He came from Khmelnytskyy. We have been working together for a long time. My second deputy is Roman Nedzelskyy (husband of the propresidential MP Oksana Belozir – Delo). He is the first vice-president for cultural issues. Television is a show. Roman had worked on a music channel for a long time and, as a result, he understands these issues. Vice-President Andriy Chernyuk also came to the channel. He had worked for national radio for a long time, and later on television in Chicago.
[Delo] What have you been able to accomplish over the past half year?
[Ilashchuk] I was surprised when asked just one week after my appointment: “Why is nothing changing at the channel?” Everything will change gradually. Sociologists say that two years are needed to radically change a channel. The first 25 per cent of these changes will already take place from 1 September. The second 25 per cent will probably happen from 1 January 2009. We cannot say that we’ will change everything 100 per cent, but we will change things gradually.
[Delo] So again what have you been able to accomplish?
[Ilashchuk] The channel will be on a satellite from 1 September. This is one of the most serious accomplishments. But the most important thing we have been able to achieve is to get the company onto clear and transparent books. I cannot catch fish in muggy water. It’s easier for me to work in clear water and see that fish. It makes the sport more interesting. The first half year we were learning the ropes of the television company where we’re working. We were busy with economic and technical issues. That’s the biggest problem for the company today.
[Delo] Did you buy any new equipment?
[Ilashchuk] We’re currently in the process of making these purchases. Everything depends on financing. Misunderstandings in the cabinet have seriously have let us down: they cannot make any changes to the budget. We have spent all our money on broadcasting the European football championship and Bartholomew’s visit (Ecumenical Patriarch of Constantinople – Delo).
 
Finances were shifted from December to July for us to cover some of our expenses. We have figured that it’s pointless to depend on the budget alone. We cannot take loans as we are a state structure. Everything points to the fact that the channel needs an individual budget or must engage in serious commercial activity to survive. [Passage omitted: Castings for new TV presenters are under way.]
[Delo] What is your position? What will you do with the personnel who, as is well known, make all the decisions?
[Ilashchuk] I’m convinced that 1,850 people is too much for a TV channel. Even yesterday at a meeting of the state TV and Radio committee I heard remarks that a maximum of 300-500 people work at other channels that broadcast 24 hours per day. Our channel broadcasts 18 hours per day because we share our frequency with Era (a TV and radio company controlled by opposition Party of Regions MP Andriy Derkach – Delo). But we still have this huge staff. It’s ineffective. People are used to just coming to work, sitting back all day and then getting their salary at the end of the month like in old times.
[Delo] If it’s not a secret, what is an overage wage at the channel? Do they get 500 dollars?
[Ilashchuk] I don’t want to name any figures because wages vary. These are questions for our accounting department.
[Delo] But are they lower than at commercial channels?
[Ilashchuk] Significantly lower. But we are prepared to take in serious specialists and get them serious salaries to improve our channel.
[Delo] How many people could you fire who are working today without detriment?
[Ilashchuk] Today we could easily get by if we fired no less than half our personnel. But we don’t want to hurt anyone. I had worked with these people for many years and for me to now say: “You’re not needed”… [ellipsis as published] That’s painful for a person to hear. People won’t understand this until certain professional norms are introduced. However, any company director knows full well who is redundant in his team and who he can go without.
[Passage omitted: repetition]
[Delo] What creative departments would you like to improve first?
[Ilashchuk] First off, I would strengthen the informational and analytical sphere as information and analysis are what television hinges on.
[Delo] So today you need editors and authors who could make analytical shows. Is this a weak link?
[Ilashchuk] It is not a weak link. The link simply does not exist. This is why we want to launch a weekly analytical show on Sundays as of 1 September that will summarize the week we have lived through. In fact, right now we are working on this project with analysts. We will have new projects from 1 September, 1 October and the New Year that I won’t talk about at the moment. Let it be a surprise for viewers.
[Delo] Today, the UT1 channel is starting to broadcast the Olympic games. But after the agreement with Inter [TV channel] to sublicense the broadcasting of the Olympics fell through (it was believed that the supermarker network Foxtrot would be the general sponsor for broadcasts of the games in Beijing), the National TV and Radio company of Ukraine wound up without any sponsors. In any case, one week before the games we were told at the UT1 channel: “Negotiations are under way.” Could you tell who will sponsor the Olympic broadcast now?
[Ilashchuk] Our commercial director could answer these questions. He handled the sponsor search. I’ll put it this way. I’m satisfied we are the only ones who will broadcast the Olympics. Just because we didn’t give a sublicense for the 2008 [European football] championship or the Olympics doesn’t mean we need money. No. The channels that wanted to buy the sublicenses from us just couldn’t meet our conditions. And they aren’t just our conditions, they are the conditions of the EBU (European Broadcasting Union – Delo).
[Delo] It’s a known fact that the cost of being a general sponsor dropped from $2.5 million, which was the initial offer. to $800,000 and then $400,000. The cost of the official and regular sponsorship also decreased twice to become $150,000. But regardless, as far as I understand, you still had problems finding a sponsor. Why?
[Ilashchuk] A minimum of one year is needed to find sponsors for such massive promotions like Eurovision or the Olympics. But when you go to a sponsor two months or a month before the event, when the companies’ budgets are already allocated to the end of the year, they can’t make this kind of commitment. How could we cope with this if Eurovision ended, the European football championship began, the European championship ended and then the Olympics started? We just didn’t have the human resources in our commercial department.
NOTE: The profile of Vasyl Ilashchuk, acting president of the National TV and Radio company of Ukraine.
Born on 20 July 1963 in Chernivtsi.
1990 – graduated from Chernivtsi State University with a degree in the Russian language and literature.
1981 – worked as a carpenter at the Chernivtsi furniture factory.
1981-1983 – served in the Armed Forces of the USSR.
1983-1992 – presenter of the TV and radio broadcasting committee of the Chernivtsi regional executive committee.
1992-1995 – presenter of the Chernivtsi regional TV and radio broadcasting union.
1995-1997 – presenter of the Chernivtsi regional state TV and Radio company.
1997-2008 – show host, presenter at the National TV and Radio company of Ukraine. For four years, he headed the production studio “Studio of exclusive TV shows”. The studio made over 50 episodes of documentaries “Along Ukraine’s roads,””Roads of Ukrainians” and others.
From January 2008 – an advisor to President Viktor Yushchenko. On 21 February 2008 appointed acting president of the National TV and Radio company of Ukraine.
——————————————————————————–
[return to index] Action Ukraine Report (AUR) Monitoring Service]
===================================================
Welcome to send us names for the AUR distribution list.
===================================================
18.  INTERNATIONAL INVESTORS ENDURE HARASSMENT IN UKRAINE
Maksim Birovash, Korrespondent, Kyiv Post, Kyiv, Ukraine, Thu, Sep 11, 2008
KYIV – When foreigners come to Ukraine to start their own small business, they often risk more than capital. They risk their health and possibly, even their lives.

When foreigners come to Ukraine to start their own small business, they often risk more than capital. They risk their health and, possibly, even their lives.
One common threat: the one two punch of local businessmen and officials who team up in envy against the successful foreign entrepreneur.

According to the World Bank, Ukraine ranked 145-th out of 155 countries in protection of foreign investors, despite attracting $36.5 billion in foreign investment since independence in 1991. Only Uzbekistan and some African countries ranked worse. The report concluded the situation is unlikely to change for the better in the next two years.
 
SWISS BUSINESSMAN MAURITS STAMM
This could mean more bad news – and bad beatings – for investors who follow in the unfortunate footsteps of Swiss businessman Maurits Stamm.
Stamm, 28, became the first foreign investor in the picturesque village of Bahva in the Cherkasy Oblast. In December 2007, he arrived to find fallow land. The collective turned private farms had gone bankrupt. The irrigation system had been destroyed by scrap hunters and much of the land had been taken over by local oligarchs to build their country villas.
The village residents said Stamm was a real ascetic. Until his company started bringing in a steady income, he lived in a repair shop for 18 months. A graduate of a provincial agricultural school, he invested 1.5 million euros into his Ukrainian farm. Within a year, he renovated an abandoned farm that soon became the first profitable enterprise in the area.
Stamm became a victim of his own success. The first person to show interest was Petro Yevych, then head of the Korsun Shevchenkivsky district administration, and now head of the agricultural firm RosAgro.
“He came together with his broadshouldered assistants and hinted that I have to hand my business over to him, or I would be in trouble,” Stamm said. The regional police department told Korrespondent, the Russian language sister publication of the Kyiv Post, that three of the visitors were members or coaches at the Cherkasy kickboxing club. Their second visit sent the foreign farmer to intensive care in Kyiv.
His misfortune is nothing unusual. Ihor Skoryk, analyst at the Center for Work with Foreign Investors, said that his organization recorded 1,500 violations of foreign investors’ property rights due to the whims of local authorities and businesses since early 2007.
Most victims speak out only after realizing that they are facing a much stronger opponent. While Stamm is facing only a former provincial government chief, wine importer Christina Xinias is fighting with a business partner in Kyiv who, she said, is backed by someone higher in the government hierarchy – the chief of the National Committee for Energy Regulation.
 
POLISH ICE CREAM MAKER WROBLEWSKI
Zbigniew Wroblewski, a Polish ice cream maker working in the Kyiv oblast, said he is losing his battle to one of Ukraine’s largest business groups. His compatriot, Dariusz Kwiecinski, has all but lost his business as a result of a decision to fire his local top manager.
“In most cases the local raiders attack businesses outside the capital,” said Dietrich Treis, head of the Association of Foreign Investors.
Local farmers say that in Stamm’s case the attack was out of envy. His company was paying over Hr 1,000 in wages to once destitute farmers, and, in return, they leased him more land in 18 months than the former government official, Yevych, had managed to rent for many years.
Apart from physical attacks, Stamm’s farm was set on fire. The very same people who had beaten him up organized several meetings with land owners, trying to persuade them to reclaim his land ownership certificates and, therefore, the land itself. But nobody would agree to it. Korrespondent contacted RosAgro for comments, but Yevych could not be reached.
Stamm has not recovered from the assault, but has maintained his company. His case is being monitored by the Cherkasy regional governor and the Swiss Embassy.
Stamm said that, despite his extreme investment experience, he will not leave Ukraine. “My whole life is in this farm. There is no way back,” he said, adding that he is considering hiring armed personal guards.
POLES IN TROUBLE 
The case of ice cream maker Wroblewski is not so straightforward. In 1997, he invested $11 million in a unique ice cream factory in the village of Kyselyovka in the Kyiv oblast. He said it had the potential to become a monopoly in the region, so the Privat business group became interested in it.
Wroblewski himself said the threat to his factory came as soon as he got Ukrainian shareholders. “When we were catastrophically short of revenue to start operating, I went to some people in a Kharkiv bank and offered them partnership for $4 million of additional investment,” he said.
KIB-Service, a Kharkiv company, and Cyprus registered Avagno Enterprises Limited both offered him investment in exchange for a share in the statutory fund of FermaKi, the company that owned the factory.
The money never materialized, but the Ukrainian partners had received enough statutory documents to attempt a takeover. “The documents I signed effectively gave my former partners a chance to take over the factory,” said Wroblewski.
In 2006 the Supreme Court confirmed that Wroblewski owned 100 percent of his company, while the General Prosecutor’s office started criminal proceedings against KIB-Service and Avagno Enterprises Limited, accusing them of largescale fraud. But Wroblewski’s joy was premature.
On Aug. 5, he lost the case in the High Economic Court in Kyiv, and almost immediately the greater part of his joint stock company was sold.
 
FELL VICTIM TO A TAKEOVER BY PRIVAT
The Polish investor said he fell victim to a takeover by Privat, a large business group led by oligarch Ihor Kolomoiskiy. Wroblewski has mentioned in many interviews to the Ukrainian press that the security company that seized his factory was connected to Biola food concern, where Kolomoiskiy is an investor.
Korrespondent contacted Biola, but their marketing department said they knew nothing of Wroblewski and had nothing to do with the takeover.
 
ANOTHER POLISH BUSINESSMAN FACED TROUBLE
Another Polish businessman, Dariusz Kwiecinski, is facing a different set of circumstances in Bibrka, Lviv oblast. After he dismissed his local manager from Polisyntez, a foamed polyurethane maker, a part of the 5 million euro factory was burned down.
 
His losses of 1.5 million euros and a cross left on top of the burned building were just the beginning of his troubles. The local council closed down the factory, claiming it threatened the environment, and a third of his company’s shares were quietly bought out by a third party.
“My partners and I realized that the dismissal, the fire, the local council ban and the purchase of shares were not a coincidence – they are links of the same chain,” said Kwiecinski. He stopped his investment projects and began extended court procedures. “Ukraine is a country where it’s impossible to defend your rights,” he said.
In some cases, Ukrainian business partners make it clear to the foreign investor that it makes sense for them to quit their business voluntarily to avoid hassles and expensive lawyers. The weightiest arguments for persuasion in such cases: high ranking state officials who turn out to be close relatives of the Ukrainian side.
 
GREEK BUSINESS LADY XINIAS
This was the case with Christina Xinias, a Greek business lady who founded wine importer and distributor DolmartUkraine 15 years ago. She said she started another company called Sommelier in 2006 to handle some aspects of the business, and appointed former commercial director of Dolmart, Anna Kalchenko, to run it.
Dolmart invested Hr 4 million into Sommelier, which later tried to take over the whole business, according to Xinias. “I have two letters that Sommelier sent to our suppliers saying that Dolmart went bankrupt, and their products will be imported to Ukraine by Sommelier,” said Xinias, who later sued Sommelier. On the eve of court hearings, strange things started happening at Dolmart. “Information started disappearing, then computers,” said Xinias.
Finally, she was paid a visit from an powerful guest, about whom she had heard many times before. It was Valery Kalchenko, the father of Anna Kalchenko and head of Ukraine’s energy regulating body. Xinias said he threatened “special interference” if Dolmart failed to withdraw its lawsuit. Korrespondent could not reach Anna or Valery Kalchenko for a response to the accusations.
According to the State Statistics Committee, in the first half of 2008 alone, foreign investors withdrew $500 million from Ukraine, and twice that in 2007. It was partly due to the stock exchange crash, but partly because of the problems facing foreign investors. The country’s president has only just noticed the trend, saying at a recent press conference that he was “concerned” by the scandals.
In the meantime, none of the cases are likely to be resolved soon. Investigation into Stamm’s case has been dragging for months, and no court hearings have been appointed. The ice cream maker Wroblewski describes his relations with Ukraine as “cold war.”
 
He and his embassy are desperately bombarding government organs with petitions, but getting nowhere. “Everything is within the frame of Ukrainian law,” Wroblewski quotes the most popular response.
 
ASSOCIATION OF FOREIGN INVESTORS
The cold shower of local realities has forced those investors who persist in staying in Ukraine to think about selfdefense. The Polish entrepreneurs united into the Association of Polish Businessmen, which grew to include representatives of other nationalities.
 
It was transformed into the Association of Foreign Investors, now headed by Treis, who also heads the Kyiv bureau of O.L.T. Ñonsult GMBH, a consultancy for foreign investors in Ukraine.
“After the cases of Stamm, Wroblewski and Kwiecinski, and a number of other outrageous reprisals, it is obvious that an organization is needed to defend the rights of foreign investors,” said Treis. He said a further increase in the number of disgruntled investors can lead to a chain reaction when other investment projects start closing down.
In the meantime, business investors are adapting to local economics, preferring to negotiate rather than fight. “You need to solve problems not with the police, but by negotiating with local authorities,” said the limping Stamm. LINK: http://www.kyivpost.com/business/29653
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
19.  UKRAINE PRESIDENT SAYS RUSSIA WANTS TO DESTABILIZE UKRAINE

 
By Maria Danilova, Associated Press (AP), Kiev, Ukraine, Tuesday, Sep 16, 2008  
 
KIEV, Ukraine – President Viktor Yushchenko accused Russia on Tuesday of trying to destabilize Ukraine by encouraging separatists in the Crimea, as fears grow about Russia’s willingness to throw its weight around the former Soviet Union.
In an interview with The Associated Press, Yushchenko sought to tamp down criticism of his leadership in Ukraine after the collapse of his pro-Western coalition raised the possibility of a third parliamentary election in as many years.
Russia’s war with Georgia last month rattled Yushchenko’s pro-Western government, which like Georgia has pushed for membership in NATO and the European Union. Many Ukrainians wonder whether Ukraine will be the next victim of Russia’s drive to stop NATO’s expansion to its borders.
Many fear Moscow could lay claim to Crimea, the Black Sea peninsula that once belonged to Russia and is now home to Russia’s Black Sea fleet. More than half its residents are ethnic Russians.
Yushchenko said Russia was interested in causing “internal instability” in parts of Ukraine. “Without a doubt, such scenarios exist,” he said.
“For some of our partners, instability in Ukraine is like bread with butter,” he said.
Yushchenko said Ukraine was too big and strong to give in to threats from Russia or a repeat of the war in Georgia, which resulted in Russia invading the country, routing its military and occupying large swaths of its territory. Moscow has recognized two breakaway Georgian regions as independent nations.
“Will they repeat the Georgian scenario?” Yushchenko asked. “For sure, no.”
“Ukraine is not Georgia,” he said. “I think that today to deal with a country like Ukraine in such an inconsiderate manner … is not a good idea for anyone.”
Russia wants to continue leasing the Sevastopol naval base in the Crimea from Ukraine after the current agreement expires in 2017. Yushchenko said the war with Georgia, with Russian warships based at Sevastopol participating, showed again that the Russian navy must leave Crimea.
Ukrainian officials also have accused Moscow of stirring trouble with claims that the Crimea belongs to Russia and by allegedly giving Russian passports to thousands of Crimeans to stoke separatist sentiments.
Yushchenko, who has made NATO membership the central theme of his four-year presidency, promised that Ukraine would eventually join the Western alliance, and he vowed to overcome domestic resistance to NATO. Opinion polls show more than half of Ukrainians oppose membership, with opposition strongest in the Russian-speaking regions in the east and south, including Crimea.
Yushchenko, wearing a striped black suit and red tie, spoke and gestured confidently during the 30-minute interview. His face looked nearly healed of the pock-like scars caused by the dioxin poisoning that briefly knocked him out of the 2004 presidential election race. He has suggested the near-fatal poisoning was masterminded in Russia.
Yushchenko spoke hours after his coalition was declared dead, starting a 30-day countdown for lawmakers to either form a new alliance or call elections.
Yushchenko said the collapse did not threaten the country’s tumultuous democracy. He accused his coalition partner Yulia Tymoshenko — the prime minister who was his ally in the 2004 Orange Revolution — of betraying national interests and acting selfishly.
The alliance between the two leaders’ parties disintegrated amid infighting ahead of the 2010 presidential election, in which both expect to compete.
Yushchenko’s allies pulled out of the coalition after Tymoshenko sided with opposition lawmakers to curtail presidential powers. Yushchenko again accused Tymoshenko of acting on the Kremlin’s behalf by failing to condemn the war in Georgia and of seeking to retain power at all costs ahead of the vote.
Tymoshenko said in a statement before the interview that she hoped Parliament would find a way out of the crisis. Analysts believe that the next coalition may include the Russia-friendly Party of Regions and be more responsive to Moscow’s demands.  [Associated Press writer Olga Bondaruk contributed to this story from Kiev.]
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
20.  UKRAINE’S RULING COALITION COLLAPSES, ELECTIONS LOOM 
By Daryna Krasnolutska and Halia Pavliva, Bloomberg, Kiev, Ukraine, Tue, Sep 16, 2008
KIEV – Ukraine’s governing coalition collapsed as the parties of President Viktor Yushchenko and Prime Minister Yulia Timoshenko failed to resolve their differences, pushing the country toward early elections.
Yushchenko’s party, which wants to forge closer ties with the European Union and the North Atlantic Treaty Organization, quit the coalition on Sept. 3, after Timoshenko’s bloc teamed up with the pro-Russian opposition to strip the president of some powers. The parties had 10 days to re-unite.
“A pro-Kremlin parliamentary majority has been de facto formed by Timoshenko’s alliance and the Party of Regions” led by former Prime Minister Viktor Yanukovych, said Vyacheslav Kyrylenko, a member of Yushchenko’s Our Ukraine party. “Our Ukraine has no other choice but to officially announce it is now in opposition.”
Yushchenko and Timoshenko teamed up four years ago to win the 2004 election in the bloodless Orange Revolution on promises to steer the country toward the EU and NATO. After a split in 2005, the two parties reformed an alliance before last year’s elections. This time they clashed over policies such as ways of damping Europe’s fastest inflation and the sale of state assets.
‘STORM IN A TEACUP’
The collapse of the coalition will probably delay Ukraine’s bid to join NATO and the EU, Oleksandr Lytvynenko, a political analyst at the Kiev-based Razumkov Center, said by phone today.
“The government will keep working, no matter what,” Timoshenko said. “These events in the parliament that happened today aren’t very pleasant, but, after all, it’s a storm in a teacup, no more than that.”
Yushchenko condemned Russian rolling over Georgia’s army and recognition of the two Georgian breakaway regions. His officials said Timoshenko did not back him because she is seeking Russian support in Ukraine’s presidential election, scheduled for 2010. Timoshenko rejected the accusation, saying she is for “Georgian territorial integrity.”
Ukraine’s aspiration to join the North Atlantic Treaty Organization and the EU has pit it against Russia since the Orange Revolution. Russia, which does not want its influence in the region to be eroded, threatened in February to aim missiles at Ukraine, a main conduit for Russian natural gas and crude oil exports to Europe, if it joins the military alliance.
U.S. Republican vice-presidential nominee Sarah Palin has said she favors NATO membership for Ukraine and Georgia, even though that might commit the U.S. to a war with Russia.
ONE MONTH
Timoshenko now has one month to form a new coalition, most likely with Yanukovych. The Communist Party and an anti-NATO group may also be included in the government. Yushchenko has twice threatened to dissolve parliament should the premier fail to win enough support.
“We will probably have early elections, I do not see any possibility for a new coalition,” said Lytvynenko. “There will not be a major winner from the elections, but Yanukovych and Timoshenko will probably have more benefits from them, while Yushchenko and his party will probably lose.”
The earliest possible date for an election would be December.
“Moscow will welcome political changes in Ukraine that weaken the pro-NATO and pro-Georgian Yushchenko,” Tanya Costello, the London-based director for Eurasia Group, said in an e-mailed note. “The perceived involvement of either Washington or Moscow in supporting one party over another would accentuate existing tensions over NATO enlargement into the former Soviet space.”
PRICE GROWTH 
Ukraine wants to bring inflation below 10 percent to spur growth and raise living standards in the former Soviet republic, where around 8 percent of the population lives in poverty. Spending this year helped boost the inflation rate to a record 31.1 percent in May, prompting Standard & Poor’s to cut the country’s credit rating.
Inflation has been at 10 percent or above since 2003. Organizations including the International Monetary Fund have urged Ukraine to run a budget surplus to quell price growth.  Timoshenko said today at a Cabinet meeting that she would implement policies to cut the inflation rate to below 10 percent in 2009.
The yield on the 4.95 percent bond due October 2015 climbed 10 basis points to 10.69 percent, the most since it was sold in October 2005. The yield on the 6.875 percent bond due March 2011 jumped 23 basis points to 9.19 percent.
Stock trading was suspended more than once today, according to the Kiev bourse’s Web site. The benchmark PFTS Index dropped 14 percent, extending a 5.9 percent decline yesterday.
The hryvnia, which the central bank manages through sales and purchases on the foreign-exchange markets, fell for a second day, dropping to 4.8272 per dollar, from 4.7800 yesterday. [To contact the reporter on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net.]
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
Please contact us if you do not wish to receive the AUR.
===================================================
21.  DEFENDING UKRAINE: WHERE ARE KIEV’S NUKES WHEN WE NEED THEM?

 
OP-ED: By Doug Bandow, Eureka Reporter, Eureka, CA Sunday, Sep 14 2008
 
The crisis over Georgia has abated, but its ramifications will only increase. What of Ukraine? The question worries people across Europe and especially those in Ukraine.
When the Soviet Union broke up, thousands of nuclear weapons remained in Ukraine, Kazakhstan and Belarus. One of America’s principal foreign policy goals became disarming these inadvertent nuclear weapons states.
The objective was valid, but there were countervailing foreign policy interests. As we have just seen with Georgia, the Soviet breakup, a sudden response to the USSR’s worsening internal political crisis, did not necessarily result in final boundaries. The events of 1989 sowed the seeds of future conflict.
The removal of nuclear weapons from Belarus and Kazakhstan proceeded with minimal controversy. More complicated was the case of Ukraine. The new nation had a population of 52 million and tore a huge hole in not just the Soviet Union, but also what had been imperial Russia. Although independence sentiment long permeated western Ukraine, ethnic Russians, who make up about 20 percent of the total population, predominated in the south and east.
Moreover, the Crimean Peninsula — in which 58 percent of the people are ethnic Russians, and many of whom retain Russian passports — only became part of Ukraine in 1954, a then-meaningless geopolitical gift from Ukrainian Nikita Khrushchev, who succeeded Joseph Stalin as the USSR’s Communist Party general secretary. When the Soviet Union broke up, Russians and many Crimeans believed that Crimea should revert to Russia.
Despite their general euphoria at escaping from Soviet control, some Ukrainians perceived clouds on the horizon. They believed that their unexpected nuclear force could act as a source of national pride and military security. The denuclearization process stretched out more than two years, as first Ukraine’s president temporized and then the parliament resisted.
There were dissident American voices also. For instance, John Mearsheimer of the University of Chicago argued: “It is imperative to maintain peace between Russia and Ukraine. That means ensuring that the Russians, who have a history of bad relations with Ukraine, do not move to reconquer it.
 
Ukraine cannot defend itself against a nuclear-armed Russia with conventional weapons, and no state, including the United States, is going to extend to it a meaningful security guarantee. Ukrainian nuclear weapons are the only reliable deterrent to Russian aggression.” All other things being equal, it was better that Ukraine not have an atomic capability, but all other things were not equal.
Today Ukraine faces a resurgent Russia and the bear is in an ugly mood. While an attempt at outright annexation seems unlikely, agitation by Russian nationalists about the Crimea grows louder as many ethnic Russians living in Crimea express their support for returning to Russia.
President Yushchenko warns that “What has happened [in Georgia] is a threat to everyone, not just for one country. Any nation could be next, any country.” Moreover, a split has developed between Yushchenko and Prime Minister Yulia Timoshenko, who appears to have become the government leader with whom Moscow can do business.
 
All of this would make for interesting political theater if the U.S. and Europe were not involved. But Washington has invested heavily in the Yushchenko government, just like Georgia’s Saakashvili government.
President Yushchenko offered to give the U.S. and Europe access to Ukraine’s missile warning systems. Most importantly, he supports Ukrainian NATO membership, which includes an American defense guarantee. That might be the best option for Ukraine, but it certainly isn’t a good policy for the U.S. or Europe. Going to war with Russia — which in this case means peering into the nuclear abyss — over Ukraine is little more palatable than doing so for Georgia.
For this reason NATO membership isn’t an effective guarantor for Kiev. Just joining the alliance won’t ensure that the other members will be prepared to confront Moscow militarily in a crisis. Imagine, however, if Ukraine had kept a few of its Soviet-era nuclear weapons and missiles. Talk of Russian pressure, let alone attack, would disappear.
 
Ukraine would be more secure, without having to hope for rescue from the West. The U.S. and Europeans would not find themselves pushed to defend a country with no intrinsic security value to them. They would not be contemplating a policy of confrontation with a nuclear-armed power.
There obviously would be downsides to Kiev’s possession of a nuclear arsenal, and the past cannot be reclaimed, but there is a lesson to be learned for the future: idealistic policies adopted in haste might actually make the world more dangerous. If America and Europe eventually find themselves at war in Ukraine, they are likely to rue the day the final Ukrainian nuclear warhead was sent back to Russia.
NOTE: Doug Bandow is the Robert A. Taft Fellow at the American Conservative Defense Alliance. He is a former special assistant to President Ronald Reagan and the author of several books, including “Foreign Follies: America’s New Global Empire.”
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
22.  SEPARATING U.S. RHETORIC FROM REALITY ON RUSSIA

 
ANALYSIS & COMMENTARY: Jonathan Russin, Leonid Sevastianov, Tom Thomson
Moscow Times, Moscow, Russia, Wednesday, September 17, 2008 

After U.S. elections, the new president’s tough rhetoric on Russia will most likely be exchanged for pragmatism to manage the common political and economic interests that bind the two countries together.

The five-day war between Georgia and Russia moved the foreign policy debate of the U.S. presidential campaign from theory to the frightening reality of an international crisis that might chill relations for some time.

 
The presidential candidates, Republican John McCain and Democrat Barack Obama, both condemned Russia’s actions, but their individual approaches to Russian ties are significantly different. Would their campaign statements on Russia be the same if they were the president?

Before the fighting began last month, McCain harshly criticized Moscow at every turn and singled out Prime Minister Vladimir Putin in particular. He suggested removing Russia from the Group of Eight and denying World Trade Organization membership as punishment for what he called its autocratic behavior, civil liberties violations and attempts to rebuild the Soviet empire.

Now, McCain says Russia’s invasion of Georgia confirms that its leaders, “rich with oil wells and corrupt with power, have rejected democratic ideals and the obligations of a responsible power.” But, he adds, “I’ll work to establish good relations with Russia so we need not fear a return to the Cold War.”

Obama, too, was critical of Russia’s record in democracy, human rights and aggressive behavior toward its neighbors before the war, and when fighting started he forcefully condemned the Kremlin for its policy toward Georgia.

But Obama urges restraint in the U.S. response and advocates a policy of constructive engagement on international terrorism, nuclear proliferation, energy security, Iran, North Korea and other vital common strategic interests.

Is McCain using sharp campaign rhetoric to build support among foreign policy hawks in the Republican Party and to attract like-minded voters in the Democratic Party and among independents? Or was he trying to articulate a “McCain Doctrine” on U.S. policy toward Russia?

Is Obama’s less confrontational approach toward Moscow, as well as the administration of President George W. Bush for being distracted by Iraq and not developing policies to deal with a resurgent Russia, a campaign ploy to gather votes from disaffected Republicans and to shore up his Democratic Party base? Or will a policy of firmness and engagement with the Kremlin be at the core of an Obama administration’s policies toward Russia?

U.S. history has repeatedly demonstrated that campaign positions on Russia do not necessarily become the basis for the president’s policy toward Moscow. The presidential candidate who was most critical of Russia has often become a strategic partner on controlling nuclear proliferation, fighting terrorism or improving trade.

During the Cold War, each Republican and Democratic presidential candidate took hard-line stances toward the Soviet Union. But even during the Cuban missile crisis, U.S. President John F. Kennedy and Soviet leader Nikita Khrushchev started secret negotiations and signed the Limited Test Ban Treaty in 1963.

Strained relations also failed to dissuade U.S. President Richard Nixon from making a bold diplomatic initiative to visit Moscow in 1972 to hold a summit with Soviet leader Leonid Brezhnev that reduced tensions and promoted greater cooperation. Nor did they give pause to U.S. President Ronald Reagan to work together with Soviet leader Mikhail Gorbachev to bring the Cold War to an end.

In the post-Soviet period, Russia’s political ideology changed, but the campaign rhetoric of the U.S. presidential candidates often mirrored the Cold War period. In the 2000 campaign, Bush said Russia was in danger of reverting back to the days of the Soviet Union under former KGB colonel Putin. But in his first meeting with Putin as president, Bush said he looked into Putin’s eyes and saw someone he could trust.

The personal chemistry between President Dmitry Medvedev and the next U.S. president also will determine largely whether Moscow and Washington have a foreign policy of cooperation and healthy competition or confrontation.

If modern history is any guide, the next U.S. president, despite the tone of his campaign rhetoric, will likely follow in the footsteps of predecessors such as George H.W. Bush vis-a-vis Gorbachev and Bill Clinton vis-a-vis President Boris Yeltsin.

But history and personal chemistry are by no means the only factors. McCain or Obama will inherit a policy framework of treaties and agreements that were initiated by prior U.S. presidents and played significant roles in defining the U.S.-Russian relationship, including WTO accession negotiations, the Nunn-Lugar programs to transform warheads into nuclear fuel and the International Space Station. A U.S.-Russia Strategic Framework Agreement signed in April was aimed to preserve a multibillion-dollar economic engagement between Russia and the United States.

Even at the lowest points of the heated debate between the United States and Russia about proposed U.S. missile-defense sites in Central Europe or NATO membership for Georgia and Ukraine, important policy initiatives remained intact.

Now, the policy framework is again being tested by the armed conflict in Georgia. Washington withdrew a joint civilian nuclear cooperation agreement from congressional consideration, and it will be less vocal in supporting Russia’s WTO accession. But both initiatives could be reinvigorated with gradual improvements in relations. Expect the U.S. business community to lobby the next White House for policies to expand commercial opportunities in Russia.

The U.S. policy debate on whether to engage or isolate Russia will intensify. It is, however, clear that relations must be pragmatic and recognize interdependencies in economic development, energy security, fighting terrorism and controlling nuclear proliferation.

 
The challenge for the next U.S. president in working with Medvedev and Putin will be to address such issues with sound judgment and an acute awareness of the consequences for failing to meet this responsibility.

NOTE: Jonathan Russin, Leonid Sevastianov and Tom Thomson are partners in RST International, a business and strategic communications consultancy based in Moscow and Washington.  LINK: http://www.themoscowtimes.com/article/1016/42/371001.htm
——————————————————————————–

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=========================================================
JOIN THE U.S.-Ukraine Business Council (USUBC) NOW
Promoting U.S.-Ukraine business investments since 1995. www.usubc.org
=========================================================
23.  THE CASE AGAINST ADMITTING GEORGIA AND UKRAINE TO NATO

 
ANALYSIS & COMMENTARY: By Chuck Spinney, Huffington Post, USA, Mon, Sep 15, 2008
Putin’s and Medvedev’s stroke in Georgia has placed the Bush Administration (not to mention the legacy of Clinton’s policy of militarizing humanitarian intervention) on the horns of dilemma that threatens to make both the Bush Administration’s policy of messianic unilateralism and the United States an international laughing stock.
On the one hand, under the Trojan Horse of promoting democracy with bombs and bullets or by using political fronts like the National Endowment for Democracy to meddle in or rig local elections, the Clinton and Bush Administrations created a situation where today the US reserves the right to intervene anywhere in the world, including the backyard of any regional power, like Russia.
 
Our own actions show that the goal of promoting democracy is a Trojan Horse, however. When a party we do not like — e.g., Hamas — wins a relatively fair election, Bush, like his predecessors, has worked to undo the result and promote a less democratic alternative.
 
Promoting democracy does not matter, because the game has degenerated into unlimited greed — i.e., grabbing or controlling energy sources and/or transfer routes and pumping ever-increasing gobs of money into the Military-Industrial-Congressional Complex or MICC, which in theory should have shrunk drastically, once its raison d’etre — the Cold War — disappeared.
On the other hand, Bush refuses to repudiate the Monroe Doctrine, which asserts that no European (or now Asiatic) power can be allowed to meddle or intervene in the Untied States’ backyard, and which we now define as the entire western hemisphere — even though that doctrine has been construed in the past to be consistent with the right of the United States to prop up vicious dictatorial governments (e.g., Samoza in Nicaragua), oppose legitimately elected governments (e.g., Allende in Chile), or annex land which was held by others before President Monroe proclaimed his doctrine (e.g, Mexico or Spain).
The message delivered by Russia’s lightning move into Georgia (which it should be remembered was triggered by Georgia’s invasion of South Ossetia, with the tacit, if not overt, encouragement of politicians in the United States) should be obvious: unlimited ambitions in someone else’s backyard can not be achieved with limited resources, and behavior that assumes otherwise makes one look like a fool. The Russian stroke showed everyone how the US Emperor had no clothes.
Nevertheless, the message seems to have been lost to the self-referencing leaders of Versailles on the Potomac. Notwithstanding the fact that Russia just demonstrated how a small military force could easily make a joke of Article 5 of the NATO treaty (which says an attack on one is an attack on all), Vice President Cheney subsequently visited Ukraine and Georgia to reassure the leaders in each country that it is in the undying strategic interest of United States to defend both countries by getting them into NATO as fast as possible.
 
The Europeans are justifiably getting nervous, as can be seen in Sarkozy’s rush to cut a cease fire deal between Russia and Georgia, as well as the EU’s tepid response to Russia’s stroke into Georgia.
European nervousness ought to be understandable. Unlike the United States, which experienced a relatively small loss of human life and almost no material damage to its civilian infrastructure in World Wars I and II or the Cold War (even at Pearl Harbor, the targets were largely military and any civilian damage was what the Pentagon would today call “collateral damage”), the Europeans — including, perhaps especially, the Russians — learned the hard way in the 20th Century that messianic unilateralism is a prescription for unending conflict and cultural collapse, not to mention mass material destruction, and huge losses of life.
 
After all, it was Michael Gorbachev’s Soviet Union that ended the Cold War, dissolved the Warsaw Pact, and peacefully withdrew from from Eastern Europe, and then dissolved itself, after being promised by President G.H.W. Bush that NATO would not expand into the void created by the dissolution of the Warsaw Pact — a promise subsequently broken by the Clinton Administration and then again by the current Bush Administration.
Nevertheless, Cheney’s strange gambit in Georgia and Ukraine still forces one to ask the question: Should these countries be put under the blanket protection of Article 5 of the NATO Treaty?
Sir Malcolm Rifkin, a former British foreign secretary, recently penned an excellent analysis explaining why it is a delusion to think that the members of the NATO Alliance can — or should — place Georgia and the Ukraine under the protection of Article 5.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
24.  UKRAINE: U.S. SHOULD HAVE NO DOG IN THIS FIGHT 
 
OP-ED: by Doug Bandow, National Interest, Washington, D.C., Tue, Sep 9, 2008

Washington has become an ugly place. Eight years of bitter Republican attacks on Bill and Hillary Clinton have been followed by eight years of bitter Democratic attacks on George W. Bush and Dick Cheney. But this venom cannot compare to the tidal wave of political hatred that has recently overwhelmed Ukraine’s capital of Kiev.

Four years ago the Bush administration actively intervened in a disputed presidential election between Viktor Yushchenko—aided by Yulia Timoshenko—and Viktor Yanukovich. Yushchenko sold himself as the pro-American candidate and charged Yanukovich with electoral fraud.
 
Yushchenko enjoyed manifold advantages in Washington: sympathy after his apparent poisoning by dioxin, the aid of his politically well-connected American wife, the fact he and many of his supporters spoke English and the aid of America’s Ukrainian diaspora, which, like him, largely hailed from nationalistic western Ukraine.
 
The United States and the European Union, aided by the NGO community, applied diplomatic pressure and spent freely to advance Yushchenko’s campaign.
Yet the issue was always more complicated than the good-versus-evil meme sold in the West by Yushchenko’s backers. In fact, both candidates were backed by oligarchs; Timoshenko herself had been charged with making money in the old-fashioned, corrupt way.
 
Both Yushchenko and Yanukovich wanted to exploit an economic opening to the West while preserving good relations with Russia—their differences were more in degree than in kind. While there was undoubtedly electoral cheating, it was not clear if enough votes had been stolen to change the result.
 
Yanukovich was far more popular than Washington wanted to acknowledge, reflected in the fact he currently heads the largest party in parliament.
Since then politics in Kiev has at times approached comic-opera status. Yushchenko and Timoshenko quickly fell out. Yushchenko dumped Timoshenko and made Yanukovich prime minister. After another election and divided outcome Yushchenko turned back to Timoshenko. They’ve since fallen out even more bitterly than before.
 
Yushchenko threatened to fire her once again; his aides accused her of treason for refusing to back his anti-Russian course. She threatened to impeach him and teamed up with Yanukovich to push legislation to curb Yushchenko’s power.
 
She and Yushchenko are expected to battle for the presidency in 2010, but rumors are floating in Kiev that Timoshenko and Yanukovich have cut a deal to create a new parliamentary coalition and for him to run for a weakened presidency while she remains prime minister. But Yanukovich’s party has fractured, with a faction backing Yushchenko. So it’s not clear that he could deliver enough votes for such a switch.
Now Yushchenko has moved to break the coalition. We have been left hanging, a bit like a season ending episode of a long-running TV series. Whether he and Timoshenko will heal their breach, Timoshenko and Yanukovich will form a new alliance, or Ukraine will go to the polls is all up in the air. The saga continues.
If it wasn’t apparent to Washington before, it should be now: politicians in Kiev are out for themselves, not for the United States. Washington is seen—especially by Yushchenko—as a valuable ally, but factional infighting takes precedence over philosophical principle and international friendship. Whoever ends up in control is likely to balance relations with Washington and Moscow.
 
While Yushchenko has tied himself more closely to America, he has proved to be the least competent and least popular of the big three Ukrainian politicians. It looked like a good bet in 2004, but it has not paid off. The game wasn’t worth playing.
There is an obvious lesson to take from Ukraine’s bizarre political maneuvering: absent unusual circumstances, the United States should stop trying to pick favorites in messy, unpredictable political systems.
[1] First, Washington rarely ‘gets it.’ The United States could have worked with any of the Big Three as president. Yushchenko might have been a bit better from America’s perspective, but his embrace of Washington in part reflects his increasing desperation as his political prospects have fallen. The potential benefit to America of favoring one political faction over another was always small.
[2] Second, there’s no guarantee of success. The United States ‘won’ in Ukraine, but has lost badly in Pakistan, where it was allied to president Pervez Musharraf. As his standing with the Pakistani public plummeted, so did Washington’s reputation.
 
Even after his party was brutalized in parliamentary elections earlier this year, the Bush administration continued to lecture Pakistanis about why they should leave Musharraf in power. This futile blustering only highlighted Washington’s loss of influence.
[3] Third, even Washington’s friends always will put their own political interests first. Prime Minister Nouri al-Maliki was supposed to be the Bush administration’s man in Baghdad. However, he torpedoed Washington’s grand plans for a permanent, or at least long-term, military presence in Iraq. America found that its puppet had become an independent nationalist looking to his political future in a country liberated by American arms.
[4] Fourth, intervening often triggers unexpected and costly consequences. Ostentatious U.S. backing for Yushchenko, as well as for Mikheil Saakashvili in Tbilisi, spurred Russian counter-efforts and increased Moscow’s suspicion of U.S. policy in the Caucasus, Baltic region and Eastern Europe.
 
Washington’s claim that NATO expansion had nothing to do with Russia was met with understandable incredulity in Moscow. American political intervention in Russia’s neighbors clearly contributed to Russia’s brutal response to Georgia’s attack on South Ossetia—Moscow was intent on teaching a lesson to the Bush administration as well as the Saakashvili government.
Obviously, Washington finds it difficult to resist the temptation to meddle in the affairs of other nations, even ones with minimal relevance to U.S. geopolitical interests. The cold war saw endless intervention, often with disastrous consequences: the Nicaraguan Sandinistas and Iran’s Islamic revolutionaries were but two ugly negatives of American policy. U.S. meddling today is usually less malign, but often no less misguided.
Nobody knows how Kiev’s political soap opera will end, but Washington should relax. Its influence over the outcome is limited and its interests are not likely to be dramatically affected irrespective of the results. It is time for America to learn from its past mistakes and make humility one of its chief watchwords in the future.

NOTE: Doug Bandow is the Robert A. Taft Fellow at the American Conservative Defense Alliance. He is a former Special Assistant to President Ronald Reagan and the author of several books, including Foreign Follies: America’s New Global Empire (Xulon).

 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
25.  CRIMEA: DIVIDED PENINSULA PLAYS HOST TO RUSSIAN WARSHIPS AND UKRAINIAN PRIDE
Tensions have risen since the war in Georgia and Kiev’s plans to join Nato
Luke Harding in Sevastopol, The Guardian, London, UK,  Tuesday September 16 2008 
 
SEVASTOPOL – From his giant monument overlooking Sevastopol, Vladimir Lenin gazes dreamily out towards the Black Sea. In the harbour, elderly ladies in floral swimming costumes bob in the warm lilac water. Shimmering in the distance is the grey Russian battleship Moskva, framed by steep chalky-coloured mountains.
 
The port of Sevastopol on Crimea’s rocky southern coast is the historic home of Russia’s Black Sea fleet. After the break-up of the Soviet Union, Ukraine allowed Russia to lease Sevastopol as a military base until 2017.
But after last month’s war in Georgia the peninsula is at the centre of growing speculation. The fear is that – like South Ossetia and Abkhazia, the breakaway regions of Georgia recognised by Moscow as independent – it could become the target of Russian ambitions.
Earlier this month Ukrainian officials accused Moscow of distributing passports to ethnic Russians in Crimea, who make up more than half of its two-million population. Kiev fears a row over the use of the base could be used to stir up separatist sentiments, with Crimea seceding from Ukraine in a referendum.
On the streets of Sevastopol, the mood is defiantly pro-Russian. It is also vehemently opposed to Ukraine’s President Viktor Yushchenko and his plans to join Nato. Last week, several hundred locals turned out to welcome the Moskva on its return from Georgia. They waved Russian flags and banners; one read: “We are proud of you.”
“The majority of the population here supports the presence of the Black Sea fleet,” said Anatoly Kalenko, chairman of Sevastopol’s veterans’ association, and a former nuclear submarine commander. According to Kalenko, locals would resist any attempt to turf out the Russian fleet, especially if Nato ships would occupy the base instead.
“We categorically don’t want other vessels here. Not the Americans, not the French and not the Turks,” he said. “Britain has a tradition of seafaring. We respect that; we remember Nelson. But frankly we don’t want you here either.’
His association did not believe in separatism, he explained, but was opposed to any attempt to remove the Soviet memorials that adorn the town’s hilly streets. Pinned to his wall was a map of the USSR; above the desk a portrait of Lenin. Popular feeling against Nato was running high, he said, since it was an “aggressive” military bloc.
Even before last month’s war, tensions were rising. In May – on the anniversary of Russia’s victory over Nazi Germany – Moscow’s mayor, Yuri Luzhkov, visited Sevastopol and said it “was, and should again be, a Russian city.” Ukraine’s furious government accused him of undermining its territorial integrity and banned him from returning.
There have been angry clashes in Sevastopol between Ukrainian nationalists and pro-Russian locals. In July, Ukraine’s defence minister unveiled a plaque to commemorate Ukraine’s brief declaration of independence in 1918. Someone removed it from the wharf, next to the statue of Russian war hero Admiral Nakhimov, and threw it into the sea.
Many of the peninsula’s politicians admit they would like Crimea to join the Russian Federation. “It’s a myth that Ukraine is not part of Russia. We don’t believe it,” Oleg Rodilov, a pro-Russian MP in Crimea’s autonomous parliament, based in the regional capital of Simferopol, said. It would be wrong to accuse him of “separatism”, he said.
“For you, Ukraine and Russia are a priori different states. For us they are a priori the same,” he said. The links of culture, language and Orthodox religion made Ukraine and Russia an indivisible entity, he said. Also, both countries were Slavic, he said. “We don’t believe there is any difference. We have been together for 350 years.”
Russian-speaking residents say the peninsula, a mass tourist destination in Soviet times, ended up in Ukraine by mistake. The Soviet leader Nikita Khrushchev transferred Crimea to the Ukrainian Soviet Republic in 1954. Russia affirmed the modern borders of Ukraine in a 1997 friendship treaty. Last April, however, Vladimir Putin, Russia’s prime minister, contemptuously described Ukraine as “not even a real state”.
Nationalist Crimean MPs now liken Crimea to Kosovo – the former Serbian province largely recognised as independent by the west this year. According to Leonid Grach, a pro-Russian communist MP, Crimea will declare itself independent should Yushchenko press ahead with his plans for Ukraine to join Nato.
 
“If Yushchenko declares that Russia is the enemy, Crimea won’t accept it,” Grach said. “It means that Ukraine will break up. In Crimea there will be a war – maybe even a world war.” Ukraine should renounce Nato, agree a friendship and cooperation treaty with Russia, and prolong the lease for Russia’s Black Sea fleet, Grach said.
Nobody doubts that staging a coup in Sevastopol would be easy. The Russian flag already flies above many of the town’s elegant and classical Stalin-era buildings belonging to the Black Sea fleet. Locals would merely need to tie up a few Ukrainian officials. Ukraine’s government would be reluctant to reclaim the town by force, fearful of provoking an all-out military conflict with Russia.
“I wouldn’t be too sad if Ukraine breaks apart. Everything would be in its right place again,” Raisa Teliatnikova said. Teliatnikova is head of Sevastopol’s Russian Community – one of several non-governmental organisations that promote Russian culture and language, and, its critics say, the views of Moscow.
Teliatnikova rejects the suggestion that her organisation is a Kremlin front.
 
“This is our land. My father and uncle fought for this territory during the Great Patriotic War [the second world war]. Why should we leave?” she said. “Nobody asked us whether we wanted to live in Ukraine. None of us are intending to go anywhere.”
There is no clear evidence to suggest that Russia has, as Kiev suggests, been doling out passports to ethnic Russians living in Crimea. But Moscow has been stepping up its influence: the flag of the pro-Kremlin United Russia party sits in Raisa’s office, situated above a dancing club and next to an acting school. Earlier this summer the party agreed to finance the Russian community’s newspaper – a small but insidious step.
Russian officials insisted yesterday that the number of Crimeans applying for Russian passports was “pretty much the same”. Vladimir Lysenko, of Russia’s consulate in Simferopol, said about 13,000 Russians lived and worked in the port. “Russia doesn’t lay any claims on Sevastopol. We don’t understand declarations from western politicians who say Ukraine ‘will be next’.”
Optimists believe talk of Russia wresting back Crimea from Ukraine is simply overblown. Crimea’s third ethnic group – the Tartars, descended from the peninsula’s Turkic inhabitants – are strongly pro-Ukrainian. Mustafa Djemilev, a pro-Yushchenko MP, believes Russia would not attempt a Georgian-style invasion in Crimea.
“The idea is nonsense. Ukraine is not Georgia or Chechnya – Ukraine is much more powerful,” he said.
BACKSTORY
Modern Crimea’s ethnic problems go back a long way. The peninsula – with its vineyards, mountains and deep natural bays – has long been attractive to invaders. These have included Scythians, Greeks, Ottoman Turks, Russians, and the British and the French, who bombarded Sevastopol during the 1854-55 Crimean war. The Nazis occupied Crimea, too, before the Red Army drove them out. But it is the Russian influence that has proved most enduring.
 
Catherine the Great annexed Crimea in 1783, after defeating the Ottoman Turks. Since then Sevastopol has been synonymous with Russian heroism. The local Black Sea fleet museum houses exhibits from the port’s tumultuous past, including a guitar played by a sailor who took part in the 1905 Sevastopol uprising on the battleship Potemkin.
 
LINK: http://www.guardian.co.uk/world/2008/sep/16/ukraine.russia
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
26.  GEORGIA NOW, UKRAINE NEXT

 
Analysis & Commentary: by Bernardo V. Lopez, Business World
New Manila, Quezon City, Philippines, Wednesday, September 17, 2008 

The Georgian conflict is but the tip of the iceberg. There are 144.2 million ethnic Russians in 14 former Russian republics across the vast Caucasus, posing a dilemma. Ukraine is the potential powder keg. Getting NATO membership may trigger a civil war.

 
Ukraine has the biggest ethnic Russian populace at 46 million. Although this comprises a mere 17.3%, they are concentrated in Crimea, where they are the majority at 58.0% of total population. Geopolitical observers now talk of a new Crimean war. The catalyst for conflict is not percentage but concentration. Putin threatened to “dismember” Ukraine if it gets NATO membership.
Russian occupation of northern Georgia sent fear across the pro-Western Ukrainian bureaucracy. Russian Bloc Party leader Gennady Basov says, “Ukraine is easy to split, it is two different countries.” The economy of the east depends on Russia, of the west on Europe. The language in the east is Russian, in the west Ukraine. The religion in the east is Orthodox, in the west Roman Catholic.
The ethnic Russian populations in Latvia and Estonia are small but comprise a huge 40% of total. Prominent ethnic Russian enclaves in the entire Caucasus include Abkhazia and Ossetia in Georgia, Crimea in Ukraine, Trans-Dniestria in Moldova, and Nagorno-Karabakh in Azerbaijan. Abkhazia and Ossetia are exceptionally concentrated and huge, which has triggered armed breakaway factions that have irritated the Georgians. This in turn triggered the shelling of Ossetia.
 
The Georgians first asked “approval” from their American brothers to ensure backup. However, the Georgians felt abandoned because the US military bluff did not work, and plans for economic sanctions are breaking down because of EU energy-related resistance. Meanwhile, an indefinite Russian presence (peace-keeping forces) in Ossetia is hinted by trenches now being dug in the outskirts of Gori.
The domino effect of the Georgian affair of breakaway enclaves launching separatist civil wars poses a dilemma for the entire Caucasus, but only for republics which, first, have a big ethnic Russian populace, and second, have become pro-Western.
 
The pro-Western republics include the so-called GUAM group of Georgia, Ukraine, Azerbaijan, and Moldova, plus Estonia, Latvia and Lithuania, which are mainly on the western border of Russia to Eastern Europe, the potential “conflict corridor” where US missiles in Poland and Czechoslovakia are just west of these republics.
 
Poland has been attending GUAM summit meetings. Uzbekistan changed its mind and fled the GUAM group. Pro-Russian republics include Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Armenia, and Belarus, which are mainly on the south and southeastern border of Russia, which is not a potential conflict zone.
It is not important if a country is small. If it is near the Russian border, and allows deployment of US-NATO missiles or is provided military support or is simply pro-Western, there is a confrontation problem. If it has a large ethnic Russian populace, the ingredients for not only civil war but also invasion, as in Georgia, are there.
 
The candidates for this type of situation are Azerbaijan, Lithuania, Estonia and Latvia. The Lithuania-Estonia-Latvia triumvirate is a very dangerous flashpoint because these are now NATO members but have a high concentration of ethnic Russians and are very close to the Russian border.
The Georgian affair has splintered NATO because Germany and Italy are two of Russia’s largest gas customers. When Russia temporarily shut down one cold winter the gas pipelines to the EU passing through the Ukraine to pressure Ukraine to reduce its huge transit fee, Europe literally froze. The EU dilemma is that it is caught between US military pressures to sanction and contain Russia via NATO and its vital energy links.
US-NATO missiles in Poland and Czechoslovakia are viewed as a “security guarantee,” but this may ironically be a “security threat.” Once these are deployed, the specter of a nuclear first-strike looms, as Russia will not permit nukes in its backyards. Russian General Anatoly Nogovitsyn says “Poland, by deploying [the missiles], is exposing itself to a nuclear strike 100 percent.” It is the Cuban crisis in reverse.
 
The US thinks this is an empty threat. It has not learned a lesson in the Georgian conflict where the Russians called its bluff. Russia denies plans to deploy counter-missiles in its Baltic border, the conflict corridor. If they do, the missiles would probably be in the Russian border facing Estonia, Latvia, Lithuania, and Ukraine.
The US, through Western media articles, talk of “punishing” Russia for its Georgian caper, not realizing it is simply a reaction to NATO expansionism that the US started in the first place. It is the US which has to be punished for placing the entire Caucasus in a state of potential conflict because of its goal to control “energy corridors.”
 
The US reaction is understandable because its bluff did not work and it has lost credibility among its allies in the entire Caucasus as their protector and savior.  LINK: http://www.bworldonline.com/BW091708/content.php?id=144
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
“ACTION UKRAINE REPORT – AUR”
A Free, Private, Not-For-Profit, Independent, Public Service Newsletter

With major support from The Bleyzer Foundation, Kyiv, Ukraine
Articles are Distributed For Information, Research, Education, Academic,
Discussion and Personal Purposes Only. Additional Readers are Welcome.
LINK TO THE AUR 2008 ARCHIVE: http://www.usubc.org/AUR/
SigmaBleyzer/The Bleyzer Foundation Economic Reports
“SigmaBleyzer – Where Opportunities Emerge”
 
The SigmaBleyzer Emerging Markets Private Equity Investment Group and The Bleyzer Foundation offers a comprehensive collection of documents, reports and presentations published by its business units and organizations.
 
All publications are grouped by categories: Marketing; Economic Country Reports; Presentations; Ukrainian Equity Guide; Monthly Macroeconomic
Situation Reports (Romania, Bulgaria, Ukraine).
 
You can be on an e-mail distribution list to receive automatically, on a monthly basis, any or all of the Macroeconomic Situation Reports (Romania,
Bulgaria, Ukraine) by sending an e-mail to mwilliams@SigmaBleyzer.com.
“UKRAINE – A COUNTRY OF NEW OPPORTUNITIES”
 
TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
If you would like to read the ACTION UKRAINE REPORT- AUR, several times a month, please send your name, country of residence, and e-mail contact information to morganw@patriot.net. Information about your occupation and your interest in Ukraine is also appreciated.
 
If you do not wish to read the ACTION UKRAINE REPORT please contact us immediately by e-mail to morganw@patriot.net.  If you are receiving more than one copy please let us know so this can be corrected. 
 
SPAM & BULK MAIL BLOCKERS ARE A REAL PROBLEM                 
If you do not receive a copy of the AUR it is probably because of a SPAM OR BULK MAIL BLOCKER maintained by your server or by yourself on your computer. Spam and bulk mail blockers are set in very arbitrary and impersonal ways and block out e-mails because of words found in many news stories or the way the subject line is organized or the header or who know what.
 
Spam blockers also sometimes reject the AUR for other arbitrary reasons we have not been able to identify. If you do not receive some of the AUR numbers please let us know and we will send you the missing issues. Please make sure the spam blocker used by your server and also the one on your personal computer, if you use a spam blocker, is set properly to receive the Action Ukraine Report (AUR).
HOTMAIL.COM AND YAHOO.COM

We are also having serious problems with hotmail and yahoo servers not delivering the AUR and other such newsletters. If you have an e-mail address other than hotmail or yahoo it is better to use that one for the AUR.
 
ACTION UKRAINE PROGRAM – SPONSORS
“Working to Secure & Enhance Ukraine’s Democratic Future”

1.  THE BLEYZER FOUNDATION, Dr. Edilberto Segura,
Chairman; Victor Gekker, Executive Director, Kyiv, Ukraine;
Additional supporting sponsors for the Action Ukraine Program are:
2. UKRAINIAN FEDERATION OF AMERICA (UFA), Zenia Chernyk,
Vera M. Andryczyk, President; Huntingdon Valley, Pennsylvania
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, kau@ukrnet.net
4. RULG – UKRAINIAN LEGAL GROUP, Irina Paliashvili,
President; Kyiv and Washington, general@rulg.com, www.rulg.com.
5. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/
6. U.S.-UKRAINE BUSINESS COUNCIL (USUBC), Washington,
D.C., Promoting U.S.-Ukraine business investments since 1995. Join Now
USUBC LINK: http://www.usubc.org
7. UKRAINIAN ORTHODOX CHURCH OF THE USA, Archbishop
Antony, South Bound Brook, New Jersey, http://www.uocofusa.org
8. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
9. U.S.-UKRAINE FOUNDATION (USUF), Nadia McConnell, President;
John Kun, Vice President/COO; http://www.USUkraine.org
10. WJ GROUP of Ag Companies, Kyiv, Ukraine, David Holpert, Chief
Financial Officer, Chicago, IL; http://www.wjgrain.com/en/links/index.html
11. EUGENIA SAKEVYCH DALLAS, Author, “One Woman, Five
Lives, Five Countries,” ‘Her life’s journey begins with the 1932-1933
genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
12. ALEX AND HELEN WOSKOB, College Station, Pennsylvania
13. SWIFT FOUNDATION, San Luis Obispo, California
14. DAAR FOUNDATION, Houston, Texas, Kyiv, Ukraine.
 
PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer, The Bleyzer Foundation
Emerging Markets Private Equity Investment Group;
President, U.S.-Ukraine Business Council (USUBC)
1701 K Street, NW, Suite 903, Washington, D.C. 20006
Tel: 202 437 4707; Fax 202 223 1224
 

Power Corrupts and Absolute Power Corrupts Absolutely.
========================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
========================================================

Leave a comment

Filed under Uncategorized

AUR#906 Sep 15 What Does Russia Want? How Do We Respond?; Missile Defenseless; U.S. On The Hook

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

Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World       
                     
ACTION UKRAINE REPORT – AUR – Number 906
Mr. Morgan Williams, Publisher and Editor, SigmaBleyzer
WASHINGTON, D.C., MONDAY, SEPTEMBER 15, 2008
 
INDEX OF ARTICLES  ——
Clicking on the title of any article takes you directly to the article.               
Return to Index by clicking on Return to Index at the end of each article
1.  WHAT DOES RUSSIA WANT? HOW DO WE RESPOND?
Lecture: by Steven Pifer, Visiting Fellow, The Brookings Institution
Scowcroft Institute Lecture, George Bush School of Government and Public Service
Texas A&M University, College Station, Texas, Thursday, September 11, 2008
Action Ukraine Report (AUR), Washington, D.C., Monday, September 14, 2008
 
2 GEORGIA’S FUTURE: WHAT THE WEST WANTS 
Opinion: By Denis Corboy, William Courtney, and Kenneth Yalowitz
International Herald Tribune (IHT), Paris, France, Sunday, September 14, 2008
 
Analysis & Commentary: By Dick Morris, The Hill, Wash, D.C., Mon, Sep 8, 2008
 
Analysis & Commentary: by Doug Bandow, National Interest, Wash, D.C., Tue, Sep 2, 2008
The United States is on the hook for Ukraine
Analysis & Commentary: By Diane Francis, National Post, Don Mills, Ontario, Canada, Mon, Sep 8, 2008
 
The Associated Press, Washington, D.C. Friday, Sep 12, 2008
 
Ukraine desperately needs a new generation of politicians 
Editorial: Kyiv Post, Kyiv, Ukraine, Thursday, September 11, 2008  
 
Reuters, Ottawa, Ontario, Canada, Saturday, Sep 13, 2008
 
9WILL PUTIN UNITE EUROPE?
Op-Ed: by Jan Pieklo, European Voice, Brussels, Belgium, Thursday, September 4, 2008
 
10GEORGIA-INVADING TROOPS LEAVE STALIN SHRINE INTACT. PITY.
Op-Ed: By Lubomyr Luciuk, Special to Kyiv Post
Kyiv Post, Kyiv, Ukraine, Thursday, September 11, 2008
 
11 LITTLE SOUTH OSSETIA: GREAT OPPORTUNITIES                                                                          
Analysis: by Lada L. Roslycky, Harvard Black Sea Security Program
Cambridge MA, USA Thursday August 21, 2008
Agence France Presse (AFP), Kiev, Ukraine, Saturday, Sept 13, 2008
 
13GEORGIA WAR SPARKS POLITICAL BATTLE IN UKRAINE 
The ruling coalition is near collapse as the president and the prime minister spar over whether to treat Russia as foe or friend.
By Megan K. Stack, Staff Writer, Los Angeles Times, Los Angeles, CA, Sun, Sep 14, 2008
Editorial: The Irish Times, Dublin, Ireland, Monday, Sep 8, 2008
 
AFP, Sevastopo, Ukraine, Sunday, 14 September 2008
 
16.  UKRAINE OFFICIAL: ODESSA-BRODY A RUSSIAN MONOPOLY BUSTER
United Press International (UPI), Kiev, Ukraine, Friday, Sept. 12, 2008

17.  ENERGY OPTIONS FOR UKRAINE SEMINAR
“Achieving National Security for Ukraine Through Energy Independence and Diversification”

WHEN: Monday, September 15, 2008, 6:30 pm – 9:30 pm (Eastern Time)
WHERE: Rome Auditorium, Rome Building, Johns Hopkins University
1619 Massachusetts Avenue, N.W., Washington, D.C. 20036

18 MCDONALD’S UKRAINE OPENS FAST-FOOD RESTAURANT NUMBER 60

Ukrinform, Kyiv, Ukraine, Wed, August 27, 2008
 
Olena Honcharenko, Ukrainian News Agency, Kyiv, Ukraine, July 21, 2008
The Day Weekly Digest, Kyiv, Ukraine, Tuesday, July 8, 2008
 
Genocide caused the death of millions of Ukrainians in 1932-1933 
By Clark Kim, Inside Toronto, Toronto, Ontario, Canada, Tue, Sep 9, 2008 
 
Robert Fulford, National Post, Don Mills, Ontario, Canada, Sat, Sep 13, 2008
 
Chance discovery leads couple to visit relatives in native land, re-establishing
ties and leading them to a new business “All Things Ukrainian.” 
By Lisa O’Donnell, Journal Reporter, Winston-Salem Journal
Winston-Salem, North Carolina, Saturday, September 13, 2008
=========================================================
1
WHAT DOES RUSSIA WANT? HOW DO WE RESPOND?

LECTURE: By Steven Pifer, Visiting Fellow, The Brookings Institution
Scowcroft Institute Lecture, George Bush School of Government and Public Service
Texas A&M University, College Station, Texas, Thursday, September 11, 2008
Action Ukraine Report (AUR), Washington, D.C., Monday, September 14, 2008
Seven years ago today, al-Qaeda launched attacks against New York and Washington, and caused a fundamental change in how the United States views threats to its national security.  Just a little over one month ago, Russian tanks rolled into Georgia and reminded us that, while confronting the threat posed by international terrorism, we cannot overlook the more traditional challenges to American security interests.
 
Today, I propose to address four subjects concerning Russia:  First, what does Russia want from the outside world?  Second, how did the U.S. government reach the point in this key bilateral relationship where it has so few tools to influence Kremlin behavior?  Third, how should we now think about the balance between punishing and engaging Russia?  Fourth, what are the options for the United States to respond?
 
RUSSIA IS BACK 
 
In the aftermath of the collapse of the Soviet Union in 1991, the Russian people passed through turbulent times.  The 1990s were a grim period:  adjusting to the loss of empire; an economic collapse worse than the Great Depression; and a political system that, while incorporating democratic practices, often appeared chaotic and corrupt.
 
For many Russians, the nadir came in 1998, when an enfeebled President Boris Yeltsin led an unstable government, economic crisis struck, and the financial system collapsed.  Since then, Russia has experienced a remarkable economic resurgence and demonstrated that assumptions in the 1990s about its long-term weakness were not well-grounded.
 
Rising prices for natural gas and oil exports fueled the recovery.  By 2008, gross domestic product topped $1.3 trillion, four times the level in 1998.  Russia’s international reserves today total more than $580 billion, and the Kremlin has established stabilization and national wealth funds that exceed $160 billion.  Living standards are rising.  Rightly or wrongly, the Russian population gives much of the credit to Vladimir Putin, who served as president from 2000 to earlier this year, when he became prime minister.
 
Moscow’s foreign policy has over the past several years adopted an increasingly assertive tone.  To put the Kremlin’s message in a slogan:  Russia is back.  And, given a widely shared belief among Russians that the West took advantage of their weakness in the 1990s, Russia is back with a chip on its shoulder.
 
Georgia last month experienced just how large that chip is.  This is not to fix all the blame for the August conflict on Russia.  Georgian President Mikhail Saakashvili’s decision to send his army into South Ossetia on August 7 was ill-advised.  He should have known that Moscow would not accept a Georgian bid to change the status of South Ossetia by force.  The American narrative on the conflict sometimes overlooks this.
 
The speed of the Russian military response nonetheless was breathtaking.  It suggests the Russians had planned and prepared to carry out a major combined arms operation in advance.  They were awaiting a pretext.  Saakashvili provided one.  The scale of Russian operations made clear that they were not just about South Ossetia.  Those operations and Moscow’s subsequent decision unilaterally to recognize South Ossetia and Abkhazia as independent states reflected the Russians’ broader unhappiness with Georgia’s pro-Western foreign policy course.  They aimed to send a message not just to Tbilisi, but to other Russian neighbors, Europe and the United States as well.
 
WHAT DOES RUSSIA WANT?
 
 
As we consider the challenge that Russia poses today, it makes sense to ask:  what does Russia want?  Let me offer five suggestions.
 
FIRST, Russia wants to develop its own political and economic model, free of criticism from the West.  As the Russians struggled in the 1990s to transform their political institutions, they welcomed democracy promotion assistance.  But, for many Russians today, the 1990s experience with democracy evokes bad memories.  They associate democracy not just with chaos and corruption, but with economic uncertainty and the country’s economic collapse.
 
Thus, when Putin began to roll back the democratic advances of the previous decade, he faced little pushback from a population that first and foremost valued economic security.  Relatively few Russians protested the roll-back, which included eliminating the direct election of regional governors, sharply reducing the independence of the judicial and legislative branches, and bringing the major television networks under Kremlin control.
 
To be sure, Russians today enjoy more individual liberties than during Soviet times.  But by any objective measure, democracy is significantly weaker than it was ten years ago.  One basic criterion:  is the outcome of elections uncertain?  However flawed the 1996 Russian presidential ballot in which Yeltsin won reelection, there was uncertainty about the outcome.  There was no uncertainty when Putin ran for reelection in 2004, or when Dmitriy Medvedev, Putin’s designated successor, ran for president this spring.
 
In the early Putin years, Kremlin pundits spoke of “managed democracy.”  More recently, they have talked of “sovereign democracy.”  Its key feature appears to be that it is solely up to Russia to decide its form of government, without Western interference.  The Russians want no lectures, no advice, no criticism about how they structure their internal institutions.  In their current robust economic circumstances, they feel they can ignore any lectures, advice or criticism that the West might offer.
 
SECOND, Russia wants a sphere of influence in the former Soviet space.  As Russia has regained its strength, it has escalated its expectations regarding its neighbors’ policies and behavior.  Moscow does not seek to recreate the Soviet Union, but it does seek special deference in the former Soviet space to what it defines as its vital interests.  President Medvedev recently cited a sphere of influence – or sphere of “privileged interests” – as one of five key principles underlying Russian foreign policy.
 
Russia’s stance has become most pointedly evident with regard to how it views the relationships between its neighbors and NATO.  Although the Ukrainian government has sought constructive relations with Moscow in parallel with its pro-European, pro-Euro Atlantic course, the Russians insist the Ukrainians make a choice:  either NATO and Europe, or good relations with Moscow.  Interestingly, the shrillness of Russian rhetoric only increased after NATO leaders at the April Bucharest summit failed to reach consensus on giving Ukraine a NATO membership action plan.
 
Georgia’s expressed desire to join NATO predates Ukraine’s.  Russia has over the past eight years applied even more intense pressure on Georgia, resorting to trade embargos, energy cut-offs, border closings, the occasional air raid and last month a full-scale military offensive.  The Abkhazian and South Ossetian problems simmered for more than 15 years in large part because the Kremlin chose not to use its influence to resolve them; it instead kept the disputes alive as pressure points to exploit against Georgia.
 
Russia should have influence with its neighbors, and they with Russia.  The problem is that Russia sees its sphere of influence largely in zero-sum terms:  Moscow regards steps by Ukraine, Georgia or other neighbors to draw closer to Europe and the West, or by Western states or institutions to engage these countries, as a threat to Russian interests.
 
THIRD, Russia wants a seat when major European or global issues are being decided and to have its views accommodated.  Moscow insists on this regardless of whether or not it can bring something to the table to facilitate resolution of the problem. 
 
Russia regularly has a seat when major issues are discussed, but Moscow has not always been a helpful participant.  On how to deal with Kosovo’s desire for independence, Russia rejected the proposal advanced by the United Nations point-man.  In the subsequent EU-U.S.-Russian mediation attempt, the Russians put forward no new or creative ideas but instead slavishly backed Serbia’s refusal to concede independence.
 
Long a participant in the Middle East quartet, Moscow’s embrace of Hamas last year did little to facilitate the thorny effort to promote peace between Israel and the Palestinians.  Moscow stands today the most important player in the effort to persuade Iran to desist from its effort to acquire nuclear weapons.  The Russians certainly do not want a nuclear-armed Iran.  But Russia’s broad geopolitical and economic interests with the Iranians mean that Russian diplomats spend as much time watering down proposals for UN sanctions against Iran as they do pressuring Tehran to end its nuclear enrichment effort.
 
So Russia sits at the table, even if it does not always exercise influence to promote solutions.  Russian leaders assert that no world problem can be resolved without their participation; simply being there appears important to Moscow, something seen as part of Russia’s due as a recovered great power.
 
FOURTH,
 Russia does not seek isolation and wants better relations with Europe and the United States, but on its terms.  Autarky makes little sense for the Kremlin.  Integration has spurred Russian economic growth.  Medvedev recognizes this and talks about integrating fully into the global economy and a greater Europe.  The Russians would like better relations with the West, but they insist that that be on Russia’s terms.  This appears to include recognition of a Russian sphere of influence in the former Soviet space.
 
Just two weeks ago, Foreign Minister Sergey Lavrov made this point explicitly.  He said the United States and the West must choose between support for Georgia and good relations with Russia.  The Kremlin feels its energy exports to Europe give it leverage to insist on its terms.  Western Europe receives 20-30 percent of the natural gas that it uses each year from Russia or from Central Asia via pipelines that transit Russia.  This dependence emboldens the Kremlin. 
 
FIFTH,
 Russia wants freedom for its major economic entities to take part in global commercial and investment markets.  This is smart for the Russian economy, as Russian companies derive significant profits from overseas operations and access to foreign capital markets.  A major goal of Russian foreign policy is to support the penetration of large companies, such as Gazprom, into global markets. 
 
The Kremlin decries efforts to limit or scrutinize the activities of Russian companies, for example, European questions regarding potential Gazprom investments in pipelines or energy distribution firms.  At the same time, the Russian government carefully scrutinizes and, in some cases, limits or thwarts parallel attempts to invest in Russia.
 
THE PRICE OF NEGLECT IN U.S.-RUSSIAN RELATIONS 
 
Russia’s assertive course has left the United States struggling for ideas on how to respond.  This was painfully evident in August, as reports came in of Russian tanks moving into South Ossetia and then into undisputed Georgian territory.  Administration officials looked for ways to influence the Kremlin but found that the thin state of the U.S.-Russia relationship yielded few useful levers.  Bilateral relations had deteriorated to the point where there was little cooperation that the U.S. government could threaten to halt that the Russians cared much about.
 
U.S.-Russian relations have declined markedly since May 2002, when Putin hosted President George Bush to a summit meeting in Moscow.  The two leaders signed the Strategic Offensive Reductions Treaty and issued joint statements outlining broad areas for cooperation, from economics and energy to missile defense and people-to-people contacts.  Officials on both sides spoke of a qualitative change in the relationship, one that would move increasingly to partnership and, on some issues, alliance.  But that meeting proved the high point of Bush-Putin summitry; thereafter, it was all downhill.
 
Washington and Moscow share responsibility for the downturn, but the effects are now being felt more acutely on the Potomac.  More so than any other bilateral relationship, U.S.-Russian relations require focused attention and guidance from the top.  After 2002, however, the two presidents became distracted with other issues.  Bush focused on Iraq; his administration did not see Russia as all that relevant for its key policy goals.  For his part, Putin focused on increasing the Kremlin’s hold on key domestic power levers.
 
As presidential attention turned elsewhere, the National Security Council and its Kremlin counterpart failed to press their bureaucracies to implement presidential commitments.  For example, neither the Pentagon nor the Russian Ministry of Defense showed much interest in missile defense cooperation in 2002-2003, regardless of what the presidents said. 
 
Despite promises to Putin, the White House failed to move to persuade Congress to graduate Russia from the Jackson-Vanik amendment.  Despite the presidential launch of a commercial energy dialogue, the Russians showed little interest in allowing American companies to invest in developing Russian energy and realize the dialogue’s potential.
 
One other problem on the American side complicated management of U.S.-Russia relations.  While bureaucratic in nature, it had strategic ramifications.  Many of the key questions in U.S.-Russian relations – bilateral issues, strategic arms control, missile defense, Iran and NATO enlargement – have been handled by different interagency groups. 
 
In each group, American officials understandably sought positions to maximize U.S. interests.  But the system lacked a mechanism to review the overall U.S.-Russia relationship.  If one truly sought to change the relationship qualitatively and build partnership relations, one could not “win” on every issue with Moscow.  Allowing the Russians a couple of “wins” was a necessary investment for a new relationship, an investment that the Bush administration proved unready to make.
 
Drift turned to clear decline in 2004, as the extent of Russia’s democratic roll-back became clear.  The Rose and Orange revolutions in Georgia and Ukraine caused new anxieties within the Kremlin, which regarded those events not as manifestations of democratic unrest but as U.S.-organized special operations to hem Russia in.  At the same time, the more assertive Russian stance in the region raised alarm in Washington.
 
Difficult problems thereafter piled up, with no resolution, including:  Iran’s nuclear effort, U.S. missile defense deployments in Europe, the fate of strategic arms control, Kosovo’s status, NATO outreach, and the adapted treaty on conventional forces in Europe.  The result of this deteriorating relationship hit home when the Georgia crisis erupted: concern about the relationship with the United States did not give the Kremlin any reason for pause before it sent its forces into South Ossetia and Georgia, and with a military response clearly not in the cards, the U.S. government could threaten little that had serious impact on Russian decision-makers.
 
SHAPING A RESPONSE – WASHINGTON’S DILEMMA
 
Washington and the West now face the challenge of shaping a response in light of Russia’s August actions.  Some suggest punishment and isolating Moscow.  Proposed measures include halting ongoing diplomatic discussions, booting Russia out of the G-8, and blocking Russian entry into the World Trade Organization and Organization for Economic Cooperation and Development.  Others suggest a boycott of the 2014 Olympic Games, scheduled to be held in Sochi, which just happens to border Abkhazia.
 
The logic behind such suggestions is understandable.  By its military action against Georgia and unilateral attempt to redraw post-Soviet borders, Russia has egregiously violated international rules.  If the international community does not respond, it runs the risk that Moscow will conclude it can take such actions in the future without penalty. 
 
On the other hand, does isolating Moscow offer the wisest course?  Some areas of cooperation, such as controlling nuclear materials, make sense even if relations are at a low point.  Getting Russia into the World Trade Organization and OECD would encourage Russia to play by the rules of institutions that have served the United States and the West well.  Likewise, participation in the G-8 creates incentives for more cooperative Russian approaches to problems on the G-8 agenda.
 
Threats to exclude Russia may well be useful, because the Kremlin cares.  Secretary Condoleezza Rice’s convening of teleconferences among the G-7 foreign ministers sent a useful reminder to Moscow that the G-8 format is not sacrosanct.  Actually excluding Russia on a permanent basis, however, could undermine U.S. and Western interests as well as punish Moscow.
 
We also need to be careful about a spiral of tit-for-tat exchanges.  The Kremlin has some serious cards to play:  the Russians could withhold oil from the global market, tamp down gas flows to Europe, use their veto more actively in the UN Security Council, or dump the U.S. treasury notes that they hold.
 
Crafting a policy response to Russia requires a deft balance.  It is important to make clear to the Kremlin the unacceptability of its assertion of a sphere of influence that denies its neighbors the freedom to choose their own foreign policy course.  Moreover, it is unwise to let Moscow conclude that its pressure tactics have succeeded at little or no cost.
 
At the same time, the West retains an interest in Russian cooperation on numerous issues.  The West likewise has an interest in seeing Russia become a stakeholder in the existing international order.  That requires, of course, that Russia accept and play by international norms and rules.
 
We should want Russia to choose integration and cooperation over self-isolation.  And, just as it was a mistake in the 1990s to assume long-term Russian weakness, we should not now overestimate Moscow’s strength.  In the coming years, Russia faces significant vulnerabilities:  overdependence on energy exports, lack of a diversified economy, fragile infrastructure, abysmal demographics.  Russia may come to see integration in its interest.
 
THE CONTINUING U.S. INTEREST IN COOPERATION 
 
Despite the current chill with Moscow, Washington and the administration that takes office in January 2009 will have an interest in exploring whether U.S.-Russian relations could be put on a more solid footing. 
 
FIRST, securing Russian help in controlling nuclear materials, pressuring Iran not to acquire nuclear arms, and countering international terrorism is in the U.S. interest.  While we may be thoroughly and rightly unhappy with Russian behavior in Georgia, it makes no sense to ignore these vital interests.
 
SECOND, the greater the interest that Moscow has in the bilateral relationship, the greater the leverage Washington has with Moscow.  Building areas of cooperation not only advances specific U.S. policy goals, but it can give Washington things to threaten should Moscow misbehave – or better yet give reasons that dissuade Moscow from misbehaving in the first place.  We should seek to have more levers than was the case in August.
 
THIRD, institutions such as the World Trade Organization and NATO-Russia Council can advance U.S. goals.  Provided that Russia is prepared to accept the norms of those institutions, the United States has every reason to be inclusive.  Having Russia at the table in a cooperative frame of mind is vastly preferable to a self-isolated, truculent Russia that tries to undermine those institutions or create alternatives.
 
HOW DOES THE UNITED STATES RESPOND? 
Finding the combination of carrots and sticks to influence Moscow to adopt the right course poses a challenge and will require a subtle, nuanced approach.  Washington, unfortunately, does not do subtlety and nuance well, normally preferring to operate in black and white.  A number of options are on the table for punishing Russia, including:  ratcheting down bilateral ties; threatening exclusion from key international institutions; and calling into question the Sochi Olympics.  Russian oligarchs, who enjoy traveling in the West and keep much of their money here, may offer another pressure point.
 
At the same time, the incoming administration should consider ways to give a new substance and tenor to bilateral relations.  The next president can develop options to advance specific U.S. national interests and, by broadening the relationship, secure greater influence with Moscow.
 
FIRST, revive the nuclear arms reduction process.  The Bush administration signed the Strategic Offensive Reductions Treaty in 2002 and then essentially shut down nuclear arms control.  The 2002 treaty allows the United States and Russia each to deploy 2200 strategic nuclear warheads.  Those levels exceed deterrent requirements and make no sense today. 
 
Moreover, America’s impressive conventional force advantages give it every incentive to deemphasize nuclear weapons.  The United States could ensure its security at a level of 1000 strategic warheads.  An American offer to reduce to such a limit, accompanied by ancillary limits on missiles and bombers, would find resonance in Moscow.  The Russians have an aging nuclear force and would welcome lower numbers.
 
Such an offer would be good not just for reducing the nuclear threat to the United States.  It could exert a positive impact on the broader bilateral relationship.  The Russians value a nuclear arms dialogue with Washington in part because such a dialogue acknowledges Russia’s standing as a nuclear superpower.  Washington should take advantage of this.
 
In the 1980s, President Ronald Reagan skillfully made nuclear arms reductions a central element of a broader agenda with the Soviet Union.  Reagan and Secretary George Shultz recognized that the Kremlin’s interest in arms control created diplomatic space and opportunities to press other questions such as human rights.  Their strategy succeeded:  as Reagan and Mikhail Gorbachev signed a treaty banning medium-range missiles, parallel discussions won exit permission for Soviet dissidents and secured more helpful Soviet approaches on issues such as the Middle East peace process.
 
Presidents George H. W. Bush and Bill Clinton also gave arms control a special place in their dealings with Gorbachev and Yeltsin.  Arms control progress contributed to more positive relations, greater confidence and a better atmosphere.  All this helped advance other U.S. interests:  Russia went along with German reunification, withdrew its military from Central Europe and the Baltics, lent diplomatic support during the 1990-91 Persian Gulf crisis, and cooperated in ending the Bosnia conflict, including deploying Russian peacekeeping troops under U.S. command alongside NATO forces.
 
Trying to link strategic arms cuts directly to Russian concessions on specific questions would fail.  But the next administration should be able to employ deft diplomacy and a restored nuclear arms dialogue to give the broader relationship a badly needed boost, create a more positive atmosphere, and carve out space to make progress on other issues.
 
SECOND,
consider dealing seriously on missile defense.  The Bush administration has pressed forward with its plan to deploy a missile defense radar and interceptors in the Czech Republic and Poland.  It has doggedly resisted any Moscow proposal that would affect that deployment plan.
 
The Russians object sharply.  This results in part from their unhappiness at seeing new U.S. military infrastructure appear closer to their borders.  Moscow, moreover, does not accept that the missile defense system is oriented against an Iranian threat, given the cost and the fact that Iran does not yet have a missile capable of reaching the United States or Europe.  Concern about breakout potential further fuels Russian suspicions – ten missile interceptors today, but how many later on?
 
The next administration should consider adjusting the pace of missile defense deployment in Central Europe.  The Defense Department budget indicates that it will take two years to construct the radar and missile interceptor sites.  The intelligence community should be asked to estimate when Iran might produce a missile capable of reaching the United States or most of Europe.  If the answer is, say, 2014, the president could offer to delay the start of construction at the radar and interceptor sites until 2012.
 
He could offer further delays if the Iranian missile program were slowed.  This would create incentives for the Russians, who have far more influence in Tehran than we do, to press the Iranians to abandon their long-range missile program.  While the odds of success might be low, such an offer at least would defuse the missile defense issue with Moscow by making clear that the system is aimed against an Iranian threat.
 
THIRD, promote NATO-Russia cooperation.  In the aftermath of the Russian-Georgian conflict, NATO-Russia relations are at a standstill.  If they can be moved from their current impasse, it would be useful to explore with allies the possibility of a more productive NATO-Russia relationship.  Transnational dangers such as international terrorism and the proliferation of weapons of mass destruction threaten NATO members and Russia equally, and there exists potential for greater cooperation in these areas.
 
NATO might also offer to make more concrete the assurances that the Alliance gave Russia in 1997 regarding restraint on the deployment of NATO forces on the territory of new member states.  Such cooperation and greater transparency regarding Alliance intentions hopefully would alter Russian attitudes toward NATO. 
 
The desire of Ukraine and Georgia to draw closer to NATO and have membership action plans (or MAPs) provokes particular concern in Moscow.  That concern made some NATO leaders reluctant to grant Ukraine and Georgia MAPs in April.  They may be more reluctant now.  NATO should ask itself, however, whether yielding to Russian pressure tactics would be wise. 
 
A Russia that sees success in such tactics will not be an easy country with which to deal.  Moreover, is NATO prepared to accept that Moscow can veto the foreign policy choices of its neighbors?  Is the Alliance prepared to see those countries permanently fenced off from Europe and the Euro Atlantic community?
 
A key question is whether Russia can get past its phobia regarding NATO.  The Alliance has changed radically over the past 20 years.  For example, the number of American troops in NATO Europe is a fifth of what it was.  NATO missions have changed as well; the Alliance no longer focuses on deterring a Soviet threat; it instead concentrates on Balkan peacekeeping, coalition operations in Afghanistan and counter-proliferation.
 
Despite this, changing Russian attitudes will be difficult.  Moscow feels aggrieved by NATO actions over the past 15 years.  Some official American comments during the negotiations on German reunification in 1990 implied no enlargement of NATO once Germany was united.  While the U.S. missile defense planned for Central Europe is aimed at Iran, not Russia, and the establishment of U.S. military headquarters in Bulgaria and Romania was driven by Middle East requirements, not Russia, Moscow sees things differently.  Moscow sees U.S. flags going up on the territory of new NATO member states, ever closer to Russian borders.  We need to understand this better in Washington. 
 
The primary motivation for NATO enlargement has not been anti-Russian but to foster a more stable and secure Europe.  The Russians do not understand it that way.  Bilateral and multilateral dialogues might develop ways to allay some Russian concerns.  Russia’s neighbors, such as Ukraine, would gain greater freedom of maneuver in their own relations with NATO if NATO-Russian relations improved.
 
FOURTH, broaden economic relations.  Broadening trade and investment links would facilitate the access of American companies to a $1.3 trillion economy with a growing and more prosperous middle class.  It would also add economic ballast that could cushion the overall relationship against unpredictable swings caused by political differences.
 
Anemic U.S.-Russian commercial relations fall well below their potential.  In 2007, two-way trade totaled $27 billion.  Russia represented just the thirtieth largest market for U.S. exports.  These numbers create little incentive for Moscow (or Washington) to adopt more measured stances when differences arise.
 
Consider the U.S.-Chinese relationship by contrast.  Two-way trade between the United States and China totaled almost $387 billion in 2007.  U.S. exports were more than $65 billion, making China America’s third largest export market.  This is real money, which factors into the calculations of political leaders as they manage the overall relationship.
 
One particular U.S.-Russian issue is the fate of the peaceful nuclear cooperation – or 123 – agreement.  In practical terms, the Russian-Georgian conflict killed that agreement for the current Congressional term, and the administration withdrew it.  At some point, reconsideration will make sense. 
 
FIRST, a 123 agreement would let U.S. companies engage in civil nuclear cooperation with Russia as their European competitors do.
 
SECOND, the Russian atomic energy agency, RosAtom, wants to store nuclear waste from third-country reactors, an activity that it sees as worth tens of billions of dollars in a world where most prefer not to have nuclear waste in their backyard.  Much of the waste would come from U.S.-origin nuclear fuel, provided under agreements by which the U.S. government must approve where the waste gets stored. 
 
The 123 agreement would create a framework; Washington would then have to approve each decision to ship nuclear waste to RosAtom for storage.  This means leverage:  the U.S. government would gain the ability to turn off a significant revenue-earner for a Russian state business.
 
Russia has felt some serious economic consequences over Georgia.  No government imposed them; the market did.  By one estimate, the Russian stock market has lost $290 billion in value since August 7.  During the same period, the ruble saw its biggest monthly decline against the dollar in nine years.  And $20-25 billion in capital flowed out of Russia during the last three weeks of August.  These are numbers that the Kremlin may find hard to ignore.  They result from Russia’s integration into the global economy.
 
STYLES OF ENGAGING RUSSIA 
 
In diplomacy, style can matter as much as substance.  The next president will need to engage his Russian counterpart to define the future of U.S.-Russian relations.  He should return to the Reagan, Bush 41 and Clinton models for talking with Russian leaders.
 
Summits between Reagan and Gorbachev, George H. W. Bush and Gorbachev, and Clinton and Yeltsin allowed plenty of time for presidential discussions.  Summits typically included two or three working sessions, each of which could range in length from 90 minutes to three hours.  This ensured that the presidents had the time to address not only the burning problems of the day but the broad range of questions on the agenda.
 
By contrast, while George Bush and Putin met far more frequently than their predecessors – almost 30 times by one count – their meetings usually were short.  Time limitations invariably meant that some problems received at best cursory review.  A personal relationship between the two presidents that was by all appearances extremely warm did little to arrest the downslide in U.S.-Russian relations. 
 
The next president also should want to have in place a national security mechanism that ensures follow-through on presidential agreements.  Moreover, building a successful U.S.-Russian relationship, one in which cooperative issues increasingly outnumber problem areas and in which Russian help can be secured on questions of key interest, requires letting Moscow sometimes “win.” 
 
The National Security Council needs to counteract stove-piping with an effective mechanism for taking an overall look at issues on the U.S.-Russia agenda, setting priorities, and identifying possible trade-offs.  Investing to build a long-term, cooperative relationship will require that Washington on occasion scale back some goals to accommodate solutions of interest to Moscow.
 
One final point:  the next president will have to work closely with Europe to forge a common Western position.  This is no simple task.  The European Union comprises 27 countries, while NATO numbers 26, with two others invited to join.  It often takes time for Europe to find its voice.  But Europe has levers that the United States lacks to affect Russian behavior.  As frustrating as it sometimes can be to coordinate with Europe, a common Western stance will have much greater resonance in Moscow than a tougher but unilateral Washington policy.
 
CONCLUSION 
 
U.S. and Western relations with a more assertive Russia have entered a new and more difficult stage.  Striking the right balance between engaging Russia, sanctioning its bad behavior, and steering Moscow toward acceptance of international norms and rules will pose a challenge for Western policymakers.  Our policy must be firm and principled, but it also should aim to move Russia back toward a path of cooperation and integration, in which Russia is an accepted international actor rather than a self-isolated renegade, a Russia that is more a partner than a problem.
 
Can we get there?  That remains to be seen.  It will depend in part on some decisions beyond our control, in the Kremlin.  But the West faced a similar challenge in dealing with Moscow between 1949 and 1989, and it met that challenge with great success.  What we need now is a similar combination of determination, skill and patience.
 
BIOGRAPHICAL NOTE: Steven Pifer is a visiting fellow with the Center on the United States and Europe at the Brookings Institution and a senior adviser (non-resident) with the Russia and Eurasia Program at the Center for Strategic & International Studies (CSIS). A retired Foreign Service officer, his more than 25 years with the State Department focused on U.S. relations with the former Soviet Union and Europe, as well as on arms control and security issues. 
 
His assignments included deputy assistant secretary of state in the Bureau of European and Eurasian Affairs (2001–2004), ambassador to Ukraine (1998–2000), and special assistant to the president and National Security Council senior director for Russia, Ukraine and Eurasia (1996–1997). 
 
Ambassador Pifer also served at the U.S. embassies in Warsaw, Moscow and London, as well as with the U.S. delegation to the Intermediate-Range Nuclear Forces negotiations in Geneva.  He holds a B.A. in economics from Stanford University, where he later spent a year as a visiting scholar at Stanford’s Institute for International Studies.  He is a member of the Council on Foreign Relations.  He also serves as a senior advisor to the U.S.-Ukraine Business Council (USUBC).
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
2. GEORGIA’S FUTURE: WHAT THE WEST WANTS 
 
OPINION: By Denis Corboy, William Courtney, and Kenneth Yalowitz
International Herald Tribune (IHT), Paris, France, Sunday, September 14, 2008

News about Georgia has focused on the war with Russia, its disproportionate action and Western aid to help Georgia recover. The time has come to begin reflecting on the conflict and draw lessons for the future, including for European and U.S. policy. The determined negotiating of President Nicolas Sarkozy of France has set the stage for a key, positive Western role.

Without doubt the United States and European Union will help rebuild Georgia. Sustained support, however, will depend on reforms and new directions. This reality is obscured in the heady rush to aid Georgia and cajole Russia to pull back. But political honeymoons can be brief.

Already calls are heard in Georgia for investigations, and EU foreign ministers have rightly called for an international inquiry. Western publics tend to believe that, despite Russian provocation and subsequent aggression, impetuous action by Georgia compounded tragedy. Georgia has an interest in building Western confidence.

Transparency in governance is essential to allay Western concern. Georgia has made great strides toward democracy, before and especially after the 2003 Rose revolution when peaceful demonstrations toppled a lethargic government. Nonetheless, Georgia today faces severe challenges. These include the lingering impact of questionable elections even after the Rose revolution, a lop-sided, compliant Parliament, and declining influence of independent NGOs.

The out-of-character crackdown on peaceful opposition demonstrators last November sent a shock wave through the West about arrogance and abuse of power in Tbilisi. To rebuild Western confidence, the government must reverse course. It should foster an open and critical dialogue with the people of Georgia and their elected representatives. The current crisis should not be used as an excuse to limit debate.

The government ought to work with the opposition to build consensus about channels for dialogue and policy debate. Calls for vaguely defined councils and charters engender concern in the West when they create divisions rather than consensus. While the printed press is reasonably free, there is an urgent need to re-establish an independent TV channel not subject to government control.

Georgia needs an independent, 9/11-style commission. It should assess the conditions which made war more likely, Georgia’s conduct during the conflict, and the immediate aftermath, including allegations on both sides of ethnic cleansing.

Commission members must be widely respected in Georgia and come from various political persuasions and institutions. Ideally, the commission should be chaired by a respected international figure. At this point Georgia needs an examination more than a “Patriot Act,” which might cause the West to doubt the leadership’s commitment to allowing alternative voices to be heard.

EU foreign ministers have agreed unanimously that an international inquiry is needed into what led to the war. As Foreign Minister Frank-Walter Steinmeier of Germany has pointed out, the results should influence future Western relations with Georgia and Russia. Both countries ought to grant full access for the inquiry. A comprehensive, balanced examination will do much to avert misplaced suspicion and create a climate for a stronger Western role.

The scope of the inquiry, however, ought to go beyond the origins of the war to encompass as well what the West could have done to mitigate risks. Did it err in not acting on signals earlier in the year of an impending conflict? Or in the 1990s should the West have offered to augment Russian peacekeeping troops in Abkhazia and South Ossetia?

Finally, Europe and the U.S. will gain added confidence from open debate in Georgia about its future policies, and a commitment to accelerate reform as the best way to strengthen the country. This will bolster Georgia’s position and unity in addressing the critical challenge of dealing with Russia.

Developing a dialogue will be not be easy in light of authoritarian and revanchist trends there, but many Georgians live in Russia and it is a huge, natural export market. Balanced assessments and policies will do much to help Europe and the U.S. mobilize support for a strong and sustained role in Georgia. This will advance its security and prosperity and foster its ties to the EU and NATO.

NOTE: Denis Corboy is director of the Caucasus Policy Institute at the University of London and a former European Commission ambassador to Georgia. William Courtney and Kenneth Yalowitz are former U.S. ambassadors to Georgia. 
 

LINK: www.iht.com/articles/2008/09/14/opinion/edcorboy.php
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
3.  BRING UKRAINE INTO NATO 

 
ANALYSIS & COMMENTARY: By Dick Morris, The Hill, Washington, D.C., Mon, Sep 8, 2008
As we watched Russian tanks and planes attack yet another small neighbor, the world had to be reminded of Hungary, Czechoslovakia and Afghanistan, three other countries that had to watch their freedom crushed beneath tank treads. The blatant, outrageous and long-planned invasion of Georgia should make it clear to the United States and Europe that there is an urgent need to pre-empt further Russian expansionism by spreading the NATO umbrella more widely.

In Eastern Europe, Ukraine is the name of the game. With close to 50 million people, it is, by far, more populous and important than any other former Soviet republic or satellite. Russia, with a population of 142 million and dropping, needs to take over Ukraine to reassert itself as a global power. Moscow is terrified that Ukraine will become part of the West.

 
That’s why Russian operatives poisoned democracy advocate Viktor Yushchenko, now the president of Ukraine, permanently scarring his face and almost killing him, and why Moscow refuses to extradite the agent responsible for the attack. And it is why the Kremlin tried to engineer the election of a pro-Russian puppet by cutting off gas supplies to Ukraine and then tripling the price it charged.
 
The Ukrainians have voted again and again for democracy and ties to the West. Putin has tried repeatedly to force the nation back into the Russian orbit.

The clear implication of the invasion of Georgia is that Russia cannot be trusted to live in peace with its neighbors. The impetus to imperial conquest predated and has outlasted communism. As Henry Kissinger argues, Russia must either be expanding or contracting. With so many divergent and often hostile nationalities inside and around Russia, the momentum of conquest is the only way to avoid an inertia that leads to decomposition.

Ukraine wants to enter NATO, but our European allies, led by Germany, are so dependent on Russian gas that they are reluctant to antagonize the bear. Until now, the case for expanding NATO’s protection to Ukraine has been hypothetical, based on fear of Russian intentions. But by breaking the civilized rules of national conduct, Russia has demonstrated the folly of leaving smaller democracies exposed on its border.

Some — initially including Barack Obama — treated the Russian invasion as a border war for which both sides were responsible. The Democratic candidate called for mutual restraint; only after two days had elapsed did he label the Russian actions as “aggression.”

 
Others have sought to blame Georgian President Mikheil Saakashvili for the war because he sent troops into South Ossetia, long a part of Georgia that the Russians have egged on to seek its independence. The breakaway province is an example of Moscow’s oft-used strategy of encouraging emigration to other countries so as to use the new demographics to justify a takeover.

Of course, NATO cannot extend its protection to every nation in Europe. It is, in the final analysis, a military alliance and it must be certain that it can back its guarantees with adequate might. The location of Georgia makes this difficult to assure. But Ukraine, located right next to NATO members Poland, Hungary, Slovakia and Romania, can and must be defended by NATO.

Russia is rapidly losing its population. It has the lowest birth rate in Europe and loses half a million people every year. Its GDP is only $1.7 trillion, a tenth of the Euro Zone’s. It is only through energy reserves that Russia is able to project its influence. And Russia must realize that the West’s likely movement away from oil and toward alternative fuels may make the energy card obsolete in the future.

It is only through blunt, blatant military force that Russia can expand and trouble its neighbors. And if the U.S. and NATO stand up to it, Russia will back down. And Ukraine is where we must make a stand.

NOTE: Dick Morris is a former Clinton adviser and now a Fox News contributor. He and his wife Eileen McGann are the co-authors of the best-selling new book Fleeced. His website is www.dickmorris.com.

 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
4.  UKRAINIAN MISSILE DEFENSELESS

 
ANALYSIS & COMMENTARY: by Doug Bandow, National Interest, Wash, D.C., Tue, Sep 2, 2008
The crisis over Georgia has abated, but its ramifications will only increase. People across Europe are worrying, What of Ukraine? At this moment the denuclearization of Ukraine looks like a shortsighted nod to foreign-policy correctness, putting mostly theoretical nonproliferation concerns ahead of very real international security interests.
When the Soviet Union broke up, thousands of nuclear weapons remained in Ukraine, Kazakhstan and Belarus (as well as Russia, of course). Ukraine ended up as the world’s third-largest nuclear power, with 1,240 nuclear warheads on 130 SS-19s and 46 SS-24s, 564 bomber-mounted cruise missiles and about 3,000 tactical nuclear weapons.
 
Although the codes were controlled by Russia, the systems could be hacked and the weapons retargeted. One of America’s principal foreign policy goals became disarming these inadvertent nuclear-weapons states.
The objective was valid, but there were countervailing foreign-policy interests. As has just been made clear—the Soviet break-up, a sudden response to the USSR’s worsening internal political crisis—did not necessarily result in final boundaries.
 
Which means that the events of 1989, though truly glorious in terms of human liberty, sowed the seeds of future conflict, such as between Russia and Georgia. Unfortunately, the importance of assuring stability and security throughout the former Soviet empire received little consideration.
With a strong push from both Washington and Moscow, removal of nuclear weapons from Belarus and Kazakhstan proceeded with minimal controversy.
 
The case of Ukraine, the largest Soviet secessionist state, was more complicated. The new nation had a population of 52 million and tore a huge hole in not just the Soviet Union but also in what had been imperial Russia. Although yearning for independence long permeated western Ukraine, ethnic Russians, who make up about 20 percent of the total population, predominate in the south and east.
 
Moreover, the Crimea—in which 58 percent of the people are ethnic Russians, and many retain Russian passports—only became part of Ukraine in 1954, a then-meaningless geopolitical gift from Ukrainian Nikita Khrushchev, who succeeded Joseph Stalin as the USSR’s Communist Party General Secretary.
 
When the Soviet Union broke up, Russians and many Crimeans believed that Crimea should revert to Russia. Indeed, in 1993 the Russian parliament approved a resolution to reclaim Sevastopol, and the two countries bickered bitterly over disposition of the Black Sea Fleet, most of which went to Russia.
Despite their general euphoria at escaping Soviet control, some Ukrainians perceived clouds on the horizon. And they believed that their unexpected nuclear force could act as a source of national pride and military security. The denuclearization process stretched out more than two years as first Ukraine’s president temporized and then the parliament, or Rada, resisted.
Thus, the Clinton administration had to apply substantial diplomatic pressure—even refusing a Ukrainian request to send President Clinton to Kiev to meet with Ukrainian President Leonid Kravchuk—and offer substantial economic inducements to get Kiev to yield its arsenal and send the nuclear material back to Russia.
 
Even after Ukraine’s government signed on the dotted line, nationalists opposed the plan in the Rada. They loudly voiced their fears about future threats from Moscow and demanded security guarantees. They received an invitation from America to participate in the Partnership for Peace and an association with NATO, in addition to an offer to mediate security disputes with Russia.
The Clinton administration celebrated its success. It eased negotiations with Moscow to implement the Strategic Arms Reduction Treaty, which resulted in dramatic cuts in the U.S. and Russian nuclear arsenals. But there were dissident American voices as well. For instance, John Mearsheimer of the University of Chicago argued for preserving a Ukrainian nuclear deterrent, leaving Kiev with sufficient force to deter a revanchist Russia. He wrote in Foreign Affairs,
it is imperative to maintain peace between Russia and Ukraine. That means ensuring that the Russians, who have a history of bad relations with Ukraine, do not move to reconquer it. Ukraine cannot defend itself against a nuclear-armed Russia with conventional weapons, and no state, including the United States, is going to extend to it a meaningful security guarantee. Ukrainian nuclear weapons are the only reliable deterrent to Russian aggression.
No doubt, there were reasons many people slept easier after Ukraine yielded its nuclear missiles. Although there has been no state failure in Ukraine, the disputed 2004 elections resulted in at least a temporary regime crisis. And the dysfunctional Yuschenko/ Timoshenko tandem has created political instability.
 
Yet while Kiev seems to have institutionalized black political comedy, there is no reason to believe that a small arsenal of nuclear weapons would have been compromised. All other things being equal, it is better that Ukraine does not have an atomic capability, but all other things are not equal.
Today Ukraine faces a resurgent Russia and the bear is in an ugly mood. While an attempt at outright annexation seems unlikely—Ukraine would be far less digestible than tiny Georgia—the potential for conflict is growing. Agitation by Russian nationalists, including Moscow’s mayor Yuri Luzhkov, about the Crimea, which is connected to Ukraine only by a narrow causeway, grows louder as Ukraine’s president Viktor Yushchenko says there will be no extension of the lease for the Russian navy’s base in Sevastopol, which runs out in 2017.
 
Moreover, in the midst of Russia’s war with Georgia, he signed a decree curbing Russian naval missions out of Sevastopol. Moscow insisted on its treaty rights and Kiev gave way. The Ukrainian government had no power to enforce its threat, but the squabble further embittered relations. President Yushchenko subsequently declared that Ukraine would increase rent on the base’s land facilities.
More ominously, many ethnic Russians living in Crimea express their support for returning to Russia. Some of them organized protests against Ukrainian-NATO naval maneuvers in July. One Crimean told Reuters that, “The fleet is a protection against everything—including NATO.” Moscow recently promised to deal “shattering blows” against anyone who threatened the Russian-speaking community.
Ukrainians have taken notice. Student leader Oleg Yatsenko warned that, “These people are separatists. They want to do the same thing here that was done in Georgia.” Oleksandr Suchko of the Kiev-based Institute for Euro-Atlantic Cooperation worried: “If the West swallows the pill and forgives Russia the Georgian war, the invasion of ‘peacekeeping tanks’ into Ukraine will be just a matter of time.” President Yushchenko warns that, “What has happened [in Georgia] is a threat to everyone, not just for one country. Any nation could be next, any country.”
Moreover, a split has developed within Kiev over relations with Russia. Although Yulia Timoshenko played the role of pro-Western firebrand in 2004, as prime minister she has become the reasonable moderate towards Russia. Her staff reportedly contains officials with access to the Kremlin and she appears to have become the government leader with whom Moscow can do business.
 
President Yuschenko’s deputy Chief of Staff, Andriy Kyslynskyi, charged that she “systematically works in the interests of the Russian side” and that her actions “show signs of high treason and political corruption.”
 
With Yuschenko—at a dismal seven percent in the polls—and Timoshenko headed towards a bitter presidential contest next year, relations with Russia, an important issue for the country’s Russian-language speakers, may become an electoral wild card. One office worker in Kiev told the New York Times: “We’re next. Sooner or later our president is going to say or do something that goes too far, and then it will start.”
Ukraine might survive these challenges unscathed. But it is vulnerable to Russian intimidation primarily because Moscow could apply disproportionate military force if it desired. Ukraine’s internal demographics and politics make it less stable, but its vulnerability to outside pressure largely stems from its military weakness vis-à-vis Russia.
All of this would make for interesting political theater if the United States and Europe were not involved. But Washington has invested heavily in the Yuschenko government, just like the Saakashvili government. The United States aided the supposed pro-West reform team of Yuschenko and Timoshenko during the 2004 election campaign and has advanced Ukraine for NATO membership.
 
The politically active Ukrainian diaspora in America is heavily weighted towards nationalists who despise Moscow. The Europeans also backed Yushchenko in the disputed election and have provided financial aid and economic ties since then.
Vice President Dick Cheney is preparing to visit the region, and last week his national security adviser declared, “The overriding priority, especially in Baku, Tbilisi, and Kiev, will be the same: a clear and simple message that the United States has a deep and abiding interest in the well-being and security in this part of the world.” British Foreign Secretary David Milibrand recently visited, proclaiming that his trip was “intended to send a simple message. We have not forgotten our commitments to you. Nor shall we do so.”
But the West has been remarkably short with meaningful assistance. The EU won’t even commit to bringing in Ukraine, something to which Moscow has voiced no objection. Thus, it should come as no surprise that President Yuschenko wants more than words from Washington and Brussels.
 
To celebrate his country’s 17th anniversary of independence on August 24, he ordered, against the wishes of the prime minister, a military parade, rather like the old Soviet military displays through Red Square. He joined the leaders of the Baltic nations and Poland in a “show of solidarity” with Georgia. He offered to give the United States and Europe access to Ukraine’s missile warning systems—which is the old Soviet system.
 
Most importantly, he avidly supports Ukrainian NATO membership. He explained in the Washington Post: “This conflict has proved once again that the best means of ensuring the national security of Ukraine and other countries is to participate in the collective security system of free democratic nations, exemplified today by NATO.”
That might be the best option for Ukraine, but it certainly isn’t a good policy for the United States or Europe. Of course, some Americans talk about rushing Kiev into the alliance as if doing so were no more significant than rushing a college fraternity.
 
National Review demanded that the first step in response to Russia “must be for the U.S. to agree with its NATO allies to confirm an offer of NATO membership for both Georgia and Ukraine,” perhaps at an emergency NATO summit. At least some NATO advocates understand that NATO remains a military alliance.
 
Clinton’s political strategist, Dick Morris, and Eileen McGann say that Ukraine “can and must be defended by NATO.” Yet going to war with Russia—which in this case means peering into the nuclear abyss—over Ukraine is little more palatable than doing so for Georgia.
Moreover, NATO membership isn’t even an effective guarantor for Kiev. Just joining the alliance won’t ensure that the other members will be prepared to confront Moscow militarily in a crisis. The likelihood of German, French, Italian, and British legions suiting up to rescue Kiev in a territorial squabble with Russia is low at best.
 
America’s willingness would be little greater, especially if the other major NATO members opted out. Ukraine wants a real security guarantee, but it is not likely to be forthcoming from NATO even if membership is offered.
But imagine if Ukraine had kept a few of its Soviet-era nuclear weapons and missiles. Talk of Russian pressure, let alone attack, would disappear.
The nuclear force would not have to have been large. For instance, the 46 SS-24s, which Ukraine’s President Kravchuk once suggested keeping, each held 10 warheads.
 
Every missile could include warheads targeted on Moscow and St. Petersburg, with the other eight warheads randomly covering other large cities. Even if only one survived a preventive Russian attack, it would be capable of inflicting massive destruction on Russia. A few hundred tactical nuclear weapons would be capable of devastating any conventional forces used in a Russian attack.
Ukraine would be more secure, without having to hope for rescue from the West. The United States and Europeans would not find themselves pushed to defend a country with no intrinsic security value to them. They would not be contemplating a policy of confrontation with a nuclear-armed power.
There obviously would be downsides to Kiev’s possession of a nuclear arsenal, and the past cannot be reclaimed. But there is a lesson to be learned for the future: idealistic policies adopted in haste might actually make the world a more dangerous place. If America and Europe eventually find themselves at war in Ukraine, they are likely to rue the day that the final Ukrainian nuclear warhead was sent back to Russia at Washington’s behest.

NOTE: Doug Bandow is the Bastiat Scholar in Free Enterprise, Competitive Enterprise Institute; Vice President for Policy, Citizen Outreach; Robert A. Taft Fellow, American Conservative Defense Alliance and the Cobden Fellow in International Economics, Institute for Policy Innovation. He is a former Special Assistant to President Ronald Reagan and the author of several books, including “Foreign Follies: America’s New Global Empire” (Xulon).

Column: http://www.antiwar.com/bandow/; Blogs: http://www.conservablogs.com/bandow/; http://www.openmarket.org/; www.4pundits.com
Foreign Follies: America’s New Global Empire: http://xulonpress.com/book_detail.php?id=3558

LINK: http://www.nationalinterest.org/Article.aspx?id=19758
——————————————————————————–

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
==============================================================
U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
Promoting U.S.-Ukraine business relations & investment since 1995.
==============================================================
5.  UKRAINE: CHENEY IOU AGAINST RUSSIA 

The United States is on the hook for Ukraine
 
ANALYSIS & COMMENTARY: By Diane Francis
National Post, Don Mills, Ontario, Canada, Monday, September 8, 2008
Last week as McCain made his speech to the Republican faithful, Vice President Dick Cheney visited Ukraine and unconditionally pledged America’s support against any attempt by Moscow to corrupt, much less invade, that giant. This is hardly popular stuff in a war-embattled America where billions are spent each month in an unnecessary occupation of Iraq.
But another entanglement may loom. The United States (under Clinton) signed an iron-clad agreement in 1994 with Ukraine, Britain (under John Major) and Russia (Boris Yeltsin). The Ukrainians back then got these three to guarantee its sovereignty as the quid pro quo for Ukraine’s agreement to dismantle and hand over its entire arsenal of nuclear weapons and missiles to Russia.
THE UNITED STATES IS ON THE HOOK FOR UKRAINE 
In essence, Washington is guarantor to Ukraine’s sovereignty, unlike Georgia’s, which was punished by Russia for an incursion, invaded temporarily and two of its breakaway provinces acquired.
Cheney’s visit was important given concerns that Moscow-style shenanigans are underway in Crimea, a Ukrainian province with a large Russian population and some oil. Separatism is being seeded there among Russian ethnics as was the case with Georgia’s two breakaway provinces.
Canadian lawyer Bob Onyschuk of Gowling Lafleur Henderson LLP advised Ukraine at the time of the landmark agreement in 1994. (He is shown here on the right and is also a founder of the Canadian-Ukrainian Chamber of Commerce board of which I’m a director.)
“I was closely involved as an advisor and this was the first thing [former Ukrainian President Leonid] Kuchma did after the elections in 1994,” said Onyschuk, who established the world’s first law office in Kiev shortly after Ukraine declared its independence in 1991.

THE BACKGROUND 
“Ukraine, as the 3rd largest nuclear power in the world, came out of the Soviet Union and had ICBM missiles and big SS24s, the most deadly of the Soviet arsenal of weapons and they were all aimed at Europe’s capital cities and other targets,” he said. “The debate among Ukrainians, after 1991, was whether Ukraine should give them up or what else they would want to do with them.”

But immediately after independence in 1991, Ukraine took the precautionary action of changing the “codes” to these missiles so that none of the western capitals were targeted.
Even so, the debate lingered amid fears that the nuclear weapons – and Ukraine’s large standing army – were needed as a last line of defense should Russia ever before aggressive again.
“That’s why we kept them. Kuchma brokered a deal with the US, UK and got Russia to go along with it. The deal was we will unilaterally disarm ourselves, give all the nuclear weapons back to Russia but the only basis upon which we were doing that is if we got guarantees from the three major nuclear powers – Russia, U.S. and Great Britain,” he said. “We were only worried about Russia.”
“The fact that the agreement has the signatures of four presidents, including UK’s John Major, Bill Clinton, Boris Yeltsin and Kuchma – was good enough.
 
Ukraine knew that if Russia didn’t keep up its part of the bargain, which they knew they might not after Yeltsin left because they never keep their word to anything, that they would have the backstop of the U.S. and Britain. That was and is what Ukraine relies on,” he said.
Cheney’s visit underscored Washington’s commitment as guarantor to the agreement and the Vice President said so.

THE DEAL IS FAR-REACHING 

Onyschuk said that this agreement is also written, and should, protect Ukraine from the kind of economic, energy and political harassment that Moscow has undertaken in recent years. This has included stopping the flow of gas, to exacting high payments and to electoral fraud which sparked the Orange Revolution.
“Russia can’t even pressure Ukraine economically and Ukraine should play this card,” added Onyschuk. The slippage in Russia into a KGB-controlled nation-state is worrisome to all its neighbors. “Brandishing this agreement is one thing but what will the Russians do? Will they honor their word?
 
EXCERPTS
The agreement welcomes Ukraine into the Treaty on the Non-Proliferation of Nuclear Weapons as a non-nuclear-weapon state. It was signed in Budapest on December 5, 1994 and here are some excerpts:
1. the three guarantors “reaffirm their commitment to Ukraine, to respect the Independence and Sovereignty and the existing borders of Ukraine.”
2, “reaffirm their obligation to refrain from the threat or use of force against the territorial integrity or political independence of Ukraine, and that none of their weapons will ever be used against Ukraine except in self-defense”
3. “reaffirm their commitment to refrain from economic coercion designed to subordinate to their own interest the exercise by Ukraine of the rights inherent in its sovereignty and thus to secure advantages of any kind.”

LINK: http://network.nationalpost.com/np/blogs/francis/archive/2008/09/08/day-four-republicans.aspx

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================      
6.  U.S. SAYS IT WILL SUPPORT UKRAINE IF THREATENED 

 
The Associated Press, Washington, D.C. Friday, Sep 12, 2008
 
WASHINGTON, D.C. – A senior U.S. diplomat said Friday the United States would back Ukraine in case of a territorial dispute but Ukraine’s defense minister said his country’s role as the main natural gas conduit to Europe makes a conflict with Russia unlikely.
The recent Russia-Georgia war has aroused concerns in Europe and ex-Soviet republics such as Ukraine about Moscow’s regional ambitions. The Kremlin has watched warily in recent years as Ukraine and other former republics have sought closer Western ties, and Moscow vehemently objects to their joining NATO.
Although Russian leaders insist they recognize Ukraine’s borders, some nationalist politicians have suggested that Russia should regain control of Ukraine’s Crimean Peninsula, a jewel of the Russian empire and home to a key Russian naval base.
U.S. Assistant Secretary of State Daniel Fried pledged Friday that the United States would back Ukraine in a territorial dispute. “The United States, and I daresay Europe as well, support Ukraine’s independence, its freedom, its democracy, its right to chose its own future,” Fried told reporters after a meeting with his Ukrainian counterpart.
“Our support for Ukraine has only increased as the result of pressure and will only increase if there is pressure from other places,” Fried said. “I hope that no one puts Ukraine’s territorial integrity into question.”
Fried’s remarks echo comments made last week by Vice President Dick Cheney. During a visit to the ex-Soviet Republic, Cheney said the U.S. has “a deep and abiding interest” in the country’s “well-being and security.”
However, Ukraine’s defense minister said during a visit to Denmark Friday that a war with Moscow was unlikely because Ukraine is such an important link in Europe’s energy supply.
Asked about a potential military conflict with Russia, Yuri Yekhanurov said he didn’t “believe something like this might happen in the future.” A conflict would “have an influence on not only Ukraine but the whole world,” Yekhanurov said, noting that 80 percent of the natural gas exported to Europe passes through Ukraine.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
7.  UKRAINE: FRESH RECRUITS NEEDED  
Ukraine desperately needs a new generation of politicians 
 
Editorial: Kyiv Post, Kyiv, Ukraine, Thursday, September 11, 2008  
  
A new breed of younger politicians needs to be brought up in the political ranks to bring fresh ideas and constructive work in Ukrainian politics. Ukraine desperately needs a new generation of politicians to rejuvenate, and bring fresh ideas and constructive work to its paralyzing politics.
The relentless political bickering by parties and politicians that dominate is evident not only in parliament, but on a handful of talk shows that air on Ukrainian television. Politicians from each party can be seen each week on these shows accusing each other of everything from theft of state assets to treason to poisoning presidential candidate Victor Yushchenko to…
For those who have long tuned out of these nauseating antics, we will spare you the rest of the accusations, but offer a breath of fresh air in watching Spokusa Vladoyu (which translates into Temptation of Political Power). The show kicked off this month on Ukraine’s First National state television channel.
Unlike other popular political talk shows which have turned into mouthpieces for manipulating politicians, this one gives novices – young Ukrainians trying to break into politics, some still students – a chance to debate on key issues. Still true to their hearts and ideals, they not only offer a breath of fresh air, but hope that the power-hungry political elite in the country will soon be replaced by a new generation.
 
They don’t have much experience yet and aren’t positioned as rivals sitting on different sides of the aisle in parliament. But the two young men and women on the show this past Tuesday were well-versed in critical issues grappling the country. They did a remarkable job defending their positions compared to those currently in power. Most importantly, they offered solid, practical solutions to the country’s deep problems.
In these challenging times, when East and West are more at odds, Ukraine is stuck in the middle along a geopolitical fault line. Yet this cool-headed youth offered pragmatic solutions on what direction Ukraine should take and how it should carefully, constructively and patriotically deal with a bullying northern neighbor, as well as ineffective Western partners that are indifferent to Ukraine’s importance, viewing it as a pawn in a bigger game.
The Spokusa Vladoyu show helps demonstrate that the time has come for a new political elite to take over. The country’s upcoming generation should be given more air time to gain experience and demonstrate its ability to take charge. We applaud the First National channel for giving them such an opportunity.
Rising up in politics will be a challenge. We urge the new generation not to sit on the sidelines grumbling, but seize the moment. Democracy is more than just voting. It is about active participation in politics. Taking office at regional councils in smaller cities is a good place for many to start. Ukrainian voters deserve more than they have been getting with the Victor vs. Victor and Yulia show.
 
LINK: http://www.kyivpost.com/opinion/29650
——————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
============================================================
NOTE: Send in a letter-to-the-editor today. Let us hear from you.
============================================================
8.  NATO’S GEORGIA & UKRAINE APRIL HESITATION EMBOLDENED RUSSIA 

 
Reuters, Ottawa, Ontario, Canada, Saturday, Sep 13, 2008
OTTAWA – NATO’s hesitation at its April summit to integrate Georgia and Ukraine into the alliance only emboldened Russia to invade Georgia last month, Canadian Prime Minister Stephen Harper said in an interview published today.

”I think if we had taken a stronger position on the membership of these countries, we would not have had the Russian aggression,” he told the National Post newspaper.

”I think that showing weakness or hesitation encourages this type of behavior on the part of Russia.” Harper expressed respect for Russia but said whether or not countries join NATO was a decision between the alliance and that country. ”Russia does not have a right to dictate decisions outside its own borders,” the Conservative prime minister said.

Canada and the United States had been among those at the Bucharest summit in April advocating offering a membership action plan to Ukraine and Georgia, but they met opposition led by Germany and France.

In the end the NATO summit promised the two countries they could join in the future but the timing was left indefinite.  Russia sent forces into Georgia in August after repelling an attempt by Tbilisi to retake the breakaway, pro-Russian South Ossetia region.

http://www.deepikaglobal.com/ENG4_sub.asp?ccode=ENG4&newscode=25854
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

===================================================
9.  WILL PUTIN UNITE EUROPE?

OP-ED: by Jan Pieklo, European Voice, Brussels, Belgium, Thursday, September 4, 2008

Sevastopol, the naval base from which the Russian Black Sea Fleet sailed to help crush Georgia, is in the Autonomous Republic of Crimea, placed under
Ukrainian jurisdiction by Nikita Khrushchev in February 1954. Russia’s lease on the port is due to run out in 2017. Will it respect the deadline? The auguries are unpromising.

After hostilities broke out in Georgia, Ukraine’s President Victor Yushchenko – a close ally of Georgia’s Mikhail Saakashvili – required the Russian fleet to give 72 hours’ notice of any ship movements in or out of the port. The order was ignored.

Ukraine’s foreign minister then demanded that “Russia should start, without delay, to make preparations for the withdrawal of its fleet in 2017”. Russian President Dmitry Medvedev responded that he was prepared to negotiate, but Kyiv would not be allowed to dictate terms.

This ominous tug-of-war takes place against the background of what looks like a terminal falling-out between President Yushchenko and his arch-rival
Prime Minister Yulia Tymoshenko, princess of the 2004 Orange Revolution.

The president’s aides publicly accuse her of making a treasonable secret deal with Russia in return for Kremlin backing in next year’s presidential election, and of promising to drop support for Georgia and to postpone Ukraine’s plans to join NATO.

According to Yushchenko’s staff, some US $1 billion dollars has been put aside by the Kremlin to implement “the Yulia Tymoshenko project”.

Ukrainian authorities are also investigating claims that Russia is distributing passports to the citizens of Sevastopol, the same tactic used in the newly-independent (at least according to Russia) Georgian enclaves of South Ossetia and Abkhazia, where Russia claimed the right to “defend our citizens”.

One scenario being discussed in the feverish, rumour-filled Ukrainian capital is for Russia at some point to call for a regional referendum on secession from Ukraine.

This may take some manipulating: in the 1991 referendum on Ukrainian independence 54.2 % in Crimea were for it, and in Sevastopol itself, 57.1 %. But installing a pro-Russian leadership under FSB control would no doubt help to improve these figures. Later, the leaders of a breakaway Crimea may feel the need for a show of Russian military solidarity.

As the smoke from Georgia clears, the future status of the Crimea, and of Ukraine – the historical Kiyevan Rus whose loss Russia has never really accepted – is set to test the mettle of the EU, and of the next US administration.

The debacle in Georgia and its worrying implications can in part be laid at the door of wishful thinking on the part of the outgoing US president. But he can hardly be blamed for the weak, disunited, and on occasion frankly unserious tactics adopted by the EU 27 towards Russia and its confetti of empire.

Divisions over energy supplies and pipelines, notably the separate deal between Germany and Russia, have laid bare the EU’s vulnerability and lack
of leverage.

Recognising past mistakes, and how much is at stake, should not be a cause for paralysis but for leadership, however belated. It is conceivable, just, that the Georgian imbroglio will prove the catalyst for the strong, united Europe which has been needed for so long.

NOTE: The writer is Director of the Kyiv and Warsaw-based Polish-Ukrainian Cooperation Foundation PAUCI.

 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
10.  GEORGIA-INVADING TROOPS LEAVE STALIN SHRINE INTACT. PITY.

OP-ED: By Lubomyr Luciuk, Special to Kyiv Post
Kyiv Post, Kyiv, Ukraine, Thursday, September 11, 2008

Despite my genuine sympathy for the many innocent Georgians now falling victim to resurgent Russian revanchism, the gutting of Gori was long overdue.

For it is a cursed site and not so much because it’s where Iosif Dzhugashvili – better known by his pseudonym of Stalin – was born on Dec. 21, 1879, as for its post-Soviet transgressions.

Inexplicably, the government of Georgian president Mikheil Saakashvili and Gori’s city fathers permitted it to remain a center for the whitewashing of
Stalin’s brutal legacy, allowing for the veneration of the greatest mass-murderer in 20th Century Europe.

Not only did its Stalin Square frame what is, quite probably, the last original Stalin statue standing in Europe, but even the hovel in which he first stole breath was enshrined in a colonnaded building, part of a museum complex that once attracted thousands.

The most recent tourists were Russian soldiers, who began infiltrating Gori around Aug. 13, although they have since decamped.

Just before they rolled in, the shrine’s intrepid director, a Stalin apologist named Robert Maglakelidze, spirited various unique artifacts away to safety, including the dictator’s military greatcoat, boots, pen, glasses, a used shaving brush, an open pack of cigarettes with 10 left untouched inside, and even one of his trademark pipes.

Now secured in the Tbilisi state museum, these items will be repatriated and put back on display when the museum re-opens, which is scheduled to happen
today. Remarkably, given the firestorm Gori sustained under air and artillery bombardment and its subsequent looting by Ossetian irregulars, the Stalin museum was left unscathed, albeit dustier for all the shelling nearby.

It seems Georgia’s violators knew where they were going and what they were shelling.

Some troopers even erected a sign outside the city announcing: “J Stalin’s Home Country – Gori,” which begs the question – why would combat soldiers
pause to do that? Was it out of admiration? That might seem preposterous, but it’s not if one reads Sarah Mendelson and Theodore Gerber’s article “Failing the Stalin Test,” published in the January-February 2006 issue of the prestigious journal, Foreign Affairs.

Their extensive survey research confirmed how “a majority of young Russians … do not view Stalin – a man responsible for millions of deaths and

enormous suffering – with the revulsion he deserves.”

They began their commentary with a provocative statement: “Imagine that a scientific survey revealed that most Germans under 30 today viewed Hitler
with ambivalence and that a majority thought he had done more good than bad. Imagine that about 20 percent said they would vote for him if he ran for
president tomorrow. Now try to envision the horrified international response that would follow.”

Yet, when their results were revealed, no significant outcry was heard. The crimes of communism, as personified by “Uncle Joe,” just do not excite us as
much as Adolf’s evildoing.

Only a month or so before Georgia’s dismemberment, other interesting, if preliminary, poll results were released.

Sponsored by the state-funded Rossiya TV channel, online respondents identified the most popular Russian. A commanding majority selected Stalin,
even though his father was Ossetian and his mother Georgian. Meanwhile his “comrade” Lenin scored a distant third.

Stalin’s rehabilitation, which began around the centenary of his birth in 1979, is yet again being promoted from the Kremlin, as plans for incorporating South Ossetia and Abkhazia into the Russian Federation were announced, international protests be damned.

How these minorities will fare inside a Russian-dominated imperium, whose masters have never shown any patience for regional autonomy or human
rights – just go ask the Chechens – remains to be seen.

Of course, there are Georgians who know what Stalin was. They are not nostalgic for an imagined past when they were supposedly much better off under Moscow’s rule. These Georgians appreciate that their culture and historical experience give them a right, and good reason, to want to reconnect with the Western civilization of which they are part.

Their way back to where they, and for that matter, Ukraine, also belongs, can come only through membership in the European Union and NATO. Lado Vardzelashvili, the Georgian governor whose office overlooks Stalin’s monument, gets that.

Pointing out that both Vladimir Putin and Dmitry Medvedev “think exactly the same way as Stalin,” he tried to cut a deal with the Russian general
commanding troops around Gori, asking that they take the Stalin statue with them and “never come back.”

His offer was not accepted. That’s a pity.

Europe’s last statue of Stalin would be far more appropriately located in today’s Moscow than in tomorrow’s Gori.

NOTE: Lubomyr Luciuk is a professor of political geography at The Royal Military College of Canada. This article is reprinted with the author’s
permission and was originally published in the Kingston Whig-Standard in Ontario, Canada.

LINK: http://www.kyivpost.com/opinion/29694

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=============================================================
U.S.-Ukraine Business Council (USUBC) www.usubc.org.
Promoting U.S.-Ukraine business & investment relations since 1995. 
=============================================================
11.  LITTLE SOUTH OSSETIA: GREAT OPPORTUNITIES

                                                                                   
Analysis: by Lada L. Roslycky, Harvard Black Sea Security Program
Cambridge MA, USA Thursday August 21, 2008
 
As news of another war sped through the fiber optic wires all over the world, decision-making presidents were entertained by Olympic Games in distant Beijing.  What would the Olympian gods have done peering down upon the benighted mortals unable to envision the beauty and peace of democracy?
 
Perhaps Zeus would have thrown a lightening bolt upon those who carry the guilt of Ares. Lacking wisdom to avoid war, they succumb to the delightful roar of its battle, the spilling of red human blood and the acquisition of power.
 
What would leaders with wisdom do in this situation? In a perfect world Russia would get off of foreign territory and mind its own. Georgia would pack away its arms, head to the tables and negotiate with its South Ossetian people. The South Ossetians would take this opportunity to embrace their ancient language and culture; allowing it to flourish in a peaceful, democratic and genuine manner. Genuine, un-manipulated Ossetian separatism would demand that Russia and Georgia give up both, North and South Ossetia and allowing them to reunite as a nation-state.
 
Unfortunately, wisdom is lacking and many decision-makers do not fit the mold of the proverbial “reasonable man”. Rather, they are infected with the geopolitical virus obsessing about the perception of their power. Men are compelled to choose sides, parties, colors and often the perceived “lesser of two evils”. This is what has happened here. States chose to realize their independence and sovereignty.
 
They chose to behave like grown-ups making their own decisions about whom to align, play and sleep with. By becoming self-aware, Ukraine, Moldova, Azerbaijan, together with Georgia, have entered adult statehood. Unfortunately, this self-awareness is perceived as unacceptable to Russia. It would rather rule over than cooperate with nations.
 
What is happening in Georgia is not unique. It can and may happen in other former Soviet States. For many years, since their independence, Georgia, Ukraine, Moldova and Azerbaijan have been struggling with Russian-backed separatism. Their populations are ready for freedom which is supposed to be guaranteed by sovereign independence.
 
Sovereignty. The word has become a cynical joke to international lawyers and laymen with a critical eye. Its violation has been witnessed in so many wars including Former Yugoslavia, Afghanistan and Iraq. However, a pivotal difference here is that the violation of Georgia’s sovereignty occurred in complete absence of consent or support from any international institution except, perhaps, the institution of silence. This violation of sovereignty can be likened to rape in which silence is perceived by Russia as acquiescence; by Georgia as a lack of allied care or support requiring the ultimate form of defense.
 
For years, little of substance has been said about the Black Sea Region’s frozen conflicts. Nevertheless, the war in Georgia should not come as a surprise to anyone who has been paying even the slightest attention to developments there. The Russian Federation has become proficient at playing the game of strategic separatism on the territory of weak states. 
 
It should be no surprise that Russia is not listening to anyone in its drive to control these weak, but independent states. It should be no surprise that it will be satisfied only when they do what it wants.  What is going to be a surprise is how this situation is going to end. Could there however, be a surprise in how this ends?
 
The consequences of this war are not limited to Georgia and Russia. It should not be perceived as an isolated matter in which credible UN approved peace keepers are promoting peace and stability. Rather, it is a geopolitical labor pain in the birth of the new Eurasian heartland. At stake lies the freedom and prosperity of millions of people, energy security, and democratic freedom in the Black Sea Region, the Trans-Atlantic Alliance, European freedom, and American reputation. It would be shameful if the West were to remain ambivalent.
 
The war between Georgia and Russia is a direct challenge to (what some have already stopped calling) “the West”. Now more than ever, the European Union, the United States and the Trans-Atlantic community as embodied in NATO, are in a position to operate jointly and severally toward rebuilding their reputations. They must reestablish themselves as reliable, democratic states which honor the rule of law they so adamantly promote. While others focus on cataloguing the destabilizing damage, I choose to focus on the opportunities here.
 
First and foremost it is an opportunity for all the orchestrated separatism in the Black Sea region to cease. By invading Georgia, the neutrality of the Commonwealth of Independent States Peacekeeping missions (100 percent Russian manned) on other territories of the Former Soviet States has been discredited. It is no secret that the Russian peacekeepers do not satisfy UN standards. Those who did not see the conflict of interest in the past may now recognize that Russia is in fact, and in deed, a participant in these conflicts, not an unbiased mediator.
 
It is an opportunity for the advancement of international law. International law is the bases of any new world order based on international cooperation. The juridical infrastructure to handle situations such as these has been in place for many years. The International Law Commission’s Articles on State Responsibility provide guidance. The Russians have argued that they were obliged to invade Georgia.
 
They have also asserted their constitutional obligation to protect Russian citizens, wherever they may be in this world. This notwithstanding, there is nothing in the current situation that would fall under Article 22 (Articles on State Responsibility) and be interpreted as circumstances precluding wrongfulness regarding the invasion of Georgia.
 
Provisions of internal law (even the constitution) cannot be used to justify internationally wrongful acts. Furthermore, the premeditation of Russia’s violations of international law is depicted in the facts that it has been handing out Russian passports to foreign citizens living in areas of its strategic interest (including Sevastopol – Ukraine and Transdniestria – Moldova). Already in 2003, then Georgian President Shevardnadze identified this activity as a reason to refusing the extension of CIS peacekeeping mandate, regarding it as “a violation of the ethics of interstate relations”.
  
It is an opportunity for reputation saving.  In recent years, the reputations of all of the players involved have been severely tarnished.
 
This is an opportunity for UN Security Council to show that the controversial veto right does not veto effective and honest cooperation. The EU’s willingness to send peace keepers on the condition of UN approval is a good test.
 
Russia can have the most to gain by backing off, withdrawing its troops and demonstrating to the international community that it is a responsible state respectful of international institutions and human rights. It could demonstrate that it can be a dependable partner. It could dispel the perceptions that its intentions with energy and gas are imperialist and not open to international investment or fair competition.
 
It could make itself attractive, by gaining respect through honorable behavior, not obedience through fear. It could agree to United Nations, EU or even NATO peacekeepers and demonstrate its political maturity countering its criminalized reputation.
 
The US has lost much of its moral high ground because of what are widely perceived as unjust wars being pursued in the name of democracy and the war on international terrorism. By imposing sanctions America can show nations in transition that it truly does value their support, their struggle for peace and democracy. This is an opportunity for America to show that it genuinely supports democracy, particularly the sovereignty of its key allies.
 
By supporting the peace process and the deployment of an international peacekeeping mission, America would demonstrate that it is still willing and able to assist Europe with its security concerns. It is an opportunity to repair the Trans-Atlantic link by using international law and good EU relations to create a framework plan for a coordinated response to similar assaults in the future.
 
The EU can show the world that, despite recent rough weather with the United States, it has learned from its past mistakes and is willing to cooperate towards peace with its oldest and most faithful democratic ally. The EU can become more unified and realize that energy security and energy diversification are faces of one coin.  By coordinating a peacekeeping mission, the EU can stand united for security and defense and show that the European Neighborhood Program is not just another sham.
 
The neighbors concerned form the only alternate energy corridor from an otherwise severe dependency problem on monopolized energy. After suffering internal blows to its own constitution and being treated like an energy junky it too can show that it is not too weak or afraid to support the democratic and security interests of its European neighbors.
 
The Newly Independent States in the Black Sea Region can use this opportunity to show that in the face of adversity their governments are capable of standing united. They can put aside all the ceaseless internal “colored-revolution bickering” and realize that their responsibility – first and foremost – is to their young states and to their people. Internationally they can support one another in the maintenance of their sovereignty and in their reach for democracy. It is an opportunity for strengthening national unity and regional solidarity.
 
NATO has the opportunity to show that it is everything it claims to be. It can show that it is a united transatlantic organization based on the foundations of peace and international stability. NATO can adjust Russia’s perception of it as a threat and demonstrate it as an institution that cooperates for international peace and stability.
 
It can show that its promises to its partners are not empty by acting as a unified political security organization whose transformation has delivered a new NATO willing and able to cooperate with its members and partners in all security sectors.
 
This war highlights how fragile states are when all of their energy eggs are in one basket. It is an opportunity for securing diversified energy supply and competition. NATO could consider its role in energy security to protect the Baku-Tbilisi-Ceyhan pipeline line upon which the security of states and individuals depend.
 
This war is an opportunity to evolve away from Realpolitik. It offers a unique opportunity for peace. It is an opportunity for the internationalization of a new style of international relations based on international cooperation, not aggression and fear.
 
The Black Sea Region used to be called Pontos Azeinos (the dark or somber sea). It has also been called Pontus Euxinus (the welcoming sea). What it will become depends upon the perception of opportunities and the wisdom of our leaders.
The gods are watching.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=========================================================
Receiving more than one copy of the AUR please contact us.
=========================================================
12.  KIEV ACCUSES RUSSIA OF ‘DESTABILISING’ UKRAINE

 
Agence France Presse (AFP), Kiev, Ukraine, Saturday, Sept 13, 2008
KIEV – Ukraine accused Russia on Saturday of seeking to destabilise the ex-Soviet state, dismissing the idea it was in Moscow’s special zone of interest and describing Kiev’s EU and NATO ambitions as “irreversible.”
Ukrainian leaders are concerned that its mainly Russian-populated autonomous region of Crimea may fall under Moscow’s influence in the same way as Georgia’s breakaway regions of Abkhazia and South Ossetia.
“Russia’s attempts to destabilise the situation in Ukraine… will not work,” a statement from the Ukrainian foreign ministry said. “Continuing with such a policy will eventually undermine the Russian Federation’s position of being a good partner in the world,” it said.
Ukrainian Foreign Minister Volodymyr Ogryzko said last week that Russia was moving to expand its influence in Crimea by giving out Russian passports.
Russia employed this policy extensively in the Georgian regions of South Ossetia and Abkhazia, both now recognised as independent states by Moscow.
Russia condemned Thursday the “unfriendly” stance of Ukraine over the war in Georgia and its treatment of ethnic Russians, fuelling tensions in what is feared could be the region’s next flashpoint.
Ukraine on Saturday rejected those accusations and criticised Russia for making statements it described as “biased” and “far from reality”. “Ukraine has been an independent state for 17 years and in no way will it be included into the sphere of ‘exclusive interests’ of any country,” the foreign ministry statement said. “Ukraine’s choice to joining EU and NATO is irreversible,” it added.
Moscow strongly opposes Kiev’s attempts to join the European bloc and the military alliance. Western analysts say Russia’s five-day war with Georgia last month was a reminder from Moscow that it wants ex-Soviet nations on its borders, especially Ukraine, to remain in Russia’s orbit.
People in the southeast of Ukraine are mainly Russian-speaking, while those in the northwest predominantly speak Ukrainian and are more oriented towards integration with the West.
Ukrainian President Viktor Yushchenko sees entry into the EU and NATO as key to anchoring it to Europe and has stepped up his campaign after Russia sent troops into Georgia last month.
Yushchenko last month earned Russia’s wrath by imposing restrictions on the Russian navy — Russia’s Black Sea fleet is based at Sevastopol on Ukraine’s Crimean coast.
Bitter in-fighting between Ukraine’s Western-oriented president and Prime Minister Yulia Tymoshenko, sharpened by divisions over ties with Russia, has done little to advance the cause of EU membership.
Relations between Yushchenko and his one-time ally have badly deteriorated, with the presidency accusing Tymoshenko of “high treason” for allegedly siding with Moscow over the Georgia conflict.
Tymoshenko hinted Monday for the first time she might form a new government coalition with the same pro-Moscow opposition she had challenged alongside Yushchenko in 2004 street protests known as the Orange Revolution.
The pro-Western coalition broke apart on September 3, with differences exacerbated by strains over Russia’s conflict with Georgia whose president Mikheil Saakashvili is a close ally of Yushchenko.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
13.  GEORGIA WAR SPARKS POLITICAL BATTLE IN UKRAINE 
The ruling coalition is near collapse as the president and the prime minister spar over whether to treat Russia as foe or friend.

 
By Megan K. Stack, Staff Writer, Los Angeles Times, Los Angeles, CA, Sun, Sep 14, 2008
KIEV, UKRAINE — They are at each other’s throats again, this country’s political lions: the president whose face is pocked from the poison that didn’t quite kill him four years ago, and the prime minister with the golden braid who once fought alongside him in the name of democracy.

The president’s office now calls Prime Minister Yulia Tymoshenko a traitor who refuses to speak out against Moscow. She shoots back that President Viktor Yushchenko is a loose cannon who has antagonized Russia to the point of endangering Ukraine.

The war in Georgia is over. But the war over the war in Georgia rages unabated in Ukraine, the former Soviet state that, like Georgia, has drawn the wrath of Moscow by building ties with the West. The collapse of this country’s ruling coalition is widely expected to become official this week, the final gasp of a threadbare alliance that has barely hung together in recent months.

The delicate balance was upended by a widening dispute over how to respond to a newly aggressive Russia. The political turmoil is, in part, early jockeying between Tymoshenko and Yushchenko for the 2010 presidential election, but it is also a clash over the existential angst that bedevils this country, where identity is stretched awkwardly between Russia and the West.

The war between Russia and Georgia has brought a sense of crisis and anxiety to the region. Fattened on oil and gas riches, Moscow has made it plain that it intends to exert power on neighbors formerly part of the Soviet Union, that it feels justified in demanding “privileged interests,” as Russian President Dmitry Medvedev explained last month.

More than anyplace else, that means Ukraine, bonded to Moscow by deep, ancient imperial and cultural ties. To the fury of Moscow, Ukraine has emerged as a close ally of the United States, its leaders berating Russia as they lobby for membership in the European Union and the North Atlantic Treaty Organization. But many Ukrainians continue to feel a strong affection and loyalty toward Russia.

Today, instead of pulling together and steeling for geopolitical maneuvers, the leaders of Ukraine are mired in internecine squabbles over what kind of country it should be and which loyalties it should foster. Like nothing else since the fall of the Soviet Union, the war in Georgia has laid bare Ukraine’s weaknesses.

When Russia sent warplanes, tank columns and thousands of soldiers into Georgia last month, Yushchenko, long an outspoken critic of Moscow, was outraged. He flew to Tbilisi, the Georgian capital, to stand in solidarity with the Caucasus nation’s president and imposed restrictions on Russia’s Black Sea fleet, based in Ukraine under a long-standing agreement.

Tymoshenko, in contrast, drew attention with her silence. The prime minister dispatched an envoy to Tbilisi and sent humanitarian aid. But there was no condemnation of Russia.

The president’s office accused her of “high treason and political corruption” and hinted it would open a criminal case against her. “I think she struck a deal with the Kremlin. . . ,” said Roman Zvarych, a lawmaker from Yushchenko’s party. “You can’t have a prime minister of a country be silent when your sovereign territory is being used as a base to attack your ally.”

Last week, Tymoshenko was abruptly summoned by the prosecutor general for questioning in the near-fatal dioxin poisoning of Yushchenko in 2004. The inquiry is nothing but a political ploy, her followers say.

For their part, they say the president has gone too far in criticizing Moscow. Not only has he whipped up tensions to a dangerous height, they say, but he also has alienated those Ukrainians who have ethnic and cultural ties to Russia and who are leery of invoking its wrath. That view seems to be gaining credibility. Yushchenko’s approval ratings are in the single digits, analysts from all camps say.

“Support for [Georgian President Mikheil] Saakashvili by Yushchenko angered Russia and woke up that bear that’s been sleeping for a long time,” said Hanna Herman, a lawmaker with the Moscow-friendly Party of Regions. “Now, Ukraine has the worst relations with Russia in the history of its independence.”

Today’s Kiev, the capital, is a battle-hardened place long drained of the pro-democracy, anti-Russia fervor of the 2004 Orange Revolution, which swept Yushchenko and Tymoshenko to power. The onetime tent city of Independence Square is a clot of black-clad youth, locked into clinging embraces, drinking cheap beer and bellowing rock songs.

Kiev hums with politics: local politics, politics for their own sake, games for stakes of power and cash. Everybody has a press aide. Even the press aides seem to have press aides. All of them want to talk to the media, unless they are plotting some new, subtle subterfuge, then they stay silent.

You get the sense sometimes that in this city, Russia and the West have been carved down to shadows of themselves, to symbols wielded like weapons in the ceaseless churn of gladiator-style matches: invoked for their associations, for the blocs of voters they move, and later discarded for the same reasons.

Many analysts here believe Ukrainian politics are drifting closer to Moscow’s sway, as evidenced by the prime minister’s reticence about criticizing Russia and the enduring popularity of the pro-Moscow politician Viktor Yanukovich, a former prime minister whose Party of Regions holds the most parliamentary votes and who is widely seen as the third contender in the presidential election.

Some analysts are convinced that Moscow engineered the current crisis to send Yushchenko into oblivion and forestall Ukraine from joining NATO or moving closer to Europe.

“All of these changes, Russia had a hand in it . . . to bring people who are loyal to power,” said Vadim Karasyov, director of the Institute of Global Strategies, a Kiev think tank. “There’s no need for them to adopt the tactics we saw in Georgia. In Ukraine, they can use soft power and slowly adapt Ukraine to their liking.”

Karasyov, who is seen as close to the president, contends that Russia is on a gradual campaign to reestablish control over Ukraine. “This is all about changing Ukraine’s foreign policy and international identity,” he said. “Everything else is just a consequence.” [megan.stack@latimes.com]

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
14.  UKRAINE MIRED IN BICKERING 

Editorial: The Irish Times, Dublin, Ireland, Monday, Sep 8, 2008
 
PULLED APART by its historical ties with Russia and its government’s ambition to join the European Union and Nato, Ukraine is in a precarious position following Moscow’s military intervention in Georgia. Warnings of further Kremlin destabilisation of the Black Sea region have focused on Ukraine’s mostly ethnic-Russian Crimea peninsula, where Russian and Ukrainian nationalists have clashed in the key port of Sevastopol, home to one of Moscow’s most powerful naval fleets.
But the danger perceived by the United States and European Union, and the potential opportunity perhaps seen by an increasingly assertive Kremlin, has fostered anything but unity among Ukraine’s pro-western leaders. As Washington and Brussels were trying to forge a united front against Moscow, following its recognition of the rebel Georgian regions of South Ossetia and Abkhazia, Ukraine’s president and prime minister were re-igniting their bitter feud.
 
Only months after the 2004 Orange Revolution propelled them to power and ousted pro-Moscow presidential candidate, Viktor Yanukovich, pro-western leaders Yulia Tymoshenko and Viktor Yushchenko were fighting each other, instead of implementing vital reforms.
 
Mr Yushchenko sacked Ms Tymoshenko from the post of prime minister in 2005, but reinstated her last year, after her party’s powerful showing in a general election – but it took only weeks for cracks in their relationship to reappear.
Now, Mr Yushchenko claims his erstwhile ally is trying to oust him with the help of Mr Yanukovich and his Kremlin-backed cohorts, while Ms Tymoshenko accuses the president of blocking vital privatisation and anti-corruption legislation. Both pro-western leaders believe the other is trying to undermine them ahead of the 2010 presidential elections.
 
The usually strident Ms Tymoshenko, who has locked horns with Russia regularly over its controversial gas supply deal with Ukraine, has soft peddled on the Georgian conflict in an apparent attempt to woo Moscow and the millions of eastern Ukrainians who feel more affinity for Moscow than Kiev.
 
Those residents of major industrial cities like Donetsk, Kharkiv and Odessa – as well and the often strident Russian nationalists of Crimea – must be won over if Ms Tymoshenko is to call herself a truly national Ukrainian leader, and to neutralise the power of Mr Yanukovich.
But in pursuing their protracted power struggle, Ms Tymoshenko and Mr Yushchenko risk damaging Ukraine’s efforts to join the EU and Nato, and could encourage hawks in Moscow to try to destabilise the already restive Crimea. Visiting Kiev last week, US vice president Dick Cheney urged Ukraine’s leaders to unite against the “threat of tyranny, economic blackmail and military invasion”.
 
His imprecations had no immediate effect in Kiev, however, and president and prime minister continue to trade allegations as tomorrow’s EU-Ukraine summit hove into view. In-fighting at the top has scuppered any chances Ukraine had of receiving a fast-track invitation to join the EU or Nato. It must not be allowed to leave Crimea – or vital energy supplies to western Europe – vulnerable to Russian interference.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
15.  UKRAINE’S CRIMEA DREAMS OF UNION WITH RUSSIA

 
AFP, Sevastopo, Ukraine, Sunday, 14 September 2008
 
SEVASTOPO – It’s the nightmare of any foreign policy expert on the former Soviet Union and the long-cherished dream of many local inhabitants of this picturesque corner of the Black Sea coast.
And, to some, the prospect of Ukraine’s Crimean peninsula joining Russia now appears a little more plausible following Moscow’s war with Georgia last month and its recognition of two Georgian separatist provinces.
“We’re living in the dream that the Crimea can become Russian again,” said Angelina Mamonchikova, a local activist in Sevastopol, the Soviet-era port in southern Ukraine at the heart of the irredentist quest.
“We have to believe it, otherwise we’d go mad,” said Mamonchikova, whose nails are painted blue, white and red — the colours of the Russian flag — and who took part in a protest this month against the arrival of a US ship.
While the sight of 100 people chanting “Yankee, Go Home!” on the quay at Sevastopol hardly seems noteworthy, many locals share the anti-Western and pro-Russian views of protesters who often take to the streets.
The Crimea was originally taken over by Russia in the 18th century and then formally handed over to Soviet Ukraine in 1954 by then Soviet leader Nikita Khrushchev at a time when internal Soviet borders hardly mattered.
Fifty-eighty percent of the Crimea’s inhabitants say in surveys that they have a Russian background, compared with 25 percent Ukrainian and 13 percent Crimean Tatars.
The Kremlin’s justification of military action in Georgia as a way to defend Russian citizens and its subsequent recognition of the independence of Abkhazia and South Ossetia have given hope to Russian-speakers in the Crimea, many of whom hold Russian passports.
“A lot of people are rubbing their hands with glee,” said Olexander Formanchuk, a Ukrainian political analyst, while European officials fret that Ukraine could be the next target for intervention by Russia.
Many local residents are also disillusioned with the chaotic political scene in the Ukrainian capital Kiev and the pro-Western government’s desire to join the NATO military alliance, a bid fiercely opposed by Russia.
“What good has Ukraine done for us? Nothing!” said Vadim, a taxi driver in Sevastopol. “On my son’s report card it says “ethnic minority language’. Who do they think they are? It’s they who are the minority here!”
A law enforcement official in Simferopol, a city of some 300,000 people, the biggest in the Crimea, told AFP on condition of anonymity: “The authorities are not doing anything for the Crimea, they couldn’t care less.”
But the prospect of a genuine separatist movement appears far-fetched, observers said. Radicals are weakly represented at local assemblies and pro-Moscow rallies rarely draw more than a few hundred people.
The presence of a large minority of Tatars, an ethnic group that was expelled from the Crimea in Soviet times, also lessens the chances of a Georgia-type scenario because of their strong opposition to Moscow.
Assertions by Ukrainian officials that there has been a “massive” increase in the number of Russian passports being given to residents of the Crimea have also been denied as a “provocation” by Russian officials.
Some local residents are also more practical about joining Russia. “So we break off the Crimea and then what do we do? How are Russians going to deliver supplies and all the rest?” said Vladimir Sukhomlinov, a businessman in Sevastopol, referring to the Crimea’s lack of a land border with Russia.
That’s little reassurance for Galina Gorbunova, an elderly woman selling guided tours on the quay at Sevastopol. “Of course we’re scared there could be a war,” Gorbunova said.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
16.  UKRAINE OFFICIAL: ODESSA-BRODY A RUSSIAN MONOPOLY BUSTER

United Press International (UPI), Kiev, Ukraine, Friday, Sept. 12, 2008

KIEV, Ukraine – The Odessa-Brody oil pipeline shows the value of Central Europe as an energy supplier to the region and a deterrent to Russian energy
aims, officials said.

In an interview with the Azeri Press Agency Friday, Ukrainian Deputy Energy Minister Burzu Aliyev said the Odessa-Brody oil pipeline serves as a major
rival to Russian aggression in the regional energy market. “The main goal of the Odessa-Brody pipeline is to dispose of Russian monopoly,” he said.

The Odessa-Brody pipeline currently runs in the reverse direction, eastward toward Russia. Aliyev said Kiev told the Russian oil pipeline firm Transneft
the direction will shift to its intended direction Nov. 1.

“Russian oil is transported from Odessa to Brody currently, and we intend to transport the oil from Odessa to Brody as it is considered in the project,” the deputy minister said. He blamed a lack of production at Ukrainian refineries for creating artificial market conditions, leaving the sector unprofitable.
——————————————————————————–

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
17.  ENERGY OPTIONS FOR UKRAINE SEMINAR
“Achieving National Security for Ukraine Through Energy Independence and Diversification,”

 
WHEN: Monday, September 15, 2008, 6:30 pm – 9:30 pm (Eastern Time)
WHERE: Rome Auditorium, Rome Building, Johns Hopkins University
1619 Massachusetts Avenue, N.W., Washington, D.C. 20036
(walking distance from the Dupont Circle Metro station, red line)
 
The Washington Group (TWG), in conjunction with the U.S.-Ukraine Foundation (USUF), the U.S.-Ukraine Business Council (USUBC), and the Ukrainian American Environmental Association (UAEA), is hosting a panel of speakers on Monday, September 15 at 6:30 p.m. who will discuss options for Ukraine to become energy independent, including energy efficiency, renewable energy, fossil fuels, and nuclear power. 
 
Ukraine presently relies on natural gas, oil, and nuclear fuel imported from Russia for more than half of its energy needs – a situation that poses serious risks to Ukraine’s national security, as evidenced by the current conflict between Russia and Georgia. The Russian-Georgian conflict underscores Need for Ukraine to slash reliance on import of Russian energy.
The panelists will address the theme “Achieving National Security for Ukraine Through Energy Independence and Diversification,” explore sustainable energy options for Ukraine, and discuss how to raise public awareness on the energy issues facing Ukraine today. 
 
A question and answer session as well as a reception will follow. The event is being simultaneously webcast – see below for information on how to register for webcast.
 
SPEAKERS:
1. Dr. William S. Woodward,  Vice President – Holtec International: Nuclear Energy (pro).
2. Michael Mariotte,  Executive Director – Nuclear Information and Resource Service: Nuclear Energy (con).
3. Edward Chow,  Senior Fellow – Center for Strategic and International Studies (CSIS) Energy Program: Fossil Fuels (oil, gas, and coal). 
4. Brian Castelli,  Chief Operating Officer – Alliance to Save Energy: Energy Efficiency.
5. Ken Bossong,  Co-Director – Ukrainian-American Environmental Association: Renewable Energy (solar, wind, geothermal, biomass/biofuels, water power). 
MODERATOR: Andrew Bihun, Global Trade Development, TWG, USUBC Senior Advisor
WHEN: Monday, September 15, 2008, 6:30 pm – 9:30 pm (Eastern Time)
WHERE: Rome Auditorium, Rome Building, Johns Hopkins University
1619 Massachusetts Avenue, N.W., Washington, D.C. 20036
(walking distance from the Dupont Circle Metro station, red line)
WEBCAST REGISTRATION:
To register for the free-of-charge live video webcast, please go to: http://thewashingtongroup.org/Events/2008/energy091508.php
FOR MORE INFORMATION:
Due to limited space, those planning to attend in person are encouraged – but not required – to RSVP.  Please contact Andriy Blokhin at andriy.blokhin@gmail.com or 202-297-2484.
SPONSORS:
The Washington Group (TWG); U.S.-Ukraine Foundation (USUF); U.S.-Ukraine Business Council (USUBC); Ukrainian American Environmental Association (UAEA)
——————————————————————————–
[return to index] Action Ukraine Report (AUR) Monitoring Service]
===================================================
Welcome to send us names for the AUR distribution list.
===================================================
18.  MCDONALD’S UKRAINE OPENS FAST-FOOD RESTAURANT NUMBER 60
 
Ukrinform, Kyiv, Ukraine, Wed, August 27, 2008

KYIV – McDonald’s Ukraine Ltd opens first fast-food restaurant in Poltava which is a center of famous Ukrainian halushkas. Construction of the restaurant is worth USD 1 million.

According to the press-service of the Poltava City Council, the city authorities approved the act of the state commission on putting into operation

McDonalds’ fast-food restaurant with summer site and parking area.

McDonald’s Ukraine Ltd plans to increase the number of its restaurants in Ukraine fourfold up to 240. In 2008 the company will open its new

establishments in Kyiv, Poltava, Kharkiv, Simferopol and Zhytomyr. At present there are 60 McDonald’s establishments in 17 Ukrainian cities. [McDonald’s Ukraine was established by business interests and investments from Vienna, Austria.]
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
19.  PRESIDENT YUSHCHENKO HANDS OVER LISTS OF GERMANS WHO
DIED OF FORCED STARVATION IN 1932-1933 TO GERMAN CHANCELLOR MERKEL 
 
Olena Honcharenko, Ukrainian News Agency, Kyiv, Ukraine, July 21, 2008
KYIV – President Viktor Yuschenko handed over to Chancellor of Germany Angela Merkel lists of Germans who died of starvation in 1932-33 in Ukraine
[Holodomor].  He announced this at a joint press-conference with Merkel.
“I handed over to madam Merkel lists of those people who in 1932-33 died from starvation in those German settlements, which were situated in eastern part of Ukraine,” Yuschenko said.  President hopes, that Merkel will hand over this data to relatives and close people of those perished.
As Ukrainian News earlier reported, on July 3 Parliamentary Assembly of the Organization for Security and Co-operation in Europe (OSCE) recognized the Holodomor famine of 1932-33 in Ukraine.  Between three million and seven million people died in the 1932 — 1933 famine in Ukraine, according to various estimates.  Moreover, according to several historians, there were famines in Ukraine in the 1921 — 1923 and 1946 — 1947 periods.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
20.  OSCE PARLIAMENTARY ASSEMBLY RECOGNIZED THE HOLODOMOR OF
1932-1933 IN UKRAINE AND ADVISED ALL PARLIAMENTS TO DO THE SAME

 
The Day Weekly Digest, Kyiv, Ukraine, Tuesday, July 8, 2008

KYIV – The 17th session of the OSCE Parliamentary Assembly (PA) passed a resolution on the Holodomor of 1932-1933 in Ukraine last Sunday in Astana.

OSCE PA,
 
[1] “pays tribute to the innocent lives of millions of Ukrainians who perished during the Holodomor of 1932 and 1933 as a result of the mass starvation brought about by the cruel deliberate actions and policies of totalitarian Stalinist regime”,
 
[2]  “welcomes the recognition of the Holodomor in the United Nations, by the United Nations Educational and Scientific Organization and by the national parliaments of a number of the OSCE participating States,”
 
[3] “endorses the Joint Statement of 31 OSCE participating States on the 75th anniversary of the Holodomor of 1932-1933 in Ukraine, delivered at the 15th Meeting of the OSCE Ministerial Council,” the resolution says in particular. Besides, OSCE PA
 
[4] “supports the initiative of Ukraine to reveal the full truth of this tragedy of Ukrainian people, in particular, through raising public awareness of the Holodomor at international and national levels, organizing the commemorations of the Holodomor as well as academic, expert and civil events aimed at discussing this issue.”  OSCE PA
 
[5] “invites the parliamentarians of the OSCE Member States to participate in the events, commemorating the 75th anniversary of the Holodomor of 1932-1933 in Ukraine” and “strongly encourages all parliaments to adopt acts regarding recognition of the Holodomor.”
COMMENTARY
Stanislav KULCHYTSKY , Deputy Director, Institute of the History of Ukraine (National Academy of Sciences):
“For the world community to recognize the 1932-1933 Holodomor as genocide, we should cooperate more with unbiased foreign historians. As it has already been reported, the book Why Was He Destroying Us? Stalin and the Holodomor in Ukraine of The Day Library series was recently launched in Bucharest.
 
Speaking at this ceremony, member of the Rumanian Academy of Sciences Florin Constantinium noted that it is strange that the polemics, which has lasted for 20 years now since the publication of Robert Conquest’s Harvest of Sorrow , is inadequately based on the findings of Ukrainian historians.
 
As is known, in this polemics the Ukrainian side does not deny the fact of an all-USSR famine in 1932-1933, but it speaks about something entirely different – the Holodomor in Ukraine, and it has enough facts to differentiate between the two phenomena. As for the attitude of Russia to this subject, we should react to the way it treats this ticklish question by way of third countries’ mediation.”
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
Please contact us if you do not wish to receive the AUR.
===================================================
21.   HOLODOMOR WILL BE RECOGNIZED IN TORONTO PUBLIC SCHOOLS

Genocide caused the death of millions of Ukrainians in 1932-1933 
By Clark Kim, Inside Toronto, Toronto, Ontario, Canada, Tuesday, September 9, 2008 

The Holodomor, an event during the early 1930s in the Ukraine where millions died of famine, will now be recognized on the fourth Friday of November in all Toronto public schools starting this year.  The motion by Ward 12 (Willowdale) Trustee Mari Rutka to honour those who died during the Holodomor was unanimously approved at the last Toronto District School Board meeting in late August.

Several countries, including Canada, recognized the Holodomor as an act of genocide caused by the Soviet regime under Joseph Stalin to “systematically destroy the Ukrainian people’s aspirations for a free and independent Ukraine, and subsequently caused the death of millions of Ukrainians in 1932 and 1933.”
“A lot of people don’t know about it,” said Rutka, noting the old Soviet government had suppressed the information until recently. “At least five million died as a result of Stalin’s policy.”
But recognizing the Holodomor at the TDSB is just the first step, Rutka said, acknowledging the Ukrainian-Canadian community in Toronto for bringing the Holodomor to the attention of the school board.
“In order to support that (motion), there will be another motion to the programs committee this month to develop resource materials for teachers so they can discuss this issue with their students,” she said.
Eugene Yakovtich, chair of the famine genocide committee with the Ukrainian Canadian Congress – Toronto Branch, said he hoped the school board will vote to see the Holodomor in the history curriculum as early as next school year.
“It’s a significant part of history in the last 100 years,” said Yakovitch, adding more documentation of the Holodomor is being revealed since Ukraine declared independence from the former Soviet Union in the early 1990s. “This could be a lesson from history.”
The motion to include the Holodomor into the public school board’s curriculum will be brought forward to the program and school services committee
Wednesday, Sept. 10.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
22.  BUCHACH: A UKRAINE TOWN DETERMINED TO SUFFER AMNESIA 

 
Robert Fulford, National Post, Don Mills, Ontario, Canada, Saturday, September 13, 2008
 
The 12,000 people who live in the western Ukrainian town of Buchach are mostly Ukrainians. Probably, they consider that fact both unremarkable and altogether proper, but for many centuries Buchach was partly Ukrainian and partly not. Many Poles also lived there. Early in the 20th century, Jews made up half the population.

Lee Strasberg, a great teacher of actors in America, was born there in 1901; and Simon Wiesenthal, the famous pursuer of war criminals, in 1908. In the 1930s, thousands of Jews still lived in Buchach.

It was Polish territory until 1939, when the Soviets (following their agreement with Germany) annexed it as part of their Ukrainian republic. The Poles, made unwelcome, soon left. Then the Germans came and most Jews were murdered by Nazis and their Ukrainian collaborators.

Today in Buchach you can easily find evidence of the Polish community; there’s a Roman Catholic church that they built, which is well maintained. But it’s hard to see any sign of the Jews. Evidence of their presence seems to be carefully eradicated.

 
The Great Synagogue, for instance, was torn down in 1950 because the locals decided it was no longer needed. The site became an open market, with no indication of what it replaced. The study house for scholars, next to the synagogue, came down in 2001, replaced by a shopping centre.

The study house has a place in literary history as a crucial setting for the novels of S.Y. Agnon, a Jew who was born in Buchach, settled in Palestine in 1909, and won the 1966 Nobel Prize for literature. In the town’s little museum, several glass cases hold books by Agnon, most of them donated by visiting Israelis in 2001, but there’s nothing to explain why he’s part of Buchach’s past.

 
In 2003, the municipality renamed the street where he lived Agnon Street but the marble plaque identifying his home was stolen soon after it was installed. A notice in a wooden frame replaced it but doesn’t mention that he was Jewish or wrote in Hebrew.

Buchach, like many other Ukrainian towns, practices a kind of reverse archaeology. It obliterates the civilization of the past rather than uncovering it. That’s the point of an unsettling and highly revealing book, “Erased: Vanishing Traces of Jewish Galicia in Present-Day Ukraine” (Princeton University Press), by Omer Bartov, an Israeli-born, Oxford-educated historian who now teaches at Brown University in Providence, R.I.

Bartov has a special interest in Buchach. That was his mother’s town, until she left for Palestine with her family in 1935. Bartov sees its monocultural character as typical of the region. He describes in detail 20 towns and cities in western Ukraine where the pattern repeats itself again and again. The local people, while devoted to their nation’s history, have developed an amnesia about their one-time Jewish neighbours.

Bartov writes about this phenomenon with an understated emotion, fact piled upon fact, until his evidence becomes overwhelming.

In 2002, Jonathan Safran Foer placed his first novel, “Everything is Illuminated”, in the same district. Searching for his family’s history, he discovered no trace of it. Instead he imagined a surrealistic narrative about his grandfather’s long-ago village.

These empty spaces in history have become a major subject for Bartov. He’s now writing a book entirely devoted to Buchach, a biography of the town and its residents from the 14th century to the end of its multi-ethnic tradition in the 1940s. He wants to understand what transformed a community based on co-
operation into a community of genocide. In this process, he’s found himself rethinking the nature of the Holocaust.

The killing of the Jews in the towns of western Ukraine (about 500,000 died there) was not, he points out, a neatly organized undertaking, directed from far away. It was “a vast wave of brutal, intimate, and endlessly bloody massacres.”

 
Hannah Arendt’s famous phrase, “the banality of evil,” doesn’t describe this case. There was nothing abstract, distant or bureaucratic about it: “Far from meaningless violence, these were often quite meaningful actions, from which many profited politically and economically.”

There are Ukrainians today who refuse to take part in consigning the local Jews to oblivion, just as (Bartov notes) there were Ukrainians who risked everything to save Jews during the Holocaust.

 
Here and there, an outspoken academic urges recognition of Jewish-Ukrainian history and a Holocaust centre in Kiev has for several years been educating Ukrainian teachers about the killing of the Jews. But in Bartov’s account, the silence is close to deafening and the reasons for it are painfully obvious.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
================================================================
U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
Promoting Ukraine and U.S.-Ukraine business investments since 1995.
================================================================
23.  LURE OF UKRAINE 
Chance discovery leads couple to visit relatives in native land,

re-establishing ties and leading them to a business “All Things Ukrainian,” 
By Lisa O’Donnell, Journal Reporter, Winston-Salem Journal
Winston-Salem, North Carolina, Saturday, September 13, 2008
CLEMMONS – Last month, two contestants on the TV show So You Think You Can Dance? performed what was billed as a traditional Russian dance in folk costumes. Except it wasn’t really a Russian dance. It was a traditional Ukrainian dance called a hopak, and they were wearing distinctive Ukrainian folk costumes.
Word of the blunder made its way to Susan Washinsky of Clemmons, who hopped on her computer and alerted members of the Ukrainian Association of North Carolina to the mistake. She requested that they write to the executive producer of the show expressing their disappointment. As the association’s action-item coordinator, Washinsky monitors how Ukraine, a former Soviet republic, is portrayed in the media.
“THE UKRAINE”
One of the most common mistakes is calling the country “The Ukraine.” When the country split from the Soviet Union in 1991, it dropped the article before its name. When a writer or broadcaster adds the article, they can expect a letter from Washinsky. “Ukrainians don’t even have the article ‘the’ in their language,” she said.
It’s a particularly sensitive issue with Ukrainians, who are trying to reclaim their identity after 70 years of Soviet rule, said her husband, John Washinsky.
“For so long, Ukrainians were denied so many things,” he said. “They were not allowed to practice their traditions and their art forms.”
The Washinskys are dedicated to preserving Ukrainian culture. John Washinsky grew up in western Pennsylvania hearing stories about Ukraine from his maternal grandfather, who immigrated to the United States around 1910.
One day in the early 1990s, while searching through his grandfather’s attic, he and Susan came across a bundle of letters from Ukrainian relatives he had never met. The last letter was dated 1968.
The Washinskys aren’t entirely sure why the correspondences stopped, but they said they believe that local Communist leaders had a role in disrupting communication between the families. A letter from or to the United States was sure to raise a red flag.
The letters piqued the Washinskys’ curiosity and, with the help of a Ukrainian friend from Greensboro, they wrote a letter and mailed it to the return address on the envelope.
Within a few months, they heard back from a cousin. Subsequent letters and e-mails with the cousin and other relatives followed. And in 1997, the Washinskys, with their son, Michael, flew to Ukraine to meet their relatives, who live in a village near Poland. “It’s hard to put into words, to think that we are now connecting after 80 years,” Susan Washinsky said.
The Washinskys fell in love with Ukrainian culture. Upon returning from Ukraine, the Washinskys started All Things Ukrainian, a Web-based business that sells handmade Ukrainian arts and such crafts as decorated eggs, stained glass, black lacquered boxes and paintings of religious icons.
The idea for the business was hatched while sitting around the table with their Ukrainian relatives. The relatives buy local art and ship it to the Washinskys.
A few times each year, a box of goods arrives at their house. “There’s a certain smell to the embroidery and the varnish. When a box arrives, you feel like Ukraine is here today,” John Washinsky said.
Oleh Wolowyna, the president of the Ukrainian Association of North Carolina, said that as far as he knows, the Washinskys’ business is the only one in the Southeast that specializes in Ukrainian crafts. “It’s a really important way for people to get acquainted with Ukrainian culture,” he said.
Susan Washinsky runs the business. She is a language lover and learned to speak Ukrainian. They travel to international festivals around the Southeast and set up booths to promote their business and Ukrainian culture. They are also active in the Ukrainian Association of North Carolina, which has 120 families, most of whom live in the Triangle.
One of the association’s main goals for this year is to promote awareness about the 75th anniversary of a famine that killed between 3 million and 6 million Ukrainians. Ukrainians refer to it as the Holodomor, which means extermination by hunger.
 
According to information from the Ukrainian Studies Fund at Harvard University, the famine was engineered by Soviet leader Joseph Stalin to crush Ukrainian resistance to forced collectivization. Little was known about the famine because news of it was suppressed by the Soviets.
The Ukrainian government is pressing other countries to label the famine a genocide as a way to raise awareness about other engineered famines in the world. As part of this effort, Susan Washinsky will be putting together some material that will be on display at the Clemmons Public Library in December.
[Lisa O’Donnell can be reached at 727-7420 or at lodonnell@wsjournal.com.]
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
“ACTION UKRAINE REPORT – AUR”
A Free, Private, Not-For-Profit, Independent, Public Service Newsletter

With major support from The Bleyzer Foundation, Kyiv, Ukraine
Articles are Distributed For Information, Research, Education, Academic,
Discussion and Personal Purposes Only. Additional Readers are Welcome.
LINK TO THE AUR 2008 ARCHIVE: http://www.usubc.org/AUR/
TO BE ON OR OFF THE FREE AUR DISTRIBUTION LIST
TO BE ADDED: If you would like to read the ACTION UKRAINE REPORT- AUR, several times a month, please send your name, country of residence, and e-mail contact information to morganw@patriot.net. Information about your occupation and your interest in Ukraine is also appreciated.
 
TO BE REMOVED: Please contact us immediately by e-mail at morganw@patriot.net. If you are receiving more than one copy please let us know so this can be corrected. 
 
PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer, The Bleyzer Foundation
Emerging Markets Private Equity Investment Group;
President, U.S.-Ukraine Business Council (USUBC);
Founder & Trustee, “Holodomor: Through The Eyes Of Ukrainian Artists”
1701 K Street, NW, Suite 903, Washington, D.C. 20006
Tel: 202 437 4707; Fax 202 223 1224
 

POWER CORRUPTS AND ABSOLUTE POWER CORRUPTS ABSOLUTELY 
=========================================================================
return to index [Action Ukraine Report (AUR) Monitoring Service]
=================================================

Leave a comment

Filed under Uncategorized

AUR#905 Sep 12 Agriculture Gains; KPMG; Banks; AeroSvit; EU Half-Open; Russia Slams Ukraine; James Mace

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

Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World      
                     
ACTION UKRAINE REPORT – AUR – Number 905
Mr. Morgan Williams, Publisher and Editor, SigmaBleyzer
WASHINGTON, D.C., FRIDAY, SEPTEMBER 12, 2008
 
INDEX OF ARTICLES  ——
Clicking on the title of any article takes you directly to the article.               
Return to Index by clicking on Return to Index at the end of each article
UN food agency says high food prices spur expansion in Eastern European crops
UN News Centre, New York, New York, Thursday, September 11, 2008
 
The Associated Press, Paris, France, Thursday, September 11, 2008
 
Dow Jones, London, UK, Thursday, September 11, 2008 
 
AgriNews, APK-Inform, Dnipropetrovsk, Ukraine, Thursday, September 11, 2008 
 
Alfred C. Toepfer International Ukraine, Kyiv, Ukraine, Tuesday, August 19, 2008
 
Export 22.6 million tonnes of grain in 2008/2009 compared to 3.7 million tonnes in the 2007/2008 year.
Interfax – Food & Agriculture, Kyiv, Ukraine, Wednesday, September 10, 2008
 
Large 2008 harvest compensates for slowdown in industrial growth
Interfax Ukraine Economic, Kyiv, Ukraine, Monday, September 8, 2008
 
Grain harvester imports are already up by 3.6 times
Ukrainian News Agency, Kyiv, Ukraine, Tuesday, September 9, 2008
 
KPMG-Ukraine Opens New Office in Donetsk
U.S.-Ukraine Business Council (USUBC), Washington, D.C., June, 2008
 
10UKRAINIAN PM BLOCKS WARSAW STOCK EXCHANGE LISTING FOR UKRAINE BANK
Warsaw Business Journal, Warsaw, Poland, Wed, September 10, 2008
 
Cbonds News, St. Petersburg, Russia, Tuesday, September 9, 2008 

12UKRAINE STRONGLY FEELS GLOBAL CRISIS SAYS NBU COUNCIL HEAD PETRO POROSHENKO
UkrInform – Ukraine News, Kyiv, Ukraine, September 11, 2008

 
Ukraine’s Civil Aviation Safety Assessment
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Tue, Sep 9, 2008

14AEROSVIT UKRAINIAN AIRLINES SUFFERS RAIDER ATTACK 

By Jim Davis, Business Ukraine magazine, Kyiv, Ukraine, Monday, September 8, 2008

Issues letter asking for protection of airline & its employees from illegal interference into the company’s activity
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Tuesday, September 9, 2008
 
16.  PM TYMOSHENKO, U.S. ASSN’T SEC OF STATE DAN FRIED DISCUSS UKRAINE’S INTEGRATION WITH NATO
Ukrainian News – on-line, Ukrainian News Agency, Kyiv, Ukraine, Thursday, September 11, 2008
 
Roman Olearchyk in Kiev, Financial Times, London, United Kingdom, Mon, Sep 8 2008
Letter-to-the-Editor: From Mr Gene Van Dyke, Founder and President,
Vanco Energy Company, Houston, TX, US, Financial Times, London, UK, Fri, Sep 12 2008
 
bne Ukraine Daily List, Berlin, Germany, Wed, September 10, 2008

20 EU KEEPS DOOR HALF-OPEN FOR UKRAINE 

Euro Activ, Brussels, Belgium, Wednesday 10 September 2008   
 
21. RUSSIA’S WESTERN NEIGHBOURS: UKRAINE COMES TO THE FOREFRONT
An already fragile Ukraine has been made a lot more nervous by Russia’s war with Georgia – and it is not alone
The Economist print edition, London, UK, Thursday, September 11, 2008
 
22RUSSIA SLAMS ‘UNFRIENDLY’ UKRAINE
Agence France Presse, Moscow, Russia, Thursday, September 11, 2008
 
By David Gauthier-Villars, The Wall Street Journal, New York, September 10, 2008; Page A9
 
Analysis & Commentary: By F. Stephen Larrabee
Corporate Chair in European Security at the RAND Corporation
Japan Times, Tokyo, Japan, Monday, September 8, 2008
 
Opinion: By Leon Aron, The Wall Street Journal, NY, NY, Wed, September 10, 2008; Page A15
 
A collection of major works by noted US historian James Mace, exposed the genocide of 1932-1933
By Nadia Tysiachna, The Day, and Natalia Dziubenko-Mace
The Day Weekly Digest, Kyiv, Ukraine, Tuesday, September 9, 2008
===================================================
1
 UKRAINE POSSESSES SIGNIFICANT UNTAPPED AGRICULTURAL POTENTIAL
UN food agency says high food prices spur expansion in Eastern European crops
UN News Centre, New York, New York, Thursday, September 11, 2008

NEW YORK – A senior United Nations food agency official today predicted a bumper harvest of cereal crops in Russia and Ukraine for this ear and said the region possesses significant untapped agricultural potential.

Rising food prices have led to an expansion of land used for agriculture in the two countries, with an increase of 2.4 million hectares to 33.8 million
hectares of soil sown with wheat, according to the UN Food and Agriculture Organization (FAO).

In Russia alone, aggregate grain area – wheat, course grains and rice – is forecast at nearly 46 million hectares for the 2008 harvest, which is 2.6 million more than in 2007.

“This clearly shows that higher prices can be an opportunity for the farming community,” said Charles Riemenschneider, Director of FAO’s Investment
Centre, at the opening of the two-day meeting in Paris on agricultural developments in the region.

Earlier this year FAO and the European Bank of Reconstruction and Development (EBRD) highlighted that as much as 13 million hectares of unused
farmland lay idle in Eastern Europe and the Commonwealth of Independent States (CIS) – 12 of the 15 former Soviet republics.

According to FAO figures, this land is already being exploited, with an aggregate production of wheat in the European CIS countries set to rise to more than 73 million tonnes in 2008, some 13 per cent more than the successful harvest of 2007.

“In March we discussed opportunities for enhancing agricultural output, and we can see from these figures that benefits are already materializing that could make a real difference on world markets,” said Mr. Riemenschneider.

“Both countries [Russia and Ukraine] have significant exportable cereal surpluses, but more long-term investment is needed to ensure that this supply
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
2.  RUSSIA, UKRAINE SET TO SIGNIFICANTLY EXPAND AGRICULTURAL OUTPUT

 
The Associated Press, Paris, France, Thursday, September 11, 2008

PARIS: Russia and Ukraine are set to significantly expand their agricultural plantings this year as higher prices for commodities such as wheat, coarse grains and rice spur farmers to expand their plantings, the U.N. Food and Agriculture Organization said Thursday.

 
Aggregate output of wheat in the European members of the Commonwealth of Independent States, a loose alliance of ex-Soviet nations, is forecast to rise 13 percent this year to 73 million tons, the FAO said in a statement. The FAO and World Bank are taking part in meetings in Paris this week on financing farming in eastern Europe and Central Asia.
Russia and Ukraine will expand their wheat plantings this year by 2.4 million hectares (5.9 million acres) to 33.8 million hectares (83.5 million acres). In Russia alone, total plantings of all grains is expected to reach 46 million hectares (113 million acres) this year, 2.6 million hectares more than in 2007, the FAO said.
The FAO is organizing a two-day meeting in Paris to discuss the agricultural potential of countries in central and eastern Europe, the Caucasus and Central Asia.
 
Lured by soaring food prices, corporations — both domestic and foreign — have been snapping up land in southern Russia’s fertile “black earth” region, replacing inefficient Soviet-style collective farming with modern farming techniques and economies of scale. Russian government officials recently announced plans to transform the country into the world’s leading grain exporter within five years.
High oil prices, changing diets, urbanization, expanding populations, flawed trade policies, extreme weather, growth in biofuel production and speculation have sent food prices soaring worldwide, trigging protests from Africa to Asia and raising fears that millions more will suffer malnutrition.
Internationally, overall food prices have risen 83 percent in three years, according to the World Bank. Part of the increase is the result of adverse weather in major grain-producing regions, with spillover effects on crops and livestock competing for the same land.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
3.  DUPONT SAYS EASTERN EUROPE AGRICULTURE GROWTH REMAINS STRONG 
 
Dow Jones, London, UK, Thursday, September 11, 2008 

LONDON – Eastern Europe’s agriculture industry has strong growth potential, which will help meet the world’s rising food needs, a DuPont Co. (DD) executive told Dow Jones Thursday.  “It’s absolutely an exciting area of the world for agriculture,” said Jim Borel, DuPont’s group vice president of crop protection and seed on the region. “Our seed and crop protection business is growing nicely.”
 
Dupont’s crop protection business in eastern Europe has risen 15%-35% over the last couple of years.  “Often times the general agriculture market in eastern European region is rising faster than other parts of the world,” said Borel. Farmers in eastern Europe are “very hungry for new technology and ready to adopt it,” added Borel.

FARMERS IN ROMANIA AND UKRAINE WERE OUT FRONT
When DuPont recently rolled out the new insecticide Rynaxypyr, farmers in Romania and Ukraine were some of the first to start using it. Just last month DuPont’s seed business Pioneer Hi-Bred, opened a new EUR1.5 million to EUR2 million research facility in Hungary.
 
In recent years investors have been attracted to eastern Europe, seeking cheap farm ground, especially after last season’s rise to record high grain prices.
 
Pioneer has been involved in eastern Europe for more than 30 years, but Borel said agriculture interest in the area really picked-up in the 1990s. There hasn’t really been a surge in investment, but rather a continuation, said Borel.
 
Most eyes have been on the Commonwealth of Independent States, where many fields were left fallow following the fall of the Soviet Union.
 
In Russia and Ukraine as much as 13 million hectares could be returned to production, according to estimates by the European Bank for Reconstruction and Development and the U.N.’s Food and Agriculture Organization.
 
Already in the 2008-09 season, aided by favorable growing weather, grain production in Russia and Ukraine is up 22% on the year at a combined 134 million tons, according to the International Grains Council. And as fields become more conditioned and increased technology is used, yields are expected to rise.
UKRAINE CORN YIELDS ARE ABOUT 40% OF THOSE IN THE U.S.
Ukraine corn yields are about 40% of those in the U.S., and by increasing them to even half of U.S. yields, about another 1.5 million tons could be harvested, according to Borel. National U.S. corn yields in 2007 were 151.1 bushels per acre. “Production potential is there,” he said.
 
Before the world produced food surpluses, now stocks are low and food demand is growing, he added. “The opportunity is real and the need is there,” said Borel. Current challenges include some lingering Soviet era government and business systems and the need to protect intellectual property. “But we see progress in those areas,” said Borel.
 
Source: Lisa Kallal, Dow Jones Newswires; (4420) 7842 9415; lisa.kallal@dowjones.com
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
4.  UKRAINE IN THE WTO: AGRICULTURAL BUSINESS PERSPECTIVES

 
AgriNews, APK-Inform, Dnipropetrovsk, Ukraine, Thursday, September 11, 2008 

KYIV – The international conference “Ukraine in WTO: Business Perspectives” will be held November 27-28 2008 [Thursday-Friday] in Kyiv (Ukraine). The event is devoted to this year Ukraine’s WTO accession, new business opportunities available for foreign investors, and experience exchange between the Ukrainian and EU agricultural companies.

Organized by: “Eurobusiness Advisory” www.euroadvisory.co.uk and the “Ukrainian Agrarian Confederation” www.agroconf.org.
Supported by the Ministry of Economy of Ukraine, Royal Agricultural Society of England, and other organizations. Amongst confirmed speakers a number of senior Ukrainian and foreign governmental officials and executives from agrarian organizations/companies, including:
– Deputy Minister of Economy of Ukraine
– Deputy Minister of Agrarian Policy of Ukraine
– Deputy General Director of WTO Secretariat
– First Deputy Head of the State Customs Service of Ukraine
– President of the Ukrainian Agrarian Confederation
– President of the Czech Agrarian Chamber
– President of the Polish National Council of Agricultural Chambers
– Vice-President of the British National Farmers Union, and many others.
Detailed information about the conference and programme can be found at: www.ua-wto.com. To enquire about sponsorship or media partnership please contact: Eurobusiness Advisory, London, UK; Tel: +44(0)2071833585; Fax:+44(0)2071993694; E-mail: admin@ua-wto.com;  Website: www.euroadvisory.co.uk
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
==============================================================
U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
Promoting U.S.-Ukraine business relations & investment since 1995.
==============================================================
5.  TOEPFER INTERNATIONAL (UKRAINE) GRAIN COMPANY SIGNS SECOND
MEMORANDUM OF COOPERATION WITH UKRAINIAN FLOUR PRODUCERS 
 
Alfred C. Toepfer International Ukraine, Kyiv, Ukraine, Tuesday, August 19, 2008
 
KYIV – Managing Director of “Alfred C. Toepfer International (Ukraine)” Bjoern Stendel, the President of CJSC “Holding” “T and S” Vladimir Slabovskiy, the First Deputy Head of the Board CJSC “Ukrzernoprom” Yevgeniy Leng and the Managing Director of “Khmelnitsk Mlyn” Ltd. Vasiliy Barilyuk today signed a memorandum of cooperation in Kyiv.
 
This is the second agreement of cooperation between Ukrainian enterprises and an international grain trading company. The main aim of the agreement is to provide Ukrainian producers with the grain at the stable prices and financing under acceptable terms. Taking into account the experience of their colleagues, one more large Ukrainian company “Khmelnitsk Mlyn” Ltd. decided to join the signing of the Memorandum.
 
According to the document, during the next marketing year “Alfred C. Toepfer International (Ukraine)” will deliver grain for CJSC “Holding “T and S”, CJSC “Ukrzernoprom”, “Khmelnitsk Mlyn” Ltd. in accordance with a preliminary developed plan, terms of financing and flexible delivery schedule, that are mentioned in the additional agreements. Thus, during 2008-2009 marketing year CJSC “Holding  “T and S” is planning to purchase 20 thousand tons of the grain, “Khmelnitsk Mlyn” Ltd. – 20 thousand tons of the grain.
 
The grain trader is obliged to coordinate with the customers the place and conditions of the grain storage during the period of the agreement validity. The sum of the contracts includes grain, grain storage, financing expenditures and income of the supplier. Besides, taking into account the previous experience, the buyer has the right to increase the amount of the grain supply.
 
Last year CJSC “Holding “T and S”` purchased 35 thousand tons of the grain for its production needs instead of planned 25 thousand tons of the grain. “Alfred C. Toepfer International (Ukraine)” supplied Ukrainian enterprises with 415 thousand tons of the grain last year.
 
As experience showed last year, cooperation between Ukrainian enterprises and the international grain trading company are mutually profitable for all the parties. Favorable financing terms are proposed to the Ukrainian producers, which are impossible to be provided by the banks and the other financial institutions.
 
Besides, the supply of the enterprises by the main products and flexible schedules depends on their production needs. On the other part, “Alfred C. Toepfer International (Ukraine)” will continue the stable work within Ukraine during the next grain year, supplying Ukrainian companies with the grain, creating the stable conditions on the flour and bread market.
 
FOOTNOTE:  U.S. agricultural company Archer Daniels Midland (ADM) is a very large shareholder in Alfred C. Toepfer International, headquartered in Hamburg, Germany. ADM is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================      
6.  UKRAINE RAISES GRAIN FORECAST TO 48.7 MILLION TONS
Will export 22.6 million tonnes of grain in 2008/2009 compared to 3.7 million tonnes in the 2007/2008 year.
 
Interfax – Food & Agriculture, Kyiv, Ukraine, Wednesday, September 10, 2008

KYIV – Ukraine expects to harvest 48.7 million tonnes of grain this year,the Agriculture Ministry said on August 25. The previous forecast had been for a harvest in the 43 million-45 million tonne range.

Ukraine will export 22.6 million tonnes of grain in the current agricultural year,compared with 3.7 million tonnes in the 2007/2008 year, Agriculture Minister Yuriy Melnik said. Ukraine exported 1.5 million tonnes of grain in August and 3.2 million since the beginning of the agricultural year (July 1).
Ukraine will consume 26.5 million tonnes of grain domestically,including 6 million tonnes for food products,of which 5.3 million tonnes for bakery products,and 2.9 million tonnes for seed. The reserve for the future agricultural year will be 5.6 million tonnes.
The Cabinet is discussing establishment of a minimum price of 816 hryvni per tonne for wheat exports (4.8435 hryvni/$1), which includes VAT refund, Prime Minister Yulia Tymoshenko said at a government session. “If we set a price of 816 hryvni per tonne,that will be a serious basis for the agricultural sector,” she said.
The sector plans to sow 8.8 million ha for the winter crop,including 6.5 million ha of wheat,0.5 million ha of rye,0.7 million ha of barley,Melnik said. Ukraine sowed 8 million ha for the winter crop in 2008,16% more than in 2007.
Ukraine had harvested 42.6 million tonnes of grain and grain legumes (bunker weight) from 12.337 million ha as of August 21,double the figure for the same day last year. The average yield was 34.5 centners/ha,up from 20.6 centners/ha a year earlier.
The harvest totaled 26.596 million tonnes of wheat from 7 million ha (37.9 centners/ha),13.354 million tonnes of barley from 4.166 million ha (32.1 centners/ha) and 1.038 million tonnes of rye from 0.455 million ha (22.8 centners/ha).
Ukraine harvested just 29.3 million tonnes of grain (including corn) after processing in 2007,14.5% less than in 2006. Rising prices prompted the government to restrict exports,which resulted in virtually zero exports for several months.
 
In the January 1-April 30 period,the Cabinet set a quota of 1.2 million tonnes on grain exports,but subsequently canceled the corn quota and raised the quota by 1 million tonnes for wheat and by 0.5 million tonnes for barley. Ukraine has capacity to ship 26 million tonnes of grain a year.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
7.  UKRAINE’S GDP GROWTH PUSHED UP BY AGRICULTURE: CONCORDE CAPITAL
Large 2008 harvest helps compensate for slowdown in industrial growth
 
Interfax Ukraine Economic, Kyiv, Ukraine, Monday, September 8, 2008

KYIV – The pace of growth of Ukraine’s GDP has accelerated mainly thanks to a rise in agricultural output, according to a press release of Kyiv-based Concorde Capital Investment Company, referring to an analytical survey drawn up by analysts Andriy Parkhomenko, Polina Khomenko and Kostiantyn Fisun.

“In July, Ukraine’s GDP reached the highest level over the year, at 7.3% compared to July 2007. The pace of GDP growth increased mainly due to a rise in agricultural output. Over the seven months of 2008, agricultural production grew by 10.6% year-over-year, while in H1 2008 a 0.3% fall was registered.
 
Thus, the large 2008 harvest allowed agriculture to compensate for the slowdown in industrial growth, which was 7.3% in seven months,” the experts said.
The experts said that the growth in investment in the agricultural sector in H1 2008 was 45.3%, while the total growth of investment in the fixed capital of economic sectors in H1 2008 slowed to 8.2% year-over-year, due to high inflation and tougher crediting conditions.
“The largest impact of these factors was seen in the processing industry: the growth of investment in the sector in H1 2008 was only 0.2%. This low indicator in the sector could mean a further slowing in its development in the medium-term outlook,” the analysts said.
The experts said that in July 2008, for the first time in more than in two years, deflation had been seen in Ukraine. Prices fell by 0.5% compared to June, which was due to a seasonal fall in the price of foodstuff products by 1.3%, mainly vegetables and fruit.
According to a forecast of Concorde Capital analysts, inflation in Ukraine in 2008 will be 21%. Concorde Capital increases its forecast for a rise in industrial prices from 33% to 40% in 2008, and the GDP deflator index from 25.5% to 31%.
The investment company also increased its GDP forecast for 2008 from $194 billion to $202.4 billion.  Concorde Capital retained its forecast for the dollar exchange rate for late 2008 at UAH 4.95/$1, saying seasonal demand for the currency over the past four months would weaken the hryvnia.
The company’s analysts expect that grain exports in 2008 will be worth $4.4 billion, which is almost five times more year-over-year, and this would help cut Ukraine’s deficit in the balance of payments to 4.3% of GDP in 2008.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
============================================================
NOTE: Send in a letter-to-the-editor today. Let us hear from you.
============================================================
8.  LARGE INCREASE IN GRAIN COMBINE IMPORTS PREDICTED FOR 2009-2015

Grain harvester imports in Ukraine are already up by 3.6 times
 
Ukrainian News Agency, Kyiv, Ukraine, Tuesday, September 9, 2008

KYIV – The director general of a large Kyiv-based agricultural supply company, Amaco Ukraine, Vitalii Skotsyk forecasts a large increase of imports of grain combines to Ukraine in 2009-2015.  ‘We expect the sales of this machinery in Ukraine to considerably grow year after year for at least five-seven years,’ he said.

Skotsyk also said that in January-August 2008, Ukraine imported 2,884 grain combines exceeding the year 2007 import indicator by 3.6 times. At the same time, Skotsyk pointed to lack of the developed system of grain combine servicing in Ukraine.
The director general said that before the harvesting campaign of 2008 Ukraine had about 47,000 combines, most of which had significant operation period.
 
‘This year, Ukraine launched the harvesting with 47,000 grain combines, of which, 80% were machines, whose operational period was 15-20 years,’ he said. He said that this resulted in low quality indicators of the harvested grain.
‘One of the problems we harvested low-quality grain is that the harvesting should last for 10-14 days, but we harvest for 1.5-2 months. Thus, the quality does not meet our expectations,’ Skotsyk said. In particular, he said that according to forecasts of the Agriculture Policy Ministry, only 11% of the wheat will be bread wheat.
As Ukrainian News earlier reported, Amaco Ukraine is engaged in sale of imported farm machinery and spare parts to it. By September 5, farm enterprises harvested 43.475 million tons of crops.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
9.  KPMG JOINS U.S.-UKRAINE BUSINESS COUNCIL (USUBC)

KPMG-Ukraine Opens New Office in Donetsk
 
U.S.-Ukraine Business Council (USUBC), Washington, D.C., June, 2008
 
WASHINGTON, D.C. –  The executive committee of the U.S.-Ukraine Business Council (USUBC), on behalf of the entire membership, is most pleased to announce that KPMG has been approved for USUBC membership. 
 

KPMG is a global network of professional firms providing audit, tax and advisory services. KPMG operates in 148 countries and have more than 113,000 professionals working in member firms around the world.
 
KPMG-Ukraine Ltd. is a company incorporated under the Laws of Ukraine and a member firm of the KPMG network of independent member firms
affiliated with KPMG International, a Swiss cooperative. 
 
Mason Tokarz is the Managing Partner of KPMG-Ukraine Ltd. According to Morgan Williams, SigmaBleyzer, who serves as president of USUBC, Tokarz  will represent KPMG on the USUBC board of directors (www.usubc.org.)
 
KPMG IN UKRAINE
As a member firm of one of the world’s leading professional services organizations, KPMG in Ukraine brings clients technical skills, solid practical experience and wide industry and sector knowledge which provide clients with a competitive edge over their competitors. Their goal is to help clients not only compete, but become marketplace leaders.

KPMG in Ukraine has established multi-disciplinary teams of Ukrainian and expatriate professionals which provide focused services to Ukrainian and
international clients. They apply a rigorous approach to assist their clients in defining their business or investment objectives and then work with them to
achieve those objectives.

The following are some of the potential benefits KPMG provides to their clients in Ukraine: (1) understanding of the local business environment; (2) industry-specific focus; (3) broad based experience  (4) combined delivery teams; (5) tangible return on investment (6) well-established assessment and implementation methodologies; (7) flexibility to match client culture; (8) access to KPMG’s global resources.

 
KPMG OPENS OFFICE IN DONETSK
On May 22, 2008 KPMG in Ukraine announced the opening of its office in Donetsk. With their business expanding rapidly across Ukraine, KPMG felt is was important to have the resources in the right place at the right time to meet the needs of their clients.

Mason Tokarz, Managing Partner, KPMG in Ukraine, said: “The Donetsk region is home to some of the largest and most recognized companies in Ukraine. It has a dynamic local economy, and is attracting considerable interest from investors all over the world. Our decision to open the office in Donetsk is aimed to better serve our existing clients in the area, and to develop relationships with potential clients in the region of Donbass”.

Anna Parkhomenko, who will direct the team in the new office, stated: “We are looking forward to the launch of our new team in Donetsk, which consists of professionals at various levels with various specialized skills.

 
“The team is excited about the opportunities arising as a result of the opening in Donetsk. At KPMG, we are committed to contributing as much as possible
to the development of the business environment in this important region of Ukraine”. For more information about KPMG-Ukraine click on: www.kpmg.kiev.ua.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
10.  UKRAINIAN PM BLOCKS WARSAW STOCK EXCHANGE LISTING FOR BANK
 

Warsaw Business Journal, Warsaw, Poland, Wed, September 10, 2008
 
WARSAW – LLC Commercial Bank Financial Initiative, one of the largest banks in Ukraine, belonging to billionaire Oleg Bachmatiuk, was to take the final step towards being listed on the Warsaw Stock Exchange this Thursday

This was the day when representatives of the company planned to sign an investment agreement, on the basis of which shares in the bank would be transferred to NFI Magna Polonia in exchange for shares in the fund.

However, this will not take place as the Prime Minister of Ukraine, Yulia Tymoshenko, has effectively blocked the transaction. “The political chaos in Ukraine, conflict in Georgia and the global break down in the banking sector are making the execution of the plans difficult.

 
It is harder to get past the legal procedures and receive funding for the bank. These are issues which are not under our control,” said supervisory board member of Commercial Bank Financial Initiative, Tadeusz Piętka.

Source: Puls Biznesu (A.K.), From Warsaw Business Journal
http://www.wbj.pl/article-42489-ukrainian-pm-blocks-wse-bank-listing.html?typ=wbj

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=============================================================
U.S.-Ukraine Business Council (USUBC) www.usubc.org.
Promoting Ukraine & U.S.-Ukraine business & investment relations since 1995. 
=============================================================
11.  UKRAINIAN BANKS FACE HIGH RISKS, POTENTIAL ECONOMIC AND POLITICAL INSTABILITY SAYS S&P 
 
Cbonds News, St. Petersburg, Russia, Tuesday, September 9, 2008 

PARIS – Standard & Poor’s Ratings Services continues to view the Ukrainian banking system as high risk according to a report “Bank Industry Risk Analysis: Ukrainian Banks Operating With High Risks And Vulnerability To Tough Macroeconomic Landscape,” published yesterday on Ratings Direct.

“Ukrainian banks remain highly vulnerable to potential shocks due to rapid, untested loan growth in recent years, amid macroeconomic and political uncertainty,” said Standard & Poor’s credit analyst Ekaterina Trofimova.

 
“Also burdening the sector are still-substantial single-name and industry concentrations, significant dollarization of operations, questions on enforcement of credit rights, insufficiently robust underwriting practices and risk management, as well as regulatory and supervisory responses lagging behind market developments.”

In a global context, we consider the banking sector in Ukraine (foreign currency B+/Stable/B, local currency BB-/Stable/B, Ukraine national scale uaAA/–/–) to be high risk.

 
UKRAINE IN GROUP 10, THE WEAKEST IN S&P BANKING INDUSTRY COUNTRY RISK ASSESSMENT
We place the system in Group 10, the weakest in our Banking Industry Country Risk Assessment (BICRA) rankings, which reflect the strengths and weaknesses of a country’s banking system relative to those of other countries. Similarly ranked banking systems include Venezuela, Jamaica, and Bolivia.

“Despite political turbulence and inflationary pressures, strong macroeconomic growth so far has supported the banking sector’s development and credit standing while partly mitigating still-high business and credit risks for domestic banks,” said Ms. Trofimova. “The gradual strengthening and increasing transparency of domestic companies, alongside growing personal wealth and banks’ ongoing business diversification, has fueled the system’s positive expansion.”

“The system’s rapid loan growth and sharply increasing debt leverage in a still unstable credit environment with questionable risk management practices could be piling up problems for the future and make the system vulnerable to a potentially severe market correction, especially in real estate and construction,” said Ms. Trofimova.

Deposit growth has risen briskly in the past few years but has not kept pace with credit growth; banks are consequently increasingly refinancing themselves abroad. Although fragmented, foreign capital and debt have continued flowing in, benefiting from increased foreign bank ownership (43% of banking sector assets at midyear 2008 compared with less than 20% in the early 2000s).

“Strategic foreign investors cannot fully eliminate still-high credit risks and potential market downturns, but they are expected to take the lead in avoiding a hard landing,” added Ms. Trofimova. Their growing role is particularly important in the context of a still fragile regulatory framework in Ukraine.

In terms of potential extraordinary state support to private-sector banks, Standard & Poor’s classifies Ukraine as “supportive” (see “Criteria:External Support Key In Rating Private Sector Banks Worldwide,” published Feb.27, 2007, on Ratings Direct), providing no rating uplift for private-sector banks.

 
In a time of crisis, the authorities are likely to increase supervision and regulation of troubled entities, but in our opinion they would provide only limited financial support for domestically owned banks–even those with large market shares–and only as a last resort.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=========================================================
Receiving more than one copy of the AUR please contact us.
=========================================================
12.  UKRAINE STRONGLY FEELS GLOBAL CRISIS SAYS NBU COUNCIL HEAD PETRO POROSHENKO
 

UkrInform – Ukraine News, Kyiv, Ukraine, September 11, 2008

KYIV – The Ukrainian economy felt in a full measure the impact of all factors of global instability, crisis of stability supports, fight of the biggest powers for political and economic influence zones.

National Bank of Ukraine (NBU) Council Chair Petro Poroshenko announced this during the 18th Business Forum in Poland on the 2007 – 2008 financial crisis, its reasons and after effects, the influence on Central European economy, Poroshenko’s press service reported.

In his words, Ukraine has one of the most open economies in the world by the level of domestic market protection. Thus, he noted a proportionate increase
in the impact of negative developments in the global economy on the national economy of Ukraine.

In the first place, the NBU council head says, that is inflation having reached Europe’s greatest scope in Ukraine. The negative foreign trade balance is also rapidly growing. Global trends as well tell on Ukrainian stock market, getting stronger against the background of domestic policy and economy problems.

Reduction of some industries’ output, including construction, also corresponds to the global tendencies, Poroshenko added. Permanent political crisis in this country, he noted, plays maybe the most devastating role in building up negative processes in Ukrainian economy.

Crisis is not adding confidence to business environment, but also scares away investors, calling in question legislative reforms the Ukrainian economy needs so badly.

“I am deep sure that, due to extremely negative political environment, it is vitally important to consolidate the leading political forces around the key tasks of stabilizing economic development and creation of favorable conditions to guarantee its new quality, implementation of priority structural reforms in order to approach the Copenhagen criteria of membership in the European Union. Ukraine has a good potential to be further developed rather than

squandered away,” the central bank council head underscored.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
13.  EXPANDING TRADE AND TRAVEL BETWEEN THE U.S. AND UKRAINE 
Ukraine’s Civil Aviation Safety Assessment
 
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Tuesday, September 9, 2008
 
WASHINGTON – In June 2005, the United States Federal Aviation Administration (“FAA”) conducted a safety assessment of the Ukrainian State Aviation Administration (“SAA”) – the governmental authority that regulates and oversees civil aviation in Ukraine.
 
The FAA found that Ukraine’s SAA was not in compliance with ICAO standards for oversight of its airline industry. As a result, the FAA downgraded SAA’s capability to Category II from Category I, according to Morgan Williams, SigmaBleyzer, who serves as president of the U.S.-Ukraine Business
Council (USUBC).
 
Under U.S. regulations, the Ukrainian airline serving the U.S. – AeroSvit Ukrainian Airlines – was allowed to continue to operate its flight from Kyiv to New York, but was not permitted to expand operations to the United States until the SAA addressed the discrepancies. In addition, no other Ukrainian airline may operate to the U.S. until Category I status is achieved.
 
As a result, travel and trade between the two countries is now limited.  AeroSvit has indicated an interest in expanding the number of flights to New York and also in adding a non-stop flight to Chicago. 
 
Following the downgrade to Category II, the SAA applied to the U.S. Trade and Development Agency (“TDA”) for assistance.  A TDA grant was awarded to the SAA in 2006 and a U.S. contractor was selected to help SAA comply with international safety standards and return to Category I status. 
 
The contractor provided the SAA in Kyiv a detailed action plan recommending specific steps for addressing the discrepancies and provided on-site support. However, progress has been particularly slow due to various governmental reorganizations.
 
U.S.-UKRAINE TRADE AND TRAVEL
President George Bush traveled to Ukraine in April 2008, as a demonstration of political support for its leaders. In June, Secretary of Commerce Gutierrez signed a Trade and Investment Cooperation Agreement with his Ukrainian counterpart in the Ministry of Economy, Bohdan Danylyshyn.
 
The agreement established the U.S.-Ukraine Council on Trade and Investment (“Council”), comprised of government officials. Among other things, the Council is charged with “identifying opportunities for expanding trade and investment…and identify and work to remove impediments to trade and investment between the Parties….” The U.S. Trade Representative’s Office (USTR) chairs the U.S. delegation.
 
U.S.-UKRAINE BUSINESS COUNCIL (USUBC) PROPOSAL
The new U.S.-Ukraine Council on Trade and Investment will meet in Kyiv for the first time in early October, USUBC president Williams said.
 
In light of the new Council’s mandate to “work to remove impediments to trade,” the U.S.-Ukraine Business Council (USUBC) proposes and recommends to the U.S. delegation – with the support of the U.S. FAA – that they raise this issue and impress upon the Ukrainian delegation the importance of their addressing the discrepancies found by the FAA so that Ukraine may reclaim Category I status as soon as possible.
 
Growth in aviation is directly tied to economic development. Addressing the discrepancies and reclaiming Category I status by the SAA will enable Ukrainian airlines to operate at higher levels to the United States and – with a large Ukrainian population in the U.S. and expanded interest from the U.S. business community – to expand trade and travel between the two countries.  
 
USUBC makes this proposal fully appreciating that aviation safety is paramount and must not be compromised for any reason. 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
14.  AEROSVIT UKRAINIAN AIRLINES SUFFERS RAIDER ATTACK 

 
By Jim Davis, Business Ukraine magazine, Kyiv, Ukraine, Monday, September 8, 2008

In today’s Ukraine the culture of corporate raiding is alive and well, with the latest incident occurring on August 27 when Aerosvit Ukrainian Airlines officials claim they fell victim to a particularly aggressive assault on the company’s main administrative offices on Shevchenko Boulevard in Kyiv.

 
The available evidence suggests that the attack may have been the work of a disgruntled minority stockholder, using a questionable court order from a distant oblast and a group of thuggish young attackers, all of whom are thought to be from Dnipropetrovsk.

SENDING IN THE HIRED MUSCLE 

“We really don’t know at this point whether this attack was the work of a minority shareholder, one of our competitors or a combination of the two. What we do know is that a group of young men, obviously chosen for their ability to intimidate, forced their way into our offices with the apparent purpose of breaking up a supervisory board meeting. They were brandishing copies of a court order from a court in Kherson Oblast that had not previously been served officially on the company,” Yevhen Treskunov, deputy CEO of Aerosvit, told Business Ukraine.
According to Aerosvit sources, about 20 persons forcibly entered the company’s administrative offices on August 27 with the apparent intent of gaining control with the use of the questionable court order. In the process, the intruders alleged injured security personnel, broke down security doors, began to enter offices and in general attempted a take-over of the company premises, Aerosvit claimed.
However, once it became clear to the interlopers that their take-over attempt would be strongly resisted and police had been summoned, many of the raider group began departing just as rapidly as they had arrived. However, some of the attackers were arrested and are now in police custody. Investigation thus far suggests that those who attempted the takeover included some with criminal records.
While Aerosvit chose to make no further comment regarding the source of the raider attack and apparent attempted corporate take-over, other airline industry sources told Business Ukraine that they believe the attack is indeed the work of a disgruntled minority stockholder.
 
The disagreement is said to have been simmering for some time and centres on a minority shareholder, a Kyiv businessperson who is believed to own about 5% of company shares, who disagrees with certain corporate decisions regarding ways to raise additional funds needed by the airline.
Aerosvit has made it clear that the attack and the questionable court order will be strongly rebuffed and that measures have already been taken to strengthen the security of all company facilities and properties. The airline states that it has called on the government to make good on its promises of greater support for businesses in opposing attempted illegal takeovers.
 
A petition from Aerosvit’s acting CEO Kostadin Botev to the Cabinet of Ministers commission against raider attacks asks the government “…to protect the airline and its employees from illegal interference into the transportation company’s activity caused by the “Bureau” Ltd. side and to apply appropriate measures to unblock the situation and punish those causing it.”

A BAD TIME FOR INTERNAL BATTLES

Aerosvit officials say that the attack comes at an extremely inopportune time. “Aerosvit and all commercial airlines are under immense pressure because of the never-ending escalation of fuel prices. We are not officially Ukraine’s flag carrier, but in many of the countries that we serve, we are the only Ukrainian company that enters the consciousness of local officials and businesspersons. Our route system extends on one end to New York and Toronto and on the other to Beijing and Delhi.
 
“In other times, this would have been less of a problem, but today these routes are extremely expensive to serve. We do not want to limit our long-haul services and in fact would like to expand. However, anything that distracts us from our main mission of running a first-class international airline is not in anyone’s best interests,” Mr. Treskunov said.
Treskunov pointed to Aerosvit’s position in acquiring new aircraft as an example of the harsh realities that all modern Ukrainian airlines face. “We have orders in place with Boeing for delivery of new aircraft. However, because of the long lead time in getting delivery, we do not expect to receive these new and more fuel efficient aircraft until 2011 and 2012.
“In the meantime, we have to make periodic payments to Boeing on these aircraft on a strict schedule. Not only that, the market for new aircraft is so tight that Boeing is able to maintain extremely strict policies on payments. For example, if we miss making a payment to Boeing by one day, we are removed from the current delivery schedule and placed at the end of the priority list.” 
 
 
FOOTNOTE:  AeroSvit Ukrainian Airlines is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
15. AEROSVIT REQUESTS HELP TO PROTECT AGAINST ILLEGAL SEIZURE AND RAIDER ATTACKS

Issues letter asking for protection of airline & its employees from illegal interference into the company’s activity
 
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Tuesday, September 9, 2008
WASHINGTON, D.C. -.The following letter was sent by AeroSvit Ukrainian Airlines, a member of the U.S.-Ukraine Business Council (USUBC), to the Inter-departmental Commission for the issues of opposition to Raider attacks, describing the attack which took place, with a request to protect AeroSvit from raider attacks that could be repeated. 
 
AeroSvit is the only Ukrainian carrier that flies non-stop to the United States.  The AeroSvit flight goes roundtrip from Kyiv to New York to Kyiv. The letter below is an informal translation in English and is published with the approval of AeroSvit, the president of the U.S.-Ukraine Business Council (USUBC), Morgan Williams, said on Tuesday.

27th August, 2008 

Inter-departmental Commission
On the issues of opposition to illegal seizure and Raider attacks
12/2, Grushevskogo str.,
Kyiv 01008
 
Declarant: CJSC “AEROSVIT AIRLINES”
08324 Kyiv area., Boryspil region, s.Gora
Postal address:
Boryspil SIA, Boryspil-7,
Kyiv region 08307
  
APPEAL
to Stambula N.V. actions  – judge of Komsomolsky regional court of Kherson,
Skal’ka S.Y. – CEO of “Bureau” Ltd., Sokolov G.O. – state executor of state executive service of Boryspil state regional Administration of Justice as of assistance in possible Raider Attack (seizure) of AEROSVIT AIRLINES.
 
Closed joint stock company “AEROSVIT AIRLINES” asks to promptly intervene in the situation which occurred and involved Komsomolsky regional court officials (judge Stambula N.V.), CEO of “Bureau” Ltd Skal’ko S.Y. and officials from state executive services of Boryspil state regional Administration of Justice (senior state executor Sokolov G.O.).
 
On 27th of August a group of young fellows up to 20 persons, some of them showing passes indicating “Bureau” seal, entered administrative office of CJSC “AEROSVIT AIRLINES” in Kyiv at 58-a Shevchenka Blvd., caused physical injuries to security, broke down the doors of check-point, crashed the windows and started rushing into the cabinets of Airline’s employees. Police was immediately called to the place of occurrence.
 
Before the arrival of operational group the majority of mentioned guys left the building in accordance with Skal’ko S.Y. instructions. Appropriate protocol was composed by Shevchenkivsky Regional Administration of State Administration of MIA (Ministry of Internal Affaires) in Kyiv where Airline’s message on the crime performed is currently under examination.
 
Besides, according to some mass-media messages, among persons, who tried to enter the administrative office at 58-a Shevchenka Blvd. on that day, there was state executor from executive authority of Boryspil state regional Administration of Justice Sokolov G.O. It should be mentioned, that administrative building at 58-a Shevchenka Blvd. is situated in the borders of administrative territorial unit other than territory of Boryspil region, in other words, exceeding of the official duties was seen in state executor’s actions.
Moreover, according to the information being checked, Komsomolsky regional court of Kherson (judge Stambula N.V.) according to the claim of “Bureau” Ltd issued a consent to ban Supervisory Board Meeting of Closed joint stock company “AEROSVIT AIRLINES” on 27th of August, interdiction for General Stakeholders Assembly, prohibition for registrar of CJSC “AEROSVIT AIRLINES” to perform registration of stakeholders to participate in the Assembly.
Furthermore, the same Komsomolsky regional court of Kherson, as appeared later, on 31st of July 2008, without appropriate notification to participants of court session about time and date of sitting of the court and with violating rights within the jurisdiction, decision to satisfy “Bureau” Ltd claim to stakeholder of CJSC “AEROSVIT AIRLINES” about restriction for action was issued.
Considering the above mentioned circumstances, CJSC “AEROSVIT AIRLINES” claims that “Bureau” Ltd possesses not more than 5% share from total amount of statute stock/capital in CJSC “AEROSVIT AIRLINES” which according to existing legislation and CJSC “AEROSVIT AIRLINES” Statute doesn’t grant “Bureau” Ltd. rights to block the actions of CJSC “AEROSVIT AIRLINES” management, all the more using force. Following the existing legislation disputes between the stakeholders on company’s management or performance, should be addressed at the place of company’s location.
 
The Supreme Court of Ukraine in the General conclusion of court practices as of 01.01.2004 (concerning the actions carried out to satisfy the claim by way of banning the general assembly) mentioned, that the restriction to hold General Assembly in fact paralyzes the work of the supreme body of the joint-stock company and is illegal interference into economic activity of the company.
 
Events happened on 27th of August in the administrative office of CJSC “AEROSVIT AIRLINES” followed by acts of force, together with working out illegal decisions against CJSC “AEROSVIT AIRLINES” and in the interest of “Bureau” Ltd., and against stakes registrar in the regions of Ukraine, are aimed at blocking the activity of management and destabilization of company’s work and can be classified as raider attack.
Considering the above mentioned CJSC “AEROSVIT AIRLINES” asks to protect the Airline and its employees from illegal interference into the transportation company’s activity caused by “Bureau” Ltd. side and to apply appropriate measures to unblock the situation and punish those causing it.
 
Sincerely,
 /s/ 
Kostadin Botev 
Acting CEO                                                                            
 
LINK to AeroSvit website: www.aerosvit.com
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
16.  PM TYMOSHENKO, U.S. ASSN’T SEC OF STATE FRIED DISCUSS UKRAINE’S INTEGRATION WITH NATO

Ukrainian News – on-line, Ukrainian News Agency, Kyiv, Ukraine, Thursday, September 11, 2008

KYIV – Prime Minister Yulia Tymoshenko and U.S. Assistant Secretary [of State] for European and Eurasian Affairs, Daniel Fried, on Thursday discussed Ukraine’s integration with North Atlantic Treaty Organization (NATO). Ukrainian News learned this from a statement of the press department of the Secretariat of the Cabinet of Ministers.

Tymoshenko and Fried also discussed matters of the Ukraine-U.S. cooperation and a question of the national security. As Ukrainian News earlier reported,
the Security Service of Ukraine on September 4 launched an information campaign to facilitate the awareness of Ukrainian citizens about NATO.

On April 3, the Bucharest NATO summit decided to postpone the consideration of a question of the NATO Membership Action Plan for Ukraine and Georgia until December 2008.
——————————————————————————–

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
17.  PM TYMOSHENKO SAYS COLLABORATION CLAIMS ARE ‘COMICAL’

 
Roman Olearchyk in Kiev, Financial Times, London, United Kingdom, Mon, Sep 8 2008
 
KIEV – Yulia Tymoshenko, Ukraine’s prime minister, has accused Viktor Yushchenko, the country’s president, of jeopardising both bilateral relations with Russia and western integration initiatives by labelling her a Kremlin conspirator during the collapse of their coalition last week.
In an interview with the Financial Times Ms Tymoshenko hit back at allegations that she had sided with Russia and was weak in her support for Georgia during last month’s conflict between the two countries. She accused Mr Yushchenko of tarnishing her image in an attempt to score points with voters ahead of next year’s presidential election.
Mr Yushchenko’s party last week pulled out of the ruling coalition after Ms Tymoshenko’s camp voted with Moscow-leaning parties to curtail presidential powers. Ms Tymoshenko, in turn, accused the president’s party of systematically sabotaging her government.
 
POINTING THE FINGER AT MOSCOW IS STUPID
“Pointing the finger at Moscow is stupid. The coalition collapsed not by the hand of the Kremlin, but by the president’s decision,” Ms Tymoshenko said, urging Mr Yushchenko to revive the coalition.
She said starting a presidential campaign “this way . . . complicated the country’s plans for closer integration with Brussels and Nato”. “I well understand his hysteria because polls show his rating has sunk from 53 per cent to 5 per cent.”
At an European Union-Ukraine summit tomorrow in the French town of Evian, Kiev hopes to win support for associate membership of the EU. In December Nato will review a membership action plan for Ukraine and Georgia. Both organisations are uneasy over the latest bout of political infighting in Kiev, which could complicate relations with Russia.
Ties with Moscow soured after the 2004 Orange Revolution brought Mr Yushchenko and Ms Tymoshenko to power. Both have pushed to break Moscow’s grip on energy supplies but Ukraine remains vulnerable, a position that will worsen if their on-off alliance turns into a cut-throat power struggle. Fears loom that a Georgia-style conflict could erupt between Ukraine and Moscow, which is staunchly against Nato’s eastward expansion.
Ms Tymoshenko stressed her support for Georgia’s territorial integrity but said only “balanced and harmonised” relations with Russia would avoid trouble and make Ukraine a reliable partner for the west. “Ukraine needs peace, stability and investment.”
Dismissing as “comical” allegations from the president that she had plotted with the Kremlin, she insisted she had pushed to cut Russia’s grasp over Ukraine’s energy sector.
She also claimed that Mr Yushchenko had protected “Russian interests” in a strategic Black Sea hydrocarbon exploration project. By cancelling the venture, “where Russian interests were camouflaged by Houston-based Vanco Energy . . . I returned Ukraine’s strategic Black Sea gas reserves”.
Asked if she would run for president next year, the prime minister said: “Before this I was willing to support a single candidate. After the events of last week I am seriously considering it.”
 
——————————————————————————–
[return to index] Action Ukraine Report (AUR) Monitoring Service]
===================================================
Welcome to send us names for the AUR distribution list.
===================================================
18.  VANCO HAS NO INTEREST IN INVOLVING RUSSIANS IN UKRAINE PROJECT

 
Letter-to-the-Editor: From Mr Gene Van Dyke, Founder and President,
Vanco Energy Company, Houston, TX, US, Financial Times, London, UK, Fri, Sep 12 2008
 
Sir, In her interview with your reporter (“Collaboration claims are ‘comical’ “, September 8), Ukraine’s prime minister, Yulia Tymoshenko, claims that “Russian interests were camouflaged by Houston-based Vanco Energy”, the company that I own and operate.
Nothing can be further from the truth. We have no interest in involving any Russian oil and gas company in our project with the Ukrainian government – and we will not do so in the future.
In 2005, the Ukrainian government initiated a public tender for offshore oil and gas exploration in the Black Sea’s Prykerchenska Block. We won that tender fairly in 2006, and in 2007 negotiated and signed a Production Sharing Agreement with the government. All of this was done transparently with no Russian oil company involvement.
We were to begin exploration operations this year. But, this past May, the government violated our agreement by unilaterally and unjustifiably withdrawing it. What price is the sanctity of contracts in Ukraine? No country can grow economically unless governments respect contracts issued by previous governments.
 
In addition, this action delays the development of Black Sea energy resources, which would in the future make Ukraine much less dependent on Russian gas and oil. We have made numerous attempts to meet with the government to try to sort things out, but to no avail. Now we are pursuing protection of our contractual rights through arbitration.
Disturbing are indications the Ukrainian government is planning to invite Russia’s Gazprom into the exploration and development of Ukraine’s Black Sea.
 
We have no interest in involving Gazprom in our project with the government. We simply want to get on with the job of exploring for hydrocarbons in the Prykerchenska licence, as our contract gives us the right to do, and which is consistent with the energy security interests of the Ukrainian people.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
19.  EU PLEDGES TO STRENGTHEN ECONOMIC AND POLITICAL LINKS TO UKRAINE 
 
bne Ukraine Daily List, Berlin, Germany, Wed, September 10, 2008

The European Union decided to dub the next EU-Ukraine pact an “Association Agreement.” Talks on this new trade and cooperation agreement should be finalized in the second half of 2009, according to Ukrainian President Viktor Yushchenko, who characterized the outcome of the summit as a historic point in EU-Ukraine relations.

 
Most recently signed Association Agreements signed by the EU have included a Free Trade Agreement. French President Nicolas Sarkozy, representing the EU, said that yesterday’s declaration marked the first time the EU has so clearly pronounced itself on Ukraine’s European orientation. The EU also said it will start talks that could lead to visa-free travel for Ukrainians to Europe.

Dragon writes: Reports from the summit suggest the EU continues to hesitate about offering Ukraine the so called “membership prospect” in the new bilateral cooperation deal while Ukraine remains determined to have the membership pledge included.

The EU’s cautious approach, epitomized by French President Nikolas Sarkozy’s statement the future association agreement “neither opens nor closes any route” for Ukraine, is understandable given the latest bout of political instability in the country and divisions within the EU itself as to how to treat Ukraine.

 
At the same time, the joint statement released after the meeting acknowledged “the European aspirations of Ukraine and welcomed its European choice” and also stated “Ukraine, as a European country, shares a common history and common values with the countries of the EU”, according to the DPA news service.
 
This is reportedly the first time such vocabulary was used in EU-Ukraine bilateral statements. In other important news from the summit, the EU agreed to start talks on a visa-free regime for Ukraine in the near-term.

We expect Ukraine to continue to negotiate the membership pledge with the EU, and stabilization of the domestic political environment will be crucial to ensuring such talks are successful. In today’s circumstances, when Ukraine is likely to receive a new ruling coalition in weeks’ time, any firmer commitment from the EU could hardly have been expected.

Galt & Taggart verdict: The 12th EU-Ukraine Summit has to be viewed as a failure for Ukraine, which had hoped for its place in Europe to be confirmed. However, Germany, Holland, and to a lesser degree Belgium, strongly opposed any guarantee of future membership, and ardent lobbying from Poland, Sweden, the United Kingdom, and the Baltic States could not sway opinion.

——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
20.   EU KEEPS DOOR HALF-OPEN FOR UKRAINE 

Euro Activ, Brussels, Belgium, Wednesday 10 September 2008   
 
By keeping Ukraine’s EU accession prospects alive, European Union leaders yesterday (9 September) steered clear of creating a “damned-if-you-do and damned-if-you-don’t” situationby balancing a desire to encourage the country’s pro-Western leadership with concerns not to further radicalise Moscow in the wake of the Georgia crisis.
 
The venue of the EU-Ukraine summit yesterday became the latest casualty of the Georgia-Russia crisis. Originally scheduled to take place in the Alpine resort of Evian, the summit had to be moved at the last minute to the Elysée Palace in Paris due to the time constraints of French President Nicolas Sarkozy and other top EU officials, who were returning from a mission to Moscow and Tbilisi (EurActiv 09/09/08). Amid the haste, the final document still referred to the Paris event as “the Evian summit”.
At the summit, EU leaders offered Ukraine’s President Viktor Yushchenko closer ties and recognised the legitimacy of Ukraine’s European aspirations, but stopped short of issuing a firm membership pledge.
The summit conclusions state that the legal basis between Ukraine and the EU, currently under negotiation, will be referred to as an “association agreement” as has always been the case with prospective EU members. But the EU has also signed “association” deals with a number of its trading partners, including Chile and Egypt.
 
What’s more, a far-from-poetic formula dims the membership perspective, specifying instead that the bloc “leaves the door open to progressive further developments in EU-Ukraine relations”.
In fact, despite the expectations, the summit did not go further than what was already agreed at foreign ministers’ level before the Georgia crisis (EurActiv 23/07/08).
The divided meet the separated 
The EU appeared to be divided at the summit, with France, Germany and Italy advocating a cautious approach to Moscow, while Poland, Sweden, the United Kingdom and the Baltic states expressed their wish to develop stronger ties with the EU’s eastern neighbourhood after the Georgia crisis.
Discussions were further complicated when EU leaders met a Ukrainian president currently in the throes of conflict with his prime minister, former Orange revolution ally Yulia Timoshenko (EurActiv 04/09/08). EU leaders would have preferred to receive both the Ukrainian president and the prime minister, but only Yuschenko and his foreign Minister Volodymyr Ogryzko made the trip to Paris.
Diplomats said Germany and the Netherlands, and to a lesser extent Belgium, were the most reluctant to state clearly that Ukraine could one day join the EU. “This is the maximum that we could do,” said Sarkozy.
Yushchenko put up a courageous face and stressed the positive achievements. “Today we started a very ambitious plan that will with time lead us to victory. Today we received the qualification of a European country,” said Yuschenko.
Ukraine the next target?
But a Ukrainian diplomat complained that Kiev has been the victim of EU divisions. European diplomats had also expressed bitterness over the ill-timed political in-fighting between the two leaders of the pro-Western coalition.
 
EU leaders, and notably French Foreign Minister Bernard Kouchner, had warned Ukraine about possible destabilisation following the Georgia crisis (EurActiv 27/08/08). Olli Rehn, the EU’s enlargement commissioner, had also said Ukraine could become Russia’s next target if it was not offered membership.
An agreement on visa facilitation seemed to be the only sweetener for Ukraine, at least in the short term, with the two parties agreeing to launch a “visa dialogue aimed at developing the adequate conditions with the long-term perspective of establishing a visa-free regime between the EU and Ukraine”.
Positions:
French Socialist MEP Bernard Poignant  warned in an article published by the daily Le Monde that the Georgian war represents a precedent for a Crimean war. Recalling that the agreement between Moscow and Kiev to use the military naval base of Sebastopol expires in 2017, Poignant argues that Moscow will continue to repeat the scenario of issuing Russian passports to the local population until these “Russian citizens” issue a call to their Moscow brothers to come to the rescue. “If Europe does not anticipate, all it will have left is its tears,” the French MEP writes.
Andrew Wilson, a Russia and Eastern Europe expert for the European Council on Foreign Relations in London, said the outcome of Tuesday’s talks was a clear step forward for Ukraine.
 
“On balance, it’s good news for Ukraine compared to where we were four years ago, three years ago or even three months ago. The problem with these kind of summits is that often expectations race ahead. Clearly Ukrainian expectations were very high, probably too high. But given what has been achieved in practice, Ukraine has got quite a lot,” he said.
Graham Watson, leader of the Alliance of Liberals and Democrats group in the European Parliament, welcomed the positive signal sent by the EU to its Ukrainian neighbours.
 
“Paradoxically, Prime Minister Putin’s military adventure in the summer has done more for the cohesion of EU foreign policy than any number of Council statements could have achieved. He has re-awakened the demons of the former Soviet era and pushed many former soviet satellites to seek shelter and stability in the European Union framework,” said Watson.
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
Please contact us if you do not wish to receive the AUR.
===================================================
21.  RUSSIA’S WESTERN NEIGHBOURS: UKRAINE COMES TO THE FOREFRONT
An already fragile Ukraine has been made a lot more nervous by Russia’s war with Georgia – and it is not alone

 
The Economist print edition, London, UK, Thursday, September 11, 2008

THE first priority for Europe after Russia’s short August war with Georgia was to secure a ceasefire and a genuine pullback of Russian forces (see article). The second was to start fretting about Russia’s other neighbours. And the most significant of these by far is Ukraine.

Ukraine could not have ignored the war even if it had wanted to. Sebastopol, on the Crimean peninsula, is home to Russia’s Black Sea fleet, some of whose warships dropped anchor off the Georgian coast during and after the fighting.
 
Evidence of Ukraine’s proximity to the conflict is also on show at Moscow’s military museum, where visitors can gawp at war booty: Georgian T-72 battle tanks that were modernised in Ukraine.
 
This, say the Russians, shows Kiev’s support for what it sees as a “criminal regime”. Indeed, Viktor Yushchenko, Ukraine’s president (pictured above) flew to Tbilisi to support his counterpart and friend, Mikheil Saakashvili.

Add to this the fact that Russian nationalists believe Crimea, which has a large ethnic Russian population, should be returned to Russia (there are rumours of new Russian passports being handed out, just as happened in South Ossetia and Abkhazia).

 
Throw in, too, the fact that Ukraine, like Georgia, has for years been trying to secure a place in both the European Union and NATO. The inevitability of Ukraine catching a post-war cold becomes clear.
Ukraine’s always anarchic politics have been directly shaken up by the war. The usually pro-Western government led by Yulia Tymoshenko, the prime minister, is unravelling.
 
The first cracks emerged when Ms Tymoshenko blocked a parliamentary motion to condemn Russia’s aggression. She also resisted Mr Yushchenko’s attempts to impose restrictions on the Black Sea fleet, accusing him of populism ahead of a presidential election in 2010 that both will contest.
 
But it was her decision to join, temporarily, with the pro-Russian Party of the Regions, led by Viktor Yanukovich, so as to push through legislation diluting presidential authority, that incensed Mr Yushchenko, who promptly pulled his own Our Ukraine party out of its coalition with the Tymoshenko block.
Mr Yushchenko claimed that Ms Tymoshenko had formed a de facto rival coalition with Mr Yanukovich’s party. Ms Tymoshenko urged him to reconsider and “save” a political partnership that burst on to the world stage in the Kiev snow in the 2004 “orange revolution”.
 
Both went on television to put their case, evidence (said some) that their relations had become so sour that they could no longer bear to sit down and talk to one another.
Even by Ukrainian standards, the recriminations have got out of hand. Mr Yushchenko accused Ms Tymoshenko of “high treason”, suggesting she was a Kremlin agent out to win Moscow’s support (and financial backing) for her presidential bid. Even as she begged his party to rejoin the coalition, she poured scorn on him, poking fun at his abysmal popularity ratings. (One poll gave him 5%, against 22.5% for her.)
 
Yet Ms Tymoshenko is no Russian stooge. She says her muted response to the Georgian war is motivated by a desire to guarantee Ukraine’s territorial integrity—without inflaming relations with Russia.
Ukraine faces three political options: a fresh parliamentary election, a face-saving truce between Mr Yushchenko and Ms Tymoshenko or a new coalition between Ms Tymoshenko and Mr Yanukovich. America’s vice-president, Dick Cheney, made his preference abundantly clear on his recent whistle-stop tour of Baku, Tbilisi, Kiev and Rome by calling for orange unity.
 
He said that Ukraine should be “united domestically first and foremost, and united with other democracies.” He reiterated that the Bush administration backed Ukraine’s NATO aspirations, angering Mr Yanukovich, who pointed out that a majority of Ukrainians are against joining.
At a European Union-Ukraine summit in Paris on September 9th, the EU too had little beside warm words of support to offer. The “maximum” it could do, said France’s Nicolas Sarkozy, was to offer to sign a vague “association agreement” next year.
 
But unlike similar-sounding agreements for the Balkan countries, this one would not carry any implication of eventual membership. Countries such as Belgium, the Netherlands and Germany are unwilling at this stage even to hint at candidate status for Ukraine.
The Russians have been publicly silent about Ukraine in recent weeks, knowing that they hold some strong cards, besides having just defeated Georgia. Ukraine is almost entirely dependent on Russia for its oil and gas, for uranium enrichment, and as a market in which it can sell its own goods. It may agonise about its east-west choice, but in reality it will have to maintain reasonable relations with Moscow as well as the rest of Europe.
The Georgian war is reverberating among Russia’s other western neighbours. The Baltics, already in both the EU and NATO, are still wary. Belarus, Europe’s “last dictatorship”, is trying to use the war to thaw its frosty relationship with the West.
 
Resisting Russian pressure to recognise South Ossetia and Abkhazia immediately, Belarus’s president, Alyaksandr Lukashenka, said he would let a new parliament decide the matter, after an election at the end of September. It is not, he hinted, a foregone conclusion; he even added that it would be wrong to “run with the crowd” (what crowd?) and recognise the two regions simply because Russia had done so.
Mr Lukashenka’s diplomatic tiptoeing came as the EU publicly voiced a desire to reward Belarus for releasing three political prisoners in August, a move that led to a slight easing of Western sanctions on the country.
 
Mr Lukashenka seems also to have ruled out the possibility of hosting Russian nuclear missiles on his soil as part of the Kremlin’s response to America’s planned missile defences in Poland and the Czech Republic. Yet he still rejoiced, in an interview with a Russian daily, Izvestia, that Moscow had got one over Washington. “The Americans got kicked in the teeth for the first time in years,” he said. “That means something, you know!”
Tiny Moldova is also anxious. Like Georgia, it has a breakaway enclave, Transdniestria, that is “protected” by Russian troops. Although Moldova has no aspirations to join NATO, it is keen to get into the EU. Its president, Vladimir Voronin, met his Russian counterpart, Dmitry Medvedev, in late August. Mr Medvedev said there was a “good chance” of settling the dispute. But after the August war, the Moldovans fear, rightly, that this might be done only on Russian terms.
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
22.  RUSSIA SLAMS ‘UNFRIENDLY’ UKRAINE

Agence France Presse, Moscow, Russia, Thursday, September 11, 2008

MOSCOW – Russia on Thursday condemned Ukraine’s “unfriendly” stance over the war with Georgia and efforts to restrict Russia’s Black Sea fleet which has a based in Ukraine. “Ukrainian authorities have recently been pursuing policies that cannot be seen as anything other than unfriendly towards Russia,” the foreign ministry said in a toughly-worded statement.

Western officials have expressed concern that Ukraine’s large ethnic Russian population could leave it exposed to intervention from Moscow after its war
in the Georgian breakaway region of South Ossetia. Russia said it was defending Russian nationals when it sent in troops to halt a Georgian offensive on South Ossetia.

Ukrainian President Viktor Yushchenko last month raised tensions by imposing restrictions on the Russian fleet, requiring ships to seek permission at least 72 hours prior to crossing the Ukrainian border.

The announcement, which came after the Black Sea fleet took part in armed conflict with Georgia, also called for talks on the future of the fleet’s base in the southern port of Sevastopol.

The Russian foreign ministry statement said the fleet — based on the predominantly Russian-speaking Crimean peninsula — was “a stabilising factor both for relations between Russia and Ukraine and in the context of regional stability.”

“The rights of the Russian-speaking population of Ukraine are being abused and there is a policy targeted at excluding the Russian language from the public life of the country,” the statement said.

Russia also accused Ukraine of siding with the pro-West government in Georgia, saying: “We have not heard words of pity or compassion on the death
of civilians in Tskhinvali and of Russian peacekeepers.

“On the contrary, the Ukrainian president has tried to blame Russia for the bloodshed,” it said, adding that Ukraine bore responsibility for casualties
because it had supplied Georgia with arms.

 
LINK: http://afp.google.com/article/ALeqM5hrc9lBEEf8vdFVclRo8FTzdqXAcA
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
=========================================================
U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
Promoting Ukraine and U.S.-Ukraine business investments since 1995.
=========================================================
23.  EU PLEDGES CLOSER TIES TO KIEV IN CAUTIOUS MOVE 

By David Gauthier-Villars, The Wall Street Journal, New York, September 10, 2008; Page A9

PARIS — The European Union said it would build closer economic and political ties with Ukraine but stopped short of inviting its neighbor to join the 27-nation bloc, despite hopes in Kiev that Russia’s incursion into Georgia would prompt a stronger signal of European support.

After a meeting in Paris with Ukraine President Viktor Yushchenko, French President Nicolas Sarkozy, who holds the rotating presidency of the EU, said both sides would finalize an “association agreement” by March 2009 to gradually eliminate trade barriers and travel restrictions.
The EU’s cautious step reflects the limits of what some of its most important members are willing to do to challenge Moscow on behalf of its neighbors. Germany and France have long opposed giving any guarantee of eventual membership to Ukraine, a nation of some 46 million that would have a major impact on budgets and power-distribution in the EU.
At a news conference with Mr. Yushchenko and EU Commission President José Manuel Barroso, Mr. Sarkozy summarized the EU’s position toward Ukraine as “this is the maximum we can do.”
Since the breakup of the Soviet Union, Ukraine has tried to free itself from Russian tutelage. Although Ukraine has a large Russian ethnic minority, Mr. Yushchenko was elected four years ago on the promise that he would drive his country toward EU membership by 2020.
After Russia unilaterally recognized the independence of two Georgian separatist territories last month, it has been widely suggested that Moscow may covet other parts of its former empire, such as parts of Ukraine — though Russia has dismissed the idea. In early 2006, however, Moscow showed it could punish Kiev for its aspirations to join the West, severing natural-gas deliveries to Ukraine for several days.
Mr. Yushchenko said Tuesday he wanted to renegotiate with Russia a set of rules governing the use of the Black Sea Fleet, a group of Russian warships anchored in the Ukraine city of Sebastopol.
Ukraine didn’t do itself any favors last week, when the government entered yet another political crisis. Mr. Yushchenko withdrew his party from the pro-Western coalition government, saying that Prime Minister Yulia Tymoshenko had become too close to a pro-Russian opposition party.
Asked at Tuesday’s news conference whether he continued to nurture hope Ukraine would join the EU one day, Mr. Yushchenko said: “We are patient.”
[Write to David Gauthier-Villars at David.Gauthier-Villars@wsj.com]
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
24.  THE NEXT CRISIS COULD TAKE PLACE IN UKRAINE

 
Analysis & Commentary: By F. Stephen Larrabee
Corporate Chair in European Security at the RAND Corporation
Japan Times, Tokyo, Japan, Monday, September 8, 2008
PRAGUE — The Russian invasion of Georgia has sent shock waves throughout the West and the former Soviet space — especially Ukraine. Indeed, Ukraine could be the next potential crisis.
Georgia’s increasingly pro-Western course, including growing ties to NATO, has been a thorn in Moscow’s side. But it did not pose a serious threat to Russian security. Georgia’s army is small, ill-equipped and no match for Russia’s, as was amply demonstrated last month.

Ukraine’s integration into NATO, by contrast, would have far-reaching strategic consequences, ending any residual Russian hopes of forming a “Slavic Union” composed of Russia, Belarus and Ukraine — a dream that still beats in the breast of many Russians. It would also have important implications for the Russian defense industry, notably air defense and missile production.

In short, the real source of Moscow’s anxiety and strategic angst is Ukraine’s future political and security orientation. Georgia has largely been a side show.
Russia has a number of means of pressuring Ukraine short of using military force. One is energy. Ukraine is heavily dependent on Russian energy, particularly gas.
Russia has used the gas issue as a foreign policy instrument. Ukraine currently pays $179 per 1,000 cubic meters for gas from Russia — more than three times what it paid in 2004 — and there have been reports that Moscow is considering a further doubling of the price. Russia’s long-term strategy is to try to gain control of Ukraine’s pipelines by transferring them to a joint venture, as it has done in Belarus, thus enabling it to control both supply and distribution of gas to Ukraine.
The Black Sea Fleet is another potential source of tension. Under an agreement signed in 1997, Ukraine granted Russia basing rights for the fleet at Sevastopol in Crimea until 2017. Ukraine has been pressing Russia to begin discussions on the fleet’s withdrawal. But Russia has dragged its feet, suggesting that Moscow may seek to use the presence of the fleet as a means of pressuring Ukraine.
Crimea itself represents a third potential flash point. Crimea is the only region in Ukraine where ethnic Russians constitute an overwhelming majority of the population (58 percent). Khrushchev transferred the peninsula to Ukraine in 1954 as a gift to commemorate the 300th anniversary of the unification of Ukraine and Russia. At the time, the gesture was largely symbolic, as Ukraine was part of the Soviet Union and few could envisage an independent Ukraine.
Separatist pressures emerged in Crimea immediately following the collapse of the Soviet Union. They subsided after 1995 largely because the Russian separatists were divided, and Moscow, facing separatist pressures in Chechnya, showed little inclination to support them.
However, separatist pressures, while diminished, continue to exist in Crimea. Given Crimea’s historic ties to Russia and its majority ethnic Russian population, many Ukrainian officials fear that Russia could try to foment separatist movements in Crimea as a means of putting pressure on Ukraine to curb its ties to the West.
Moscow’s tactics in Abkhazia and South Ossetia provide cause for concern in this regard. Russia encouraged and supported separatist movements in both entities, then used the separatist tensions to justify sending “Russian peacekeepers” into the regions. Moreover, it granted Russian citizenship to Abkhaz and South Ossetian residents, and then justified its recent invasion of Georgia on the grounds that it had an obligation to protect Russian citizens.
 
Western allies have a strong strategic interest in supporting Ukrainian democracy and Ukraine’s Euro-Atlantic integration. But this course must be pursued prudently and with great care.
As the Georgian crisis has underscored, there are limits to the ability to influence developments in a region where Russia has strong strategic interests and a preponderance of military power. Thus Europe and the United States need to be very careful about making security commitments they are unwilling or unable able to carry out.
This does not mean that Moscow should be given a veto over Ukraine’s security orientation or that Ukraine can never become a member of NATO. The door for Ukraine to join NATO should remain open.
But with Russia in a defiant mood and refusing to fully withdraw its troops from Georgia, now is not the time to accelerate efforts to bring Ukraine into the Alliance. Poking an angry bear is not a wise policy. Ask Mikhail Saakashvili.
NOTE: F. Stephen Larrabee holds the Corporate Chair in European Security at the RAND Corporation, a nonprofit institution that helps to improve policy and decision-making through research and analysis. He served on the U.S. National Security Council staff in the Carter administration. © 2008 Project Syndicate
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
25.  RUSSIA’S NEXT TARGET COULD BE UKRAINE
 
OPINION: By Leon Aron, Director of Russian studies
Resident Scholar at the American Enterprise Institute (AEI)
The Wall Street Journal, New York, NY, Wed, September 10, 2008; Page A15

Perhaps the most urgent question in the world affairs today is whether Russia’s invasion and continuing occupation of Georgia was a singular event. Or was it the onset of a distinct, and profoundly disturbing, national security and foreign policy agenda?

Much as one would like to cling to the former theory, the evidence favors the latter. A European delegation led by French President Nicolas Sarkozy did manage this week to get assurances that Russian troops would withdraw from Georgia (excepting Abkhazia and South Ossetia, whose independence Moscow says is “irrevocable”).
 
But ultimately, this short war is likely to be remembered as the beginning of a decisive shift in Russia’s national priorities. The most compelling of these new priorities today seems to be recovery of the assets lost in the Soviet Union’s collapse in 1991, which Vladimir Putin has called the “greatest geopolitical catastrophe of the 20th century.”
 
How does Russia achieve this goal? By dominating the domestic politics and, more importantly, economic- and foreign-policy orientation, of the former Soviet republics. Anything considered antithetical to Russia’s interests, as interpreted by the current Kremlin leadership, must be discarded — be it democratization, oil and gas exports that bypass Russia, and, especially, the membership in the Western organizations such as the European Union and NATO.
 
And if, in the process, Russia must sacrifice most or even all of the fruits of the post-Soviet rapprochement with the West — including membership in the G-8, entry to the World Trade Organization or ties to the EU — so be it.
Russia’s “targets of opportunity” include simmering border disputes (and virtually all Russia’s borders with newly independent states could be disputed, since they are but the very badly demarcated internal borders of the Soviet Union), and the presence of the ethnic Russian or Russian-speaking minorities in neighboring countries.
Apart from Estonia and Latvia — where ethnic Russians constitute over a quarter of the population, but where NATO membership raises the risk for the Kremlin — by far the most likely target is Ukraine. Kiev has repeatedly defied and angered Russia by the domestic politics of democratization, a decidedly pro-Western orientation, and the eagerness of its leadership to join NATO. Nearly one in five Ukraine citizens are ethnically Russian (a total of almost eight million) and live mostly in the country’s northeast, adjacent to the Russian border.
Mr. Putin has made his contempt for Ukrainian sovereignty clear, most notably at the NATO summit in Bucharest last April when, according to numerous reports in the Russian and Ukrainian press, he told President Bush that the Ukraine is “not even a real state,” that much of its territory was “given away” by Russia, and that it would “cease to exist as a state” if it dared join NATO.
 
Clearly, Vice President Cheney’s trip to Ukraine this past weekend, where he expressed America’s “deep commitment” to this “democratic nation” and its “right” to join NATO, was intended as a message to Moscow.
Still, there is no better place to cause a political crisis in Ukraine and force a change in the country’s leadership, already locked in a bitter internecine struggle, than the Crimean peninsula. It was wrestled by Catherine the Great from the Ottoman Turks at the end of the 18th century. Less than a quarter of the Crimeans are ethnic Ukrainians, while Russians make up over half the inhabitants (the pro-Ukrainian Crimean Tatars, one-fifth).
Ever since the 1997 Treaty of Friendship and Cooperation between Russia and Ukraine, signed by President Boris Yeltsin and Ukrainian President Leonid Kuchma, a solid majority of the Russian parliament has opposed the recognition of the Crimea as Ukrainian territory.
 
Russian nationalists have been especially adamant about the city of Sevastopol, the base for Russia’s Black Sea fleet and the site of some of the most spectacular feats of Russian military valor and sacrifice in World War II and the Crimean War of 1854-55.
Nationalist politicians, including Moscow Mayor Yuri Luzhkov, have repeatedly traveled to Crimea to show the flag and support the Russian irredentists — many of them retired Russian military officers who periodically mount raucous demonstrations. In 2006, their protests forced the cancellation of the joint Ukraine-NATO Sea Breeze military exercises.
 
Sevastopol was and should again be a Russian city,” Mr. Luzhkov declared this past May, and the Moscow City Hall has appropriated $34 million for “the support of compatriots abroad” over the next three years. On Sept. 5, Ukraine’s Foreign Minister Vladimir Ogryzko accused the Russian consulate in the Crimean capital of Simferopol of distributing Russian passports to the inhabitants of the peninsula.
With almost three-quarters of Sevastopol’s 340,000 residents ethnically Russian, and 14,000 Russian Navy personnel already “on the inside” (they’ve been known to don civilian clothes and participate in demonstrations by Russian Crimean irredentists), an early morning operation in which the Ukrainian mayor and officials are deposed and arrested and the Russian flag hoisted over the city should not be especially hard to accomplish.
 
Once established, Russian sovereignty over Sevastopol would be impossible to reverse without a large-scale war, which Ukraine will be most reluctant to initiate and its Western supporters would strongly discourage.
A potentially bolder (and likely bloodier) scenario might involve a provocation by the Moscow-funded, and perhaps armed, Russian nationalists (or the Russian special forces, spetznaz, posing as irredentists). They could declare Russian sovereignty over a smaller city (Alushta, Evpatoria, Anapa) or a stretch of inland territory.
 
In response, Ukrainian armed forces based in the Crimea outside Sevastopol would likely counterattack. The ensuing bloodshed would provide Moscow with the interventionist excuse of protecting its compatriots — this time, unlike in South Ossetia, ethnic Russians.
Whatever the operational specifics, the Russian political barometer seems to augur storms ahead.
NOTE: Mr. Aron, director of Russian studies and resident scholar at the American Enterprise Institute (AEI), Washington, D.C., is the author, most recently, of “Russia’s Revolution: Essays 1989-2006” (AEI Press, 2007).
 
——————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
===================================================
26.  AN ANALYTICAL DIARY OF THE DEFEATS AND VICTORIES OF THE UKRAINIAN STATE

A collection of major works by noted US historian James Mace, exposed the genocide of 1932-1933

By Nadia Tysiachna, The Day, and Natalia Dziubenko-Mace

The Day Weekly Digest, Kyiv, Ukraine, Tuesday, September 9, 2008
Another book has just been published as part of The Day’s Library Series. The new publication, entitled James Mace: “Vashi mertvi vybraly mene” (James Mace: “Your Dead Chose Me”) is Ukraine’s first collection of the major works of this noted US historian, who exposed the truth about the Holodomor genocide in Ukraine.
The volume includes nearly all his articles that were pub­lished in The Day between 1997 and 2004, as well as a handful of his articles that were published in other Ukrainian periodicals. An inalienable component of Ukrainian journalism and political culture, Mace’s articles are a kind of analytical diary of the defeats and victories of the Ukrainian state.
Mace’s scholarly grasp of the Holodomor reveals his quest for the purely political reasons behind this heinous crime, and this collection of articles addresses a number of crucial political, economic, and cultural issues. At the same it is a social diagnosis of the pathologies afflicting the Ukrainian society and state, a quest for optimal solutions with a universal and substantial meaning.
 
The creation of a civil society, the assertion of freedom of expression and freedom of the individual, and many other urgent problems are considered on the foundations of humanistic world views, with the aid of a variety of intellectual tools that were the hallmark of this outstanding American with a Ukrainian heart.
Mace stood out conspicuously among Ukrainian intellectuals with his quick temperament, fundamental knowledge, erudition, and undeniable polemical talents. He responded to all attacks and attempts to label him and, at the same time, deprive him of the moral right to his own ideas with genuine good humor tinged with regret.
He wrote: “At this point a digression is in order…What did I need this for? I have been asked this question frequently, and I have often been tempted to ask in turn: Why should millions of Russians, Jews, Armenians, and Ukrainians travel across the ocean to that faraway and godforsaken country, my America?
 
FATE DECREED THAT THE VICTIMS CHOSE ME
I did it because Ukrainian Americans required this research, and fate decreed that the victims chose me. Just as one cannot study the Holocaust without becoming half- Jewish in spirit, one cannot study the Famine and not become at least half- Ukrainian. I have spent too many years for Ukraine not to have become the greater part of my life. As Martin Luther said, ‘Here I stand, I can do no other.'”
In 2006 the President of Ukraine signed an edict establishing the Ukrainian Institute of National Memory. Mace had voiced this same idea in several Ukrainian periodicals as early as 1993, and his proposal sparked a heated debate in the press. He responded with a series of devastating articles that reflected the pain in his heart. Eventually, he wrote the program and statute of the new institute.
That same year the Ukrainian World Coordinating Council appointed him head of the newly established structure. The present volume includes Mace’s programmatic speech in Baturyn. This conceptually important speech points toward the direction in which it is necessary to move and indicates how to turn this institution into a truly living organism, a powerful generator of new ideas and new research, one that will be able to influence all aspects of intellectual life.
 
DECISIVE ROLE IN EXPOSING THE HIDDEN STALINIST CRIME OF THE FAMINE
“James Mace played a decisive role in exposing the hidden Stalinist crime of the famine of 1932-33 in Ukraine,” noted Stanislav Kulchytsky, deputy director of the Institute of Ukrainian History at the National Academy of Sciences of Ukraine.
 
“As the executive director of the US Commission on the Ukraine Famine, in 1988 he prepared and published the groundbreaking Report to the US Congress, which was followed in 1990 by three volumes of Holodomor eyewitness testimonies. These publications forced the Soviet Ukrainian government to officially acknowledge the fact of the famine, which had been kept secret for 55 years.
“The activities of Mace’s commission gave an impetus to research on the Ukrainian tragedy. The truth about the Holodomor turned into an effective means of freeing Ukrainian society from misleading Soviet propaganda stereotypes.
 
James Mace dedicated the last 10 years of his short life to Ukraine. His scholarly and educational endeavors focused on amassing arguments that prove that the Holodomor was an act of genocide corresponding to the UN Convention on the Prevention and Punishment of the Crime of Genocide (Dec. 9, 1948).
 
We owe the ratification by the Verkhovna Rada of the Law of Ukraine “On the Holodomor” to a number of domestic and foreign scholars, but we must not forget that Mace was present at the early stages of this research.
 
The truth about the Holodomor is helping us revive our historical memory, rally the Ukrainian people, and direct the state-building process along national lines. This is precisely why James Mace became a Great Ukrainian.” [To inquire about ordering this book, call (044) 414-6400 in Ukraine.]
 
FOOTNOTE:  The artistic work on the cover of the book, a pencil on paper drawing, showing a grieving mother sitting on the ground with her child, is by famous Ukrainian graphic artist Volodymyr Kutin.  The original of this artwork is held in the collection “Holodomor: Through The Eyes Of Ukrainian Artists,” Morgan Williams, Founder and Trustee, Kyiv, Ukraine.  LINK to article and photograph of book: http://www.day.kiev.ua/251220/.

————————————