"THE ACTION UKRAINE REPORT"
An International Newsletter
In-Depth Ukrainian News, Analysis, and Commentary
"The Art of Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World"
"THE ACTION UKRAINE REPORT" - Number 442
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, Thursday, March 17, 2005
-----INDEX OF ARTICLES-----
"Major International News Headlines and Articles"
1. IMPLEMENTATION OF JUDICIAL AND LEGAL REFORMS IN UKRAINE
Testimony by Judge Bohdan A. Futey (1)
Hearing at the Verkhovna Rada (Ukraine Parliament)
Kyiv, Ukraine, Wednesday, March 16, 2005
The Action Ukraine Report
Washington, D.C., Thursday, March 17, 2005
2. UKRAINE TO DROP DOLLAR PEG, ADD EURO TO REFLECT
TRADE WITH EUROPEAN UNION
BLOOMBERG, London, UK, Wednesday, March 16, 2005
3. THE BEST OPPORTUNITIES LIE BEYOND EU BORDERS
Big rewards may lie in Bulgaria, Romania and Ukraine
By Phil Davis, Financial Times
London, UK, Sunday, March 13, 2005
4. "IF YOU HAVE SURPLUS DOLLARS, CHANGE THEM!"
'The Government and Business' Forum
By Natalia HUZENKO, The Day
The Day Weekly Digest in English, #8
Kyiv, Ukraine, Tuesday, March 15, 2005
5. TARASIUK AND WORLD ECONOMIC FORUM PRESIDENT SCHWAB
DISCUSS PREPARATIONS FOR ECONOMIC FORUM IN UKRAINE
Ukrainian News Agency, Kyiv, Ukraine, March 16, 2005
6. GRAIN TRADING COMPANY BUILDS BRAND-NEW OIL MILL
By Svitlana Bilohub, The Ukrainian Times
Kyiv, Ukraine, Thursday, March 17, 2005
7. AGRARIAN POLICY MINISTRY TO HELP RETURN VAT TO
EXPORTERS OF SUNFLOWER OIL, GRAIN
Ukrainian News Agency, Kyiv, Ukraine, Wed, March 16, 2005
8. UKRAINIAN PRESIDENT YUSHCHENKO HOPES FOR STRONGER
TIES AHEAD OF US VISIT IN EARLY APRIL
UNIAN news agency, Kiev, in Ukrainian 1238 gmt 16 Mar 05
BBC Monitoring Service, UK, in English, Wed, March 16, 2005
9. UKRAINE LEAVES THE USA ASIDE, AIMS TO DEVELOP
CLOSE TIES WITH RUSSIA
The US administration believes that it is useless to invest
in the conflict between the two neighboring states
PRAVDA, Moscow, Russia, Thursday, March 17, 2005
10. "GENIUS AND REVOLUTION"
Dedicated to the 191st anniversary of Taras Shevchenko's birth
By Oleksandr Kyslyi, Candidate of Historical Sciences
The Day Weekly Digest in English #8
Kyiv, Ukraine, Tuesday, 15 March 2005
===============================================================
1. IMPLEMENTATION OF JUDICIAL AND LEGAL REFORMS IN UKRAINE
Testimony by Judge Bohdan A. Futey (1)
Hearing at the Verkhovna Rada (Ukraine Parliament)
Kyiv, Ukraine, Wednesday, March 16, 2005
The Action Ukraine Report
Washington, D.C., Thursday, March 17, 2005
In the aftermath of the Orange Revolution, the recent transition of power
in Ukraine has brought with it a much needed emphasis on political and
economic reform. While these areas certainly warrant attention, it is
imperative that legal and judicial reform receive the same level of
scrutiny.
It cannot be forgotten that the adoption of the Constitution on June 28,
1996, was only the first step in the development of a Ukrainian nation which
places the Rule of Law and a free market economic system among its
highest values.
Ukraine must now focus on the second step in the process, a step where
"enabling" legislation is enacted to implement the rights guaranteed by the
Constitution. The enabling legislation corresponding to these rights will
determine the quality and character of the Constitution not only as the
supreme law of Ukraine, but also as documentary guarantor of the basic
rights for all Ukrainians.
Moreover, as with any emerging market economy, the existence of an
independent judicial branch which secures these rights in accordance with
Rule of Law principles is crucial to continued economic viability. Against
this backdrop, the following short-term and long-term judicial reforms are
recommended.
1. FRAGMENTED JUDICIARY
The Constitution does not envision a unified judicial system. It
distinguishes between the Constitutional Court and the courts of general
jurisdiction. Although it would have been preferable to completely unify
the judicial system in Ukraine under one Supreme Court as it exists in the
United States, it must be stressed that Ukraine's current system presents
a substantial improvement over prior suggestions, such as the system it
utilized in the past.
Nevertheless, a bifurcated judicial system somewhat complicates the
doctrine of separation of powers because the courts of general jurisdiction,
in my opinion, lack the tools necessary to act as a separate but co-equal
branch of government. For example, the Supreme Court and lower courts
of general jurisdiction can neither interpret the laws nor declare laws and
acts unconstitutional.
The Constitution has assigned this authority to the Constitutional Court.
Therefore, if the courts of general jurisdiction are faced with issues
concerning the constitutionality of laws and regulations, including official
interpretation of the Constitution and laws of Ukraine, the Supreme Court
is required to submit the issue to the Constitutional Court. In a similar
vein, a recent suggestion to alter the structure of the judiciary to include
several higher specialized courts would further compound the problem.
Another issue arises concerning the establishment of lower administrative
courts. Although a higher specialized administrative court has been
established, lower administrative courts should be organized this year
pursuant to legislation adopted last year.
Lastly, any restructuring of the judiciary must comport with Article 125 of
the Constitution which mandates that "the system of courts of general
jurisdiction [be] formed in accordance with the territorial principle and
the principle of specialization."
2. ENFORCEMENT OF JUDICIAL DECISIONS
The establishment of the rule of law principle rests with a development of a
system which respects and enforces judicial decisions. According to Article
11 of the Law on the Judiciary, court decisions, entered into force, are
binding and must be followed by state organs, local authorities, its
officials, associations and other organizations, citizens and legal entities
in Ukraine. The lack of enforcement of judicial decisions by the executive
must be addressed.
Government officials must lead by example and abide by court decisions. In
"Re Dual Mandates of Verkhovna Rada Deputies," the Constitutional Court
held in 1997 that National Deputies elected after June 8, 1995, may not
simultaneously hold two state positions. (2) The court's holding clearly
and unequivocally prohibits National Deputies from possessing dual
mandates.
Yet, individuals from within the government who were recently appointed to
elevated positions in the new administration have not resigned from their
prior posts. Their actions plainly contradict the dual mandates decision.
It is incumbent upon the new administration to enforce the prohibition on
dual mandates.
Also, the importance of enforcing judicial decisions cannot be overstated;
it goes part and parcel with the establishment of a credible, respected and
independent judiciary. Nearly all governments enforce the decisions of
their judicial systems. In the United States, the judiciary depends upon
the executive branch to enforce court decisions. The strongest argument,
however, in favor of enforcing judicial decisions in an emerging market
economy such as Ukraine is economic.
Putting aside the moral implications of failing to enforce judicial
decisions, domestic and foreign investors would be rightfully hesitant to
engage in financial transactions in a country that failed to adequately
protect an investor's rights. Therefore, it is imperative that Ukraine
enforce its decisions, and enable the courts to provide needed stability in
commercial transactions by assuring domestic and foreign investors that
judicial decisions will be enforced.
3. JURIES
The Constitution introduced the people's direct participation in the
judicial system through people's assessors and juries (Art. 124). Article
127 also addressed juries, but it is unclear from this provision whether the
jurors will act as lay judges, as occurs in European systems, or as jurors
in the United States, who make findings of fact as well as determine guilt
in criminal cases and liability in civil cases. The Constitution states that
people's assessors and jurors participate in the administration of justice
"in cases determined by law."
The Law on the Judiciary states that people's assessors resolve cases in
court proceedings "in cases determined by the procedural law" (Law Art. 65),
and that juries are formed to review "disputes determined by the procedural
law" in cases at the first instance (Law Art. 68). Complications arise
because the current procedural codes do not provide for activities of juries
and people's assessors. Rules should be adopted to clarify the people's
participation in the judicial system as guaranteed by the Constitution.
4. ADJUDICATION OF ELECTION DISPUTES
Another area which deserves intimate attention is the adjudication of
election disputes - - particularly issues of jurisdiction and venue. During
Parliamentary elections of 1998 and 2002, the Law on Elections of deputies
allowed candidates to challenge the election procedure and election results.
As a result, the courts were overloaded with disputes. In 1998, the Courts
of Ukraine of all levels reviewed 162 disputes by participants in the
election process, while in 2002 the courts reviewed more than 500 disputes.
(3) Adjudication of these disputes revealed the shortcomings of the system.
The courts' resolution of the enormous number of election disputes was
characterized by inconsistent rulings and failure to take jurisdiction, as
well as the improper taking of jurisdiction, among courts of first instance,
as well as reviewing courts, and contributed to confusion among the courts,
parties and the public.
In fact, some cases were heard in seemingly improper venues. That is, they
were heard in courts outside of the geographic area in which the alleged
acts took place. For example, in 1998, the election of the mayor of the
City of Odesa was challenged in the City of Kirovohrad, which is in a
different oblast. The Kirovohrad Court invalidated the election.
Likewise, a court in the city of Lviv recently invalidated the June 29, 2003
election of the mayor in the City of Mukachevo; again, a city in a different
oblast. It appears that someone in these instances selected a forum that
would most likely produce the results he/she was seeking. Establishing
concrete jurisdictional and venue rules will eliminate forum-shopping issues
which presented concerns and problems in the past.
The importance of resolving the above-mentioned electoral issues stems
from the fact that the right to vote in a democratic society is one of the
most precious of all individual rights. The United States Supreme Court
has endorsed this proposition: "No right is more precious in a free country
than that of having a choice in the election of those who make the laws
under which as good citizens they must live." (4)
Voters' trust and confidence are of great significance. If citizens cannot
be assured of a fair and honest election process, they will have no faith in
other components of the political process. Social stability rests on the
individual's confidence in the electoral process to function correctly in
every respect. Courts must ensure that the adjudication process is
implemented in a proper way.
5. EX PARTE COMMUNICATIONS
It is worthy to note that in order to ensure the principle of independence,
judges must refrain not only from conduct that is improper but also from any
conduct that could create an appearance of impropriety. The appearance of
impropriety is sometimes as damaging as the act itself. In this regard, ex
parte communications must be avoided. Ex parte is defined as "[o]n one
side only; by or for one party; done for, in behalf of, or on the
application of, one party only." (5)
The Supreme Court and other lower courts currently have visiting hours where
parties can individually meet with the judges. To prevent an appearance of
impropriety, these ex parte meetings should cease immediately and all
communications between the court and the parties should be conducted in
an open forum with both parties present.
6. STATE COURT ADMINISTRATION
It is necessary to pay proper attention to the provisions of the Law on the
Judiciary which established the State Court Administration of Ukraine. Its
mandate is to provide logistical, administrative, and organizational support
to the courts of general jurisdiction, as well as other organs and
institutions of the judicial system. The State Court Administration,
however, is a central organ of the executive branch. As a part of the
executive branch, the State Court Administration is granted with wide
authority to provide the judicial branch with financial and other
assistance.
Such a structure provides an opportunity for further oversight by the
executive branch over the judiciary. It may also cause negative influence
or pressure on courts and judges. (6) Presently, however, there is a
legitimate movement directed toward making the State Court
Administration a part of the judicial branch.
7. STRENGTHENING JUDICIAL INDEPENDENCE IN GENERAL
a. Monetary Funding
Establishing a viable court system cannot proceed without
overcoming several economic hurdles. Obvious concerns relate to
financial matters: that adequate budgetary means for administering
justice are provided. In other words, to strengthen their independence,
the courts must receive proper funding under a separate budgetary
authority and judges must receive adequate salaries.
Judges in Ukraine are under-compensated: (1) lower court
judges are paid $100 to $200 per month; (2) appellate judges receive
several hundred dollars per month; and (3) Supreme Court justices
receive approximately $1000 per month. (7)
b. Miscellaneous Concerns
The courts must ensure that their decisions are promptly
published and made available to the public. The lack of published written
opinions undermines public confidence in the judiciary, causes confusion in
legal circles, and prevents transparency in the decision-making process.
These negative side-effects were visible during the various elections which
preceded the 2004 Ukrainian presidential elections.
In addition, Judges must not allow themselves to be drawn into
political contests between the executive and legislative branches of
government. The court should resist any temptation to involve itself in the
ongoing political struggles. Judges should be aware of the danger of
becoming entangled in politics.
In this regard, they must refrain from making pronouncements
concerning political cases that are, or may come, before them. Such
occurrences, which threaten the impartiality of the judiciary and erode
public confidence in the system, must be eliminated. For this purpose,
a strong bar association must be established and be well organized to
oppose, expose, and prevent coercion of the judiciary.
Lawyers and bar associations have an obligation to speak out against
improper intrusion into the province of the judiciary and, likewise,
improper judicial conduct. In this respect, it is also important to adopt
an effective and substantive Code of Judicial Conduct.
8. APPOINTMENT AND ELECTION OF JUDGES
In general, the Constitution authorizes the President to appoint judges for
their initial five-year term (Art. 128). The Verkhovna Rada has the power
to elect judges for life thereafter (Arts. 85.27 and 128). To assist in the
appointment process, the Constitution establishes the High Council of
Justice, which is composed of members of all branches of government and
is charged with the "submission of a proposal regarding the appointment"
of judges (Art. 131).
To ensure that individuals selected to serve on the bench are qualified, it
may be beneficial to consider employing a system of uniform testing similar
to that used in Georgia. Moreover, the composition of the Supreme Court of
Ukraine should be revisited; specifically, whether it is necessary for such
a large number of judges to sit on the court.
The United States Supreme Court is comprised of nine justices whereas the
Supreme Court of Ukraine consists of over 80 judges. As the number of
judges on a particular court increases, the degree of uniformity and
consistency decreases. Given the Supreme Court's role as the final arbiter,
the number of judges on the court should be reduced. Lastly, it is
necessary to ascertain whether all procedures for appointing and electing
judges are in compliance with the Constitution.
9. ADOPT CODES OF PROCEDURE (CRIMINAL AND ADMINISTRATIVE)
It is imperative that an Administrative Code be established as per
legislation adopted last year and that a new Criminal Code also be adopted.
Further, inconsistencies in terminology and definitions between Civil and
Commercial (Economic) codes should be eliminated. The two codes are in
certain respects inherently contradictory as well as incompatible with other
aspects of Ukraine's legal framework. Failure to reconcile the
discrepancies will cause confusion and apprehension amongst investors
and may inadvertently provide opportunities for corruption.
In addition, it is vital to keep in mind the importance of protecting
intellectual property rights. The Parliament should adopt updated and
revised intellectual property laws in order to bring Ukraine's legislation
in line with international standards. Such measures would not only increase
much needed foreign investment, but would also provide a smoother and
quicker accession to World Trade Organization membership.
10. CONCLUSION
While the implementation of the above-enumerated suggestions will
improve the legal framework in Ukraine, significant strides were made in the
previous year which cannot go unnoticed. On December 3, 2004, the
Supreme Court of Ukraine, in Yushchenko v. CEC, re-instituted in practice
the theory of separation of powers and affirmed the judiciary's
independence. The Supreme Court harnessed its strengths and seized
upon the judiciary's true potential.
The judges fulfilled their constitutional mandate by placing the Rule of Law
above any individual or political interests. Simply put, the judges will be
afforded respect because they respected themselves. Putting aside the
substance of its decision, the example the Supreme Court has set for
Ukraine's judiciary will have far reaching implications. The theory of
separation of powers no longer exists as merely a principle; rather, the
day has come where the judicial branch is in application a co-equal and
independent branch of government.
The Supreme Court should be congratulated. It seized upon the unique
opportunity in Yushchenko v. CEC to shape the law and the legal system in
the same manner that the United States Supreme Court did in Marbury v.
Madison two hundred years ago.8 It is now necessary to build upon the solid
foundation laid by the Supreme Court and further strengthen democracy and
the Rule of Law in Ukraine. -30-
-----------------------------------------------------------------------------------------------------------
FOOTNOTES:
1. Judge of the United States Court of Federal Claims appointed by
President Ronald Reagan in May, 1987.
2. "Re Dual Mandates of Verkhovna Rada Deputies," Visnyk
Konstytutsiinoho Sudu Ukrainy 2 (1997):5.
3. Speech by Mykhailo Ryabets, Head of the Central Election
Commission of Ukraine, Munich, February 15, 2002.
4. Westberry v. Sanders, 376 U.S. 1 (1964).
5. Black's Law Dictionary 517 (5 ed. 1979).
6. It should be noted that the Supreme Court, Constitutional Court, and
higher specialized courts are not subject to the jurisdiction of the State
Court Administration.
7. Ivan Lozowy, Ukraine: "Underpaid, Underqualified, and Under the Gun"
A Profession Without Honor, Transitions Online (May 27, 2004).
8. See Marbury v. Madison, 5 U.S. (1 Cranch) 137, 2 L. Ed. 60 (1803)
(establishing the doctrine of judicial review).
-----------------------------------------------------------------------------------------------------------
Bohdan A. Futey is a Judge on the U.S. Court of Federal Claims in
Washington, DC and has been active in various Rule of Law and
Democratization Programs in Ukraine since 1991. He served as an advisor
to the Working Group on Ukraine's Constitution, adopted June 28, 1996.
Judge Futey served as an official international election observer for the
International Republican Institute (IRI) during the first two rounds of the
Ukrainian presidential election as well as during the repeat second round.
------------------------------------------------------------------------------------------------------------
NOTE: Formatting and minor editing by The Action Ukraine Report
Monitoring Service, Washington, D.C.
===============================================================
2. UKRAINE TO DROP DOLLAR PEG, ADD EURO TO REFLECT
TRADE WITH EUROPEAN UNION
BLOOMBERG, London, UK, Wednesday, March 26, 2005
KYIV - Ukraine plans to replace the hryvnia's peg to the dollar with a
more flexible exchange-rate system that includes the euro, reflecting
the former Soviet state's growing trade with Western Europe,
Economy Minister Serhiy Teryokhin said.
The policy will raise the share of Europe's common currency in Ukraine's
$9.5 billion of foreign exchange reserves to about 25 percent and may
involve a ``managed float,'' in which the hryvnia will trade more freely
after being linked to the dollar since 1998, Teryokhin said.
``The strict peg to the dollar should be replaced by a basket at a first
stage,'' Teryokhin said in an interview during a London investment
conference yesterday. ``It is too early to say how'' the exchange-rate
system ``will look.''
President Viktor Yushchenko, who won an election in December, wants
the nation to join the European Union to boost growth and raise living
standards. Easing limits on the hryvnia would help move the $60 billion
economy closer to the EU and follow similar moves by regional peers
including Poland and the Czech Republic, which ousted communism
in 1989 and joined the EU last year.
Ukraine, with a population of about 47 million, is sandwiched between
Russia and the EU and is the main transit territory for delivery of Russian
natural gas to Europe. Russia supplies about a quarter of Europe's gas.
STRENGTHENING CURRENCY
The hryvnia may strengthen to as high as 4.8 against the U.S. dollar by the
end of the year, Teryokhin said. It traded at 5.2765 per dollar at the close
of trading yesterday, little changed from the day before, according to
Bloomberg data.
``We already started to strengthen the exchange rate,'' he said. ``We'll
see. If budget revenue increases it is clear that we won't be changing the
exchange rate sharply.''
Central banks of countries including China, Japan and Russia are mulling
increasing their holdings of currencies other than the dollar as they seek
to raise returns in their foreign-exchange reserves, said Alex Patelis, head
of G-10 currency strategy in London at Merrill Lynch & Co. on Feb. 3.
Dollars accounted for 63.8 percent of the world's currency reserves at the
end of 2003, down from 66.9 percent two years earlier, according to
International Monetary Fund figures released in April last year.
BOOSTING TRADE
The 25-member EU accounts for 42 percent of Ukrainian trade, including
exports of metals and chemicals, Teryokhin said. Poland and the Czech
Republic ship three-quarters of their goods to other EU nations.
Ukraine's exports to Europe as a whole rose to $11.3 billion in 2003 from
$8.6 billion in 2002, according to Deutsche Bank AG. Imports from Europe
rose to $13.9 billion in 2003 from $10.7 billion in 2002.
The changes would involve removal of controls on ``non- capital''
foreign-exchange transactions and restrictions on investing in foreign
securities markets, the minister said. The government also plans to remove
a 1.5 percent tax on repatriation of profits for foreign investors, he said,
without giving a time- frame.
The proposals will need to be outlined in draft budget proposals to
parliament on March 21, he said. The measures don't require parliamentary
approval, he said.
At the same time, the government and the central bank are discussing how
to prevent an increase of ``speculative'' investments, especially in
Ukraine's stock market, he said.
HIGHER GROWTH
The central bank has been buying foreign currencies from exporters,
increasing the money supply and adding to inflation, to keep the hryvnia
from strengthening. Demand for the local currency is rising as exporters are
bringing home more revenue because of high prices for metals, chemicals
and grain.
Prime Minister Yulia Timoshenko's government has raised its forecast for
economic growth this year to 8.6 percent from 6.5 percent to 436 billion
hryvnia ($83 billion), Teryokhin said. The economy grew 12 percent last
year.
The government is seeking to bring down the inflation rate to 9.8 percent in
December from 12.3 percent in 2004. Consumer prices rose 2.7 percent
in the first two months of the year, he said.
To rein in inflation, the government plans to curb spending, end tax
exemptions, raise excise alcohol and tobacco taxes and rent payments for
natural resources, coal, power, oil and gas. It will also cancel tax
exemptions on energy tariffs, to collect a total of at least 8 billion
hryvnia, he said.
BUDGET, ASSETS
The government plans a balanced budget for this year and an average
exchange rate of 5.1 hryvnia per dollar, he said.
Ukraine also is seeking to accelerate sales of state assets, including,
phone company VAT UkrTelecom, to raise 5.4 billion hryvnia, he said.
That sale won't happen before the second half, he said.
Separately, Yushchenko plans to discuss with Russian President
Vladimir Putin contracts for shipping Russian gas to Europe, Teryokhin
said. Yushchenko said on Oct. 27 he planned to review the contracts,
if elected. Putin will visit Kiev March 19.
"This is a very sensitive'' issue, Teryokhin said. "The Kremlin doesn't
want at all to discuss this issue and is threatening us with all sorts of
sanctions if we continue this discussion.'' -30-
-----------------------------------------------------------------------------------------------
To contact the reporter on this story:
Marta Srnic in the London newsroom at msrnic@bloomberg.net
To contact the editor responsible for this story:
Chris Kirkham at ckirkham@bloomberg.net
===============================================================
3. THE BEST OPPORTUNITIES LIE BEYOND EU BORDERS
Big rewards may lie in Bulgaria, Romania and Ukraine
By Phil Davis, Financial Times
London, UK, Sunday, March 13, 2005
Europe's unofficial boundaries are growing fast - and it is future entrants,
such as Turkey and Ukraine, that are exciting investors. The Middle East,
north and southern Africa are featuring on their lists as capital rushes
from western to central Europe and beyond.
RAB, the specialist hedge fund manager, sees opportunities outside the
growth areas of the past two years. Its emerging Europe fund, set up last
year by Leila Kardouche and Pavel Kolouch, formerly hedge fund managers
at Schroders, will use its multilingual managers to invest in uncharted
waters.
Ms Kardouche, half Egyptian, half Lebanese, speaks Arabic and French,
north Africa's business language. Mr Kolouch, born in Czechoslovakia,
speaks Russian.
The $25m (13m) fund, which has a capacity of $250m, is unlikely to invest
heavily in central Europe. "All the easy money has been made," says Ms
Kardouche. "These markets will not be doubling any time soon. In fact, the
shorting opportunities are in central Europe. That doesn't mean there are
lots of bad companies, just expensive ones."
The exception may be Poland, which suffered a downturn in 2000-2003,
largely due to tightening of monetary policy, intended to curb inflation,
which strangled growth. RAB forecasts 4-5 per cent growth this year.
Big rewards may lie in Bulgaria, Romania and Ukraine, which are due to join
the EU in 2007 and are likely convergence plays. RAB is bullish on Ukraine,
because of its big population and new democratic credentials. "They have
embraced western-style liberal democracy compared to Russia's managed
democracy," says Ms Kardouche.
The RAB team uses local brokers as a first screen then arranges one-
on-one meetings. As it takes big bets, with a concentrated portfolio of 30
companies or fewer, it is likely to invest in one Ukrainian company at a
time. In young markets such as this, the investment is usually long. "If we
shorted new companies in new markets, no one would want to meet us,"
says Ms Kardouche.
RAB thinks that in Russia, relative to assets and earnings, valuations are
lagging. "Russia is here to stay. You can't write it off; there are too many
good companies," to the initial public offering of the conglomerate,
Sistema, last month, which raised $1.35bn, valuing the group at $8bn. "This
is the new Russia. It's about conglomerates with stakes in the consumer
markets of mobiles and insurance, not just about oil and gas."
Investors worrying about the lack of liquidity in Russia may be encouraged
by S&P's plans to launch a Moscow index with a local exchange this year.
David Blitzer, head of the index committee at S&P, says: "People have been
trying to run mutual funds in Russia for 20-30 years but the lack of
structured markets means it is hard to get money in. A recognised branded
index allows positions to be sold straight away, instead of selling down
over two or three weeks. It also allows the shorting of a whole market,
which can provide short-term protection."
But interest in Russia and Ukraine could be overridden by "frontier"
countries, such as Morocco, Turkey, Egypt and the Gulf states. Initial
success will depend on local knowledge. Ms Kardouche is a fan of Egypt's
Orascom Telecom, for example, but only close inspection shows that its
value, and the source of its high cash flow, lies in GSM licences in
Pakistan, Iraq and Bangladesh.
Egypt, whose economy was almost dormant from 1998 to 2003, is
competing for foreign investment, has a free-floating currency after
years of a dollar peg and is reducing its deficit and inflation. "There is
still lots of bureaucracy but they realise that competition for capital
in emerging markets is high," says Ms Kardouche.
The Gulf States are part of this competition. The United Arab Emirates is
setting up a stock exchange in Dubai intended to be a regional hub creating
a liquid market.
Investors cannot tell if Turkey is near convergence or a reversal. RAB
bought government bonds at 20-22 per cent yields, confident the volatile
currency would hold. Ms Kardouche points to productivity gains, wage
restraint and growing consumer markets. "People are reluctant to see Turkey
as a convergence play because it's so far down the road, but it definitely
is," she says. RAB also sees perceptions of country risk in Israel as
overdone, as many high-technology companies effectively operate abroad.
South Africa, too, is seen as part of emerging Europe. "People said it was
a social time bomb. They said there was no FDI. But it's changing fast and
will change even faster with the emerging black middle classes," Ms
Kardouche says. -30- (The Action Ukraine Report Monitoring Service)
===============================================================
4. "IF YOU HAVE SURPLUS DOLLARS, CHANGE THEM!"
'The Government and Business' Forum
By Natalia HUZENKO, The Day
The Day Weekly Digest in English, #8
Kyiv, Ukraine, Tuesday, March 15, 2005
The new Ukrainian government is making a generous gesture by extending
a hand to business. What is in this hand and is there something "up the
government's sleeve?" This was the theme of a forum called "The
Government and Business," held last Friday.
"Business is always right." President Viktor Yushchenko of Ukraine spelled
out the new formula for the relationship with the entrepreneurial community
and told the audience about his plans in his own inimitable style. Broaching
the subject of businessmen's social responsibility, the head of state tried
to arouse feelings of sympathy in the forum participants. "You were born
and raised in this land, where your umbilical cord lies buried.
Aren't you ashamed to bask somewhere on a sandy or pebbled beach,
knowing that somebody else earns a wage of 240 hryvnias? Do you have
sympathy or not? Are we citizens or not?" he asked the audience. By all
accounts, sympathy for ordinary Ukrainians is to come from financial-
industrial group leaders Viktor Pinchuk, Oleksandr Yaroslavsky, and Vitaly
Haiduk, UMC president Eric Franke, members of parliament, and managers
of large business associations, all of whom were spotted in the room.
Most of the entrepreneurs who attended the forum chose farsightedly not
to turn away from the government: they also want to see the latter as their
partner. The president set his own conditions and warned about possible
penalties. "I oblige you not to bribe. I'm not begging you meekly, I'm
obliging you! Should you continue to do these kinds of things, you will not
be my partners and God will punish you. Please enter one revenue item
into your 2005 budget: savings on bribes," President Yushchenko said.
He announced that the government will be fighting bribe-takers within
administrative bodies: "We are establishing the National Bureau of
Investigations to concentrate in one office all the investigative functions
to look into abuses on the part of class 1-3 civil servants." President
Yushchenko also made a firm promise: "Upon my word, officials will not
be taking bribes." He went on to recall the previous government, "Three
families reigned supreme, trampling over the rest."
Businessmen are not objecting to the president's statements. In an interview
with The Day, Vadym Bodayev, director of the local branch of the Sigma
Blazer international investment company, said that business should play by
the rules and then, if the two sides show good will, it will not be
difficult to separate business from government and work to civilized
standards. Natalia Sokolska, president of the Atek joint-stock company, said
to The Day, "For the economy to function and entrepreneurs to demonstrate
their talents and capabilities, the government should at least not
interfere."
The president's promise to simplify in two or three weeks the procedure of
registering new businesses was taken with cautious optimism. Mr. Yushchenko
announced that today it takes an enterprise "18 months" to get registered
because it has to formalize about 60 documents and dish out bribes, while in
Moldova this procedure takes a mere 2 hours. Ukraine also intends to
concentrate all enterprise registration elements in one office, where the
new Ukrainian business will be forming.
To ease the existing tax burden, the president decided to offer a gift. "Ms.
Yuliya and Mr. Viktor should plug their ears," said Mr. Yushchenko, turning
to Prime Minister Yuliya Tymoshenko and Finance Minister Viktor Pynzenyk,
"What about a three-year tax holiday for newly-established ones?" In his
words, the budget can be fulfilled at the expense of existing enterprises.
The president said that tax cuts would be a test for both business and the
government if, naturally, nobody evades their taxes.
Prime Minister Tymoshenko, who looked very assertive, backed up the
president. What she spelled out were not ideas but action plans for the
nearest future. She said the cabinet was now assessing the possibility of
rescinding a number of taxes in Ukraine. Ms. Tymoshenko assured the
audience that she hated the VAT "with every fiber of her soul" and it will
be axed, as will the wages fund tax. What will be left intact is the tax on
natural persons' incomes (with a rate of 13%), the 7-10-% sales tax, as
well as rents and excise taxes.
"We are also prepared for a fiscal, capital, and property amnesty, but you
must first step out of the shadows and pay taxes on time," President
Yushchenko told the audience, "so that those who pay them do not know
the tax inspector even by sight. But we will take a tough stand against
adventurers." After announcing this perk, the president promised that the
government would not hinder business development, nor would it take into
account the political views of businessmen if the latter fairly cooperated
with the state.
But, as Ms. Tymoshenko said wittily and unexpectedly, "now representatives
of the old authorities are continuing to beat 'orange' businessmen, while
the new authorities are begin to beat the 'blue' ones." "We will see to it
that these things stop in 2-3 days," the premier added, recalling her own
experience of business suppression.
The prime minister also seems to be modifying her views on re-privatization.
"High governmental bodies are now thinking about how to seize large
enterprises, medium-level bodies about how to seize medium enterprises, and
local bodies about how to seize hairdresser's shops," she said. "We do not
encourage this." The premier emphasized that the new government had
decided "not to grill people over the privatization of hairdresser's shops,
stores, and offices even if this privatization was done illegally." If we
recall "the list of 3,000," these words look like self-criticism.
Supporting the premier's efforts to spell out concrete plans for the future,
Minister of Economics Serhiy Teriokhin promised a bit of liberalism.
According to the minister, the National Bank is going to cancel compulsory
sales of part of exporters' hard-currency earnings. Along with other
agreed-upon measures, this step will drastically strengthen the hryvnia's
rate. Besides, Mr. Teriokhin tried to play on the hryvnia's revaluation
right on the spot. "Dear friends, if you have surplus dollar reserves,
please exchange them for the Ukrainian currency," he suggested.
As for the businessmen, they also offered suggestions to the government
behind the scenes. For example, Leonid Yakovenko, representing the Guild
of Entrepreneurs in Zaporizhzhia, told The Day it was the state's urgent
duty to create favorable taxation and customs control conditions, while all
that is required of business people is to obey the law. -30-
----------------------------------------------------------------------------------------------------
LINK: www.day.kiev.ua/133858
===============================================================
5. TARASIUK AND WORLD ECONOMIC FORUM PRESIDENT SCHWAB
DISCUSS PREPARATIONS FOR ECONOMIC FORUM IN UKRAINE
Ukrainian News Agency, Kyiv, Ukraine, March 16, 2005
KYIV - Foreign minister Borys Tarasiuk and Klaus Schwab, President of the
annual World Economic Forum held in Davos, Switzerland, met on March 15 in
Geneva to discuss preparations for the economic forum to be held in Kyiv in
June. Ukrainian News learned this from the press service of the Ministry of
Foreign Affairs.
"The interlocutors have discussed in details the state of readiness for
holding a "mini-Davos" in Kyiv in June of this year and expressed the belief
that the event will be of huge interest among business circles worldwide,"
the press report reads.
Schwab gave his high estimates to the activity of President Viktor Yuschenko
and the Cabinet of Ministers aimed at building a democratic, wealthy
Ukraine.
Tarasiuk and Schwab shared their thoughts about the ways for creation of
a favorable investment climate and new market infrastructure in Ukraine.
As Ukrainian News earlier reported, Tarasiuk traveled to Geneva on March
14 to attend the sixty-first session of the United Nations Organization's
human rights commission. Yuschenko attended the World Economic Forum
in Davos in late January. -30- (The Action Ukraine Report Monitoring
Service)
===============================================================
6. GRAIN TRADING COMPANY BUILDS BRAND-NEW OIL MILL
By Svitlana Bilohub, The Ukrainian Times
Kyiv, Ukraine, Thursday, March 17, 2005
Construction of a brand-new, modern mill designed to produce sunflower oil
and oil cakes became a remarkable event in the food industry of Ukraine that
should not pass unnoticed. It is seen as one of the largest enterprises in
Eastern Europe.
In 2003 the Holding Grain Trading Company started reconstruction of the oil
mill KirovohradOlia, which is registered in the form of an open joint-stock
company, and construction of a modern, energy-efficient elevator with a
capacity of 100,000 tons of sunflower seeds (200,000 tons of grain) in the
city of Kirovohrad. Plans are in hand to put the first stage of the elevator
into operation this year. The project is valued at a total of some $70
million.
At present, 20 oil extracting lines are in service in Ukraine: 12 lines
(57%), seven lines (33%) and one line (10%) have been respectively operating
for nearly 40 years, 15-30 and up to five years. Thus, wear and tear of more
than half the oil extracting lines amount to about 40 years. In this
context, the final stage of reconstruction by the holding company of mill's
facilities outfitted with imported up-to-date equipment is to raise sharply
its competitive capacity both on the domestic and world markets. The latest
technology will above all help cut the cost of finished products, namely
sunflower oil and granulated oil cakes.
Having stood the test of time and achieved positive results, successful
experience of holding company's work in the oil and fats industry as well as
operating capacities expand the capabilities to process raw products of rape
and soybeans. These products are in great demand on the market to an
increasing degree. Virtually, there is no competition for their production
which is under state protection.
At the moment of completion of reconstruction the mill will have a
production capacity of 1,400 tons of sunflower seeds per day.
The organization of novel production working on the principle of a closed
cycle, which takes account of all economic, geographic and competitive
advantages of enterprises of the holding company and particularly
KirovohradOlia under conditions of stiff competition on the domestic market,
features the above project. -30- [Action Ukraine Report Monitoring]
===============================================================
7. AGRARIAN POLICY MINISTRY TO HELP RETURN VAT TO
EXPORTERS OF SUNFLOWER OIL, GRAIN
Ukrainian News Agency, Kyiv, Ukraine, Wed, March 16, 2005
The Agrarian Policy Ministry intends to help return value-added tax to the
exporters of sunflower oil and grain. Reporters learned this from Agrarian
Policy Minister Oleksandr Baranivskyi. He noted that the Ministry had
already initiated consideration of this issue at the Cabinet of Ministers'
meeting on March 16.
As Ukrainian News reported, early this month the Ukrainian Grain Association
asked the Cabinet of Ministers to consider the question of overdue VAT
refunds to grain exporters. As of January 2004, the debt on VAT
reimbursement to grain traders amounted to UAH 400 million.
The grain association and the Agricultural Policy Ministry predict export of
the 2004 harvest grain crops at the level of 11 million tons. In 2004, the
grain harvest (including corn) rose by 21.498 million tons or 106.3% to
41.718 million tons in after-treatment weight, compared with 2003. The
annual demand of the domestic market for grain to produce bread and
bakery goods is 6.3-6.5 million tons. -30-
===============================================================
8. UKRAINIAN PRESIDENT YUSHCHENKO HOPES FOR STRONGER
TIES AHEAD OF US VISIT IN EARLY APRIL
UNIAN news agency, Kiev, in Ukrainian 1238 gmt 16 Mar 05
BBC Monitoring Service, UK, in English, Wed, March 16, 2005
KIEV - Ukrainian President Viktor Yushchenko has said that Ukraine is ready
for serious changes in its foreign policy concept. He was commenting today
on his visit to the USA, which is planned for early April, the presidential
press service said. "Ukraine is preparing serious changes to the concept,
and they will be related to both the European Union and our strategic
partners - Russia, Poland and the USA," Yushchenko said.
"We want to boost our ties with the strategic partners and raise them to a
qualitatively new level," Yushchenko added. Yushchenko said that his US
visit would above all focus on boosting political and economic ties, as well
as trade.
Yushchenko said he hoped that a number of bilateral documents would be
signed "which would pave the way for Ukraine's accession to the WTO". He
also expects that "a number of regulations and procedural issues will be
reviewed, making it easier for Ukraine to be present on the US market".
The presence of the Ukrainian peacekeeping contingent in Iraq will also be
discussed during the summit. Ukraine's position regarding the withdrawal of
its peacekeepers remains unchanged, Yushchenko stressed. At the same
time, he noted that all actions "will be agreed with our partners".
Speaking on relations between the two states, Yushchenko noted that they
varied - "there were high points and difficult times". But, he said, "the
new leader and the new team want to declare that they will never pursue a
Byzantine policy towards their strategic partners."
"Ukraine's foreign policy will be aimed not against anyone, but exclusively
at implementing Ukraine's interests," Yushchenko said. -30-
===============================================================
9. UKRAINE LEAVES THE USA ASIDE, AIMS TO DEVELOP
CLOSE TIES WITH RUSSIA
The US administration believes that it is useless to invest
in the conflict between the two neighboring states
PRAVDA, Moscow, Russia, Thursday, March 17, 2005
MOSCOW - Latest actions taken by the head of the new Ukrainian
administration, Viktor Yushchenko, prove that the new president has revised
his views regarding Ukraine's foreign economic policy. The Ukrainian
government is interested in the Russian business now. Yushchenko believes
that Ukraine is going to intensify its relations with strategic partners and
take them to a qualitatively new level. The short-term cooperation with the
former ideological ally, the USA, is being currently nullified.
The current week can be characterized with new rather important events for
Ukraine. Viktor Yushchenko invited leading Russian businessmen and
coordinated the date of Russian President Putin's visit to Ukraine as well.
In addition, the committee for assignments of the US Congress refused to
assign $60 million for Yushchenko's administration for the support and
consolidation of historical achievements of the democratic election in
Ukraine. The USA halved the financial help for Ukraine to almost $26.3
million.
It is not ruled out that the West has realized the fact that political and
economic ties between Russia and Ukraine are going to improve. The US
administration probably believed that it was useless to invest in the
conflict between the two neighboring states. On the other hand, the
financial cut was probably the USA's way of telling Yushchenko that he was
pushing the democratic accomplishment of the Ukrainian nation (the result of
the "orange revolution") into the background. The Ukrainian government,
however, has already made several important decisions to become closer to
Russia.
Viktor Yushchenko stated at the meeting with a group of leading Russian
businessmen that he was intended to sign an order about the establishment of
the acceptable environment for running business activities. The environment,
Yushchenko added, would be characterized with a civilized fiscal policy and
tax system and with the reduction of business registration procedures in
Ukraine nationwide. The Ukrainian president also assured the businessmen
that their investments in the business of Ukraine would be safe and sound.
It is important now for Viktor Yushchenko to create the image of a
self-restrained, civilized and adequate leader, taking into consideration
his previous statements about nationalization, close cooperation with
Western sponsors and persecution of political rivals. The new president
needs to prove that it is possible and reliable to conclude long-term
agreements with Ukraine.
This perception is especially important against the background of Vladimir
Putin's forthcoming visit to Ukraine. It will be Putin's first visit to the
neighboring state after Yushchenko's election for the post. Putin intends to
use the chance to improve relations with Ukraine: the presidents are going
to discuss the strengthening of economic ties between the two countries.
Experts believe that Putin's visit to Ukraine will let the international
community know that post-Soviet states always stick together. It is
noteworthy that Viktor Yushchenko as the new president made his first
official visit to Russia. Russia's ambassador to Ukraine, Viktor
Chernomirdin, said that Russia and Ukraine had a huge potential for
cooperation. The annual commodity turnover between the two countries was
planned to reach $50-60 billion, Chernomirdin added. [Translated by: Dmitry
Sudakov] -30- [The Action Ukraine Report Monitoring Service]
===============================================================
10. "GENIUS AND REVOLUTION"
Dedicated to the 191st anniversary of Taras Shevchenko's birth
By Oleksandr Kyslyi, Candidate of Historical Sciences
The Day Weekly Digest in English #8
Kyiv, Ukraine, Tuesday, 15 March 2005
"L'Ukraine a toujours aspire a etre libre" [Ukraine has always aspired to
liberty] declared Voltaire (1694-1778). While he had a high regard for
Tsar Peter I's reforms, the French philosopher knew there was a
different fate in store for Ukraine.
There are a number of reasons why it is impossible to fully fathom
Shevchenko's role in securing this "different fate" for Ukraine. It is still
appropriate to note the significance of his personality in the light of
present-day problems. Thus, Shevchenko means:
1. Dedication to freedom in its most humanistic and complete form, which
brings one face to face with the question of the search for truth and the
meaning of life, but does not verge on absolute humanocentrism.
At all times, but especially after the Renaissance, and in 19th-century
Russia, there were many philosophers who touted personal freedom as
the ultimate value. However, where the freedom of "smaller brothers" was
concerned (in the Caucasus, Africa, or elsewhere, depending on which
metropolis you're looking outward), it was invariably restricted.
After the "fraternal Soviet republics" obtained (i.e., did not win through
battle) their independence (from one another), one Slavic nation became
resentful over the newfound freedom of its closest ethnogenetic relatives,
even though it ardently defended the freedom of certain remote and
little-known tribes.
Shevchenko wrote: "Come, clasp your [smaller] brothers to your heart, -
Then shall our day of hope arrive, Ukrainian glory shall revive" ("To the
dead, to the living, and to those yet unborn, my countrymen, all who live in
Ukraine and outside Ukraine, my friendly epistle," 1845). Despite the
multitude of studies on ethnic tolerance and the significance of a civil
society or political nation-state, Shevchenko was perhaps the first in
Ukraine to establish a direct connection between building a free state
and ensuring a free existence for national minorities.
In terms of possible amendments to the Constitution of Ukraine, we should
perhaps do what all nation-states must eventually do, i.e., grant all ethnic
groups that have historically inhabited Ukrainian territory but do not have
their own state the constitutional right to build their own national
statehood within Ukraine. Would that create problems and conflicts?
Absolutely. Yet it is conflicts and efforts to resolve them that result in
ethnic development.
Ethnic problems have to be resolved without formulating a new concept of
ethnic and national development of Ukraine to suit every occasion,
especially considering that all these concepts guarantee all ethnic
minorities only the development of their folklore within the framework of a
larger political nation-state. The possibility for the development of every
ethnic community, from the level of each family all the way to elements of
their own statehood, should be espoused as a principle of the new state.
Only through real action and interaction can we achieve true ethnic
tolerance.
2. Understanding of the significance of every individual ethnic culture.
Although modern civilization recognizes the significance of ethnic cultures,
it does not associate them with the preservation of life on the planet.
While no one questions the importance of all the natural species on which
humans obviously depend for their survival, we have yet to grasp the vital
significance of every ethnos. There is an emerging understanding whereby
every ethnic culture that has survived in our epoch of unnatural
globalization has the right to full-fledged development, and not simply the
development of its folklore.
Those who consider such an approach a waste of time should be reminded
of Keynesian economic theory, according to which "burying money in the
sand" often produces development, while the opposite may bring the
most developed and independent societies to the brink of degradation.
3. Understanding the possible failure of the development of every ethnos,
the Ukrainian one being no exception. Shevchenko offered a critical analysis
of the strengths and weaknesses of his own ethnos. That such a failure is
possible in principle in terms of the economy and the demographic situation
is explained in a recent study (Oleksandr Kyslyi, Demohrafichnyi vymir
istoriyi [The Demographic Dimension of History], Kyiv: Aristey, 2005).
4. Understanding the form of historical and spiritual unity of Slavic
cultures, whereby they are self-sufficient, like rivers merging into a
single sea. Yet this merging does not mean their self-annihilation.
Therefore, individual Slavic cultures, which are valuable in and of
themselves, can challenge Western cultures in terms of their influence.
In a poem dedicated to the Slavist Paul Joseph Safarik (1795-1861),
Shevchenko wrote: "Glory to you, noble sage / Wise Czech and faithful
Slav / Who from the bottomless abyss / Saved all the Truth we have!"
("The Heretic").
So-called Russian patriots have always viewed Ukrainian independence
as a threat. The non-acceptance of other Eastern Slavic cultures except
Russian has a long history. In the Euro-Atlantic culture every component
is valuable, and it would be illogical to question the importance of any
such constituent culture or consider it superfluous.
Meanwhile, by virtue of its feudal and traditionalist nature, Russian
economic culture follows an extensive pattern of development. But unless
we recognize the possibility of the self-sufficient development of every
individual Slavic culture, any positive competition with the Euro- Atlantic
community will be out of the question. Unless we do so, in the near future
we may no longer see any Slavophile virtues in real life, only in museums
created by Western Europeans along with the Western Slavs. Thus, the
biggest enemy of all Eastern Slavs is the millennium-long prospect of
extensive economic development.
It was this order that Shevchenko protested in the 19th century and against
which Ukrainians revolted on Independence Square in 2004. This order
means the irresponsible consumption of resources and disregard for one's
own people, identity, and knowledge. All of this leads to thievery as a
social norm, absolutist forms of government, parading one's narrow-
mindedness, and disrespect for virtues espoused by the world's
leading nations.
All of this led Peter I to seek the breath of freedom in Europe. Yet to this
day the attempt to artificially impose sustainable freedom on Russian soil
has failed. Characteristically, after returning from the West, Alexander
Solzhenitsyn initially called upon the Russian government to divest itself
of all its superfluous territories, but eventually thought better of it.
5. A continuation of the early Christian ideals of defending the oppressed
and persecuted. Shevchenko is unforgiving of evil acts, no matter who
commits them. Sainthood stems from truth and fidelity and not the other way
around. Consider Shevchenko's words about the suffering of the Decembrists:
"And you, All-seeing Eye, have you looked down / Out of high heaven upon
blessed slaves, / Fettered by hundreds in their chains and driven / To far
Siberia, or racked, or hanged?" ("The Idiot").
6. Understanding of women's social role that is on an equal footing with
men's. Understanding of love between a man and a woman as a value that
transcends all pseudo-moral codes of behavior: "You ... sin against God's
Mother /With wicked meekness. Waken up, dear crony! / Be roused, and
glance around you while you may! / Spurn all that maiden coyness you affect,
/ And, with a heart sincere and innocent, / At least for once, my darling,
go
astray! (A poem to "N.T." 1860).
7. An attitude toward the government and its functions from the perspective
of an individual's needs and present-day civil society: "Why do you need
those kings? / Why do you need those kennel keepers? / You are people, not
dogs!" (November 3, 1860). Shevchenko looked toward the best international
examples of state building: "Ah, you miserable and cursed crew, / when will
you breathe your last? / When shall we get ourselves a Washington / To
promulgate his new and righteous law?" ("The Idiot").
8. Understanding religion as merely a form that may vary and in individual
cases may not even have any bearing on God the Absolute. Shevchenko was
implacable in his condemnation of those who created injustice in the name of
the church ("Under injustice and its yoke / All silent are the trampled
folk, / While on the apostolic throne / A fatted monk now reigns alone, /
Who barters human blood for pelf / And farms out paradise itself. / God!
Thy judgment seems in vain, / And futile all Thy heavenly reign!") ("The
Heretic", 1845).
Therefore, ministers have no advantage over mere mortals aside from the
understanding of their own and corporate sins. They have to
be more committed to seeking the truth and setting an example by serving
this truth. It is worth noting in this connection that our revolution has
been seeking and will continue to seek those moral underpinnings on which
it might build a new society. State building is currently the overriding
goal of many nations across the globe.
We should not forget, however, that Ukraine is not a country of only
Orthodox Ukrainians. When some televised programs preach with annoying
regularity that Orthodoxy is the only spiritual way for the soul, I ask
myself
why such people need God at all, along with the national heritage and
Shevchenko.
9. Understanding the role of moral principles, the elite, art, and science
both in the poet's epoch and future periods. Aside from his numerous calls
for us to "read, study, and discern," I should point out the following words
that he wrote a few months before his death: "The day goes passing by,
likewise the night ... / And, pressing your dull head between your hands, /
You wonder why the Lord of Truth and Light / Sends no Apostle to these
darkened lands!"
"Truth and science." What a strange combination. Yet these words are meant
precisely for us. Only science will enable us to switch to higher-level
resources and break the millennium-long enchanted circle of extensive
economic development and self-delusion. It is believed that Shevchenko as
a poet-creator was primarily guided by the principles of anthropocentrism,
i.e., he placed the human being at the center of his worldview.
Apparently, this is true, because it must have been love of people that set
him on this unerring path to the truth. Meanwhile, as Dmytro Chyzhevsky
(1894-1977), the renowned philosopher and literary historian, wrote: "In
Shevchenko's world nature is subordinated to man; it is a resonator, or
mirror of emotional experiences." But this is not the case. The second
statement is much easier to refute.
In Shevchenko's poetry, man is an observer, who watches nature unfold on its
own, as if there were no need for him and never was any: nature basks in its
own beauty and brings forth beauty, which is a never-ending process. The
impact of this portrayal of nature is so profound that even human injustice,
"tears and misery" in Shevchenko's poem "The Dream," pale before the vision
of eternity. Of course, Shevchenko, who was a sublime wordsmith, used nature
imagery to convey the mood of his characters.
The first statement about Shevchenko's anthropocentrism stems from
Christianity and, to a larger extent, from the fact that the Renaissance
philosophers, followed by the European humanists, viewed the human being
as created in the image of God and later on even opposed to God. But
Shevchenko is more complex than that.
His poem, "I Somehow Think, But Cannot Ratify," has a satirical beginning:
"I somehow think, but cannot ratify, / That men at point of death don't
really die / But, still alive, go crawling into swine / Or to some kindred
beast their souls assign; / Then in a slough their wallowing begins, / As
formerly they wallowed in their sins." But in the same poem he shows when
he can "call God a God." This time Shevchenko sings the praises of Mikhail
Lermontov, because he is "God's prophet" and "The poet's blessed soul his
words enhance; / He lives on in that holy utterance; / And as we read his
pages we revive / And feel that God in heaven is still alive" ("I Somehow
Think, But Cannot Ratify" 1850).
What does this mean? It means that we are not always capable of taking
Shevchenko for what he's worth. We can only adapt him to our current morals
and philosophy. Only prophets and geniuses are blessed with a keen
understanding of the truth that sets them free for a fleeting moment from
the confines of time.
Frequent misunderstandings arise over the place of God in Shevchenko's
world perception. Our new national heroes liken Shevchenko to themselves
and have talked their way to the point of calling him a devout Christian. As
a result, like before, they shun his "blasphemous" poems. Therefore, their
Shevchenko is "falling apart," and they are willing to hide from him behind
the walls of new Christian churches for the sake of their petty interests.
Others view him as a "belligerent atheist," much like in the Soviet period.
I have the impression that they have never taken the time to take a closer
look at his works or the Bible. There is a simple explanation for this too.
Researchers do not dare assume that in his understanding of God Shevchenko
eclipsed many religious and secular philosophers. It is just that he had
neither opportunity nor need to create philosophical works. But his poems
confirm his extremely holistic understanding of humans, creation, and truth.
We are only now approaching his level of understanding.
At the heart of Shevchenko's idea of God is not simply a human being or
eternal human values, but certain superior values that transcend the world,
observed by the poet. At the center of his philosophy is not
anthropocentrism and not even God himself, but the beginning and the end,
the truth to which God and man aspire. If we view the human being as the
highest value, this rules out the possibility of transformations.
If you carefully select the episodes in Shevchenko's poetry in which he
contemplates the role of superior forces on earth, and analyze them, you
will see that his God is undergoing transformations and that his heaven is
not a rest home for the chosen few ("There is no paradise on earth, and
heaven itself in doubt"), and his hell is all that is happening on earth.
It would therefore be grossly inadequate to say that Shevchenko does not
have the slightest shadow of dogmatism, piousness, and worshipping of
dead icons (what representatives of other religions do not understand in
Christianity). He does not have an empty faith that is unsupported by
supreme ideals. The paradox is that lately all kinds of pastors have again
been urging the peoples of Ukraine to embrace faith, without proposing any
ideals that would be superior to those that have repeatedly discredited
themselves in the history of mankind.
There is a dire shortage of such ideals among the new clerics on Ukrainian
territory. The new clerics, much like the original pastors early in the
history of mankind, refuse to recognize the fact that religions cannot be de
facto different, and hence cannot be secondary, or less or more important in
the eyes of God. Meanwhile, everyone has his unique faith and spirituality,
which is his own attitude to Him. Therefore, there is one faith for all.
Only a personal path to God makes a person free of all the unnecessary
conventionalities and most dependent only on ultimate values, which must
be discovered by the spiritual elite.
Of course, these are only superficial observations. The issue of
Shevchenko's faith is a very complex one, and future researchers must
also have the same faith - independent of the flow of time and arbitrary
views. Future generations will have the honor of examining Shevchenko's
works with their minds clear of the dogmatic confines of class ideology,
piety, anthropocentrism, or progressivism, ethnic pseudo-tolerance, or
There comes a time in the life of every nation when God brings His
blessing upon it. In the life of the Ukrainian nation it was the day
Shevchenko was born and, let us hope, one of the days in the present
epoch. -30- [The Action Ukraine Report Monitoring Service]
===============================================================
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Minneapolis, Minnesota,
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 295 7275 in Kyiv.
4. ODUM- Association of American Youth of Ukrainian Descent,
Minnesota Chapter, Natalia Yarr, Chairperson.
5. ACTION UKRAINE COALITION: Washington, D.C.,
A. UKRAINIAN FEDERATION OF AMERICA (UFA),
Zenia Chernyk, Chairperson; Vera M. Andryczyk, President;
Huntingdon Valley, Pennsylvania.
B. UKRAINIAN AMERICAN COORDINATING COUNCIL,
(UACC), Ihor Gawdiak, President, Washington, D.C., New York, NY
C. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Washington, D.C.; Markian
Bilynskyj, Kyiv, Ukraine. Web: http://www.USUkraine.org
6. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C., Van
Yeutter, Cargill Inc., Interim President; Jack Reed, ADM, Interim
Vice President; Morgan Williams, Interim Secretary-Treasurer
7. ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
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PUBLISHER AND EDITOR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer Investment Banking Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
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Senior Advisor; Ukrainian Federation of America (UFA)
Coordinator, Action Ukraine Coalition (AUC)
Senior Advisor, U.S.-Ukraine Foundation (USUF)
Interim Secretary-Treasurer, Ukraine-U.S. Business Council
Publisher, Ukraine Information Website, www.ArtUkraine.com
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