Ukraine Media Test Liberty, Irk President

KIEV, Ukraine -- Ukrainian media are testing the boundaries of their newly won freedoms with hard-hitting exposes on the allegedly extravagant lifestyle of President Viktor Yushchenko's son, sparking a feud with the president over what is fair game in this former Soviet republic.

Yushchenko says the press went too far in attacking his teenage son, while journalists are now questioning the president's commitment to freedom of the press.

"This is a test of what kind of relationship we are going to have in Ukraine between the government and the press, and it is difficult to say how it is going to develop," said Dmytro Krikun, development director at Internews, a non-profit group that aids the formation of a free press.

The muckraking Web site Ukrainskaya Pravda last week ran stories alleging Yushchenko's 19-year-old son, Andriy, drives a $160,000 BMW and frequently slaps down rolls of $100 bills at trendy restaurants.

Amid the controversy, the Interior Ministry said Thursday that police have ordered Yushchenko's son to pay a $3.36 fine for illegally driving the BMW, which is registered to another person. The fine was levied by Interior Minister Yuriy Lutsenko in a television broadcast late Wednesday.

The reports about Andriy's lavish spending were picked up by newspapers and have riveted readers in the impoverished nation, where the average monthly salary is $152.

Asked about them at a news conference this week, Yushchenko lashed out at the Web site's reporter, calling him a "hitman" and saying that he had advised his son to "find that restaurant check . . . shove this check under that journalist's snout and then sue."

Some 200 journalists responded by signing an open letter, reminding Yushchenko that he had vowed not only to end the intimidation and pressure that had plagued them during the previous decade under Leonid Kuchma but also that he--and his family--would be accountable for their actions. They accused him of "showing disdain for free speech."

"The president's words show that the president himself misunderstands free speech in general," said Ihor Kulia, an independent media expert. "The president has no right to offend a journalist and point out to the journalist what to write about and what not to write about."

Yushchenko sent a letter to the Web site, insisting that he highly values free speech.

"It is very good that we live in a country where there are no taboo themes and persons," wrote Yushchenko, who won a court-ordered presidential repeat vote last year after protests over fraud dubbed the Orange Revolution. He took office in January on a reformist, pro-Western platform.

"It is correct that the president's family lives under big media attention, but that isn't cause to remove his natural right to a private life," he said.

He also said at the news conference that his son, a university student, works at an unspecified consulting firm and earns enough to be able to rent such a costly car.

Andriy, who could not be reached for comment by The Associated Press, told a Ukrainian newspaper, Ukraina Moloda, that his father gave him a "tough talking to . . . probably the most difficult conversation of my life." He added that he felt responsible for his father's outburst at the news conference.

"To be honest, if I'd known that such attention would be focused on me, I would have given less occasion for discussion . . . behaved myself differently," he said.

Ukrainskaya Pravda, where the report on Yushchenko's son first appeared, once was run by Heorhiy Gongadze. He was abducted in 2000 and killed, reportedly in connection with his investigations into high-level corruption. A Kuchma bodyguard later released secretly made tape recordings in which the former president appeared to be ordering action against Gongadze.

Kuchma has not been charged in Gongadze's death and has denied involvement.

Source: Chicago Tribune

Ukrainian PM to Ally With President in Parliamentary Polls

KIEV, Ukraine -- Ukrainian Prime Minister Yulia Tymoshenko said Saturday that she will stand alongside President Viktor Yushchenko instead of being his rival in the parliamentary elections in 2006.

Tymoshenko told a press conference in the city of Simferopol that she is a member of the president's camp and has no intention to compete with him, according to the Interfax-Ukraine news agency.

Either her or the president's prestige will add to the prestige of the president's camp as a whole, and the enhancement of either's prestige will help propel the country's political reforms, she said.

"I want to compete against nobody. I know my position and know what I should do and how to do it," she said.

Ukraine plans to hold parliamentary elections in March 2006. Political parties are actively preparing for the polls and forming their own alliances.

Source: Xinhua

Few Real Signs Of Crisis For Yushchenko And Orange Revolution

KIEV, Ukraine -- Western media reports are increasingly claiming that the Orange Revolution is floundering in Ukraine. The Independent asserted, "There is a growing consensus in Ukraine that Mr. Yushchenko and Ms. Tymoshenko have frittered away much of their political capital." The International Herald and Tribune focused on the policy divides in President Viktor Yushchenko's coalition and their alleged fear of undertaking tougher reforms.

Ukrainian President Viktor Yushchenko (R) listens to Prime Minister Yulia Tymoshenko
While these claims hold some truth, overall they misread the Yushchenko administration. Some economic policies in Yushchenko's first 100 days were undoubtedly misplaced, bordering more on socialist than free market economics. Nevertheless, Russian opposition politician Boris Nemtsov's description of Prime Minister Yulia Tymoshenko as "very left-wing, hugely populist, paternalistic, and also very charismatic" is a gross exaggeration.

Tymoshenko's penchant for state intervention in some areas is tempered by her support for free market economics in others. Tymoshenko is not an ideologically driven socialist, unlike the Socialist Party (SPU), which is allied to Yushchenko. Yet during the parliamentary debates over adopting WTO legislation, Tymoshenko backed the government while the SPU voted against them.

The government has not been given sufficient credit in three areas.

First, despite talk about re-privatization, Ukraine has not followed Russia in trumping up false charges against oligarchs to put them behind bars. No oligarch in Ukraine is set to go to prison just because he is an oligarch who supports the opposition.

Second, the Yushchenko government is sincerely committed to combating corruption, which must be curbed in order to attract foreign investment and to facilitate Ukrainian business.

Third, the government is more favorably disposed towards small- and medium-sized businesses, as many of those owners backed the Orange Revolution.

Critics of the Yushchenko government often make assumptions that are not relevant for Ukraine.

First, the average Ukrainian citizen does not take notice of reductions in GDP and vote accordingly. If this were the case, former prime minister Viktor Yanukovych would have won a landslide in the 2004 presidential election when Ukraine's economy was growing at record levels. But Ukrainian voters did not see high economic growth creating a higher standard of living. They instead feared unemployment (73%), rising prices (71%), unpaid wages (65%), and even famine (51%).

Second, the average Ukrainian citizen does not understand or take an interest in many issues that are strategically important for the country, such as WTO membership. Parliamentary Speaker Volodymyr Lytvyn complained that few parliamentary deputies fully understand the ramifications of the legislation required for WTO membership.

Instead, the real threat to the Orange Revolution rests in an area ignored in Western commentaries. The Orange Revolution and Yushchenko's election took place when a sizeable proportion of Ukrainian voters began to believe that Yushchenko was different from other politicians. As in many post-communist states, after a decade of "transition" Ukrainian voters believed that all politicians were corrupt and only wanted public office for personal gain.

The fate of the Orange Revolution and Yushchenko himself hinges upon whether or not Ukrainians continue to believe the new president is different, rather than lumping him with former presidents Leonid Kravchuk and Kuchma. So far, despite a number of crucial mistakes made by the Yushchenko administration, ratings for Yushchenko and Tymoshenko remain high.

The only exception is among eastern Ukrainians, who primarily voted for Yanukovych in 2004. The commonly heard view among them is: "At best…the Orange Revolution replaced one criminal clan, Mr. Yanukovych's, with a new one -- Mr. Yushchenko's".

Eastern Ukrainians, particularly in Yanukovych's home base of Donetsk, continue to remain cynical towards all politicians. Following this logic, better then the "lesser of two evils" and the election of "our own boys" into power rather than western Ukrainians.

A more complicated factor to deal with fairly is the question of double standards within the government. As the Wall Street Journal wrote, "Worst is the presence in the new government of Ms. Tymoshenko -- a former head of United Energy Systems of Ukraine who was prosecuted by the Kuchma government…" This is seen in eastern Ukraine as "evidence of a double standard in fighting corruption."

The questions of whether to review corrupt privatizations dominated much of the government's time and Prime Minister Tymoshenko's rhetoric during the first 100 days. Reviewing all privatizations would be impossible and undesirable. After all, the Yushchenko team includes many businessmen. Ukraine scholar Anders Aslund described the Orange Revolution as a "revolt by millionaires against billionaires."

Populist anti-oligarch feeling remains high, helping to change Tymoshenko's ratings from -50% under Kuchma to +50% under Yushchenko. Most Ukrainian citizens see privatization conducted in the 1990s in negative terms. Some 67% of Ukrainians believe that privatization was undertaken in an unjust manner, with only 9% believing the opposite. Consequently, some 71.3% of Ukrainians would support the re-privatization of large enterprises.

The highest support for re-privatization of large enterprises exists in western and central Ukraine (79.5 and 81.2% respectively), two regions where Yushchenko obtained his greatest support in the 2004 election. This high level could be explained by anti-oligarch feeling and by the fact that most large enterprises are based in eastern Ukraine. In eastern Ukraine support for re-privatization is lower at 53%.

The glow of the Orange Revolution is unlikely to fade before the 2006 parliamentary election. More radical policies this autumn will, if anything, increase its brightness.

Source: Eurasia Daily Monitor

That Kid Again

KIEV, Ukraine -- The controversy concerning President Viktor Yushchenko, his allegedly wayward son Andriy, and the media is a bit of a tempest in a teacup. The 19-year-old First Son’s alleged sins, while obnoxious, are venial in a Ukrainian context in which members of ruling-class clans have been known to steal whole industrial sectors from the commonwealth. At the same time, the fire around the controversy keeps getting stoked by a media that recognizes good copy when it sees it.

Andriy Yushchenko (4th from the left) with Viktor Yushchenko (C) During Orange Revolution
That said, the media has a point when it comes to one thing: President Yushchenko’s behavior during this uproar has left a bit to be desired.

If you’re not up on l’affaire Andriy Yushchenko, here’s the back story. Last week the popular Internet news site Ukrainska Pravda ran investigative pieces detailing the misbehavior of the president’s teenage son. The kid seems to be a bit fast. He drives a stunningly expensive BMW M6, lives in a huge apartment, uses a cell phone worth the price of a unit in a left bank high-rise, and is protected by private security guards who shoo away the police when they object to his alleged outrageous violations of traffic laws. The Beemer is reportedly borrowed. The apartment is paid for – depending on what story you believe – either by the Yushchenko family or by Andriy himself. He can afford it, the Yushchenkos claim, because the kid has a high-paying job at a consulting firm.

It’s worth separating what’s outrageous about the above from what isn’t. Listening to some of the journalistic rhetoric, you’d think young Andriy was an outrageous decadent in the mold of the Marquis de Sade, squandering the national wealth on ceaseless orgies. In fact, his lifestyle is not atypical of that of young people in positions analogous to his. It might be unfair, but the kids of powerful politicians tend to be showered with gifts and offered opportunities the rest of us don’t get. They get offered high-paying sinecures. When Ukrainska Pravda editor Olena Prytula says in a recent interview that Andriy’s lifestyle raises corruption issues, because Andriy’s unnamed benefactors might be trying to influence the president, she’s mistaken. There’s nothing that says a First Child has to take a vow of poverty, and there’s nothing illegal about a private citizen – which is what Andriy is – accepting gifts or a high salary for doing too little work. Without proof of a quid pro quo involving his father, what Andriy owns – or borrows or uses or accepts as a gift – is no one’s business but his own and his family’s. Unseemliness is no crime. This is a free country.

What is outrageous, however, is Andriy’s allegedly loutish behavior. No one should be able to park illegally in the middle of the street; no one’s bodyguards should be able to warn off the police. This speaks to an old Ukrainian problem: that there have been two sets of laws in this country, one for the guys in the black luxury sedans, and another for everybody else. If young Yushchenko gets to break the laws everyone else lives under, then this is absolutely a matter for a watchdog press.

This brings us back to President Yushchenko’s behavior throughout this hullabaloo. It hasn’t been good. When an Ukrainska Pravda reporter questioned him about his son at a press conference this week, Yushchenko exploded in dudgeon. In a rambling response, he insisted on his son’s flawless morality, weirdly brought up the specter of threats of violence against his family, adjured journalists not to disgrace their profession, offered conflicting versions of who’s paying for his son’s luxuries, and – most startling of all – told Ukrainska Pravda’s reporter not to be a “hired killer.” That’s a loaded thing to say in a country where journalists have indeed been long for hire, and where they’ve too often been killed.

If Yushchenko’s going to be the leader of a European country, he should try to sound like one. Do we believe Yushchenko has the same contempt for a free press that his predecessor in office did? No. But the trouble with this sort of ranting is that it sets a bad example for officials down the food chain. If a newspaper cameraman has his equipment smashed by an Interior Ministry cop next week, we’ll wonder whether Yushchenko’s effusion didn’t have something to do with it.

Instead of lashing out at the press, Yushchenko should have simply addressed the issues at hand. First, he should have affirmed his underage kids’ right to privacy. Second, he should have acknowledged the (yes) unseemliness of a spectacularly luxurious lifestyle for the young son of a reform politician in an impoverished country. Third, he should have pledged to look into his son’s allegedly illegal behavior, to punish it severely, and to punish moreover the policemen who let Andriy slide, if they can be identified.

Finally, he should have reiterated his respect for a free media. By doing this especially, he would have set the sort of example a good leader should set, and at the same time have disarmed his journalistic critics.

The president missed an excellent chance to strengthen democracy and the media environment here, and to affirm that the days of well-connected Ukrainians being above the law are over.

Source: Kyiv Post

100 Most Powerful Women in the World

NEW YORK, NY -- US Secretary of State Condoleezza Rice is the world's most powerful woman, beating out a host of presidents, celebrities and chief executives to top Forbes magazine's global ranking of feminine clout.

The annual list was Forbes' second ranking of the world's 100 most powerful women and left Rice two-for-two, having topped the 2004 version as US national security adviser.

Elizabeth MacDonald, senior editor at Forbes, cited Rice for "reinvigorating the role of Secretary of State with a form of diplomatic activism that we haven't seen in a while."

Chinese Vice Premier Wu Yi was runner-up for the second year in a row, but other prominent Asian women fared less well.

PM Tymoshenko - 3rd World's Most Powerful Woman
Ukraine's Prime Minister Yulia Tymoshenko, 44 came in third. Tymoshenko was one of the leaders of Ukraine's Orange Revolution last fall that toppled a stagnant, corrupt regime.

For her support, the country's new president, Victor Yushchenko, appointed her prime minister, a post she is using forcefully to shake up Ukrainian oligarchs.

Her bold moves to re-privatize industrial assets, allegedly bought on the cheap by billionaires like Rinat Akhmetov and Victor Pinchuk, have met with criticism both inside and outside Ukraine.

But Tymoshenko is used to controversy, having fallen out with the sitting government in 2001, leading to her arrest and later dismissal. Tymoshenko is also known for her fashion sense, appearing on the cover of the Ukrainian edition of Elle magazine earlier this year.

Source: Forbes

U.S. Administration Loves Ukraine More than Congress

WASHINGTON, DC -- Wednesday the U.S. Congress held a hearing about relations with Ukraine, which was organized by a subcommittee of European Countries Connections. The Congressmen were wondering why the U.S. is not in a hurry to fulfill the promises given to Ukrainian president Vladimir Yushenko during his visit to Washington in April.

U.S. President George W. Bush and Ukrainian President Viktor Yushchenko (L) shake hands at the end of their press conference in the East Room of the White House in Washington, April 4, 2005
During Yushenko’s visit to Washington, the administration and Congress promised him a lot: to recognize Ukraine as a country with a market economy and to provide it most favorable nation status in trade with U.S.; to lift the Jackson-Vanik Amendment; to help the country join WTO and NATO. However, from April there was no step made to fulfill the promises. The participants of the discussion were trying to understand the reason for the delay. The U.S. position on the hearings was presented by Deputy Secretary of State for Europe and Eurasian Daniel Frid, who recently returned from Kiev. Also, there were other active participants in the discussions such as the chairman of the Congressional subcommittee Elton Gallegly and professor for the Institute of European, Russian and Eurasian Research at George Washington University Taras Kuzio.

Gallegly stated the fire by admitting that “Congress is too slow with lifting the Jackson-Vanik Amendment and provision of most favorable status to Ukraine.” Answering Kommersant’s question of when he thinks Congress will start acting, Gallegly answered: “It doesn’t look like any changes are going to happen this year.”

Such a situation does not satisfy the U.S. administration. Daniel Frid directly stated that the White House expects Congress to lift the amendment and “to move in this direction ASAP.”

One of the reasons for the sluggishness of American lawmakers could be heard from the corridors. “Many, many people are unhappy with Yushenko’s decision to withdraw the troops from Iraq,” one of Kommersant’s sources in the Capitol said. “They think that the Ukrainian president should not give such a promise during the election campaign.” Knowing about such thoughts in the Congress, Frid tried to persuade the lawmakers that withdrawal of Ukrainian troops should not create a negative reaction—this process would be gradual and will be finished by the end of this year. “Besides, we and other allies agreed with this step,” Frid concluded.

The Deputy Secretary of State let it be understood that most favorable status and admitting Ukraine to the WTO are not in the too distant future. But, Kiev has to do its part as well. Frid positively appraised “the uneasy joint success of President Yushenko, Prime Minister Timoshenko and Speaker Litvin in adaptation by the Ukrainian parliament on July 6-7 of important laws that would help the country to join WTO.” One of the amendments to these laws was protection of intellectual property in Ukraine, which according to Frid is an important step. As a response, the White House might be able in the nearest time to delete Ukraine from the blacklist of countries that constantly break intellectual property laws.

Frid thinks that the issue of giving Ukraine most favorable nation status with market economy might be resolved in the middle of January 2006. However, to achieve it “Kiev would have to clarify some of its actions in front of Western investors.” The deputy secretary of state did not precise what he meant, however, Kommersant’s source in Congress said that he was talking about “Kiev’s reconsideration of some privatization results.”

All speakers were coming to the conclusion that “the situation in Ukraine remains pretty difficult.” “The opposition to reforms is still very strong,” Frid said. He explained that by the example describing how “anti-corruption campaign of Yushenko hurt interest of powerful groups.”

Frid confirmed that the U.S. supports Kiev’s intention to join NATO. However, the speed of joining the alliance, according to the deputy secretary of state, will depend on Ukraine’s desire and readiness to follow the standards of this organization. “The key to entering NATO for Ukraine will be completion of the political and economic military reforms as well as free and honest parliamentary elections in March 2006,” Freed stated.

When the Kommersant correspondent noted that Russia is not pleased with the possibility of Ukraine joining NATO, Frid expressed surprise. “I am really upset if it is really the case,” he said. “I think, NATO is not an incompatible organization with Russian.”

However, the participants of the hearing let it be understood that the date of Ukraine joining NATO will also depend on how fast it will be able to settle some sharp contradictions with Russia—from their point of view the alliance should not get entangled in the Russian-Ukrainian confrontation. Gallegly, for instance, thinks that “Kiev must settle with Moscow presence on Ukrainian territory of the Russian Black Sea Navy.”

Taras Kuzio did not quite agree with that point of view. According to him, Washington would not wait too long while Russia gives yes for Ukraine joining the alliance. “The attitude of the White House toward Moscow and Kiev drastically changed,” he said. “If during the first presidential term of Bush they thought about Putin well, and thought bad about Kuchma, now Putin is being considered an enemy of democracy and Yushenko is well received by Washington.”

Source: Kommersant

Opinion: Yushchenko Looses His Orange Revolution Cool

MOSCOW, Russia -- Ukrainian President Viktor Yushchenko's acrimonious exchange with a journalist this week is a very telling reflection of Ukraine's troubled Orange Revolution.

When challenged on his son's spending habits and lifestyle, Yushchenko launched into a diatribe that was defiant, at times confused, and directionless.

We may never really know what Yushchenko was thinking when a journalist from Ukrainska Pravda said he wanted to ask a question that "has to do with a much-talked-about issue these days. It's about the president's son - what car he is driving, and other quite expensive items [is he using]? The question has to do with morality - is it moral to use such things in such a country?" Yushchenko could have and probably should have politely declined to answer, citing family privacy. Instead, his aggressive reply touched upon more than the defense of his son - it spoke volumes about the state of the Orange Revolution.

Yushchenko was once the darling of Ukraine's free media. Those days appear to be over. When asked a hard or awkward question, Yushchenko instructed the journalist to "act as an honest journalist and not as a contract killer" and said "let me tell you, friends, such...[questions] should be humiliating for an honest journalist." Some of his strongest supporters during last year's protracted presidential election were in media, particularly journalists at Ukrainska Pravda. Yushchenko now likens some journalists to retired thugs from the security forces.

Many journalists are irresponsible, but Yushchenko's contemptuous attitude only encourages the irresponsible ones and disappoints those who are professional. The Orange Revolution sought to open the government and make it accountable to the public. Yushchenko's comments prove he not up to standard. In fact, his behavior in this case was reminiscent of his predecessor Leonid Kuchma's arrogant treatment of the media.

Yushchenko has also demonstrated that he is touchy about the issue of corruption, particularly allegations of personal wrongdoing. When directly asked about his son's spending habits and lifestyle, Yushchenko proceeded to talk about himself first, "You know, I have lived my life witnessing how people would remain at their posts for half a year and then have to go to prison, usually because these people would steal. My professional life has been in this environment and in this system; many of my colleagues are not there any longer or are still in prison."

Yushchenko's comments amount to an admission of how little has been done to deal with corrupt state officials since the Orange Revolution. Yushchenko and his family may not be corrupt, but there is an acute public awareness that state officials continue to live well at the state's expense. Yet again, the Orange Revolution has not lived up to its promise.

While defending his son, Yushchenko rattled off a rant about personal safety. "Son, I can only help you with one [piece of] advice - learn to protect yourself! Learn to protect yourself!" Yushchenko also responded to rumors that his son is protected by private bodyguards. It is not surprising that Yushchenko is very sensitive about personal safety after being poisoned during last year's presidential campaign.

However, the warning says a lot about Yushchenko's current political predicament. Often at odds with Prime Minister Yulia Tymoshenko over administrative and economic policies, Yushchenko will soon cede to her many of his presidential powers. Tymoshenko is a political rival and with parliamentary elections slated for March 2006, Yushchenko is finding that he has poorly protected his political options, future ambitions and legacy.

Yushchenko's outburst released an enormous sense of frustration, the same frustration many Ukrainians feel demanding justice for murdered journalist Georgy Gongadze. At the World Economic Forum in Davos, Switzerland in January, Yushchenko promised that the Gongadze case would go to court by May. This has not happened yet and is very unlikely to happen any time soon given the collective resistance within the security forces to move on the case. The failure to finally close the Gongadze case will seriously damage the legitimacy of those who came to power through the Orange Revolution.

Maybe Yushchenko simply was having a bad day and being forced to defend his son in public sent him reeling. Nonetheless, he revealed in the most vivid way what frustrates him and what has become of the once glorious Orange Revolution.

Source: RIA Novosti

Ukraine Scraps Visas for Canadian, EU Citizens

KIEV, Ukraine -- Ukraine said Thursday it was scrapping visas for Canadians from Aug. 1 and extending visa-free travel for travelers from the European Union as part of President Viktor Yushchenko's plan to move closer to the West.

A presidential decree posted on his Web site www.president.gov.ua said visas would no longer be required for Canadian visitors coming into Ukraine for less than 90 days.

Another decree on the same site said visa-free travel for citizens of the EU countries and Switzerland would be extended beyond the initial deadline of Sept. 1.

Ukraine canceled visas for EU travelers in March for a four-month trial period from May to September.

Foreign Minister Borys Tarasyuk has previously said the experiment was successful and the number of EU tourists to Ukraine has more than doubled since May 1 when the cancellation took effect.

Citizens of Japan have also been allowed to travel to Ukraine without visas. Visa requirements for U.S nationals have been considerably simplified.

Yushchenko, elected after a popular "Orange Revolution" against electoral fraud at the end of last year, wants to take his ex-Soviet country of 47 million people closer to the European mainstream and aims for EU membership.

Yushchenko, who has already made a dozen visits to Western countries since taking power in January, has also urged foreign governments to ease their visa regimes for Ukrainians.

But so far no country has said it will lift visa restrictions for Ukrainians in the near future.

Source: Reuters

Ukraine Probes Threat to Tymoshenko

KIEV, Ukraine -- Ukraine is investigating reports of an attempt to assassinate Prime Minister Yulia Tymoshenko, the Ukrainian Security Service, or SBU, said Thursday.

"The SBU is checking this information and is taking the necessary measures," SBU spokeswoman Marina Ostapenko said. She said the information was received from law enforcement agencies of Western countries.

Prime Minister Yulia Tymoshenko
She gave no information about who was behind the attack, or when or where it was supposed to have taken place. Tymoshenko's office was not immediately available for comment.

Tymoshenko, once dubbed the "gas princess" for her role in the energy industry, was appointed prime minister in February and won overwhelming parliamentary support. In her six months as prime minister, Tymoshenko has spearheaded a government fight against corruption and smuggling.

Source: Moscow Times

Son’s Car Lands Yushchenko in Media Hot Water

KIEV, Ukraine -- Six months ago Ukraine President Viktor Yushchenko was a media darling, hailed as a democratic reformer. Today he faces a hail of criticism amid warnings of creeping censorship.

What happened?

His son took a ride in a flashy car.

The car – a sleek BMW that reportedly has a price tag of well over 100,000 euros ($120,000) – peaked the interest of a muckraking Internet newspaper, Ukrainska Pravda.

Ukraine's President Viktor Yushchenko's son, Andriy
After poking around, it published a critical story that asked how Yushchenko’s oldest son Andriy, a 19-year-old university student, could afford luxuries like the posh BMW, a cell phone said to cost some 4,000 euros, and restaurant bills in the hundreds of dollars.

The story sparked a furious reaction from the president.

“Act like a polite journalist and not a hired killer,” Yushchenko told a Ukrainska Pravda reporter when the latter asked him to comment on the topic at a press conference late on Monday.

Then in a long-winded, somewhat rambling discourse, Yushchenko said that his son was a moral, well-brought up person who rented the luxury vehicle with earnings from a part-time job.

He also said that the reporter who wrote the story was paid to do so by his political opponents.

Yushchenko’s comments – directed at a reporter from a publication that staunchly supported him during last year’s “orange revolution” – shocked the journalism community, which openly cheered the election of the Ukrainian leader.

By late yesterday, more than 300 reporters had signed a letter that demanded Yushchenko publicly apologise for his remarks.

“You had sworn ... to uphold the freedom of speech,” it said.

“Today you disregard freedom of the press, which includes free access to information, including that of public figures. You have to realise that you and your family are objects of public attention. Society has the full right to know about the revenues, spending and lifestyle of your family.

“We are forced to talk about the country sliding into censorship, self-censorship and the lack of freedom of speech.”

Yushchenko has sought to soothe tensions

“It is right for the president’s family to live under the press spotlight,” Yushchenko said in a letter to Ukrainska Pravda late on Tuesday. “But it’s not a reason to deny my family the right to a personal life.”

But journalists say the conflict is the latest in a worrying trend by Yushchenko’s administration, which ran on pledges of transparency and a free press but has since sought to tighten control over Internet publications and often dismisses criticism as a result of a political order.

“Apparently the current Ukrainian president thinks that freedom of the press is when he reads flattering articles,” one journalist wrote in the Den daily yesterday.
Observers say the conflict is a test of whether Yushchenko’s administration will fulfil its campaign pledges now that it is in power.

“We’re not talking about invasion of privacy of the president or his son,” said Yevgen Bystritskiy, executive director of the non-governmental organisation Renaissance Fund, which monitors the Ukrainian media.

“This is a question of principle of how transparent are relations between the government and oligarchs,” he said.

Ukrainska Pravda said spending habits of Ukraine’s first family are fair game for reporters, since business interests under the previous regime often influenced policymakers by lavishing gifts on them and their families.

“This government differs little from the previous one in that it doesn’t like and it doesn’t handle criticism well,” Yelena Pritula, chief editor, told AFP.

“They haven’t found a way to react to it,” she said. “Yushchenko’s reaction differed little ... to what (previous president Leonid) Kuchma would have said in a similar situation.”

“Instead of dealing with the situation, the president decided to insult the journalist,” she said.

Source: AFP

Economic Reform Lags in Ukraine

KIEV, Ukraine -- President Viktor Yushchenko, who swept into power last January on promises that he would stamp out corruption and press ahead with economic reforms in Ukraine, is making so little headway that foreign investors are staying away and growth is falling sharply.

Economists and analysts say the delay is the result of government infighting as well as a shortage of competent personnel in state administration and the courts.

Ukraine's Prime Minister Yulia Tymoshenko, left, Ukraine's President Viktor Yushchenko, center, and Ukraine's Parliament Speaker Volodymyr Lytvyn durinfg a news conference in Kiev
Now with presidential powers due to be curbed in September under new constitutional amendments - and fresh parliamentary elections scheduled for next March - the fear among those hoping for a European-style free market in Ukraine is that Yushchenko has very little time left to exert his influence.

"We are a little behind from where we were a half a year ago," said Vladimir Litvin, the influential speaker of the Parliament.

"Our actions are often convulsive," he said Saturday at a conference organized by the Yalta Europe Strategy, a group that support's Ukraine's eventual membership in the European Union.

"We are not pro-active concerning the challenges. We don't have the concepts or programs for Ukraine's development over the next 10 years."

The biggest casualties so far, economists say, have been the process of privatization and efforts to clarify property rights and to make the banking system flexible and transparent.

Much of the problem, they say, is within the government and the courts, which are struggling with disputes over the privatization and renationalization of enterprises. Although a new, reform-minded elite has emerged - as evidenced by the burgeoning of independent research groups and economic and political institutes - this new generation so far is mostly remaining outside government, stepping forward only as advisers.

"There is a real lack of institutional capacity," said Alexander Sushko, director of the Center for Peace, Conversion and Foreign Policy of Ukraine. "There is simply not enough personnel around ministers who want to introduce reforms."

Yushchenko, who wants to integrate Ukraine into the world economy as soon as possible, defeated Viktor Yanukovich, his conservative archrival, amid huge protests demanding free and fair elections.

After taking office, Yushchenko said he would not pursue a witch hunt against those who bought enterprises under dubious circumstances from the former government.

Prime Minister Yulia Timoshenko, however, has started to renationalize some of the companies. Her aim, economists say, is to curb the powers of the oligarchs, most of whom supported Yanukovich in the presidential elections.

One recent renationalization was the profitable steel maker Kryvorizhstal.

It was sold in June 2004 to a consortium controlled by Viktor Pinchuk, one of the six oligarchs and a son-in-law of Leonid Kuchma, who resigned as president late last year. Pinchuk's $800 million bid beat out one of $1.5 billion from U.S. Steel and its Dutch partner, Mittal Steel.

Pinchuk, a member of Parliament and chairman of the giant Interpipe, declined to comment on the recent renationalization.

"I don't want to make a political issue out of it," he said.

He has been fighting in court to get the plant back but suffered another setback this week. A Ukrainian appeals court on Tuesday upheld a decision declaring the original auction illegal, The Associated Press reported.

The court ordered the controlling stake to be returned to the state and told the government to return his purchase price after the steel maker is resold. Timoshenko announced last month that it would be reprivatized.

This month, a plan to privatize Ukrtelecom was halted amid concerns it was not ready.

Timoshenko then announced last week that only 42 percent would be sold, leaving a controlling stake in state hands, according to the Prime-Tass news agency.

The latest forecasts by the Institute for Economic Research and Policy Consulting show that the uncertainty about privatization is already contributing to reduced investment and low growth. It said real growth in gross domestic product is forecast to be around 4 percent in 2005, well down from 12 percent last year. Forecasts for unemployment are not yet available, but the rate rose to 8.7 percent during the last quarter of 2004, compared with 8.1 percent in the previous quarter.

Efforts to clarify privatization and property issues have also become bogged down in ideological battles inside the coalition government. The government was hastily put together in January from the legislators who belonged to the previous Parliament.

The privatization agency, the property rights agency and the agricultural ministry are under the control of Timoshenko's Socialist Party. This partly explains why Yushchenko, head of the party Our Ukraine, has been unable to influence policy as much as he would have hoped.

With parliamentary elections scheduled for March, the government is also treading cautiously because it fears that nonreformers could regroup and form an alliance with supporters of Yanukovich and other leftist parties.

"We must not forget that 44 percent voted against Yushchenko in the presidential elections," said Alexander Rahr, director of Research at the German Council on Foreign Relations and who works closely with Ukrainian reformers.

Source: International Herald Tribune

An Assassination Attempt on Yushchenko Planned in Georgia?

KIEV, Ukraine -- President Viktor Yushchenko delayed his trip to Georgia because of available information about a terrorist act which was being prepared against him.

This was reported on Wednesday by Georgian newspaper "Rezonansy".

According to the paper, the attempt on the life of Ukrainian president was planned by the criminal Russian-Ossetian group. It was even preparing to shoot down the presidential plane.

Meanwhile, the press service of the Georgian president denies the information about a terrorist plot allegedly prepared against Yushchenko during his visit to Georgia, "Novyny-Ukrayina" reports.

"Everything that the "Rezonansy" newspaper published today about the terrorist plot against the president of Ukraine Viktor Yushchenko is a figment of the paper's imagination. Everything talked about in the paper is absolutely untrue," the head of information service of the presidential press service Teimuraz Grigalashvili said.

Viktor Yushchenko's visit was scheduled to start on July 26th, but on July 25th it was delayed to a later date.

The journalists were told by the State Chancellary of Georgia that the end of July was particularly busy for the Ukrainian president, and he decided to delay the trip towards the beginning of August, in order to stay in the country longer and to get to know it better.

Yushchenko was scheduled to take a six-day vacation in Georgia. The Georgian government was preparing intensively for his visit and developed a programme of his visit, including the Borjomi resort and the ancient capital of Georgia - Mtskheta, along with other notable destinations.

Source: Ukrayinska Pravda

New Ukrainian Leadership Embraces Soviet-Style Conspiracy Theories

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko sent an open letter to Ukrayinska pravda yesterday (July 26) following his public broadside against the publication at a press conference one day earlier. Yushchenko has accused Ukrayinska pravda of deliberately trying to discredit his son, Andriy, and his presidency.

Yushchenko was referring to a two-part article in Ukrayinska pravda provocatively entitled "Andriy Yushchenko: Son of God?" The article investigated Andriy's personal characteristics, portraying him as a spoiled brat. The author particularly wanted to know how a 19-year old could afford to drive around in an expensive BMW M6 (base price: 133,000 euro).

It is not unusual for Western leaders to occasionally be disturbed by media coverage that delves too deeply into their personal lives. But with Yushchenko it is unusual how much a pro-Western reformist leader has apparently embraced a political culture that regularly sees conspiracies. Former president Leonid Kuchma frequently resorted to such suspicions, a tactic that draws upon vestiges of Soviet political culture.

Since coming to power in January, the Yushchenko administration has frequently blamed conspiracies for its problems. Parliamentary Speaker Volodymyr Lytvyn claims the government regularly hurls "insinuations, accusations, intrigue, and lies". The oil crisis, caused by the government price ceiling, was blamed on Russia. The meat crisis was blamed on "speculators," while the sugar shortage and the failure to fully adopt legislation required by the WTO were blamed on parliament and Lytvyn personally.

Within the government, Minister of Justice Roman Zvarych has excelled at blaming conspiracies when unpleasant facts arise surrounding his alleged doctorate from Columbia University. Zvarych recently claimed that the attack on his credentials was staged by an organized conspiracy of persons he refused to reveal who had illegally hacked into the Columbia University database.

His penchant for conspiracy theories has ready-made supporters within the Yushchenko administration. National Security and Defense Council Petro Poroshenko blamed a conspiracy by former Kuchma loyalists when discrepancies first arose about Zvarych's credentials. Poroshenko claimed that public discussion about Zvarych's qualifications was planted by forces seeking to divide the Yushchenko camp.

Zvarych's attitude typifies the radical right of Ukrainian diaspora politics, where Russian-backed conspiracies are the norm. But by dwelling on intrigue, Zvarych and others in the Yushchenko administration ignore the right of media to investigate legitimate issues.

The Ukrainian opposition and its Russian allies also trade in conspiracy theories. Opposition leader Viktor Yanukovych and his Russian allies believe that the West, specifically the United States, orchestrated Yushchenko's victory in the 2004 presidential election. Regarding thee Orange Revolution, Yanukovych's website asks, "Where did the large sums of cash come from to finance the transportation of tens or more likely hundreds of thousands of people from Western Ukraine to Kyiv and their accommodation in tents, the printing of leaflets, preparation of large numbers of symbols, ensuring support, and a lot more?" The Yanukovych camp believes that these funds came from abroad.

Yanukovych voters take a similar view: 43% of them believe that "outside forces" organized the Orange Revolution. Only 14% of Yushchenko's voters agree.

As a result of these conspiracy theories, neither Russia nor Yanukovych accept Yushchenko as the legitimately elected president of Ukraine. Yanukovych refuses to acknowledge the massive evidence of election fraud on his behalf. Instead, Yanukovych claims, "We prepared for elections -- they [prepared] to grab power". Yanukovych believes Yushchenko staged a coup d'etat with U.S. help. "This is not a revolution," he claims, "but political technology with the involvement of special services".

The Yanukovych conspiracy theory goes further still, claiming that Kuchma, former presidential administration head Viktor Medvedchuk, and Yanukovych's own campaign chief, Serhiy Tyhipko, conspired against Yanukovych. Political analyst Volodymyr Kornilov claimed, "From the very beginning [Yanukovych] was not supposed to win".

Yanukovych's election press secretary, Anna Herman, blamed Tyhipko for "executing somebody's will". Yanukovych's main problem, she claimed, was not Yushchenko, but a "third person who did not abandon hopes of being the rescuer of the nation." Presumably she means Kuchma, as the Constitutional Court had ruled that Kuchma could stand in the 2004 election, as he had only served on full term since the 1996 constitution came into effect.

These views feed into the broader, Soviet-style revival of Western-backed conspiracies that is becoming popular in Russia. Western NGOs are accused of subverting Moscow, and the FSB is reviving KGB-style tactics and rhetoric to defeat this "conspiracy". FSB head Nikolai Patrushev, for example, linked U.S.-backed conspiracies to the democratic revolutions in the CIS. He warned the State Duma, "Our opponents are steadily and persistently trying to weaken Russian influence in the CIS and the international arena as a whole. The latest events in Georgia, Ukraine, and Kyrgyzstan unambiguously confirm this".

The majority of the Russian public and political elite is convinced that Washington put Yushchenko into power and that he is therefore a U.S. lackey. His American-born wife, Kateryna, and her past employment in the U.S. government, are touted as "proof" that she works for the CIA.

The Yushchenko administration unquestionably supports reform and Ukraine's Euro-Atlantic integration. It is therefore strange that they, like their opponents, draw on neo-Soviet political culture by frequently using conspiracy theories to explain their difficulties.

Source: Eurasia Daily Monitor

Yushchenko Angers Ukrainian Press

KIEV, Ukraine -- More than 100 Ukrainian journalists have written to President Viktor Yushchenko demanding he apologise for labelling a reporter a "hitman".

Serhiy Leshchenko had pressed the president to answer questions about his son's spending and lifestyle.

BMW M6
Andriy Yushchenko is a 19-year-old university student, but reportedly drives a BMW worth $120,000 (£70,000).

The row has strained relations between the president and the same press that supported his "orange revolution".

It suggests the honeymoon between President Yushchenko and the press may be over, says BBC world media correspondent Sebastian Usher.

Mr Leshchenko, a reporter with the widely read online newspaper Ukrayinska Pravda, has written articles questioning how Mr Yushchenko's son could support his apparently lavish lifestyle.

'Censorship'

The president said his son had a job that allowed him to rent the BMW M6 sports car, and that an expensive mobile phone he uses was a present from a friend.

When the reporter asked on Monday where the boy worked, Mr Yushchenko told him to "act like a polite journalist and not like a hitman".

The response outraged journalists, who accused the president of returning Ukraine to the climate of censorship experienced under his predecessor, Leonid Kuchma.

"We don't think that the vocabulary and the tone that you used while answering a question about your son's lifestyle are worthy of a leader of a democratic European country," said a letter signed by more than 100 journalists and posted on the Ukrayinska Pravda site.

"You have to realise that you and your family are objects of public attention. Society has the full right to know about the revenues, spending and lifestyle of your family," it continued.

Mr Yushchenko replied with his own open letter, saying: "It's right for the president's family to live under the press spotlight.

"But it's not a reason to deny my family the right to a personal life."

Source: BBC News

Viktor Yushchenko's Son Drives Luxurious BMW for 130,000 Euros

KIEV, Ukraine -- Andrey Yushchenko, the son of Ukrainian President Viktor Yushchenko, has recently made headlines in Ukrainian press. It turns out that "children of the orange revolution" live in luxury. Viktor Yushchenko's 19-year-old son, Andrey Yushchenko, drives a BMW, which costs more than 130,000 euros. Eyewitnesses say that the young man ignores road laws and develops the speed of 100 km/h on Kiev's narrow streets.

Andrey Yushchenko
Until recently, Andrey was visiting his girlfriend driving her Mercedes CLS 500 (over $90,000). This week, however, the young man was spotted driving a BMW M6 with Czech numbers CZ3U1 0401. Andrey's girlfriend, Anna, owns an apartment near the building of the presidential administration in Kiev. One square meter of such an apartment is evaluated at more than $4,000.

The basic model of a BMW M6 costs 133,000 euros in Kiev car saloons. The magnificent car is available on the base of a customized delivery only. Reporters found out that there is only one car like that in Kiev; the vehicle belongs to the son of the Ukrainian president, who recently urged Ukrainians not to steal, the Ukrainian Pravda newspaper wrote.

In addition, Andrey Yushchenko has become a patron of Kiev's most expensive night clubs and restaurants. Ukrainian reporters have recently photographed Viktor Yushchenko's son near two most expensive restaurants in Kiev, which enjoy popularity with footballers of Kiev Dynamo team. Eyewitnesses say that Andrey orders extremely expensive champagne for 1,000 euros per bottle and leaves $300 for restaurant personnel as tips.

The son of the Ukrainian president obviously has a fondness for expensive equipment. Andrey owns a Vertu cellular phone, the cost of which fluctuates from 4,700 to 35,000 euros.

Yushchenko's son appears in public with escorting bodyguards, who defend the young man against reporters' curiosity. The press service of the Ukrainian president has recently distributed the following statement: "The car, which I drive, belongs to a friend of mine, whose name I would rather not expose. My parents hired a group of bodyguards for me during the election campaign. I realize the responsibility, which I carry on account of my last name, Yushchenko. I study and work in a commercial firm, trying to obtain financial independence. I do not own a collection of vehicles, but I can make money for my own life."

It is noteworthy that the Ukrainian president himself earns about $5,000 a month. This profit is five times less than the wages of Europe's highest-paid official, German Chancellor Gerhard Schroeder. Viktor Yushchenko should therefore work for 30 years to be able to afford a BMW M6.

Andrey Yushchenko is a student of the Kiev Institute of International Relations. The Ukrainian president rejected the information about the luxurious property of his son. Viktor Yushchenko stated as a press conference on Monday that his son was simply renting a prestigious foreign-made car.

Yushchenko emphasized that his son works in a consulting firm, the profit of which helps Andrey pay the car rent and bodyguards' services, RIA Novosti reports. "This is not a lot of money, but it is enough to pay for the rent of the vehicle and for the services of the private security firm," the president of Ukraine said.

According to Viktor Yushchenko, his family receives the income of several millions of hryvnas (the national currency of Ukraine, which corresponds to $400,000). The president urged Ukrainian reporters to leave "women and children" alone if they want to search for compromising and sensational materials. "Those who know my son can confirm that this is a well-bread, moral and religious guy," Ukrainian President Viktor Yushchenko said.

Source: Pravda

Belarus’ Lukashenko Accuses West of Intervention Plans

MINSK, Belarus -- Belarus President Alexander Lukashenko has accused Western countries of attempting to destabilize the situation in the country. He did not rule out the possibility of intervention.

“We are heading into a very serious confrontation,” RIA-Novosti news agency quoted the Belarus leader as saying. “Of course, the Americans, the West will aim to destabilize the situation here in any possible way. They have worked out certain tactics that may include even intervention in our country.”

Speaking at a meeting on foreign and interior politics, Lukashenko said the Western countries have created bases to influence the situation in Belarus, such as “media, control and tracking from Lithuania and Poland. Currently, they are trying to involve Ukraine into this activity.”

He added that the foreign countries have activated control and intelligence services in Belarus and are going to “create certain groups that will head for Minsk when needed and will make a revolution in the main square. Well-known organizations will be concentrated on the territory of Lithuania, Poland and Ukraine. They even try to create such detachments in Russia.” Lukashenko recalled the so-called “orange revolution” in Ukraine late last year that started from opposition protest rallies on the main square of the Ukrainian capital of Kiev.

“I want to warn that we are aware of it. And we know how to oppose the intervention. I am not threatening anyone, but everybody should understand that I, as an elected head of state, will defend my people in all accessible ways provided by the Constitution,” Lukashenko said.

The Belarusian leader added that he had earlier discussed the recent revolutions in former Soviet republics with his Russian counterpart, Vladimir Putin. “I cannot say that we are as worried about revolutionary changes in Belarus and Russia as media report. There will be no revolution either in Belarus, or in Russia, we have agreed about that.”

He added that Russia widely supports Belarus on foreign issues and would consider “a revolution in Belarus as a revolution in Moscow.”

Source: MosNews

Yushchenko Offers Upbeat Assessment of First Six Months in Power

KIEV, Ukraine -- President Viktor Yushchenko gave an upbeat assessment July 25 of his first six months in office but also sounded a warning to his often-feuding government not to abandon the unity that brought them to power.

"We must demonstrate that we have stayed the same as we were seven months ago on Independence Square," Yushchenko said after a marathon eight-hour, closed door session with his top ministers.

Viktor Yushchenko with Family at January Inauguration
Yushchenko came to power in January after last year's mass protests known as the Orange Revolution in which a divergent group of opposition leaders called their supports onto the streets to challenge a fraud-marred presidential vote.

The vote was re-held and Yushchenko convincingly won, going on to form a coalition government that brought together wealthy oligarchs, pro-business politicians and Socialists.

The team won popular support for their pledges to improve living standards and fight the corruption and cronyism that had marred the decade-long rule of former President Leonid Kuchma.

"All the immediate tasks that we put before us for the first half of the year, we solved them," Yushchenko said.

He claimed 489,500 new jobs had been created - halfway to the goal he set himself of one million new jobs every year. Yushchenko also praised the 4 percent growth in Ukraine's economy even though it represents a slowdown from last year, and the government's success at holding inflation at 6.4 percent.

"Today I can look in the eyes of those people who before this hadn't received pensions of a minimum living standard, of handicapped children and mothers who give birth to a kid," Yushchenko said, referring to new social benefits and the increase in pensions paid by his government.

Yushchenko called on the government and parliament to improve relations, asking them to "work as one team." This month, lawmakers refused to pass all the parts of the government's much-sought after package of legislation that is needed before Ukraine can join the World Trade Organization.

"You should be able to forgive and focus on the state," Yushchenko said, flanked by Parliament Speaker Volodymyr Lytvyn and Prime Minister Yulia Tymoshenko.

Yushchenko and his allies face parliamentary polls next spring, a major test at a time when political reforms will have transferred much of the presidency's powers to the prime minister, who will be chosen by the political forces that triumph in the legislative vote.

Yushchenko didn't address some of the thorniest issues to face the new government, such as the fuel crisis earlier this fall and rising food prices.

Notoriously late, Yushchenko kept journalists waiting on July 26 for almost three hours. At one point, he noted that he doesn't own a watch.

Source: AP

Rival Views Divide Top Leadership in Ukraine

YALTA, Ukraine -- Eight months after hundreds of thousands of demonstrators ousted a corrupt government, Ukraine's peaceful Orange Revolution is being undermined by personal rivalries, conflicting reform programs and lack of coordination between the two people who did most to lead the revolt, according to advisers and supporters in both camps.

Yushchenko-Timoshenko Team During Orange Revolution
They say the struggle between President Viktor Yushchenko, a former chief of Ukraine's National Bank, and Prime Minister Yulia Timoshenko, a former business tycoon, over shaping Ukraine's future is delaying much-needed reforms. It could even erode the popular support that put both leaders - who are very different - into power.

"Timoshenko is very left-wing, hugely populist, paternalistic and also very charismatic," said Boris Nemtsov, a former vice-prime minister of Russia, leading member of the liberal Union of Right Forces political party and now an adviser to Yushchenko. "Yushchenko is a liberal, democrat, European-oriented politician. Such ideological differences are very hard to overcome. There is jealousy and rivalry while reforms keep being delayed."

Yet, say their advisers and analysts, they depend on each other. Yushchenko needs Timoshenko's power, popularity and political guile to keep a fragile coalition of liberals, socialists and communists together before next March's parliamentary elections. Timoshenko likewise needs Yushchenko's support in order to retain the office of prime minister, who is appointed by the president.

Neither politician will admit publicly to clashing with the other. But the openness with which their advisers discussed the problem at a weekend conference in Yalta illustrates that the rivalry and clash of agendas are hampering change. This means that much-needed reforms proposed by the International Monetary Fund and the European Bank for Reconstruction and Development - including introduction of clear property rights, the rule of law and privatization - have not gotten very far.

"There is a question hanging over the Yushchenko-Timoshenko team," said Grigoriy Nemyrya, adviser to the prime minister and director of the Center for European and International Studies in Kiev.

"There is a lack of coordination and coherence inside the government. If last December's revolution was a managed revolution, then a managed counterrevolution is possible over the next eight months," he said. "It would be damaging for Europe and Ukraine. It would be catastrophic for the region."

Nemtsov and Nemyrya were among several top advisers and business people at the weekend conference held in the Livadia Palace, a favorite summer residence of the Russian czars perched above the southernmost tip of Ukraine's Crimean coast. It was here, early in 1945, that the United States, Britain and the Soviet Union decided the postwar fate of Germany and Eastern Europe. After Nazi Germany capitulated four months later, Eastern Europe soon came under Soviet domination.

Sixty years on, with the Soviet Union gone, Germany reunited and former Communist countries in the EU and NATO, there is another agenda. "This is about bringing Ukraine back to Europe," said Marek Siwiec, a Polish legislator in the European Parliament and board member of the Yalta European Strategy, a nongovernmental organization that organized the conference.

The aim of Yalta Ukraine Strategy is to muster international support for Ukraine's eventual membership into the European Union. It is headed by Steven Byers, a former British trade and industry minister in Prime Minister Tony Blair's government. But the driving force behind it is the oligarch Viktor Pinchuk, who is chairman of the giant Interpipe corporation and son-in-law of the former Ukrainian president, Leonid Kuchma.

Kuchma stepped down last December after Yushchenko was elected his successor in elections that were rerun because of massive protests at electoral fraud in an earlier November vote.

At the Livadia conference, Ukraine's staunchest supporters from inside and outside could not hide their disappointment over the slow pace of reforms.

"There is mounting anger in Western business circles over the lack of radical liberal reforms and the failure to establish a functioning legal system," said Alexander Rahr, a Russian expert and program director at the German Council for Foreign Relations in Berlin.

With parliamentary elections scheduled for next March, Rahr and other analysts said Ukraine's legislators will balk at any reforms that could damage their election chances.

This was clear two weeks ago, when the government tried to win parliamentary approval for new laws required for joining the World Trade Organization.

The debates literally ended in fistfights as Socialist Party legislators backed by the Ministry of Agriculture fought hard to prevent any lifting of the high tariffs on sugar imports in order to protect domestic farmers.

"The point is that useful reforms have to be unpopular," said Dmitriy Vydrin, director of the European Integration and Development Institute in Kiev. "Yet when you look at what is taking place in the Parliament, you see too many factions which are still being influenced by the big businesses. The government has not pushed through enough changes or reforms to break those links."

Some attribute the slow pace of reforms to the chaotic organization of the government as well as the resistance to change from state and local officials.

"There is no clarity over how instructions are issued," said Timoshenko's adviser, Nemyrya. "There is one set of instructions issued by the prime minister, another by the secretariat, another by the Security Council and another by the parliamentary factions."

The tension between the two leaders means they do not intervene effectively to clear up the confusion, according to their respective advisers. This is damaging Ukraine's image abroad - European foreign investors, for example, are staying away until the government passes a law on property rights, privatization and intellectual property rights.

"The delay in setting out clear property rights affects how the government will proceed with privatization," said Igor Burakovsky, director of the independent Institute for Economic Research in Kiev. "Timoshenko is pursuing populist measures ahead of the March elections," he added. Pensions have been increased for the third time since last autumn. The receipts earned from privatization were meant to finance the increases. But during the first six months of this year, only $100 million had been earned from privatization sales - well short of the target of $1.2 billion for all of 2005.

"We are losing time and we are losing good will from abroad," Burakovsky said.

Source: International Herald Tribune

Ex-Soviet Republics Unfriendly, Russians Complain

MOSCOW, Russia -- Russians are unhappy with a hostile policy pursued by most former Soviet republics, showed an opinion poll carried out by the All-Russian Public Opinion Research Center on July 16-17. The survey encompassed 1,600 people in 153 locations across Russia.

Alexander Lukashenko - Best Known by Russians
CIS leaders best known to Russians were Belarus leader Alexander Lukashenko and Ukrainian president Viktor Yushchenko: they were correctly identified by 85 and 76 percent of respondents, respectively. The least known were presidents of Moldova, Tajikistan and Kyrgyzstan (19, 16 and 14 percent).

Leaders of most former Soviet republics are pursuing an unfriendly policy towards Russia, most Russians think. Ukrainian president Viktor Yushchenko and Georgian head of state Mikhail Saakashvili were seen as the most active anti-Russian campaigners, with 55 and 53 percent of respondents describing their policy towards Russia as hostile.

Moldovan leader is next in this line, with 38 percent seeing him an anti-Russian leader and 11 percent – as pro-Russian. Turkmen and Tajik leaders were seen as anti-Russian by 24 and 25 percent, and as pro-Russian – by 19 and 20 percent, respectively. The only exceptions were Belarus and Kazakh leaders, who were seen as pro-Russian by 52 percent and 50 percent of respondents, and as anti-Russian – by 22 percent and 15 percent.

Fifteen percent think Russian authorities have something to learn from Lukashenko, and eight percent said Russian officials could learn something from the Kazakh head of state.

Source: Gateway to Russia

Ukraine to Expand Trade at Sevastopol

KIEV, Ukraine -- Ukraine is considering three new terminal projects for its Crimean Black Sea port of Sevastopol to boost its international maritime trade.

A $70 million, 5-million-ton capacity breakbulk terminal is being proposed for construction in Dock Bay. A second potential construction project is a 32-acre kaolin terminal capable of handling up to 700,000 tons per annum for Kamyshovaiia Bay, while DonetskStal Metal Works plans a 37-acre coke terminal in the Kamyshovaya Bay.

Sevastopol
Environmentalists have already registered opposition to all three projects. The Sevastapol city council after the public hearings on August 3 will make its final decision.

Sevastopol is a Ukrainian port city on the Crimean peninsula with a population of 328,600. The port is the home of the former Soviet Black Sea Fleet and Russia still maintains naval forces there under a 1997 agreement. Under the agreement the Russian naval facility is defined as being "located in Sevastopol," for which the Kremlin pays rent.

Following the collapse of Communism in 1991 the Russian Federation initially refused to recognize Ukrainian sovereignty over Sevastopol and the surrounding Crimean province, arguing that city was never practically integrated into the Ukrianian SSR because of its military base status. The issue was only resolved in 2004 by the bilateral "Peace and Friendship" treaty between the Russian Federation and Ukraine, which stated that Sevastopol belongs to Ukraine.

While both nations are concerned about providing security against terrorists for the rising volumes of Caspian oil exported via the Black Sea, Ukraine would like to expand Sevastopol's use away from being a purely military base, as it is one of the finest deepwater habors on the Black Sea.

Source: UPI

Ukraine, Israel Ready for Aircraft and Tank Building Cooperation

TEL AVIV, Israel -- Ukraine and Israel are looking to cooperate in the aircraft and tank building industries, the Novosti-Ukraine agency quoted Ukrainian Defense Minister Anatoly Hritsenko, currently in Tel Aviv, as saying.

Hritsenko said the Ukrainian Armed Forces had many planes and helicopters in need of repair.

Defense Minister Anatoly Hritsenko
"Having considered the opportunities of the Israeli side, we should specify bilateral Ukrainian-Israeli issues and trilateral issues involving Russia," he said.

Hritsenko also said Ukraine and Israel had joint tank building interests and intended to create new destruction systems.

"A bilateral working group is tackling this issue," he said.

Source: RIA Novosti

Ammunition Stockpiles Explode Again in Ukraine

KIEV, Ukraine -- The Zaporozhsk Military Prosecutor's Office has started criminal investigations into a fire that caused an explosion in the Novobogdanovka military stockpiles in southwestern Ukraine.

According to Novosti-Ukraina, the General Prosecutor's Office said Monday that criminal investigations are underway into infringements of military code and the rules of handling military stockpiles and explosive substances.

The fire broke out at 5:00 p.m. on Saturday. A similar fire had occurred nearby on May 6 2004.

The 2004 fire caused an explosion of firearms. According to official data, 5 people died, 4 were seriously injured and another 81 were hospitalized. The fire was not fully extinguished until May 19.

The recent fire, although it caused no casualties, brought the Moskva-Simferopol railroad line to a standstill, delaying trains for more than 24 hours and redirecting them through Kiev.

Source: RIA Novosti

IFC Invests $25 Million in Leading Petroleum Retailer in Ukraine

KIEV, Ukraine -- The International Finance Corporation, the private sector arm of the World Bank Group, signed an agreement today to provide $25 million in loans to support an expansion and efficiency project at a leading petroleum retailer in western and central Ukraine. This is IFC's first investment in Ukraine's oil sector, Harold Doan and Associates reported.

Plan for OKKO Filling Stations
Gas station operator Galnaftogaz will use IFC's financing to expand its network of service stations and improve the quality of its products and services. IFC has advised the company on implementing one of the country's first corporate governance codes, which positions Galnaftogaz as a national leader in conducting business in a transparent and responsible way.

Ukrainian drivers will profit from the expansion, as Galnaftogaz will modernize the domestic petroleum retail sector, which has a legacy of old, uneconomic gas stations. The firm wills more than double the number of service stations operating under the "OKKO" brand, from 103 today to more than 260 by 2008. The new stations will be providing high-quality fuels using modern equipment and will offer such complementary services as convenience stores, car washes, and cafeterias.

Rashad Kaldany, IFC's Director for Oil, Gas, Mining, and Chemicals, said, "We believe the expansion will help Galnaftogaz gain economies of scale, improve operating efficiencies, raise quality standards, and ultimately increase competition in the petroleum retail market. IFC is delighted to provide the necessary long-term financing to support a local company with good growth prospects."

Yuriy Kuchabskiy, General Director of Galnaftogaz, said, "We operate one of Ukraine's new and fastest-growing networks of service stations, and IFC's investment will enable us to expand into other regions of the country. This will significantly increase our sales and profitability. In addition to financing, we appreciate IFC's assistance in corporate governance and in environmental and social issues. We look forward to continued support from IFC in the future."

Ukraine became a shareholder of IFC in 1993. As of June 30, 2005, IFC has invested $355 million across 18 projects in the country. IFC significantly expanded its investment program in Ukraine in FY04, committing $87 million, and again in FY05, committing $255 million in the agribusiness, financial, and general manufacturing sectors. IFC has also been conducting an extensive advisory program in Ukraine since 1992. Current donor-funded programs offer advice on corporate governance to companies and banks, seek to improve the business environment, and promote leasing, development of the agribusiness sector, and the growth of small and medium enterprises.

Source: ForUm

Russian Church Against Ukraine-Style Uprising

MOSCOW: Russia’s church said yesterday that a Ukraine-style revolution would rip the country apart – the latest top institution to warn Russians against an uprising.

Last year’s “Orange Revolution” in Ukraine and 2003’s “Rose Revolution” in Georgia have worried many Russian officials, who say pro-democracy movements in ex-Soviet states are a Western plot to undermine Moscow’s influence.


“Russia has already lived through a coloured revolution – a red one ... Russia will not survive another revolution,” Interfax news agency quoted Orthodox church spokesman Vsevolod Chaplin as telling members of the pro-Kremlin youth group Nashi. “If our country falls apart, it will not become a group of little Switzerlands but one big Yugoslavia pulled apart by bloody chaos, which no foreign peace-keepers could deal with.”

The bloodless revolutions in Georgia and Ukraine were sparked by government attempts to rig elections, and some Russian officials have mobilised to prevent such an uprising in Russia.

The main KGB successor agencies of the ex-Soviet states have met to co-ordinate steps to stop the pro-democracy movement spreading, and Russia’s FSB has demanded tighter controls on non-governmental organisations (NGOs).

President Vladimir Putin said on Wednesday that foreigners were meddling in Russia’s politics by financing NGOs, and offered to fund them himself from Kremlin coffers.

“We understand that he who pays the piper calls the tune,” Putin told NGO leaders.

“The defence of the country’s unity, its independence and its spiritual freedom must be the business of all society and every one of us,” Chaplin told the camp.

The Orthodox church was oppressed under the Soviet Union, with many churches demolished or used as factories and warehouses.

Since 1991, it has established a cosy relationship with the Kremlin and former KGB spy Putin frequently attends major religious events.

Source: Reuters

Resolution of Gongadze Murder Blocked

KIEV, Ukraine -- Despite hopes to the contrary, the election of a new president of Ukraine has not sped the investigation into the murder of opposition journalist Heorhiy Gongadze. At the Davos World Economic Summit in January, President Viktor Yushchenko promised that the Gongadze case would be submitted to court by May.

In fact, there is little progress beyond the arrest of two Interior Ministry officers and the release of a third on bail. All three were involved in Gongadze's kidnapping in fall 2000.

Opposition Journalist Heorhiy Gongadze
Prosecutor-General Sviatyslav Piskun visited the United States in the second week of July where he had planned to meet Mykola Melnychenko, the former presidential guard who had bugged President Leonid Kuchma's office. A fragment of one tape recording with Kuchma's voice ordering violence against Gongadze was played in parliament on November 28, 2000, sparking the Kuchmagate crisis.

For still-unclear reasons, Piskun did not meet Melnychenko. Instead, he discussed other issues with the United States, such as signing an extradition treaty, the deportation of former prime minister Pavlo Lazarenko (on trial in California since 2004), and the extradition of former Kuchma officials wanted in Ukraine but now living in the United States.

Melnychenko blamed Piskun for changing the time and place of the planned meeting. Piskun was to have taken Melnychenko's affidavit and hoped to take the original recordings back to Ukraine. But observers are now wondering if the "scheduling error" is really a smokescreen covering both Piskun and Melnychenko.

First, both Melnychenko and Gongadze's widow, Myroslava, have long argued that Yushchenko was mistaken in retaining Piskun as prosecutor. Yushchenko may belatedly be coming round to that same conclusion. At a meeting of central and regional prosecutors, Yushchenko accused the Prosecutor's Office of taking bribes to block investigations ordered by the Interior Ministry (MVS) and Security Service (SBU).

Yushchenko noted that top Kuchma-era officials all seem to get advance warnings to flee Ukraine ahead of their imminent arrest. For example, General Oleksiy Pukach, who was in the car alongside three other MVS officers accused of kidnapping Gongadze, fled to Israel in 2004. When the SBU and Israeli security service jointly located Pukach in Israel and passed this information through Interpol to the Ukrainian Prosecutor's Office, somebody leaked this information to Segodnya, allowing Pukach to go into hiding. As Zerkalo Nedeli/Tyzhnia put it, "In a word, it all looks professional and smells bad."

Second, Melnychenko's reputation has been tarnished. Semen Shevchuk leaked information to Ukrayinska Pravda that detailed meetings in Berlin (February), August (Moscow), and September 2004 (Moscow) between Melnychenko and Kuchma officials, with Russia's SVR acting as intermediaries. The Russian side was interested in protecting Kuchma as well as ensuring that fragments of Melnychenko's tapes relating to corruption by Russia's leaders in cahoots with Kuchma did not go public.

Melnychenko and Oleksandr Yeliashkevych, another political refugee from Ukraine, both demanded and received $1 million each from the Kuchma authorities. The funds were organized by Viktor Medvedchuk, then head of the Presidential Administration, and negotiated in Moscow by Ihor Bakay, then head of the Directorate for State Affairs. Bakay is now living in Moscow and wanted by the current Ukrainian authorities on charges of stealing $300 million. This explains why so little of the Melnychenko tapes were released during the 2004 election and his reluctance to assist the Gongadze investigation since Yushchenko came to power. His silence was agreed in Moscow as part of the monetary arrangement.

Third, the latest tapes to be released make top Yushchenko officials look guilty. Newly released tapes from 2000 incriminate National Security and Defense Council Secretary Petro Poroshenko, portraying him as a Kuchma lackey hostile to then First Deputy Prime Minister, now Prime Minister, Yulia Tymoshenko. Zerkalo Nedeli/Tyzhnia described this development as the recordings' "transformation from a heroic deed into something absolutely different. And a national tragedy has been transformed into a farce."

However, the Kuchma camp is not the only faction that has sought to buy off people involved in the Gongadze case. The Ministry of Justice attempted to bribe Myroslava Gongadze with 100,000 Euros in exchange for her withdrawing all future claims against the government. She described this offer as "an absolutely vulgar proposal by the Ukrainian government to shut me up". Unlike Melnychenko, Myroslava Gongadze refused the offer and demanded that the Ukrainian authorities punish the "organizers," and not just the MVS officers who carried out the murder of her husband.

Two further suspicions have also arisen. The first rests with the death of former Interior Minister Yuriy Kravchenko, whose voice is heard on the Melnychenko tape dealing with Gongadze. MVS Minister Yuriy Lutsenko and former SBU chairman Ihor Smeshko do not believe Kravchenko committed suicide -- especially as he was found with two bullets to his head -- after Prosecutor Piskun publicly called him to give testimony. Smeshko said, "I am inclined not to believe that he committed suicide. The information I have at the moment poses huge questions as to why the murder version was not pursued".

The second suspicion rests with efforts to bring Kuchma to justice. First Deputy Prime Minister Mykola Tomenko believes that any investigation of the Gongadze affair should begin with Kuchma and parliamentary speaker Volodymyr Lytvyn. Lytvyn, who was head of the Presidential Administration from 1996-2002, has never been called in for questioning and will be a coalition partner with Yushchenko in the 2006 parliamentary election.

Deputy Prosecutor Viktor Skokin is now stating that Kuchma did not issue the order to "deal with" Gongadze. Shokin was deputy prosecutor in October 2003, when the Presidential Administration responded to pressure and released Pukach from a brief imprisonment.

Failure to proceed on the Gongadze affair will seriously damage the legitimacy of those who came to power through the Orange Revolution. As SBU Chairman Oleksandr Turchynov admitted, "the death of this person [Gongadze] really shook up and changed the country". Without Kuchmagate, there likely would have never been an Orange Revolution exactly four years later.

Source: Eurasia Daily Monitor

Yushchenko Backs Japan Bid for UNSC

TOKYO, Japan -- Japan is qualified to secure a permanent seat on the U.N. Security Council, in view of the political and economic role it has played within the organization, visiting Ukrainian President Viktor Yushchenko said Thursday.

Ukraine is among the 23 nations that jointly submitted a resolution to expand the UNSC, in conjunction with the so-called Group of Four nations that aspire to become permanent members of the council -- Japan, Germany, India and Brazil.

Ukrainian President Viktor Yushchenko places a wreath in front of a cenotaph for the atomic bomb victims at the Peace Memorial Park in Hiroshima, Japan
During a lecture in Tokyo, Yushchenko thanked Japan for expressing support for granting a rotating UNSC seat to an Eastern European nation, such as Ukraine.

"It will not be permissible to ignore the position of these countries in forming the history of the modern world," he said.

Yushchenko added that Ukraine had in the 1990s abandoned its nuclear weapons program, a legacy of Soviet rule, as a means of boosting democracy. European countries, as well as Japan, provided financial support for Kiev's efforts to dismantle its nuclear arms.

The president, who is on a four-day visit to Japan, met with Prime Minister Junichiro Koizumi later Thursday and is scheduled to leave Japan on Saturday.

Ukrainian President Viktor Yushchenko visited the Tokyo Stock Exchange, saying he wants to foster cooperation with TSE officials as a means of bolstering the infrastructure of the securities market in Ukraine.

Yushchenko told reporters "technical cooperation and advice from Japan" would be essential to improve the Ukrainian stock market environment.

Source: The Japan Times

IKEA Goes to Ukraine from Moscow

MOSCOW, Ukraine -- Ramstore retail chain has sealed an agreement with IKEA to become a major operating company in Kyiv’s MEGA shopping mall. The project proves that the Ukrainian capital is an undisputed leader on the volume of Russian retail investment among the CIS cities (excluding Moscow). However, experts predict a forthcoming sharp decline in the attractiveness of Ukrainian projects Ramstore's Ukrainian expansion will copy the retailer’s triumphal entry of the Moscow market in 1997. Ramstore in Kyiv will also be the biggest food store in the country with the total area of 12,000 sq. km.

Ramstore in Moscow
Ukrainian projects are now highly popular with Russian businessmen, as nearly all top Moscow retailers have their shops in Ukraine. Russian retailers do not pay that much attention to any other Russian regions, except for Moscow. The volume of the retail market is estimated to have risen 28 percent. The city is relatively close to Moscow – 800 km, compared to several thousand kilometers to Russian million-populated cities. What is more, many retailers view Ukrainians as weak rivals.

However, experts predict the Ukrainian retail a short life. The Russian expansion may die out in a year or a year and a half, as the rent on commercial premises has soared due to the entry of Russian retailers, the rates approaching Moscow ones. In these conditions it is easier to go developing Russian cities with the population of 500,000 – 700,000.

Source: Kommersant

Georgia's Strategic Partnership With Ukraine

TBILISI, Georgia -- Ukrainian President Victor Yushchenko will be vacationing in Georgia from July 26-30, and although the Georgian president's administration stresses that this is an unofficial visit, it nevertheless underlines the close ties between the two countries, as well as offers an opportunity for the further deepening of relations.

The Ukrainian president is slated to visit many of Georgia's tourism highlights, including Tbilisi and Mtskheta, Borjomi and Bakuriani, Vardzia, Svaneti and a vineyard in Kakheti. President Mikheil Saakashvili is reportedly cutting short his stay in Holland, where he is visiting his wife Sandra Roelofs who is pregnant with the couple's second child, in order to accompany Yushchenko. During the trip meetings are also scheduled for Prime Minister Zurab Noghaideli and Speaker of Parliament Nino Burjanadze.

The visit symbolizes not only the strategic partnership developing between Georgia and Ukraine but also the close personal relationship between the presidents of the two countries. Saakashvili was vocal in his support of Yushchenko in the run-up to the Orange revolution and ensuing presidential elections, and the two men have met a number of times since, including spending their New Year holidays together in Ukraine.

Their relationship has been central to the development of ever closer relations between Georgia and Ukraine. The two countries, along with fellow GUAM member Moldova, share similar goals and difficulties. Most obviously, both have expressed their strong desire to become members of NATO and the European Union, and this has entailed a cooling in relations with the Kremlin.

Russia is duly taking measures against both countries, by raising the price of Russian gas exports, for example, and this in turn means the strategic partnership between the countries is of even greater importance. While Georgia has much to gain from close ties with Ukraine, which is after Russia the most powerful post-Soviet country, Georgia's strategic position between Ukraine and Caspian gas and oil fields means Ukraine too has much to gain from the partnership.

The two countries are currently planning deeper economic integration, and this is of particular importance for Georgia, whose biggest trade partner is currently Russia. The Ukrainian market offers great potential as a recipient of Georgian products, and with relations with Moscow currently so strained, Tbilisi is eager to diversify not only its energy sources but trade partners as well.

Georgia could also potentially benefit from closer ties with Ukraine with regard to its ongoing efforts to resolve its internal conflicts. Russia is obviously the country best placed to intervene in the Ossetian and Abkhaz conflicts to pressurize the separatist regimes to come to the negotiating table, but it seems highly unlikely that this is a route Moscow will take. Kiev, on the other hand, is keen to play a role in resolving these conflicts, as well as the Moldovan-Transdnestrian conflict, which it is admittedly in a stronger position to influence.

It is arguably in Kiev's interests to see an end to ethnic conflicts in the region, as Ukraine could potentially be threatened by a similar conflict with the eastern part of the country, which is predominantly populated by ethnic Russians, seeking to break from the western part. It goes without saying that an increase in the role played by Ukraine in resolving regional conflicts would be in the interests of Moldova and Georgia.

The Ukrainian Ministry of Foreign Affairs of Ukraine has published a statement recently declaring Ukrainian support for the Georgian government's initiatives to peacefully resolve the South Ossetian conflict. The statement reads that the recent Batumi international conference to discuss the proposals was an important step towards conflict settlement, and that the initiatives provide a real base for dialogue between Tskhinvali and Tbilisi.

Western countries and organizations have also praised the Saakashvili peace initiatives but past experience suggests that this verbal support is unlikely to translate into genuine efforts to get involved in the peace process. It remains to be seen whether Ukraine will make this move from statements of support to active involvement, but the people of Georgia hope that Yushchenko's visit will lead to just that, and there is no doubt that this would be a positive step.

Source: The Messenger

With Parliament In Recess, Yushchenko Moves To Assert Authority

KIEV, Ukraine -- Ukraine's President Viktor Yushchenko has used the past week, with parliament closed for summer recess, to assert his authority in key state institutions. Yet these latest moves have failed to dispel the growing opinion that Yushchenko is not making use of the extensive powers he will lose after the March 2006 parliamentary election.


President Viktor Yushchenko
Despite his efforts, three obstacles impede progress in reform.

First, administrative capacity is weak. Under former president Leonid Kuchma, reformist legislation and decrees were never meant to be implemented, and some senior officials and middle-level bureaucrats simply ignore Yushchenko's decrees and demands.

Second, there remains a widespread view among senior officials that nothing has changed. In other words, Yushchenko's rhetoric against corruption and reform should be ignored just as they were under Kuchma.

Third, senior officials continue to believe they should be above the law. When charged with crimes, they cry "political persecution," although Interior Minister Minister Yuriy Lutsenko insists: "There is prosecution for crimes and abuse of office".

These three types of blockages have manifested themselves in six areas.

First, the government cannot push important issues through parliament, such as the legislation required for WTO membership. This is also evident in the lack of discipline within Yushchenko's Our Ukraine parliamentary faction.

Second, the Prosecutor's Office does not follow through on investigations by the Security Service (SBU) and Interior Ministry (MVS). Files seem to become "lost" in the Prosecutor's Office.

Third, former Kuchma officials routinely ignore subpoenas from the Prosecutor's Office or the MVS, details of which are widely disseminated through the media. Donetsk oligarch Renat Akhmetov and the leaders of the Social Democratic Party-United (SDPUo) and Regions of Ukraine, Viktor Medvedchuk and Viktor Yanukovych, have ignored such writs.

Fourth, Kuchma continues to act as an elder statesman. The Ukrayina Foundation he heads publicizes its work in the media. However, 64% of Ukrainians have a negative view of Kuchma, with only 6% regarding him as positive. Some 45% would like him out of politics, and 35% would like to see him placed on trial.

Fifth, Yushchenko's party of power, People's Union–Our Ukraine, has not been successful in encouraging national democratic parties to merge with it. National democratic parties are campaigning to create a bloc of parties to support Yushchenko that would resemble Our Ukraine in the 2002 election. First Deputy Prime Minister Roman Bezsmertny, whose responsibilities includes the establishment of the new party, threatened to resign this week, but Yushchenko refused to accept his resignation.

Sixth, new governors have come under criticism from both People's Union-Our Ukraine and Yushchenko himself for adopting no reforms or not implementing changes in cadres. Yushchenko warned Donetsk governor Vadym Chupryna that he would be removed if the entire leadership in the region's law enforcement and tax offices is not be changed by September 1.

Yushchenko was highly critical of the Prosecutor's Office headed by Sviatyslav Piskun, a holdover from the Kuchma era. Yushchenko accused the Prosecutor's Office of taking bribes to block investigations of high-ranking officials transferred to them by the SBU and MVS.

Details of these cases are regularly leaked to the media. These officials then flee abroad, usually to Moscow, where MVS Minister Lutsenko believes there is now a "government-in-exile," consisting of former SBU deputy chairman Volodymyr Satsiuk, Odessa Mayor Ruslan Bodelan, the head of the Directorate on State Affairs Ihor Bakay, and former Kyiv governor Anatoliy Zasukha.

Lutsenko has promised that investigations into fraud in the 2004 presidential election would be completed by August. If the inquiry reaches up to senior officials, such as Medvedchuk, Yanukovych, and Central Election Commission (CEC) chairman Serhiy Kivalov, the opposition would be decapitated ahead of the 2006 election.

Yushchenko has drawn particular attention to the violence provoked by the Kuchma authorities at an opposition rally outside the CEC on October 23, 2004. Recently released information showed the Yanukovych camp had hired organized crime thugs to initiate violence against rally participants in order to draw the Yushchenko leadership outside the CEC. They were then refused re-entry into the building so that the Yanukovych camp could try and force through an expansion in the number of polling stations inside Russia for the October 31 vote.

Yushchenko has heavily criticized the MVS, complaining that the lack of progress in some regions was due to close ties between the MVS and organized crime. Yushchenko has complained that the MVS in certain regions was a protective krysha (roof) for organized crime. Four regional MVS heads were asked to resign, as well as the head of the Department to Combat Narcotics. Yushchenko also followed Georgian President Mikheil Saakashvili's lead in disbanding the highly unpopular traffic police, whom Yushchenko admitted could not be cleaned up.

Yushchenko has also targeted organized crime. He complained that details of the 78 organized crime groups in Ukraine were known and yet they were still allowed to operate. Yushchenko ordered MVS Minister Lutsenko to "liquidate" these organized crime groups by December 31. In the Kuchma era, organized crime worked closely with oligarch clans in Trans-Carpathia (through the SDPUo) and in Donetsk (through Regions of Ukraine).

The Customs Service has also come under heavy criticism. The director, his first deputy, and the heads of two west Ukrainian regional Customs offices were forced to resign.

Yushchenko was visibly angry when making these recent statements. The only organization that he praised was the SBU. If these deadlines are acted upon, organized crime, former Kuchma officials, and opposition party leaders will face tougher treatment in the fall.

Source: Eurasia Daily Monitor

Ukraine Promised International Aid to Reprocess Chernobyl Radioactive Waste

KIEV, Ukraine -- Ukraine is to receive $7 million (5.8 million euros) in international aid to construct a facility for reprocessing Chornobyl nuclear waste, the Emergency Situations Ministry said July 22.

The aid was approved during a conference of donor nations in London, attended by Ukraine's Emergency Situations Ministry David Zhvania. Ukraine hopes to complete the facility to reprocess liquid waste within three years.


Chernobyl after nuclear accident in 1986
Plans are also underway to build a storage facility to hold the reprocessed materials. The Chornobyl plant was the site of the world's worst nuclear accident when a reactor exploded in 1986, spewing radiation over much of northern Europe.

The plant's remaining reactors were shut down in 2000 but decommissioning work continues.

On July 22, Ukraine announced the creation of a special committee which will oversee safety as work begins to strengthen the concrete and steel shelter hastily erected over the destroyed No. 4 reactor 19 years ago.

Work is set to begin next week. In May, the West offered more money to this cash-strapped government to help fund a replacement.

Source: AP

HIV/AIDS Epidemic in Ukraine

KIEV, Ukraine -- Ukraine has the highest per capita prevalence of HIV infection within Europe—1.4%. This poses a serious threat to the region's social and economic stability. Ukraine is geographically the largest country in Europe, apart from the Russian Federation. Economic growth year on year started in 2000, following a decade of recession during "transition" after the collapse of the Soviet Union (1989) and Ukrainian independence (1991). At current rates of growth, pre-transition levels of prosperity will not be reached until 2016.



The impact of transition on public health is difficult to correlate precisely with socioeconomic and political change. The inability to manage the spread of HIV is one example of the way Ukraine's health system has been adversely affected by transition. HIV/AIDS is relatively new to the country, appearing in the mid-1990s, rising dramatically between 1995 and 2002, and continuing to rise at exponential rates. The transmission route for infection was originally injecting drug use, mainly in young men, but infection is now spreading via unprotected heterosexual sex.

Ukraine has no public health information service, no sexual health education in its schools, and no national information dissemination strategy for HIV/AIDS. At least a decade of corruption within the former Kuchma government has had a deleterious effect on development of public services, including the health system. Investment is mainly absorbed in maintaining large hospitals, a continuation of the pre-transition approach to health care. Communicable diseases carry a stigma within the population, and no public health policy exists to fund HIV information, prevention, care, or treatment.

UNAIDS/WHO estimates that for the Eastern European and Central Asia region to avert continuous spread of infection and to treat those people who are already infected, funding should be scaled up from about $300m to $1.5bn (from £166m to £900m; 250m to 750m) by 2007, to reflect 2-3% of a national health budget. Of the region's funding, 60% is needed for Ukraine, Russia, and Kazakhstan.

Investment in healthcare services in Ukraine is generally inadequate, even when compared within the Eastern European and Central Asia region. The most recent available figures (for 2001) show 2.9% of Ukraine's gross domestic product spent on public health care and 1.4% on private health care; the corresponding figures for the Russian Federation were 3.7% and 1.7%.

Public awareness of HIV risk is low, a consequence of the government's neglect of public health. Lack of investment, widespread poverty, social and judicial constraints on decriminalisation of drug use, drug trafficking, and government corruption have been key influencing factors.

Cultural attitudes toward injecting drug users, sex workers, same sex relationships, immigrants, and people with communicable diseases remain punitive. At the same time, the country has experienced steep rises in injecting drug use, the initial transmission route for HIV. Corrupt border controls and drug trafficking have been internationally recognised features in Ukraine until recently. There is hope among the population that the new government under President Viktor Yushchenko, elected in December 2004, will change this profile.

Injecting drug use remains criminalised, and the only treatment for addiction is via state mental health services or private psychosocial counselling services. No harm reduction programme is in place to help prevent HIV transmission.

Drug trafficking from the east, via the Black Sea, has produced an explosion in the numbers of intravenous drug users, and with it a spread in HIV, mainly in men, but infection is now rapidly moving into the heterosexual population. Our analysis of available data indicates that the River Dnieper is a permeable border: the five highest rates of intravenous drug users, in Dnipropetrovsk, Odesa, Kiev, Mikolaiv, and Zaporizhzhia, all lie along the Dnieper. Targeting health care and treatment, information, and harm reduction programmes along this corridor would be a valuable first step.

The numbers of officially registered intravenous drug users inevitably under-report actual intravenous drug users. Because injecting drug users do not receive care or treatment, incentives to register are minimal, and actual numbers are higher than officially registered numbers.

The gap between rich and poor is extreme, even for a transition economy—the World Bank estimates that average earnings are $4650. The work force is well educated, yet labour costs are below $160 a month per worker (labour costs in neighbouring Poland are $400 a month). Low income is widespread despite national economic growth of at least 7.3% a year since 2000. At the same time, a small minority of the population has capitalised on the transition to a private enterprise economy. Dollar multimillionaires control business and industry, the economy, the media, and parliament. This new system of oligarchy within Ukraine, combined with citizens' frustration at levels of corruption, was the primary focus for the strongly contested elections in 2004.

The government's total tax revenue is low because the population relies heavily on a cash economy. In 2004, Kuchma's government reduced the higher rate tax from 40% to an overall 13%, thus favouring the wealthy. The government is not poor, but its revenue distribution has included no new investment for developing health care.

A combination of good macroeconomic policy from 2000 alongside a pattern of industrial ownership by a small number of private owners has produced a powerful group of wealthy Ukrainians. The consequence for health has been to create a wide gap between the seriously rich and the extremely poor. This favours private medicine at the expense of tax based or insurance based systems.

Poverty, the marginalisation of risk groups, and ignorance of the health implications of personal behaviour are the fuel that is ensuring spread of HIV. Furthermore, deaths from tuberculosis (which are also on the increase), hepatitis B and C, and causes of death associated with HIV are not necessarily registered as HIV/AIDS related where that is or may be the primary cause.

Just over half the population is in the 15-49 age group (the core workforce), with young adults (ages 15-29) in the highest HIV risk group. (The actual population figures are contested but evidence of progressive reduction in population numbers is widely accepted.) Epidemiological data are collected inside Ukraine without systematic cohort analysis. This has made it difficult to ascertain which sectors of the population to target in order to reduce HIV transmission rates.

The transmission of HIV and related infectious diseases threatens to deplete a generation of Ukrainian youth. In a country experiencing economic growth and considerable development potential, HIV/AIDS threatens to undermine the workforce, jeopardising a national resource on which the economy depends.

Largely because of the inadequacies of data collection, estimates of HIV infection and AIDS deaths vary considerably. Five years ago it was estimated that between 60 000 and 180 000 people were infected. The high estimate of deaths thus far from AIDS is 33 000. The rate of new infections is still rising, whereas in Russia, Estonia, and Moldova rates have declined since 2001.

Most data for surveillance of HIV/AIDS that include data from Ukraine are published outside the country. Evidence based on research within Ukraine is patchy and its quality varies between regions (oblasts). Despite sophisticated in-country expertise, the Ministry for Health has not used its in-country epidemiologists coherently.

Cultural attitudes to infection, alongside the absence of population care and treatment programmes, are likely to be leading to under-reporting. Throughout the country, recorded infection rates increased by at least 13% between 2001 and 2003. The number of deaths attributed to AIDS rose from 473 in 2001 to 3592 in 2003.

The exception to treatment patterns of no treatment is the provision of antiretroviral drugs for HIV infected pregnant women. UNAIDS/WHO reports that 91.3% of 1334 HIV positive women who delivered in 2002 received antiretroviral prophylaxis of vertical transmission during pregnancy and delivery. This followed on from the maternal and child health services' programme for prevention of HIV infection in infants, which tested 97.5% of all pregnant women for HIV in 2002. No counselling is linked to HIV testing.

At present, parents tend to abandon infected babies to institutionalised state care. Reliable data are lacking for the numbers of children orphaned by HIV infected parents, but these numbers are likely to rise. Ukraine has no social care system to support vulnerable families, instead relying on large institutional "orphanages."

Source: British Medical Journal

Specter of "Velvet Revolutions" in Russia

MOSCOW, Russia -- For months politicians wondered if "color" revolutions could spread to Russia, but the probability was viewed as minimal. Now we can say that it has grown immeasurably.

Russian President Vladimir Putin, who tried to avoid making statements on this delicate subject, has admitted that there is a danger of destabilization in Russia. He said firmly at a meeting with members of the Council for Assistance to Civil Society Institutions and Human Rights: "We are against external financing of political activities in Russia... No self-respecting state permits this, and we will not permit this either."

Ukraine's Orange Revolution
The report of a participant in the meeting did not mention political organizations or color revolutions, but the inherent idea of attracting foreign funds to public activities in Russia was apparent, and the president spoke about the danger of bringing incendiary revolutionary bombs to the country. "Foreign money is allocated for specific political activities in Russia, including with regard to the most acute problems," he said. "Alexander Zhukov [vice-premier of the government] has informed me of this."

The meeting participants later admitted that Putin was near irritation when he spoke about this.

I can understand the president's emotions. The elite groups of the former Soviet states were shattered by the revolution in Georgia and especially by the "orange" events in Ukraine. Such brazen interference in the affairs of a major European state [Ukraine], not a banana republic, was impossible to imagine even in a political detective story. Democratic slogans were used there to seize power in an undemocratic manner, as the Russian Foreign Ministry said soon afterwards.

Roman Bezsmertny, the Ukrainian vice premier and a manager of Yushchenko's presidential campaign, has said to the Guardian: "Our goal was actually a peaceful coup d'etat... The US State Department spent $67 million in Ukraine in the past two years."

Valery Khomyakov, the general director of the National Strategy Council who witnessed the change of power in Ukraine, told RIA that the Ukrainian opposition was financed and guided through the office of the U.S.-based Freedom House.

The events in Kyrgyzstan confirmed that money and young people fomented by the demand for their contribution were the catalysts of revolutionary explosions.

The recent summit of the Shanghai Cooperation Organization gave a consolidated reply to the challenge of political subversion experts. It called on the U.S. in no uncertain terms to set the date for its withdrawal from Uzbekistan and Kyrgyzstan. The six-state organization clearly wants not so much to get rid of foreign military bases as to preclude the interference of American non-governmental foundations in the affairs of sovereign countries.

Has Russian society been prepared for such social experiments? The recent polls show that over 40% of Russians think a "color" revolution is possible in their country. An explosion can be provoked by the people's disappointment in the inability of economic growth to improve their life. The polls also show that 3-4% of the population might participate in public disobedience street actions.

If the figures are correct, the modest 3-4% actually means millions of people, or more than enough for "the color revolution technology." Power in Ukraine was changed by fewer than 100,000 supporters of the "orange" opposition who gathered in the main square of Kiev.

But the Russian political scientists with whom I have talked do not dramatize the situation in the remaining months before the 2007 parliamentary election and the 2008 presidential race. They say that the Russians' historical and genetic memory of the past wars is still fresh and will prevent millions from plunging into the madness of "a third Russian revolution."

Vladislav Surkov, deputy chief of the presidential staff, spoke without panic in a recent interview about alleged preparations for a revolution in Russia: "This is true, but I do not view this as a serious threat."

Psychologists and historians are convinced that it is almost impossible to bend the mind of Russians whose deep patriotic roots run for generations. An attempt to bring revolution to Russia under the guise of "the import of democracy" will provoke only a negative reaction, anti-Americanism and anti-anything else.

But politically active Russians still cannot forget about "the specter of the revolution" despite the concerted assurances by respected experts, probably because there is no unifying idea or an understandable development goal in society. Russia's future will ultimately depend on the solution of this problem.

Source: RIA Novosti

Akhmetov Tagged as Suspect in Attempted Murder Case

KIEV, Ukraine -- A top Ukrainian law enforcement official has tagged Ukraine's richest man as a suspect in a shooting that occurred in the east of Ukraine almost 20 years ago.

The development signals apparent attempts by Ukraine's new administration to shift its criminal investigations into higher gear, especially those involving prominent - and once considered untouchable - political opponents who allegedly committed crimes under the nation's previous leadership.

Billionaire Rinat Akhmetov
Donetsk tycoon Rinat Akhmetov, who remains outside Ukraine at an unknown location, has denied involvement in the shooting through statements issued by his principle holding company, System Capital Management, and a law firm based in Washington D.C. that represents him.

In an interview published on July 20, one day after Akhmetov failed to show up for questioning at the Interior Ministry, Deputy Interior Minister Hennady Moskal said that a criminal case was likely to be launched soon in connection with an incident in Donetsk dating back to 1988. During the incident, an alleged crime figure nicknamed Botsman was shot, but survived. Botsman, a.k.a. Serhiy Chernyshev, now resides in Moscow.

Citing Moskal, Kyiv-based Internet publication Glavred.info reported that Akhmetov has been fingered as the suspect in the shooting. Moskal's words confirm news reports, spread by Ukrainian media in recent days, citing informed sources linking Akhmetov to the crime.

Source: Kyiv Post

Gassy Deal

KIEV, Ukraine -- Ukrainian Minister of Justice Roman Zvarich said yesterday that Ukraine intends to pay Gazprom its debt of $1.43 billion for gas supplies from 1997 to 2000 with money. This is in violation of the agreement with Naftogaz Ukrainy signed in August 2004, under which Ukraine is undersupplied up to 5 billion cu. m. of Russian gas annually at $50 per 1000 cu. m. The sale of that gas in export (if it is received) will enable Ukraine to earn an additional $2 billion in profit. Gazprom holds that the deal was completed a year ago, and Naftogaz paid its debt through Vneshekonombank at that time.

Ukrainian Minister of Justice Roman Zvarich
On August 10, 2004, Gazprom, Vneshekonombank and Naftogaz signed a package of documents to the effect that Naftogaz's debt of $1.62 billion (the principle was $1.43 billion and interest $1.9 million) to Gazprom for natural gas delivered from 1997 to 2000 was paid. Vnesheknombank extended Gazprom a $1.25-billion credit, and received the right to collect Gazprom's debt. It gave that sum to Naftogaz in exchange for decreasing the amount of its annual gas supply received as payment for transport services in Ukraine for 2005 to 2009 from 26 billion cu. m. to 21 billion cu. m. On the same day, Naftogaz paid its debt to Vneshekonombank. At the very end of his presidency, Leonid Kuchma awarded Naftogaz head Yury Boiko the title of Hero of Ukraine for the payment of that debt.

Ukrainian Justice Minister Zvarich told Kommersant yesterday after an administration meeting that “The Cabinet was supposed to examine my report on the agreements to pay Ukraine's $1.43 billion debt for gas today, but Naftogaz chairman of the board Alexey Ivchenko was absent. We looked at the question later and came to the conclusion that paying that debt contravenes an intergovernmental agreement reached in 2000. So we can have them invalidated in court. However, we like the price of gas set there - $50 per 1000 cu. m.”

Zvarich said that Ukraine will discuss the price of gas with Russia and propose removing the point in the intergovernmental agreement that calculates the payment of the debt with gas and substitute the payment of the debt with money, at $50 per 1000 cu. m. “We are prepared to return $1.4 billion to Russia. We will take out a credit from Deutsche Bank at 8 percent per annum,” Zvarich told Kommersant.

Naftogaz refused to comment on the matter. A source in the company said that Naftogaz did not initiate the statements. A Kommersant source in the Ukrainian Ministry of Industry and Energy added that “reexamination of the contracts is only possible with the permission of the president, who is not here yet. That's why Alexey Ivchenko [who had said he was sick the day before] did not take part in the Cabinet meetings.”

Deputy chairman of the board of Gazprom Alexander Ryazanov told Kommersant yesterday that deal on the 1997-2000 gas debt “is absolutely legal. All the documents were passed by the Ukrainian Ministry of Justice.” Ryazanov expressed surprise at Zvarich's statement yesterday. “Several days ago,” he said, “we made an agreement with Naftogaz on the gas in underground storage facilities [7.8 billion cu. m. of Russian gas that was “lost” by Naftogaz in its storage units] and no questions about the debt came up.”

A Kommersant source in the Ukrainian Cabinet said that Prime Minister Yulia Timoshenko had approved the Justice Ministry's initiative, which will result in Ukraine receiving an additional 20 billion cu. m. of gas from Russia at $50 per 1000 cu. m. by selling that gas in Western Europe, Ukraine will make no less than $2 billion. It was not possible to obtain a comment from the Cabinet itself yesterday. It is advantageous for Ukraine to pay Russia $50 when we can sell the gas in Western Europe for $198. Of course, it will be a fitting answer to Russia for the accusation of stealing 7.8 billion cu. m. of gas,” Alexander Gudyma, a member of the Heating and Energy Committee of the Supreme Rada told Kommersant.

Timoshenko headed United Energy Systems of Ukraine, the country's largest gas trader, from 1994-1997. She knows how to trade gas.

Source: Kommersant

Japan Backs Ukraine's Bid to Join WTO

TOKYO, Japan -- Japan is backing Ukraine's bid to join the World Trade Organization (WTO), a key goal of pro-Western President Viktor Yushchenko who took power after a peaceful uprising last year.

Yushchenko signed the agreement on WTO backing at a meeting with Prime Minister Junichiro Koizumi after political unrest at home over Ukraine's bid to enter the world trade body.

Visiting Ukrainian President Viktor Yushchenko (L) and Japanese Prime Minister Junichiro Koizumi shake hands after they addressed statements of their talks in Tokyo
Koizumi and Yushchenko 'welcomed the conclusion of the bilateral negotiations between Japan and Ukraine (on) the WTO and expressed their hope for the early accession of Ukraine,' a joint statement said.

Joining the WTO 'would further promote the integration of Ukraine into the world community,' it said.

Ukraine has finished WTO accession negotiations with the European Union, which it also wants to join, but the United States has said Kiev must first take further measures to conform to world trade rules.

The Ukrainian parliament descended into chaos including fistfights when it took up WTO accession earlier this month, passing only half of the necessary bills before adjourning for summer recess.

Yushchenko had hoped for approval of the bills to show the international community Ukraine's pro-Western ambitions and set the state for its accession at a WTO ministerial meeting in Hong Kong in December.

Yushchenko is on a four-day mission to Japan meant to shore up investment from the world's second-largest economy.

Source: AFX

Yushchenko’s and Tymoshenko’s Wages - $8,000 for Both

KIEV, Ukraine -- At last the most intimate detail of president’s and premier’s life became known for public. From now on they’ll get salary at the level of head of a major bank but their wages are still lower than that of a top manager of a western company representation.

So, as from June Yushchenko’s salary will be UAH 23,657, Tymoshenko’s – UAH 16,898 per month. The figures were given by president’s press service. Press secretary added that was the sum subject to taxation, without grants and premiums.

Viktor Yushchenko (L) with Yulia Tymoshenko
As known, according to the recent decree issued by the government, president’s salary is attached to the premier’s and constituted 140% of the latter. This rule functions as from June but premier’s salary was unknown. So it was impossible to figure out what Yushchenko brings home.

On May 8th, the Cabinet of Ministers adopted a decree raising wages to state officials, but Tymoshenko didn’t specify the sums. “We think that president and premier should have fixed wages. The salary should correspond the amount of job done by the official”, Tymoshenko noted.

When asked about her salary, Tymoshenko responded she had no time to get it. Now she knows it’s a lot of dough, so maybe she finds time to get the money. Before these decrees were adopted her salary constituted UAH 2,040, says Tymoshenko’s press-secretary Vitaliy Chepynoga.

According to the head of State Service Ihor Tarasuyk, the president’s salary was UAH 2,600 in December 1999. Kuchma himself gave the same figures.

In desperation he put his hands in the air, accidentally demonstrating his 10,000 euro watch… “There’s no problem of spending my salary. As they say in Odessa: may you live for just one salary”, Kuchma cracked a joke.

Now the salaries are much higher. Supposedly that will keep officials from Kuchma’s life style.

Salaries of the other highest state officials also depend upon Tymoshenko’s wages. Although, these depend upon her salary scale, which is still unknown.

So, the secretary of National Security Council will have 95% of Tymoshenko’s wages, the first Vice-Minister - 94%. The others Vice-Ministers will have 92% of Tymoshenko’s salary.

It needs mentioning that other officials are not that lucky. Their wages will be dependent on minimum wages that will constitute UAH 332 in September.

For instance, the head of Central Election Committee will have UAH 5,580 (18 minimum wages), the head of Constitutional Court - 4,650 (15 minimum wages). The head of the Supreme Economical Court, who decides million disputes, will get the salary at the rate of 13 minimum wages, i.e. UAH 4,030.

Their only consolation is extra payments for official status, long-service bonus, academic status and even the knowledge of foreign language if they have corresponding pretensions.

Yushchenko’s salary is six times smaller than Schroeder’s

Radical and considerable rise of salaries approximates Yushchenko’s and Tymoshenko’s salaries to European level.

In June of this year there have been announced the results of study of premiers’ salaries carried out by International Wages Bureau Hay Group. German chancellor Gerhard Schroeder appeared the “wages champion”. His salary constitutes, without bonuses, 272,000 euro a year.

British Premier Tony Blair got the second place in this contest: his salary constitutes 261,000 euro. Last year his salary was raised by 2%.

French premier brings up the rear with the salary of 240,000 euro. Then comes his Belgian colleague Guy Verhofstadt with 192,000 euro. Dutch premier Jan Peter Balkenende has 123,000 a year.

Polish premier, according to EU standards, got the lowest salary of 49,500 euro a year. But Tymoshenko’s $300 a month would be a shock for Europe even on the background of polish premier’s wages.

Tymoshenko’s UAH 16,898 equals 2,748 euro or $3,364 that makes 33,000 euro or $40,000 a year.

Yushchenko gets even more – 3,847 euro or $4,685 that makes 46,160 euro or $56,215 a year.

Although, Russian president gets higher salary after 2004 when he raised salaries for himself and state officials. So his wages constitute RUR 1,760,000 that equals $61,000 a year.

But Ukrainian officials have won over other neighboring colleagues. Lukashenka gets $300 a year. There is a standing joke: “As a president I get 300 bucks, as the president of national Olympic Committee another 300. Have some bonus as Supreme Commander-in-Chief. Not that bad, I should admit…”.

After that it was forbidden to mention president in such jokes on TV, and Belarusian censorship eradicates the entire negative aspects for the president.

The president of Moldova, Vladimir Voronin gets about $740 plus $288 of pension.

It needs mentioning that East and West-European leaders can’t compete with the US presidents. George Bush Junior gets $400,000 a year.

The first US president George Washington had the salary of $25,000 a year which was pretty much at the end of the 18th century. Although he refused to take the money since he was a rich man. Among his followers, only John Kennedy did the same.

Source: Ukrayinska Pravda

Yushchenko's Kid

KIEV, Ukraine -- In the popular imagination, President Viktor Yushchenko is seen as a humble man who spends his free time painting rustic landscapes, hiking, and communing with his collection of Ukrainian folk handicrafts. If only by default, his family has tended to be considered quiet and humble, too.

Andriy Yushchenko
Now, courtesy of the news Web site Ukrainiska Pravda, come indications that even the Yushchenko family might be less than perfect. A Pravda article nastily entitled “Andriy Yushchenko – The Son of God?” examines aspects of the personal life of the president’s teenage son. The amusing piece has the young Yushchenko driving at least two extremely expensive luxury cars – one of them a BMW M6 that the article says costs 133,000 euros – and taking liberties that only the extremely well-connected can take. In one anecdote, Andriy parks squarely in the middle of Luteranska outside of his girlfriend’s home, blocking traffic and forcing cars onto the sidewalk. His bodyguards, meanwhile, fend off the timid officers of the State Auto Inspection (which President Yushchenko liquidated the other day).

The article also has Andriy hanging around Decadence House nightclub drinking Cristal champagne (which costs more than $1,000 a bottle) and using a cellphone that sells for $43,000. He’s Ukraine’s own little Sean “P. Diddy” Combs.

In the end, none of this is so scandalous. Yushchenko is at worst another rich, well-connected brat, somewhere on the continuum between the Bush daughters and Paris Hilton. Ukraine will survive.

But it will be interesting to see where the kid ends up in a few years. Will he grow out of this high life nonsense, realize it’s unseemly, and make something of himself? Or will he get worse, and become another sponging, string-pulling, nepotism-exploiting victim of “affluenza,” a parasite who drives half-million dollar cars around his impoverished country and takes off to Ibiza for the weekend?

Time will tell. But we’ve got our eye on that young fellow. We trust his father does, too.

Source: Kyiv Post Editorial

Viktor Yushchenko Dragged to Peace

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko received the president and major shareholder of Evrazholding Alexander Abramov yesterday to discuss the conflict over the Nikopolsky Ferroalloys Plant. Shareholders of Evrazholding and Renova, headed by Viktor Vekselberg, are reported to be negotiating the purchase of the plant’s controlling stake with Ukrainian Interpipe group. Once the information was disclosed, Prime Minister Yulia Timoshenko overtly warned Viktor Vekselberg against this purchase. President Yushchenko said following meeting with Mr. Abramov that “politics must not interfere in the privatization”.

The Nikopolsky Ferroalloys Plant accounts for nearly 10 percent of the world ferroalloys market. The plant’s return amounted to $462.5 million in 2004, its net profit – to $13.2 million. State-controlled 50 percent stake plus one stock of the plant was sold for $77.5 million in 2003 to Pridnieprovye consortium set up by the Nizhnednieprovsky Tube-rolling Plant, Niko Tube Nikopolsky plant of non-suture tubes, Credit-Dnieper bank and Aura insurance company. All the companies are incorporated into Interpipe group which holds a 73 percent stake in the plant.

The Ukrainian Prosecutor’s General Office filed a lawsuit with the Kyiv Economic Court to invalidate the privatization of the plant. The court dismissed the claim on May 26. It became known in late June that shareholders of Everazholding and Renova were negotiating the purchase of the plant with Interpipe. Early July prime minister Yulia Timoshenko (who is believed to support Privat, another co-owner of the plant) made an overt warning for Viktor Vekselberg against buying 50 percent plus one stock in the Nikopolsky plant, saying the state had claims on it. She repeated on Monday that “the government defends its position on the return of the shares to the state” but made an important remark that “the decision will entirely depend on court”. The case of the Nikopolsky Ferroalloys Plant is to be heard at the Kyiv Court of Appeal on July 22.

Mr. Yushchenko and Mr. Abramov met on the eve of the court’s session. Renova reported to Kommersant that Evrazholding president expressed to the Ukrainian leader the joint position of his partners in the deal, reached at a recent meeting of Alexander Abramov and Viktor Vekselberg. The purchase of the controlling stake in the Nikopolsky plant became the central topic of the talks, a source in Evrazholding confirmed. The source also maintains that Alexander Ambramov intended to seek the consent of Ukrainian president to settle the litigation over the plant by sealing some amicable agreement. The proposal allegedly fell flat with Viktor Yushchenko.

The Ukrainian president’s press service skated over the details of the talks. Still, its information contradicts the news Kommersant obtained at Evrazholding. The presidential press service reports that Yushchenko said vexed questions connected with the Nikopolsky plant must be resolved by courts only or by closing amicable agreements in line with laws. “Politics must not interfere in the issue of privatization,” the presidential press service quoted him as saying.

It is not the first time that president Yushchenko mentions “laissez-faire policy” for cases concerning disputed matters in the Ukrainian business. Shortly before the practically unavoidable displacement of Naftogaz president Alexey Ivchenko (for the absence of an agreement with Gazprom over the “lost” 7.8 billion cubic meters of Rusaian gas in the country), Viktor Yushchenko said, “Activities of Naftogaz of Ukraine cannot be a subject of political polemic. It is a strategic interest of the state.” After the speech, the government suspended the discussion of Mr. Ivchenko's personal case, and Gazprom and Naftogaz managed to settle disputed questions. It is possible that this will be the case with the Nikopolskly plant too, and the Kyiv Court of Appeal will legitimate the privatization of the plant and keep the controlling package of the plant's stocks with Interpipe.

Source: Kommersant

Solana Says EU`s Relations With Ukraine Closer Than Ever

KIEV, Ukraine -- Ukraine and the European Union (EU) are establishing a relationship closer than ever before, the 25-nation bloc`s foreign policy chief said here on Tuesday.

Javier Solana, while on a one-day working visit to Ukraine, made the remarks after meeting with President Viktor Yushchenko.

Ukraine's President Viktor Yushchenko (R) invites European Union Foreign Policy Chief Javier Solana to the table for negotiations as they meet in Kiev
EU-Ukrainian relations have benefited from Ukraine`s efforts of the past six months on political and economic reforms, Solana said at a press conference.

He also praised Ukraine for its implementation of a three-year joint action plan, signed in Brussels in February, which asked the country to carry out reforms in some fields to meet EU standards.

Solana said the EU will soon recognize Ukraine as a market economy and expressed his hope that the country`s bid to join the World Trade Organization would be successful as soon as possible.

Yushchenko was even more optimistic about the rapid development of bilateral relations.

The "fulfillment of the planning points (discussed with Solana) will create the possibility of shifting relations between Ukraine and the EU from the partnership stage to the integration stage," the president said.

Source: AngolaPress

Ukrainian Swindlers Out of the Net

KIEV, Ukraine -- Ukrainian enforcement bodies confirmed yesterday, July 19, detention of a gang of high-tech swindlers headed by Dmitry Golubov. The investigators spotted Golubov after the U.S. special services started probing into the fraudulent operations via Carderplanet.com.

The fraudulent operations via Ukrainian ATMs have been chewed over for a number of months. In March of this year, Raiffeisenbank first warned and then blocked all card operations through ATMs of Ukraine. Two more Russian banks – Slavyansky and Master Bank backed up Raiffeisen. After that, MasterCard and Visa acknowledged Ukraine had felt a surge of fraud via plastic cards in the fall of 2004.

The first results of the battle unleashed by Ukraine against the bank card swindlers were reported only in July. Vladimir Shilomentsev, deputy head of high-tech crimes fighting division of Ukrainian Interior Ministry, confirmed yesterday the detention of Dmitry Golubov. Golubov (Script) is suspected in having created the fraudulent Carderplanet.com, which used to offer a package of services, including the stolen numbers of plastic cards along with their PIN-codes.

Source: Kommersant

Hewlett-Packard to Assemble its Personal Computers in Ukraine

KIEV, Ukraine -- Hewlett-Packard Company, the world’s leader in the field of the IT-solutions is contemplating the opportunity of starting to assemble its personal computers in Ukraine, according to a press release obtained by UNIAN from the Company.

Hewlett-Packard Desktop PC
In Ukraine Hewlett-Packard holds the leading position in categories of notebooks, printers and servers. The PC category of this global brand is not so well-known to Ukrainian users, even though Hewlett-Packard holds the 1st place in Europe in their PCs sales, — i.e. in the consumers’ preference (according to the IDS reports for 1st quarter 2000 thru 1st quarter 2005).

Such situation can only be explained by the fact that for a long time in this country because of the high import duty tax on PCs the latter’s prices have been unduly high. The production of PCs in Ukraine will allow considerable reduction of these products’ prices, thus making the HP quality more affordable both for corporate clients and for individual users. For the Hewlett-Packard company this is a strategically important step made in the Ukrainian market, for the consumers — it means the availability of the break-through technologies and more effective business time management.

According to Gilles Lambinet, Sales and Marketing Manager of Personal Systems Group in Europe, ISE region “the development of each new line of PCs requires the investment of approximately USD 8M, and new products are introduced several times a year. Only major international companies can afford to make such investments. However these expenses pay back in the reliable work of equipment and its ability to fully meet the demands of the consumers”.

The PC productions standards of HP guarantee to the Ukrainian user the same flawless product quality as it does in any other country of the world, since the company maintains one and the same QC system all over the world. For example, the testing manual is a 60-page book full of detailed instructions, each of which is mandatory for any HP factory producing desktops worldwide.

The information regarding all failures of the computers sold in Ukraine or any other country is accumulated in one global information database. This global system allows keeping a close eye on the HP computers’ components effectiveness all over the world — something that no local manufacturer can make possible. In 2004 for example, this database accumulated the information about 24 million of computers in 165 countries of the world.

The Hewlett-Packard PCs are supplied with the licensed Microsoft software. Together with Microsoft Corporation HP makes every effort to developing the civilized market and protection of the intellectual property.

Assembling PCs in Ukraine will give more flexibility to production as well as certain tactical advantages. This is especially important for large international customers that quite often require non-standard configurations while the delivery timing pays an important part in the choice of the supplier.

“As the economy of Ukraine develops itself the fact of world’s IT leaders entering its market becomes only natural and unavoidable.

Such giants as HP are capable of offering more to the consumer since their potential in the field of development and implementation of the new technologies is more powerful, and their experience in carrying out complex projects, organization of the production and business processes is immeasurable”— says Olivier Lerouge, PC systems supply chain department manager in Europe.

Projects like this one are bringing new jobs to this country, as well as new knowledge and technologies, plus contribute to the augmentation of the prestige, quality and competitiveness of the Ukrainian products at the world’s markets.

HP is the world’s largest supplier of the key technologies both for the corporate customers and the end users. The company offers the solutions in the field of IT-infrastructure, personal computing systems, services on system integration, service support and outsourcing, as well as printing and imaging devices for large enterprises, medium and small businesses and end users. During the last 4 quarters ending on April 30, 2005 the revenue of HP amounted to USD 8.3 billion.

Source: Unian

Isuzu to Start Producing Trucks in Ukraine in 2006

TOKYO, Japan -- Isuzu Motors Ltd, an affiliate of General Motors Corp, plans to begin manufacturing trucks in Ukraine around 2006, the Nihon Keizai Shimbun reported without citing sources.

It will set up a joint venture there with Holding Bogdan, a local bus maker based in Kiev, to assemble auto parts exported from Japan, the business daily reported.



Bogdan will likely take a 50 pct stake in the joint venture, while Isuzu will acquire 20 pct interest and the rest by Japanese trading firm Sojitz.

Isuzu has been supplying 1,000 to 1,500 units' worth of microbus parts annually to Bogdan since 1999. But the joint venture will be the first production base to be created by a Japanese automaker in the former Soviet bloc, the paper said.

Starting with an annual output of several thousand units, the joint venture is slated to export some of the trucks to Russia and other neighboring countries.

Source: AFX News

Ukrainian Traffic Police Officers Confused

KIEV, Ukraine -- Ukraine's traffic police were confused about their fate Tuesday, a day after President Viktor Yushchenko said he wanted to disband the 23,000-member traffic police department because of widespread corruption.

Yushchenko left on an official visit to Japan, and it remained unclear whether he had signed an order disbanding the traffic police, which his chief of staff had promised would be ready Tuesday.

A unidentified traffic policeman stands idle near a traffic jam in downtown Kiev, Tuesday, July 19 2005
Interior Ministry officials were not available for comment, but Dnipropetrovsk police chief Volodymyr Evdokimo said "the ministry will dismantle the traffic police within a week."

Meanwhile in Kiev, for many traffic policemen, it was business as usual. They maintained their presence on congested boulevards in downtown Kiev and routinely stopped cars that violated traffic rules. Mykola, a police sergeant who, fearing for his job, gave only his first name, said that his precinct "did not receive any orders to stop operating." "We heard the president's allegations, and many of us disagree. Only a few rotten apples have solicited bribes," he said.

But only few hundred meters down the road, Oleksiy Demyanenko, a constable, decided not to stop a driver for a clear traffic violation. "Didn't you hear? We do not exist anymore," he said.

Kiev drivers hailed Yushchenko's move. "For years we had to bribe them for virtually everything: accident reports, minor speeding, even for completely imaginary violations," a taxi driver said.

Georgian President Mikheil Saakashvili, citing similar problems with corruption, disbanded his country's traffic police after assuming office in the 2003 Rose Revolution.

Source: AP

Yushchenko Targets Donetsk "Clans"

KIEV, Ukraine -- "I am the president of all Ukrainians, those who voted for me and those who didn't, those who understand me and those who don't," President Viktor Yushchenko said upon his July 15 arrival in the eastern city of Donetsk, which remains largely hostile towards him. Donetsk Region voted overwhelmingly in favor of former prime minister Viktor Yanukovych in last year's presidential polls, while support for Yushchenko was limited to single digits. Last Friday marked Yushchenko's second trip to Donetsk since his inauguration. This visit was not only an attempt to win the hearts and minds of the locals, who believe Yushchenko is too nationalist and too pro-American to be the leader of the Ukrainian nation, but probably also the last warning to the local elites, who, Yushchenko believes, resist democratic changes.

Donetsk Mayor Oleksandr Lukyanchenko
Yushchenko's reception in Donetsk this time around was an example of Soviet-era hospitality. In October 2003, when he tried to hold a congress of his Our Ukraine bloc in Donetsk, he was met with insulting posters depicting him in a Nazi uniform. In July 2005, Yushchenko was met with freshly mended roads and welcoming billboards. The day before his arrival, a local court outlawed an anti-Yushchenko protest near the airport, so arriving in Donetsk he saw orange flags and happy faces. But this, apparently, failed to impress him. "The authorities must be moral. But in Donetsk they are not," Yushchenko said, addressing a hall full of local dignitaries. Yushchenko's allies had been ejected from this same hall in 2003. "The [Donetsk] authorities do not understand their purpose yet, they are restoring clans and bringing back the links that discredit all of you," the president warned.

This was a clear warning to local officials. Recalling the 2003 propaganda campaign against him, Yushchenko openly accused Donetsk Mayor Oleksandr Lukyanchenko, of "assisting the crime." Yushchenko said that he still expects an apology from the mayor, which he received on July 19. It was expected that on coming to Donetsk Yushchenko might fire regional governor Vadym Chuprun, a former ambassador to Turkmenistan, whom he had picked to head the region last February. On July 9, Yushchenko's Our Ukraine-People's Union Party adopted a motion (1,362 votes to three) urging Yushchenko to dismiss Chuprun for failure to diminish the influence of the local "clans." It was rumored that Chuprun might be replaced by Our Ukraine MP Mykhaylo Pozhyvanov, a former mayor of Donetsk Region's second largest city, Mariupol, and a former deputy mayor of Kyiv. But Yushchenko apparently gave Suprun another chance, as he chaired the July 15 meeting.

Steel tycoon Renat Akhmetov, who is believed to be the real boss of Donetsk Region, may have no such second chance, as reports have appeared that police suspect him of criminal activity. On June 23 the Interior Ministry's anti-organized crime department head Serhy Kornych said at a news conference, "Akhmetov is a real boss of an organized criminal group." Interior Minister Yuriy Lutsenko, asked to comment on Kornych's statement on June 28, said that he had no evidence of Akhmetov's involvement in crime, and that Kornych would have to "either prove his statement with evidence or apologize." But no apology came from Kornych; instead, on July 13 the Interior Ministry's criminal investigation department summoned Akhmetov for questioning on July 18 (Akhmetov ignored the summons, and his aides replied to the ministry that he is vacationing abroad). Also on July 13, Glavred quoted a source in the ministry as saying that Akhmetov is suspected of masterminding an attempt on the life of a criminal boss in Donetsk in 1988. Interviewed on television on July 16, Lutsenko indirectly confirmed this report. "The criminal investigation department told me today that one individual who lives abroad testified that Akhmetov committed an attempt on his life," he said. "An investigation has to be conducted in order to find the truth."

Symptomatically, Akhmetov did not attend the meeting with Yushchenko, neither did Mayor Lukyanchenko. And Donetsk Regional Council Chairman Borys Kolesnykov could not do so physically, as on the day of Yushchenko's trip to Donetsk a court in Kyiv, where he faces a trial on extortion charges, ruled to extend his term in custody. Another former local dignitary recently targeted by police is a former mayor of Makiyivka and former deputy governor of Donetsk Region Vasyl Dzharty. The Interior Ministry said on July 13 that Dzharty is suspected of tax evasion during the purchase of a Mercedes limousine in 2002, and that the purchases by him of a Lexus and two more Mercedes cars are being checked.

Source: Eurasia Daily Monitor

Ukraine: Yushchenko Orders Law-Enforcement Overhaul

PRAGUE, Czech Republic -- Yesterday, President Yushchenko ordered the traffic police to be abolished within 24 hours.

The traffic police, known as DAI, is a large unit that employs 23,000 people. It is also known for being notoriously corrupt.

Ukrainian Traffic Police DAI
During a meeting at the Interior Ministry, Yushchenko said DAI had fully discredited itself.

"You have discredited yourself. That's why I have decided that there will be no DAI in this country. A draft of a decree will be ready in 24 hours. Guys, enough with making money on the roads. Enough with harassing drivers," Yushchenko said.

Yushchenko said the "the main objective of traffic police is to provide assistance" for drivers, but officers "come out to harass people." The president said his government's efforts at reforming the traffic police had proved unsuccessful. "Liquidation of the institution does not always mean solving a problem. Yes, traffic police in many sociological polls figures as one of the most corrupt institutions in Ukraine. However, I don't think it is the most clever measure to root out corruption by rooting out the institution itself."

DAI is very unpopular with drivers as they impose fines on the spot and often demand bribes.

So there's little wonder that many people on Kyiv's streets support the president's move. "I support it [the decision] because they are doing nothing good but only take money and hide in the bushes as Yushchenko says," one passerby said.

Others say it will be difficult without traffic police but agree there is hardly another way out.

"I do not have a definite opinion about it because it will be difficult without DAI. Drivers are not educated. On the other hand, DAI has compromised itself, so I support the move," another passerby said.

However, Larysa Denyssenko, who represents Transparency International in Ukraine, is skeptical about the move. She says DAI was probably one of the most corrupt institutions in the country and something had to be done. However, she doubts if radical measures will work.

"Liquidation of the institution does not always mean solving a problem. Yes, traffic police in many sociological polls figures as one of the most corrupt institutions in Ukraine. However, I don't think it is the most clever measure to root out corruption by rooting out the institution itself," Denyssenko says.

Denyssenko says DAI tried to introduce some order on the Ukrainian roads and streets. Ukraine is known not only for traffic police corruption, but also for a high rate of car accidents.

Denyssenko says transferring traffic police work to the municipalities might work.

The authorities seem to have a similar plan. Interior Minister Yuriy Lutsenko says the DAI will be replaced with a "European level" highway patrol service.

"The majority [of police officers] will be transferred to unified patrol service. Like in all European countries, it will control street crossings and traffic on [local] roads. This patrol service will report to districts and municipalities. To control traffic outside the cities [on highways] another service with different responsibilities will be created," Lutsenko says.

The Ukrainian move is not unique. Georgian President Mikheil Saakashvili disbanded the Georgian traffic police, which employed 36,000 people, at the beginning of last year.

RFE/RL's Tbilisi bureau chief Tamar Chikovani says Georgian authorities have created a new unit named "Patrul (Patrol)." Some former traffic police officers have managed to win the competition and join the new force.

Chikovani says members of the new unit are paid better salaries and have good equipment. Many women serve in the unit. Chikovani says people are enthusiastic about the new police force and trust it very much. Recent polls show that the unit is now the country's most popular institution.

At the same meeting with the Interior Ministry officials on 18 July, President Yushchenko said that it is necessary to change all Ukrainian regional police chiefs in order to counteract corruption and enhance efficiency of law enforcement, Interfax-Ukraine reported.

"With a new personnel we will have hope that the work in regions will improve.... If we begin fighting corruption from the beginning, we should fully replace people representing the discredited part of the police," Yushchenko said, noting that oblast police directorates employ investigators who use torture and take bribes.

Source: Radio Free Europe

Top Kiev Beauties in Ugly Medvedchuk Row

KIEV, Ukraine -- A political patronage row has rocked the local beauty industry. It focuses around former Miss Ukraine Olexandra Nikolayenko, who represented Ukraine at the Miss Universe 2004 competition.

Olexandra Nikolayenko at the Miss Universe 2004 Competition
Miss Ukraine President Sergey Matyash claims Olexandra was sent to Ecuador as a direct result of pressure from Viktor Medvedchuk, then Head of the Presidential Administration.

He claims Olexandra brought an official letter from Medvedchuk 'suggesting' she be chosen, copies of which have made their way into the press. Lilya Kuznetsova of Miss Ukraine also confirmed that there was pressure on her from some high-level state officials and that she had personally received a phone call from Medvedchuk.

Olexandra Nikolayenko refutes the claims as nonsense while Medvedchuk, who surely has bigger worries these days, also denied the charges.

Source: What's On

Ukraine Traffic Police Abolished

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko is to disband the country's traffic police because it has proved impossible to stamp out corruption. He has ordered a decree to be drawn up, within one day, abolishing the department, which employs 23,000 people.

Mr Yushchenko said his government's efforts at reforming the traffic police had proved unsuccessful.

Ukraine's traffic police is one of the most corrupt in the world
Traffic police are said to be unpopular with motorists as they impose on the spot fines and often demand bribes.

Mr Yushchenko said the traffic police had "discredited themselves".

He said he had warned senior traffic police officials "three times that if they only keep on hiding in bushes with speed cameras... and do nothing else, they will no longer exist".

Since his inauguration in January, Yushchenko has pledged to crack down on corruption and nepotism and has promised to sever government links to organized crime, which plagued the decade-long tenure of his predecessor. Former president Leonid Kuchma has been accused of using police to intimidate and even kill political opponents. He has denied the accusations.

Over the last 10 years, several criminal groups led by police officers have been charged with crimes ranging from robbery and extortion to murder. Two former police officials were detained in March and charged with the 2000 murder of a leading investigative journalist who crusaded against corruption.

Anti-Swearing Drive

The interior ministry says the new "patrol service" will be up to "top European standards" and will be monitored carefully for bribe-taking.

Mr Yushchenko, who came to power in January after the disputed presidential elections and Orange Revolution, is also trying to stamp out swearing.

Interfax reports that he told law enforcement officials: "Let's agree: you should leave foul language at home.

"Actually, it would be better if you didn't use it at home either. You are servants of the state. Try to talk without swearing. If anyone can't learn to do this, then write a letter of resignation."

Source: BBC News and Others

Three Die Climbing Ukraine's Highest Mountain

KIEV, Ukraine -- Three people died July 16 climbing Ukraine's highest summit in a group event whose participants included President Viktor Yushchenko, a Ukrainian television station reported.

About 16,000 people accompanied Yushchenko on the annual ascent up Hoverla Mountain, about 2,000 meters (6,600 feet) above sea level in western Ukraine's Carpathian Mountains.

Hoverla Mountain
The annual climb was held July 16 to mark the 15th anniversary of this ex-Soviet republic's declaration of sovereignty. Two of the climbers died from health problems, and a third was killed when the weather turned bad and lightening struck near the peak, 1+1 television reported.

The station also reported that several people suffered minor injuries. Emergency officials could not be reached to comment late July 16. Yushchenko's office said the president safely descended the mountain, and it could not immediately confirm the report of deaths.

Yushchenko has previously climbed the mountain about 30 times since 1971. In 2001, he announced the formation of his party, Our Ukraine, from atop the mountain. This time, the president was accompanied by two of his daughters, and was stopped almost every 10 meters (33 feet) to sign autographs and pose for photographs with other climbers, news reports said.

Source: AP

Ukraine Billionaire Fails to Appear for Questioning

KIEV, Ukraine -- Ukraine's richest man and an ally of Ukraine's opposition leader failed to appear for questioning by police in a criminal investigation on Monday because he was out of the country, the Interior Ministry said.

Rinat Akhmetov, whose fortune is estimated at $2.4 billion, was summoned for questioning about criminal cases that happened at least 10 years ago in Donetsk.

Akhmetov, president of Shakhtar soccer club, is a supporter of ex-prime minister Viktor Yanukovich who lost a December presidential election to Viktor Yushchenko after weeks of popular protests against electoral fraud.

A senior Interior Ministry official told reporters police had received faxes from companies controlled by Akhmetov saying he was out of the country for holidays and business.

"We will invite him again. If there is a need, we will go to see him," minister official Sergei Blokhin said.

Police officials said they wanted to question Akhmetov about events in the 1990s in Donetsk, an eastern industrial city then caught in gangster wars and high-profile killings.

Akhmetov's business empire, made in the 1990s, is centred in Donetsk and includes steel plants, machine-building plants, telecoms companies, banks and the soccer club, which became Ukraine's champions last season.

Yanukovich was the governor of Donetsk region before becoming prime minister in 2003, and police have questioned him several times as part of investigations into misuse of state funds and separatist activity in the east of the country.

Yanukovich and his supporters say the investigations are politically motivated ahead of a parliamentary election in March.

Source: Reuters

Doctor: Yushchenko in 'Very Good' Health

KIEV, Ukraine -- President Viktor Yushchenko is in "very good" health despite the dioxin poisoning last year that left him badly disfigured, his Swiss doctor said Monday.

The dioxin is now leaving Yushchenko's system through this skin, which has resulted in his face being pockmarked and discolored, said Dr. Jean Saurat of the University Hospital of Geneva.

President Viktor Yushchenko
"His external appearance doesn't reflect on the health of his internal organs," Saurat said.

Yushchenko fell ill last fall during the hotly contested presidential election and was later diagnosed as having suffered massive dioxin poisoning. He said the symptoms began appearing after a dinner with the heads of the security service and has called the poisoning an assassination attempt.

Security Service officials who attended the dinner have denied all allegations of involvement.

Saurat said there was no doubt that Yushchenko suffered a dioxin poisoning, but said that so far they could only pinpoint within weeks when the dose was administered.

Saurat and his colleague, biochemist Olier Sorg, started treating Yushchenko in December and the Ukrainian leader has made three visits to see them, said Yushchenko's spokeswoman, Irina Gerashchenko. The two have also come to Ukraine three times, she said, adding that Yushchenko is paying personally for the treatment.

Saurat said that the treatment was aimed at getting the dioxin out of Yushchenko's system as quickly as possible, but he said the process "goes on for years."

There was no indication that Yushchenko had been administered the poison more than once, he said.

Saurat and another colleague were in Ukraine to give Yushchenko a checkup before he made his annual climb up Ukraine's highest peak, Hoverla Mountain. Yushchenko completed the climb Saturday without any problems, his doctors said.

Source: AP World News

Rocker Knocked Out by Ukraine PM's Girl

KIEV, Ukraine -- He is a rottweiler-owning rock singer from Leeds, she is the daughter of the Ukrainian Prime Minister: they seem a mismatched couple whose unlikely romance would succeed only in fiction.

But Sean Carr, a cobbler and key cutter when he is not singing with a heavy metal band, is to wed Evgenia Tymoshenko, the daughter of Ukraine's billionaire Prime Minister.

Sean Carr and the Death Valley Screamers
Evgenia's mother, Yuliya, became a heroine in Ukraine after she led the Orange Revolution against Leonid Kuchma, the country's unpopular and autocratic former president.

Ms Tymoshenko was swept to power alongside Viktor Yushchenko and became known for the rousing speeches she made to her followers, who spent weeks protesting against the Government in sub-zero temperatures.

Mr Carr, a tattooed singer who plays in a band called Death Valley Screamers, closed his market stall in Leeds and moved to Ukraine after meeting his future wife in a bar in Egypt.

The Prime Minister's daughter, who is often pictured accompanying her mother at events, fell in love with Mr Carr at an Egyptian holiday resort.

The improbable romance began when Ms Tymoshenko, 25, asked for Mr Carr's number from his friend, who initially asked for payment in return. By the time he relented, Mr Carr had returned to Britain.

Ms Tymoshenko, who studied at the London School of Economics, sent Mr Carr, 36, a text message on her return to London and they arranged to meet at a biker festival.

But it was only when Mr Carr visited her flat in London that he discovered that she was the heiress to a multi-billion-pound fortune.

He told The Yorkshire Evening Post: "I still didn't know about her mum, but she seemed to be living in an awful lot of luxury for a student."

Five months after they met and the Orange Revolution was at its height, Mr Carr visited Ukraine. Yuliya Tymoshenko was leading the opposition movement alongside Mr Yushchenko, who is now the President.

The day after Mr Carr arrived in Ukraine he stood on a stage in front of thousands of people as his future mother-in-law called for Mr Kuchma to resign. She was appointed Prime Minister six months ago.

Mr Carr said that he was initially terrified of his fiancee's mother, but now calls her "Mama" and has moved his customised Harley-Davidson motorcycle and 11-stone rottweiler, Salem, to Ukraine.

"I know it's mad," he said. "I can't really believe it myself. It's just bizarre. It has been a big adjustment for me but I am making it. I am picking up some Ukrainian and have formed a rock band."

Yuliya Tymoshenko, who recently had to cancel a visit to Moscow because of an outstanding warrant for her arrest in Russia, said that she was delighted by her prospective son-in-law.

"He is an excellent person," she said. "He has a beautiful name. I know he writes music, sings very wonderfully and writes good poetry. He is an artistic person and I like that very much. I like it that he is not a businessman."

Source: The Australian

Ukraine Refuses to Discuss Tuzla Island Ownership with Russia

KIEV, Ukraine -- The Ukrainian Foreign Ministry said that the Tuzla Island is an inseparable part of Ukraine's territory and its ownership cannot be discussed in talks with Russia.

Dmitrey Svistkov, deputy director of the press department of the ministry, was quoted by the Interfax-Ukraine news agency as saying that Ukraine was surprised at the comments of the Russian Foreign Ministry on the issue.

Sea of Azov
Svistkov said according to an accord on joint exploration of the Azov Sea and the Kerch Strait, Russia has for several times during bilateral talks recognized Ukraine's ownership of the island.

The Russian Foreign Ministry said Wednesday in a statement that the issue of the ownership of the Tuzla Island should be solved after both sides resolve all the demarcation issues on the Azov Sea, the Kerch Strait and the Black Sea.

Also on Wednesday, the third round of border negotiations of 2005 between Ukraine and Russia ended, with Russia declaring again recognition of Ukraine's ownership of the Tuzla Island.

Ukraine and Russia have been at odds over the border demarcation of the Kerch Strait after the disintegration of the former Soviet Union.

Tensions began to run high on Sept. 29, 2003, when Russia started to build a dike stretching from its southern mainland toward the Tuzla Island near the frontier with Ukraine on the Kerch Strait.

The crisis ended after Russia suspended the dam project and Ukraine agreed to withdraw its troops from the Tuzla island.

The Kerch Strait, 41 km in length, four to 15 km in width and five to 15 meters in depth, is not only a key shipping gateway between the Azov Sea and the Black Sea, but also rich in fishing resources.

The two countries have been divided over the border demarcation of the Kerch Strait, the Black Sea and the Azov Sea, haggling about where to draw a border line to divide the water areas.

Russia insisted on demarcating lines on the sea floor of the Azov Sea and the Kerch Strait. But Ukraine preferred to draw the border line on the water surface in accordance with international law.

Source: Xinhua

Ukrainians Threaten Orthodox Split

KIEV, Ukraine -- More than a thousand years ago, a Slavic prince ordered his subjects into the Dnieper River that slices through the Ukrainian capital to baptize themselves in his newly adopted faith. Now the powerful Russian Orthodox Church that emerged from that christening is losing control over its Ukrainian birthplace.

Ukrainian Patriarch Filaret (L - Yushchenko in the background) and Russian Patriarch Alexy II (R)
Having broken free of Russia's political grip in last year's Orange Revolution, many Ukrainians are now turning their nationalistic impulses toward religion, and with tacit backing from their president, Viktor Yushchenko, are seeking to create an independent Ukrainian church -- an equal to Moscow, rather than a daughter.

For the Russian Orthodox Church, to lose this predominantly Orthodox nation of 48 million would be a devastating blow, significantly shrinking the size of its flock and its global clout. It could sever one of the oldest links between the two neighboring countries, dealing another setback to the Kremlin's efforts to maintain influence in the former Soviet republics.

"Russia understands and is fighting to keep the Ukrainian church ... if it loses the church, Moscow doesn't have any hope of ever returning Ukraine into a revived Russian empire," said Patriarch Filaret, who heads the breakaway Ukraine Orthodox Church Kiev Patriarchate.

The split is already real, with two breakaway churches having set themselves up since the end of Soviet rule. They are now talking about unifying, which would create a strong new independent church, boasting nearly 4,700 parishes and 3,400 priests. Although still smaller than the Ukrainian Orthodox Church Moscow Patriarchate, as the Russian Orthodox Church is called here, its size could nudge Patriarch Bartholomew, the spiritual leader of the world's 200 million Orthodox, into recognizing the new church.

That would be a significant stamp of legitimacy that Patriarch Filaret believes will prompt many priests and parishes to switch sides.

Monasteries as Prizes

Losing Ukraine would cost the Russian Orthodox Church not only followers, but also valuable church property, including some of Russian Orthodoxy's most revered sites. The oldest and holiest monastery, the Pechersky Lavra, remains under the control of the Moscow Patriarchate. But around a bend in the Dnieper, the majestic Vydubytsky Monastery, which commemorates the mass baptism ordered by Volodymyr in 988 is in the hands of the breakaway church.

In Orthodox countries, national identity is often forged equally by the state and the church, giving the clergy a powerful voice in society. That clout has been growing since the fall of the Soviet Union and the end of a communist creed hostile to religion.

Russia Preaches Unity

The Russian connection long predates communism, dating to 1654 when a Ukrainian Cossack leader signed an alliance with Russia, which gradually ushered in the Russian political, religious and cultural domination that persists to this day.

The Russian Orthodox Church promoted a message of unity between the Ukrainian and Russian peoples. Critics say this was done -- particularly in communist times -- at the expense of Ukraine's identity. The church is basically "an avant garde of Russian influence in Ukraine," said Ivan Dzyuba, a religion analyst with Ukraine's National Academy of Science.

Ukraine renewed the push for its independent Orthodox church shortly after the Soviet Union dissolved in 1991. But the Russian church resisted, sparking a division that led to three separate Ukrainian churches: the Moscow Patriarchate, the breakaway Kiev Patriarchate, and its splinter, the Ukrainian Autonomous Orthodox Church.

A Shared Liturgy

The Moscow and Kiev churches are the two dominant ones, and differ little in liturgical terms. It's not unheard of for Ukrainians to marry in one church and baptize a child in another. Opinion polls suggest many Ukrainians identify themselves simply as neither Moscow- nor Kiev-aligned, just Orthodox.

The choice is often more political than spiritual.

"Of course, our links with Russia are very strong. We are all Slavs and Russia has always been the most dominant Slavic country, but Ukraine has detached itself so why shouldn't our church also enjoy that independence," asked Nina Venhar, 57, emerging from one of the cool, candlelit churches that make up the Vydubytsky Monastery.

Politics is Involved

Ukraine's first post-Soviet president, Leonid Kravchuk, was a moderate nationalist and backed the breakaway church. His successor, Leonid Kuchma, whose support base was Russian-speaking eastern Ukraine, swung state support back toward the Moscow Patriarchate.

Mr. Yushchenko, winner of last year's tumultuous election, has said he will not meddle in church affairs, but he has also emphasized that Ukrainians are eager for an independent, united national church.

For Ukraine's new government, which has been using Cossack symbols to strengthen Ukrainian identity, the need for an independent church is also driven by political concerns.

During last year's presidential campaign, church leaders insisted that they weren't meddling in politics, yet priests and monks from the Moscow Patriarchate regularly marched through the streets of Kiev holding icons and crosses aloft in support of the Russian-backed candidate, Viktor Yanukovych. Meanwhile, Patriarch Filaret and clergy from his breakaway church were often on stage blessing the crowds at the pro-Yushchenko rallies.

Reunification Studied

The Moscow Patriarchate insists it too wants a Ukrainian Orthodox church as "an equal sister in the family of Orthodox Churches, but we are going toward this on a canonical path," its leader Metropolitan Vladimir, told the Associated Press in a written response to questions.

The Russian Orthodox Church's powerful Patriarch Alexy II of Moscow and all Russia, however, has given no indication that he would consider loosening his church's grip on Ukraine.

The breakaway churches hope to force his hand. The Kiev Patriarchate and Autonomous Orthodox Church agreed in May to begin reunification talks. The next move would be winning official recognition from Bartholomew of Constantinople.

U.S. Church Weighs In

In March, Archbishop Vsevolod of the Ukrainian Orthodox Church in the United States, announced that under canon law, the Moscow Patriarchate has jurisdiction only over territory that it claimed up to the year 1686 -- an area that didn't yet include Ukraine.

Archbishop Vsevolod said he was pronouncing the position of the "Mother Church" in Constantinople. But Patriarch Alexy fired back that redrawing jurisdictional boundaries could destabilize the entire Orthodox world.

"Such a reconsideration could affect not only Russia but practically every local church and could become the reason for many conflicts," the Moscow patriarch said in an interview published on his church's Web site.

New Religious Wars?

It remains to be seen whether Ukraine has the appetite for such a fight. The new government came to power amid threats of a split between Ukraine's pro-Russian industrial east and its more nationalistic west. Those passions, while somewhat cooled, still exist, and Mr. Yushchenko has his hands full fighting corruption and trying to win much-needed foreign investment.

Oles Doniy, head of Ukraine's Center for Research into Political Values, cautioned against adding a religious battle to the mix.

"Religious wars in Europe took place several centuries ago," he said, "and it is hardly necessary to rouse those spirits on the shores of the Dnieper."

Source: The Washington Times

Time to Relaunch Ukraine’s Economic Policy

WASHINGTON, DC -- Ukraine is an important American geostrategic priority in Eastern Europe. Many U.S. policymakers and experts believe that Ukraine’s integration into the global economy, and Europe in particular, will change the geopolitical balance in Eastern Europe and could trigger positive changes in other post-Soviet states. Above all, it will benefit the people of Ukraine. Therefore, the outcome of Ukrainian reforms is important for U.S. foreign policy.

Map of Ukraine
Since the events leading to the Orange Revolution in Kiev, the U.S. government has supported Viktor Yushchenko, who became president of Ukraine in January 2005, and his political allies. The Bush Administration has spent over $60 million on Ukrainian democratic transition, and the fiscal year 2005 supplemental budget includes a similar amount. However, Ukraine’s economic policy has been derailed since Yushchenko took power, for the following reasons:

- The lack of a free-market vision at the highest level of the Ukrainian government;

- The breakdown of governmental economic decision-making mechanisms;

- An inadequate judiciary and a corrupt and inefficient bureaucracy;

- Continuous violation of property rights and excessively complicated taxation, which is implemented in an arbitrary fashion;

- Anti-market and protectionist policies pursued by Prime Minister Yulia Tymoshenko;

- Insufficient integration into the global economy due to the parliament’s reluctance to pass the necessary laws.

The conflict between President Yushchenko’s pro-market declarations and his cabinet’s centralizing instincts and confused performance has resulted in an economic policy that appears to be statist and populist in nature. This year’s track record lags behind 2004 economic achievements, which included gross domestic product (GDP) growth of 12 percent and an over 200 percent increase in the Ukrainian stock market.

Lackluster Performance

Key indicators of the Ukrainian economy have deteriorated since the beginning of 2005, endangering the future of the Yushchenko Administration.

Macroeconomic Indicators. The results of the populist policies have been immediate. In the first four months of 2005, GDP growth plunged to an annual rate of 5 percent while inflation surged to 15 percent.Construction contracted significantly, by 5.9 percent per year in the first quarter of 2005 compared to the first quarter of 2004. Metallurgy also declined by 3.6 percent in the first quarter due to increased input costs, especially energy costs.

Privatization. The new government has promised a new privatization deal that has prompted lengthy discussions about what should be reprivatized and how it should be done. The government has drafted a broad law that could undo much of Ukraine’s privatization. This has endangered the property rights of thousands of enterprises.

The new government has not executed its controversial plans for renationalization and subsequent reprivatization of Kryvorizhstal, Ukraine’s biggest steel mill. In an apparent exercise in corruption and nepotism, the giant plant was originally bought for 10 percent of its fair market value by a consortium that included then-President Leonid Kuchma’s son-in-law and close supporters of then-Prime Minister Viktor Yanukovich.

President Yushchenko has also appointed Valentina Semenyuk as the new privatization “czarina.” Semenyuk hails from the Socialist Party and is on record as opposing privatization.

Budget and Taxation. In the first quarter of 2005, the consolidated budget had a surplus of 3.85 percent of GDP. Budget revenues increased by 31 percent, and expenditures rose by 23 percent. However, concerns remain about the government’s ability to collect enough revenue to finance its debt payments and social expenditures, including those promised by Yushchenko during his presidential campaign. These include increased benefits for the newborn and the disabled, as well as raising pensions and minimum wages by 42 percent in the first quarter of 2005.

In March, the Rada (Ukraine’s parliament) adopted amendments to the 2005 budget envisionsing a budget deficit equal to 1.86 percent of GDP. The budget accounts for the ambitious increases in pensions and the minimum wage but uses overly optimistic estimates of revenue growth. In reality, the government is scrambling to find more revenue. Discretionary tax exemptions have been abolished in a hurried and incompetent fashion. This has forced tens of thousands of small entrepreneurs to close their businesses or to shift operations into the black market economy.

Policy Discord. The government does not speak with one voice. First Vice Premier Anatoly Kinakh is one of the vocal critics of the prime minister’s policies. He has publicly criticized the introduction of price controls and the imbalance between social and economic policy in the 2005 national budget.

Inflation and Prices. Ukraine has the highest inflation rate in the Commonwealth of Independent States. The inflation increased from 13.3 percent annually in February to 14.7 percent in April. According to the State Statistics Committee of Ukraine, the annual inflation rate for January–May 2005 was 14 percent, compared to 7.2 percent for the same period in 2004.

Relaxed fiscal policies and falling savings rates have encouraged greater consumption, which has led to higher food prices, including prices for meat. The government responded by imposing price controls on food items. Prime Minister Tymoshenko also issued a decree requiring every region to develop, present, and implement a meat production self-sufficiency program — an approach reminiscent of Soviet-style central planning.

Ukraine is also suffering from an oil shortage, which some blame on the Russian government for blocking delivery of crude oil. However, high oil prices worldwide influenced Russian shipments.

Ukraine’s oil price controls, which order state oil companies to deliver gasoline at prices below market levels, have had disastrous effects, leaving Ukrainians queuing fruitlessly for fuel. While the price controls were in effect, only Russian-owned stations had gasoline. On May 18, President Yushchenko signed into law a bill intended to ease a fuel supply crisis by canceling customs duties and taxes on fuel and to allow Ukraine to reduce its energy dependence on Russia. Canceling duties on imported fuel allows Ukraine to purchase oil from other exporters, such as Kazakhstan, Iran, and Iraq, at higher prices without increasing the cost to consumers. After his trip to Azerbaijan, Foreign Affairs Minister Borys Tarasyuk announced that Ukraine would be willing to buy fuel from Azerbaijan. This is in line with the president’s statement about diversifying Ukraine’s crude oil market and seeking three to four sources of crude oil for Ukraine—specifically, Russia, Kazakhstan, Azerbaijan, and Libya.

Trade. First quarter exports increased by 16.8 percent over the previous year, while imports grew by 18.5 percent. Metals were the major contributor to export growth. However, the trade balance is likely to become negative due to the appreciating hryvnia (the Ukrainian monetary unit) and cheap imports.

Monetary Policy. Strong exports and foreign exchange inflows led to nominal appreciation of the hryvnia in April. In a step toward liberalizing the foreign currency market, the National Bank of Ukraine rescinded the regulation requiring the mandatory sale of 50 percent of export proceeds. This is a welcome step, but more needs to be done in other areas of economic policy.

Business Reforms. The government does not seem to have a clear legislative, regulatory, or administrative strategy for the development, approval, passage, and implementation of major business reforms. Every week, there is a new plan for a new vertically integrated business company to be owned and run by the Ukraine government, and this includes the energy sector. The Tymoshenko cabinet does not discuss the reform of state monopolies, but instead talks about their reinforcement.

Lack of reform discourages American investment, as does widespread violation of intellectual property rights. Ukraine’s software piracy rate (90 percent) is one of the highest in the world, comparable to the software piracy rates of Vietnam, China, and Zimbabwe.

On May 31, the Rada voted down a package of amendments to Ukraine’s intellectual property rights laws. As a result, U.S. economic sanctions, imposed in 2002, will remain in place, affecting $75 million of Ukrainian imports. In 2004, the U.S. reaffirmed the sanctions, citing Ukraine’s poor efforts to fight optical media (CDs and DVDs) piracy and trademark counterfeiting as the main reasons for sanctions. Failure to pass this legislation will also delay Ukraine’s entry into the World Trade Organization (WTO), block the U.S. Department of Commerce from granting the coveted market economy status to Ukraine, and send more negative signals to foreign investors.

On July 6, overcoming the rowdy opposition of the Communist and Socialist Parties, the Rada passed a law making it a crime to distribute compact disks, equipment, raw materials for their production, and moulds illegally. This law brings Ukraine closer to WTO membership. However, the Rada has adopted only five of 15 WTO-related reform bills. Three more passed the first reading, but five have failed, and two have been postponed.

What Is at Stake?

The United States has much at stake in Ukraine, but it will be difficult to implement a policy of economic reform in the context of the constitutional changes that take effect in September — which shift power from president to prime minister in September — and parliamentary elections in March 2006. If the economic policy fails, Russia will try to relaunch its own candidates for the March 2006 parliamentary elections and will attempt to bring to power its own Ukrainian prime minister, who will have more power than President Yuschenko under the new constitutional arrangement.

Economic deterioration will also discredit U.S.-supported democratization in Ukraine, and this will have repercussions beyond Ukraine. If Ukraine fails, so also may Georgia, Kyrgyzstan, and other countries of the former Soviet Union. Moreover, current economic policies discourage Western investment while allowing corrupt Ukrainian and Russian interests, accustomed to the murky waters of government-regulated transitional economies, to thrive.

What Should Be Done

The Bush and Yushchenko Administrations need to take action to relaunch Ukrainian economic reforms. The main effort to turn the tide, however, must come from the Ukrainian side. The U.S. can supply technical assistance and moral support, but the leadership and management of the economic reform process can come only from the Yushchenko Administration.

Specifically, the Yushchenko Administration should:

Create a uniform public vision of the president’s economic reforms. The government should execute and implement President Yushchenko’s vision for economic reform and creation of a positive investment environment. The plan of action should include a timetable with specific and achievable benchmarks. It should designate specific officials who will be responsible for implementing the plan. The Yushchenko Administration should formulate a single business and legal strategy, improve the institutional capacity to absorb and manage international assistance, and centralize the process for requesting and coordinating tech­nical assistance.

Engage an outside management consulting firm to review the current government decision-making and policymaking process. This could be funded as part of existing U.S. technical assistance. The government, working together with such a consultancy, should use this assessment to implement a comprehensive government reform to improve the decision-making process in the economic, financial, fiscal, and investment policy fields. Improving the government’s institutional capacity to implement stable and lasting reforms will foster an environment and infrastructure that attracts foreign and internal investment.

Reduce the tax burden and enhance property rights protection and the rule of law. The Rada should begin by repealing Ukraine’s Soviet-style commercial code (also known as the economic code), adopting the Joint Stock Company Law, and abolishing all price controls. Significantly deregulating the economy, including removal of hidden charges and obstacles to start-up and small and medium businesses, is also necessary.

Ukraine should reform the judicial and legal system so that it can enforce court decisions in a transparent and timely manner. It should also undertake comprehensive legal reform to facilitate economic competition and reform the administrative legislation and procedural code as recommended by the United Nations Development Programme’s Blue Ribbon Commission for Ukraine. Such a reform would include facilitating enforcement of foreign judgments, including arbitration awards and improving bailiff service. On June 23, the Rada voted to remove the state bailiff service from the Ministry of Justice to ensure its independent function, which is a step in the right direction. Finally, it should consolidate and significantly reduce social insurance taxes, as one of the ways to entice business out of the shadow economy.

Integrate Ukraine into the global economy. The Yushchenko Administration should reconstitute an interdepartmental working group on market economy status to guide Ukrainian efforts to secure market economy status from the United States. The Ukraine government should also appoint a high-level official responsible for completing this task within a certain time frame. The government should complete, by the end of 2005, negotiations for entry into the WTO.

On the U.S. side, the Bush Administration should:

Promote Ukraine’s integration into the global economy. The Bush Administration should ask Congress to exempt Ukraine from the Jackson–Vanik Amendment. The amendment was proposed and enforced against the Soviet Union for a different purpose, and U.S. – Ukraine relations have changed radically since the collapse of the Soviet Union.

The Bush Administration should also support Ukraine’s bid to join the WTO and achieve market economy status, provided all U.S. concerns are resolved. The recent arrival of the U.S. government interagency delegation to Ukraine — which has been holding a series of meetings with top Ukrainian officials on Ukraine’s European and WTO integration, its market economy status, safety of the Chernobyl nuclear power plant, and HIV/AIDS—is an encouraging step forward.

Despite time lost since the beginning of this year, it is not too late to relaunch the effort to put Ukraine on the road to economic reform, increased domestic and foreign investment, and prosperity. This effort will require bold leadership, commitment to economic freedom, and qualitative improvement in the rule of law and protection of property rights. If done right, U.S.–Ukrainian cooperation on economic policy will greatly benefit the peoples of both countries.

The Yushchenko Administration needs to start speaking with one voice and taking the necessary steps to make Ukraine as competitive and attractive as its Central European and Baltic neighbors. Anything less will be a huge disservice to the people of Ukraine who won and celebrated their freedom in Independence Square at the end of 2004. They deserve not just political liberty, but also economic freedom.

The U.S. should continue to help and support Ukraine in this quest.

Source: The Heritage Foundation

Post-Soviet Danger: Vulnerable Munitions Depots

ICHNYA, Ukraine -- The ammunition is stacked in mounds in a clearing, exposed to rain and sun. The crates that hold it are rotting. After more than a decade in the elements, many of them have ruptured and come undone, exposing high-explosive rockets and mortar fins.

A Ukrainian munitions depot being inspected
This is the overstuffed ammunition depot behind the security fences at Military Unit A1479 in the Ukrainian forest. At least 5,700 tons of ammunition, grenades and explosive powder have come to rest here, according to an unclassified NATO inventory. Almost all of it is unwanted. Much of it has expired, and some is considered too unreliable or too unsafe to use.

The scenes at Unit A1479 provide a glimpse of a dangerous legacy of the militarized Soviet state, one that has emerged as a risk to post-Soviet states and to nations far away, endangering local environments and communities, as well as providing a reservoir of lethal materials for terrorists and armed groups.

Recent history has shown how fluid and dangerous the arms can be.

Huge depots of conventional weapons and ammunition remain in much of the former Soviet borderland, many of them vulnerable to the elements, inadequately secured or watched over by security agencies with histories of corruption and suspicious arms sales. Largely unaddressed while Western nations and post-Soviet states have worked to secure and dispose of nuclear, chemical and biological weapons, the conventional stockpiles pose problems as yet unsolved.

NATO and the Ukrainian military estimate that Soviet soldiers left 2.5 million tons of conventional munitions in Ukraine as they withdrew from Europe, as well as more than 7 million rifles, pistols, mortars and machine guns.

The surplus weapons and ammunition, some dating to World War I and stored in military posts around the country, are packed in bunkers, locked in salt mines and sitting in open air.

Shipments of the more modern munitions and equipment have departed Ukraine in suspicious arms deals and reappeared in conflicts in Africa and the Middle East. Western governments worry that some of the stocks, including explosives and portable antiaircraft missiles that can down civilian aircraft, might find homes with terrorist groups.

In one deal alone, extensively documented by the United Nations and human rights organizations, 68 tons of munitions were transferred in 1999 from Ukraine to Burkina Faso to Liberia, ending up in the hands of the Revolutionary United Front, which sacked Sierra Leone. 25

Ukraine has not been alone in such circuitous deals. In a report released July 5, Amnesty International claimed that 400 tons of surplus ammunition were shipped from Albania and Serbia to Rwanda in 2002 and 2003, and then channeled to armed groups in the Democratic Republic of Congo.

Allegations of illegal arms dealing have also adhered to Trans-Dniester, the breakaway region of Moldova, which, according to estimates provided by Russia to the Organization for the Security and Cooperation in Europe, has 42,000 small arms and 20,000 tons of munitions, including aircraft bombs, rockets and 39,000 land mines.

Russia is thought to have the largest stockpiles, but has been less forthcoming about them than Ukraine.

Such stockpiles endanger global security not only because they arm rebel groups, but also because military munitions can readily be disassembled and their explosives used to manufacture powerful makeshift bombs. This risk is among the worries with regard to Ukraine.

"Based on the record of the Ukrainian military over the last several years, in diverse settings, there is a certain probability that it might sell explosives to terrorists," said Andreas Heinemann-Gruder, a senior researcher at the Bonn International Center for Conversion, a private organization in Germany working on demilitarization and defense conversion that has studied the Ukrainian stockpiles. "Sectors of the Ukrainian military have cooperated with whomever offered them money, and there have been no moral considerations."

The concerns over accidental explosion were evident in Ichnya, where firefighting equipment is neatly arranged near the gate and laborers hacked at saplings and thigh-high grass, removing material that might kindle flame or block the passage of the depot's armored fire trucks.

Throughout the depot, which consists of 47 warehouses and 47 house-sized stacks of ammunition, the military has erected lightning rods 80 feet high to divert lightning from ammunition stores. At least two of the rods have been struck, said the depot commander, Colonel Oleksandr Bogdan.

Amid the mounting safety and security concerns, Western sponsors are trying to accelerate the disposal of the Ukraine's arms burden. The efforts include a $29.8 million, or 24.7 million, NATO program expected to start this fall that plans to destroy 133,000 tons of munitions, 1.5 million guns and 1,000 portable antiaircraft missiles, known as MANPADS, which could be used to disrupt air traffic world-wide. It will be the largest effort in the world to destroy surplus small arms and munitions, according to Michel Duray, a NATO spokesman in Ukraine. The United States is a principal sponsor, donating more than $1.6 million for the first phase.

Donors and Ukrainian military officials caution that it is only a start. Ukraine has been trying to destroy its surplus inventory since 1993. At the current pace the disposal will last another 50 to 100 years. "We will have to spend some decades to reach a level of moderate safety," said Leonid Polyakov, Ukraine's first deputy minister of defense, who assumed his post this year.

Source: International Herald Tribune

Otto Schily Testifies in Ukraine Visa Scandal Probe

BERLIN, Germany -- Embattled German Chancellor Gerhard Schroeder's centre-left coalition suffered further embarrassment Friday when a cabinet member was forced to testify before a parliamentary enquiry committee looking into alleged immigration policy abuses.

Testimony by Interior Minister Otto Schily came at the height of a general election campaign that shows Schroeder's and Schily's Social Democrats trailing badly.

In what was likely to be the last committee hearing before the September general election, a feisty Schily took the witness stand to testify that he know of no irregularities in the issuance of visas by the German embassy in the Ukraine.

In rambling introductory remarks that went on for more than four hours, Schily pointed out that his ministry had no hand in issuance of visas. All visa authority rests with German Foreign Minister Joschka Fischer's Foreign Ministry, he said.

Fischer has admitted "mistakes and oversights" in the scandal over liberalisation of granting visas to east Europeans.

The visa programme - which was strongly opposed by German diplomats in east Europe - led to a large number of people getting visas ostensibly as tourists to travel to Germany and European Union (E.U.) nations in the Schengen bloc which have eliminated border controls within the E.U.

Many of those granted German visas, however, are alleged to have come to work illegally including in prostitution.

The exact number who have arrived in Germany under the programme is unclear but one of the companies which provided mandatory travel insurance to those getting visas issued 172,000 policy certificates.

Both the companies which issued insurance policies have since had their semi-official status revoked by the German Foreign Ministry.

One of the firms, Reiseschuetz AG, was found to have been working with organisations involved in people smuggling.

Smelling political blood, leaders of the opposition Christian Democratic alliance (CDU/CSU) launched the parliamentary probe into the visa affair and subpoenaed testimony by Fischer.

Thousands of pages of ministry documents have been obtained by parliament for the probe which is expected to culminate just in time for Germany's general election in which Schroeder and Fischer are seeking a third term.

Source: Expatica

Yushchenko Visits Hostile Donetsk

DONETSK, Ukraine -- Ukrainian President Viktor Yushchenko told a packed auditorium in the hostile eastern city of Donetsk that he was ready to bury the past and work to improve life throughout Ukraine.

"I want to say that old disappointments and old insults don't exist for me," Yushchenko said in remarks aired live on Ukraina TRK television, owned by the Donetsk-based tycoon Rinat Akhmetov.

Ukrainian President Viktor Yushchenko (L), is greeted by Director of the Zasyadko coal mine Yefim Zvyagilsky in Donetsk
Yushchenko was making a one-day visit to Donetsk, a Russian-speaking region that overwhelmingly supported his rival in last year's bitter election.

Nearly 94 percent of Donetsk voters supported their native son, former Prime Minister Viktor Yanukovych, who advocated closer ties with Moscow.

Many Donetsk residents feared that Yushchenko was a pro-American nationalist who would sever ties with Russia, ban Russian-language schools and close down the mines and factories that are the lifeblood of this region. Yushchenko has said they were misled by election propaganda against him.

About 3,000 demonstrators - primarily from the Communist Party and the party Derzhava - gathered outside the regional headquarters July 15 to protest Yushchenko's visit, waving signs that read "Get out!" and "No to a pro-American regime," according to Ukrainian media reports. On the eve of Yushchenko's visit, cars drove through the streets waving banners reading, "Ukraine without Yushchenko!"

"I will forgive," Yushchenko said, adding, however, that he would keep coming to Donetsk as long as it took to insist that everyone lives by the law.

"I want to make people proud, so that they can live in a unique country and can live prosperously," Yushchenko said. "Together we can accomplish a lot of useful work."

Earlier, Yushchenko laid flowers at a chapel in memory of people who have died on the job. The Donetsk region is the center for Ukrainian coal mines, considered among the most dangerous in the world.

Yushchenko made his first postelection visit to Donetsk in February - a lightning-speed trip where he was met by crowds of hostile protesters, who threw snowballs at him.

Source: AP

Police Summon Medvedchuk for Questioning

KIEV, Ukraine -- Ukrainian police said July 15 they had summoned former President Leonid Kuchma's one-time administration chief as part of an investigation into the awarding of medals and state honors to the ex-leader's cronies.

Viktor Medvechuk
Viktor Medvechuk, who now heads the opposition Ukrainian Socialist Party (United), was summoned to explain why "some people received high state decorations and medals," a police statement said.

Police said they want to interview Medvedchuk about several Hero of Ukraine medals awarded to officials who were close to Kuchma's inner circle.

Medvedchuk was a top ally of Kuchma, whose decade in power ended after former opposition leader Viktor Yushchenko won last year's bitterly contested presidential vote.

Yushchenko, inaugurated in January, has pledged to crack down on corruption and nepotism and sever government links to organized crime that plagued Kuchma's decade-long tenure.

Medvedchuk was not immediately available for comment.

Source: AP

Branches of Authority Clash in Ukraine

KIEV, Ukraine -- A new scandal is breaking out in Ukraine, in the center of which are Prime Minister Yulia Timoshenko and Speaker of the Supreme Rada Vladimir Litvin. After the disagreement between the two leading Ukrainian politicians reached the point of being newsworthy, President Yushchenko tried to mediate in the situation, calling on them to bury the hatchet for the sake of the future of Ukraine.

Speaker of the Supreme Rada Vladimir Litvin (seated) and Prime Minister Yulia Timoshenko do not get on well
The conflict between the head of the cabinet and the head of the parliament was unexpected. On May 22 of this year, not all that long ago, Yushchenko, Timoshenko and Litvin visited the grave of Taras Shevchenko at Kaneva, were they announced that the political forces they control would enter the 2006 elections together. Observers took that political gesture as a sign that the informal trinity of Orange Revolution leaders were coalescing into a new political bloc that would eliminate their opponents' chances of attaining revenge in next year's parliamentary elections.

However, the longer-range development of events has shown once again that the face of modern Ukrainian politics changes at a whirlwind pace. At a Wednesday Cabinet meeting, Timoshenko made a sharply-worded statement about the Rada and its leadership, accusing it of attempting “to maintain social and economic tension in society” in order to discredit her cabinet. Timoshenko did not mince her words, speaking of “political savagery,” “a planned provocation,” on the principle of “the worse, the better.” She called the abortive discussion in the Rada of bill on the WTO “unprecedented,” when deputies blocked the podium and “the president was unable to address the people from the podium of the parliament.” She strongly indicated that, as the summer recess begins, the deputies should think about their behavior and return in the fall ready to work differently. “A normally functioning parliament after the recess is a guarantee that the country will have the necessary legislation in the fiscal arena and a budget for next year,” she said.

Timoshenko restrained herself from mentioning Litvin by name, but a key member of the Cabinet, Deputy Prime Minister for Humanitarian Issues Nikolay Tomenko, did so that yesterday. On Era radio station yesterday morning, Tomenko devoted a significant part of his appearance to Litvin, whom he accused of having too close ties with the old elite headed by former president Leonid Kuchma. Indulging in sarcasm, the deputy premier noted that the speaker “spent too much time writing speeches for Kuchma as is adviser and head of his administration. Tomenko further opined that that that was the reason why Litvin “out of inertia, continues to make statements with a superior, almost presidential, tone.” Tomenko spoke in favor of forming a new majority in the Rada that could work stably, as the de facto majority of Kuchma, Litvin and [Ukrainian Communist Party leader Petr] Simonenko does today.”

The other side responded rapidly. The conciliation council of the Rada factions and groups issued a statement yesterday saying that the Supreme Rada is “categorically against the intervention of the administration in the activities of the parliament, open public manipulation and insults to the highest representational body of the Ukrainian people… We will decisively withstand attempts to dismantle the highest representational body of the state and will not allow politics in Ukraine to be based on conflict.” The document also accused Timoshenko of attempting to draw the president into an artificially created political conflict, where “his authority will be used to cover the mistakes and miscalculations in the actions of the Cabinet of Ministers.”

It also became known yesterday that Socialist party of Ukraine leader Alexander Moroz is in solidarity with Litvin. Moroz made a harsh statement in regard Timoshenko's cabinet, which, he said “rudely interferes in the economy and will rapidly lose the confidence of the people, investors, and its political partners and allies.” Moroz demanded that “the work of the Cabinet of Ministers be made ore transparent, effective and genuinely democratic.” Secretary of the Council of National Security and Defense Petr Poroshenko thinks that the conflict between the administration and the parliament is not of political character, however. “I think the reason for the crisis is the uncoordinated actions of the team,” he said at a press conference in Kiev yesterday. “It is a purely technical reason, I don't see any political reasons.”

Nonetheless, President Yushchenko has intervened in the situation, understanding that the situation could get out of hand. At a press conference yesterday in Kiev, he said that he had conducted negotiations with both sides for several hours the day before, trying to reconcile them. It is not clear yet to what extent he was successful. The president admitted that, if the reconciliation is unsuccessful, “a serious revision awaits the country at the polls in 2006.” “I would like Vladimir Mikhailovich [Litvin] and Yulia Vladimirovna [Timoshenko], who are both wise people, to understand that their behavior today has not enhanced the status of the branches of authority that they head.”

Source: Kommersant

US to Grant Ukraine Market Economy Status by Year End

KIEV, Ukraine -- The United States is to grant Ukrainea market economy status by the end of the year, said Deputy Assistant Secretary of the US Commerce Department Eric Stewart Thursday.

At a press conference here, Stewart said that the US governmentis currently studying Ukraine's application for the status, which the United States is likely to grant at the end of the year.

Regarding the possibility of Ukraine's accession into the WorldTrade Organization (WTO), the official said that it largely depends on the progress of Ukrainian parliament's legislation.

Stewart positively evaluated some of the documents relating to Ukraine's WTO accession bid, which have been approved by Ukraine's parliament, especially the recently approved laws on the protection of intellectual property rights.

Earlier, Stewart also discussed with Ukrainian Prime Minister Yulia Tymoshenko issues on Ukraine's accession into the WTO and the expansion of trade cooperation with the United States.

Ukraine has stepped up its WTO accession bid since President Viktor Yushchenko 's election in January.

Yushchenko had secured US president George W. Bush's commitment to help his country with its WTO membership bid during his visit to the United States this April.

Source: Xinhua

Auditing Boost in Ukraine

KIEV, Ukraine -- Parliament’s attempt last week to shove through legislation necessary to making Ukraine a credible World Trade Organization candidate was a colorful mess – we’re informed that a full five microphones were broken during all that brawling around the Rada speaker’s podium.

Fight in the Parliament of Ukraine between deputies of the progovernmental fractions and oppositions
But some good did come out of the spectacle. In particular, the Rada passed a law that will allow qualified foreigners to perform auditing work in Ukraine. This is a small, healthy step for the country.

In reality, nothing much is expected to change in the short term. Western auditing firms – and Western auditors – have been a presence in Ukraine for a long time. They’ve gotten around legal restrictions by using native Ukrainian employees as, in effect, front-men on auditing jobs, and through other means. But parliament’s move sends the right signal. For one thing, it eliminates yet another of the command-economy obstacles to Ukraine’s assuming its place in the world community. For another thing, it makes it easier for Western auditing practices to disseminate themselves through the Ukrainian market. Ukraine has a lot to learn from Western auditors, and this will make it easier for it to do so.

As good as this move is, Ukraine still hides behind other self-defeating obstacles. One of them is the dumb law that mandates that companies who want to hire a non-Ukrainian must prove that no native exists who can perform the job as well.

This silly law should be scrapped, because it’s bad for Ukraine. Bringing foreign professionals into Ukraine – it hardly needs saying – is good for the country. It raises industry standards and injects new energy and ideas into the mix. That Ukrainians have been legally discouraged from working alongside their most advanced Western colleagues in various fields is self-destructive. Shouldn’t a country in fact want top quality people working in its economy, no matter where they’re from? Isn’t so much of the intellectual and economic vitality of the West a function of its embrace of outsiders who have something to teach it?

The sooner the Rada scraps these ludicrous measures, too, the better. Too bad legislators won’t be back at work until September.

Source: Kyiv Post

Ukraine's Economic Growth Slumps

KIEV, Ukraine -- Ukraine's fast-growing economy is losing some of its zip as uncertainty about the investment environment and lower metal prices take their toll.
Growth in the first six months of this year was 4%, compared with almost 13% in the same period a year earlier.

The government has warned it may trim its 2005 growth forecast to 8%, down from the stellar 19.1% the year before.

Ukraine has gone through a difficult period since the ruling administration was overthrown last year.

Promises

After long-standing President Leonid Kuchma was toppled in the Orange Revolution, the new government pledged to cut corruption, revitalise the economy, improve living standards, and move Ukraine closer to its western neighbours.

Despite the good intentions, the administration has failed to push through legislation paving the way for membership of the World Trade Organization and recent debates have ended in parliamentary punch ups.

With the good will that followed the change in power fading, the state of the economy has come back into the focus.

Figures released earlier this week showed that Ukraine's foreign trade surplus during the first five months of this year tumbled to $794.6m from $2.1bn in the same period a year earlier.

Speaking earlier this week, President Viktor Yushchenko admitted that some decisions taken after the revolution may have hurt the economy.

More than six months on from the ouster of Mr Kuchma, foreign investment in Ukraine has only increased by 3%.

About turn?

With that in mind, Mr Yushchenko said on Wednesday that Ukraine may reinstate special economic zones that gave tax breaks and cheap investment opportunities to both domestic and foreign companies.

The government is also continuing with its plans to review some of the controversial privatisations of the past. However, the much touted list of targets has yet to materialise.

On Tuesday, a Kiev court seized control of Nikopol Ferroallay Plant, which is owned by Viktor Pinchuk, the son-in-law of former President Mr Kuchma.

The government contends that a number of Ukraine's key assets were sold off to supporters of Mr Kuchma for a fraction of their real value.

While the move to review the state asset sales have won support, it also has created an air of uncertainty that has deterred foreign and domestic companies from investing in Ukraine.

The government, meanwhile, is not spending its budget to drive the economy but is using it to finance state pensions and wages ahead of elections scheduled for later this year.

According to the statistical office's economic growth figures, economic expansion slowed to 1.1% in June, down from 19.1% a year earlier.

Source: BBC News

Joint 22-Nation Military Exercises Start in Ukraine

KIEV, Ukraine -- Joint military exercises of 22 countries aimed at practicing international peacekeeping operations kicked off here on Wednesday, said the press office of Ukraine's Defense Ministry.

The 20-day exercises, Peace Shield 2005, are participated in by 750 servicemen from the countries including the United States, Germany, Italy, Canada, Poland, Azerbaijan, Belarus, Armenia, Georgia, Kyrgyzstan and Moldova.



The exercises, different from traditional ones, are divided into two stages, according to the office.

In the first stage, computer networks will be used to enhance coordination between the headquarters and various sections of the troops as well as coordination between multinational troops in their peacekeeping missions.

Exercises at this stage will be directed from Ukraine's state academy of national defense research and last till July 25.

The second stage will take place between Aug. 3-13 at the Crimean peninsula in south Ukraine. Exercises at the stage will be mainly naval, land and air real-combat drills. The United States will send its marine corps to the drills.

The Peace Shield 2005 exercises are part of the bilateral military cooperation program between Ukraine and the United States, according to press report.

Source: Xinhua

Internal Divisions May Defeat Yushchenko's WTO Aspirations

KIEV, Ukraine -- The Ukrainian parliament went into summer vacation this week after adopting only six of the 14 legislative acts needed for possible WTO membership. Two related laws were adopted earlier. The government had wanted parliament to consider all 14 laws as a package, but parliament refused.

A key legislative act adopted on July 6 deals with intellectual property rights. Ukraine has long been a major player in the worldwide market of pirated CDs. The bill passed, although the Communists, Regions of Ukraine, and Social Democratic Party-United (SDPUo) all opposed the law.

WTO Meeting
The Ukrainian government and World Bank believe that, although all 14 draft laws were not adopted, a sufficient number passed to qualify Ukraine to be considered for WTO membership at the WTO biannual conference in Hong Kong on December 13-18. Ukraine will need to adopt a total of 26 laws for WTO membership.

According to Economics Minister Serhiy Teryokhin, Ukraine has now adopted 90% of the legislative acts required to join the WTO ahead of Russia later this year. After gaining membership, Ukraine hopes to begin negotiating a free-trade zone with the EU. President Viktor Yushchenko also sees WTO membership as a key component of Ukraine's Euro-Atlantic integration.

Yushchenko and the government claimed that joining the WTO would lead to an additional 1.9% annual growth of GDP, $300 million additional in exports, and new markets would open to Ukrainian goods. Ukraine would also save $1.6 billion that it currently loses due to laws that are not compatible with those of the 148-member WTO.

The opposition argued that WTO membership would lead to price rises and the collapse of Ukraine's agriculture, auto, and metallurgical industries. Opposition centrists, such as Regions of Ukraine and the SDPUo, support Ukraine's joint entry into the WTO alongside Russia. The Communists oppose WTO membership, while the Socialists support joining in stages.

Attempts to force the laws through parliament ahead of the summer recess were hampered by the lack of leadership on the part of Yushchenko and a lack of unity in the Yushchenko coalition. Writing in Zerkalo Nedeli/Tyzhnia, Serhiy Rakhmanin declared that the new political leadership had flunked its first major test, because, "The entire political leadership lacks potency, and the new system of political decision-making works too poorly."

This "impotence of authority" has emerged because the new regime does not use bribes, threats, and blackmail as was common under former president Leonid Kuchma. The new opposition is not afraid of the authorities because, Rakhmanin believes, Yushchenko's team has not adequately punished the former regime for its past misdeeds.

Yushchenko made another strategic miscalculation when he did not order his own governors and government ministers to relinquish their parliamentary seats. Twenty parliamentary deputies held government or state administrative positions, including National Security and Defense Council secretary Petro Poroshenko. The Communist and centrist opposition seized on this issue to demand that they give up their seats ahead of the parliamentary debate on WTO membership. While in opposition, Yushchenko had specifically criticized the authorities for illegally holding parliamentary and government positions, now this issue was used against him. Yushchenko finally ordered his team to vacate the parliamentary seats on July 2, only six days before the summer recess.

Yushchenko's team did not present a united front on the WTO issue. Although the Socialists supported Yushchenko in round two of the 2004 presidential election and have been rewarded with government and governor positions, the SPU joined the Communists and centrists in opposing WTO legislation. The SPU seems unclear on whether it is part of the opposition or part of the governing coalition. Socialist leader Oleksandr Moroz said, "We criticize constructively. We should do this because these are our authorities". Yet just last month Moroz declared that the SPU would never go into opposition to Yushchenko.

Yushchenko's People's Union-Our Ukraine party and Prime Minister Tymoshenko are divided on the usefulness of the SPU. After the SPU failed to back the WTO legislation, Tymoshenko and Economics Minister Teryokhin called for the replacement of SPU ministers, particular Agriculture Minister Oleksandr Baranovskiy. In contrast, Yushchenko and People's Union-Our Ukraine officials continue to delude themselves that the SPU are useful and should be therefore be invited to join their bloc in the March 2006 parliamentary election.

The SPU also differs with the government over privatization, including whether to keep Kryvorizhstal in state hands or put it up for a new privatization tender. The SPU is also hostile, like the Communist and centrist opposition, to NATO membership.

Parliamentary bickering in the last week before the summer recess also deepened the rift with parliamentary speaker Volodymyr Lytvyn, whose People's Party is a potential member of the Yushchenko coalition in the 2006 election. Lytvyn accused the government of preparing flawed bills in great haste and called for greater debate about the merits of joining the WTO. Lytvyn also accused the government of being unwilling to cooperate with parliament.

Tymoshenko retorted that Lytvyn and Moroz were, alongside the Communist-centrist opposition, also her opponents. As for government work on WTO legislation, she said, "Don't listen to these stupidities, when they say that the government submitted something in haste, that it submitted half-baked documents, that something was not agreed with MPs". In reality, "The government is being obstructed from working," Tymoshenko alleged.

Source: Eurasia Daily Monitor

Ukraine Confiscates Rough Diamonds

KIEV, Ukraine -- Border police in Ukraine confiscated two kilograms of rough diamonds, Khaleej Times reported on July 13. According to Ukraine’s Ministry of Interior officials, police were performing routine inspections of the Moscow-Kiev passenger express train when they found the diamonds concealed in a carriage compartment.

Rough Diamonds
The estimated value of the rough diamonds found runs as high at $6.9 million, but actual value is dependent upon the quality of rough. All passengers asked denied knowledge of the stash.

The gems are believed to be the most valuable smuggled goods confiscated by Ukrainian border police in the past five years. Ministry officials said that the diamonds are likely to have been mined in Russia and were destined for cutting and illicit sale abroad.

Source: Diamond Net

Ukraine’s Richest Man Akhmetov Summoned for Questioning in Kiev

KIEV, Ukraine -- Ukraine’s richest man, Rinat Akhmetov was summoned for questioning in Kiev Tuesday. Akhmetov is known as an ally of Viktor Yanukovich, Ukraine’s former PM, who ran against Viktor Yushchenko for the presidency late last year.

Rinat Akhmetov
His company System Capital Management has stakes in several metal, chemical and other plants.

The Donetsk-based businessman has been sent a written invitation to appear at the criminal investigations department of the Ukrainian Interior Ministry on July 18, the Interfax news agency reported.

The Interior Ministry’s public affairs department said that Akhmetov has been called in for questioning concerning an event that took place in Donetsk, but authorities failed to specify what the event was.

Source: MosNews

Commercial Piracy in Ukraine

KIEV, Ukraine -- The international recording industry today welcomed the adoption by Ukraine of a landmark CD plant law that is a decisive step in the fight against the country's unacceptably high levels of piracy. Ukraine's Parliament Verkhovna Rada) passed the long-awaited Bill of amendments to Ukraine's Law on Laser-readable Discs which is essential to tackle ongoing pirate CD production and illegal exports from Ukraine.

Commercial CD Piracy
IFPI, representing 1,450 record companies worldwide, estimates that Ukraine's piracy level is 65-70% of the music market. The pirate market in Ukraine is worth an estimated US$42 million, but actual losses to the legitimate industry are far greater.

Ukraine's CD plant capacity of around 50 million discs a year is three times its legitimate demand. The adoption of the law follows sustained pressure from the recording industry and Ukraine's trading partners.

John Kennedy, Chairman and CEO of IFPI, said: "The massive scale of piracy in Ukraine has seriously deterred international investment in this country's copyright sector. We warmly welcome today's decision by the Ukrainian Parliament to reinforce the CD Plant Law and tackle the country's piracy epidemic. This law and its enforcement are likely to have a positive impact on Ukraine's WTO accession bid."

IFPI has kept a regular presence in Kiev in the last five years to offer expert technical and legal assistance to the Ukraine government. Most recently, IFPI met with President Yuschenko in the context of the Eurovision Song Contest Finale in Kiev in May to call on his personal support for the adoption of the bill of amendments.

Stefan Krawczyk, IFPI Deputy Regional Director, Europe, said: "This is great news for the music industry in Ukraine and internationally. Ukrainian and foreign artists, songwriters, record labels and retailers have been losing millions of dollars due to rampant piracy. The passing of the bill today shows that President Yuschenko and his administration are serious about eradicating piracy and supporting the growth of a legitimate industry."

Ukraine's Law on Laser-Readable Discs was first adopted in 2002 as part of the USUkraine Joint Action Plan on Intellectual Property Enforcement. Due to its serious shortcomings, this Law became the focus of current US trade sanctions against Ukraine. The Bill adopted today contains the necessary provisions to bring Ukrainian law up to the required level.

Attempts to amend the CD Plant Law have up until now ended in failure, resulting in continued US trade sanctions against Ukraine. This has also had a negative impact on the country's WTO accession process.

Pressure on Ukraine has also stepped up in Europe in recent years. The European Union has made intellectual property protection a top priority of its bilateral trade agenda with Ukraine. Under the EU-Ukraine Partnership and Cooperation Agreement Ukraine was obliged to bring its intellectual property laws and enforcement into line with the EU by the end of 2001. In recent meetings in Brussels, Geneva and Kiev the EU has been highly critical of the lack of progress towards this goal.

Ukraine was recently cited in IFPI's Commercial Piracy Report (June 2005) as one of the recording industry's Top Ten Priority Countries.

Ukraine was made a Priority Foreign Country (PFC) in 2002, the highest in a league of categories used by the US government in assessing the effectiveness of countries' protection of intellectual property. Under the Special 301 legislation, the United States Trade Representative (USTR) has the authority to impose economic sanctions on countries designated PFC.

Source: Computer Crime Research Center

Ukraine Steps Up Antiterrorist Measures After London Blasts

KIEV, Ukraine -- An antiterrorist coordination centre has been set up at the Ukrainian Ministry of Transport and Communications following the recent terrorist acts in London. The centre is headed by Deputy Minister Mykola Hordiyenko, the transport ministry's press service reports.



The antiterrorist centre has been set up to guard against possible terrorist acts against the most vulnerable sections of the transport infrastructure.

The centre's activities are coordinated with the interdepartmental coordination commission of the Antiterrorist Centre of Ukraine's Security Service.

Antiterrorist centres and groups are to be set up by 12 July at Ukravtodor [the state road-building company], the State Aviation Service, the Ukrainian Sea River Fleet, the Ukrainian Automobile Transport Company, the State Communications Company, the Main Automobile Transport Inspectorate, the Ukrainian State Railways Company, the State Special Transport Service (railway troops) and at their subsidiary companies, organizations and institutions.

The Ministry of Transport and Communications is taking other measures to enhance security.

All means of transportation - buses, sea and river boats, planes, railway and underground trains will be checked for unidentified objects.

Rolling stock, rail platforms, luggage stores, basements and attics, engineering structures, train depots, baggage compartments, sewer tunnels, ventilation shafts, machine rooms and other sites potentially exposed to terrorism will be checked for explosive and other dangerous substances at bus and railway stations, sea and river passenger ports, airports and at underground metro stations.

Bus stations will be cleared of unauthorized vehicles. Security has been stepped up at bridges, tunnels and other man-made structures and hydrotechnical shipping structures on the Dnipro. Instructions have been issued to provide aviation security services with modern equipment for checking passengers and baggage.

The armed rail security services and transport police will carry out joint snap inspections and there will be checks of the security systems of harbour facilities and trade port engineering structures and of air security at air companies and airports.

[State communications body] Gossvyaz will take measures within a week to protect communications from criminal attacks. Postal workers get instruction and take part in special exercises to enable them to spot explosive and other dangerous substances.

Source: BBC Monitoring

Ukraine's Ex-Security Service Chief Denies Agents Poisoned President Yushchenko

KIEV, Ukraine -- The former chief of the Ukrainian Security Service (SBU), Ihor Smeshko, has denied that SBU officers could have been involved in a plot to poison President Viktor Yushchenko during last year's election campaign, according to the BBC Monitoring Service.

Ex-SBU Chief Ihor Smeshko
Smeshko, who headed the SBU under former President Leonid Kuchma, was interviewed live on Ukraine's pro-government 5 Kanal TV, in connection with his libel suit against Prosecutor-General Svyatoslav Piskun following Piskun's allegations that Smeshko had been involved in arms smuggling and blocking investigation into the murder of journalist Heorhiy Gongadze.

Smeshko told the channel's presenter, Roman Skrypin, that the charges were untrue and that it was his staff who found key witnesses in the Gongadze case. He accused Piskun of looking for scapegoats in a bid to cover up his failure in high-profile investigations, such as the Gongadze murder and Yushchenko's poisoning.

"I have reasons to believe that the poisoning is not being investigated," Smeshko said. "There are certain attempts on the part of top Prosecutor-General's Office people to find scapegoats in the poisoning of President Yushchenko. The president is being misinformed, and this can have serious consequences because it is impossible to prove something that did not happen."

Smeshko and his deputy, Volodymyr Satsyuk, had a private dinner meeting with Yushchenko when he was presidential candidate for the opposition, after which Yushchenko became ill, leading to Satsyuk becoming a suspect. Satsyuk has gone into hiding fearing arrest.

"I can confirm again that no Security Service personnel, from the head to ordinary operatives, including former deputy chief Satsyuk, had anything to do with the deterioration of Viktor Yushchenko's health. I am absolutely confident that Viktor Andriyovych knows this.

"Otherwise Viktor Andriyovych Yushchenko would not have thanked me for the cross I had to bear during the Orange Revolution - those were his words when he presented Mr [Oleksandr] Turchynov [the new head of SBU]."

He compared Satsyuk to the former interior minister Yuriy Kravchenko, who is believed to have committed suicide after being summoned for questioning over his role in the Gongadze murder. "I am inclined not to believe that he committed suicide. The information I have at the moment poses huge questions why the murder version was not pursued."

Asked why he did not support the Orange Revolution, Smeshko said his main goal had been to prevent bloodshed. "During the Orange Revolution, Security Service officials did their utmost to prevent a single drop of blood being shed. There were forces on both sides, in both political movements, who were prepared to pay the price of people's blood for the end result."

He denied Security Service staff tapped phone lines during the election campaign, adding that any illegal phone bugging was the work of private agents. "The Security Service acted exclusively within the law, and I made sure this was the case, as far as possible. I am not ashamed to look my former staff and the people of Ukraine in the eye."

He expressed concern at civil servants of the former presidency losing their jobs under the new government and called for legislation to protect civil servants.

Asked about the possibility of opening files on Ukrainian officials who collaborated with the KGB, Smeshko said many files had been destroyed prior to his coming into post.

Source: Unian

Ukraine Investors Wary as Progress is Slow

KIEV, Ukraine -- T shirts, caps and key rings celebrating the mass opposition protests last year continue to be sold from street stalls in the capital.

The demonstrations which swept the pro-European Viktor Yushchenko to power also led to a rush of interest from western investors about the potential of Ukraine.



But the reality hasn't lived up to the hype.

Everyone is welcome

More than six months on from the Orange Revolution, foreign investment in Ukraine has only increased by 3%.

"The desire is there to improve the business climate, but achieving it will be a long and difficult process," says Christian Mol, executive vice president of International Retail at Rabobank after a recent trip to Ukraine.

The government is urgently trying to attract western funding, which the country needs if it is to meet its election pledge of raising living standards.

"An investor entering Ukraine should be looked after," says President Yushchenko.

"I have told the government many times, your mission is like that of a doorman at a hotel or restaurant. You should invite everyone walking down the street to the restaurant."

More is needed

But the new leadership has left some people disappointed and others confused about its commitment to business.

Investors at a recent World Economic Forum conference in Kiev called on Ukraine's new administration to use the momentum from the Orange Revolution to quickly make the necessary changes.

"Ukraine's well-educated, highly-skilled workforce and low labour costs provide an ideal environment for businesses to prosper," insists Silviu Popovici, general manager of Coca-Cola Beverages, Ukraine.

"This can truly happen only if it's supported by strong implementation of political and economic reform."

New rules

Ukraine's Soviet legacy means that it will be a big task.

Last week, opposition deputies in Ukraine blocked a planned debate in parliament on new laws that would pave the way for World Trade Organisation membership.

Moreover, corruption is rife, bureaucracy is unwieldy and a great deal of the economy is controlled by oligarchs.

"We would like to show that the rules of the game for investors have changed in Ukraine," President Yushchenko told investors.

"Foreign business, from now on, will operate in accordance with the new rules of transparency and stability, no longer burdened with excessive regulations."

But not everyone is convinced

"Nothing has really changed," says Pete McAndrew, a westerner who started investing in Ukraine two years ago.

"People still want bribes and sometimes feels likes the only objective of bureaucracy is to stifle business."

Uncertain investors

Since coming to power, the new authorities have been reviewing some of the controversial privatisations of the past.

Ukraine's largest steel works were recently taken back into state ownership after the government said the law was broken when it was sold and so it will be auctioned off again.

For months there has been talk about a list of other re-privatisation targets, but now the president says there will be no list.

This uncertainty is harming Ukraine's investment prospects.

But it should not put people off, according to former US Congressman John Conlan who links up foreign firms with Ukrainian companies.

"This is just a socially justified corrective measure," he says.

"The authorities are not going after business with western involvement."

Fantastic profit margins

Ukraine has one of Europe's fastest growing economies.

It occupies a strategic position on the edge of the European Union while also bordering Russia.

"We will defiantly be keeping an eye on the market as there are bound to be good opportunities," says Christian Mol, executive vice president of international retail at Rabobank.

"We are certain that the focus of Ukraine is towards the west and greater democracy."

For the moment the risks are too high for many western investors, but for some the rewards make it all worthwhile.

"Ukraine is risky but fun," quip Techinvest's Roman Kyzyk, insisting that despite all the challenges encountered, there is no better place anywhere today in the former Soviet Union for emerging markets investors.

Kiev businessman Pete McAndrew agrees.

"It's so frustrating dealing with all the problems, all the red tape, but for all that trouble we end up with fantastic profit margins."

Source: BBC News

Ukraine, Country Outlook - July 2005

LONDON, England -- Viktor Yushchenko's victory in the presidential election in late 2004 has begun to translate into greater political openness and faster economic reform. However, policy missteps and government in-fighting will continue--as seen in recent months--to limit the extent of improvements possible. Moreover, the 2006 parliamentary election and the planned switch to a more parliamentary political system will be significant distractions.

Viktor Yushchenko After Winning Election in 2004
The Economist Intelligence Unit expects real GDP growth to decelerate to 6% in 2005 and to below 6% in 2006. Year-end inflation is forecast to slow to 8% by 2006. The currency will remain broadly stable in nominal terms against the US dollar in 2005-06, with only a slight appreciation expected. The current-account surplus reached a record high in 2004, but will decline in 2005-06 as export growth diminishes.

Both the president, Mr Yushchenko, and the prime minister, Yuliya Tymoshenko, continue to enjoy solid support and are expected to continue to co-operate with one another during the rest of the 2005-06 forecast period. The risk of political instability and inefficacy will nevertheless continue to be high.

Ukraine's new leadership has already provided several reminders that it remains an uneasy coalition of heterogeneous political forces, and that strong disagreements persist over policy and the division of responsibilities. These differences will become harder to contain as the March 2006 parliamentary election approaches, and as the debate heats up over the implementation of constitutional changes that are scheduled to come into effect by early 2006.

The tone of relations with Western governments and institutions has improved considerably with the departure from power of the previous president, Leonid Kuchma, particularly as the new administration is much more committed to closer Western integration. In 2005-06 Ukraine's relationship with the West will remain better than it was during the Kuchma era.

Despite the recent rejection of the EU constitutional treaty by Dutch and French voters--which has produced a backlash against enlargement--Ukraine will continue to prioritise its relationship with the EU and push ahead with implementing the commitments contained in the EU-Ukraine Action Plan signed earlier in 2005.

However, the Ukrainian leadership will undoubtedly continue to be frustrated with the EU's hesitant stance, and there is a risk that the Action Plan will be an even less effective policy anchor than before.

The election of Mr Yushchenko as president in late 2004 has given new impetus to the process of economic liberalisation, and his appointment of Ms Tymoshenko as prime minister has confirmed his willingness to accelerate reforms. Ms Tymoshenko is one of Ukraine's most outspoken critics of shadow economic structures and of the economic role played by vested oligarchic interests, and her government is by far the most reform-minded in Ukraine to date.

We therefore expect greater progress on key issues than in the past: privatisation sales are likely to become more transparent, fiscal policy will be rationalised, energy sector reform will resume, and a more concerted effort will be made to bring businesses out of the shadow economy.

With economic policy being tightened in a number of countries and high levels of debt weighing on consumers, companies and governments, a global slowdown is in prospect for 2005-06. We forecast a deceleration in world GDP growth on a purchasing power parity (PPP) basis, from an estimated 5.1% in 2004 to 4.2% in 2005 and 4% in 2006.

A fall in oil prices later in 2005 and in 2006 will lead to slower real GDP growth in Russia, Ukraine's largest export market, although Russian import demand will remain relatively strong. The prospects for Ukraine's terms of trade more generally are mixed. Ukraine will benefit from a reduction in the cost of oil imports.

However, this will be more than offset by a decline in prices for steel, which is Ukraine's most important export commodity. Average steel prices are expected to fall by almost 30% in 2006. The slump in steel prices will reflect slower growth in demand and the coming on stream of new production capacity.

Ukraine's economy has cooled rapidly so far in 2005. Real GDP growth fell to 5.4% year on year in the first quarter of the year, and then slowed further to 4.7% in January-May, down from a post-independence record of over 12% for 2004 as a whole. The slowdown reflected less buoyant external conditions, as well as sluggish investment trends--prompted by political instability and concerns over the government's plans to review previous privatisations.

However, investment is expected to pick up somewhat in the second half of 2005, assuming that the government still manages to clarify its re-privatisation plans. Moreover, household consumption is expected to be buoyant, as a consequence of rising consumer confidence and the generous wage and benefit increases included in the 2005 budget.

Consumer price inflation rose above 12% at end-2004 and stood at 14.6% year on year in May 2005. Inflation is expected to remain high, owing to sharply rising incomes and an ongoing increase in producer prices, which is at least in part being passed on to consumers. A rise in administered prices, which were generally kept down in 2004 because of the approach of the election, will also add to inflation.

The currency's recent strengthening against the US dollar will nevertheless contain the pressure on prices, as it is expected to permit a slightly tighter monetary policy. Moreover, the government's fiscal policy in the second half of 2005, although remaining lax, will at least be more prudent than during the year-earlier period. Inflation is expected to fall to around 12% by the end of 2005 as a result, and then to drop more steeply, to around 8%, by end-2006.

During the past three years the National Bank of Ukraine (NBU, the central bank) had often intervened on the interbank market to keep the hryvnya's exchange rate against the US dollar essentially unchanged. The central bank signalled a shift in policy in April 2005, when it allowed the hryvnya to appreciate by 3%. Since then the exchange rate of the hryvnya to the US dollar has remained stable.

The April appreciation is so far proving to be a one-off attempt by the NBU to mitigate risks inherent in the continued large-scale inflows of export earnings and increased interest from foreign investors in the Treasury-bill market. The volumes of US dollars that these inflows were forcing the NBU to purchase, in order to keep the exchange rate stable, were having an increasingly inflationary effect.

However, a further sharp shift in the exchange rate of the hryvnya to the US dollar is not expected. The hryvnya is now forecast to remain broadly stable, appreciating only moderately in 2005-06. This will translate into a real effective appreciation, in view of inflation differentials and the expected greater stability of the US dollar against the euro.

Ukraine's current-account surplus is expected to fall from the high of 10.5% of GDP recorded in 2004. Steel prices in 2005 will not enjoy the same growth recorded in 2004. The increase in export revenue will slow accordingly--a trend that will be reinforced by some easing in Russian import demand.

The rise in import expenditure will therefore outpace export growth and lead to a narrower current-account surplus, which we forecast at the equivalent of 6% of GDP. The current-account surplus is set to narrow further, to around 2.4% of GDP, in 2006, when prices for steel are forecast to drop by almost 30%.

Source: The Economist Intelligence

US Intellectual Property Sanctions Against Ukraine Will be Cancelled by End of 2005 DPM Rybachuk Predicts

KIEV, Ukraine -- Deputy Prime Minister for European Integration Oleh Rybachuk predicts that the United States will cancel its intellectual property sanctions against Ukraine by the end of this year, following adoption by the Verkhovna Rada of the law introducing criminal responsibility for violations in export and import of laser discs. Rybachuk made this statement to Ukrainian News.

"Yes, it is possible this year. I think, it will be in autumn because now it is a summer holiday time," he said. Rybachuk noted that the adopted law may help to remove a great deal of problems in the talks with the US on Ukraine's accession to the World Trade Organization and rendering Ukraine a full market economy status (in antidumping investigations).

"Most of the problems [in the talks with the US] were related to a demonstrative unwillingness of the old Ukrainian government to pass the law that attributes intellectual piracy to a crime," the deputy prime minister said.

Rybachuk added that the US revises its black list of countries uncooperative in the efforts against intellectual piracy every year (in April), but still it made Ukraine believe that it is ready to remove Ukraine from the list if it will show progress in this issue.

Today Ukraine has no need to submit an official application for revision of the US black list decision in relation to Ukraine, and the talks will be conducted at the expert and diplomatic level, Rybachuk opined.

"It has been envisaged. Now it is up to diplomacy. There will be no loud declarations, it is an expected reaction [of the US]," he said.

As Ukrainian News earlier reported, Rybachuk believes that changes in the legislation on laser disks in accordance with WTO requirements are a compulsory precondition for WTO entry.

The Verkhovna Rada amended the law on laser discs on July 6. The law makes amendments to the Criminal Code, the Law "On Peculiarities of State Regulation of Business Activity, Connected with Production, Export, Import of Discs for Laser Reading Systems," and the Law "On Licensing of Certain Types of Business Activity."

In April 2001, the US government imposed prohibitive tariffs on USD-75-million worth of imports from Ukraine because of its failure to enact legislation to crack down on sound recording and optical media piracy.

On April 29 of this year, the US kept Ukraine on its Special 301 Report of countries having problems with fulfillment of intellectual property rights (IPR) and preserved trade sanctions with respect to Ukraine. Special 301 Report for 2005 lists a total of 52 countries or economies for IPR-related problems.

Moreover, Ukraine is the only country designated a "priority foreign country" (showing highest level of infringements) and remains subject to trade sanctions. The US Trade Representative announced in May 2005 that a Special 301 out-of-cycle review would be commenced in 2005 to monitor Ukraine's progress in passing amendments to its optical media law.

Source: Ukrainian News Agency

First Defeat for Ukraine's New Leader Raises Doubt on Reforms and Exposes Weaknesses of His Team

KIEV, Ukraine -- The mayhem in Ukraine's parliament last week not only dealt a humiliating first defeat to the nation's new pro-Western leader, but raised doubts about his ability to enact promised reforms by exposing weaknesses of his team, analysts say.

President Viktor Yushchenko's administration began last week hoping to deliver the international community concrete results of its pro-Western ambitions -- passage of 14 bills required for Ukraine's bid to join the World Trade Organization.

Ukrainian Parliament Speaker Volodymyr Lytvyn, top right, and his first deputy Adam Martunyuk, top left, look at as lawmakers fight around the rostrum
It ended it with a bleak picture -- in chaotic sessions marked by fistfights and bedlam, lawmakers approving only half of the bills before adjourning for their summer recess.

"The authorities faced a most serious test," wrote the respected Dzerkalo Tyzhnya weekly. "They failed." "This was the first real defeat for the new team," said Vadim Karasyov, an analyst.

Passing the WTO bills was key because Ukraine is hoping to enter the 148-member club by the end of this year, ahead of Russia with whom tensions have risen since Yushchenko mounted an "orange revolution" to defeat the Moscow-backed candidate in last year's presidential election.

It would have translated Yushchenko's oft-repeated aspirations to drive Ukraine toward eventual membership in the European Union into concrete results.

"Everyone has tired of declarations not backed by real reforms, both here and abroad," Dzerkalo wrote.

But now Kiev's bid to join the WTO at its ministerial meeting in Hong Kong in December is in real jeopardy, analysts say.

Parliament must still approve the remaining bills, but when it reconvenes in September, its focus will be on a legislative election next March, which promises to be as bitterly-fought as last year's presidential race.

And though Yushchenko put a brave face on his defeat -- "the president is certain that the rest of the legislation will be passed before October," his press service said in a statement -- others did not share in the optimism, both for the WTO bills or any other painful reforms.

"This parliament will not approve 'euroeconomic' rules of the game when it returns," Dzerkalo wrote. The week wasn't supposed to end like this.

After Prime Minister Yulia Tymoshenko announced that consultations with lawmakers showed that nearly two-thirds of the chamber would back the WTO measures, Yushchenko and the entire cabinet came to the legislature on Tuesday evening.

It was the day before a WTO committee examining Ukraine's bid was to meet in Geneva and the administration was hoping all 14 bills would be approved as a packet.

But lawmakers balked, refusing to even consider the measures. Yushchenko left the chamber empty-handed.

During the next two days, bedlam erupted every time a WTO bill came up for a vote, with opposition deputies swarming the speaker's tribune, sounding sirens through megaphones, and throwing occasional punches at their ideological opponents.

Most in Kiev blamed the government for the debacle, saying it had had tried to ram through the legislation without carrying out necessary consultation with lawmakers.

"You can't substitute dialogue and arguments with blatant pressure," said parliament speaker Volodymyr Lytvyn. "The only information I had on some of the bills that I was putting up for a vote was their number."

Moreover, the government failed to secure support from its allies -- many Socialist deputies voted against the measures.

Yushchenko added fuel to the fire by turning a blind eye on members of his administration who had not officially given up their deputy seats, as dictated by law and demanded by the opposition.

"By allowing his subordinates to break the law so obviously, the president gave the opposition a major trump card," wrote the Den daily.

Meanwhile trade officials in WTO's seat in Geneva took a cautiously optimistic tone, applauding the fact that the government did manage to push through some important bills, but warning that much remained to be done.

"It looks quite good, but... everything still very much depends on what happens from now to autumn," said a trade official in Geneva who requested anonymity.

Source: Agence France Presse

PM Tymoshenko Defends Handling of WTO Bills - Blames Moroz and Lytvyn for Obstructing Their Passage

KIEV, Ukraine -- Prime Minister Yuliya Tymoshenko has robustly defended the government's efforts last week to push through parliament a package of 14 bills essential to Ukraine's WTO entry, and blamed two allies – Socialist Party leader Oleksandr Moroz and parliament speaker and People's Party leader Volodymyr Lytvyn - for obstructing their passage.

Prime Minister Yuliya Tymoshenko
Speaking during a 20-minute studio interview on One Plus One TV's weekly news review programme on 10 July, Tymoshenko dismissed suggestions that the government had put undue pressure on parliament to adopt flawed documents.

"Don't listen to these stupidities, when they say that the government submitted something in haste, that it submitted half-baked documents, that something was not agreed with MPs," she said. "When you hear such criticisms of the government, you should know that the government is being obstructed from working."

Tymoshenko attributed parliament's failure to adopt the full package to the fact that the country is already in the run-up to the parliamentary elections in March 2006.

"Moroz's faction, which I respect a lot; Volodymyr Lytvyn in Zerkalo Nedeli hinted that he has a self-sufficient force that will take part in the elections independently; Regions of Ukraine and the United Social Democratic Party - these are all opponents in one way or another," she said.

Tymoshenko repeated her challenge to the most vociferous critic of Ukraine's WTO entry, Communist leader Petro Symonenko, to debate the issue on TV.

Tymoshenko also said that she had spoken to Interior Minister Yuriy Lutsenko about rumours in the press that the ministry had received instructions to look for material compromising her and that he assured her this was completely out of the question. "The minister's words are enough for me," she said.

Source: BBC Monitoring Service

Ukraine Rejects Gas Theft Accusations

KIEV, Ukraine -- Ukrainian Prime Minister Yulia Tymoshenko said Ukraine's national company Naftogas Ukrainy is not siphoning off gas in excess of contract volumes.

"I would not like anyone to humiliate Ukraine or say things that are not true," Tymoshenko said in remarks about Russian President Vladimir Putin's statement that Russia would be prepared to cooperate with Ukraine in the gas sector if Ukraine stops "snitching gas."

Tymoshenko also said that Ukraine is "scrupulously registering all flows of gas, including transit gas, and does not deserve such statements."

"We have never taken and will never take a single droplet of gas that does not belong to us," the Ukrainian prime minister said.

Source: Interfax

United Ukrainian Orthodox Church Movement Gathering Speed

KIEV, Ukraine -- More than a thousand years ago, a Slavic prince ordered his subjects into the Dnieper River that slices through the Ukrainian capital to baptize themselves in his newly adopted faith. Now the powerful Russian Orthodox Church, which emerged from that christening, is losing control over its Ukrainian birthplace.

Ukrainian Patriarch Filaret
Having broken free of Russia's political grip in last year's Orange Revolution, many Ukrainians are now turning their nationalistic impulses toward religion, and with tacit backing from their president, Viktor Yushchenko, are seeking to create an independent Ukrainian church - an equal to Moscow, rather than a daughter.

To lose this predominantly Orthodox nation of 48 million would be a devastating blow for the Russian Orthodox Church, significantly shrinking the size of its flock and its global clout. It could sever one of the oldest links between the two neighbouring countries, dealing another setback to the Kremlin's efforts to maintain influence in the former Soviet republics.

"Russia understands and is fighting to keep the Ukrainian church . . . if it loses the church, Moscow doesn't have any hope of ever returning Ukraine into a revived Russian empire," said Patriarch Filaret, who heads the breakaway Ukraine Orthodox Church Kyiv Patriarchate.

Two breakaway churches who set themselves up after the end of Soviet rule are now talking about unifying. This would create a strong independent church boasting nearly 4,700 parishes and 3,400 priests. Although still smaller than the Ukrainian Orthodox Church Moscow Patriarchate, as the Russian Orthodox Church is called here, its size could nudge Patriarch Bartholomew, the spiritual leader of the world's 200 million Orthodox, into recognizing the new church.

That would be a significant stamp of legitimacy that Filaret believes will prompt many priests and parishes to switch sides.

Losing Ukraine would cost the Russian Orthodox Church not only followers, but also valuable church property, including some of Russian Orthodoxy's most revered sites. The oldest and holiest monastery, the Pechersky Lavra, remains under the control of the Moscow Patriarchate. But around a bend in the Dnieper, the majestic Vydubytsky Monastery, which commemorates the mass baptism ordered by Volodymyr in 988, is in the hands of the breakaway church.

Russia's political, cultural and religious domination of Ukraine dates back to 1654, when a Ukrainian Cossack leader signed an alliance with Russia, and the church is basically "an avant garde of Russian influence in Ukraine," says Ivan Dzyuba, a religion analyst with Ukraine's National Academy of Science. Critics say the church promoted unity between the two peoples at the expense of Ukrainian identity - particularly during Soviet times.

Ukraine renewed the push for its own independent Orthodox church shortly after the Soviet Union dissolved in 1991. Resistance by the Russian church sparked a division that resulted in three separate Ukrainian churches: the Moscow Patriarchate, the breakaway Kyiv Patriarchate, and its splinter, the Ukrainian Autonomous Orthodox Church.

The Moscow and Kyiv churches are the two dominant ones, and differ little in liturgical terms. It's not unheard of for Ukrainians to marry in one church and baptize a child in another. Opinion polls suggest many Ukrainians identify themselves simply as neither Moscow-nor Kyiv-aligned, just Orthodox.

The choice is often more political than spiritual.

"Of course, our links with Russia are very strong," said Nina Venhar, 57, emerging from one of the cool, candlelit churches that make up the Vydubytsky Monastery. "We are all Slavs and Russia has always been the most dominant Slavic country, but Ukraine has detached itself so why shouldn't our church also enjoy that independence?"

For Ukraine's new government, which has been using Cossack symbols to strengthen Ukrainian identity, the need for an independent church is also driven by political concerns.

During last year's presidential campaign, church leaders insisted that they weren't meddling in politics, yet priests and monks from the Moscow Patriarchate regularly marched through Kyiv's streets holding icons and crosses aloft in support of the Russian-backed candidate, Viktor Yanukovych. And Filaret and clergy from his breakaway church were often on stage blessing the crowds at the pro-Yushchenko rallies.

The Moscow Patriarchate insists it too wants a Ukrainian Orthodox church as "an equal sister in the family of Orthodox Churches, but we are going toward this on a canonical path," its leader Metropolitan Vladimir told The Associated Press in written response to questions.

The Russian Orthodox Church's powerful Alexy II, however, has given no indication that he would consider loosening his church's grip on Ukraine.

The breakaway churches hope to force his hand. The Kyiv Patriarchate and Autonomous Orthodox Church agreed in May to begin reunification talks. The next move would be winning official recognition from Bartholomew of Constantinople.

In March, Archbishop Vsevolod of the Ukrainian Orthodox Church in the United States, announced that under canon law, the Moscow Patriarchate has jurisdiction only over territory that it claimed up to the year 1686 - an area that didn't yet include Ukraine.

Vsevolod said he was pronouncing the position of the "Mother Church" in Constantinople. But Alexy fired back that redrawing jurisdictional boundaries could destabilize the entire Orthodox world.

"Such a reconsideration could affect not only Russia but practically every local church and could become the reason for many conflicts," Alexy II said in an interview published on his church's Web site.

Source: CNews

Putin Promises Stable Gas Supplies to Europe, Says Ukraine Must Give Guarantees

GLENEAGLES, Scotland -- Speaking at the G8 summit in Gleneagles, Scotland, President Vladimir Putin assured his European partners that Russia will do everything to ensure stable energy supplies. At the same time he stressed that a project to deliver Russian natural gas to Europe via Ukraine was only possible if Kiev gave clear guarantees that it would honor commitments.

Putin Speaking at G8 Summit
A member of the Russian delegation at the summit told the RIA Novosti agency that the issue of stable supplies of energy resources has been raised during a discussion which focused on economic development.

“The president said that Russia would do everything possible to ensure the stable development of the global economy,” the official said. He also added that Putin told the other G8 leaders about specific energy supply projects and stressed that Russia would make every effort to develop transport infrastructure to guarantee that the country’s partners received sufficient energy resources.

The Russian president informed his colleagues in detail about a project to build an “eastern” oil pipeline from East Siberia to the Pacific Ocean. He also told them about plans to construct an oil pipeline from Siberia to the White Sea, which will be used to supply the United States with oil, and the Baltic Pipeline System, which should supply Europe and the U.S. with oil. The delegation member said that Putin had told the G8 that Russia planned to increase its supplies of natural gas to 40 billion cubic meters by 2010.

Speaking of the current deliveries of natural gas to Europe, Putin said that the deliveries of gas via Ukraine were possible only if Kiev gave clear guarantees that it would honor its commitments. “The president said Ukraine was hard to deal with at the moment,” the agency source said. “There is a tri-party project involving Germany, but the relevant agreement with Ukraine has not been signed yet.”

Putin said further work on the project would only be possible if Ukraine gave clear guarantees. Ukraine has demanded that a natural gas consortium established by the Russian and Ukrainian presidents, and the German chancellor in 2002, be closed down. Simultaneously, it is holding talks with Turkmenistan, a major gas producer in Central Asia, on direct supplies of Turkmen gas and the construction of a gas pipeline to bypass Russia. The gas consortium, which planned to build a natural gas pipeline from Bogorodchany to Uzhgorod, on Ukraine’s western border, would allow Russia’s natural gas monopoly Gazprom to control gas deliveries through Ukraine’s pipeline network.

Since President Viktor Yushchenko and his team came to power in the wake of the “orange revolution” in winter 2004, Ukraine has been trying to reduce its dependence on Russia’s energy resources. The latest move by Naftogaz Ukraine, the country’s national gas company, was to warn Gazprom that it may halt deliveries of Russian gas to European customers if Ukraine does not receive enough gas for its own needs.

Source: MosNews

Gaultier Couture: Orange Revolution Chic

PARIS, France -- Fashion celebrated the biggest democratic win of the century Friday, when Jean Paul Gaultier presented a couture collection completely inspired by the Ukraine.

With Ukrainian first lady Kateryna Yushchenko sitting front row, Gaultier sent out peasant girl blouses, Cossack coats and traditional costumes all given his inimitable spin and twist.

It was very much a case of rock meets revolution with Yushchenko placed just a few seats down from Christina Aguilera. The traditionally scantily clad rocker has moved her look majorly upmarket this week in Paris. Aguilera attended shows by Christian Dior and Chanel with new Jean Harlow silver hair, and at Gaultier appeared just seconds before the show began in a sexily severe black suit.

In recent seasons, the appearance of rock stars at couture generally heralds their intention of creating a collection of their own – Puff Daddy, Gwen Stefani, Beyonce, to name a few, all did precisely that. So perhaps we can expect some Aguilera ready-to-wear in the near future.

Whether it will look anything like Gaultier's very fine collection seems unlikely, indeed impossible, given the remarkable level of quality and finish these clothes exuded.

It helped that Jean Paul's creative team was in fine fettle. Odile Gilbert, our vote for the world's best hair stylist, whipped up tentacle-like woven strands of hair that mimicked the traditional extensions of Ukrainian country lasses. Frederic Sanchez, the season's best DJ, sampled funk, Slavonic orchestral sounds and the occasional orgasmic yelp of a very happy girl, into a particularly memorable soundtrack that summed up with a French twist the political and sexual liberation of the eastern European country.

Highlights on the catwalk in Gaultier's 3rd arrondissement headquarters included a splendid cashmere coat with Saga mahogany mink trim worn by Erin O'Connor, a layered boyar coat in inky black cashmere, a magnificently cut Cossack's jacket with Jesuitical sleeves and a stunning mallard green pants suit that was so cool it left you shaking your head. But our favorite was a Romanian velvet blouson in cobalt blue with steel and pearl embroidery worn over butter-colored suede pants.

For evening, Gaultier displayed patchwork folkloric dresses that could only be made in Paris or maroon lace sheathes finished with embroidery of flowers from the Steppes.

Let's raise a glass to this great couture display, or come to think of it a shot of Nemiroff vodka and an amuse bouche of caviar, like those served at the show.

Source: Fashion Wire Daily

A Protester in Ukraine Set Clothing on Fire

KIEV, Ukraine -- Ukrainian authorities have faced major problems, despite promises given in a fit of temper during the “orange revolution.” The cabinet seems to be helpless in fighting corruption and guaranteeing fair judiciary.

A man briefly set his clothing on fire and several others threatened self-immolation Friday during an anti-corruption protest outside Ukraine's parliament.

Yury Dyashchenko, 50, set his shirt ablaze, but then quickly took it off and put out the fire, leaving his hair slightly singed. Police, who brought reinforcements along with two ambulances, had tried to negotiate with the group earlier but backed off after another man doused himself with gasoline, reports the AP.

The protesters accused President Viktor Yushchenko and his new government of failing to fulfill pledges to crack down on rampant corruption among state authorities.

Dyashchenko, a lawyer from eastern Ukraine, accused a local mayor of stealing his company in early 1990s. He said all his attempts to reclaim his property in the court have failed because of corruption.
"Everything is corrupted and with new people in power it turned from bad to worse," he said.

Another man, Viktor Lavrynych, 42, said that "the courts are violating the laws in most of Ukraine.

"I supported Yushchenko but nothing has been changed," he said.

Yushchenko came to power promising fight corruption and end the favoritism and cronyism that tainted the 10-year rule of his predecessor Leonid Kuchma.

The protest action started on May, 16. The protesters organized a tent township in front of the Ukrainian parliament. None of the parliament members came to discuss the situation with the protesters, the leader of the human rights movement against corrupt justice, Nikolay Gubenko said, reports Pravda.Ru in Russian. Several days ago President Viktor Yushchenko met with the protesters and promised to help, but nothing has been done yet, says Gubenko.

Source: Pravda

OSCE-NATO Meeting in Ukraine Focuses on Disposal of Dangerous Rocket Fuel

KIEV, Ukraine -- Finding a comprehensive solution to the major threat to health and environment posed by the explosive missile fuel component, commonly known as melange, was the focus of a joint OSCE-NATO workshop that ended on Friday in the Ukrainian capital.

During the three-day workshop, experts and representatives of countries facing this problem (Georgia, Armenia, Ukraine, Uzbekistan, Azerbaijan, and Kazakhstan) have shared information on its extent and on the best technologically and environmentally sound solutions.

Melange in Storage Tanks
Melange is a highly unstable and explosive missile fuel component that was used for rockets and guided missiles in the former Soviet Union. It is a highly complex chemical substance, whose components are extremely reactive, volatile and highly toxic. It thus urgently requires neutralization.

After its collapse, large stocks were left on the territory of the former republics of the USSR. Many OSCE or NATO partner countries are unable to solve this problem alone due to the lack of necessary technical, material and financial resources. Therefore, international assistance is urgently needed.

"Melange disposal is a priority for us," said the Ukraine Deputy Defence Minister Volodymyr Tereshchenko, opening the workshop.

Dr. Chris De Wispelaere from the NATO Public Diplomacy Division said: "Bringing together so many specialists in melange in such a very short period of time illustrates that OSCE and NATO can indeed efficiently work together. I expect that this workshop will lead to a concrete joint OSCE-NATO work plan that will substantially contribute to melange conversion in all countries facing this threat to the environment."

During the workshop, a NATO Maintenance and Supply Agency (NAMSA) request for proposals for the provision of a mobile melange disposal plant was presented, and several companies discussed the best technologies available.

The Head of the OSCE Office in Yerevan, Ambassador Vladimir Pryakhin, presented an OSCE-led project in Armenia to convert approximately 875 tonnes of melange into liquid fertilizer, which could be used as a management model for other regions.

The Environment and Security Initiative, or ENVSEC (a partnership of the United Nation Environment Programme UNEP, the United Nations Development Programme UNDP, NATO and the OSCE to tackle environmental risks to human security) was also presented as a model of inter-agency co-operation that could bring donors' attention to remediate this hazardous military legacy.

As a follow-up to the workshop, an international team of experts will visit several melange storage sites in Ukraine to assess the environmental and health risks and assess the best options for remediation. The OSCE Project Co-ordinator in Ukraine will co-ordinate the expert's visit together with Ukrainian authorities.

Source: Noticias Info

Yushchenko Election Coalition Divided Over Role For Lytvyn

KIEV, Ukraine -- As the Ukrainian parliament adjourns today for its summer recess, Western observers are increasingly noting the divisions inside President Viktor Yushchenko's team. However, such commentaries typically focus on the wrong divisions.

Yushchenko (L), Lytvyn (C), Tymoshenko (R)
In a report entitled, "Political Rivalries Threaten Ukraine's Reforms," the Financial Times focused on divisions between Prime Minister Yulia Tymoshenko and the free-market proponents grouped around Petro Poroshenko, secretary of the National Security and Defense Council. This split between left-right populists (Socialists, Tymoshenko) and free marketers (Yushchenko, Poroshenko, First Deputy Prime Minister Anatoliy Kinakh) has been noted before. Although this division does exist, and personal relations between Tymoshenko and Poroshenko are poor, focusing on this schism misses two fundamental points.

First, although a populist, Tymoshenko is not ideologically determined, unlike left populists in the Socialist Party. This was clearly seen in parliamentary debates over legislation to join the WTO, which Tymoshenko and her faction supported but the Socialists (and Communists) opposed. Tymoshenko's penchant for state capitalism was also short lived, from February to May, since she no longer supports price controls. The memorandum signed by the government, president, and parliament at the recent mini-Davos summit in Kyiv ended speculation about mass re-privatization.

Second, Yushchenko must decide the expediency of forging an electoral alliance with Parliamentary Speaker Volodymyr Lytvyn for the March 2006 parliamentary elections. Such an alliance would include Lytvyn's People's Party (the former Agrarians), Yushchenko's People's Union-Our Ukraine, and Tymoshenko's Fatherland party. Currently polling only 2-3%, Lytvyn's party might not cross the 3% threshold on its own.

According to Serhiy Skrypnyk, head of the Kyiv-based Evolution Media Research and Analysis Service, "Yushchenko needs Lytvyn because Tymoshenko is too radical for Yushchenko. She still relies on revolutionaries more than on the ruling elites. Lytvyn helps Yushchenko to incorporate the former, not-too-compromised elites in the new authorities while distancing them from the opposition."

Yushchenko's team needs to prevent Lytvyn from joining the ranks of the hard-line opposition parties (Regions of Ukraine and Social Democratic Party-United) or from becoming a third force positioned between the authorities and the hard-line opposition.

First Deputy Prime Minister Roman Besmertnyi, the main organizer behind Yushchenko's new People's Union-Our Ukraine Party, does not see Lytvyn bringing anything positive to an alliance, but his inclusion would ensure "that there will be no minuses" from him either.

Lytvyn sat on the fence throughout the 2004 presidential election, although his People's Party officially supported Prime Minster Viktor Yanukovych. Lytvyn, however, did keep parliament open during the protests and when the legislature refused to accept the official results declaring Yanukovych the winner.

Lytvyn's parliamentary faction has tripled to 40 deputies since the Orange Revolution, as moderate defectors from former president Leonid Kuchma's camp have rallied under his umbrella. Lytvyn also has the loyal Democratic Ukraine satellite faction of 20 deputies, giving him a reliable bloc of at least 60 deputies.

Poroshenko remains Lytvyn's main lobbyist in the Yushchenko coalition. Speaking about Lytvyn during the 2004 election Poroshenko averred, "I am certain that this person undertook a major role in the revolution". He and Lytvyn have similar backgrounds in the Kuchma camp. Until 1998-99 he was aligned with the SDPUo, but after leaving the SDPUo Poroshenko created the Solidarity parliamentary faction with Lytvyn's assistance. In 2000-2001 Solidarity merged with Regions of Ukraine.

Like Yushchenko, Poroshenko only went into the opposition against Kuchma after the April 2001 parliamentary vote of no confidence in then-Prime Minister Viktor Yushchenko's government. New transcripts of conversations in Kuchma's office in June 2000, only ten months earlier, quote Poroshenko describing his loyalty to the president. The transcripts also reveal the hostility Poroshenko and Kuchma held toward then-First Deputy Prime Minister Tymoshenko.

Poroshenko and Lytvyn are also united by their reluctance to pursue the inquiry into the murder of opposition journalist Heorhiy Gongadze. Although head of the presidential administration when Gongadze was murdered in fall 2000, Lytvyn has not been called to give testimony to the Prosecutor's office. Rumors suggest that Lytvyn "earned" immunity thanks to his stance during the 2004 election.

Ukrainian commentators and Gongadze's widow, Myroslava, believe that it was Lytvyn who lobbied Kuchma to order his Interior Minister to "deal" with Gongadze in September 2000. Lytvyn has blocked the parliamentary commission investigating the murder from presenting its findings, as the report accuses Lytvyn of involvement. Yushchenko and his Our Ukraine faction have also voted against hearing the report, which by law should have been heard in 2003.

Local parties members and key Yushchenko allies in Kyiv are resisting an alliance between People's Union-Our Ukraine and Lytvyn, because they see former Kuchma officials taking political refuge in Lytvyn's party. State Television Channel 1 President Taras Stetskiv complained that those who have joined Lytvyn's People's Party "are all from Kuchma's guard!". He fears that an alliance with these former Kuchma supporters would harm the ratings of People's Union-Our Ukraine.

Besmertnyi admitted that local branches of People's Union-Our Ukraine are pressuring him to not cooperate with Lytvyn. The head of the Kharkiv branch of the People's Union-Our Ukraine, for example, complained that former Kuchma supporters are joining Lytvyn's People's Party to ingratiate themselves with the new authorities.

Lytvyn has fiercely responded by accusing People's Union-Our Ukraine and Tymoshenko's representatives of doing "everything in their power to discredit the idea [of an election alliance] at its birth". He is now threatening to have his party independently contest the 2006 election.

Source: Eurasia Daily Monitor

World Bank Urges Reforms In Ukraine

KIEV, Ukraine -- Paul Bermingham, the World Bank Director for Ukraine, Belarus and Moldova said on Wednesday that a doubling of World Bank lending to Ukraine over the next 12 months will be determined by the pace of reform, reports Reuters.

Bermingham said lending was likely to exceed $500 million under a revised strategy by the new government of President Viktor Yushchenko, swept to power after "Orange Revolution" protests last year. "We're trying to help the government that has announced a very ambitious reform program but has sometimes struggled to turn it into actions," Bermingham said. "The purpose of our program is to respond to objectives we feel are very good objectives and help them realize them in a concrete way for the benefit of Ukrainian people," he added.

Bermingham said he was encouraged to see movement on the country joining the World Trade Organization, which has sparked heated debate in parliament as the government pressed on with legislation needed to join the trade body. Yushchenko has said Ukraine hopes to secure WTO membership in October. Bermingham said WTO admission would boost foreign investment and open markets to the ex-Soviet state trying to move closer to the West and hoping for European Union membership.

But despite progress, the horizon was still clouded by political uncertainty over parliamentary election in March 2006 and status of a constitution approved by parliament during last year's crisis, said Bermingham. "I think the political situation will remain fluid through to the parliamentary elections and whether the constitutional changes approved during the course of the political crisis will actually take place," he added.

Bermingham also said Ukraine's economy was "sound" although there were concerns about inflation and a widening fiscal deficit.

Going forward, Bermingham said strengthened governance, tackling corruption, judicial reforms and property rights were crucial, especially for changing the business environment. "These are all areas the government has correctly diagnosed it needs to do more and I think its translating that diagnosis into the actions it wants to do is the challenge over the next one to two years," he said. "It is policy and institutional reforms agendas that will attract more investment, that will liberate domestic entrepreneurs from the bureaucratic shackles within which they operate today, so that they continue strong growth going forward," Bermingham added.

In a related piece, Reuters reports that the World Bank said on Wednesday it had has approved funding of $251.26 million to back the Ukrainian government efforts to reform its economy and move closer to the West. "The Ukrainian government has set out an ambitious agenda designed to transform the economic and social development of the country and to enhance Ukraine's role in the global economy," Bermingham said. "We in the World Bank have adapted our programs to assist the government to achieve these goals. We now see a real opportunity to pursue the fundamental reforms needed to secure for Ukraine sustained strong growth and poverty reduction."

Ukrainian News adds that the $251.26 million loan is the World Bank’s First Development Policy Loan (DPL) for Ukraine. A World Bank statement said the DPL is the first in a planned series of three annual loans designed to help the government translate its objectives into a sequenced and prioritized program of actions.

In related news, the Associated Press writes that communists and pro-government lawmakers threw punches at each other Wednesday during an angry debate in the Ukrainian parliament over a package of bills needed for entry to the WTO . The session ended with only one of the necessary 14 measures being adopted, but Yushchenko's government remained optimistic that it will push through the bills. Lawmakers managed to approve legislation on the protection of intellectual property rights over compact disc production. Parliament is expected to continue discussion of the WTO bills Thursday.

Gaining membership in the WTO is seen as a major, short-term goal for Ukraine's new pro-Western government, which needs massive amounts of foreign investment to raise living standards in this nation of 48 million. Foreign investors had urged Yushchenko to ensure the bills were passed before parliament breaks Friday for its summer recess, fearing that a delay would dash Ukraine's hopes of WTO membership this year. The hurry is also due to fears that Russia will win WTO membership this year and then impose a series of new conditions on Ukraine, delaying Kiev's admission.

Source: World Bank

Learning a Lesson From Bulgaria

KIEV, Ukraine -- In the middle of June, the Razumkov Center and the Kyiv International Institute of Sociology tried to throw light on what Ukrainians think about making Russian the second official state language. The results of the poll showed that 56.2 percent of the nation’s population “are completely in agreement” or “somewhat in agreement” with the idea.



Still, giving in to the opinion of the majority of Ukrainians and granting Russian official status would be a big mistake on the part of lawmakers. Moreover, these data can be interpreted as evidence of the government’s insufficient energy in promoting Ukrainian.

At the beginning of the 1980s, when I was a schoolboy, I was given a table of subjects, among which were included “the native language” and “the Russian language.” The teacher asked us to cross out the “Russian” and pencil in “Ukrainian” instead. He explained that Russian was our native language. When I got a little older, I discovered that my beloved Jules Verne, Arthur Conan Doyle and Walter Scott didn’t exist in Ukrainian translation, and that I had to read these authors in Russian. I watched foreign films dubbed exclusively into Russian; only a few Soviet movies, meanwhile, were in Ukrainian. Entertainment, and the announcement of stations in the subway, and the signs in the stores – everything was in Russian. Back then I didn’t really think much about why I spoke Ukrainian at home but Russian everywhere else. I was just surprised by it.

Thinking about this issue and analyzing it started for me at the end of the 1980s, when the language issue become relevant. Back then it was easier for me to communicate in Russian than in Ukrainian. Then, in 1989, Ukraine’s Supreme Soviet passed the law on languages, which secured official state status for Ukrainian.

What has changed since then? Russian hasn’t given up its position. Russian schools are functioning, Russian language books and media are published, Russian translations are shown on television, Russian-language movies are screened, and the movies you rent are all dubbed into Russian. Even state officials are obliged to know Russian and to answer visitors in that language.

Ukrainian is in a significantly worse position. Ukraine lacks even one theater in which Ukrainian-dubbed movies are shown, the state doesn’t support the national book publishers, and the overwhelming majority of the mass media is in Russian.

The result is a closed circle. Since almost every Ukrainian understands Russian, there’s no sense in publishing books or making movies in Ukrainian. It’s possible that there’s nothing terrible about the fact that Russophone Ukrainians should exist – after all, the Irish are English-speaking, and everything is more or less fine.

But here we should recall the rebirth of Finnish. A hundred years ago, Swedish was widespread in Finland, especially in the cities – and now Swedish-speaking Finns practically don’t exist. In its own time, Bulgarian occupied second rank in Bulgaria, while Turkish, the language of the country’s former imperial master, ruled. Thanks to skillful linguistic politics, Czech became the basic language in the Czech Republic, where once German was widespread.

But there are other examples. In 1998, our neighbor Belarus made Russian its second state language. The result is that Russian has almost completely squeezed out Belarusian. If things go on like they have, that country’s language could simply die out.

Even though they’re Russified, many Ukrainians have strenuously read Ukrainian books, consciously chosen Ukrainian mass media outlets, and watched Ukrainian-language TV – and with time their knowledge of Ukrainian became deep enough that they can speak it fluently. Furthermore, I know of cases in which ethnic Russians who came not long ago to Ukraine thoroughly studied Ukrainian. And if many Ukrainians can’t speak Ukrainian fluently, that’s not because they don’t wish to, but because of a lack of Ukrainian-language environments, which have to be energetically set up.

The sociologists’ data doesn’t point to the way things have to be. When the experience of other countries is added to them, they are rather an incentive to action. The Russian government granted numerous advantages to its book publishers. Many federal taxes were cancelled, and many municipal taxes pared down, for publishing houses. The result was that Russian publishing blossomed and took over the Ukrainian market. The Ukrainian government should do the same thing. It also follows that the use of Ukrainian should be encouraged on television, in the movies, and in the print media in every possible way. The degraded Ukrainian movie industry should be helped. And, in the end, more people will speak Ukrainian.

In other words, the Ukrainian government has to start creating Ukrainian-speaking environments, and the sooner the better.

Source: Kyiv Post

Alfa Moves to Secure Ukraine Expansion

MOSCOW, Russia -- Alfa Group said on Thursday that it had decided to call an extraordinary shareholders' meeting of the country's second largest mobile firm, VimpelCom, in mid-August to discuss expansion in Ukraine.

Alfa Telecom, Alfa's telecoms arm, said in a statement that the exact date would be announced in the next few days.

Alfa Chairman Mikhail Fridman
VimpelCom is torn by a conflict between two key shareholders, Alfa and Norway's Telenor, over whether the company should expand in Ukraine, where Telenor controls the country's second-biggest mobile phone company.

Telenor opposes the purchase of a small firm, Ukrainian RadioSystems, saying the financial arguments in favor of it are weak.

Alfa wants VimpelCom to expand in Ukraine, as the Russian mobile phone market is close to saturation. The management has warned that time is running out for expansion.

"Alfa Telecom still thinks that the expansion of VimpelCom in the Ukrainian mobile services market is in line with the company's long-term interests and its strategy approved by the shareholders," the statement said.

The Ukrainian issue turned into a heated battle over how many independent directors proposed by Alfa and Telenor should be on VimpelCom's board, with Alfa managing to push through two and Telenor one.

With the two key shareholders at odds over the issue, minorities have become more important.

"Alfa Telecom thinks that minority shareholders have demonstrated their support for the company's management initiative to expand in Ukraine by supporting two candidates nominated by Alfa Telecom," the statement said.

Even if the shareholders' meeting backs the Ukrainian RadioSystems purchase, the decision would still not be binding under VimpelCom's charter, which requires board approval by a supermajority, or eight votes out of nine.

There are three representatives of Alfa, three representatives of Telenor and three independent directors on VimpelCom's board. However, analysts have said that Alfa could use the meeting to try to change the charter.

Telenor has opposed what it calls "illegal" efforts by Alfa to change the company's charter to allow decisions by simple board majority.

Alfa Group wants to hold a stake in a global mobile phone operator, the Financial Times quoted Alfa chairman Mikhail Fridman as saying on Thursday.

"The past few years have shown that the future belongs to global companies such as Vodafone and Orange, and we are much more interested in being a minority investor in a larger multinational company than remain investors in several national companies," Fridman said.

Alfa owns stakes in Russia's second-largest mobile phone company, VimpelCom; in Russia's third-biggest mobile operator, MegaFon; and in Golden Telecom, the country's top independent fixed-line operator.

Source: The Moscow Times

Nevzlin poses challenge to Leviev in Ukraine-Israel trade

TEL AVIV, Israel -- Russia is calling for his extradition to face fraud charges, but former so-called oligarch Leonid Nevzlin has other plans. The Russian-Israeli billionaire now living in Israel intends to set up a chamber of commerce linking the Ukraine and Israel, "to support the young European democracy," as he puts it. His intention, say those close to him, is not to frontally challenge diamond baron Lev Leviev, who already runs a chamber of commerce connecting the two countries.

Leonid Nevzlin
Nevzlin's sources denied meaning to compete with Leviev, saying the goal was to benefit Ukrainian democracy through trade.

Leviev's associates commented that the existing chamber of commerce is working perfectly well; but recent events led it to lower its profile, so it wouldn't be considered as wielding political influence.

"We welcome competition designed to promote trading relations between the Ukraine and Israel," Leviev's associate said, "but any new body will have to prove itself."

Leviev's cronies stressed that his activities in the Ukraine are not motivated by personal or commercial gain; they are purely philanthropic in nature. Among other things he has been responsible for building 25 schools, they said, adding, "We hope that the other activities are also being carried out for pure motives, not personal interests."

Nevzlin, 45, is one of the owners of Yukos, which the Russian government has stripped of assets in its fight against the former oil giant's shareholders. His fellow owner Mikhail Khodorkovsky has been sentenced to nine years' prison for fraud, tax evasion and related crimes, while Nevzlin fled to Israel and refuses to return to Russia.

Just yesterday the Russian Prosecutor General's Office petitioned Israel for Nevzlin's extradition, based on new materials delivered to Interpol. Russia is accusing Nevzlin of murder and attempted murder.

Israel has an extradition treaty with Russia but Prime Minister Ariel Sharon has said that Nevzlin will not be sent back, for fear his trial would not be fair.

Nevzlin himself denies any wrong-doing and says the Kremlin is persecuting him for his opposition to president Vladimir Putin.

Meanwhile, MosNews reported this week that Khodorkovsky and his erstwhile partner Platon Lebedev will face new charges of money-laundering. Lawyers on Khodorkovsky's behalf say they do not know what the new charges will be, and Nevzlin has called them another fabrication, according to the Gazeta.ru website.

Source: Haaretz

Ukrainian Opposition Goes After The Microphones

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko yesterday signed a decree dismissing First Deputy Interior Minister Aleksandr Fokin, who accused his boss of arranging the tapping of telephone conversations of high-ranking Interior Ministry officials. Kiev has decided to suppress the scandal by firing its initiator, and the center of tension shifted yesterday to the Supreme Rada, where deputies spent the whole day sorting out their relations with one another.

The parliamentary microphones took the brunt of the political battle in the Supreme Rada
There was already a whiff of a brawl in the Supreme Rada the day before. Representatives of opposition factions blockaded the parliamentary rostrum, demanding that their colleagues in the executive branch resign their powers as deputies. Ukrainian President Viktor Yushchenko had tried to get the same from a number of bureaucrats. The combined efforts paid off. Petr Poroshenko, the secretary of the National Security Council, yesterday submitted a letter of resignation from his powers as deputy.

This success reinforced the belief of the parliamentary opposition, especially members of the Communist Party of Ukraine (KPU), that they were on the right track in the political struggle. They continued to blockade the rostrum, despite the fact that Speaker Vladimir Litvin ordered the cost of the microphone torn from the parliamentary leader's seat the day before to be deducted from the salary of one of the deputies.

The ruling parties weren't asleep either. At the very start of the session, about 30 deputies from the Yulia Timoshenko Bloc, the People's Party, and the Our Ukraine faction surrounded the rostrum. These elected representatives of the people had received instructions from the government to ensure passage of a package of laws dealing with Ukraine's accession to the WTO. However, as soon as the Speaker tried to announce discussion of the question entered on the agenda, Communist Party member Aleksander Bondarenko began to break off the speaker's microphone. Members of the People's Party tried to stop him. A scuffle broke out. After a while, passions cooled, but the Communist deputies refused to leave the rostrum.

Somewhat later, when Litvin gave the floor to Prime Minister Yulia Timoshenko in the discussion of the draft bills on WTO accession, the Communists roused themselves again. In order to prevent the prime minister from speaking, Communist Party member Aleksey Bondarchuk turned on the siren. Andrey Shkil, Timoshenko's colleague in the bloc, tried to obstruct the Communist. Communist Yury Salamatin came to his comrade's defense, and a fight broke out between him and Shkil. Social Democratic Party member Nestor Shufrich pulled the fighters apart, but the remaining deputies blockading the rostrum had already joined in the brawl.

Nevertheless, towards evening, the Supreme Rada passed the first of a series of laws required to accelerate the country's accession to the WTO and also approved another two draft bills on first reading. However, the deputies refused to consider several other key draft bills, despite the urging of Prime Minister Timoshenko and President Yushchenko, who asked parliament to pass another ten laws eliminating problems in the negotiations Ukraine's accession to the WTO before the end of this week.

Source: Kommersant

Ukrainian Forces Test Their Strength

KIEV, Ukraine -- A major scandal is brewing in Kiev involving the leaders of Ukraine's Interior Ministry. On Monday evening, First Deputy Interior Minister Aleksandr Fokin publicly accused his boss of ordering his telephone conversations tapped. Minister Yury Lutsenko yesterday denied these accusations and said he would seek his deputy's dismissal. Ukrainian President Viktor Yushchenko has the final say in the dispute.

First Deputy Interior Minister of Ukraine Aleksandr Fokin
Aleksandr Fokin's claim made on Ukraine's Channel 5 television on Monday evening had the effect of an exploding bomb. With no fear of airing his dirty laundry in public, Fokin went on TV to attack his immediate superior. “I have information that for a long time I and other deputy ministers have been subject to wiretaps on the minister's orders. Furthermore, I'm waiting for open provocations from the police who are directly under the minister. They've been illegally listening to my conversations with deputies and ministers. These are telephones that should not be tapped, and I'm not talking about cell phones or home phones,” Fokin said.

In stating his version of the causes of the dispute with Yury Lutsneko, Fokin, who is responsible for financial, material, and human resources in the Interior Ministry, noted that “many people dislike my position on the inviolability of the ministry's resource base.” He also recalled that he was appointed to his position by President Yushchenko, whom he had already advised of what he considered to be Lutsenko's illegal actions.

Lutsenko's response was not long in coming. At a press conference in Kiev yesterday, Lutsenko denied the accusations against him and advised that back on June 17 he had submitted a request for Fokin's dismissal. Lukin gave his lack of organizational skills and use of official duties in his family's interests as the reasons for getting rid of the first deputy minister. The minister said that his deputy used an official car for personal purposes and lobbied the interests of his company. According to the minister, he had pointed out the deficiencies of his deputy's work to him, but Fokin had not made the appropriate conclusions. The interior minister did not rule out the possibility of initiating a criminal case against Fokin. In conclusion, he expressed confidence that President Yushchenko would sign the request for Fokin's dismissal. “If he doesn't sign, I'll cooperate with him and hold discussions with him,” the minister noted.

Yushchenko must now become the arbitrator in the dispute between the two top officials in the Ukrainian power ministry.

Source: Kommersant

Ukraine Demands Payment for the Gas that was Not Given to Export

MOSCOW, Russia -- Yesterday, the acting head of Central Energy Customs of Ukraine (CEC) Viktor Vecher accused Gasprom of not paying for storage of 7.8 billion cubic meters of gas that was pumped into the Ukrainian underground storage facilities more than a year ago. Gasprom responded that the contract with Naftogaz of Ukraine, which supervises the storage facility, requires to pay the stored gas only at the moment of withdrawal. President of Ukraine Viktor Yushenko tried to calm down high-running passions and demanded from the government “to be more responsible to the organization and conduct of state gas policy.”



Yesterday morning, on the press conference, Taras Shepit’ko, the main inspector of custom controllers of CEC made a statement that Gasprom did not pay to Naftogaz for the storage of 7.8 billion cubic meters of its gas. Viktor Vecher confirmed this information. “We checked the underground storage facility only July 6 and verified the presence of 7.8 billion cubic meters of gas belonging to Gasprom,” he said. “The problem is that Gasprom did not pay for storage despite the fact that gas was kept in the facilities for storage only. Let Gasprom pay for it and take it out.”

Until this time, Ukrainian officials and representatives of Naftogaz agreed with the fact that Ukraine is the debtor because it did not put Russian gas for export. However, yesterday, Dmitry Marunich, deputy head of Naftogaz press service, when Kommersant asked him to make a comment about Vecher’s statement, said, “Read it. There is everything in there.”

Gasprom made the next statement after these events: “We do not have to react on the statements of people who have nothing to do with the agreement between Gasprom and Naftogaz which states we are paying for the storage upon withdrawal.”

Practically right after the statement from CEC, the press service of the Ukrainian president published Yushenko’s letter to the Ukrainian government. “The activities of Naftogaz of Ukraine cannot be a subject for political speculation but rather a strategic state interest. The emotional, not-well-thought-out public actions of the people, including those who have nothing to do with the company business, bring a lot of damage to the national market. The situation that appeared around Naftogaz of Ukraine activities makes the government approach more responsibly and delicately conduct state gas policy,” the letter said.

Whether the cabinet of ministers of Ukraine will listen to the words of the president will be clear Saturday—there is a session that is scheduled for this day which will examine the results of Naftogaz activities (Earlier it was thought that Alexei Ivchenko, head of the company, would give a report on Wednesday). Let’s note that yesterday evening, the press service of Naftogaz made public comments which contained words of Ivchenko: We have perfect personal relationship with the head of Gasprom Alexei Miller. But we have a probably on a political level.”

Source: Kommersant

Russia Opposes NATO Naval Exercises in Black Sea

MOSCOW, Russia -- Russia has opposed the North Atlantic Treaty Organization (NATO) conducting naval exercises in the Black Sea, saying such operations are only open to countries from the region, local media reported.

Defense Minister Sergei Ivanov said Wednesday that only Black Sea countries — Russia, Turkey, Bulgaria, Romania, Ukraine and Georgia — have the right to take part in naval exercises in the region.

However, Ukraine has been seeking NATO membership, and under a bilateral accord Russia, whose naval bases were left on the Ukrainian Black Sea coast after the collapse of the Soviet Union, has to withdraw its fleet from Ukraine’s Crimea by 2017.

Ivanov said Russia allocated $32.14 million for the building of naval bases at its largest Black Sea port of Novorossiysk will add another $35.71 million next year for the project.

Source: MosNews

More Scuffles In Ukrainian Parliament

KIEV, Ukraine -- Lawmakers scuffled for a second day today as parliament tried to debate legislation needed for entry to the World Trade Organization (WTO), forcing the session to end early.

Communists and pro-government lawmakers shoved each other and threw punches, crushing up against Parliament Speaker Volodymyr Lytvyn. Bodyguards escorted Lytvyn out of the hall through the shoving crowd.



Lytvyn adjourned the session after about two minutes, shouting to make himself heard above wailing sirens sounded by Communists. Lawmakers were scheduled to return in the evening for more debate.

President Viktor Yushchenko's government is determined to push through the 14-bill package, whose passage, foreign investors say, will be a critical test of the government's pro-West ambitions.

But Communists and the Socialist Party have launched aggressive attacks, warning that the legislation would make the economy subservient to foreign demands.

Source: Radio Free Europe

Chernobyl Victims Heal in Cuba

TARARARA, Cuba -- At a beach resort near Havana, children with bald heads and skin lesions splash with joy in the warm Caribbean sea. They are victims of radiation fallout from the worst civilian disaster of the nuclear age — the 1986 power plant explosion in Chernobyl — and are in Cuba for treatment.

“I want to stay here,” says Sveta, a blue-eyed 15-year-old from Ukraine’s capital Kiev whose eyelashes are beginning to grow back.

Since 1990, communist Cuba has treated free of charge 18,000 Ukrainian children for hair loss, skin disorders, cancer, leukaemia and other illnesses attributed to the radioactivity unleashed by the reactor meltdown years before they were born.

Up to 800 children travel to the Tarara Paediatric Hospital each year for at least two months, accompanied by parents or tutors. Some stay for years. They live in bungalows built as beach houses by rich Cubans before Fidel Castro’s 1959 revolution.

Most get treatment for hair loss, spending 15 minutes a day under an infra-red light after a lotion made from human placenta is applied to their heads. Hair grows back in 60 per cent of cases, said Dr. Giraldo Hernandez.

Many children suffer from vitiligo, a patchy loss of skin pigmentation, which is treated with another placenta-based lotion and lots of sunlight on the beach. Psoriasis is also common.

More serious cases of cancer require chemotherapy or surgery.

Six leukaemia patients have received bone marrow transplants in Cuba.

While some disorders, such as the 30-fold increase in thyroid cancer among Ukrainian children, are directly linked to the Chernobyl accident, scientists do not know whether hair loss is caused by radioactive pollution or post-traumatic stress.

Recreation in the tropical sun is as much a part of the cure as the medical treatment, Cuban doctors say.

Source: Reuters

Ukraine to Investigate Diamonds-for-Arms

KIEV, Ukraine -- Ukraine's law enforcement agencies are set to begin an investigation into recent allegations by Amnesty International that the former government was involved in illicit weapons sales to the Congo and neighboring countries, the Associated Press reported.



Dmytro Svistkov, a spokesman for Ukraine's Foreign Ministry said "competent authorities are investigating the allegations" that Ukraine was involved. He said that Ukraine adheres to it international obligations regarding weapons sales.

A report released by Amnesty International on July 5 blames the recent violence in eastern Congo on weapons and ammunition shipped by international arms traffickers from United States, Israel, Great Britain, and Russia. Amnesty says in the report that it has evidence of arms-for-diamonds agreements between the Congolese government and companies in Israel, Czeck Republic, and Ukraine.

The report accuses a mining company in Congo of being involved last year in the purchase of heavy weapons from Ukraine and the Czeck Republic in exchange for diamonds. Ukraine's new president Vickto Yushchenko has pledged to investigate all illegal weapons sales.

Close to 4 million people were killed in Congo's civil war. Despite a peace agreement and a vast amount of natural resources, Congo has failed to see economic progress, said Amnesty International.

Source: Rapaport News

Britain's Leeds Rocker to Wed Ukraine's PM Daughter

LONDON, England -- He IS a rottweiler-owning rock singer from Leeds, she is the daughter of the Ukrainian Prime Minister: they seem a mismatched couple whose unlikely romance would succeed only in fiction.

But Sean Carr, a cobbler and key cutter, is to wed Evgenia Tymoshenko, the daughter of the billionaire Ukrainian Prime Minister.


Evgenia Tymoshenko
Evgenia’s mother, Yuliya, became a heroine in Ukraine after she led the Orange Revolution against Leonid Kuchma, the country’s unpopular and autocratic former President.

Ms Tymoshenko was swept to power alongside Viktor Yushchenko and became known for the rousing speeches she made to her followers, who spent weeks protesting against the Government in sub-zero temperatures.

Mr Carr, a tattooed singer who plays in a heavy-metal band called Death Valley Screamers, closed his market stall in Leeds and moved to Ukraine after meeting his future wife in a bar in Egypt.

The improbable romance began when Miss Tymoshenko, 25, asked for Mr Carr’s number from his friend, who initially asked for payment in return. By the time he relented, Mr Carr had returned to Britain.

Miss Tymoshenko, who studied at the London School of Economics, sent Mr Carr, 36, a text message on her return to London and they arranged to meet at a biker festival. But it was only when Mr Carr visited her flat in London that he discovered that she was the heiress to a multibillion-pound fortune.

He told the Yorkshire Evening Post: “I still didn’t know about her mum, but she seemed to be living in an awful lot of luxury for a student.” Five months after they met and the Orange Revolution was at its height, Mr Carr visited Ukraine. Yuliya Tymoshenko was leading the opposition movement alongside Mr Yushchenko, who is now the President.

The day after Mr Carr arrived in Ukraine he stood on a stage in front of thousands of people as his future mother-in-law called for Mr Kuchma to resign. She was appointed Prime Minister six months ago.

Mr Carr said that he was initially terrified of his fiancée’s mother, but now calls her “Mama” and has moved his customised Harley-Davidson motorcycle and 11-stone rottweiler, Salem, to Ukraine.

“I know it’s mad,” he said. “I can’t really believe it myself. It’s just bizarre. It has been a big adjustment for me but I am making it. I am picking up some Ukrainian and have formed a rock band.”

Yuliya Tymoshenko said that she was delighted by her prospective son-in-law. “He is an excellent person,” she said.

The wedding will take place on November 2 and the venue is believed to be in Yorkshire.

SOURCE: Times on Line

Ukraine Denies Illegal Arms Transfer

KIEV, Ukraine -- Petro Poroshenko, head of the Ukrainian National Security and Defense Council, said on Tuesday that accusations of Ukraine's illegal arms export were groundless.

Poroshenko told the press that Ukraine's arms trade conforms to international regulations.

Petro Poroshenko
He said the Democratic Republic of Congo (DRC) is not on the list of the countries to which arms are forbidden to export, and Ukraine did not conduct any illegal arms dealings.

On the same day, Dmitry Svistkov, deputy chief of the press office of the Ukrainian Foreign Ministry, repeated at a press conference that Ukraine has established an effective arms export supervision mechanism, which can make sure that regulations of related international organizations are taken into consideration when arms and military technology are transferred to other countries.

According to the Interfax-Ukraine news agency, a German radio station made public on Monday an investigation report of the human rights group Amnesty International on illegal arms exports to the DRC, in which the group said a Ukrainian company had illegally exported arms to the conflict-ridden African country.

Source: Xinhua

WTO Obstructionists

KIEV, Ukraine -- The legislation necessary to prepare Ukraine for World Trade Organization (WTO) accession this year seemed to be going through parliament. But the war in the Rada over that legislation was an instructive lesson in just who in politics is on the side of progress, and who’s a reactionary hack.

Ukrainian parliament deputies stand around Ukrainian President Viktor Yushchenko (C) as th