Thursday, December 31, 2009

IMF Lowers Loan Bar To Allow Ukraine To Pay For Gas

WASHINGTON, DC -- The International Monetary Fund said Wednesday it had eased loan criteria for Ukraine to allow the government to use international reserves to meet its debts, including gas payments.

Ukraine, which has been hammered by the global financial and economic crises, was granted its request for a modification of its $16.4-billion-dollar standby arrangement, the IMF said in a statement.

The IMF said it had agreed to lower the end-December floor of Ukraine's net international reserves by approximately $2.0 billion dollars.

"This important step will enable the Ukrainian authorities to use existing resources to make external payments due -- including gas payments -- within the framework of Ukraine's program with the fund," the Washington-based institution said.

"It does not involve any new disbursement by the IMF," the fund noted.

The head of Russian gas giant Gazprom said Friday that Ukraine had cut back on purchases of Russian gas since mid-December and appeared to be facing serious cash problems.

"Ukraine is experiencing serious problems with payment," Alexei Miller said on Russia's Vesti channel in comments carried by the Ria-Novosti news agency.

Ukraine has until January 11 to pay for gas, according to Gazprom, which has cut off supplies to the country over unpaid bills repeatedly in the past.

Ukraine has been seeking the next installment of $3.8 billion dollars from its IMF standby loan.

So far the government has received a total of $10.6 billion dollars of the $16.4-billion-dollar credit extended in November 2008 to help Ukraine cope with the global economic crisis.

Acting Finance Minister Igor Umansky a week ago was quoted by Interfax news agency as saying that the IMF had turned down the request for the new installment to be disbursed this year due to concerns over the intense campaigning for a presidential election on January 17.

Umansky led a delegation to appeal for the release of at least half the new credit installment -- or about $2.0 billion dollars -- in talks at the IMF's Washington headquarters this month.

He said negotiations with the fund would continue in January.

Cash-strapped Kiev this month called its financial situation without the IMF loan money "extremely difficult."

Ukraine has been hard hit by the economic crisis after the global slowdown triggered a massive slump in its export-dependent heavy industrial sector.

The IMF loan -- by far Ukraine's biggest source of foreign income in 2009 -- is crucial to help the country overcome the crisis, but the IMF has been exasperated by political infighting and new laws on wages and pensions.

Source: AFP

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Poll: Yanukovych Ukraine’s Next President

KIEV, Ukraine -- Ukraine’s opposition leader Viktor Yanukovych will most likely defeat Prime Minister Yulia Tymoshenko in the runoff vote to become the country’s next president, the latest opinion poll suggested Tuesday.

Viktor Yanukovych with Russia's Vladimir Putin (L). It appears the Kremlin will once again have its own man, in Kiev.

Ukrainians will go to polling stations on January 17, 2010 to pick the next president, but the runoff between the two most popular candidates will probably be required on February 7.

“Without any doubts and questions Viktor Yanukovych and Yulia Tymoshenko will come to the runoff,” Iryna Bekeshkina, a senior analyst with Democratic Initiatives, said.

Yanukovych was likely to score 33.6% support in the first round of voting, followed by Tymoshenko’s 19.2%, the poll organized and paid for by Democratic Initiatives, a non-profit group, shows.

In the runoff, Yanukovych was likely to defeat Tymoshenko 44.3% vs. 28%, according to the poll.

“It is impossible to overcome the 16% gap in one month,” Oleksandr Vyshniak, the head of Ukrainian Sociology Service, which handled the poll for Democratic Initiatives, said.

The poll was conducted between December 12 and December 26 among 2,010 respondents throughout Ukraine with the margin of error at 2.3%.

The new president will define the country’s foreign and defense policies for the next five years.

The poll also found that an unusually high number of voters – at about 18.8% - will vote against both Yanukovych and Tymoshenko, underscoring the high level of dissatisfaction with policies associated with them.

“Scandals are turning voters away from going to polling stations,” Bekeshkina said.

Incumbent President Viktor Yushchenko will probably finish the No. 5 among 18 candidates with 3.7% popular support, the poll suggested.

The figure shows Yushchenko has failed to boost his rating over the past two months by fiercely criticizing Tymoshenko’s economic policy.

The poll also underscores a steep rise of Serhiy Tyhypko, a former governor of the National Bank of Ukraine, who was likely to score 9.23% support to become the No. 3 most popular politician.

The figure may eventually help propel Tyhypko to the post of the prime minister under certain political configuration, analysts said.

Arseniy Yatseniuk, a 35-year old former speaker of Parliament, has received 6.1% support from respondents to become the No. 4 most popular candidate, according to the poll.

Communist Party leader Petro Symonenko recorded support from 3.4% of respondents, followed by Parliamentary Speaker Volodymyr Lytvyn’s 2.6%, nationalist Svoboda leader Oleh Tiahnybok’s 1.6% and former Defense Minister Anatoliy Hrytsenko’s 1.3%.

At least 5.3% of respondents said they would vote against all candidates, while 11.1% said they are still to decide who to support among the candidates.

Source: Ukrainian Journal

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Wednesday, December 30, 2009

Oil Drops From Five-Week High As Russia, Ukraine Reach Accord

LONDON, England -- Crude oil fell from near a five-week high as Russia reached an agreement with Ukraine on oil exports to Europe, allaying concerns of a supply disruption.

Russia agreed to pay 30 percent more to transport oil to Europe via Ukraine next year, according to Ukrainian state energy company NAK Naftogaz Ukrainy. Crude climbed to a five- week high yesterday as Iran, holder of the second-largest oil reserves, continued a crackdown on political protests.

“This takes one of the geopolitical risks off the table, I assume there’s not going to be a disruption in Russian flows to Europe,” said Olivier Jakob, managing director of Petromatrix GmbH in Zug, Switzerland. “If prices are still $78 to $80 at the start of next week there should be some downward pressure as stocks are so plentiful.”

Crude oil for February delivery declined as much as 50 cents, or 0.6 percent, to $78.27 a barrel, in electronic trading on the New York Mercantile Exchange. It was at $78.69 at 12:55 p.m. London time. Oil gained 72 cents to $78.77 yesterday, the highest close since Nov. 18.

Futures have advanced 77 percent this year and tripled in the past decade.

Brent crude for February settlement was at $77.31 a barrel, down 1 cent, on the ICE Futures Europe exchange at 12:55 p.m. local time. It rose $1.01, or 1.3 percent yesterday, to $77.32 a barrel.

Source: Bloomberg

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2009: Ukraine Becomes World's Third Largest Grain Exporter

KIEV, Ukraine -- Ukraine's grain harvest will exceed 49 million tonnes in 2009, country's Prime Minister Yulia Tymoshenko has said.

Ukraine used to be referred to as the "Breadbasket of Europe".

To date, the harvest is about 48.5 million tonnes, she said at a news conference yesterday, adding, "I think that it will be slightly more than 49 million tonnes."

Timoshenko associated the aforesaid achievements amid the economic crisis with the governmental funding of the agricultural sector.

"We created an agrarian fund, as banks had stopped crediting farmers," the Ukrainian prime minister said.

"In 2009, Ukraine first ever became the world's third grain exporter after the United States and the European Union, outstripping Russia and Canada," Timoshenko stressed.

She also reported about the increase of the state grain reserves to 1.416 million tonnes in 2009 from 724,000 tonnes in 2008.

In 2008, Ukraine's grain harvest amounted to 53.3 million tonnes and was the biggest for the years of its independence.

Source: Press Trust of India

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AP Interview: Presidential Frontrunner Says Ukraine Paid Too High A Price On Democratic Reform

KIEV, Ukraine -- Ukraine has paid too high a price for the democratic reforms ushered in by the 2004 Orange Revolution, according to the pro-Russian front-runner in the country's presidential race, who pledges to bring back the "rule of law" if elected next month.

Viktor Yanukovych

Viktor Yanukovych, whose Kremlin-backed election victory in 2004 was overturned by the Supreme Court amid allegations of fraud, says the pro-Western revolution that brought his rivals to power has led to political chaos, corruption and a dismal economy.

"So what did this Orange Revolution give us?," Yanukovych asked in an interview Monday with The Associated Press. "Freedom of speech? That's very good. But what price did the Ukrainian people pay for this? For the development of this democratic principle in our country, the price was too great."

Democracy is "above all the rule of law," which the Orange Revolution has failed to bring, he said.

Since taking power in 2005 on a wave of hope and excitement, the revolution's leaders have disappointed many Ukrainians, fostering nostalgia among some for the stable, if autocratic, rule of an earlier era.

The Orange Revolution took Ukraine out of Russia's orbit, as the pro-Western leadership sought membership in the European Union and NATO. It also deepened animosity between the pro-Russian east and the west of the country, where Ukrainian nationalism is strong.

Yanukovych said his first priority as president would be to revive the use of the Russian language in schools and in the workplace, a move that would reverse the "forced Ukrainization" of the millions of Russian-speaking Ukrainians who support him.

"This is the main question that we have to solve right now, the one that is very seriously worrying the people," he said.

This change would comply with the one wish Russian President Dmitry Medvedev made last week for the Ukrainian elections.

"The only thing I really want is for the future president ... to be intent on warm, heartfelt, even brotherly relations between our countries, and for the Russian language not to be insulted," Medvedev said in a televised interview.

With elections less than three weeks away, Yanukovych, 59, is leading in the polls. The former electrician told the AP that he would put his weight behind Moscow on issues ranging from trade to security.

He repeated his pledge not to seek membership in NATO, Russia's Cold War foe. But he said he would give his full support to Medvedev's proposal for a joint European security regime, which has gotten an icy reception in most of Europe.

He also promised, if elected, to do everything in his power to speed Russia's entry into the World Trade Organization.

Viktor Yushchenko, the current president and the leader of the Orange Revolution, is going into the vote with approval ratings in the single digits. He has been at loggerheads with his former ally, Prime Minister Yulia Tymoshenko, for most of his time in office, causing political gridlock that has deepened the country's economic collapse and alienated voters.

Yanukovych, a barrel-chested hunting enthusiast, also denied that his 2004 presidential victory had been fixed. Instead the Supreme Court broke the law when it overturned his election and ordered another round of voting, he said.

"The third round of those elections was illegal," he said. "Why? Because five years have passed, and in those five years, the falsification of my election has basically not been proven. This means that those elections were legal. They were not rigged."

His campaign has focused on shaming Tymoshenko, his only real competition, for her leadership of the Orange Revolution, which he blames for turning Ukraine's government into one of the most corrupt in the world and its economy into one of the worst-performing.

"Democracy is above all rule of law, it is compliance with the law and constitution by everyone, and in these five years we have seen how the laws have been systematically broken, how the principles of the law have been replaced by political expediency," Yanukovych said.

In most of the country, the issues of language and national identity have been more divisive than bread-and-butter issues like unemployment. The word "Ukraine" derives from the Russian for "at the outskirts," an identity the leaders of the Orange Revolution have sought to uproot by promoting a unique Ukrainian identity. The use of Russian, seen by its opponents as a symbol of Soviet subjugation, has been phased out.

On a recent campaign trip to the Russian-speaking Crimean peninsula, where he enjoys broad support, Yanukovich poked fun at the Ukrainian language and the politicians who insist on speaking it.

As he mocked Tymoshenko's upbeat appraisals of the economy, he sarcastically switched into Ukrainian from Russian, drawing laughs from the crowd of about 2,000 supporters.

Switching back into Russian, he said, "I'm tired of hearing five years of this gibberish, and seeing this variety show performed by the Orange troupe."

Valentina Goncharova, a 59-year-old retiree who said she receives a pension of around $100 per month, said she supports Yanukovich not because of his promises of higher pensions and wages, but because of his pro-Russian views.

"The Crimea has always belonged to Russia," she said. "It has always been closer to Russia. I think that is why people support him here."

Source: The Canadian Press

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Tuesday, December 29, 2009

Pirate Update: Ariana Crew Abandoned Again

NAIROBI, Kenya -- One of the most inhumane and cruel Somali piracy stories of 2009 involve the tragic happenings on MV ARIANA, the Greek/British-owned, Malta-flagged and Ukrainian-crewed cargo vessel held in Somalia for six months until a ransom between USD 2.8 million and USD 3.5 million was paid for the release of the 37,955 gross tonnage bulk carrier.

A female sailor is beaten by her ship's engineer so severely that she loses her unborn child; it is the MV ARIANA's tragic story of poverty, piracy, unexpected heroes, and a captive crew turning on themselves.

While one side of the coin is the criminal act of piracy committed by misled, desperate Somali sea-shifta, the non-Somali side must be held responsible for all the crimes and cruelties caused by the inaction of the shipowner-conglomerate represented by Greek national Captain Spyros Minas and the Ukrainian officials.


The simple case of an abduction for ransom, which the Somalis claim as compensation for the devastation of their livelihoods by toxic dumping and illegal fishing in earlier years, turned into a nightmare when one of the two female sailors of Ukraine nationality, who was five months pregnant, was beaten by the Ukrainian engineer onboard so severely that she suffered a miscarriage.

The Somali pirate captors who witnessed the scene in early July were so furious about the murder of the unborn child, that they wanted to take the Ukrainian man immediately ashore and execute him according to Sharia law.

Official Ignorance

After the sad news transpired and was immediately verified by an Ukrainian speaking doctor and gynecologist from Nairobi, who was allowed to give medical advice to the seriously ill woman, Larysa Salinska, the humanitarian branch of ECOTERRA Intl. immediately offered to evacuate both women from the vessel.

The offer was accepted by the pirates but persistently refused by the shipowner and never facilitated by the Ukrainian government, despite the fact that the situation of the woman became life-threatening because the miscarriage resulted in a serious infection.

“I was bleeding like a tap. I thought I would die from bleeding,” Salinska, 39, the ship’s cook, said tearfully on August 30 to the Kyiv Post.

It must be stated at this point also that the master of the ship, Captain Genadiy Voronov, was reluctant to demand the evacuation, because he believed the sick and the other woman on board, Natalia Los, were push-factors for an early release of vessel and all crew. He didn't calculate the cruelty and ignorance of the shipowner and his own governmental officials.

Spin, Spin, Spin

Though the fetus is still kept in the cold storage of the ship, it turns out that the crew of the seized Spanish fishing vessel FV ALAKRANA invented a story, which they later even narrated to a judge in Spain, saying they had visited the MV ARIANA, provided fuel, food and medicine, and also observed a third female person on board.

This third female was reported to be the 11 or 12-year old daughter of the second female sailor with blond hair and blue eyes.

All this is believed now to be part of spin-doctoring between Ukrainian, Spanish and Greek politicians of ministerial level to distract from their own failures and to aid a stronger European military approach for which the misled public outcry over these atrocities was seen as necessary to be approved by the European ministerial conference.

Abandoned Again

While the MV ARIANA had received fuel from another hostage ship to sail off the Somali coast after her final release on 12th December - two days later, as the shipowner claimed before the media - the Ukrainian sailors were not immediately relieved at the nearest possible harbour, but forced by Spyros Minas to sail towards Iran, despite what he knew about the fuel shortage.

The question as to why the ship didn't come to Mombasa or Dubai to exchange the crew and to do the bunkering has so far not been answered but led to immediate speculations that the cargo from Brazil might not just be soybeans and is not supposed to be inspected.

Another story has it that a deal among the release team comprising of the Greek shipowner representative, Ukrainian officials, members of the Kenyan armed forces and an Italian shipping firm went sour, which saw the arrest of the master and six armed Somalis from T/B SOLAND, owned by Southern Engineering of Mombasa, whose Director M. Esposito was not able today to get at least the Tanzanian master released on bond.

With all this turmoil it is obviously right what the Chief of the Foreign Intelligence Service of Ukraine (FIS) Mykola Malomuzh stated: "The crew will be back home earliest after the New Year".

Malomuzh says another tugboat is now heading to MV ARIANA for refueling, but that ship is delayed due to stormy weather. Meanwhile, BBC has reported the ARIANA ship owner, who should have coordinated all actions, has set the ship adrift. That information comes from Mikhail Voytenko, the director with the Maritime Bulletin.

"If the bulker reaches the port of designation in Iran, it's good. If not, the ship owner will get insurance," he said.

Extremely Dangerous

Andrew Mwangura, head of the the East African Seafarer's Assistance Programme sees the situation of the vessel as very critical: "To set her adrift is extremely dangerous to the heavily laden ship itself in heavy weather and as well to other ocean-going ships in the area. Such is irresponsible of the owner and demands a full investigation."

British company SEVEN SEAS MARITIME Ltd. from London are calling themselves the only agent, while the ISM manager is ALLOCEANS SHIPPING CO LTD from Athens, Greece and registered ship-owner is CANDELA SHIPPING of Malta - in order to evade tax and regulations by flying this flag of convenience.

The vessel has no ITF approved CBA (collective bargaining agreement)for the crew. Insured by the London P&I Club, this case seems to be another feast for those who profit from piracy, besides the pirates.

ECOTERRA Intl. Spokesman Hans-Juergen Duwe demanded on Christmas eve that a coalition warship immediately secure the MV ARIANA, assist the crew, and since all the EU NAVFOR or CTF vessels have legal and police personnel on board, start investigations into all the mysteries surrounding the vessel and the crew.

"The crew has the right to be rescued, not only from Somali pirates, but also from an inhumane shipowner. And the families as well as the public have a right to know all the truth!" Duwe stated in Germany.

Source: Salem-News

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Putin Accuses Ukraine Of 'Abuse' On Oil Transit Deal

MOSCOW, Russia -- Prime Minister Vladimir Putin accused Ukraine Tuesday of "abuse" of Russian oil transits via its territory but predicted both sides would abide by contractual obligations to keep supply flowing to Europe.

Russian Prime Minister Vladimir Putin.

"We are ready to deliver (oil), we have a contract, but if any of the transit countries abuse, what can you do?" Putin was quoted by Russian news agencies as saying.

"We have a contract to deliver oil. I think that this contract will be fulfilled," he added.

His comments came after Ukraine said Monday it wanted to change the terms of its 2004 transit contract with Russia for oil shipments via Ukrainian territory to the European Union.

Earlier on Tuesday, Russia's Deputy Prime Minister Igor Sechin said Russian oil shipments to Europe through Ukraine will continue without disruption as the two countries renegotiate their transit agreement.

"We expect that there will be no problems with the transit," Sechin was quoted as saying by the RIA Novosti news agency.

Ukraine had sought and obtained an increase in the tariffs Russia pays to transit its oil through Ukrainian pipelines, but the two sides had still not agreed on how much oil -- subject to those tariffs -- Russia would "guarantee" to pump through Ukraine, officials said.

Sechin said Russia was still negotiating with Ukraine on the final terms of the new deal.

Disputes between Russia and Ukraine on pricing and transit of Russian natural gas shipped to EU clients have caused serious supply disruptions in recent years, but Ukrainian officials gave assurances that transit would continue even if talks were not concluded by the end of the year.

EU sources in Brussels also played down fears of another looming energy dispute between Russia and Ukraine that could have an impact on EU energy supplies.

Source: AFP

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Cynicism Replaces Tide Of Orange As Ukraine Returns To Polls

OTTAWA, Canada -- The euphoric optimism of Ukraine’s 2004 Orange Revolution has vanished like the tears of a long-spurned lover, replaced by profound cynicism as the country braces for its first presidential vote since that dramatic show of people power five years ago.

Everyone likes to make a clean start on New Year’s Eve, even more so for one that starts a new decade. Unfortunately, Ukraine is going into 2010 with most of the unsolved problems from the previous decade.

President Viktor Yushchenko, greeted as a hero during his 2008 Canadian tour by Prime Minister Stephen Harper, both houses of Parliament, and members of Canada’s 1.2 million-strong Ukrainian-Canadian community, barely registers in polls and is expected to be trounced in the first round of voting on Jan. 17.

His Orange Revolution partner-turned-rival Yulia Tymoshenko, the charismatic though erratic prime minister, is running second in polls to Viktor Yanukovych, who was portrayed by the western media as a Moscow stooge when he ultimately lost that 2004 showdown.

Yanukovych, the Regions Party leader, has a political resume so blemished it would spell doom in any democracy not so deeply influenced by regionalism and corruption.

Yanukovych was imprisoned twice in his youth (once for a robbery, once for assault), has questionable literacy skills (his claim to be a university professor was challenged when he misspelled “professor” and made numerous other grammatical and punctuation errors on an 2004 election document), is a painfully awkward public speaker, is beholden to several oligarchs (in particular shadowy billionaire Rinat Akhmetov), and was tainted by the rigged 2004 election.

Yanukovych initially won that vote, but the victory was soon nullified after fraud was detected and hundreds of thousands of protesters, wearing Yushchenko’s orange campaign scarves and hats and waving orange flags, took to the streets to successfully demand a new vote.

The drama of Yushchenko’s subsequent win was heightened by the botched attempt earlier that year to kill him with poison, which left facial scars that looked like war wounds. His approval rating soon soared above 60 per cent.

Today, thanks to a brutal recession, chronic infighting with Orange partner Tymoshenko, and numerous scandals, the current president is polling at around three per cent.

For those enthused by political horse races, the Ukraine election has much to offer. While Yanukovych is leading in polls, many observers believe he has limited appeal outside the country’s Russian-speaking south and east.

That means the populist Tymoshenko, a strong public speaker, could pull off a come-from-behind win in the second round of votes to take place Feb. 7.

More sobering, however, is the sour mood of Ukrainians in a country that has long been viewed as strategically crucial in the West’s ability to contain Russian aggression.

Polls indicate that roughly three-quarters of the population view politicians as self-serving and corrupt, while a November survey by Washington, D.C.-based Pew Research Center concluded that Ukrainians were among the most bitter citizens of ex-communist countries since the collapse of the old Soviet Union during the 1989-91 period.

Ukrainians ranked a distant last among those surveyed on several questions relating to their appreciation of democracy and free enterprise, according to Pew survey in September of 1,000 Ukrainians, which has an error margin of four percentage points.

An astonishingly low 30 per cent per cent said they approve of the change to democracy – the only one of nine countries with a score lower than 50 per cent. Just 36 per cent of Ukrainians polled approved of the move to capitalism.

Ukraine’s pervasive cynicism, corruption, and petty squabbling among political leaders is disturbing for many members of the 1.2 million-strong Ukrainian-Canadian community that is one of the most influential diasporas in Canada.

“The fights between them (Orange Revolution heroes Yushchenko and Tymoshenko), and in particular between the gatekeepers and insiders in both camps, is just abominable. It’s horrible, terrible,” Canada Ukraine Foundation chairman Bob Onyschuk, a Toronto lawyer, said in an interview.

Marco Levytsky, publisher of the Edmonton-based Ukrainian News, said there is “considerable disillusionment” within the Canadian diaspora, which is overwhelmingly from western Ukraine, is hostile to Russia, and therefore mostly opposed to Yanukovych’s Russia-friendly political movement.

“Yushchenko has been a great disappointment and Tymoshenko seems to be concerned about power for the sake of power rather than about real reform.”

Both Canadians said their main concern has been recent electoral law changes, which they fear will increase the likelihood of fraud.

The Canada Ukraine Foundation has pressed, so far without success, for the Harper government to fund community members to attend the presidential elections as observers.

(The Canadian government, which lists Ukraine as the only European country in its top-20 list of targets for development assistance, is contributing instead to a delegation of observers from the Organization for Security and Co- operation in Europe.)

While the 2004 election was often described by the western media as a battle over whether Ukraine would join the West or fall under Russia’s domination, many analysts say public concerns then and now are predominantly over incessant corruption.

Transparency International ranks Ukraine as the 146th most corrupt country on the planet, in an unflattering tie with a group of countries that includes dictator Robert Mugabe’s corrupt and impoverished Zimbabwe.

The ranking is particularly shocking given that the country is, according to the United Nations, the 85th most developed country in terms of measurements such as per capita income, health and education.

While examples of corruption are rife, perhaps the most disheartening for Ukraine-watchers occurred the day in 2005 when Yushchenko, a former central bank president with a modest government salary, was confronted by the media with evidence that his 19-year-old son was driving around town in a $150,000 US sports car, living in an outrageously expensive apartment, and carrying a platinum-plated cellphone said to be worth $50,000 US.

Yushchenko called journalists names while shooting back that the items were all gifts from his son’s wealthy friends.

But the event led the public to conclude that “corruption had spread into Yushchenko’s closest circles,” wrote University of Victoria political scientist Serhy Yekelchyk in his 2007 book Ukraine: Birth of a Modern Nation.

Historians say two factors have created huge barriers standing in the way of a single democratic force being able to get a political mandate to bring in sweeping economic and political reforms.

The first is the country’s regional divisions that are rooted in centuries of conquest by outsiders. The Russian-speaking population in the south and east is naturally friendlier to Moscow and more hostile to Ukraine’s unsuccessful attempts, as advocated by Ukraine nationalists in the West and cheered on by the Canadian diaspora, to develop close formal and informal ties with Europe and the U.S.

The second factor, which is exacerbated by the first according to British historian and author Andrew Wilson, is the way Ukraine bloodlessly established its independence from Moscow in 1991 and again in 2004.

In neither case was there an actual “revolution” leaving real battle scars and prompting actual regime change, so the communist apparatchiks and their cronies in power before independence kept their clout.

While Onyschuk holds out hope that Tymoshenko can win and provide an impetus for reform, Levytsky is simply hoping the country’s fragile democratic institutions aren’t irreparably wounded by election fraud.

“The hope is that, despite the leaders, the civic society will eventually prevail and the leaders will have to more or less serve the people,” he said.

Source: Canwest News Service

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Monday, December 28, 2009

Ukraine To Develop Offshore Oil, Gas Fields In Black Sea

KIEV, Ukraine -- Ukraine is set to start developing offshore oil and gas fields in the Black Sea from 2010, the country's prime minister says.

Ukraine's Prime Minister, Yulia Tymoshenko.

"There are oil and gas reserves to last Ukraine for 150 years. From 2010 ... we will launch large-scale development at the expense of government funds," Yulia Tymoshenko said on Saturday.

She said the offshore natural gas and oil reserves would belong to the nation, not to "certain corrupt groups."

The Ukrainian government earlier planned to develop a section of the Black Sea shelf near the Kerch Strait together with the US oil company Vanco.

The Kerch area's reserves are estimated at 10.8 billion cubic meters of natural gas. Production at this section would allow Ukraine to increase its annual gas production by 4 billion cubic meters, and oil by 3 million tons.

Ukraine presently produces about 20 billion cubic meters of gas and 4 million tons of oil a year which is about 20 percent of its annual consumption.

Source: Press TV

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Sunday, December 27, 2009

Ukraine's Orange Revolution Sours

KIEV, Ukraine -- Five years after Victor Yushchenko became the disfigured face of the Orange Revolution, it is tempting to believe the conspiracy theories that he was never actually poisoned at all.

2005 saw euphoric celebrations in Independence Square when Viktor Yushchenko was inaugurated.

The skin that was once hideously pockmarked is gradually recovering, and with the help of make-up, there is little sign of the attack that nearly killed him back in 2004. Indeed, were it not for the blood tests that confirmed the presence of lethal dioxin poisons, the wear and tear on his cheeks might be simply the strains of steering Ukraine away from Russia's grasp and towards the West.

To this day, though, the Ukrainian president remains "vigilant" about his personal security - not that he thinks there was anything particularly personal about the original attack, which was blamed on pro-Kremlin political rivals. Whoever wins next month's presidential elections will find themselves in the firing line, he says, if they try to take Ukraine down the same path he has done.

"It was not about me, Yushchenko," he said in an interview with The Sunday Telegraph last week. "Ukraine was proving a bad example for Russia, and a good example for Europe, and that was the problem. Irrespective of the name of the next president, if he or she is a democrat, a pro-European politician, they will have similar problems."

One other thing, however, also looks certain - that new president is unlikely to be Mr Yushchenko. The man once hailed as democracy's battle-scarred posterboy is trailing far behind in the contest, scraping just single figures in some polls. After personifying the hopes of the Orange Revolution five years ago, he now symbolises the way its glow has faded, having failed to secure either European Union or Nato membership.

It marks a sour end to what began as a Christmas political fairy tale five years ago, when Mr Yushchenko and his glamorous blonde ally, Yulia Tymoshenko, formed a kind of "Beauty and the Beast" alliance against the Moscow-favoured Viktor Yanukovych.

When Mr Yanukovych triumphed in what was seen as a rigged presidential election, Kiev's Independence Square filled with half a million protestors, who camped out night after night in sub-zero temperatures.

People power finally triumphed when Ukraine's supreme court ordered the vote to be re-run on Boxing Day, ushering in Mr Yushchenko as president and Ms Tymoshenko as prime minister.

Last week, though, the unusually early cold snap that covered the square's Stalinist-era architecture with thick snow was the only reminder of those euphoric days. Mr Yushchenko and Mrs Tymoshenko, once iconised in Time and Elle magazines respectively, have proved unable to get along, leading the government into paralysis.

That, in turn, has stymied efforts at economic and political reform, and convinced Brussels bureaucrats - already suffering from enlargement fatigue - that Kiev's government is far from ready for EU membership. To complete the drift back to square one, Mr Yanukovych - the man painted as the pro-Kremlin villain from the last elections - is favourite to win again this time, with or without fraud.

Moscow, which viewed 2004's turmoil as a Western-inspired coup d'etat in its backyard, looks on gleefully.

If it is dispiriting for the Orange Revolution's figureheads, it is even more so for its student-based grassroots support, who were originally denounced as CIA-backed subversives when they threw their weight behind Mr Yushchenko's moderate Our Ukraine party. Nazar Pervak recalls how he was shown on government television as an aggressive young rabble-rouser, causing a rift with his father, a judge.

"It was extremely cold, like it is out there now," said Mr Pervak, 27, sipping coffee in an Independence Square cafe. "But it was very exciting - shopkeepers gave free food and clothes, businessmen even paid for hotels for protesters who came in from outside Kiev.

"Today, though, I feel very disillusioned, because we didn't use the great chance we had properly. Integration with Europe did not come true either. Now Western Europe simply accepts that Ukraine is now under Russia's influence."

So what went wrong? Critics pin some blame on Mr Yushchenko, who failed to use his momentum to give the Augean stables of Ukrainian politics the Herculean spring clean it needed. Parliament remains full of corrupt, criminal MPs, whose punch-ups in the chamber rival those of Ukraine's legendary boxing duo, Klitschko brothers.

Thanks to constitutional wrangling and a problem with "electoral tourism", whereby politicians switch allegiances in exchange for favours, it is also hard to get much done.

The Yushchenko-Tymoshenko alliance was also forged more on a mutual dislike of Moscow than on any common policies, and over time, they have even parted company on that. Ms Tymoshenko now favours patching things up with Russia, a move seen as a betrayal by Mr Yushchenko, whose relations with the Kremlin are worse than ever.

In August, Russian President Dmitri Medvedev withdrew Moscow's ambassador to Kiev, accusing Mr Yushchenko of being "anti-Russian". In an echo of the Litvinenko case in Britain, Moscow also refuses to extradite a suspect in the poisoning plot who moved to Russia.

Many Ukrainians also question whether Ms Tymoshenko or Mr Yushchenko really merited their Orange halos in the first place. Ms Tymoshenko, despite her pretty face, is seen as a quarrelsome opportunist, while Mr Yushchenko, although viewed as competent and honest, comes across as slightly plodding.

Certainly, interviewing him is not like meeting some Eastern European Tony Blair - he is prone to monologues rather than soundbites, and reluctant to concede fault.

Asked why his popularity has slipped so badly, he responds firstly by insisting that he is still going to win, and then by reciting economic growth statistics at length. When The Sunday Telegraph tries to interrupt after five minutes, he tuts and continuing regardless.

"Last year 23 million tourist visited Ukraine. This figure was 21 million for Turkey. One million Ukrainians travelled to Europe last year, two times more than 2007..." The list goes on and on, reminiscent - to Western ears at least - of Communist-era reports on annual tractor production.

Mr Yuschchenko is also under fire for campaigns to demolish all Soviet-era monuments, and to get the Ukrainian famine of the 1930s, when up ten million Ukrainians died, recognised internationally as a Stalin-sponsored genocide. Not only does it seem like a diversion from more immediate problems, it alienates some of the 20 per cent of Ukrainians who are ethnic Russians, who do not share his anomisity to Moscow anyway.

"The nationalist Ukrainians are trying to divide people into Ukrainian and Russian," said Viktor Knyazev, 31, an adviser in an import-export firm. "Other people died in that famine too, not just Ukrainians."

"Both Stalin and Lenin were negative figures, but at least they managed to keep order," added his wife Larisa, 28, who, like her husband, wants Mr Yanukovic back in power. "Why can't we have good relations with Russia?"

As things stand, the vote on January 17 is expected to end in a run-off between Mr Yanukovych and Ms Tymoshenko, heralding a gradual thaw with Moscow. Yet despite having the same old faces to vote for, the youthful Orange Revolutionaries are not entirely despondent.

"There is a total disbelief in these candidates," admitted former activist Dmitry Yurchenko, 27. "But the Orange Revolution did at least change attitudes to politicians - there is a free media now, and people realise they can demand things if they want."

What is really needed, they argue, is for a new post-Orange Revolution generation of voters, devoid of the "Post-Soviet" mentality that does not readily question political leaders, and expects them to be omnipotent. "Once Yushchenko was in power, Ukrainians thought everything would simply change," said Mr Pervak. "They don't take responsibility themselves."

Mr Yushchenko, meanwhile, may have more time to spend beekeeping, a hobby he has enjoyed since childhood. Compared with running the affairs of 47 million Ukrainians, managing the industrious populations of his hives is a relaxing task. Yet for a man who detests Stalin, it is perhaps a strange choice - after all, with their armies of loyal workers, are bees not natural communists?

"No," he replies firmly. "Communists lose their ideals, they are people who bring injustice, who killed tens of millions of my people."

With that, the world's only apiarist-president is off, pausing only to show an advice note from one of his junior civil servants on constitutional reform. It probably won't solve his electoral ills, but that isn't the point. In the old days, he says, no lowly functionary would dare tell the president how to do his job. "That's the Orange Revolution for you."

Source: Telegraph UK

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End Of Decade

KIEV, Ukraine -- First, some of the decade’s high points: Democracy triumphed, but only briefly, in the dead of the 2004-2005 winter. Millions of Ukrainians are living better than a decade ago. Many are eating better. Consumer goods are in abundance and many more people can afford them. More cars clog the city streets. Almost all teenagers have mobile phones, even if they have no money to use them.

A decade of revolutionary progress and hard setbacks.

Today, in fact, it is possible to purchase almost anything, including power, political patronage and university degrees, just like 10 years ago. And herein lies some of the nation’s intractable problems.

For all the signs of progress, Ukraine’s achievements don’t decisively add up to a nation that is starting 2010 in better shape than it started the year 2000. Instead, the nation embarks on the new decade hobbled by many of the same old problems: distrust, corruption, instability, billionaires who stifle both democracy and the economy, a judicial system incapable of dispensing justice, a demographic crisis and dire poverty for a quarter or more of its 46 million people. And on and on.

Still, taking into account decades and even centuries of misery, Ukrainians may have never had it so good. But millions – perhaps four million Ukrainians – have left the nation in frustration and in search of better lives and better jobs abroad, while many of those stayed behind in the homeland are quick to say that their lives are hard and should be better.

Overall, the nation is freer, but still poor and corrupt.

Here is a look back:

Heroes to zeroes

The 2004 Orange Revolution is the decade’s highlight. It briefly enhanced national self-esteem and raised hopes. But the subsequent political breakup of heroes President Victor Yushchenko and Prime Minister Yulia Tymoshenko created instability, with the nation ending the decade in stagnation and economic recession.

The decade started with former President Leonid Kuchma grabbing power after his 1999 re-election. When hundreds of hours of his taped conversations and the Sept. 16, 2000 murder of journalist Georgiy Gongadze showed that Kuchma may have grabbed too much power, people started to revolt.

The disobedience of the Ukraine Without Kuchma rallies in the early 2000s paved the way for the 2002 parliamentary election triumph of Yushchenko’s Our Ukraine and Tymoshenko’s eponymous bloc. This national assertiveness culminated in the successful street protests of the Orange Revolution, which overturned the Nov. 21, 2004, presidential election rigged for Victor Yanukovych.

Yushchenko was swept into office with high popularity and international adulation. He is ending his five-year term with almost no public support, in no small part because of his administration’s inability to solve crimes and rein in the nation’s high-flying billionaire oligarchs who control such a large share of the nation’s economy.

Boom goes bust

Fueled largely by raw material exports and a credit boom, Ukraine’s decade of robust economic growth came to a screeching halt in the fall of 2008, and then slipped into reverse. The ongoing recession translated into extended furloughs, mass layoffs, a credit drought and a nation edging closer to default and bankruptcy.

The central bank spent billions of dollars to prop up the hryvnia, but failed to arrest its slide from Hr 5 to the dollar to Hr 8. The International Monetary Fund rode to the rescue with a $16.4 billion line of credit, but abruptly stopped its lending at $11 billion after it blanched at the fiscal irresponsibility of the nation’s leaders.

In rescuing the nation’s commercial banks, perhaps billions of dollars were misspent or stolen. The ex-chief executive officer of Nadra Bank, Igor Gilenko, was among the many accused criminals on the lam by year’s end.

Lawlessness reigns

The birth of new media and death of Internet journalist Gongadze, co-founder of one of the country’s first news websites, Ukrainska Pravda, started the decade. The murder triggered civil disobedience and nationwide protests.

Digital recordings implicated Kuchma in the crime and so many more: rigging court rulings and elections, illegal surveillance and blackmail. But the authorities spent the rest of the decade squelching any meaningful criminal investigation into the tapes revealed by Mykola Melnychenko, a former Kuchma bodyguard.

Law enforcement – from police to prosecutors and judges – remains impotent, corrupt or unwilling to solve the nation’s major crimes.

Information age

In other areas, Ukraine joined the world in logging on to the Internet, blogging and connecting with each other on social networks, on You Tube and by texting. But traditional media – including TV stations with national reach – remained under the ownership of competing groups of influential businesspeople. While censorship is gone, few would argue that Ukraine’s public and media are truly free, at least in the information sphere.

Constitutional gridlock

The nation ends the decade still trying to find a Constitution that works. Kuchma sought stronger presidential powers in 2000, but was rebuffed. Yushchenko wants changes to the Constitution he agreed to amend in 2005 to end the Orange Revolution. The guiding document today muddles executive authority, diluting presidential powers and giving the prime minister many executive roles.


The hryvnia is worth half of what it was in 2000 against the dollar and inflation has worsened its buying power. In 2000, Yushchenko became prime minister and helped to mitigate the economic lows of the 1990s. He and his deputy prime minister, Tymoshenko, squeezed out corruption from the electricity sector and started paying wages and pensions on time.

Combined with his successful introduction of the hryvnia in 1996, Yushchenko was building his reputation as a successful economic manager. But the Yushchenko-Tymoshenko pair did nothing to break Kuchma’s grip over law enforcement or the doling out of state assets to favored insiders in rigged privatizations.

Government stakes in chemical factories and regional energy utilities were put on the auction block and sold like fattened calves to oligarchs within the president’s close circle. As the 2004 election neared, Kuchma undertook the mother of all scams by selling the country’s largest steel producer Kryvorizhstal to his son-in-law, Victor Pinchuk, and Donetsk billionaire Rinat Akhmetov for $800 million, a small fraction of its worth.

Re-privatization became the mantra of the Orange team of Yushchenko and Tymoshenko. They re-sold Kryvorizhstal to ArcelorMittal in late 2005 for $4.8 billion – six times the Akhmetov-Pinchuk price of a year ago – in a fair, open, transparent, competitive, televised auction. The success was never repeated, before or since, in the nation’s history.

International affairs

Relations between Kyiv and Moscow deteriorated significantly after the 2004 Orange Revolution, following the defeat of Kremlin-favored presidential candidate Yanukovych. Yushchenko embarked on an agenda to bring Ukraine closer to NATO and the European Union, irritating Moscow.

In the end, Ukraine came no closer to either. Yushchenko further alienated Ukraine’s big neighbor by seeking to win international recognition of the Holodomor famine of 1932-1933 as Soviet genocide of millions of Ukrainians who starved to death.

Ukraine and Russia sparred over the Russian Black Sea Fleet in Crimea and the 2008 Russia-Georgia war. Disputes over natural gas pricing prompted Moscow to cut off supplies twice, in 2006 and again in 2009.

At decade’s end, Russian Prime Minister Vladimir Putin was flirting with his counterpart, Tymoshenko, keeping his distance from Yanukovych and doing nothing to conceal his contempt for Yushchenko.

Ukraine’s reputation suffered in many parts of the world as unending tragedies, disasters and political infighting gave rise to questions about whether the nation can govern itself. “Ukraine fatigue” arose in Europe.

The Sept. 11, 2001, attacks on America shifted the attention of one of Ukraine’s friendlier international patrons. The U.S. remained bogged down in wars in Afghanistan and Iraq through much of the decade, and is now beset by its own economic troubles and spiraling debt.

Death, disease, despair

From an estimated 54 million persons living in Ukraine in 1991, the decade closed with just under 46 million people estimated to be living in the nation today. There are 8.5 million less Ukrainians than 10 years ago.

The nation has yet to find the key to reversing its demographic slide and public health crisis. With one of the highest death and suicides rates in Europe, Ukraine is the European leader in HIV/AIDS prevalence and tuberculosis.

It is a world leader in smoking and child alcoholism. The number of Ukrainian drug addicts increased exponentially over the last decade. Officially, Ukraine has more than 500,000 hard-drug users but, unofficially, it is believed to have many more.

Poverty may be at the root of much of this social breakdown. Some 26 million Ukrainians earn less than Hr 1,567 ($200) monthly, according to Myroslav Yakibchuk, the head of the National Forum of Labor Unions in Ukraine.

No one knows for sure, because so much of the economy remains in the shadows. Some experts say that real disposable income increased by 178 percent in the last 10 years.

But debts also grew, reaching $19 billion (about 30 percent of gross domestic product) in sovereign foreign debt and more than $100 billion in foreign debt, private and public.

And simply changing the calendar doesn’t wipe the slate clean.

Source: Kyiv Post

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Saturday, December 26, 2009

Fears Of New Russia-Ukraine Gas Dispute On The Rise

KIEV, Ukraine -- Ukraine is dismissing Russian claims that it is having trouble paying its gas bill despite a shortage of IMF funds and cold temperatures.

Ukraine Prime Minister Yulia Tymoshenko

Ukrainian Prime Minister Yulia Tymoshenko denied accusations on Saturday by Russian gas exporter Gazprom that the country would be unable to pay its energy bills.

"We - Ukraine - are clearly and confidently managing our financial life during the crisis," she said, according to the Russian news agency Interfax.

Gazprom had asserted that Ukraine had further cut back its gas purchases in the middle of December, leading chief executive Alexei Miller to assume that the nation was facing fiscal difficulties.

"We assess the situation with payments for Russian natural gas deliveries in December as very alarming," Miller told state television.

"In the middle of December, there was a trend of a reduction of gas off-take which confirms that Ukraine is facing serious difficulties with gas payments," he said.

Politics of energy

The International Monetary Fund had extended a 16.4-billion-dollar credit in 2008 to assist Kyiv with the global financial crisis.

But the fund is now withholding the next payment due to worries about political infighting in the run-up to the presidential election.

Ukraine has a January 11 deadline to make payments on its supply of gas, according to Gazprom. In November Tymonshenko and Russian Prime Minister Vladimir Putin met and vowed to prevent a repeat of the gas shortages of 2006 and early 2009 across Europe.

The European Union, which receives one-fifth of its gas from Russia, had met with Ukrainian government officials earlier in December to assuage the fears of another gas crisis.

Source: Deutsche Welle

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Visiting Kiev, The Capital Of Ukraine And A Cradle Of Russian Culture

KIEV, Ukraine -- Some cities are love at first sight. People fall for Paris in the taxi from the airport. Others take you slowly. Kiev is like that.

Kiev's St. Sophia's Cathedral has survived centuries of warfare.

I've walked the streets of this Ukrainian capital almost every day for a year. I've watched white-tailed eagles on a vast swampy island in the middle of the Dnieper River, listened as unseen nuns filled a vaulted church with their harmonies, marveled at the parade of tall women in stilettos clicking confidently down icy sidewalks and suffered a mild concussion myself when my feet shot out from under me in a frozen alley.

I've passed markers commemorating millions of murders. I've negotiated for a baggie of turmeric with a man from Samarkand. I've lost my bearings in candlelit catacombs, felt the sting of the winter wind on the city's high bluffs, watched twilight envelop golden-domed churches and talked to the genius behind the city's strangest museum. (And I'm not talking about the toilet museum, either.)

I've discovered wooden windmills, taxi-driver poets, gilded icons, robed monks, blues singers, cheap river cruises, horseradish vodka and a few new things about myself. Perhaps the only thing I haven't encountered in Kiev is a dull day. It is an unsung capital, full of surprises. During the day, you may be startled by the sudden cascade of sound that tumbles out of churches on religious holidays -- the "raspberry bells," it's called. By night, you may flinch at the concussion of the boisterous fireworks that Ukrainians send arcing over the city four or five nights a month.

Sixteen months ago, I walked away from my desk at The Post. Shortly afterward, my wife landed an 18-month job in Ukraine.

We arrived on a fall day as the sun was setting and had our first meal at Oscar's Place, a three-table restaurant on the street where we'd be living. My wife, who speaks Russian, told the barmaid that it was my first night in Ukraine. Don't order, she replied. I'll bring you real Ukrainian food. She did. And it was great, though the first dish -- salo, slices of raw pork fat served on black bread -- is best if washed down with vodka.

Since then, I've been spending the afternoons writing and exploring the city and the mornings studying Russian. (Almost everybody in Kiev speaks both Russian and Ukrainian. I picked Russian because I've always dreamed of reading Chekhov in his native tongue.)

I began with a seven-word vocabulary: Yes, no, please, thank you, hello, goodbye and beer ("peevo"). That was enough to get started. People I met were happy to communicate. Gestures and pantomime worked wonders when words failed. I found myself thinking: I doubt this would work with the French.

To my chagrin, I found that people sometimes addressed me in English before I opened my mouth. Was it my clothes? No, I was usually wearing black jeans and a black pullover, like every other man in town. Shoes? In Washington, I could always spot tourists by their shoes. But my low black boots were exactly what many Ukrainians had on. Finally I asked. Turned out, it was my face.

I never thought I looked American, but apparently I do, at least in Slavic countries. Most people here have better cheekbones than Tom Cruise. I don't.

Tragedy and rebirth

Kiev is an old city, one of the cradles of Russian culture. The Russians, in fact, call it the mother of cities. Legend has it that in A.D. 560, three Viking brothers rowed down the Dnieper with their sister at the steering oar. She picked the spot where they settled and named it for the eldest brother, Kyi. Sounds like she was in charge.

Although Kiev is spread out along both sides of the Dnieper, I generally walk the oldest sections, which are scattered along the hills of the west bank. The golden domes of churches, monasteries and bell towers adorn the ridge above the river, as if some giant had dropped a handful of Christmas decorations.

The center of Kiev remains a remarkably intimate place for a big city (2.7 million). Not many high rises. Lots of quirky streets and eccentric apartment buildings festooned with sculptural reliefs -- lions here, gods and goddesses there, laurel wreaths above the windows. There's a concrete rhino poking out of one building. And in some sections, the facades are frosted with a layer of ceramic tile.

If you squint past the drab Soviet architecture that mars some of the city, you can see enormous beauty. But there is sadness in it. People used to say that New Orleans was "the city that care forgot." Nobody ever said that about Kiev.

Everywhere, you sense layers of tragedy and rebirth. The churches of Kiev make the point. Near our flat, you can find the remains of a church destroyed by invaders in the 13th century. A few hundred yards away, on the same hilltop, stands St. Michael's Monastery of the Golden Domes, home to my favorite bells. A church has been on that spot for more than 900 years, but today's lovely cerulean building is a recent reconstruction of an old church that communists blew up in the 1930s.

The nearby streets include ornate pre-Soviet facades and a few cold examples of Stalinist gigantism. You meet many self-congratulatory statues but scads of modest, carefully sculpted portraits, too. They're easy to miss. Most jut just above eye level from the sides of old apartment buildings.

Each shows a distinguished painter or agronomist or writer or ballet master . . . who had an apartment in the building the memorial is bolted to. As you walk along, you think of the aging physicist skittering across a frozen curb here or the lovely actress memorizing lines from "Uncle Vanya" on a park bench just there.

On one of my earliest walks, not far from our flat, I found a small stone sculpture of the silhouette of a child inside the outline of a robed woman, perhaps an angel. It commemorates the Great Famine of 1932-33. Unlike most famines, this one was man-made. Ultimately, the man who made it was Stalin.

He demanded impossible amounts of grain for export. Desperate to comply, local bosses kept supplies of grain locked in warehouses while Ukrainians starved. Estimates of the death toll range from 2.5 million to nearly 10 million. It was mostly ignored in the West.

Children suffered terribly. Some people survived by eating corpses. Standing in the wind in front of the memorial and feeling very small, I tried to grasp the enormity of it.

Perhaps because my great-grandfather Capt. Frank C. Robbins fought there, I think about the carnage of Gettysburg, one of the bloodiest battles of America's bloodiest war. Seven thousand died at Gettysburg, so -- assuming that 5 million died -- Ukraine's Great Famine killed more than 700 Gettysburgs.

The worst of the famine was not here in Kiev, but in villages. But walking down the city's lovely old streets, passing people whose families almost all endured the famine, you can't help admiring the grit and grace of Ukrainians.

Ukrainians don't get a lot of respect from Westerners. Theirs is the largest country in Europe, save for the European part of Russia. Ukraine was part of the Russian empire and then a republic within the Soviet Union. It became independent in 1991. A pro-Western government took over after the peaceful protests of the "Orange Revolution" of 2004. But a lot of Americans think it is still part of Russia. Someone in the United States sent a letter to a friend here addressed to "Kiev, Russia." It arrived.

Green hills, broken hearts

When I think of the city, the color that comes to mind is not orange but green. It's a very leafy place.

A beautiful string of parks stretches along the hills above the river. It's probably the best walk in the city. Eventually, you reach the high-walled Kiev-Pechersk Lavra. Once one of the most important centers of Orthodox Christianity and home to 1,000 monks, it was taken over by the Soviet government in 1930. Religious activities resumed over time. Today, some buildings are secular cultural museums and some are part of a religious complex operated by the Orthodox Church.

Beneath several of the churches is a labyrinth of tunnels, used by reclusive monks in times gone by and now the resting place for many saints. Carved into the 660 yards of stone tunnels are a number of tiny, elegant churches fitted with glittering gold icons. Parts of the cave complex are open to the public. For me, lighting a candle and walking through the cramped, whitewashed passages is both strange and moving. Along with tourists, devout worshipers come here to kneel and pray next to the small, glass-topped coffins.

Part of the Lavra encompasses the secular exhibitions -- which run the gamut from displays of ornamental gold fashioned by the mysterious Scythian peoples who once ruled the Ukrainian steppe to the marvelously quirky Museum of Micro-Miniatures.

The latter grew out of the imagination of one man, Mykola Syadristy, who set out to make items so tiny they could only be appreciated when viewed through microscopes. My favorite consists of a human hair, drilled hollow and then polished to transparency. Inside this tiny tube, Syadristy managed to insert a miniature rose.

Now 72, Syadristy often hangs around the museum. His picture is on the wall, and it's easy to pick him out if he's there. One afternoon, my friend Karen, who speaks fluent Russian, and I struck up a conversation with him. We thought he would regale us with stories of his secret techniques -- how he made the minuscule maiden with an umbrella who sits on the proboscis of a life-size golden mosquito, or how he placed an entire desert caravan inside the eye of a needle.

Our initial question produced an uninterruptible 15-minute oration, but it wasn't about how he put a chess set on the head of a pin. It was about Marx, Engels, Lenin and the shortcomings of Ukraine's current leadership.

The more you talk to Ukrainians, the more you realize that for all their toughness, their hearts have been broken by politicians.

President Viktor Yushchenko, who led the Orange Revolution, seemed poised to become the country's George Washington. But in the run-up to this winter's election, his approval rating is in the neighborhood of 2 to 3 percent, making him perhaps the world's most unpopular elected leader.

Part of the reason is that the financial crisis that shook the United States has been catastrophic here. You wonder how much Ukrainians can take. Unemployment is up. The economy is sagging. People who have been sacked can't get at their savings because banks are in trouble.

But you can walk the streets here and still see plenty of shiny cars threading their way around the rattling Russian-designed Ladas. On the sidewalks march Ukrainian women in glittering shoes and fur-trimmed leather jackets. On the outskirts, marshy fields erupt with hulking McMansions.

It's as if Ukraine is somehow sure that its encounter with misfortune will have a storybook ending, an attitude captured in the local saying: If Khevrya hadn't fallen into the puddle, she wouldn't have gotten married. Although no handsome stranger has pulled Kiev out of the mud lately, people here have a profound understanding of misfortune.

The reality of that hits home as you walk south from the old monastic citadel. The city falls away on either side and the view is dominated by Kiev's perhaps most dramatic landmark: Rodina Mat, the mother of the country.

She is tall, she is titanium, she has a 53-ton sword, she is not particularly happy.

The statue stands atop a museum dedicated to World War II's Eastern Front, and the story inside the museum is more than sobering. Moving through the museum, I often wonder why I knew so little of it until now.

In history courses in high school and college, I got the standard American account of the war: Blitzkrieg, Dunkirk, Battle of Britain, Churchill with a defiant cigar, D-Day, pretty girls showering GIs with flowers in Paris, Battle of the Bulge, our tanks rumbling toward Hitler's bunker. Victory.

Well, no.

Walking through the museum made me want to learn more about the "Great Patriotic War" and the mammoth battles of the Eastern Front.

In the United States, we revere my father's contemporaries as the "Greatest Generation." And their bravery and sacrifice is beyond question. But when the Greatest Generation handed down the story of the war in Europe, they often neglected to mention that it was the Red Army that broke Hitler's back.

The Soviet losses were staggering. In 1941, at the First Battle of Kiev -- which I had never really heard of before I got here -- the Soviet army suffered 700,000 killed, wounded and captured. If you count German losses and civilian carnage, the figure approaches 1 million -- or 20 to 25 Gettysburgs, where 50,000 were killed or wounded. That's just one of the battles fought at Kiev. There were others.

Then there's the secluded gully where in two days in September 1941, the victorious Germans shot 33,771 Jews. Executions of Jews, communists, partisans, gypsies and others continued at the Babi Yar ravine until 1943. A hundred thousand may have died there. Maybe more.

The Soviets erected a grandiose marker in a nearby park in 1976 but didn't quite have room on the tablet to mention that the people shot to death were mostly Jews. Eventually a memorial in the shape of a menorah was built in the woods nearby, overlooking the lip of the ravine.

Yet despite all this sadness and grief, there is wonder and splendor, too. Twist your way down the street known as St. Andrew's Descent, past the wedding-cake architecture of St. Andrew's Church and the tiny cafes clinging to the slope, and you can almost image you are seeing Kiev 100 years ago, when the great novelist Mikhail Bulgakov ("The Master and Margarita") lived and worked in a little house on the right.

To find much of this charm, you must look around, or at least understand, the top layer of the city: the Soviet layer. It has a special grimness. Peeling back the layers of a place takes time. I was in Miami for 16 years and spent most of the time trying to figure out what was at the heart of it. It's a slippery place. I never got to the center, but I did figure out that the center wasn't very important. It was what was on the glittering surface that mattered.

Kiev is the opposite, I think. Yes, it's a city with plenty of tricks. But it has been around for more than 14 centuries. Kiev knows who it is.

The place where I feel the heart of Kiev most intensely is looking at the green and golden domes of St. Sophia's Cathedral. This building somehow survived the attack of Batu Khan and his Golden Horde in the 13th century. Down the street, the khan, grandson of Genghis Khan, burned down an even older church with 3,000 Kievans inside. St. Sophia's also survived the czars, the Bolshevik Revolution and Hitler. It survived Stalin's penchant for blowing churches to smithereens.

Kievans tell of a legend that the call of the city's church bells can weave a shield over the city.

Looking at them with my foreign eyes, I consider the centuries of faith here and think about being from a culture where a shield involves missiles or lasers.

And it occurs to me that when I leave, the thing I will miss most of all will be the bells.

Source: The Washington Post

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Ukraine Facing 'Serious Problems' Paying For Gas: Gazprom

MOSCOW, Russia -- The head of Russian gas giant Gazprom said Friday that Ukraine had cut back on purchases of Russian gas since mid-December and appeared to be facing serious cash problems.

A pipeline is seen at the Russian gas compressor station in Sudzha near the Russian-Ukrainian border in January 2009. The head of Russian gas giant Gazprom said Friday that Ukraine had cut back on purchases of Russian gas since mid-December and appeared to be facing serious cash problems.

"Ukraine is experiencing serious problems with payment," Alexei Miller said on Russia's Vesti channel in comments carried by the Ria-Novosti news agency.

Ukraine has until January 11 to pay for gas, according to Gazprom, which has cut off supplies to the country over unpaid bills repeatedly in the past.

"We are hearing and seeing that Ukraine is experiencing very, very serious problems in paying for supplies of Russian gas for December," Miller said.

"We estimate the situation with the payment for the December supplies of the Russian gas as very serious," Miller added.

Gazprom spokesman Sergei Kupriyanov, speaking to AFP, said Ukraine would find it hard to cover its next gas bill after the International Monetary Fund turned down its request for a new loan tranche of $3.8 billion dollars.

Asked what will happen if Ukraine fails to meet the January 11 deadline, Kupriyanov said Gazprom would act "in accordance with the contract," a phrase the company has used in the past when turning off supplies.

"At the current moment there are no objective reasons for a new crisis," Kupriyanov added.

Ukraine's energy company Naftogaz declined immediate comment.

In January, a pricing dispute between the two countries resulted in Russian gas being cut to much of Europe for two weeks as winter temperatures plunged.

Prime Minister Vladimir Putin has repeatedly said that Russia will cut gas supplies to Ukraine again if the struggling ex-Soviet nation fails to pay for its energy supplies.

If Gazprom acts on its warning, the cuts would come amid intense campaigning for Ukraine's presidential election on January 17.

Last month, Putin and his Ukrainian counterpart Yulia Tymoshenko vowed at a meeting in the Ukrainian resort town of Yalta that there would be no repeat of the gas crisis in 2010.

Ukraine has been hard hit by the global economic crisis which triggered a massive slump in its export-dependent heavy industrial sector.

The IMF extended a $16.4 billion dollar credit in November 2008 to help Ukraine weather the downturn, by far the country's biggest source of foreign income in 2009.

So far the government has received a total of $10.6 billion dollars but the IMF is withholding the next tranche of $3.8 billion dollars due to concerns over political infighting in the run-up to the presidential election.

Source: AFP

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Friday, December 25, 2009

Happy Holidays...

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Hottest Heads Of State Ranks Leaders For Their Eye-Candy Appeal

WASHINGTON, DC -- If there is power in beauty, then the leader of the free world is Yulia Tymoshenko, the 49-year-old prime minister of Ukraine with the porcelain features and a halo of luscious golden braids. She's got the body of Barbie and the face of a Hummel figurine, not to mention the responsibility of leading 46 million people and the No. 1 ranking on the Web site

Yulia Tymoshenko is the hottest [looking] leader on the planet, at No. 1 according to and last at No. 172, is Kim Jong-Il of North Korea.

Joe Biden spoke to Tymoshenko on the phone Tuesday from his residence, five months after meeting her in Kiev and proclaiming that Ukraine boasts "the most beautiful women in the world."

What did the beauty and the, uh, distinguished-looking gentleman discuss?

1. The economic situation in Ukraine. (Not hot. Fugly, in fact.)

2. The war in Afghanistan. (Hot, but for the wrong reasons.)

No word on whether Biden blushed his way through the call. The vice president wasn't eligible for the ranking, but his boss was. President Obama came in at No. 15, despite the surf-ready torso and numerous magazine covers.

Obama landed directly behind the president of the Maldives, who's been swiping headlines throughout the year because he's young, attractive and walks to work, and because his island nation is drowning in the rising waters of the Indian Ocean. Even hotter than high cheekbones and bronze skin is a man wrestling with dire climatological forces.

"I have no comment on the hotness of the president or any other head of state," says deputy White House press secretary Bill Burton.

Comely world leaders can capitalize on their looks to goose their appeal, but they must stop short of seeming sexual, according to Barbara Kellerman, a professor of leadership at Harvard's Kennedy School of Government. This might explain Tymoshenko's tightly wound braids, which bind her looks in tradition, or why Obama often looks paternally frumpy outside of work.

"He has gone out of his way to not seem hot," Kellerman says. "We've been reminded that he's a devoted husband at every turn, and the way he longingly looks into his wife's eyes suggests sexuality but only in terms of his wife. He's been chided for wearing jeans that are baggy. He's trying to be middle-of-the-road."

Still, Obama ranks ahead of rival beefcake. Vladimir Putin, that musky Muscovite, comes in at No. 18 and supermodel magnet Nicolas Sarkozy popped up at No. 28.

But what of the science behind this ranking? Who were the loony beauty experts who scrutinized the pores of presidents?

Turns out Hottest Heads of State was the idea of a temp/musician in New York named Derek Dobson. He came up with the concept after a night of drinking with friends. He, his brother and sister-in-law created the site and ranked the leaders simply because it's never been done before on the Internet, which is littered with the carcasses of a zillion lists. They threw the list onto a blog template and began to post polls and write irreverent entries on the hotness quotient of world leaders. Hilarious comments from around the world have been steadily rolling in for the past five months.

One recent commenter simply purred, "Mmmm . . . Jens Stoltenberg," in reference to the somewhat dashing prime minister of Norway, who's No. 2.

"Some of these people are mass murderers, so it's kind of flippant to be ranking them on their good looks," says Dobson, 28, of the list's more poisonous potentates. "I'm thinking of doing a post on Ahmadinejad [No. 48], but it's hard to write with that ironic flavor when you're talking about a possibly evil man."

Do crimes against humanity diminish a man's physical hotness? Can the silky hair of the president of Argentina (Cristina Fernández de Kirchner, No. 5) be compared to the piercing blue eyes of the president of Slovenia (Borut Pahor, No. 21)? The answers aren't the point. The fact that the ranking was viewed more than half a million times is the point.

Apparently, it all comes down -- like everything else these days -- to Sarah Palin. She is the first female leader to overtly flaunt her sexuality, according to Kellerman, the Harvard professor. She's a timely case study in the blendering of celebrity and politics, and of statecraft and sexuality. These days, a president or prime minister or even a pope (Benedict XVI is No. 171) can be reduced to their hotness, ranked by the masses, and subjected to the whims of a temping musician who lives in Brooklyn.

"It's part of a larger cultural shift, with leaders weakening in many ways," says Kellerman, whose recent writing focuses on empowered masses and diluted leadership. "One of the ways they're weakening is we are daring to do to them what we'd do to a movie star or rock star. This ranking would've been considered outrageous not too long ago."

Last, and maybe least, at No. 172, right behind the pontiff: Kim Jong-Il, who looks like everybody's grandmother.

Source: The Washington Post

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Thursday, December 24, 2009

IMF Turns Down Ukraine Plea For $2 Billion Loan

LOS ANGELES, USA -- The International Monetary Fund has rejected Ukraine's request for a $2 billion loan to help the recession-strapped country meet financial obligations by year's end, a senior Ukrainian official told the Financial Times on Wednesday.

IMF headquarters in Washington, DC.

In refusing to extend additional funds, the IMF cited the Ukraine government's failure to abide by its financial and economic obligations and infighting among the former Soviet state's political leaders, the Financial Times reported.

IMF officials could not be reached for comment late on Wednesday.

Ukrainian officials told the FT the government has other options to bring in the funds to pay natural gas import bills to Russia's Gazprom, and state employees' pensions and wages.

Kiev had expected to receive about $3.8 billion in a fourth tranche of IMF credit by the New Year under a $16.4 billion bailout plan. It has already drawn $10.5 billion under the program.

The IMF is withholding disbursement of the fourth tranche until Ukraine's political leaders begin working together to solve the country's financial problems amid a 15 percent drop in gross domestic product.

The situation is complicated by the upcoming Jan. 17 presidential election which has President Viktor Yushchenko, Prime Minister Yulia Tymoshenko and ex-premier Viktor Yanukovich all competing for the office. A second round run-off, if necessary, will be held in February.

Alexander Ginzburg, an advisor to Tymoshenko, told the FT that the IMF could loosen cash reserve minimums for Kiev's central bank to allow the transfer to government accounts of billions of dollars in reserves built up with IMF money this year.

Yushchenko has vowed, however, to block such a move, the FT reported.

Source: Newstin

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Tymoshenko Looks To Europe

LUHANSK, Ukraine -- Prime Minister Yulia Tymoshenko pledged to pull Ukraine further toward Europe by cleaning up corruption and bringing order to the country if she wins the presidential election early next year.

Ukraine's Premier Yulia Tymoshenko, trailing in presidential poll, vows to clean up corruption, integrate with EU.

Campaigning in the country's industrial east, which traditionally favors front-runner Viktor Yanukovych, Ms. Tymoshenko said in an interview that voters have a stark choice between a European future and a corrupt past, embodied by her chief rival.

She said he is a political relic who represents "very powerful criminal groups" and accused him of working with President Viktor Yushchenko to derail her presidential bid by undermining the economy.

Mr. Yanukovych, in an earlier interview, accused Ms. Tymoshenko and Mr. Yushchenko of their own corruption and fueling "chaos" through ineffective leadership.

Ms. Tymoshenko is using fiery rhetoric in an attempt to attract voters disappointed by the country's lack of progress in eradicating corruption and prosperity after gaining independence in 1991 when the Soviet Union split.

Eighteen candidates are vying for the presidency in the Jan. 17 election, and none will likely get more than 50% of the vote, setting the stage for a runoff between the two leading candidates in February.

The France-sized country of 45 million was set on a democratic path in 2004 when street protests, known as the Orange Revolution, overturned a presidential election fraught with allegations that it was rigged and brought Mr. Yushchenko to power. But domestic political and economic changes foundered amid bitter infighting between Mr. Yushchenko and Ms. Tymoshenko, his ally during the revolution.

In the most recent polls carried out by the International Foundation for Electoral Systems this month, Mr. Yanukovych led with 31%, followed by Ms. Tymoshenko's 19%. No other candidate had more than 5% support. However, she is expected to pick up more votes from other candidates than Mr. Yanukovych in the runoff, which political observers expect to be tight.

Now in her second stint as prime minister after being fired by Mr. Yushchenko less than a year after the Orange Revolution, Ms. Tymoshenko blamed the president for the failure to push through economic changes and combat corruption, calling him a "very weak president, who is unable and unwilling to fight the lawlessness he declared war against."

Ukraine was hit hard in the fall of 2008, when demand for its major steel and chemical exports plunged. The International Monetary Fund stepped in quickly with a $16.4 billion loan, which has helped prop up an economy that has contracted 15% this year. The IMF cut off funding last month, though, after a rise in social spending that was supported by Mr. Yanukovych's political party and signed off on by the president.

Ukraine Finance Minister Ihor Umanskiy said Wednesday that he doesn't expect the scheduled $3.8 billion installment to be disbursed until next year.

In combative campaign speeches, Ms. Tymoshenko has slammed political opponents and corrupt officials for exacerbating the country's economic woes for their own benefit. She vowed in the interview to bring order to the country by establishing "dictatorship of the law" where "no crime would go unpunished."

"Tymoshenko is campaigning in Bolshevik style by finding enemies to fight against," said Yevhen Bystrytskiy, executive director of the Kiev-based International Renaissance Foundation, a democracy-promoting think tank. "Instead of talking about other candidates, she should present a platform of systemic reforms."

Ms. Tymoshenko's campaign has portrayed attacks on her as also being directed against the country.

"She plays on the idea that she is a fragile woman on the one hand, and she is the only real man in the country on the other," said Oleh Rybachuk, who worked for Mr. Yushchenko as chief of staff and served in Ms. Tymoshenko's government as deputy prime minister.

Ms. Tymoshenko said she would "build Europe in Ukraine" to pursue integration into the EU. She called for "pragmatic" relations with Russia, while urging Moscow to "respect" its neighbor.

Mr. Yushchenko accuses Ms. Tymoshenko of betraying Ukrainian interests in dealings with Russia, particularly in agreements to buy Russian natural gas. Ms. Tymoshenko has developed a strong relationship with Russian Prime Minister Vladimir Putin, who has described working with Ms. Tymoshenko as "comfortable."

Ms. Tymoshenko is cooler on the North Atlantic Treaty Organization than the current president, who has irritated Russia with calls for membership in a bloc the Kremlin views as hostile. She calls for continued cooperation, but stresses the lack of support among Ukrainians for membership, talking instead of a pan-European security pact.

Mr. Yanukovych has also softened the pro-Russian message that failed to bring him victory in 2004, promising to foster closer ties with the European Union while strengthening relations with Russia that have become strained under Mr. Yushchenko.

But observers say both front-runners will struggle to make significant progress toward Europe, which would necessitate more transparency in politics and business.

"They both see Ukraine as part of Europe, so it's not so much about the direction, but the speed," said Mr. Rybachuk. "We have a train going toward Europe, but the speed at which we are going is clearly not fast-track with either."

Source: The Wall Street Journal

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Wednesday, December 23, 2009

Prez: Govt Looting Accounts To Pay Bills

KIEV, Ukraine -- Ukraine’s cash-strapped government appears to have looted some 6.2 billion hryvnias ($780 million) out of state-controlled accounts in its scramble to stay financially afloat, President Viktor Yushchenko said in a filing asking prosecutors to investigate the case.

Viktor Pynzenyk

The figure surfaced after the State Treasury released data showing that the Treasury’s account was holding 1.8 billion hryvnias, while it should have kept 8 billion hryvnias.

The most of the cash supposed to be sitting in the account was owned by local governments throughout Ukraine and state-owned business entities, with a number of them recently reporting failed transactions when they have tried to pay for services.

“What did the government do to this money? It has eaten the money up,” Viktor Pynzenyk, a former finance minister, said Tuesday. “The money is not there.”

The development underscores the depth of the government’s financial crunch in December, while Prime Minister Yulia Tymoshenko has been desperately seeking to borrow at least $2 billion from the International Monetary Fund.

The government needs to raise at least 60 billion hryvnias in revenue in December alone - almost four times it has been raising monthly so far this year - in order to meet original 2009 budget revenue forecast, analysts said.

The government has been facing similar financial problems throughout the past 12 months, but it had managed to cover the crunch due to massive lending from the IMF.

The IMF disbursed $10.6 billion, or almost 84 billion hryvnias, to Ukraine over the past 12 months, before suspending the disbursements in November after the government had failed to implement promised reforms.

Now the government has been desperately holding the talks with the IMF seeking to borrow again to prevent a major budget failure, analysts said.

But Pynzenyk, who quit the government in February following a clash with Tymoshenko over the size of budget deficit, said further borrowing without implementing reforms would be a mistake.

“Is that normal that the country cannot live without injections?” Pynzenyk said. “The loan can help bridge budget gap, let’s say we can cover November. But what’s next?”

Pynzenyk estimated that Ukraine’s budget deficit will widen by 15 billion hryvnias in December to 103 billion hryvnias for the entire year of 2009.

The government has officially forecast its 2009 budget deficit at 31.5 billion hryvnias.

The rampant borrowing and the depreciation of the hryvnia over the past 12 months has been increasing Ukraine’s state debts to levels that can become unsustainable, Pynzenyk warned.

Ukraine’s state debt rose to 280 billion hryvnias as of the end of September, up from 189 billion hryvnias as of the end of December 2008, increasing financial burden.

“The spending on interest is growing. It has doubled only in the course of this year,” Pynzenyk said, adding the government plans to spend 22 billion hryvnias on interest payments in 2010.

Source: Ukrainian Journal

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Report: Weapons Flight Heading To Iran

BRUSSELS, Belgium -- The flight plan for an aircraft seized in Thailand with a load of illicit North Korean arms and ammunition shows that the mysterious plane was headed to Iran, a new report from arms trafficking researchers says.

Graphic showing the known movements of a cargo plane that flew from Pyongyang in North Korea to Bangkok, Thailand, with an illegal cache of missiles, rocket-propelled grenades and other war weapons.

According to the flight plan seen by researchers, the aircraft was chartered by Hong Kong-based Union Top Management Ltd., or UTM, to fly oil industry spare parts from Pyongyang to Tehran, with several other stops, including in Azerbaijan and Ukraine.

Thai authorities, acting on a U.S. tip, impounded the Ilyushin Il-76 cargo plane when it made a scheduled refueling stop in Bangkok on Dec. 12, uncovering 35 tons of weapons, reportedly including explosives, rocket-propelled grenades and components for surface-to-air missiles. The plane's papers described its cargo as oil-drilling machinery for delivery to Sri Lanka.

The U.N. imposed sanctions in June banning North Korea from exporting any arms after the communist regime conducted a nuclear test and test-fired missiles. Impoverished North Korea is believed to earn hundreds of millions of dollars every year by selling missiles, missile parts and other weapons to countries such as Iran, Syria and Myanmar.

The report on the flight plan from the nonprofit groups TransArms in the United States and IPIS of Belgium was funded by the Belgian government and Amnesty International. It could not be independently verified.

The report says the plane was registered to Air West, a cargo transport company in the former Soviet republic of Georgia. Asked to comment on whether the plane was bound for Tehran, company owner Levan Kakabadze told The Associated Press that he was unaware of the plane's final destination.

Speaking by telephone from Batumi, Georgia, Kakabadze said that he had leased the plane to the SP Trading company and could bear no responsibility for what happened next.

"I know that the flight documents listed the cargo as oil drilling equipment. It turned out that they were carrying weapons," Kakabadze said. "After leasing the plane, I can't be held responsible for what happened. It's a problem for people who leased the plane. I have nothing else to say."

The authors cite confidential e-mails saying that UTM had ruled out a direct flight from Pyongyang to Tehran.

The report also raises multiple questions, including why the plane would stop in Thailand, since arms traffickers would be wiser to fly over China toward the former Soviet republics and on to Iran, rather than the well-policed southeastern Asian country.

It says that the final flight plan shows that the aircraft stopped at an Azerbaijani air force base a few miles (kilometers) north of the capital, Baku, on its way to North Korea, and was expected to make a stop there on its way back from Pyongyang to Tehran.

An Azerbaijani aviation spokesman Tuesday denied the plane stopped in his country, which shares a border with neighboring Iran.

"The claims that the plane made a refueling stop in Azerbaijan have nothing to do with reality," said Maharram Safarli, a spokesman for the national flag carrier AZAL. "This plane has never landed in Azerbaijan."

The report, which was released Monday, also says that the aircraft's lease owner, SP Trading, which is located in New Zealand, was told that the equipment on board should be brought to Ukraine first for handling before its delivery to Pyongyang.

Ukrainian Foreign Minister Petr Poroshenko has been quoted as saying that the plane was not Ukrainian. He said the plane landed in Ukraine on Nov. 13 empty and left empty on Dec. 8.

The researchers say that the plane's previous registration documents link it to Air Cess and Centrafrican Airlines, which are allegedly connected to accused weapons trafficker Victor Bout, who has been in prison in Thailand since he was arrested March 6 and is battling attempts to be extradited to the United States on terrorism charges.

But, the report said there was not enough evidence to link the plan definitively to Bout.

"In the arcane and esoteric world of former Soviet aircraft registration it is only possible to say that it is 'highly probable' that this aircraft is the same plane which, up to a decade or so ago, was part of a fleet of aircraft which 'quite likely' were under the control of Mr. Bout," it said.

"But this is rather like saying that possession of one's vintage Jaguar, which a decade ago was used as the getaway car in a bank job, makes one a bank robber."

The aircraft itself was formerly a Soviet air force plane that was later converted to civilian use in Ukraine before it was reportedly exported to Malaysia in 1997. It resurfaced in Swaziland in 1998 and was spotted again in the United Arab Emirates in 2003.

Source: AP

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Tight Times In Ukraine Means Cramped Quarters For Its Zoo Animals

KIEV, Ukraine -- Tatyana Shvets strode through the Kiev Zoo recently as if it were her own backyard, feeding scraps of bread to the bison (“Hello, my dears!”), cooing to the storks (“Oh, you must be cold!”) and lavishing love upon every creature in sight, as she has since she first visited as a child half a century ago.

A monkey at the Kiev zoo.

But often enough, her glee turned to dismay.

The camels’ corral was a mess, she insisted. The elephant was scrawny. The hippopotamus seemed depressed. And the monkeys’ cramped accommodations?

“God, what a nightmare,” she said.

Ms. Shvets chased after and berated zoo workers, making mental notes about complaints that she would send to the zoo’s management. There was a lot to write up.

The Kiev Zoo, it seems, has seen better days. Ukraine’s government is in disarray and the political discord has been unrelenting — and, yes, now even the lions and tigers and bears have been drawn in.

The zoo was expelled from the European Association of Zoos and Aquaria in 2007 over poor conditions and mistreatment of animals. Advocates and former workers maintained that a giraffe and other animals died from the zoo’s ineptitude, and that money was siphoned from the zoo’s budget through corrupt schemes.

The zoo’s director was dismissed last year by Kiev’s eccentric mayor, Leonid M. Chernovetsky, after failing to find a mate for an elephant — or so Mr. Chernovetsky said. The new director has stirred an uproar among the staff for her supposedly tyrannical ways, and in October, a brawl erupted among workers during a celebration of the zoo’s centennial.

Lately, animal rights advocates, including Ms. Shvets, have contended that the zoo’s distress has been orchestrated by top city officials who want to sell the zoo’s choice urban real estate to developers and move the animals to the suburbs. The advocates call the strategy, “No animal, no problem,” a play on Stalin’s infamous saying, “No person, no problem.”

“This is being done so there are less and less animals, and they can make money from the land,” said Ms. Shvets, 60, a retired government worker. “The authorities in Kiev these days, all they care about is money.”

The troubles are not always immediately obvious. During a walk around the zoo on a Saturday morning, the place seemed more shabby than squalid, as if it once aspired to great-zoo status but had fallen on hard times for lack of money and attention.

Still, advocates said the worst conditions were obscured behind closed doors, and they have circulated photographs that they said revealed how the animals were treated out of sight.

Many of the primates and bears are held in claustrophobic quarters because the public enclosures are run-down, they said. Construction was begun on a primate pavilion at great cost, then abandoned last year. Workers tell visitors that most monkeys are “under quarantine.”

“I really cried when I went inside and saw the conditions for the monkeys,” said Tamara Tarnawska, leader of SOS-Animals Kiev. “It was absolutely horrible. I felt ashamed to be human.” She said the animals were crammed together in cages that were poorly lighted and dirty.

The zoo’s management disputed many of the criticisms, saying that they were voiced by disgruntled former workers or outsiders with no expertise. The zoo’s director, Svetlana Berzina, did acknowledge that the zoo was in bad shape when she took over last year. She said the previous management was incompetent and had begun projects that were expensive, unnecessary and never finished, like the primate pavilion.

Ms. Berzina said she was replacing workers, spearheading renovations, bringing in consultants and establishing a code of ethics.

“We are consistently dealing with all these issues,” she said. “But I think that you can understand that problems that accumulated over decades cannot be resolved in a single year.”

“A significant number of workers at the zoo clearly were not doing their jobs, and many were simply drinking heavily on the job,” she added. Ms. Berzina denied that there were plans to sell the zoo’s land, and she called publicity over the fight at the zoo’s celebration in October overblown, saying that it was provoked by former workers.

City officials said they hoped to improve the zoo enough to have it reinstated to the European Association of Zoos and Aquaria, but the association said the zoo would have to wait at least until 2012.

While conflicts over the zoo have been widely publicized, some visitors said they did not see what all the fuss was about.

“Compared to other zoos I’ve been to, the animals live pretty well here,” said Aleksei Nazarenko, 22. “There are all these zoos that travel from city to city in Ukraine, and the animals live pretty poorly there. Here, they seem O.K.”

But Yelena Ryabova, 55, said she was worried that the zoo would be relocated.

“They want to put it 40 kilometers away,” she said, referring to the persistent rumors. (Forty kilometers is about 25 miles.) “That is a long way to go.”

When Ms. Shvets overheard people saying that the animals seemed fine, she shook her head. She said that in her many years of coming to the zoo, things had never been so unsettling. During Soviet times, the zoo’s facilities might have been relatively spare, but the care was far better, she said.

Now, she noted, signs were out of date, animals were mysteriously missing and the zoo was pocked with deserted renovation sites.

And then she stalked off to do some more snooping.

“Where is the hippopotamus?” she demanded of a worker, standing at the edge of an empty outdoor enclosure.

“When the mayor gives us money for repairs, you can see the hippopotamus,” the worker grumbled.

Ms. Shvets located the forlorn animal in a small pen elsewhere. “Good morning, my darling!” she said.

Source: The New York Times

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Gazprom Gives Ukraine More Time To Pay

KIEV, Ukraine -- Russia’s Gazprom announced on Tuesday that it would grant Naftogaz, the cash-strapped Ukrainian state energy company, a few extra days in January to pay its December natural gas import bill due to the New Year and Christmas holidays.

“Taking into account the holidays, an agreement was reached to postpone the payment date for December supplies from January 7 to January 11 2010,” Gazprom said in a statement. January 7 is the day most Christians in both countries celebrate Christmas.

The European Union, which saw Russian gas supplies cut off for weeks during the Russia-Ukraine energy spat in January 2009, has urged both sides to avoid repeat disruption. In recent months, Russian and Ukrainian officials have moved to reassure Brussels that a repeat stand-off was unlikely.

But with the political temperature in Ukraine high ahead of a presidential election, some experts fear political rivalries in Kiev could help spark a repeat dispute. Moreover, the cost of Russian imports for a financially stretched Ukrainian government is to increase sharply during the first quarter of 2010 from a 2009 average of $208 per 1,000 cubic meters to about $305.

As Ukraine is hit by a 15 per cent drop in gross domestic product, Naftogaz has struggled amid falling gas consumption and payment by consumers.

Kiev has stayed financially afloat and made monthly payments to Gazprom this year largely thanks to $11bn in aid provided by the International Monetary Fund.

But a lack of political consensus and reforms in the run up to a January 17 presidential election caused the IMF to freeze additional assistance, raising fears that Kiev could find it particularly difficult to pay gas import bills in coming months.

Ukrainian officials have in recent weeks held talks with the IMF on resuming assistance in the form of an emergency $2bn loan. They say the assistance is needed to ensure timely gas, pension and wage payments ahead of the election – expected to wrap up after a February second round run-off.

Source: FT

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Tuesday, December 22, 2009

The Difficulty Of Being Ukraine

WASHINGTON, DC -- Ukraine holds presidential elections next month, and the outcome is likely to spell the epitaph of the Orange Revolution. The euphoria of 2003-04, when a grand display of “people power” reversed a rigged election, has long faded.

The country of 46 million has been one of the hardest hit by the global financial meltdown, suffering a sharp currency devaluation and a projected 14 percent GDP drop this year.

President Viktor Yushchenko, once the Orange hero, is now polling in low single digits. Much like Lech Walesa in Poland a generation ago, the out-of-touch Yushchenko has unceremoniously morphed from national icon of change into political footnote.

The January ballot is likely to lead to a run-off between Prime Minsiter Yulia Tymoshenko, a feisty populist, and Viktor Yanukovich, a drab but steady former premier and Yushchenko rival, whose Party of Regions boasts the strongest organization.

Both are pragmatic leaders. But whichever wins will face enormous challenges, foremost restarting the anti-crisis program with the IMF, which suspended its $16 billion lending facility last month due to the bitter political impasse between Yushchenko and Tymoshenko.

The winner will also need to remember that to lead Ukraine is to balance East and West. This imperative reflects the pressures of both external geopolitics and internal demographics.

Russia and the United States tend to view Ukraine as a key battleground in a cosmic proxy war between East and West. Both have a bad habit of trying to pick winners in Ukrainian politics. These interventions, naïve in their own ways, tend to backfire, often at Ukraine’s expense.

Russian meddling fueled the Orange backlash against the mediocre Leonid Kuchma and his cronies and ended in a series of crippling winter gas cut-offs and sabre-rattling over Crimea.

Meantime, the U.S. expected far more from Yushchenko than he could deliver, deepening his isolation at home. The curse of U.S. foreign-policy idealism, whether neoconservative or liberal, is to make the best the enemy of the good.

By putting more emphasis on the symbolism of a failed NATO membership bid than the unglamorous work of energy reform, the U.S. did no favor for Ukraine’s security. It should be clear that an independent Ukraine must not consume Russian-sourced energy as though it were still part of the U.S.S.R.

By contrast, Russia’s designs on Ukraine are hardly idealistic. At the NATO summit last year, Vladimir Putin reportedly remarked to former president George W. Bush, “You understand, George, that Ukraine isn’t even a country. What is Ukraine? Part of its territory is Eastern Europe, and part of it, a significant part, was given by us.”

Political bullies can be clever at implanting a grain of truth in their predatory barbs. Like other European nations, Ukraine’s ethnicity is mixed and its borders were not God-given. These things emerged through collisions of tribes, ethnic intermingling and considerable bloodshed over centuries.

Western Ukraine — Galicia and Bukovina — were Habsburg lands and never part of the czarist empire. The Crimean peninsula was transferred from the Russian Republic to Soviet Ukraine by Nikita Khrushchev in 1954, when both were part of the Soviet Union.

Ukraine faces deep identity issues. Ethnic Russians are roughly 20 percent of the population, and many more Ukrainians speak Russian. The languages are close, like High German and Bavarian or Danish and Swedish.

Europe prides itself on what Freud called “the narcissism of small differences.” However, Ukrainian nationalists would be wise not to overplay their hand, as Yushchenko often has done on sensitive language and historical issues.

In the 21st century, Ukraine needs to pursue its own path as a pluralist democracy and emerging market, balancing Western integration with a respect for its older cultural roots and affinities. Despite the present economic crisis and wide dissatisfaction with the political elite, Ukraine has a bright future. It has fertile land, solid industry and well-endowed human capital.

It also has a libertarian Cossack streak that explains how Ukraine came into being — precisely because of the proud self-reliance of its diverse people. The streets of Kiev, Lvov, Kharkov, Dniepropetrovsk and Simferopol (forgive the Russian transliterations) today have a distinct whiff of freedom, and they should keep it.

What should the West do to help? The U.S. needs to continue balancing its important “reset” policy with Russia by reassuring its neighbors, foremost Ukraine, of its active commitment.

It is the fate of the post-Soviet countries to be part of what Moscow calls the “near abroad.” While these states will always be near, it must be the policy of the U.S. and European Union to make sure they remain “abroad,” and free and prosperous.

Earlier this year, a senior Ukrainian official, anxious about the reset, asked me whether the Obama adminsitration would “trade us for something like cooperation on Iran.” I told her that the U.S. was rooting for Ukraine even when Leonid Kravchuk and Leonid Kuchma, less than stellar figures, were its elected leaders. This will not change.

Yet Ukrainians remember lost dreams of statehood during the two great European wars in the 20th century. And they remember the “Chicken Kiev” speech of President George H.W. Bush to the Ukrainian Supreme Soviet on Aug. 1, 1991, just months before the unraveling of the U.S.S.R., when he said, “Americans will not support those who seek independence in order to replace a far-off tyranny with a local despotism.” Bush had uncannily bad timing, but his underlying point about the need for political maturity remains important.

Ukrainians and their Western partners alike should stick to a balanced path of reform and long-term sustainability, not quick fixes and grand gestures. The end of the Orange era will not be the end of Ukraine's independence — nor of its Euro-Atlantic identity.

Source: The New York Times

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European Parliament Leader Calls For Fair Presidential Elections In Ukraine

KIEV, Ukraine -- Visiting European Parliament President Jerzy Buzek Monday called on Ukraine to hold "a free, fair and transparent" presidential poll.

European Parliament President Jerzy Buzek.

"The European Union does not support any presidential candidate. But we are very interested in a free, fair and transparent election in Ukraine," Buzek told a press conference after talks with Ukraine's Parliament Speaker Volodymyr Lytvyn.

Buzek said the European Parliament will send observers to Ukraine during the presidential elections, stressing "Ukraine is EU's important strategic partner."

He also urged Ukraine to speed up economic reforms, ensure energy security and maintain its political balance.

Lytvyn, for his part, said Ukraine will cooperate with domestic and international observers in order to ensure the election democratic and fair.

"I believe Ukraine will continue its democracy road, though election campaigns have made the political situation complicated," he said.

Ukraine is scheduled to hold the presidential poll on Jan. 17, 2010. A total of 18 presidential candidates will run for the post.

At present, leader of the oppositional Region's Party Viktor Yanukovich and incumbent Prime Minister Yulia Tymoshenko are leading in opinion polls.

Source: Xinhua

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Man Jailed For Ukraine Sex Abuse

HAMPSHIRE, England -- A paedophile from Hampshire has been given an indeterminate jail term after admitting travelling to Eastern Europe to sexually abuse young children.

British paedophile Trevor Sharpe.

Trevor Sharpe, 50, of Goldcrest Close, Horndean, travelled to Ukraine to take photos and videos of his encounters.

The IT specialist pleaded guilty to 58 charges of abuse relating to a period between April 2005 and January 2009.

He also admitted four charges of possessing a prohibited weapon, and was sentenced at Portsmouth Crown Court.

The court heard the weapons charges related to four cans of pepper spray.

Prosecutors said Sharpe drove from the UK to council estates in Ukraine, mostly in the city of Odessa, to entice children to come into his car.

Police believe he had more than 30 victims, some as young as seven and some of whom he paid.

A total of 325 photos and 78 video clips taken by Sharpe were found on his computer as well as a separate hard drive.

Another 26,443 photos and 95 video clips he had downloaded were also found.

The court heard only three of Sharpe's victims had so far been identified from the pictures.

The charges Sharpe admitted included engaging in sexual activity in the presence of children, causing or inciting children to engage in sexual activity, sexual assault of a child under 13 and taking or making indecent images of children.

Sentencing Sharpe, Judge Richard Price said: "You are a highly-dangerous man as far as children are concerned, highly-dangerous."

No emotion

He told Sharpe he would not be considered for release until he had served at least two years and one month.

But Mr Price stressed this was an indeterminate sentence "from [which] you will not be released until you are safe".

"You may never be released, you may spend the rest of your life in prison."

Sharpe was also placed on the sex offenders register for life and was banned from ever owning a computer or phone or device that can connect to the internet.

He was also banned from owning a device for taking still or video images, and was banned from having contact with children under 16.

Defence counsel Richard Onslow, said Sharpe could not explain why he had engaged in the behaviour, of which he was deeply ashamed.

He also said Sharpe had not distributed any of the material he had taken or downloaded.

Source: BBC News

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Ukrainian Election Seems To Be About Damage Control

KIEV, Ukraine -- The good news is that nobody can predict the result of Ukraine's presidential election on Jan. 17, a sign of a healthy democracy. The incumbent, Viktor Yushchenko, who swept to power in the Orange Revolution in 2004-05, is almost certain to be voted out.

Presidential candidates Viktor Yanukovych and Yulia Tymoshenko.

But a second round of voting is likely to be needed between Yulia Tymoshenko, the prime minister and former orange ally of Yushchenko, and Viktor Yanukovich, a former prime minister who was the anti-Yushchenko loser then. In the fluid world of Ukrainian politics, allies become enemies and vice versa.

Russia strongly backed Yanukovich in 2004. This time, the Kremlin would settle for either front-runner and has also promised no gas war this Christmas.

After years of political crisis, at least Ukraine is taking the election in stride. The protesters' tents that were once a fixture of Ukraine's political life are so far absent. Political fighting is fierce, as reflected by television channels that plug the interests of their powerful owners. But at least the overall coverage is diverse.

The bad news is that the leaders of this country of 46 million, bordering the EU in the west and Russia in the east, have largely squandered the credit they won in the heyday of the Orange Revolution.

Corruption is rife, the courts are bent, institutions are dysfunctional and the economy (dominated by Soviet-era steel and chemical factories) is sick. Instead of reforming Ukraine, politicians have fought over power and assets, blocking each other's decisions.

This is exemplified by Yushchenko's recent actions, aimed at damaging Tymoshenko at any cost, even if they discredit the country.

Yushchenko has even managed to sabotage the disbursement of a badly needed International Monetary Fund loan. The fund bailed out Ukraine to the tune of $16.4 billion, and was relatively lenient over its conditions.

One thing it did ask was that the budget deficit be kept down. So when Yushchenko signed a law to increase public-sector wages, the fund had little choice but to suspend the final $3.8 billion payment.

On paper, both Tymoshenko and Yanukovich are promising reforms. But Ukrainians know better than to believe promises. Tymoshenko's record in office is mixed. In two stints as prime minister, she reversed one of Ukraine's more controversial privatizations and scrapped an opaque intermediary in the gas trade between Russia and Ukraine. She has also held down public spending.

But her bid to control prices, her rabble-rousing instincts and her scheming were all alarming. Not long ago she tried to forge a deal with Yanukovich to amend the constitution so that parliament would elect the president.

According to a leaked document, parliamentary elections were to be held in two rounds, giving the winning party total control. The arrangement fell through only after Yanukovich walked away.

The common wisdom in Ukraine suggests that, if Tymoshenko wins the election, she will consolidate her power, undermine the opposition and micromanage the government. There is no danger of micromanagement with Yanukovich, who represents the interest of big industrial groups in the Russian-speaking east.

Worryingly, his political camp includes Ukrainian officials involved in the scrapped gas intermediary. Yet corruption is so rife that even the most scandalous allegations surprise nobody.

"The trouble is that 80 per cent of what Tymoshenko says about Yanukovich is true, but 80 per cent of what Yanukovich says about Tymoshenko is also true," says Yulia Mostovaya, editor of Zerkalo Nedeli, a weekly.

The choice in this election is not, say some Ukrainians, who would do the best job but who would do the least damage. Whoever wins will have to amend the constitution that makes decisions in Ukraine so hard to reach.

Source: Winnipeg Free Press

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Monday, December 21, 2009

Ukraine: Where Are You Going?

PRAGUE, Czech Republic -- Ukraine is eager to end the marathon round of talks that would guarantee the fourth and final tranche of a $16.4 billion loan from the International Monetary Fund (IMF) by the end of this year. The government hopes to assure this loan ahead of upcoming presidential elections.

A Ukrainian police officer stands amongst boxes sprayed with a radioactive symbol thrown by Green Party activists during a demonstration near parliament in Kiev on Dec. 17 protesting a bill proposing the construction of a radioactive waste dump in the Kiev region.

According to the New York Times, the IMF is playing a waiting game with Kiev and plans to withhold the $3.5 billion final tranche until after the presidential elections, which are due to be held January 17.

The loan was approved in the midst of the global financial crisis, in late 2008. Yet it appears, the results of the upcoming presidential election will be a crucial factor in sealing the deal for the final disbursement of the IMF "lifeline," or cash injection, on which Ukraine's faltering economy depends to stay afloat.

In addition to these loans, Ukraine has requested an additional $2 billion in urgent "emergency loans," according to the Financial Times, in order for it to ensure the flow of natural gas through its transit country, which originates in Russia and is destined for Western European markets.

Ukraine has seen its gas supply shut off in the past by Moscow, due to its failure to pay Russia outstanding energy debts. The Moscow-Kiev gas disputes, or "wars," which often center on pricing and delayed payments owed on the Ukrainian side, has led to interruptions in gas exports to several E.U. member states in the midst of winter.

This has added to the perception abroad of Ukraine being an unreliable trade partner.

Kiev comes to Midtown Manhattan

At a conference in New York City earlier this month, organized by the Financial Times and the Kiev-based "Foundation for Effective Governance," Western diplomats, Ukrainian philanthropists, entrepreneurs and politicians gathered to assess the country's present, in an attempt to chart a roadmap for its uncertain future.

The country has been hit hard along with the Baltic States in the ex-Soviet bloc region during the 2008 global financial meltdown. Its development is further hampered by endemic corruption, a lack of diversification in its economy and a weak banking sector.

"What we need is strategic patience" when dealing with the Ukraine, U.S. Ambassador William Taylor told a captive audience in Kiev.

"We need to understand that Ukraine is a work in progress," he added. Indeed, it has been a long hard slog so far for Ukrainians. The country is situated in an ill-defined geopolitical zone, a kind of no man's land.

It is neither in NATO nor the E.U., unlike the Baltic states or its Western neighbors—Poland, for instance. The former Soviet republic's NATO candidacy and perhaps eventual membership is still "in the cards… but it's up to the Ukraine," as one of the speakers put it.

Ukraine, despite its newfound national revival on the political map, remains wary of a resurgent Russia that still considers it to be its "backyard." This is a major concern for Washington.

And it was clearly conveyed in Ambassador Taylor's remarks. "It is in the [West's] strategic interest that Ukraine succeeds in maintaining its independence and sovereignty," he said.

Ukraine gained its independence in 1990, in the wake of the failed KGB attempted August coup in Moscow, and has struggled to resist the gravitational pull of its former Russian overlord ever since then.

After the so-called "Orange revolution" in November 2004, its leaders—despite constant bickering and infighting, especially between the current President Viktor Yushchenko and Prime Minister Yulia Tymoshenko—have been almost obsessed with distancing themselves from Moscow.

Western powers have sought to assist these attempts by sponsoring loans to Kiev and mentoring the state's fledgling democracy with "good governance "techniques." Nevertheless, Ukraine is mired in endless economic woes.

As mentioned earlier, so far only IMF funding has kept the country from falling over the cliff and into default on its foreign debt.

The country is also hobbled by other obstacles—a Byzantine bureaucracy, onerous regulations and permits, a flimsy concept of the rule of law that is exemplified by the lack of bankruptcy protection laws, and high taxes.

A clear and viable tax code is nonexistent. Above all, inviolability of property rights is not yet guaranteed. Legalization is lacking in these crucial areas. Passing laws that would make Ukraine more congenial to international investors will be a top priority, it seems.

That was the message delivered to the conference participants by lawmakers such as Vladyslav Kaskiv, a member of the Ukrainian parliament, and his legislative colleague Irina Akimova.

Added to this is the political uncertainty that exists in the run-up to the presidential elections and beyond. This, for instance, poses problems for long-term infrastructural projects.

As Georgina Baker, the director of Global Financial Markets at the World Bank's International Financial Corporation (IFC)—whose investment program in Ukraine amounts to about $500 million—put it, "There are still a lot of uncertainties, as the country is heading for a presidential election in January, and I think investors are looking for stability and coordinated efforts of different branches of government after the elections."

As far as Ukraine's long-term financial health is concerned, she added, "My feeling is that there is some recovery, at least in certain sectors, agriculture being one of them. We are also seeing that the banking sector has survived through the initial shock. And we hope that it will start financing the real economy."

Yet despite certain perceived and real hindrances to doing business in the country, "great [profit] margins make it easier to navigate in this environment," Oleksky Skrypnik, CEO of Eleks Software Company, said.

Ukraine: a "Ferrari in a cave" or a failed state?

The country, with its great potential (a well-educated and low-wage work force, a crucial East-West transit corridor, etc.), remains overshadowed by Russia.

Referring to the authoritarian tendency next door, Ukrainian MP Mrs. Akimova said that she "would strongly prefer a Ukrainian mess to Russian order." The question is does the Western businessman agree with her viewpoint on this?

The country has been described as a "Ferrari in a cave and an unopened pearl," by potential investors, yet it still hasn't gotten its act together.

The elusive prospect of E.U. membership isn't helping, either. According to Mr. Skrypnik, 20 years after the fall of communism in Europe, "Brussels has built a new Berlin wall on Ukraine's western border." For Ukraine, "the E.U. is now far away," he added.

Meanwhile, Ukraine is still west bound and on course for more "radical reforms," which are supposed to lead it towards a free-market economy. Whether it can achieve a stable and functional democracy as well is quite another story.

Source: World Press Review

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Sunday, December 20, 2009

Ex-Soviet Giants Limp Into 2010 With Fragile Recovery

MOSCOW, Russia -- Bloodied by the economic crisis, the three major economies of the former Soviet Union are finally turning the corner but recovery in 2010 is likely to be fragile and vulnerable to external shocks.

Farmers harvest grain north of Kiev in August.

Kazakhstan, Russia and Ukraine are expected to post respectable growth in 2010 after enduring a dire 2009 but this will largely be due to the favourable base comparison they will have with this year, economists said.

All three countries were badly hit by the global slump due to weaknesses in their economies and while the recovery will help end the slowdown, much more radical reform work needs to be done in the long term.

"Recovery is expected to be sluggish," the International Monetary Fund said after its December staff visit to Russia, the biggest economy in the former Soviet Union.

Predicting 3.5 percent growth in Russia in 2010, it said this largely reflected base effects and a turn in the cycle of inventories, which were emptied during the slowdown.

"Underlying domestic demand is likely to be subdued as bad loans in the banking system are expected to weigh on credit growth," the IMF said.

The government has warned of an 8.5 percent contraction for Russia this year, a ghastly statistic after the country enjoyed five years of pulsating growth on the back of the high price of oil, its main export.

Reform meanwhile has been slack -- the privatization programme was largely mothballed from 2004 while labour productivity is one third that of the United States.

Tom Mundy, strategist at Renaissance Capital in Moscow, said the external environment will remain crucial for Russia and the withdrawal of fiscal stimulus packages abroad, especially in China, could also hit its markets.

Meanwhile, like any major emerging economy, a worry cloud for investors in Russia is the risk of an external shock such as the recent announcement by Dubai World it was seeking a debt restructuring which roiled markets globally.

At present, the biggest risk would be any financial meltdown in Greece, which is suffering severe budgetary problems, Mundy said.

"A sovereign default or a repeat of the Dubai situation is the biggest risk on the horizon. There is no real relation at all between Russia and Dubai -- it's just that investors start selling emerging market risk."

Ukraine's government meanwhile announced Friday it expected at least three percent growth in 2010 after a contraction of 12 percent in 2009, according to the Interfax Ukraine news agency.

The country, dependent on exports for half of its Gross Domestic Product, was hit like Russia by the collapse in external demand and slump in raw materials prices .

But the problems were compounded by a problem unique to Ukraine -- an extraordinary soap opera of bickering between the president and prime minister ahead of January's presidential elections.

The political problems, along with populist wage and pension changes that have stretched the budget further, have led the IMF to so far withhold the next 3.8 billion dollars tranche of a 16.4 billion dollar standby credit.

"The recovery in Ukraine has not started yet. Ukraine has suffered a lot from this policy mess," said Alexei Moiseev, economist at Renaissance Capital.

"Once a new government is elected, it will have to pull back the populist measures (made) in the run-up to the election. They have to do this."

The future of the IMF credit remains up in the air and while economists brush off fears of a sovereign default for the moment, the country remains hugely vulnerable to any external shocks such as a meltdown in Greece.

Kazakhstan, like Russia a major exporter of oil and gas, was hit badly by the slump in commodities prices due to the economic crisis.

But this was aggravated by a major crisis in its banking system which had expanded wildly and was too exposed to the property market which collapsed during the crisis.

The IMF forecasts a two percent contraction in growth in 2009 followed by a fragile recovery to two percent growth in 2010.

According to Moissev, reform of the agricultural sector in Kazakhstan also remains a major priority for reform as it employs 30 percent of the population but accounts for just three percent of GDP.

Source: AFP

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Yushchenko's Exit Plan: Jump Before Being Pushed

KIEV, Ukraine -- Not to be outdone by Yulia Tymoshenko, Ukraine's embattled president, Viktor Yushchenko, has indicated that Ukrainian "Democrats" may consider nomination of a single presidential candidate.

(Click on image for a larger view.)

Exactly who Yushchenko considers to be part of the "Ukrainian democrats" is not clear let alone what process they will take in deciding to nominate only one candidate.

It is a bit late to decide this issue now. The deadline for nomination withdrawals is December 21. If candidates withdraw before that date they can get their deposit back after that date they forfeit their 2.5 million deposit.

Yushchenko's support rating has slumped to a low 3.5% and a recent survey conducted by U.S.-based International Foundation for Electoral Systems and financed by the United States Agency for International Development lists Yushchenko with the highest negative rating (83%) of all candidates.

The report in the media gives rise that Yushchenko, with only 4 weeks remaining, may be seeking an exit plan, a way to pull out of the election before he faces total embarrassment and humiliation by losing in the first round of the election.

Source: Ukraine Today

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Ukraine-EU Summit A Failure?

KIEV, Ukraine -- The Ukraine-European Union (EU) summit held in Kiev failed to move the country closer to the West. An association agreement, viewed in Ukraine as a serious step toward EU membership, was not signed because a free trade zone accord which is part of the agreement was not prepared.

Ukraine's President Viktor Yushchenko (C) with Swedish Prime Minister Fredrik Reinfeldt (L) and EC Chair Jose Manuel Barroso (R) at the Ukraine-EU Summit in Kiev.

Very little progress was reported on EU visa regime liberalization for Ukraine. Similarly, Kiev was told to sort out its gas relations with Russia. The summit’s results were predictable, given Ukraine’s political instability and lack of progress in reforming the economy.

President Viktor Yushchenko hoped to sign an association agreement at the summit, and consequently it was rescheduled from September to December. This was despite warnings from diplomats who argued the goal was unrealistic, given the failure to prepare a free trade zone agreement, which the EU refused to adopt separately from the association agreement.

Differences over sanitary norms in agriculture, intellectual property rights, trade quotas and the EU’s refusal to allow visa-free travel were among the main stumbling blocks.

Had an agreement been signed, Yushchenko would have claimed it as his personal achievement ahead of the January 2010 election. Recently, Yushchenko grudgingly accepted that this was out of the question, telling visiting Lithuanian President Dalia Grybauskaite that only “intermediary documents” would be signed with the EU.

Off the record, Ukrainian diplomats blamed Yushchenko’s bullishness and unrealistic expectations for the failure to achieve more concrete results.

Ahead of the summit, the EU sent negative signals. An unusually harsh statement was offered by the EU envoy Jose Teixeira, who said that Ukraine had failed to reform after the break-up of the Soviet Union and remained, in many aspects, like it was 20 years ago.

That is why the economic crisis hit Ukraine so badly, he opined. According to Teixeira, oligarchs are stifling the economy, choking competition and hindering Ukraine’s European integration through corruption and administrative barriers.

He said the free trade agreement would be signed only when the main economic players in Ukraine agreed to launch real economic reform.

Kommersant-Ukraine cited Ukrainian Foreign Ministry sources as saying that the association agreement would be signed in 2011 or 2012. European Commission President Jose Barroso was more optimistic at the summit, saying that the agreement should be completed in 2010, after the presidential election.

Meanwhile, Barroso criticized the Ukrainian leadership for slow reform and said that Ukraine should move from words to deeds after the presidential election. However, Yushchenko blamed recent reforms in the EU, the financial crisis, and Prime Minister Yulia Tymoshenko for the lack of progress in relations with the EU.

In a joint statement summing up the summit Kiev pledged to attain political and economic stability through improving its constitution, fighting corruption and improving its investment climate.

Yushchenko told a press conference that it was agreed to launch talks to improve the EU visa regime for Ukraine. Foreign Minister Petro Poroshenko said most EU countries would start to issue visas to Ukrainians for free from 2010.

However, the real problem for Ukrainian citizens is not visa costs, but EU bureaucratic hurdles making it virtually impossible for ordinary Ukrainians to obtain visas especially from the consulates of Spain, Italy, France and Germany.

Ukraine introduced a visa-free regime for EU citizens in 2005, but many EU countries have toughened their visa requirements for Ukrainians since then. In early 2009, Ukrainian officials hinted that visa requirements for the EU would be reintroduced if no progress was achieved, but this threat achieved nothing.

Kiev was told in clear terms at the summit that the EU would blame it for a possible repeat of the disruptions to Russian gas supply from January 2009. Swedish Prime Minister Fredrik Reinfeldt warned that European consumers may “lose patience” over Ukraine’s unpredictability in gas issues.

Yushchenko promised stable gas transit, but he argued that gas deliveries are not only a Ukrainian problem and that the EU should contribute to its solution. According to Yushchenko, Ukraine spends about $7 billion per annum in order to pump 25 billion cubic meters of gas into its underground reservoirs to ensure stable gas deliveries to Europe during winter. He said Ukraine should not carry this burden alone.

Earlier, the EU refused to provide a loan to Ukraine for buying Russian gas. Naftohaz Ukrainy, the debt-ridden state-controlled oil and gas company, may be short of money to pay for December deliveries from Gazprom. The payment is due in early January.

Kommersant-Ukraine reported that the EU hinted to Ukrainian diplomats that Ukraine should be getting ready for membership talks in the future to join the EU simultaneously with Moldova.

Moldova is more economically backward than Ukraine, it has not yet started talks on an association agreement with the EU, and it has problems with its breakaway Dniester region, but being a small country it could adapt its legislation to EU standards faster. The Ukrainian foreign ministry vehemently dismissed Kommersant-Ukraine’s report, but EU officials neither unequivocally denied nor confirmed it.

Source: Eurasia Daily Monitor

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Saturday, December 19, 2009

Ukraine Denies Involvement In Attempted Smuggling Of Russian Air Defence Device

KIEV, Ukraine -- Chief of Security Service of Ukraine (SBU) Valentyn Nalyvaichenko has refuted the information about the involvement of the SBU into an attempt by employers of a Ukrainian company to smuggle from Russia technical documents and a sample of a state-of-the-art Russian device capable of protecting aircraft from interception by man-portable air defense systems (MANPADS).

Chief of Security Service of Ukraine, SBU (formerly known as KGB), Valentyn Nalyvaichenko.

"I officially deny this information. The SBU has no relation to this citizen and to the situation reported in mass media," the SBU chief told reporters in Kyiv on Friday.

He also said that Ukraine is ready to help Russia investigate the incident, as soon as Russia's Prosecutor General's Office or Federal Security Service (FSB) sends a relevant request.

Russian media reported earlier referring to a source that employers of a Ukrainian company tried to smuggle technical documents and a sample of a state-of-the-art Russian device capable of protecting aircraft from interception by man-portable air defense systems (MANPADS).

The Volodarsky District Court in Bryansk found Mykola Arkhipov, the general director of the Ukrainian research and production company Adron, guilty of smuggling and sentenced him to five months in prison on November 16, a source involved in investigating the case told Interfax on Thursday.

Arkhipov tried to smuggle documents and an experimental sample of an infrared lamp playing the key role in Russian anti-MANPADS devices, he said.

The media also said that Arkhipov had maintained close ties with two Ukrainian Security Service officers specializing on providing counterintelligence support to Ukraine's military-technological cooperation with other countries. Arkhipov himself confessed that his company had been collecting scientific and technological information under instructions from these very officers.

Source: Interfax-Ukraine

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Ukraine To Be Accepted In Europe's Energy Community

PRAGUE, Czech Republic -- Europe's Energy Community, an organisation seeking to liberalise the sector, provisionally accepted Ukraine as a member on Friday, a move that could help the country modernise its gas transit system.

Europe's Energy Community

The group, created in 2005 to ensure close cooperation within the EU and neighboring countries, said Ukraine and Moldova would be able to join when and if they make their gas laws compliant with those of the European Union.

In January officials said they would work on bringing Ukraine into the group following the country's gas dispute with Russia that cut off supplies to Europe and raised fears for energy security.

Europe receives a fifth of its gas from Russia via Ukraine.

"The accession of Ukraine and Moldova to the Energy Community Treaty will catalyze energy sector reforms in these countries, which will result in a mutually beneficial enlarged market based on common rules," European Union Energy Commissioner Andris Piebalgs said in a statement.

"This could in particular help Ukraine, an important transit country, to upgrade its infrastructure."

The accession agreement provides for easier trade and travel, some aid and strong economic cooperation. A key for Ukraine is attracting investment for EU countries to help modernise its gas transit system.

The European Union has also been generally keen to draw Ukraine away from the sphere of influence of its former Soviet master Russia, especially after last winter's so-called gas war.

Earlier this week, the head of Russian natural gas giant Gazprom sought to calm such fears amid a cold spell, saying he did not expect a new gas war with Ukraine to erupt over New Year.

Energy Community officials added that enlarging the Vienna-based organisation is an important part of the EU's energy security goals.

"The gas crisis at the beginning of this year taught us all clear lessons," Slavtcho Neykov, director of the Energy Community Secretariat, said in a statement.

"Putting infrastructural and institutional setting concerns apart, following the treaty obligations in real terms is a challenge and Ukraine, which is a key gas partner, and Moldova have to be well prepared for it."

Source: Yahoo News

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Same Faces, No Issues, As Ukrainians Prepare To Vote

KIEV, Ukraine -- Ukraine is about to elect a new president, but the main contenders are anything but new. In first place in the polls is former Prime Minister Viktor Yanukovych, the villain of the 2004 race, which was decided only after the country’s Orange Revolution.

Pro-Moscow Viktor Yanukovych

Since 2004, Mr. Yanukovych has done much to shed his image as an ex-con, Russian stooge and henchmen of eastern oligarchs. He showed himself to be a confident manager after returning to head the government in 2006. But, he lost that position due to a coalition of Orange politicians, as surely as he lost the presidency to Orange revolutionaries in 2004.

Yanukovych can now with equal force of argument be seen as the comeback kid or a perpetual loser. It depends on how one looks at it, really. Some feel that the ageing strongman from Donetsk doesn’t even need the hassle of public office any more.

After all, with the prompting of numerous American PR gurus, the man has had to change so much – his speech, his hairdo and ultimately his views. More importantly, so has the presidency changed, its authorities watered down from the dictatorial days of Leonid Kuchma just as the victorious Orange team was about to take power.

The Donbass region from where Yanukovych hails from has also changed: Independence has set in, the Ukrainian language is no longer taboo, wealth and globalization have begun to brighten the lives of bleak coalmining towns.

The oligarchs of Donetsk can no longer justly be characterized as anti-Western revanchists bent on bringing Ukraine back into the Russian fold. They borrow money from Western lenders, sell their products abroad and compete with Russian tycoons for market share in Ukraine.

Against such a background, the “old” Yanukovych is a dinosaur. But Ukrainian politics has always been more of a merry-go-round than a tug-a-war: once you climb on board, you can keep riding until you fall off, or the music stops.

Yanukovych continues to ride, out of inertia more than anything else. Why run for president? Because politics is now the only trade that he knows, because eastern Ukraine doesn’t have any other candidate to put forward.

So what does Mr. Yanukovych stand for now in terms of policy? Well if his latest public statements can be taken seriously, Yanukovych wants to strengthen Ukraine’s position in its relations with the IMF.

“I think that both sides – the IMF and the Ukrainian government – are at fault for the disruption and discrediting of the loan program for Ukraine. The Cabinet of Ministers took on obligations that it couldn’t perform. Massive IMF funds were used without transparency, and the authorities haven’t been able to explain where the money was spent.”

Mr. Yanukovych is right about IMF money being misspent – the case of Bank Nadra being the best example of such misspending – however, it wasn’t the government that controlled the National Bank as the global financial crisis struck last year.

What Yanukovych is really saying – in addition to taking a campaign swipe at his primary election opponent Prime Minister Yulia Tymoshenko, is that he doesn’t want Ukraine to be pushed around by international lending organizations.

Here in lies the vague basis of some kind of policy: namely, tighter fiscal control but also more rule setting by Ukraine’s industrialists.

As for Ms. Tymoshenko, she’s been on Ukraine’s political stage even longer than Yanukovych. Also a former premier, she rose to fame in the long struggle to dethrone Kuchma. That struggle culminated during the Orange Revolution, after which Yushchenko was crowned Ukraine’s new king.

As queen, Ms. Yulia soon filed for divorce and the three-way struggle for executive power that has characterized Ukrainian politics ever since began.

Unlike Mr. Yanukovych, whose main support base is in the east, and President Yushchenko, whose remnants of a support base are in the west, Tymoshenko feels confident all over the country. She’s currently rated No.2 by polls, which always underestimate her, but her personal determination and campaign skills far outweigh those of her opponents.

She is, indeed, such a force to be reckoned with that some (including Tymoshenko) are suggesting that Yanukovych has promised Yushchenko to be premier in exchange for campaign support.

“If 18 candidates are running for president, it’s clear that none of them has a chance of winning. Instead, they are all running against one candidate. It’s all a campaign strategy that envisions they all work together to get Yanukovych elected in return for appointments after the elections,” she said.

As always, Tymoshenko is positioning herself as the underdog, the defender of the people under attack by the forces of evil. What this translates to in terms of policy is known more commonly as populism. Tymoshenko has Orange (i.e. pro-Western) credentials but is not shy about courting favor with the Kremlin; and her economics are predicated more on political rivalries, but appear to be more transparent than those of her opponents.

In short, Ms. Tymoshenko is a policy in progress, in flux and always in response.

Maybe this is why President Yushchenko has said that a Tymoshenko victory would lead the country to “catastrophe.”

“Tymoshenko is the essence of the crisis, a crisis in everything that she touches,” he said. The president has further blamed his former co-revolutionary for betraying the Orange team and predicted that her political career would soon come to an end.

Although the president’s statements definitely betray a rather skewed interpretation of recent Ukrainian history, suffice it to say that he clearly seems more critical of Tymoshenko than his former arch enemy Yanukovych.

It was the fight against Yanukovych, the oligarchs and the bandits that rallied hundreds of thousands in Kyiv to protest the initial, fraudulent results of the 2004 ballot and hand Yushchenko the presidency. Now, Mr. Yushchenko is attempting to vilify his former ally, Ms. Tymoshenko, before the people.

The faces in Ukraine’s never-ending political drama have remained the same – not much of a choice for voters. But the issues have become completely blurred, if they exist at all.

Source: Eurasian Home

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Friday, December 18, 2009

Severe Winter Weather Slams Ukraine

ODESSA, Ukraine -- Severe winter in Ukraine has left thousands of drivers stranded and dozens of villages without power, local media reported Friday. Heavy snow that knocked down power lines left 158 villages and towns in the former Soviet republic without power, said officials from the Ministry of Emergency Situations (MES).

The worst-hit region was Ukraine's usually snow-free south and east, where high winds and heavy snow fall had piled up drifts in excess of a metre at some locations, MES director Ihor Krol was quoted as saying by the Interfax news agency.

Between five and eight thousand cars and lorries were stranded Thursday evening on a highway to the west of the Black Sea port city Odessa, forcing drivers and passengers to abandon their vehicles and seek shelter.

Road-clearing and emergency-assistance teams sent by local officials were assisting the motorists, the Odessa-based news agency Liga reported.

"There have not been any deaths or injuries, but some of the drivers are panicking, which is interfering with the assistance effort," said Denys Kostenko, a Odessa-based MES spokesman.

The traffic jam of stuck and abandoned vehicles blocked a 6- kilometre stretch of highway on Thursday, he said.

Anatoly Vorokhaev, Odessa deputy mayor, told the Korrespondent website that poor driver preparation for winter roads was contributing to the difficulties.

"One of the main reasons for ... the traffic jams is that motorists have not put winter tyres on their vehicles, and lots of times they are just driving on bald tyres," he said.

Stuck vehicles and delays of six hours and more were also reported on highways in Ukraine's eastern Kherson and Donetsk provinces.

Traffic police on Thursday evening closed a heavily travelled intercity roadway in Kherson province to nighttime use.

Source: DPA

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Ariana Crew Members Still Adrift At Sea After Release

KIEV, Ukraine -- Freed from pirates on Dec. 10, the Ariana and its 24 Ukrainian crew members are still drifting along in the dark waters of the Indian Ocean. After seven months in the “pirates’ prison,” the Ukrainians are still not home free.

Relatives of the Ariana crew fought for seven months to secure the release of the 24 Ukrainians held hostage by pirates off the Somalian coast in the Indian Ocean. The crew was set free on Dec. 10, when Greek ship owner Spyros Minas paid a ransom. However, Ariana crew members still adrift at sea after release.

The latest word is that the ship is out of fuel near the Somalian coast and awaiting supplies. No one knows whether the crew will be returned to Ukraine by New Year’s Day.

“I have no more strength, no more tears and no more belief. It’s seems to me this nightmare will never end,” said Anna Murugova, who has spent 13 months without her husband, Andrey Murugov, Ariana’s mechanic. She is raising their baby on her own.

“All I need is my husband home,” Murugova said. “All I worry about is his mental and physical health. Somebody, please, end this torture.” This time, she said, the crew is being held “hostage to human ignorance and indifference.”

A ransom of $2.8 million was paid by the ship’s Greek owner, Spyros Minas, to free the hostages from the high seas pirates who kidnapped them. An American warship is temporarily guarding the ship in the Indian Ocean and supplying the Ariana with daily fuel needed to keep the engines working.

Relatives blame ship owner Minas for the slow progress in bringing the Ariana crew home. “The ship owner continues to demonstrate indifference and disrespect to the life of the Ariana crew,” said Zoya Vasilchenko, mother of 26-year-old crew member. Yuriy Vasylchenko. “[A fuel] tanker could have been arranged beforehand." There are reports that Minas is not helping with a possible airlift of the crew to safety. Minas could not be reached for comment.

The Ukrainian Foreign Ministry says it has been told by Minas’ representative that a tanker with fuel supplies is on its way.

“We all are exhausted by uncertainty, by fear,” said Nadezhda Geraschenko, wife of Ariana’s boatsman, Serhiy Gerashchenko. In a telephone conversation with her husband after the crew’s release, he told her: “I am standing on the deck in shorts, a beard down to my knees and 10 kilograms lighter.”

Crew members told relatives back in Odesa that the pirates stripped everything of value from the ship and left it a mess. “When we first went out on the deck, it seemed like a tribe of savages lived there. We are still cleaning out the ship,” Gerashchenko told his wife.

Despite the ongoing hardship, the nearby U.S. frigate provided medical examinations that showed that everyone on board was in satisfactory condition. The Americans are also supplying food, drinking water, medicines and clothes.

Even Larysa Salynska, the ship’s cook, who was in critical condition due to a miscarriage suffered on board, is doing much better. “She is not in critical condition anymore,” said Zoya Vasilchenko, mother of crew member Yuriy Vasylchenko.

There is still hope for a Happy New Year. "I believe that before the New Year we will be able to bring our sailors back to Ukraine," said the chief of Ukraine's Foreign Intelligence Service, Mykola Malomuzh, on Dec. 17.

Source: Kyiv Post

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Thursday, December 17, 2009

Russia Set To Win The War For Ukraine

KIEV, Ukraine -- Opinion polls show that a pro-Russia politician will probably win Ukraine’s January 17 presidential election. After the 2004 “Orange Revolution” it seemed as if Ukraine had moved toward the West. But polls strongly indicate that Russia will bring the errant nation to heal in January. And, unlike Georgia, it seems that Ukraine won’t require a military campaign to be reconquered by Moscow.

Ukrainian Prime Minister Yulia Tymoshenko is widely seen as likely to face ex-Prime Minister Viktor Yanukovych in a run-off election for president. Both are pro-Russian.

The current pro-Western President Viktor Yushchenko’s approval ratings are in the single digits. Although we cannot be sure who will win the election, we can be almost certain that it won’t be Ukraine’s only pro-Western candidate. He has worked hard to align Ukraine with NATO, but neither of his more popular opponents, along with 88 percent of Ukraine’s population, want Ukraine in NATO.

The polls predict that ex-Prime Minister Viktor Yanukovych will ultimately win the election, beating Prime Minister Yulia Tymoshenko in a run-off ballot. Neither of these candidates is expected to garner the 50 percent of votes necessary to win the January 17 elections outright—meaning they will probably face each other in a run-off election on February 7.

But, of course, both of these candidates are pro-Russian. Viktor Yanukovych led Ukraine before 2004, when it was decidedly more supportive of the Kremlin. He had the support of then Russian President Vladimir Putin. Yulia Tymoshenko used to be pro-Western, working with Yushchenko to move Ukraine out of Russia’s sphere of influence. But she appears to be a pragmatist, and has decided that she has a better chance of being reelected by focusing on mending Ukraine’s ties with Russia.

The rest of the world seems to have resigned itself to letting Russia have Ukraine back. The United States appears to have abandoned Ukraine in exchange for more Russian help in Afghanistan. Germany too seems content to let Russia take Ukraine—perhaps as part of an earlier deal that allowed Kosovo to break off from Serbia without too much fuss.

NATO has declined to offer Ukraine a membership action plan, and has instead said that Ukraine’s path to NATO is only going to get more difficult. On the other hand, the Collective Security Treaty Organization (CSTO), Russia’s alternative to NATO, says that if Ukraine wanted to join, it could be a member within a month.

“With us, Ukraine would not have to carry out the kind of overhaul of its entire defense and security system that NATO demands,” said Vitaly Strugovets, CSTO’s chief spokesman. “If you look at it from an overall security standpoint, Ukraine is fundamentally a lot closer to the CSTO’s way of doing things. I’m talking about everything from military hardware to the basic mentality of the officer corps.”

Yanukovych has hinted that he likes the idea. “We are surrounded by strong governments,” he said. “Naturally, this means above all Russia, as well as other Eurasian countries, for whom Ukraine is desirable as a stable country, a reliable link in a system of collective security.”

While 33 percent of voters are undecided—and politics can always hold surprises —watch for Russia to regain control of this vital piece of land on January 17.

In some ways, this victory would be more significant than Russia’s invasion of Georgia in 2008. Georgia is now powerless to oppose Russia, but it is nowhere near joining the csto. In Ukraine, Russia has not conquered territory, but rather won the battle for the people’s hearts and minds.

Over the past several years, Russia has worked hard to isolate Ukraine from Western nations while at the same time trying to win the Ukrainian people over to its side. In doing this, it has used the Russian Orthodox Church and even movies. Russia President Dmitri Medvedev has been careful to direct his criticism of Ukraine at the leadership alone, emphasizing friendship with the people.

As a result, it seems that Russia has a victory more complete than any war. Ukraine is a vital piece of territory for Russia. It is also a key to controlling the Caucasus. In addition to housing Russia’s Black Sea fleet and its continental ballistic missiles, Ukraine is a buffer state in defending Russia’s south.

Without Ukraine, Russia is vulnerable. But with it, the Kremlin will begin to feel a lot more secure. January 17 could bring a major increase in Russian power. And Russia has shown that it is not afraid to invade its neighbors.

This in turn will make Europe much more nervous. “As Russia gets stronger, as the world grows more dangerous, as economic problems escalate, the Germans will be crying out for strong leadership!” wrote Trumpet editor in chief Gerald Flurry last year. “They are looking for a king—with a fierce enough countenance to stand up to Vladimir Putin!”

If either Tymoshenko or Yanukovych win the elections, it will amount to a bloodless takeover by Russia. Watch for Russia to increase in power, and watch for Europe’s response.

Source: The Trumpet

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Wednesday, December 16, 2009

Viktor Yushchenko’s Foreign Policy Agenda

WASHINGTON, DC -- Viktor Yushchenko has trailed badly in opinion polls in the last year with ratings of less than 5 percent, but has benefitted from the collapse of Arseniy Yatseniuk’s election campaign. Yushchenko is now the main “Orange” competitor to Yulia Tymoshenko in Western Ukraine.

Viktor Yushchenko

In foreign policy terms, Yushchenko is a different candidate to five years ago, when he presented himself as a centrist (patriotic) politician to broaden the appeal of national democrats like himself beyond their Western Ukrainian heartland.

This strategy won Yushchenko the crucial swing region of central Ukraine and the presidency. Yushchenko’s move away from centrist patriotism to nationalism in the 2010 elections echoes the retreat of Our Ukraine from central Ukraine, which won four Galician and Trans-Carpathian oblasts in 2006 and only Trans-Carpathia in 2007.

Yushchenko’s nationalist platform is only a threat to Tymoshenko in the three Galician, and to a lesser degree in the four other Western Ukrainian oblasts. Yushchenko will compete with the rising contender Serhiy Tihipko, Viktor Yanukovych’s election manager in 2004, for third and fourth place in round one.

In the 2004 elections, Yushchenko’s “Ten Steps to the People” election program never mentioned NATO, Trans-Atlantic integration or even the EU (Our Ukraine has also not referred to NATO in any of its election programs).

The only mention of foreign policy was a vague reference to Russia and Belarus (but nothing on the CIS). This unwillingness to highlight Yushchenko’s pro-Western orientation was an outcome of his 2004 centrist-patriotic platform that sought to appeal beyond western Ukraine.

Yushchenko’s 2010 election program also makes no reference to NATO but does, unlike in 2004, state: “Together with European neighbors, we will strengthen the Euro-Atlantic system of collective security”.

On the European Union, Yushchenko’s 2010 election program calls for a visa-free regime and membership with the EU. The program overlooks the Free Trade Zone between Ukraine and the EU that will be signed next year.

Yushchenko has at least supported Ukraine’s integration into NATO and the EU. Under the 1996 and 2006 constitutions, Yushchenko can appoint the Foreign and Defense Ministers, National Security and Defense Council (NRBO) secretary and Security Service chairman providing him with institutional control over Ukraine’s security policy.

Four problems bedevil Yushchenko’s foreign policy:

1. The translation of Kuchma-era rhetoric on trans-Atlantic integration into action requires a president to work together with a parliamentary coalition and government of like mind. Addressing Yushchenko at the recent EU-Ukraine summit, European Commission President Jose Manuel Barrosso said, “I will speak honestly with you, Mr. President.

It often seems to us that commitments on reform are only partly implemented and words are not always accompanied by action. Reforms are the only way to establish stability, and build closer ties with the EU”.

During Yushchenko’s five years in office there have been four governments, three of which have been “Orange.” Yushchenko has only had good relations with one of the four governments and with only one of the three “Orange” governments led by Yuriy Yekhanurov in 2005-2006.

2. The successful implementation of trans-Atlantic integration requires an understanding of the inter-connection between domestic and foreign policies, which Yushchenko has never understood. The consequences have been a domination of rhetoric over substance, as in the Kuchma era.

3. Yushchenko has taken one step backwards compared to Kuchma with regard to his mis-use of the NRBO, whose four secretaries were chosen not for their experience in trans-Atlantic integration, but for their value in battling unfriendly governments. All four pale in comparison with Kuchma’s NRBO secretaries, Volodymyr Horbulin and Yevhen Marchuk. The NRBO under Yushchenko has been used not to coordinate Ukrainian institutions on national security, but as an alternative government to Tymoshenko and Viktor Yanukovych.

4. In 2005-2006 the EU failed to rise to Ukraine’s democratic breakthrough because of a lack of strategic vision, enlargement fatigue and constitutional chaos. The US and NATO did rise to the occasion and a Membership Action Plan (MAP) could have been offered to Ukraine in Riga in November 2006.

The US and other NATO members sympathetic to Ukrainian membership pushed for an “Orange” coalition to be established quickly after the March 2006 elections, which would have been followed by President George W. Bush’s visit to Ukraine in June and a MAP in November.

Yushchenko’s hostility to the return of Tymoshenko as Prime Minister undermined this plan, which was ultimately undone when an “anti-Orange” and anti-crisis coalition was established in July.

Prime Minister Yanukovych told NATO in Brussels two months later that Ukraine was not interested in receiving a MAP. From 2007 onward Ukraine’s trans-Atlantic integration was hamstrung by a combination of Ukraine and then Yushchenko-fatigue and Germany’s increasingly independent line in the EU and NATO and Russia-first foreign policy.

Three Ukrainian factors led to skepticism in Western Europe towards Yushchenko’s rhetoric on Trans-Atlantic integration. Frequent government turnovers negatively impacted upon the ability of three “Orange” governments to launch information campaigns in support of NATO membership which has remained at 20 percent throughout Yushchenko’s presidency.

Moreover, political instability and elite in-fighting was repeatedly raised by Germany as a concern. During the election campaign Yushchenko continues to hurl insults at Tymoshenko on a daily basis, calling her “homeless” and a “bum.”

Finally, the Party of Regions alliance with Russian nationalist-separatists in the For Yanukovych! Bloc in the Crimean parliament led to the first ever violent anti-American/NATO protests in the Crimea. These de-railed joint military exercises with NATO that had peacefully occurred for a decade under Kuchma.

Yushchenko’s 2010 election program is more pro-Western than in 2004, but following five years of a widening gulf between rhetoric and substance few Ukrainians believe in his ability to deliver on foreign (or domestic) policies.

When giving their vote to Yushchenko, Galician Ukrainians do so out of a misplaced fear that Tymoshenko’s mix of pragmatism and ideology means she has sold out to Russia.

In reaching this conclusion, they forget that Tymoshenko’s 2010 centrist-patriotic election program is not fundamentally different to the platform upon which Yushchenko won the presidency five years ago.

Source: Eurasia Daily Monitor

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Tuesday, December 15, 2009

International Foundation For Electoral Systems Releases Survey On Ukrainian Political Attitudes

WASHINGTON, DC -- As Ukraine prepares for the January 2010 presidential elections, the newest survey released today by the International Foundation for Electoral Systems (IFES) finds that a precipitous decline in satisfaction with socio-political conditions and political elites in the country since the Orange Revolution are driving factors in the presidential race.

Presidential candidate, pro-Moscow Viktor Yanukovych.

The survey finds that Viktor Yanukovych of the Party of Regions is likely to receive the most votes in the first round January 2010 presidential poll.

The annual survey conducted by the world's leading election-assistance and democracy promotion NGO showed that 31% of Ukrainians say they will vote for Viktor Yanukovych in the first round of the election and 19% for Prime Minister Yulia Tymoshenko.

Other candidates with significant percentages include Serhiy Tygypko (4.8%), Arseniy Yatsenyuk (4.7%), Petro Symonenko (3.8%), President Viktor Yushchenko (3.5%), and Volodomyr Lytvyn (2.8%).

Given the likelihood that no candidate is likely to win the presidency outright in the first round, in a possible second round matchup, Yanukovych would top Tymoshenko 42% versus 28% with 18% saying they would vote against both.

In a matchup between Yanukovych and Yatsenyuk, Yanukovych would have the support of 42% versus 23% for Yatsenyuk and 22% against both.

The survey also finds that although Yanukovych is viewed negatively by a majority of Ukrainians, his positive rating is the highest of all presidential candidates--a factor in his lead for the presidency.

When rating Yanukovych, 55% view him negatively while 42% view him positively. For Tymoshenko, those numbers are 67% and 30%. The data for other leading candidates: Yatsenyuk (56%, 32%), Tygypko (50%, 32%), Lytvyn (60%, 31%), Symonenko (69%, 22%), and Yushchenko (83%, 13%).

Ukrainians continue to have pessimistic assessments of the socio-political situation in the country. Seventy-four percent believe Ukraine is on a path toward instability and more than nine in ten Ukrainians are dissatisfied with the economic (96%) and political situation (92%) in the country.

It follows that economic and governance concerns dominate the list of issues Ukrainians would like the winning presidential candidate to address once he or she takes office.

The survey was conducted by IFES' F. Clifton White Applied Research Center (ARC). The data in this survey is representative of the national population of Ukraine. The national-level data has a margin of error of plus/minus 2.5%. All interviews were conducted in Ukrainian and Russian by the Kiev International Institute of Sociology (KIIS).

Source: International Foundation for Electoral Systems

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Time Nears For Brussels To Give Some Shape To Ukraine Policy

BRUSSELS, Belgium -- All the European Union`s happy neighbours are like each other, but each unhappy neighbour is unhappy in its own way - starting with Ukraine, according to FT. What can the EU do to ensure that, unlike Leo Tolstoy`s Anna Karenina , Ukraine`s story will have a positive ending?

EU member states map as of 2009.

Of all the former Soviet Union countries, none bar Russia matters as much to the EU as Ukraine - and none tries the EU`s patience as much.

For one thing, Ukraine is the conduit for 80 per cent of the EU`s natural gas imports from Russia. As the Union learned to its cost in January, when a Moscow-Kiev dispute cut off gas supplies for two weeks, events in Ukraine can cause havoc in member states that depend entirely on Russian gas. Some experts fear another gas crisis next January.

But gas is far from the whole story. With 46m people, a 1,400km border with four EU nations and frequent tensions with Russia that have nothing to do with gas, Ukraine is pivotal to the security of the EU`s eastern flank.

After Ukraine`s 2004 Orange Revolution some EU strategists hoped that the path to liberal democracy, the rule of law and economic prosperity would become irreversible in Ukraine. But it has not turned out that way.

The Russian-Georgian war of August 2008 shocked the EU into realising that the Kremlin was prepared to use force if necessary to halt the expansion of western influence into former Soviet republics. With its southern peninsula of Crimea home to a restive ethnic Russian population egged on by Moscow, the implications for Ukraine`s territorial integrity and independence were worrisome indeed.

Then the global financial crisis laid low Ukraine`s economy, which at present survives on a $16.4bn (?11bn, £10bn) loan from the International Monetary Fund. The crisis sharpened the rivalries that paralyse its politics and give an impression of endemic instability.

Worst of all, the Orange Revolution failed to clean up the corruption that runs deep in Ukraine`s business world, especially the energy sector. Corruption is bound up with the personal animosities and shadowy connections with Russian interests that bedevil Ukraine`s political scene. The EU feels irritation and helplessness. Since the January crisis, Ukraine`s authorities have done little to improve transparency in the energy sector.

All these difficulties explain why many in the 27-nation bloc are unwilling to offer Ukraine even a vague promise that it may one day be invited to join the EU. But the EU increasingly senses that it cannot afford to let its relationship with Ukraine drift directionless for much longer.

Ukraine`s woes were the subject of a two-day conference staged in Brussels last week by Wilton Park, the UK event organisers. Several speakers predicted that the key moment in EU-Ukrainian relations would be its January 17 presidential election. Anything less than a free and fair election, and a mature acceptance of the result by winners and losers alike, would be catastrophic for Ukraine`s image in EU eyes.

Ukraine is hoping to complete a so-called EU association agreement and a comprehensive free trade accord by the end of 2010. It may also be able to secure visa-free travel arrangements with the EU in advance of the Euro 2012 soccer tournament that Ukraine is to co-host with Poland. If these three agreements can be concluded over the next 12 months they will do more to "normalise" Ukraine than any steps since independence in 1991.

But an unsatisfactory election process in January could turn EU governments against Kiev, weakening support for the association and free trade accords. Even now, France and Germany are delaying Ukraine`s accession to the EU`s energy community treaty, which aims to create an integrated energy market in Europe and guarantee security of supply.

Moreover, Poland - which used to defend Ukraine inside the EU - is fed up with its poor progress in preparing for Euro 2012. Slovakia has been irritated with Kiev ever since its citizens suffered a mid-winter freeze because of January`s gas cut-off.

Ukraine has friends in the EU, but the balance is finely positioned. It will take an effort from Ukraine`s political leaders as well as the EU to make sure the scales do not tip the wrong way.

Source: FT

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Ukraine, Belarus And Kazakhstan Disavow Arms Flight From North Korea

MOSCOW, Russia -- The intended destination of a plane carrying 35 tonnes of arms from North Korea and impounded in Thailand was tonightstill unclear, with none of the governments apparently linked to the seized flight admitting any responsibility for its cargo.

Crew from the detained cargo plane in the custody of Thai authorities.

Ukraine today said it had launched an investigation into the Ilyushin-76 aircraft, amid speculation that it may have been transporting arms to Iran as part of a North Korean smuggling network used to fund North Korea's banned nuclear weapons programme.

Ukrainian sources indicated the plane had originally set off from Belarus. Belarus's foreign ministry denied the report, but confirmed that one of its citizens – Mikhail Petukov – had been on board, working as a flight engineer.

According to Ukrainian officials, the plane travelled via Ukrainian airspace and refuelled at an airport near Kiev. It set off again on 8 December without a cargo to North Korea. The plane picked up a shipment of portable grenade launchers, an anti-aircraft missile system and other weapons from Pyongyang, North Korea's capital.

Thai officers seized the aircraft on Saturday at Bangkok's Don Muang airport, acting on tip-offs from US and other intelligence agencies that the plane had been carrying North Korean weapons in contravention of a UN security council ban on arms exports.

Today Bangkok's criminal court extended the detention of the plane's five-man crew, four of whom come from Kazakhstan. Kazakhstan tonight denied any knowledge of the illegal arms shipment. It said the plane was registered in Georgia on 7 October and had been leased to a New Zealand company.

The crew has been charged with possession of heavy weapons and misstating the nature of the cargo, officially described as "oil-drilling equipment". Crew members claim they had no idea they were carrying weapons.

"They thought it was a civilian freight flight carrying oil drilling pipes and other equipment for oil drilling," defence lawyer Somsak Saithong said, according to Reuters. Saithong said the crew had delivered such equipment "a few times" in the past, adding that three of the crew were trained pilots. According to military sources, the cargo also included missile tubes, spare parts and other heavy weaponry. Experts are now examining the contents at a secluded military airport.

Today, government spokesman Panitan Wattanayagorn said the aircraft was supposed to be flying to the Sri Lankan capital, Colombo. But he said the authorities were investigating whether the flight plan was misleading, and the final destination was in the Middle East, noting the aircraft had recently stopped in the United Arab Emirates.

"We believe after Colombo there may have been another destination," he said, adding that, according to the crew, the plane had planned to refuel in the United Arab Emirates and Azerbaijan before flying to its "final destination" in the Ukraine.

"We are taking all of this with a pinch of salt. We will have to verify all the claims, including whether the passports are real," Panitan said, adding police still had little information about who the crew members were, where they have been trained and whether they were linked to a terrorist organisation.

North Korea was hit in June with fresh UN sanctions to punish it for a nuclear test in May. These are aimed at cutting off its arms sales, which earn the isolated and impoverished state more than $1bn a year. The North's biggest arms sales come from ballistic missiles, with Iran and other Middle Eastern states major customers, US government officials suggest.

Source: Guardian UK

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Monday, December 14, 2009

Party Of Regions: Ukraine Doesn't Provide Systemic Control Over Arms Exports

KIEV, Ukraine -- Ukraine does not provide systemic control over arms exports, Party of Regions faction member Valeriy Konovaliuk told Interfax on Dec. 14.

Arms trade in Ukraine is a corrupt business, and the returns do not go to the national budget, according to the representative of Party of Regions.

He referred to the Ilyushin Il-76 plane seized in Thailand on Dec. 13. There had been reports claiming that the plane had come from Ukraine.

"Certain members of the [President Victor] Yushchenko team are engaged in regular arms trade under the cover of Ukrainian security services. The arms contraband continues despite recent scandals involving Ukraine," he said.

Arms trade in Ukraine is a corrupt business, and the returns do not go to the national budget, he said.

"In my opinion, these are the problems highlighted by the ad hoc parliamentary commission - the absolute lack of control over arms trade returns and the high degree of corruption. The only reason why our plane was seized, why in Congo and Somalia pirates took control over Ukrainian armor and other weaponry was that the shadow arms business in Ukraine continued to flourish despite the public response," he said.

Source: Kyiv Post

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Co-Hosts In Bloom For EURO 2012

KIEV, Ukraine -- The official logo, visual identity and slogan for UEFA EURO 2012™ have been unveiled at a special event in Kiev's Mykhailivska Square with co-hosts Ukraine and Poland looking forward to 'Creating History Together'.

Star Guests

Polish Football Association President Grzegorz Lato, his Football Federation of Ukraine counterpart Grigoriy Surkis and UEFA President Michel Platini officially unwrapped the logo as the highlight of the launch proceedings.

The ceremony was attended by the President of Ukraine, Viktor Yushchenko, and Prime Minister Yulia Tymoshenko, representatives from the eight host cities – Gdansk, Warsaw, Poznan, Wroclaw, Lviv, Kharkiv, Donetsk and Kyiv – and numerous other dignitaries.

Visual Identity

The purpose of the logo is to give UEFA EURO 2012™ a personality of its own, with the visual identity to be applied across a range of promotional applications from tickets to web banners. The objective is to help promote the tournament – one of the world's biggest sporting events – by providing an easily recognisable identity with a flavour of the host nations.

The logo takes its visual lead from 'wycinanka', the traditional art of paper cutting practised in rural areas of Poland and Ukraine, as a tribute to the fauna and flora of the region.

EURO Bloom

The 'bloom' logo has a flower representing each of the co-host nations and a central ball symbolising the emotion and passion of the competition, while the stem denotes the structural aspect of the competition, UEFA and European football.

Nature has inspired other features of the visual identity, with woodland green, sun yellow, aqua blue, sky blue and blackberry purple being the crucial tones of the palette of colours to figure in official tournament branding.

Uniting Ethos

The event slogan, meanwhile, is 'Creating History Together'. The staging of the UEFA European Championship finals in Poland and Ukraine, a first for Central and Eastern Europe, will have a place in the history books, with everyone involved in UEFA EURO 2012™ – organisers, host countries, host cities, players and fans – contributing to another exciting chapter of European football.

Source: UEFA

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Plane With Arms Detained In Thailand Was Bound For Ukraine

BANGKOK, Thailand -- A cargo plane full of North Korean weapons, detained in Thailand after an emergency landing at Bangkok airport, was bound for Ukraine, the Thai news agency TNA reported on Sunday.

An Il-76 cargo plane, the type detained in Thailand.

Thai authorities on Saturday seized about 40 tons of weapons from an Il-76 cargo plane which they said had come from North Korea after it landed for refueling at Bangkok's Don Muang airport, and arrested its five crew members.

Ukraine said later on Sunday that it is checking the reports on the plane. "The information on this score is being verified," a Foreign Ministry official said.

The aircraft's weapons arsenal included missiles and rocket-propelled grenades.

According to TNA, the plane's crew commander, a Belarusian national, said during a six-hour interrogation that the plane had flown from Ukraine and loaded weapons in North Korea.

The plane's commander said the aircraft refueled in Azerbaijan, then in the United Arab Emirates and after that in Thailand while en route to Pyongyang. On its way back, the plane was intended to refuel in Thailand and Sri Lanka, following which the cargo was expected to be delivered to Ukraine, TNA reported.

The plane's commander claimed that neither he, nor the other crewmembers who are Kazakh nationals knew about the military nature of the cargo.

Thai authorities accuse the crew of the plane, which is registered in Georgia, of illegal storage and transportation of weapons and misinformation, TNA reported. A United Nations resolution bans the transportation of certain weapons, including conventional arms, from or to North Korea.

The communist state is in the center of a long-running international dispute on its nuclear program.

The seizure came days after the U.S. presidential envoy's rare visit to North Korea designed to persuade Pyongyang to return to six-nation nuclear disarmament talks. Both parties said after the trip they understood the need to resume the talks.

TNA said Thai authorities were preparing a report for the UN on the arrest of the plane.

Source: RIA Novosti

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Sunday, December 13, 2009

Russia-France Arms Deal Raises Concerns For Neighbours

PARIS, France -- A potential deal that would see France selling advanced military technology to Russia has been causing concern among former Soviet states.

The attack abilities of a Mistral-class ship have caused concern.

Moscow is said to be getting closer to buying from the French a Mistral-class assault warship - capable of transporting and deploying up to 16 helicopters, 13 battle tanks and 450 troops - costing between $600m (£368m) and $750m.

But critics of the potential deal in nations neighbouring Russia - such as Ukraine, Georgia and the Baltic states - say it would dramatically increase the military threat from Russia, increasing tensions in some already difficult relations.

Nika Laliashvili, of the Georgian parliament's defence committee, has said that Georgia "strongly opposes" the sale.

Should Paris decide to go ahead with the sale, France would become the first Nato member to have chosen to sell advanced military technology to Moscow.

'Serious danger'

Russian Prime Minister Vladimir Putin discussed the potential deal during a recent official visit to Paris.

"We are buyers, you are sellers," he told his hosts.

"Whoever we buy it from, we will reserve the right to use it where and when we consider necessary."

And Russian generals have said that, had they had such a warship during the August 2008 conflict with Georgia, they would have been able to reach its shores within 40 minutes - rather than the 26 hours the country's navy took after setting off from their base in the Ukrainian Crimean port of Sevastopol.

But Mr Laliashvili said the deal would pose a "serious danger" to Georgia.

And his comments have been echoed by Estonian Foreign Minister Urmas Paet.

"Adding new military technology to the Black Sea... [would] not be a good idea," said Mr Paet.

Concerns have also been raised in France itself.

"If such a decision is made, we need to understand the long-term consequences it will have," Francoise Thom, an expert on the former Soviet Union at Sorbonne University in Paris, told the BBC's Ukrainian Service.

"It's obvious that such weaponry would allow Russia to mount aggression against its neighbours," she added.

"It looks like France is giving Russia a green light for new imperialistic wars."

Starved of funds

Meanwhile, Andre Glucksmann, a leading French writer and philosopher, said the deal raised the risk not only of attack, but also of blackmail by Russia.

"The countries of the Black Sea, Caspian and Baltic Sea regions are nervous," he said.

"Poland and the Baltic States should state their objections publicly, and Brussels should intervene to stop such a deal."

Retired Russian naval officers acknowledge that the Russian navy is in a very poor state.

The shipyard, which produced the majority of Soviet aircraft carriers and missile cruisers, is not even Russian; it is in Mykolayiv, in southern Ukraine.

What remains of the Russian navy is estimated to be 20 times smaller than that of the US.

Yet Russian manufacturers themselves oppose the potential purchase from France - suggesting Moscow would do better to invest the money in reinvigorating Russia's own military industrial complex, which they say has been starved of funds.

Ukrainian Rear Adm Serhiy Blyznyukov, an adviser to the Ukrainian defence minister, said it was not clear whether Russia would deploy a Mistral-class warship to the Black Sea.

The base at Sevastopol, he said, is lacking the required infrastructure - meaning Russia would have to station the warship at the base of its Northern or Pacific Fleets.

But he acknowledged that in the longer term Russia could upgrade and modernise its facilities in Sevastopol.

Another solution for Russia, he said, would be the creation of a new naval base at the Russian Black Sea port of Novorossiysk, where Ukraine hopes the current Black Sea fleet will be based after Russia's lease in Crimea expires in 2017.

The Russian Defence Ministry said it was "continuing discussions" over whether to purchase a French warship. A decision is expected by the end of 2009.

Source: BBC News

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Klitschko Beats Johnson To Keep WBC Belt

BERNE, Switzerland -- Vitali Klitschko easily retained his WBC world heavyweight title on Saturday, winning a unanimous points decision against American challenger Kevin Johnson.

Defending champion Vitali Klitschko (R), from Ukraine, exchanges punches with challenger Kevin Johnson from the U.S. during their WBC heavyweight title fight in Bern, Switzerland, Saturday, Dec. 12, 2009.

The 38-year-old Ukrainian spent the entire fight on the offensive against previously unbeaten Johnson but could not find his customary knockout as his opponent opted for survival.

A sell-out 17,000 crowd at Berne's PostFinance Arena willed the 38-year-old Klitschko to finish the job inside the distance, as he had done in 37 of his previous 38 victories from 40 fights, but Johnson's chin was up to the task, even though he rarely landed a meaningful punch.

"He was a very unusual fighter," Klitschko said at ringside after his fourth win since returning to action in 2008 following an injury-induced retirement in 2005.

"He moved very well and was not easy to hit. I'm disappointed because I would have preferred a knockout but I'm happy that I won all 12 rounds."

Johnson's chief tactic appeared to be to irritate the champion, gesticulating throughout the fight and pointing to his chin and tempers flared briefly at the end of the 11th when the fighters traded punches after the bell.

Vladimir Klitschko, Vitali's younger brother and holder of the WBO, IBO and IBF, also became involved in a brief exchange with Johnson after the final bell at the end of the 12th.

Klitschko said he hoped to take on Briton David Haye, who beat Russian giant Nikolai Valuev last month to win the WBA belt, in a unification fight next year.

"I'm ready," Klitschko said. "I will be happy to fight him next year. David Haye is the trash talking world champion."

Source: BreakingNews

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Saturday, December 12, 2009

MV Ariana Finally Truly Free From Somali Pirates

FINGAL HEAD, Australia -- The Greek-owned vessel with 24 Ukrainians on board, had been called free already four times before - but it was not true, neither two month ago, nor one month ago or three days ago or yesterday.

Somalia piracy

Even yesterday a wire-service as well as the owner company said the vessel had been released, while it was actually still held near Hobyo at the Central Somali coast.

“The ship was released a few hours ago and the pirates have left,” Spyros Minas, the head of Alloceans Shipping, had told Reuters in Athens. “The ship is now sailing to the Middle East.”

The ship belongs to All Oceans shipping in Greece and it is managed by Seven Seas Maritime in London, who both refused to explain why it took so long to free the crew and vessel.

Analysts also wondered how Ukrainian President Viktor Yushchenko could hail the delayed and often failing release operation a success.

The Maltese-flagged ship was seized in May 2009, while heading from Brasilia to Middle East. The ship-owners paid large amount of ransom for the vessel to be released, Ukrainian President Viktor Yushchenko stated December 10, 2009.

According to the Head of Ukrainian Foreign Intelligence Service Nikolai (aka Mykola) Malomuzh, saying also that a higher ransom had been handed over, the crew members are in good health and Ariana will sail to the nearest port within 5-7 days.

However, "there were some problems with ship's engine", Interfax Ukraine reported.

Luckily the soy-laden carrier sailed truly free Friday evening after having been held hostage for 6 month after it had received not only the ransom in an amount which was reported to match the latest demand as revealed earlier from the ground and not the lesser amount as said by a statement from the owner.

More importantly the ill-fated ship could only leave after it had received again fuel from the Chinese-owned MV DE XIN HAI.

“As of now the boat is under the protection of Portuguese ship Al Vars Carbol. In five to seven days the boat is likely to arrive at the nearest safe port,” the Ukrainian presidential press service reported.

Finally also the 24 strong Ukrainian crew is free, including the two female sailors, of which especially one lady in serious condition had been abandoned by the Ukrainian government, their open and covert officials and the ship-owner, who didn't facilitate her medical evacuation.

The spin, however, produced by the crew of the Spanish vessel FV ALAKRANA concerning a 11 or 12 year old girl being on board ("with blond hairs and blue eyes") in addition to the two women was a hoax, as we had revealed earlier, and was invented to serve as tool to coerce the Spanish public and European taxpayers to opt for more aggressive military actions - and the financial means for it - against Somalia.

It will be interesting to see how the Spanish judge will handle the obvious lies the Spanish sailors had told him concerning the sea-jacked bulk carrier, since they reportedly never even set foot on MV ARIANA, but told the Spanish court otherwise, causing through the Spanish media thereby also serious harm and grief to the Ukrainian families of the seafarers.

All 24 Ukrainian crew luckily survived the ordeal and the vessel will most likely dock in Mombasa, Kenya, according to Serhiy Borodenkov, the deputy director of the Ukrainian Foreign Ministry's consular service department.

"I emphasize that this will most likely be Mombasa, although we are only considering this [as a] possibility. It's not definite yet," he said at a press conference in Kyiv on Thursday.

Deputy Foreign Minister Valeriy Chaly, confirmed that the Ariana is being escorted by a military frigate allocated under the European Union's anti-piracy mission, Operation Atalanta.

Chaly said that there is practically no diesel or drinking water on board the ship. He said that all of the ship's crewmembers would return home by the New Year.

Source: Australia World News

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Ukraine Cities Get UEFA's Euro 2012 Green Light

FUNCHAL, Portugal -- Ukrainian cities Kiev, Lviv, Donetsk and Kharkiv will host matches in the 2012 European soccer championship, UEFA said on Friday, with the capital confirmed as the venue for the final.

UEFA President Michel Platini (L), shakes hands with the President of the soccer federation of Ukraine, Grigoriy Surkis, following the UEFA Executive Committee meeting in Funchal, in the Portuguese island of Madeira, Friday, Dec. 11 2009.

European football's governing body had delayed the decision over hosting matches in all the proposed Ukrainian cities except Kiev after the slow progress of infrastructure projects.

"I'm pleased to tell that thanks to the tremendous efforts of the Ukrainian government we can finally give the green light to a symmetrical tournament with four cities in Poland, and Kiev, Lviv, Kharkiv and Donetsk in Ukraine," UEFA president Michel Platini told a news conference.

"There remain considerable work to be done and considerable hoops to jump through. I entirely trust Ukraine and Poland as hosts," he added.

The tournament is being co-hosted with Poland, where four cities -- Poznan, Wroclaw, Warsaw and Gdansk -- had already been confirmed by UEFA as able to host matches.

"Today Ukraine won, the people of Ukraine won," Ukrainian Prime Minister Yulia Tymoshenko told local television.

UEFA has been frustrated by the slow progress of work in Ukraine and in May gave the four cities six months to show significant improvement, with Platini decrying 'huge' problems with airport infrastructure, transport networks and suitable accommodation for a huge influx of fans.


"Mr. Platini, the great player and president, has given us a new opportunity, an opportunity to show what we are made of," Ukrainian FA president Grigoriy Surkis told the news conference.

"We are going to make sure that Euro 2012 will be at least as successful as the previous two tournaments. Now isn't a time to rest on our laurels.

"We've suffered a great deal in the runup to this decision, a lot of difficulties have been experienced but...the red light has been averted because those warnings were heeded," he added.

"We're going to modernise our infrastructure, build what remains to be built, prepare for a wonderful spectacle. We're going to leave no stone unturned to maintain the prestige of UEFA.

"It would have been so terrible to let this tremendous opportunity slip through our fingers. This enables us to ensure a promising future for our country. It's not a Christmas present for me, it's a Christmas present for all Ukrainians."

Surkis said he had missed his father's 90th birthday to attend the meeting on the island of Madeira.

"Elderly people understand the importance of these transformations. He was present when World War Two was won. My father has had a very difficult life; this is a heart-warming decision for him."

Source: The New York Times

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Friday, December 11, 2009

Nation’s Law Enforcers Have Dismal Track Record Of Solving Old Crimes As New Ones Keep Happening

KIEV, Ukraine -- Numerous high-profile cases involving sensational and public events remain unsolved by the nation’s law enforcers, including the powerful General Prosecutor’s Office, headed since 2005 by Oleksandr Medvedko.

Numerous high-profile cases involving sensational and public events remain unsolved by the nation’s law enforcers.

The track record shows a national criminal justice system that has never worked properly since independence 18 year ago, whether because of bribes, politicization, incompetence or a combination of all three factors. While the biggest cases are widely known, no one knows how many unsolved crimes and injustices lurk beneath the public’s radar, uncovered by the news media and uninvestigated by police and prosecutors at local levels.

Fresh crimes are happening that follow the same dismal pattern as the old unsolved cases: Loud and indiscrete public accusations followed by prosecutorial silence and inaction. Among them:

Nadra Bank. While depositors still can’t get their money back, the bank’s top managers and chief executive officer Igor Gilenko went into hiding this fall, allegedly after up to $1 billion was embezzled from the bank through false loans and other fraud. Much of this money came courtesy of the National Bank of Ukraine, which has never explained why it did not more rigorously oversee a $13 billion bank recapitalization and refinancing program involving many of the nation’s most troubled banks. An arrest warrant was issued on Oct. 9 against Gilenko and other top bank officials as investigations continue into Nadra and other troubled banks;

Pedophilia. The mother of two children on April 16 told Interior Ministry police that the minors had been sexually abused; six months later, in October, the Prosecutor General’s Office took over the case after parliamentarians and officials of a popular children’s camp in Crimea were implicated. Since then, the case has dropped out of sight;

Murder suspect Victor Lozinsky, a member of parliament with the Bloc of Yulia Tymoshenko, was stripped of his Verkhovna Rada seat on July 3. By then, however, he had gone missing and is now is a fugitive whose arrest was sanctioned on July 8 by Kyiv Pechersky District Court, acting on a request by the General Prosecutor’s Office. Lozinsky lost his lawmaker’s status after becoming a suspect in the June 16 murder of Valeriy Oliynyk, a 55-year-old resident of Kirovohrad Oblast who died of gunshot wounds;

Alleged corruption charges against ex-Lviv Judge Ihor Zvarych. On Dec. 3, 2008, prosecutors opened a criminal case on suspicion that Zvarych had taken a $100,000 bribe. The next day, the offices and apartments of Zvarych and another seven judges of the court were searched. Some $1 million and over Hr 300,000 were discovered at Zvarych’s home. He was arrested in Lviv on March 9, but the case is still dragging on;

The deaths of scores of pedestrians mowed down by fast-moving state and local officials. One of the latest incidents under investigation involves Oleksandr Omelchenko, a Verkhovna Rada deputy and former mayor of Kyiv, who on Nov. 25 struck and killed a pedestrian on the zebra-striped pedestrian crossing near the elite Koncha Zaspa district. Interior Minister Yuriy Lutsenko said the investigation could drag on until March at least.

Along with these cases are some of the most sensational ones in the nation’s history, old cases that seem increasingly likely never to be solved. Among them:

The hundreds of hours of secretly recorded conversations made in former President Leonid Kuchma’s office during 1999 and 2000. The so-called Melnychenko tapes, named for the former presidential bodyguard who reputedly made the recordings, describe dozens of high-level crimes that could keep teams of prosecutors busy for years – and many of the nation’s highest-level current and former officials in prison for a long time. Nearly a decade after their release, authorities are still debating the authenticity of the recordings rather than establishing whether the crimes discussed on the recordings actually occurred;

The alleged suicides by gunshot wounds of former Transportation Minister Heorhiy Kirpa on Dec. 27, 2004, and Interior Minister Yuriy Kravchenko on March 4, 2005, also remain mysteries;

The 2000 murder of journalist Georgiy Gongadze, who was kidnapped, forced to dig his own grave, choked to death with his own belt and beheaded. Hopes briefly flickered in summer that the nation would finally learn who ordered the murder of the investigative journalist who co-founded the Ukrainska Pravda online news site. Ex-Interior Ministry general Oleksiy Pukach, who allegedly helped strangle Gongadze before going into hiding for nearly six years, was arrested in Zhytomyr Oblast in July. But, even though investigators said he was cooperating and naming names from the start, nothing has come of the arrest thus far – except a recent pre-trial extension of Pukach’s confinement until after the Jan. 17 presidential election;

The dioxin poisoning of presidential candidate Victor Yushchenko in 2004;

The 2004 election fraud. Despite what appears to be convincing evidence pointing to high-level involvement in the Kuchma administration and the Central Election Commission, no criminal charges have been filed against top officials in the rigged presidential election that triggered the 2004 Orange Revolution. In fact, one of the top election-fraud suspects, former CEC head Serhiy Kivalov, is a Regions Party deputy who heads parliament’s Judiciary Committee;

The murky and alleged corrupt role of energy middlemen, such as RosUkrEnergo, which Tymoshenko claims has links to her political opponents, namely presidential front-runner Victor Yanukovych and incumbent President Victor Yushchenko;

Dozens of cases from Ukraine have been filed with the European Court of Human Rights in Strasbourg, France, a sign that more Ukrainians have given up hope at home and are seeking justice abroad;

Ihor Honcharov, a retired police officer and alleged member of a gang of former police officers, died in police custody in August 2003 after telling investigative journalist Oleh Yeltsov that police tracked Gongadze before his abduction;

Ihor Bakai, who is suspected of stealing hundreds of millions of dollars as head of Ukraine’s state gas monopoly Naftogaz. Bakai took a job in Kuchma’s presidential administration before fleeing to Moscow before Ukraine’s Orange Revolution; and

Volodymyr Shcherban, former Sumy Oblast governor, who was charged with extortion and other crimes. In October 2005, Shcherban was detained in Miami, Florida. He returned to Ukraine in November 2006 and remains free.

Source: Kyiv Post

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Melnychenko Ties Lytvyn To Gongadze’s 2000 Murder

KIEV, Ukraine -- Mykola Melnychenko, a former bodyguard of ex-President Leonid Kuchma, this week repeated allegations that parliamentary speaker Volodymyr Lytvyn was behind the murder of journalist Georgiy Gongadze.

Mykola Melnychenko, the former bodyguard to ex-President Leonid Kuchma, unleashed a continuing national scandal with recordings that allege numerous crimes were committed by Kuchma and his top aides.

After saying on television that Lytyvn had ordered the murder of the muckraking journalist in 2000, he alleged in a telephone interview with the Kyiv Post that Lytvyn had convinced Kuchma to have Gongadze dealt with outside the law.

“Lytvyn brought articles [by Gongadze] to Kuchma that were critical about Kuchma and his family. But when Kuchma wanted to take Gongadze to court, Lytvyn convinced him to get [former Interior Minister Yuriy] Kravchenko to deal with him using his methods,” he said.

Lytvyn, Kuchma’s chief of staff in 1999 and 2000, denies involvement in the murder. Olha Chorna, a spokesperson for Lytvyn, dismissed Melnychenko’s claims as part of the presidential election campaign. “It’s ridiculous. It’s not the first time he’s brought this up. Melnychenko has learnt to make money from these accusations,” she said.

Gongadze, who co-founded the opposition Ukrainska Pravda web site in April 2000, disappeared in September 2000. His decapitated remains were found in November, two months later, outside Kyiv. In recordings made secretly in Kuchma’s office by Melnychenko, a voice resembling Kuchma’s told Kravchenko to “deal with” Gongadze.

“Take his pants off and give him to the Chechens,” the voice said.

The 10-year investigation into who ordered murder accelerated this summer after the capture of Oleksiy Pukach, a police general who allegedly carried out the killing. Pukach is currently being held in police custody, but there has been no report of progress since his arrest.

Melnychenko fled Ukraine in November 2000, taking up to 1,000 hours of highly compressed digital audio recordings to Ostrava in the Czech Republic. The United States granted the former guard, his wife and young daughter refugee status in April 2001.

The International Press Institute in February 2001 vouched for the authenticity of 45 hours of the recorded conversations. Lytvyn and Kuchma have denied giving a direct order to murder Gongadze.

The results of analysis by experts in Germany were received by the Prosecutor General’s Office in November, although its examination of the materials was delayed by the poor quality of the translation into Ukrainian. Yuri Boichenko, spokesman for the prosecutor’s office, on Dec. 6 declined to say exactly what recordings were analyzed.

“I cannot comment on the analysis because it is part of a criminal investigation,” Boichenko said. He added that Melnychenko, who is a witness in the case, had also signed a confidentiality agreement not to talk publicly about the recordings.

Last month, officials from the prosecutor’s office complained that Lytvyn refuses to cooperate with the investigation where he is also a witness. As a member of parliament possessing immunity he cannot be forcefully detained for questioning.

Melnychenko told the Kyiv Post on Dec. 9 that he possesses a recording of the conversation between Kuchma and Lytvyn. On Dec. 10 he gave the Kyiv Post one of the 18 recorded excerpts checked this year for authenticity by German audio forensic experts, saying the minutes-long audio file demonstrates Lytvyn’s role in the abduction and murder of Gongadze. Voices resembling former president Kuchma and Lytvyn are heard on the recording.

Chorna accused Melnychenko of working for Lytvyn’s opponents in order to sabotage his support rating in the presidential campaign. A survey at the end of November by the FOM-Ukraine pollster put Lytvyn’s support at 2.5 percent.

Melnychenko denied allegations of attempts to sabotage Lytvyn’s campaign, saying, “For me it’s important only that people whose hands are covered in blood are brought to justice.”

Melnychenko isn’t the only one who’s bringing up Lytvyn’s alleged involvement in Gongadze’s murder. Oleksandr Moroz, the leader of the Socialist Party who revealed the Melnychenko tapes in parliament in 2000, also accused the current parliamentary speaker in November. Moroz is also running in the current presidential race.

Source: Kyiv Post

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Somali Pirates Set Ukraine Crew Free - Ransom $2.8 million Dollars

KIEV, Ukraine -- Somali pirates set a Ukrainian crew and the Greek- owned cargo ship Ariana free on Thursday after making a 2.8-million- dollar ransom payment, officials in Kiev said.

Greek-owned cargo ship MV Ariana.

An aircraft dropped the cash into water adjacent to the vessel, to be collected by pirates in a small boat, said Mykola Malomuzh, a spokesman for Ukraine SBU (formerly the KGB) national spy agency.

The 24-man crew and ship would arrive at an as yet undisclosed Middle Eastern port in five to seven days, Malomuzh said, according to an Interfax news agency report.

All the crew members were in reasonably good health despite their seven-month ordeal as hostages, he said.

Ukrainian President Viktor Yushchenko said the Ariana's release demonstrated 'a high level of professionalism' by Ukrainian government agents sent to the region to free the crew.

'Our external intelligence agencies and national special services performed excellent work,' Yushchenko said, speaking to reporters in the west Ukrainian city Ivano-Frankivsk, according to a Unian news agency report.

The Ukrainian government would send an airplane to bring the sailors home once they reached land, Yushchenko said.

Pirates captured the Maltese-flagged Ariana on May 2 as the ship was traveling north past the Somali coast towards the Red Sea.

They held the ship and crew hostage in the Somali port Haradheere, according to news reports.

Source: DPA

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Thursday, December 10, 2009

Ukraine Polls See Yanukovich As Presidential Winner

KIEV, Ukraine -- Ukrainian ex-Prime Minister Viktor Yanukovich is favoured to beat Prime Minister Yulia Tymoshenko in a run-off for president, according to opinion polls, although a third of people have yet to decide who to vote for.

Pro-Moscow Viktor Yanukovich

The ex-Soviet republic holds a presidential election on Jan. 17. No contestant is expected to win the first round outright but Yanukovich and Tymoshenko are widely seen as likely to face each other in a Feb. 7 run-off.

Foreign investors hope the election will end squabbling between the president, prime minister and parliament that has paralysed vital decision-making in a country that has been hit hard by the global recession.

Figures published from two surveys, which questioned about 2,000 people each, showed an advantage for Yanukovich.

In one survey, by the Razumkov Centre, an average of 40.5 percent of those polled said they would vote for Yanukovich in a second-round clash, against 33.3 percent for Tymoshenko.

The All-Ukrainian sociological service showed a 38.5 percent to 30.6 percent split in Yanukovich's favour.

"If we rely on the surveys, then there is great probability of victory by Viktor Yanukovich. But experience shows that one should not rush to say that this is a settled fact," Yuri Ruban, director of the national institute for strategic research, told a news conference.

"There is a still a reserve. A third of the people did not say (for whom they would vote), a third might change their minds and, of course, such an energetic and powerful player as Yulia Tymoshenko will not sit by with her arms folded," he said.


Polls continued to show that President Viktor Yushchenko, who came to power in 2005 following the re-run of an election won by Yanukovich but which was denounced as fraud, was badly trailing the two front-runners.

Much of the tension in Ukrainian politics has been generated by intense rivalry between Yushchenko and Tymoshenko who were once allies in the 2004 "Orange revolution" street protests that then ended Yanukovich's hopes of the presidency.

"It is most probable that Yanukovich will become president, but it is far from 100 percent because first round results and and events which might occur will influence the choice," said Andriy Bychenko of the Razumkov centre.

"The emotional element can have a strong influence," he said.

In an interview published on Wednesday in the Russian newspaper Kommersant, Yanukovich said he would not want Tymoshenko as his prime minister.

""She has her own programme, and I do not think that she would agree to implement somebody else's. And what is even more important, even if she agrees, I won't believe her," Yanukovich said.

"President Yushchenko believed her twice, and she deceived him," he said. "I don't, and can't, have any confidence in Tymoshenko," he said.

Source: Kyiv Post

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US Urges Ukraine To Pursue Reform To Get Gas Investment

WASHINGTON, DC -- US Secretary of State Hillary Clinton on Wednesday urged Ukraine to pursue reforms to attract foreign investment for an energy sector both sides want to become more independent from Russia.

US Secretary of State Hillary Clinton.

"We reiterated... the importance that we place on Ukraine becoming more energy secure and more energy independent," Clinton said at a press briefing with Ukrainian Foreign Minister Petro Poroshenko.

"There is a tremendous opportunity in the future for Ukraine to develop much greater energy sufficiency by attracting investments in the natural gas sector," the chief US diplomat said following talks with Poroshenko.

"A lot of it, though, will depend on the economic and political reforms that Ukraine is addressing," she said.

"But we reiterated with the minister and his delegation that we will certainly support Ukraine becoming more integrated within the European energy security framework," she said.

"And we will support in any way, through technical expertise and other assistance, the development of the Ukrainian energy sector," she said.

"We know that there are number of investors from the United States and elsewhere who are interested in participating but the most important pre-condition is that these economic and political reforms take place," she said.

Ukraine still relies almost exclusively on Russia for natural gas supplies crucial to its own industry and is also the primary transit country for Russian gas shipments to European countries further downstream.

That reality, a result of a unified energy infrastructure built when Ukraine and Russia were part of the Soviet Union, is at the root of energy crises in recent years which have had broad international implications.

Source: EUbusiness

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Ukraine Reaches $2.5B Arms Deal With Iraq

KIEV, Ukraine -- Ukraine will provide Iraq with $2.5 billion worth of weapons and military equipment under a deal intended to short up Iraq's fledgling armed forces before the planned pullout of U.S. troops, a senior Ukrainian lawmaker said Wednesday.

Ukrainian BTR-4 armored personnel carrier.

Anatoly Grytsenko, head of the Ukrainian parliament's security and defense committee, said the agreement with the Iraqi ministry of defense calls for Ukraine to produce and deliver 420 BTR-4 armored personnel carriers, six AN-32B military transport planes and other military hardware to Iraq.

"It's worth around $2.5 billion," Grytsenko, who previously served as Ukraine's defense minister, told The Associated Press after being briefed on the deal Wednesday by state arms exporter UkrSpetsExport. UkrSpetsExport, which is handling the contracts, declined numerous requests for comment Wednesday.

"The deals have been concluded. They are now formalizing the contracts," Grytsenko said. "The contract is to be carried out in stages and, from what I was told, just the first stage is worth $400 million."

Grytsenko said the deal also included repair work on two Mi-8T military helicopters for Iraq.

President Barack Obama laid out plans to withdraw troops from Iraq and pass security operations in the country back to Iraqi police and armed forces.

The United States is providing billions of dollars in military aid to ready the Iraqis for the task of policing a country still plagued by insurgents and suicide bombings. A string of suicide bombings Tuesday killed at least 127 people and wounded over 500 in the Iraqi capital.

The deal will be the largest in Ukraine's history and could elevate the former Soviet nation to the ranks of the top arms dealers in the world this year, said Sergei Zgurets, head of research at the Center for Army, Conversion and Disarmament Studies (CACDS), a Kiev-based think-tank.

Source: BusinessWeek

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Wednesday, December 09, 2009

Exploding Chewing Gum Blows Off College Student's Jaw

KONOTOP, Ukraine -- chemistry student in the Ukraine was found dead with his jaw blown off by what is believed to be exploding chewing gum, according to reports.

Student may have dipped his gum in an explosive substance.

The 25-year-old's disfigured remains were discovered at his parent's home in the northern Ukrainian city of Konotop, reports in the Eastern European country said.

The young man, who studied at Kiev Polytechnic Institute, was working at a computer late on Saturday when the alleged explosion happened.

"A loud pop was heard from the student's room," the Web site said, citing an aide to the city's police chief.

"When his relatives entered the room, they saw that the lower part of the young man's face had been blown off."

A forensic examination established that the chewing gum was covered with an unidentified chemical substance, thought to be some type of explosive material.

The student apparently had a bizarre habit of chewing gum after dipping it into citric acid, Russian news agency Ria Novosti said.

Officers found both citric acid packets and a similar-looking unidentified substance, believed to be some kind of explosive material, on a table near the body, the agency continued.

Investigators suspect that the student simply confused the packets and put gum covered with explosive material into his mouth.

Forensic experts were to travel from Kiev to investigate the substance, as local authorities feared it may explode if transported.

Source: FOX News

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Ukraine To Set Up Independent Anti-Corruption Bureau

KIEV, Ukraine -- Ukraine plans setting up an independent Anti-Corruption Bureau, Prime Minister Yulia Timoshenko told a session of the cabinet of ministers Tuesday.

Ukrainian Prime Minister Yulia Tymoshenko

"We should test all the algorithms for organizing the Anti-Corruption Bureau, which won't be subordinate to anyone, because any struggle with corruption is brought to a halt once you get executive subordination," she said.

The new agency will have the power to investigate the cases of corruption.

The cabinet of ministers is supposed to consider the regulations for selecting and publishing the information on legal entities brought to responsibility for corruption-related offenses, as well as the setting up of a specialized unit for prevention of corrupt practices in the ministries and departments.

Ukraine's Main Auditing and Inspecting Department has issued more than 6,500 acts testifying to the plundering of the state budget, yet only 769 criminal cases have been instituted and the majority of them "hasn't reached even the neighborhood of courts," Timoshenko said.

This disqueting statistis proves that the level of corruption still remains high in Ukraine, she said.


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Elton John To Support Child He Hoped To Adopt

LONDON, England -- Elton John intends to provide financial and other support to a young Ukranian boy he had hoped to adopt, the singer-songwriter's partner David Furnish said Tuesday.

Elton John kissed baby Lev during a news conference at a orphanage for HIV-positive children in the town of Makeyevka, Ukraine on September 12, 2009.

Furnish told BBC Radio that the couple were -hugely disappointed- that Ukrainian authorities had blocked their attempts to adopt Lev, a toddler they met in a Ukrainian orphanage, but hoped to still have some impact on his life.

Officials in the former Soviet republic said in September that foreigners are only allowed to adopt if they are married, and deemed the couple too old.

John, 62, and his long-term partner Furnish, 47, had a civil partnership in Britain in 2005 but the Ukraine does not recognise same-sex marriage.

"It's not possible -- the laws don't support the adoption" Furnish said.

"And we are finding ways of supporting Lev and his brother from here, keeping them in their own country and just making sure that they have the best health care, education and family options available to them."

He added "(We) really felt we could make a huge difference in their lives, but we'll make a difference from here."

Elton said in September that Lev, then 14-months old, had -stolen his heart- when he visited Ukraine with his AIDS charity foundation.

The parents of some of the children in the orphanage had died of AIDS, although staff there have said it will not be possible to confirm whether Lev is HIV positive until he reaches the age of 18 months.

Furnish said the couple would campaign against Ukraine's adoption laws.

"I think there's a lot of things they need to catch up in terms of adoption and the status of the child that's HIV positive and what the status of their adoption is within their country" he said.

"This would not apply to Lev and his brother - because we just want to get them out of the orphanage and with a good family as soon as possible. But for future children, they can have a better and a smoother path."

Source: JAVNO

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Tuesday, December 08, 2009

Ukraine's Tymoshenko Changes Iconic Hairstyle

KIEV, Ukraine -- Ukraine's prime minister and presidential candidate, Yulia Tymoshenko, is to change her iconic hairstyle, her stylist said Tuesday.

Star Wars' Princess Leia (L) and Ukrainian Prime Minister Yulia Tymoshenko (R).

Tymoshenko, famous for the instantly-recognisable style - said by some to resemble that of Princess Leia in the film Star Wars - came to public prominence as one of the leaders of her country's Orange Revolution in 2002.

After several political stand-offs with President Victor Yushchenko, Tymoshenko herself is running for the top job in Ukraine's January 17 election.

The new style is apparently shorter, although still blonde. "It is an evolution rather than a revolution," the stylist said.

Tymoshenko once joked about the braided 'crown' of her cut being "the steering wheel of my country."

Source: DPA

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Ukraine's German Chance

EICHSTAETT, Germany -- The issue of an EU membership perspective for Ukraine is central to this young democracy's current foreign relations and future domestic development. At least, this is what many members of Kyiv's political and intellectual elite believe – arguably, for good reasons.

Dr. Andreas Umland, the author of this article, is a former fellow at Stanford, Harvard and Oxford.

The prospect of becoming a fully accepted “member of the European family” was, in the opinion of many in both the West and East, important for the political and economic development of Central European as well as Baltic countries in the 1990s. It was a driving force in the quick transition of these post-totalitarian states into more or less liberal democracies today.

Ukraine has been lacking this incentive for comprehensive democratization and effective state-building so far. The EU has adopted a position that, depending on who in Brussels and the Union's surrounding institutions or groups you talk too, is more or less vague. Some of the EU's political, intellectual and economic leaders say that, while there has been no official invitation so far, “the door remains open,” and that it depends on Ukraine whether it will receive a membership perspective or not.

The current mainstream position seems to be something like “the door is neither open nor closed” – a purposefully imprecise postponement of the thorny issue of what do to with a basically democratic country that is fully located in Europe and sees itself as being part and parcel of many pan-European traditions. Finally, a few “realist” commentators think that the enlargement of the EU is now over – with possible future exceptions to be allowed concerning countries like Iceland, Norway and Switzerland, or, at most, the former Yugoslav republics.

These European “pragmatists” may concede that Kyiv will receive a “privileged association” – a formula that could entail fairly close cooperation between Brussels and Kyiv. However, such is the dominant opinion within this influential camp of West European conservative economic and political elites, the status of Ukraine and various other countries, like Turkey, Moldova or Georgia, will always remain “below full membership.”

With the announcement of the composition of Germany's future cabinet in October this year, there has emerged a chance that the EU's approach may become both clearer and friendlier towards Ukraine. In the coming four years, the regular term of Germany's new government, Ukraine may be provided with an opportunity to improve its standing as a possible future candidate for EU membership.

In a best-case scenario, we will see the emergence of a pro-Ukrainian coalition within the EU. Such an alliance could consist of Central European and Baltic states as well as of Great Britain plus Germany, and may be able to push through an affirmative specification of the EU's official position towards a future membership of Ukraine.

As had been expected since the announcement of the results of the Bundestag elections in late September 2009, the head of the economically right-wing and politically liberal Free Democratic Party (FDP), Guido Westerwelle, was not only announced as the Federal Republic's future Vice-Chancellor.

An internationally little-known, but domestically prolific leader of the German liberals, Westerwelle also received the post of the Foreign Minister. This particular fact is in so far relevant for EU-Ukrainian relations as the FDP is the only German party that has clearly stated, in the programs for both the European and German parliamentary elections last summer, that Ukraine may one day have the option to apply for EU membership.

The respective passage in the European and German parliamentary election programs of the FDP says: “The states of the Western Balkans have a medium- to long-term perspective to join the EU – a position supported by the FDP. In the long run, this also applies to Ukraine.”

To be sure, other German politicians, for instance, the new Federal Minister of Finance Wolfgang Schaeuble, have expressed similar sentiments, at one point or another, too. Also, the German left-liberal party, Buendnis 90/Die Gruenen (Union 90/The Greens), whose leader Joschka Fischer had been head of the German Foreign Service in 1998-2005, has an international policies program obviously implying a EU membership perspective for Ukraine and other European countries that are currently not in the pipeline for entering the Union.

However, the FDP remains the only relevant party in Germany that, even if only very briefly, mentions specifically and affirmatively Ukraine in connection with the issue of possible future candidates for an entry into the EU.

It needs to be added, on the other hand, that, while Germany is an important European country, the FRG is only one of the 27 states formulating EU foreign policies. Moreover, with the creation of a Union foreign service, after the adoption of the Lisbon Treaty, the influence of national ministries of international affairs, including Germany's Auswaertiges Amt, on pan-European politics will decline.

Also, Germany's system of rule is a so-called “chancellor's democracy” meaning that the Federal Republic's chief of cabinet Angela Merkel determines the main directions in all areas, including foreign policy. Merkel represents Germany's Christian Democratic Union (CDU) that has been ambivalent on Ukraine's possible entry into the EU. Moreover, the position of the CDU's Bavarian sister party and third government coalition partner, the Christian Social Union (CSU), can be said to be, in a certain sense, anti-Ukrainian: In spite of Munich's close relations with Kyiv, the CSU's political program implies that, among other countries, Ukraine has no EU membership perspective whatsoever.

It also needs to be admitted that Ukraine is currently not a salient issue in either German or EU external affairs. Ukraine's future is not a critical issue for either the FDP or any other German political party. Finally, in Germany like in other countries, electoral party programs, as the FDP's, not always fully reflect what party functionaries do after gaining governmental positions.

It is thus not clear what the partial change of personnel and policy line in the German cabinet will mean, for Ukraine. Still, even a short line within a long political program, like the one sentence on Ukraine in the FDP's official agenda, is not a trivial phenomenon in as developed a democracy as Germany's. The status of the party program is above statements of individual preferences of – even, influential – party leaders.

As the program has been collectively formulated and democratically approved by the FDP's elected organs, it has a weight (and could even develop a dynamic) of its own. Ukraine may be one of the least issues currently on Westerwelle's mind. However, both Ukrainian political leaders and pro-Ukrainian civic actors in the West, have now the opportunity to mention the respective sentence of the FDP's European and national electoral programs when discussing with Westerwelle Ukraine's future.

To this, for Ukraine's already fortunate situation, one might add that the FDP did, in Germany's new coalition government, not only receive the Foreign Service, but also the Federal Ministry for Economic Cooperation and Development that administers most of the German foreign aid programs, including those related to Ukraine. Dirk Niebel, the FDP's General Secretary in 2005-2008, will be heading this ministry – a fact that came as a surprise to many observers as the liberals had been demanding the abolishment of that ministry.

Whatever the particular circumstances of these decisions, Kyiv will now have two institutional partners in Germany's government who are headed by politicians, presumably, in favor of a long-term EU membership perspective for Ukraine.

Last but not least, Westerwelle may not always be as junior a figure in Germany's foreign relations as he will be for the next months or even couple of years to come. Certainly, Ukrainian leaders should keep in mind Merkel's standing in international politics, no the least, on the European arena, on the one side, and Westerwelle's current lack of foreign policy experience, on the other.

This will constrain Westerwelle's influence on policy making for some time, and allow Merkel to exercise fully her so-called “directives competence” when determining how Germany should behave internationally. However, it is not only unclear how far Merkel's future Ostpolitik will be informed by skeptic positions towards Ukraine, such as those in the CSU – now that her former Foreign Minister and follower of Gerhard Schroeder's pro-Russian line in international affairs, Frank-Walter Steinmeier, is gone.

It is also worth noting that Westerwelle may, in the coming months, receive advice not only from the FDP's previous Foreign Service head Klaus Kinkel. He will also benefit from behind-the-scenes guidance by Germany's legendary former Vice-Chancellor as well as past Minister of Domestic and Foreign Affairs Hans-Dietrich Genscher – one of Europe's most experienced elder statesmen.

Genscher, himself a former head of the FDP, was one of Westerwelle's sponsors during his rise to party leadership, and may, to one degree or another, be playing the role of an advisor on Germany's foreign policy making for the next months. At least, Westerwelle will seemingly have the opportunity to consult Genscher should he encounter a salient, difficult foreign policy issue calling for well-informed advice.

That Westerwelle does not expect his political line to become succumbed under the Christian Democract's foreign agenda was demonstrated when, at a press conference in November, he was asked why it is that his FDP colleague Niebel became the minister responsible for foreign technical assistance.

Westerwelle replied: “It is important for us [i.e. for the FDP] that no auxiliary foreign policy will be happening within the development aid ministry.” By “auxiliary foreign policy,” the leader of Germany's liberal party clearly meant possible international preferences of his conservative coalition partners.

Should this statement preview the FDP's future behavior within Germany's foreign policy making community, we may see more changes in German and European foreign relations, including those with Ukraine, than one would otherwise expect.

Source: OEN News

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Ukraine’s Inflation Slowest In More Than Two Years

KIEV, Ukraine -- Ukraine’s inflation rate, Europe’s highest, declined in November for a fourth month as the recession curbed domestic consumption.

Ukraine’s inflation rate, Europe’s highest, declined in November for a fourth month.

The rate fell to 13.6 percent, the lowest since July 2007, from 14.1 percent in October, the Kiev-based state statistics committee said today in a statement on its Web site. The median estimate of eight economists in a Bloomberg survey was 13.7 percent. In the month, prices increased 1.1 percent.

The economic contraction, including a record annual 20.3 percent slump in the first quarter, is helping subdue inflation, which the government has been unable to push below 10 percent since 2003. The central bank has cut its key interest rate twice since June as the recession blunted price pressures.

“It’s a decent number as deflationary pressure in the economy outweighed the impact of loose fiscal policy,” said Oliver Weeks, a London-based economist at Morgan Stanley. “But it’s hard to get too optimistic given household natural gas prices will eventually have to rise sharply.”

The hryvnia strengthened to 7.9949 versus the dollar as of 2:03 p.m. in Kiev, compared with a close of 8.0045 on Dec. 4, Bloomberg data shows.


Annual growth in utility prices declined to 16.1 percent in November from 22.3 percent the previous month, while the rise in transport costs fell to 20.9 percent from 22.2 percent, according to the committee. Food prices rose 10.3 percent, compared with 8.8 percent in October.

Ukraine depends on Russia for more than 50 percent of its gas needs. Russia has increased the price of gas Ukraine pays more than four times since 2006, while the cost for households has remained unchanged since the end of 2006.

Ukraine was to raise gas prices by 20 percent for households and for utilities that provide hot water and heating this autumn to meet a condition of a bailout loan from the International Monetary Fund. The unpopular increase was delayed ahead of January presidential elections.

“There is an inflation risk next year because sooner or later the authorities will have to increase gas prices for households,” said Andriy Nesteruk, an analyst at Kiev-based Phoenix Capital investment bank. “And it is not clear what monetary policy the central bank will have as we will have a new central banker after the presidential elections.”

Interest Rates

Inflation, which peaked at 31.1 percent in May 2008, slowed from February through May, allowing the central bank to cut the discount rate to 10.25 percent. The government wants rates to fall further to spur economic growth.

Output has been shrinking since the fourth quarter of last year as demand for exports such as steel and chemicals plunged, investments waned and the currency weakened. The IMF, which approved in November 2008 a $16.4 billion two-year loan for Ukraine to support banks and the currency, said on Nov. 4 the economy remains “highly fragile.”

The Washington-based lender estimates an average inflation rate of 14 percent this year and 9 percent in 2010.

Producer prices, an early indicator of inflation, increased 0.4 percent on the month in November, according to the statistics office. Annual producer prices rose 13.2 percent.

Source: Bloomberg

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Monday, December 07, 2009

Their Ukraine

KIEV, Ukraine -- The Ukrainian state only benefits those who run it, and not those who live in it. Diplomats tend to tiptoe around the truth. But European Union ambassador Jose Manuel Pinto Teixeira hit the nail on the head last week when he suggested that the Ukraine’s rich and powerful have a stranglehold over the country, and are choking it for personal gain.

Rinat Akhmetov, richest of the rich Ukrainians.

The EU ambassador didn’t mention oligarchs by name. But it’s clear who he was referring to when he said that life could be much better in Ukraine, but that progress is sabotaged for the masses because it runs contrary to the interests of the filthy few rich who so control the country, both its economy and politics.

In 18 years of independence, the state has been made to serve the will of rapacious businessmen, greedy bureaucrats and corrupt politicians. As the health care, education and social welfare systems have fallen apart, the leeches have sucked public finances dry to buy mansions, cars and designer clothes.

They drive their Bentleys bought with pilfered public money along roads peppered with potholes, and sometimes over unfortunate pedestrians.

The blame falls not only on the oligarchs, but on the politicians and bureaucrats who are all part of the same game, built for their benefit and by their rules. The state is working for them; they are not working for the state.

Terrified of competition and jealous of success, they have stifled small and medium businesses, and made life a nightmare for foreign businesses. They are above the law because the law is in their pockets.

The biggest split in Ukraine today is not between east and west, or between Russian speakers and Ukrainian speakers. It is between ordinary people who want to be free to build successful businesses and pay taxes in return for good public services, and the leeches who know only how to steal.

The Orange Revolution was supposed to change all that. It didn’t. Instead, weaker central authorities who can’t coordinate their efforts have overseen an increase in corruption.

The Jan. 17 presidential election should give some hope for change, but Ukrainians are not looking at the ballot with much hope. No candidate has put forward concrete measures in his or her program to tackle the biggest problem that Ukraine has today – that the Ukrainian state benefits only those who run it, and not those who live in it.

Source: Kyiv Post

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Sunday, December 06, 2009

Ukraine's PM Offers Condolences Over Russian Nightclub Fire

KIEV, Ukraine -- Ukrainian Prime Minister Yulia Tymoshenko offered her condolences on Saturday to the families of over 100 people killed in a nightclub fire in the Russian Urals city of Perm.

Police officers stand in front of the entrance to the Lame Horse nightclub where a fire took place on Friday in the centre of Perm, 1,150 km
(720 miles) east of Moscow.

The blaze broke out in the city's Lame Horse nightclub during an indoor firework display at around 01:00 a.m. local time, killing at least 102 people and injuring over 130 more.

"This is a terrible tragedy for all of us, as Ukraine recently experienced a similar disaster. It is sad that a tragic accident has claimed the lives of young people, full of energy, who had their whole lives ahead of them," Tymoshenko said in a message to Russian premier Vladimir Putin, posted on the Ukrainian government website.

"I express my heartfelt condolences to the families of those who have died, and I wish a quick recovery for those injured," she said.

The owner and manager of the club, Anatoly Zak and Svetlana Yefremova, have been arrested for breaching fire safety rules, and face jail terms of up to seven years.

Investigation Committee spokesman Vladimir Markin told RIA Novosti that four other suspects are wanted in the case.

Regional security minister Igor Orlov earlier told Russian media that the club's plastic ceiling caught fire during the indoor fireworks display, held during a celebration of the venue's seventh anniversary.

The health ministry has said that the injured are being flown to Moscow, to be treated in the city's best hospitals.

Investigators have so far identified 10 of those killed in the fire.

The venue, which covers an area of 500 square meters, was almost completely destroyed by the blaze.

Source: RIA Novosti

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Tymoshenko Predicts Yanukovych Defeat In Presidential Election

KIEV, Ukraine -- Premier and presidential candidate Yulia Tymoshenko addressed journalists in the Big Politics live talk show broadcast by the Inter TV channel.

PM Yulia Tymoshenko on Inter TV.

Commenting on the alleged lead of Viktor Yanukovych in the polls reported by the media, she called them fabricated, saying: “I guess, as experienced journalists you should know the true value of such polls. They are hatched in campaign staffs and then poured out at the people.

They shouldn’t really be trusted.” Tymoshenko recalled a miserable 0.5% forecast for her party back in 2002 when BYT, in fact, scored 8%. The story repeated in 2004 when such made-to-order polls gave BYT only 12%, and her party won over 24% of the vote. "Ukrainians are being manipulated by the media, starting from TV news and ending with pseudo polls. Their brains are washed to the wishes of the masters of life, Tymoshenko replied.


The premier recalled her statement made in Lviv last week for democratic candidates to unite in the runoffs around the highest scorer.

“I think, every sensible person in Ukraine realizes that if the mafia [referring to the Party of Regions] comes to power it will be the end of Ukraine’s normal development,” Yulia Tymoshenko stressed.


A deliberate financial Holodomor [famine] was launched in Ukraine. It was well-orchestrated and is still being implemented, she warned.

Asked about who is to blame, she responded by pointing to politicians who strive to ruin the country as a means of preserving or gaining power. She stressed the Central bank is the main perpetrator, with President Yushchenko controlling the bank. “I don’t believe the president was not in the know about the bank’s wheelings and dealings,” she added.

The country has been deliberately cash-strapped by the Central bank and pocket commercial banks. As a result, crediting businesses has been stopped due to abominable 16% rate charged by the Central bank and the 30-35% by commercial banks. The economy is being strangled, the premier continued.

The Central bank printed 100 billion hryvnias. Instead of channeling the money to the economy, it gave it to commercial banks which bought hard currency for it and funneled it out of Ukraine to off-shore zones After the election, I’ll turn this financial beehive out [a reference to Yushchenko’s hobby as a beekeeper] and show the nation through which banks the money was funneled abroad,” the premier warned.

“We’ll have the prosecutor general with enough political will and courage not only to expose but also to bring to account,” she said.


The premier complained that the fat cats that came to power during Pres. Kuchma’s rule still dominate the country. They own major enterprises and most of the media. If you want to oppose the system, you inevitably will be in the opposition. They are all against me, Tymoshenko admitted.

“The prosecution is controlled by the Party of Regions, same as the bulk of the media and local authorities. In the Verkhovna Rada there is no effective majority ready to implement reforms,” she said.

The will of Ukrainians who protested on the Maidan in 2004 has not been implemented by Yushchenko, Tymoshenko charged, and her goal is to see this done. The Maidan is not history, she stressed.


Tymoshenko threatened to prosecute those who lined their pockets with illegally stolen state property. “I have a long list of people who deserve being jailed for what they have done to Ukraine in the past 18 years,” she warned.

Asked what she expects the fat cats to do, Tymoshenko presented her code for the tycoons: “pay taxes honestly, pay fair wages to employees, invest in modernization instead of funneling money to off-shore accounts.”


Tymoshenko described the present situation as being very grave, especially due to large-scale theft of state property by officials.

Asked if she will press for the prosecution of Pres Yushchenko, she said it would be wrong to name the corrupt officials at the moment.

Simultaneously, she was indignant and fuming, accusing Viktor Yanukovych of grabbing a former government residence in Mezhyhory [a 600-sq.m house and 140 hectares of land]. She also mentioned that Yushchenko has bought a 13-heactare lot of “golden” land in the Kyiv suburbs in 2009.


Asked whether she was a hobo [Yushchenko once, after analyzing her tax declaration, compared her to a hobo, saying the country cannot be run by a persons without any property, land or money] or a billionaire, Tymoshenko responded by saying she had been prosecuted by the Kuchma regime. “If I had billions, they would have found them,” she commented.

She stressed she had been cleared of all the charges by all the 30 judges of the Supreme Court.

Source: ZIK

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Crimean Tatar Leader Backs EU, NATO Membership For Ukraine

SIMFEROPOL, Ukraine -- The outgoing leader of Crimea's Tatars says that NATO membership for Ukraine is the safest way to avoid a repeat of the Russian-Georgian war of 2008, RFE/RL's Ukrainian Service reports.

Mustafa Djamilev

Mustafa Dzhemilev, the head of the Crimean Tatars' Mejlis or parliament, spoke to RFE/RL on December 4 ahead of the Kurultai, or Crimean Tatar Assembly, to be held in Sevastopol on December 5-6.

Dzhemilev said he supports Ukraine's moves to join the European Union and NATO. He added that although a referendum in Ukraine might show a lack of support for joining NATO, it is the duty of politicians to convince people to take "the right direction."

Dzemilev said European integration will be useful for Crimean Tatars in terms of protecting human rights and gaining support for minority issues.

The agenda of the Kurultai will include discussion of the January presidential election in Ukraine and the election of a new head of Mejlis, replacing Dzhemilev.

He said his decision to leave the post is not supported by many members of the Crimean Tatar diaspora or the Kurultai.

Dzhemilev, who spent many years in the gulag as a Soviet dissident, has been the chairman of the Crimean Tatar Assembly since 1991.

He said incumbent Ukrainian President Viktor Yushchenko had unfortunately failed to keep his campaign promises.

Dzhemilev called for a tolerant election campaign to take place without insults and social polarization, and said many people still have to overcome "Soviet propaganda" and review their personal values.

Dzhemilev said that any discussion about Crimean Tatar separatism or annexation to Russia is baseless, but he said that one of the most important and worrying questions for Crimean Tatars is the preservation of their national identity.

He added that more efforts should be made in terms of security because of attempts made by Russian authorities to undermine Ukrainian and Crimean Tatar bodies.

Dzhemilev said he believes that Russia's Federal Security Service is behind reported operations to assassinate him. He referred to the arrest on October 26 of two alleged members of an Islamist group, At-Takfir wal-Hidjra, who were reportedly planning to kill Dzhemilev.

Source: Radio Free Europe

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Saturday, December 05, 2009

EU, Ukraine Trade Accusations At Summit

KIEV, Ukraine -- A top EU official accused Ukraine of dragging its feet on reforms at a summit in Kiev on Friday, while the ex-Soviet republic's leader complained about a delay in a promised EU-Ukraine accord.

Ukraine's President Viktor Yushchenko (C), Swedish Prime Minister Fredrik Reinfeldt (L) and European Commission Chairman Jose Manuel Barroso (R) pose after the Ukraine-EU summit in Kiev. A top EU official accused Ukraine of dragging its feet on reforms at a summit in Kiev on Friday, while the ex-Soviet republic's leader complained about a delay in a promised EU-Ukraine accord.

"It seems to us quite often that the promises of reforms are only partially respected," European Commission President Jose Manuel Barroso told Ukrainian President Viktor Yushchenko, in comments translated into Ukrainian.

Barroso urged the divided Ukrainian leadership to "ensure the country's political and economic stability" in the run-up to presidential elections scheduled to be held in January 2010.

"The EU wishes to support Ukraine and we're doing a lot in concrete terms," Barroso said at a press conference held after the talks.

But he added: "In the end, the responsibility for the reform in Ukraine is not for the EU, but for the Ukrainians themselves."

Barroso and other EU officials also advised Ukraine's leaders to make every effort to gain access to aid from the International Monetary Fund (IMF) by carrying out economic reforms.

Kiev received a 16.4 billion-dollar loan from the IMF in November 2008, but the fund has refused to hand over the third instalment because of Ukraine's failure to maintain fiscal discipline.

The European Union then froze a 600 million-euro (904 million-dollar) loan to Ukraine.

"The IMF programme must get back on track," Swedish Prime Minister Fredrik Reinfeldt, whose country holds the current EU presidency, said at the press conference.

Meanwhile Yushchenko revealed his bitterness at the postponement of the signing of an association agreement designed to develop links between Ukraine and the EU, placing some of the blame on Brussels.

"The EU must understand that we all have the responsibility of making the association agreement into an example for all the countries in the region on their way towards European integration," Yushchenko said.

He placed blame for Ukraine's failure to meet its obligations to the EU on the country's government, which is led by his archrival, Prime Minister Yulia Timoshenko, who is running against him in the January 17 presidential vote.

The association agreement, which was to have been concluded this year, had been intended to showed Europe's willingness to boost ties with the ex-Soviet republic, though it stopped short of promising eventual EU membership.

Yushchenko was the darling of the West five years ago after he swept into power after the pro-Western "Orange Revolution," but since then his reputation has suffered amid endless political infighting and gas disputes with Russia.

Barroso warned that European consumers should not suffer a repeat of last winter's Russian-Ukrainian gas conflict, which caused a long interruption of Russian gas supplies to more than a dozen countries in January.

"We should not be affected by any problem that we had at the beginning of the year," Barroso said.

A quarter of the EU's gas comes from Russia, 80 percent of which is transported via Ukraine.

So far this winter, a new gas crisis has been averted as Ukraine has managed to pay its gas bills to Moscow, despite being short of cash due to the world economic crisis.

Ukraine's state gas firm Naftogaz said on Friday that it had paid for all the Russian gas delivered in November, a statement that was confirmed by Russian state-controlled energy giant Gazprom.

Source: AFP

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Friday, December 04, 2009

Ukraine Struggles To Find The Right Pitch in bid for EU membership

KIEV, Ukraine -- When Ukraine won its bid to co-host the 2012 European Championships, it saw the decision as its pass to EU integration. But since then, Kiev has done more to floodlight its incompetence than its credibility.

Stadium construction work has been painfully slow.

If there are two things likely to bind a nation, they are soccer and a desire for progress. In terms of the former, Ukraine scores well, but on the latter, it let's itself down. Particularly when it comes to the ongoing issue of how to make it into the league of nations which form the European Union.

That Kiev yearns to hear the beckoning call from Brussels is no secret, but so far the fledgling democracy has failed to inspire the kind of confidence necessary to support that invitation for membership.

Its politics are often characterised by mud-slinging and below-the-belt tactics, and there is no parliamentary majority to push through the types of reforms the EU would want to see. In short, there is a long way to go.

But if the sprawling landmass on Europe's eastern edge is serious about making it into the inner sanctum, why does it not do more for its cause?

Kataryna Wolczuk, an expert on eastern European affairs, says the reasons are manifold. She cites the Orange Revolution - the protest movement which followed the run-off vote of the 2004 presidential elections - as the kick-off point for the country's current ineffectiveness.

“It raised expectations to such an extent that the political leadership has been embroiled in a tug-of-war ever since,” Wolczuk told Deutsche Welle. She says politicians are more interested in scoring points against one another than they are in long-term policy making.

And in a country which is known for its corrupt judicial system and flimsy institutional framework, such a combative approach to governance is bound to make the EU flinch.

Not a one-way street

But as Wolczuk says, it takes two to tango, and she firmly believes that the EU had a hand in preventing faster Ukrainian progress. “The Orange Revolution presented a window of opportunity, there was new leadership, there were expectations, there was ambition,” she said.

Only instead of seizing the moment and casting Kiev a symbolic anchor, the EU opted for a wait-and-see approach which is keenly felt and has dampened enthusiasm.

Nico Lange, Head of the Konrad Adenauer Stiftung in Kiev, agrees there is scope for Brussels to be clearer about membership prospects for post-Soviet countries but he also stresses the need for Ukraine to think more broadly.

“There needs to be a greater willingness to understand that becoming a member of the EU is not simply something that can be thrashed out at the negotiating table, but something which requires reform and political will,” Lange told Deutsche Welle.

He said the hope among Ukrainians is that someone will come along and do everything for them, that the EU will step up and modernize the country on their behalf. “But obviously they have to do that for themselves.”

Wasted opportunity?

The question is, are they up to the job? If the 2012 European Championships genuinely are a measure of the country's readiness to come in from the cold, the answer would likely be ‘no'. Preparations are running behind schedule and as a result UEFA has not yet decided which Ukrainian stadiums will host matches during the tournament.

It's all a bit of a mess and certainly hasn't done much to raise the country's profile abroad. “The project has been beset by the same problems of corruption, bureaucracy and mismanagement inherent in Ukraine,” Lange said.

Wolczuk agrees that preparations for the soccer tournament are symptomatic of Ukraine's internal struggles. “It wants to achieve something, but then realises how difficult it is without functional institutions.”

Which leads right back to the issue of reform and just what it will take to stop Ukraine from repeatedly shooting own goals on the European playing field.

Lange says it's all about stimulating political will. “If the public were to exert pressure like they did in other countries, not only with words but with deeds, Ukraine could very quickly become very dynamic.”

Source: Deutsche Welle

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Can Lazarenko Hurt Tymoshenko's Bid?

KIEV, Ukraine -- Behind almost every successful politician and businessperson is a mentor who helped put the person on the path to fame and fortune. Yulia Tymoshenko had one too: Pavlo Lazarenko, convicted U.S. felon.

Pavlo Lazarenko, convicted U.S. felon.

Lazarenko served under ex-President Leonid Kuchma as prime minister from 1996-1997. He is now serving an eight-year prison sentence in America for laundering money, part of the ill-gotten fortune he amassed in the nation that he allegedly ran like a mafia boss.

In the early 1990s, Lazarenko helped make Tymoshenko, the current prime minister, a big-time player in the lucrative gas-trading business and also gave the rising star a political boost.

Now, as Tymoshenko is one of two front-runners in the Jan. 17 presidential election, the question is: Can the ex-prime minister hurt the current prime minister politically?

Lazarenko has hinted that he can, telling leading Inter TV channel in 2005 that he could “turn much in the arrangement of political forces in Ukraine upside down.” But Tymoshenko has kept her distance and dismissed attempts to tie her to his wrongdoing as merely more scurrilous attacks on her from her enemies.

The consensus seems to side with Tymoshenko – that Lazarenko is harmless to her now -- even among those who might wish otherwise.

“Lazarenko cannot significantly influence the course of political events in the country,” Oleh Lytvak, who coordinates law-enforcement activities for the Presidential Secretariat, told UNIAN news agency on Dec. 1.

Lytvak would be in a position to know more than most. As acting prosecutor general during 1997-98, Lytvak worked on the Lazarenko case.

“Much has changed during his absence,” Lytvak told UNIAN. “Lazarenko today is correctly associated with past criminal acts. The only thing he could do if he returned would be to start talking about his unpunished accomplices. He has that right. But then the Prosecutor General’s Office would be obliged to open an official investigation, a full, all-encompassing and objective one.”

Taras Berezovets, a political analyst at the Kyiv-based Politech think tank and a campaign adviser for Tymoshenko’s eponymous bloc in parliament, is even more certain.

“Many young voters don’t even know who Lazarenko is,” Berezovets said. “Tymoshenko’s relationship with Lazarenko is not a stain on her political career. She has proven that over and over again during the years as an opposition leader and running in parliamentary elections.”

A third voice echoing this sentiment is that of Serhiy Taran, director of the International Democracy Institute, a Kyiv-based think tank. He said Tymoshenko’s business and political dealings with Lazarenko took place too long ago to matter today. “If there had been documented evidence of wrongdoing between Lazarenko and Tymoshenko, state prosecutors would have used it against her during the early 2000s,” Taran said.

The decade-long court battle between American law enforcers and Pavlo Lazarenko came closer to an end on Nov. 18, when a U.S. appeals court judge shaved 11 months off the ex-prime minister’s prison sentence.

The presiding U.S. judge hasn’t decided whether the convict will spend an additional 18-32 months in a prison or confined at his San Francisco Bay Area home, wearing an electronic bracelet. Lazarenko also has yet to cough up millions of dollars he accumulated in Ukraine.

One thing is clear: Tymoshenko and Lazarenko go way back.

Tymoshenko earned a fortune during the crony capitalist 1990s, when she headed a natural gas trading company, United Energy Systems of Ukraine. The company profited handsomely from state contracts awarded by then-Prime Minister Lazarenko.

Documents leaked by Ukrainian prosecutors over the years suggest that Tymoshenko’s companies made payments to Lazarenko-controlled companies in return for lucrative gas contracts. And it was precisely for laundering dirty money from such dealings that U.S. officials convicted Lazarenko, whose activities extended into U.S. jurisdiction.

U.S. prosecutors are proud of the conviction. “The sentence against Lazarenko should send a strong message to corrupt foreign public officials,” said First Assistant U.S. Attorney David Anderson in a statement issued by the Justice Department on Nov. 19.

Lazarenko has vowed over the years to return to Ukraine in order to clear his name. He said so again on Nov. 18. “After my release I will go to Ukraine to work hard and work honestly,” Lazarenko said. “In the past 10 years I have come to a full understanding. Every way that I personally could punish myself, I have punished myself.”

Some doubt he will ever come back, noting that he is wanted for serious crimes, including murder.

Ukrainian prosecutors in 2000 said they suspected Lazarenko of being involved in the 1996 murder of parliament deputy Yevhen Shcherban, the 1998 slaying of central bank chairman Vadym Hetman, abuse of office, extortion, fraud, embezzlement and theft of state property. Lazarenko has denied all the charges, claiming they are politically motivated.

Lazarenko served as energy minister and deputy first prime minister years before Kuchma tagged him to become premier in June 1996. Lazarenko had by then amassed a fortune buying and selling energy contracts and arranging trades with state enterprises buying natural gas at state-government-subsidized rates.

Lazarenko was able to leverage illegally procured gas into virtually any commodity through unregistered barter transactions; he could then trade the goods on the open world market.

Kuchma, Lazarenko and Tymoshenko are from Dnipropetrovsk, where in the 1990s, businessmen and bankers teamed up with public officials to devise ways for bankrupt state and commercial enterprises to purchase cheap Russian gas. Regional suppliers set up payment in whatever way the former Soviet plants could: cash, goods or shares.

Tymoshenko has for years denied wrongdoing in her business and political relationship with Lazarenko.

The topic of Tymoshenko’s business dealings with Lazarenko has not been an issue during the years-long trial, where the star witness had been former Lazarenko associate, Petro Kyrychenko, the Ukrainian businessman from California who, in the early 1990s, helped Lazarenko set up foreign bank accounts. FBI agents recreated the web of Lazarenko’s bank transfers from evidence found in Kyrychenko’s garbage.

With Kyrychenko’s help, U.S. prosecutors untangled a complex series of transactions involving banks in Poland, Switzerland and Antigua, and ending up in banks in San Francisco. The money laundered had been extorted by Lazarenko, prosecution lawyers said.

Lazarenko timeline

May 1996 – appointed prime minister

July 1997 – resigns under pressure

Dec. 1998 – detained in Switzerland

Feb. 1999 – arrested in New York

June 2000 – convicted in Switzerland (in absentia)

June 2004 – convicted in the United States of money laundering and fraud

Aug. 2006 – sentenced to nine years in prison

Nov. 2009 – resentenced to eight years in prison

Source: Kyiv Post

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KIEV, Ukraine -- The European Union's top official in Ukraine this week dropped diplomatic doublespeak and nuance and said what he and a lot of others really think about what's wrong with the nation.

A woman begs on a street in downtown Kiev. Nearly 18 years after the collapse of the Soviet Union, Ukraine’s economy and government are still controlled by a small number of billionaire industrialists, while many of its citizens live in misery.

The European Union’s top official in Ukraine this week dropped diplomatic doublespeak and nuance and said what he and a lot of others really think about what’s wrong with the nation.

“Corruption, red tape, administrative obstacles of every kind – these are only things that serve the interests of those who today control the economy because they do not want competition. They are allergic to competition,” Jose Manuel Pinto Teixeira of Portugal told journalists on Nov. 30. “The vast majority of Ukrainians cannot have employment, cannot have decent salaries, do not have a decent social system, because the country today is in many aspects like 20 years ago.”

Teixeira’s comments came ahead of the Ukraine-European Union summit in Kyiv on Dec. 4 and against a backdrop of the nation’s long-stalled efforts to achieve European integration and shed its Soviet past. The remarks, which the ambassador elaborated on in a Dec. 2 interview with the Kyiv Post, also came ahead of the Jan. 17 presidential election, a race in which a candidate who will usher in major reforms is hard to identify.

In an interview, Teixeira wouldn’t name names when asked to be specific about who he thinks is stifling Ukraine’s economy and democratic progress. But he also said he doesn’t think it is much of a mystery about who is creating the bottlenecks.

A list of top suspects might start with Ukraine’s richest businessmen, or the so-called oligarchs, who today have commanding influence in politics and who control much of the country’s economy. They made spectacular fortunes from the opaque privatizations of government-owned assets after the nation gained independence in 1991.

They have long reaped billion-dollar profits out of Ukraine, and are accused by some of stalling changes – such as progressive yet simplified taxes, effective law enforcement and less bureaucracy – that could make Ukraine’s economy fairer and more competitive.

While a couple of them – Rinat Akhmetov and Victor Pinchuk – have spokespeople who pump out scads of press releases, Ukraine’s richest pair would not comment to the Kyiv Post this week about Teixeira’s comments or whether they thought he was talking about them. Kostyantin Zhevago refused comment. Gennadiy Bogolyubov and Igor Kolomoisky could not be reached before the newspaper went to press on Dec. 3.

But an endorsement of Teixeira’s assessment came from Andrei Lobatch of the Foundation for Effective Governance, a policy center funded by Akhmetov. “I agree with him in a general way. There are a lot of things that need to be done. There is obviously a great need to have a consolidated view on reform priorities.”

Oleksandr Sushko, an analyst with the Institute for European Atlantic Cooperation, said some Ukrainian industries are hindering progress towards a free-trade agreement with the European Union because their owners fear competition and loss of profits. “One must approach this carefully,” Sushko said. “It’s impossible to ignore domestic businesses because their short-term interests don’t always coincide with the long-term interests of government.”

In his Dec. 2 interview with the Kyiv Post, Teixeira said his views are common knowledge. While the nation has made progress, the ambassador said Ukraine still lacks a “consolidated political view” and is hobbled by an unclear constitution, a poor legal system, “widespread corruption and conflicts within the country’s institutions of power.” He also called the nation’s haphazard path “unsustainable.”

Teixeira also said on Nov. 30 that “very little has been done” in the last 18 years. “Politicians should tune into the reality more. Much more could have been done. There is a long way to go and the nation’s [citizens are] demanding progress.”

The recent economic crisis and current recession have exposed how undiversified Ukraine’s economy remains, dependent upon exports of steel, raw materials and thereby extremely vulnerable to global price shocks.

The Soviet-era industries of steel, chemicals and coal mining dominate the economic landscape. These heavy industries are located in the country’s industrial east and south and are owned by a handful of business groups, including those controlled by Akhmetov, Pinchuk, Kolomoisky and Serhiy Taruta.

While Ukraine’s business tycoons have started to invest into modernizing these highly inefficient behemoths, their efforts are seen as small compared to the large fortunes earned to date in the sectors . Together, with others, Ukraine’s oligarchs wield immense influence in government and, along with their industries, are able to command big favors.

The government recently extended a freeze on gas, electricity and railway tariffs in effect since November 2008. The sweetheart deals will now last through the end of 2010 for steel and iron ore producers. According to a Millennium Capital analyst, the rate freeze “is negative for electricity manufacturers and railway companies as well as other companies who might gain from raising the tariffs. But metallurgy is the main source of hard currency inflow into the country and the interests of all others take the back seat now.”

More than half of the nation’s 50 wealthiest Ukrainians either made money in or are currently involved in the Soviet-era industries of steel, iron ore and coal mining, chemical production, machine building and automotives. Their estimated combined wealth in July was $16.6 billion, according to Dragon Capital, or 15 percent of the country’s 2009 forecasted nominal gross domestic product. The July estimated combined market capitalization of Ukraine’s metallurgical and mining companies is $13 billion, according to Dragon Capital.

Yaroslav Misyats, head of the Party of Small and Medium Size Businesses, said the government is more to blame than the business elite. “The oligarchs exist as long as the nomenclature allows and encourages it,” Misyats said. “The Ukrainian government is built on theft, controls theft, and proliferates it. That is what does not allow Ukraine to move forward.”

But others think that Ukraine’s business elite exerts more influence over politicians than vice versa. And many of the nation’s business elites also have powerful posts in government, holding seats in parliament or other positions. So if they had a genuine interest in changing the status quo, many think they could have done so by now.

“Undoubtedly, in Ukraine there are forces that perceive free trade and the reforms pursued by the Tymoshenko-government as a threat to monopolies and corrupt ways of doing business,” said Hryhoriy Nemyria, vice prime minister in Prime Minister Yulia Tymoshenko's Cabinet. “But, we won’t be deflected from establishing a free trade regime [with the EU] which provides an equal playing field.”

Whoever is to blame, the consequence is clear for average Ukrainians.

“Many Ukrainians are living in poverty, are underemployed, underpaid; they have poor health care and social support systems because the country hasn’t enacted any real reform. It lacks the political will to democratize Ukraine,” said Yevhen Bystrytsky, head of the Renaissance Foundation.

Ukraine has consistently scored poorly in various international evaluations. This year, Transparency International said the level of corruption, already alarmingly high, has worsened to 146 out of 180 countries surveyed. Ukraine also sunk in the Global Competitiveness Report, dropping from 72 to 82 out of 133 countries ranked.

In terms of quality of life, Ukraine was placed with Indonesia, Turkmenistan and Azerbaijan, according to the latest United Nations Development Program report. Direct foreign investment has been paltry in Ukraine since independence, especially compared to neighboring nations such as Poland.

Anna Derevyanko, executive director of the European Business Association, said that investment “should be fast, easy and transparent.” But it is not. “It seems like our political leaders don’t have a strategic view on Ukraine’s development,” Derevyanko added.

Jorge Zukoski, president of the American Chamber of Commerce in Ukraine, echoed the sentiment: “The reticence of the political elite to embark on the path of true reforms that roots out corruption, strengthens the rule of law, fosters transparency and creates a level and clear playing field for all market players has not yet been a priority in the 18 years since independence. The frustration that the EU leadership feels is understandable as they and others have continually extended a hand of friendship to the leaders of Ukraine.”

Since 1992, the EU has given Ukraine more than 1 billion euro in aid and is currently the largest donor of technical assistance, providing on average of nearly 200 million euro annually. The upshot is that Ukraine-EU “action plans” are misnomers – action has been lacking.

So it was hard to argue with Borys Tarasyuk, head of parliament's committee on European integration, when he said on Dec. 1 that it is “too optimistic to speak of signing the association agreement” between Ukraine and the European Union at the Dec. 4 summit.

The agreement, meant to move integration forward, also isn’t foreseen anytime soon by Ukrainian Deputy Foreign Minister Kostyantin Yeliseyev. He said on Dec. 2: “There is political readiness on the European side to take the earliest opportunity to sign an association agreement with Ukraine, which would involve a free trade zone, but certain conditions are to be created for this – Ukraine must do its homework, as it were.”

Source: Kyiv Post

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Ukraine's Deep C02 Cut Masks A Dirty Reality

DNIPRODZERZHYNSK, Ukraine -- Ukraine has made some of the world's deepest cuts in carbon emissions over the past two decades, but the ring of steel and chemical factories polluting her hometown make Natalya Maksymenko sceptical.

A steel plant is seen in the morning fog in Dniprodzerzhynsk, some 450 km (280 miles) south east of Kiev.

"This is not air -- this is a horror," said the 25-year-old mother, screwing up her nose at the smoke belching out of factory chimneys in Dniprodzerzhynsk, an industrial city of 250,000 people and birthplace of Soviet leader Leonid Brezhnev.

"We can even hear ourselves breathing in and out. You can see what is swimming in this air -- carbon certainly and factory pollution. Everything is dirty," she complained.

Dirt-encrusted shop fronts stretch out a couple of kilometres along Lenin Avenue then end in an haze at a gigantic steel complex surrounded by swirling fumes.

It is hard to tell where the clouds end and the smoke begins in Dniprodzerzhynsk, a city which expanded rapidly under Soviet dictator Josef Stalin's forced industrialisation programme.

Yet as leaders from around the world attempt to seal a deal on climate change in Copenhagen next week, on paper Ukraine looks like a model pupil on CO2 emissions reduction.

It has halved CO2 output from 1990 levels to 345 million tonnes a year, according to U.N. statistics, allowing it to sell carbon emission rights it received under the Kyoto Protocol that are potentially worth billions of dollars.

But the reality is that Ukraine's plunging emissions have simply mirrored the collapse of its Soviet-era industry -- the economy is still only three-quarters the size it was in 1990.


The global economic crisis accelerated that drop and the concern now is that this is killing the motivation to make greener power stations, factories and mines built 100 years ago.

Earlier this year, Ukraine sold 30 million carbon emission rights to Japan for $375 million and hopes to earn $2 billion or more from the sale of the right to pollute carbon credits that it does not use.

Viktor Khazan, a local environmentalist in Dniprodzerzhynsk, says the 3 billion euros ($4.5 billion) Ukraine could make from its sale of C02 rights is being wasted rather than spent on green projects, as intended by the Kyoto rules.

"There were projects where the funds were partially used and the rest went to altogether other uses," he said. "As long as there is no control over organisations, political parties, we can't say the money will be used only (on ecological projects)."

Mykola Sasiuk, the deputy head of Ukraine's environmental investment agency that sells C02 rights, denies this. He says 150 projects have been outlined, with 30 approved.

"These projects are already working and have produced real reductions (in emissions)," he said.

Ukraine's largest coalmine, Zasyadko, for example, had cut emissions by 4 million tonnes, he said.

But for some in Dniprodzerzhynsk, the projects have come far too late.

"I was poisoned by coking coal fumes and after that I could not go to work at the factory because it affected my health badly," said unemployed former steelworker Viktor, 37.

"We don't have the power to change anything," he said with a shrug as he fished from a bridge over the Dnipro river that gives the town its name.

Source: USA Today

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Thursday, December 03, 2009

EU Losing Patience With Ukraine

BRUSSELS, Belgium -- EU officials head for Kiev on Friday for a summit with Ukraine at which they will make clear their concern at the glacial pace of reforms in a country beset with rising debt and recurrent political crises.

France's European affairs minister, Pierre Lellouche.

A year is a long time in diplomacy and the atmosphere has completely changed since Europe proposed, in September 2008, a wide-ranging association agreement with Kiev which was to have been concluded this year.

That idea stopped short of promising eventual EU membership, but showed Europe's willingness to boost ties with a country spooked by Russia's brief war in Georgia that summer.

However when European and Ukrainian officials meet on Friday, to Kiev's great disappointment, there will be no such accord to sign.

Europe is in no hurry to help out any particular candidate ahead of Ukraine's presidential election on January 17, says Vadim Karassiov, the director of Kiev's institute for global strategies.

"Some countries are disappointed with Ukraine, with the lack of recent progress, they want to see a new start after the election, a renewed burst of reform energy," echoes Andrew Wilson, an analyst at London's European Council on Foreign Relations.

France's European affairs minister, Pierre Lellouche, read out a pretty fundamental wish list earlier this month

Europe wants "a return to a state of law, an end to corruption" in Ukraine and "electoral promises must not be financed with money from the international community, from the IMF (International Monetary Fund) and European taxpayers," he explained.

Ukraine is one of the countries worst hit by the economic crisis and was granted a $16.4 billion (£9.8 billion) IMF loan last year. But the money has been frozen after Ukraine's parliament voted to increase social spending.

The European Bank for Reconstruction and Development has separately delayed a decision on a planned $300-million loan to Ukraine because of its failure to implement reforms.

Neither are there too many green economic shoots visible to ease the problems, with the country facing a 15 per cent contraction of its economy this year.

A Ukraine teetering on the edge of bankruptcy is especially worrying to the EU, which relies on it to transport Russian natural gas - which meets a quarter of Europe's needs.

In January, a row betweenRussia and Ukraine resulted in the gas taps to much of Europe being turned off for two weeks when the temperature was freezing.

The EU's attentions have also been increasingly turning towards Moscow, amid a thawing in relations since the end of hostilities in Georgia.

Europe is not the only party feeling frustrated at the rate of change.

Ukraine is "the only European nation with clear ambitions to enter the EU which hasn't even vaguely been recognised as a potential future member state," Konstantin Eliseev, the deputy foreign minister, complained in Brussels recently.

The EU team is to repeat in Kiev Friday that Ukraine is a "European country" that "shares a history and common values" with the 27 EU nations.

A European country, but not a prospective European Union country despite Kiev's eagerness for both EU and Nato membership ever since the Orange revolution of 2004.

Ukraine's presidential election may not prove the catalyst for changing that scenario.

The current opinion poll favourite, Victor Yanukovich, favours closer ties with Russia, though he has in recent years sought to shake off his image as a servant of Moscow.

"The priority of the foreign policy will be the revival a full partnership with Russia and also the development of partnership with the United States and European Union," he has said.

Source: Telegraph UK

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Ukraine's Political Cat-Fight Leaves Voters Cold

KIEV, Ukraine -- On 17 January, Ukrainians will vote in the first presidential election since the Orange Revolution, which raised hopes of lasting change. But five years on, the names on the ballot papers are largely the same, and the prevailing mood is one of disillusionment, says the BBC's Gabriel Gatehouse.

Yushchenko is standing for re-election, but his support has evaporated.

On a wintry afternoon in November, on the anniversary of the start of the Orange Revolution, President Viktor Yushchenko addressed a packed hall just a few hundred yards from Independence Square, the epicentre of the protests which brought him to power. He was trying hard to rally the crowd.

The revolution was a dream, he said - a dream of a Ukraine free from Russian influence; a Ukraine ruled not by a handful of corrupt oligarchs, but by the people themselves, dreaming of a better life.

Mr Yushchenko is standing for re-election in January. But his support has evaporated, and opinion polls suggest he has almost no chance of winning.

The financial crisis has hit Ukraine hard. Some banks have collapsed and it is not uncommon to see people queuing up outside their branches in the hope of compensation.

What most people worry about here are not rather abstract notions of relations with Moscow or membership of Nato. Their main concern is the economy. And for many, in the past five years, things have got worse, not better.

"We were hoping that at last we would be independent," said one woman in her mid-60s wearing a headscarf, standing in line outside a bank.

"Finally we thought we would get closer to Europe, to the standards of living there. But it turned out to be nothing but lies."

Another pensioner agreed: "These elections will change nothing. We need a strong leader, because everywhere you turn there's nothing but corruption, corruption and corruption."

Old power structures

On the main thoroughfare leading into Independence Square there are a few people handing out leaflets to a mostly indifferent public.

Five years ago this street was packed with hundreds of thousands of protestors, chanting slogans, braving the winter cold.

They believed that their presence could make a difference.

Olexiy Tolkachev was among them, a young activist who was involved in organising the demonstrations. Today, his mood is one of deep disappointment.

"After the Orange Revolution the problem was, Yushchenko became the president, but society, all the people from Maidan [Independence Square] they went home," he says.

Mr Tolkachev says Ukraine's new leaders have not been held to account and that while the names and the faces of those in government changed, the power structures did not.

"We didn't change the system, and Yushchenko became a part of the old system in Ukraine."

There are many who, like Mr Tolkachev, believe that all the major candidates in this election would merely perpetuate the current status quo. There is, though, a possible alternative.

'Against everyone'

Vasyl Protyvsikh is a candidate with a difference.

He is a pensioner from western Ukraine, and he recently changed his name.

In Ukrainian, "proty vsikh" means "against everyone" and, standing on a street corner, he is hoping that his unusual surname will appeal to the disillusioned masses.

"Every soldier should have a dream to become a general," he says.

"I can see how people are becoming more and more frustrated with those in power. We can't stand this any more! We've had enough of being made fools of. All they do is make promises and promises, for years on end."

It is a nice dream, but Mr Protyvsikh does not really stand a chance.

Russian return

One of the front-runners for 2010 is Viktor Yanukovych, the man whom Russia backed five years ago, and who eventually turned out the loser in the Orange Revolution.

Today, he is trying hard to shed the image of being "Moscow's man".

At a meeting with international businessmen at the US Chamber of Commerce, he told the BBC that much had changed since 2004.

"I remain committed to a balanced policy, which will protect our national interests both on our eastern border - I mean with Russia - and of course with the European Union," he said.

"Ukraine's integration with the EU remains our strategic aim."

His nearest rival is another familiar face - Prime Minister Yulia Tymoshenko.

Back in 2004, she was firmly in the Orange camp. With her trademark braids and fiery rhetoric, she was a fierce critic of Russian involvement in Ukraine. Now, though, things have changed

At a recent meeting on the thorny subject of the gas trade between Russia and Ukraine, the Russian Prime Minister, Vladimir Putin, said Ms Tymoshenko was a woman he could do business with.

"We are happy working with the government of Yulia Tymoshenko," he announced. "In the time we have worked together, our relations have been strengthened and become more stable."

That is probably as close as anyone is going to get to his endorsement.

Today on Independence Square, you can hardly tell there is an election coming up. There are no rallies, no tents, and certainly no crowds of protestors.

The events of the winter of 2004 seem like a very distant memory indeed.

And with both the front-runners in this presidential contest apparently acceptable to Moscow, some might be forgiven for thinking that, five years on, the Kremlin was having the last laugh.

Source: BBC News

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Wednesday, December 02, 2009

Putin, Tymoshenko Agree On Gas And Deride Yushchenko, Saakashvili

WASHINGTON, DC -- Russian Prime Minister Vladimir Putin and his Ukrainian counterpart Yulia Tymoshenko met in Yalta on November 19 and reached a number of agreements, confirming once again that their relationship is of a special character.

Prime Minister of Russia Vladimir Putin (L) with his Ukrainian counterpart Yulia Tymoshenko in Yalta, November 19, 2009.

Putin reiterated that Naftohaz Ukrainy, the debt-ridden state-controlled oil and gas behemoth, will not be fined for its failure to buy as much gas as stipulated by the January 2009 contracts between Naftohaz and Gazprom.

The two rejected Ukrainian President Viktor Yushchenko’s calls for an urgent revision of the contracts and derided Yushchenko and Georgian President Mikheil Saakashvili who were meeting in Kyiv simultaneously.

Naftohaz will import 24-26 billion rather than 33 billion cubic meters of gas in 2009 as stipulated by contracts, and according to the take-or-pay clause in the contracts it could face multi-billion dollar fines.

After his meeting with Tymoshenko, Putin said that Moscow would not penalize Naftohaz “taking into account the special character of relations between Russia and Ukraine”.

Putin probably had no choice, as the fines would have bankrupted Naftohaz, further complicating the problem of payments. Also, apparently not only will Naftohaz be “forgiven,” Tymoshenko believes Moscow will not fine any country for buying less gas in 2009 than stipulated by contracts with Gazprom because of the global recession.

Russia probably has not had enough gas to adhere to all of its contractual obligations in 2009, since it did not buy sufficient gas from Turkmenistan.

Putin and Tymoshenko confirmed their earlier agreement that Ukraine will not be granted a 20 percent discount from the price of gas in 2010, while it will charge 60 percent more for Russian gas transit to Europe.

Throughout 2009 Putin kept warning the European Union as the main consumer that Ukraine would be unable to pay for gas. However, during his meeting with Tymoshenko he praised her cabinet for meeting contractual obligations. “For the first time in many years Ukraine has been fully meeting all of its obligations, which is an important factor for increasing energy stability in Europe,” he said.

Putin and Tymoshenko rejected Yushchenko’s proposal to revise the Naftohaz-Gazprom contracts which he made in a letter to Russian President Dmitry Medvedev ahead of the Putin-Tymoshenko meeting.

Yushchenko reiterated that the contracts were harmful to Ukraine as the price of gas grew while transit fees were unchanged in 2009, and Naftohaz faced fines for buying less gas than agreed, since Gazprom has no obligations on the volume of transit.

Yushchenko suggested that the base price of gas and Ukraine's obligations regarding the volume of gas to buy should be revised and that a “transit or pay” clause must be added to the contracts for Gazprom in 2010, so that it would face penalties for pumping less than a stipulated volume to Europe through Ukraine.

Medvedev’s adviser Sergey Prikhodko dismissed Yushchenko’s proposals as a “blackmail” of Russia and Europe. Tymoshenko defended the contracts, saying that they were market-based and transparent while the pre-2009 relations with Gazrpom, according to Tymoshenko, were built on “a mega-corruption model”.

Putin derided Saakashvili and Yushchenko who were meeting in Kyiv, suggesting that the two were discussing their “common defeats.” Earlier, Yushchenko defended his decision to supply arms to Georgia prior to the Russia-Georgia war in 2008, and meeting Saakashvili he reiterated his support for Georgia’s territorial integrity.

This must have angered Putin. He joked in his usual degrading style, warning Yushchenko apparently in a reference to a well-known BBC video showing Saakashvili chewing his tie in August 2008, that Saakashvili might chew Yushchenko’s tie. Tymoshenko played up to him, giggling.

Saakashvili was outraged, commenting on Putin’s behavior, and Yushchenko’s chief aide Vira Ulyanchenko called Tymoshenko’s reaction inadmissible. Tymoshenko reacted in a similar manner in the fall of 2008 when Putin called Yushchenko a trickster for trying to prevent her visit to Moscow.

Earlier this year, Tymoshenko complained in a telephone conversation with Putin that Yushchenko tried to hinder payments for gas. Putin confirmed that his relationship with Tymoshenko is special, summing up their meeting in Yalta. “It has been comfortable for us to work with the Tymoshenko government. I believe that relations between Russia and Ukraine have become more stable and stronger,” he said.

Tymoshenko’s smooth relationship with Putin at a time when relations between Russia and Ukraine are strained and ahead of the crucial January 17 presidential election makes jealous other Ukrainian presidential candidates who also seek Moscow’s backing.

Former parliamentary speaker Arseniy Yatsenyuk, the third most popular hopeful according to opinion polls, predicted that Moscow would increase its political pressure on Kyiv in exchange to economic concessions to Tymoshenko.

Tymoshenko’s arch-rival Viktor Yanukovych, who leads the presidential race as the main opposition candidate, suggested that it is comfortable for Putin to work with Tymoshenko because she agreed to expensive gas thereby making Ukrainian industry uncompetitive vis-a-vis Russian companies.

Source: Eurasia Daily Monitor

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Raiffeisen says uncertainty still high in Ukraine

NEW YORK, USA -- Emerging Europe's No. 2 bank Raiffeisen International will cut more jobs in Ukraine, the bank's biggest "sore spot" in Eastern Europe, as political uncertainty runs high in the country, Chief Financial Officer Martin Gruell said.

However, Raiffeisen does not expect a country default or a further decline of the Ukrainian currency hryvnia anymore, and therefore sees a rather stable development of its business, Gruell told journalists at an investor conference.

"Ukraine is the sore spot," Gruell said about the country, where Raiffeisen owns the second-biggest lender, Raiffeisen Bank Aval. However, "the situation is rather stable now, even though uncertainty, especially politically, is high," he said.

Gruell said the rise of bad debt in Ukraine was now slowing down, provided that the currency did not depreciate further. "The big caveat is that if there is another big devaluation, nothing is going to be stable anymore," he said.

Raiffeisen owns banks in 17 countries across the former Communist part of Europe, a region hit hard by the financial crisis. In the third quarter, its units in Ukraine and Hungary were the main loss-makers for the bank.

"There will be more job cuts in Ukraine," Gruell said, declining to say how many. Raiffeisen said earlier this year it would slash its payroll of 18,000 by around 10 percent. Those job cuts are not concluded yet, Gruell said.

Ukraine's economy, one of the worst-performing in Europe, is expected to shrink by up to 15 percent this year after steel and chemical exports slumped. The currency lost more than 60 percent of its value in a year, which in turn shook the banking system.

The International Monetary Fund, keeping Ukraine afloat with emergency loans, last month said it would resume work with Ukraine only after presidential elections due Jan. 17, after a public wages hike pushed its $16.4 billion bailout "off-track."

UniCredit , BNP Paribas and OTP are the other key foreign bank owners in Ukraine. Under an IMF-sponsored deal, they pledged to stay in the country and keep their units capitalised and funded to avoid a banking crisis.

Gruell said visibility in Ukraine was now better for the bank's retail business, but that the bank could still be surprised at any time by sudden corporate defaults.

Gruell reiterated Raiffeisen had no need to raise capital after the bank received a 1.25 billion euro cash infusion from its parent RZB this summer, which left its core Tier 1 capital ratio at 8.7 percent at the end of September.

"Look at our numbers. We feel pretty comfortable with this level," Gruell said. "There is also no particularly dynamic (asset) growth" which would lead to higher capital needs, he added.

Austrian peer Erste Group Bank last month raised 1.74 billion euros in a rights issue.

Source: ForexYard

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Tuesday, December 01, 2009

Oligarchs Stall Ukraine Progress - Top EU Official

KIEV, Ukraine -- Ukraine's business oligarchs are stifling the economy by choking competition and are holding up improved trade and economic ties with the European Union, the EU Commission's top official in Kiev said on Monday.

Jose Manuel Pinto Teixeira

Jose Manuel Pinto Teixeira told a news briefing that the global economic crisis had hurt Ukraine so badly because it had barely reformed in the two decades since the collapse of the Soviet Union.

"Corruption, red tape, administrative obstacles of every kind. These are only things that serve the interests of those who today control the economy because they do not want competition, they are allergic to competition," he said.

"The vast majority of Ukrainians cannot have employment, cannot have decent salaries, do not have a decent social system, because the country today is in many aspects like 20 years ago."

Teixeira was speaking ahead of Friday's annual summit between Ukraine and the European Union and his comments underscored the EU's disappointment five years after an "Orange Revolution" brought pro-Western leaders to power.

But hopes that Ukraine -- a major transit route for Russian gas to Europe -- could move out of Moscow's shadow have been frustrated.

Bitter political rows have led to little reform, closed business circles still control the economy, bureaucracy and legal wrangling infuriates foreign investors.


The global economic crisis means Ukraine's economy is expected to shrink by up to 15 percent this year, after exports of its key products -- steel and chemicals -- plunged.

Much of the industry lies in the east of the country and under the control of a handful of business magnates.

Teixeira said things would change when those with "a major stake in the economy, and therefore influence the government and politicians accordingly...understood that the free trade agreement is an opportunity for Ukraine to transform itself and transform its economy."

Friday's summit in Kiev will assess progress on a new "Association Agreement" that would throw open the door for Ukrainian goods to the EU market through a free trade agreement.

Asked when such an agreement could finally be signed -- 18 months ago some politicians said by the end of this year -- Teixeira said it would be impossible to fix a deadline.

Despite impatience with reform, the EU in the past year has tried to help Ukraine's energy sector after Kiev's feuding over gas prices with Moscow led to supply cuts to hundreds of thousands of Europeans for two weeks in January.

The EU facilitated loans worth up to $1.7 billion to overhaul the creaky gas infrastructure and has also promised a $500 million loan for the economy -- but all of them based on conditions that Ukraine had agreed to and then not met.

Source: ForexPros

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Who Won In Ukraine? Bandits

LONDON, England -- As Ukraine approaches its first presidential election since the Orange revolution in 2004, disappointment runs deep. A recent survey shows that 75% of Ukrainians believe the leaders of the street protests, which overturned a rigged ballot and catapulted Viktor Yushchenko to the presidency, used it for their own ends and betrayed their supporters.

The Orange revolution aim of a democratic, 'western' economy has failed; the losers are the Ukrainian people.

One dominant interpretation of the "failure" of the Orange revolution is as the failure of the west. This view can be traced back to the erroneous idea (propagated by Russia) that the Orange revolution was actually created by the west. In this interpretation, Ukraine became "free" in 2004 from the Russian yoke – the west "won".

The subsequent failure of Ukraine to join NATO, make significant progress on European Union membership or develop European-style institutions and leadership, led one commentator, Simon Tisdall, to declare that, five years on, "in a sense, [Russian prime minister Vladimir] Putin has won".

But the Orange revolution was not primarily about defining Ukraine's future as with the west or with Russia, about leaving Russia's sphere of influence, and joining the west's (again, how Russia interpreted it).

It was about defining Ukraine's aspirations and values as western (free and fair elections, rule of law, a balanced media, limited corruption, diversified market economy) as opposed to Russian (rigged elections, legal anarchy, controlled media, rampant corruption, crony state capitalism).

If the west didn't "win" Ukraine in 2004, Putin cannot "win" it back now. The real failure of the Orange revolution, therefore, lies in the inability of its leaders to push through reforms to build a state corresponding to the western values to which the protestors aspired.

It is this dynamic that is driving the candidates' election campaigns this time round. Most candidates are focusing on economic and social issues, as well as promising strong leadership to end the "chaos" of the past five years.

The candidate who received open support from Moscow in 2004, Viktor Yanukovych, now leads in polls. This doesn't reflect a dramatic shift in voters' sympathy toward Russia, but is an indictment of the domestic failures of the Orange leaders. In fact, Yanukovych hardly mentions geopolitical issues in his campaigning, and has even called for "balanced" relations with Russia and the EU.

Prime Minister Yulia Tymoshenko, Yushchenko's former ally turned bitter foe and the other leading contender in for the ballot alongside Yanukovych, says she is building "pragmatic" relations with Russia, but is also a vocal supporter of Ukraine's European integration.

If we do talk about "winners" and "losers" in the Orange revolution, the most obvious victory in the eyes of Ukrainians has gone to the "bandits" who have not been sent to jail, as Yushchenko promised.

Politicians, big businessmen (often one and the same) and government bureaucrats, remain "untouchables", as one recent television series (Ukrainian) dubbed them. They drive between parliament and their mansions in blacked-out Mercedes, running over pedestrians.

They embezzle state funds and hide behind political protection. They acquire state land and fence off beaches for their own personal use. Parliamentary deputies have immunity from prosecution, and when in one case this year it was lifted, the deputy – the prime suspect in a murder case – conveniently managed to get away before parliament passed the decision.

The anger towards politicians in Ukraine makes Britain's attitude towards MPs look cuddly. One minor candidate for the presidency has a game on his website where you can shoot characters who bear a remarkable likeness to the country's top politicians. Nothing captures the mood better than the man who has changed his surname to "Againstall" and is running for president.

This is the result of the Orange revolution – no one believes that any politician can make a positive difference to their lives. The real loser is not the west; it is the Ukrainian people.

Source: Guardian UK

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